EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made as of the first day of February,
1999 (the "Closing Date") by and between Thermo Vision Corporation, a Delaware
corporation ("Thermo Vision") and Thermo Vision Opticon Corporation, a Delaware
corporation ("NewCo") ("Buyer"), Opticon Corp., a Massachusetts corporation
("Seller"), and Xxxxxx Xxxxxxxx ("Stockholder"). Thermo and NewCo are referred
to together as "Buyers".
RECITALS
NewCo is a newly-formed Delaware corporation 100% owned by Thermo Vision.
Seller is engaged in the business of designing, manufacturing, marketing
and distributing replicated optical components in a facility located in North
Billerica, Massachusetts.
Buyers desire to purchase, and Seller desires to sell, substantially all
of its assets, subject to the assumption by Buyers of certain liabilities of
Seller.
Stockholder is the sole stockholder of Seller.
NOW THEREFORE, in consideration of the premises and the mutual covenants,
agreements and provisions herein contained, the parties hereto agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.8.
"Adjusted Net Tangible Assets" -- Net Tangible Assets as shown on the
Closing Balance Sheet.
"Agent" -- as defined in Section 2.10.
"Applicable Contract"-- any Contract (whether written or oral and
whether express or implied): (a) under which Seller has any rights, (b)
under which Seller has any obligation or liability, or (c) by which
the Seller or any of the Assets are bound.
"Assets" -- as defined in Section 2.1.
"Assumed Liabilities" -- as defined in Section 2.4.
"Balance Sheet Date" -- as defined in Section 2.4.
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"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Buyers" -- as defined in the first paragraph of this Agreement.
"Buyer Indemnified Persons" -- as defined in Section 5.2.
"Closing" -- as defined in Section 2.7.
"Closing Balance Sheet" -- as defined in Section 2.5(b).
"Closing Date" -- as defined in the first paragraph of this Agreement.
"Code" -- the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"Competitive Business" -- as defined in Section 6.17.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Assets by Seller to Buyers;
(b) the assumption of the Assumed Liabilities by Buyers;
(c) the execution and delivery and performance of the Escrow
Agreement, the Employment Agreement, the Xxxx of Sale and Assignment, and the
Assumption Agreement;
(d) the performance by Buyers and Seller of their respective
covenants and obligations under this Agreement; and
(e) Buyers's acquisition and ownership of the Assets and exercise of
control over the Assets following the Closing.
"Contract"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"Damages" -- as defined in Section 5.2.
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"Disclosure Schedule" -- the Disclosure Schedule delivered by Seller to
Buyers concurrently with the execution and delivery of this Agreement, attached
hereto as Exhibit A and incorporated into this Agreement as a part hereof.
"Draft Closing Balance Sheet" -- as defined in Section 2.5(a).
"Encumbrance" -- any charge, claim, condition, equitable interest, lien,
mortgage, option, pledge, security interest, right of first refusal, or
restriction of any kind, including any restriction on use or exercise of any
attribute of ownership.
"Environment" -- soil, land, surface or subsurface strata, surface waters
(including navigable waters and ocean waters), groundwater, drinking water
supply, stream sediments, ambient air (including indoor air), plant and animal
life, and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law, Occupational Safety and Health Law, a Contract or other
obligation relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical or radioactive substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
remedial, or inspection costs and expenses arising under Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or Occupational
Safety and Health Law for cleanup costs or corrective action, including any
cleanup, removal, containment, or other remediation or response actions
("Cleanup") required by applicable Environmental Law or Occupational Safety and
Health Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages; or
(d) any other compliance, corrective, or remedial measures required
under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action" include the types of
remedial activities covered by the United States Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et seq., as
amended ("CERCLA").
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"Environmental Law" -- any Legal Requirement designed:
(a) to advise appropriate authorities, employees, and the public of
intended or actual releases of pollutants or hazardous or toxic substances or
materials, violations or discharge limits, or other prohibitions and of the
commencement of activities, such as resource extraction or construction, that
could have an adverse impact on the Environment;
(b) to permit or license, or to prevent or acceptably minimize the
release of pollutants or hazardous or toxic substances or materials into the
Environment;
(c) to reduce the quantities, prevent the release, and minimize the
hazardous characteristics of wastes that are generated;
(d) to assure that products are designed, formulated, packaged, or
used so that they do not present unreasonable risks to human health or the
Environment when used or disposed of;
(e) to protect resources, species, or ecological amenities;
(f) to acceptably minimize the risks inherent in transportation of
hazardous or toxic substances, pollutants, oil, petroleum, or other potentially
harmful substances;
(g) to clean up pollutants that have been released, prevent the
threat of release, or pay the costs of such cleanup, remediation or prevention;
or
(h) to make responsible parties pay private parties, or groups of
them, for damages done to their health or Environment.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"Escrow Amount" -- as defined in Section 2.10.
"Exchange Act" -- the Securities Exchange Act of 1934 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"Excluded Assets" -- as defined in Section 2.2.
"Excluded Liabilities" -- all liabilities of Seller other than the
Assumed Liabilities.
"Facilities" -- any leaseholds, or other interests currently or formerly
leased or operated by Seller in the conduct of Seller's business and any
buildings, plants, structures, or equipment currently or formerly owned, leased
or operated by Seller in the conduct of Seller's business.
"Financial Statements" -- as defined in Section 3.4.
"GAAP" -- generally accepted United States accounting principles, applied
on a basis consistent with the basis on which the 1997 Balance Sheet and the
other financial statements referred to in Section 3.4 were prepared (except as
to inventory which was not valued in accordance with GAAP).
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"Governmental Authorization" -- any approval, consent, license, permit,
waiver, exemption or variance, or other authorization issued, granted, given, or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement.
"Governmental Body" -- any body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial (including court),
legislative, police, regulatory, or taxing authority or power of any nature over
Seller, including any:
(a) federal, state, local, municipal, foreign, or other government
and any agency, branch or department thereof;
(b) court or other tribunal; or
(c) multi-national organization or body.
"Hazardous Activity" -- the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that unreasonably increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities, or that may affect the value of the Facilities or the Assets.
"Hazardous Materials" -- any substance that is now listed, designated, or
classified as, or otherwise determined by a Governmental Body to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and urea formaldehyde, polychlorinated biphenyls, asbestos or asbestos
containing materials.
"Indemnified Person" -- a Buyer Indemnified Person or a Seller
Indemnified Person.
"Intangibles" -- as defined in Section 3.19.
"Inventories" -- as defined in Section 3.27.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"June Balance Sheet" -- as defined in Section 3.4.
"June Income Statements" -- as defined in Section 3.4.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
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(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving as a director,
officer or senior management employee of such Person (or in any similar
capacity) has Knowledge of such fact or other matter.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other, constitution, law, ordinance, Order,
principle of common law, regulation, requirement, statute or treaty.
"Material Adverse Effect" -- any loss to Seller in excess of $10,000.
"Net Asset Benchmark" -- as defined in Section 2.5(e).
"Net Tangible Assets" --as defined in Section 2.5(a).
"Neutral Auditors" -- as defined in Section 2.5(b).
"NewCo" --as defined in the first paragraph of this Agreement.
"Occupational Safety and Health Law" -- any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards designed to provide safe and healthful working conditions.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day operations of such
Person;
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority), is not required to be specifically authorized by the parent
company (if any) of such Person, and does not require any other separate or
special authorization of any nature; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
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"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the certificate of
organization and management agreement of a limited liability company or limited
liability partnership; (d) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (e) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (e) any amendment to any of the foregoing.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, limited
liability partnership, joint venture, estate, trust, association, organization,
or other entity or Governmental Body.
"Plans" -- as defined in Section 3.11.
"Premises" - as defined in Section 2.8 (f).
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price" -- as defined in Section 2.3.
"Related Person" -- any of the following with respect to a specified
Person:
(a) a Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person;
(b) a Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, executive officer,
partner, executor, or trustee of such specified Person (or in a similar
capacity);
(d) a Person in which such specified Person holds a Material
Interest; and
(e) a Person with respect to which such specified Person serves as a
general partner or a trustee (or in a similar capacity).
For purposes of this definition, "Material Interest" means direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of voting
securities or other voting interests representing at least 10% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 10% of the outstanding equity securities or
equity interests in a Person.
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment (including
the abandonment or discarding of barrels, containers, tanks or other
receptacles).
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"Restricted Employee" -- as defined in Section 6.16.
"Securities Act" -- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Seller" -- as defined in the first paragraph of this Agreement.
"Seller Indemnified Persons" -- as defined in Section 5.3.
"Subsidiary" -- any Person in which a corporation or other Person (the
"Owner") has, directly or indirectly, a majority interest. A majority interest
in a Person includes the power of the Owner to elect a majority of the Board of
Directors or the power otherwise to direct the business and policies of that
Person.
"Tax" -- any tax (including without limitation any income, capital gains,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax or other fiscal charges of any kind whatsoever, including any fine,
interest, penalty, or addition thereto, whether disputed or not), imposed,
assessed, or collected by or under the authority of any Governmental Body or
payable pursuant to any tax-sharing agreement or any other Applicable Contract
relating to the sharing or payment of any such tax.
"Tax Return" -- any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without limitation
any schedule or attachment thereto, and any amendment thereof.
"Thermo Vision" --as defined in the first paragraph of this Agreement.
"Threat of Release" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been made or
any written notice has been given, or if any other event has occurred or any
other circumstances exist, that would lead a prudent Person to conclude that
such a claim, Proceeding, dispute, action or other matter is likely to be
asserted, commenced, taken, or otherwise pursued in the future.
"Trade Secrets" -- as defined in Section 3.19.
"1997 Balance Sheet" -- as defined in Section 3.4.
"1997 Income Statements" -- as defined in Section 3.4.
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2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 Sale of Assets. At the Closing, Buyers shall purchase, acquire and
accept, and Seller shall assign, transfer, convey and deliver, all of Seller's
right, title and interest in and, the following assets, properties and rights
(contractual or otherwise) of Seller (collectively, the "Assets") free and clear
of any Encumbrances except as set forth in the Disclosure Schedule.
(a) Inventories. All inventories of raw materials, work-in-process,
finished products and resale merchandise, scrap inventory, and expendable
manufacturing supplies as set forth or summarized in the Disclosure Schedule and
reflected in the June Balance Sheet with changes resulting in the Ordinary
Course of Business from the date of the June Balance Sheet to the Closing Date.
(b) Machinery and Equipment. All machinery and equipment used in the
research and development, manufacture, production, assembly, testing, handling,
distribution, demonstration and sale of Seller's products, together with the
spare-parts inventories and all manufacturing or production tools and
maintenance supplies pertaining thereto.
(c) Intellectual Property Rights and Trademarks. All patents,
trademarks, service marks, copyrights, trade names and applications therefor
which have been or are being used by Seller, including without limitation, the
name "Opticon."
(d) Technical Information and Intangibles. All inventions,
discoveries (whether patentable or unpatentable), processes, designs, know-how,
trade secrets, proprietary data, software programs and intellectual property of
all kinds, including drawings, plans, specifications, processes, patents, dies,
designs, blue prints, records, data, product development records, production
outlines, diskettes, source code, object code, flow charts, information, media
or knowledge and procedures, and customer and supplier lists.
(e) Contracts. All Applicable Contracts, including, without
limitation, all real and personal property leases, licenses, sales,
distribution, and supply contracts, purchase contracts, sales orders, and any
prepaid items, warranties and all causes of action and claims related thereto.
(f) Books and Records. All books, records and accounts,
correspondence, production records, technical, manufacturing and procedural
manuals, and customer lists; and any confidential information which has been
reduced to writing relating to or arising out of the Seller's business, all
whether in hard copy or computerized form.
(g) Permits and Approvals. To the extent transferable, all
Governmental Authorizations.
(h) Claims. All claims, deposits, prepayments, refunds, security
interests, causes of action, choses in action, rights of recovery, rights of
setoff, rights of recoupment, rights under warranties and other similar assets.
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(i) Furniture and Fixtures. All office furniture, office equipment
and supplies and computer hardware.
(j) Accounts Receivable. All trade and other accounts and notes
receivable and any rights of recovery or set off of every type and character.
(k) Miscellaneous Supplies. All catalogs, brochures, product
literature, product-related application notes, manuals, technical papers, other
printed materials, shipping and packaging materials and labels, cartons and
shipping containers, palettes, shipping equipment, graphics, artwork,
photographic film, slides, negatives, color separations, printer's and
photographer's plates and so-called "camera-ready materials" and sales and
advertising materials.
(l) Copies. To the extent not previously provided, copies of all
accounting records of Seller's business operations; employment records; studies,
reports and summaries relating directly to any environmental conditions or
consequences of any operation of Seller's business, as well as all studies,
reports and summaries relating directly to the general condition of Seller's
business.
2.2 Excluded Assets. Notwithstanding anything to the contrary herein, the
Assets ---shall not include (a) cash, bank accounts, money market accounts,
certificates of deposit, treasury bills, bonds, notes, securities and similar
short term investments with maturity dates within 90 days of issuance or (b)
receivables from Stockholder, employees of Seller or other individuals (the
"Excluded Assets").
2.3 Purchase Price for the Assets. Subject to Section 2.5, the aggregate
purchase price for the Assets shall be $2,000,000 (the "Purchase Price").
2.4 Assumption of Liabilities. At the Closing and effective as of the
Effective Date, Buyers shall assume only the following liabilities of Seller
(the "Assumed Liabilities"): (i) liabilities reflected on the June Balance
Sheet, except for any liabilities discharged since the date of the June Balance
Sheet (the "Balance Sheet Date"), (ii) liabilities incurred by Seller in the
Ordinary Course of Business since the Balance Sheet Date for which performance
is due after the Closing Date (except those liabilities, if any, that arise out
of Seller's breach of contract, breach of warranty, tort, infringement or
violation of any Legal Requirement or out of any Proceeding), and (iii)
liabilities and obligations under any Applicable Contract assigned to Buyers
pursuant hereto except to the extent such obligations and liabilities arise out
of Seller's default under or breach of any such Contract. In furtherance of, but
without limiting, the foregoing, the Assumed Liabilities will not include any
liabilities or obligations of Seller (a) for any Environmental, Health and
Safety Liabilities resulting from the ownership, operation or condition of
Seller, its Assets and the Facilities, or for any liabilities or obligations
resulting from any Hazardous Activity in either case conducted on or prior to
the Closing Date, (b) for any Taxes resulting from the conduct of Seller's
business on or prior to the Closing Date, (c) for any litigation or Proceeding
relating to Seller's business or the Assets resulting from events occurring on
or prior to the Closing Date, (d) for any product liability claims relating to
Seller's products sold on or prior to the Closing Date, (e) to employees of
Seller, including all retired and former employees arising out of their
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employment by Seller, (f) under any Plan maintained at any time by Seller or to
which Seller contributes, or relating to any termination of the rights of any
employee under any such Plan, (g) for any vacation time in excess of 80 hours
accrued by any individual employee of Seller with respect to the period on or
before the Closing Date, or (h) for any vacation time equal to or less than 80
hours accrued by any individual employee of Seller with respect to the period on
or before the Closing Date that is not accrued on the Closing Balance Sheet.
2.5 Post-Closing Adjustments. The Purchase Price set forth in Section 2.2
shall be subject to adjustment after the Closing Date as follows:
(a) Within 45 days after the Closing Date, Thermo Vision shall
prepare and deliver to Seller a balance sheet reflecting Seller's Net Tangible
Assets as of the Closing Date (a "Draft Closing Balance Sheet") at Buyers'
expense. Thermo Vision shall prepare the Draft Closing Balance Sheet in
accordance with GAAP [except inventories which shall be reflected in accordance
with Seller's past accounting practices.] For purposes of this Agreement, "Net
Tangible Assets" shall mean the Assets other than cash, intellectual property
and goodwill minus Assumed Liabilities.
(b) Seller shall deliver to Thermo Vision within 30 days after
receiving the Draft Closing Balance Sheet a detailed statement describing its
objections (if any) thereto. Failure of Seller so to object to the Draft Closing
Balance Sheet shall constitute acceptance thereof, whereupon such Draft Closing
Balance Sheet shall be deemed to be the "Closing Balance Sheet." Thermo Vision
and Seller shall use reasonable efforts to resolve any such objections, but if
they do not reach a final resolution within 30 days after Thermo Vision has
received the statement of objections, Thermo Vision and Seller shall select a
nationally recognized accounting firm mutually acceptable to them which shall
not be the regular accounting firm of Buyers or Seller (the "Neutral Auditors")
to resolve any remaining objections. If Thermo Vision and Seller are unable to
agree on the choice of Neutral Auditors, they shall select as Neutral Auditors a
nationally recognized accounting firm by lot (after excluding their respective
regular independent accounting firms). The Neutral Auditors shall determine,
within 30 days after their appointment, whether the objections raised by Seller
are valid. The Draft Closing Balance Sheet that is the subject of objections by
Seller shall be adjusted in accordance with the Neutral Auditors' determination
and, as so adjusted, shall be the Closing Balance Sheet. Such determination by
the Neutral Auditors shall be conclusive and binding upon Buyers and Seller.
Buyers, on the one hand, and Seller, on the other, shall share equally the fees
and expenses of the Neutral Auditors.
(c) If Adjusted Net Tangible Assets are less than the Net Asset
Benchmark, Seller shall pay to Buyers, by wire transfer in immediately available
funds, within ten business days after the date on which the Closing Balance
Sheet is finally determined pursuant to this Section 2.5, an amount equal to
such deficiency.
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(d) If Adjusted Net Tangible Assets are more than the Net Asset
Benchmark, Buyers shall pay Seller, by wire transfer in immediately available
funds, within ten business days after the date on which the Closing Balance
Sheet is finally determined pursuant to this Section 2.5, an amount equal to
such excess.
(e) As used in this Section 2.5, "Net Asset Benchmark" means
$621,000.
2.6 Allocation of Purchase Price. Seller and Buyers agree that the
Purchase Price shall be provisionally allocated among the Assets as provided on
Exhibit B attached hereto. The final allocation of the Purchase Price shall
differ from the provisional allocation only to reflect the book value of the
Adjusted Net Tangible Assets as shown on the Closing Balance Sheet. Buyers and
Seller each shall report the federal, state, provincial, foreign and local
income and other tax consequences of the transaction contemplated hereby in a
manner consistent with such allocation.
2.7 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") is occurring by the exchange of facsimile signature
pages on the date set forth in the first paragraph of this Agreement (the
"Closing Date") to be followed by the exchange of fully executed original
documents, the wire transfer of the Purchase Price (less the Escrow Amount) to
the account designated by Seller and the wire transfer of the Escrow Amount to
the Agent.
2.8 Deliveries by Seller to Buyers. At the Closing, Seller shall deliver,
or cause to be delivered, to Buyers:
(a) such executed assignments, bills of sale, certificates of title,
or other documents, each dated the Closing Date, as shall be reasonably
necessary, in the opinion of Buyers and their counsel to transfer to Buyers all
of Seller's right, title and interest in and to the Assets;
(b) an opinion of Peabody & Xxxxxx LLP, counsel to Seller and
Stockholder, in the form attached hereto as Exhibit C;
(c) consents to the assignment of the Contracts listed on Exhibit D;
(d) an Escrow Agreement in the form of Exhibit E executed by Seller;
(e) executed copies of such other agreements contemplated hereunder
to which Seller is party;
(f) consent to assignment of the lease of the premises at 00 Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 ("Premises") and
release of Seller from the lease; and
(g) an executed employment agreement between NewCo and Xx. Xxxxxx
Xxxxxxxx in the form attached hereto as Exhibit G.
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2.9 Deliveries by Buyers to Seller. At the Closing, Buyers shall deliver
to Seller:
(a) Subject to Section 2.10 hereof, the Purchase Price by wire
transfer to the account designated by Seller;
(b) an Escrow Agreement in the form of Exhibit E, executed by Buyers
and Agent;
(c) an executed assumption agreement and such other documents, each
dated as of the Closing Date, as shall be reasonably necessary, in the opinion
of Seller and its counsel, for the assumption by Buyers of all of the Assumed
Liabilities; and
(d) an executed employment agreement between NewCo and Xx. Xxxxxx
Xxxxxxxx in the form attached hereto as Exhibit G.
2.10 Escrow. For the purpose of providing security for the obligations of
Seller under Section 5.2 hereof, $200,000 (the "Escrow Amount") shall be
withheld from the Purchase Price delivered at Closing and shall be placed in an
escrow account with State Street Bank as escrow agent (the "Agent"). The Agent
shall hold the Escrow Amount pursuant to the terms of an escrow agreement among
Seller, Buyers and the Agent substantially in the form attached hereto as
Exhibit E. At any time on or after the date that is 18 months from the Closing
Date, Seller will have the right to withdraw the Escrow Amount, together with
any interest thereon, less the amount of any unsatisfied claim for
indemnification made by Buyers prior to such date. Any portion of the Escrow
Amount that cannot be withdrawn from the escrow account due to pending claims by
Buyers for indemnification, shall remain in the escrow account until the
resolution of such claims by judgment of any court of competent jurisdiction
from which no appeal can be made, decision of an arbitrator from which no appeal
can be made, or agreement of Buyers and Seller.
2.11 Transfer Taxes. Seller shall pay all sales, use, excise or other
taxes which may be payable in connection with the sale and transfer of the
Assets.
2.12 Offers of Employment. NewCo intends to employ and agrees to make good
faith offers of employment to the employees of Seller listed on Exhibit F. All
such employees who elect to become employees of NewCo shall be provided benefits
under the Thermo Vision benefit and welfare plans for which they qualify with
credit being given under the Thermo Vision plans for time in service with
Seller.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller and Stockholder jointly and severally represent and warrant to
Buyers as follows:
3.1 Organization and Good Standing.
Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the state or other jurisdiction of its
incorporation or organization, with full corporate power and authority to
conduct its business as now being conducted, to own or use the properties and
assets that it purports to own or use in its business, and to perform all its
obligations under Applicable Contracts. Seller has no Subsidiaries.
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3.2 Authority; No Conflict.
(a) Subject to obtaining the consents set forth in Part 3.2 of the
Disclosure Schedule, Seller has the absolute and unrestricted right, power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. All corporate and other actions and proceedings to be taken by or on
the part of Seller to authorize and permit the execution and delivery by Seller
of this Agreement and the instruments required to be executed and delivered by
Seller pursuant hereto, the performance by Seller of the obligations hereunder
and the consummation by Seller of the transactions contemplated herein, have
been duly and properly taken. This Agreement has been duly executed and
delivered by Seller and constitutes the legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms.
(b) Except as set forth in Part 3.2 of the Disclosure Schedule,
neither the execution and delivery of this Agreement by Seller nor the
consummation or performance of any of the Contemplated Transactions by Seller
will, directly or indirectly (with or without notice or lapse of time): (i)
contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of Seller, or (B) any resolution adopted by the board
of directors or the stockholders of Seller; or, to the Knowledge of Seller and
Stockholder, (ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under,
any Legal Requirement or any Order to which Seller, or any of the Assets, may be
subject; (iii) contravene, conflict with, or result in a violation or breach of
any provision of, or give any Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; (iv) result in the imposition or
creation of any Encumbrance upon or with respect to any of the Assets; or (v)
entitle any employee or other Person to severance or other payments by Seller or
create any other obligation to an employee or other Person, including any
increase in benefits.
(c) Except as set forth in Part 3.2 of the Disclosure Schedule,
Seller is not and will not be required to give any notice to, make any filing
with, or obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions by Seller.
3.3 Qualification to do Business. All of the jurisdictions in which the
business of Seller requires Seller to qualify as a foreign corporation are
listed on Part 3.3 of the Disclosure Letter with a notation of those
jurisdictions in which Seller is so qualified.
3.4 Financial Statements. Seller has delivered to Buyers: (a) an unaudited
balance sheet as at December 31, 1997 (the "1997 Balance Sheet"), and the
related unaudited statements of income, cash flows and retained earnings for the
fiscal year then ended with the review report thereon of Xxxxx, Xxxxxxxxx and
Company, independent public accountants (the "1997 Income Statements") and (b)
an unaudited balance sheet as at June 30, 1998 (the "June Balance Sheet") and
the related unaudited statements of income, cash flows and retained earnings for
the six-month period then ended (the "June Income Statements"). The 1997 Balance
Sheet, the June Balance Sheet, 1997 Income Statements and the June Income
Statements are referred to collectively as the "Financial Statements". The
Financial Statements fairly present Seller's financial condition and the results
of operations and cash flows as at the respective dates of and for the periods
referred to therein all in accordance with GAAP. The Financial Statements
reflect the consistent application of such accounting principles throughout the
periods involved and are consistent with the books and records of Seller.
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3.5 Books and Records. The books of account, and other records of Seller,
all of which have been made available to Buyers, are complete and correct in all
material respects.
3.6 Title to Properties; Encumbrances. Except as set forth in Part 3.6 of
the Disclosure Schedule, Seller has valid and legally enforceable title to all
of the Assets free and clear of any Encumbrances whatsoever, and the
consummation of the Contemplated Transactions will vest in Buyers all of
Seller's right, title and interest in and to the Assets.
3.7 Condition and Sufficiency of Assets. The tangible Assets are in good
operating condition and repair, normal wear and tear excepted, and are adequate
for the uses to which they are being put, and are not in need of maintenance or
repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The Assets constitute substantially all of the
Assets used in Seller's business and are the only assets necessary for the
continued conduct of the business after the Closing in substantially the same
manner as conducted prior to the Closing. Seller does not own and has never
owned any real estate.
3.8 Accounts Receivable. All of Seller's accounts receivable are reflected
properly on its books and records in accordance with GAAP. All of Seller's
accounts receivable that are reflected on the June Balance Sheet (except for
those collected in full prior to the Closing Date) or shown on Seller's
accounting records as of the Closing Date (collectively, the "Accounts
Receivable") represent or will represent valid obligations arising from sales
actually made or services actually performed in the Ordinary Course of Business.
Unless paid prior to the Closing Date and except as set forth on Part 3.8 of the
Disclosure Schedule, the Accounts Receivable are or will be as of the Closing
Date current and collectible net of the respective reserves shown on the June
Balance Sheet or on Seller's accounting records as of the Closing Date. There is
no contest, claim, or right of set-off with any maker of an Account Receivable
relating to the amount or validity of such Account Receivable.
3.9 No Undisclosed Liabilities. Except a set forth in Part 3.9 of the
Disclosure Schedule, to the Knowledge of Seller and Stockholder, Seller has no
liabilities or obligations of any nature (whether absolute, accrued, contingent,
or otherwise), and there is no basis for the assertion against Seller of any
such liability or obligation, except for liabilities or obligations set forth,
or reserved against in, the June Balance Sheet and current liabilities incurred
in the Ordinary Course of Business since the Balance Sheet Date (none of which
liabilities results from, arises out of, or relates to, is in the nature of, or
was caused by any breach of contract, breach of warranty, tort, infringement or
violation of law).
3.10 Taxes. Except as set forth in Part 3.10 of the Disclosure Schedule,
Seller has accurately prepared and duly and timely filed all Tax Returns that it
was required to file. All such Tax Returns were correct and complete in all
respects. Seller is not the beneficiary of any extension of time within which to
file any Tax Return where the failure to file would have a Material Adverse
Effect on Seller or the Assets. All Taxes owed by Seller have been paid when
due, other than those being contested in good faith and where adequate reserves
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(determined in accordance with GAAP) have been established therefor. All Taxes
of Seller for Tax periods or portions thereof ending on or prior to the Closing
Date, including Taxes that may become payable by Seller in future periods in
respect of any transactions or sales occurring on or prior to the Closing Date,
that have not yet been paid have, in the aggregate, been adequately reflected as
a liability on Seller's books in accordance with GAAP. Seller is not currently
being audited or examined by any Governmental Body, and no deficiencies for any
Tax have been asserted against Seller that would have a Material Adverse Effect
on Seller or the Assets. Without limiting the generality of the foregoing,
Seller has withheld or collected and duly paid all Taxes required to have been
withheld or collected and paid in connection with payments to foreign persons,
sales and use Tax obligations, and amounts paid or owing to or on behalf of any
employee, independent contractor, creditor, stockholder or other Person.
3.11 Employee Benefits. Part 3.11 of the Disclosure Schedule contains a
true, correct and complete list of all benefit plans (as defined in Section 3(3)
of ERISA) and all pension, benefit, profit sharing, retirement, deferred
compensation, welfare, insurance, disability, bonus, vacation pay, severance pay
and other similar plans, programs and agreements, whether reduced to writing or
not, relating to any of Seller's employees (the "Plans"). Seller has performed
all obligations required to be performed by it under, and is not in violation of
any of the Plans as they relate to Seller's employees. There are no pending or,
to the Knowledge of Seller or Stockholder, Threatened Proceedings by employees
or former employees, or beneficiaries or spouses of any of the above, involving
any Plan.
3.12 Compliance with Legal Requirements;
(a) Except as set forth in Part 3.12 of the Disclosure Schedule: (i)
to the Knowledge of Seller and Stockholder, Seller is, and at all times has
been, in compliance in all material respects with each Legal Requirement that is
or was applicable to it or to the conduct or operation of its business or the
ownership or use of any of its assets ; (ii) to the Knowledge of Seller and
Stockholder, no event has occurred or circumstance exists that (with or without
notice or lapse of time) may constitute or result in a violation by Seller of,
or a failure on the part of Seller to comply with, any Legal Requirement; (iii)
Seller has not received, any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding any actual,
alleged, possible, or potential violation of, or failure to comply with, any
Legal Requirement by it.
(b) Seller has obtained all Governmental Authorizations reasonably
necessary for the conduct of its business as currently conducted. Except as set
forth in Part 3.12 of the Disclosure Schedule: (i) Seller is, and at all times
has been, in compliance in all material respects with each such Governmental
Authorization, (ii) no event has occurred or circumstance exists that may (with
or without notice or lapse of time) constitute or result directly or indirectly
in a violation of or a failure to comply with any term or requirement of any
such Governmental Authorization; (iii) Seller has not received any notice or
other communication (whether oral or written) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible, or potential violation
of or failure to comply with any term or requirement of any such Governmental
Authorization, or (B) any actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to any
such Governmental Authorization; and (iv) the rights of Seller under such
Governmental Authorizations shall not be affected by the consummation of the
Contemplated Transactions.
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3.13 Legal Proceedings; Orders.
(a) Except as set forth in Part 3.13 of the Disclosure Schedule, to
Seller's and Stockholder's Knowledge, there is no pending Proceeding: (i) that
has been commenced by or against Seller or that otherwise relates to or may
affect, Seller or the Assets, or (ii) that challenges, or that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the Contemplated Transactions. To the Knowledge of Seller and
Stockholder, (A) no such Proceeding has been Threatened, and (B) no event has
occurred or circumstance exists that may give rise to or serve as a basis for
the commencement of any such Proceeding.
(b) Except as set forth in Part 3.13 of the Disclosure Schedule
there is no Order to which Seller or any of the Assets is subject. Seller is in
compliance in all material respects with all of the terms and requirements of
each Order to which Seller or any Assets are subject.
3.14 Absence of Certain Changes and Events. Except as set forth in Part
3.14 of the Disclosure Schedule, since the date of the June Balance Sheet,
Seller has conducted its business only in the Ordinary Course of Business and
there has not been any:
(a) except in the Ordinary Course of Business, payment or increase
by Seller of any bonuses, salaries, commissions or other compensation to any
employee or entry into any employment, severance, or similar Applicable Contract
with any employee;
(b) adoption of, or increase in the payments to or benefits under,
any profit sharing, bonus, deferred compensation, savings, insurance, pension,
retirement, or other employee benefit plan for or with any employees;
(c) damage to or destruction or loss of any of Seller's assets or
property, whether or not covered by insurance, having a Material Adverse Effect
on Seller;
(d) except in the Ordinary Course of Business, sale, lease, or other
disposition of any of Seller's assets or property or mortgage, pledge, or
imposition of any Encumbrance on any asset or property of Sellers;
(e) cancellation or waiver of any claims or rights with a value to
Sellers in excess of $10,000;
(f) material change in the accounting methods used by Seller in
maintaining records and reporting results of Seller's operations (it being
understood and acknowledged by all parties that the method for accounting for
inventory will be changed by Buyers immediately following the Closing);
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(g) change in the financial condition, assets, liabilities,
earnings, business or prospects of Seller having a Material Adverse Effect;
(h) indebtedness or other liability or obligation (whether absolute,
accrued, contingent or otherwise) incurred, or other transaction (except that
reflected in this Agreement) engaged in, by Seller, except those in the Ordinary
Course of Business which are individually less than $10,000 in amount and in the
aggregate less than $25,000 in amount;
(i) acquisition on behalf of Seller of any assets other than in the
Ordinary Course of Business;
(j) material reduction in the rate of, or gross margins associated
with, bookings or orders for Seller's products or services; or
(k) agreement, whether oral or written, to do any of the foregoing.
3.15 Contracts; No Defaults.
(a) Seller has delivered to Buyers true and complete copies of all
of the written Applicable Contracts. Part 3.15(a) of the Disclosure Schedule
contains a complete and accurate description of each of the following Applicable
Contracts, whether oral or written: (i) each agreement that involves aggregate
future payments by Seller of more than $10,000; (ii) each distributorship, sales
agency, franchise, joint venture or partnership agreement; (iii) each agreement
not made in the Ordinary Course of Business which is to be performed after the
Closing; (iv) each outstanding commitment to make a capital expenditure, capital
addition or capital improvement involving an amount in excess of $5,000; (v)
each real or personal property lease requiring payments of more than $10,000 in
the aggregate; (vi) each agreement relating to the loan of money or availability
of credit to or from Seller; (vii) each agreement limiting the freedom of Seller
to compete in the line of business of Seller or with any Person engaged in a
business similar to Seller's; (viii) each Applicable Contract between Seller and
any present or former employee; (ix) each license agreement relating to patents,
trademarks, know-how or other intellectual property included in the Assets,
whether as licensee or licensor; (x) each collective bargaining agreement or
other contract or commitment to or with any labor union or other group of
employees representing the employees; (xi) each mortgage, pledge, security,
title retention, or similar agreement encumbering any of the Assets for more
than $10,000; (xii) each agreement providing for payments to or by any Person
based on sales, purchases, revenues, profits or assets; (xiii) each guaranty or
similar undertaking by Seller with respect to the obligations of any other
Person for more than $10,000; (xiv) each agreement relating to the acquisition
or disposition of significant assets, businesses or companies within the past
five years; and (xv) each other agreement requiring payments of more than
$10,000 in the aggregate which cannot be terminated by Seller within one year
after the date hereof without penalty or under which the consequences of a
default or termination would have a Material Adverse Effect. Exhibit D contains
a complete list of Applicable Contracts that require a third party to consent to
their transfer to Buyers.
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(b) Except as set forth in Part 3.15(b) of the Disclosure Schedule,
to the Knowledge of Seller and Stockholder, each Applicable Contract is in full
force and effect and is valid and enforceable against Seller in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting rights of creditors
generally. Except as set forth in Part 3.15(b) of the Disclosure Schedule: (i)
Seller is, and at all times has been, in compliance in all material respects
with all applicable terms and requirements of each Applicable Contract; (ii) to
the Knowledge of Seller and Stockholder, each other Person that has any
obligation or liability under any Applicable Contract is, and at all times has
been, in compliance in all material respects with all applicable terms and
requirements of such Applicable Contract and no such Person is insolvent or
involved in bankruptcy, insolvency or other Proceedings to enforce creditors
rights generally nor is any such Proceeding Threatened; and (iii) Seller has not
given to or received from any other Person, at any time, any notice or other
communication (whether oral or written) regarding any actual, alleged, possible,
or potential violation or breach of, or default under, any Applicable Contract.
(c) There are no renegotiations of, attempts to renegotiate, or
outstanding rights to renegotiate any material amounts paid or payable to Seller
under Applicable Contracts with any Person having the contractual or statutory
right to demand or require such renegotiation and no such Person has made
written demand for such renegotiation.
3.16 Insurance. Part 3.16 of the Disclosure Schedule sets forth a list
(including the name of the insurer, the name of the policyholder, the name of
each insured, the policy number and periods of coverage, and the scope of
coverage) of all policies of fire, theft, casualty, liability, burglary,
fidelity, workers compensation, business interruption, environmental, product
liability, automobile and other forms of insurance covering Seller and its
operations under which Seller is the beneficiary, including any self-insurance
arrangement affecting Seller. Seller has not received any notice from any
insurer under any such policy disclaiming coverage or canceling or materially
amending any such policy. Such policies or extensions or renewals thereof in
such amounts will be outstanding and in full force and effect without
interruption until the Closing Date. Seller has paid all premiums due, and has
otherwise performed all of its material obligations under, each such policy.
Seller has given proper and timely notice to the insurer of all claims that may
be insured under such policies. Seller has delivered true and complete copies of
all such insurance policies to Buyers
3.17 Environmental Matters. Except as set forth in Part 3.17 of the
Disclosure Schedule:
(a) Seller is in substantial compliance with all Environmental Laws.
Seller has no basis to expect, nor has it or, to the Knowledge of Seller and
Stockholder any other Person for whose conduct it is responsible received, any
actual or Threatened order, notice, or other communication from (i) any
Governmental Body or private citizen acting in the public interest, (ii) the
current or prior owner or operator of any Facilities, or (iii) any other Person,
of any actual or potential violation or failure to comply with any Environmental
Law, or of any actual or Threatened obligation of Seller to undertake or bear
the cost of any Environmental, Health and Safety Liabilities with respect to any
of the Facilities or any other properties or assets (whether real, personal, or
mixed) in which Seller (or any predecessor) has or had an interest, or with
respect to any property or facility at or to or from which Hazardous Materials
were generated, manufactured, refined, transferred, imported, used, transported
or processed by Seller (or any predecessor), or any other Person for whose
conduct Seller is responsible.
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(b) There are no pending or, to the Knowledge of Seller and
Stockholder, Threatened claims, Encumbrances, or other restrictions of any
nature, resulting from any Environmental, Health and Safety Liabilities or
arising under or pursuant to any Environmental Law, with respect to or affecting
any of the Facilities or any other properties and assets (whether real,
personal, or mixed) in which Seller (or any predecessor) has or had an interest.
(c) Neither Seller nor, to the Knowledge of Seller and Stockholder,
any other Person for whose conduct Seller is responsible, has any Environmental,
Health and Safety Liabilities with respect to the Facilities or any other
properties and assets (whether real, personal, or mixed) in which Seller (or any
predecessor) has or had an interest, or at any property geologically or
hydrologically adjoining the Facilities or any other property or assets.
(d) To the Knowledge of Seller and Stockholder, there has been no
Release or Threat of Release, of any Hazardous Materials (i) at or from the
Facilities or at any other locations where any Hazardous Materials were
generated, manufactured, refined, transferred, transported, produced, imported,
used, or processed or (ii) any property geologically or hydrologically adjoining
the Facilities in which Seller has an interest.
(e) Seller has delivered to Buyers true and complete copies and
results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by Seller pertaining to Hazardous Materials or Hazardous Activities
in, on, or under the Facilities, or concerning compliance by Seller, or any
other Person for whose conduct Seller is responsible, with Environmental Laws or
Occupational Safety and Health Laws in connection with the operation of Seller's
business.
(f) Part 3.17 of the Disclosure Schedule sets forth or describes in
reasonable detail: (i) all landfills, surface impoundments, pits, underground
injections xxxxx, waste piles, incinerators and any other units used by Seller
(or any predecessor) for the handling, treatment, recycling, storage or disposal
of Hazardous Materials and (ii) all underground or above-ground storage tanks at
the Facilities.
(g) This Section 3.17 contains the sole and exclusive
representations and warranties of the Seller with respect to any Environmental
Health and Safety Liabilities, Environmental Law, Occupational Safety and Health
Law and Hazardous Activity, including without limitation, any matter arising out
of federal, state and local environmental legal
requirements.
3.18 Labor Disputes; Compliance. Seller has not been a party to any
collective bargaining or other labor Contract applicable to Seller. There has
never been, there is not presently pending or existing, and to the Knowledge of
Seller and Stockholder there is not Threatened, any strike, slowdown, picketing,
work stoppage, labor arbitration or proceeding in respect of the grievance of
any employee, application or complaint filed by an employee or union
representing such employees with the National Labor Relations Board or any
comparable Governmental Body, organizational activity, or other labor dispute,
in each case, against or affecting Seller's operations, the Assets or the
Facilities, and no application for certification of a collective bargaining
agent on behalf of Seller's employees is pending or to the Knowledge of Seller
or Stockholder is Threatened. To the Knowledge of Seller and Stockholder, no
event has occurred or circumstance exists with respect to Seller's business that
would provide the basis for any work stoppage or other labor dispute between
Seller and its employees. There is no lockout of any employees by Seller, and no
such action is contemplated by Seller.
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3.19 Intellectual Property. Except as set forth in Part 3.19 of the
Disclosure Schedule, Seller owns or has adequate licenses to use, free and clear
of any Encumbrance of which Seller has Knowledge and free from any obligation of
payment, all patents, trademarks, trade names, service marks, branch names and
copyrights, and applications therefor, used in the conduct of Seller's business
or the use of which is necessary for the conduct of Seller's business as
presently conducted (the "Intangibles"). Set forth in Part 3.19 of the
Disclosure Schedule is a complete list and summary description of all
Intangibles and licenses or sublicenses entered into or granted by or to Seller
with respect thereto and the countries of registration. Seller owns or possesses
adequate rights to use, free and clear of any Encumbrance of which Seller has
Knowledge and from any obligation of payment, all inventions, technology,
technical know-how, processes, designs, trade secrets, vendor and customer lists
and other confidential information required or used by Seller in its business as
presently conducted ("Trade Secrets"). No Person has made any claim or demand
upon Seller pertaining to, and no Proceedings are pending, or, to the Knowledge
of Seller or Stockholder, Threatened, which challenge the rights of Seller in
respect of any Intangibles or Trade Secrets. No Intangible owned or used by
Seller is subject to any Order. To the Knowledge of Seller and Stockholder,
Seller has not infringed or engaged in the unauthorized use of, or violated any
confidentiality agreement that pertains to, any patent, trademark, trade name,
service xxxx, brand name or copyright, or any invention, technology, technical
know-how, process, design, trade secret or other intellectual property of
another Person. To the Knowledge of Seller and Stockholder, there has been no
infringement or unauthorized use of any Intangible or Trade Secret by any other
Person. All Assets used for information processing management and/or services
("Information Technology") which are material to the conduct of Seller's
business as presently conducted can accurately process time/date including, but
not limited to, calculating, comparing and sequencing) from, into and between
the twentieth and twenty-first centuries and the years 1999 and 2000, including:
(i) leap year calculations and (ii) if such functionality is currently contained
in the Information Technology, accurate derivation of the day of the week.
3.20 Disclosure. To the Knowledge of Seller and Stockholder, no
representation or warranty of Seller in this Agreement and no statement in the
Disclosure Schedule omits to state a material fact necessary to make the
statements herein or therein, in light of the circumstances in which they were
made, not misleading.
3.21 Relationships with Related Persons. Except as set forth in Part 3.21
of the Disclosure Schedule, no Related Person of Seller has any interest in any
property (whether real, personal, or mixed and whether tangible or intangible)
used in or pertaining to Seller's business.
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3.22 Brokers or Finders. Neither Seller nor its officers or agents have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
the Contemplated Transactions except with New England Business Exchange and
Seller will indemnify and hold Buyers harmless from any such payments due and
alleged to be due from New England Business Exchange or otherwise by or through
Seller as a result of the actions of Seller or its officers or agents.
3.23 No Termination of Relationship. To the Knowledge of Seller and
Stockholder, except as set forth in Part 3.23 of the Disclosure Schedule, no
relationship between Seller and a distributor, customer, supplier, lender, or
other Person (other than employees who elect not to accept NewCo's offer of
employment) will be terminated or adversely affected as a result of the
execution of this Agreement or the performance of the Contemplated Transactions.
3.24 Customers and Suppliers. No unfilled customer orders or commitments
obligating Seller to process, manufacture or deliver products or perform
services, which orders or commitments are material, individually or in the
aggregate, to Seller will result in a material loss to Seller upon completion of
performance. No purchase orders or commitments of Seller, which orders or
commitments are material, individually or in the aggregate, to Seller, are
materially in excess of normal requirements for Seller, nor are prices provided
therein materially in excess of current market prices for the products or
services to be provided thereunder. No material supplier of Seller has indicated
within the past year that it will stop, or materially decrease the rate of,
supplying materials, products, or services to Seller and, except as set forth in
Part 3.24 of the Disclosure Schedule, no material customer of Seller has
indicated within the past year that it will stop, or materially decrease the
rate of, buying materials, products or services from Seller. Part 3.24 of the
Disclosure Schedule sets forth a list of (a) each customer that accounted for
more than 5% of Seller's combined revenues during the last fiscal year and (b)
each supplier that is the sole supplier of any product or component that is
significant to Seller's business.
3.25 Recalls. No products of Seller have ever been recalled and, to the
Knowledge of Seller and Stockholder, there is no basis for any such recall.
3.26 Backlog. Seller's backlog as of the Closing Date is greater than or
equal to $1,000,000. For purposes of this Section 3.26, "backlog" means all firm
orders and commitments for products and services and contain terms and
conditions that are consistent with Seller's practices over the past year.
3.27 Inventories. All Inventories (as defined below) are of a quality and
quantity usable and salable in the Ordinary Course of Business. Items included
in such Inventories are carried on Seller' books in accordance with prior
practices as set forth in the June Balance Sheet. The term "Inventories"
includes all stock of raw materials, work-in-process and finished goods held by
Seller for manufacturing, assembly, processing, finishing, and sale or resale to
others.
3.28 Product and Service Warranties. Seller has provided Buyers with
copies of the current standard warranty used for each of Seller's products and
services. Part 3.28 of the Disclosure Schedule describes any and all other
product or service warranties made by or on behalf of Seller that deviate
materially from the current standard warranties and which remain in effect on
the date hereof, or pursuant to which Seller has any remaining obligations.
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4. REPRESENTATIONS AND WARRANTIES OF BUYERS
Buyers jointly and severally represent and warrant to Seller and
Stockholder as follows:
4.1 Organization and Good Standing. Each of Buyers is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware.
4.2 Authority; No Conflict.
(a) Each of Buyers has the absolute and unrestricted right, power,
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement. All corporate and other actions and
proceedings to be taken by or on the part of each of Buyers to authorize and
permit the execution and delivery by it of this Agreement and the instruments
required to be executed and delivered by it pursuant hereto, the performance by
it of its obligations hereunder and the consummation by it of the transactions
contemplated herein, have been duly and properly taken. This Agreement has been
duly executed and delivered by each of Buyers and constitutes the legal, valid,
and binding obligation of each of Buyers, enforceable against Buyers in
accordance with its terms.
(b) Neither the execution and delivery of this Agreement by Buyers
nor the consummation or performance of any of the Contemplated Transactions by
Buyers will, directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of (A) any provision of
the Organizational Documents of either Buyer or any agreement which it or its
assets may be subject, or (B) any resolution adopted by the board of directors
or the stockholders of either Buyer; or (ii) contravene, conflict with, or
result in a violation of, or give any Governmental Body or other Person the
right to challenge, any of the Contemplated Transactions or to exercise any
remedy or obtain any relief under, any Legal Requirement or any Order to which
either Buyer may be subject.
(c) Neither Buyer is nor will it be required to give any notice to,
make any filing with or obtain any Consent from any Person in connection with
the execution and delivery of this Agreement by it or the consummation or
performance of any of the Contemplated Transactions by it except as has been
given, made or obtained on or prior to the Closing Date.
4.3 Certain Proceedings. There is no pending Proceeding that has been
commenced against Buyers and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyers' Knowledge, no such Proceeding has been
Threatened and no event has occurred or circumstance exists that may give rise
to or serve as a basis for commencement of any such Proceeding.
4.4 Brokers and Finders. Neither of Buyers nor their respective officers
and agents have incurred any obligation or liability, contingent or otherwise,
for brokerage or finders' fees or agents' commissions or other similar payment
in connection with the Contemplated Transaction and Buyers will indemnify and
hold Seller harmless from any such payment alleged to be due by or through
Buyers as a result of the action of either of Buyers or their respective
officers or agents.
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4.5 Disclosures. To the Knowledge of Buyers, no representation or warranty
of Buyers in this Agreement omits to state a material fact necessary to make the
statements herein, in light of the circumstances in which they were made, not
misleading.
5. INDEMNIFICATION; REMEDIES
5.1 Survival. All representations, warranties, covenants, and obligations
in this Agreement, the Disclosure Schedule and any other certificate or document
delivered pursuant to this Agreement will survive the Closing for the respective
periods specified therefor in this Agreement; the right to indemnification,
reimbursement, or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any Knowledge acquired (or capable of being acquired) about
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant, or obligation.
5.2 Indemnification and Reimbursement by Seller and Stockholder. Seller
and Stockholder will jointly and severally indemnify and hold harmless each of
Buyers, their respective representatives, stockholders, controlling persons, and
affiliates (collectively, the "Buyer Indemnified Persons"), and will reimburse
the Buyer Indemnified Persons, for any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable attorneys' fees)
(collectively, "Damages"), arising from or in connection with any Breach of any
representation or warranty made by Seller in this Agreement.
5.3 Indemnification and Reimbursement by Buyers. Buyers will jointly and
severally indemnify and hold harmless Seller, its representatives, stockholders,
controlling persons and affiliates (collectively "Seller Indemnified Persons"),
and will reimburse Seller Indemnified Persons for any Damages arising from or in
connection with any Breach of any representation or warranty made by Buyers in
this Agreement.
5.4 Time Limitations. Seller will have no liability for indemnification
under Section 5.2 with respect to any representation or warranty in Section 3,
other than those in Sections 3.10 and 3.17 unless, on or before the second
anniversary of the Closing Date, Seller is given notice of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known by
Buyers. Seller will have no liability for indemnification under Section 5.2 with
respect to Section 3.10 unless, on or before the third anniversary of the
Closing Date, Seller is given notice of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Buyers. Seller will
have no liability for indemnification under Section 5.2 with respect to Section
3.17 unless on or before the expiration of the applicable statute of limitations
Seller is given notice of a claim specifying the factual basis of that claim in
reasonable detail to the extent then known by Buyers. Buyers will have no
liability for indemnification under Section 5.3 with respect to any
representation or warranty in Section 4 unless, on or before the second
anniversary of the Closing Date, Buyers are given notice of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known by
Seller.
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5.5 Limitation on Amount. Seller and Stockholder shall have no indemnity
obligations to Buyers, joint or several, unless and until the aggregate
cumulative amount for which Buyers are entitled to indemnity hereunder exceeds
$100,000, whereupon Buyers shall be entitled to recover the entire aggregate
cumulative amount of all indemnity claims for which it is entitled to recover
hereunder. In no event shall the indemnity obligations, joint or several, of
Seller and Stockholder to Buyers under this Agreement exceed $1,500,000.
5.6 Procedures for Indemnification -- Third Party Claims.
(a) Promptly after receipt by a Buyer Indemnified Person or a Seller
Indemnified Person (an "Indemnified Person") under Section 5.2 or Section 5.3 of
notice of the commencement of any Proceeding against it for which a claim is to
be made against an indemnifying party under such Section, the Indemnified Person
will give notice to the indemnifying party of the commencement of such
Proceeding, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any Indemnified
Person, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the Indemnified Person's failure to give
such notice.
(b) If any Proceeding referred to in Section 5.6(a) is brought
against an Indemnified Person and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the Indemnified Person
determines in good faith that joint representation would be inappropriate, or
(ii) the indemnifying party fails to provide reasonable assurance to the
Indemnified Person of its financial capacity to defend such Proceeding and
provide indemnification with respect to such Proceeding), to assume the defense
of such Proceeding with counsel reasonably satisfactory to the Indemnified
Person and, after notice from the indemnifying party to the Indemnified Person
of its election to assume the defense of such Proceeding, the indemnifying party
will not, as long as it diligently conducts such defense, be liable to the
Indemnified Person under this Section 5 for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the Indemnified Person in connection with the defense
of such Proceeding, other than reasonable costs of investigation.
(c) If the indemnifying party assumes the defense of a Proceeding
referred to in Section 5.6(a), (i) it will be conclusively established for
purposes of this Agreement that the claims made in that Proceeding are within
the scope of and subject to indemnification hereunder; (ii) no compromise or
settlement of such claims may be effected by the indemnifying party without the
Indemnified Person's consent (which will not be unreasonably withheld) unless
(A) there is no finding or admission of any violation of Legal Requirements by
the Indemnified Person or any violation of the rights by the Indemnified Person
of any Person and no effect on any other claims that may be made against the
Indemnified Person, and (B) the sole relief provided is monetary damages that
are paid in full by the indemnifying party; and (iii) the Indemnified Person
will have no liability with respect to any compromise or settlement of such
claims effected without its consent (which will not be unreasonably withheld).
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(d) If notice is given to an indemnifying party of the commencement
of any Proceeding referred to in Section 5.6(a) and the indemnifying party does
not, within ten business days after the Indemnified Person's notice is given,
give notice to the Indemnified Person of its election to assume the defense of
such Proceeding, the indemnifying party will be bound by any determination made
in such Proceeding or any compromise or settlement effected by the Indemnified
Person.
(e) Notwithstanding the foregoing, if a customer or a supplier of
Seller asserts that either of Buyers is liable to such customer or supplier for
a monetary obligation which may constitute or result in Damages for which Buyers
may be entitled to indemnification pursuant to this Section 5 and Buyers
reasonably determine that there is a valid business reason to fulfill such
obligations, then (i) Buyers shall be entitled to satisfy such obligations
without prior notice to or consent from Seller, (ii) Buyers may make a claim for
indemnification pursuant to this Section 5 and (iii) Buyers shall be reimbursed,
in accordance with the provisions of this Section 5, for any Damages for which
they are entitled to indemnification pursuant to the provisions of this Section
5; provided, however, that if Buyers make a claim for indemnification in
accordance with this sentence Seller shall not be deemed to have waived any
defense to such claim by Buyers.
(f) Notwithstanding the foregoing, if an Indemnified Person
reasonably determines in good faith that there is a reasonable probability that
a Proceeding will adversely affect it or its Related Persons other than as a
result of monetary damages for which it would be entitled to indemnification
under this Agreement, the Indemnified Person may, by notice to the indemnifying
party, assume the exclusive right to defend, compromise, or settle such
Proceeding, but the indemnifying party will not be bound by any determination of
a Proceeding so defended or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
(g) Buyers and Seller hereby consent to the non-exclusive
jurisdiction of any court in which a Proceeding is brought against an
Indemnified Person for purposes of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding or the matters alleged
therein, and agrees that process may be served on Seller with respect to such a
claim anywhere in the world.
(h) With respect to any Proceeding subject to indemnification under
this Section 5: (i) both the Indemnified Person and the indemnifying party, as
the case may be, shall be kept fully informed of the Proceeding at all stages
thereof where such party is not represented by its own counsel, and (ii) the
parties agree to render to each other such assistance as they may reasonably
require of each other and to cooperate in good faith with each other in order to
ensure the proper and adequate defense of any Proceeding brought by any third
party.
(i) With respect to any Proceeding subject to indemnification under
this Section 5, the parties agree to cooperate in such a manner as to preserve
in full (to the extent possible) the confidentiality of all confidential
business records and the attorney-client and work-product privileges. In
connection therewith, each party agrees that: (i) it will use its best efforts,
in any Proceeding in which it has assumed or participated in the defense, to
avoid production of confidential business records (consistent with applicable
law and rules of procedure), and (ii) all communications between any party
hereto and counsel responsible for or participating in the defense of any
Proceeding shall, to the extent possible, be made so as to reserve any
applicable attorney-client or work-product privilege.
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5.7 Procedure for Indemnification -- Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
6. GENERAL PROVISIONS
6.1 Expenses. Except as otherwise expressly provided in this Agreement,
each party will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be subject to any rights
of such party arising from a breach of this Agreement by another party.
6.2 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, by Buyers only with the consent of Seller, and by Seller, only with
the consent of Buyers, none of which consents will unreasonably be withheld;
provided, however, that either of Buyers or Seller may make any public
disclosure it believes in good faith is required by law or regulation. The
content of any public announcement by Buyers will be subject to review and
approval by Seller, and the content of any public announcement by Seller will be
subject to review and approval by Buyers, none of which approvals will
unreasonably be withheld. Seller and Buyers will consult with each other
concerning the means by which Seller's employees, customers, and suppliers and
others having dealings with Seller will be informed of the Contemplated
Transactions, and Buyers will have the right to be present for any such
communication.
6.3 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given immediately if sent by confirmed facsimile transmission, when actually
received or if earlier, one day after deposit with a nationally recognized
overnight delivery service, charges prepaid, or three days after deposit in the
U.S. mail by certified mail, return receipt requested, postage prepaid, in each
case to the appropriate addresses and telecopier numbers set forth below (or to
such other addresses and telecopier numbers a party may designate by notice to
the other party):
Seller:
Xxxxxx Xxxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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with a copy to:
Peabody & Xxxxxx LLP
00 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Buyers:
Thermo Vision Corporation
0X Xxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention : President
Telecopy No.: (000) 000-0000
with a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: General Counsel
Telecopy No.: (000) 000-0000
6.4 Jurisdiction; Service of Process. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may be brought against any of the parties in the courts of the Commonwealth of
Massachusetts, or, if it has or can acquire jurisdiction, in the United States
District Court for the District of Massachusetts and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
6.5 Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
6.6 Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other parties; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
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6.7 Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
6.8 Disclosure Schedule. In the event of any inconsistency between the
statements in the body of this Agreement and those in the Disclosure Schedule
(other than an exception expressly set forth as such in the Disclosure Schedule
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
6.9 Assignments, Successors, and Third-Party Rights. No party hereto may
assign any of its rights under this Agreement without the prior written consent
of the other party. This Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
parties. Nothing expressed or referred to in this Agreement will be construed to
give any Person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
6.10 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
6.11 Section Headings; Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Sections" refer to the corresponding
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
6.12 Time of Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
6.13 Governing Law. This Agreement will be governed by and construed under
the laws of the Commonwealth of Massachusetts without regard to conflicts of
laws principles.
6.14 Relief. In the event of a breach of the provisions of this Agreement
by Seller or Stockholder, in addition to any other rights and remedies that
Buyers may have under law or in equity, Buyers shall have the right to specific
performance and injunctive relief, it being acknowledged and agreed that money
damages will not provide an adequate remedy. In the event litigation is
maintained by a party to this Agreement against any other party to enforce this
Agreement or to seek any remedy for breach, then the party prevailing in such
litigation shall be entitled to recover from the non-prevailing party reasonable
attorneys' fees and costs of suit.
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6.15 Access to Historical Financial Information. Seller shall make
available, and direct and authorize its independent public accountants to make
available, to Buyers and to the independent public accountants representing
Buyers, all working papers pertaining to the examination by Seller's accountants
of Seller's accounting records, and shall provide such cooperation as Buyers
shall reasonably request in connection with Buyers's preparation of any
financial statements relating to the Assets required to be included in any
filing made by Buyers or any affiliate of Buyers with the Securities and
Exchange Commission pursuant to the Securities Act or the Exchange Act.
6.16 Termination of Retirement Plan. Seller and Stockholder agree to take
all steps necessary to terminate Seller's simple XXX Retirement Plan effective
as of the Closing Date.
6.17 Liquidation. Stockholder agrees to cause the complete liquidation of
Seller on or before May 1, 1999.
6.18 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BUYERS:
THERMO VISION CORPORATION
By: /s/ Xxxxxxxx Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxx Xxxxxxx
Title: President
THERMO VISION OPTICON CORPORATION,
By: /s/ Xxxxxxxx Xxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxxx Xxxxx Xxxxxxx
Title: President
SELLER:
OPTICON CORP.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President
STOCKHOLDER:
/s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx
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