RECAPITALIZATION AGREEMENT
Among
BAUSCH & LOMB INCORPORATED,
ENDOSAFE, INC.,
CRL HOLDINGS, INC.,
XXXXXXX RIVER LABORATORIES, INC., XXXXXXX RIVER SPAFAS, INC.,
BAUSCH & LOMB INTERNATIONAL, INC.,
WILMINGTON PARTNERS, L.P.,
BAUSCH & LOMB CANADA, INC.,
CRL ACQUISITION LLC
and
DLJ MERCHANT BANKING PARTNERS II, L.P.
Dated as of July 25, 1999
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS, ETC. 2
1.1 Definitions 2
1.2 Construction. 14
1.3 Accounting Conventions 15
1.4 Disclosure Schedule 15
ARTICLE 2 REORGANIZATION, MERGER RECAPITALIZATION,
REDEMPTIONS AND CLOSING 15
2.1 Reorganization; Merger 15
2.2 Recapitalization of Recap Co 16
2.3 Redemptions 16
2.4 Closing 17
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER PARENT 17
3.1 Organization, Good Standing and Power 17
3.2 Authorization and Validity 18
3.3 Capitalization of Recap Subco and Recap Subsidiaries 18
3.4 Consent and Approvals; No Conflict 19
3.5 Purchased Shares in Merger 19
3.6 Financial Statements. 19
3.7 Absence of Undisclosed Liabilities 20
3.8 Absence of Certain Changes 20
3.9 Entire CRL Business 21
3.10 Legal Proceedings 21
3.11 Employees and Labor Relations Matters. 22
3.12 CRL Business Tangible Assets; Real Property. 22
3.13 Intellectual Property 23
3.14 Compliance with Applicable Laws 23
3.15 Employee Benefit Plans. 24
3.16 Environmental Matters 26
3.17 Tax Matters. 27
3.18 Contracts 27
3.19 Certain Fees 28
3.20 Year 2000 28
3.21 Insider Interests; Intercompany Transactions 28
3.22 No Other Representations or Warranties 28
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER
AND BUYER PARENT 29
4.1 Organization, Good Standing and Power 29
4.2 Authorization and Validity of Agreements 29
4.3 Consents and Approvals; No Conflict 29
4.4 Legal Proceedings 30
4.5 Certain Fees 30
4.6 Financing 30
4.7 Access and Investigation 30
4.8 No Other Representations or Warranties 31
ARTICLE 5 COVENANTS OF THE PARTIES 31
5.1 Access to Information; Confidentiality 31
5.2 Approvals under Competition Laws. 32
5.3 Conduct of the CRL Business Pending the Closing Date 32
5.4 Consents 33
5.5 Tax Matters. 34
5.6 Employee Matters. 35
5.7 Additional Assurances. 36
5.8 Updated Disclosure Schedule 37
5.9 Buyer's Insurance 38
5.10 Cash Management 38
5.11 Company Acquisition Proposal 38
5.12 Books and Records 39
5.13 Use of Names 39
5.14 Commitment Letters 39
5.15 Broekman Sale 39
5.16 Stage I Reorganization Matters 40
5.17 Confidential Information 40
5.18 Closing Efforts 40
5.19 Interim Financial Statements 40
5.20 Financial Assurances 41
5.21 Financial Statements. 41
5.22 Net Underfunding Amount 42
ARTICLE 6 CONDITIONS TO CLOSING 42
6.1 Conditions to Obligations of Buyer and Seller Parent and
Recap Co 42
6.2 Conditions to Obligations of Buyer 43
6.3 Conditions to Obligations of Seller Parent, the Sellers,
Recap Co and Recap Subco 45
ARTICLE 7 TERMINATION AND ABANDONMENT 45
7.1 Termination. 45
7.2 Effect of Termination and Abandonment 46
ARTICLE 8 SURVIVAL AND INDEMNIFICATION 47
8.1 Survival of Representations, Warranties and Covenants 47
8.2 Indemnification by Seller Parent 47
8.3 Indemnification by Recap Co 47
8.4 Certain Limitations on Indemnities 48
8.5 Procedure 49
8.6 No Consequential Damages 50
8.7 Exclusive Remedy 50
8.8 Validity 50
8.9 Waiver 51
ARTICLE 9 MISCELLANEOUS 51
9.1 Public Announcement 51
9.2 Expenses 51
9.3 Transfer Taxes and Recording Expenses 52
9.4 Knowledge 52
9.5 Notices 52
9.6 Severability 54
9.7 Specific Performance 54
9.8 No Conflict of Interest 54
9.9 Binding Effect; Benefit 54
9.10 Assignability 54
9.11 Amendment, Waiver 55
9.12 Section Headings 55
9.13 Counterparts 55
9.14 Applicable Law 55
9.15 Submission to Jurisdiction 55
9.16 Entire Agreement 56
RECAPITALIZATION AGREEMENT
This Recapitalization Agreement is made as of the 25th day
of July, 1999, by and among Bausch & Lomb Incorporated, a New
York corporation ("Seller Parent"), Endosafe, Inc., a Delaware
corporation ("Recap Co"), CRL Holdings, Inc., a Delaware
corporation ("Recap Subco"), Xxxxxxx River Laboratories, Inc., a
Delaware corporation ("CRL"), Xxxxxxx River SPAFAS, Inc., a
Delaware corporation ("SPAFAS"), Bausch & Lomb International,
Inc., a New York corporation ("International"), Wilmington
Partners, L.P., a Delaware limited partnership ("WPLP"), Bausch &
Lomb Canada, Inc., a Canadian corporation ("Parent Canada"), CRL
Acquisition LLC, a Delaware limited liability company ("Buyer"),
and DLJ Merchant Banking Partners II, L.P., a Delaware limited
partnership ("Buyer Parent"). Certain terms which are
capitalized in this Agreement are used with the meanings ascribed
thereto in Section 1.1.
RECITALS
Recap Subco, directly and through its direct and indirect
subsidiaries, together with WPLP and Parent Canada, are engaged
in the CRL Business.
Seller Parent, through CRL, SPAFAS and International, owns
all of the issued and outstanding shares of capital stock of
Recap Subco.
Immediately prior to the Closing, Seller Parent, WPLP and
Parent Canada shall cause the reorganization to occur so that at
the Closing, (i) Recap Subco, or a subsidiary thereof, shall own
all of the assets used in the CRL Business (other than the
Excluded Assets), (ii) Recap Subco shall be a wholly owned
subsidiary of Recap Co and (iii) CRL, SPAFAS, International and
WPLP shall own all of the issued and outstanding shares of
capital stock of Recap Co.
Immediately prior to the Closing, Buyer Parent shall cause
Buyer to be capitalized with at least $90,000,000, Acquisition Co
to be formed and capitalized by Buyer with at least $90,000,000
and Acquisition Co to be merged with and into Recap Co.
Upon the terms and subject to the conditions set forth in
this Agreement, at the Closing, Seller Parent shall cause Recap
Co and Recap Subco to incur indebtedness to facilitate the
recapitalization of Recap Co, and Buyer shall assist Recap Co and
Recap Subco in incurring such indebtedness.
At the Closing, immediately following the incurrence of the
foregoing indebtedness, Seller Parent and Buyer shall cause Recap
Subco to use all of the net proceeds of such indebtedness
incurred by it to declare and pay a dividend to Recap Co.
Immediately following the payment of such dividend, Seller
Parent shall cause Recap Co to use the proceeds of such dividend
and the indebtedness incurred by it to redeem for cash all of the
shares of Recap Co Common Stock held by SPAFAS and International
and all of the shares of Recap Co Preferred Stock held by WPLP
and to redeem for cash and the Recap Co Sub Note certain shares
of Recap Co Common Stock held by CRL such that immediately
thereafter CRL shall own 12.5% of the number of issued and
outstanding shares of Recap Co Common Stock and Buyer shall own
87.5% of the number of issued and outstanding shares of Recap Co
Common Stock.
ARTICLE 1
DEFINITIONS, ETC.
1.1 Definitions
. As used in this Agreement, the following terms shall have
the meanings set forth below:
"Accounting Firm" means Xxxxxx Xxxxxxxx LLP or if such firm
does not accept an engagement, then an independent nationally
recognized accounting firm mutually agreed upon by Seller Parent
and Buyer.
"Acquisition Co" has the meaning set forth in Section 2.1.6.
"Affiliate" means, with respect to any Person, any
subsidiary, officer or director of such Person and any other
Person which directly or indirectly controls, is controlled by or
is under common control with such Person, whether through the
ownership of securities, by contract or otherwise.
"Agreement" means this Recapitalization Agreement and the
Exhibits and the Disclosure Schedule to this Agreement, as the
same may from time to time be amended as provided herein.
"Assumed Liabilities" means all liabilities and obligations
of Seller Parent, any Seller or any of the CRL Companies arising
from or with respect to the CRL Business or the CRL Business
Assets, except for the Excluded Liabilities.
"Audited Financial Statements" has the meaning set forth in
Section 5.21.
"Balance Sheet" means the December 26, 1998 balance sheet of
the CRL Business included in the Audited Financial Statements.
"Balance Sheet Date" means December 26, 1998.
"Benefit Plan" has the meaning set forth in Section 3.15.1.
"Broekman Sale" has the meaning set forth in Section 5.15.
"Business Day" means any day other than a day when the
commercial banks doing business in New York or Massachusetts are
required or permitted by Law to be closed for business.
"Buyer" has the meaning set forth at the beginning of this
Agreement.
"Buyer's Group" means, collectively, Buyer and Buyer Parent.
"Buyer Indemnified Parties" has the meaning set forth in
Section 8.2.
"Buyer Material Adverse Effect" means one or more adverse
changes which, individually or in the aggregate, is or would
reasonably be expected to materially adversely effect the ability
of Buyer or Buyer Parent to consummate the transactions
contemplated by this Agreement on the terms and conditions and
within the time frame set forth herein.
"Buyer Parent" has the meaning set forth at the beginning of
this Agreement.
"CERCLA" has the meaning set forth in Section 3.16.
"Claim" has the meaning set forth in Section 8.5.
"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,
and the Treasury regulations issued thereunder.
"Commercial Efforts" means diligent, good faith efforts
which shall not require the performing party to (i) take any
action which is unreasonable under the circumstances, (ii) make
any investment or capital contribution not expressly contemplated
by this Agreement or the Commitment Letters, (iii) amend or waive
any rights under this Agreement or the Commitment Letters, or
(iv) incur or expend any amount of funds with respect to any
matter in excess of $5,000 but, notwithstanding the foregoing,
Commercial Efforts shall require the expenditure of all
reasonable out-of-pocket expenses necessary to satisfy a party's
obligations under this Agreement, including the fees, expenses
and disbursements of accountants, counsel, investment bankers and
other professionals.
"Commitment Letters" means those commitment letters attached
hereto as Exhibit 4.6.
"Company Acquisition Proposal" has the meaning set forth in
Section 5.11.
"Computer Systems" has the meaning set forth in
Section 3.20.
"Confidentiality Agreement" has the meaning set forth in
Section 5.1.
"Contracts" has the meaning set forth in Section 3.18.
"Contribution Agreements" has the meaning set forth in the
definition of Stage 1 Reorganization.
"Cost" means, collectively, Losses and Litigation Expenses
which are not unconditionally covered by insurance (provided that
if the CRL Business is unconditionally entitled to insurance with
respect to such Loss or Litigation Expense, such insurance
proceeds shall be applied to the Loss or Litigation Expense).
"CRL" has the meaning set forth at the beginning of this
Agreement.
"CRL Business" means the businesses conducted by Seller
Parent through its direct and indirect subsidiaries, including,
as of the date hereof, Recap Subco, the Recap Subsidiaries, WPLP
and Parent Canada and, prior to the Stage 1 Reorganization, also
through CRL, SPAFAS and International, in each case relating to
(i) the production, supply and resale of laboratory animals for
use in pharmaceutical and other medical testing (the "Research
Models"), (ii) the production and supply of specific pathogen
free eggs for vaccine production and research, (iii) testing and
monitoring of laboratory animal colonies, (iv) special laboratory
animal contract services for the performance of studies for
pharmaceutical and biotechnology companies, (v) research services
for large laboratory animals, (vi) laboratory animal facility
management, (vii) biological and analytical testing of large non-
animal molecule products, (viii) the production and supply of in
vitro test kits for bacterial endotoxin detection in parental
drugs and devices, (ix) the production and supply of monoclonal
and polyclonal antibodies, and (x) the sale of equipment related
to laboratory animal production and maintenance.
"CRL Business Assets" means the CRL Business and all of
Seller Parent's, each of the Sellers' and each CRL Companies'
right, title and interest in and to all of the assets, rights and
properties of every kind and nature, whether real, personal or
mixed, tangible or intangible, whether identifiable or
contingent, wherever located, which are related to or used in the
CRL Business, other than the Excluded Assets, which CRL Business
assets, rights and properties include, without limitation, all of
the following except for the Excluded Assets:
(i) all assets shown or reflected on the Balance
Sheet, except for changes made therein in the
ordinary course of business since the Balance
Sheet Date and through the Closing Date;
(ii) all land and other real property, all buildings
and other improvements located thereon, and all
rights, interests or appurtenances thereto which
are related to or used in the conduct of the CRL
Business;
(iii)all of the fixed assets and other tangible
personal property, including, without limitation,
machinery, vehicles, tools, equipment, furniture,
fixtures, leasehold improvements and supplies
related to or used in the conduct of the CRL
Business wherever located (collectively, the
"Property"), including Property acquired through
the Closing Date;
(iv) all research models, raw materials, components and
other parts, work-in-process, finished goods and
all other inventory whether on hand, on order, in
transit or held by others on a consignment basis
(collectively, the "Inventory") related to or used
in the conduct of the CRL Business wherever
located, including the inventory shown or
reflected on the Balance Sheet and Inventory
acquired after the Balance Sheet Date and through
the Closing Date, excluding only such Inventory as
shall have been sold in the ordinary course of
business after the Balance Sheet Date and through
the Closing Date;
(v) all tradenames, tradename rights, trademarks,
trademark rights, licenses, patents, patent
rights, copyrights, copyright rights, service
marks, service xxxx rights, trade secrets, trade
secret rights, confidential information, mailing
lists, customer lists, supplier lists, market
studies, training and equipment manuals, trade
dress, designs, patterns, technology, trade
secrets, and manufacturing, engineering, technical
and any other know-how processes, business
opportunities, and businesses, projects and
products planned or under development, other
intellectual property rights (including without
limitation, all goodwill associated with any of
the foregoing, licenses in respect of any of the
foregoing, applications relating to any of the
foregoing and claims for infringement of or
interference with any of the foregoing) and other
proprietary information related to or used in the
conduct of the CRL Business, in any case whether
domestic or foreign or registered or common law
including, without limitation, the names "Xxxxxxx
River Laboratories," "Xxxxxxx River" and "SPAFAS"
and all variations thereof (collectively,
"Intellectual Property");
(vi) all receivables related to the CRL Business,
including, without limitation, trade accounts and
other accounts receivable, loans receivable and
advances as at the Balance Sheet Date and all
receivables related to the CRL Business acquired
or created after the Balance Sheet Date and
through the Closing Date (collectively, the
"Receivables"), excluding only such Receivables as
shall have been collected on or prior to the
Closing Date;
(vii)all contracts of or related to the CRL
Business, including without limitation, the
Material Contracts and all contracts relating to
the Benefit Plans and Non-US Benefit Plans;
(viii)all goodwill, other intangible property, and
causes of action, actions, claims, rights and
remedies of any kind as against others (whether by
contract or otherwise) relating to the CRL
Business or any of the other CRL Business Assets
or Seller Parent, any of the Sellers or any of the
CRL Companies in the conduct or operation of the
CRL Business (including without limitation, the
Intellectual Property) or the Assumed Liabilities;
(ix) all books and records (financial, accounting and
other), correspondence, and all sales, marketing,
advertising, packaging and promotional materials,
files, data (whether written, on disk, film, tape
or other media, and including all computerized
data), drawings, engineering and manufacturing
data and other technical information and data, and
all other business and other records, in each case
relating to Recap Subco, any Recap Subsidiary,
WPLP, Parent Canada, the CRL Business Assets, the
Assumed Liabilities or the CRL Business wherever
located, except for any located at Seller Parent
in Rochester, New York;
(x) all Permits to the extent legally transferable;
(xi) all prepaid expenses, refunds, security and like
deposits and all other investments relating to the
CRL Business; and
(xii)all proceeds of any of the foregoing (other than
Excluded Assets).
"CRL Business Material Adverse Effect" means one or more
adverse changes which, individually or in the aggregate, has
resulted in or would reasonably be expected to result in either
(a) the loss of $15,000,000 or more of annual revenue by the CRL
Business or (b) Costs in excess of $15,000,000; provided, however
that none of the events set forth on Schedule 1.1.3 shall
constitute a CRL Business Material Adverse Effect.
"CRL Companies" shall mean Recap Subco, each of the Recap
Subsidiaries, WPLP and Parent Canada.
"Default" means the occurrence of any event which of itself
or with the giving of notice or the passage of time or both would
constitute a breach, a default or an event of default under the
applicable agreement, contract, instrument or lease or would
permit any party thereto to cancel or terminate performance or
seek damages or specific performance for breach or default.
"Disclosure Schedule" means the Disclosure
Schedule delivered by Seller Parent to Buyer simultaneously with
the execution of this Agreement and shall include an Update in
accordance with Section 5.8.
"DOJ" has the meaning set forth in Section 5.2.
"Draft Audited Financial Statements" has the meaning set
forth in Section 3.6.
"Draft Unaudited Financial Statements" has the meaning set
forth in Section 3.6.
"Draft Financial Statements" has the meaning set forth in
Section 3.6.
"Employees" means all of those persons employed as of the
Closing Date by any of the CRL Companies in the CRL Business,
including employees who are on disability (whether short-term or
long-term) or other leave from any of the CRL Companies.
"Environmental Claim" means any notice or claim by any
person or entity alleging potential liability (including
potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, property
damages, personal injuries or penalties) arising out of, based on
or resulting from (i) the generation, treatment, storage,
transportation or recycling of any Hazardous Substance or the
presence, or release, discharge, disposal or emission into the
environment, of any Hazardous Substances at the Real Property or
at any other real property, whether or not presently or formerly
owned or leased by any of the CRL Companies, or (ii) any
violation, or alleged violation, of any Environmental Laws by any
of the CRL Companies, Sellers or Seller Parent prior to the
Closing Date, in each case with respect to the CRL Business.
"Environmental Laws" means any and all Laws of any
Governmental Entity in effect as of the Closing Date, relating to
health, pollution control or protection of the environment,
including all Laws relating to the manufacture, processing,
distribution, generation, use, ownership, collection, treatment,
storage, transportation, recovery, recycling, removal, handling,
discharge, disposal, release or threatened release of any
Hazardous Substances, or regarding exposure to, monitoring or
assessment of, or remediation (including operation and
maintenance of remedial systems) of, any Hazardous Substances, or
record keeping, notification or reporting requirements respecting
any Hazardous Substances, or the on-site or off-site
contamination or pollution of the environment, or air, soil, or
water quality, or air or water emissions, or public health and
safety or community right-to-know, including Laws of the United
States, Belgium, Canada, China, France, Germany, Italy, Japan,
Mexico, Netherlands, United Kingdom, Australia, Czech Republic,
Hungary, Japan, Spain and Sweden.
"ERISA" means the Employee Retirement Income Security Act of
1974 and all regulations promulgated thereunder, as the same have
from time to time been amended.
"Excluded Assets" means:
(i) all cash (except to the extent necessary to
satisfy the requirements of Section 5.10 hereof,
except for any cash received with respect to
divested assets pursuant to Section 5.2.2 hereof,
except an amount equal to 50% of all indebtedness
of Xxxxxxx River Japan, Inc. for borrowed money
evidenced by a note, bond, debenture or similar
instrument, except an amount equal to the Net
Underfunding Amount and except any net proceeds
arising from the sale of assets referred to in
item 6 of Schedule 3.8, all of which shall
constitute CRL Business Assets and all of which
shall be held by Recap Co, Recap Subco or one of
the U.S. wholly owned Recap Subsidiaries) and cash
equivalents of the CRL Business, Recap Subco,
Recap Co and the Recap Subsidiaries on the date
immediately preceding the Closing Date;
(ii) (A) all books and records relating to the CRL
Business that are located at Seller Parent in
Rochester, New York and (B) all books and records
relating to the CRL Business that are located in
Wilmington, Massachusetts or at any of the Recap
Subsidiaries which are required to be retained by
Seller Parent, CRL, WPLP, SPAFAS, International or
Parent Canada pursuant to any applicable Law (in
the case of (A) and (B) of this clause, copies of
such books and records, to the extent related to
the CRL Business, shall be provided to Buyer,
Recap Co and the Recap Subsidiaries upon request);
(iii)all Tax assets of Recap Co and the Recap
Subsidiaries which relate to pre-closing periods;
(iv) all assets set forth on Schedule 1.1.1(iv);
provided, however, in the event the Broekman Sale
is not consummated on or after the Closing Date,
item 2 on Schedule 1.1.1(iv) shall not be an
Excluded Asset; and
(v) all Receivables from Seller Parent or any
Affiliate of Seller Parent which is not one of the
CRL Companies.
"Excluded Debt" shall mean, with respect to Seller Parent,
any Seller, Recap Subco or any Recap Subsidiary, without
duplication, (i) all indebtedness of Seller Parent, any Seller,
Recap Subco or any Recap Subsidiary for borrowed money, and all
indebtedness evidenced by notes, bonds, debentures or similar
instruments, (ii) the deferred purchase price of assets or
services which in accordance with GAAP would be shown on the
liability side of the balance sheet of Seller Parent, any Seller,
Recap Subco or any Recap Subsidiary, (iii) all indebtedness of a
second Person secured by any Lien on any property owned by Seller
Parent, any Seller, Recap Subco or any Recap Subsidiary, whether
or not such indebtedness has been assumed, (iv) all obligations
under any lease of any property (whether real, personal or mixed)
by Seller Parent, any Seller, Recap Subco or any Recap Subsidiary
as lessee which, in conformity with GAAP, would be accounted for
as a capital lease on the balance sheet of such Person (each a
"Capital Lease"), other than Capital Lease obligations as of
June 30, 1999 set forth on Schedule 1.1(x), (v) all net
obligations of Seller Parent, any Seller, Recap Subco or any
Recap Subsidiary under interest rate agreements, swap, cap,
collar or similar agreements or instruments and (vi) all
contingent obligations of Seller Parent, any Seller, Recap Subco
or any Recap Subsidiary arising from the guaranty by Seller
Parent, any Seller, Recap Subco or any Recap Subsidiary of
Excluded Debt of other Persons; provided, however, that Excluded
Debt which is owed by any Joint Venture shall mean the product of
the amount of Excluded Debt of such Joint Venture and the
percentage of the total equity interests of such Joint Venture
held by all CRL Companies (other than such Joint Venture) in such
Joint Venture.
"Excluded Liabilities" means:
(i) all debts, claims, liabilities or obligations for
any Tax (except for any Tax arising as a result of
the breach of any representation or warranty
contained in Article 3 other than Section 3.17)
(A) arising from or with respect to the CRL
Business Assets or the operation or conduct of the
CRL Business on or prior to the Closing Date,
including but not limited to all income taxes
directly arising from the deemed sale of assets
under the Section 338(h)(10) Election, whether or
not due and payable on or before the Closing Date
and whether or not attributable to a Tax period
that ends on or before the Closing Date (in which
event the Tax attributable to the period on or
prior to the Closing Date shall be determined on a
closing-of-the-books method, ending the close of
business on the Closing Date, with respect to
income Taxes and on a per diem basis, including in
such period the Closing Date, with respect to all
other Taxes); (B) of or attributable to any Tax
Sharing Agreement to which Recap Subco or any
Recap Subsidiary is or was a party for any period
on or prior to the Closing Date; and (C) for which
Recap Subco or any Recap Subsidiary is held liable
under Treasury Regulation 1.1502-6 or any
similar provisions of state, local or foreign Law,
which Tax is attributable to income of any Person
other than Recap Subco or any Recap Subsidiary
arising on or prior to the Closing Date.
(ii) all debts, claims, liabilities or obligations of
Seller Parent, any of the CRL Companies or
Sellers, in respect of accounts payable, notes
payable (including intercompany promissory notes
and similar financing arrangements) or other
obligations (whether or not billed or accrued) to
Seller Parent or any Affiliate of Seller Parent
which is not Recap Subco or one of the Recap
Subsidiaries;
(iii)all debts, claims, liabilities or obligations,
whether presently in existence or arising after
the date of the Agreement, relating to fees,
commissions or expenses owed to any broker,
finder, investment banker, accountant, attorney or
other intermediary or advisor employed by Seller
Parent or any Affiliate of Seller Parent in
connection with the transactions contemplated
hereby;
(iv) the Excluded Debt;
(v) all debts, claims, liabilities or obligations
specifically arising out of or relating to any of
the Excluded Assets which fall within
subparagraphs (i), (ii), (iii), (iv) (but only
with respect to such debts, claims, liabilities or
obligations specifically arising out of or related
to (A) the contract for the sale of the property
and assets set forth in item 1 of
Schedule 1.1.1(iv) and (B) businesses and assets
of or operation or ownership thereof by the
entities set forth in item 3 through 7 of
Schedule 1.1.1(iv) other than the CRL Business or
the CRL Business Assets), or (v) of the definition
of Excluded Assets;
(vi) the accrued and unpaid deferred compensation and
bonuses payable or accrued as of June 30, 1999 to
the management and other employees of the CRL
Business;
(vii)all debts, claims, liabilities or obligations
arising out of or relating to the net underfunding
if any, of Non-U.S. Benefit Plans that are defined
benefit plans; provided, however, that as to any
Non-U.S. Benefit Plan covering employees of an
entity as to which a third party holds an equity
interest exceeding 15% of the total equity
interests of such entity (such entity being
referred to herein as a "Joint Venture" and such
Non-U.S. Benefit Plan, a "Joint Venture Non-U.S.
Benefit Plan"), Excluded Liabilities shall be the
product of the aggregate Excluded Liability of
such Joint Venture as to the applicable Joint
Venture Non-U.S. Benefit Plan and the percentage
of the equity interests held by all CRL Companies
(other than such Joint Venture) in such Joint
Venture (the "Net Underfunding Amount"); and
(viii) the obligations under the Retention Agreements
with respect to Section I(A) regarding the XXX
Xxxxx and with respect to Section I(B) regarding
the compensation for accelerated vesting of Seller
Parent stock options for Employees and the
obligations of Seller Parent or, prior to the
Closing Date Recap SubCo, under the Releases.
"Expiration Date" has the meaning set forth in Section 8.1.
"Financial Statements" has the meaning set forth in
Section 5.21.
"FTC" has the meaning set forth in Section 5.2.
"GAAP" means generally accepted U.S. accounting principles,
as in effect at the time to which the financial statements or
records relate, applied on a consistent basis in accordance with
the policies applied in the preparation of the Financial
Statements.
"Governmental Consents" has the meaning set forth in
Section 6.1.1(b).
"Governmental Entity" means, collectively, the United States
government, the government of any of the states constituting the
United States, any municipality and any other domestic or foreign
national or provincial or regional government, and all of their
respective branches, departments, agencies, instrumentalities,
courts, subsidiary corporations or other subdivisions, to the
extent such Governmental Entity has jurisdiction.
"Hazardous Substances" means any (i) material, substance,
waste (including any solid, liquid, semisolid or gas or gaseous
mixture), product, chemical, pesticide, fungicide, rodenticide,
pollutant, contaminant, hazardous material, hazardous substance,
hazardous waste or solid waste, as the foregoing terms are
considered or defined as harmful or toxic under, regulated by or
form the basis of liability under any applicable Environmental
Law; (ii) petroleum (including crude oil or any fraction thereof)
products of any kind; (iii) asbestos, asbestos containing
material; (iv) radioactive substance; and (v) any polychlorinated
biphenyl (PCB).
"Highly Compensated Employee" has the meaning set forth in
Section 3.11.1.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976 and all regulations promulgated thereunder, as the
same has been amended from time to time.
"Immaterial Injunction" has the meaning set forth in
Section 6.1.1.
"Indemnitee" has the meaning set forth in Section 8.5.
"Indemnitor" has the meaning set forth in Section 8.5.
"Intellectual Property" has the meaning set forth in the
definition of CRL Business Assets.
"Interest Rate" means the sum of the annual rate of interest
from time to time announced publicly by The Chase Manhattan Bank
as its prime rate, plus two percent or if The Chase Manhattan
Bank no longer announces its prime rate, LIBOR plus five percent.
"Internal Reorganization" means, collectively, the Stage 1
Reorganization and the Stage 2 Reorganization.
"International" has the meaning set forth at the beginning
of this Agreement.
"Investors' Agreement" means the agreement entered into as
of the Closing Date among Recap Co, Buyer, CRL and each other
stockholder of Recap Co in substantially the form of
Exhibit 2.3.8.
"IRS" means the U.S. Internal Revenue Service.
"Joint Venture" shall have the meaning set forth in
subparagraph (vii) of the definition of Excluded Liabilities.
"Joint Venture Non-U.S. Benefit Plan" shall have the meaning
set forth in subparagraph (vii) of the definition of Excluded
Liabilities.
"Knowledge" has the meaning set forth in Section 9.4.
"Law" means any constitution, law, statute, code, ordinance,
rule, regulation, order, judgment or decree that is of a binding
nature and enforceable by or through any Governmental Entity
through the Closing Date.
"Litigation Expense" means any costs and expenses incurred
in connection with investigating, defending or asserting any
claim, action, suit or proceeding incident to any matter
indemnified against under this Agreement, including, without
limitation, court filing fees, court costs, arbitration fees or
costs, witness fees and reasonable fees and disbursements of
legal counsel (whether incurred in any action or proceeding
between the parties to this Agreement or between any party to
this Agreement and any third party), investigators, expert
witnesses, accountants and other professionals and all costs and
expenses incurred as a result of Section 8.4.5.
"Loss" means any loss, obligation, claim, liability,
settlement payment, award, judgment, tax, fine, penalty, interest
charge, cost, expense, damage or deficiency or other charge,
other than Litigation Expense and all costs and expenses incurred
as a result of Section 8.4.5.
"Material Contracts" has the meaning set forth in
Section 3.18.
"Merger" shall mean the merger of Acquisition Subco with and
into Recap Co.
"Multiemployer Plans" has the meaning set forth in
Section 3.15.1.
"NewCanCo" has the meaning set forth in Section 2.1.1.
"Net Underfunding Amount" has the meaning set forth in
subparagraph (vii) of the definition of Excluded Liabilities.
"Non-U.S. Benefit Plans" has the meaning set forth in
Section 3.15.13.
"Other Consents" has the meaning set forth in Section 6.2.5.
"Parent Canada" has the meaning set forth at the beginning
of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permits" has the meaning set forth in Section 3.14.
"Permitted Encumbrances" means: (i) those encumbrances
disclosed in Schedule 1.1.4 of the Disclosure Schedule;
(ii) those encumbrances disclosed in the notes to the Audited
Financial Statements, excluding encumbrances in respect of
Excluded Liabilities; (iii) liens for Taxes, assessments and
other governmental charges not yet due and payable or due but not
delinquent or being timely contested in good faith by appropriate
proceedings and for which adequate reserves have been established
in accordance with GAAP; (iv) mechanics', workmen's, repairmen's,
warehousemen's, carriers' or other like liens arising or incurred
in the ordinary course of business and securing obligations which
are not past due or being timely contested in good faith by
appropriate proceedings; (v) Capital Leases and equipment leases
with third parties entered into in the ordinary course of
business excluding Capital Leases constituting Excluded Debt;
(vi) with respect to Real Property: (A) easements, quasi-
easements, leases, licenses, restrictive covenants, rights-of-way
and other similar encumbrances, provided that none of the same
(individually or in the aggregate) could reasonably be expected
to result in Costs in excess of $350,000, (B) any conditions that
would be shown on or disclosed by a current survey, provided that
none of the same (individually or in the aggregate) could
reasonably be expected to result in Costs in excess of $350,000,
and (C) restrictions imposed by any applicable Law, including
zoning and building Laws; and (vii) all rights in Intellectual
Property requiring subsequent recording or registration to
perfect title.
"Person" means any individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an
association, an unincorporated organization, a Governmental
Entity and any other entity.
"Plans" has the meaning set forth in Section 3.15.1.
"Premises" means the real property presently owned, leased
or licensed by or for the CRL Business.
"Purchase Price" means $443,000,000.
"Purchased Shares" means the shares of Recap Co Common Stock
issued to Acquisition Co in the Merger.
"Real Property" has the meaning set forth in Section 3.12.
"Recapitalization" has the meaning set forth in Section 2.2.
"Recapitalization Documents" means all credit facilities,
notes, indentures, securities purchase agreements, security
documents and other agreements, instruments or documents entered
into in connection with the Recapitalization.
"Recap Co" has the meaning set forth at the beginning of
this Agreement.
"Recap Co Common Stock" means the common stock, par value
$.01, per share, of Recap Co.
"Recap Co Sub Note"means the subordinated, pay-in-kind
promissory note to be issued by Recap Co to CRL on the Closing
Date in substantially the form of Exhibit 2.3.1.
"Recap Subco" has the meaning set forth at the beginning of
this Agreement.
"Recap Subco Common Stock" means the common stock, par value
$.01, per share, of Recap Subco.
"Recap Co Preferred Stock" means the Series A Redeemable
Preferred Stock, par value $.01 per share, of Recap Co.
"Recap Subco Preferred Stock" means the Series A Redeemable
Preferred Stock, par value $.01 per share, of Recap Subco.
"Recap Subsidiaries" means the corporations and other
entities whose capital stock or equity interests are owned by
Recap Subco as and in the percentages listed on Schedule 3.3 of
the Disclosure Schedule, and shall mean and include Recap Co.
"Receivables" has the meaning set forth in the definition of
CRL Business Assets.
"Redemptions" means the series of transactions whereby Recap
Co redeems Common Stock held by CRL, SPAFAS, and International
and Preferred Stock held by WPLP, in each case as described in
Section 2.3.
"Releases" means each Agreement and Release, dated the date
hereof, among each Person who is a party to the Retention
Agreements, Recap Subco and Seller Parent.
"Representative" has the meaning set forth in Section 5.1.
"Required Consents" means, collectively, the Governmental
Consents and the Third Party Consents.
"Retention Agreements" means the agreements set forth on
Schedule 5.6.5.
"Section 338(h)(10) Election" has the meaning set forth in
Section 5.5.5.
"Seller Indemnified Parties" has the meaning set forth in
Section 8.3.
"Seller Parent" has the meaning set forth at the beginning
of this Agreement.
"Sellers" means CRL, SPAFAS, WPLP and International.
"Seller's Equity Percentage" shall mean the number of shares
of Recap Co Common Stock that CRL or any Affiliate of CRL owns at
such time divided by the total number of issued and shares of
Recap Co Common Stock.
"SERP" means the Xxxxxxx River Laboratories Executive Life
Insurance/Supplemental Retirement Income Plan, as amended and
restated.
"SPAFAS" has the meaning set forth at the beginning of this
Agreement.
"Stage 1 Reorganization" means the transactions which
occurred on July 9, 1999 pursuant to the Contribution Agreement
between Recap Subco and CRL, the Contribution Agreement between
Recap Subco and International, the Contribution Agreement between
Recap Subco and SPAFAS, and the Contribution Agreement between
Recap Subco and CRL (with respect to the transfer of all of the
issued and outstanding shares of CRL U.K. Limited) (collectively,
the "Contribution Agreements").
"Stage 2 Reorganization" has the meaning set forth in
Section 2.1.
"Tax" means any federal, state, local, foreign or provincial
income, gross receipts, property, sales, service, use, license,
lease, excise, franchise, employment, payroll, withholding,
employment, unemployment insurance, workers' compensation, social
security, alternative or added minimum, ad valorem, value added,
stamp, business license, occupation, premium, environmental
windfall profit, customs, duties, estimated, transfer or excise
tax, or any other tax, custom, duty, premium, governmental fee or
other assessment or charge of any kind whatsoever, together with
any interest or penalty imposed by any Governmental Entity.
"Tax Returns" means all returns, reports, estimates,
information returns and statements any nature with respect to
Taxes.
"Tax Sharing Agreements" has the meaning set forth in
Section 3.17.1.
"Transfer Taxes" has the meaning set forth in Section 9.3.
"Transfer Tax Returns" has the meaning set forth in
Section 9.3.
"Unaudited Financial Statements" has the meaning set forth
in Section 5.21.
"Update" has the meaning set forth in Section 5.8.
"WPLP" has the meaning set forth at the beginning of this
Agreement.
"Year 2000 Compliant" has the meaning set forth in
Section 3.20.
1.2 Construction.
1.2.1 References in this Agreement to any gender shall
include references to all genders. Unless the context otherwise
requires, references in the singular include references in the
plural and vice versa. References to a party to this Agreement
or to other agreements described herein means those Persons
executing such agreements. The words "include," "including" or
"includes" shall be deemed to be followed by the phrase "without
limitation" or the phrase "but not limited to" in all places
where such words appear in this Agreement. Except with respect
to Sections 3.2 and 4.2, the representation or statement that an
agreement is "enforceable" shall be deemed to include an
exception to the extent that enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar Laws relating to or affecting the
enforcement of creditor's rights generally, and general equitable
principles, whether considered in a proceeding in equity or at
law. The words "the transactions contemplated by this Agreement"
shall include the Redemptions, the Merger, the Recapitalization
and the execution and delivery of the Recap Co Sub Note and the
Investors' Agreement. This Agreement is the joint drafting
product of Seller Parent and Buyer and each provision has been
subject to negotiation and agreement and, in the event of an
ambiguity or question of intent or interpretation, shall not be
construed for or against either party as drafter thereof.
1.2.2 The phrases "have heretofore been provided" or
"has provided" or similar words mean that Seller Parent has
delivered copies of such information to Buyer. The phrase "has
provided access" or similar words means that Seller Parent has
allowed Buyer to review such information if requested by Buyer.
1.3 Accounting Conventions
. All references in the Agreement to financial terms shall
be deemed to refer to such terms as they are defined under GAAP,
unless specifically identified otherwise.
1.4 Disclosure Schedule
. The Disclosure Schedule shall be prepared by Seller
Parent and delivered to Buyer simultaneously with the execution
of this Agreement and shall be arranged in Schedules
corresponding to the numbered Sections contained in this
Agreement. The disclosures in any Schedule shall qualify any
other Schedule or Section to the extent that such information is
pertinent unless the Section specifies a specific Schedule and
all contracts, agreements or other documents referred to on any
Schedule are hereby incorporated by reference. The inclusion of
any contract, agreement or matter on any Schedule shall not be
deemed an admission by Seller Parent or Recap Co that such
contract, agreement or matter is material or required to be
disclosed or that all similar contracts, agreements or matters
have been disclosed except as otherwise expressly required by the
terms of this Agreement.
ARTICLE 2
REORGANIZATION, MERGER RECAPITALIZATION,
REDEMPTIONS AND CLOSING
2.1 Reorganization; Merger
. Upon the terms and subject to the conditions of this
Agreement, the parties agree that the following transactions will
take place immediately prior to the Closing in the order set
forth below (with the steps set forth in Section 2.1.1 through
2.1.5 being hereinafter referred to as the "Stage 2
Reorganizations"):
2.1.1 Recap Subco shall form a wholly owned Canadian
Corporation ("NewCanCo").
2.1.2 WPLP shall contribute all of its CRL Business
Assets used in the CRL Business to Recap Subco and, in exchange
therefor, Recap Subco shall issue to WPLP the Recap Subco
Preferred Stock pursuant to a contribution agreement in
substantially the form of the Contribution Agreements.
2.1.3 Each of CRL, SPAFAS, and International shall
exchange all of Recap Subco Common Stock owned by it for the same
number of shares of Recap Co Common Stock and WPLP shall exchange
all of the Recap Subco Preferred Stock for the same number of
shares of Recap Co Preferred Stock.
2.1.4 CRL shall purchase shares of Recap Co Common Stock
in exchange for cash, Recap Co shall purchase shares of Recap
Subco Common Stock in exchange for cash and Recap Subco shall
purchase shares of NewCanCo common stock in exchange for cash.
2.1.5 Parent Canada shall sell all of its CRL Business
Assets used in the CRL Business to NewCanCo in exchange for cash
pursuant to an Asset Purchase Agreement in substantially the form
of the Contribution Agreements.
2.1.6 Buyer shall form a wholly owned Delaware
corporation ("Acquisition Co") and contribute at least
$90,000,000 thereto in exchange for shares of common stock of
Acquisition Co.
2.1.7 Buyer and Seller Parent shall cause Acquisition Co
to merge with and into Recap Co with Recap Co being the surviving
entity and with Buyer receiving such number of shares of Recap Co
Common Stock constituting 87.5% of the total number of shares of
Recap Co Common Stock which shall be issued and outstanding
following the Redemptions.
2.2 Recapitalization of Recap Co
. Upon the terms and subject to the conditions of this
Agreement, prior to the Closing Date, Buyer will use its
Commercial Efforts to assist Recap Co and Recap Subco to obtain
debt financing all upon the terms and conditions set forth in the
Commitment Letters (the "Recapitalization"). On the Closing
Date, Seller Parent shall cause Recap Co and Recap Subco to enter
into the Recapitalization Documents. The proceeds of the
Recapitalization together with the Recap Co Sub Note will be used
to consummate the Redemptions.
2.3 Redemptions
. Upon the terms and subject to the conditions of this
Agreement, at the Closing:
2.3.1 Recap Co shall redeem all of the shares of Recap
Co Preferred Stock owned by WPLP for $242,000,000 in cash payable
by wire transfer of immediately available funds to such account
as is designated by WPLP, and WPLP shall deliver to Recap Co
certificates, duly endorsed for transfer, representing such
shares of Recap Co Preferred Stock.
2.3.2 Recap Co shall redeem all of the shares of Recap
Co Common Stock owned by SPAFAS for $10,000,000 in cash payable
by wire transfer of immediately available funds to such account
as is designated by SPAFAS, and SPAFAS shall deliver to Recap Co
certificates, duly endorsed for transfer, representing such
shares of Recap Co Common Stock.
2.3.3 Recap Co shall redeem all of the shares of Recap
Co Common Stock owned by International for $8,000,000 in cash
payable by wire transfer of immediately available funds to such
account as is designated by International, and International
shall deliver to Recap Co certificates representing such shares
of Recap Co Common Stock.
2.3.4 Recap Co shall redeem such number of shares of
Recap Co Common Stock owned by CRL constituting 87.5% of the
total number of shares of Recap Co Common Stock then issued and
outstanding following the redemptions set forth in Sections 2.3.1
through 2.3.3 so that immediately after all of the Redemptions
CRL shall own 12.5% of the issued and outstanding shares of Recap
Co Common Stock for $140,000,000 in cash, payable by wire
transfer of immediately available funds to such account as is
designated by CRL, and $43,000,000 in principal amount of the
Recap Co Sub Note, and CRL shall deliver to Recap Co
certificates, duly endorsed for transfer, representing such
shares of Recap Co Common Stock.
2.3.5 By execution and delivery of this Agreement, Buyer
and the other parties to this Agreement hereby and as of the
Closing Date consents to the Redemptions.
2.4 Closing
. Unless this Agreement shall have been terminated and the
transactions contemplated herein have been abandoned pursuant to
Article 7, the Closing of the Stage 2 Reorganization,
Recapitalization, Redemptions and Merger (the "Closing") shall
take place at 10:00 a.m. at the offices of Xxxxx, Xxxxxxx LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the later of
September 24, 1999 (with an effective date upon the close of
business on September 25, 1999) or the tenth calendar day
following the satisfaction of all conditions in Article 6 or such
other time and place as may be agreed to by Seller Parent and
Buyer (the "Closing Date").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER PARENT
Seller Parent represents and warrants to Buyer as of the
date hereof as follows:
3.1 Organization, Good Standing and Power
. Except as set forth in the Disclosure Schedule, each of
Seller Parent, Recap Co, Recap Subco, CRL, SPAFAS, International
and Parent Canada is a corporation duly organized, validly
existing and in good standing under the Laws of the jurisdiction
of its incorporation. Seller Parent, Recap Co, Recap Subco and
each Seller (other than WPLP) has all requisite corporate power
and authority to enter into this Agreement and to perform its
obligations hereunder. WPLP is a limited partnership duly
organized under the laws of the State of Delaware. WPLP has all
requisite partnership power and authority to enter into this
Agreement and to perform its obligations hereunder. Each of the
Celtics Companies has all requisite corporate power and authority
to own, lease and operate the CRL Business Assets owned by it.
As of the Closing Date, Recap Co, Recap Subco and each of the
Recap Subsidiaries will be duly authorized, qualified or licensed
to do business as a foreign corporation and, where such concept
is applicable, in good standing, in each of the jurisdictions in
which its ownership of the CRL Business Assets owned by it as of
the Closing Date, or the conduct of the CRL Business by it as of
the Closing Date, requires such authorization, qualification or
licensing, except where the failure to so qualify or to be in
good standing would not, individually or in the aggregate,
reasonably be expected to have a CRL Business Material Adverse
Effect.
3.2 Authorization and Validity
. The execution, delivery and performance by Seller Parent,
Recap Co, Recap Subco and each Seller (except WPLP) of this
Agreement and the consummation by such corporations of the
transactions contemplated by this Agreement and the Internal
Reorganization has been duly authorized by the Boards of
Directors of Seller Parent, Recap Co, Recap Subco and each Seller
(except WPLP), respectively. As of the Closing Date, no other
corporate or stockholder action on the part of Seller Parent,
Recap Co, Recap Subco, CRL, SPAFAS, International or Parent
Canada will be necessary for the authorization, execution,
delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby or the Internal
Reorganization. The execution, delivery and performance by WPLP
of this Agreement has been duly authorized by all partnership
action required on its part. This Agreement has been duly
executed and delivered by each of Seller Parent, Recap Co, Recap
Subco and each Seller and constitutes a valid and legally binding
obligation of each of them, enforceable against each of them in
accordance with its terms.
3.3 Capitalization of Recap Subco and Recap Subsidiaries
. The Disclosure Schedule sets forth all classes or series,
and the number of shares of capital stock or other equity
interests of Recap Co and Recap Subco authorized, issued and
outstanding and the beneficial and record holders thereof.
Except as described in this Agreement (including the Stage 2
Reorganization) or the Recapitalization Documents and except for
arrangements, understandings, agreements or commitments to which
Buyer is a party or plans of Buyer, there are no outstanding
options, calls, warrants, subscriptions or other rights or
agreements to acquire, or any plans, agreements, or commitments
providing for the issuance or redemption of or the right to
acquire: (i) any capital stock or other equity interest of Recap
Subco or any Recap Subsidiary, or (ii) any securities or other
obligations or rights convertible into, exercisable for or
exchangeable for the capital stock or other equity interests of
Recap Subco or any Recap Subsidiary. Other than the Recap
Subsidiaries, neither Recap Co nor Recap Subco has any equity
ownership interest in any other Person. Except as set forth in
the Disclosure Schedule, as of the Closing Date, all of the
issued and outstanding shares of capital stock or other equity
interests of each of the Recap Subsidiaries will be owned,
directly or indirectly, by Recap Co, free and clear of all liens,
encumbrances and transfer restrictions of any kind. All of the
issued and outstanding shares of common stock and other capital
stock of each Recap Subsidiary have been duly and validly
authorized and issued and are fully paid and non-assessable.
3.4 Consent and Approvals; No Conflict
. Except as described in the Disclosure Schedule and except
for the pre-merger notification requirements of the HSR Act, the
expiration or early termination of the waiting periods thereunder
and such filings, notifications and approvals as are required
under foreign antitrust or competition Laws, the execution,
delivery and performance of this Agreement by Seller Parent,
Recap Co, Recap Subco and by each Seller, and the consummation by
each of them of the transactions contemplated hereby and the
Internal Reorganization: (i) did not (with respect to the
Stage 1 Reorganization) and will not (with respect to the Stage 2
Reorganization and the transactions contemplated hereby), with or
without the giving of notice or the lapse of time or both,
violate, or require any of them to obtain any consent, approval,
or authorization to make any filing or to give any notice to any
Governmental Entity under any provision of any Law except where
the failure to obtain, make or give any such consents, approvals,
filings or notices would not, individually or in the aggregate,
reasonably be expected to result in Costs in excess of $350,000;
and (ii) did not (with respect to the Stage 1 Reorganization) and
will not (with respect to the Stage 2 Reorganization and the
transactions contemplated hereby), with or without the giving of
notice or the lapse of time or both, conflict with, result in the
breach or termination of any provision of, constitute a Default
under, result in the acceleration of the performance of an
obligation of the CRL Business, or result in the creation of a
lien, charge or encumbrance upon any of the CRL Business Assets
pursuant to any of the organizational documents of Recap Subco,
or any Recap Subsidiary, or any Contract to which Seller Parent
(with respect to the CRL Business), any Seller (with respect to
the CRL Business), Recap Subco or any Recap Subsidiary is a party
or by which Seller Parent (with respect to the CRL Business), any
Seller (with respect to the CRL Business), Recap Subco or any
Recap Subsidiary or any of the CRL Business Assets is bound,
except for such conflicts, breaches, terminations, Defaults,
accelerations, liens, charges or encumbrances which would not,
individually or in the aggregate, reasonably be expected to
result in Costs in excess of $350,000. Seller Parent has
delivered to Buyer a true, complete and correct copy of each
agreement or other document relating to the Stage 1
Reorganization prior to the date hereof.
3.5 Purchased Shares in Merger
. The Purchased Shares are duly authorized, validly issued,
fully paid and non-assessable. The issuance of the Purchased
Shares in the Merger are not subject to any preemptive, right of
first refusal, first offer, or other rights on behalf of any
Person. At the Closing, upon the issuance of the Purchased
Shares to the Buyer in the Merger, Buyer will have good and valid
title to the Purchased Shares free and clear of all liens,
restrictions or other encumbrances of any kind.
3.6 Financial Statements.
3.6.1 Seller Parent has delivered to Buyer the most
recent draft of the consolidated balance sheets of the CRL
Business as of December 26, 1998 and December 27, 1997, and the
related consolidated statements of income, changes in
shareholder's equity, and cash flows, including the notes
thereto, for each of the three years in the period ended
December 26, 1998 (the "Draft Audited Financial Statements").
Seller Parent has also delivered to Buyer the most recent draft
of the unaudited consolidated balance sheet of the CRL Business
as of June 26, 1999, and the related unaudited consolidated
statements of income and cash flows, including the notes thereto,
for the six-month periods ended June 26, 1999 and June 27, 1998
(collectively, the "Draft Unaudited Financial Statements" and
together with the Draft Audited Financial Statements, the "Draft
Financial Statements"). Upon delivery of the Financial
Statements to Buyer pursuant to Sections 5.21.1 and 5.21.2, they
will have been prepared from the books and records of the CRL
Business and in accordance with GAAP consistently applied and
maintained throughout the periods indicated (except that the
Unaudited Financial Statements will not include comprehensive
footnotes) and will fairly present in all material respects the
financial condition of the CRL Business as at their respective
dates and the results of its operations and cash flows for the
periods covered thereby. Upon delivery of the Unaudited
Financial Statements to Buyer pursuant to Section 5.21.2, they
will include all adjustments, which consist only of normal
recurring adjustments, necessary for such fair presentation.
3.6.2 Notwithstanding anything contained herein to the
contrary, neither Seller Parent nor Recap Co make any
representation or warranty as to any tax or accounting treatment
which may or may not be available to Recap Co or Buyer upon
consummation of the transactions contemplated by this Agreement,
including the availability of any step-up in basis for tax
purposes or the availability of leveraged recapitalization
accounting treatment and the existence of goodwill (or the amount
thereof) that is or may be required to be in any financial
statements of Recap Co for periods after the Closing Date.
3.7 Absence of Undisclosed Liabilities
. Except as set forth in or reserved against in the Balance
Sheet and except as set forth in the Disclosure Schedule, the CRL
Business does not have any liabilities of any nature (whether
accrued, absolute, contingent or otherwise, whether due or to
become due, and whether or not the amount thereof is readily
ascertainable or required by GAAP to be disclosed on a balance
sheet (or a footnote thereto)), except for current liabilities
(determined in accordance with GAAP consistently applied)
incurred after the Balance Sheet Date in the ordinary course of
business consistent with past practice; provided, however in no
event shall the representation and warranty contained in this
Section 3.7 cover or be deemed to cover any matter, subject,
category or event which is covered by or addressed in any other
representation or warranty of Seller Parent contained in this
Agreement.
3.8 Absence of Certain Changes
. Except as set forth in the Disclosure Schedule, since the
Balance Sheet Date, the CRL Business has been conducted in the
ordinary course of business consistent with past practice, and
other than in the ordinary course of business, there has not been
with respect to the CRL Business any: (i) sale, assignment,
pledge, hypothecation or other transfer of any of the CRL
Business Assets which, individually or in the aggregate, could
reasonably be expected to have a value in excess of $350,000,
except for the sale of inventory, collection of accounts
receivable and the disposal of obsolete or worn out equipment, in
any case in the ordinary course of business consistent with past
practice, (ii) termination or material amendment of any Material
Contract, (iii) suffered any damage, destruction or other
casualty loss (whether or not covered by insurance) which,
individually or in the aggregate, have resulted or are reasonably
likely to result, in Costs in excess of $350,000, (iv) except for
salary, bonuses and incentive compensation paid or adjusted in
the ordinary course of business consistent with past practices,
increase or amend the compensation payable or to become payable
to any Highly Compensated Employee or increase or amend any
employee benefit plan, payment or arrangement for any such Highly
Compensated Employee; (v) labor dispute or, to the Knowledge of
Seller Parent, threatened labor dispute involving any Highly
Compensated Employee or any group of employees, (vi) actual or
threatened dispute with, or loss of business from, any material
customer or supplier, or to the Knowledge of Seller Parent, any
event or circumstances which could reasonably be expected to
result in any such dispute or loss of business, (vii) change in
the method or procedures for billing or collection of customer
accounts or recording of customer accounts receivable or reserves
for doubtful accounts, or any method of accounting or accounting
principles, (viii) cancellation of debts or waiver of any claim
or right which could reasonably be expected to have a value,
individually or in the aggregate, in excess of $350,000,
(ix) agreements or commitments for capital expenditures in excess
of $350,000 (individually or in the aggregate) other than as set
forth in the 1999 capital expenditure budget of the CRL Business
heretofore delivered to Buyer or other than as approved by Buyer
in writing, (x) security interest, lien or other encumbrances
with respect to any of the CRL Business Assets other than
Permitted Encumbrances, (xi) adverse change which is reasonably
likely to have a CRL Business Material Adverse Effect,
(xii) amendment of any charter, by-laws or other governing
documents of Recap Subco or any Recap Subsidiary,
(xiii) employment or consulting agreement entered into with any
Employee or any increase in the compensation of any Employee,
except for increases in the ordinary course of business
consistent with past practice or as a result of any collective
bargaining, employment or other agreement, or pursuant to any
policy or any bonus, pension, profit-sharing or other plan or
commitment set forth in the Disclosure Schedule, (xiv) loans or
any other transaction with any Affiliate other than transactions
entered into in the ordinary course of business consistent with
past practice, (xv) establishment, amendment or contribution to
any pension, retirement, profit sharing, or stock bonus plan or
multiemployer plan covering any of the employees of the CRL
Business, except as required by Law or in accordance with past
practice, or (xvi) an agreement to do any of the foregoing.
3.9 Entire CRL Business
. Except for the Excluded Assets or as set forth on
Schedule 3.9 of the Disclosure Schedule and except for such
assets or rights the failure of which to have would be reasonably
likely to result in Costs in excess of $350,000, the CRL Business
Assets constitute all of the assets, properties and rights used
to conduct the CRL Business as conducted on the date of this
Agreement and will constitute all of the assets, properties and
rights used to conduct the CRL Business on the Closing Date.
3.10 Legal Proceedings
. Except as described in the Disclosure Schedule, there is
no litigation, proceeding, action, suit, order, judgment or
decree before, of or by, or to the Knowledge of Seller Parent,
investigation by, any Governmental Entity or any claim in writing
outside of the ordinary course of business which is pending
against Seller Parent, any Seller or any CRL Company with respect
to the CRL Business or, to the Knowledge of Seller Parent,
threatened in writing against Seller Parent, any Seller or any
CRL Company or the CRL Business: (i) relating to the CRL
Business Assets or the CRL Business as to which there is a
reasonable likelihood of an outcome or outcomes that would,
individually or in the aggregate, reasonably be expected to
result in Costs in excess of $350,000, or (ii) which seeks to
question, delay or prevent the consummation of the transactions
contemplated by this Agreement or the Internal Reorganization.
3.11 Employees and Labor Relations Matters.
3.11.1 The Disclosure Schedule contains a list of all
employees of the CRL Business whose projected 1999 annual base
compensation equals or exceeds $100,000 (each, a "Highly
Compensated Employee").
3.11.2 Except as described in the Disclosure Schedule, to
the Knowledge of Seller Parent, there are no strikes, walk-outs,
lock-outs or other concerted work actions or union organization
activity involving a material number of employees of the CRL
Business pending or threatened with respect to the CRL Business
which, individually or in the aggregate, could reasonably be
expected to result in Costs in excess of $350,000. Neither Recap
Subco nor any Recap Subsidiary nor any Seller is a party to any
collective bargaining agreements with respect to the CRL Business
with any labor union or other representative of employees with
respect to employees of the CRL Business located in the United
States.
3.11.3 Except as set forth in the Disclosure Schedule, no
CRL Company nor any Seller is a party to any collective
bargaining agreements with any labor union or other
representative of employees or any works' council or similar
entity under applicable Laws with respect to employees of the CRL
Business located outside of the United States, including local
agreements, amendments, supplements, letters and memoranda of
understanding of any kind, nor, to the Knowledge of Seller
Parent, is there any pending or threatened union organization
activity by or among any such employees.
3.11.4 Except as set forth in the Disclosure Schedule,
there are no material violations of any Federal, state, local or
foreign statutes, ordinances, rules, regulations, orders,
directives or other Laws with respect to the employment of
individuals by, or the employment practices or work conditions
of, Recap Subco or any Recap Subsidiary or any Seller with
respect the conduct of the CRL Business, or the terms and
conditions of employment, wages and hours of employees of the CRL
Business. Neither Recap Subco nor any Recap Subsidiary nor any
Seller with respect to the CRL Business is engaged in any unfair
labor practice or other unlawful employment practice and, except
as set forth in the Disclosure Schedule, there are no charges of
unfair labor practices or other employee-related complaints
pending or, to the Knowledge of Seller Parent, threatened against
any such Person before the National Labor Relations Board, the
Equal Employment Opportunity Commission, the Occupational Safety
and Health Review Commission, the Department of Labor or any
other Governmental Entity.
3.12 CRL Business Tangible Assets; Real Property.
(a) Except as set forth in the Disclosure Schedule, as
of the Closing Date, (i) Recap Subco or one of the Recap
Subsidiaries will have good, valid and marketable title to all of
the CRL Business Assets which constitute owned real property,
(ii) Recap Subco or one of the Recap Subsidiaries will have good
and valid title to all of the CRL Business Assets which
constitute personal, mixed or other (except Intellectual
Property, as to which Section 3.13 relates) property, (iii) Recap
Subco or one of the Recap Subsidiaries will have a valid and
binding leasehold interest in all of the CRL Business Assets
which constitute leased property, and (iv) Recap Subco or one of
the Recap Subsidiaries will have good and valid title to the
percentage of outstanding capital stock or other equity interests
of all of the Recap Subsidiaries as set forth in Schedule 3.3 of
the Disclosure Schedule, in each case, except to the extent that
such CRL Business Assets have been sold or otherwise disposed of
prior to the Closing Date in the ordinary course of business or
otherwise in accordance with this Agreement, and in each case
free and clear of all liens, charges and other encumbrances of
any kind, except Permitted Encumbrances.
(b) The Disclosure Schedule sets forth a complete and
accurate list of all real property leased to or owned by any of
the CRL Companies and all other real property in which any of the
CRL Companies has any interest (collectively, the "Real
Property").
3.13 Intellectual Property
. Except as described in the Disclosure Schedule, as of the
Closing Date, Recap Subco or one of the Recap Subsidiaries will
own good and valid title to, or be licensed to use, all material
Intellectual Property used to conduct the CRL Business as
presently conducted. Except as set forth in the Disclosure
Schedule, to the Knowledge of Seller Parent (i) there are no
actions or proceedings pending or threatened in writing which
challenge the CRL Business' right to use any of the Intellectual
Property necessary to conduct the CRL Business, and (ii) neither
Seller Parent nor any of its Affiliates has received any written
notice of, nor has knowledge of any facts which indicate the
likelihood of, any infringement by the CRL Business as presently
conducted of the trademark rights of others in any manner which
would, individually or in the aggregate, reasonably be expected
to result in Costs in excess of $350,000 and (iii) neither Seller
Parent nor any of its Affiliates has received any written notice
of, nor has knowledge of any facts which indicate the likelihood
of, any infringement by, or any conflict with any third party
with respect to, the patents included in the Intellectual
Property (including, without limitation, any demand or request
that Seller Parent or its Affiliates license any rights from a
third party). Notwithstanding anything to the contrary contained
in this Agreement, except for the representations and warranties
contained in this Section 3.13, neither Seller Parent nor any
other Person makes any express or implied representation or
warranty on behalf of Seller Parent, Recap Subco or any Recap
Subsidiary with respect to Intellectual Property.
3.14 Compliance with Applicable Laws
. Except as set forth in the Disclosure Schedule, and
without admitting any liability with respect thereto (except to a
Buyer Indemnified Party in the event of a breach of the
representation and warranty contained in this Section 3.14 which
entitles such Buyer Indemnified Party to indemnification pursuant
to Section 8.2(a)), the CRL Business and each of Seller Parent
(with respect to the CRL Business), Sellers (with respect to the
CRL Business), Recap Subco and the Recap Subsidiaries, has been
and is operated and conducted so as to comply with all applicable
Laws, except where the failure to comply with such Laws would
not, individually or in the aggregate, reasonably be expected to
result in Costs in excess of $350,000. Except as described in
the Disclosure Schedule, as of the Closing Date, to the Knowledge
of Seller Parent, Recap Subco and Recap Subsidiaries shall have
all licenses, permits, consents, approvals, authorizations,
qualifications and orders of each Governmental Entity required
for the ownership of the CRL Business Assets and conduct of the
CRL Business as presently conducted (collectively, "Permits"),
except where the failure to have such licenses, permits,
consents, approvals, authorizations, qualifications and orders
would not, individually or in the aggregate, reasonably be
expected to result in costs in excess of $350,000.
3.15 Employee Benefit Plans.
3.15.1 The Disclosure Schedule sets forth with respect to
all United States locations of the CRL Business each pension,
profit-sharing, savings, bonus, incentive or deferred
compensation, severance pay, vacation pay, medical, life
insurance, welfare or other employee benefit plan in which
employees of Recap Subco or any of the Recap Subsidiaries
participate or that Recap Subco or any of the Recap Subsidiaries
maintains or sponsors, or to which Recap Subco or any of the
Recap Subsidiaries is required to make contributions. All
pension, profit-sharing, savings, bonus, incentive or deferred
compensation, severance pay, medical, life insurance, welfare or
other employee benefit plans within the meaning of Section 3(3)
of ERISA in which the U.S. employees of Recap Subco or any of the
Recap Subsidiaries participate (such plans and related trusts,
insurance and annuity contracts, funding media and related
agreements and arrangements, other than any "multiemployer plan"
(within the meaning of Section 3(37) of ERISA), being hereinafter
referred to as the "Benefit Plans" and any such multiemployer
plans being hereinafter referred to as the "Multiemployer Plans")
comply with all requirements of the Department of Labor (the
"DOL") and the IRS, and with all other applicable Laws, except
where the failure to comply with such Laws (individually or in
the aggregate) would not reasonably be expected to result in
Costs in excess of $350,000. The CRL Companies have furnished to
Buyer copies of all Benefit Plans and all financial statements,
actuarial reports and annual reports and returns filed with the
IRS with respect to such Benefit Plans for a period of two years
prior to the date hereof. To the Knowledge of Seller Parent,
such financial statements, actuarial reports and annual reports
and returns are true and accurate in all material respects.
3.15.2 Except as set forth in the Disclosure Schedule,
each Benefit Plan intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS
as to its qualification under Section 401(a) of the Code, and
nothing has occurred in the operation of any such Benefit Plan
which, either individually or in the aggregate, would reasonably
be expected to cause the loss of such qualification or the
imposition of any liability, penalty or tax under ERISA or the
Code which would reasonably be expected to result in Costs in
excess of $350,000.
3.15.3 No Benefit Plan which is a "defined benefit plan"
(within the meaning of Section 3(35) of ERISA) (hereinafter
referred to as the "Defined Benefit Plans") has incurred an
"accumulated funding deficiency" (within the meaning of
Section 412(a) of the Code), whether or not waived.
3.15.4 Except as set forth in the Disclosure Schedule, in
the last six (6) years there has been no "reportable event"
(within the meaning of Section 4043 of ERISA) for which there has
been a nonwaiveable notice requirement imposed under Section 4043
of ERISA with respect to any Defined Benefit Plan.
3.15.5 To the Knowledge of Seller Parent, no "prohibited
transaction" (within the meaning of Section 406 of ERISA or
Section 4975(c) of the Code) has occurred with respect to any
Benefit Plan.
3.15.6 None of the CRL Companies has incurred any
liability to the PBGC, except for required premium payments. No
notice of termination has been filed by the plan administrator
(pursuant to Section 4041 of ERISA) or issued by the PBGC
(pursuant to Section 4042 of ERISA) with respect to any Benefit
Plan subject to ERISA. There has been no termination of any
Defined Benefit Plan or any related trust by any of the CRL
Companies.
3.15.7 As of the date of the most recent actuarial
report, the excess of the aggregate present value of accrued
benefits over the aggregate value of the assets of any Defined
Benefit Plan (computed both on a termination basis and on an
ongoing basis) is not more than $-0-, and there are no unfunded
vested benefits (within the meaning of PBGC Reg. 4006.4) with
respect to any Defined Benefit Plan.
3.15.8 There are no overdue contributions which are
required to be made by any of the CRL Companies to trusts in
connection with any Benefit Plan that is a "defined contribution
plan" (within the meaning of Section 3(34) of ERISA).
3.15.9 Other than claims in the ordinary course for
benefits with respect to the Benefit Plans, there are no actions,
suits or claims (including claims for income taxes, interest,
penalties, fines or excise taxes with respect thereto) pending
with respect to any Benefit Plan, or, to the Seller Parent's
Knowledge, any circumstances which would reasonably be expected
to give rise to any such action, suit or claim (including claims
for income taxes, interest, penalties, fines or excise taxes with
respect thereto).
3.15.10 All material reports, returns, notices and similar
documents with respect to the Benefit Plans required to be filed
with the IRS, the DOL, the PBGC or any other Governmental Entity
have been so filed.
3.15.11 Except as set forth in the Disclosure Schedule,
none of the CRL Companies has any obligation to provide health or
other welfare benefits to former, retired or terminated employees
in the CRL Business, except as specifically required under
Section 4980B of the Code or Section 601 of ERISA. Each of the
CRL Companies has complied with the notice and continuation
requirements of Section 4980B of the Code and Section 601 of
ERISA and the regulations thereunder.
3.15.12 None of the CRL Companies maintains, sponsors or
contributes to and has never maintained, sponsored or contributed
to any Multiemployer Plan.
3.15.13 The Disclosure Schedule sets forth all benefit
plans, contracts and arrangements covering non-U.S. CRL Business
employees ("Non-U.S. Benefit Plans"). Each of the CRL Companies
and Sellers is and following the Stage 2 Reorganization each of
Recap Subco and each Recap Subsidiary will be in compliance with
applicable Laws and collective bargaining agreements with respect
to all Non-U.S. Benefit Plans except where the failure to comply
with such Laws and agreements (individually or in the aggregate)
would not reasonably be expected to result in Costs in excess of
$350,000. Except as set forth in the Disclosure Schedule, there
are no unfunded liabilities (determined in accordance with GAAP)
with respect to any Non-U.S. Benefit Plans that are defined
benefit plans.
3.16 Environmental Matters
. Except as set forth in the Disclosure Schedule:
(a) each of the CRL Companies has duly complied with,
and the CRL Business is conducted and has been conducted in
substantial compliance with, all Environmental Laws, except where
the failure to comply with such Laws (individually or in the
aggregate) would not reasonably be expected to result in Costs in
excess of $350,000, and each of the CRL Companies has provided
Buyer with copies of all Phase I and Phase II environmental site
assessments and other material reports, notices and similar
materials in their possession and related to Environmental Laws
or Environmental Claims;
(b) none of the CRL Companies has received written
notice of, nor are there any facts to Seller Parent's Knowledge
which can reasonably be expected to give rise to, any
Environmental Claim against or affecting any of the CRL Companies
in the conduct or operation of the CRL Business as currently
conducted;
(c) none of the CRL Companies, nor, to the Knowledge
of Seller Parent, any other Person, has generated, treated,
transported, stored, recycled, discharged, emitted, disposed of
or released any Hazardous Substances or arranged for the
generation, treatment, transport, storage, recycling, discharge,
emission, disposal or release of any Hazardous Substances, which
could reasonably be expected to give rise to any Environmental
Claim or any liability or corrective or remedial obligation of
any of the CRL Companies in the conduct or operation of the CRL
Business under any Environmental Laws, except for such
Environmental Claims, liabilities or obligations which
(individually or in the aggregate) would not reasonably be
expected to result in Costs in excess of $350,000;
(d) none of the Real Property, or property to which
any of the CRL Companies has transported or arranged for the
transportation of any Hazardous Substances, is listed on the
National Priorities List promulgated pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), on CERCLIS (as referred to in
CERCLA) or on any similar federal or state list of sites
requiring investigation or clean-up; and
(e) The New Jersey Industrial Site Recovery Act,
N.J.S.A. 13:1 K-6 et seq., and the regulations promulgated
thereunder, will not be applicable to any of the Real Property
upon consummation of the transactions contemplated by this
Agreement or the Internal Reorganization. The Connecticut
Transfer Act, C.G.S.A., Chapter 445, 22a-134 et seq., and the
regulations promulgated thereunder, will not be applicable to any
of the Real Property upon consummation of the transactions
contemplated by this Agreement or the Internal Reorganization.
3.17 Tax Matters.
3.17.1 Except as disclosed in the Disclosure Schedule:
(i) Recap Subco and each Recap Subsidiary has filed all material
Tax Returns required to be filed by it, or requests for
extensions to file such Tax Returns have been timely filed,
granted and have not expired; (ii) Recap Subco and each Recap
Subsidiary has paid all Taxes which have become due as shown on
such Tax Returns; (iii) no material claim for unpaid Taxes is
being asserted in writing by a Tax authority with respect to
Recap Subco or any Recap Subsidiary; and (iv) all Tax sharing
agreements to which Recap Subco and any Recap Subsidiary is a
party ("Tax Sharing Agreements") will be terminated as of the
Closing Date and after the Closing Date none of Recap Subco nor
any Recap Subsidiary shall have any liability with respect to any
Tax under any such Tax Sharing Agreement.
3.17.2 CRL is a member of Seller Parent's consolidated
federal income tax group, eligible to file the Section 338(h)(10)
Election.
3.17.3 No election under Section 341(f) of the Code has
been or will be made to treat Recap Subco or any Recap Subsidiary
as a "consenting corporation" as defined therein.
3.17.4 The accrual for Taxes reflected in the Financial
Statements accurately reflects the total amount of unpaid Taxes
arising from or with respect to the CRL Business Assets or the
operation or conduct of the CRL Business on or prior to the
Closing Date, whether or not disputed and whether or not
presently due and payable, of Recap Subco and each Recap
Subsidiary as of the close of the periods covered by the
Financial Statements. Adequate accruals and reserves have been
made in the Financial Statements and the books and records of
each of Recap Subco and each Recap Subsidiary for the payment of
all unpaid federal, state, local, foreign and other Taxes arising
from or with respect to the CRL Business Assets or the operation
or conduct of the CRL Business on or prior to the Closing Date
for all periods through the respective dates thereof, whether or
not yet due and payable and whether or not disputed.
3.18 Contracts
. Except as set forth in the Disclosure Schedule, all
written and, to the Knowledge of Seller Parent, all oral
contracts, employment agreements, consulting agreements, service
agreements, guarantees (or other agreements or commitments
relating to contingent obligations), purchase commitments for
materials and other services, advertising and promotional
agreements, leases, license agreements and other agreements
pertaining to the CRL Business that are included in the CRL
Business Assets ("Contracts") which (a) (i) may be performed in
whole or in part after the Closing Date; (ii) individually
involve payments or other financial commitments as of the date of
this Agreement which, by its terms, must be in excess of $100,000
during any twelve month period; (iii) extend more than twelve
(12) months after the date of this Agreement; and (iv) are not
terminable without penalty within ninety (90) days or (b) are set
forth in Schedule 3.18 of the Disclosure Schedule (collectively
the "Material Contracts") are in full force and effect and are
valid and enforceable in accordance with their respective terms
except where the failure to be in full force and effect and valid
and enforceable would not, individually or in the aggregate,
reasonably be expected to result in Costs in excess of $350,000.
The Disclosure Schedule sets forth a complete and correct list of
each Material Contract and all powers of attorney, if any,
relating to the conduct or operation of the CRL Business. Except
as set forth in the Disclosure Schedule, the CRL Business is not
in Default in the performance of any obligation under any
Contract except for such Defaults which, individually or in the
aggregate, would not reasonably be expected to result in Costs in
excess of $350,000, and the Celtics Business has not received
written notice or, to Seller Parent's Knowledge, oral notice that
any party to any Material Contract intends to terminate, amend or
modify any such Material Contract. To the Knowledge of Seller
Parent, no other party or parties to any Material Contract is in
Default in the performance of any obligation thereunder except
for such Defaults which, individually or in the aggregate, would
not reasonably be expected to result in Costs in excess of
$350,000.
3.19 Certain Fees
. With the exception of fees and expenses payable to Xxxxxx
Xxxxxxx & Co. Inc., which shall be paid by Seller Parent, none of
Seller Parent, any Seller, any CRL Company nor any of their
Affiliates has employed any broker or finder or incurred any
other liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by this
Agreement.
3.20 Year 2000
. Except as set forth in the Disclosure Schedule, to the
Knowledge of Seller Parent all computer software, hardware and
related systems (including without limitation embedded
microcontrollers in non computer equipment) (collectively,
"Computer Systems") included in the CRL Business Assets are
either (i) Year 2000 Compliant or (ii) designated (in the 1999
capital expenditure budget of the CRL Business heretofore
delivered to Buyer) to receive upgrades or modifications to
become Year 2000 compliant, except where a failure of such
Computer Systems to be Year 2000 Compliant would not
(individually or in the aggregate) reasonably be expected to
result in Costs in excess of $350,000. For purposes of this
Section 3.20, "Year 2000 Compliant" shall mean that the Computer
Systems are designed, have been modified or will be modified to
be able to process accurately all date/time data to be used prior
to, during, and after the calendar year 2000 A.D., without error,
aborts, delays or other interruptions relating to the processing,
calculation, comparing, sequencing or other use of date/time data
from, into and between the twentieth and twenty-first centuries.
3.21 Insider Interests; Intercompany Transactions
. Except as set forth in the Disclosure Schedule, no
stockholder, officer, director or Affiliate of Seller Parent or
any CRL Company (a) is presently a party to any transaction,
agreement or arrangement pertaining to the CRL Business or
(b) owns any interest in any of the CRL Business Assets.
3.22 No Other Representations or Warranties
. Except for the representations and warranties contained
in this Article 3 or in any certificate executed by Seller
Parent, any CRL Company or any Seller pursuant to Section 6.2.3,
neither Seller Parent nor any other Person makes any express or
implied representation or warranty on behalf of Seller Parent,
any CRL Company or any Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER AND BUYER PARENT
Buyer and Buyer Parent, jointly and severally, represent and
warrant to Seller Parent and each of the Sellers as follows:
4.1 Organization, Good Standing and Power
. Buyer is a limited liability company and Buyer Parent is
a limited partnership, in each case, duly organized, validly
existing and in good standing under the Laws of the jurisdiction
of its incorporation or formation, as the case may be, and has
all requisite limited partnership or limited liability company
power and authority to own, lease and operate the assets owned by
it and to conduct the business as now conducted by it. Each of
Buyer and Buyer Parent has all requisite limited partnership or
limited liability power and authority to enter into this
Agreement and the Recapitalization Documents to which it is a
party and to perform its obligations hereunder and thereunder.
Each of Buyer and Buyer Parent is duly authorized, qualified or
licensed to do business as a foreign corporation or entity and,
where such concept is applicable, is in good standing, in each of
the jurisdictions in which its ownership of assets owned by it,
or the conduct of the business as now conducted by it, requires
such authorization, qualification or licensing, except where the
failure to so qualify or to be in good standing would not,
individually or in the aggregate, reasonably be expected to have
a Buyer Material Adverse Effect.
4.2 Authorization and Validity of Agreements
. The execution, delivery, and performance by Buyer and
Buyer Parent of this Agreement and the consummation by Buyer and
Buyer Parent of the transactions contemplated hereby have been
duly authorized by all necessary limited liability company or
partnership action. No other limited liability company or
partnership action on the part of Buyer or Buyer Parent is
necessary for the authorization, execution, delivery and
performance by Buyer or Buyer Parent of this Agreement and the
consummation by Buyer or Buyer Parent of the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by each of Buyer and Buyer Parent and constitutes a
valid and legally binding obligation of each of Buyer and Buyer
Parent, enforceable against each of Buyer and Buyer Parent in
accordance with its terms.
4.3 Consents and Approvals; No Conflict
. Except for the pre-merger notification requirements of
the HSR Act, the expiration or early termination of the waiting
periods thereunder and such filings, notifications and approvals
as are required under foreign antitrust or competition Laws, the
execution, delivery and performance of this Agreement by Buyer or
Buyer Parent, and the consummation by each of them of the
transactions contemplated hereby and thereby:
(a) will not violate, or require any consent,
approval, filing or notice to be made by the Buyer or Buyer
Parent under, any provision of any Law applicable to the Buyer or
Buyer Parent; and
(b) will not conflict with, result in the breach or
termination of any provision of, constitute a Default under,
result in the acceleration of the performance of an obligation of
Buyer or Buyer Parent under, or result in the creation of a lien,
charge or encumbrance upon the assets of the Buyer or Buyer
Parent pursuant to: (i) the operating agreement, partnership
agreement or by-laws (or analogous organizational documents) of
Buyer or Buyer Parent, or (ii) any indenture, mortgage, deed of
trust, lease, licensing agreement, contract, instrument or other
agreement to which Buyer or Buyer Parent is a party or by which
Buyer or Buyer Parent or any of their respective assets is bound.
4.4 Legal Proceedings
. There is no litigation, proceeding or governmental
investigation pending or, to the Knowledge of Buyer, threatened
against Buyer or Buyer Parent, which seeks to question, delay or
prevent the consummation of, or would impair the ability of Buyer
or Buyer Parent to consummate, the transactions contemplated by
this Agreement.
4.5 Certain Fees
. With the exception of fees and expenses payable to DLJ
Securities Corp. and payable as contemplated by the Commitment
Letters, which shall be paid by Recap Co or Recap Subco on the
Closing Date, none of Buyer, Buyer Parent nor any of their
Affiliates has employed any broker or finder or incurred any
other liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated hereby or
thereby.
4.6 Financing
. Buyer has heretofore delivered to Seller Parent true and
complete copies of the Commitment Letters. As of the date of
this Agreement, the Commitment Letters are in full force and
effect and have not been rescinded, amended or modified in any
respect.
4.7 Access and Investigation
. In connection with the negotiation and execution of this
Agreement, Buyer's Group has performed a comprehensive
investigation of the CRL Business and, with its advisors, has
made its own analysis and evaluation of the CRL Business, the
Purchased Shares and Assumed Liabilities and has received from
Seller Parent or its Affiliates or had access to all information
that Buyer or Buyer Parent deems necessary or desirable in
deciding whether to acquire the Purchased Shares. Buyer's Group
has had the opportunity to ask questions of and receive answers
from officers and other representatives of Seller Parent, Recap
Co and other management of the CRL Business regarding the terms
and conditions of its acquisition of the Purchased Shares. In
entering into this Agreement, Buyer's Group has relied solely
upon its own investigation and analysis and the representations,
warranties and other provisions of this Agreement and
acknowledges that none of the Seller Parent, Recap Co or any
other of their Affiliates, employees, agents or representatives
makes or has made any representation, express or implied, with
respect to the CRL Business or the Purchased Shares except as
expressly set forth in this Agreement or any certificate
delivered pursuant hereto. Buyer, by reason of its business or
financial experience, or the business and financial experience of
its professional advisors has the capacity to evaluate and
protect its own interests in the acquisition of the Purchased
Shares. Buyer, and each of its equity owners, has the financial
capacity to bear the risk of, including the entire loss of, its
investment in the Purchased Shares. Nothing contained in this
Section 4.7 shall prohibit or in any way limit Buyer and Buyer
Parent from relying upon the representations and warranties of
Seller Parent contained in Article 3 nor from being indemnified
pursuant to Article 8.
4.8 No Other Representations or Warranties
. Except for the representations and warranties contained
in this Article 4 or in any certificates or other documents
executed by Buyer or Buyer Parent in connection with the
transactions contemplated by this Agreement, neither Buyer, Buyer
Parent nor any other Person makes any express or implied
representation or warranty on behalf of Buyer or Buyer Parent.
ARTICLE 5
COVENANTS OF THE PARTIES
5.1 Access to Information; Confidentiality
. Each of Seller Parent and Recap Co agrees that, during
the period commencing on the date hereof and ending on the
Closing Date, it will (a) give or cause to be given to Buyer and
its counsel, financial advisors, auditors, lenders, investors and
their respective authorized representatives in connection with
the Recapitalization (collectively, "Representatives") access to
the properties, books and records of the CRL Business and each of
the CRL Companies to the extent that Buyer may from time to time
reasonably request such access, (b) furnish or cause to be
furnished to Buyer or its Representatives such financial and
operating data and other information relating to the CRL
Business, the CRL Business Assets and each of the CRL Companies
as Buyer may from time to time reasonably request, (c) provide
Buyer and its Representatives such access as Buyer may reasonably
request to the representatives, officers and employees of its
Affiliates actively involved in the CRL Business, and (d) assist
Buyer and its Representatives as reasonably requested by Buyer in
connection with the Recapitalization and related transactions,
provided that such assistance will not unreasonably interfere
with the conduct of the CRL Business; provided, however, that
(i) access to the properties, books, records, representatives,
officers and employees shall only be provided during normal
business hours, upon reasonable advance notice and in such manner
as will not unreasonably interfere with the operation of the CRL
Business, (ii) all requests for access shall be directed to
Xxxx X. Xxxxxxxxxx, Vice President Business Development of Seller
Parent, or such other person as Seller Parent shall designate
from time to time, and (iii) Seller Parent shall have the right
to have a representative present at all times access to
properties, books, records representatives, officers and
employees is provided. Buyer agrees that, prior to the Closing,
it will, and will cause its Affiliates and Representatives to,
continue to treat all information so obtained from Seller Parent
or any of its Affiliates as "Confidential Information" under the
Confidentiality Agreement entered into between Seller Parent and
Buyer dated January 4, 1999 (the "Confidentiality Agreement"),
and will continue to honor its obligations thereunder and that if
requested by Seller Parent, Buyer will cause any of its
Representatives so requested to enter into a written agreement
acknowledging the terms of the Confidentiality Agreement and
agreeing to be bound thereby.
5.2 Approvals under Competition Laws.
5.2.1 Seller Parent and Buyer will, (i) as promptly as
practicable but in no event later than ten (10) Business Days
after the date of this Agreement, file with the United States
Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") in materially accurate and
complete form, the notification and report form, if any, required
for the transactions contemplated hereby pursuant to the HSR Act
and (ii) as promptly as practicable, make such filings or
notifications and seek such approvals as are required for the
transactions contemplated hereby under foreign antitrust or
competition Laws. Each of Seller Parent and Buyer shall furnish
to the other such necessary information and reasonable assistance
as the other may request in connection with its preparation of
any filing or submission that is necessary under the HSR Act or
under foreign antitrust or competition Laws. Seller Parent and
Buyer shall promptly notify the other of the status of any
communications with, and inquiries or requests for additional
information from, the FTC, the DOJ and the Governmental Entities
which administer the foreign antitrust or competition Laws and
shall comply promptly with any such inquiry or request. Each of
Seller Parent and Buyer will use its Commercial Efforts to obtain
as promptly as possible any clearance required under the HSR Act
and the foreign antitrust or competition Laws for the
consummation of the transactions contemplated hereby.
5.2.2 Buyer and Buyer Parent shall take or cause to be
taken, and Seller Parent shall reasonably cooperate in connection
therewith, any and all reasonable actions, including any
divestitures of assets of (i) Buyer and/or Buyer Parent and/or
their Affiliates and/or (ii) the CRL Business Assets, that may be
required by any Governmental Entity pursuant to the antitrust
laws of the United States or foreign antitrust or competition
Laws in order to obtain required consents or non-opposition to
the transactions contemplated hereby from the United States and
other relevant jurisdictions or to permit the consummation of the
transactions contemplated hereby on terms and conditions
consistent with the terms of any judgment, decree or order issued
by any court of competent jurisdiction that may be in effect on
the Closing Date; provided, however, that Buyer shall not be
required to violate any such judgment, decree or order, or to
effect or agree to effect any divestitures of assets of Buyer
and/or Buyer Parent and/or their Affiliates and/or the CRL
Business Assets if the aggregate annual revenues associated with
all such divested assets of Buyer and/or Buyer Parent and/or
their Affiliates and/or the CRL Business Assets exceed
$15,000,000 (individually or in the aggregate), using for the
purposes of such calculation the most recently completed fiscal
year of Buyer and with respect to the CRL Business, the fiscal
year ended December 26, 1998; provided, however, that any and all
proceeds of any such divestiture of assets shall be the exclusive
property of Buyer (or Recap Subco or one of the Recap
Subsidiaries as may be designated by Buyer).
5.3 Conduct of the CRL Business Pending the Closing Date
. Seller Parent agrees that, except as permitted, required
or contemplated by this Agreement or any Recapitalization
Document, or the Exhibits or Disclosure Schedules attached hereto
(including, without limitation, Schedule 5.3 of the Disclosure
Schedule) or thereto and except that none of the restrictions set
forth in this Section 5.3 shall apply to any of the Excluded
Assets, during the period between the date of this Agreement and
the Closing Date, without the prior written consent of Buyer
which shall not be unreasonably withheld, delayed or conditioned:
5.3.1 Seller Parent will, and will cause its Affiliates
to, operate the CRL Business only in the ordinary course of
business consistent with past practice;
5.3.2 Seller Parent will not, and will cause its
Affiliates not to, amend or modify in any material respect any
Material Contract;
5.3.3 Seller Parent will not permit Recap Subco or any
Recap Subsidiary to amend its charter or by-laws (or analogous
organizational documents), except as may be required in
connection with the consummation of the transactions contemplated
by this Agreement;
5.3.4 Seller Parent will not permit Recap Subco or any
Recap Subsidiary to issue or agree to issue any additional shares
of capital stock of any class or series, or any securities
convertible into or exchangeable for shares of capital stock, or
issue any options, warrants or other rights to acquire any shares
of capital stock;
5.3.5 Seller Parent will not, and will not permit any of
its Affiliates to: (i) sell, transfer, dispose of or encumber
any of the CRL Business Assets having a value, individually or in
the aggregate, in excess of $100,000, other than in the ordinary
course of business consistent with past practice; (ii) enter into
any employment or consulting agreement with any employee of the
CRL Business or grant any increase in the compensation of any
such employee, except for increases in the ordinary course of
business consistent with past practice or as a result of any
collective bargaining, any industrial award or as required by any
employment or other agreement, or pursuant to any policy or any
bonus, pension, profit-sharing or other plan or commitment;
(iii) make any loans or enter into any transaction with any
Affiliate other than transactions entered into in the ordinary
course of business consistent with past practice; (iv) establish,
amend or contribute to any pension, retirement, profit sharing,
or stock bonus plan or multiemployer plan covering any of the
employees of the CRL Business except as required by Law or in the
ordinary course of business consistent with past practice;
(v) waive, cancel, sell or otherwise dispose of for less than the
face value thereof any material claim or right that the CRL
Business has against others, except in the ordinary course of
business consistent with past practices; (vi) incur indebtedness
at any Joint Venture which would constitute Excluded Debt; or
(vii) commit, or enter into any agreement to do, any of the
foregoing.
5.4 Consents
. Seller Parent shall, at its sole cost and expense, use
its Commercial Efforts to promptly obtain the consents, approvals
and authorizations and to take the other actions set forth on
Schedule 3.4. Buyer shall, on Seller Parent's request, use its
Commercial Efforts to assist Seller Parent in obtaining such
consents, approvals and authorizations and shall have the right,
if additional assurances with respect to the assumption of
obligations by Recap Subco or any of the Recap Subsidiaries after
the Closing Date are requested by the Person from whom consent,
approval or authorization is sought, participate, directly or
through its Representatives, in the process of obtaining such
consents, approvals and authorizations. The forms, terms and
conditions of such consents, approvals and authorizations shall
be subject to the prior approval of Buyer, which shall not be
unreasonably withheld or delayed.
5.5 Tax Matters.
5.5.1 Seller Parent shall cause the CRL Business, Recap
Subco and the Recap Subsidiaries to be included in the
consolidated federal income Tax Returns of Seller Parent for any
periods for which it is required to be so included, and in any
other required state, local and foreign consolidated, affiliated,
combined, unitary or other similar group income Tax Returns that
include the CRL Business, for all periods ending on or prior to
the Closing Date. Seller Parent shall prepare information
(including schedules, worksheets and other data) necessary, in
Seller Parent's judgment, to include the CRL Business, Recap
Subco and the Recap Subsidiaries in such income Tax Returns for
such periods. Seller Parent shall timely prepare and file, or
cause to be prepared and filed, all income Tax Returns of or
including the CRL Business, Recap Subco and the Recap
Subsidiaries for all taxable periods ending on or before the
Closing Date and shall pay, or cause to be paid, when due all
income Taxes relating to such Tax Returns.
5.5.2 (a) Seller Parent shall have the right and
obligation to represent the interests of the CRL Business, Recap
Subco or the Recap Subsidiaries in any Tax audit or
administrative or court proceeding relating to Tax Returns for
any periods or portions thereof ending on or prior to the Closing
Date.
(b) Following the Closing, in the event of an audit of
Recap Subco or any Recap Subsidiary as referred to in
Section 5.5.3, Buyer shall execute, or cause the appropriate
Affiliate of Buyer to execute, a federal tax Form 2848 or
comparable Power of Attorney authorizing Seller Parent or Seller
Parent's designated representative to represent Recap Co or such
Recap Subsidiary with respect to income Taxes for which Seller
Parent may be liable pursuant to this Section 5.5 or Article 8.
5.5.3 Buyer shall promptly notify Seller Parent in
writing upon receipt by Buyer or any Affiliate of Buyer of notice
of any pending or threatened Tax audits or assessments of the CRL
Business, Recap Subco or the Recap Subsidiaries so long as any
period or portion thereof prior to the Closing Date remains open
to the Knowledge of Buyer.
5.5.4 After the Closing Date, Buyer and Seller Parent
shall provide each other with such cooperation and information
relating to the CRL Business, Recap Subco or the Recap
Subsidiaries as either party reasonably may request in filing any
Tax Return (or amended Tax Return) or refund claim, determining
any Tax liability or a right to a refund, conducting or defending
any audit or other proceeding in respect of Taxes or effectuating
the terms of this Agreement. The parties shall retain all Tax
Returns, schedules, work papers and other material documents
relating thereto, until the seventh anniversary of the Closing
Date or, if later, the expiration of any relevant statute of
limitations (and, to the extent notified by any party, any
extensions thereof) and, unless such Tax Returns and other
documents are offered and delivered to Seller Parent or Buyer, as
applicable, until the final determination of any Tax in respect
of such years. Any information obtained under this Section 5.5.4
shall be kept confidential, except as may be otherwise necessary
in connection with filing any Tax Return (or amended Tax Return)
or refund claim, determining any Tax liability or a right to a
refund, conducting or defending any audit or other proceeding in
respect of Taxes or otherwise effectuating the terms of this
Agreement. Notwithstanding the foregoing, neither Seller Parent
nor Buyer, nor any of their Affiliates, shall be required
unreasonably to prepare any document, or determine any
information not then in its possession, in response to a request
under this Subsection 5.5.4; provided, however, no request shall
be deemed unreasonable if made in response to the request of a
taxing authority for information or documents not in the
possession of the party receiving the request nor otherwise
reasonably available to it.
5.5.5 CRL will join with Buyer in making a timely
election under Section 338(h)(10) of the Code (the
"Section 338(h)(10) Election") to treat the Merger as the deemed
sale of the assets of all or some (as elected by Buyer) of Recap
Co and the Recap Subsidiaries while such Persons are members of
Seller Parent's consolidated group for federal income tax
purposes. If requested by Buyer, CRL (unless there is a material
detriment to CRL) will also join with Buyer in making any similar
election under state or local law, which if made shall be treated
as part of the Section 338(h)(10) Election. In order to effect a
timely Section 338(h)(10) Election, at the Closing, each of CRL
and Buyer shall jointly prepare and execute copies of IRS Form
8023 and all attachments required to be filed therewith in
accordance with the Code and the applicable regulations
thereunder, which Form 8023 shall be completed by them to the
extent practicable at the time of the Closing in a manner
consistent with the parties' agreement as to the allocation of
the "MADSP" among the assets of Recap Co and the Recap
Subsidiaries as set forth in Schedule 5.5.5 of the Disclosure
Schedule and shall be delivered to Buyer at the Closing.
Following the Closing, Buyer will complete the Form 8023 and will
adjust any allocation to comply with the requirements of
Section 33 8(h)(10) of the Code and in a manner consistent with
provisions of Schedule 5.5.5 of the Disclosure Schedule, and will
file the Form 8023 with the IRS (and any applicable state or
local tax authority) with a copy to CRL in order to effect a
timely Section 338(h)(10) Election. CRL and Buyer agree
otherwise to take all necessary action to make a timely
Section 338(h)(10) Election with respect to the Merger, and shall
otherwise cooperate fully with each other in the making of such
election and to comply with all substantive and procedural
requirements of Section 338(h)(10) of the Code, any applicable
regulations thereunder and any applicable provision of state or
local law. Except as required by applicable Law, neither CRL nor
Buyer will take, nor permit any Affiliate to take, for federal,
state or local income Tax purposes, any position inconsistent
with the Section 338(h)(10) Election or the allocation set forth
in the Form 8023 filed by Buyer. Buyer will make a timely
election under Section 338(g) of the Code with respect to any
Recap Subsidiary which is incorporated in a jurisdiction other
than the United States and shall comply with all substantive and
procedural requirements of Section 338(g) of the Code and any
applicable regulations thereunder, unless Buyer would suffer a
material detriment as a result of making such election.
5.6 Employee Matters.
5.6.1 During the period commencing on the Closing Date
and ending on the eighteen (18) month anniversary of the Closing
Date, Buyer shall, or shall cause Recap Subco and the Recap
Subsidiaries to provide employee benefit plans, programs and
arrangements having benefits not less favorable in the aggregate
to the Employees of Recap Subco and the Recap Subsidiaries than
the Benefit Plans and Non-U.S. Benefit Plans, as applicable,
provided that nothing in this Agreement shall require Buyer,
Recap Subco or any Recap Subsidiary to establish, provide,
sponsor or maintain any specific plan, program or arrangement or
shall require any such Person to continue the employment, or to
refrain from modifying or terminating the terms of employment of
any Employee. In the case of any new plan, program or
arrangement, Buyer shall, or shall cause Recap Subco and the
Recap Subsidiaries to the extent permitted under applicable Law,
provide that periods of service with any of Recap Subco any Recap
Subsidiary, any Seller or any Affiliate of any of the foregoing
Persons prior to the Closing Date shall be credited for
eligibility, vesting and benefits purposes (if applicable and
without duplication) with respect to such plan, program or
arrangement, provided that no service will be credited for
purposes of calculating an employee's benefit accrual under any
Defined Benefit Plan or any Non-U.S. Benefit Plan that is a
defined benefit plan for any period of time that the employee did
not participate in such plan on or before the Closing Date.
5.6.2 For any mass layoff or plant closing which occurs
on or after the Closing Date, Buyer shall cause Recap Subco or
the relevant Recap Subsidiary to give any notice to the Employees
which is required under the Worker Adjustment and Retraining
Notification Act or any similar federal, state, local or foreign
Law.
5.6.3 On the Closing Date, Buyer shall have in effect
and thereafter maintain or cause Recap Subco and the Recap
Subsidiaries to have in effect and maintain all policies of
worker's compensation, employer's liability or similar insurance
which are required by any Governmental Entity to be in effect as
of the Closing Date.
5.6.4 Buyer shall provide or shall cause Recap Subco or
the Recap Subsidiaries to provide continuation health care
coverage pursuant to Part 6 of Title I of ERISA to all current or
former employees of Recap Subco, Recap Subsidiaries and/or their
predecessors and such individuals' qualifying beneficiaries who
are eligible for such coverage.
5.6.5 On the Closing Date, Seller Parent shall pay and
discharge in full all Excluded Debt other than Excluded Debt with
respect to Joint Ventures and terminate all related liens,
security interests or other encumbrances in respect of CRL
Business Assets and comply and cause Recap Subco to comply with
their respective obligations under the Releases.
5.7 Additional Assurances.
5.7.1 After the Closing Date, Seller Parent shall
promptly and shall cause its Affiliates promptly to, and Buyer
shall promptly and shall cause Recap Co and the Recap
Subsidiaries promptly to, take such additional actions and
execute any such additional documents and instruments as may be
reasonably necessary (i) to effectuate the transactions
contemplated by this Agreement, including to fully vest good and
valid title to all of the CRL Business Assets in Recap Subco and
the Recap Subsidiaries, as applicable, and to fully vest good and
valid title in the Excluded Assets in Seller Parent or its
Affiliates free and clear of all liens, claims or other
encumbrances except Permitted Encumbrances, and (ii) to cause
Seller Parent or its Affiliates to retain or assume any Excluded
Liabilities not retained or assumed by Seller Parent or an
Affiliate prior to or on the Closing Date, or to cause Recap
Subco or any Recap Subsidiary to assume any Assumed Liability not
assumed by it prior to or on the Closing Date. Prior to and
after the Closing Date, Seller Parent agrees to assist Buyer in
any reasonable manner requested, and without unreasonable delay,
in the preparation of financial statements of the CRL Business,
including the interim unaudited financial statements at and for
the three months ended March 27, 1999 and at and for nine months
ended September 25, 1999, including so that such financial
statements can be presented in conformity with the accounting
rules of Regulation S-X under the Securities Act of 1933, as
amended; provided however, that Buyer shall bear any out-of-
pocket costs and expenses incurred by Seller Parent or any of its
Affiliates in connection with providing such assistance.
5.7.2 Notwithstanding anything to the contrary contained
in this Agreement, to the extent that the sale, assignment,
transfer, conveyance or delivery or attempted sale, assignment,
transfer, conveyance or delivery of any CRL Business Asset in the
Internal Reorganization or any transaction contemplated by this
Agreement is prohibited by any applicable Law or would require
any Governmental Entity or other third party authorizations,
approvals, consents or waivers and such authorizations,
approvals, consents or waivers shall not have been obtained prior
to the Closing and either such item(s) are not a condition to
Closing or Buyer shall have waived in writing the applicable
condition to Closing with respect to such item(s), this Agreement
shall not constitute a sale, assignment, transfer, conveyance or
delivery, or any attempted sale, assignment, transfer, conveyance
or delivery thereof. Following the Closing, the parties shall
use Commercial Efforts and shall cooperate with each other to
obtain promptly such authorizations, approvals, consents or
waivers. Pending such authorization, approval, consent or
waiver, the parties shall cooperate with each other in any
reasonable and lawful arrangements designed to provide to Buyer,
Recap Co and the Recap Subsidiaries the benefits and liabilities
of use of such CRL Business Asset. Once such authorization,
approval, consent or waiver for the sale, assignment, transfer,
conveyance or delivery of a CRL Business Asset not sold,
assigned, transferred, conveyed or delivered at the Closing is
obtained, Seller Parent shall and shall cause its Affiliates to
promptly assign, transfer, convey and deliver, or cause to be
assigned, transferred, conveyed and delivered, such CRL Business
Asset to Recap Subco or a Recap Subsidiary for no additional
consideration free and clear of all liens, claims or other
encumbrances except Permitted Encumbrances. To the extent that
any such CRL Business Asset cannot be transferred or the full
benefits and liabilities of use of any such CRL Business Asset
cannot be provided to Buyer, Recap Subco and the Recap
Subsidiaries following the Closing pursuant to this Section 5.7,
then Buyer and Seller Parent or one or more of its Affiliates
shall enter into such arrangements (including subleasing or
subcontracting if permitted) designed to provide to Recap Subco
and the Recap Subsidiaries the economic and operational
equivalent of obtaining such authorization, approval, consent or
waiver and the performance by Recap Subco and the Recap
Subsidiaries of the obligations thereunder to the extent
permitted by Law.
5.7.3 Subject to Section 5.4, Buyer and Seller Parent
shall cooperate with each other and use their Commercial Efforts,
as soon as practicable after the Closing, to take all actions, if
any are required, to transfer all permits, authorizations and
registrations issued to the CRL Business.
5.8 Updated Disclosure Schedule
. Seller Parent shall prepare and deliver to Buyer at least
five (5) Business Days prior to the Closing an update of the
Disclosure Schedule for the sole purpose of disclosing events or
other matters which have occurred after the date of this
Agreement other than as a result of the breach of this Agreement
by Seller Parent, any of the Sellers, Recap Subco or Recap Co or
occurred prior to the date of this Agreement but did not require
disclosure as of the date of this Agreement (an "Update"). In
the event of the delivery to Buyer of an Update which sets forth
the occurrence or existence of an event or other matter which
would cause the condition set forth in Section 6.2.1 hereof not
to be satisfied (determined without regard to the Update), Buyer
shall have no obligation to complete the Closing of the
transactions contemplated by this Agreement and may terminate
this Agreement pursuant to and in accordance with the procedure
set forth in Section 7.1.1(d) (without regard to the twenty (20)
day cure period); provided that in the event that Buyer does not
so terminate this Agreement and the Closing occurs, the
Disclosure Schedule shall be deemed to be amended as of the date
of this Agreement to include the events or other matters set
forth in the Update for all purposes of this Agreement, including
Article 8.
5.9 Buyer's Insurance
. From and after the Closing and at all times until the
Recap Co Sub Notes have been paid in full and Seller Parent
and/or its Affiliates cease to beneficially own any shares of
Recap Co Common Stock, Buyer shall cause Recap Co and the Recap
Subsidiaries to procure and maintain in full force and effect
insurance coverage in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions
as is the normal industry practice for businesses of similar size
operating in similar industries and markets and with similar
financial conditions, including without limitation, Directors and
Officers Liability Insurance with annual limits in an amount not
less than $10,000,000 per occurrence and in aggregate.
5.10 Cash Management
. On the Closing Date, Seller Parent shall cause the
checking and all other applicable bank accounts of Recap Co and
the Recap Subsidiaries to have on deposit all amounts in good
funds to pay in full on or following the Closing Date all checks
and drafts of the CRL Business issued but not drawn on or prior
to the Closing Date.
5.11 Company Acquisition Proposal
. Seller Parent covenants and agrees that, from and after
the date of this Agreement and until the first to occur of its
termination pursuant to Article 7 or the Closing, neither it nor
any of its Affiliates nor any of its representatives shall
directly or indirectly (a) take any action to solicit or initiate
any Company Acquisition Proposal (as hereinafter defined), or
(b) engage in discussions or negotiations with any Person with
respect to any Company Acquisition Proposal, or (c) disclose any
non-public information relating to the CRL Business or afford
access to the employees, properties, books or records of the CRL
Business to any Person that has made or, to Seller Parent's
Knowledge is considering making, a Company Acquisition Proposal.
Within five (5) Business Days after receipt of a Company
Acquisition Proposal or any request for nonpublic information
relating to the CRL Business or for access to the employees,
properties, books or records of the CRL Business by any Person
who indicates that they may be considering making, or has made, a
Company Acquisition Proposal, Seller Parent shall notify Buyer of
the fact that such event has occurred and shall notify Buyer of
the Person if the Company Acquisition Proposal is received,
directly or indirectly, by any Person identified on Schedule 5.11
hereto. For the purposes hereof, "Company Acquisition Proposal"
shall mean any offer or proposal for (whether oral or in
writing), or any indication of interest in, a merger or other
business combination involving any of the CRL Business, Recap
Subco or any Recap Subsidiary or any Seller or the acquisition of
any equity interest in, or all or a substantial portion of the
assets of, any of Recap Subco, any Recap Subsidiary or any Seller
or the CRL Business, other than the transactions contemplated by
this Agreement and other than transactions with respect to the
Excluded Assets.
5.12 Books and Records
. Seller Parent shall retain in accordance with its current
records retention polices all books and records relating to the
CRL Business and, unless otherwise consented to in writing by
Seller Parent or Buyer (as the case may be), Buyer and Seller
Parent will not, for a period of six years following the Closing
Date, destroy, alter, or otherwise dispose of any of such books
and records without first offering to surrender to Seller Parent
or Buyer, as the case may be, such books and records or any
portion thereof which Buyer or Seller Parent, as the case may be,
may intend to destroy, alter, or dispose. Buyer and Seller
Parent will allow the other party's representatives access to
such books and records, upon reasonable request during such
party's normal business hours, for the purpose of examining and
copying the same (but only to the extent they relate to the CRL
Business) in connection with any matter related to or arising out
of this Agreement or the transactions contemplated hereby or the
conduct by Buyer of the CRL Business.
5.13 Use of Names
. Buyer, Recap Co and the Recap Subsidiaries are
purchasing, acquiring or otherwise obtaining right, title or
interest in the names "Xxxxxxx River Laboratories" and "SPAFAS"
and any tradenames, trademarks, identifying logos or service
marks related thereto or employing the words "Xxxxxxx River" or
"SPAFAS" (collectively, the "Names"). Seller Parent agrees that,
neither it nor any of its Affiliates shall make any commercial
use of the Names from and after the Closing Date; provided,
however, Seller Parent shall retain the right to make use of the
Names for purposes of reflecting its ownership of the CRL
Business prior to the Closing Date. On the Closing Date, Seller
Parent shall cause the name of each of its Affiliates that
contains the words "Xxxxxxx River" or "SPAFAS" to be changed to a
name that does not contain such words.
5.14 Commitment Letters
. Buyer shall use its Commercial Efforts to obtain the
financing contemplated by the Commitment Letters and shall use
Commercial Efforts to notify Seller Parent in writing within one
(1) Business Day if any of the Commitment Letters are terminated
or within five (5) Business Days of any of the terms or
conditions of the Commitment Letters are amended or modified in
any material respect.
5.15 Broekman Sale
. In the event that the sale of the Broekman Institute
B.V., a Netherlands corporation located at Schoolstraat 21,5711
CP Someran, The Netherlands, to Panning B.V. or an Affiliate
thereof (the "Broekman Sale") is consummated after the Closing
Date, Buyer shall cause Xxxxxxx River Laboratories Europe GmbH to
pay to Seller Parent all net proceeds of the Broekman Sale within
two (2) Business Days after receipt of such proceeds by Xxxxxxx
River Laboratories Europe GmbH; provided, however, Xxxxxxx River
Laboratories Europe GmbH shall be entitled to retain any and all
sale proceeds which are placed in escrow on the closing date of
the Broekman Sale (the "Escrow Amount") and thereafter released,
regardless of whether the Broekman Sale occurs prior to, on or
after the Closing Date. In the event that Pharming B.V. or an
Affiliate thereof (the "Broekman Purchaser ") makes a claim for
indemnification under the Broekman Sale agreement, after the
Closing Date Buyer shall cause Recap Subco or a Recap Subsidiary,
at Seller Parent's sole cost and expense, to defend the claim, to
the same extent as it would defend any claim for which it was
responsible for payment. In the event the Broekman Purchaser is
entitled to indemnification, such amount first shall be paid out
of the sale proceeds placed in escrow to the extent of the Escrow
Amount and the balance, if any, shall promptly be paid by Seller
Parent. Buyer shall cause Recap Co or a Recap Subsidiary to keep
Seller Parent informed on a timely basis of any and all
indemnification claims and the status thereof. In the event that
the Broekman Sale is consummated after the Closing Date, Seller
Parent shall indemnify Recap Co and the Recap Subsidiaries for
any income tax or similar tax liability arising from any income
or gain realized by Recap Co or any Recap Subsidiaries on the
Broekman Sale.
5.16 Stage I Reorganization Matters
. Seller Parent shall use its Commercial Efforts cause to
CRL, SPAFAS or International, as the case may be, to obtain the
consents, approvals and authorizations and make the filings set
forth in Schedule 5.16 of the Disclosure Schedule on or prior to
the Closing Date.
5.17 Confidential Information
. Seller Parent and the Sellers covenant and agree that
none of them will, following the Closing, without the prior
written consent of Buyer, disclose (or permit to be disclosed) or
use in any way any confidential information of the CRL Business
unless (i) compelled to disclose such confidential information by
judicial or administrative process or, in the opinion of its
counsel, by other requirements of Law, (ii) such confidential
information is available to the public through no fault of Seller
Parent or any of the Sellers, (iii) such confidential information
becomes available to Seller Parent or any of the Sellers from a
third party who to their knowledge, is under no confidential
fiduciary obligation to the CRL Business, Recap Co, the Recap
Subsidiaries or Buyer with respect to such confidential
information, or (iv) such confidential information is used in
connection with reflecting, asserting or defending Seller
Parent's or any of the Seller's ownership of the CRL Business
prior to the Closing Date.
5.18 Closing Efforts
. Each of Buyer, Buyer Parent and Seller Parent shall use
their respective Commercial Efforts to consummate the
transactions contemplated hereby.
5.19 Interim Financial Statements
. Seller Parent will, or will cause its Affiliates to,
maintain the books and records of the CRL Business, on a basis
consistent with past practice, and Seller Parent will furnish, or
will cause its Affiliates to furnish, Buyer for each complete
fiscal quarter occurring after June 26, 1999, financial
statements (the "Quarterly Financial Statements") of the CRL
Business, including consolidated statements of income, changes in
shareholders' equity and cash flows and a consolidated balance
sheet, all prepared in accordance with GAAP (but without
footnotes) on a basis consistent with the preparation of the
Unaudited Financial Statements, within fifteen (15) days of the
end of such fiscal quarter ending on or prior to the Closing.
5.20 Financial Assurances
. As promptly as practicable after the Closing Date, Buyer
shall provide to Seller Parent evidence of the release of Seller
Parent or any Seller from, the cancellation of Seller Parent's or
any Seller's obligation under, or the substitution of Buyer,
Recap Co, Recap Subco or any Recap Subsidiary for Seller Parent
or any Seller in, the financial assurances or Letters of Credit
related to the CRL Business set forth on Schedule 5.20 of the
Disclosure Schedule (the "Financial Assurances"), which evidence
shall be in form and substance reasonably satisfactory to Seller
Parent.
5.21 Financial Statements.
5.21.1 On or before August 4, 1999, Seller Parent shall
deliver to Buyer the audited consolidated balance sheets of the
CRL Business as of December 26, 1998 and December 27, 1997 and
the related audited consolidated statements of income, changes in
shareholder's equity and cash flows, including the notes thereto,
for each of the three years in the period ended December 26,
1998, with an unqualified report thereon by
PricewaterhouseCoopers LLP (the "Audited Financial Statements").
5.21.2 On or before August 4, 1999, Seller Parent shall
deliver to Buyer the final unaudited consolidated balance sheet
of the CRL Business as of June 26, 1999, and the related
unaudited consolidated statements of income and cash flows,
including the notes thereto, for the six-month periods ended
June 26, 1999 and June 27, 1998 (the "Unaudited Financial
Statements"). The Audited Financial Statements and the Unaudited
Financial Statements are collectively referred to as the
"Financial Statements."
5.21.3 On or before midnight on the second Business Day
after the date of delivery of the Financial Statements, Buyer
shall provide a written notice (the "Notice") to Seller Parent
which states whether or not the Financial Statements comply with
the following (the "Standards"): (i) as to the Audited Financial
Statements: (A) the Audited Financial Statements are
substantially identical to the Draft Audited Financial Statements
with respect to the consolidated balance sheets as at
December 27, 1997 and December 26, 1998 and the related
consolidated statements of income and changes in shareholder's
equity for each of the three years in the period ended
December 26, 1998, (B) the Audited Financial Statements are
substantially identical to the Draft Audited Financial Statements
with respect to the line items in the consolidated cash flow
statements for each of the three years in the period ended
December 26, 1998 for cash and cash equivalents at the beginning
of the applicable period, cash and cash equivalents at the end of
the applicable period, depreciation, amortization and capital
expenditures, in each case for the applicable periods, and
(C) the notes to the Audited Financial Statements are
substantially identical as to form with the notes to the Draft
Audited Financial Statements, and the notes to the Audited
Financial Statements contain the financial information required
by GAAP to be contained therein; and (ii) as to the Unaudited
Financial Statements: (A) the Unaudited Financial Statements are
substantially similar to the Draft Unaudited Financial Statements
with respect to the consolidated balance sheet as of June 26,
1999 and the related consolidated statements of income for the
six month periods ended June 26, 1999 and June 27, 1998, (B) the
Unaudited Financial Statements are substantially similar to the
Draft Unaudited Financial Statements with respect to the line
items in the consolidated cash flow statements for the six month
periods ended June 26, 1999 and June 27, 1998 for cash and cash
equivalents at the beginning of the applicable period, cash and
cash equivalents at the end of the applicable period,
depreciation, amortization and capital expenditures, in each case
for the applicable periods, and (C) the notes to the Unaudited
Financial Statements are substantially similar as to form with
the notes to the Draft Unaudited Financial Statements, and the
notes to the Unaudited Financial Statements contain the financial
information required by GAAP to be contained therein. If the
Notice states that the Financial Statements are not in conformity
with the Standards, or if Buyer provides a written notice to
Seller Parent after August 4, 1999 that the Financial Statements
have not been delivered to Buyer, this Agreement automatically
shall terminate and be of no further force and effect. If the
Notice states that the Financial Statements are in conformity
with the Standards, or if the Notice is not timely given, this
Agreement shall continue in full force and effect in accordance
with its terms.
5.22 Net Underfunding Amount
. Ten (10) Business Days prior to the Closing Date, Seller
Parent shall deliver to Buyer its calculation of the Net
Underfunding Amount, together with supporting documentation.
Seller Parent and Buyer shall use their Commercial Efforts to
reach agreement on the Net Underfunding Amount. In the event
they are unable to reach agreement within three Business Days
after Buyer's receipt of Seller Parent's calculation, Xxxxxx
Xxxxxxxx LLP shall be engaged to determine the Net Underfunding
Amount and Buyer and Seller Parent shall be bound by its
determination. The fees and expenses of Xxxxxx Xxxxxxxx LLP
shall be paid 50% by Buyer and 50% by Seller Parent.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of Buyer and Seller Parent and
Recap Co
. The respective obligations of Buyer, Buyer Parent, Seller
Parent, the Sellers, Recap Co and Recap Subco to consummate the
transactions contemplated by this Agreement shall be subject to
the satisfaction at or prior to the Closing of the following
conditions:
6.1.1 (a) There shall be no injunction, restraining
order or decree of any nature of any Governmental Entity that is
in effect that restrains or prohibits the consummation of the
transactions contemplated hereby, provided that with respect to
injunctions, restraining orders or decrees that do not
individually, or in the aggregate, restrain the transfer of a
material portion of the CRL Business Assets (an "Immaterial
Injunction"), Buyer shall be required to use Commercial Efforts
to remove such Immaterial Injunction by entering into an
agreement with the applicable Governmental Entity to divest such
enjoined CRL Business Assets after the Closing Date, or Buyer
shall have the right to require Seller Parent to divest the
enjoined CRL Business Assets on or prior to the Closing Date, and
in either case Buyer shall be entitled to the proceeds of such
divestiture.
(b) Subject to Section 5.2.2, all consents, approvals,
authorizations and orders of Governmental Entities that are
necessary to permit the consummation of the transactions
contemplated by this Agreement and which are set forth on
Schedule 6.1.1 (the "Governmental Consents") shall have been
obtained in form and substance reasonably satisfactory to Buyer
and Seller Parent, and, without limiting the foregoing, all
applicable waiting periods specified under the HSR Act and
applicable foreign antitrust and competition Laws with respect to
the transactions contemplated by this Agreement, shall have
lapsed or been terminated.
(c) For purposes of Section 6.1.1(a), a material
portion of the CRL Business Assets shall mean CRL Business Assets
generating aggregate annual revenues exceeding $15,000,000 based
on the fiscal year ended December 26, 1998.
6.2 Conditions to Obligations of Buyer
. The obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to the satisfaction
(or waiver in writing by Buyer) at or prior to the Closing of
each of the following conditions:
6.2.1 Each representation and warranty of Seller Parent
contained in this Agreement shall be true and correct on and as
of the Closing Date, with the same force and effect as though
such representations and warranties had been made on and as of
the Closing Date, except (i) to the extent that any such
representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true
and correct as of such date, and (ii) to the extent that any
inaccuracies in such representations and warranties, individually
or in the aggregate, have not had, and would not reasonably be
expected to have, a CRL Business Material Adverse Effect.
6.2.2 Seller Parent, Recap Subco and each Seller shall
have performed all obligations and agreements, and complied with
all covenants and conditions, contained in this Agreement to be
performed or complied with by each of them prior to or on the
Closing Date except to the extent that any breaches of such
obligations, agreements, covenants and conditions, individually
or in the aggregate, have not had, and would not reasonably be
expected to have, a CRL Business Material Adverse Effect.
6.2.3 Buyer shall have received a certificate of Seller
Parent, dated the Closing Date and executed by an officer of
Seller Parent, to the effect that each of the representations and
warranties of Seller Parent contained in this Agreement is true
and correct on the Closing Date as if made on such Date, except
as set forth in the Update, and that the Update is true and
correct.
6.2.4 The Affiliates of Parent, other than the CRL
Business employees, who are directors and officers of Recap Subco
and the Recap Subsidiaries and who have been requested to resign
by Buyer shall have tendered their resignations effective as of
the Closing Date.
6.2.5 Buyer shall have received evidence satisfactory to
Buyer of receipt of the consents or approvals to the consummation
of the transactions contemplated by this Agreement and the
Internal Reorganization under (or, as applicable, the taking of
the indicated action in connection with the transactions
contemplated by this Agreement and the Internal Reorganization
with respect to) the contracts, agreements, leases, other
instruments, licenses and other items which have been designated
with an asterisk in Schedule 3.4 of the Disclosure Schedule,
which consents, approvals and actions shall be in form and
substance reasonably satisfactory to Buyer.
6.2.6 On the Closing Date, Seller Parent shall have
delivered to Buyer all of the following:
(i) stock certificates representing the Purchased
Shares. Each such certificate evidencing the
Purchased Shares shall be duly endorsed in blank,
or be accompanied by stock transfer powers duly
executed in blank, and shall be accompanied by all
requisite documentary or stock transfer taxes
affixed thereto and canceled;
(ii) all stock certificates, minute books, stock books,
ledgers and registers, corporate seals and other
corporate records relating to the organization,
ownership and maintenance of Recap Subco and each
Recap Subsidiary which are not located at Recap
Subco or any Recap Subsidiary in Wilmington,
Massachusetts or at the principal place of
business of Recap Subco or any Recap Subsidiary;
(iii)original or copies of consents, filings,
authorizations, approvals and other actions
described in Sections 5.5.5, 6.1.1(b) or 6.2.5;
(iv) certificates as to the valid existence and good
standing of Recap Subco and each Recap Subsidiary
which is organized under the Laws of the United
States of America (or other appropriate
certificates in those jurisdictions that do not
issue such good standing certificates) from the
Secretary of State or other appropriate
Governmental Entity of each of such Person's
respective jurisdiction of incorporation,
organization or formation, as the case may be,
dated as of a date within thirty (30) days of the
Closing Date; and
(v) a true and correct copy of the certificate of
incorporation or articles of organization, as the
case may be, by-laws or other organizational
documents of each of Recap Co, Recap Subco and
each Recap Subsidiary which is organized under the
Laws of the United States of America, certified as
true and correct by the Secretary or Assistant
Secretary of Seller Parent.
6.2.7 Seller Parent, Recap Co and each other stockholder
of Recap Co (other than Buyer) shall have executed and delivered
to Buyer the Investors' Agreement.
6.2.8 Buyer, Recap Co and Recap Subco shall have
received debt and equity proceeds in the amounts and on the terms
and conditions set forth in the Commitment Letters or such other
terms and conditions satisfactory to Buyer.
6.2.9 Buyer shall have received an opinion of counsel
for Seller Parent, Recap Co, Recap Subco and the Sellers, dated
the date of the Closing, in form and substance reasonably
satisfactory to Buyer.
6.3 Conditions to Obligations of Seller Parent, the Sellers,
Recap Co and Recap Subco
. The obligations of Seller Parent, each Seller, Recap Co
and Recap Subco to consummate the transactions contemplated by
this Agreement are subject to the satisfaction (or waiver in
writing by Seller Parent) at or prior to the Closing of each of
the following conditions:
6.3.1 Each of the representations and warranties of
Buyer contained in this Agreement shall be true and correct on
and as of the Closing Date, with the same force and effect as
though such representations and warranties had been made on and
as of the Closing Date, except (i) to the extent that any such
representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true
and correct as of such date, and (ii) to the extent that any
inaccuracies in such representations and warranties, individually
or in the aggregate, have not had, and would not reasonably be
expected to have, a Buyer Material Adverse Effect.
6.3.2 Buyer shall have performed all obligations and
agreements, and complied with all covenants and conditions,
contained in this Agreement to be performed or complied with by
it prior to or on the Closing Date except to the extent that any
breaches of such obligations, agreements, covenants and
conditions, individually or in the aggregate, have not had, and
would not reasonably be expected to have, a Buyer Material
Adverse Effect.
6.3.3 Seller Parent shall have received a certificate of
Buyer, dated the Closing Date and executed by an officer of
Buyer, to the effect that the conditions specified in
Sections 6.3.1 and 6.3.2 above have been fulfilled.
6.3.4 Buyer, Recap Co and each other stockholder of
Recap Co (other than CRL) shall have executed and delivered to
Seller Parent the Investors' Agreement.
6.3.5 Seller Parent shall have received an opinion of
counsel for Buyer and Buyer Parent, dated the date of the
Closing, in form and substance reasonably satisfactory to Seller
Parent.
ARTICLE 7
TERMINATION AND ABANDONMENT
7.1 Termination.
7.1.1 This Agreement maybe terminated at anytime prior
to the Closing Date:
(a) by mutual written consent of Seller Parent and
Buyer;
(b) by either Seller Parent or Buyer, if: (i) the
Redemptions, Merger and Recapitalization shall not have been
consummated on or prior to the date which is three (3) months
after the date hereof; provided, however, that the right to
terminate this Agreement pursuant to this Section 7.1.1(b) shall
not be available to any party whose breach of any of its
representations, warranties, covenants or other agreements under
this Agreement or failure to perform any of its obligations under
this Agreement results in the failure of the transactions
contemplated by this Agreement to be consummated by such time; or
(ii) subject to Section 5.2.2 any Governmental Entity shall have
issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement
and such order, decree or ruling or other action shall have
become final and non-appealable (but only if the terminating
party (if it has standing to do so) shall have used its
Commercial Efforts to cause such order, decree or ruling or other
action to be lifted or vacated);
(c) by Seller Parent, if (i) Buyer or Buyer Parent
shall have breached any of its representations, warranties,
covenants or other agreements contained in this Agreement, which
breach or failure to perform is incapable of being cured or has
not been cured within 20 days after the giving of written notice
thereof to Buyer and such breach, individually or in the
aggregate, has had or would reasonably be expected to have, a
Buyer Material Adverse Effect; provided, however, that Seller
Parent may not terminate this Agreement pursuant to this
Section 7.1.1(c) if Seller Parent, Recap Subco, Recap Co or any
Seller is then in breach in any material respect of any of such
Person's representation, warranty, covenant or agreement
contained in this Agreement, or (ii) one or more of the
Commitment Letters have been terminated or have expired and
substitute commitment letters, on substantially the same terms
and conditions, have not been entered into by Buyer at the time
of such termination or expiration.
(d) by Buyer, if Seller Parent, Recap Co, Recap Subco
or any Seller shall have breached any of such Person's
representations, warranties, covenants or other agreements
contained in this Agreement, which breach or failure to perform
is incapable of being cured or has not been cured within 20 days
after the giving of written notice thereof to Seller Parent and
such breaches, individually or in the aggregate, have had or
would reasonably be expected to have, a CRL Business Material
Adverse Effect; provided, however, that Buyer may not terminate
this Agreement pursuant to this Section 7.1.1(d) if Buyer is then
in breach in any material respect of any representation,
warranty, covenant or agreement contained in this Agreement.
7.1.2 The party desiring to terminate this Agreement
pursuant to Section 7.1.1 shall give written notice of such
termination to the other party in accordance with Section 9.5
below.
7.1.3 This Agreement shall automatically terminate under
the circumstances set forth in Section 5.21.3.
7.2 Effect of Termination and Abandonment
. In the event of termination of this Agreement and the
abandonment of the transactions contemplated by this Agreement
pursuant to this Article 7, this Agreement (other than as set
forth in this Section 7.2 and Sections 9.1 (Public Announcement),
9.2 (Expenses), 9.5 (Notices) and 9.14 (Applicable Law)) shall
become void and of no effect with no liability on the part of any
party hereto (or of any of its directors, officers, employees,
agents, legal or financial advisors or other representatives);
except nothing contained in this Agreement shall relieve any
party from any liability for any inaccuracy, misrepresentation or
breach of any representation, warranty, covenant or agreement
contained in this Agreement prior to such termination.
ARTICLE 8
SURVIVAL AND INDEMNIFICATION
8.1 Survival of Representations, Warranties and Covenants
. The representations and warranties of the parties
contained in this Agreement shall survive the Closing for the
periods set forth in this Section 8.1. The representations and
warranties of Seller Parent and Recap Co shall survive the
Closing and the representations and warranties of Buyer and Buyer
Parent shall survive the Closing until the close of business on
March 31, 2001 (the "Expiration Date"), provided, however, that
the representations and warranties contained in Sections 3.1,
3.2, 3.3, 3.5, 3.12(a)(i), (ii) and (iv), 4.1, 4.2, 4.3., and 4.7
shall survive the Closing until the sixth year anniversary of the
Closing Date with respect to claims which may be asserted in
connection with a breach thereof, the representations and
warranties contained in Section 3.16 shall survive the Closing
for four years with respect to claims which may be asserted in
connection with a breach thereof, and the representations and
warranties that are the subject of any indemnification claim
shall survive indefinitely, but only with respect to such
indemnification claim until such claim is finally resolved. The
covenants and agreements made by any party which are to be
performed after the Closing Date shall survive until fully
performed and the covenants and agreements made by any party
which are to be performed at or prior to the Closing Date shall
expire at the Closing other than Article 2 and Sections 5.6.5,
5.10 and 5.11.
8.2 Indemnification by Seller Parent
. Subject to the applicable limitations set forth in
Section 8.4 and in the manner herein provided, from and after the
Closing Date, Seller Parent shall indemnify and hold harmless
Recap Co, Recap Subco, each Recap Subsidiary, Buyer and its
Affiliates, and their respective employees, directors, agents and
representatives (collectively, the "Buyer Indemnified Parties"),
from and against any and all Loss and Litigation Expense, which
they or any of them may suffer or incur as a result of or arising
from any of the following: (a) any misrepresentation or breach
of any representation or warranty of Seller Parent contained in
this Agreement or in any certificate delivered pursuant hereto
including, without limitation, pursuant to Section 6.2.3 or as a
result of an Update; or (b) the failure by Seller Parent, any
Seller, Recap Co or Recap Subco to perform any of such Person's
covenants and agreements under this Agreement (in the case of
Recap Co and Recap Subco, covenants and agreements to be
performed on or prior to the Closing Date); or (c) any Excluded
Liability.
8.3 Indemnification by Recap Co
. Subject to the applicable limitations set forth in
Section 8.4 and in the manner herein provided, from and after the
Closing Date, Recap Co shall indemnify and hold harmless Seller
Parent, its Affiliates and their respective employees, directors,
agents and representatives (collectively, the "Seller Indemnified
Parties"), from and against any and all Loss and Litigation
Expense which they, or any of them, may suffer or incur as a
result of or arising from any of the following: (a) any
misrepresentation or breach of warranty of Buyer or Buyer Parent
contained in this Agreement; (b) the failure by Buyer, Buyer
Parent or, after the Closing Date, Recap Co or Recap Subco to
perform any of such Person's covenants and agreements under this
Agreement (in the case of Recap Co and Recap Subco, covenants and
agreements to be performed after the Closing Date); (c) any
Assumed Liability; or (d) the conduct of the CRL Business after
the Closing Date except to the extent the Losses or Litigation
Expense resulted from the conduct of the CRL Business prior to
the Closing Date. Any indemnity payable pursuant to
Section 8.3(a) or Section 8.3(b) (but only with respect to the
covenants and agreements, contained in Section 5.15), shall be
increased by an amount equal to the sum of (i) such Loss and
Litigation Expense and (ii) the product of such amount and
Seller's Equity Percentage at the time.
8.4 Certain Limitations on Indemnities
8.4.1 Subject to the terms hereof, the aggregate
liability of Seller Parent or Recap Co, as the case may be, for
Losses and Litigation Expenses under Sections 8.2(a) or 8.3(a),
respectively, other than Losses and Litigation Expenses arising
from any inaccuracy or breach of any of the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.5, 3.12(a)(iv),
4.1, 4.2, 4.3, and 4.7 (in which case the limits set forth in
this Section 8.4.1 shall be inapplicable), is, and shall be,
limited to an amount equal to $100,000,000.
8.4.2 No Buyer Indemnified Party nor any Seller
Indemnified Party shall be entitled to indemnification pursuant
to Sections 8.2(a) or 8.3(a) hereof unless and until the
aggregate amount of all Losses and Litigation Expenses sustained
or incurred by all Buyer Indemnified Parties or all Seller
Indemnified Parties, as the case may be, under Sections 8.2(a) or
8.3(a), respectively, exceeds an aggregate amount (the "Basket
Amount") equal to $4,000,000, and then only for the amount of
such excess, provided however, that the limit set forth in this
Section 8.4.2 shall not be applicable for Losses or Litigation
Expenses for any indemnification obligation arising under
(a) Section 8.2(a) (to the extent relating to misrepresentations,
inaccuracies or breaches of the representations and warranties
contained in Sections 3.1, 3.2, 3.3, 3.5, 3.9, 3.12(a)(iv)) or
(b) Section 8.3(a) (to the extent relating to misrepresentations,
inaccuracies or breaches of the representations and warranties
contained in Sections 4.1, 4.2, 4.3, or 4.7).
8.4.3 Any indemnity payable pursuant to this Agreement
shall be decreased to the extent of any insurance proceeds (net
of all Costs payable in connection therewith) actually received
by a Buyer Indemnified Party or Seller Indemnified Party or which
a Buyer Indemnified Party or a Seller Indemnified Party is
unconditionally entitled to receive in respect of the Loss giving
rise to such indemnity payment.
8.4.4 The indemnifying party under Sections 8.2(a) and
8.3(a) shall not be liable to any Indemnified Party with respect
to any occurrence, event, circumstance, act, omission or conduct
unless such matter or a series of related matters arising from
the same or similar occurrences, events, circumstances, acts,
omissions or conduct which causes a representation or warranty
under Sections 8.2(a) or 8.3(a) to be breached results in Costs
of $25,000 or more, and then only for the amount of such excess.
8.4.5 Each indemnified party shall be obligated, in
connection with any claim for indemnification under Section 8.2
or 8.3, to use Commercial Efforts to mitigate Losses upon and
after becoming aware of any event which could reasonably be
expected to give rise to such Losses.
8.5 Procedure
. Promptly after acquiring knowledge of any Loss, or any
action, suit, investigation, proceeding, demand, assessment,
audit, judgment, or claim ("Claim") which may result in a Loss or
Litigation Expense, the Person seeking indemnity under this
Article 8 (the "Indemnitee") shall give written notice thereof to
the party from whom indemnity is sought (the "Indemnitor");
provided, however, that the failure to promptly notify the
Indemnitor shall not affect the indemnification obligation
hereunder if the Indemnitor was not prejudiced thereby and the
failure to promptly notify was inadvertent. The Indemnitor shall
have the right, at its expense, to defend or contest (subject to
the third to last sentence of this Section 8.5) such Claim,
through counsel of its choice (unless such Indemnitor is relieved
of its liability hereunder with respect to such Claim and Loss
and Litigation Expense by the Indemnitee) and shall not then be
liable for fees or expenses of the Indemnitee's attorneys (unless
the Indemnitor and Indemnitee are parties to the action and there
exists a conflict of interest between the Indemnitor and the
Indemnitee, in which event the Indemnitor will be responsible for
the reasonable fees and expenses of one firm of counsel for all
Indemnitees), and the Indemnitee and the Indemnitor shall provide
to each other all necessary and reasonable cooperation in the
defense of all Claims, including, but not limited to, reasonable
access to employees who are familiar with the transactions out of
which such Claim or Loss may have arisen. In the event that the
Indemnitor shall undertake to defend any Claim, it shall promptly
notify the Indemnitee of its intention to do so within thirty
(30) days of being notified of any such Claim. In the event that
the Indemnitor, after written notice from Indemnitee, fails to
take timely action to defend the same, the Indemnitee shall have
the right to defend the same by counsel of its own choosing, but
at the cost and expense of the Indemnitor, provided no settlement
of a Claim by Indemnitee (other than a Claim relating to an
Excluded Liability) shall be effected without the consent of the
Indemnitor which shall not be unreasonably withheld or delayed
unless Indemnitee waives any right to indemnification therefor.
The Indemnitor may settle or compromise any Claim without the
prior written consent of Indemnitee except for settlement or
compromise of a Claim (i) which includes the unconditional
release by the Person asserting the Claim and any related
claimants of Indemnitee from all liability with respect to such
Claim in form and substance reasonably satisfactory to
Indemnitee, (ii) which would not adversely affect the Indemnitee
and its Affiliates to own, hold, use and operate their respective
assets and businesses, and (iii) for money damages only. Seller
Parent and Buyer shall treat any payment under this Article 8 for
all Tax purposes as an adjustment of the Purchase Price and as
allocable to the assets deemed purchased under the
Section 338(h)(10) Election as shall reasonably be determined by
the Indemnitee, except to the extent such treatment is not
permitted under applicable Law.
8.5.1 (a) The amount of any indemnification payment
otherwise determined to be due under this Article 8 shall be
reduced (but not increased) by the amount of the "Actual Tax
Savings" (as hereinafter defined), if any, realized by the
Indemnitee with respect to the indemnified Loss. For purposes
hereof, the amount of an Indemnitee's Actual Tax Savings shall be
equal to the excess, if any, of the Actual Tax Benefit Amount
over the Actual Tax Detriment Amount, each as defined below and
each of which shall be calculated taking into account only those
items of tax savings or tax liabilities actually incurred by the
Indemnitee in the taxable year in which the indemnification
payment is made (taking into account all of the indemnitee's tax
attributes for the period or periods in question).
(b) The Actual Tax Benefit Amount shall equal the
actual amount of any reduction of the Indemnitee's federal, state
or local (but not foreign) income tax liability for the taxable
year in which the indemnification payment is made, which
reduction would not have been realized but for the occurrence of
the event in respect of which the indemnification payment is made
or the receipt of the indemnification payment. The Actual Tax
Detriment Amount shall equal the actual amount of any increase in
the Indemnitee's federal, state or local (but not foreign) income
tax liability for the taxable year in which the indemnification
payment is made, which increase would not have been realized but
for the occurrence of the event in respect of which the
indemnification payment is made or the receipt of the
indemnification payment.
(c) The parties agree that any determination made
under this Section 8.5.1 shall be made by the Indemnitee, who
shall provide the Indemnitor with its calculation of the Actual
Tax Savings in writing. The parties shall attempt to resolve any
dispute over such determination in good faith, provided that if
such dispute is not resolved by the parties such determination
shall be made by the national accounting firm regularly employed
by the Indemnitee.
8.6 No Consequential Damages
. NEITHER ANY PARTY TO THIS AGREEMENT NOR THEIR AFFILIATES
SHALL BE LIABLE FOR CONSEQUENTIAL DAMAGES SUFFERED BY A PARTY OR
ITS AFFILIATES WITH RESPECT TO ANY TERM OR THE SUBJECT MATTER OF
THIS AGREEMENT; PROVIDED, HOWEVER, THAT THIS WAIVER SHALL NOT
LIMIT ANY LIABILITY OF ANY PARTY TO INDEMNIFY THE APPLICABLE
INDEMNIFIED PARTIES FOR LOSS OR LITIGATION EXPENSES ARISING FROM
COSTS OF SUCH TYPE WHICH THE INDEMNIFIED PARTY IS REQUIRED TO PAY
TO ANY OTHER PERSON.
8.7 Exclusive Remedy
. If the Closing occurs, the exclusive remedies for any
breach of any representation, warranty, covenant or agreement
hereunder shall be the indemnification provided by this
Article 8, and each party expressly waives any other rights or
remedies it may have, whether under this Agreement or otherwise,
or (other than in the case of fraudulent conduct) at law or in
equity, provided, however, that equitable relief, including the
remedies of specific performance and injunction shall be
available with respect to any actual or attempted breach of this
Agreement occurring before the Closing Date or with respect to
the breach of any covenant to be performed after the Closing
Date.
8.8 Validity
. The indemnification agreements provided for in this
Article 8 shall apply notwithstanding any knowledge of, or any
investigation made at any time by or on behalf of, any party
hereto.
8.9 Waiver
. It is understood and agreed that neither Seller Parent
nor any Seller shall be entitled to any indemnification, right of
contribution or other right of recovery from Recap Co, Recap
Subco or any Recap Subsidiary in connection with any claim made
by any Buyer Indemnification Party(s) against Seller Parent
hereunder, all of which are hereby irrevocably and
unconditionally waived and released by Seller Parent and each
Seller; provided, however, such waiver shall not preclude Seller
Parent or any Seller from contesting any such claims made by any
Buyer Indemnified Party, including, without limitation, on the
basis that the alleged Loss or Litigation Expense arose, in whole
or in part, as a result of the operation of the CRL Business
after the Closing Date or arose out of an Assumed Liability.
ARTICLE 9
MISCELLANEOUS
9.1 Public Announcement
. Except in furtherance by Buyer and Buyer Parent of its
covenants in Sections 5.14 and 5.18 and notwithstanding anything
contained in this Agreement, no news release or other public
announcement pertaining in any way to the transactions
contemplated by this Agreement will be made by any party without
the prior consent of the other parties (which consent shall not
be unreasonably withheld, conditioned or delayed) unless such
release or announcement is required by applicable Laws or
pursuant to any applicable listing agreement with, or rules or
regulations of, the NYSE, in which case the disclosing party,
prior to making such announcement, shall consult with the other
parties. In the event the transactions contemplated by this
Agreement are not consummated, each party shall return to the
other all documents, work papers and other materials, including
any extracts, summaries, analyses, compilations or other
documents prepared by the receiving party or its representatives
from such information (including any copies thereof whether in
written, electronic or other format) or destroy such materials
and provide to the other a written certification of such
destruction and will hold in absolute confidence any information
obtained from the other party except to the extent (i) such party
is required to disclose such information by Law or such
disclosure is necessary or desirable in connection with the
pursuit or defense of a claim relating to the transactions
contemplated hereby, (ii) such information was known by such
party prior to such disclosure or was thereafter developed or
obtained by such party independent of such disclosure, or
(iii) such information becomes generally available to the public
or is otherwise no longer confidential. Prior to any disclosure
of information pursuant to the exception in clause (i) of the
preceding sentence, the party intending to disclose the same
shall so notify the party that provided the same in order that
such party may seek a protective order or other appropriate
remedy should it choose to do so.
9.2 Expenses
. Subject to the provisions of Sections 7.2 and 9.3,
whether or not the transactions contemplated by this Agreement
are completed, each of the parties hereto shall pay the fees and
expenses incurred by it in connection with the negotiation,
preparation, execution and performance of this Agreement,
including, without limitation, attorneys', accountants', brokers'
and other advisors' fees.
9.3 Transfer Taxes and Recording Expenses
. All excise, sales, use, transfer, stamp, documentary,
filing, recording and other similar taxes or fees which may be
imposed or assessed as the result of the transactions
contemplated hereby, including, without limitation, the Merger
and Redemptions ("Transfer Taxes"), together with any interest or
penalties with respect thereto, shall be shared by the Seller
Parent and Recap Co as follows: the first $100,000 shall be paid
by Seller Parent, the second $100,000 shall be paid by, and all
amounts in excess of $200,000 shall be paid 50% by Recap Co and
50% by Seller Parent. All excise, sales, use, transfer, stamp,
documentary, filing, recording and other similar taxes or fees
which may be imposed or assessed as the result of the Internal
Reorganization, together with any interest or penalties with
respect thereto ("Reorganization Transfer Taxes"), shall be paid
56.25% by Recap Co and 43.75% by Seller Parent. All Tax Returns
required to be filed in connection with any Transfer Taxes or
Reorganization Transfer Taxes ("Transfer Tax Returns") shall be
prepared and filed when due by the party responsible under
applicable Law or custom to file such Transfer Tax Returns. The
filing party shall promptly provide the other applicable parties
with copies of such Transfer Tax Returns. All Transfer Tax
Returns shall be prepared on a basis consistent with
Schedule 5.5.5 of the Disclosure Schedule. From time to time but
not later than ninety (90) days after the Closing Date, Seller
Parent shall provide notice to Buyer of any Transfer Taxes and
Reorganization Transfer Taxes paid by Seller Parent or its
Affiliates and Buyer shall promptly reimburse Seller Parent or
its Affiliates as applicable in accordance with the provisions of
this Section 9.3. From time to time but not later than ninety
(90) days after the Closing Date, Buyer shall provide notice to
Seller Parent of any Transfer Taxes and Reorganization Transfer
Taxes paid by Buyer or its Affiliates and Seller Parent shall
promptly reimburse Buyer or its Affiliates as applicable in
accordance with the provisions of this Section 9.3. Seller
Parent shall pay all interest or penalty charges associated with
Seller Parent's failure to pay when due any Transfer Taxes or any
Reorganization Transfer Taxes, provided that such failure is not
the result of Buyer's failure to remit amounts agreed to be paid
under this Section 9.3 to Seller Parent promptly upon request.
9.4 Knowledge
. Whenever used in this Agreement, the words "knowledge" of
Seller Parent or similar words or phrases shall mean the actual
knowledge of those officers of Seller Parent or the CRL Business
who are listed on Schedule 9.4(a) and the words "knowledge" of
Buyer or similar words or phrases shall mean the actual knowledge
of those officers of Buyer, Buyer Parent or its Affiliates who
are listed on Schedule 9.4(b).
9.5 Notices
. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if
delivered personally, if sent by telecopier or facsimile or sent
by a recognized overnight courier service or mailed, first class
mail, postage prepaid, return receipt requested, as follows:
(a) If to Seller Parent or, prior to the Closing Date,
to Recap Co or Recap Subco:
Bausch & Lomb Incorporated
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxx
Vice President - Business Development
Fax: (000)000-0000
with copies to:
Bausch & Lomb Incorporated
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Senior Vice President and General Counsel
Fax: (000)000-0000
Xxxxx Peabody LLP
X.X. Xxx 0000
Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
(b) If to Buyer or Buyer Parent or, after the Closing
Date, to Recap Co or Recap Subco:
DLJ Merchant Banking Partners
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Cost, Esq.
Fax: (000) 000-0000
or to such other address as either party shall have specified by
notice in writing to the other party. All such notices,
requests, demands and communications shall be deemed to have been
given on the date of personal delivery or upon confirmed receipt
to the person to whom addressed if sent by telecopier, overnight
courier service or mail.
9.6 Severability
. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other
provisions hereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is invalid
or unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement
and the application of such provision to other persons, entities
or circumstances shall not be affected by such invalidity or
unenforceability.
9.7 Specific Performance
. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, the parties further agree
that each party shall be entitled to an injunction or restraining
order to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, all without the
necessity of posting any bond or other security and without the
need to show any actual damages or that money damages would not
afford an adequate remedy, this being in addition to any other
right or remedy to which such party may be entitled under this
Agreement, at law or in equity.
9.8 No Conflict of Interest
. Each of the parties to this Agreement hereby agrees that
Xxxxx Xxxxxxx LLP (or its successor) may serve as counsel to
Seller Parent and its Affiliates and Xxxxxx & Xxxxxx (or its
successor) may serve as counsel to Buyer and its Affiliates in
connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereunder and that either Xxxxx Peabody
LLP (or its successor) or Xxxxxx & Xxxxxx (or any successor) may
serve as counsel to Seller Parent, Seller Parent's Affiliates,
Buyer, Buyer's Affiliates or any director, officer, employee or
affiliate of any one or more of them in connection with any
litigation arising out of or relating to this Agreement or the
transactions contemplated by this Agreement, each of the parties
hereto hereby consenting thereto and waiving any conflict of
interest arising therefrom. This Agreement shall not limit,
impair or modify any existing agreement, arrangement or
understanding relating to the representation by Xxxxx Peabody LLP
(or its successor) or Xxxxxx & Xxxxxx (or its successors) of any
of the parties hereto or any beneficial owner of any such party.
9.9 Binding Effect; Benefit
. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors
and permitted assigns. Except as provided in Article 8 with
respect to indemnification, nothing in this Agreement, expressed
or implied, is intended to confer on any Person other than the
parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
9.10 Assignability
. This Agreement shall not be assigned by Seller Parent,
Parent Canada, any Seller, Recap Subsidiary or Recap Co without
the prior written consent of Buyer or by Buyer without the prior
written consent of Seller Parent; provided, however, that at and
after the Closing, Buyer's, Recap Co's and Recap Subco's rights
or interest under this Agreement may be assigned, upon at least
30 days (or two (2) days in the case of clause (a) below) prior
written notice to Seller Parent, (a) to any Affiliate of Buyer,
and (b) in connection with a sale of all or substantially all of
the assets of Buyer or any of its corporate parents, or direct or
indirect consolidated subsidiaries; and provided further that at
and after the Closing, Buyer's, Recap Co's and Recap Subco's
rights or interests under this Agreement may be assigned to any
bank, financial institution or other Person which has extended
credit to Recap Co, Recap SubCo, Buyer or any Affiliate of Buyer.
Any attempted assignment in violation of this Section 9.10 shall
be null and void.
9.11 Amendment, Waiver
. This Agreement may be amended, supplemented or otherwise
modified only by a written instrument executed by Seller Parent
and Buyer. No waiver by any party of any of the provisions
hereof shall be effective unless explicitly set forth in writing
and executed by the party so waiving. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf
of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations,
warranties, covenants or agreements contained herein or in any
other document delivered in connection herewith. The waiver by
any party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent
breach. No failure on the part of any party hereto to exercise,
and no delay in exercising, any right hereunder shall operate as
a waiver thereof.
9.12 Section Headings
. The Section headings contained in this Agreement and the
table of contents to this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this
Agreement.
9.13 Counterparts
. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same
instrument.
9.14 Applicable Law
. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard
to the conflicts of laws principles thereof.
9.15 Submission to Jurisdiction
. The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the federal
courts of the United States of America located in Monroe County,
New York for any actions, suits or proceedings arising out of or
relating to this Agreement, the Recapitalization Documents or the
transactions contemplated hereby or thereby, and the parties
agree not to commence any action, suit or proceeding relating
thereto except in such courts, and further agree that service of
any process, summons, notice or document by U.S. registered mail
shall be effective service of process for any action, suit or
proceeding brought against the parties in any such court. The
parties hereby irrevocably and unconditionally waive any
objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement, any Recapitalization
Document or the transactions contemplated hereby or thereby, in
the federal courts of the United States of America located in
Monroe County, New York, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such
court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
9.16 Entire Agreement
. This Agreement, including the Exhibits and the Disclosure
Schedule hereto, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral and
written (other than the Confidentiality Agreement which shall not
survive the Closing). There are no restrictions, promises,
representations, warranties, covenants or undertakings, other
than those expressly set forth or referred to herein.
IN WITNESSETH WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
Bausch & Lomb, Incorporated
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
CRL Holdings, Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Endosafe, Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Bausch & Lomb International,
Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Xxxxxxx River SPAFAS, Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Xxxxxxx River Laboratories,
Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Wilmington Partners, L.P.
By: Wilmington Management
Corp., a General Partner
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
Bausch & Lomb Canada, Inc.
By:
Name: Xxxx X. Xxxxxxxxxx
Title: Vice President
CRL Acquisition LLC
By:
Name: Xxxx Xxxxxx
Title: President
DLJ Merchant Banking Partners
II, L.P.
By:
Name: Xxx Xxxxxxxxxx
Title: Principal
