Exhibit 2.1
Execution Copy
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of the 25th
day of January, 1996, by and among Thermedics Detection Inc., a corporation
organized under the laws of Massachusetts (the "Buyer"), Moisture Systems
Corporation, a Massachusetts corporation ("MSC"), Moisture Systems Limited, a
limited company organized under the laws of England ("MSC-UK"), Anacon
Corporation, a Massachusetts corporation ("Anacon"), and the principals of MSC,
MSC-UK and Anacon whose names appear on the signature pages hereto (the
"Principals"). MSC, MSC-UK and Anacon are referred to herein individually as the
Seller and collectively as the Sellers.
The Buyer desires to purchase, and the Sellers desire to sell
substantially all of their assets, subject to the assumption by the Buyer of
certain liabilities.
NOW THEREFORE, in consideration of the premises and the mutual
covenants, agreements and provisions herein contained, the parties hereto agree
as follows:
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"Accounts Receivable" -- as defined in Section 3.7.
"Assets" -- as defined in Section 2.1.
"Applicable Contract"-- any Contract (a) under which any of the Sellers
has any rights, (b) under which any of the Sellers has subject to any obligation
or liability, or (c) by which any of the Sellers or any of the assets owned or
used by any of the Sellers is bound.
"Assumed Liabilities" -- as defined in Section 2.4.
"Balance Sheet Date" -- as defined in Section 2.4.
"Best Efforts"-- the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result is
achieved as expeditiously as possible; provided, however, that a Person required
to use his Best Efforts under this Agreement will not be required to take
actions that would result in a materially adverse change in the benefits to such
Person of this Agreement and the Contemplated Transactions.
"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been any inaccuracy in or breach of, or any failure to perform or comply with,
such representation, warranty, covenant, obligation, or other provision, and the
term "Breach" means any such inaccuracy, breach, or failure.
"Buyer" -- as defined in the first paragraph of this Agreement.
"Closing" -- as defined in Section 2.7.
"Closing Balance Sheet" -- as defined in Section 2.5.
"Closing Date" -- as defined in Section 2.7.
"Code" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"Competitive Business" -- as defined in Section 6.17.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" -- all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Assets by the Sellers to Buyer;
(b) the performance by Buyer and the Sellers of their respective
covenants and obligations under this Agreement; and
(c) Buyer's acquisition and ownership of the Assets and exercise
of control over the Assets.
"Contract" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"Damages" -- as defined in Section 5.2.
"Disclosure Letter" -- the disclosure letter delivered by the Sellers to
the Buyer concurrently with the execution and delivery of this Agreement and
attached hereto as Exhibit A and incorporated into this Agreement as a part
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hereof.
"Draft Closing Balance Sheet" -- as defined in Section 2.5.
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"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, or restriction of any kind, including any restriction on use,
voting (in the case of any security), transfer, receipt of income, or exercise
of any other attribute of ownership.
"Environment" -- soil, land, surface or subsurface strata, surface
waters (including navigable waters and ocean waters), groundwater, drinking
water supply, stream sediments, ambient air (including indoor air), plant and
animal life, and any other environmental medium or natural resource.
"Environmental, Health and Safety Liabilities" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law, Occupational Safety and Health Law, a contract or other
obligation relating to:
(a) any environmental, health, or safety matters or conditions
(including on-site or off-site contamination, occupational safety and health,
and regulation of chemical substances or products);
(b) fines, penalties, judgments, awards, settlements, legal or
administrative proceedings, damages, losses, claims, demands and response,
remedial, or inspection costs and expenses arising under Environmental Law or
Occupational Safety and Health Law;
(c) financial responsibility under Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment, or other remediation or response
actions ("Cleanup") required by applicable Environmental Law or Occupational
Safety and Health Law (whether or not such Cleanup has been required or
requested by any Governmental Body or any other Person) and for any natural
resource damages; or
(d) any other compliance, corrective, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.
The terms "removal," "remedial," and "response action" include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Sec. 9601 et seq., as amended
("CERCLA").
"Environmental Law" -- any Legal Requirement designed:
(a) to advise appropriate authorities, employees, and the public
of intended or actual releases of pollutants or hazardous substances or
materials, violations or discharge limits, or other prohibitions and of the
commencements of activities, such as resource extraction or construction, that
could have an adverse impact on the Environment;
(b) to permit or license, or to prevent or acceptably minimize
the release of pollutants or hazardous substances or materials into the
Environment;
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(c) to reduce the quantities, prevent the release, and minimize
the hazardous characteristics of wastes that are generated;
(d) to protect resources, species, or ecological amenities;
(e) to acceptably minimize the risks inherent in transportation
of hazardous substances, pollutants, oil, or other potentially harmful
substances;
(f) to clean up pollutants that have been released, prevent the
threat of release, or pay the costs of such clean up or prevention; or
(g) to make responsible parties pay private parties, or groups
of them, for damages done to their health or Environment, or to permit self-
appointed representatives of the public interest to recover for injuries done to
public assets.
"ERISA" -- the Employee Retirement Income Security Act of 1974 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
"ERISA Affiliate" -- as defined in Section 3.9.
"Exchange Act" -- the Securities Exchange Act of 1934 or any successor
law, and regulations and rules issued pursuant to that Act or any successor law.
"Excluded Assets" -- as defined in Section 2.2.
"Excluded Liabilities" -- as defined in Section 2.4.
"Facilities" -- any real property, leaseholds, or other interests
currently or formerly owned or operated by any of the Sellers (or any
predecessor Person) and any buildings, plants, structures, or equipment
currently or formerly owned, leased, or operated by any of the Sellers (or any
predecessor Person).
"FERC" -- Federal Energy Regulatory Commission
"Financial Statements" -- as defined in Section 3.4.
"GAAP" -- generally accepted United States accounting principles,
applied on a basis consistent with the basis on which the Balance Sheet and the
other financial statements referred to in Section 3.4 were prepared.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, exemption or variance, or other authorization issued, granted, given,
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement.
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"Governmental Body" -- any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled or purporting to exercise, any
administrative, executive, judicial (including court), legislative, police,
regulatory, or taxing authority or power of any nature.
"Hazardous Activity" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment, and any
other act, business, operation, or thing that increases the danger, or risk of
danger, or poses an unreasonable risk of harm to persons or property on or off
the Facilities.
"Hazardous Materials" -- any substance that is listed, deemed,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos containing materials.
"Indemnified Persons" -- as defined in Section 5.2.
"IRS" -- the United States Internal Revenue Service or any successor
agency, and, to the extent relevant, the United States Department of the
Treasury.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the Ordinary Course of
Business or in the course of a reasonable investigation made in connection with
making representations and warranties concerning the sale of a business.
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A Person (other than an individual) will be deemed to have "Knowledge" of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, employee, partner, executor, or
trustee of such Person (or in any similar capacity) has, or at any time had,
Knowledge of such fact or other matter; provided that, the Sellers will be
deemed to have "Knowledge" of a particular fact or other matter only if any of
Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxx or Xxxxxxxxx Xxxxx has, or at any
time had, Knowledge of such fact or other matter.
"Lease" -- a lease of MSC-UK's premises at the Xxx Xxxxxx, Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx Xxxxxxx to be entered into at the Closing by MSC-UK (as
lessor) and the Buyer or the Buyer's designee (as lessee).
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other constitution, law, ordinance, order,
principle of common law, regulation, statute, or treaty.
"Material Adverse Effect" -- any loss to the Sellers or, after the
Closing, to the Buyer that, taken as a whole, is in excess of $100,000.
"Net Asset Benchmark" -- as defined in Section 2.5.
"Occupational Safety and Health Law" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
(b) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons exercising
similar authority), is not required to be specifically authorized by the parent
company (if any) of such Person, and does not require any other separate or
special authorization of any nature; and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Organizational Documents" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement
and any statement of partnership of a
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general partnership; (c) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (d) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; (e) the memorandum and articles of association of an
English company; and (f) any amendment to any of the foregoing.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or other entity or
Governmental Body.
"Plan" -- as defined in Section 3.9.
"Principals" -- as defined in the first paragraph of this Agreement.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"Purchase Price" -- as defined in Section 2.3.
"Related Person" -- with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by any
one or more members of such individual's Family;
(c) any Person in which members of such individual's Family hold
(individually or in the aggregate) a Material Interest; and
(d) any Person with respect to which one or more members of such
individual's Family serves as a director, officer, partner, executor, or trustee
(or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is directly
or indirectly controlled by, or is directly or indirectly under common control
with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest; and
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(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity).
For purposes of this definition, (a) the "Family" of an individual includes
(i) the individual, (ii) the individual's spouse and former spouses, (iii) the
brother, sister or child of the individual or the individual's spouse, and (iv)
any other natural person who resides with such individual, and (b) "Material
Interest" means direct or indirect beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of voting securities or other voting interests
representing at least 5% of the outstanding voting power of a Person or equity
securities or other equity interests representing at least 5% of the
outstanding equity securities or equity interests in a Person.
"Release"-- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment.
"Representative"-- MSC, as representative of all of the Sellers and the
Principals.
"Restricted Employee" -- as defined in Section 6.16.
"Securities Act"-- the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.
"Seller" and "Sellers"-- as defined in the first paragraph of this
Agreement.
"Subsidiary"-- with respect to any Person (the "Owner"), any corporation
or other Person of which securities or other interests having the power to elect
a majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries.
"Tax"-- any tax (including without limitation any income, capital gains,
gross receipts, license, payroll, employment, excise severance, stamp,
occupation, premium, windfall profits, environmental (including without
limitation taxes under Code Section 59A), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax or other fiscal charges of any kind whatsoever, including any fine,
interest, penalty, or addition thereto, whether disputed or not), imposed,
assessed, or collected by or under the authority of any Governmental Body or
payable pursuant to any tax-sharing agreement or any other Contract relating to
the sharing or payment of any such tax.
"Tax Return"-- any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including without limitation
any schedule or attachment thereto, and any amendment thereof.
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"Threat of Release" -- a substantial likelihood of a Release that may
require action in order to prevent or mitigate damage to the Environment that
may result from such Release.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exists, that would
lead a prudent Person to conclude that such a claim, Proceeding, action or other
matter is likely to be asserted, commenced, taken, or otherwise pursued in the
future.
"UK Employees" -- all employees of MSC-UK, as listed in Exhibit G
attached hereto.
2. SALE AND TRANSFER OF ASSETS; CLOSING
2.1 Sale of Assets. Subject to Section 2.2, at the Closing, the
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Buyer shall purchase, acquire and accept, and the Sellers shall assign,
transfer, convey and deliver all of the Sellers' right, title and interest in
and to, the assets, properties and rights (contractual or otherwise) of every
kind, nature and description owned by the Sellers (collectively, the "Assets").
The Assets shall include, without limitation, the following:
(a) Inventories. All inventories of raw materials, work in
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process, finished products and resale merchandise, scrap inventory, and
expendable manufacturing supplies.
(b) Machinery and Equipment. All machinery and equipment
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used in the research and development, manufacture, production, assembly, test,
handling, distribution, demonstration and sale of products, together with the
spare-parts inventories and all manufacturing or production tools and
maintenance supplies pertaining thereto.
(c) Intellectual Property Rights and Trademarks. All
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patents, trademarks, service marks, copyrights, trade names and applications
therefor.
(d) Technical Information and Intangibles. All inventions,
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discoveries (whether patentable or unpatentable), processes, designs, know-how,
trade secrets, proprietary data, software programs and intellectual property of
all kinds, including drawings, plans, specifications, processes, patents, dies,
designs, blue prints, records, data, product development records, production
outlines, diskettes, source code, object code, flow charts, information, media
or knowledge and procedures, and customer and supplier lists.
(e) Contracts. All real and personal property leases,
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licenses, sales, secrecy, confidentiality, distribution, supply and other
Contracts, purchase contracts, sales orders, prepaid items, warranties and all
causes of action and claims related thereto.
(f) Motor Vehicles. All cars, trucks and other motor
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vehicles, automotive equipment and other rolling stock.
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(g) Books and Records. All books, records and accounts,
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correspondence, production records, technical, accounting, manufacturing and
procedural manuals, and customer lists; employment records, studies, reports or
summaries relating to any environmental conditions or consequences of any
operation, as well as all studies, reports or summaries relating directly to the
general condition of the Sellers; and any confidential information which has
been reduced to writing relating to or arising out of the business of the
Sellers.
(h) Permits and Approvals. To the extent transferable, all
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Governmental Authorizations.
(i) Claims. All claims, prepayments, refunds, causes of
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action, choses in action, rights of recovery, rights of setoff, rights of
recoupment, rights under warranties and other similar assets.
(j) Furniture and Fixtures. All office furniture, office
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equipment and supplies and computer hardware.
(k) Accounts Receivable. All trade and other accounts and
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notes receivable and any rights of recovery or setoff of every type and
character.
(l) Miscellaneous Supplies. All catalogs, brochures, product
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literature, product-related application notes, manuals, technical papers, other
printed materials, shipping and packaging materials and labels, cartons and
shipping containers, palettes, shipping equipment, graphics, artwork,
photographic film, slides, negatives, color separations, printer's and
photographer's plates and so-called "camera-ready materials" and sales and
advertising materials.
(m) Cash and Securities. All cash, bank accounts, money
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market accounts, certificates of deposit, treasury bills, bonds, notes,
securities and similar assets.
(n) Stock in Subsidiaries. All of the Sellers' stock in any
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Subsidiaries.
2.2 Excluded Assets. Notwithstanding anything to the contrary
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herein, the Assets shall not include the following assets of the Sellers (the
"Excluded Assets"):
(a) The buildings and real property located at Xxx Xxx
Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx, Xxxxxxx owned by MSC-UK.
(b) The assets described on Exhibit B attached hereto.
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2.3 Purchase Price for the Assets. Subject to Section 2.5, the
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aggregate purchase price for the Assets shall be $13,500,000 (the "Purchase
Price") payable as follows: (a) $12,225,000 to MSC, (b) $475,000 to MSC-UK and
(c) $800,000 to Anacon.
2.4 Assumption of Liabilities. At the Closing, the Buyer shall
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assume only the following liabilities of the Sellers (the "Assumed
Liabilities"): (i) liabilities reflected on the
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September Balance Sheets, except for any such liabilities discharged since the
date of the September Balance Sheets (the "Balance Sheet Date") and except for
liabilities excluded from the Draft Closing Balance Sheet pursuant to Section
2.5(a), (ii) liabilities incurred by the Sellers in the Ordinary Course of
Business since the Balance Sheet Date, (iii) liabilities under bona fide
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warranty obligations of the Sellers outstanding as of the Closing Date, and (iv)
liabilities and obligations under any Contract assigned to the Buyer pursuant
hereto, except for any such liabilities or obligations resulting from the actual
or alleged breach by any of the Sellers of any such Contracts. In furtherance
of, but without limiting, the foregoing, except to the extent reflected on the
September Balance Sheets, the Assumed Liabilities will not include any
liabilities or obligations of the Sellers (a) for any Environmental Health and
Safety Liabilities resulting from the ownership, operation or condition of the
Facilities, or for any liabilities or obligations resulting from any Hazardous
Activity conducted on or prior to the Closing Date, (b) for any Taxes resulting
from the conduct of the business of the Sellers prior to the Closing Date, (c)
to any retired or other former employees of any of the Sellers for salaries or
benefits accrued prior to the Closing Date, (d) under any agreements with any
employees providing for severance payments in the event such employees are
terminated by Buyer after the Closing, (e) under any employee benefit plan
maintained by any of the Sellers, including, without limitation, the defined
benefit plan maintained by MSC-UK or (f) payables relating to the dust monitor
business. The Sellers and the Buyer anticipate that the United Kingdom Transfer
of Undertakings (Protection of Employment) Regulations 1981 (the "Transfer
Regulations") will apply to the sale and purchase under this Agreement in
respect of the UK Employees. The Sellers and the Buyer acknowledge and agree
that under the Transfer Regulations the contracts of employment between MSC-UK
and the UK Employees will have effect after the Closing Date as if originally
made between Buyer and the UK Employees. This shall not, however, diminish the
Sellers' obligations pursuant to Section 5.2 to indemnify the Buyer against the
liabilities specified in clauses (c), (d) and (e) of the preceding sentence or
any other liabilities not specifically assumed by the Buyer under this Section
2.4, in relation to the UK Employees or any other past or present employees of
MSC-UK or any predecessor of MSC-UK. Notwithstanding the foregoing, the Buyer
acknowledges and agrees that it will be responsible for any severance payments
imposed by statute incurred when any UK Employee is terminated by Buyer after
the Closing. Any liabilities or obligations of the Sellers that are not Assumed
Liabilities are referred to herein as "Excluded Liabilities."
2.5 Post-Closing Adjustments. The Purchase Price set forth in
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Section shall be subject to adjustment after the Closing Date as follows:
(a) Within 60 days after the Closing Date, the Buyer shall
prepare and deliver to of each prepare the Draft Closing Balance Sheets in
accordance with GAAP. For purposes of this Agreement, "net tangible assets"
shall mean tangible Assets minus Assumed Liabilities. Notwithstanding anything
to the contrary herein, the Draft Closing Balance Sheets shall not include any
liabilities for vacation time for employees of the Sellers accrued between June
1, 1995 and the Closing Date or any of the following liabilities: (i) as
described in the September Balance Sheet of MSC, (A) notes payable-officers, (B)
accrued royalties payable, (C) accrued salaries-officers and (D) accrued
dividends, (ii) as described in the September Balance Sheet of Anacon, (A) notes
payable-officers, (B) accrued rent-related, (C)
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accrued expenses-related and (D) accrued dividends, and (iii) any payables from
MSC-UK to Moisture Systems Consolidated Corporation In addition, the Draft
Closing Balance Sheets shall not include any of the following assets as
described on the September Balance Sheet of MSC: (i) notes receivable, (ii)
interest receivable and (iii) rents receivable. It is agreed that the valuation
for all inventory on the Draft Closing Balance Sheet for Anacon shall be no
greater than $150,000.
(b) The Representative shall deliver to the Buyer within 60
days after receiving the Draft Closing Balance Sheets a detailed statement
describing its objections (if any) thereto. Draft Closing Balance Sheet shall
constitute acceptance thereof, whereupon such Draft Closing Balance Sheet shall
be deemed to be a "Closing Balance Sheet". The Buyer and the Representative
shall use reasonable efforts to resolve any such objections, but if they do not
reach a final resolution within 30 days after the Buyer has received the
statement of objections, the Buyer and Representative shall select an
internationally recognized accounting firm mutually acceptable to them (the
"Neutral Auditors") to resolve any remaining objections. If the Buyer and
Representative are unable to agree on the choice of Neutral Auditors, they shall
select as Neutral Auditors an internationally recognized accounting firm by lot
(after excluding their respective regular independent accounting firms). The
Neutral Auditors shall determine whether the objections raised by the
Representative are valid. Each Draft Closing Balance Sheet that is the subject
of objections by the Representative shall be adjusted in accordance with the
Neutral Auditor's determination and, as so adjusted, shall be a Closing Balance
Sheet. Such determination by the Neutral Auditors shall be conclusive and
binding upon the Buyer and Representative. The Buyer, on one hand, and the
Sellers, on the other, shall share equally the fees and expenses of the Neutral
Auditors.
(c) If the net tangible assets as shown on the Closing
Balance Sheet applicable to any Seller is less than the Net Asset Benchmark for
such Seller, such Seller shall pay to the Buyer, by wire transfer in immediately
available funds, within ten business days after the date on which the Closing
Balance Sheet is finally determined pursuant to this Section 2.5, an amount
equal to such deficiency (plus interest thereon from the Closing Date at the
interest rate equal to the base rate of the Bank of Boston as announced from
time to time).
(d) If the net tangible assets as shown on the Closing
Balance Sheet applicable to any Seller is more than the Net Asset Benchmark for
such Seller, the Buyer shall pay to such Seller, by wire transfer in immediately
available funds, within ten business days after the date on which the Closing
Balance Sheet is finally determined pursuant to this Section 2.5, an amount
equal to such excess (plus interest thereon from the Closing Date at the
interest rate equal to the base rate of Bank of Boston as announced from time to
time).
(e) As used in this Section 2.5, "Net Asset Benchmark" means
(i) with respect to MSC, $2,415,000, (ii) with respect to MSC-UK, $313,500 and
(iii) with respect to Anacon, $250,000.
2.6 Allocation of Purchase Price. The final allocation of the
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Purchase Price among the Assets shall reflect the book value of the Assets as
shown on the Closing Balance Sheets. The
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Buyer and the Sellers each shall report the federal, state, provincial, foreign
and local income and other tax consequences of the transaction contemplated
hereby in a manner consistent with such allocation.
2.7 The Closing. The closing of the transactions contemplated by
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this Agreement (the "Closing") shall occur at the offices of Thermo Electron
Corporation, 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, at 10:00 a.m. on the date
set forth in the first paragraph of this Agreement (the "Closing Date").
2.8 Deliveries by the Sellers to the Buyer. At the Closing, the
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Sellers shall deliver, or cause to be delivered, to the Buyer, or any Subsidiary
of the Buyer designated by the Buyer for this purpose:
(a) such executed assignments, patent assignments, trademark
assignments, bills of sale, certificates of title, or other documents, each
dated the Closing Date, as shall be necessary, in the reasonable opinion of
Buyer and its counsel to transfer to the Buyer all of the Sellers' right, title
and interest in and to the Assets; and
(b) an opinion of Xxxxxxx, Xxxx & Xxxxx, counsel to the
Sellers, in the form attached hereto as Exhibit C;
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(c) consents to the assignment of the Contracts listed on
Exhibit D; and
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(d) the Lease.
2.9 Deliveries by the Buyer to the Sellers. At the Closing, the
--------------------------------------
Buyer shall deliver to the Sellers:
(a) the Purchase Price less the retention described in
Section 2.10 by wire transfer to the account(s) designated by the Sellers; and
(b) an executed assumption agreement and such other
documents, each dated as of the Closing Date, as shall be necessary, in the
reasonable opinion of the Sellers and their counsel, for the assumption by the
Buyer of all of the Assumed Liabilities.
(c) an opinion of Xxxx X. Xxxxxxxxx, general counsel of the
Buyer, in the form attached hereto as Exhibit E.
---------
2.10 Escrow. For the purpose of providing security for the
------
obligations of the Sellers and the Principals under section 5.2, $1,350,000 (the
"Escrow Amount") shall be withheld from the Purchase Price delivered at Closing
and shall be placed in an escrow account with an escrow agent (the "Agent")
satisfactory to the parties. On the first anniversary of the Closing Date, the
Representative may withdraw for distribution to the Sellers, as their interests
appear, 50% of the Escrow Amount, together with interest earned on such portion,
less the amount of any unsatisfied claims for indemnification made by the Buyer
prior to such first anniversary. On the second
13
anniversary of the Closing, the Representative may withdraw the remainder of the
Escrow Amount, together with any interest thereon, for distribution to the
Sellers, as their interests appear, less the amount of any unsatisfied claims
for indemnification made by the Buyer on or prior to such second anniversary.
Any portion of the Escrow Amount that cannot be withdrawn from the escrow
account due to pending claims by the Buyer for indemnification, shall remain in
the escrow account until the resolution of such claims by judgment of a court
from which no appeal can be made, decision of an arbitrator or agreement of the
Buyer and the Representative.
3. REPRESENTATIONS
The Sellers represent and warrant to Buyer as follows:
3.1 Organization and Good Standing.
------------------------------
(a) Each of the Sellers is a corporation duly organized,
validly existing, and in good standing under the laws of the state or other
jurisdiction of its incorporation or organization, with full corporate power and
authority to conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to perform all its
obligations under Applicable Contracts. Each of the Sellers is duly qualified to
do business as a foreign corporation and is in good standing under the laws of
each state or other jurisdiction in which either the ownership or use of the
properties owned or used by it, or the nature of the activities conducted by it,
requires such qualification, except where the failure to so qualify,
individually or in the aggregate, would not have a Material Adverse Effect.
(b) Each of the Sellers has delivered to Buyer copies of its
Organizational Documents, as currently in effect.
3.2 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid, and binding
obligations of the Sellers, enforceable against them in accordance with its
terms.
(b) Except as set forth in Part 3.2 of the Disclosure
Letter, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time): (i)
contravene, conflict with, or result in a violation of (A) any provision of the
Organizational Documents of any of the Sellers, or (B) any resolution adopted by
the board of directors or the stockholders of any of the Sellers; (ii)
contravene, conflict with, or result in a violation of, or give any Governmental
Body or other Person the right to challenge any of the Contemplated Transactions
or to exercise any remedy or obtain any relief under, any Legal Requirement or
any Order to which any of the Sellers, or any of the assets owned or used by any
of the Sellers, may be subject; (iii) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person the right to declare
a default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Applicable Contract;
(iv) result in the imposition or creation of any Encumbrance upon or with
respect to any of the assets
14
owned or used by any of the Sellers; or (v) entitle any employee or other person
to severance or other payments by any of the Sellers or create any other
obligation to an employee or other person, including any increase in benefits.
(c) Except as set forth in Part 3.2 of the Disclosure Letter,
none of the Sellers will be required to give any notice to or obtain any Consent
from any Person in connection with the execution and delivery of this Agreement
or the consummation or performance of any of the Contemplated Transactions.
3.3 Subsidiaries. Set forth in Part 3.3 of the Disclosure Letter is
------------
a list of all Subsidiaries of the Sellers, including, with respect to each
Subsidiary, its jurisdiction of incorporation. All of the outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is fully
paid, nonassessable and free of preemptive rights, and is owned beneficially and
of record by the respective Seller or by another Subsidiary of a Seller free and
clear of any Encumbrance or restriction of any nature, including, without
limitation, any restriction on transfer or voting. No shares of any Subsidiary's
capital stock are reserved for issuance, and there are no options, warrants,
convertible instruments or other rights, agreements or commitments, contingent
or otherwise, obligating a Subsidiary to issue, sell or purchase shares of
capital stock. None of the Sellers is a partner or joint venturer with any other
person. None of the Sellers is subject to any obligation, contingent or
otherwise, to provide funds to or make an investment (in the form of a loan,
capital contribution or otherwise) in any entity. None of the Sellers has any
equity interest in any corporation, partnership or other business entity other
than the Subsidiaries listed on the Disclosure Letter. Each Subsidiary is in
good standing under the laws of its jurisdiction of incorporation and has all
requisite power and authority to own, operate and lease its properties and to
carry on its business as it is now being conducted. The Sellers have delivered
to Buyer complete and correct copies of the Organizational Documents of each
Subsidiary, as amended. Each Subsidiary is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of the properties owned, operated or leased by it or the
nature of its activities is such that qualification is required by applicable
laws, except where the failure to so qualify would not, individually or in the
aggregate, have a Material Adverse Effect. All jurisdictions where the
Subsidiaries are qualified as foreign corporations or are required to be so
qualified are listed on Part 3.3 of the Disclosure Letter.
3.4 Financial Statements. Each Seller has delivered to Buyer: (a) an
--------------------
unaudited consolidated balance sheet of such Seller as at December 31, 1994
(each a "1994 Balance Sheet"), and the related unaudited statement of income and
cash flows for the fiscal year then ended (each a "1994 Income Statement") and
(b) an unaudited balance sheet of such Seller as at September 31, 1995 (each a
"September Balance Sheet") and the related unaudited statement of income and
cash flows for the nine months then ended (each a "September Income Statement").
The 1994 Balance Sheets, September Balance Sheets, 1994 Income Statements and
September Income Statements are referred to collectively as the "Financial
Statements". The Financial Statements fairly present the financial condition and
the results of operations and cash flows of the Sellers as at the respective
dates of and for the periods referred to therein all in accordance with GAAP,
except that the September Balance Sheets are subject to normal year-end
adjustments. The
15
Financial Statements reflect the consistent application of such accounting
principles throughout the periods involved.
3.5 Books and Records. The books of account, minute books, and
-----------------
other records of the Sellers, all of which have been made available to Buyer,
are complete and correct in all material respects.
3.6 Title to Properties; Encumbrances. Except as set forth in part
---------------------------------
3.6 of the Disclosure Letter, the Sellers have valid and legally enforceable
title to all of the Assets free and clear of any Encumbrances whatsoever, and
the consummation of the Contemplated Transactions will vest in Buyer all of the
Sellers' right, title and interest in and to the Assets.
3.7 Accounts Receivable. All accounts receivable of the Sellers that
-------------------
are reflected on the September Balance Sheets (except for those collected in
full prior to the Closing Date) or on the accounting records of the Sellers as
of the Closing Date (collectively, the "Accounts Receivable") represent or will
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. Unless paid prior to the
Closing Date and except as set forth on Part 3.7 of the Disclosure Letter, to
the Knowledge of the Sellers, the Accounts Receivable are or will be as of the
Closing Date current and collectible net of the respective reserves shown on the
September Balance Sheets or on the accounting records of the Sellers as of the
Closing Date. Except as set forth on Part 3.7 of the Disclosure Letter, none of
the Sellers has received notice that there is any contest, claim, or right of
set-off with any maker of an Account Receivable relating to the amount or
validity of such Account Receivable. The Sellers do not have any accounts
receivable from Moisture Systems Consolidated Corporation and MSC does not have
any accounts receivable from MSC-UK which were assigned to MSC from Moisture
Systems Consolidated Corporation.
3.8 Taxes. Except as set forth in Part 3.8 of the Disclosure
-----
Letter:
Each of the Sellers has accurately prepared and duly and timely
filed all Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all material respects. All Taxes owed by the Sellers
have been paid when due, other than those being contested in good faith and
where adequate reserves (determined in accordance with GAAP) have been
established therefor. All Taxes of any of the Sellers attributable to Tax
periods or portions thereof ending on or prior to the Closing Date, including
Taxes that may become payable by any of the Sellers in future periods in respect
of any transactions or sales occurring on or prior to the Closing Date, that
have not yet been paid have, in the aggregate, been adequately reflected as a
liability on the books of the Sellers in accordance with GAAP. None of the
Sellers is currently being audited or examined by any Governmental Body, nor
have any deficiencies for any Tax been asserted against any of the Sellers. No
claim or inquiry with respect to any material amount of Taxes has been made
within the past seven years by an authority in a jurisdiction where any of the
Sellers did not file Tax Returns that it is or may be subject to any Tax by that
jurisdiction. Without limiting the generality of the foregoing, each of the
Sellers has withheld or collected and duly paid all Taxes required to have been
withheld or collected and paid in connection with
16
payments to foreign persons, sales and use Tax or Value Added Tax obligations,
and amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other person.
3.9 Employee Benefits. Part 3.9 of the Disclosure Letter contains a
-----------------
true, correct and complete list of all benefit plans ERISA) and all pension,
benefit, profit sharing, retirement, deferred compensation, welfare, insurance,
disability, bonus, vacation pay, severance pay and other similar plans, programs
and agreements, whether reduced to writing or not, relating to any of the
employees of any of the Sellers (the "Plans") and, except as set forth in Part
3.9 of the Disclosure Letter, none of the Sellers has any obligations,
contingent or otherwise, past or present, under applicable law or the terms of
any Plan. With respect to all Plans, each of the Sellers is in compliance with
all applicable Legal Requirements, including ERISA. Each of the Sellers has
performed all material obligations required to be performed by it under, and is
not in material violation of, and there has been no material default or
violation by any other party with respect to, any of the Plans. There are no
pending or, to the Knowledge of the Sellers, Threatened Proceedings by employees
or former employees of any of the Sellers, or beneficiaries or spouses of any of
the above, involving any Plan (other than routine, undisputed claims for
benefits). The Sellers have provided the Buyer with copies of each Plan that is
in writing and with a written summary of each oral Plan. Except for MSC's 401(k)
plan, no Plan is an "employee pension benefit plan" as such term is defined in
Section 3(2) of ERISA. None of the Sellers nor any ERISA Affiliate (as defined
below) contributes to or has an obligation to contribute to or has contributed
to or had an obligation to contribute to within the past six years, a
"multiemployer" plan as defined in Section 4001(a)(3) of ERISA. None of the
Sellers nor any ERISA Affiliate has withdrawn from a multi-employer plan in a
complete or partial withdrawal that resulted in any unsatisfied employer
liability. None of the Sellers contributes to an employee pension benefit plan
that is subject to Section 412 of the Code or Title IV of ERISA. "ERISA
Affiliate" means an entity which is a member of (i) a controlled group of
corporations (as defined in Section 414(b) of the Code), (ii) a group of trades
or businesses under common control (as defined in Section 414(c) of the Code),
or (iii) an affiliated service group (as defined in Section 414(m) of the Code
or the regulations under Section 414(o) of the Code), any of which includes any
of the Sellers.
3.10 Compliance with Legal Requirements;
----------------------------------
(a) Except as set forth in Part 3.10 of the Disclosure
Letter: (i) each of the Sellers is, and at all times since January 1, 1991 has
been, in compliance with each Legal the conduct or operation of its business or
the ownership or use of any of its assets; (ii) no event has occurred or
circumstance exists that (with or without notice or lapse of time) may
constitute or result in a violation by any of the Sellers of, or a failure on
the part of any of the Sellers to comply with, any Legal Requirement; (iii) none
of the Sellers has received, at any time since January 1, 1991, any notice or
other communication (whether oral or written) from any Governmental Body or any
other Person regarding any actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement. Notwithstanding anything
herein to the contrary, the Sellers make no representation or warranty with
respect to the applicability of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, to the Contemplated Transactions.
17
(b) The Sellers have obtained all Governmental
Authorizations necessary for the conduct of their respective businesses as
currently conducted. Except as set forth in Part 3.10 of the Disclosure Letter:
(i) each of the Sellers is, and at all times since January 1, 1991 has been, in
compliance in all material respects with each such Governmental Authorization,
(ii) no event has occurred or circumstance exists that may (with or without
notice or lapse of time) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any such
Governmental Authorization; (iii) none of the Sellers has received, at any time
since January 1, 1991, any notice or other communication (whether oral or
written) from any such Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or failure to comply with
any term or requirement of any such Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any such Governmental
Authorization; and (iv) the rights of the Sellers under such Governmental
Authorizations shall not be affected by the consummation of the Contemplated
Transactions. Notwithstanding anything herein to the contrary, the Sellers make
no representation or warranty with respect to the applicability of the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, to the Contemplated
Transactions.
3.11 Legal Proceedings; Orders.
-------------------------
(a) Except as set forth in Part 3.11 of pending Proceeding:
(i) that has been commenced by or against any of the Sellers or that otherwise
relates to or may the assets owned or used by, any of the Sellers, or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To the
Knowledge of the Sellers, (A) no such Proceeding has been Threatened, and (B) no
event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.
(b) Except as set forth in Part 3.11 of the Disclosure
Letter there is no Order to which any of the Sellers, or any of the assets owned
or used by any of the Sellers is subject. Each of the Sellers is in full
compliance with all of the terms and requirements of each Order to which it, or
any assets owned or used by it, is subject.
3.12 Absence of Certain Changes and Events. Except as set forth in
-------------------------------------
Part 3.12 of the Disclosure Letter, since the Balance Sheet Date, each of the
Sellers has conducted its business only in the Ordinary Course of Business and
there has not been any:
(a) except in the Ordinary Course of Business, payment or
increase by any of the Sellers of any bonuses, salaries, commissions or other
compensation to any stockholder, director, officer, or employee or entry into
any employment, severance, or similar Contract with any director, officer, or
employee;
18
(b) adoption of, or, except in the Ordinary Course of
Business, increase in the payments to or benefits under, any profit sharing,
bonus, deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of any of the Sellers;
(c) damage to or destruction or loss of any asset or
property of any of the Sellers, whether or not covered by insurance, having a
Material Adverse Effect;
(d) except in the Ordinary Course of Business, sale (other
than sales of inventory in the Ordinary Course of Business), lease, or other
disposition of any asset or property of any of the Sellers or mortgage, pledge,
or imposition of any Encumbrance on any asset or property of any of the Sellers;
(e) cancellation or waiver of any claims or rights with a
value to any of the Sellers in excess of $25,000;
(f) material change in the accounting methods used by any of
the Sellers;
(g) material adverse change in the financial condition,
assets, liabilities, earnings, business or prospects of the Sellers, taken as a
whole;
(h) indebtedness or other liability or obligation (whether
absolute, accrued, contingent or otherwise) incurred, or other transaction
(except that reflected in this Agreement) engaged in, by any of the Sellers,
except those in the Ordinary Course of Business which are, individually and in
the aggregate to one group of related parties, less than $25,000 in amount;
(i) acquisition of any assets other than in the Ordinary
Course of Business;
(j) any material reduction in the rate of, or gross margins
associated with, bookings or orders for the products or services of the Sellers,
taken as a whole; or
(k) agreement, whether oral or written, by any of the
Sellers to do any of the foregoing.
3.13 Contracts; No Defaults.
----------------------
(a) Part 3.13(a) of the Disclosure Letter contains a
complete and accurate list, and the Sellers have delivered to Buyer true and
complete copies of, each of the following Applicable Contracts: (i) each
agreement that involves aggregate future payments by any of the Sellers of more
than $25,000; (ii) each distributorship, sales agency, franchise, joint venture
or partnership agreement; (iii) each agreement not made in the ordinary course
of business which is to be performed after the Closing; (iv) each outstanding
commitment to make a capital expenditure, capital addition or capital
improvement involving an amount in excess of $20,000; (v) each real or personal
property lease; (vi) each agreement relating to the loan of money or
availability of credit to or from any of the Sellers; (vii) each agreement
limiting the freedom of any
19
of the Sellers to compete in any line of business or with any Person; (viii)
each written agreement, contract, arrangement or understanding between any of
the Sellers and any present or former employee; (ix) each license agreement
relating to patents, trademarks, know-how or other intellectual property,
whether as licensee or licensor; (x) each collective bargaining agreement or
other contract or commitment to or with any labor union or other group of
employees; (xi) each mortgage, pledge, security, title retention, or similar
agreement encumbering any of the Assets; (xii) each agreement providing for
payments to or by any Person based on sales, purchases, revenues, profits or
assets; (xiii) each guaranty or similar undertaking with respect to the
obligations of any other Person; (xiv) each agreement relating to the
acquisition or disposition of significant assets, businesses or companies within
the past five years; and (xv) each other agreement which cannot be terminated by
the Sellers within one year after the date hereof without penalty or under which
the consequences of a default or termination would have a Material Adverse
Effect.
(b) Except as set forth in Part 3.13(b) of the Disclosure
Letter, to the Knowledge of the Sellers, each Contract identified or required to
be identified in Part 3.13(a) of the Disclosure Letter is in full force and
effect and is valid and enforceable in accordance with its terms. Except as set
forth in Part 3.13(b) of the Disclosure Letter and except where non-compliance
would not result in a Material Adverse Effect: (i) each of the Sellers is, and
at all times since January 1, 1991 has been, in compliance with all applicable
terms and requirements of each Applicable Contract; (ii) each other Person that
has any obligation or liability under any Applicable Contract is, and at all
times since January 1, 1991 has been, in compliance with all applicable terms
and requirements of such Applicable Contract; and (iii) none of the Sellers has
given to or received from any other Person, at any time since January 1, 1991,
any notice or other communication (whether oral or written) regarding any
actual, alleged, possible, or potential violation or breach of, or default
under, any Applicable Contract.
(c) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate any material amounts paid or payable to any
of the Sellers under Applicable Contracts with any Person having the contractual
or statutory right to demand or require such renegotiation and no such Person
has made written demand for such renegotiation.
3.14 Insurance. Part 3.14 of the Disclosure Letter sets forth a list
---------
(including the name of the insurer, the name of the policyholder, the name of
each insured, the policy number and periods of coverage, and the scope of
coverage) of all policies of fire, theft, casualty, liability, burglary,
fidelity, workers compensation, business interruption, environmental, product
liability, automobile and other forms of insurance under which any of the
Sellers is the beneficiary. None of the Sellers has received notice from any
insurer under any such policy disclaiming coverage or canceling or materially
amending any such policy. Such policies or extensions or renewals thereof in
such amounts will be outstanding and in full force without interruption until
the Closing Date. The Sellers have paid all premiums due, and have otherwise
performed all of their respective obligations under, each such policy. The
Sellers have given proper and timely notice to the insurer of all claims that
may be insured under such policies.
3.15 Environmental Matters. Except as set forth in Part 3.15 of the
---------------------
Disclosure Letter:
20
(a) To the knowledge of the Sellers, the Sellers are in full
compliance with all Environmental Laws. None of the Sellers has any basis to
expect, nor has any of them or any other Person for whose conduct they are or
may be held to be responsible received, any actual or Threatened order, notice,
or other communication from (i) any Governmental Body or private citizen acting
in the public interest, (ii) the current or prior owner or operator of any
Facilities, or (iii) any other Person, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which any of the Sellers has had
an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, transported or processed by any of the Sellers, or any other
Person for whose conduct they are or may be held responsible, or from which
Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of any of the
Sellers, Threatened claims, Encumbrances, or other restrictions of any nature,
resulting from any Environmental, Health, and Safety Liabilities or arising
under or pursuant to any Environmental Law, with respect to or affecting any of
the Facilities or any other properties and assets (whether real, personal, or
mixed) in which any of the Sellers has or had an interest.
(c) To the knowledge of the Sellers, none of the Sellers nor
any other Person for whose conduct they are or may be held responsible, has any
Environmental, Health, and Safety Liabilities with respect to the Facilities or
any other properties and assets (whether real, personal, or mixed) in which any
of the Sellers (or any predecessor) has or had an interest, or at any property
geologically or hydrologically adjoining the Facilities or any such other
property or assets.
(d) To the knowledge of the Sellers, there has been no
Release or, to the Knowledge of any of the Sellers, Threat of Release, of any
Hazardous Materials at or from the Facilities or at any other locations where
any Hazardous Materials were generated, manufactured, refined, transferred,
transported, produced, imported, used, or processed from or by the Facilities,
or from or by any other properties and assets (whether real, personal, or mixed)
in which any of the Sellers has or had an interest, or to the Knowledge of any
of the Sellers any geologically or hydrologically adjoining property, whether by
the Sellers or any other Person.
(e) The Sellers have delivered to Buyer true and complete
copies and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by any of the Sellers pertaining to Hazardous Materials
or Hazardous Activities in, on, or under the Facilities, or concerning
compliance by any of the Sellers, or any other Person for whose conduct they are
or may be held responsible, with Environmental Laws or Occupational Safety and
Health Laws.
(f) Part 3.15 of the Disclosure Letter sets forth or
describes in reasonable detail: (i) all landfills, surface impoundments, pits,
underground injections xxxxx, waste piles,
21
incinerators and any other units used by any of the Sellers for the handling,
treatment, recycling, storage or disposal of Hazardous Materials at any Facility
and (ii) all underground or above-ground storage tanks at the Facilities or on
any property owned or operated at any time by any of the Sellers.
3.16 Labor Disputes; Compliance. Since January 1, 1991, none of the
--------------------------
Sellers has been a party to any collective bargaining Contract or other labor
Contract. Since January 1, 1991, there has not been, there is not presently
pending or existing, and to the Knowledge of the Sellers or the Principals
there is not Threatened any strike, slowdown, picketing, work stoppage, labor
arbitration or proceeding in respect of the grievance of any employee,
application or complaint filed by an employee or union with the National Labor
Relations Board or any comparable Governmental Body, organizational activity,
or other labor dispute against or affecting any of the Sellers or their
premises, and no application for certification of a collective bargaining agent
is pending or to the Knowledge of the Sellers is Threatened. There is no
lockout of any employees by any of the Sellers, and no such action is
contemplated by any of the Sellers. There is no recognized trade union in
respect of the UK Employees.
3.17 Intellectual Property. The Sellers own or have adequate license
---------------------
to use, free and clear of any Encumbrance or obligation of payment, all patents,
trademarks, trade names, service marks, branch names and copyrights, and
applications therefor, used in the conduct of the business or the use of which
is necessary for the conduct of the business of the Sellers as presently
conducted (the "Intangibles"). Set forth in Part 3.17 of the Disclosure Letter
is a complete list and summary description of all Intangibles and licenses or
sublicenses entered into or granted by or to the Sellers with respect thereto
and the countries of registration. The Sellers own or possess adequate rights to
use, free and clear of any Encumbrance or obligation of payment, all inventions,
technology, technical know-how, processes, designs, trade secrets, vendor and
customer lists and other confidential information required for or used in the
business of the Sellers as presently conducted ("Trade Secrets"). No person has
made any claim or demand upon any of the Sellers pertaining to, and no
proceedings are pending or to the Knowledge of the Sellers Threatened, which
challenge the rights of any of the Sellers in respect of any Intangibles or
Trade Secrets. No Intangible owned or used by any of the Sellers is subject to
any Order. To the Knowledge of the Sellers, none of the Sellers has infringed or
engaged in the unauthorized use of, or violated any confidentiality agreement
that pertains to, any patent, trademark, trade name, service xxxx, brand name or
copyright, or any invention, technology, technical know-how, process, design,
trade secret or other intellectual property of another Person. To the Knowledge
of the Sellers no third party is engaged in the infringement or unauthorized use
of any Intangible or Trade Secret.
3.18 Relationships with Related Persons. Except as set forth in Part
----------------------------------
3.18 of the Disclosure Letter, no Related Person of any of the Sellers has any
interest in any property (whether real, personal, or mixed and whether tangible
or intangible) used in or pertaining to the business of any of the Sellers.
Except as set forth in Part 3.18 of the Disclosure Letter, no Related Person of
any of the Sellers owns of record or as beneficial owner, an equity interest or
any other financial or profit interest in any Person that (i) has business
dealings or a financial interest in any transaction with any of the Sellers, or
(ii) engages in a Competing Business except
22
for ownership of less than one percent of the outstanding capital stock of any
Competing Business that is publicly traded on any recognized exchange or in the
over-the-counter market. Except as set forth in Part 3.18 of the Disclosure
Letter, none of the Sellers nor any Related Person of any of the Sellers is a
party to any Contract with, or has any claim or right against, any of the
Sellers.
3.19 Brokers or Finders. None of the Sellers or the Principals or
------------------
their respective agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with the Contemplated Transactions.
3.20 No Termination of Relationship. To the Knowledge of the Sellers
------------------------------
no relationship between any of the Sellers and a distributor, customer,
supplier, lender, employee or other person will be terminated or adversely
affected as a result of the execution of this Agreement or the performance of
the Contemplated Transactions.
3.21 Customers and Suppliers. No material supplier of the Sellers
-----------------------
has indicated within the past year that it will stop, or materially decrease the
rate of, supplying materials, products, or services to the Sellers and no
material customer of the Sellers has indicated within the past year that it will
stop, or materially decrease the rate of, buying materials, products or services
from the Sellers. Part 3.21 of the Disclosure Letter sets forth a list of (a)
each customer that accounted for more than 5% of the combined revenues of the
Sellers during the last fiscal year and (b) each supplier that is the sole
supplier of any significant product or component to the Sellers.
3.22 Recalls. No products of any of the Sellers have been recalled
-------
since January 1, 1991 and, to the Knowledge of the Sellers there is no basis for
any such recall.
3.23 Backlog. The backlog of MSC as of the Closing Date is greater
-------
than or equal to $1,750,000. For purposes of this Section 3.23, "backlog" means
all firm orders and commitments for MSC's products and services which orders and
commitments contain terms and conditions that are consistent with MSC's
practices over the past year.
3.24 Inventories. All Inventories (as defined below) are of a
-----------
quality and quantity usable and salable in the Ordinary Course of Business.
Items included in such Inventories are carried on the books of the Sellers at
the lower of cost or market and, with respect to Inventories existing as of the
Balance Sheet Date, are reflected on the September Balance Sheets net of
applicable reserves for excess and obsolete items. Such reserves have been
determined in accordance with past practices and conform to generally accepted
accounting principles consistently applied. The term "Inventories" includes all
stock of raw materials, work-in-process and finished goods held by the Sellers,
for manufacturing, assembly, processing, finishing, and sale or resale to
others.
3.25 Product and Service Warranties. The Sellers have provided the
------------------------------
Buyer with copies of the current standard warranty used for each of the products
and services of the Sellers. Part 3.25 of the Disclosure Letter also describes
any and all other product or service warranties made by or on behalf of the
Sellers that deviate materially from the current standard warranties and which
remain in effect on the date hereof, or pursuant to which any of the Sellers
have any remaining obligations.
23
3.26 Authority of Representative. The Representative has all
---------------------------
necessary legal power and authority to act on behalf of the Sellers and the
Principals as provided herein.
3.27 No Additional Representations and Warranties. Except as
--------------------------------------------
specifically set forth in this Agreement (including the Disclosure Letter), the
Sellers and Principals disclaim all representations and warranties, whether
express or implied, written or oral.
3.28 Sufficiency of Assets. Except as set forth in Part 3.28 of the
---------------------
Disclosure Letter, the assets owned by the Sellers are the only assets
necessary for the continued conduct of the businesses of the Sellers after the
Closing in substantially the same manner as conducted prior to the Closing.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Sellers as follows:
4.1 Organization and Good Standing. Buyer is a corporation duly
------------------------------
organized, validly existing, and in good standing under the laws of the
Commonwealth of Massachusetts.
4.2 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power, and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.
(b) Except as set forth in Exhibit D, neither the execution
---------
and delivery of this Agreement by Buyer nor the consummation or performance of
any of the Contemplated Transactions by Buyer will give any Person the right to
prevent, delay, or otherwise interfere with any of the Contemplated Transactions
pursuant to: (i) any provision of Buyer's Organizational Documents; (ii) any
resolution adopted by the board of directors or the stockholders of Buyer; (iii)
any Legal Requirement or Order to which Buyer may be subject; or (iv) any
Contract to which Buyer is a party or by which Buyer may be bound.
Except as set forth in Exhibit D, Buyer is not and will not be required to
---------
obtain any Consent from any Person in connection with the execution and
delivery of this Agreement by Buyer or the consummation or performance of any
of the Contemplated Transactions by Buyer.
4.3 Certain Proceedings. There is no pending Proceeding that has
-------------------
been commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
24
4.4 Brokers and Finders. Buyer and its officers and agents have
-------------------
incurred no obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement and will indemnify and hold the Sellers and the Principals
harmless from any such payment alleged to be due by or through Buyer as a result
of the action of Buyer or its officers or agents.
5. INDEMNIFICATION; REMEDIES
5.1 Survival. Subject to Section 5.4, all representations,
--------
warranties, covenants, and obligations in this Agreement, the Disclosure Letter
and any other certificate or document delivered pursuant to this Agreement will
survive the Closing; the right to indemnification, reimbursement, or other
remedy based on such representations, warranties, covenants, and obligations
will not be affected by any investigation conducted with respect to, or any
Knowledge acquired (or capable of being acquired) about the accuracy or
inaccuracy of or compliance with, any such representation, warranty, covenant,
or obligation.
5.2 Indemnification and Reimbursement By the Sellers and the
--------------------------------------------------------
Principals. The Sellers and the Principals will indemnify and hold harmless
----------
Buyer, its representatives, stockholders, controlling persons, and affiliates
(collectively, the "Indemnified Persons"), and will reimburse the Indemnified
Persons, for any loss, liability, claim, damage, expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising from or in connection with:
(a) any Breach of any representation or warranty made by any
of the Sellers in this Agreement, the Disclosure Letter, or any other
certificate or document delivered at and in connection with the Closing of the
Contemplated Transactions by any of the Sellers pursuant to this Agreement;
(b) any Breach by any of the Sellers of any covenant or
obligation of any of the Sellers in this Agreement;
(c) any Excluded Liability;
(d) any claim by any Person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with any of the Sellers or the
Principals; or
(e) any product liability claim relating to products sold by
any of the Sellers prior to the Closing Date; provided that such claim is not
caused by Buyer's intervening negligence in the service, maintenance or repair
of such product.
5.3 Indemnification and Reimbursement by Buyer. Buyer will
------------------------------------------
indemnify and hold harmless the Sellers and the Principals, and will reimburse
the Sellers and the Principals, for any Damages arising from or in connection
with (a) any Breach of any representation or warranty made by Buyer in this
Agreement or in any certificate delivered by Buyer pursuant to this
25
Agreement, (b) any Breach by Buyer of any covenant or obligation of Buyer in
this Agreement, (c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Buyer (or any Person acting on its
behalf) in connection with any of the Contemplated Transactions or (d) any
Assumed Liabilities.
5.4 Time Limitations. None of the Sellers or the Principals will
----------------
have any liability for indemnification under section 5.2(a) with respect to any
representation or warranty in Sections 3.4, 3.5, 3.7, 3.9, 3.12, 3.14, 3.16,
3.19, 3.20, 3.21, 3.22, 3.23, 3.24 unless on or before March 31, 1997 the
Representative is given notice of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Buyer. None of the
Sellers or the Principals will have any liability for indemnification under
section 5.2(a) with respect to any representation or warranty in Sections 3.8,
3.10, 3.11, 3.13, 3.15, 3.17, 3.18, 3.25, 3.26, unless on or before the second
anniversary of the Closing Date the Representative is given notice of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by Buyer. The Sellers and the Principals will have no liability for
indemnification under Section 5.2(a) with respect to Section 3.1, 3.2, 3.3, or
3.6, unless on or before the expiration of the applicable statute of limitations
the Representative is given notice of a claim specifying the factual basis of
that claim in reasonable detail to the extent known by Buyer. A claim for
indemnification or reimbursement under Sections 5.2 (b), (c) or (d) may be made
at any time.
5.5 Limitations on Amount -- Sellers and Principals.
-----------------------------------------------
(a) None of the Sellers or the Principals will have any
liability for indemnification pursuant to Section 5.2(a), (i) at any time with
respect to any claim by the Buyer for less than $5,000 and (ii) until the total
of all Damages with respect to such matters (including claims under $5,000)
exceeds $100,000, and then such liability shall only be for Damages in excess of
$100,000. Notwithstanding any provision herein to the contrary, except for
liability for indemnification with respect to breaches of Sections 3.1, 3.2, 3.3
or 3.6, the maximum aggregate liability of the Sellers and the Principals under
Section 5.2 shall not exceed $6,750,000.
(b) Notwithstanding any provision herein to the contrary,
except for liability for indemnification with respect to breaches of Sections
3.1, 3.2, 3.3 or 3.6, no Principal shall have any liability under section 5.2 in
excess of the amount set forth opposite such Principal's name on Exhibit F
---------
attached hereto. In addition, with respect to any single claim (and subject to
the overall limitation set forth in the preceding sentence) for indemnification,
Xxxxxx Xxxxxxx shall not have any liability which is greater than the product of
(i) the amount set forth opposite Xxxxxx Xxxxxxx'x name on Exhibit F attached
---------
hereto divided by $6,750,000 and (ii) the total amount of the claim for which
Buyer is then seeking indemnification.
5.6 Procedures for Indemnification -- Third Party Claims.
-----------------------------------------------------
(a) Promptly after receipt by an indemnified party under
Section 5.2 or Section 5.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made against an
indemnifying party under such Section, give notice to the
26
indemnifying party of the commencement of such claim, but the failure to notify
the indemnifying party will not relieve the indemnifying party of any liability
that it may have to any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such action is prejudiced by
the indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in Section 5.6(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will,
unless the claim involves Taxes, be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such Proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently conducts
such defense, be liable to the indemnified party under this Section 5 for any
fees of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of a Proceeding,
(i) no compromise or settlement of such claims may be effected by the
indemnifying party without the indemnified party's consent unless (A) there is
no finding or admission of any violation of Legal Requirements or any violation
of the rights of any Person and no effect on any other claims that may be made
against the indemnified party, and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying party; and (ii) the
indemnifying party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the defense of
such Proceeding, the indemnifying party will be bound by any determination made
in such Proceeding or any compromise or settlement effected by the indemnified
party. Notwithstanding the foregoing, if a customer or a supplier any of the
Sellers asserts that the Buyer is liable to such customer or supplier for a
monetary obligation which may constitute or result in Damages for which the
Buyer may be entitled to indemnification pursuant to this Section 5 and the
Buyer reasonably determines that it has a valid business reason to fulfill such
obligations, then (i) the Buyer shall be entitled to satisfy such obligation
without prior notice to or consent from the Sellers, (ii) the Buyer may make a
claim for indemnification pursuant to this Section 5 and (iii) the Buyer shall
be reimbursed, in accordance with the provisions of this Section 5, for any such
Damages for which it is entitled to indemnification pursuant to the provisions
of this Section 5; provided, however, that if the Buyer makes a claim for
-------- -------
indemnification in accordance with this sentence the Sellers and the Principals
shall not be deemed to have waived any defense to such claim by the Buyer,
notwithstanding the Buyer's prior satisfaction of the obligation for which
indemnification is sought, and it shall not be a defense to the Buyer's claim
for indemnification that the Buyer has satisfied the obligation for which
indemnification is sought.
27
(c) Notwithstanding the foregoing, if an indemnified
good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise, or settle such Proceeding, but the
indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent.
(d) For purposes of providing any notice required under this
Section 5, the Buyer may treat the Representative as the authorized
representative of all of the Sellers and Principals any notice given to the
Representative shall be deemed given to each Seller and each Principal.
5.7 Procedure for Indemnification -- Other Claims. A claim for
---------------------------------------------
indemnification for any matter not involving a third-party claim may be
asserted by notice to the party from whom indemnification is sought.
6. GENERAL PROVISIONS
6.1 Expenses. Except as otherwise expressly provided in this
--------
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of this Agreement by
another party.
6.2 Public Announcements. Any public announcement or similar
--------------------
publicity with respect to this Agreement or the Contemplated Transactions will
be issued, if at all, by the Buyer only with the consent of the Representative,
and by any of the Sellers or the Principals, only with the consent of the Buyer,
none of which consents will unreasonably be withheld. The content of any public
announcement by the Buyer will be subject to review and approval by the
Representative, and the content of any public announcement by any of the Sellers
or the Principals will be subject to review and approval by the Buyer, none of
which approvals will unreasonably be withheld. Sellers and Buyer will consult
with each other concerning the means by which the Sellers' employees, customers,
and suppliers and others having dealings with the Sellers will be informed of
the Contemplated Transactions, and Buyer will have the right to be present for
any such communication.
6.3 Notices. All notices, consents, waivers, and other
-------
communications under this Agreement must be in writing and will be deemed to
have been duly given when actually received or if earlier, one day after deposit
with a nationally recognized overnight delivery service, charges prepaid, or
three days after deposit in the U.S. mail by certified mail, return receipt
requested, postage prepaid, in each case to the appropriate addresses and
telecopier numbers set forth below (or to such other addresses and telecopier
numbers a party may designate by notice to the other parties):
28
any Seller or the Representative:
Moisture Systems Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: President
Fax No.: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxxxxx III, Esq.
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Buyer:
Thermedics Detection Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
Fax No.: (000) 000-0000
with a copy to:
Thermo Electron Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: General Counsel
Fax No. (000) 000-0000
6.4 Jurisdiction; Service of Process. Any action or proceeding
--------------------------------
seeking to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the
Commonwealth of Massachusetts, County of Middlesex, or, if it has or can acquire
jurisdiction, in the United States District Court for the District of
Massachusetts and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. With respect to MSC-
UK and the Principals, any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may be brought against
any of the parties in the courts of England and each of MSC-UK, the Principals
and Buyer consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in this
Section 6.4 may be served on any party anywhere in the world.
29
6.5 Further Assurances. The parties agree (a) to furnish upon
------------------
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the documents referred to in this Agreement.
6.6 Waiver. The rights and remedies of the parties to this
------
Agreement are cumulative and not alternative. Neither the failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or the documents referred to in this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Agreement or the documents referred to in this Agreement can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that
may be given by a party will be applicable except in the specific instance for
which it is given; and (c) no notice to or demand on one party will be deemed to
be a waiver of any obligation of such party or of the right of the party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
6.7 Entire Agreement and Modification. This Agreement supersedes
---------------------------------
all prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party to be charged with the amendment.
6.8 Disclosure Letter. In the event of any inconsistency between
-----------------
the statements in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
6.9 Assignments, Successors, and Third-Party Rights. No party
-----------------------------------------------
hereto may assign any of its, his or her rights under this Agreement without the
prior consent of the other parties except that Buyer may assign any of its
rights under this Agreement to any Subsidiary of Buyer, provided that Buyer
shall remain jointly and severally liable with such Subsidiary for any of
Buyer's obligations hereunder. Subject to the preceding sentence, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.
6.10 Severability. If any provision of this Agreement is held
------------
invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full
30
force and effect. Any provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect to the extent not
held invalid or unenforceable.
6.11 Section Headings; Construction. The headings of Sections in
------------------------------
this Agreement are provided for convenience only and will not affect its
construction or interpretation. All references to "Sections" refer to the
corresponding Sections of this Agreement. All words used in this Agreement will
be construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
6.12 Time of Essence. With regard to all dates and time periods set
---------------
forth or referred to in this Agreement, time is of the essence.
6.13 Governing Law. This Agreement will be governed by and construed
-------------
under the laws of the Commonwealth of Massachusetts without regard to conflicts
of laws principles.
6.14 Relief. In the event of a breach of the provisions of this
------
Agreement by a Seller, in addition to any other rights and remedies that Buyer
may have under law or in equity, Buyer shall have the right to specific
performance and injunctive relief, it being acknowledged and agreed that money
damages will not provide an adequate remedy.
6.15 Access to Information. The Sellers shall make available, and
---------------------
direct and authorize their respective independent public accountants to make
available, to the Buyer and to the independent public accountants representing
the Buyer (at no cost to the Buyer), all working papers pertaining to the
examination by the Sellers' accountants of the accounting records of the
Sellers, and shall provide such cooperation as Buyer shall reasonably request in
connection with Buyer's preparation of any financial statements relating to the
businesses of the Sellers required to be included in any filing made by Buyer or
any affiliate of Buyer with the Securities and Exchange Commission pursuant to
the Securities Act or the Exchange Act. For a period of time as may be
reasonably requested, upon written request of a Seller or Principal, Buyer or
its successor shall make or cause to be made available to such Seller or
Principal, as the case may be, all books and records included in the Assets that
are needed by such Seller or Principal for a valid business or financial
purpose, and permit such Seller or Principal to inspect and copy such books and
records upon reasonable notice and at such reasonable times as may be mutually
agreed upon by such Seller or Principal and Buyer and shall be at such Seller's
or Principal's sole cost and expense.
6.16 Solicitation. For a period of two years after of the Sellers or
------------
the Principals shall, either directly or indirectly as a stockholder, investor,
partner, director, officer, employee or in any other capacity, solicit or
attempt to induce any Restricted Employee to terminate his or her employment
with Buyer or any affiliate of the Buyer; provided, however, that it shall not
-------- -------
be a breach of this Section 6.16 for any Seller or Principal to solicit
Restricted Employees by means of general public advertisements. For purposes of
this agreement, a "Restricted Employee" shall mean any person, other than
employees terminated involuntarily by the Buyer, who (i) either (A) hold or have
access to trade secrets or other confidential information relating to the
business of the Sellers or (B) had annual base salary in 1994 of at least
$50,000, and (ii) either (X) was an employee of the Buyer or any affiliate of
the Buyer on either the date of
31
this Agreement or the Closing Date or (Y) was an employee of any of the Sellers
on either the date of this Agreement or the Closing Date and who is employed by
the Buyer immediately after the Closing.
6.17 Non-Competition.
---------------
(a) For a period of five years after the Closing Date, none
of the Sellers or the Principals shall, either directly or indirectly as a
stockholder, investor, partner, director, officer, employee, consultant or
otherwise, engage in a Competitive Business in any territory. For purposes of
this Agreement, a "Competitive Business" means (i) the development, manufacture,
marketing or sale of any product utilizing near infrared technology which is
competitive with any product manufactured, sold or developed (or under
development) by a Seller on or prior to the Closing Date or (ii) the rendering
or marketing of any service which is competitive with any service rendered or
marketed (or proposed to be rendered or marketed) by a Seller on or prior to the
Closing Date. Buyer acknowledges and agrees that the Principals are and will be
passive investors in Sensortech Systems Inc.
(b) The Sellers and the Principals agree that the duration
and geographic scope of the non-competition provision set forth in this Section
6.17 are reasonable. In the event that any court determines that the duration or
the geographic scope, or both, are unreasonable and that such provision is to
that extent unenforceable, the parties agree that the provision shall remain in
full force and effect for the greatest time period and in the greatest area that
would not render it unenforceable. The parties intend that this non-competition
provision shall be deemed to be a series of separate covenants, one for each and
every county of each and every state of the U.S. and each and every political
subdivision of each and every country outside the U.S. where this provision is
intended to be effective.
6.18 Seniority of Employees. To the extent that length of service is
----------------------
relevant for vesting or benefit calculations or allowances under retirement or
other benefit plans made available to Buyer's employees, any of the Seller's
employees that accept employment with the Buyer shall receive credit for their
years of service with the Sellers.
6.19 United Kingdom Value Added Tax. The Sellers and Buyer intend
------------------------------
that article 5 of the United Kingdom Value Added Tax (Special Provisions) Order
1992 shall apply to the sale of Assets located in the United Kingdom under this
Agreement, so that the sale is treated as neither a supply of goods nor a supply
of services.
6.20 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
32
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
THERMEDICS DETECTION INC.
By: /s/ Xxxx X. Xxxx Xx.
---------------------------
Name: Xxxx X. Xxxx Xx.
-------------------------
Title: Chairman
------------------------
SELLERS:
MOISTURE SYSTEMS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: President
------------------------
MOISTURE SYSTEMS LIMITED
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
-------------------------
Title: Director
------------------------
ANACON CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
-------------------------
Title: President
------------------------
PRINCIPALS:
/s/ Xxxxxx Xxxxxxx
------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxx
------------------------------
Xxxxx Xxxxxxx
/s/ Xxxx Xxxxxxx
------------------------------
Xxxx Xxxxxxx
33
