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EXHIBIT 2.1
PURCHASE AGREEMENT
PURCHASE AGREEMENT, entered into as of March 14, 1997, by and among
XXXXXX X. XXXXXX, as Trustee of the Xxxx Xxxx Xxxxxxx Trust, dated November 10,
1992, XXXXXX X. XXXXXX, as Trustee of the Megan Xxxx Xxxxxxx Trust, dated
November 10, 1992, XXXXXX X. XXXXXX, as Trustee of the Xxxxxx Xxx Xxxxxxx
Trust, dated November 10, 1992, and XXXXXX X. XXXXXX, as Trustee of the Xxxx
Xxx Xxxxxxx Trust, dated November 10, 1992 (collectively, the "Xxxxxxx Children
Trusts" and each being the holder of a limited partnership interest in Remel
Limited Partnership (the "Company")), REGIONAL MEDIA LABORATORIES, INC.
("RMLI", being the holder of a limited partnership interest in the Company and
a limited liability company interest in Chrisope Technologies, L.C. ("Xxxxxxxx
X.X.")), RIVERSIDE/REMEL LIMITED PARTNERSHIP ("R/RLP", being the holder of a
limited partnership interest in the Company and sole shareholder of Remel
Management, Inc. ("RMI", which together with the Xxxxxxx Children Trusts, RMLI
and R/RLP are hereinafter collectively referred to as the "Remel Partners"),
XXXXXXX FAMILY PARTNERSHIP, L.P. ("Xxxxxxx X.X.") being the holder of a limited
partnership interest in Innovative Diagnostic Systems Limited Partnership ("IDS
L.P."), Remel Acquisition Co., a Wisconsin corporation (the "Buyer"), and
Riverside Partners, Inc. (the "Agent"). Hereinafter from time to time the
Xxxxxxx Children Trusts, RMLI, R/RLP, and Xxxxxxx X.X. are collectively
referred to as the "Sellers"; and Xxxxxxxx X.X. and IDS L.P. are collectively
referred to as the "Operating Subsidiaries". The obligations of the Buyer
under this Agreement are guaranteed by Sybron International Corporation (the
"Guarantor") pursuant to a guarantee set forth at the end of this Agreement.
Introduction
The Remel Partners own in the aggregate one hundred percent (100%) of
the issued and outstanding partnership interests of the Company; R/RLP owns in
the aggregate one hundred percent (100%) of the issued and outstanding capital
stock of RMI; the Company and RMLI own in the aggregate one hundred percent
(100%) of the issued and outstanding limited liability company interests of
Xxxxxxxx X.X.; and the Company (directly and indirectly through its
wholly-owned subsidiary, IDS Management, Inc. ("IDS, Inc.", which together with
the Operating Subsidiaries are hereinafter collectively referred to as the
"Subsidiaries")) and Xxxxxxx X.X. own in the aggregate one hundred percent
(100%) of the issued and outstanding partnership interests of IDS L.P.
The Sellers wish to sell, and the Buyer wishes to buy, all of such
partnership interests, limited liability company interests and capital stock,
for the purpose of acquiring the businesses conducted by the Company and the
Subsidiaries (collectively, the "Business"), on the terms and conditions set
forth herein.
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The guaranty provided by the Guarantor is a material inducement to the
Sellers to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF PARTNERSHIP INTERESTS,
CAPITAL STOCK AND LIMITED LIABILITY INTERESTS
Section 1.01. Purchase and Sale. Based on the representations,
warranties and covenants contained in this Agreement, and subject to the terms
and conditions hereof, at Closing (as hereinafter defined) the Sellers shall
sell, transfer, assign and deliver to the Buyer, and the Buyer shall purchase
from the Sellers (a) all of the Company's issued and outstanding partnership
interests, except that of RMI (the "Remel Partnership Interests"), (b) all of
the issued and outstanding capital stock of RMI, (c) all of the issued and
outstanding partnership interests of IDS L.P. which are owned by Xxxxxxx X.X.
and (d) all of the issued and outstanding limited liability company interests of
Xxxxxxxx X.X. which are owned by RMLI (all of the interests and stock referred
to in clauses (a) through (d) being hereinafter referred to collectively as the
"Remel Entity Interests").
ARTICLE II
PURCHASE PRICE AND PAYMENT
Section 2.01. Purchase Price. The aggregate purchase price to be paid by
the Buyer for the Remel Entity Interests shall be the Final Purchase Price (as
hereinafter defined), which shall be payable as set forth below.
Section 2.02. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings set forth below:
(a) "Base Purchase Price" means $155,000,000.
(b) "Closing Purchase Price" means the Base Purchase Price, adjusted
to reflect any adjustments set forth on the Estimated Purchase Price Certificate
(as defined in Section 2.03).
(c) "Final Purchase Price" means (i) the Base Purchase Price,
(ii) plus the amount, if any, by which Net Asset Value (as hereinafter defined)
exceeds $24,435,140 or less the amount, if
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any, by which Net Asset Value is less than $24,435,140, and (iii) plus the
amount of cash (the "Cash") held by the Company and its Subsidiaries
immediately prior to the Closing (whether positive or negative), determined in
accordance with generally accepted accounting principles, as shown on the Final
Balance Sheet.
(d) "Net Asset Value" means, with respect to the Company and the
Subsidiaries, on a consolidated basis, (i) the sum of current assets, deposits
(such as security deposits), downpayments for the purchase of assets, equipment
in process, property and equipment and other tangible assets, but excluding cash
(determined in accordance with generally accepted accounting principles), less
(ii) balance sheet liabilities (other than any portion of any indebtedness to be
paid pursuant to Section 2.04), determined as of immediately prior to the
Closing, as shown on the Final Balance Sheet and as finally determined in
accordance with Section 2.05. Net Asset Value shall be calculated in a manner
consistent with the calculation of net asset value as of December 31, 1996 which
is set forth on Schedule 2.02(d) hereto and, notwithstanding any generally
accepted accounting principle to the contrary, shall not reflect as a liability
or obligation the amount of the payment obligations under the Letter Agreements
referenced in footnotes 3, 4 and 5 of Schedule 4.16 hereto.
(e) "Final Balance Sheet" means a consolidated combined balance sheet
of the Company and the Subsidiaries as of immediately prior to the Closing,
prepared in accordance with generally accepted accounting principles on a basis
consistent with the procedures and principles used in the preparation of the
Balance Sheet (as hereinafter defined), as finally determined in accordance with
Section 2.05.
Section 2.03. Preparation of Pre-Closing Estimated Purchase Price
Certificate. At least three days before the Closing Date, the Sellers will
furnish to the Buyer an estimated Final Balance Sheet and the Sellers'
certificate (the "Estimated Purchase Price Certificate") setting forth
(a)_estimated Net Asset Value, (b) estimated Cash and (c) the Sellers' estimated
calculation of the Final Purchase Price.
Section 2.04. Payments at Closing. At the Closing, the Buyer shall make
the following payments from the Closing Purchase Price (up to an amount, in the
aggregate, equal to the Closing Purchase Price):
(a) to Xxxxxx Financial, Inc. ("Xxxxxx") in full satisfaction of the
Company's indebtedness thereto;
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(b) to RMLI in full satisfaction of the Company's indebtedness
thereto;
(c) to Chrisope Technologies, Inc. in full satisfaction of Xxxxxxxx
X.X.'s indebtedness thereto;
(d) to the holders of any other long-term indebtedness in full
satisfaction thereof, if applicable;
(e) $10,000,000 to a mutually acceptable escrow agent (which escrow
agent shall be a major commercial bank) to be held pursuant to an escrow
agreement in the form of Exhibit 2.04(e) hereto (the "Escrow Agreement") by and
among the Agent, the Buyer, and the escrow agent named therein; and
(f) the remainder to the Agent, as agent for the Sellers,
in each case by wire transfer of immediately available funds, and in the case
of funds wired pursuant to clause (f) above, the Agent will forward to each
Seller, such Seller's portion of the Closing Purchase Price (as set forth on
Schedule 2.04 hereto), but reduced by the amount which the Agent determines to
be necessary to pay expenses of and to reserve for any purchase price
adjustments relating to the transactions contemplated hereby, which amount will
be applied to pay such expenses and adjustments. Any excess amounts retained
by the Agent after payment of expenses will be forwarded to the Sellers who
would otherwise be entitled to receive such amounts.
Section 2.05. Determination of Final Purchase Price.
(a) Within 45 days after the Closing Date, the Sellers will deliver
to the Buyer: (i) their proposed Final Balance Sheet and (ii) a certificate (the
"Final Purchase Price Certificate"), executed by the Agent, stating that such
Final Balance Sheet was prepared as provided in Section 2.02 above and setting
forth (A) a reconciliation of the changes to the proposed Final Balance Sheet
from the estimated Final Balance Sheet, (B) Net Asset Value, (C) Cash and (D) a
computation of the Final Purchase Price.
(b) If the Buyer delivers written notice (the "Disputed Items
Notice") to the Agent within 30 days after receipt by the Buyer of the proposed
Final Balance Sheet and the Final Purchase Price Certificate, stating that the
Buyer objects to any items on the Final Purchase Price Certificate or the
proposed Final Balance Sheet, specifying the basis for such objection and
setting forth the Buyer's proposed modification to
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the Final Balance Sheet and computation of the Final Purchase Price, the Agent
and the Buyer will attempt to resolve and finally determine the Final Purchase
Price and agree on a Final Balance Sheet as promptly as practicable.
(c) If the Agent and the Buyer are unable to agree upon the Final
Purchase Price and Final Balance Sheet within 30 days after delivery of the
Disputed Items Notice, the Agent and the Buyer will select by lot an independent
"Big-6" accounting firm to resolve the disputed items and make a determination
of the Final Purchase Price and Final Balance Sheet. Such determination will be
made within 60 days after such selection and will be binding upon the parties.
The fees, costs and expenses of the accounting firm so selected will be borne by
the party whose positions generally did not prevail in such determination, or if
the accounting firm determines that neither party could be fairly found to be
the prevailing party, then such fees, costs and expenses will be borne 50% by
the Buyer and 50% by the Sellers.
(d) If the Buyer does not deliver the Disputed Items Notice to the
Agent within 30 days after receipt by the Buyer of the Final Purchase Price
Certificate, the Final Purchase Price specified in the Final Purchase Price
Certificate and the Final Balance Sheet will be conclusively presumed to be true
and correct in all respects and will be binding upon the parties.
(e) At such time as the Final Purchase Price is finally determined,
either (i) the Buyer shall pay to the Agent, for the account of the Sellers, an
aggregate amount equal to the excess of the Final Purchase Price over the
Closing Purchase Price, plus interest on such excess calculated from the Closing
Date at 8% per annum, or (ii) the Agent, on behalf of the Sellers, shall pay the
Buyer an amount equal to the excess of the Closing Purchase Price over the Final
Purchase Price, plus interest on such excess calculated from the Closing Date at
8% per annum.
(f) The Buyer shall make available to the Sellers and their
representatives at all times all books, records and personnel (including without
limitation the Company's chief financial officer) of the Company and the
Subsidiaries (including their outside auditors) in connection with the
preparation of the Final Balance Sheet and the determination of the Final
Purchase Price under this Section 2.05.
Section 2.06. Allocation. The Final Purchase Price shall be allocated
among the assets of the Company and the Subsidiaries as reflected on
Schedule 2.06. It is agreed by the parties that
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such allocation was arrived at by arm's-length negotiation and in the judgment
of the parties properly reflects the fair market value of such assets. It is
agreed that the allocations under this Section 2.06 will be binding on all
parties for federal, state, local and other tax purposes in connection with the
transactions contemplated by this Agreement, and will be consistently reflected
by each party on his or its tax returns.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CONCERNING THE SELLERS
Each Seller hereby severally represents and warrants to the Buyer that each
of the statements contained in this Article III is true and correct as of the
date hereof:
Section 3.01. Title. Such Seller is the record and beneficial owner of
the Remel Entity Interests set forth on Schedules 4.02 and 4.03 as being owned
by such Seller. Such Seller will have at the Closing, good, marketable and
unencumbered title to the Remel Entity Interests to be sold by such Seller
hereunder and full legal right, power and authority to enter into this Agreement
and sell, transfer, assign and deliver such Remel Entity Interests as herein
agreed. Buyer will, on transfer and delivery of the Remel Entity Interests at
the Closing, acquire good and marketable title to such Remel Entity Interests,
free and clear of any liens, encumbrances, security interests, claims of other
persons or restrictions on transfer other than restrictions under generally
applicable securities laws and other than liens, encumbrances, security
interests, claims of other persons or restrictions on transfer caused by actions
of the Buyer. Such Seller has not granted any option or right, and is not a
party to any other agreement, which requires, or upon the passage of time or
payment of money, or occurrence of any other event, may require such Seller to
transfer any of the Remel Entity Interests being sold by such Seller to anyone
other than the Buyer except for security interests granted to Xxxxxx which shall
terminate at the Closing.
Section 3.02. Due Issuance. The Remel Entity Interests held by such
Seller are duly authorized, validly issued, and, in the case of the capital
stock of RMI, fully paid and nonassessable.
Section 3.03. Validity and Enforceability. This Agreement is, and each of
the other agreements and instruments of such Seller contemplated hereby will be,
the valid and binding obligations of such Seller, enforceable in accordance with
their
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respective terms. The execution and performance of this Agreement and the
other instruments and agreements contemplated hereby by such Seller will not
result in any violation of, be in conflict with or constitute a default under,
any law, statute, regulation, ordinance, or contract, agreement, instrument,
judgment, decree or order to which such Seller is a party or by which such
Seller is bound except for such violations, conflicts or defaults which are
not, individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole.
Section 3.04. Authorizations or Approvals. No governmental
authorizations or approvals, other than those listed on Schedule 3.04, are
required to permit such Seller to fulfill all its obligations under this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
CONCERNING THE COMPANY, RMI AND THE SUBSIDIARIES
The Sellers hereby jointly and severally represent and warrant to the Buyer
that each of the statements contained in this Article IV is true and correct as
of the date hereof:
Section 4.01. Organization, Power and Standing.
(a) The Company is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware. The
Company has full partnership power and authority to own, lease and operate its
properties and to carry on its business as such business is now conducted. True
and complete copies of the Certificate of Limited Partnership of the Company and
of the First Amended and Restated Agreement of Limited Partnership of the
Company, each as amended to date (the "Partnership Documents"), have been
delivered to the Buyer by the Sellers.
(b) RMI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. RMI has full corporate power
and authority to own, lease and operate its properties and to carry on its
business as such business is now conducted. True and complete copies of the
Certificate of Incorporation and Bylaws of RMI, each as amended to date (the
"RMI Charter Documents") have been delivered to the Buyer by the Sellers.
Section 4.02. Subsidiaries. Except as disclosed on Schedule 4.02, the
Company and RMI have no subsidiaries and do not, directly or indirectly, own or
have the right to acquire any
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equity interest in any other corporation, partnership, joint venture, trust or
other business organization, except in the ordinary course of business. The
record and beneficial owners of all of the issued and outstanding capital
stock, partnership interests and limited liability company interests, as
applicable, of each of the Subsidiaries is as listed on Schedule 4.02. Each of
the Subsidiaries is duly formed, validly existing and in good standing under
the laws of its state of organization, as set forth on Schedule 4.02. Each of
the Subsidiaries has full corporate or partnership power, as applicable, and
authority to own, lease and operate its properties and to carry on its portion
of the Business as such business is now conducted. There are no outstanding
options, warrants, convertible or exchangeable securities or other rights that
would obligate any Subsidiary to issue additional capital stock, partnership
interests or limited liability company interests, as applicable.
Section 4.03. Capitalization. Schedule 4.03 sets forth (a) a complete and
accurate list of the partners of the Company and their respective issued and
outstanding partnership interests in the Company and (b) a complete and accurate
list of the shareholders of RMI and their respective issued and outstanding
equity interests in RMI. Except as set forth on Schedule 4.03, there are no
outstanding options, warrants, convertible or exchangeable securities or other
rights that would obligate the Company or RMI to issue or purchase shares of its
partnership interests or capital stock, as applicable, or other securities.
Upon acquisition of the Remel Entity Interests hereunder, the Buyer will own,
directly or indirectly, one hundred percent (100%) of the (a) issued and
outstanding partnership interests of the Company, (b) issued and outstanding
capital stock of RMI, and (c) issued and outstanding capital stock, partnership
interests and limited liability company interests, as applicable, of the
Subsidiaries.
Section 4.04. Qualification in Foreign Jurisdictions. Schedule 4.04 sets
forth a complete and accurate list of each jurisdiction in which the Company and
each Subsidiary is duly qualified or licensed and in good standing as a foreign
corporation, limited partnership or limited liability company, as applicable,
duly authorized to do business and in which the character of the properties
owned or leased or the nature of the activities conducted by it makes such
qualification or licensing necessary, except for any jurisdiction(s) in which
the failure to so qualify would not materially and adversely affect the Company
and its Subsidiaries, taken as a whole.
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Section 4.05. Financial Statements.
(a) The Company has delivered to the Buyer audited, consolidated
balance sheets of the Company and its Subsidiaries as at December 31, 1995 and
December 31, 1996 (the "Balance Sheet Date", such consolidated balance sheet as
at the Balance Sheet Date being hereinafter referred to as the "Balance Sheet")
and audited, consolidated statements of income and changes in financial position
of the Company and its Subsidiaries for the years then ended. Such financial
statements and the notes thereto fairly present the financial condition of the
Company and its Subsidiaries at the respective dates thereof and the results of
operations for the periods then ended, and were prepared in accordance with the
books and records of the Company and its Subsidiaries in conformity with
generally accepted accounting principles consistently applied during the periods
covered thereby.
(b) To the knowledge of the Sellers, the Company and its Subsidiaries
have no material liabilities or indebtedness, contingent, absolute, accrued, or
otherwise, other than (i) as set forth on the Balance Sheet or to be set forth
on the Final Balance Sheet, (ii) as set forth on any Schedule to this Agreement,
(iii) to the extent arising in the ordinary course of the Business of the
Company and its Subsidiaries and not required to be set forth in any Schedule
hereto, (iv) taxes that are not yet due, (v) performance and payment obligations
incurred under agreements of the Company and its Subsidiaries which are not
required under generally accepted accounting principles to be set forth on the
Balance Sheet or the Final Balance Sheet, and (vi) obligations under applicable
law including Environmental Laws (as hereinafter defined).
Section 4.06. Absence of Certain Changes. Since the Balance Sheet Date,
(a) the Company and its Subsidiaries have conducted their respective businesses
only in the ordinary and usual course consistent with past practice and
(b) there has been no event, circumstance or condition relating specifically to
the Company or any Subsidiary (rather than to general economic conditions or
generally to the industries in which they operate) which materially and
adversely affects or is likely to materially and adversely affect the Company
and its Subsidiaries, taken as a whole.
Section 4.07. Taxes. The Buyer has been provided with true and correct
copies of the original and amended tax returns of the Company for all open
years. The Company and its Subsidiaries have prepared and filed when due all
federal, state and other tax and/or information returns required by law to be
filed and has
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paid when due all taxes, assessments and other governmental charges levied upon
any of its properties, assets, income or franchises shown to be due thereon,
other than those not yet delinquent. All such returns are true and correct in
all material respects. Neither the Company nor any Subsidiary has ever
executed any waiver that would have the effect of extending any applicable
statute of limitations in respect of any of its tax liabilities. The charges,
accruals and reserves on the books of the Company in respect of taxes for all
fiscal periods are adequate, and neither the Company nor any Seller knows of
any unpaid assessment or of any reasonable basis for the assessment against the
Company of any additional taxes, penalties or interest for any fiscal period or
any pending or threatened tax examination or audit by any federal, state or
local taxing authority. All taxes and other assessments and levies which the
Company is required by law to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity, other than
any that if not withheld or collected or paid would not have a material adverse
effect on the Company and its Subsidiaries, taken as a whole. There are no tax
liens or claims pending or, to the knowledge of the Sellers, threatened against
the Company, its assets or property. There are no outstanding tax sharing
agreements or other such arrangements between the Sellers, the Company or any
other corporation or entity (other than the Subsidiaries).
Section 4.08. Personal Property, Etc. Except as listed on Schedule 4.08,
the Company and each Subsidiary has good and marketable title or a valid
leasehold or license interest in each item of personal property used primarily
by it in the Business, and which is material to the Company and its
Subsidiaries, taken as a whole, free and clear of any security interests or
encumbrances of every kind, nature and description, except for such as are not,
individually or in the aggregate, material to the Company and its Subsidiaries,
taken as a whole, and all material operating assets of the Company and each
Subsidiary are in good operating condition and repair, normal wear and tear
excepted. The assets and properties of the Company and its Subsidiaries are
adequate to conduct their respective operations as currently conducted. The
inventory to be included on the Final Balance Sheet will be current,
merchantable, usable, and as to finished goods, resalable at normal prices and
discounts in the ordinary course of business, excluding inventory which may
thereafter be written off in the ordinary course of business and consistent with
past practice. The quantity of said inventory on the Closing Date will be at a
level consistent with the past practice of the Business.
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Section 4.09. Real Property. The Company and/or its Subsidiaries have
good and marketable title to the real property listed on Schedule 4.09(a),
subject to liens and title imperfections shown on Schedule 4.09(a). Schedule
4.09(b) describes each interest in real property leased by the Company and its
Subsidiaries, including the lessor of such leased property, and identifies each
lease or any other arrangement under which such property is leased. The Company
and each Subsidiary enjoys peaceful and quiet possession of its leased premises
and has not received any notice asserting the existence of a default under any
such leasehold. The Company has not been informed that the lessor under any of
such leases has taken action or threatened to terminate the lease before the
expiration date specified in the lease. Except as shown on Schedule 4.09(b),
the transactions contemplated by this Agreement will not cause a default under
any such lease or entitle the lessor of any real property leased by the Company
or any Subsidiary to terminate the lease on such property prior to that
expiration date.
Section 4.10. Intellectual Property, Etc. Schedule 4.10 hereto sets forth
a list of all the material patents, trademarks, service marks, trade names,
copyrights, licenses, and royalty agreements and other rights with respect to
the foregoing (collectively, with any registrations and applications with
respect to the issuance or granting of any of the foregoing, the "Intellectual
Property") owned or used by the Company and its Subsidiaries. To the knowledge
of the Sellers, said Intellectual Property includes all material intellectual
property of the kinds specified above used in or necessary for the operation of
the Business. All Intellectual Property shown as registered in Schedule_4.10
has been properly registered, all pending registrations and applications have
been properly made and filed and all annuity, maintenance, renewal and other
fees relating to registrations or applications are current. The Company or its
Subsidiaries, as applicable, hold all interests in the Intellectual Property
purported to be owned by them, except to the extent that the failure to hold
such interests would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole. To the knowledge of the Sellers, neither the
Intellectual Property, the other assets of the Company or its Subsidiaries, nor
the Business infringes on any intellectual property rights of others, except to
the extent that any such infringement would not have a material adverse effect
on the Company and its Subsidiaries, taken as a whole. The Sellers know of no
facts which would render any of the Intellectual Property invalid or
unenforceable. Except as listed on Schedule 4.10 the Company has not been
notified of any material claim by any person that the Company or any Subsidiary
is violating any trademark,
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service xxxx, trade name or patent owned by any other person or that it is
using any name which is confusingly similar to that of any other person.
Section 4.11. Information Relating to Material Contracts and Commitments.
Schedule 4.11 hereto sets forth for the Company and its Subsidiaries a complete
and accurate list and compilation of all of the following contracts, agreements
(written or unwritten), and instruments, except those which will be terminated
at or before the Closing:
(a) contracts with respect to which the Company or any Subsidiary has
any liability or obligation, contingent or otherwise, involving more than
$100,000 or which place any material limitation on the method of conducting
or scope of the Company's business, including agreements containing
covenants not to compete other than purchase orders and similar commitments
and obligations for the purchase or sale of goods or services in the
ordinary course of business;
(b) contracts of the Company or any Subsidiary with partners,
officers, employees, agents and/or consultants of the Company or any
Subsidiary or the spouses or relatives of such persons involving annual
payments in excess of $75,000;
(c) agreements, contracts or instruments of the Company or any
Subsidiary relating to the borrowing of money, or the guaranty of any
obligation for the borrowing of money;
(d) agreements relating to any securities of the Company or any
Subsidiary or rights in connection therewith;
(e) contracts and other agreements for the sale of any of the
Company's or any Subsidiary's material assets or properties other than in
the ordinary course of business; and
(f) contracts otherwise material to the Company and/or its
Subsidiaries.
All of the foregoing are herein called "Material Contracts." Except as set
forth in Schedule 4.11, there have been no material amendments or side or
supplemental arrangements to or in respect of any Material Contract. The
Company has made available to the Buyer true and correct copies of all Material
Contracts. Each Material Contract is valid and in full force and effect as to
the Company and the Subsidiaries, as applicable, and, to the knowledge of the
Sellers, each other party thereto, and the Company and the Subsidiaries, as
applicable, have performed all
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material obligations required to be performed by them thereunder. Except as
set forth on Schedule 4.11, neither the Company nor any Subsidiary is in
material default under or in breach or violation of any material term of any
Material Contract, and the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not result in any
such default, breach or violation of any Material Contract or give any party
the right to terminate any Material Contract. To the knowledge of the Sellers,
no third party is in material default under any material provision of any
Material Contract.
Section 4.12. Litigation. Except as disclosed on Schedule 4.12, there is
not now nor has there been since January 1, 1995 (or, in the case of each
Subsidiary, the date (if later) on which such Subsidiary was acquired by the
Company), any litigation pending or, to the knowledge of the Sellers, threatened
against the Company or any Subsidiary, other than any which has not had or would
not have a material adverse effect on the Company and its Subsidiaries, taken as
a whole.
Section 4.13. Required Consents, Etc. Except as set forth on Schedule
4.13, no consent, order, approval, authorization, declaration or filing,
including, without limitation, any consent, approval or authorization of or
declaration or filing with any governmental authority, is required on the part
of the Company for or in connection with the execution and delivery of this
Agreement or sale of the Remel Entity Interests pursuant hereto, except for
those which, if not obtained, would not have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
Section 4.14. Licenses and Permits. Schedule 4.14 hereto sets forth a
list of all licenses, permits and authorizations of governmental authorities
held by the Company or any Subsidiary which are material to their businesses
(collectively, the "Authorizations"). The Company and its Subsidiaries are in
material compliance with all Authorizations, and all of the Authorizations are
in full force and effect.
Section 4.15. Compliance with Law. The Company, its Subsidiaries, and
their respective products and operations are in compliance with all foreign,
federal, state or local statutes, laws, ordinances, judgments, decrees, orders
or governmental rules, regulations, policies, specifications, permits,
approvals, registrations, requirements and guidelines applicable to them, except
where noncompliance would not have a material adverse effect on the Company and
its Subsidiaries, taken as a whole (and except as to Environmental Laws, which
are referred to in Section 4.21). The Company and its Subsidiaries have paid
when
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due all applicable fees, renewals, reports, and other similar obligations with
respect to their Business operations and their products. Neither the Company
nor any Subsidiary has received any deficiency notice that the Business or its
products do not satisfy any material requirements under any law, including
those relating to good manufacturing practices, device listing, establishment
registration, product and/or label registration, and product marketing
clearance.
Section 4.16. Employees and Compensation.
(a) Except as described on Schedule 4.16(a) hereto, no employees of
the Company, RMI or any Subsidiary are represented by any union; and to the
knowledge of the Sellers, there is no labor strike, slowdown, stoppage or
organizational effort pending or, threatened against the Company, RMI or any
Subsidiary.
(b) Schedule 4.16(b) sets forth (i) a true and correct list of the
name and current annual salary of each officer or employee of the Company, RMI
or any Subsidiary whose annual cash compensation exceeds $75,000 and (ii) any
other form of compensation (other than salary or customary benefits) paid or
payable by the Company, RMI or any Subsidiary to each such person for the
current fiscal year.
Section 4.17. Benefit Plans.
(a) Schedule 4.17 hereto sets forth all material employee benefit
plans, agreements and arrangements of any type (including, but not limited to,
plans described in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) maintained by the Company, RMI or any Subsidiary
for the benefit of employees of the Company, RMI or any Subsidiary, or with
respect to which the Company, RMI or any Subsidiary has a material liability
(including, but not limited to, liabilities arising from affiliation under
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as amended
(the "Code") or Section 4001 of ERISA) (the "Benefit Plans").
(b) With respect to each Benefit Plan, the Company has made available
to Buyer true and complete copies of: (i) any and all plan texts and
agreements; (ii) any and all summary plan descriptions and material
modifications thereto; (iii) the two most recent annual reports, if applicable;
(iv) the most recent annual and periodic accounting of plan assets, if
applicable; and (v) the most recent determination letter received from the
Internal Revenue Service (the "Service"), if applicable.
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(c) Except as set forth on Schedule 4.17, with respect to each
Benefit Plan: (i) such plan has been administered and enforced in accordance
with its terms and all applicable laws in all material respects; (ii) no breach
of fiduciary duty has occurred with respect to which the Company, RMI, any
Subsidiary, or any Benefit Plan may be liable or otherwise damaged in any
material respect; (iii) no material disputes are pending or threatened; and (iv)
no "prohibited transaction" (within the meaning of either Section 4975(c) of the
Code or Section 406 of ERISA) has occurred with respect to which the Company,
RMI, any Subsidiary, or any Benefit Plan may be liable or otherwise damaged in
any material respect.
(d) Except as set forth on Schedule 4.17, no Benefit Plan is subject
to Title IV of ERISA.
Section 4.18. Banking Relations; Powers of Attorney. All material
arrangements which the Company or any Subsidiary has with any banking
institution are described on Schedule 4.18 indicating with respect to each of
such arrangements the type of arrangement maintained and the person or persons
authorized in respect thereof. Neither the Company nor any Subsidiary has
granted a power of attorney or other banking authority to any person except as
indicated on Schedule 4.18.
Section 4.19. Insurance. The Company, its Subsidiaries and their
respective businesses, properties and/or employees are insured under the
insurance policies listed on Schedule 4.19, all of which are valid and in full
force.
Section 4.20. Brokers. Except for Xxxxxxx (whose fee will be borne by the
Sellers), the Company, its Subsidiaries and the Sellers have not dealt with any
broker, finder or similar agent with respect to the transactions contemplated by
this Agreement, and neither the Sellers, the Company nor its Subsidiaries are
under any obligation to pay any broker's fee, finder's fee or commission in
connection with the transactions contemplated by this Agreement as a result of
any agreement of the Sellers, the Company or its Subsidiaries.
Section 4.21. Compliance with Environmental Laws. Except as set forth on
Schedule 4.21:
(a) All of the Company's and its Subsidiaries' current operations
are, and have been at all times, in compliance with all Environmental Laws (as
hereinafter defined), except where any failure to comply would not have a
material adverse effect on the Company and the Subsidiaries, taken as a whole.
There are no past or present (or, to the knowledge of Sellers, future) events,
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conditions, circumstances, activities, practices, incidents, actions, omissions
or plans (i) which, in connection with the Business, may interfere with or
prevent material compliance or continued material compliance with Environmental
Laws or with any order issued, entered, promulgated or approved thereunder, or
(ii) which may subject the Company to damages (including liability under
CERCLA), penalties, injunctive relief, or cleanup costs under any Environmental
Laws or pursuant to any third-party claim, or which require or are likely to
require reporting, cleanup, removal, remedial action, or other response
pursuant to Environmental Laws or a third party claim. The Company and its
Subsidiaries have obtained all permits, licenses and authorizations required
under applicable Environmental Laws, and the Company and its Subsidiaries and
their respective operations are in compliance with the terms and conditions of
any required permits, licenses and authorizations, in each case except where
any failure would not have a material adverse effect on the Company and the
Subsidiaries, taken as a whole.
(b) None of the Company's and its Subsidiaries' operations have
involved the use, handling, manufacture, treatment, processing, storage,
generation, release, discharge dumping or disposal of any Hazardous Substances
(as hereinafter defined), except in compliance in all material respects with all
applicable Environmental Laws, in each case except where any failure to comply
would not have a material adverse effect on the Company and the Subsidiaries,
taken as a whole.
(c) There is no pending or, to the knowledge of the Sellers,
threatened Environmental Claim (as hereinafter defined) against the Company or
any Subsidiary.
(d) There has been no release by the Company or its Subsidiaries of
any Hazardous Substances at, on or under any property owned or leased by them
which would have a material adverse effect on the Company and its Subsidiaries,
taken as a whole, or would require cleanup or remedial action under
Environmental Laws.
(e) To the knowledge of the Sellers, there are no underground storage
tanks, active or abandoned, on or under any property leased or owned by the
Company or its Subsidiaries.
(f) The Company and the Subsidiaries possess all permits, licenses,
and approvals, if any, required under applicable Environmental Laws in
connection with the conduct of the Business, except those which the failure to
possess would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole.
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(g) To the knowledge of the Sellers, no off-site location at which
the Company or any Subsidiary has disposed or arranged for the disposal of any
waste is listed on the National Priorities List or on any comparable state list
and neither the Company nor any Subsidiary has received any written notice with
respect to any off-site location, or potential or actual liability or a written
request for information under or relating to CERCLA or any comparable state or
local law.
As used herein, the following terms shall have the meanings indicated
below:
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C.A. Section 9601, et seq., and
the rules, regulations and orders promulgated thereunder.
"Environmental Laws" shall mean all federal, state, local, and other
applicable statutes, regulations, rules, codes, ordinances, restrictions,
requirements, orders, decrees, or consents relating to the Environment or the
use, disposal, existence, or release of any Hazardous Substances, including but
not limited to any and all laws concerning, affecting, controlling, or directly
relating to, whether in whole or in part, air pollutants, water pollutants,
process waste water, or Hazardous Substances.
"Environment" shall mean soil, surface waters, groundwaters, land, surface
or subsurface strata and ambient air.
"Hazardous Substances" shall mean any substance which is a "hazardous
substance", "hazardous waste", "toxic substance", "toxic waste", "pollutant",
"contaminant" or words of similar import under any Environmental Law, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C.
Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. 2601, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. 1801, et seq.), the
Occupational Safety and Health Act (29 U.S.C. 651 et seq.), and including
without limitation, which contains polychlorinated biphenyl, asbestos, or
gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic
compounds.
"Environmental Claim" shall mean any litigation, claim, proceeding, order,
directive, summons, complaint or citation, from any governmental authority or
any third person relating to
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Environmental Laws or Hazardous Substances.
For purposes of this Section 4.21, the terms "Company" and "Subsidiaries"
include, where appropriate, the predecessors to said entities.
Section 4.22. Products.
(a) The products of the Business meet in all material respects the
product and/or process specifications (including product testing procedures)
that they purport or are required to meet.
(b) The products of the Business satisfy and possess in all material
respects applicable governmental agency requirements, including registration,
notice, and label requirements.
(c) All instances of product warranty and product liability claims
involving amounts in excess of $15,000 per occurrence (and all product recalls
regardless of amount) that have occurred and for which notice has been received
by the Company or any Subsidiary within the past three years (or, in the case of
each Subsidiary, since the date (if later) on which such Subsidiary was acquired
by the Company) are listed on Schedule 4.22(c) hereto.
(d) Sellers know of no existing facts or circumstances that would
likely cause a material product warranty claim or product liability matter to
occur prior to or after the Closing Date.
Section 4.23. Disclosure. The representations and warranties of the
Sellers contained in this Agreement and the information included in the
Schedules hereto, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein and therein complete and not misleading as of the
dates thereof in light of the circumstances in which they were made.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Sellers that each of the
statements contained in this Article V is true and correct:
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Section 5.01. Organization, Power and Standing. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Wisconsin with all requisite power and authority (corporate and
otherwise) to own its properties and to carry on its business as such business
is now conducted and presently proposed to be conducted.
Section 5.02. Power and Authority Relative to Transaction. The Buyer has
full corporate power and authority and has taken all required action necessary
to permit it to execute and deliver and to carry out the terms of this Agreement
and all other documents or instruments required hereby and none of such actions
will violate any provision of law or of the Certificate of Incorporation, as
amended, or by-laws of the Buyer or will result in any breach of any agreement,
mortgage, instrument, order or judgment to which the Buyer is a party or by
which its assets may be bound.
Section 5.03. Valid and Binding Obligation. This Agreement constitutes,
and each other instrument or agreement to be executed and delivered by the Buyer
in accordance herewith will constitute, the valid and legally binding obligation
of Buyer, enforceable against it in accordance with their respective terms.
Section 5.04. Brokers. The Buyer has not dealt with any broker, finder or
similar agent with respect to the transactions contemplated by this Agreement.
Section 5.05. Investment Representations.
(a) The Buyer is acquiring the Remel Entity Interests for its own
account for investment only, and not with a view to, or for sale in connection
with, any distribution of the Remel Entity Interests in violation of the
Securities Act of 1933, as amended (the "Securities Act"), any rule or
regulation under the Securities Act, or any state securities laws.
(b) The Buyer has had such opportunity as it has deemed adequate to
obtain from management of the Company such information about the business and
affairs of the Company as is necessary to permit the Buyer to evaluate the
merits and risks of its investment in the Company and its Subsidiaries.
(c) The Buyer has sufficient experience in business, financial and
investment matters to be able to evaluate the merits and risks involved in the
purchase of the Remel Entity Interests and to make an informed investment
decision with respect to such purchase.
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(d) The Buyer understands that the Remel Entity Interests have not
been registered under the Securities Act and are therefore "restricted
securities" within the meaning of Rule 144 under the Securities Act, and the
Remel Entity Interests cannot be sold, transferred or otherwise disposed of
unless they are subsequently registered under the Securities Act or an exemption
from registration is then available.
Section 5.06. Financing. The Buyer will have sufficient funds to
consummate the transactions contemplated by this Agreement.
ARTICLE VI
COVENANTS
Section 6.01. Access to Information; Confidentiality.
(a) The Sellers shall, and shall cause the Company and its
Subsidiaries to, permit the Buyer and its counsel, accountants and other
representatives access, upon reasonable notice and during normal business hours
throughout the period prior to the Closing, to the properties, books and records
of the Company and its Subsidiaries and to the following employees: Xxxx X.
Xxxxxxx, Xxxxxx Xxxxxxxxxx, Xxxx Xxxxxxx, Xxxxxx Xxxxx, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxxx and Xxxxx Xxxxxxx. Any such access shall be subject to such reasonable
limitations as the Sellers may require to prevent disclosure of the transactions
contemplated hereby.
(b) The confidentiality agreement between the Guarantor and the
Company dated November 13, 1996 shall remain in full force and effect and shall
be applicable to the Buyer and enforceable by the Sellers.
Section 6.02. Conduct of Business. Between the date of this Agreement and
prior to the Closing, unless the Buyer shall otherwise consent in writing:
(a) Required Actions. The Sellers shall cause the Company, RMI and
each Subsidiary to do the following:
(i) maintain their respective partnership, corporate and limited
liability company existences; and
(ii) conduct their businesses only in the ordinary course
consistent with past practice.
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(b) Prohibited Actions. The Sellers shall not permit the Company,
RMI or any Subsidiary to do any of the following:
(i) effect any material amendment to the Partnership Documents,
the RMI Charter Documents or the respective organizational
documents of the Subsidiaries;
(ii) acquire or dispose of any material properties or assets
except in the ordinary course of business consistent with
past practice; or
(iii) subject any of their properties or assets to any additional
material mortgage, pledge, security interest or lien.
Section 6.03. Consents and Approvals. The Sellers and the Buyer shall
cooperate and use all reasonable efforts to obtain all governmental and
regulatory approvals and actions necessary to consummate the transactions
contemplated hereby which are required to be obtained by applicable law or
regulations or otherwise. The Sellers and the Company shall use diligent
efforts to obtain all consents to the transactions which are subject to this
Agreement which are required by any of the agreements or leases listed on
Schedules 4.11 and 4.13. If and when reasonably requested by the Buyer, the
Sellers shall cooperate with the Buyer to assist Buyer in obtaining consents it
may need in the future in connection with a proposed reorganization of the
Buyer.
Section 6.04. HSR Act Filings. To the extent required in connection with
the transactions contemplated by this Agreement, each of the Buyer and the
Sellers shall promptly (and in any event no later than 10 days after the date
hereof) make any and all required filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and will request early
termination of the waiting period required under the HSR Act. The parties agree
to cooperate and promptly respond to any inquiries or investigations initiated
by the Federal Trade Commission or the Department of Justice in connection with
any such filings.
Section 6.05. Resignations. If so requested by the Buyer at least five
(5) days prior to Closing, the Sellers shall cause each officer and member of
the Board of Directors of RMI and IDS Management, Inc. to tender his or her
resignation as such director or officer effective as of the Closing.
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Section 6.06. Reasonable Efforts. All parties hereto agree to use all
reasonable good faith efforts to obtain the satisfaction of the conditions
specified in this Agreement necessary to consummate the transactions
contemplated hereby.
Section 6.07. Publicity. All general notices, releases, statements and
communications to employees, suppliers, and customers of the Business and to the
general public and the press relating to the transactions contemplated by this
Agreement shall be made only at such times and in such manner as may be mutually
agreed upon by Buyer and Sellers; provided, however, that any party shall be
entitled to make a public announcement of the proposed transactions if, in the
opinion of its counsel, such announcement is required to comply with any law or
any rule or regulation of any securities exchange or securities quotation system
and such party shall, to the extent practicable, consult with the other party
with respect to such announcement and give reasonable prior notice of its intent
to issue such an announcement; and further provided, that no such announcement
will include information about the amount of the purchase price hereunder except
for any such announcement which (a) is made after the Closing Date or (b) if
made prior to the Closing Date, is required to be disclosed in connection with
the filing of a Form 10-Q with the Securities and Exchange Commission.
Section 6.08. Environmental Investigation. The Sellers will allow the
Buyer to conduct environmental site assessments on the Company's and the
Subsidiaries' real property under the terms of an access agreement in the form
attached hereto as Exhibit 6.08.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.01. Conditions Precedent to Buyer's Obligations. The obligation
of Buyer to purchase the Remel Entity Interests is expressly subject to the
fulfillment or express written waiver of the following conditions on or prior to
the Closing Date:
(a) Representations and Warranties True; Obligations Performed.
Each of the representations and warranties contained in Articles III and IV
shall be true and correct in all material respects at and as of the Closing, the
Sellers shall have performed in all material respects, on or before the Closing
Date, all obligations contained in this Agreement which by the terms hereof are
to be performed by Sellers on or before the Closing Date, and the Buyer shall
have received a certificate signed by the Sellers to such effect.
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(b) Required Consents. The Sellers will have obtained all consents
to the transactions which are the subject of this Agreement which are required
by any of the agreements or leases listed on Schedules 4.11 and 4.13 and marked
on such Schedules with an asterisk.
(c) No Injunction, etc. There will not be any order of any court
or governmental agency restraining or invalidating the transactions which are
the subject of this Agreement or any pending or threatened litigation to such
effect or seeking damages from the Buyer or the Company if the transactions
which are the subject of this Agreement are completed.
(d) Legal Opinions from Counsel for Sellers. Buyer shall have
received the written opinion of Xxxxxx, Xxxx & Xxxxxxx, counsel for the Company
and the Sellers, dated as of the Closing Date and in the form of Exhibit 7.01(d)
(the "Xxxxxx Hall Opinion").
(e) HSR Act. The waiting period under the HSR Act applicable to
the transactions contemplated by this Agreement shall have expired.
(f) Actions at Closing. The actions and deliveries contemplated by
Section 8.02 shall have been fulfilled.
Section 7.02. Conditions Precedent to Sellers' Obligations. The
obligation of the Sellers to sell the Remel Entity Interests is subject to the
fulfillment of the following conditions on or prior to the Closing Date:
(a) Representations and Warranties True; Obligations Performed.
Each of the representations and warranties of the Buyer contained in Article V
shall be true and correct in all material respects at and as of the Closing, the
Buyer shall have performed, on or before the date of Closing, all obligations
under this Agreement which by the terms hereof are to be performed by Buyer on
or before the date of Closing, and the Sellers shall have received a certificate
signed by an authorized officer of Buyer to such effect.
(b) Legal Opinion from Counsel for Buyer. Sellers shall have
received the written opinion of Xxxxxxx & Xxxxx, counsel for Buyer, dated the
Closing Date, in form of Exhibit 7.02(b) hereto (the "Buyer's Counsel Opinion").
(c) No Injunction, etc. There will not be any order of any court
or governmental agency restraining or invalidating the transactions which are
the subject of this Agreement or any
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pending or threatened litigation to such effect or seeking damages from any
Seller or the Company if the transactions which are the subject of this
Agreement are completed.
(d) HSR Act. The waiting period under the HSR Act applicable to
the transactions contemplated by this Agreement shall have expired.
(e) Actions at Closing. The actions and deliveries contemplated by
Section 8.03 shall have been fulfilled.
ARTICLE VIII
CLOSING
Section 8.01. Date and Place of Closing. The consummation of the
transactions contemplated hereby (the "Closing") shall be held at 10:00 a.m. on
April 30, 1997 or such later date as is seven (7) days after all conditions to
Closing contemplated by this Agreement have been satisfied or waived, at the
offices of Xxxxxx, Hall & Xxxxxxx, Exchange Place, 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx or at such other time and place as the parties may mutually agree
in writing (the "Closing Date").
Section 8.02. Deliveries at Closing by the Sellers. At the Closing,
provided the Buyer has fully performed its obligations hereunder, Sellers shall
deliver or cause to be delivered to Buyer the following:
(a) amendments to the Partnership Documents whereby the Remel
Partnership Interests are transferred to Buyer;
(b) certificates representing all of the issued and outstanding
shares of capital stock of RMI, duly endorsed for transfer or with duly
executed stock powers attached, together with a new certificate or
certificates duly issued in the name of the Buyer representing all of the
shares of such capital stock;
(c) amendments to the Agreement of Limited Partnership of IDS L.P.
whereby all of such Subsidiary's issued and outstanding partnership
interests held by Xxxxxxx X.X. are transferred to the Buyer;
(d) amendments to the Operating Agreement of Xxxxxxxx X.X. whereby
all of such Subsidiary's issued and outstanding limited liability company
interests held by RMLI are transferred to the Buyer;
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(e) the Xxxxxx Xxxx Opinion;
(f) a release and waiver from Xxxx X. Xxxxxxx with respect to his
employment and employment agreement with the Company;
(g) a release and waiver from Xxxxxx Xxxxxxxxxx with respect to
options to acquire partnership interests in the Company;
(h) a five year noncompetition agreement, in form and substance
reasonably acceptable to Buyer, from Xxxx X. Xxxxxxx (it being agreed that
the form set forth in his employment agreement with the Company qualified
by the proviso set forth in Section 12.12 would be acceptable);
(i) the Escrow Agreement; and
(j) such other instruments of transfer or other ancillary closing
documents as the Buyer or its counsel may reasonably request.
Section 8.03. Deliveries at Closing by Buyer. At the Closing, provided
Sellers have fully performed all of their obligations hereunder, Buyer shall
deliver or cause to be delivered to Sellers the following:
(a) payment of the Closing Purchase Price as provided in
Section 2.02;
(b) certified copies of resolutions duly adopted by the Buyer's
Board of Directors approving and authorizing the transactions provided for
in this Agreement, the execution hereof and the performance of all acts
required herein, accompanied by an appropriate certificate of incumbency;
(c) the Buyer's Counsel Opinion;
(d) the Escrow Agreement; and
(e) such ancillary closing documents as the Sellers or their counsel
may reasonably request.
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ARTICLE IX
FURTHER ASSURANCES
Section 9.01. Further Assurances. Following the Closing, the Sellers
shall execute and deliver to the Buyer such documents and take such other
actions as the Buyer may reasonably request in order to consummate more
effectively the transactions contemplated hereby and to vest in the Buyer good
title to the Remel Entity Interests being transferred hereunder.
ARTICLE X
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 10.01. Survival. The Sellers and the Buyer agree that the
representations and warranties contained in this Agreement shall survive the
Closing for a period of twelve (12) months, and no claim for indemnification
resulting from the breach of any representation, warranty, covenant or agreement
set forth herein or in any certificate delivered pursuant hereto shall be made
more than twelve (12) months after the Closing Date.
Section 10.02. Indemnification of Buyer. Subject to Section 10.01, the
Sellers agree to indemnify the Buyer and hold it harmless against and in respect
of any and all payments, damages, claims, demands, losses, expenses, costs,
obligations and liabilities, including without limitation reasonable attorneys'
fees (collectively, "Losses") which arise or result from any breach of any of
the Sellers' representations or warranties contained herein or in any
certificate delivered pursuant hereto or the failure of the Sellers to perform
any of their covenants or agreements contained herein or in any certificate
delivered pursuant hereto. Notwithstanding the foregoing,
(a) the Sellers shall have no obligation to make indemnification
payments hereunder that exceed in the aggregate (i) $10,000,000;
(b) the Sellers shall have no obligation to indemnify or hold harmless
the Buyer with respect to any single Loss which is less than $100,000 (it being
agreed upon that notwithstanding the terms "material" and "material taken as a
whole", any Loss in excess of $100,000 shall be an indemnifiable Loss, subject
to the other limitations contained herein);
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(c) the Sellers shall have no obligation to indemnify or hold harmless
the Buyer except to the extent that the aggregate amount of Losses incurred by
the Buyer (excluding Losses for which indemnification would not be available as
a result of clause (b) above) exceeds $1.5 million (subject to the other
limitations contained in this Article X);
(d) each Seller shall be liable severally, and not jointly, for all
Losses arising out of any breach of such Seller's representations and warranties
contained in Article III, for an amount not to exceed such Seller's pro rata
share of the aggregate indemnification obligation set forth in
Subsection 10.02(a), provided that each Seller shall be liable severally, and
not jointly, for all Losses arising out of any breach of the representations and
warranties contained in Section 3.01 and the first sentence of Section 3.03 for
an amount not to exceed such Seller's pro rata share of the Final Purchase
Price;
(e) the Sellers shall not be obligated to indemnify or hold harmless
the Buyer with respect to Losses relating to Environmental Laws, Environmental
Claims or any breach of the representations and warranties contained in Section
4.21, except to the extent such Losses represent amounts actually incurred by
the Buyer for the performance of remedial action or the payment of any fine,
penalty or damage award in each case ordered by any court or governmental agency
or in reasonable settlement of a claim of noncompliance with any Environmental
Laws asserted by any governmental agency or other third party (and related
out-of-pocket fees and expenses);
(f) the Sellers shall not be obligated to indemnify or hold harmless
the Buyer with respect to Losses arising out of breaches of the representations
or warranties of the Sellers known by the Buyer at or prior to the date of this
Agreement;
(g) except for amounts referred to in the proviso to Subsection
10.02(d), the sole source for payment of any amounts payable by the Sellers in
respect of indemnifiable Losses shall be the amount held by the Escrow Agent
under the Escrow Agreement.
In determining the foregoing thresholds and in otherwise determining the amount
of any Losses for which the Buyer is entitled to assert a claim for
indemnification, the amount of any such Losses shall be determined after
deducting therefrom the amount of any insurance proceeds or other third party
recoveries received by the Buyer, the Company or any Subsidiary in respect of
such Losses (which recoveries the Buyer agrees to use diligent
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efforts to obtain) and the amount of any net tax benefit related thereto. If
an indemnification payment is received by the Buyer, and the Buyer, the Company
or any Subsidiary later receives insurance proceeds, other third party
recoveries, or net tax benefits in respect of the related Losses, the Buyer
shall immediately pay to the Agent, for the account of the Sellers that made
such indemnification payment, a sum equal to the lesser of (i) the actual
amount of insurance proceeds, other third party recoveries, or net tax benefit
or (ii) the actual amount of the indemnification payment previously paid by the
Sellers with respect to such Losses.
Section 10.03. Indemnification of Sellers. Subject to Section 10.01,
Buyer agrees to indemnify the Sellers and hold the Sellers harmless against and
in respect of any and all damages, claims, losses, expenses, costs, obligations
and liabilities (including reasonable attorneys' fees) which arise or result
from or are related to any breach or inaccuracy of any of Buyer's
representations and warranties, or the failure of the Buyer to perform any of
its commitments, obligations, covenants or conditions hereunder.
Section 10.04. Procedure for Indemnification. Any party making a claim
for indemnification hereunder shall notify the indemnifying party of the claim
in writing, describing the claim, the amount thereof, and the basis therefor.
The party from whom indemnification is sought shall respond to each such claim
within 30 days of receipt of such notice. No action shall be taken pursuant to
the provisions of this Agreement or otherwise by the party seeking
indemnification until the later of (a) the expiration of the 30-day response
period (unless reasonably necessary to protect the rights of the party seeking
indemnification), or (b) 30 days following the termination of the 30-day
response period if a response received within such 30-day period by the party
seeking indemnification requested an opportunity to cure the matter giving rise
to indemnification (and, in such event, the amount of such claim for
indemnification shall be reduced to the extent so cured within such 30-day cure
period). If such demand is based on a claim by a third party, the indemnifying
party shall have the right to assume the entire control of the defense thereof,
including at its own expense, employment of counsel reasonably satisfactory to
the indemnified party, and, in connection therewith, the party claiming
indemnification shall cooperate fully to make available to the defending party
all pertinent information under its control and shall not thereafter be
indemnified for the cost of any counsel retained by it in connection with such
claim. No such third party claim, demand, action, or proceeding shall be
settled without the prior written consent of Buyer and Sellers. If a
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firm written offer is made to settle any such third party claim, demand,
action, or proceeding and Buyer or Sellers refuse to consent to such
settlement, then: (i) the "consenting party" shall be excused from, and the
"nonconsenting party" shall be solely responsible for, all further defense of
such third party claim, demand, action, or proceeding; and (ii) the maximum
liability of the "consenting party" relating to such third party claim, demand,
action, or proceeding shall be the amount for which said party would have been
liable had both parties consented to the settlement (subject to the limits
contained in Section 10.02 hereof).
Section 10.05. Remedies Exclusive. The remedies provided in this Article
X shall be the exclusive remedies of the parties hereto after the Closing in
connection with, arising out of, or related to this Agreement and the
transactions contemplated hereby, including without limitation the purchase and
sale hereunder of the Remel Entity Interests.
ARTICLE IX
TERMINATION
Section 11.01. Termination. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated:
(a) by mutual written consent of Buyer and Sellers;
(b) by the Buyer, if the Sellers shall have breached or failed to
perform in any material respect any of the their obligations, covenants or
agreements under this Agreement, or if any of the representations and warranties
of the Sellers set forth in this Agreement shall not be true in any material
respect, and such breach, failure or misrepresentation is not cured to the
Buyer's reasonable satisfaction within thirty (30) days after the Buyer gives
the Sellers written notice identifying such breach, failure or
misrepresentation;
(c) by the Sellers, if the Buyer shall have breached or failed to
perform in any material respect any of its obligations, covenants or agreements
under this Agreement, or if any of the representations and warranties of the
Buyer set forth in this Agreement shall not be true in any material respect, and
any such breach, failure or misrepresentation is not cured to the Sellers'
reasonable satisfaction within ten (10) days after Sellers give the Buyer
written notice identifying such breach, failure or misrepresentation;
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(d) by the Buyer, if the conditions set forth in Section 7.01
become incapable of satisfaction;
(e) by the Sellers, if the conditions set forth in Section 7.02
become incapable of satisfaction; or
(f) by either the Buyer or the Sellers if the Closing has not
occurred by July 31, 1997, or such other date, if any, as the Buyer and the
Sellers may agree in writing.
Section 11.02. Effect of Termination.
(a) If this Agreement is terminated (i) under Section 11.01(a) or
(ii) under Sections 11.01(d), (e) or (f) at a time when no party is in breach of
a representation or warranty or in violation of a covenant or agreement
contained herein, all further obligations of the Sellers to the Buyer and of the
Buyer to the Sellers will terminate without further liability of any party
hereto.
(b) If this Agreement is terminated under Section 11.01(b), (c),
(d), (e) or (f) at a time when one or more parties is in breach of a
representation or warranty or in violation of a covenant or agreement contained
in this Agreement, the liabilities and obligations of the parties not in breach
or violation of this Agreement shall terminate, and the party or parties which
are in breach or violation of this Agreement shall remain liable for such
breaches and violations, and nothing contained herein shall be deemed to
restrict the remedies available against such party or parties.
(c) The obligations of the Buyer under Section 6.01(b) shall
survive the termination of this Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Notices. All notices to a party hereunder shall be deemed
to have been adequately given if delivered in person (in a manner through which
delivery may be verified) or sent by nationally recognized overnight delivery
service or mailed, certified mail, return receipt requested, to such party at
its address set forth below (or such other address as it may from time to time
designate in writing to the other parties hereto):
To the Sellers:
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c/o Riverside Partners, Inc.
Xxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
with a copy to:
Xxxxxxx X. X. Xxxxx, Esq.
Xxxxxx, Hall & Xxxxxxx
Exchange Place
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
To the Buyer:
Remel Acquisition Co.
c/o Sybron International Corporation
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: R. Xxxxxxx Xxxxxx, Esq.
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxx
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Section 12.02. No Waiver. No failure to exercise and no delay in
exercising, on the part of the Buyer or the Sellers, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or remedy hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. Except as
otherwise expressly provided herein, the rights provided are cumulative and not
exclusive of any rights provided by law.
Section 12.03. Amendments and Waivers. This Agreement may be modified or
amended only by a writing signed by the Buyer and the Sellers. No waiver of any
term or provision hereof shall be effective unless in writing signed by the
party waiving such term or provision.
Section 12.04. Choice of Law. This Agreement shall be governed by and
construed in accordance with the Delaware Revised Uniform Limited Partnership
Act and the internal laws of The Commonwealth of Massachusetts, without regard
to the choice of law provisions thereof.
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Section 12.05. Binding Effect and Benefits. This Agreement shall be
binding upon and shall inure to the benefit of the parties and their respective
heirs, successors and assigns but may not be assigned by any party without the
written consent of the Buyer and the Sellers.
Section 12.06. Integration. This writing, together with the Exhibits and
Schedules attached hereto, embodies the entire agreement and understanding
between the parties with respect to this transaction and supersedes all prior
discussions, understandings and agreements concerning the matters covered
hereby, except as set forth in Section 6.02.
Section 12.07. Counterparts. This Agreement may be executed in one or
more counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart. One or more counterparts may be delivered via telecopier,
and any such telecopied counterpart shall have the same force and effect as an
original counterpart hereof.
Section 12.08. Limitation on Scope of Agreement. If any provision of this
Agreement is unenforceable or illegal, such provision shall be enforced to the
fullest extent permitted by law and the remainder of the Agreement shall remain
in full force and effect.
Section 12.09. Appointment of Agent. The Sellers hereby appoint Riverside
Partners, Inc. as their sole and exclusive agent with respect to this Agreement
and the Escrow Agreement to be executed in connection herewith. In its capacity
as agent, the Agent shall be authorized, in its discretion, to consent to such
amendments, modifications, waivers and revisions to this Agreement and the
Escrow Agreement on behalf of the Sellers as it shall deem appropriate, and to
take any and all actions on behalf of the Sellers, including without limitation
executing closing certificates and documents, as it shall deem appropriate, and
the signature of an authorized agent of the Agent shall be sufficient to
evidence the approval of the Seller(s) thereto. No Seller shall take any action
hereunder without the approval of the Agent. The Agent shall not be liable to
any Seller for any action taken by it in good faith pursuant to this Agreement,
and the Sellers shall jointly and severally indemnify the Agent from any losses,
claims, damages and expenses arising out of its serving as agent hereunder.
Section 12.10. Headings. The headings of Articles and Sections herein are
inserted for convenience of reference only and shall be ignored in the
construction or interpretation
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hereof.
Section 12.11. Sales Tax; Expenses. Notwithstanding any provisions of law
imposing the burden of such taxes on the Sellers or the Buyer, as the case may
be, Buyer shall be responsible for and shall pay (a) all sales, use, recording,
ad valorem, excise, transfer and all other federal, state, local or other taxes
(other than taxes on income to the Sellers) and recording fees, if any, which
arise out of the sale by the Sellers of the Remel Entity Interests and other
transactions contemplated by this Agreement, and (b) all governmental charges,
if any, upon the sale or transfer of any of the Remel Entity Interests. All
legal and other costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses, except as otherwise expressly provided herein.
Section 12.12. Termination of Contracts. Concurrent with the Closing and
without any further action required by any party, the following agreements shall
terminate: that certain employment agreement dated as of September 18, 1992
between the Company and Xxxx X. Xxxxxxx (except that all of Section 6 thereof
shall survive and the non-competition period set forth in subsections 6 (f) and
(g) thereof shall be for a period of five years after the Closing; provided,
however, that Xxxx X. Xxxxxxx may, as a passive investor, own not more than a
five percent (5%) equity interest in an investment fund or partnership which
holds an equity interest in a company which would otherwise cause him to violate
the terms of subsection 6(f) or (g).
Section 12.13. Books and Records. The Buyer will retain after the Closing
Date all books and records pertaining to the Company, RMI and the Subsidiaries.
After the Closing, the Sellers' duly authorized representatives shall be
entitled at all reasonable times to have access to and to make copies of all
such books and records as necessary in connection with Sellers' tax returns. If
the Buyer desires to destroy within five (5) years after the Closing Date any of
such books and records that may be required in connection with the preparation
or audit of any of the Sellers' tax returns, the Buyer shall first give the
Sellers ninety (90) days' written notice and the Seller shall within ninety (90)
days of such notice have the right to remove and retain such books and records,
and any books and records not so removed by the Sellers may thereafter be
destroyed by the Buyer. For purposes of this Section and Section 12.14, the
Sellers shall include any person or entity that holds a direct or indirect
beneficial interest in any Seller and that is responsible for any tax liability
relating to the Company or any Subsidiary prior to the Closing or arising out of
the sale of the Remel Entity
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Interests.
Section 12.14. Tax Audits. The Buyer will allow the Sellers and their
counsel to control (at their expense) all audits of the Company's and the
Subsidiaries' tax returns to the extent that any tax items in dispute could
result in an increased tax liability to any Seller for any period ending on or
prior to the Closing. The Sellers will not settle any such audit in a manner
which could result in an increased tax liability to the Buyer for a period
ending after the Closing without the consent of the Buyer, which consent will
not be unreasonably withheld.
Section 12.15. Other Obligations. The Buyer hereby agrees that: (a) at
and after the Closing the Company shall be responsible for and shall pay any and
all obligations of the Company, Riverside Partners, Inc., Xxxx X. Xxxxxxx and/or
the Sellers arising out of or relating to indemnification obligations under
Annex A to that certain letter agreement among Xxxxxxx, Sachs & Co., the
Company, Riverside Partners, Inc. and Xxxx X. Xxxxxxx; and (b) with respect to
the Letter Agreements referenced in footnotes 3, 4 and 5 to Schedule 4.16
hereto, the sale of the Remel Entity Interests contemplated hereunder shall be
deemed to be a "Sale" thereunder and each of the applicable employees shall be
deemed to have fully performed under his or her respective Letter Agreement, if
he or she agrees, if requested, to continue employment for 90 days following the
Closing, unless the Agent notifies the Buyer that any such employee has failed
to satisfy such employee's obligations under paragraph 2 of such Letter
Agreement. Sellers shall pay the following: (a) the Xxxxxxx, Xxxxx & Co. fee
due in connection with the purchase and sale contemplated and consummated
hereunder; and (b) any payments to Xxxx X. Xxxxxxx due as a result of the
termination of his employment agreement with the Company.
Section 12.16. Definitions. The following terms, as used in this
Agreement, have the meanings given to them in the section indicated:
Term Section or Place Where Defined
Agent First Paragraph
Authorizations Section 4.14
Balance Sheet Section 4.05
Balance Sheet Date Section 4.05
Bankruptcy Limitation Section 3.03
Base Purchase Price Section 2.02
Benefit Plans Section 4.17
Business Introduction
Buyer First Paragraph
Buyer's Counsel Opinion Section 7.02
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Cash Section 2.02
Xxxxxx Xxxx Opinion Section 7.01
Xxxxxxxx X.X. First Paragraph
Closing Section 8.01
Closing Date Section 8.01
Closing Purchase Price Section 2.02
Code Section 4.17
Company First Paragraph
Disputed Items Notice Section 2.05
ERISA Section 4.17
Environment Section 4.21
Environmental Claim Section 4.21
Environmental Laws Section 4.21
Xxxxxxx X.X. First Paragraph
Escrow Agreement Section 2.04(e)
Estimated Purchase Price
Certificate Section 2.03
Final Balance Sheet Section 2.02
Final Purchase Price Section 2.02
Final Purchase Price Certificate Section 2.03
Guarantor First Paragraph
HSR Act Section 6.04
Hazardous Substances Section 4.21
Xxxxxx Section 2.02
IDS, Inc. Introduction
IDS L.P. First Paragraph
Intellectual Property Section 4.10
Losses Section 10.02
Material Contracts Section 4.11
Xxxxxxx Children Trusts First Paragraph
Net Asset Value Section 2.02
Operating Subsidiaries Introduction
Partnership Documents Section 4.01
RMI First Paragraph
RMI Charter Documents Section 4.01
RMLI First Paragraph
R/RLP Introduction
Remel Entity Interests Section 1.01
Remel Partners Introduction
Remel Partnership Interests Section 1.01
Securities Act Section 5.05
Sellers First Paragraph
Service Section 4.17
Subsidiaries Introduction
[Signatures appear on the following page.]
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as a sealed instrument under the laws of The Commonwealth of
Massachusetts as of the date first above written.
BUYER:
REMEL ACQUISITION CO.
By /s/ Xxxxxx Xxxxx
--------------------------------
Vice President/Treasurer (Title)
SELLERS:
REGIONAL MEDIA LABORATORIES, INC. RIVERSIDE/REMEL LIMITED PARTNERSHIP
By: Riverside Fund I, L.P.,
its general partner
By: RPI Limited Partnership I, its By
/s/ Xxxx X. Xxxxxxx managing general partner
-----------------------------------
Xxxx X. Xxxxxxx, President
By /s/ Xxxxx Xxxxxxx
---------------------------------
/s/ Xxxxxx X. Xxxxxx General Partner
-----------------------------------
Xxxxxx X. Xxxxxx, as Trustee
of the Xxxx Xxx Xxxxxxx Trust,
dated November 10, 1992, and not XXXXXXX FAMILY PARTNERSHIP, L.P.
individually
By /s/ Xxxxx X. Xxxxxxx
----------------------------------
/s/ Xxxxxx X. Xxxxxx Xxxxx X. Xxxxxxx, General Partner
-----------------------------------
Xxxxxx X. Xxxxxx, as Trustee
of the Megan Xxxx Xxxxxxx Trust,
dated November 10, 1992, and not RIVERSIDE PARTNERS, INC.,
individually as agent for the Sellers
By /s/ Xxxxx Xxxxxxx
----------------------------------
/s/ Xxxxxx X. Xxxxxx Vice President (Title)
------------------------------------
Xxxxxx X. Xxxxxx, as Trustee
of the Xxxxxx Xxx Xxxxxxx Trust,
dated November 10, 1992, and not
individually /s/ Xxxxxx X. Xxxxxx
----------------------------------
Xxxxxx X. Xxxxxx, as Trustee
of the Xxxx Xxxx Xxxxxxx Trust,
dated November 10, 1992, and not
individually
/s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx, for purposes
of Section 12.12 only
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GUARANTY OF PARENT
The undersigned, as the ultimate parent corporation of Remel Acquisition
Co. (the "Buyer"), hereby absolutely and unconditionally guarantees to the
Sellers the prompt payment and performance of all liabilities and obligations to
the Sellers ("Buyer Obligations") of the Buyer under the foregoing Purchase
Agreement. This guaranty is an absolute, unconditional and continuing guaranty
of the full and punctual payment and performance by the Buyer of the Buyer
Obligations and not of collectability, and is in no way conditioned upon any
requirement that the Sellers first attempt to collect any of the Buyer
Obligations from the Buyer or any other contingency whatsoever. The undersigned
acknowledges that the Sellers are relying upon this guaranty in entering into
the Purchase Agreement.
SYBRON INTERNATIONAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Chairman, President and
Chief Executive Officer (Title)
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