_________________________________________________________________
_________________________________________________________________
PURCHASE AGREEMENT
BY AND AMONG
VWR SCIENTIFIC PRODUCTS CORPORATION,
AND
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇,
SCIENCE KIT, INC.,
BOREAL LABORATORIES, LTD.,
▇▇▇▇'▇ NATURAL SCIENCE ESTABLISHMENT, INC.,
CENTRAL SCIENTIFIC COMPANY,
ARBOR SCIENTIFIC CO. LIMITED,
CENTRAL SCIENTIFIC COMPANY OF CANADA LIMITED
and
▇▇▇▇'▇ NATURAL SCIENCE LTD.
Dated as of July 21, 1998
_________________________________________________________________
_________________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 2
ARTICLE 2 PURCHASE AND SALE OF SHARES
Section 2.1 Sale of Shares 6
Section 2.2 Purchase Price 6
Section 2.3 Closing; Effective Time 7
Section 2.4 Closing Documentation 7
Section 2.5 Post-Closing Purchase Price Adjustment 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
AND THE SHAREHOLDERS
Section 3.1 Organization 10
Section 3.2 Authorization; Enforceability 10
Section 3.3 Authority; No Violation 10
Section 3.4 Capital Structure of the Companies 11
Section 3.5 Title to Shares 14
Section 3.6 Articles of Incorporation and By-Laws 15
Section 3.7 Subsidiaries; Investments 15
Section 3.8 Financial Statements 15
Section 3.9 Absence of Undisclosed Liabilities 16
Section 3.10 Inventory 16
Section 3.11 Absence of Changes 16
Section 3.12 Taxes 18
Section 3.13 Employee Benefit Plans 20
Section 3.14 Employees; Labor Relations 23
Section 3.15 Licenses and Permits 24
Section 3.16 Compliance with Law 24
Section 3.17 Actions and Proceedings 25
Section 3.18 Real Property Leases 25
Section 3.19 Real Property 25
Section 3.20 Accounts Receivable 26
Section 3.21 Intellectual Property 26
Section 3.22 Tangible Property 27
Section 3.23 Title to Assets; All Necessary Assets 27
Section 3.24 Material Contracts 27
Section 3.25 Customers and Suppliers 28
Section 3.26 Insurance 28
Section 3.27 Warranties 29
Section 3.28 Books and Records 29
Section 3.29 Affiliate Transactions 29
Section 3.30 Banks, Brokers and Proxies 29
Section 3.31 Environmental Matters 30
Section 3.32 Brokerage 31
Section 3.33 Disclosure 31
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Section 4.1 Organization 31
Section 4.2 Authorization; Enforceability 31
Section 4.3 Authority; No Violation 32
Section 4.4 Purchase for Investment 32
Section 4.5 Actions and Proceedings 32
ARTICLE 5 COVENANTS OF THE SHAREHOLDERS
Section 5.1 Due Diligence Cooperation 33
Section 5.2 Conduct of Business Prior
to the Closing 33
Section 5.3 Preservation of Business 34
Section 5.4 Standstill 34
Section 5.5 Confidential Information 34
Section 5.6 Non-Competition 35
Section 5.7 Further Assurances 35
Section 5.8 Consents and Conditions 36
Section 5.9 Filings 36
Section 5.10 Cooperation in Third-Party Litigation 36
Section 5.11 Injunctive Relief 37
Section 5.12 Supplements to Schedules 37
Section 5.13 Shareholders' Agreement 37
Section 5.14 Dividends and Distributions 37
Section 5.15 Termination of 401(k) Plans 37
Section 5.16 Termination of Shareholders Compensation
Agreements 38
Section 5.17 Termination of Profit Sharing Plan 38
ARTICLE 6 COVENANTS OF THE PURCHASER
Section 6.1 Representations and Warranties 38
Section 6.2 Consents and Conditions 38
Section 6.3 Filings 39
Section 6.4 Cooperation in Third-Party Litigation 39
Section 6.5 Further Assurances 39
ARTICLE 7 ADDITIONAL COVENANTS
Section 7.1 Expenses; Brokers 40
Section 7.2 Record Retention 40
Section 7.3 Public Announcements 40
Section 7.4 Tax Matters 41
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATION OF
THE PURCHASER
Section 8.1 Representations and Covenants 45
Section 8.2 Consents, Filings; Etc. 45
Section 8.3 Third-Party Consents 45
Section 8.4 Certificates 46
Section 8.5 Litigation 46
Section 8.6 Delivery of Stock Certificates 46
Section 8.7 No Material Adverse Change 47
Section 8.8 Opinion of Counsel 47
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE SHAREHOLDERS
Section 9.1 Representations and Covenants 47
Section 9.2 Consents, Filings; Etc. 47
Section 9.3 Certificates 48
Section 9.4 Litigation 48
Section 9.5 No Material Adverse Change 48
Section 9.6 Opinion of Counsel 48
ARTICLE 10 SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
Section 10.1 Shareholders' Indemnity 49
Section 10.2 Purchaser's Indemnity 50
Section 10.3 Indemnification Procedure 50
Section 10.4 Survival 52
Section 10.5 Maximum Indemnification 52
ARTICLE 11 MISCELLANEOUS
Section 11.1 Termination 53
Section 11.2 Notices 54
Section 11.3 Headings 55
Section 11.4 Entire Agreement 55
Section 11.5 Severability 55
Section 11.6 Waiver 55
Section 11.7 Binding Effect; Assignment 55
Section 11.8 No Third-Party Beneficiaries 56
Section 11.9 Counterparts 56
Section 11.10 Governing Law 56
Section 11.11 Certain Interpretive Matters 56
Section 11.12 Independence of Covenants and
Representations and Warranties 57
LIST OF SCHEDULES
2.2 Allocation of Purchase Price among the
Shareholders
2.4 Wire Instructions
2.5 Closing Balance Sheet Accounting Principles
3.1 Foreign Qualifications of the Companies
3.3 Conflicts; Default; Violations
3.4 Ownership of Shares
3.5 Encumbrances on Shares
3.8 Financial Statements; Variances from GAAP
3.9 Undisclosed Liabilities
3.11 Certain Changes
3.12 Tax Matters
3.13 Employee Benefit Plan Matters
3.13(i) Non-accrued Plan Termination Liabilities
3.14 Employees; Labor Matters
3.15 Licenses and Permits
3.16 Compliance with Law
3.17 Actions and Proceedings
3.18 Real Property Leases
3.19 Owned Real Property; Encumbrances on Real
Properties
3.20 Non-Bona Fide Accounts Receivables
3.21 Intellectual Property Matters
3.22 Tangible Property
3.23 Encumbrances on Assets
3.24 Contracts
3.25 Customers and Suppliers
3.26 Insurance
3.27 Warranties
3.29 Affiliate Transactions
3.30 Accounts
3.31 Environmental Matters
LIST OF EXHIBITS
Exhibit A Financial Statements
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this Agreement) dated as of July 21,
1998, among VWR SCIENTIFIC PRODUCTS CORPORATION, a Pennsylvania
corporation (the Purchaser) and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇, SCIENCE KIT, INC., a New York corporation (Science Kit),
BOREAL LABORATORIES LTD., a Canadian federal corporation
(Boreal), ▇▇▇▇'▇ NATURAL SCIENCE ESTABLISHMENT, INC., a Delaware
corporation (▇▇▇▇'▇), CENTRAL SCIENTIFIC COMPANY, an Illinois
corporation (Central), ARBOR SCIENTIFIC CO. LIMITED, a Canadian
federal corporation (Arbor), CENTRAL SCIENTIFIC COMPANY OF CANADA
LIMITED, an Ontario corporation (Central of Canada) and ▇▇▇▇'▇
NATURAL SCIENCE LTD., a Canadian federal corporation (▇▇▇▇'▇ of
Canada). ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ are hereinafter
sometimes referred to individually as a Shareholder and
collectively as the Shareholders. Science Kit, Boreal, ▇▇▇▇'▇,
Central, Arbor, Central of Canada and ▇▇▇▇'▇ of Canada are
hereinafter sometimes referred to collectively as the Companies.
WHEREAS, the Shareholders are the beneficial and record
owner of 142 shares of Science Kit common stock, without par
value (the Science Kit Shares), which constitute all of the
issued and outstanding shares of capital stock of Science Kit;
and
WHEREAS, the Shareholders are the beneficial and record
owner of 200 shares of ▇▇▇▇'▇ common stock, without par value
(the ▇▇▇▇'▇ Shares), which ▇▇▇▇'▇ Shares constitute all of the
issued and outstanding shares of capital stock of ▇▇▇▇'▇; and
WHEREAS, the Shareholders are the beneficial and record
owner of 50,000 shares of Central common stock, $.10 par value
per share (the Central Shares), which Central Shares constitute
all of the issued and outstanding shares of capital stock of
Central; and
WHEREAS, Science Kit is the beneficial and record owner
of (i) 30,000 shares of Boreal common stock, without par value,
(ii) 30,000 shares of Boreal class A preference stock, without
par value and (iii) 9,280 shares of Boreal class B preference
stock, without par value ( collectively, the Boreal Shares),
which constitute all of the issued and outstanding shares of
capital stock of Boreal; and
WHEREAS, Boreal is the beneficial and record owner of (i)
1 share of Arbor common stock, without par value (the Arbor
Shares), which constitutes all of the issued and outstanding
shares of capital stock of Arbor, (ii) 1 share of Central of
Canada common stock, without par value (the Central of Canada
Shares), which constitutes all of the issued and outstanding
shares of capital stock of Central of Canada and (iii) 100 shares
of ▇▇▇▇'▇ of Canada capital stock, without par value (the ▇▇▇▇'▇
of Canada Shares), which constitute all of the issued and
outstanding shares of capital stock of ▇▇▇▇'▇ of Canada; and
WHEREAS, the Shareholders desire to sell to the Purchaser
all of the Science Kit Shares, ▇▇▇▇'▇ Shares and Central Shares
(collectively, the Shares) and, indirectly, all of the Boreal
Shares, Arbor Shares, Central of Canada Shares and ▇▇▇▇'▇ of
Canada Shares, and the Purchaser desires to purchase all of the
Science Kit Shares, ▇▇▇▇'▇ Shares, Central Shares, Boreal Shares,
Arbor Shares, Central of Canada Shares and ▇▇▇▇'▇ of Canada
Shares, upon the terms and conditions as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and
mutual covenants hereinafter contained, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
The following additional defined terms shall have the
following meanings when used in this Agreement:
Accounts Receivable means all accounts receivable and trade
receivables of the Companies, including, without limitation,
those reflected in the Financial Statements.
Acquired Net Worth has the meaning assigned to such term in
Section 2.5(f).
Affiliate(s) means, with respect to any person or entity,
any other person or entity controlling, controlled by or under
common control with such person or entity, where control means
the possession, directly or indirectly, of the power to direct
the management and policies of a person or entity, whether
through the ownership of voting securities, contract or
otherwise.
Books and Records has the meaning assigned to such term in
Section 3.28.
Closing and Closing Date have the meanings assigned to such
terms in Section 2.3.
Closing Balance Sheet means the unaudited combined balance
sheet of the Companies as of July 31, 1998.
Code means the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder.
Competitive Business means any business engaged in the
design, development, manufacture, merchandising, distribution or
sale of any products or services designed, developed,
merchandised, manufactured, distributed or sold by the Companies
during the one (1) year period prior to the Closing Date to or
for life science, educational and/or industrial organizations,
including, without limitation, laboratories and schools.
Contracts has the meaning assigned to such term in Section
3.24.
Environmental Laws means all applicable federal, state,
local and foreign statutes, regulations, ordinances and similar
provisions having the force or effect of law, all judicial and
administrative orders and determinations, all contractual
obligations and all common law concerning public health and
safety, worker health and safety, and pollution or protection of
the environment, including, without limitation, all those
relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution,
labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum
products or byproducts, asbestos, polychlorinated biphenyls,
noise or radiation, each as amended and as now in effect.
ERISA means the Employee Retirement Income Security Act of
1974, as amended, and any regulations promulgated thereunder.
Established Net Worth means the sum of $27,214,000.
Financial Statements has the meaning assigned to such term
in Section 3.8.
401(k) Plans means the Science Kit, Inc. 401K Savings Plan
and the ▇▇▇▇'▇ Natural Science Establishment, Inc. 401K Savings
Plan.
HSR Act means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
Indemnified Party means, with respect to any Loss(es), the
party seeking indemnification hereunder.
Indemnifying Party means, with respect to any Loss(es), the
party from whom indemnification is being sought hereunder.
Independent Accountants has the meaning assigned to such
term in Section 2.5(b).
Intellectual Property means all registered and unregistered
patents, copyrights, trademarks, service marks, logos, trade
dress, trade names and corporate names and all of the goodwill of
the business associated therewith; all registrations,
applications, reissuances, continuations, revisions, extensions
and renewals for any of the foregoing; all formulae,
compositions, manufacturing and production processes and
techniques, research information, drawings, specifications, mask
works and computer software.
Inventory means all items of inventories and supplies of the
Companies, wherever located, at the Real Properties, with third
parties or otherwise, including, without limitation, all finished
goods, work in process, raw materials and spare parts.
IRS means the Internal Revenue Service of the United States
of America.
Labor Agreements has the meaning assigned to such term in
Section 3.14.
Leased Real Property means the real properties leased or
subleased by the Companies as set forth in Schedule 3.18.
Licenses and Permits has the meaning assigned to such term
in Section 3.15.
Loss(es) means any and all costs and expenses including, but
not limited to, reasonable attorneys' fees, damages and losses
actually incurred by the Indemnified Party net of any tax
adjustments, benefits, savings or reductions received by the
Indemnified Party and net of any insurance proceeds the
Indemnified Party has received by virtue of such Loss(es).
Material Adverse Effect means a material adverse effect on
the properties, business, financial condition or results of
operations of the Companies, taken as a whole.
Net Worth means, as of any given date, the amount of the
combined assets of the Companies, less the amount of the combined
liabilities of the Companies, calculated in accordance with
United States generally accepted accounting principles applied in
a manner consistent with the preparation of the Financial
Statements, except to the extent provided otherwise by the terms
of this Agreement.
Non-Compete Period means the three (3) year period
commencing on the Closing Date and ending on the third
anniversary thereof.
Notice of Claim has the meaning assigned to such term in
Section 10.3.
Owned Real Property means the real property owned by the
Companies, as described in Schedule 3.19.
Plan(s) has the meaning assigned to such term in Section
3.13.
Permitted Liens means (a) liens resulting from taxes not yet
due and payable, (b) imperfections in title, if any, not material
in amount and which, individually or in the aggregate, do not
materially interfere with the conduct of the business or the
operations of the Companies or the use of their assets, (c) liens
and encumbrances arising in the ordinary course of business of
the Companies, consistent with past practice and (d) the liens
and encumbrances set forth in the Title Insurance Policies,
Schedule 3.19 and Schedule 3.23.
Purchase Price has the meaning assigned to such term in
Section 2.2.
Purchaser Ancillary Documents has the meaning assigned to
such term in Section 4.2.
Purchaser's Disallowed Deduction has the meaning assigned to
such term in Section 7.4.
Real Properties means the Owned Real Property and the Leased
Real Property.
Real Property Leases has the meaning assigned to such term
in Section 3.18.
Regulated Substances means any material, substance, product
or waste that is hazardous or toxic or that is regulated by, or
that may form the basis of liability under, any Environmental
Law.
Seller Ancillary Documents has the meaning assigned to such
term in Section 3.2.
Shareholders' Disallowed Deduction has the meaning assigned
to such term in Section 7.4.
Shareholders' Knowledge, to the knowledge of the
Shareholders or any phrase of similar import means the knowledge
of each of the Shareholders and the knowledge of each of ▇▇▇▇▇
▇'▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and Dr. ▇▇▇▇▇▇ ▇▇▇▇▇▇.
Shareholder Tax Benefit has the meaning assigned to such
term in Section 7.4.
Tangible Property has the meaning assigned to such term in
Section 3.22.
Taxes means any federal, state, local or foreign income,
gross receipts, franchise, estimated, alternative minimum, add-on
minimum, sales, use, transfer, registration, value added, excise,
natural resources, severance, stamp, occupation, premium,
windfall profit, environmental, customs, duties, real property,
personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of
the foregoing.
Tax Returns means returns, declarations, reports, claims for
refund, information returns or other documents (including any
related or supporting schedules or statements of information)
filed or required to be filed in connection with the
determination, assessment or collection of Taxes of any party of
the administration of any laws, regulations or administrative
requirements relating to any Taxes.
Termination Date means the date, if any, upon which this
Agreement is terminated pursuant to the provisions of Section
11.1.
Title Insurance Policies means, for each parcel of the Owned
Real Property, the owners title insurance policy (or endorsements
to existing policies) to be issued to the Purchaser at the
Purchaser's cost and expense by a title insurance company
reasonably satisfactory to the Purchaser, in such amount as the
Purchaser reasonably determines to be the fair market value,
insuring marketable title in fee simple or leasehold interest in
such parcel, as the case may be, as of the Closing.
ARTICLE 2
PURCHASE AND SALE
OF SHARES
2.1 Sale of Shares. On the terms and subject to the
conditions set forth in this Agreement, at the Closing the
Shareholders shall sell, transfer, assign and deliver to the
Purchaser the Shares, free and clear of all liens and
encumbrances.
2.2 Purchase Price. The purchase price (the Purchase Price)
to be paid by the Purchaser to the Shareholders for the Shares
shall be the aggregate sum of One Hundred Ten Million and 00/100
Dollars ($110,000,000). Schedule 2.2 sets forth the portion of
the Purchase Price to be paid to each of the Shareholders. The
Purchase Price shall be subject to adjustment after the Closing
as provided in Section 2.5.
2.3 Closing; Effective Time. Unless this Agreement shall
have been terminated pursuant to the provisions of Section 11.1,
and subject to Articles 8 and 9, the closing of the sale and
purchase of the Shares (the Closing) shall take place at the
offices of Lippes, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, 700
Guaranty Building, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00
a.m., local time, on July 31, 1998, or as soon thereafter as
practicable after all of the conditions set forth in Articles 8
and 9 have been satisfied or waived. The date on which the
Closing shall occur is referred to herein as the Closing Date.
Notwithstanding the foregoing, the effective time of the closing
of the sale and purchase of the Shares pursuant to this Agreement
shall be deemed to have occurred at 11:59 p.m., local time, on
the Closing Date.
2.4 Closing Documentation. At the Closing,
(a) the Shareholders will deliver to the Purchaser:
(i) certificates evidencing the Shares, which
shall be properly endorsed for transfer to the
Purchaser or accompanied by duly executed stock powers,
in either case executed in favor of the Purchaser or
its nominee as the Purchaser may direct prior to the
Closing, and otherwise in a form acceptable for
transfer on the books of the Companies;
(ii) the executed certificate required by Section
8.1(c);
(iii) the executed consents and approvals
required by Sections 8.2 and 8.3;
(iv) the executed certificates required by
Section 8.4;
(v) the opinion of counsel to the Companies and
the Shareholders required by Section 8.8;
(vi) all of the Books and Records and corporate
seals of the Companies; and
(vii) such other documents as are required by
Article 8 hereof or as the Purchaser may reasonably
request.
(b) the Purchaser will deliver to the Shareholders:
(i) a sum representing the Purchase Price, by
wire transfer of same day funds credited to the
account(s) set forth in Schedule 2.4;
(ii) the executed certificate required by Section
9.1(c);
(iii) the executed consents and approvals
required by Section 9.2;
(iv) the executed certificates required by
Section 9.3;
(v) the opinion of counsel to the Purchaser
required by Section 9.5;
(vi) such other documents as are required by
Article 9 hereof or as the Shareholders may reasonably
request.
(c) The Shareholders shall pay any stock transfer and
other taxes required to be paid in connection with the sale,
transfer and delivery to the Purchaser of any or all of the
Shares.
2.5 Post-Closing Purchase Price Adjustment. The Purchase
Price shall be subject to adjustment after the Closing in
accordance with the following procedure:
(a) Within sixty (60) days after the Closing Date,
the Purchaser will prepare and deliver the Closing Balance
Sheet to the Shareholders. The Closing Balance Sheet shall
be prepared at the Purchaser's cost and expense in
accordance with generally accepted accounting principles,
applied in a manner consistent with the preparation of the
Financial Statements, except that the Closing Balance Sheet
shall reflect or not reflect, as the case may be, the
accounting principles, reserves, accruals and items set
forth in Schedule 2.5.
(b) The Closing Balance Sheet shall be final and
binding on the Shareholders unless, within forty-five (45)
days after the Shareholders' receipt of the Closing Balance
Sheet, the Shareholders shall have delivered to the
Purchaser a detailed statement describing its objections to
the Closing Balance Sheet. The Purchaser and the
Shareholders will use their reasonable best efforts to
resolve any such objections. If final resolution is not
obtained within fifteen (15) days after the Purchaser has
received the statement of objections, each of the Purchaser
and the Shareholders shall have the right to refer the
matters in dispute to such independent accountants as shall
be mutually agreed upon by the Purchaser and the
Shareholders (such accounting firm is referred to herein as
the Independent Accountants).
(c) The Purchaser will revise the Closing Balance
Sheet as appropriate to reflect the resolution of the
objections of the Shareholders (as agreed by the parties or
as directed by the Independent Accountants) and deliver it
to the Shareholders within five (5) business days after the
final resolution of such objections. Such revised statement
shall constitute the Closing Balance Sheet.
(d) If any unresolved objections are submitted to the
Independent Accountants for resolution as provided above,
the fees and disbursements of the Independent Accountants
shall be borne equally, one-half (1/2) by the Purchaser and
one-half (1/2) by the Shareholders.
(e) The Purchaser will make the work papers used in
preparing the Closing Balance Sheet available to the
Shareholders at reasonable times and upon reasonable notice.
The Shareholders will make available to the Purchaser at
reasonable times and upon reasonable notice the work papers
used in preparing the Financial Statements to assist the
Purchaser in its preparation of the Closing Balance Sheet or
the Purchaser's evaluation of objections made to the Closing
Balance Sheet by the Shareholders.
(f) If the Net Worth reflected in the Closing Balance
Sheet, as finally determined (the Acquired Net Worth) is
less than the Established Net Worth, the Purchase Price
shall be reduced on a dollar-for-dollar basis by such
difference. If the Acquired Net Worth is greater than the
Established Net Worth, the Purchase Price shall be increased
on a dollar-for-dollar basis by such difference. Any payment
pursuant to this Section shall be made within ten (10)
business days after final resolution of the Closing Balance
Sheet, shall be made by wire transfer of immediately
available funds and shall be accompanied by accrued interest
from the Closing Date to the date of payment at an annual
rate of eight percent (8%). In the event that the Purchase
Price adjustment determined pursuant to this Section 2.5
shall be less than or equal to One Hundred Thousand Dollars
($100,000), then such amount shall be deemed de minimis and
no payment by either the Shareholders or the Purchaser shall
be required with respect thereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND THE
SHAREHOLDERS
Each of the Companies and each of the Shareholders, jointly
and severally (except as to the representations and warranties
contained in Section 3.5, which are given severally), represent
and warrant to the Purchaser as follows:
3.1 Organization. Each of the Companies (i) is a
corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, (ii) is duly
qualified and in good standing as a foreign corporation in good
standing in each jurisdiction in which it leases or owns property
or in which the conduct of its business requires it to be
qualified, which jurisdictions are set forth in Schedule 3.1,
except where the failure to be so qualified would not have a
Material Adverse Effect and (iii) has all requisite corporate
power and authority to own or lease its assets and to operate and
carry on its business as presently conducted.
3.2 Authorization; Enforceability. Each of the Companies
and each of the Shareholders has full power and authority to
enter into this Agreement and each of the other documents and
instruments to be executed and delivered by it or him pursuant to
this Agreement (the Seller Ancillary Documents) and to consummate
the transactions contemplated hereby and thereby. Each of the
Companies has taken all action as and in the manner required by
law, its articles of incorporation, by-laws and organization
documents, or otherwise to authorize the execution, delivery and
performance of this Agreement and the Seller Ancillary Documents.
This Agreement is, and when executed and delivered the Seller
Ancillary Documents will be, the valid and binding obligation of
the Companies and the Shareholders, enforceable against the
Companies and the Shareholders, as the case may be, in accordance
with their respective terms, except that: (a) such enforcement
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
affecting the enforcement of creditor's rights; and (b) the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may
be brought.
3.3 Authority; No Violation. Except for the requirements
of the HSR Act and as further set forth in Schedule 3.3, neither
the execution and delivery of this Agreement, the Seller
Ancillary Documents, the sale of the Shares nor the consummation
of the transactions contemplated by this Agreement or the Seller
Ancillary Documents do and, on the Closing Date, will:
(a) conflict with or result in any breach of any of
the provisions of;
(b) constitute a default under;
(c) result in a violation of;
(d) give any third party or governmental authority any
interest or right, including, without limitation, the right
to terminate, cancel or accelerate any obligation under; or
(e) result in the creation of any lien, security
interest, charge or other encumbrance upon the Shares or the
assets of any of the Companies under:
the provisions of the articles of incorporation or by-laws of any
of the Companies or any indenture, mortgage, lease, loan
agreement or other material agreement or instrument to which any
of the Companies or any of the Shareholders is bound or affected,
or any law, statute, rule or regulation or any judgment, decree,
or order to which any of the Companies is subject.
3.4 Capital Structure of the Companies.
(a) Science Kit. The authorized capital stock of
Science Kit consists of 1,000 shares of common stock,
without par, of which 142 shares, constituting the Science
Kit Shares, are issued and outstanding. The Science Kit
Shares are owned beneficially and of record by the
respective Shareholders set forth in Schedule 3.4. All of
the Science Kit Shares have been duly authorized, are
validly issued, fully paid and non-assessable. Except as set
forth in Schedule 3.4, there are no outstanding or
authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights, exchange
rights or other agreements or commitments to which Science
Kit or any of the Shareholders is a party, or which are
binding upon Science Kit or any of the Shareholders,
providing for the issuance, disposition or acquisition of
any of Science Kit's capital stock or the conversion into or
exchange for shares of capital stock or indebtedness of
Science Kit or other securities convertible into or
exchangeable for shares of capital stock of Science Kit.
There are no outstanding contractual obligations of Science
Kit to repurchase, redeem or otherwise acquire any of the
Science Kit Shares.
(b) Boreal. The authorized capital stock of Boreal
consists of (i) an unlimited number of shares of common
stock, without par value, of which 30,000 shares are issued
and outstanding, (ii) an unlimited number of shares of class
A preference stock, without par value, of which 30,000
shares are issued and outstanding and (iii) an unlimited
number of shares of class B preference stock, without par
value, of which 9,280 shares are issued and outstanding.
The issued and outstanding 30,000 shares of Boreal common
stock, 30,000 shares of Boreal class A preference stock and
9,280 shares of Boreal class B preference stock constitute
the Boreal Shares. The Boreal Shares are owned beneficially
and of record by Science Kit. All of the Boreal Shares have
been duly authorized, are validly issued, fully paid and
non-assessable. There are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, exchange rights or other
agreements or commitments to which Boreal or Science Kit is
a party, or which are binding upon Boreal or Science Kit,
providing for the issuance, disposition or acquisition of
any of Boreal's capital stock or the conversion into or
exchange for shares of capital stock or indebtedness of
Boreal or other securities convertible into or exchangeable
for shares of capital stock of Boreal. There are no
outstanding contractual obligations of Boreal to repurchase,
redeem or otherwise acquire any of the Boreal Shares.
(c) ▇▇▇▇'▇. The authorized capital stock of ▇▇▇▇'▇
consists of 1,000 shares of common stock, without par value
per share, of which 200 shares, constituting the ▇▇▇▇'▇
Shares, are issued and outstanding. The ▇▇▇▇'▇ Shares are
owned beneficially and of record by the respective
Shareholders set forth in Schedule 3.4. All of the ▇▇▇▇'▇
Shares have been duly authorized, are validly issued, fully
paid and non-assessable. Except as set forth in Schedule
3.4, there are no outstanding or authorized options,
warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, exchange rights or other
agreements or commitments to which ▇▇▇▇'▇ or any of the
Shareholders is a party, or which are binding upon ▇▇▇▇'▇ or
any of the Shareholders, providing for the issuance,
disposition or acquisition of any of ▇▇▇▇'▇ capital stock or
the conversion into or exchange for shares of capital stock
or indebtedness of ▇▇▇▇'▇ or other securities convertible
into or exchangeable for shares of capital stock of ▇▇▇▇'▇.
There are no outstanding contractual obligations of ▇▇▇▇'▇
to repurchase, redeem or otherwise acquire any of the ▇▇▇▇'▇
Shares.
(d) Central. The authorized capital stock of Central
consists of (i) 100,000 shares of common stock, $.10 par
value per share, of which 50,000 shares, constituting the
Central Shares, are issued and outstanding and (ii) 10,000
shares of preferred stock, $100 par value per share, of
which no shares are issued and outstanding. The Central
Shares are owned beneficially and of record by the
respective Shareholders set forth in Schedule 3.4. All of
the Central Shares have been duly authorized, are validly
issued, fully paid and non-assessable. Except as set forth
in Schedule 3.4, there are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to
subscribe, conversion rights, exchange rights or other
agreements or commitments to which Central or any of the
Shareholders is a party, or which are binding upon Central
or any of the Shareholders, providing for the issuance,
disposition or acquisition of any of Central's capital stock
or the conversion into or exchange for shares of capital
stock or indebtedness of Central or other securities
convertible into or exchangeable for shares of capital stock
of Central. There are no outstanding contractual
obligations of Central to repurchase, redeem or otherwise
acquire any of the Central Shares.
(e) Arbor. The authorized capital stock of Arbor
consists of 50,000 shares of common stock, without par
value, of which 1 share, constituting the Arbor Shares, is
issued and outstanding. The Arbor Shares are owned
beneficially and of record by ▇▇▇▇▇▇. All of the Arbor
Shares have been duly authorized, are validly issued, fully
paid and non-assessable. There are no outstanding or
authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights, exchange
rights or other agreements or commitments to which Arbor or
Boreal is a party, or which are binding upon Arbor or
Boreal, providing for the issuance, disposition or
acquisition of any of Arbor's capital stock or the
conversion into or exchange for shares of capital stock or
indebtedness of Arbor or other securities convertible into
or exchangeable for shares of capital stock of Arbor.
There are no outstanding contractual obligations of Arbor to
repurchase, redeem or otherwise acquire any of the Arbor
Shares.
(f) Central of Canada. The authorized capital stock of
Central of Canada consists of an unlimited number of shares
of common stock, without par value, of which 1 share,
constituting the Central of Canada Shares, are issued and
outstanding. The Central of Canada Shares are owned
beneficially and of record by Boreal. All of the Central of
Canada Shares have been duly authorized, are validly issued,
fully paid and non-assessable. There are no outstanding or
authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights, exchange
rights or other agreements or commitments to which Central
of Canada or Boreal is a party, or which are binding upon
Central of Canada or Boreal, providing for the issuance,
disposition or acquisition of any of Central of Canada's
capital stock or the conversion into or exchange for shares
of capital stock or indebtedness of Central of Canada or
other securities convertible into or exchangeable for shares
of capital stock of Central of Canada. There are no
outstanding contractual obligations of Central of Canada to
repurchase, redeem or otherwise acquire any of the Central
of Canada Shares.
(g) ▇▇▇▇'▇ of Canada. The authorized capital stock of
▇▇▇▇'▇ of Canada consists of an unlimited number of shares
of one class, without par value, of which 100 shares,
constituting the ▇▇▇▇'▇ of Canada Shares, are issued and
outstanding. The ▇▇▇▇'▇ of Canada Shares are owned
beneficially and of record by ▇▇▇▇▇▇. All of the ▇▇▇▇'▇ of
Canada Shares have been duly authorized, are validly issued,
fully paid and non-assessable. There are no outstanding or
authorized options, warrants, rights, contracts, calls,
puts, rights to subscribe, conversion rights, exchange
rights or other agreements or commitments to which ▇▇▇▇'▇ of
Canada or Boreal is a party, or which are binding upon
▇▇▇▇'▇ of Canada or Boreal, providing for the issuance,
disposition or acquisition of any of ▇▇▇▇'▇ of Canada's
capital stock or the conversion into or exchange for shares
of capital stock or indebtedness of ▇▇▇▇'▇ of Canada or
other securities convertible into or exchangeable for shares
of capital stock of ▇▇▇▇'▇ of Canada. There are no
outstanding contractual obligations of ▇▇▇▇'▇ of Canada to
repurchase, redeem or otherwise acquire any of the ▇▇▇▇'▇ of
Canada Shares.
3.5 Title to Shares.
(a) Except as set forth in Schedule 3.5, each of the
Shareholders owns his respective Science Kit Shares, ▇▇▇▇'▇
Shares and Central Shares beneficially and of record and
free and clear of any lien, mortgage, claim, charge, pledge,
security interest, encumbrance or other restriction or
limitation affecting such Shareholder's ability to transfer
title to the Shares to the Purchaser, and none of the
Science Kit Shares, ▇▇▇▇'▇ Shares or Central Shares are
subject to any voting trust, proxy or other contract,
agreement, arrangement, commitment or understanding relating
thereto.
(b) Except as set forth in Schedule 3.5, Science Kit
owns the Boreal Shares beneficially and of record and free
and clear of any lien, mortgage, claim, charge, pledge,
security interest, encumbrance or other restriction or
limitation, and none of the Boreal Shares are subject to any
voting trust, proxy or other contract, agreement,
arrangement, commitment or understanding relating thereto.
(c) Except as set forth in Schedule 3.5, Boreal owns
the Arbor Shares, Central of Canada Shares and ▇▇▇▇'▇ of
Canada Shares beneficially and of record and free and clear
of any lien, mortgage, claim, charge, pledge, security
interest, encumbrance or other restriction or limitation,
and none of the Arbor Shares, Central of Canada Shares or
▇▇▇▇'▇ of Canada Shares are subject to any voting trust,
proxy or other contract, agreement, arrangement, commitment
or understanding relating thereto.
(d) Upon delivery of and payment for the Shares as
herein provided, the Purchaser will acquire good and
marketable title to the Shares, free and clear of any lien,
mortgage, claim, charge, security interest, encumbrance or
other restriction or limitation whatsoever.
3.6 Articles of Incorporation and By-Laws. The
Shareholders have heretofore delivered to the Purchaser true and
complete copies of the articles of incorporation and by-laws of
each of the Companies as in effect on the date hereof and
including all amendments thereto and restatements thereof. None
of the Companies is in violation of any provision of its articles
of incorporation or by-laws, as amended and restated.
3.7 Subsidiaries; Investments.
(a) Boreal is a wholly-owned subsidiary of Science Kit
and Arbor, Central of Canada and ▇▇▇▇'▇ of Canada are
wholly-owned subsidiaries of Boreal. Except as provided in
the preceding sentence, none of the Companies has any
subsidiaries.
(b) None of the Companies owns or holds the right to
acquire any shares of stock or any other security or
interest in any other corporation, partnership, joint
venture, limited liability company or other entity.
3.8 Financial Statements. Annexed hereto as Exhibit A is
a complete copy of (i) Science Kit, Inc. and Subsidiary, ▇▇▇▇'▇
Natural Science Establishment, Inc. and Central Scientific
Company Combined Financial Statements for the years ended
December 31, 1997, 1996 and 1995, as audited by KPMG Peat Marwick
LLP, (ii) Science Kit, Inc. Financial Statements for the years
ended December 31, 1997, 1996 and 1995, as audited by KPMG Peat
Marwick LLP, (iii) ▇▇▇▇'▇ Natural Science Establishment, Inc.
Financial Statements for the years ended December 31, 1997, 1996
and 1995, as audited by KPMG Peat Marwick LLP, (iv) Central
Scientific Company Financial Statements for the years ended
December 31, 1997, 1996 and 1995, as audited by KPMG Peat Marwick
LLP and (iv) Consolidated Financial Statements of Boreal
Laboratories Ltd. for the years ended December 31, 1997, 1996 and
1995, as audited by KPMG (collectively, the Financial
Statements). Except as set forth in Schedule 3.8, the Financial
Statements have been derived from the books and records of the
Companies, have been prepared in accordance with United States
generally accepted accounting principles consistently followed
throughout the periods presented and, at the balance sheet dates
and for the periods of the income statements, present fairly in
all material respects the assets, liabilities, financial position
and results of operations of the Companies.
3.9 Absence of Undisclosed Liabilities. Except as set
forth in Schedule 3.9 or the other Schedules to this Agreement,
the Companies do not have any liability or obligation, contingent
or otherwise, other than
(a) liabilities or obligations reflected in or
reserved against in the Financial Statements; and
(b) those liabilities and obligations reflected in the Closing
Balance Sheet which were incurred since December 31, 1997 in
the ordinary course of business, consistent in type and
amount with past practice and experience.
3.10 Inventory. Except as disclosed in the Financial
Statements, to the knowledge of the Shareholders, all of the
Inventory is of substantially good, usable and merchantable
quality and is saleable in the ordinary course of business
consistent with past practice. The Financial Statements include
adequate reserves for excess and obsolete Inventory. The
inventory of Science Kit, ▇▇▇▇'▇ and Central is valued on a last
in first out basis. The inventory of Boreal, Arbor, ▇▇▇▇'▇ of
Canada and Central of Canada is valued on a first in first out
basis.
3.11 Absence of Changes. Since December 31, 1997, there
has not been any change in the business, financial condition or
results of operations of the Companies, taken as a whole, except
for changes in the ordinary course of business. Except as set
forth in Schedule 3.11 or as expressly contemplated by this
Agreement, since December 31, 1997, none of the Companies has:
(a) amended its articles of incorporation or by-laws
or merged with or into or consolidated with any other person
or entity, subdivided or in any way reclassified any shares
of its capital stock or changed or agreed to change in any
manner the rights of its outstanding capital stock or the
character of its business;
(b) issued, sold, purchased or redeemed, or issued
options or rights to subscribe to, or entered into any
contracts or commitments to issue, sell, purchase or redeem
any shares of its capital stock or securities convertible
into or exchangeable for any shares of its capital stock;
(c) entered into, renegotiated or amended any
employment agreement or collective bargaining agreement or
adopted, entered into, amended or terminated any Plan;
(d) declared or paid any dividends or declared or made
any distributions of any kind to its shareholders, or made
any direct or indirect redemption, retirement, purchase or
other acquisition of any shares of its capital stock;
(e) made any material change in its accounting methods
or practices or its accounts payable practices or policies,
or in its manner of keeping its books, records or accounts;
(f) made any material change in the normal and ordinary
manner in which its business is conducted, including,
without limitation, changes in the manner in which Inventory
purchases are made, changes in manufacturing methods and
changes in sales and marketing policies;
(g) changed any of its warranty or other material
business policies other than in the ordinary course of
business;
(h) granted any increase in wages, salary, bonus, or
any other direct or indirect compensation or benefits to or
for any of its officers, directors, employees, consultants
or agents, or any accrual for or commitment or agreement to
make or pay the same, other than in the ordinary course of
business consistent with prior practice and, in the case of
employees, in connection with an annual or other periodic
regular review;
(i) made any loan or advance to any of its
shareholders, officers, directors, employees, consultants,
agents or other representatives (other than expense advances
made in the ordinary course of business) or made any other
loan or advance other than in the ordinary course of
business;
(j) made any payment or commitment to pay any severance
or termination pay to any of its officers, directors,
employees, consultants, agents or other representatives,
other than payments or commitments to employees made in the
ordinary course of business;
(k) made any capital expenditures or capital
commitments in excess of $100,000, individually, or $250,000
in the aggregate;
(l) except in the ordinary course of business, incurred
or assumed any debt, obligation or liability material to the
Companies, taken as a whole;
(m) except for Inventory and equipment acquired in the
ordinary course of business, made any material acquisition
of all or any part of the assets, properties, capital stock
or business of any other person or entity;
(n) conducted its business (including, without
limitation, pricing, rebate practices, credit practices and
maintenance and repair of assets) other than in the ordinary
course as heretofore conducted; or
(o) agreed to take any action, taken any action or
omitted to take any action that would result in the
occurrence of any of the foregoing.
3.12 Taxes.
(a) Except as set forth in Schedule 3.12, (i) each of
the Companies has filed on a timely basis all Tax Returns
(or have filed valid extensions with respect to such Tax
Returns) required to be filed on or prior to the date hereof
under applicable laws and regulations, (ii) all such Tax
Returns are complete and correct and have been prepared in
compliance with all applicable laws and regulations, (iii)
the Companies have paid all Taxes due and owing by them
(whether or not such Taxes are required to be shown on a Tax
Return) or, in the case of Taxes not yet due, fully provided
for such Taxes in the Financial Statements or, in the case
of Taxes accruing after the date of the Financial
Statements, on the books of account of the Companies, and
have withheld and paid over to the appropriate taxing
authority all Taxes which they are required to withhold from
amounts paid or owing to any employee, equityholder,
creditor or other third party, (iv) none of the Companies
has waived any statute of limitations with respect to any
Taxes or agreed to any extension of time with respect to any
Tax assessment or deficiency and (v) no foreign, federal,
state or local tax audits or administrative or judicial
proceedings are pending or being conducted with respect to
any of the Companies.
(b) There are no liens for Taxes (other than for
current Taxes not yet due and payable) upon the assets of
any of the Companies.
(c) The Purchaser will not be required to deduct and
withhold any amount pursuant to Section 1445(a) of the Code
upon the transfer of the Shares to the Purchaser.
(d) Neither any of the Companies nor either of the
Shareholders have received any notice that any issues are
currently pending by the IRS or any other taxing authority
in connection with any of the Tax Returns referred to in
subsection (a) above.
(e) Schedule 3.12 identifies all Tax Returns of or with
respect to the Companies which have been examined since
1991, or which are currently under examination, by the IRS
or by other taxing authorities. Except as and to the extent
shown on such Schedule 3.12, all deficiencies asserted or
assessments made as a result of such examinations have been
fully paid, and there are no other unpaid deficiencies
asserted or assessments made by any taxing authority against
any of the Companies.
(f) Schedule 3.12 lists all elections by or with
respect to each Company for federal or state income or
franchise tax or Canadian income tax purposes that are
currently applicable. No Company has filed any consent
under Section 341(f)(1) of the code or agreed to have the
provisions of code Section 341(f)(2) apply to any
dispositions of subsection (f) assets as such term is
defined in code Section 341(f)(4); has agreed to or is
required to make any adjustments under Code Section 481(a)
by reason of a change in accounting method or otherwise, has
made a transfer of intangible property on which Code Section
367(d) or 482 will require the recognition of additional
income for any period after the date hereof; or owns stock
in a passive foreign investment company within the meaning
of Code Section 1297(a). To the knowledge of the
Shareholders, the books and records of each Company are
sufficient to prove the correctness of all Tax Returns for
open tax years and to determine and prove the adjusted tax
basis for income tax purposes of each asset of such Company.
(g) Except as set forth in Schedule 3.12, each of
Science Kit, ▇▇▇▇'▇ and Central has been an S corporation
for federal and all relevant state income tax purposes since
the later of (i) its respective date of incorporation and
(ii) January 1, 1987; and none of such Companies has, within
the past ten years, acquired any assets from a C corporation
in a transaction in which gain was not recognized by the
transferor C corporation.
(h) No payment that is owed or may become due to any
director, officer, employee, or agent of any Company will be
non-deductible to the Companies or subject to tax under
Sections 280G or 4999 of the Code; nor will any Company be
required to gross up or otherwise compensate any such person
because of the imposition of any excise tax on a payment to
such person.
3.13 Employee Benefit Plans.
(a) Schedule 3.13 sets forth a list of:
(i) each material written personnel practice
which is in effect for employees of any of the
Companies, including, without limitation, vacation
policies, holiday pay policies, severance pay policies,
sick or personal pay policies, incentive bonus
programs, bereavement pay programs, company car
policies, service award policies, tuition refund
policies, relocation assistance policies and patent
award policies;
(ii) each plan, fund or program constituting an
employee welfare plan which is in effect for employees
of any of the Companies within the meaning of Section
3(1) of ERISA, including, without limitation, basic and
supplemental life insurance, health insurance
(including medical, dental and hospitalization),
accidental death and dismemberment insurance, business
travel and accident insurance, short and long term
disability insurance programs; and
(iii) each employee pension benefit plan within
the meaning of Section 3(2) of ERISA, including,
without limitation, pension, profit sharing, and 401(k)
retirement plans which is maintained or contributed to
by any of the Companies. The items listed in clauses
(i), (ii) and (iii) of Section 3.13 (a) are referred to
herein individually as a Plan and collectively as the
Plans.
(b) None of the Plans is a multi-employer plan (within
the meaning of Sections 3(37) and 4001(a)(3) of ERISA).
(c) Except as set forth in Schedule 3.13, each of the
Plans is now and always has been maintained, funded and
administered in material compliance with its respective
terms and the requirements of ERISA, the Code and all other
applicable laws, including, without limitation, the
continuation coverage requirements of Section 4980B of the
Code and Title 1, Subtitle B, Part 6 of ERISA. The
Companies have performed all obligations required to be
performed by them under, are not in default under or in
violation of, and have no knowledge of any default or
violation by any other party to, any Plan, except for such
non-performance, default or violation which, either
individually or in the aggregate, would not result in a
Material Adverse Effect. All contributions, reserves or
premium payments which the Companies are required to have
made under the terms of any Plan as of the date hereof have
been made, and no Plan subject to the minimum funding
requirements of Part 3 of subtitle B of Title I of ERISA or
subject to Section 412 of the Code has incurred any
accumulated funding deficiency within the meaning of Section
302 of ERISA or Section 412 of the Code. No legal action,
suit or claim is pending or, to the knowledge of the
Shareholders, threatened with respect to any Plan (other
than claims for benefits in the ordinary course) and no fact
or event exists that could give rise to any such action,
suit or claim.
(d) Each Plan which is intended to be qualified under
Section 401(a) of the Code or Section 401(k) of the Code has
been determined by the Internal Revenue Service to be so
qualified and each trust established in connection with any
Plan which is intended to be exempt from federal income
taxation under Section 501(a) of the Code has been
determined by the Internal Revenue Service to be so exempt,
and no fact or event has occurred since the date of such
determination by the IRS to adversely affect the qualified
status of any such Plan or the exempt status of any such
trust.
(e) To the knowledge of the Shareholders, there has
been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with
respect to any Plan.
(f) Except as set forth in Schedule 3.13:
(i) the Companies have complied in all material
respects with the health care continuation requirements
of Part 6 of Title I of ERISA; and
(ii) the Companies have no obligations under any
Plan or otherwise to provide health benefits to former
employees of the Companies or any other person, except
as specifically required by Part 6 of Title I of ERISA.
(g) Except as set forth in Schedule 3.13, neither any
of the Companies nor any affiliate required to be aggregated
with any of the Companies under Section 414(b), 414(c),
414(m) or 414(o) of the Code has, within the past six (6)
years, maintained or been obligated to contribute to any
employee pension plan subject to Title IV of ERISA
(including a multi-employer plan) other than a Plan that is
listed on Schedule 3.13 pursuant to Section 3.13(a).
(h) Except as set forth in Schedule 3.13, the
consummation of the transactions contemplated by this
Agreement will not, alone or together with any other event,
(i) entitle any person to severance pay, unemployment
compensation or any other payment, which such person would
not be entitled to receive if the consummation of the
transactions contemplated by this Agreement did not occur,
(ii) result in the acceleration of the time of payment or
vesting of any benefits provided for by any of the Plans, or
cause any increase in the amount of compensation due to any
employee under any of the Plans or otherwise or (iii) result
in the creation of any liability under Title IV of ERISA or
in the creation of any other liability which the Companies
are not currently obligated to pay, perform and discharge.
(i) Except for Plans listed in Schedule 3.13(i) and
Plans which any of the Companies are required to maintain
pursuant to the applicable provisions of state or federal
law, the Companies have the right under the Plans to
terminate or amend the Plans without any liability to
participants thereof except for the liability for payment of
benefits accrued by such participants as of the effective
date of any such amendment or termination.
(j) With respect to benefit plans existing in respect
of the employees of any of the Companies who are residents
of or employed in Canada: (i) each such benefit plan is
listed in Schedule 3.13; (ii) each such benefit plan is
duly registered where required by, and is in good standing
under, all applicable laws including the Income Tax Act
(Canada), and the Pension Benefits Act (Ontario); (iii) all
required employer and employee contributions and premiums
under each such benefit plan to the date hereof have been
made and (iv) each such benefit plan which is a pension
plan is fully funded both on a going concern and on a
solvency basis in accordance with the actuarial methods and
assumptions utilized in the most recent actuarial report
thereon, with applicable laws and with the rules of such
pension plan. The following definitions shall apply for
purposes of this Section 3.13(j): (A) the term benefit plan
shall mean a benefit plan relating to the employees of
any of the Companies, including a profit sharing, pension,
retirement, deferred compensation, phantom stock option,
stock option, employee stock purchase, bonus, retirement,
health or insurance plan, whether written or oral;
(B) the term laws shall mean all statutes, codes,
ordinances, decrees, rules, regulations, municipal by-laws,
judicial or arbitral or administrative or ministerial or
department or regulatory judgments, orders,
decisions, rulings or awards, or any provisions of the
foregoing, including general principles of common and
civil law and equity; and (C) the term pension plan shall
mean a pension plan relating to the employees of any of
the Companies.
3.14 Employees; Labor Relations.
(a) The Shareholders have previously provided to the
Purchaser a list of the names and current salaries, if any,
of the directors, officers and managers of the Companies
dated July 21, 1998. Schedule 3.14 hereto sets forth:
(i) a payroll list of the names and current
salaries of the employees of the Companies, other than
officers, managers and directors; and
(ii) any employment agreements and collective
bargaining agreements of the Companies (collectively,
Labor Agreements). In addition, to the extent any
employees of the Companies are on leaves of absence,
Schedule 3.14 indicates the nature of each such leave
of absence and each such employee's anticipated date of
return to active employment.
(b) Except as specified on Schedule 3.14, as it
relates to the Companies:
(i) there is no unfair labor practice charge or
complaint pending or, to the knowledge of the
Shareholders, threatened before the National Labor
Relations Board;
(ii) within the past three (3) years, there has
not occurred, nor to the knowledge of the Shareholders
has there been threatened, a labor strike, request for
representation or lockout, nor is there currently any
labor strike, request for representation or lockout
against or affecting any of the Companies;
(iii) there is no representation claim or
petition pending before the National Labor Relations
Board and no question concerning representation is
presently being raised or, to the knowledge of the
Shareholders, is threatened respecting the employees of
any of the Companies;
(iv) no grievance or arbitration proceeding
arising out of or under any Labor Agreement is pending,
and no such claims with respect thereto, to the
knowledge of the Shareholders, are threatened or exist;
(v) no charges with respect to or relating to the
Companies are pending before the Equal Employment
Opportunity Commission or any state, local or foreign
agency responsible for the prevention of unlawful
employment practices; and
(vi) none of the Companies has received notice of
the intention of any federal, state, local or foreign
agency responsible for the enforcement of labor or
employment laws to conduct an investigation of or
relating to any of the Companies.
3.15 Licenses and Permits. Set forth in Schedule 3.15 is a
list of all licenses, permits, certificates, approvals and other
authorizations of foreign, federal, state and local governments
or authorities or other similar rights owned, possessed or used
by the Companies in the conduct of their respective businesses
(collectively, Licenses and Permits). To the knowledge of the
Shareholders, the Licenses and Permits are all of the permits,
licenses, certificates, approvals and authorizations of, and
registrations with, and under, all federal, state, local and
foreign laws, authorities and agencies as are required by the
Companies for the operation of their respective businesses in the
manner presently conducted. To the knowledge of the
Shareholders, (i) each of the Licenses and Permits is in full
force and effect, (ii) none of the Companies is in violation of
any of its Licenses and Permits and (iii) no proceeding is
pending or, to the knowledge of the Shareholders, threatened
seeking the revocation or limitation of any of the Licenses and
Permits.
3.16 Compliance with Law. Except for non-compliance which
would not result in a Material Adverse Effect and except as set
forth in Schedule 3.16, the Companies are in compliance with all
applicable federal, state, local and foreign laws, statutes,
codes, ordinances, rules and regulations and orders, decrees and
consents of all governmental and administrative entities. Except
as set forth in Schedule 3.16, no notice of any claim, suit,
action or inquiry has been issued and served upon or delivered to
any of the Companies, and no investigation or review is pending
or, to the knowledge of the Shareholders, threatened by any
governmental entity with respect to any alleged violation by any
of the Companies of any law, statute, code, ordinance, rule or
regulation of any governmental entity or any order, decree or
consent of any governmental or administrative entity.
3.17 Actions and Proceedings. Except as set forth in
Schedule 3.17, there are no actions, suits or claims or legal or
administrative proceedings (judicial, governmental or arbitral),
outstanding orders, judgments, injunctions, awards or decrees of
any court, regulatory body or arbitration tribunal,
investigations (whether or not the defense thereof or liabilities
in respect thereof are covered by insurance) pending or, to the
knowledge of the Shareholders, threatened against any of the
Companies or any of their respective properties, assets,
operations or business or which seek to prevent the consummation
of the transactions contemplated by this Agreement or the Seller
Ancillary Documents.
3.18 Real Property Leases. Schedule 3.18 sets forth a list
of all of the leases and subleases (the Real Property Leases) and
each leased and subleased parcel of real property in which any of
the Companies has a leasehold or subleasehold interest. With
respect to each of the Real Property Leases:
(a) it is legally valid, binding and in full force and
effect;
(b) except as set forth in Schedule 3.18, it will
continue to be legally valid, binding, enforceable and in
full force and effect on identical terms upon consummation
of the Closing without the necessity of any consent or
approval of any third party;
(c) neither the Companies nor, to the knowledge of the
Shareholders, any other party to the Real Property Lease is
in breach or default, and no event has occurred which, with
notice or the passage of time, would constitute such a
breach or default or permit termination, modification or
acceleration under any of the Real Property Leases;
(d) the Real Property Leases have not been modified in
any material respect, except to the extent that such
modifications are disclosed in documents delivered to the
Purchaser; and
(e) the Companies have not assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any
interest in any of the Real Property Leases.
3.19 Real Property.
(a) Schedule 3.19 sets forth the legal description of
each parcel of the Owned Real Property. The Companies own
good and marketable title to the Owned Real Property in fee
simple, free and clear of all mortgages, liens, charges,
claims, restrictions, pledges, security interests,
impositions, covenants, conditions, rights of way, easements
and other encumbrances (whether or not of record) other than
the Permitted Liens and as disclosed in the Title Insurance
Policies or in Schedule 3.19.
(b) Except as set forth in Schedule 3.19 and except
for Permitted Liens, (i) there are no parties other than the
Companies in possession of the Real Properties or any
portion thereof and (ii) there are no leases, subleases,
licenses, concessions, written or oral, granting to any
party or parties the right of use or occupancy of any of the
Real Properties or any portion thereof. There are no
outstanding options or rights of first refusal to purchase
or lease the Owned Real Property, or any portion thereof or
interest therein.
(c) Except for the Real Properties, there is no real
property leased or owned by the Companies.
3.20 Accounts Receivable. Except as set forth in Schedule
3.20, all of the Accounts Receivable arose from bona fide
transactions in the ordinary course of business of the Companies.
The Financial Statements include adequate reserves for
uncollectable Accounts Receivable.
3.21 Intellectual Property.
(a) Schedule 3.21 contains a list of all of the
material Intellectual Property owned or used by the
Companies. Except as set forth in Schedule 3.21:
(i) to the knowledge of the Shareholders, the
Companies own and possess all right, title and interest
in and to, or have a valid and enforceable written
license to use, all of the Intellectual Property
necessary for the operation of their respective
business as presently conducted;
(ii) the Companies are not in breach of any
license or other grant of rights with respect to
Intellectual Property;
(iii) no claim by any third party contesting the
validity, enforceability, use or ownership of any
Intellectual Property owned or used by the Companies
has been made or is currently outstanding;
(iv) none of the Companies has received any
notice as to any infringement or misappropriation by,
or conflict with any third party with respect to the
Intellectual Property owned or used by the Companies,
nor have the Companies received any claims alleging
infringement or misappropriation, or other conflict
with, any Intellectual Property of any third party; and
(v) to the knowledge of the Shareholders, the
Companies have not infringed, misappropriated or
otherwise conflicted with any Intellectual Property of
any third party.
(b) To the knowledge of the Shareholders, the
Intellectual Property set forth in Schedule 3.21 comprises
all of the proprietary or Intellectual Property rights
necessary for the operation by the Companies of their
respective businesses as currently conducted.
(c) Assuming the Post-Closing operations of the
Companies are substantially similar to such operations prior
to the Closing, the Companies will not require additional
material cash or material manpower expenditures in order to
enable the computer software utilized by the Companies in
their AS400 computers to record, store, process and
present calendar dates on or after January 1, 2000 in the
same manner and with the same functionality, completeness
and accuracy as calendar dates falling on or before December
31, 1999. Except as set forth in Schedule 3.21, no consent
or approval of any party to any license or other grant of
rights to any of the Companies, with respect to computer
software or any other Intellectual Property, is required for
the execution of this Agreement or the consummation of the
transactions contemplated hereby.
3.22 Tangible Property. Schedule 3.22 sets forth a list
and description of all machinery, equipment, inventory, vehicles,
working stock, structures, fixtures and other tangible personal
property (Tangible Property) material to the business of the
Companies which is treated by the Companies as depreciable
property not normally sold or disposed of in the ordinary course
of business and which had an original book value in excess of
$1,000 per item.
3.23 Title to Assets; All Necessary Assets. Except for
Permitted Liens and as set forth in Schedule 3.23, the Companies
have good and valid title to all of their respective assets, free
and clear of any lien, mortgage, claim, charge, security interest
or encumbrance.
3.24 Material Contracts.
(a) Schedule 3.24 sets forth a list of all of the
contracts, leases, licenses, agreements, indentures, bonds,
mortgages, franchise agreements and commitments (the
Contracts), written or oral, to which any of the Companies
is a party or by or to which any of the Companies or its
assets or properties are bound or affected as of the Closing
Date, which involve the unfulfilled receipt by the Companies
of more than $100,000 and which are not cancellable without
penalty upon not more than thirty (30) days notice.
(b) Except as set forth in Schedule 3.24, each of the
Contracts is valid and in full force and effect as to the
Companies and, to the knowledge of the Shareholders, the
other parties thereto, and no default by any of the
Companies or, to the knowledge of the Shareholders, by the
other parties thereto, nor any event which, with notice or
passage of time, or both, would constitute a material
default, exists.
3.25 Customers and Suppliers. Except as set forth in
Schedule 3.25, none of the Companies is engaged in material
disputes with any of its material customers or material
suppliers, except for such disputes as will not, individually or
in the aggregate, result in a Material Adverse Effect. Schedule
3.25 sets forth a list of each customer of each of the Companies
that represented more than five percent (5%) of the aggregate
sales of such Company for the year ended December 31, 1997.
3.26 Insurance.
(a) Schedule 3.26 sets forth a list and brief
description (specifying the insurer and the policy number)
of all policies of insurance maintained by the Companies,
including policies of life, fire, theft, casualty, product
liability, worker's compensation, business interruption,
employee fidelity and other casualty and liability
insurance, indicating the type of coverage, name of insured,
the insurer, the expiration date of each policy, the amount
of coverage and whether on an occurrence or claims made
basis.
(b) All such policies are in full force and effect
and, to the knowledge of the Shareholders, are sufficient
for compliance with all material requirements of law and of
all applicable material agreements to which any of the
Companies is a party.
(c) Except as set forth in Schedule 3.26, since
December 31, 1997:
(i) the Companies have not been denied any
insurance coverage which any of them have requested;
(ii) there is no default which would lead to the
cancellation of any such policy or binder for non-
payment thereunder; and
(iii) none of the Companies has received notice
from any of its insurance carriers of any surcharge or
refusal to cover any insurance risk.
3.27 Warranties. Schedule 3.27 sets forth a description of
all warranties and other guarantees provided to any customer of
the Companies in respect of products sold or services performed.
3.28 Books and Records. The books of account, minute books,
stock record books and other records of the Companies (the Books
and Records) are complete and correct in all material respects
and have been maintained in accordance with sound business
practices. All material transactions related to the business of
the Companies have been reflected in the Books and Records.
3.29 Affiliate Transactions. Except as set forth in
Schedule 3.29, no officer, director, employee or shareholder of
any of the Companies, or member of the immediate family of any
such person, or any entity in which any such person or any member
of the immediate family of any such person is an officer,
director, trustee, partner or beneficial or record holder of more
than 5% of the outstanding capital stock thereof, is a party to
any transaction with the Companies other than payments of
compensation, bonus, and dividends in the ordinary course of
business and reimbursement of ordinary and necessary business
expenses.
3.30 Banks, Brokers and Proxies. Schedule 3.30 sets forth:
(a) the name of each bank, trust company, securities or
other broker or other financial institution with which any
of the Companies has an account, credit line or safe deposit
box or vault, or otherwise maintains relations;
(b) the name of each person authorized by the Companies
to draw thereon or to have access to any safe deposit box or
vault;
(c) the purpose of each such account, safe deposit box
or vault; and
(d) the names of all persons authorized by proxy,
powers of attorney or other instruments to act on behalf of
the Companies in matters concerning its business or affairs.
All such accounts, credit lines, safe deposit boxes and
vaults are maintained by the Companies for normal business
purposes, and no such proxies, powers of attorney or other like
instruments are irrevocable.
3.31 Environmental Matters.
(a) Except as set forth in Schedule 3.31, to the
knowledge of the Shareholders, no Regulated Substances have
been released at the Real Properties in amounts which, under
applicable Environmental Laws, either (i) require
remediation or corrective action as the result of the
receipt by the Companies of a written notice or directive
from any governmental regulatory authority or (ii) could
reasonably be anticipated to require remediation or
corrective action by any governmental regulatory authority.
All Regulated Substances used or generated at the Real
Properties were and are used, stored, treated, disposed or
otherwise managed in material compliance with all applicable
Environmental Laws.
(b) Except as set forth in Schedule 3.31, (i) the
Companies are in material compliance with all Environmental
Laws, and (ii) none of the Companies has received any notice
or report of any release or threat of release of any
Regulated Substances with respect to the Real Property or
any violation or alleged violation of any Environmental
Laws.
(c) To the knowledge of the Shareholders, each of the
Companies has obtained all permits, approvals and
authorizations as may be required under applicable
Environmental Laws to conduct its business. Each of the
Companies is in compliance in all material respects with the
terms and conditions of any such permit. Except as set
forth in Schedule 3.31, all such permits presently allow the
conduct of the businesses of the Companies as presently
conducted.
(d) Except as set forth in Schedule 3.31, none of the
following exists at the Owned Real Property or, to the
knowledge of the Shareholders, at the Leased Real Property:
(A) underground storage tanks;
(B) asbestos containing material in any form or
condition;
(C) materials or equipment containing
polychlorinated biphenyls; or
(D) landfills, surface impoundments or other
treatment, storage or disposal areas.
(e) Except as set forth in Schedule 3.31, no wastes
generated by the Companies have been directly or indirectly
sent, transported, transferred to, treated, stored or
disposed of at any site listed or formally proposed for
listing on the National Priorities List pursuant to CERCLA
or any similar state list of sites requiring or recommended
for investigation or cleanup.
3.32 Brokerage. Except for the fees of NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities, which shall be the sole obligation of the
Shareholders, there are no claims for brokerage commissions,
finders' fees, investment bankers' fees or similar compensation
in connection with the transactions contemplated by this
Agreement based on any contract, commitment or arrangement made
by or on behalf of any of the Companies or any of the
Shareholders.
3.33 Disclosure. Neither this Agreement, any of the Seller
Ancillary Documents, nor any of the Schedules or Exhibits hereto
contain any untrue statement of a material fact or omits a
material fact necessary to make the statements contained herein
or thereunder in the light of the circumstances in which they
were made not false or misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Shareholders
that:
4.1 Organization. The Purchaser (i) is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Pennsylvania, (ii) is duly qualified and in good
standing as a foreign corporation in good standing in each
jurisdiction in which it leases or owns property or in which the
conduct of its business requires it to be qualified, except
where the failure to be so qualified would not have a Material
Adverse Effect and (iii) has all requisite corporate power and
authority to own or lease its assets and to operate and carry on
its business as presently conducted.
4.2 Authorization; Enforceability. The Purchaser has full
power and authority to enter into this Agreement and each of the
other documents and instruments to be executed and delivered by
it pursuant to this Agreement (the Purchaser Ancillary Documents)
and to consummate the transactions contemplated hereby and
thereby. The Purchaser has taken all action as and in the manner
required by law, its certificate of incorporation, by-laws and
organization documents, or otherwise to authorize the execution,
delivery and performance of this Agreement and the Purchaser
Ancillary Documents. This Agreement is, and when executed and
delivered the Purchaser Ancillary Documents will be, the valid
and binding obligation of the Purchaser, enforceable against the
Purchaser, in accordance with their respective terms, except
that: (a) such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect affecting the enforcement of creditor's
rights; and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.3 Authority; No Violation. Except for the requirements
of the HSR Act, neither the execution and delivery of this
Agreement, the Purchaser Ancillary Documents, the purchase of the
Shares nor the consummation of the transactions contemplated by
this Agreement or the Purchaser Ancillary Documents do and, on
the Closing Date, will:
(a) conflict with or result in any breach of any of
the provisions of;
(b) constitute a default under;
(c) result in a violation of;
(d) give any third party or governmental authority
any interest or right, including, without limitation, the
right to terminate, cancel or accelerate any obligation
under; or
(e) result in the creation of any lien, security
interest, charge or other encumbrance upon the assets of the
Purchaser under:
the provisions of the certificate of incorporation or by-laws of
the Purchaser or any material indenture, mortgage, lease, loan
agreement or other agreement or instrument to which the Purchaser
is bound or affected, or any law, statute, rule or regulation or
any judgment, decree, or order to which the Purchaser is subject.
4.4 Purchase for Investment. The Purchaser is purchasing
the Shares for investment and not for resale or distribution.
4.5 Actions and Proceedings. There are no actions, suits,
proceedings or governmental investigations or inquiries pending
or, to the knowledge of the Purchaser, threatened against the
Purchaser or any of its Affiliates or their respective
properties, assets, operations or businesses seeking to prevent
the consummation of the transactions contemplated by this
Agreement or the Purchaser Ancillary Documents.
ARTICLE 5
COVENANTS OF THE SHAREHOLDERS
From and after the date hereof, the Shareholders, jointly
and severally, covenant and agree that:
5.1 Due Diligence Cooperation. The Shareholders shall, and
shall cause the Companies to, make available for inspection by
the Purchaser and its lenders and their respective counsel,
accountants and other representatives, during normal business
hours, corporate records, books of accounts, contracts and all
other documents reasonably requested by the Purchaser relating to
the Companies and their assets. The Shareholders shall cause the
Companies' managerial and supervisory employees, counsel and
auditors to provide, and shall permit the Purchaser, its lenders
and their respective counsel, accountants and other
representatives, reasonable access to the plants and properties
of the Companies, upon reasonable advance notice to the
Shareholders, in order to permit the Purchaser and such
representatives to make such inspection and examination of the
businesses and affairs of the Companies as they shall desire to
make. The Shareholders shall further cause managerial and
supervisory employees, counsel and regular independent certified
public accountants of the Companies to be available upon
reasonable notice to answer questions of the Purchaser, its
lenders or their respective representatives concerning the
businesses and affairs of the Companies. The Purchaser agrees
that access pursuant to this Section 5.1 shall be done in a
reasonable manner, so as to minimize the disruption of the
businesses or operations of the Companies.
5.2 Conduct of Business Prior to the Closing. During the
period commencing on the date hereof and continuing until the
Closing, the Shareholders will cause the Companies to (except as
contemplated by this Agreement or to the extent that the
Purchaser shall otherwise consent in writing):
(a) not take any action that would cause any of the
representations and warranties of the Shareholders contained
in Section 3.11 hereof to be untrue as of the Closing Date;
(b) conduct their respective businesses only in the
usual and ordinary course of business in accordance with
past custom and practice;
(c) maintain their physical facilities and equipment
in operating condition and repair (ordinary wear and tear
excepted), maintain insurance reasonably comparable to that
in effect on the date hereof, maintain inventory, supplies
and spare parts at customary operating levels consistent
with past practices and replace in accordance with past
practice any inoperable, worn out or obsolete assets with
assets of comparable quality;
(d) maintain its books, accounts and records in
accordance with past custom and practice as used in the
preparation of the Financial Statements;
(e) maintain in full force and effect the existence of
all Intellectual Property; and
(f) comply with all legal requirements and contractual
obligations applicable to the operations and business of the
Companies and pay all applicable Taxes.
5.3 Preservation of Business. During the period commencing
on the date hereof and continuing until the Closing, the
Shareholders will use, and will cause the Companies to use, their
best efforts to keep intact the business organization and
reputation of the Companies and to preserve for the Purchaser the
goodwill of suppliers, customers, distributors, sales
representatives, employees and others having business relations
with the Companies. The Shareholders will promptly notify the
Purchaser of any Material Adverse Effect.
5.4 Standstill. During the period commencing on the date
hereof and until the earlier of the Termination Date or the
Closing Date, each of the Shareholders will not, and will cause
the Companies and their directors, officers, employees,
representatives, financial or legal advisors, agents or other
representatives not to make, solicit, assist, or encourage the
initiation of any inquiries or proposals or participate in any
discussions or negotiations with any party or furnish any
confidential information to any party (other than the Purchaser
and its agents and employees) concerning the direct or indirect
acquisition of the Shares or any portion of the assets,
properties or business of the Companies, other than dispositions
of assets in the ordinary course of business.
5.5 Confidential Information. From and after the Closing,
each of the Shareholders agrees that he will not divulge or
disclose to any third party (other than the Purchaser or any
agent or employee of the Purchaser) any information of a
proprietary, secret or confidential nature related to the
Companies.
5.6 Non-Competition.
(a) During the Non-Compete Period, each of the
Shareholders agrees that he will not, and will cause each of
his Affiliates not to, for any reason whatsoever, directly
or indirectly, either individually or as an owner, partner,
officer, director, lender or otherwise, engage in any
Competitive Business anywhere in the United States or
Canada. The ownership by any of the Shareholders of up to
5% of any class of securities of any company which has a
class of securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended, shall not
constitute a breach of this covenant.
(b) During the Non-Compete Period, each Shareholder
shall not: (i) induce or attempt to induce any employee of
any of the Companies to leave the employ of the Companies,
or in any way interfere with the relationship between
Purchaser or the Companies and any such employee thereof;
(ii) hire directly or indirectly any person who was an
employee of the Companies within sixty days prior to the
time such employee was hired by such Shareholder; or (iii)
induce or attempt to induce any customer, supplier, licensee
or other business relation of any of the Companies to cease
doing business with the Companies or in any way interfere
with the relationship between any such customer, supplier,
licensee or business relation of any of the Companies.
(c) Notwithstanding anything in this Section 5.6 to
the contrary, if at any time, in any judicial proceeding,
any of the restrictions stated in this Section 5.6 are found
by a final order of a court of competent jurisdiction to be
unreasonable or otherwise unenforceable under circumstances
then existing, the Shareholders and the Purchaser agree that
the period, scope or geographical area, as the case may be,
shall be reduced to the extent necessary to enable the court
to enforce the restrictions to the extent such provisions
are allowable under law, giving effect to the agreement and
intent of the parties that the restrictions contained herein
shall be effective to the fullest extent permissible. The
Shareholders agree that the restrictions contained in this
Section 5.6 are reasonable in all respects.
5.7 Further Assurances. Subject to the terms and
conditions herein provided, each of the Shareholders agrees to
use his best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement
and the Seller Ancillary Documents as expeditiously as
practicable. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of
this Agreement, the Seller Ancillary Documents or the Purchaser
Ancillary Documents, each of the Shareholders agrees to take all
such necessary action, without expense to the Shareholders,
including, without limitation, the execution and delivery of such
further instruments and documents as may be reasonably requested
by the Purchaser to complete or perfect the transactions
contemplated hereby or thereby.
5.8 Consents and Conditions. The Shareholders will use
their best efforts, at their own cost and expense (but only as to
items which are properly for the account of the Shareholders),
to:
(a) seek to obtain any required shareholder, third-
party and governmental consents to the transactions
contemplated by this Agreement and the Seller Ancillary
Documents; and
(b) cause each of the conditions to the obligations of
the Purchaser and the Shareholders hereunder (as more
particularly set forth in Articles 8 and 9 hereof) to be
satisfied.
5.9 Filings. To the extent not already completed, as soon
as practicable, the Shareholders shall make any and all filings
required under the HSR Act in connection with the transactions
contemplated hereunder. The Shareholders shall furnish to the
Purchaser such necessary information and reasonable assistance as
the Purchaser may reasonably request in connection with its
preparation of necessary filings or submissions to any
governmental agency, including, without limitation, any filings
necessary under the provisions of the HSR Act. The Shareholders
will supply the Purchaser with copies of all correspondence,
filings or communications (or memoranda setting forth the
substance thereof) between the Shareholders and/or the Companies
or their respective representatives, on the one hand, and the
Federal Trade Commission, the Antitrust Division of the U.S.
Department of Justice or any other governmental agency or
authority or members of their respective staffs, on the other
hand, with respect to this Agreement or the transactions
contemplated hereunder.
5.10 Cooperation in Third-Party Litigation. After the
Closing Date, each of the Shareholders agrees, at no expense to
such Shareholder, to provide such cooperation as the Purchaser or
its counsel may reasonably request in connection with:
(a) any proceedings related to any of the Companies
and/or any of their assets which are hereafter pending or
threatened and to which any of the Companies, the Purchaser
and/or any Affiliate of any of them is a party, and
(b) any proceedings for which the Shareholders are
entitled to indemnification from the Purchaser under
Section 10.2. Such cooperation shall include, but not be
limited to, making any of the Shareholders available upon
the reasonable request and at the expense of the Purchaser
or its counsel to consult with and assist the Purchaser and
its counsel in connection with any such proceedings and to
prepare for and testify in any such proceedings, including
depositions, trials and arbitration proceedings.
5.11 Injunctive Relief. The parties acknowledge and agree
that damages in the event of a breach of any of the provisions of
Sections 5.4, 5.5, 5.6 or 5.7 would be difficult, if not
impossible, to ascertain and it is therefore agreed that the
Purchaser, in addition to and without limiting any other remedy
or right it may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction
enjoining any such breach.
5.12 Supplements to Schedules. From time to time prior to
the Closing Date, the Shareholders shall promptly supplement any
Schedules referred to in this Agreement with respect to any
matter arising after the execution of this Agreement, which, if
existing or occurring at or prior to the date of this Agreement,
would have been required to have been set forth by the
Shareholders in a Schedule pursuant to this Agreement.
Notwithstanding the foregoing, for purposes of the Purchaser's
right to terminate this Agreement pursuant to Section 11.1(a),
the Schedules to this Agreement delivered by the Shareholders
shall be deemed to include only such information as is contained
therein on the date of this Agreement and shall be deemed to
exclude any information contained in any supplement thereto.
5.13 Shareholders' Agreement. The Shareholders shall, prior
to the Closing, terminate, and waive all of their respective
rights under, the agreement between them dated December 2, 1996
concerning their ownership of one or more of the Companies.
5.14 Dividends and Distributions. If the Closing Date
occurs after July 31, 1998, the Shareholders will cause the
Companies not to pay any dividends or make any distributions to
the Shareholders from August 1, 1998 through the Closing Date.
5.15 Termination of 401(k) Plans. Not later than three (3)
business days prior to the Closing Date, the Companies, or the
sponsors of the 401(k) Plans, shall adopt resolutions or take
other action as required by the 401(k) Plans to (i) terminate the
401(k) Plans effective as of the day before the Closing Date,
subject to a receipt of a ruling from the District Director of
the IRS that the termination does not adversely affect the tax
qualified status of the 401(k) Plan(s), and (ii) cease
contributions under the 401(k) Plans effective as of the day
before the Closing Date. Such resolutions (or other evidence of
such action required by the 401(k) Plan(s) shall be in a form
satisfactory to the Purchaser. As soon as practicable after the
Closing Date, the Purchaser, or the sponsors of the Purchaser's
401(k) Plan, shall adopt resolutions or take other action as
required by the Purchaser's 401(k) Plan to accept roll-over
contributions from participants of the 401(k) Plans pursuant to
direct roll-over authorizations made in connection with
termination distributions under the 401(k) Plans.
5.16 Termination of Shareholders Compensation Agreements.
The Shareholders shall, and shall cause the Companies to,
terminate, effective not later than the date of the Closing
Balance Sheet, all agreements pursuant to which compensation of
any kind (including, without limitation, consulting fees) is
payable to either or both of the Shareholders.
5.17 Termination of Profit Sharing Plan. Prior to the
Closing Date, the Companies shall adopt resolutions or take other
action as may be required to (i) terminate the profit sharing
plan maintained by the Companies for their management employees
effective as of the day before the Closing Date and with no
future liability thereunder to the Companies or the Purchaser and
(ii) pay all benefits accrued thereunder through the date of
termination to participants.
ARTICLE 6
COVENANTS OF THE PURCHASER
From and after the date hereof, the Purchaser hereby
covenants and agrees that:
6.1 Representations and Warranties. The Purchaser will not
take any action which would cause any of the representations and
warranties made by it in this Agreement to be untrue as of the
Closing Date.
6.2 Consents and Conditions. The Purchaser will use its
best efforts, at its own cost and expense (but only as to items
which are properly for the account of the Purchaser), to:
(a) seek to obtain any required shareholder, third-
party and governmental consents to the transactions
contemplated by this Agreement and the Purchaser Ancillary
Documents; and
(b) cause each of the conditions to the obligations of
the Purchaser and the Shareholders hereunder (as more
particularly set forth in Articles 8 and 9 hereof) to be
satisfied.
6.3 Filings. To the extent not already completed, as soon
as practicable, the Purchaser shall make any and all filings
required under the HSR Act in contemplation of the transactions
contemplated hereunder. The Purchaser shall furnish to the
Shareholders such necessary information and reasonable assistance
as the Shareholders may reasonably request in connection with its
preparation of necessary filings or submissions to any
governmental agency, including, without limitation, any filings
necessary under the provisions of the HSR Act. The Purchaser
will supply the Shareholders with copies of all correspondence,
filings or communications (or memoranda setting forth the
substance thereof) between the Purchaser or its representatives,
on the one hand, and the Federal Trade Commission, the Antitrust
Division of the U.S. Department of Justice or any other
governmental agency or authority or members of their respective
staffs, on the other hand, with respect to this Agreement or the
transactions contemplated hereunder.
6.4 Cooperation in Third-Party Litigation. After the
Closing Date, the Purchaser agrees, at no expense to the
Purchaser, to provide such cooperation as any Shareholder or its
counsel may reasonably request in connection with:
(a) any proceedings relating to any of the Companies
which are hereafter pending or threatened and to which such
Shareholder is a party; and
(b) any proceedings for which the Purchaser is
entitled to indemnification from such Shareholder under
Section 10.1 hereof.
Such cooperation shall include, but not be limited to, making
employees of the Purchaser available upon the reasonable request
and at the expense of such Shareholder or its counsel to consult
with and assist such Shareholder and its counsel regarding any
such proceedings and to prepare for and testify in connection
with any such proceedings, including depositions, trials and
arbitration proceedings.
6.5 Further Assurances. Subject to the terms and conditions
herein provided, the Purchaser agrees to use its best efforts to
take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement and the Purchaser
Ancillary Documents as expeditiously as practicable. In case at
any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, the Seller
Ancillary Documents or the Purchaser Ancillary Documents, the
Purchaser agrees to take all such necessary action, without
expense to the Purchaser, including, without limitation, the
execution and delivery of such further instruments and documents
as may be reasonably requested by the Shareholders to complete or
perfect the transactions contemplated hereby or thereby.
ARTICLE 7
ADDITIONAL COVENANTS
7.1 Expenses; Brokers. Except as otherwise provided
herein, each party to this Agreement shall pay its own expenses
in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereunder,
including the fees of any attorneys, accountants or others
engaged by such party. The Purchaser shall be responsible for
the payment of all applicable fees payable in connection with all
required filings under the HSR Act. Any and all transfer, sale,
use, documentary and similar taxes and recording fees incurred in
connection with the transactions contemplated hereby shall be
paid one-half (1/2) by the Purchaser and one-half (1/2) by the
Shareholders.
7.2 Record Retention. The Purchaser shall cause the
Companies to retain the Books and Records and, unless otherwise
consented to in writing by the Shareholders, the Purchaser shall
not, for a period of at least four (4) years or, in the case of
environmental and tax records, six (6) years after the Closing
Date, destroy or otherwise dispose of the Books and Records.
During the period the Books and Records are required to be
preserved and kept by the Purchaser pursuant to the foregoing
provisions, duly authorized representatives of the Shareholders
shall, upon reasonable prior notice, have access thereto during
normal business hours to examine, inspect and copy the Books and
Records.
7.3 Public Announcements. During the period from the date
of this Agreement to the Closing Date, no party hereto shall make
any press release or public announcement, including announcements
by any party hereto for general reception by or dissemination to
the employees, agents, customers or suppliers of any of the
Companies, with respect to the transactions contemplated hereby
without the prior consent of the other parties; provided,
however, that each party may make any disclosure or announcement
which such party, in the opinion of its counsel, is obligated to
make pursuant to applicable law, in which case if possible such
party shall consult with the other parties prior to making such
disclosure or announcements.
7.4 Tax Matters. The following provisions shall govern the
allocation of responsibility as among the Purchaser, the
Companies and the Shareholders for certain Tax matters following
the Closing Date:
(a) Tax Periods Ending on or Before the Closing Date.
The Purchaser shall prepare or cause to be prepared and file
or cause to be filed all Tax Returns for the Companies for
all periods ending on or prior to the Closing Date which are
filed after the Closing Date. Except as otherwise required
by applicable law, such Tax Returns shall be prepared in a
manner consistent with Tax Returns prepared and filed prior
to the Closing Date. The Purchaser shall permit the
Shareholders to approve each such Tax Return described in
the preceding sentence prior to filing.
(b) Tax Periods Beginning Before and Ending After the
Closing Date. The Purchaser shall prepare or cause to be
prepared and file or cause to be filed any Tax Returns of
the Companies for tax periods which begin before the Closing
Date and end after the Closing Date. Except as otherwise
required by applicable law, such Tax Returns shall be
prepared in a manner not in conflict with Tax Returns
prepared and filed prior to the Closing Date. The Purchaser
shall permit the Shareholders to review and comment on each
such Tax Return described in the preceding sentence prior to
filing.
(c) Tax Periods Beginning on the Closing Date and
Ending on December 31, 1998. The Purchaser shall prepare or
cause to be prepared and file or cause to be filed any
income Tax Returns of the Companies for the tax period which
begins on the Closing Date and ends on December 31, 1998.
Except as otherwise required by applicable law, such income
Tax Returns shall be prepared in a manner not in conflict
with income Tax Returns prepared and filed prior to the
Closing Date. The Purchaser shall permit the Shareholders
to review and comment on each such income Tax Return
described in the preceding sentence prior to filing.
(d) Disallowed Deductions.
(i) If, in connection with any audit or other
investigation by any taxing authority of any Taxes
payable by the Shareholders for any period ending on
or prior to the Closing Date (x) any deduction claimed
by any of the Shareholders with respect to any such
pre-Closing tax period is disallowed by the taxing
authority conducting such audit or investigation and
(y) the taxing authority which is conducting such
audit or investigation agrees that the Purchaser or
any of the Companies will be permitted to use such
deduction for purposes of calculating the Taxes due
and payable by the Purchaser or any of the Companies
with respect to any period ending after the Closing
Date (any such deduction being hereinafter referred to
as a Shareholders' Disallowed Deduction), then the
Purchaser agrees to pay to the Shareholders an amount
equal to the amount of the Shareholders' Disallowed
Deduction multiplied by the applicable tax rate of the
Purchaser or the Companies, as the case may be, in the
jurisdiction in which such Tax audit or investigation
is being conducted and in the year the Shareholders'
Disallowed Deduction may be used by the Purchaser or
the Companies, no later than thirty (30) days
following the date on which the applicable taxing
authority issues a written statement which indicates
that the Shareholders' Disallowed Deduction may not be
used by the Shareholders in connection with their
calculation of the Taxes payable for periods ending on
or before the Closing Date but may be used for
purposes of calculating the Taxes payable by the
Purchaser or the Companies for any period ending after
the Closing Date. The Shareholders will provide the
Purchaser with such information as may be reasonably
requested by the Purchaser in order to enable the
Purchaser to use the Sellers' Disallowed Deduction and
file a claim for a tax refund for any tax period
ending after the Closing Date in which the
Shareholders' Disallowed Deduction may be used.
(ii) If in connection with any audit or other
investigation by any taxing authority of any Taxes
payable by the Purchaser or any of the Companies for
any period following the Closing Date (x) any
deduction claimed by the Purchaser or any of the
Companies with respect to any such post-Closing tax
period is disallowed by the taxing authority conducting
such audit or investigation and (y) the taxing
authority which is conducting such audit or
investigation agrees that the Shareholders will be
permitted to use such deduction for purposes of
calculating the Taxes due and payable by them with
respect to any period ending on or prior to the Closing
Date (any such deduction being hereinafter referred to
as a Purchaser's Disallowed Deduction), then the
Shareholders agree to pay to the Purchaser an amount
equal to the amount of the Shareholder Tax Benefit
(as defined below) to the Shareholders no later than
thirty (30) days following the date on which the
applicable taxing authority issues a written statement
which indicates that the Purchaser's Disallowed
Deduction may not be used by the Purchaser or the
Companies in connection with their calculation of the
Taxes payable for periods after the Closing Date but
may be used for purposes of calculating the Taxes
payable by the Shareholders for any period ending on or
prior to the Closing Date. The Purchaser will
provide the Shareholders with such information as may
be reasonably requested by the Shareholders in order to
enable the Shareholders to use the Purchaser's
Disallowed Deduction and file a claim for a tax refund
for any tax period ending on or prior to the Closing
Date in which the Purchaser's Disallowed Deduction may
be used. As used herein, Shareholder Tax Benefit
shall mean, for each Shareholder, the amount of the
Purchaser's Disallowed Deduction allocable to such
Shareholder multiplied by the tax rate of such
Shareholder in the jurisdiction in which the above-
described Tax audit or investigation is being conducted
and in the year the Purchaser's Disallowed Deduction
may be used by such Shareholder.
(e) Tax Refunds. The Purchaser acknowledges and agrees
that any and all refunds of any Taxes paid by the
Shareholders or the Companies, respectively, in connection
with all periods ending on or before the Closing Date shall
be the property of the Shareholders and such refunds,
including interest thereon paid by any taxing authority, net
of any additional Taxes imposed on the Purchaser or the
Companies for any period occurring after the Closing Date
and which are attributable to the receipt of such refunds,
shall be paid by the Purchaser to the Shareholders promptly
after such refund is either received or credited against
such liability of the Purchaser or any of the Companies for
Taxes. The Purchaser agrees that neither the Purchaser nor
any of the Companies has any right to carry back any loss
incurred by any of the Companies after the Closing Date to
any period ending on or before the Closing Date.
(f) Section 338(h)(10) Elections. The Shareholders and
the Purchaser shall jointly make and timely file mutually
agreeable elections under Section 338(h)(10) of the Code
with respect to the purchases hereunder of the Shares. For
tax purposes, the adjusted grossed-up basis and the modified
adjusted deemed sales price, as defined in applicable
regulations under Section 338 of the Code, for each of
Science Kit, ▇▇▇▇'▇ and Central shall be allocated among
their assets as the parties shall mutually agree within 120
days of the Closing Date. The only assets that will be
written up above net book value are (i) inventory to its
FIFO book value, (ii) land and buildings within the range of
their aggregate net book value to aggregate appraised value
and (iii) goodwill. The Shareholders shall pay all federal,
New York and California Taxes resulting from the elections
made under Section 338 of the Code for periods ending on or
before the Closing Date.
(g) Cooperation on Tax Matters.
(i) The Purchaser, the Companies and the
Shareholders shall cooperate fully, as and to the
extent reasonably requested by the other party, in
connection with the filing of Tax Returns pursuant to
this Section and any audit, litigation or other
proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's
request) the provision of records and information which
are reasonably relevant to any such audit, litigation
or other proceeding and making employees available on a
mutually convenient basis to provide additional
information and explanation of any material provided
hereunder. The Companies and the Shareholders agree:
(A) to retain all books and records with
respect to Tax matters and pertinent to the
Companies relating to any taxable period
beginning before the Closing Date until the
expiration of the statute of limitations (and, to
the extent notified by the Purchaser or the
Shareholders, any extensions thereof) of the
respective taxable periods and to abide by all
record retention agreements entered into with any
taxing authority; and
(B) to give the other party reasonable
written notice prior to transferring, destroying
or discarding any such books and records and, if
the other party so request, the Companies or
Shareholders, as the case may be, shall allow the
other party to take possession of such books and
records.
(ii) The Purchaser and the Shareholders further
agree, upon request, to use their best efforts to
obtain any certificate or other document from any
government authority as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed
(including, but not limited to, with respect to the
transactions contemplated hereunder).
ARTICLE 8
CONDITIONS PRECEDENT TO THE OBLIGATION OF THE PURCHASER
Each and every obligation of the Purchaser under this
Agreement to be performed on or before the Closing Date shall be
subject to the satisfaction or fulfillment on or before the
Closing Date of each of the following conditions, any one or more
of which may be waived by the Purchaser:
8.1 Representations and Covenants.
(a) The representations and warranties of the
Shareholders contained in this Agreement, in the Schedules
hereto, in the Seller Ancillary Documents and in all
certificates and other documents delivered by or on behalf
of the Shareholders, shall be true and complete as of the
date when made and on and as of the Closing Date with the
same force and effect as though made on and as of the
Closing Date, except for such changes as are contemplated
herein.
(b) The Shareholders and the Companies shall have
performed and complied in all material respects with all
covenants, agreements and obligations required by this
Agreement and the Seller Ancillary Documents to be performed
or complied with by the Shareholders or the Companies, as
the case may be, on or prior to the Closing Date.
(c) The Shareholders shall have delivered to the
Purchaser a certificate, dated the Closing Date to the
effect of the matters in clauses (a) and (b) above.
8.2 Consents, Filings; Etc. All consents, approvals,
authorizations, filings and registrations required to be made
under applicable law in connection with the transactions
contemplated by this Agreement and the Seller Ancillary Documents
shall have been made and shall be in full force and effect, the
waiting period under the HSR Act shall have expired and no
conditions to the transactions contemplated by this Agreement
shall have been imposed or proposed by any federal, state, local
or foreign governmental agency.
8.3 Third-Party Consents. All consents and approvals from
parties to contracts or other agreements with the Companies that
are required in connection with the consummation of the
transactions contemplated by this Agreement and the Seller
Ancillary Documents or the performance by the Shareholders of
their obligations under this Agreement or the Seller Ancillary
Documents shall have been obtained, which consents and approvals
shall not have resulted in a material adverse effect on the terms
or conditions of any of such contracts and agreements as the same
shall be in effect on or after the Closing.
8.4 Certificates. The Shareholders shall have furnished
the Purchaser with the following certificates:
(a) Good Standing Certificates. A certificate,
executed by the applicable Secretary of State, as to
(i) the good standing or subsistence of each of
the Companies in its respective jurisdiction of
incorporation and
(ii) the authority or qualification of each of
the Companies to conduct business as a foreign
corporation in each jurisdiction where it is so
authorized or qualified.
(b) Secretary's Certificate. A certificate from the
Secretary of each of the Companies attaching copies of its
articles of incorporation, by-laws and resolutions
authorizing the execution, delivery and performance of this
Agreement and the taking of all action required hereunder or
in connection herewith; and
(c) Incumbency Certificate. A certificate of the
Secretary of each of the Companies certifying the incumbency
of its officers and their genuine signatures, with a cross
certification of such Secretary's incumbency and genuine
signature.
8.5 Litigation. No action, suit or proceeding shall have
been instituted before any court or governmental or regulatory
body, or instituted or threatened by any governmental or
regulatory body seeking to restrain, modify, prevent or otherwise
which may adversely affect the consummation of the transactions
contemplated by this Agreement, the Seller Ancillary Documents or
the Purchaser Ancillary Documents, or to seek damages or a
discovery order in connection with such transactions, or that has
or may have, in the reasonable opinion of the Purchaser, a
Material Adverse Effect.
8.6 Delivery of Stock Certificates. As contemplated in
Section 2.4, the Shareholders shall have delivered to the
Purchaser stock certificates representing all of the Shares duly
endorsed in blank or accompanied by stock powers duly executed in
blank, in proper form for transfer of the Shares to the
Purchaser.
8.7 No Material Adverse Change. No event or condition
shall exist or have occurred since the date of this Agreement
that, individually or in the aggregate, has had or resulted in,
or would reasonably be expected to have or result in, a Material
Adverse Effect.
8.8 Opinion of Counsel. The Purchaser shall have received
the opinion of Lippes, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, counsel
to the Companies and the Shareholders, dated the date of the
Closing, addressed to the Purchaser, in form and substance
reasonably satisfactory to the Purchaser.
ARTICLE 9
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SHAREHOLDERS
Each and every obligation of the Shareholders under this
Agreement to be performed on or before the Closing Date shall be
subject to the satisfaction or fulfillment on or before the
Closing Date of each of the following conditions, any one or more
of which may be waived by the Shareholders:
9.1 Representations and Covenants.
(a) The representations and warranties of the
Purchaser contained in this Agreement, in the Schedules
hereto and in all certificates and other documents delivered
by or on behalf of the Purchaser, shall be true and complete
as of the date when made and on and as of the Closing Date
with the same force and effect as though made on and as of
the Closing Date, except for such changes as are
contemplated herein.
(b) The Purchaser shall have performed and complied
in all material respects with all covenants, agreements and
obligations required by this Agreement and the Purchaser
Ancillary Documents to be performed or complied with by the
Purchaser on or prior to the Closing Date.
(c) The Purchaser shall have delivered to the
Shareholders a certificate, dated the Closing Date to the
effect of the matters in clauses (a) and (b) above.
9.2 Consents, Filings; Etc. All consents, approvals,
authorizations, filings and registrations required to be made
under applicable law in connection with the transactions
contemplated by this Agreement and the Purchaser Ancillary
Documents shall have been made and shall be in full force and
effect, the waiting period under the HSR Act shall have expired
and no conditions to the transactions contemplated by this
Agreement shall have been imposed or proposed by any federal,
state, local or foreign governmental agency.
9.3 Certificates. The Purchaser shall have furnished the
Shareholders with the following certificates:
(a) Good Standing Certificate. A certificates,
executed by the Secretary of State as to the good standing
of the Purchaser in its jurisdiction of incorporation;
(b) Secretary's Certificate. A certificate from the
Secretary of the Purchaser attaching copies of its
certificate of incorporation, by-laws and resolutions
authorizing the execution, delivery and performance of this
Agreement and the taking of all action required hereunder or
in connection herewith; and
(c) Incumbency Certificate. A certificate of the
Secretary of the Purchaser certifying the incumbency of its
officers and their genuine signatures, with a cross
certification of such Secretary's incumbency and genuine
signature.
9.4 Litigation. No action, suit or proceeding shall have
been instituted before any court or governmental or regulatory
body, or instituted or threatened by any governmental or
regulatory body seeking to restrain, modify, prevent or otherwise
which may adversely affect the consummation of the transactions
contemplated by this Agreement, the Seller Ancillary Documents or
the Purchaser Ancillary Documents, or to seek damages or a
discovery order in connection with such transactions.
9.5 No Material Adverse Change. No event or condition
shall exist or have occurred since the date of this Agreement
that, individually or in the aggregate, has had or resulted in,
or would reasonably be expected to have or result in, a Material
Adverse Effect.
9.6 Opinion of Counsel. The Shareholders shall have
received the opinion of Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, counsel to
the Purchaser, dated the date of the Closing, addressed to the
Shareholders, in form and substance reasonably satisfactory to
the Shareholders.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1 Shareholders' Indemnity.
(a) Indemnification. After the Closing Date, each of
the Shareholders, jointly and severally, covenants and
agrees to indemnify and hold harmless the Purchaser from and
against any and all Loss(es) which arise out of, relates to
or results from:
(i) the breach by the Companies and/or any of the
Shareholders of any representation or warranty
contained in this Agreement;
(ii) any breach by any of the Shareholders of any
covenant or obligation contained in this Agreement; and
(iii) any and all claims incident to the
enforcement of this Section 10.1.
Except as expressly provided herein, no Shareholder shall
have any rights, hereunder or otherwise, to indemnification or
contribution from any or all of the Companies with respect to any
matter, including, without limitation, any breach of any
representation or warranty or covenant of any or all of the
Companies made in or pursuant to this Agreement or any Seller
Ancillary Documents, and each Shareholder hereby irrevocably
releases each and all of the Companies from any liability for any
such claim.
The Shareholders shall reimburse the Purchaser for any
Loss(es) to which this Section 10.1 relates only if a Notice of
Claim is given within the period of survival of the applicable
representation, warranty or covenant as described in Section 10.4
below.
(b) General Indemnification Threshold. The Purchaser
shall not be entitled to indemnification hereunder until
such time as a single Loss or an aggregate of two (2) or
more Losses exceeds One Million Dollars ($1,000,000), at
which time the Purchaser shall be entitled to
indemnification for all Losses sustained, incurred, paid or
required to be paid by the Purchaser in excess of One
Million Dollars ($1,000,000); except that this threshold on
the indemnification obligation of the Shareholders shall not
apply to (i) any breach of the representations and
warranties, covenants, agreements and/or obligations set
forth in Sections 3.5 and 3.12 or (ii) any adjustments to
the Purchase Price contemplated by Section 2.5, nor shall
the amounts or Losses described in clauses (i) or (ii)
hereinabove be counted against the One Million Dollar
($1,000,000) threshold provided for in this Section.
10.2 Purchaser's Indemnity.
(a) After the Closing Date, the Purchaser covenants
and agrees to indemnify and hold harmless the Shareholders
from and against any Loss(es) sustained, incurred, paid or
required to be paid by the Shareholders which arises out of,
relates to or results from:
(i) the breach by the Purchaser of any
representation or warranty contained in this Agreement;
(ii) any breach by the Purchaser of any covenant
or obligation contained in this Agreement;
(iii) any claims made against the Companies or
the Shareholders relating to the operation or ownership
of the Companies after the Closing Date; and
(iv) any and all claims incident to the
enforcement of this Section 10.2.
The Purchaser shall reimburse the Shareholders for any
Loss(es) to which this Section 10.2 relates only if a Notice of
Claim is given within the period of survival of the applicable
representation, warranty or covenant as described in Section 10.4
below.
(b) General Indemnification Threshold. The
Shareholders shall not be entitled to indemnification
hereunder until such time as a single Loss or an aggregate
of two (2) or more Losses exceeds One Million Dollars
($1,000,000), at which time the Shareholders shall be
entitled to indemnification for all Losses sustained,
incurred, paid or required to be paid by the Shareholders in
excess of One Million Dollars ($1,000,000).
10.3 Indemnification Procedure.
(a) Notice. An Indemnified Party shall use its best
efforts to give prompt written notice (a Notice of Claim) to
the Indemnifying Party of any claim or event known to it
which does or may give rise to a claim by the Indemnified
Party against the Indemnifying Party based on this
Agreement, stating the nature and basis of said claim or
event and the amount thereof, to the extent known.
(b) Defense of Claims or Actions.
(i) In the event any claim, suit or proceeding is
made or brought by a third party, the Indemnified Party
shall deliver a Notice of Claim and a copy of the
claim, process and all legal pleadings with respect
thereto to the Indemnifying Party within ten (l0) days
of being served with such claim, process or legal
pleading. Such deliveries shall not be a condition
precedent to any liability of the Indemnifying Party
under this Agreement.
(ii) The Indemnifying Party shall have the right
to assume the defense of any such claim or action. If
the Indemnifying Party wishes to assume the defense of
such claim or action, such assumption shall be
evidenced by delivery of written notice by the
Indemnifying Party to the Indemnified Party delivered
within five (5) days of the Indemnifying Party's
receipt of the Notice of Claim. After delivery of such
notice, the Indemnifying Party shall engage independent
legal counsel of reputable standing selected by it to
assume the defense and may contest, pay, settle or
compromise any such claim or action on such terms and
conditions as the Indemnifying Party may determine. If
the Indemnifying Party assumes the defense of any such
claim, action, suit or proceeding, the Indemnified
Party shall have the right to employ their own counsel,
at their own expense; provided, however, that if the
Indemnified Party shall have reasonably concluded and
specifically notified the Indemnifying Party either
that there may be specific defenses available to it
which are different from or additional to those
available to the Indemnifying Party or that such claim,
action, suit or proceeding involves or could result in
a Material Adverse Effect with respect to matters
beyond the scope of the indemnity provided hereunder,
then the counsel representing them, to the extent made
necessary by such defenses, shall have the right to
direct such defenses of such claim, action, suit or
proceeding in its behalf.
(iii) In the event that the Indemnifying Party
shall not agree in writing to assume the defense of
such claim or action, the Indemnified Party may engage
independent legal counsel of reputable standing
selected by them to assume the defense and may contest,
pay, settle or compromise any such claim or action on
such terms and conditions as the Indemnified Party may
determine; provided, however, that the Indemnified
Party shall not settle or compromise any claim or
action without the prior consent of the Indemnifying
Party if the Indemnifying Party acknowledges in writing
its liability for any Loss(es) incurred or required to
be paid in respect of such claim or action.
(iv) The Indemnified Party and the Indemnifying
Party shall cooperate in good faith in connection with
such defense and all such parties shall have the right
to employ their own counsel, but, except as provided
above, the fees and expenses of their counsel shall be
at their own expense. The Indemnified Party or the
Indemnifying Party, as the case may be, shall be kept
fully informed of such claim, action, suit or
proceeding at all stages thereof whether or not they
are represented by their own counsel. The Indemnifying
Party shall be subrogated to any and all defenses,
claims and set-offs which the Indemnified Party
asserted or could have asserted against the third party
making a claim. The Indemnified Party shall execute
and deliver to the Indemnifying Party such documents as
may be reasonably necessary to establish by way of
subrogation the ability and right of the Indemnifying
Party to assert such defenses, claims and set-offs.
10.4 Survival. The representations and warranties made by
the parties in this Agreement, the Seller Ancillary Documents,
the Purchaser Ancillary Documents and in any other certificates,
agreements and documents delivered in connection herewith shall
survive the Closing under this Agreement for a period of twelve
(12) months, except as follows:
(a) the representations and warranties made by the
Shareholders in Section 3.12 shall survive the Closing for
the applicable statutory period of limitations with respect
to any liabilities covered thereby;
(b) the representations and warranties made by the
Shareholders in Sections 3.2, 3.4 and 3.5 and by the
Purchaser in Sections 4.2 and 4.3 shall survive the Closing
without limitation; and
(c) the representations and warranties made by the
Shareholders in Section 3.31 shall survive the Closing for a
period of five (5) years.
All covenants of the parties that are to be performed
after Closing shall continue in effect and expire in accordance
with their respective terms.
10.5 Maximum Indemnification. Notwithstanding the
foregoing, no claim for indemnification of Loss(es) (whether in
an action for indemnification or otherwise) may be made hereunder
by the Purchaser against the Shareholders, or the Shareholders
against the Purchaser, as the case may be, to the extent the
aggregate Loss(es) paid or asserted (and, if asserted, paid at
any time thereafter) during said period by the Shareholders to
the Purchaser, or the Purchaser to the Shareholders, as the case
may be, exceed the sum of Ten Million and 00/100 Dollars
($10,000,000).
ARTICLE 11
MISCELLANEOUS
11.1 Termination.
(a) Subject to the provisions of Section 11.1(b), this
Agreement, by written notice given at any time at or prior
to the Closing in the manner provided in Section 11.2, may
be terminated or abandoned:
(i) by mutual written consent of the Shareholders
and the Purchaser;
(ii) by any of the Shareholders, not then in
default under this Agreement, if any of the conditions
provided for in Article 9 shall not have been satisfied
on or before August 31, 1998, or such later date as may
be agreed upon by all of the parties hereto;
(iii) by the Purchaser, not then in default under
this Agreement, if any of the conditions provided for
in Article 8 shall not have been satisfied on or before
August 31, 1998, or such later date as may be agreed
upon by all of the parties hereto; or
(iv) by either the Shareholders or the Purchaser
if there shall have been entered a final, non-
appealable restraining order or injunction restraining
or prohibiting the sale of the Shares.
(b) In the event this Agreement is terminated
pursuant to Section 11.1(a), all further obligations of the
parties hereunder shall terminate on and as of the
Termination Date; provided, however, that if this Agreement
is so terminated by one party because one or more conditions
to such party's obligations hereunder is not satisfied as a
result of the other party's:
(i) willful failure to comply with its
obligations under any provision of this Agreement; or
(ii) willful breach of a representation or
warranty,
the terminating party's right to pursue all legal remedies
for breach of contract and damages shall survive such
termination and the Termination Date unimpaired.
11.2 Notices. All notices, requests, demands and other
communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been
duly given if (a) delivered personally, (b) mailed, certified or
registered mail (return receipt requested) with postage prepaid
or (c) sent by next day or overnight mail or nationally
recognized courier, addressed as follows:
If to the Purchaser, a single notice addressed to:
VWR SCIENTIFIC PRODUCTS CORPORATION
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ 19380
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
With a copy to:
Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to any Shareholder, notices addressed to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
Lippes, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
700 Guaranty Building
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Such addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section.
All such notices, requests, demands and other communications
shall be deemed to have been received (w) if delivered
personally, on the day delivered, (x) if mailed registered or
certified mail (return receipt requested), on the next business
day following the day on which the written receipt of such mail
is signed and (y) if sent by next day or overnight mail or
courier, on the day delivered.
11.3 Headings. The headings contained in this Agreement are
intended solely for convenience and shall not affect the rights
of the parties to this Agreement.
11.4 Entire Agreement. This Agreement, including the
Schedules, Exhibits and attachments hereto and documents and
certificates delivered pursuant hereto, is intended by the
parties to and does constitute the entire agreement of the
parties with respect to the transactions contemplated by this
Agreement. This Agreement supersedes any and all prior
understandings, written or oral, between the parties, and this
Agreement may not be amended, modified or waived orally, but only
by an instrument in writing signed by the party against whom
enforcement of the amendment, modification or waiver is sought.
11.5 Severability. If any provision of this Agreement is
held to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, in order to achieve the intent
of the parties to this Agreement to the fullest extent possible.
In any event, all other provisions of this Agreement shall be
deemed valid and enforceable to the fullest extent possible.
11.6 Waiver. Waiver of any term or condition of this
Agreement by any party hereto shall only be effective if in
writing and shall not be construed as a waiver of any subsequent
breach or failure of the same term or condition or any other term
or condition of this Agreement.
11.7 Binding Effect; Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned
(whether voluntarily, involuntarily, by operation of law or
otherwise) by any of the parties hereto without the prior written
consent of the other parties; provided, however, that the
Purchaser may assign this Agreement, in whole or in any part, and
from time to time, to a wholly owned, direct or indirect,
subsidiary of the Purchaser, but any such assignment shall not
relieve the Purchaser of its obligations hereunder.
11.8 No Third-Party Beneficiaries. Nothing in this
Agreement shall confer any rights upon any person or entity that
is not a party to this Agreement except as expressly provided
hereunder.
11.9 Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this
Agreement.
11.10 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New
York, applicable to agreements made and to be performed entirely
within such State, or United States federal law (to the extent
applicable) without regard to the conflict of laws principles
thereof.
11.11 Certain Interpretive Matters.
(a) Unless the context otherwise requires, (i) all
references to Sections, Articles, Schedules or Exhibits are
references to Sections, Articles, Exhibits or Schedules of or to
this Agreement, (ii) each term defined in this Agreement has the
meaning assigned to it, (iii) each accounting term not otherwise
defined in this Agreement has the meaning assigned to it in
accordance with generally accepted accounting principles, (iv) or
is disjunctive but not necessarily exclusive and (v) words in the
singular include the plural and vice versa.
(b) No provision of this Agreement shall be
interpreted in favor of, or against, any of the parties hereto by
reason of the extent to which any such party or its counsel
participated in the drafting thereof or by reason of the extent
to which any such provision is inconsistent with any prior draft
hereof or thereof.
(c) Matters disclosed in any Schedule or Exhibit
shall be deemed to have been disclosed for all purposes of this
Agreement, whether or not disclosed in any other Schedule or
Exhibit where such disclosure would also be appropriate.
(d) Where any representation of the Shareholders in
this Agreement is made to the Shareholders' Knowledge, the
occurrence of any event, condition liability or obligation that
is the subject of such representation shall not constitute a
breach of Section 3.9 of this Agreement unless such event
condition, liability or obligation constitutes a breach of the
relevant representation made subject to the Shareholders'
Knowledge.
11.12 Independence of Covenants and Representations and
Warranties. All covenants hereunder shall be given independent
effect so that if a certain action or condition constitutes a
default under a certain covenant, the fact that such action or
condition is permitted by another covenant shall not affect the
occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all
representations and warranties hereunder shall be given
independent effect so that if a particular representation or
warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar
subject matter is correct or is not breached will not affect the
incorrectness or a breach of such initial representation or
warranty.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
VWR SCIENTIFIC PRODUCTS CORPORATION
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
SCIENCE KIT, INC.
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, President
BOREAL LABORATORIES, LTD.
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Chairman
▇▇▇▇'▇ NATURAL SCIENTIFIC
ESTABLISHMENT, INC.
By:
▇▇▇▇ ▇. ▇▇▇▇▇, President
CENTRAL SCIENTIFIC COMPANY
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Chairman
ARBOR SCIENTIFIC CO. LIMITED
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Chairman
▇▇▇▇'▇ NATURAL SCIENCE LTD.
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Chairman
CENTRAL SCIENTIFIC COMPANY
OF CANADA LIMITED
By:
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Chairman