PURCHASE AGREEMENT
by and among
Thermo BioAnalysis Corporation,
Thermo BioAnalysis Limited,
Thermo BioAnalysis (Guernsey) Limited,
Thermo BioAnalysis SA,
DLW Inc. and
BioAnalysis International Sales Inc.
(as Buyers),
Thermo Instrument Systems Inc.
(as Buyers' Parent),
and
Dynatech Laboratories, Inc.,
Dynatech Hong Kong Ltd.,
Dynatech Corporation Limited,
Laboratoires Dynatech, S.A.R.L.,
Dynatech Medical Products Limited and
Dynatech Corporation
(as Sellers)
February 5, 1996
PAGE
PURCHASE AGREEMENT
INDEX
SECTION 1. PURCHASE AND SALE OF ASSETS 2
1.1 Sale of Assets 2
1.2 Excluded Assets 3
1.3 Assumption of Liabilities 3
1.4 Purchase Price and Payment 6
1.5 The Closing 7
1.6 Delivery of Agreements of Assumption of Liabilities 7
1.7 Transfer of Subject Assets; Closing Deliveries 8
1.8 Delivery of Records and Contracts; Further Assurances 8
1.9 Allocation of Purchase Price 9
1.10 Sales and Transfer Taxes 9
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS 10
2.1 Organization and Qualification of the Sellers, Dynatech sro
and Dynatech GmbH 10
2.2 Subsidiaries; Dynatech sro and Dynatech GmbH 10
2.3 Ownership of Capital Stock of the Sellers, Dynatech sro and
Dynatech GmbH 11
2.4 Authority of the Sellers 11
2.5 Finder's Fee 12
2.6 Status of Tangible Property 12
2.7 Financial Statements 13
2.8 Taxes 14
2.9 Accounts Receivable 14
2.10 Absence of Certain Changes 14
2.11 Consents and Approvals 15
2.12 Intellectual Property 15
2.13 Litigation 16
2.14 Insurance 16
2.15 Environmental Matters 16
2.16 Employee Benefit Plans 17
2.17 Permits 18
2.18 Customers and Distributors; Relationships 18
2.19 Transactions with Affiliates 18
2.20 Inventories 18
2.21 Contracts 19
(i)
PAGE
2.22 Compliance with Laws 19
2.23 Employees; Labor Matters 19
2.24 Backlog 20
2.25 Product Quality; Warranties; Recalls 20
2.26 Disclaimer 21
2.27 Sufficient Funds 21
2.28 Definition of Knowledge 21
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BUYERS 21
3.1 Organization 21
3.2 Ownership of the Buyers 21
3.3 Authority of the Buyer and Buyers' Parent 21
3.4 Consents and Approvals 22
3.5 Litigation 22
3.6 Finder's Fee 22
3.7 No Knowledge of Breach 23
3.8 Sufficient Funds 23
SECTION 4. CONDITIONS TO OBLIGATIONS 23
4.1 Conditions to Obligations of the Buyers 23
4.2 Conditions to Obligations of the Sellers 24
SECTION 5. CERTAIN COVENANTS 25
5.1 Proprietary Information; Confidentiality 25
5.2 No Solicitation or Hiring of Former Employees 26
5.3 Noncompetition Agreement 26
5.4 Provision of Financial Information 27
5.5 Product Warranty Matters 27
5.6 Transitional Use of Dynatech Names 28
5.7 Subleases; Assignments 30
5.8 Certain Bonuses Payable by Dynatech 30
SECTION 6. MODIFICATION, WAIVER AND TERMINATION 31
6.1 Modification and Amendments 31
6.2 Waivers 31
6.3 Termination 31
6.4 Effect of Termination 31
(ii)
PAGE
SECTION 7. EMPLOYEES 32
7.1 Offers of Employment of Employees; Benefits 32
7.2 Responsibility for Obligations to Non-Transferred Employees;
Constructive Termination 32
7.3 No Third Party Rights 33
7.4 Certain Transitional Benefit Matters 33
7.5 Effect of Transfer Regulations 34
7.6 Hong Kong Employees 34
SECTION 8. [INTENTIONALLY OMITTED] --
SECTION 9. INDEMNIFICATION 35
9.1 Indemnification by the Sellers 35
9.2 Limitations on Indemnification by the Sellers 36
9.3 Indemnification by the Buyers 37
9.4 Limitations on Indemnification by the Buyers 38
9.5 Notice; Defense of Claims 38
9.6 Payment of Claims; Arbitration 39
9.7 Definition of Damages 39
9.8 Limitation on Remedies 40
SECTION 10. MISCELLANEOUS 40
10.1 Bulk Sales Law 40
10.2 Fees and Expenses 40
10.3 Governing Law 40
10.4 Notices 40
10.5 Entire Agreement 41
10.6 Assignability; Binding Effect 42
10.7 Captions and Gender 42
10.8 Execution in Counterparts 42
10.9 Amendments 42
10.10 Press Releases 42
10.11 Consent to Jurisdiction 43
(iii)
DISCLOSURE MEMORANDUM
EXHIBITS
1.1 Identity of Buyers and Sellers
1.6 Form of Agreement of Assumption of Liabilities and Excluded
Liabilities
1.9 Allocation of Purchase Price
3.1 Organization of the Buyers and Buyers' Parent
5.4 Financial Information to be Provided to the Sellers
7.1 List of Employees
(iv)
PURCHASE AGREEMENT
AGREEMENT entered into as of February 5, 1996 by and among (i) Thermo
BioAnalysis Corporation, a Delaware corporation ("BioAnalysis"); Thermo
BioAnalysis Limited, a company organized under the laws of England; Thermo
BioAnalysis (Guernsey) Limited, a company organized under the laws of Guernsey;
Thermo BioAnalysis SA, a French societe anonyme; DLW Inc., a Virginia
corporation; BioAnalysis International Sales Inc., a Delaware corporation (each
such entity, a "Buyer" and such entities, collectively, the "Buyers"); and
Thermo Instrument Systems, Inc., a Delaware corporation of which the Buyers are
direct or indirect subsidiaries ("Buyers' Parent"); on the one hand, and (ii)
Dynatech Laboratories, Inc., a Delaware corporation; Dynatech Hong Kong Ltd., a
private company organized under the laws of Hong Kong; Dynatech Corporation
Limited, a company organized under the laws of England; Laboratoires Dynatech,
S.A.R.L., a French limited liability company; and Dynatech Medical Products
Limited, a company organized under the laws of Guernsey (each such entity,
together with Dynatech Laboratories spol. s.r.o, a limited liability company
organized under the laws of the Czech Republic ("Dynatech sro"), and Dynatech
Deutschland GmbH, a limited liability company organized under the laws of the
Federal Republic of Germany ("Dynatech GmbH"), a "Dynatech Entity" and all such
entities, together with Dynatech sro and Dynatech GmbH, collectively, the
"Dynatech Entities"); and Dynatech Corporation, a Massachusetts corporation
("Dynatech"), of which the Dynatech Entities are direct or indirect wholly-owned
subsidiaries. The Dynatech Entities (other than Dynatech sro and Dynatech GmbH)
are sometimes hereinafter referred to collectively as the "Sellers" or
individually as a "Seller."
W I T N E S S E T H
WHEREAS, the Dynatech Entities are engaged in the business of
designing, manufacturing and marketing IN VITRO diagnostic instrumentation and
disposables for the worldwide immunodiagnostic market (the "Business").
WHEREAS, subject to the terms and conditions hereof, each Seller
desires to sell the portion of the Business conducted by such Seller; each
Seller other than Dynatech and Dynatech Corporation Limited desires to sell
substantially all of its properties and assets; Dynatech Corporation Limited
desires to sell certain of its assets and properties used by Dynatech
Corporation Limited in the conduct of the portion of its business conducted by
its Dynatech Laboratories division (the "UK Business"); and Dynatech desires to
sell all of the ownership interests in Dynatech sro and all of the share capital
of Dynatech GmbH; and
WHEREAS, subject to the terms and conditions hereof, the Buyers desire
to purchase said properties and assets of the Sellers for the consideration
specified herein and the assumption by the Buyers of certain liabilities and
obligations of the Dynatech Entities;
NOW, THEREFORE, in order to consummate said purchase and sale and in
consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
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SECTION 1. PURCHASE AND SALE OF ASSETS.
1.1 SALE OF ASSETS. Subject to the provisions of this Agreement, each
Seller agrees to sell and each Buyer as identified on EXHIBIT 1.1 hereto agrees
to purchase, at the Closing (as defined in Section 1.5 hereof), all of the
properties, assets and rights of such Seller of every kind and description,
tangible and intangible, real, personal or mixed, and wherever located, owned by
such Seller as of the Closing Date (as defined in Section 1.6) which are used
primarily by such Seller in the conduct of the portion of the Business, or in
the case of Dynatech Corporation Ltd., the UK Business, conducted by such Seller
other than the Excluded Assets (as defined in Section 1.2 below), including,
without limitation:
(a) All of such Seller's machinery, equipment, tools,
furniture, fixtures, motor vehicles, supplies, catalogs, product literature and
other tangible assets listed in SECTION 1.1(a) of the Disclosure Memorandum
attached hereto (the "Disclosure Memorandum");
(b) All of such Seller's inventories of raw materials, work in
process, finished products and resale merchandise listed in SECTION 1.1(b) of
the Disclosure Memorandum;
(c) All of the contracts, agreements and personal property
leases to which such Seller is a party, including, without limitation, the
contracts, agreements and personal property leases listed in SECTION 1.1(c) of
the Disclosure Memorandum, excluding in the case of Dynatech Corporation Limited
contracts and agreements which are not related to the UK Business (the
"Contracts");
(d) All of such Seller's patents, trademarks, trade names
(except as set forth in Section 1.2(d) hereof), service marks, copyrights, trade
secrets, technology, inventions, proprietary information, know-how, licenses,
data, designs, drawings, specifications and other documents related thereto,
including without limitation those items listed in SECTION 1.1(d) of the
Disclosure Memorandum;
(e) All of such Seller's accounts, accounts receivable and
notes receivable, excluding in the case of Dynatech Corporation Limited accounts
and notes receivable booked with respect to the portion of Dynatech Corporation
Limited's business that is not a part of the UK Business;
(f) All of such Seller's licenses, permits and regulatory approvals (to the
extent transferable) listed in SECTION 2.17 of the Disclosure Memorandum;
(g) Except as set forth in Section 1.2(b) below, all of such Seller's books
and records, wherever located, that relate primarily to the Business;
(h) All of such Seller's other intangible assets not described above that
are primarily related to the Business;
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(i) All of the issued and outstanding share capital of Dynatech GmbH and of
Dynatech sro (collectively, the "Shares"); and
(j) Dynatech Laboratories, Inc.'s lock-box maintained at Bank
of Boston; Dynatech Corporation Limited's lock-box maintained at Barclays Bank;
and Laboratoires Dynatech S.A.R.L.'s lock-box maintained at BNP.
The assets, property and rights of the Sellers to be sold to and
purchased by the Buyers under this Agreement (including the Shares) are
hereinafter sometimes referred to as the "Subject Assets."
1.2 EXCLUDED ASSETS. Notwithstanding anything in this Agreement to the
contrary, there shall be excluded from the Subject Assets those assets listed on
SECTION 1.2 of the Disclosure Memorandum and the following property:
(a) Cash and intercompany accounts between any of the Dynatech
Entities (including Dynatech sro and Dynatech GmbH) on the one hand, and
Dynatech or any of its subsidiaries (other than the Dynatech Entities (including
Dynatech sro and Dynatech GmbH)) on the other hand;
(b) Each Seller's corporate seals, corporate franchise,
Articles of Incorporation (or comparable charter document) ("Charter"), By-laws,
stock record books, corporate record books containing minutes of meetings of
directors and stockholders and such other records as have to do exclusively with
such Seller's organization or stock capitalization (collectively, the "Corporate
Records");
(c) All assets of Dynatech Corporation Limited which are not used primarily
in the UK Business; and
(d) All of Dynatech's and each Seller's right, title and
interest in the name "Dynatech", other than the rights granted to the Buyers for
the six-month period commencing on the Closing Date in accordance with Section
5.6 hereof.
The assets, property and rights of the Sellers to be excluded from the
sale to the Buyers shall be referred to as the "Excluded Assets."
1.3 ASSUMPTION OF LIABILITIES. Upon the sale and purchase of the
Subject Assets, and subject to the provisions of this Agreement, each Buyer as
identified on EXHIBIT 1.1 hereto agrees to assume and to pay or to discharge
when due in accordance with their respective terms, only the following
liabilities and obligations (collectively, the "Liabilities"):
(a) The liabilities and obligations of the Dynatech Entities
shown or reflected and reserved against on the Base Balance Sheet (as defined in
Section 2.7 hereof) (but
3
not in amounts in excess of the amounts so shown, reflected or reserved
against), excluding any of such liabilities and obligations discharged since the
date of the Base Balance Sheet;
(b) All liabilities and obligations of the Dynatech Entities
incurred in connection with the Business in the ordinary course of such business
from and after the date of the Base Balance Sheet to the Closing Date to the
extent such liabilities or obligations (i) have not been satisfied prior to the
Closing Date and (ii) are shown or reflected and reserved against on the Closing
Net Asset Statement (as defined in Section 1.4(b) hereof) (but not in amounts in
excess of the amounts so shown, reflected or reserved against);
(c) Liabilities and obligations with respect to product or
service warranties (excluding product liability claims) for products or services
of the Business sold or delivered by any of the Dynatech Entities prior to the
Closing; and
(d) All liabilities and obligations of the Dynatech Entities
under the Contracts listed in SECTION 1.1(c) of the Disclosure Memorandum to the
extent that such liabilities or obligations accrue subsequent to the Closing or
relate to the period of time after the Closing.
Notwithstanding the foregoing, the Buyers shall not assume and shall
not pay any of the following liabilities or obligations:
(i) Taxes (as defined in Section 2.8 hereof) of Dynatech or of any
Dynatech Entity relating to periods before the Closing or incurred by Dynatech
or by any of the Dynatech Entities in connection with this Agreement and the
transactions provided for herein), including any liability for Taxes arising out
of the inclusion of any of the Dynatech Entities in any group filing
consolidated, combined or unitary tax returns or arising out of any transferee
liability, it being specifically agreed that the Buyers shall not be deemed to
be the Sellers' transferees with respect to any Tax liability;
(ii) Liabilities of Dynatech or of any Dynatech Entity under any
Environmental Law (as defined in Section 2.15 hereof) (A) arising from the
generation, transportation, storage, treatment, disposal or management of any
Hazardous Waste (as defined in Section 2.15) at any facility of Dynatech or of
any Dynatech Entity or at any site to which any such Hazardous Waste generated
by Dynatech or by any Dynatech Entity was transported prior to the Closing Date
or (B) otherwise resulting from the conduct of the Business by any Dynatech
Entity prior to the Closing Date;
(iii) Liabilities in connection with or relating to any and all actions,
suits, claims, proceedings, demands, assessments and judgments, costs, losses,
liabilities, damage, deficiencies and expenses (whether or not arising out of
third-party claims) in connection with any litigation or any governmental or
administrative proceedings to the extent arising out of events occurring prior
to the Closing Date;
4
(iv) Liabilities and obligations of any of the Dynatech Entities for
product liability claims with respect to products sold by any of the Dynatech
Entities prior to the Closing Date;
(v) Liabilities and obligations of Dynatech or of any of the Dynatech
Entities with respect to any current, retired or former employee of such
Dynatech Entities, including liabilities for salary, bonuses, commissions,
contingent payments and other compensation for services provided prior to the
Closing Date, and including liabilities for worker's compensation and other
employee claims, grievances or other proceedings arising out of events occurring
prior to the Closing Date (but excluding any liabilities for accrued vacation on
the books of Dynatech GmbH, which shall be assumed);
(vi) Liabilities and obligations of Dynatech or of any of the Dynatech
Entities under any pension, benefit, profit sharing, retirement, stock, deferred
compensation, welfare, insurance, disability, salary continuation (other than
the salary continuation obligations assumed by the Buyers pursuant to Section
7.1 hereof) and other similar plans, programs and agreements maintained by
Dynatech or by any Dynatech Entity at any time in the past; or
(vii) Any other liabilities and obligations of Dynatech or of any of the
Dynatech Entities (including without limitation any liabilities, penalties or
other costs which may be imposed on any of the Buyers or any of the Dynatech
Entities arising out of any violation of any applicable law by any of the
Dynatech Entities prior to the Closing Date and/or any failure by any Dynatech
Entity to have obtained and have in effect at all relevant times any permit,
license, approval or authorization necessary to conduct its business as such
business was conducted prior to the Closing Date), except for the Liabilities,
as defined in Sections 1.3(a) through Section 1.3(d) above.
The liabilities and obligations which are not assumed by the Buyers
under this Agreement are hereinafter sometimes referred to as the "Excluded
Liabilities." Upon the sale and purchase of the Subject Assets, and subject to
the provisions of this Agreement, Dynatech and the Sellers hereby expressly
agree to assume and to pay or to discharge when due any of the Excluded
Liabilities to the extent that such Excluded Liabilities may be liabilities or
obligations of Dynatech sro or Dynatech GmbH. Any Excluded Liability to which
any Buyer shall succeed as a matter of law notwithstanding the express terms of
this Agreement shall, as between the parties, nonetheless be deemed to be an
Excluded Liability, which, as between the Parties shall be the sole obligation
of Dynatech and the Sellers. The assumption of said Liabilities by any party
hereunder shall not enlarge any rights of third parties under contracts or
arrangements with the Buyers or the Sellers and nothing herein shall prevent any
party from contesting in good faith with any third party any of said
Liabilities.
5
1.4 PURCHASE PRICE AND PAYMENT.
(a) In consideration of the sale by the Sellers to the Buyers
of the Subject Assets, subject to the assumption by the Buyers of the
Liabilities and the satisfaction of all of the conditions contained herein, the
Buyers agree that at the Closing they will deliver to an account or accounts
designated in writing by Dynatech a bank cashier's check(s) or wire transfer(s)
of immediately available funds in the aggregate amount of Forty-Three Million
Dollars ($43,000,000) (the "Purchase Price"), subject to adjustment as set forth
in Section 1.4(b) hereof. The Purchase Price shall be allocated among the
Sellers in the manner provided in Section 1.9 hereof and, to the extent that any
funds representing any portion of the aggregate Purchase Price so allocated to
the acquisition of the Subject Assets or Shares from any Seller are in fact
received from the Buyers by Dynatech, Dynatech shall receive such funds solely
as agent for such Seller.
(b) Within 30 calendar days after the Closing, Dynatech shall
deliver to BioAnalysis a statement setting forth the Net Tangible Assets of the
Business (as defined below) of the Closing Date (the "Closing Net Asset
Statement"). BioAnalysis shall provide Dynatech and its accountants and advisors
with access (during BioAnalysis' normal business hours and upon reasonable
notice) to all data, workpapers and other information reasonably required for
Dynatech to prepare the Closing Net Asset Statement. The Purchase Price shall
then be either (i) increased by the amount by which the Net Tangible Assets of
the Business as set forth on the Closing Net Asset Statement exceed $13,500,000;
or (ii) decreased by the amount by which $13,500,000 exceeds the Net Tangible
Assets of the Business as set forth on the Closing Net Asset Statement (such
amount, as the case may be, the "Purchase Price Adjustment"); provided, however,
that no Purchase Price Adjustment will be due or payable to any party hereto in
the event that the difference between the Net Tangible Assets of the Business as
set forth on the Closing Net Asset Statement and $13,500,000 is less than
$200,000.
(c) For purposes of this Section 1.4, the Net Tangible Assets
of the Business shall equal the value of the tangible Subject Assets (excluding
the value of the Shares but including the value of the assets of Dynatech sro
and Dynatech GmbH (collectively, the "Incorporated Assets") as reflected on the
Closing Net Asset Statement less the Liabilities, and the value of the tangible
Subject Assets shall be determined in accordance with Dynatech's standard
accounting practices and policies, provided, however that (i) such practices and
policies shall conform in all material respects to United States generally
accepted accounting principles and (ii) such practices and policies shall be
applied on a basis consistent with Dynatech's practices for prior year-end
audits.
(d) Dynatech shall provide BioAnalysis and its accountants and
advisors with access (during Dynatech's normal business hours and upon
reasonable notice) to all data, workpapers and other information from which the
Closing Net Asset Statement was prepared. If BioAnalysis notifies Dynatech in
writing of any disagreement with respect to any amount set forth in the Closing
Net Asset Statement submitted by Dynatech within the 45 days after the
6
receipt thereof by BioAnalysis, then BioAnalysis and Dynatech shall attempt to
resolve any such disagreement in good faith and on a reasonable schedule. If
BioAnalysis does not provide such a written notice to Dynatech within 45 days
after the receipt of the Closing Net Asset Statement by BioAnalysis (as such
period may be extended pursuant to Section 5.8 hereof) , then the Closing Net
Asset Statement submitted by Dynatech shall be deemed to be accepted by
BioAnalysis and shall be final and binding on the parties for purposes of
determining the Purchase Price Adjustment (if any). If the parties are unable to
agree on the Closing Net Asset Statement or the Purchase Price Adjustment by the
close of business on the 120th day after the Closing, then the parties shall
retain an internationally recognized accounting firm (which shall not be Coopers
& ▇▇▇▇▇▇▇ LLP or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP) to resolve any dispute between them and
the Closing Net Asset Statement and the Purchase Price Adjustment determined by
such accounting firm shall be binding upon the parties. BioAnalysis and Dynatech
shall each pay one-half of such accounting firm's fees and expenses.
(e) In the event an adjustment to the Purchase Price is made
or resolved pursuant to the terms of this Section 1.4, the following payments
shall be made:
(i) if the Purchase Price has been adjusted upward, the Buyers shall,
within two (2) business days of the resolution of such adjustment, pay to an
account or accounts designated in writing by Dynatech such adjustment amount; or
(ii) if the Purchase Price has been adjusted downward, Dynatech shall,
within two (2) business days of the resolution of such adjustment, pay to an
account or accounts designated in writing by BioAnalysis such adjustment amount.
1.5 THE CLOSING. The closing of the purchase and sale provided for in
this Agreement (herein called the "Closing") shall take place at the offices of
Thermo Electron Corporation, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at
10:00 a.m., local time, on the later of (i) February 7, 1996 and (ii) the
satisfaction of all other conditions to Closing as set forth in Section 5
hereof, or at such other time or date as may be mutually agreeable to the
parties hereto (the date on which the Closing occurs being herein called the
"Closing Date"). All transactions at the Closing shall be deemed to take place
as of the end of the business day in Boston, Massachusetts, on the Closing Date
simultaneously and no transaction shall be deemed to have been completed and no
document or certificate shall be deemed to have been delivered until all
transactions are completed and all documents (other than the Local Transfer
Agreements (as defined in Section 10.5)) are delivered.
1.6 DELIVERY OF AGREEMENTS OF ASSUMPTION OF LIABILITIES. At the
Closing, each Buyer shall deliver or cause to be delivered to the appropriate
Seller, as identified on Exhibit 1.1, an Agreement for Assumption of the
Liabilities by such Buyer in substantially the form of Exhibit 1.6 hereto, and
Dynatech shall deliver or cause to be delivered to BioAnalysis an Agreement for
Assumption of the Excluded Liabilities of Dynatech sro and Dynatech GmbH by
Dynatech in substantially the form of Exhibit 1.6 hereto.
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1.7 TRANSFER OF SUBJECT ASSETS; CLOSING DELIVERIES.
(a) At the Closing, each Seller shall deliver or cause to be
delivered to the appropriate Buyer, as identified on EXHIBIT 1.1, good and
sufficient instruments of transfer transferring to such Buyer all of such
Seller's right, title and interest in and to all the Subject Assets owned by
such Seller. Such instruments of transfer (a) shall be in the form and will
contain provisions not inconsistent with the provisions hereof which are usual
and customary for transferring the type of property involved under the laws of
the jurisdictions applicable to such transfers, (b) shall be in form and
substance reasonably satisfactory to the Buyers and their counsel, and (c) shall
effectively vest in the appropriate Buyer all of the appropriate Seller's right,
title and interest in and to the Subject Assets, free and clear of all liens,
restrictions and encumbrances other than the Liabilities.
(b) At the Closing, in addition to the taking of such other
actions as may be provided in this Agreement, each party shall deliver such
closing certificates, documents and opinions of counsel as may be reasonably
requested by counsel to the other parties hereto.
1.8 DELIVERY OF RECORDS AND CONTRACTS; FURTHER ASSURANCES.
(a) At the time of the Closing, subject to Section 1.8(b)
below, each Seller shall deliver or cause to be delivered to the appropriate
Buyer all of such Seller's leases, contracts, commitments, agreements and rights
which are included in the Subject Assets, with such assignments thereof and
consents to assignments as are necessary to assure such Buyer of the full
benefit of the same. Each Seller shall also deliver to the appropriate Buyer at
the time of the Closing all of such Seller's business records, copies of all Tax
returns, books and other data relating to the Business (or the UK Business)
(except corporate records and other property of such Seller excluded under
Section 1.2(b)), and each Seller shall take all requisite steps to put the Buyer
in actual possession and operating control of the Subject Assets of the Seller.
For a period of six (6) years after Closing, or such longer period as may be
reasonably requested by Dynatech, upon written request of Dynatech, BioAnalysis
or its successor shall make or cause to be made available to Dynatech, as the
case may be, (i) all books and records included in the Subject Assets that are
needed by any Seller or any successors or assigns for a valid business purpose,
and permit Dynatech and its agents to inspect and copy such books and records
and (ii) assistance in arranging discussions with officers, employees and agents
of the Buyers and their parent or affiliate companies on matters which relate to
the Business as previously conducted by the Sellers and the same as continued by
the Buyers, provided that all such inspection or assistance shall be at
reasonable times as may be mutually agreed upon by such BioAnalysis and Dynatech
and shall be at Dynatech's sole cost and expense.
(b) If an attempted sale, conveyance, assignment, transfer or
delivery of any contracts, claims, leases, commitments, franchises, privileges,
permits, consents, certificates, licenses or any other assets, rights or
benefits to be sold, conveyed, assigned, transferred and delivered to any Buyer
which are included in the Subject Assets (collectively, the "Rights") would be
ineffective without the consent of any other person, and such consent has not
been
8
obtained on or before the Closing Date, this Agreement shall not constitute an
assignment or an attempted assignment of such Right if such assignment or
attempted assignment would constitute a breach thereof or be unlawful. In such
case, each Seller at and after the Closing will, at the request and under the
direction of the Buyers and in the name of such Seller or otherwise as the
Buyers shall specify, take or cause to be taken all such action (including
without limitation the appointment of the Buyers as attorney-in-fact for such
Seller, but with powers limited to the specific purposes contemplated hereby)
and do or cause to be done all such things as shall in the reasonable opinion of
the Buyers or their counsel be necessary or proper to (a) assure that Rights
shall be preserved for the benefit of the Buyers, and (b) facilitate receipt by
the Buyers of the consideration to which the Sellers would otherwise be entitled
in and under all Rights, which consideration shall be held for the benefit of,
and shall be delivered to, the Buyers. In order to accomplish the foregoing, the
Sellers may designate the Buyers as subcontractors to perform obligations of any
Seller under any Rights. The Seller whose Rights are being assigned shall also
use commercially reasonable efforts to obtain, as soon as practicable, the
consent of each such or other person in all cases in which such consent is
required, and such Seller and the Buyers will cooperate in any reasonable
arrangement designed to enable such Seller to perform its obligation hereunder,
and to provide for the assumption by the appropriate Buyer of the benefits,
risks and burdens of any such agreement. Nothing in this Section shall in any
way diminish the obligations hereunder of the Sellers to use commercially
reasonable efforts to obtain all consents and approvals and to take all such
other actions prior to or at Closing as are necessary to enable the Sellers to
convey or assign valid title to all the Subject Assets to the Buyers.
(c) The Sellers from time to time after the Closing at the
request of the Buyers and without further consideration shall execute and
deliver further instruments of transfer and assignment and take such other
action as the Buyers may reasonably require to more effectively transfer and
assign to, and vest in, the Buyers each of the Subject Assets.
1.9 ALLOCATION OF PURCHASE PRICE. The Purchase Price and all other
capitalized costs of consummating the transactions contemplated by this
Agreement shall be allocated among the Subject Assets as set forth on EXHIBIT
1.9 hereto. Such allocation shall be binding upon the Buyers and the Sellers for
all purposes (including financial accounting purposes, financial and regulatory
reporting purposes and tax purposes). The Buyers and the Sellers also each agree
to report all federal, state, foreign, provincial and local income and other tax
consequences of the transactions contemplated hereby consistently with the
foregoing and agree not to take any position inconsistent therewith upon
examination of any tax return, in any refund claim, in any litigation or
otherwise.
1.10 SALES AND TRANSFER TAXES. Notwithstanding any other provision of
this Agreement, all sales, transfer or similar taxes required to be paid in
respect of the conveyances, assignments or transfers contemplated hereby shall
be paid by the Buyers.
9
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
The Sellers hereby represent and warrant to the Buyers, jointly and
severally, that except as set forth in the Disclosure Memorandum (specifying the
relevant subsection of this Section 2):
2.1 ORGANIZATION AND QUALIFICATION OF THE SELLERS, DYNATECH SRO AND
DYNATECH GMBH. Each Seller, and each of Dynatech sro and Dynatech GmbH, has been
duly organized, validly existing and in good standing under the laws of the
jurisdiction set forth next to its name in SECTION 2.1 of the Disclosure
Memorandum with full corporate power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is currently conducted. The
copies of the Articles of Association of Dynatech GmbH (as amended to date and
as certified by its Commercial Registry) and the Prague Commercial Register
Extract of Dynatech sro (as amended to date), each heretofore delivered to the
Buyers' counsel, are complete and correct, and no amendments thereto are
pending. Each Seller, and each of Dynatech sro and Dynatech GmbH, is duly
qualified and to conduct its business and own its property in all jurisdictions
wherein the character of the properties owned or leased by them or the nature of
the activities thereof makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on the
Subject Assets or the Business or financial condition of the Dynatech Entities
(excluding the portion of Dynatech Corporation Limited's business that is not a
part of the UK Business) taken as a whole (a "Material Adverse Effect").
2.2 SUBSIDIARIES; DYNATECH SRO AND DYNATECH GMBH.
(a) No Seller has any subsidiaries except as set forth in
SECTION 2.2 of the Disclosure Memorandum. No Seller owns or has any interest in
any corporation, partnership or joint venture except as set forth in SECTION 2.2
of the Disclosure Memorandum.
(b) The registered capital of Dynatech sro amounts to 100,000
Czech crowns, all of which are fully paid and registered in the Prague
Commercial Register. The books and records of Dynatech sro, including without
limitation the books of account and minute books, are complete and correct in
all respects except as would not have a material adverse effect on the business
of Dynatech sro.
(c) The registered share capital of Dynatech GmbH amounts to
DM 2,000,000, and consists of two shares in the nominal amounts of DM 100,000
and DM 1,900,000, all of which are fully paid up. The books and records of
Dynatech GmbH, including without limitation the books of account and minute
books, are complete and correct in all respects except as would not have a
material adverse effect on the business of Dynatech GmbH.
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2.3 OWNERSHIP OF CAPITAL STOCK OF THE SELLERS, DYNATECH SRO AND
DYNATECH GMBH. The beneficial and record owner of all of the issued and
outstanding shares (or registered share capital, as the case may be) of each
Dynatech Entity is set forth in SECTION 2.3 of the Disclosure Memorandum.
Without limiting the generality of the foregoing, Dynatech is the lawful record
and beneficial owner of all of the Shares, free and clear of any liens, claims,
restrictions (including restrictions upon transfer), equities or encumbrances.
All of the outstanding Shares have been duly authorized and validly issued, are
fully paid, nonassessable and free of preemptive rights and/or
sub-participations. There are no options, warrants, contracts, calls,
commitments or demands of any nature relating to the Shares, or to authorized,
issued or unissued ownership interests in Dynatech sro or share capital of
Dynatech GmbH.
2.4 AUTHORITY OF THE SELLERS. Each Seller has all necessary authority
and power to enter into this Agreement and to carry out the transactions
contemplated hereby. The execution, delivery and performance by each Seller of
this Agreement and the consummation by each Seller of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
of each Seller, and no other action on the part of each Seller is required in
connection therewith. This Agreement constitutes, and the other agreements
executed by each Seller in connection herewith constitute, the valid and binding
obligations of each Seller, enforceable against each Seller in accordance with
their respective terms. Except as set forth in SECTION 2.11 of the Disclosure
Memorandum, the execution, delivery and performance by each Seller of this
Agreement and the other agreements executed by each Seller in connection
herewith do not, and the performance by each Seller of the transactions
contemplated hereby and thereby, will not:
(i) violate any provision of the Charter or By-laws of such Seller, of
Dynatech sro or of Dynatech GmbH;
(ii) violate any laws of the United States, or any country, state or other
jurisdiction, or any order, judgment or decree, applicable to such Seller, to
Dynatech sro or to Dynatech GmbH or require such Seller or Dynatech sro or
Dynatech GmbH to obtain any approval, consent or waiver of, or make any filing
with, any person or entity (governmental or otherwise) that has not been
obtained or made;
(iii) with or without notice or lapse of time or both, result in a
violation or any breach of or constitute a default under, or require the consent
or approval of any third party under, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Seller or Dynatech sro or Dynatech GmbH
is a party or to which any of the Subject Assets (including the Shares and the
Incorporated Assets) are subject; or
(iv) result in the creation or imposition of any lien, encumbrance, charge,
claim or restriction upon any of the Subject Assets, the Shares or the
Incorporated Assets.
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2.5 FINDER'S FEE. No Dynatech Entity has incurred or become liable for
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement, except for amounts payable to The
▇▇▇▇▇▇▇▇▇▇ Group which shall be paid by the Sellers.
2.6 STATUS OF TANGIBLE PROPERTY.
(a) Owned Real Property. No Dynatech Entity owns any real property.
(b) LEASED REAL PROPERTY. SECTION 2.6(b) of the Disclosure Memorandum
contains a complete and correct list of the addresses of all real property
leased by each Dynatech Entity (the "Leased Real Property").
(i) LEASES. True, complete and accurate copies of all leases or other
agreements ("Leases") under which each Dynatech Entity leases Leased Real
Property, together with all amendments thereto, have been heretofore delivered
to the Buyers and all such Leases are identified on SECTION 2.6(b) of the
Disclosure Memorandum. Each such Lease has been duly authorized and executed by
the parties thereto and is in full force and effect. No Dynatech Entity is in
default under any of such Leases, nor has any event occurred which, with notice
or passage of time, or both, would give rise to a default.
(ii) TAXES. There are no taxes or betterment assessments other than
ordinary real estate taxes pending or payable against the Leased Real Property.
(iii) UTILITIES. All water, sewer, gas, electric, telephone, drainage and
other utility equipment required by law or necessary for the current operation
of the Leased Real Property are installed and connected to the Leased Real
Property and such utilities are available in sufficient quantities and such
connections are adequate to service the Leased Real Property as it is currently
improved and operated.
(iv) CONDITION. Except as set forth on SECTION 2.6(b) of the Disclosure
Memorandum, to the best of the Sellers' knowledge, there are no material defects
in the physical or mechanical condition of any improvements constituting a part
of the Leased Real Property, and all such items are in reasonable operating
condition and repair, normal wear and tear excepted.
(v) COMPLIANCE WITH LAW; GOVERNMENT APPROVALS. No Dynatech Entity has
received any notice from any governmental authority of any violation of any law,
ordinance, regulation, license, permit or authorization issued with respect to
any of the Leased Real Property that has not been corrected heretofore, and no
such violation exists which could have a Material Adverse Effect.
(vi) REGULATORY PROCEEDINGS. To the best of the Sellers' knowledge, there
are no condemnation, environmental, zoning, expropriation, reserve or other
land-use
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regulation proceedings either instituted or planned to be instituted which would
detrimentally affect the use and operation of the Leased Real Property in the
manner in which the Leased Real Property is now used and operated.
(c) PERSONAL PROPERTY. Each Dynatech Entity has good and
valid, legal title to all of the personal property identified in SECTION 1.1(a)
of the Disclosure Memorandum as being owned by such Dynatech Entity, in each
case subject to no mortgage, hypothec, attachment, lien, pledge, option, title
retention, conditional sale or other security interest, restriction, claim,
charge or other encumbrance of any kind, and each Seller has the complete and
unrestricted right to sell assign, transfer, convey and deliver such assets to
the Buyers at the Closing without any restrictions of any kind.
(d) NATURE OF ASSETS. Except as identified in SECTION 2.6(d)
of the Disclosure Memorandum (and other than (i) Excluded Assets, (ii) licenses
and permits that are by their terms or as a matter of law not transferable and
that are identified in SECTION 2.17 of the Disclosure Memorandum and (iii)
services and benefits provided to the Dynatech Entities by Dynatech or its
affiliates other than other Dynatech Entities and identified in SECTION 2.19 of
the Disclosure Memorandum), the Subject Assets and the Incorporated Assets
include all of the assets, properties and rights used in the operation of the
Business as presently conducted, and, with the exception of assets sold,
consumed or otherwise disposed of in the ordinary course, include all of the
assets reflected on the Base Balance Sheet.
2.7 FINANCIAL STATEMENTS. The Buyers have received the following financial
statements, copies of which are attached hereto as a part of SECTION 2.7 of the
Disclosure Memorandum:
(i) unaudited consolidated financial statements of the Dynatech Entities
(excluding the portion of Dynatech Corporation Limited business that is not part
of the UK Business) for its fiscal years ending on March 31, 1994 and 1995; and
(ii) an unaudited consolidated balance sheet of the Dynatech Entities
(excluding the portion of Dynatech Corporation Limited's business that is not
part of the UK Business) as of September 30, 1995 (the "Base Balance Sheet") and
a related statement of income for the period then ended.
Said financial statements have been prepared in accordance with
Dynatech's standard accounting policy for its consolidated operations, which
policy conforms in all material respects with United States generally accepted
accounting principles ("GAAP"), applied consistently during the periods covered
thereby and present fairly the financial condition of the Dynatech Entities
(excluding the portion of Dynatech Corporation Limited's business that is not
part of the UK Business) at the dates of said statements and the results of its
operations for the periods covered thereby; provided, however, that none of the
financial statements have footnotes required under GAAP and the Base Balance
Sheet is subject to normal year-end adjustments.
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2.8 TAXES. Each Seller, and Dynatech sro and Dynatech GmbH has timely
filed all federal or foreign, as the case may be, income Tax returns and all
other material state, local and foreign Tax returns and reports required to be
filed by it through the date hereof. SECTION 2.8 of the Disclosure Memorandum
indicates those Tax returns that are currently the subject of an audit. Except
as set forth in SECTION 2.8 of the Disclosure Memorandum, no taxing authority or
agency is now asserting or, to the knowledge of the Sellers, threatening to
assert against any Seller any material deficiency or material claim for
additional Taxes or interest thereon or penalties in connection therewith. There
are no liens for Taxes upon the assets of any Seller or of Dynatech sro or of
Dynatech GmbH. For purposes of this Agreement, "Tax" means any federal, state,
provincial, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including without limitation Taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax or other fiscal charges of any kind whatsoever,
including without limitation any interest, penalty, or addition thereto, whether
disputed or not).
2.9 ACCOUNTS RECEIVABLE. SECTION 2.9 of the Disclosure Memorandum sets
forth the accounts receivable of each Dynatech Entity and aging information with
respect to such accounts receivable as at the dates indicated. All of such
accounts receivable have arisen and were booked in the ordinary course of the
Dynatech Entities' business and represent bona fide amounts due as a result of
products actually sold or services actually provided by the Dynatech Entities.
2.10 ABSENCE OF CERTAIN CHANGES. Since the date of the Base Balance Sheet,
except as set forth in SECTION 2.10 of the Disclosure Memorandum, there has not
been:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations of any Dynatech Entity which, either
individually or in the aggregate, has had or will have a Material Adverse
Effect;
(b) any purchase, sale or other disposition, or any agreement
or other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of any Dynatech Entity other than in the ordinary course of
business;
(c) any damage, destruction or loss, whether or not covered by
insurance, with respect to any property or asset of any Dynatech Entity that has
had or will have a Material Adverse Effect;
(d) any material obligation or liability of any nature
incurred by any Dynatech Entity, whether absolute, contingent or otherwise,
other than obligations and liabilities incurred in the ordinary course of
business;
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(e) any material change in the compensation payable by any
Dynatech Entity to any of its officers, employees, agents or independent
contractors other than normal merit increases in accordance with its usual
practices;
(f) any change in accounting methods or practices, credit practices, or
collection policies used by any Dynatech Entity;
(g) to the best of the Sellers' knowledge, any statute, rule,
regulation, ordinance, order or government policy adopted, which is specifically
applicable to firms in the line of business in which the Seller is engaged due
to its conduct of the Business, which may, in the Sellers' reasonable judgment,
have a Material Adverse Effect; or
(h) any strike, labor dispute or any other new event,
development or condition of any character which could have a Material Adverse
Effect.
2.11 CONSENTS AND APPROVALS. Except as set forth in SECTION 2.11 of the
Disclosure Memorandum, the execution and delivery of this Agreement by each
Seller do not, and the performance of the transactions contemplated by this
Agreement by each Seller will not, require any filing with or notification to,
or any consent, approval, authorization or permit from, any governmental or
regulatory authority (a "Governmental Entity") or any other person except (a)
filings under Section 7A of the ▇▇▇▇▇▇▇ Act (the "▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act") and
under the merger control laws of the Federal Republic of Germany, and (b) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications (i) would not prevent or delay the
consummation of the transactions contemplated by this Agreement, and (ii) would
not have a Material Adverse Effect.
2.12 INTELLECTUAL PROPERTY. SECTION 2.12 of the Disclosure Memorandum
sets forth a true and correct list of all patents, patent applications,
trademarks, trademark registrations and applications and registered copyrights
owned by or licensed to each Dynatech Entity, and all applications therefor,
other than retail software which each Dynatech Entity licenses for its own
internal use (collectively, "Intellectual Property"). Except as set forth in
SECTION 2.12 of the Disclosure Memorandum, each Dynatech Entity owns or has a
valid license to use all proprietary rights used in the operation of the
Business as heretofore conducted, including all of such Intellectual Property.
Except as set forth in any license identified in SECTION 2.12 of the Disclosure
Memorandum, no Seller and no Dynatech Entity has granted to any other person or
entity any rights to any of the Intellectual Property. No Seller has any
knowledge of any infringement by others of any of its Intellectual Property
rights. To the knowledge of the Sellers, the present business, activities and
products of the Dynatech Entities does not infringe any Intellectual Property of
any other person or entity. Since January 1 1993, (and, to the knowledge of the
Sellers, since January 1, 1991), no Seller or Dynatech GmbH has received any
complaint, claim or notice in writing alleging any such infringement, which
complaint, claim or notice has not been resolved to the mutual satisfaction of
the parties involved in a manner which involves no future obligations of any
Dynatech Entity. No Seller or Dynatech GmbH has agreed, except either (i) in the
ordinary course of business in conjunction with
15
product sales or (ii) as identified in any contract identified in SECTION 1.1(c)
of the Disclosure Memorandum or in any other section of the Disclosure
Memorandum, to indemnify any person or entity for or against any infringement,
misappropriation or other conflict with any Intellectual Property.
2.13 LITIGATION. Except as set forth in SECTION 2.13 of the Disclosure
Memorandum, there is no litigation or, to the knowledge of the Sellers,
governmental or administrative proceeding or investigation pending against any
Seller, or against Dynatech sro or Dynatech GmbH or, to the knowledge of the
Sellers, threatened against any Seller, or against Dynatech sro or Dynatech
GmbH, which may have a Material Adverse Effect or which would prevent or hinder
the consummation of the transactions contemplated by this Agreement.
2.14 INSURANCE. A summary of insurance coverage of each Dynatech Entity
or of Dynatech for the benefit of any Dynatech Entity is contained in SECTION
2.14 of the Disclosure Memorandum. All policies providing such coverage are
nontransferable other than any such policies obtained by Dynatech sro or by
Dynatech GmbH. Neither Dynatech sro nor Dynatech GmbH is in default with respect
to any provisions of any policy of general liability, fire, title or other form
of insurance covering the portion of the Business conducted by such entity or
the Incorporated Assets. Dynatech sro and Dynatech GmbH are each current in the
payment of all premiums due with respect to such insurance. To the best of the
Sellers' knowledge, no basis exists which would jeopardize the coverage under
any such insurance.
2.15 ENVIRONMENTAL MATTERS.
(a) To the best knowledge of the Sellers, except as set forth in SECTION
2.15 of the Disclosure Memorandum:
(i) No Dynatech Entity is or has been in violation, in any material
respect, of any federal, foreign, state, municipal or provincial law,
regulation, order, decree or rule relating to the prevention of pollution or the
protection of the environment ("Environmental Laws");
(ii) the Leased Real Property has never been the subject of a material
cleanup or remediation of environmental contamination;
(iii) the Leased Real Property does not contain any Hazardous Material (as
defined below) in amounts which would require removal or remediation under any
Environmental Law applicable to any such property;
(iv) no Dynatech Entity has ever owned or operated a petroleum or Hazardous
Waste (as defined below) landfill or any petroleum or other Hazardous Waste
treatment, storage or disposal facility subject to any permit requirements;
16
(v) there are no proceedings under any Environmental Law applicable to any
of the Leased Real Property pending or, to the best of the Sellers' knowledge,
threatened which could have a material adverse effect on the present or future
use of the Leased Real Property for the purpose for which it is currently used;
(vi) the Leased Real Property is not and has not been on any federal,
foreign or state "Superfund" list and is not on the Comprehensive Response,
Compensation and Liability Information System list compiled by the United States
Environmental Protection Agency or on any analogous state or foreign
environmental agency list;
(vii) with regard to the Leased Real Property, neither Dynatech nor any of
the Dynatech Entities has received any notice from any governmental agency or
other party alleging any liability under any Environmental Law;
(viii) the Leased Real Property is not subject to a lien under any
Environmental Laws;
(ix) none of the Leased Real Property contains any Hazardous Substances (as
defined below) which requires release reporting or removal or remediation under
any Environmental Law.
For purposes of this Agreement, "Hazardous Material" means any material
as so defined under the Federal Hazardous Materials Transportation Act, codified
within 49 U.S.C. Sections 5101-5127 and its implementing regulations, or under
any similar federal, state, provincial and county and foreign laws; "Hazardous
Waste" means any material as so defined under the Federal Solid Waste Disposal
Act as amended by the Resource Conservation and Recovery Act, as codified within
42 U.S.C. Sections 6901-6992k and its implementing regulations, or under any
similar federal, state, provincial and county and foreign laws; and "Hazardous
Substances" means those substances listed or identified pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 in Section
302.4 of the National Contingency Plan (Title 40 of the Code of Federal
Regulations) as in effect as of the Closing Date, or under any similar federal,
state, provincial and county and foreign laws.
2.16 EMPLOYEE BENEFIT PLANS.
(a) DISCLOSURE. SECTION 2.16 of the Disclosure Memorandum
contains a true and complete list of all pension, benefit, profit sharing,
retirement, stock, deferred compensation, welfare, insurance, disability, salary
continuation and other similar plans, programs and agreements, currently
maintained by any of the Dynatech Entities for the benefit of its U.S. employees
(or by Dynatech or any of its affiliates for the benefit of the U.S. employees
of any of the Dynatech Entities), including such plans which are "employee
benefit plans" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (the "Employee Plans").
17
(b) CLAIMS AND LITIGATION. Except as set forth in SECTION 2.16
of the Disclosure Memorandum, there are no pending claims, suits or other
proceedings by present or former employees of any of the Dynatech Entities, or
of any plan participants, beneficiaries or spouses of any of the above, with
respect to or involving any Employee Plan, or any rights or benefits thereunder,
other than claims by participants or beneficiaries of such Employee Plans for
ordinary and usual benefits to which such beneficiaries of participants are
entitled under the terms of such Employee Plans.
2.17 PERMITS. SECTION 2.17 of the Disclosure Memorandum lists all
permits, registrations, licenses, franchises, certifications and other approvals
required from federal, foreign, state, or local authorities in order for the
Dynatech Entities to conduct the Business, the loss or absence of which could
have a Material Adverse Effect.
2.18 CUSTOMERS AND DISTRIBUTORS; RELATIONSHIPS. SECTION 2.18 of the
Disclosure Memorandum lists, separately for each Dynatech Entity, any sales
representative, distributor or direct customer (whether pursuant to a
commission, royalty or other arrangement) who accounted for more than 10% of the
sales of such Dynatech Entity for the nine months ended December 31, 1995
(collectively, the "Customers and Distributors"). To the best of the Sellers'
knowledge, no relationship between any of the Dynatech Entities and any
Customer, Distributor, material supplier or officer or key employee of any of
the Dynatech Entities will be terminated or adversely affected as a result of
the execution of this Agreement or the consummation of the transactions
contemplated hereby.
2.19 TRANSACTIONS WITH AFFILIATES. Except as set forth in SECTION 2.19
of the Disclosure Memorandum, no Dynatech Entity owns, and, to the best of the
Sellers' knowledge, none of the Dynatech Entities' stockholders, officers,
employees or directors own directly or indirectly on an individual or joint
basis any interest in (other than passive investments of less than 5% of the
equity ownership of a publicly-traded enterprise), or serve as an officer or
director or in another similar capacity of, any competitor or supplier of
Dynatech or of any Dynatech Entity, or, to the knowledge of the Sellers, any
organization which has any material contract or arrangement with Dynatech or
with any Dynatech Entity. Except as set forth in SECTION 2.19 of the Disclosure
Memorandum, no Dynatech Entity is or, during the nine-month period ending on
December 31, 1995, has been a party to any material sales or purchase contract
or transaction with any affiliate of Dynatech other than any other Dynatech
Entity.
2.20 INVENTORIES. All of each Dynatech Entities' inventory items (net
of any reserve therefor identified on the Base Balance Sheet) are of a quality
and quantity salable in the ordinary course of its business. The values of the
inventories stated in the Base Balance Sheet reflect the normal inventory
valuation policies of each Dynatech Entity and were determined in accordance
with Dynatech's accounting policy described in Section 2.7.
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2.21 CONTRACTS. Except for contracts, commitments, plans, agreements
and licenses described in SECTION 1.1(c), SECTION 1.2, SECTION 1.3, SECTION
2.11, SECTION 2.16, Section 2.19 or SECTION 2.21 of the Disclosure Memorandum,
no Dynatech Entity is a party to or subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the payment of more than $75,000 annually or which is not terminable
within 30 days by each Dynatech Entity without liability for any penalty or
severance payment (other than as required by statute or by commonly recognized
employment practices that may require the giving of additional notice, severance
payments or both);
(c) except for purchase orders in the ordinary course for less
than $100,000 in the aggregate for any single vendor, any contract or agreement
for the purchase of any commodity, material or equipment which is not terminable
without penalty or other obligation upon 90 days' notice;
(d) any contract with any sales agent or distributor of products which is
not terminable without penalty or other obligation upon 90 days' notice;
(e) any contract containing covenants limiting the freedom of any Dynatech
Entity to compete in any line of business or with any person or entity;
(f) any indenture, mortgage, promissory note, loan agreement, guaranty or
other agreement or commitment for the borrowing of money; or
(g) any contract or agreement with any officer, employee, director or
stockholder of any Dynatech Entity or with any persons or organizations
controlled by or affiliated with any of them.
Each Dynatech Entity is in compliance in all material respects with
such contracts, plans or agreements, except for such defaults thereunder as
would not have a Material Adverse Effect.
2.22 COMPLIANCE WITH LAWS. Each Dynatech Entity is in compliance in all
material respects with all applicable statutes, ordinances, orders, rules and
regulations promulgated by any federal, foreign, state, municipal or other
governmental authority which apply to the conduct of its business, and no
Dynatech Entity has received any notice of a violation or alleged violation of
any such statute, ordinance, order, rule or regulation.
2.23 EMPLOYEES; LABOR MATTERS. Each Dynatech Entity employs approximately
the number of employees set forth in SECTION 2.23 of the Disclosure Memorandum
next to its
19
respective name and generally enjoys a good employer-employee relationship. No
Dynatech Entity is delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees. No Dynatech Entity is party to any collective bargaining agreement or
recognizes (or is required to recognize) any trade union. There is not
currently, and within the last three years no Dynatech Entity has experienced,
any strike, picketing, boycott, work stoppage or slow down or union organization
activity. Except as may be described in SECTION 2.23 of the Disclosure
Memorandum, no Dynatech Entity has received written notice within the last three
years (i) of any allegation, charge or complaint of unfair labor practice,
employment discrimination or other matter relating to the employment of labor
pending or threatened against it, or (ii) that it has not complied in all
material respects with all applicable laws relating to the employment of labor.
2.24 BACKLOG. The firm sales orders and commitments for the Dynatech
Entities' products and services that make up the Dynatech Entities' backlog as
of the date of the Base Balance Sheet (which in each case are subject to
cancellation by the customer in the ordinary course of business) was not less
than $5,378,000 at September 30, 1995. All such orders and commitments and any
quotations for work which were outstanding at that time arose and were booked in
the ordinary course of the Dynatech Entities' business and contained terms and
conditions that were consistent with the past practice of the Dynatech Entities
over the past year.
2.25 PRODUCT QUALITY; WARRANTIES; RECALLS.
(a) PRODUCT QUALITY. Since January 1, 1993, (i) there has not
existed any pattern of return of shipments by customers, cancellation of
purchase orders, rejection of products by customers or claims by customers for
allowances that would indicate a problem with respect to the quality of any
products sold by the Business; and (ii) no products sold by the Business have
been authorized to be returned or, to the best knowledge of the Sellers,
rejected by the purchasers which products have not, in either case, been
returned to and accepted by any Dynatech Entity prior to the Closing except for
such returns and rejections of items occurring in the normal course of business.
(b) PRODUCT WARRANTIES. A statement of the current standard
product warranty used for each of the products of the Business is set forth in
SECTION 2.25(b) of the Disclosure Memorandum. Such Section of the Disclosure
Memorandum also lists and accurately summarizes any and all other product
warranties (other than express or implied product warranties required by law)
made by or on behalf of any Dynatech Entity in connection with the Business
which deviate in any material respect from such Dynatech Entity's current
standard product warranty and which remain in effect on the date hereof, or
pursuant to which any of the Dynatech Entities has any remaining obligations.
(c) RECALLS. To the best knowledge of the Sellers, there is no basis for
the recall, withdrawal or suspension of any approval by any governmental
regulatory agency with
20
respect to any product or service sold or proposed to be sold by the Business.
None of the Business's products or services is the subject of any recall
proceedings, no such proceedings have been threatened, and (except as set forth
on SECTION 2.25(c) of the Disclosure Memorandum) no product or service of the
Business has been recalled since January 1, 1993.
2.26 DISCLAIMER. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
OF THE SELLERS CONTAINED HEREIN, THE SELLERS DISCLAIM ALL
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE.
2.27 SUFFICIENT FUNDS. Dynatech and the Sellers have and will have funds
sufficient to perform and discharge the Excluded Liabilities.
2.28 DEFINITION OF KNOWLEDGE. In each case where a representation or
warranty by the Sellers contained in this Agreement is qualified as being "to
the best of the Sellers' knowledge" (or otherwise similarly qualified), such
knowledge shall be deemed to consist of the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and the actual knowledge of the principal executive,
financial and operating officers of each Dynatech Entity as identified in
SECTION 2.28 of the Disclosure Memorandum next to their respective names, in
each case after actually conducting a reasonable investigation.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BUYERS.
The Buyers and Buyers' Parent hereby represent and warrant to the
Sellers, jointly and severally, that:
3.1 ORGANIZATION. Each Buyer and Buyers' Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction set forth next to its name in EXHIBIT 3.1 hereto with full
corporate power and authority to own or lease its properties and to conduct its
business in the manner and in the places where such properties are owned or
leased or such business is currently conducted.
3.2 OWNERSHIP OF THE BUYERS. Buyer's Parent owns a majority of the
issued and outstanding capital stock of BioAnalysis. BioAnalysis directly or
indirectly owns all of the issued and outstanding capital stock of each other
Buyer.
3.3 AUTHORITY OF THE BUYERS AND BUYERS' PARENT. Each Buyer and Buyers'
Parent has all necessary authority and power to enter into this Agreement and to
carry out the transactions contemplated hereby. The execution, delivery and
performance by each Buyer and Buyers' Parent of this Agreement and the
consummation by each Buyer and Buyers' Parent of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of each Buyer
and Buyers' Parent, and no other action on the part of each Buyer or Buyers'
Parent is required in connection therewith. This Agreement constitutes, and
21
the other agreements executed by each Buyer and Buyers' Parent in connection
herewith constitute, the valid and binding obligations of each Buyer and Buyers'
Parent, enforceable against each Buyer and Buyers' Parent in accordance with
their respective terms. The execution, delivery and performance by each Buyer
and Buyers' Parent of this Agreement and the other agreements executed by each
Buyer and Buyers' Parent in connection herewith do not, and the performance by
each Buyer and Buyers' Parent of the transactions contemplated hereby and
thereby, will not:
(i) violate any provision of the Charter or By-laws of such Buyer or of
Buyers' Parent;
(ii) violate any laws of the United States, or any country, state or other
jurisdiction, or any order, judgment or decree, applicable to such Buyer or to
Buyers' Parent or require such Buyer or Buyers' Parent to obtain any approval,
consent or waiver of, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; or
(iii) with or without notice or lapse of time or both, result in a
violation or any breach of or constitute a default under, or require the consent
or approval of any third party under, any material note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Buyer or Buyers' Parent is a party.
3.4 CONSENTS AND APPROVALS. The execution and delivery of this
Agreement by each Buyer does not, and the performance of the transactions
contemplated by this Agreement by each Buyer will not, require any filing with
or notification to, or any consent, approval, authorization or permit from, any
Governmental Entity or any other person except (a) filings under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act and under the merger control laws of the Federal Republic
of Germany, and (b) where failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications would not
prevent or delay the consummation of the transactions contemplated by this
Agreement.
3.5 LITIGATION. There is no litigation or, to the knowledge of the
Buyers, governmental or administrative proceeding or investigation pending
against any Buyer or against Buyers' Parent or, to the knowledge of the Buyers
or of Buyer' Parent, threatened against any Buyer or against Buyers' Parent,
which would prevent or hinder the consummation of the transactions contemplated
by this Agreement.
3.6 FINDER'S FEE. Neither the Buyers nor Buyers' Parent have incurred
or become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
22
3.7 NO KNOWLEDGE OF BREACH. Neither the Buyers nor Buyers' Parent have
any actual knowledge of a breach (or of any fact or set of facts which
constitute a breach) of any representation or warranty of the Sellers made in
this Agreement or in any Exhibit hereto.
3.8 SUFFICIENT FUNDS. The Buyers and the Buyers' Parent have and will have
funds sufficient to satisfy the sums due at Closing as set forth in this
Agreement and to perform and discharge the Liabilities.
SECTION 4. CONDITIONS TO OBLIGATIONS
4.1. CONDITIONS TO OBLIGATIONS OF THE BUYERS. The obligations of the
Buyers to consummate the transactions contemplated hereby are subject to the
satisfaction, on or before the Closing, of the following conditions (unless
waived in writing by BioAnalysis in the manner provided in Section 6.2 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF THE
SELLERS. The representations and warranties set forth in Section 2 hereof shall
be accurate on and as of the date hereof, and shall be accurate in all material
respects on and as of the Closing Date as though made on and as of the Closing
Date, and the Sellers shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by them under this
Agreement prior to the Closing.
(b) NO MATERIAL ADVERSE CHANGES. There shall have been no
material adverse change in the financial condition, properties, assets,
liabilities, earnings, business, operations or prospects of any of the Dynatech
Entities since the date of this Agreement, whether or not in the ordinary course
of business. For purposes of the preceding sentence, materiality shall be
determined with respect to the Dynatech Entities as a whole.
(c) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by the Sellers and the consummation
of the transactions contemplated hereby shall have been duly and validly taken
by the Sellers. Dynatech shall have furnished BioAnalysis with a copy of all
resolutions adopted by its Board of Directors in connection with such actions,
certified by the Clerk or an Assistant Clerk of Dynatech, together with copies
of such other instruments and documents as BioAnalysis shall have reasonably
requested.
(d) CONSENTS. Any governmental authority having jurisdiction
over any Seller or any Dynatech Entity or over any Buyer, to the extent that its
consent or approval is required by applicable law or regulation for the
performance of this Agreement or the consummation of the transactions
contemplated hereby shall have granted any necessary consent or approval.
(e) PERMITS AND APPROVALS. Any and all consents, permits, approvals or
other actions of any person, jurisdiction or authority required in the
reasonable opinion of BioAnalysis for lawful consummation of the transactions
contemplated hereby shall have been
23
obtained, and shall be in full force and effect, and no such consent, permit,
approval or other action shall contain any provision that in the reasonable
judgment of BioAnalysis is unduly burdensome.
(f) GOOD STANDING CERTIFICATES. Each of Dynatech and Dynatech Laboratories,
Inc. shall have delivered to BioAnalysis a corporate good standing certificate
from its jurisdiction of incorporation.
(g) MATTERS RELATED TO INDEBTEDNESS OF DYNATECH GMBH. Dynatech
shall have delivered to BioAnalysis evidence of the release of Dynatech GmbH of
from all indebtedness to Bank of Boston and/or any other person or entity.
(h) OFFICER'S CERTIFICATE. Dynatech shall have delivered to
BioAnalysis a certificate executed by an officer of Dynatech, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Sections
4.1(a) and 4.1(b).
(i) DOCUMENTS SATISFACTORY. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to BioAnalysis, and BioAnalysis shall have
received all documents that it may have reasonably requested in connection with
the transactions contemplated hereby, in form and substance reasonably
satisfactory to it.
4.2. CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers to consummate the transactions contemplated hereby are subject to the
satisfaction, on or before the Closing, of the following conditions (unless
waived by Dynatech in writing in the manner provided in Section 6.2 hereof):
(a) REPRESENTATIONS, WARRANTIES AND PERFORMANCE OF THE BUYERS.
The representations and warranties set forth in Section 3 hereof shall be
accurate on and as of the date hereof, and shall be accurate in all material
respects on and as of the Closing Date as though made on and as of the Closing
Date, and the Buyers shall have performed all obligations and complied with all
covenants required to be performed or to be complied with by them under this
Agreement prior to the Closing.
(b) AUTHORIZATION. All action necessary to authorize the
execution, delivery and performance hereof by the Buyers and the consummation of
the transactions contemplated hereby shall have been duly and validly taken by
the Buyers. BioAnalysis shall have furnished Dynatech with a copy of all
resolutions adopted by its Board of Directors in connection with such actions,
certified by the Secretary or an Assistant Secretary of BioAnalysis, together
with copies of such other instruments and documents as Dynatech shall have
reasonably requested.
(c) CONSENTS. Any governmental authority having jurisdiction over any
Seller or any Dynatech Entity or over any Buyer, to the extent that its consent
or approval is required by applicable law or regulation for the performance of
this Agreement or the
24
consummation of the transactions contemplated hereby shall have granted any
necessary consent or approval.
(d) PERMITS AND APPROVALS. Any and all consents, permits,
approvals or other actions of any person, jurisdiction or authority required in
the reasonable opinion of Dynatech for lawful consummation of the transactions
contemplated hereby shall have been obtained.
(e) GOOD STANDING CERTIFICATES. Each of BioAnalysis, DLW Inc. and
BioAnalysis International Sales Inc. shall have delivered to Dynatech a
corporate good standing certificate from its jurisdiction of incorporation.
(f) OFFICER'S CERTIFICATE. BioAnalysis shall have delivered to
Dynatech a certificate executed by an officer of BioAnalysis, dated the Closing
Date, certifying to the fulfillment of the conditions specified in Section
4.2(a).
(g) DOCUMENTS SATISFACTORY. The form and substance of all
legal matters contemplated herein and of all papers used or delivered hereunder
shall be reasonably acceptable to Dynatech, and Dynatech shall have received all
documents that it may have reasonably requested in connection with the
transactions contemplated hereby, in form and substance reasonably satisfactory
to it.
SECTION 5. CERTAIN COVENANTS.
5.1 PROPRIETARY INFORMATION; CONFIDENTIALITY.
(a) At all times subsequent to the Closing, each of the
Sellers and each of their affiliates shall hold in confidence all knowledge and
information of a secret or confidential nature with respect to the Business
("Proprietary Business Information") and shall not disclose, publish or make use
of the same without the consent of the Buyers.
(b) At all times subsequent to the Closing, the Sellers, the
Buyers and their respective affiliates shall hold in confidence all knowledge
and information of a secret or confidential nature supplied to them by the other
parties hereto for their respective evaluations of this Agreement (such
information, excluding the Proprietary Business Information, which shall be
governed by Section 5.1(a) the "Evaluation Information").
(c) The obligations of the parties under this Section 5.1
shall not apply to any Proprietary Business Information or Evaluation
Information which:
(i) shall have become public knowledge other than by breach of this
Agreement by the disclosing party;
25
(ii) is required to be disclosed by legal process or by any applicable law,
rule or regulation of any governmental or regulatory body or stock exchange;
(iii) becomes available to the disclosing party from a source other than
another party to this Agreement or the representatives or agents of such other
party;
(iv) was known by the disclosing party prior to its receipt from another
party to this Agreement or from the representatives or agents of such party;
(v) has been or is subsequently developed independently by the disclosing
party; or
(vi) is disclosed more than three years after the date of this Agreement.
(d) If (i) the employment of an officer, director or other
employee of the Sellers or the Buyers, or of their respective affiliates, to
whom Proprietary Business Information or Evaluation Information has been
disclosed is terminated and (ii) such individual is subject to an obligation to
maintain such knowledge or information in confidence after such termination, the
Buyers or the Sellers (as the case may be) shall, upon request by the other,
take all reasonable steps at their own expense to enforce such confidentiality
obligation in the event of an actual or threatened breach thereof. Any legal
counsel retained by any of the Sellers or the Buyers (as the case may be) in
connection with any such enforcement or attempted enforcement shall be selected
by such party but shall be subject to the approval of the other party, which
approval shall not be unreasonably withheld.
(e) The parties hereto agree that the remedy at law for any
breach of this Section 5.1 would be inadequate and that the other parties hereto
shall be entitled to injunctive relief in addition to any other remedy they may
have upon breach of any provision of this Section 5.1.
5.2 NO SOLICITATION OR HIRING OF FORMER EMPLOYEES. For a period of
three years after the Closing Date, no Seller nor any affiliate thereof shall,
without the prior written consent of BioAnalysis, (a) solicit any Transferred
Employee (as defined in Section 7.1) to terminate his employment with the Buyers
or to become an employee of such Seller or affiliate, or (b) hire any such
Transferred Employee except employees involuntarily terminated by the Buyers.
5.3 NONCOMPETITION AGREEMENT.
(a) UNDERTAKING. For a period of three years after the Closing
Date, no Seller nor any affiliate thereof shall directly or indirectly
manufacture, market or sell, anywhere in the world, any product manufactured or
marketed by any Dynatech Entity (except
26
with respect to Dynatech Corporation Limited, as to which such covenant shall
relate only to products manufactured or marketed by the UK Business) as of the
Closing Date.
(b) INTERPRETATION AND REMEDIES. The parties hereto agree that
the duration, geographic scope and ambit of the noncompetition provision set
forth in this Section 5.3 are reasonable. In the event that any court of
competent jurisdiction determines that the duration, the geographic scope, the
ambit, or any of the foregoing, are unreasonable and that such provision is to
that extent unenforceable, the parties hereto agree that the provision shall
remain in full force and effect for the greatest time period, in the greatest
area and to the greatest extent that would not render it unenforceable. The
parties intend that this noncompetition provision shall be deemed to be a series
of separate covenants, one for each and every county of each and every state of
the United States of America and each and every political subdivision of each
and every country outside the United States of America where this provision is
intended to be effective. The Sellers agree that damages are an inadequate
remedy for any breach of this provision and that the Buyers shall, whether or
not they are pursuing any potential remedies at law, be entitled to equitable
relief in the form of preliminary and permanent injunctions without bond or
other security upon any actual or threatened breach of this noncompetition
provision.
5.4 PROVISION OF FINANCIAL INFORMATION. Within 60 days after the
Closing, the Buyers shall provide the Sellers with such financial information
with respect to the Business for the period from April 1, 1995 up to and
including the Closing identified on EXHIBIT 5.4 for the purpose of allowing each
Seller to prepare financial reporting information required by federal and state
securities and tax laws.
5.5 PRODUCT WARRANTY MATTERS.
(a) After the Closing Date, the Buyers shall provide warranty
service with respect to all warranties on products sold or services delivered by
the Sellers prior to the Closing Date (the "Pre-Closing Warranties"). In the
event that the Buyers' direct costs of labor, materials and out-of-pocket
expenses (without any overhead allocation except overhead allocation to the cost
of products and materials consistent with the Sellers' practices prior to the
Closing Date) with respect to the Buyers' satisfaction of the Pre-Closing
Warranties ("Warranty Expenses") shall exceed $125,000 in the aggregate (the
"First Warranty Threshold"), the Buyers shall provide notice to Dynatech that
the Buyers' Warranty Expenses have exceeded the First Warranty Threshold and the
Sellers shall, within 30 days after receipt of such notice, reimburse the Buyers
for 25% of such costs in excess of the First Warranty Threshold (up to $150,000
of Warranty Expenses (the "Second Warranty Threshold")). In the event that the
amount of Warranty Expenses exceeds the Second Warranty Threshold, the Buyers
shall provide notice to Dynatech that the Buyers' Warranty Expenses have
exceeded the Second Warranty Threshold and the Sellers shall, within 30 days
after receipt of such notice, reimburse the Buyers for 75% of such costs in
excess of the Second Warranty Threshold (up to $175,000 of Warranty Expenses
(the "Third Warranty Threshold")). If the amount of Warranty Expenses exceeds
the Third Warranty Threshold, the Buyers shall
27
provide notice to Dynatech that the Buyers' Warranty Expenses have exceeded the
Third Warranty Threshold and the Sellers shall, within 30 days after receipt of
such notice, reimburse the Buyers for 100% of such costs in excess of the Third
Warranty Threshold.
(b) Notwithstanding the foregoing, it is understood and agreed
that the Sellers shall not be liable for expenses of the Buyers incurred in
connection with the Buyers' satisfaction of the Pre-Closing Warranties in a
manner which is not materially consistent with the manner employed by the
Sellers prior to the Closing Date with respect to such Pre-Closing Warranties,
nor shall any such expenses be included for purposes of determining whether any
of the First Warranty Threshold, the Second Warranty Threshold or the Third
Warranty Threshold has been exceeded.
(c) Within 30 days after the end of each calendar quarter, the
Buyers shall provide Dynatech with reasonably detailed, written information with
respect to warranty work performed by the Sellers in satisfaction of the
Pre-Closing Warranties, including, but not limited to, (i) the names of the
customers for whom such work was performed, (ii) the product or products on
which such work was performed, (iii) a list of the employees who performed any
such work and the cost for such employees associated with such work, (iv) a list
of the materials required to complete such work and the Sellers' cost for such
materials (exclusive of any overhead costs, except as provided above), (v) the
aggregate cost of all such work performed by the Sellers to date and (vi) such
other information as Dynatech may reasonably request.
5.6 TRANSITIONAL USE OF DYNATECH NAMES.
(a) Effective as of the Closing Date, Dynatech and the
Dynatech Entities hereby grant to the Buyers the fully paid right and license to
continue to (i) conduct business and hold themselves out to the public under the
names "Dynatech Laboratories," "Laboratoires Dynatech" and/or "Dynatech Medical
Products" (the "Marks") and (ii) use the Marks as brand names and service marks
for products sold and services provided by the Business on a transitional basis
during the period beginning on the Closing Date and ending on the date which is
180 days after the Closing Date (the "License Period"), as and to the extent
provided herein, solely to permit the Buyers to establish different trading and
brand name(s) under which to conduct the Business and to market and sell
products and services sold and provided by the Dynatech Entities as of the
Closing Date. The foregoing right and license shall be personal to the Buyers
and the Buyers shall not have any right to transfer, directly or indirectly, by
sublicense, assignment or otherwise, any of the rights conferred hereby to any
other person or entity; provided, however, that the Buyers may transfer such
right and license to one or more entities controlled by, which control or which
are under common control with the Buyers in the event that any such entity or
entities succeeds to all or any substantial portion of the Business.
(b) The Buyers may use the Marks only in the combinations of words set
forth herein and the Buyers are not granted any right or license, and the Buyers
shall never
28
use, the name or ▇▇▇▇ "Dynatech" alone or without the other words constituting
any of the Marks. The Buyers shall not join any name or names, ▇▇▇▇ or marks,
design or designs with any of the Marks so as to form a new or confusingly
similar trademark; provided, however, that the Buyers may indicate their legal
corporate names and their affiliations with BioAnalysis, the Buyers' Parent and
Thermo Electron Corporation in letterhead, promotional materials, check stock
and other written materials containing the Marks. No license is granted
hereunder for the use of any other trademark, service ▇▇▇▇ or trade name owned
by Dynatech or any of the Dynatech Entities.
(c) The Buyers may use the Marks solely in connection with the
marketing and sale of products marketed and sold, and services provided by the
Dynatech Entities as of the Closing as part of the Business. The Buyers shall
not, during the License Period, manufacture, market or sell any other products
or services employing the Marks. During the License Period, the Buyers shall
adhere to at least the same quality standards adhered to by the Dynatech
Entities prior to the Closing, and shall not distribute any product under the
Marks if Dynatech reasonably determines that such product does not meet such
quality standards. The Buyers shall ensure that the method and manner of using
and displaying the Marks during the License Period shall be substantially
similar to the method and manner used by the Dynatech Entities prior to the
Closing. The Buyers may continue to use existing supplies of promotional and
sales materials bearing the Marks (and to the extent displayed thereon, the name
and ▇▇▇▇ "Dynatech Corporation") during the License Period, but shall use
reasonable efforts to ensure that customers are aware that the Buyers and their
products are no longer affiliated with or owned by Dynatech or any of its
affiliates. The Buyers shall ensure that any new brand names adopted during or
subsequent to the termination of the License Period are not similar to or
reasonably capable of confusion with the name and ▇▇▇▇ "Dynatech." The Buyers
shall provide reasonable prior written notice to Dynatech of any such proposed
brand names and shall permit Dynatech a reasonable opportunity to object to any
such names or marks if Dynatech reasonably believes that any of such names or
marks is reasonably likely to cause confusion in the marketplace.
(d) The Buyers acknowledge that the Marks and all rights and
goodwill pertaining thereto belong exclusively Dynatech and the Dynatech
Entities. To the extent any right in and to any of the Marks is deemed to accrue
to the Buyers, the Buyers hereby assign any and all such rights, at such time as
they may be deemed to accrue, including the related goodwill, to Dynatech and
the Dynatech Entities. The Buyers shall never challenge the validity of
Dynatech's and the Dynatech Entities' ownership of the Marks or any application
for registration thereof, or any trademark registration thereof, and never
contest the fact that the Buyers' rights under this Agreement are solely those
of a licensee, and terminate at the end of the License Period or upon the
earlier termination of the license granted hereby. The Buyers shall at any time,
whether during or after the License Period, execute any documents reasonably
requested by Dynatech or the Dynatech Entities to confirm Dynatech's and the
Dynatech Entities' ownership rights in the Marks. All such rights in the Marks
other than those specifically granted herein are reserved by Dynatech and the
Dynatech Entities for their
29
own use and benefit. The Buyers agree not to register or attempt to register any
of the Marks in its or their own names or any other name, anywhere.
(e) Each of Dynatech GmbH and Dynatech sro shall take all
actions necessary to change its respective corporate name to eliminate the name
and ▇▇▇▇ "Dynatech" therefrom prior to the termination of the License Period.
(f) For a period of six months following the termination of
the License Period, Buyers shall have the further right and license to indicate
in their own promotional materials that the products and services offered
thereby are formerly those offered by the Dynatech Entities, solely by use of
the words, to the right of or beneath any reference to Buyers' own legal names,
trade names, trademarks or service marks, "formerly Dynatech Laboratories,"
"formerly Laboratoires Dynatech" and/or "formerly Dynatech Medical Products."
Any such references shall employ a type size no larger than the type in which
the Buyers' legal names, trade names, trademarks or service marks appear, and
shall not employ any distinctive type font or trademark that is associated with
the Dynatech Entities or that is reasonably likely to cause confusion in the
marketplace.
5.7 SUBLEASES; ASSIGNMENTS. As soon as practicable after the Closing,
Dynatech shall cause the respective Dynatech Entities (a) to execute and deliver
sublease agreements with respect to the space occupied by the such Dynatech
Entities in Guernsey, UK, and Saint ▇▇▇▇▇▇▇ en Yvelines, France and (b) to use
commercially reasonable efforts to procure assignments or novations of leases
under which they occupy real property in favor of the relevant Buyer, each on
terms reasonably acceptable to such Buyer.
5.8 CERTAIN BONUSES PAYABLE BY DYNATECH.
(a) Within 30 days after the Closing Date, Dynatech shall pay,
or shall cause to be paid, all bonuses which may be, or become, payable to any
Transferred Employee as a result of such Transferred Employee's employment by
any of the Dynatech Entities, irrespective of whether the calculation of any
such bonus is based on (i) the performance of the Transferred Employee or of the
Dynatech Entity employing such Transferred Employee or of Dynatech, (ii) the
Purchase Price (as paid at the Closing or as adjusted) or (iii) any other
criteria.
(b) Buyers' sole remedy for the failure by Dynatech to pay the
bonuses as provided in the preceding paragraph is that the 45-day period
provided by Section 1.4(d) hereof during which BioAnalysis may notify Dynatech
of any disagreement with respect to any amount set forth in the Closing Net
Asset Statement shall be extended by one day for each day (in excess of 30 days)
that all such bonuses remain unpaid in full.
(c) BioAnalysis hereby covenants that it shall not establish
any bonus plan, contract or arrangement with or for the benefit of any
Transferred Employee pursuant to which any compensation which may become payable
to such Transferred Employee will be
30
dependent directly on any amount or amounts set forth in the Closing Net Asset
Statement. Dynatech acknowledges and agrees, however, that BioAnalysis may
establish bonus plans and arrangements that may link compensation of one or more
of the Transferred Employees to the performance of the Business over time, that
such performance may be measured commencing as of the Closing, and that,
accordingly, such compensation may be linked indirectly to the Closing Net Asset
Statement.
SECTION 6. MODIFICATION, WAIVER AND TERMINATION
6.1. MODIFICATIONS AND AMENDMENTS. The parties may mutually amend any
provision of this Agreement at any time prior to the Closing Date. No amendment
of any provision of this Agreement shall be valid unless the same shall be in
writing and signed by all of the parties.
6.2. WAIVERS. The parties hereto may, by a written signed instrument,
extend the time for or waive the performance of any of the obligations of
another party hereto or waive compliance by such other party with any of the
covenants or conditions contained herein.
6.3. TERMINATION. At any time prior to the Closing, this Agreement may
be terminated (a) by mutual consent of BioAnalysis and Dynatech; (b) by
BioAnalysis if (i) there has been a material breach by Dynatech or by any Seller
of a covenant, representation or warranty contained in this Agreement; (ii)
BioAnalysis has notified Dynatech in writing of the existence of such breach;
and (iii) the party in breach has failed to cure such breach within a reasonable
period of time after receiving such notice; (c) by Dynatech if (i) there has
been a material breach by any Buyer of a covenant, representation or warranty
contained in this Agreement; (ii) Dynatech has notified BioAnalysis in writing
of the existence of such breach; and (iii) the party in breach has failed to
cure such breach within a reasonable period of time after receiving such notice;
(d) by BioAnalysis or by Dynatech if (i) there shall be an order of a court in
effect preventing consummation of the transactions contemplated by this
Agreement or (ii) there shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated, issued or deemed applicable to this
Agreement, by a governmental authority that would make consummation of such
transactions illegal; or (e) by BioAnalysis or by Dynatech if the Closing does
not occur by March 1, 1996. Any such termination shall be binding upon the
respective affiliates of Dynatech and of BioAnalysis.
6.4. EFFECT OF TERMINATION. If this Agreement shall be terminated as
provided in Section 6.3, this Agreement shall forthwith become void (except as
otherwise provided in Section 10.2); provided, however, that the foregoing shall
not relieve any party from liability for damages actually incurred as a result
of any breach of this Agreement.
31
SECTION 7. EMPLOYEES.
7.1 OFFERS OF EMPLOYMENT OF EMPLOYEES; BENEFITS. At or prior to the
Closing, the Buyers shall offer employment as of Closing Date (or in the case of
the Hong Kong Employees (as defined in Section 7.6), in accordance with Section
7.6) to all employees of the Dynatech Entities (but in respect of employees of
Dynatech Corporation Limited, only such employees who are engaged in the UK
Business) who are employed on the Closing Date and (except as required by law)
who are not then absent due to serious injury, long-term sickness or disability,
layoff or leave of absence, such employees being listed on Exhibit 7.1 hereto.
Exhibit 7.1 shall also set forth each such employee's salary level, years of
uninterrupted employment and years of service for benefit plan purposes. The
Buyers shall offer employment to each such employee at the same or greater cash
compensation as that provided by the applicable Dynatech Entity to such employee
immediately prior to the Closing Date. Except as set forth in Section 7.4 below,
effective as of the Closing Date, the Buyers shall cause each employee who
accepts such offer of employment or whose employment is transferred
automatically to the Buyers by operation of law (the "Transferred Employees") to
be provided with benefit programs at a level and on a basis consistent with
similarly situated employees of the Buyers or, to the extent required by law,
with benefit programs comparable to those provided by the applicable Dynatech
Entity immediately prior to the Closing Date. For purposes of all such benefit
programs, the Buyers shall, to the extent applicable, recognize each Transferred
Employee's years of service and level of seniority with Dynatech or any of its
subsidiaries. If the employment of any Transferred Employee who is a resident of
the United States of America is terminated by any Buyer during the nine-month
period after the Closing, other than terminations as a result of the voluntary
resignation of any such Transferred Employee or a termination for cause which
relieves the Buyers and the Sellers and their respective affiliates from any
obligation to provide salary continuation benefits, the Buyers shall provide to
such terminated Transferred Employee salary continuation benefits for a minimum
of (i) two weeks plus an additional week for each full year of uninterrupted
employment by the Buyers or the Sellers beyond the first year if such
Transferred Employee is not, at the Closing Date or upon termination, a salaried
employee or (ii) four weeks plus an additional week for each full year of
uninterrupted employment by the Buyers or the Sellers beyond the first year if
such Transferred Employee is, at the Closing Date or upon termination, a
salaried employee. Subject to the preceding sentence, the Buyers may, to the
extent permitted by law, treat the Transferred Employees as at-will employees
and may modify the terms of such Transferred Employees' employment in its sole
discretion.
7.2 RESPONSIBILITY FOR OBLIGATIONS TO NON-TRANSFERRED EMPLOYEES;
CONSTRUCTIVE TERMINATION. The Sellers shall be responsible for, and hold the
Buyers harmless against, any severance payments or other obligations (including
without limitation any liability for wrongful discharge) that may be due by
reason of termination of employment of any employees of any Dynatech Entity who
are not Transferred Employees whether or not such termination occurred before or
after the Closing Date. Without limiting the generality of the foregoing, the
Sellers shall be responsible for, and hold the Buyers harmless against, any
liabilities, obligations and expenses that may be due in connection with the
employment (or
32
termination thereof) of any employees of any Dynatech Entity who are not
Transferred Employees but with respect to whom any liability transfers to any
Buyer by virtue of the UK Transfer of Undertakings (Protection of Employment)
Regulations 1981 (the "Transfer Regulations") or by virtue of any similar law or
regulation in any other country in connection with this Agreement. The Buyers
shall be responsible for, and hold the Sellers harmless against, any payments or
other liabilities, obligations or expenses arising from or in any way connected
with the employment or the termination of employment of any of the Transferred
Employees at any time after the Closing or by reason of constructive dismissal
of any of the Transferred Employees outside of the United States resulting from
differences between any of the terms and conditions of employment (including,
without limitation, differences in pension benefits and death in service
benefits) after the Closing and those in effect prior to the Closing.
7.3 NO THIRD PARTY RIGHTS. Except as set forth in Section 7.1, nothing
contained in this Agreement shall, under any circumstances whatsoever, be
construed as, expressly or impliedly, constituting or creating any employment
contract, offer of employment, promise of continuing employment, promise of
employee benefits, or other obligation of any other kind of or by the Buyers,
to, or in favor of, any employees or consultants of any Dynatech Entity, and the
Buyers expressly disclaim any and all liability to any such third party arising
out of this Agreement.
7.4 CERTAIN TRANSITIONAL BENEFIT MATTERS.
(a) ACCRUED VACATION. Promptly after the Closing, the Sellers
shall pay each employee of each Seller whose employment by such Seller is being
terminated in connection with the transactions contemplated by this Agreement,
irrespective of whether such employees are Transferred Employees, the value of
all unused vacation time accrued by such employee in accordance with the
policies of such Dynatech Entities and in accordance with applicable law, and
the Buyers shall have no liability therefor. Transferred Employees shall begin
to accrue additional vacation time after the Closing in accordance with the
Buyers' policies.
(b) THRIFT PLANS. Effective as of the Closing Date, Dynatech
Laboratories, Inc. shall cause each of its Transferred Employees to have a fully
nonforfeitable right to such Transferred Employee's account balance under the
Dynatech Corporation Profit-Sharing and 401(k) Savings Plan (the "Seller's
Thrift Plan"). The Buyers shall take all action necessary and appropriate to
extend coverage, effective as of the first day of the third month following the
month in which the Closing occurs, under the Thermo Electron Corporation
MoneyMatch Plus 401(k) Plan (the "Buyers' Thrift Plan") to the Transferred
Employees who have met the eligibility requirements of the Seller's Thrift Plan
or of the Buyers' Thrift Plan as of such date. All Transferred Employees shall
be credited under the Buyers' Thrift Plan, for eligibility and vesting purposes,
with the service credited under the terms of the Seller's Thrift Plan. The
Sellers shall provide the Buyers with all such information as is necessary for
the Buyers to carry out their obligations under the foregoing sentence. The
Sellers shall cause to be made any matching or regular contributions that are
required under the Seller's Thrift Plan
33
for any period prior to the Closing Date and the Buyers shall have no
responsibility therefor. Each such Transferred Employee shall be permitted to
make a lump sum withdrawal of his or her account balance under the Seller's
Thrift Plan. The Buyers shall cause the Buyers' Thrift Plan to accept any direct
cash rollovers with respect to such Transferred Employees from the Seller's
Thrift Plan to the Buyers' Thrift Plan. As soon as practicable after the
Closing, the account balances of Transferred Employees under the Seller's Thrift
Plan shall be transferred from the Seller's Thrift Plan to the Buyers' Thrift
Plan or, to the extent permitted under Code Sections 401(k) and 411(d)(6) and
regulations thereunder, shall be made available for distribution from the
Seller's Thrift Plan to Transferred Employees at their election, provided that
Transferred Employees with outstanding loans under the Seller's Thrift Plan must
make such election, at their discretion, by February 15, 1996. All transfers of
account balances from the Seller's Thrift Plan to the Buyers' Thrift Plan shall
be made in cashand promissory notes representing loans made to Transferred
Employees.
(c) U.S. MEDICAL AND DENTAL BENEFITS. Dynatech Laboratories, Inc. shall
make such arrangements as may be necessary for its Transferred Employees who are
residents of the United States of America to remain as participants in its
medical and dental plans for a period extending up to the last day of the second
month following the month in which the Closing occurs. The Buyers shall bear the
cost of such coverage for such Transferred Employees during such period as
follows:
(i) The Buyers shall pay the out-of-pocket cost of actual claims for such
Transferred Employees (and their covered dependents) incurred and paid after the
Closing Date under Dynatech Laboratories, Inc.'s group medical benefits plan
and/or group dental plan plus an administrative fee equal to 6% of actual
claims; and
(ii) The Buyers shall pay the premium cost for participation of such
Transferred Employees (and their covered dependents) in a health maintenance
organization.
(d) LIFE INSURANCE BENEFITS. Life insurance coverage for any
Transferred Employee who is absent from work on the Closing Date due to serious
injury, long-term sickness or disability shall not become effective until such
Transferred Employee's return to active employment.
7.5 EFFECT OF TRANSFER REGULATIONS. The Buyers and the Sellers
acknowledge that the Transfer Regulations apply to the sale and purchase of the
UK Business under this Agreement and anticipate that the contracts of employment
of the employees of the UK Business listed on Exhibit 7.1 will have effect after
the Closing as if originally made with a Buyer.
7.6 HONG KONG EMPLOYEES.
(a) On the Closing Date, the Buyers shall procure that BioAnalysis
International Sales Inc. shall offer to all employees of Dynatech Hong Kong Ltd.
who are
34
employed on the Closing Date (the "Hong Kong Employees") by a letter from
BioAnalysis International Sales Inc. in terms agreed to by the Sellers, which
offers employment with BioAnalysis International Sales Inc. with effect from the
termination of the notice referred to in Section 7.6(b) below, on terms no less
favorable to the Hong Kong Employees than those enjoyed by the Hong Kong
Employees with Dynatech Hong Kong Ltd. on the Closing Date.
(b) On the Closing Date, the Sellers shall procure that
Dynatech Hong Kong Ltd. shall serve notice on the Hong Kong Employees to
terminate in accordance with the terms of the applicable employment contracts
their employment with Dynatech Hong Kong Ltd.
(c) During the period from the Closing Date until the date on
which the full notice period referred to in Section 7.6(b) expires in respect of
the Hong Kong Employees, the Sellers will procure that Dynatech Hong Kong Ltd.
shall make available to the Buyers the services of the Hong Kong Employees in
order to carry on the Business. In consideration thereof, the Buyers shall
reimburse (and indemnify Dynatech Hong Kong against) the cost of all wages,
pension contributions, holiday pay, employer's liability and third party
insurance premiums and against all claims and demands and liabilities (including
all employer's liability for personal injury or otherwise) in respect of such
Hong Kong Employees accruing during such period (provided, however, that this
sentence shall not relieve Dynatech Hong Kong Ltd. of its obligations under
Section 7.2 with respect to employees other than Transferred Employees).
(d) Unless with the consent of Manufacturers Life Insurance
Company (if required) the policy relating to the Group Retirement Plan for
Salaried Employees of Dynatech Hong Kong Ltd. (the "Plan") is assigned to the
relevant Buyer or the Plan is otherwise novated or arranged as agreed between
Dynatech Hong Kong Ltd. and the relevant Buyer, Dynatech Hong Kong Ltd. shall
issue written instructions to Manufacturers Life Insurance Company to
discontinue the Plan, with the intent that the assets of the Plan shall be
distributed to the Hong Kong Employees pursuant to the provisions and conditions
of the Plan document.
SECTION 8. [INTENTIONALLY OMITTED]
SECTION 9. INDEMNIFICATION.
9.1 INDEMNIFICATION BY THE SELLERS. The Buyers, upon demand, shall be
indemnified by the Sellers, jointly and severally, for the full amount of all
Damages (as defined in Section 9.7 below) suffered by the Buyers as a direct or
indirect result of:
(i) the breach of any representation or warranty made by the Sellers in or
pursuant to this Agreement (including without limitation the representations and
warranties set forth in Section 2);
35
(ii) any failure by the Sellers to perform any obligation or comply with
any covenant or agreement of the Sellers specified herein or in any other
document executed at the Closing;
(iii) any claim for severance payments or other liabilities with respect to
the termination of any employee (other than a Transferred Employee) by the
Sellers, any claim alleging the wrongful termination of any employee (other than
a Transferred Employee) by the Sellers, any claim with respect to the
termination or modification of any of the Sellers' employee benefit plans or the
benefits provided thereunder and any claim with respect to injury or death of
employees engaged in the Business arising out of events occurring prior to the
Closing, and all liabilities and expenses in connection with the employment (or
termination thereof) of any person other than a Transferred Employee for whom
liability transfers to any Buyer by virtue of the Transfer Regulations (or by
virtue of any similar law or regulation in any other country) in connection with
this Agreement (provided, however, that the Buyers agree to notify the Sellers
as soon as is reasonably practicable after any discovery thereof and will, at
the request of the Sellers, terminate the employment of any such person);
(iv) any claim asserted with respect to the Excluded Liabilities;
(v) the failure of the Sellers to obtain the protections afforded by
compliance with the notification and other requirements of the bulk sales laws,
fraudulent conveyance laws or other laws for the protection of creditors in
force in the jurisdictions in which such laws may be applicable to either the
Sellers or the transactions contemplated by this Agreement;
(vi) any claim (including, without limitation, claims alleging death or
injury to persons or damage to property), whether based in tort, contract or
otherwise resulting from or caused by any product sold, or service provided, by
any Dynatech Entity prior to the Closing (other than claims with respect to
product or service warranties for products or services of the Business sold or
delivered by any of the Dynatech Entities prior to the Closing, as contemplated
by Sections 1.3(c) and 5.5 hereof); and
(vii) any liability of any kind, arising directly or indirectly out of a
default under, or a breach of, any contract or commitment of any kind by any of
the Dynatech Entities prior to the Closing.
9.2 LIMITATIONS ON INDEMNIFICATION BY THE SELLERS. Notwithstanding the
foregoing Section 9.1, the right of the Buyers to indemnification under Section
9.1(i) shall be subject to the following provisions:
(a) No indemnification shall be payable to the Buyers by any
Seller pursuant to Section 9.1(i) unless the total of all claims for
indemnification pursuant to Section 9.1(i) shall exceed 1.25% of the Purchase
Price (as adjusted in accordance with Section 1.4(b)
36
hereof) in the aggregate, whereupon only the amount of such claims in excess of
the foregoing threshold amount shall be recoverable in accordance with the terms
hereof.
(b) No indemnification shall be payable to the Buyers pursuant
to Section 9.1(i) for amounts in excess of 75% of the Purchase Price (as
adjusted in accordance with Section 1.4(b) hereof) in the aggregate.
(c) No indemnification shall be payable to the Buyers pursuant
to Section 9.1(i) with respect to any claim asserted by the Buyers after August
7, 1997 (the "Indemnification Cut-Off Date"); provided, however, that the
foregoing shall not apply to Claims resulting from any breach of the
representations and warranties contained in (i) the first sentence of Section
2.1; (ii) the second sentence of Section 2.3; (iii) Section 2.4; or (iv) Section
2.6(c).
9.3 INDEMNIFICATION BY THE BUYERS. The Sellers, upon demand, shall be
indemnified by the Buyers, jointly and severally, for the full amount of all
Damages suffered by the Sellers as a direct or indirect result of:
(i) the breach of any representation or warranty made by the Buyers in or
pursuant to this Agreement (including without limitation the representations and
warranties set forth in Section 3);
(ii) any failure by the Buyers to perform any obligation or comply with any
covenant or agreement of the Buyers specified herein or in any other document
executed at the Closing;
(iii) any claim for payments or other liabilities with respect to the
employment (or the termination thereof) of any Transferred Employee, any claim
alleging the wrongful termination of any Transferred Employee by the Buyers
(including, without limitation, constructive dismissal of any Transferred
Employee outside of the United States resulting from a difference between the
terms and conditions of employment (including, without limitation, differences
in pension benefits and death in service benefits) after the Closing and those
in effect prior to the Closing), any claim with respect to the termination or
modification of any of the Buyers' employee benefit plans or the benefits
provided thereunder and any claim with respect to the injury or death of any
Transferred Employee arising out of events occurring after the Closing;
(iv) any claim asserted with respect to the Liabilities;
(v) any claim (including, without limitation, claims alleging death or
injury to persons or damage to property), whether based in tort, contract or
otherwise resulting from or caused by any product sold, or service provided, by
the Buyers subsequent to the Closing; and
37
(vi) any activities of the Buyers after the Closing, whether arising out of
the operation of the Business or the ownership or use of the Subject Assets
after the Closing, including without limitation any violation of any
Environmental Law resulting from the conduct of the Business by any Buyer after
the Closing Date (provided, however, that nothing in this clause (vi) shall be
construed to limit the scope of any representation, warranty or covenant of the
Sellers made herein or to otherwise limit or affect the Sellers' obligation to
indemnify the Buyers pursuant to Section 9.1 hereof).
9.4 LIMITATIONS ON INDEMNIFICATION BY THE BUYERS. Notwithstanding the
foregoing Section 9.3, the rights of the Sellers to indemnification under
Section 9.3(i) shall be subject to the following provision:
(a) No indemnification shall be payable to the Sellers by any
Buyer pursuant to Section 9.3(i) unless the total of all claims for
indemnification pursuant to Section 9.3(i) shall exceed 1.25% of the Purchase
Price (as adjusted in accordance with Section 1.4(b) hereof) in the aggregate,
whereupon only the amount of such claims in excess of the foregoing threshold
amount shall be recoverable in accordance with the terms hereof.
(b) No indemnification shall be payable to the Sellers
pursuant to Section 9.3(i) for amounts in excess of 75% of the Purchase Price
(as adjusted in accordance with Section 1.4(b) hereof) in the aggregate.
(c) No indemnification shall be payable to the Sellers
pursuant to Section 9.3(i) with respect to any claim asserted by the Sellers
after the Indemnification Cut-Off Date; provided, however, that the foregoing
shall not apply to Claims resulting from any breach of the representations and
warranties contained in (i) Section 3.1; (ii) Section 3.2; or (iii) Section 3.3.
9.5 NOTICE; DEFENSE OF CLAIMS.
(a) Promptly after receipt by any indemnified party of notice
of any claim, liability or expense to which the indemnification obligations
hereunder are reasonably likely to apply, such party shall give notice thereof
in writing to (i) Dynatech, in the case of an indemnification demand by the
Buyers, or (ii) BioAnalysis, in the case of an indemnification demand by the
Sellers (as the case may be, the "Indemnifying Party"). Such notice shall state
the information then available regarding the amount and nature of such claim,
liability or expense.
(b) The Indemnifying Party shall have the right, exercisable
upon written notice to the party demanding indemnification (the "Indemnified
Party") within 20 days after receiving the notice referred to in Section 9.5(a),
at its expense, to defend, contest, protest, settle and otherwise control the
resolution of any such claim, action or proceeding. The Indemnifying Party shall
keep the Indemnified Party apprised of developments with respect to any such
claim, action or proceeding, and the Indemnified Party shall have the right to
consult
38
with the Indemnifying Party, and to participate therein, subject to the
Indemnifying Party's right of control thereof, at the Indemnified Party's
expense and with counsel selected by the Indemnified Party. If the Indemnifying
Party shall notify the Indemnified Party that the Indemnifying Party has elected
to assume any such defense, contest or protest, then the Indemnifying Party
shall not be liable to the Indemnified Party hereunder for any legal or other
expense subsequently incurred by the Indemnified Party in connection therewith.
(c) If the Indemnifying Party does not notify the Indemnified
Party of its election to defend any claim as provided in Section 9.5(b), then
the Indemnified Party may defend, contest, protest, settle and otherwise control
the resolution of such claim, action or proceeding. The Indemnified Party shall
keep the Indemnifying Party apprised of developments with respect to any such
claim, action or proceeding, and the Indemnifying Party shall have the right to
consult with the Indemnified Party, and to participate therein, subject to the
Indemnified Party's right of control thereof, at the Indemnifying Party's
expense and with counsel selected by the Indemnifying Party. If such event, then
the Indemnified Party shall not be liable to the Indemnifying Party hereunder
for any legal or other expense subsequently incurred by the Indemnifying Party
in connection therewith.
9.6 PAYMENT OF CLAIMS; ARBITRATION. All claims (other than claims made
by third parties which are the subject of a good faith dispute between the
Indemnified Party (or the Indemnifying Party) and any such third party) shall be
paid or otherwise satisfied by the Indemnifying Party within 60 days after
notice thereof is given by the Indemnified Party. If within said 60-day period,
the Indemnifying Party indicates in a writing delivered to the Indemnified Party
that it disputes the nature or amount of the claim, the dispute upon the
election of any party hereto after said 60-day period shall be referred to
Endispute to be settled by arbitration in Boston, Massachusetts in accordance
with the commercial arbitration rules of said organization. The fees and
expenses of the arbitrator shall be borne by the parties in such proportions as
shall be determined by the arbitration, or if there is no such determination
then such fees and expenses shall be borne equally by (a) the Indemnifying Party
and (b) the Indemnified Party. The determination of the arbitrator as to the
amount, if any, of the indemnification claim which is properly allowable shall
be conclusive and binding upon the parties hereto and judgment may be entered
thereon in any court having jurisdiction thereof.
9.7 DEFINITION OF DAMAGES. An Indemnified Party shall be entitled to
recover the full amount of any liabilities, expenses, costs or loss incurred due
to the matter for which indemnification is sought, including reasonable
attorney's fees incurred in connection therewith, but any recovery shall be net
of any economic benefit to which the Indemnified Party is entitled due to such
liabilities, expenses, costs or loss, including, without limitation, (i) any tax
refund, reduction or benefit, (ii) any insurance proceeds (excluding
self-insured amounts and deductible amounts) and (iii) any warranty
reimbursements (collectively, "Damages"). Notwithstanding the foregoing,
insurance proceeds to which the Indemnified Party may be entitled shall not
reduce the Damages recoverable from the Indemnifying Party if the Indemnified
Party shall determine, in good faith, that filing a claim therefor would be
likely either to result in (i) a significant increase in the premiums payable
with respect to the
39
continuation of such insurance coverage or (ii) the cancellation of the
applicable policy. In no event shall any Indemnified Party be awarded punitive
or multiple damages.
9.8 LIMITATION ON REMEDIES. It is specifically understood and agreed
that, in the absence of knowing and intentional fraud by any party hereto, in
the event a misrepresentation or breach of warranty or covenant is discovered by
any party after the Closing, such party's remedies shall be limited solely to
the indemnification set forth in this Section 9 of this Agreement.
SECTION 10. MISCELLANEOUS.
10.1 BULK SALES LAW. Subject to the Sellers' indemnification
obligations under Section 9.1(v) hereunder, the Buyers waive compliance by the
Sellers with the provisions of any applicable bulk sales, fraudulent conveyance
or other law for the protection of creditors in connection with the transfer of
the Subject Assets under this Agreement.
10.2 FEES AND EXPENSES.
(a) Each of the Sellers, on the one hand, and each of the
Buyers, on the other hand, will bear their own expenses in connection with the
negotiation and the consummation of the transactions contemplated by this
Agreement, including, without limitation, any broker's commission or finder's
fee incurred by any of such parties. Dynatech will pay all of the expenses
incurred by Dynatech GmbH in connection with this Agreement and the consummation
of the transactions contemplated hereby.
(b) Except as provided in Section 1.10 with respect to sales
and transfer taxes on the Subject Assets, the Buyers will pay all costs
incurred, whether at or subsequent to the Closing, in connection with the
transfer of the Subject Assets to the Buyers as contemplated by this Agreement,
including without limitation, all recording charges and fees applicable to the
recordation of deeds and mortgages and other instruments of transfer; and all
costs of obtaining or transferring permits, registrations, applications and
other tangible and intangible properties.
10.3 GOVERNING LAW. This Agreement shall be construed under and governed by
the internal laws of the Commonwealth of Massachusetts without regard to its
conflict of laws provisions.
10.4 NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission or overnight courier,
upon receipt, or if sent by registered or certified mail, upon the sooner of the
date on which receipt is acknowledged or the expiration of three days after
deposit in United States post office facilities properly addressed with postage
prepaid. All notices to a party will be sent to the addresses set forth below or
to such other address or person as such party may designate by notice to each
other party hereunder:
40
TO SELLERS: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Park
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Business Development
In each case, with a copy to: ▇▇▇▇▇▇▇, Procter & ▇▇▇▇
Exchange Place
Boston, MA 02109
Attn.: ▇▇▇▇▇▇ ▇. O'Dell, Jr., P.C.
TO BUYERS: c/o Thermo BioAnalysis Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive
Officer
In each case, with a copy to: Thermo Electron Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn.: General Counsel
Any notice given hereunder may be given on behalf of any party by counsel to
such party or other authorized representatives.
10.5 ENTIRE AGREEMENT.
(a) This Agreement, including the Disclosure Memorandum and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings; no promises, representations,
understandings, warranties and agreements have been made by any of the parties
hereto except as referred to herein or in such Disclosure Memorandum and
Exhibits or in such other writings, and all inducements to the making of this
Agreement relied upon by either party hereto have been expressed herein or in
such Disclosure Memorandum or Exhibits or in such other writings.
(b) The parties acknowledge and agree that the terms of this
Agreement, including the scope and content of the representations and warranties
of the parties in Sections 2 and 4, and the indemnification provisions and the
limitations thereon in Section 9, have been negotiated by the parties and are
intended to be the full statement of the parties' agreement with respect to the
matters set forth therein. The parties therefore agree that, notwithstanding the
terms of any local transfer agreement, instrument of assignment or other
agreement or
41
document intended to effect or supplement the transactions contemplated hereby
in any jurisdiction other than the United States (a "Local Transfer Agreement"),
in the event of any inconsistency between the terms of this Agreement and any
Local Transfer Agreement, the terms of this Agreement shall govern and control.
(c) The execution and delivery of any Local Transfer Agreement
shall be subject to the consummation of the transactions contemplated hereby and
shall not be effective unless and until the Closing hereunder takes place. If
the Closing hereunder does not take place or if this Agreement is terminated,
any Local Transfer Agreement shall be null and void and of no force or effect.
10.6 ASSIGNABILITY; BINDING EFFECT. This Agreement shall only be
assignable by the Buyers to one or more corporations or partnerships
controlling, controlled by or under common control with the Buyers upon written
notice to Dynatech, provided that such assignment shall not relieve the Buyers
of any of their obligations hereunder. This Agreement may not be assigned by the
Sellers without the prior written consent of BioAnalysis. This Agreement shall
be binding upon and enforceable by, and shall inure to the benefit of, the
parties hereto and their respective successors, and permitted assigns.
10.7 CAPTIONS AND GENDER. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter
pronoun, as the context may require.
10.8 EXECUTION IN COUNTERPARTS. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
10.9 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
10.10 PRESS RELEASES. The content of any press release of the
consummation of the transactions contemplated by this Agreement by any party
hereto shall be subject to the review and approval of BioAnalysis and Dynatech,
such review to be timely and such approval not to be unreasonably withheld.
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10.11 CONSENT TO JURISDICTION. Solely for the purpose of allowing a
party to enforce its indemnification and other rights hereunder, each of the
parties hereby consents to personal jurisdiction, service of process and venue
in the federal or state courts of Massachusetts.
[REMAINDER OF PAGE INTENTIONALLY BLANK.]
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PURCHASE AGREEMENT SIGNATURE PAGE
IN WITNESS WHEREOF the parties hereto have executed or caused this
Agreement to be executed by their duly authorized representatives as of the date
set forth above.
DYNATECH LABORATORIES, INC.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
DYNATECH HONG KONG LTD.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
DYNATECH CORPORATION LIMITED
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
LABORATOIRES DYNATECH, S.A.R.L.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
44
DYNATECH MEDICAL PRODUCTS LIMITED
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
DYNATECH CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer and
Treasurer
THERMO BIOANALYSIS CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
THERMO BIOANALYSIS LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
THERMO BIOANALYSIS (GUERNSEY) LIMITED
By: ▇▇▇▇ ▇. ▇▇▇▇
Title: Director
45
THERMO BIOANALYSIS SA
By: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President du Conseil
d'Administration
DLW INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
BIOANALYSIS INTERNATIONAL SALES INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
THERMO INSTRUMENT SYSTEMS INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Title:
46