1
Exhibit 99.3
STOCK AND ASSET PURCHASE AGREEMENT
among
THE ▇▇▇▇▇▇ COMPANIES, INC.,
as Guarantor,
COOPERSURGICAL ACQUISITION CORP.,
as Purchaser,
and
NETOPTIX CORPORATION,
LEISEGANG MEDICAL, INC.,
GALENICA INC.
and
LEISEGANG FEINMECHANIK-OPTIK GMBH
-------------------------
Dated as of
December 14, 1999
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TABLE OF CONTENTS
PAGE
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ARTICLE I PURCHASE AND SALE OF SHARES AND ASSETS; SALES TAXES.....................................................2
1.1 Transfer of the Share and Purchased Assets.............................................................2
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1.2 Assets Not Being Transferred...........................................................................5
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1.3 Instruments of Conveyance and Transfer, Etc............................................................6
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1.4 Further Assurances.....................................................................................6
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1.5 Assignment of Contracts, Rights, Etc...................................................................6
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1.6 Power of Attorney; Right of Endorsement, Etc...........................................................7
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1.7 Sales Taxes............................................................................................7
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1.8 Definitions............................................................................................8
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ARTICLE II ASSUMED LIABILITIES; EXCLUDED LIABILITIES..............................................................8
2.1 Liabilities Being Assumed..............................................................................8
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2.2 Liabilities Not Being Assumed..........................................................................8
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ARTICLE III PURCHASE PRICE; PURCHASE PRICE ADJUSTMENT............................................................11
3.1 Purchase Price........................................................................................11
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3.2 Escrow Contribution...................................................................................11
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3.3 Purchase Price Adjustment.............................................................................11
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3.4 Allocation of Purchase Price..........................................................................14
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ARTICLE IV CLOSING...............................................................................................14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLERS..........................................................15
5.1 Organization; Good Standing; Qualification and Power..................................................15
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5.2 Equity Investments of Leisegang GmbH..................................................................15
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5.3 Capital Stock of Leisegang GmbH; Ownership............................................................15
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5.4 Authority; Noncontravention; Consents.................................................................16
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5.5 SEC Filings: Financial Statements.....................................................................16
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5.6 Royalties.............................................................................................17
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5.7 Absence of Undisclosed Liabilities....................................................................17
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5.8 Absence of Changes....................................................................................18
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5.9 Tax Matters; Certain Definitions......................................................................20
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5.10 Title to Assets, Properties and Rights and Related Matters............................................22
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5.11 Intellectual Property.................................................................................23
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5.12 Agreements, No Defaults, Etc..........................................................................24
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5.13 Litigation, Etc.......................................................................................26
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5.14 Compliance; Governmental Authorizations...............................................................26
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5.15 FDA and Other Governmental Compliance.................................................................27
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5.16 Insurance.............................................................................................28
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5.17 Labor Relations: Employees............................................................................29
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5.18 ERISA Compliance......................................................................................29
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5.19 Environmental Matters.................................................................................30
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5.20 Brokers...............................................................................................32
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5.21 Accounts and Notes Receivable.........................................................................32
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5.22 Accounts and Notes Payable............................................................................32
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5.23 Warranties of Products; Products Liability; Regulatory Compliance.....................................32
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5.24 Inventories...........................................................................................33
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5.25 Suppliers, Consultants and Vendors....................................................................33
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5.26 Customers.............................................................................................33
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5.27 Real Property-Owned or Leased.........................................................................33
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5.28 Year 2000.............................................................................................34
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5.29 Sufficiency of Assets................................................................................35
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5.30 Disclosure............................................................................................35
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ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇..............................................................35
6.1 Organization; Good Standing; Qualification and Power..................................................36
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6.2 Authority; Corporate Action; Authority; No Conflict...................................................36
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6.3 Litigation, Etc.......................................................................................36
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6.4 Brokers...............................................................................................36
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6.5 Consent...............................................................................................37
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6.6 Purchase for Investment...............................................................................37
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6.7 Licenses; Authorizations..............................................................................37
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ARTICLE VII CONDUCT AND TRANSACTIONS PRIOR TO AND AT CLOSING.....................................................37
7.1 Access to Information.................................................................................37
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7.2 Conduct of each Seller................................................................................37
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7.3 Efforts to Consummate.................................................................................38
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7.4 Exclusivity...........................................................................................38
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7.5 Special Payment to Purchaser Based on Another Transaction.............................................40
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7.6 Public Announcements..................................................................................40
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7.7 Consents..............................................................................................40
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7.8 Notice of Prospective Breach; Supplement to Schedules.................................................40
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7.9 Exchange of Proceeds..................................................................................41
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7.10 Employee Matters......................................................................................41
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7.11 Sublease..............................................................................................43
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7.12 Quebec Bulk Sales Law.................................................................................43
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7.13 Products..............................................................................................43
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ARTICLE VIII CLOSING CONDITIONS..................................................................................43
8.1 Conditions to Obligations of Purchaser................................................................43
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8.2 Conditions to Obligations of each Seller..............................................................46
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ARTICLE IX INDEMNIFICATION.......................................................................................48
9.1 Indemnification Generally; Etc........................................................................48
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9.2 Assertion of Claims...................................................................................50
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9.3 Notice and Defense of Claims..........................................................................50
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9.4 Survival of Representations and Warranties............................................................51
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9.5 Limitations on Indemnification........................................................................52
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9.6 Definitions...........................................................................................52
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9.7 Payments from Escrow Fund.............................................................................53
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ARTICLE X TERMINATION; EFFECT OF TERMINATION.....................................................................53
10.1 Termination...........................................................................................53
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10.2 Termination Procedures................................................................................54
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10.3 Effect of Termination.................................................................................54
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ARTICLE XI POST CLOSING COVENANTS................................................................................54
11.1 Access to Records.....................................................................................54
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11.2 Physical Transfer of Purchased Assets.................................................................55
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11.3 Collection of Accounts Receivable.....................................................................55
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11.4 Sale of NetOptix Inventory............................................................................56
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11.5 Escrow Agreement......................................................................................57
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11.6 Apportionments........................................................................................58
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11.7 Corporate Name Change.................................................................................59
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ARTICLE XII MISCELLANEOUS PROVISIONS.............................................................................59
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12.1 Amendment.............................................................................................59
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12.2 Extension; Waiver.....................................................................................59
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12.3 Entire Agreement......................................................................................59
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12.4 Severability..........................................................................................60
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12.5 Benefits of Agreement.................................................................................60
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12.6 Fees and Expenses.....................................................................................60
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12.7 Headings..............................................................................................60
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12.8 Notices...............................................................................................60
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12.9 Counterparts..........................................................................................61
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12.10 Governing Law.........................................................................................62
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12.11 Incorporation of Exhibits and Schedules...............................................................62
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12.12 Independence of Covenants and Representations and Warranties..........................................62
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12.13 Interpretation; Construction..........................................................................62
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12.14 Definitions...........................................................................................63
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12.15 Remedies..............................................................................................65
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ARTICLE XIII NETOPTIX AS REPRESENTATIVE..........................................................................65
ARTICLE XIV JURISDICTION.........................................................................................66
14.1 Mutual Waiver of Jury Trial...........................................................................66
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14.2 Exclusive Jurisdiction................................................................................66
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SCHEDULE AND EXHIBITS
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EXHIBITS
Exhibit A - Form of ▇▇▇▇ of Sale of the U.S. Sellers
Exhibit B - Form of ▇▇▇▇ of Sale of Galenica
Exhibit C - Form of Escrow Agreement
Exhibit D - Form of Opinion of counsel to the Sellers-Closing
Exhibit E - Form of Opinion of counsel to the Sellers-Delaware Law
Exhibit F - Form of Opinion of counsel to Galenica
Exhibit G - Form of Opinion of counsel to Leisegang GmbH
Exhibit H - Form of Non-Competition Agreement
Exhibit I - Form of Opinion of counsel to the Purchaser
SCHEDULES
Schedule 1.1(a)(i) - Products
Schedule 1.1(a)(iv) - Tangible Personal Property
Schedule 1.1(a)(vi) - Intellectual Property Rights
Schedule 1.1(a)(ix) - Assigned Contracts
Schedule 3.1 - Gross Margin Shortfall Calculation
Schedule 3.3(a) - Valuation of Inventory and Assumed Liabilities
Schedule 3.4 - Statement of Allocation
Schedule 5.1 - Organization; Good Standing; Qualification and Power
Schedule 5.2 - Equity Investments
Schedule 5.3 - Capital Stock of Leisegang GmbH
Schedule 5.4 - Authority; Noncontravention; Consents
Schedule 5.5 - SEC Filings; Subsidiary Financial Statements
Schedule 5.7 - Absence of Undisclosed Liabilities
Schedule 5.8 - Absence of Changes
Schedule 5.9 - Tax Matters; Certain Definitions
Schedule 5.10(a) - Title to Assets, Properties and Rights and Related Matters
Schedule 5.10(b) - Permitted Encumbrances
Schedule 5.11 - Intellectual Property
Schedule 5.12 - Agreements, No Defaults, Etc.
Schedule 5.13 - Litigation, Etc.
Schedule 5.14 - Compliance; Governmental Authorizations
Schedule 5.15 - FDA Compliance
Schedule 5.16 - Insurance
Schedule 5.17 - Labor Relations: Employees
Schedule 5.18 - ERISA Compliance
Schedule 5.19 - Environmental Matters
Schedule 5.20 - Brokers
Schedule 5.21 - Accounts and Notes Receivable
Schedule 5.22 - Accounts and Notes Payable
Schedule 5.24 - Inventories
Schedule 5.25 - Suppliers, Consultants and Vendors
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Schedule 5.26 - Customers
Schedule 5.27 - Real Property - Owned or Leased
Schedule 5.28 - Year 2000
Schedule 11.5 - NetOptix Inventory
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INDEX OF DEFINED TERMS
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The following capitalized terms, which may be used in more than one
Section or other location of this Agreement, are defined in the following
Sections or other locations:
TERM LOCATION
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Accountant's Determination...................................................................................3.3(c)
Acquisition Expenses.........................................................................................7.4(a)
Affiliate.....................................................................................................12.14
Agreement.....................................................................................................12.13
Another Transaction..........................................................................................7.4(a)
Asset Closing............................................................................................ARTICLE IV
Asset Seller...............................................................................................Recitals
Assigned Contracts.......................................................................................1.1(a)(ix)
Assumed Liabilities.............................................................................................2.1
Berlin Facility..........................................................................................1.1(a)(ii)
Best Knowledge................................................................................................12.13
Bills of Sale...................................................................................................1.3
Business Day..................................................................................................12.14
Business...................................................................................................Recitals
By-laws.........................................................................................................5.1
Canadian Office Facility.................................................................................1.1(a)(ii)
Canadian Manufacturing Facility..........................................................................1.1(a)(ii)
Canadian Mortgages...........................................................................................2.1(c)
CERCLA......................................................................................................5.19(e)
CERCLIS.....................................................................................................5.19(e)
Charter.........................................................................................................5.1
Claim.......................................................................................................11.3(e)
Closing..................................................................................................ARTICLE IV
Closing Date.............................................................................................ARTICLE IV
Closing Statements...........................................................................................3.3(b)
Code......................................................................................................3.4(b)(i)
Company.....................................................................................................Caption
Company Employee Plans......................................................................................5.18(a)
Contract....................................................................................................5.12(a)
Control.......................................................................................................12.14
Debtor......................................................................................................11.3(e)
Direct Claim.................................................................................................9.3(e)
Disputed Receivable.........................................................................................11.3(e)
Employee Benefit Plan.......................................................................................5.18(b)
Encumbrances..................................................................................................12.14
Environmental, Health and Safety Laws.......................................................................5.19(e)
ERISA Affiliate.............................................................................................5.18(b)
ERISA...................................................................................................5.12(a)(vi)
Escrow Account..................................................................................................3.2
Escrow Agent....................................................................................................3.2
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Escrow Agreement................................................................................................3.2
Escrow Amount................................................................................................3.1(a)
Escrow Fund.....................................................................................................3.2
Escrow Income...............................................................................................11.5(a)
Examination Period...........................................................................................3.3(b)
Exchange Proceeds ..............................................................................................7.9
Excluded Assets..............................................................................................1.2(b)
Excluded Liabilities.........................................................................................2.2(b)
Facilities...............................................................................................1.1(a)(ii)
FDA.........................................................................................................5.15(a)
FDA QSR..................................................................................................5.15(b)(v)
Final Decree............................................................................................11.5(a)(iv)
Florida Facility.........................................................................................1.1(a)(ii)
Florida Facility Lease........................................................................................12.14
Foreign Subsidiaries........................................................................................Caption
GAAP..........................................................................................................12.14
Galenica....................................................................................................Caption
Governmental Entity..........................................................................................5.4(c)
Godin...................................................................................................7.10(a)(ii)
Gross Margin Shortfall.......................................................................................3.1(a)
Hazardous Materials.........................................................................................5.19(e)
Incremental Sales Cost......................................................................................11.4(d)
Indemnified Persons.............................................................................................9.6
Indemnifying Persons............................................................................................9.6
Information Technology......................................................................................5.28(b)
Intellectual Property Rights................................................................................5.11(c)
Inventory...............................................................................................1.1(a)(iii)
Inventory and Receivables Statement.......................................................................3.3(a)(i)
IRS.......................................................................................................5.9(c)(i)
Latest Seller SEC Report.....................................................................................5.5(a)
Latest Subsidiary Balance Sheet..............................................................................5.5(c)
Law(s)........................................................................................................12.14
Leased Property.............................................................................................5.27(a)
Leisegang...................................................................................................Caption
Leisegang Employees......................................................................................7.11(a)(i)
Leisegang GmbH..............................................................................................Caption
Liability.....................................................................................................12.14
Licensed Requisite Rights................................................................................5.11(a)(i)
Litigation Expense............................................................................................12.14
Losses........................................................................................................12.14
▇▇▇▇▇▇▇▇................................................................................................7.10(a)(ii)
Massachusetts Facility......................................................................................1.1(ii)
Material Adverse Effect.......................................................................................12.14
MDRs..................................................................................................5.15(b)(viii)
NetOptix....................................................................................................Caption
NetOptix Inventory..........................................................................................11.4(a)
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Net Receivables.........................................................................................3.3(a)(iii)
Net Receivables Amount......................................................................................11.3(d)
Non-Competition Agreement.................................................................................8.1(i)(i)
Non-Subleased Premises......................................................................................11.2(b)
Objection Notice.............................................................................................3.3(c)
Orders........................................................................................................12.14
Owned Requisite Rights...................................................................................5.11(a)(i)
Parent......................................................................................................Caption
Permits.......................................................................................................12.14
Permitted Encumbrances........................................................................................12.14
Person........................................................................................................12.14
Physical Inventory........................................................................................3.3(a)(i)
PMA.........................................................................................................5.15(a)
Pre-Closing Period..............................................................................................7.1
Proceedings...................................................................................................12.14
Products..................................................................................................1.1(a)(i)
Purchase Price..................................................................................................3.1
Purchased Assets.............................................................................................1.1(b)
Purchaser........................................................................................Caption and 1.1(e)
Purchaser Indemnified Persons...................................................................................9.6
Purchaser Indemnifying Persons..................................................................................9.6
Purchaser Losses................................................................................................9.6
Receivables.................................................................................................11.3(e)
Related Documents............................................................................................8.1(i)
Representatives...............................................................................................12.14
Requesting Party...............................................................................................11.1
Requisite Rights.........................................................................................5.11(a)(i)
Sale.......................................................................................................Recitals
Sales Return Liability.......................................................................................2.1(b)
SEC...........................................................................................................12.14
Securities Act................................................................................................12.14
Securities Exchange Act.......................................................................................12.14
Seller Indemnified Persons......................................................................................9.6
Seller Indemnifying Persons.....................................................................................9.6
Seller Losses...................................................................................................9.6
Seller SEC Reports...........................................................................................5.5(a)
Sellers.....................................................................................................Caption
Settlement Agreement.........................................................................................3.3(c)
Sellers' Inventory........................................................................................3.3(a)(i)
Share......................................................................................................Recitals
Share Closing............................................................................................ARTICLE IV
Share Transfer Agreement..................................................................................8.1(i)(v)
Special Tax Losses...........................................................................................9.1(b)
Statement of Allocation......................................................................................3.4(b)
Statement of Assets and Liabilities.......................................................................3.3(a)(i)
Sublease......................................................................................................12.14
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Subsidiary Financial Statements..............................................................................5.5(c)
Survival Date...................................................................................................9.4
Tax Return...................................................................................................5.9(d)
Taxes........................................................................................................5.9(d)
Third Party Claim...............................................................................................9.3
Title Commitment............................................................................................5.27(b)
Transaction Taxes...............................................................................................1.7
U.S. Sellers................................................................................................Caption
Year 2000 Compliant.........................................................................................5.28(b)
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STOCK AND ASSET PURCHASE AGREEMENT dated as of December 14,
1999 among THE ▇▇▇▇▇▇ COMPANIES, INC., a Delaware corporation,
as guarantor of the Purchaser's obligations under this
Agreement and each Related Document to which the Purchaser is
a party ("Parent"), COOPERSURGICAL ACQUISITION CORP., a
Delaware corporation that is wholly-owned by Parent (the
"Purchaser"), NETOPTIX CORPORATION, a Delaware corporation
("NetOptix"), LEISEGANG MEDICAL, INC., a Florida corporation
("Leisegang" or the "Company"), GALENICA INC., a company
continued under the laws of the Province of New Brunswick,
Canada ("Galenica"), and LEISEGANG FEINMECHANIK-OPTIK GMBH, a
company organized under the laws of Germany ("Leisegang
GmbH"). NetOptix, Leisegang, Galenica and Leisegang GmbH are
collectively called the "Sellers" and individually called a
"Seller." NetOptix and Leisegang are collectively called the
"U.S. Sellers" and individually called a "U.S. Seller."
Galenica and Leisegang GmbH are collectively called the
"Foreign Subsidiaries".
RECITALS
A. NetOptix is the record and beneficial owner of all shares
of capital stock, each with a par value of DM 50,000.00 per share, of Leisegang
GmbH (collectively, the "Share").
B. NetOptix and the other Sellers are engaged in the business of
developing, manufacturing and distributing women's health-related medical
products (the "Business") including colposcopes, ultrasound devices, rigid and
flexible hysteroscopes, fetal monitors, endoscopes, single-use vaginal specula
and a variety of surgical and diagnostic instruments and accessories.
C. The U.S. Sellers and Galenica (each, an "Asset Seller," and
together, the "Asset Sellers") desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Asset Sellers, certain of the assets of
the Asset Sellers, subject to the Purchaser's assumption of certain specified
liabilities of the Asset Sellers, in each case related to the Business, on the
terms and subject to the conditions contained in this Agreement and NetOptix
desires to sell to the Purchaser, and the Purchaser desires to purchase from
NetOptix, the Share (the "Sale").
ACCORDINGLY, in consideration of the premises and the mutual
representations hereinafter set forth, the parties hereto hereby agree as
follows:
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ARTICLE I
PURCHASE AND SALE OF SHARES AND ASSETS; SALES TAXES
1.1 TRANSFER OF THE SHARE AND PURCHASED ASSETS.
(a) On the terms and subject to the conditions contained in this
Agreement, at the Closing (x) NetOptix shall sell, transfer, convey and assign
to the Purchaser, free and clear of adverse claims and all other Encumbrances,
and the Purchaser shall purchase and acquire from NetOptix, all of NetOptix'
right, title and interest to the Share and (y) the Asset Sellers shall sell,
transfer, convey and assign to the Purchaser, free and clear of all Encumbrances
except Permitted Encumbrances, and the Purchaser shall purchase and acquire from
the Asset Sellers, all of the Asset Sellers' right, title and interest in, to
and under the assets, properties, interests in properties and rights of the
Asset Sellers relating to the Business of every kind and description, whether
real, personal or mixed, tangible or intangible (other than the Excluded
Assets), wherever located, as the same shall exist immediately prior to the
Closing, including the following:
(i) the products listed on SCHEDULE 1.1(a)(i) hereto (the
"Products");
(ii) all manufacturing, production, maintenance, packaging
and/or testing machinery and equipment, tools, dies, molds, jigs,
patterns, gauges (together with all spare and maintenance parts) used
in or relating to the Products and the Business which (i) are located
on, or normally located on but temporarily removed from or in transit
to the facilities of the Business at the following locations: the
facility of NetOptix in Sturbridge, Massachusetts (the "Massachusetts
Facility"), the facility of Galenica in ▇▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
(the "Canadian Manufacturing Facility"), the facility of Galenica in
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Canadian Office Facility") and the
facility of Leisegang in Boca Raton, Florida (the "Florida Facility")
(collectively, with Leisegang GmbH's facility in Berlin, Germany (the
"Berlin Facility"), the "Facilities") or (ii) are owned by the Asset
Sellers and have been furnished to any supplier, subcontractor or other
Person in connection with the manufacture, sale or servicing of the
Products;
(iii) all inventory, raw materials, components,
work-in-progress, finished products, packaging materials and stores and
supplies existing as of the Closing relating to the Products and the
Business including any of the foregoing (i) located on, or normally
located on but temporarily removed from, or in transit to, the
Facilities or (ii) furnished to any supplier, subcontractor or other
Person in connection with the manufacture, sale or servicing of any
Product or (iii) which are in transit to customers, but not including
the NetOptix Inventory as hereinafter defined (collectively, the
"Inventory");
(iv) the office furniture and equipment (consisting of desks,
chairs, tables, bookcases, partitions and cubicle spaces, personal
computers, printers and other equipment) which are located on the
Non-Subleased Premises and which are connected with the employees of
Leisegang hired at the Closing by the Purchasers, and all other items
of tangible personal property listed on SCHEDULE 1.1(a)(iv) hereto;
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(v) all accounts and notes receivable of the Business;
(vi) all intellectual property relating to the Products and
the Business including know-how, proprietary processes and information,
computer software and the Intellectual Property Rights identified on
SCHEDULE 1.1(a)(vi) hereto, including the name "Leisegang" and the
other names listed on such schedule, and the goodwill connected with
such names, the Products and the Business and all software and other
Intellectual Property Rights used in connection therewith;
(vii) all prepaid expenses, advances and deposits (other than
prepaid insurance premiums) relating to the Products and the Business;
(viii) the books, records and files (including computer files
and electronic media), correspondence, supplier and customer records
and information, blue prints, drawings and other technical papers and
specifications, records and files concerning the Products, including
those related to the FDA and other Governmental Entities, product
research and test data, quality control records, service manuals,
service bulletins, training materials, product bulletins, product
information booklets, business plans, inventory records, appraisals,
maintenance and asset history and depreciation records, accounting
records, ledgers and books of original entry that primarily relate to
the Business, sales, customer, vendor and purchase history of the
Business for the last four years in computer and other formats, all
technical manuals and other documents necessary to the use of the
Purchased Assets including Intellectual Property Rights, the production
of the Products by the Sellers and the conduct of the Business by the
Sellers;
(ix) all contracts, licenses, commitments, personal property
leases, purchase orders, sales orders and other agreements relating to
the Business (i) which are identified on SCHEDULE 1.1(a)(ix) hereto,
(ii) which are purchase and sales orders entered into in the ordinary
course of business of the Business consistent with past practice from
the date of this Agreement to the Closing Date and (iii) which are
contracts, licenses, commitments, personal property leases and other
agreements relating to the Business which have been disclosed by the
Asset Sellers in writing to the Purchaser and which the Purchaser, in
its discretion, consents on or prior to the Closing Date to include in
the Purchased Assets (collectively, the "Assigned Contracts");
(x) warranties and guarantees from vendors, suppliers and
manufacturers of the Purchased Assets and all rights, choses in action
and claims, known or unknown, matured or unmatured, accrued or
contingent, against third parties (including all warranty, indemnity
and other contractual claims, whether express, implied or otherwise),
to the extent relating to any Purchased Asset or any Assumed Liability
(and any such right, chose in action or claim to the extent relating to
an Excluded Asset or an Excluded Liability shall remain with the Asset
Sellers);
(xi) all rights (including experience ratings) with respect to
unemployment, workers' compensation and other similar insurance
reserves, if applicable, of Galenica;
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(xii) all transferable federal, state, local and foreign
governmental Permits, authorizations and approvals relating to the
Products and the Business, except those related to the Massachusetts
Facility and those certain portions of the Florida Facility which are
not at Closing being subleased by the Purchaser;
(xiii) all purchase orders, forms, labels, shipping materials,
catalogs, brochures, art works, photographs and advertising, sales and
promotional materials relating to the Business;
(xiv) all telephone, telex and facsimile numbers and all
listings of the Business in all telephone books and directories;
(xv) all interests in websites associated with the Business
and software and licenses connected therewith;
(xvi) the real property which is part of the Canadian
Manufacturing Facility, together with all appurtenances to such real
property and all of the Seller's interest in all of the structures,
fixtures and improvements located thereon;
(xvii) the lease for the Canadian Office Facility;
(xviii) all other goodwill associated with the Business; and
(xix) all other assets of any nature whatsoever used by the
Asset Sellers in the operation of the Business or relating to the
Purchased Assets, other than the Excluded Assets.
(b) For convenience of reference, the assets, properties, interests in
properties and rights that are to be sold, transferred, conveyed and assigned by
the Asset Sellers to the Purchaser at the Closing pursuant to SECTION 1.1(a) are
collectively called the "Purchased Assets" in this Agreement.
(c) Anything contained in this Agreement to the contrary
notwithstanding, to the extent that any asset, property, interest in property or
right relating to, or used or held for use by, the Asset Sellers in the conduct
of, or otherwise relating to, the operation of the Business is owned by any
shareholder, any subsidiary of the Asset Sellers or any other Affiliate of the
Asset Sellers, such asset, property, interest in property or right shall be
deemed to be a Purchased Asset for all purposes of this Agreement, and the Asset
Sellers shall do, and shall cause any such shareholder, subsidiary or other
Affiliate of the Asset Sellers to do, all things required to be done by the
Asset Sellers with respect thereto, including those things set forth in SECTIONS
1.3, 1.4 and 1.5.
(d) Purchased Assets set forth on each schedule to this SECTION 1.1,
shall be separately stated on such schedule as Purchased Assets owned by each
U.S. Seller and by Galenica, respectively.
(e) The Purchaser may purchase the Share and all or part of the
Purchased Assets itself, or cause the Share and/or all or any part of the
Purchased Assets to be purchased by one or
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more, direct or indirect, wholly-owned subsidiaries of the Parent, the identity
of which shall be designated in writing to NetOptix prior to Closing. No such
designation shall relieve the Purchaser or the Parent from any liability or
obligation hereunder. In this Agreement, "Purchaser" means the Purchaser and one
or more of such subsidiaries, or any of them.
1.2 ASSETS NOT BEING TRANSFERRED.
(a) Anything contained in SECTION 1.1 or elsewhere in this Agreement to
the contrary notwithstanding, the following are expressly excluded from the
Purchased Assets:
(i) the consideration delivered to the Asset Sellers pursuant
to this Agreement;
(ii) cash and cash equivalents of the Asset Sellers on hand
and in banks;
(iii) assets located at the Facilities but owned by third
Persons;
(iv) all right, title, and interest of the Asset Sellers in,
to, and under all Contracts which are not Assigned Contracts;
(v) insurance policies and rights and obligations thereunder,
subject to SECTION 7.9;
(vi) the minute books and ownership record books of the Asset
Sellers;
(vii) the capital stock of or other equity interests in the
Asset Sellers;
(viii) any assets relating to any Employee Benefit Plan of
NetOptix, Leisegang and Galenica;
(ix) the real property which is part of the Massachusetts and
Florida Facilities and any leases for that real property, and any
related leasehold improvements;
(x) the name "Galileo" and derivatives, and any rights thereto
or registrations thereof; (xi) the office furniture and equipment
(consisting of desks, chairs, tables, bookcases, partitions and cubicle
spaces, personal computers, printers and other equipment) which are
located on the Non-Subleased Premises and which are not connected with
the employees of Leisegang hired at the Closing by the Purchaser; and
(xii) contracts, licenses, commitments, personal property
leases, purchases orders, sales orders and other agreements which are
not Assigned Contracts.
(b) For convenience of reference, any assets of the Asset Sellers which
are not included in the Purchased Assets are collectively called the "Excluded
Assets" in this Agreement.
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1.3 INSTRUMENTS OF CONVEYANCE AND TRANSFER, ETC.
At the Closing:
(a) NetOptix shall assign and transfer to the Purchaser good title in
and to the Share, free and clear of all adverse claims and all other
Encumbrances, by delivering the Share Transfer Agreement, duly executed by
NetOptix, and by performing such acts and delivering to the Purchaser such items
as may be required by the Share Transfer Agreement; and
(b) each of the U.S. Sellers and Galenica shall execute and deliver to
the Purchaser ▇▇▇▇ of sale, assignment and assumption agreements in
substantially the form of EXHIBIT A and EXHIBIT B hereto, respectively
(collectively, the "Bills of Sale"), and such other deeds, endorsements,
assignments and other good and sufficient instruments of conveyance and transfer
as shall be necessary or desirable to transfer, convey and assign good and
marketable title to the Purchased Assets to the Purchaser free and clear of any
and all Encumbrances except Permitted Encumbrances. Each Asset Seller shall take
all reasonable legal steps that may be necessary to put the Purchaser in
possession and operating control of the Purchased Assets.
1.4 FURTHER ASSURANCES.
The Asset Sellers shall promptly pay or deliver to the Purchaser any
Purchased Asset which may be received by any Asset Seller after the Closing.
Each Asset Seller shall, at any time and from time to time after the Closing,
upon the request of the Purchaser, do, execute, acknowledge and deliver, and
cause to be done, executed, acknowledged or delivered, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney or assurances as
may be reasonably required to transfer, assign, convey, grant and confirm to the
Purchaser, or to aid and assist in the collection of or reducing to possession
by the Purchaser, the Purchased Assets, or to vest in the Purchaser good and
marketable title to the Purchased Assets as herein provided.
1.5 ASSIGNMENT OF CONTRACTS, RIGHTS, ETC.
Anything contained in this Agreement to the contrary notwithstanding,
this Agreement shall not constitute an agreement or an attempted agreement to
sell, transfer, sublease or assign any Assigned Contract (or any claim or right
or any benefit arising thereunder or resulting therefrom) if the attempted
transfer, sublease or assignment thereof, without the consent of any other party
thereto, would constitute a breach thereof or in any way affect the rights of
the Purchaser or any of the Asset Sellers thereunder. Each Asset Seller shall
use its commercially reasonable efforts to obtain the consent of the other party
to any Assigned Contract to the transfer, sublease or assignment thereof to the
Purchaser in all cases in which such consent is required for the transfer,
sublease or assignment of any such Assigned Contract, including any novation
required to assign contracts with certain Governmental Entities. If any such
consent is not obtained and the Closing occurs, each Asset Seller shall use its
commercially reasonable efforts (which shall not require payment of amounts to
any other party to an Assigned Contract) to provide for the Purchaser the
benefits of such Assigned Contract, including (a) adherence to reasonable
procedures established by the Purchaser for the immediate transfer to the
Purchaser of any payments or other funds received by any Asset Seller thereunder
and (b) enforcing at the expense of the Purchaser for the benefit of the
Purchaser any and all rights of each Asset Seller
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thereunder against the other party or parties thereto arising out of the breach
or cancellation thereof by such other party or parties or otherwise.
1.6 POWER OF ATTORNEY; RIGHT OF ENDORSEMENT, ETC.
Effective as of the Closing, each Asset Seller hereby constitutes and
appoints the Purchaser as its true and lawful attorney, with full power of
substitution, in the name of the Purchaser or any of the Asset Sellers, on
behalf, for the benefit and at the expense of the Purchaser, solely (a) to
collect all Purchased Assets, (b) to endorse, without recourse, checks, notes
and other instruments in connection with or attributable to the Purchased Assets
and the Assumed Liabilities, (c) to institute and prosecute all proceedings
which the Purchaser may deem proper in order to collect, assert or enforce any
claim, right or title in, to or under or otherwise attributable to the Purchased
Assets and the Assumed Liabilities, (d) to defend and compromise all actions,
suits or proceedings with respect to any of the Purchased Assets, as well as any
Assigned Contracts, or the Assumed Liabilities and (e) to do all such reasonable
acts and things with respect to the Purchased Assets, as well as any Assigned
Contracts, or the Assumed Liabilities as the Purchaser may deem advisable. The
foregoing powers are coupled with an interest and shall not be revocable by any
Asset Seller, directly or indirectly, by the dissolution of any Asset Seller or
in any other manner. The Purchaser shall retain for its own account any amounts
collected pursuant to the foregoing powers with respect to the Purchased Assets
and the Assigned Contracts, and each Asset Seller shall promptly pay to the
Purchaser any amounts received by such Seller after the Closing with respect to
the Purchased Assets and the Assigned Contracts.
1.7 SALES TAXES.
The Asset Sellers shall bear one-half and the Purchaser shall bear
one-half of any sales taxes, use taxes, transfer taxes, documentary charges,
recording fees, costs arising from the notarial deed required under German law
to consummate the transactions contemplated hereunder and under the Share
Transfer Agreement, or similar taxes, charges or fees that may become payable in
connection with the sale of the Share and the Purchased Assets to the Purchaser
(the "Transaction Taxes"). If the Asset Sellers pay less than one-half of the
total Transaction Taxes, NetOptix shall pay to the Purchaser a sum equal to the
difference between one-half of the total Transaction Taxes and the amount of
Transaction Taxes so paid by the Asset Sellers. If the Purchaser pays less than
one-half of the total Transaction Taxes, it shall pay to NetOptix a sum equal to
the difference between one-half of the total Transaction Taxes and the amount of
Transaction Taxes so paid by the Purchaser. The Asset Sellers and the Purchaser
shall timely pay the amount of Transaction Taxes they are obligated to pay to
the appropriate Governmental Entity, and NetOptix shall thereafter send evidence
to the Purchaser and the Purchaser shall send evidence to NetOptix that such
Transaction Taxes have been paid. The Asset Sellers and the Purchaser shall use
commercially reasonable efforts to reduce the total Transaction Taxes, including
applying for any reduction, rebate or refund of the Transactions Taxes available
under applicable Law. The amount of any such reduction, rebate or refund shall
be taken into consideration when calculating the total Transaction Taxes.
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1.8 DEFINITIONS.
Certain capitalized terms used and not otherwise defined in this
Agreement have the meanings given to them in SECTION 12.14.
ARTICLE II
ASSUMED LIABILITIES; EXCLUDED LIABILITIES
2.1 LIABILITIES BEING ASSUMED.
Upon the terms and subject to the conditions of this Agreement,
effective as of the Closing, and from and after the Closing, the Purchaser shall
pay or assume, perform and discharge when due, the following, and only the
following, Liabilities of the Asset Sellers (collectively, the "Assumed
Liabilities"):
(a) all Liabilities accruing from and after the Closing Date under the
Assigned Contracts in accordance with their respective terms, but in each case
only to the extent such Assigned Contracts have been effectively assigned and
transferred to the Purchaser pursuant to the provisions hereof;
(b) the amount of all product warranty obligations arising in the
ordinary course of the Business which are accrued on or before Closing to accept
sales returns and to provide allowances to customers subsequent to the Closing
Date, up to not more than a total of $150,000 (the "Sales Return Liability");
(c) an aggregate of up to $60,000 of the Liabilities under the
registered mortgages (collectively, the "Canadian Mortgages") on the Canadian
Manufacturing Facility, one in favor of the Business Development Bank of Canada
and the other in favor of Caisse Populaire de St. Luboire;
(d) commission obligations incurred by the Asset Sellers pursuant to
its existing agreements with sales personnel and distributors for sales of the
Products shipped by the Purchaser subsequent to the Closing Date based on orders
for the Products accepted by the Seller prior to the Closing Date; and
(e) all Liabilities relating to or arising out of the operation or
conduct of the Business from and after the Closing Date.
2.2 LIABILITIES NOT BEING ASSUMED.
(a) This Agreement is intended as and shall be deemed to be an
agreement for the sale and purchase of capital stock and assets and, except as
is specifically provided for in this Agreement, none of the provisions hereof
shall be deemed to create any obligation or liability of the Purchaser to any
Person that is not a party to this Agreement, whether under a third-party
beneficiary theory, successor liability theory or otherwise. Except as is
otherwise provided in this Agreement, the Purchaser shall not, as a result of
the execution and consummation of this Agreement, assume, discharge or become
liable for any of the liabilities, obligations, debts,
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contracts or other commitments of any of the Asset Sellers of any kind or nature
whatsoever, known or unknown, fixed, approved, contingent or otherwise, existing
on the Closing Date or arising out of any transaction entered into, or any state
of facts existing, prior to, at or subsequent to the Closing Date.
(b) Anything contained in this Agreement to the contrary
notwithstanding, the Purchaser is not assuming any Liabilities of the Asset
Sellers other than the Assumed Liabilities, whether or not relating to the
Purchased Assets or the Business, all of which Liabilities shall at and after
the Closing remain the exclusive responsibility and obligation of the Asset
Sellers (collectively, the "Excluded Liabilities"). Without limiting the
generality of the foregoing, the Purchaser is not assuming any of the following
Liabilities:
(c) any Liability of any Asset Seller under this Agreement;
(d) any Liability of any Asset Seller for expenses, Taxes or fees
incident to or arising out of the negotiation, preparation, approval or
authorization of this Agreement, the Related Documents or the consummation (or
preparation for the consummation) of the transactions contemplated hereby or
thereby (including all attorneys' and accountants' fees, and brokers' or
finders' fees incurred by or imposed upon any Asset Seller);
(e) any Liability of any Asset Seller for any account payable,
indebtedness or expense;
(f) any Liability of any Asset Seller with respect to any Taxes for any
period ending on or prior to the Closing Date (or the portion ending on the
Closing Date of any period that includes but does not end on the Closing Date);
(g) any Liability of any Asset Seller (A) arising by reason of any
violation or alleged violation of any Law or any requirement of any Governmental
Entity, (B) arising under any Environmental, Health and Safety Laws, including
those with respect to any Asset Seller's operation of any business or the
Purchased Assets (including any properties previously owned, leased or occupied
by any Asset Seller) or (C) arising by reason of any breach or alleged breach by
any Asset Seller of any Contract or Order, in any such case to the extent such
Liability results from or arises out of events, facts or circumstances occurring
or existing on or prior to the Closing, notwithstanding that the date on which
any Proceeding or Claim is commenced or made is after the Closing;
(h) except as provided in SECTION 2.1(b) above, any Liability for the
return by any customer of any Asset Seller of a product manufactured or sold by
any Asset Seller on or prior to the Closing or any Liability or Claim for any
product or service manufactured, sold, distributed or performed, as the case may
be, by any Asset Seller on or prior to the Closing based on any express
warranty, oral or written, or any implied warranty arising due to the statements
or conduct of any Asset Seller or its employees or agents;
(i) any Liability of any Asset Seller for which the Purchaser may
become liable as a result of or in connection with the failure by any Asset
Seller to fully and properly comply with any applicable bulk sales or transfers
laws, including but not limited to any liability in connection with
non-compliance with the Bulk Sales Law of Quebec.
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(j) any Liability of any Asset Seller arising out of the injury to or
death of any person, or damage to or destruction of any property, whether based
on negligence, breach of warranty, strict liability, enterprise liability or any
other legal or equitable theory arising from or related to products (or parts of
components thereof) distributed or otherwise disposed of or for services
performed by any Asset Seller, to the extent any of such Liabilities result from
or arise out of events, facts or circumstances occurring or existing on or prior
to the Closing, notwithstanding that the date on which any Proceeding or Claim
is commenced or made is after the Closing;
(k) any Liability of any Asset Seller relating to any Proceeding
arising out of or in connection with its conduct of the Business or any other
business prior to the Closing or any other conduct of any Asset Seller's
officers, directors, employees, stockholders, consultants, agents or advisors,
whether or not disclosed on the Schedules hereto;
(l) except as provided in SECTION 7.10(a)(i), any Liability of any
Asset Seller for severance pay or the like with respect to any employee of any
Asset Seller;
(m) except as provided in SECTION 7.10(a)(i), any Liability relating to
a contractual obligation of any Asset Seller, whether written or oral, for
bonuses or like payments to any director, officer or employee of any Asset
Seller for the period ending on or prior to the Closing;
(n) any Liability relating to any Employee Benefit Plan of the Asset
Sellers;
(o) any Liability of any Asset Seller for worker's compensation based
on an event occurring on or prior to the Closing Date;
(p) any Liability of any Asset Seller which relates to the Excluded
Assets; and
(q) any other Liability of any Asset Seller not expressly assumed by
the Purchaser under SECTION 2.1 (including any Liabilities arising out of
transactions entered into at or prior to the Closing, any action or inaction at
or prior to the Closing or any state of facts existing at or prior to the
Closing, regardless of when asserted, which are not expressly described in
SECTION 2.2).
Each Asset Seller acknowledges that it is retaining the Excluded
Liabilities, and the Asset Sellers shall pay, discharge and perform all Excluded
Liabilities promptly when due.
In addition, the Purchaser is not responsible for any Liability of
Leisegang GmbH (i) accruing on or before the Closing which is not reflected as a
Liability on its Statement of Assets and Liabilities and (ii) any Liabilities
not included in the Statement of Assets and Liabilities with respect to the
termination by Leisegang GmbH of the nine (9) employees pursuant to SECTION
7.10(a)(iii) that accrue after the Closing. All such Liabilities described in
clauses (i) and (ii) shall be "Excluded Liabilities" for all purposes hereunder.
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ARTICLE III
PURCHASE PRICE; PURCHASE PRICE ADJUSTMENT
3.1 PURCHASE PRICE.
Subject to SECTION 3.3, as the aggregate consideration for the sale of
the Share and the Purchased Assets to the Purchaser:
(a) at the Closing, the Purchaser shall pay (i) to NetOptix by wire
transfer of immediately available funds, $9,000,000, minus an amount equal to
the Gross Margin Shortfall described on SCHEDULE 3.1, if any, and (ii) to the
Escrow Agent by wire transfer of immediately available funds, $1,000,000 (the
"Escrow Amount") which shall be deposited in escrow as hereinafter provided; and
(b) at the Closing, the Purchaser shall assume the Assumed
Liabilities.
The "Purchase Price" means $10,000,000, as adjusted pursuant to SECTION
3.3, less the Gross Margin Shortfall plus the amount of the Assumed Liabilities.
3.2 ESCROW CONTRIBUTION.
At the Closing, the Escrow Amount shall be deposited by the
Purchaser into an escrow account (the "Escrow Account") with Chase Bank, N.A.
(the "Escrow Agent") to be established and distributed in accordance with the
terms and conditions set forth in this Agreement and the escrow agreement, which
shall be in substantially the form attached hereto as EXHIBIT C (the "Escrow
Agreement"). The amount in the Escrow Account is called the "Escrow Fund".
3.3 PURCHASE PRICE ADJUSTMENT.
(a) Preparation of Closing Statements.
(i) As of the Closing, the Purchaser shall (a) take a physical
inventory ("Physical Inventory") of all the Inventory and of the
inventory owned by Leisegang GmbH (collectively, the "Sellers'
Inventory") in a manner to be agreed upon by NetOptix and the Purchaser
(which may be observed by NetOptix), (b) prepare a written statement
which sets forth the value as of the Closing of the Sellers' Inventory
and the Net Receivables for each Asset Seller (the "Inventory and
Receivables Statement") and (c) prepare a statement which sets forth
the value as of the Closing of the assets and liabilities of Leisegang
GmbH (the "Statement of Assets and Liabilities"). The Purchaser shall
deliver to NetOptix within sixty (60) days of Closing the Inventory and
Receivables Statement and the Statement of Assets and Liabilities.
(ii) The Sellers' Inventory and Net Receivables and the assets
and liabilities of Leisegang GmbH on the Statement of Assets and
Liabilities shall be determined in accordance with GAAP, each as
modified in accordance with the methodology set forth on SCHEDULE
3.3(a)(i) and as follows:
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(A) Liabilities in the Leisegang GmbH Statement of Assets and
Liabilities shall reflect all Liabilities with respect to the employee
terminations required by SECTION 7.10 that have not been fully paid by
the Sellers by the Closing Date;
(B) all intercompany Receivables and other assets and all
intercompany Liabilities shall be eliminated or released; and
(C) No Sales Return Liability shall be accrued on the
Statement of Assets and Liabilities.
(iii) "Net Receivables" means the sum of trade accounts receivable
as of the Closing included in the Purchased Assets and on the Statement
of Assets and Liabilities (determined in accordance with GAAP) minus,
in each case, reserves for doubtful trade accounts receivable (such
reserves to be calculated in accordance with GAAP based on the
historical experience of each Seller).
(b) Review of the Closing Statements.
Promptly after the Inventory and Net Receivables Statement and the
Statement of Assets and Liabilities (collectively, the "Closing
Statements") are delivered to NetOptix pursuant to SECTION 3.3(a), NetOptix
shall conduct an examination of the Closing Statements. The Purchaser shall
give NetOptix and its Representatives timely and reasonable access to such
of the Purchaser's working papers, documents, financial information and
other information used in the preparation of the Closing Statements as
NetOptix reasonably deems necessary or desirable in connection with such
examination. NetOptix shall complete its examination of the Closing
Statements during the Examination Period. The "Examination Period" shall
commence upon delivery by the Purchaser to NetOptix of the Closing
Statements and end on the earliest of (i) thirty (30) days after such
delivery, (ii) the date NetOptix delivers a Closing Statement Objection
Notice to the Purchaser and (iii) the date NetOptix notifies the Purchaser
that NetOptix accepts the Closing Statements. The Closing Statements as
prepared by the Purchaser and examined by NetOptix shall be conclusive and
binding on the parties hereto for purposes of this Agreement, subject to
the resolution of any disputes in accordance with SECTION 3.3(c).
(c) Disputes.
NetOptix may object to the Closing Statements during the
Examination Period by providing the Purchaser a written notice describing
in reasonable detail NetOptix's objections to any item or valuation on the
Closing Statements (an "Objection Notice"). NetOptix's failure to deliver
an Objection Notice to the Purchaser within thirty (30) days after the
Purchaser's delivery of the Closing Statements to NetOptix shall constitute
NetOptix's binding acceptance of such statements and all matters identified
therein. If NetOptix and the Purchaser fail to resolve any objection
described on an Objection Notice within ten (10) days after the date the
Objection Notice is delivered to the Purchaser, then, at the request of
either NetOptix or the Purchaser, they shall meet in an attempt to resolve
an objection described on the Objection Notice and reach a written
agreement (the "Settlement Agreement"). If the parties enter into a
Settlement Agreement, the Closing Statements shall be deemed to be as
agreed therein. If the parties are
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unable to resolve the objection described on the Objection Notice within twenty
(20) days after receipt by Purchaser of such Objection Notice, then NetOptix and
the Purchaser shall select an independent accounting firm of recognized national
standing (or, if the parties cannot agree upon a selection, they shall select
such accounting firm by lot from among the five largest accounting firms in the
United States) which shall resolve such objection as promptly as possible. The
accounting firm selected shall not at the time of selection be performing
services for either the Purchaser or any Seller. A decision by the independent
accounting firm as to the resolution of such objection shall be (absent an
agreement of the parties regarding an error that is manifest) conclusive and
binding upon the parties for purposes of this Agreement (the "Accountant's
Determination"). The Accountant's Determination shall be (1) in writing, (2)
made in accordance with GAAP as modified by the standards provided for in this
Agreement for the Closing Statements and (3) nonappealable and incontestable by
NetOptix and the Purchaser and each of their respective Affiliates and
successors and not subject to collateral attack for any reason. All fees and
costs payable to the independent accounting firm referred to in this SECTION
3.3(c) shall be borne one-half by the Purchaser and one-half by the Asset
Sellers.
(d) Additional Payments.
(i) If the value of the Sellers' Inventory and the Net Receivables
and the cash on the Statement of Assets and Liabilities is in the aggregate
greater than $4,800,000, then the Purchaser shall pay to NetOptix an amount
equal to the excess over $4,800,000 of the value of the Sellers' Inventory
and the Net Receivables and the cash on the Statement of Assets and
Liabilities. If such value of the Sellers' Inventory and Net Receivables
and the cash on the Statement of Assets and Liabilities is in the aggregate
less than $4,800,000, then NetOptix shall pay to the Purchaser an amount
equal to the excess of $4,800,000 over such value.
(ii) If the value of all Liabilities of Leisegang GmbH on the
Statement of Assets and Liabilities is greater than $500,000, then NetOptix
shall pay to the Purchaser an amount equal to the excess over $500,000 of
the amount of such Liabilities. If such value of such Liabilities is less
than $500,000, then the Purchaser shall pay to NetOptix an amount equal to
the excess of $500,000 over such value.
(iii) Net Payments due from NetOptix under this paragraph shall
first be satisfied from any balance in the Escrow Fund to the extent
available. Any excess due over the amount available in the Escrow Fund
shall be paid by NetOptix.
(iv) Each value referred to in subparagraph (i) and (ii) above
shall be as determined in the Closing Statements or, in the case of a
dispute, as determined in a Settlement Agreement or in the Accountant's
Determination.
(v) All payments to be made pursuant to this SECTION 3.3(d) shall
be made by wire transfer of immediately available funds.
(vi) Payments due pursuant to this SECTION 3.3 shall bear interest
at the rate of 10% per annum from and after the 45th day following the
Closing Date until paid in full. Any interest payable by the Purchaser to
NetOptix under this clause (vi) shall be
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reduced by interest accruing on the Escrow Fund for the same period as
the period during which such interest accrues.
(e) Schedule of Payments. Any payments required to be made pursuant to
SECTION 3.3(d) shall be made as follows: (i) if NetOptix shall not have
delivered an Objection Notice to the Purchaser in accordance with the provisions
of SECTION 3.3(c), then the payment required to be made pursuant to SECTION
3.3(d) shall be made no later than five (5) days after the end of the
Examination Period, and (ii) if NetOptix shall have delivered an Objection
Notice to the Purchaser in accordance with the provisions of SECTION 3.3(c),
then payment of any undisputed amounts shall be paid no later than five (5) days
after the end of the Examination Period, and the payment required to be made
pursuant to SECTION 3.3(d) with respect to any disputed amounts shall be made
within five (5) days after the resolution of the dispute, whether by the
Settlement Agreement or upon the Accountant's Determination.
3.4 ALLOCATION OF PURCHASE PRICE.
(a) $2,750,000 of the Purchase Price shall be allocated to the
Share.
(b) The portion of the Purchase Price attributable to the Purchased
Assets shall be allocated to the Purchased Assets sold by each Asset Seller
in accordance with the allocation set forth in SCHEDULE 3.4 hereto (the
"Statement of Allocation"). Within 90 days after the Closing, NetOptix
shall:
(i) complete and execute a Form 8594 Asset Acquisition
Statement under Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code"), consistent with the Statement of Allocation; and
(ii) deliver a copy of such form to the Purchaser.
(c) The Purchaser and the Asset Sellers shall file a copy of such
form with their respective tax returns, as the case may be, for the period
which includes the Closing Date.
ARTICLE IV
CLOSING
(a) The closing of the sale of the Purchased Assets to the
Purchaser and the transactions contemplated hereby (the "Asset Closing")
shall take place at the offices of ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, ▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ January 31, 2000 or such later
date which is no later than two days after the date that all closing
conditions set forth in SECTIONS 8.1 and 8.2 have been satisfied or waived
or on such other date to which NetOptix and the Purchaser mutually agree
(the "Closing Date").
(b) Simultaneously with the closing of the sale of the Purchased
Assets, the closing of the sale of the Share to the Purchaser (the "Share
Closing", and together with the Asset Closing, the "Closing") shall take
place at the offices of the notary in Germany delivering the notarial deed
under the Share Transfer Agreement.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally, represent and warrant to
the Purchaser as follows:
5.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER.
Each Seller is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation as set
forth on SCHEDULE 5.1, has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted and, except as set forth on SCHEDULE 5.1, is duly qualified and in
good standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
necessary, each of which jurisdictions is set forth on SCHEDULE 5.1. NetOptix
has delivered to the Purchaser true and complete copies of each Seller's
certificate of incorporation (or comparable organizational document) (each, a
"Charter") and by-laws (or comparable organization document) ("By-laws"), in
each case as amended to the date hereof.
5.2 EQUITY INVESTMENTS OF LEISEGANG GMBH.
Except as set forth on SCHEDULE 5.2, Leisegang GmbH has never had, nor
does it currently have, any subsidiaries, nor has it ever owned, nor does it
currently own or have options or rights to purchase, any capital stock or other
equity or proprietary interest, directly or indirectly, in any Person.
5.3 CAPITAL STOCK OF LEISEGANG GMBH; OWNERSHIP.
(a) The authorized capital stock or stated capital of Leisegang GmbH
consists of one share of common stock, of which only the Share is outstanding.
The Share is validly issued, fully paid and non-assessable. Except as set forth
on SCHEDULE 5.3, there are no securities presently outstanding, and on the
Closing Date there will not be any outstanding securities, which are convertible
into, exchangeable for, or carrying the right to acquire, equity securities of
Leisegang GmbH, or subscriptions, warrants, options, calls, puts, convertible
securities, registration or other rights, arrangements or commitments obligating
Leisegang GmbH to issue, sell, register, purchase or redeem any of its equity
securities or any ownership interest or rights therein. There are no voting
trusts or other agreements or understandings to which Leisegang GmbH is bound
with respect to the voting of Leisegang GmbH capital stock. There are no stock
appreciation rights, phantom stock rights or similar rights or arrangements
outstanding. Except as set forth on SCHEDULE 5.3, there are no Contracts,
commitments, arrangements, understandings, or restrictions to which Leisegang
GmbH or any other Person is bound relating to any shares of capital stock or
other securities of Leisegang GmbH.
(b) NetOptix has good and marketable title to, and is the lawful record
and beneficial owner of, the Share. NetOptix owns the Share free and clear of
all adverse claims and other Encumbrances. Upon the delivery of the Share
Transfer Agreement with respect to the Share and completion of all action that
is required thereunder in the manner contemplated under
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SECTION 1.3(a), the Purchaser will acquire the beneficial and legal, valid and
indefeasible title to the Share, which at such time will represent all of the
issued and outstanding capital stock of Leisegang GmbH.
5.4 AUTHORITY; NONCONTRAVENTION; CONSENTS.
(a) Each Seller has all the requisite corporate power and authority to
enter into this Agreement and each Related Document to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and each Related Document to which such Seller is
a party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary corporate action on the
part of such Seller. This Agreement and each Related Document to which each
Seller is a party has been or will be at or prior to the Closing duly and
validly executed and delivered by such Seller and is or will be the valid and
binding obligation of such Seller, enforceable against each Seller in accordance
with its terms.
(b) Neither the execution, delivery and performance of this Agreement
and each Related Document to which each Seller is a party nor the consummation
by such Seller of the transactions contemplated hereby or thereby nor compliance
by such Seller with any provision hereof or thereof shall (i) conflict with, or
result in any violations of, or cause a default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation contained in or the loss of any
material benefit under, or result in the creation of any Encumbrance upon any of
the properties or assets of such Seller under any term, condition or provision
of (x) such Seller's Charter or the By-laws or (y) except as set forth on
SCHEDULE 5.4(b), any Contract to which such Seller is a party or by which its
properties or assets are bound, or (ii) violate any Laws applicable to such
Seller or any of its properties.
(c) Except as set forth on SCHEDULE 5.4(c), no consent, approval, Order
or authorization of, registration, declaration or filing with, or notification
to any court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, Federal, state or local (a
"Governmental Entity") or any other third Person is required in connection with
the execution, delivery and performance by each Seller of this Agreement or the
Related Documents to which it is a party or the consummation of the transactions
contemplated hereby or thereby.
5.5 SEC FILINGS: FINANCIAL STATEMENTS.
(a) Except as disclosed in SCHEDULE 5.5(a), all forms, reports,
statements and other documents required to be filed by NetOptix (including those
filed under its prior name, Galileo Corporation) with the SEC since September
30, 1996 (excluding the exhibits filed therewith) (the "Seller SEC Reports") (i)
were prepared in all material respects in accordance with the applicable
requirements of the Securities Act, or the Securities Exchange Act, as the case
may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
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order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The Seller SEC Report filed on Form 10-Q
with the SEC with respect to the fiscal quarter ended June 30, 1999 is referred
to as the "Latest Seller SEC Report".
(b) The consolidated financial statements (including, in each case, any
related notes or schedules thereto) contained in the Latest Seller SEC Report
were prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved (except as may be indicated therein or in the notes thereto
or, in the case of unaudited interim financial statements, as permitted by Form
10-Q of the SEC), and fairly presented in all material respects the consolidated
financial position of NetOptix and its consolidated subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments.
(c) NetOptix has previously delivered to the Purchaser the unaudited
balance sheets of Leisegang, Galenica and Leisegang GmbH, each as of June 30,
1999 and September 30, 1998 and 1997, and the related statements of income,
shareholders' equity, cash flows and supplemental data for periods then ended
(collectively, the "Subsidiary Financial Statements"). The unaudited balance
sheets of Leisegang, Galenica and Leisegang GmbH, each as of June 30, 1999, are
called the "Latest Subsidiary Balance Sheet".
(d) Since June 30, 1999, except as required by applicable Law or GAAP,
there has been no change in (i) any accounting principle, procedure or practice
followed by any Seller or (ii) the method of applying any such principle,
procedure or practice.
(e) Except as set forth on SCHEDULE 5.5(e), the Subsidiary Financial
Statements (x) are in accordance with the books and records of Leisegang,
Galenica and Leisegang GmbH (which have been maintained in accordance with good
business practices and are true and complete in all material respects), fairly
present the financial condition of Leisegang, Galenica and Leisegang GmbH as at
the respective dates indicated and at the Latest Balance Sheet Date, their
liabilities, and the results of operations, shareholders' equity and cash flows
of Leisegang, Galenica and Leisegang GmbH for the respective periods indicated
and (y) have been prepared in accordance with GAAP (or with respect to Galenica
and Leisegang GmbH, the local domestic equivalent of GAAP) consistently applied
throughout the periods covered thereby except, with respect to the unaudited
Financial Statements, for normal year-end adjustments (none of which will be
material) and for the absence of footnotes.
5.6 ROYALTIES.
No Seller has any obligations to third Persons for royalties related to
the Business and the Products.
5.7 ABSENCE OF UNDISCLOSED LIABILITIES.
Except as set forth on SCHEDULE 5.7, the Sellers have no material
Liability and each of Leisegang, Galenica and Leisegang GmbH has no material
Liability, except for (i) Liabilities of the Sellers reflected on the Latest
Seller SEC Report and Liabilities of each of Leisegang, Galenica and Leisegang
GmbH reflected on its Latest Subsidiary Balance Sheet, and (ii)
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Liabilities that have arisen since June 30, 1999 in the ordinary course of
business (none of which relates to breach of contract, breach of warranty, tort,
infringement, violation of Law, or any action, suit or Proceeding (including any
Liability under any Environmental, Health and Safety Laws)). All reserves set
forth on the Latest Seller SEC Report and each Latest Subsidiary Balance Sheet
were and are adequate for the purposes indicated therein at and after June 30,
1999. There are no loss contingencies (as such term is used in Statement of
Financial Accounting Standards No. 5 issued by the Financial Accounting
Standards Board in March 1975) that are not adequately provided for on the
Latest Seller SEC Report and each Latest Subsidiary Balance Sheet. Except as set
forth on SCHEDULE 5.7, each Seller has not, either expressly or by operation of
law, assumed or undertaken any Liability of any other Person, including, without
limitation, any obligation for corrective or remedial action relating to
Environmental, Health and Safety Laws.
5.8 ABSENCE OF CHANGES.
Except as set forth on SCHEDULE 5.8, since the date of the Latest
Seller SEC Report, each Seller has been operated in the ordinary course,
consistent with past practice, and there has not been:
(a) any change, other than an immaterial change, in the business,
operations, assets, condition (financial or otherwise), operating results,
liabilities, employee relations or business prospects of the Business or any
casualty loss or damage to the assets of any Seller, whether or not covered by
insurance;
(b) any change in the customers, suppliers or the personnel of any
Seller other than such routine changes which occur in the ordinary course of
business and consistent with past practice;
(c) any Liability including indebtedness (whether absolute, accrued,
contingent or otherwise and whether due or to become due) incurred, or any
transaction, contract or commitment entered into, amended or terminated, with
respect to any Seller, other than items incurred or entered into on an arms'
length basis in the ordinary course of business and consistent with past
practice;
(d) any acceleration, payment, discharge or satisfaction of any
Liability (including any claim) or Encumbrance by any Seller (whether fixed or
contingent, matured or unmatured), except on an arms' length basis in the
ordinary course of business and consistent with past practice;
(e) any declaration, setting aside or payment of any distribution with
respect to any shares of capital stock of any Seller, or any direct or indirect
redemption, purchase or other acquisition of any thereof, or any other payments
of any nature to any Affiliate of any Seller whether or not on or with respect
to any shares of capital stock of any Seller owned by such Affiliate;
(f) any issuance or sale, or any Contract entered into for the issuance
or sale, of any shares of capital stock of a Foreign Subsidiary or securities
convertible or exchangeable into or exercisable for such capital stock;
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(g) any labor trouble, problem or grievance adversely affecting the,
assets or prospects of the Business or of any Seller, or, to the Best Knowledge
of the Sellers, any basis for the occurrence of any such trouble, problem or
grievance;
(h) any license, sale, transfer, pledge, mortgage, or other disposition
of any tangible or intangible asset of Leisegang GmbH or any Asset Seller
related to the Business, except on an arms' length basis in the ordinary course
of business and consistent with past practice;
(i) any write-down or write-up of the value of any inventory of
Products of any Seller or any write-off as uncollectible of any accounts or
notes receivable of any Seller related to the Business, or any portion thereof,
or any amendment or waiver or termination of any claims or rights of value of
the Business;
(j) any general uniform increase in the compensation of employees of
the Foreign Subsidiaries (including, without limitation, any increase pursuant
to any bonus, pension, profit-sharing or other plan or commitment), any increase
in any such compensation payable to any officer, employee, consultant or agent
thereof, the establishment or institution of any employee benefit plan or
arrangement, the entering into by any of the Sellers of any employment Contract
with any officer or employee, or the making of any loan to, or, engagement in
any transactions with, any officer, director or employee of Leisegang or the
Foreign Subsidiaries;
(k) any single capital expenditure of any Seller related to the
Business or commitment therefor in excess of $25,000 for additions to property,
plant or equipment;
(l) any change in the tax or other accounting methods or practices
(including any material Tax election) followed by any Seller or any change in
depreciation or amortization policies or rates previously adopted;
(m) any change in the manner in which Products or services of any
Seller related to the Business are marketed (including, without limitation, any
change in prices), or any change in the manner in which any Seller with respect
to the Business extends discounts or credit to customers or otherwise deals with
such customers;
(n) any forward purchase commitments of the Business in excess of the
requirements of any Seller's historical practices or normal operating
inventories or needs, or at prices higher than current market prices;
(o) any forward sales commitments of any Seller for the Business at
prices lower than current market prices, or commitments of any Seller for the
Business for the sale of merchandise or services in excess of the ability of a
Seller to fulfill the same at its normal profit margin;
(p) any termination of employment of any officer or key employee of a
Foreign Subsidiary or any expression of intention by any such officer or key
employee to terminate such employment with such Seller;
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(q) any failure by a Seller to operate the Business in the ordinary
course consistent with past practice, including any failure by such Seller to
make capital expenditures or investments or any failure to pay trade accounts
payable or any other obligation or liability of such Seller when due;
(r) any action or contemplated action which would or could require a
Foreign Subsidiary to pay, accrue or establish a reserve for the payment of any
severance, termination or similar obligation to any current or former employee;
(s) any account of any Seller in respect of the Business in excess of
$25,000 subsequent to the date of the Latest Seller SEC Report (i) which has
become delinquent in its payment, (ii) which has had asserted against it any
claim, refusal to pay or right of set-off, or has been made subject to
provisions for retainage of payments, (iii) the account debtor of which has
refused or threatened to refuse to pay for any reason, (iv) the account debtor
of which has become insolvent or bankrupt or (v) which has been pledged to any
third Person;
(t) any agreement by or on behalf of Leisegang GmbH to make any
charitable contribution or to incur any nonbusiness expense in excess of $1,000
in the aggregate;
(u) any other transaction entered into by any Seller other than in the
ordinary course of its business and consistent with past practice which has had
or might have an adverse effect on the Business or prospects of the Business or
which involves aggregate payments related to the Business to or by such Seller
in excess of $25,000; or
(v) any agreement, whether in writing or otherwise, to take any of the
actions specified in the foregoing clauses (a) through (u).
5.9 TAX MATTERS; CERTAIN DEFINITIONS.
(a) Except as set forth on SCHEDULE 5.9(a), the Sellers and each other
Person included in any consolidated or combined Tax Return or part of an
affiliated group, within the meaning of Section 1504 (without regard to Section
1504(b)) of the Code, of which each Seller is or has been a member,
(i) has timely paid or caused to be paid all Taxes (as defined
below) required to be paid by it through the date hereof (including any
Taxes shown due on any Tax Return (as defined below));
(ii) has filed or caused to be filed in a timely manner (within any
applicable extension periods) all Tax Returns required to be filed by it
with the appropriate Governmental Entities in all jurisdictions in which
such Tax Returns are required to be filed; and
(iii) has not requested or caused to be requested any extension of
time within which to file any Tax Return, which Tax Return has not since
been filed.
(b) True, correct and complete copies of all Tax Returns filed by or on
behalf of each of the Sellers for the three most recent completed Tax years of
the Sellers have been
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delivered to or made available to the Purchaser. As of the time of filing, such
Tax Returns were complete and correctly reflected in all respects the facts
regarding the income, business, assets, operations, activities and status of the
Sellers and any other information required to be shown therein. All Taxes shown
to be due on such Tax Returns have been timely paid in full. The Sellers'
federal, state and foreign taxpayer identification numbers are listed on
SCHEDULE 5.9(b).
(c) Except as set forth in SCHEDULE 5.9(c):
(i) no Seller has been notified by the Internal Revenue Service
(the "IRS") or any other taxing authority that any issues have been raised
(and are currently pending) by the IRS or any other taxing authority in
connection with any Tax Return of the Sellers, and no waivers of statutes
of limitations have been given or requested with respect to the Sellers;
(ii) there are no pending Tax audits of any Tax Returns of any of
the Sellers, and no unresolved questions or claims concerning any Sellers'
Tax Liability exist;
(iii) no Tax liens exist for any Taxes upon any of the property or
assets of any of the Sellers, other than liens for Taxes not yet due, and
no deficiency or addition to Taxes, interest or penalties for any Taxes has
been proposed, asserted or assessed against any of the Sellers or any
member of any affiliated or combined group of which any of the Sellers was
or is a member;
(iv) full and adequate provision has been made (A) on the Latest
Seller SEC Report and the Latest Subsidiary Balance Sheet, and the books
and records of each Seller for all Taxes payable by the Sellers for all
periods prior to the date of the Latest Seller SEC Report, and (B) on the
books and records of the Sellers for all Taxes payable by each Seller for
all periods beginning on or after the date of the Latest Seller SEC Report;
(v) no Seller has nor shall it incur any Tax Liability or
obligation, whether direct or indirect, from and after the date of the
Latest Seller SEC Report other than Taxes incurred in the ordinary course
of business and consistent with previous years and past practices;
(vi) no Seller (A) has made an election to be treated as a
"consenting corporation" under Section 341(f) of the Code or (B) is or has
been a "personal holding company" within the meaning of Section 542 of the
Code;
(vii) each Seller (including all predecessors thereof) has complied
in all respects with all applicable Laws relating to the collection or
withholding of Taxes (such as sales Taxes or withholding of Taxes from the
wages of employees), and no Seller has been and is liable for any Taxes for
failure to comply with such Laws;
(viii) no Seller is or has ever been a party to any Tax sharing
agreement with any Person;
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(ix) no Seller has agreed to and is required to make any
adjustments or changes to its accounting methods pursuant to Section 481 of
the Code, and the IRS has not proposed any such adjustments or changes in
the accounting methods of such Seller;
(x) no claim has ever been made by any Taxing authority in a
jurisdiction in which any Seller does not file Tax Returns that any Seller
is or may be subject to taxation by that jurisdiction;
(xi) no Seller has made an election to have the provisions of
Section 1362(a) of the Code (relating to the taxation of S corporations)
made applicable to it; and
(xii) Neither NetOptix nor Leisegang is a foreign Person within the
meaning of Section 1.1445-2(b) of the rules and regulations promulgated
under Section 1445 of the Code, and the Purchaser has been or shall at
Closing be furnished with a true and accurate certificate of each such
Seller so stating which complies in all respects with Section
1.1445-2(b)(2) of such rules and regulations; and
(xiii) Neither of the Foreign Subsidiaries is or has been (A) a
foreign personal holding company for purposes of Section 552 of the Code,
(B) a passive foreign investment company for purposes of Section 1297 of
the Code, or (C) in receipt of Subpart F income as defined in Section 952
of the Code.
(d) "Taxes" means, with respect to any Person, (i) all income taxes
(including any tax on or based upon net income, gross income, income as
specially defined, earnings, profits or selected items of income, earnings or
profits) and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp, occupation,
premium, property or windfall profits taxes, alternative or add-on minimum
taxes, customs duties and other taxes, fees, assessments or charges of any kind
whatsoever, together with all interest and penalties, additions to tax and other
additional amounts imposed by any taxing authority (domestic or foreign) on such
Person (if any) and (ii) any liability for the payment of any amount of the type
described in clause (i) above as a result of (A) being a "transferee" (within
the meaning of Section 6901 of the Code or any other applicable Law) of another
Person, (B) being a member of an affiliated, combined or consolidated group or
(C) a contractual arrangement or otherwise. "Tax Return" means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
5.10 TITLE TO ASSETS, PROPERTIES AND RIGHTS AND RELATED MATTERS.
Each Seller has good title to the Intellectual Property Rights of such
Seller as provided in SECTION 5.11 and to all other assets, properties and
interests in properties, real, personal or mixed, reflected on the Latest Seller
SEC Report or the Latest Subsidiary Balance Sheet or acquired after the date of
the Latest Seller SEC Report which is necessary or required for their conduct of
the Business as currently conducted and as currently proposed to be conducted
(except inventory or other property sold or otherwise disposed of since the date
of the Latest Seller SEC Report in the ordinary course of business and accounts
receivable and notes receivable paid in full subsequent to such date), free and
clear of all Encumbrances, of any kind or character, except for
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Permitted Encumbrances. There does not exist any condition which materially
interferes with the economic value or use of any such assets. Except for
inventory and supplies in transit in the ordinary course of business and except
as set forth on SCHEDULE 5.10(a), all material tangible personal property is
located on the premises of each Seller.
5.11 INTELLECTUAL PROPERTY.
(a) Except in each case as set forth on SCHEDULE 5.11(a):
(i) each Seller owns, has the right to use, sell, license and
dispose of, and has the right to bring actions for the infringement of, all
Intellectual Property Rights (as defined below) (collectively, the "Owned
Requisite Rights"), other than those Intellectual Property Rights for which
such Seller has a valid license, all of which are listed on SCHEDULE
5.11(a) (collectively, the "Licensed Requisite Rights"; and together with
the Owned Requisite Rights, the "Requisite Rights"), and such rights to
use, sell, license, dispose of and bring actions are exclusive with respect
to the Owned Requisite Rights;
(ii) each Seller's Requisite Rights, all of which are listed on
SCHEDULE 5.11(a), are sufficient for its conduct of its Business as
currently conducted;
(iii) each Seller has made timely and proper application for
issuance of letters of patent in the United States for all patentable
inventions included within its Owned Requisite Rights;
(iv) there are no royalties, honoraria, fees or other payments
payable by any Seller to any Person by reason of the ownership, use,
license, sale or disposition of each Seller's Owned Requisite Rights or
Licensed Requisite Rights;
(v) no activity, service or procedure currently conducted or
proposed to be conducted by any Seller violates or shall violate any
contract, instrument, license, commitment, lease or similar document of any
Seller with any third Person relating to any Intellectual Property Rights,
all of which are listed on SCHEDULE 5.11(a), or infringe any Intellectual
Property Rights of any other Person;
(vi) each Seller has taken the steps described on SCHEDULE 5.11(a)
designed to safeguard and maintain (i) the secrecy and confidentiality of
confidential or proprietary information and (ii) the proprietary rights of
such Seller in all of its Owned Requisite Rights;
(vii) to the Best Knowledge of the Sellers, no Seller has
interfered with, infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property Rights of any Person or committed
any acts of unfair competition, and no Seller has received from any Person
in the past five years any notice, charge, complaint, claim or assertion
thereof, and no such claim is impliedly threatened by an offer to license
from another Person under a claim of use; and
(viii) no Seller has sent to any Person in the past five years, or
otherwise communicated in writing to any Person, any notice, charge,
complaint, claim or other
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assertion of any present, impending or threatened infringement by or
misappropriation of, or other conflict with, any Intellectual Property
Rights of any Seller by such other Person or any acts of unfair
competition by such other Person, nor, to the Best Knowledge of the
Sellers, is any such infringement, misappropriation, conflict or act of
unfair competition occurring or threatened.
(b) SCHEDULE 5.11(b) contains a true and complete list of all
applications, filings and other formal actions made or taken pursuant to any
Laws by each Seller to perfect or protect its interest in its Intellectual
Property Rights, including, without limitation, all patents, patent
applications, trademarks, trademark applications, servicemarks and servicemark
applications.
(c) "Intellectual Property Rights" means all intellectual property
rights, including patents, patent applications, trademarks, trademark
applications, tradenames, servicemarks, servicemark applications, domain names
and applications therefor, trade dress, logos and designs and goodwill connected
with the foregoing, copyrights and copyright rights, know-how, trade secrets,
proprietary processes and formulae, confidential information, franchises,
licenses, inventions, instructions, marketing materials and all documentation
and media constituting, describing or relating to the foregoing, including
software, manuals, memoranda and records. Intellectual Property Rights for the
Asset Sellers is limited to those related to the Business and does not include
those Intellectual Property Rights associated solely with the Excluded Assets.
5.12 AGREEMENTS, NO DEFAULTS, ETC.
(a) SCHEDULE 5.12 contains a true and complete list and brief
description of all written or oral Contracts to which each Seller is a party and
(x) which were entered into or made outside the ordinary course of the business
of Leisegang GmbH or, with respect to the Asset Sellers, outside the ordinary
course of the Business or (y) which were entered into or made in the ordinary
course and are described in clauses (i) through (xx) of this SECTION 5.12 (each,
a "Contract" and collectively, the "Contracts"). Except as set forth on SCHEDULE
5.12, neither Leisegang GmbH nor any Asset Seller in respect of the Business is
a party to any of the following:
(i) distributorship, dealer, sales, advertising, agency,
manufacturer's representative or other Contract relating to the payment of
a commission;
(ii) collective bargaining agreement or other Contract with or
commitment to any labor union or proposed labor union;
(iii) continuing Contract for the future purchase of products,
material, supplies, equipment or services in excess of $30,000 which is not
immediately terminable by such Seller without cost, forfeiture or other
liability at or at any time after the Closing;
(iv) Contract for future sales in excess of $30,000 which is not
immediately terminable by such Seller without cost or other liability at or
at any time after the Closing;
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(v) Contract or commitment for the employment of any officer,
employee or consultant or any other type of Contract or understanding with
any officer, employee or consultant, including any agreement or
understanding relating to severance payments;
(vi) formal or informal profit sharing, bonus, stock option,
pension, retirement, disability, stock purchase, hospitalization, insurance
or similar plan or agreement providing benefits to any current or former
director, officer, employee or consultant, whether or not subject to the
Employee Retirement Income Securities Act of 1974, as amended ("ERISA"), of
the Foreign Subsidiaries;
(vii) Contract or commitment for the borrowing of money, for a line
of credit or for a leasing transaction of a type required to be capitalized
in accordance with Statement of Financial Accounting Standards No. 13 of
the Financial Accounting Standards Board;
(viii) Contract or commitment for charitable contributions in
excess of $1,000;
(ix) Contract or commitment for capital expenditures in excess of
$10,000;
(x) agreement or arrangement for the sale of any assets, properties
or rights in excess of $50,000 in the aggregate other than the sale of
services or products in the ordinary course of business at normal profit
margins;
(xi) lease or other agreement pursuant to which it is a lessee of
or holds or operates any machinery, equipment, motor vehicles, office
furniture, fixtures, products, merchandise or similar personal property
owned by any other Person with rental payments in excess of $25,000 per
annum in the aggregate;
(xii) Contract with respect to the lending or investing of funds;
(xiii) Contract or indemnification with respect to any form of
intangible property, including any Intellectual Property Rights or
confidential information;
(xiv) Contract or commitment to issue or sell any securities of
Leisegang GmbH;
(xv) Contract which restricts any Seller from engaging in any
aspect of Business anywhere in the world;
(xvi) Contract or group of related Contracts with the same Person
(excluding purchase orders entered into in the ordinary course of business
which are to be completed within three months of entering into such
purchase orders) for the purchase or sale of products or services under
which the undelivered balance thereof (including the aggregate undelivered
balance under any such Contracts between the same Person and any Seller)
has a selling price in excess of $50,000;
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(xvii) Contract (A) that is not terminable by either party thereto
without penalty upon not more than 30 days' advance notice and involves
aggregate consideration in excess of $25,000 or (B) that involves aggregate
consideration in excess of $25,000 (excluding, in the case of clauses (A)
and (B) above, any purchase order entered into in the ordinary course of
business which is to be completed within three months of entering into such
purchase order);
(xviii) confidentiality, non-disclosure or non-compete agreement
with any officer, director, employee of or consultant to any Seller or
other Person with access to or knowledge of confidential or propriety
information designed to safeguard and maintain (A) the secrecy and
confidentiality of confidential or proprietary information and (B) the
proprietary rights of each Seller in all of its Owned Requisite Rights;
(xix) Contract with any Affiliate of any Seller; or
(xx) other Contract material to the business of any Seller.
(b) All items listed on SCHEDULE 5.12 are in full force and effect,
constitute legal, valid and binding obligations of the respective parties
thereto, and are enforceable in accordance with their respective terms. Each
Seller has in all respects performed in respect of such items all of the
obligations required to be performed by it to date, and there exists no default,
or any event which upon the giving of notice or the passage of time, or both,
would give rise to a claim of a default in the performance by each Seller or any
other party to any of the foregoing of their respective obligations thereunder.
The Purchaser has been furnished with true, complete and correct copies of all
written items listed on SCHEDULE 5.12 and SCHEDULE 5.12 contains complete
descriptions of all oral items listed on SCHEDULE 5.12. No consent or approval
by, or any notification or filing with, any party to any of the agreements on
SCHEDULE 5.12 is required in connection with the execution, delivery and
performance by any Seller or any Affiliate thereof of this Agreement or any of
the Related Documents to which any such Seller or Affiliate is a party or the
consummation by any such Seller or Affiliate of the transactions contemplated
hereby or thereby, except for those consents, approvals, notifications or
filings set forth on SCHEDULE 5.12, which, except as set forth on SCHEDULE 5.12,
have been or shall be made or obtained prior to the Closing.
5.13 LITIGATION, ETC.
Except as set forth on SCHEDULE 5.13 and workers' compensation claims
made in the ordinary course of business and consistent (in frequency and cost)
with past practices, there are no (i) Proceedings pending or, to the Best
Knowledge of the Sellers, threatened against any Seller, whether at law or in
equity, or before or by any Governmental Entity or arbitrator or (ii) Orders of
any Governmental Entity or arbitrator against any Seller. Each Seller has
delivered to the Purchaser all material documents and correspondence relating to
such matters referred to on SCHEDULE 5.13.
5.14 COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS.
Except as set forth on SCHEDULE 5.14, the Business has not and is not
being conducted in violation in any material respect of, and no Foreign
Subsidiary is in violation in any material
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respect of, any Law, Order or Permit, including, without limitation,
Environmental, Health and Safety Laws. Except as set forth on SCHEDULE 5.14, no
investigation or review by any Governmental Entity with respect to any Seller is
pending or, to the Best Knowledge of the Sellers, threatened, nor has any
Governmental Entity notified any Seller of its intention to conduct the same.
Each Seller has all Permits necessary for the conduct of its business, including
those required under any Environmental, Health and Safety Laws, such Permits are
in full force and effect, no violations are or have been recorded in respect
thereof and no Proceeding is pending or, to the Best Knowledge of the Sellers,
threatened, to revoke or limit any thereof. SCHEDULE 5.14 contains a true and
complete list of all such Permits under which any Seller is operating or bound,
and each Seller has furnished to the Purchaser true and complete copies thereof.
5.15 FDA AND OTHER GOVERNMENTAL COMPLIANCE.
(a) Except as set forth on SCHEDULE 5.15(a), each Seller is in
substantial compliance, in all material respects, with all Laws applicable to it
and its business including all Laws administered or issued by the United States
Food and Drug Administration (the "FDA") and the FDA Guidance Documents. All
Products, where required by Laws applicable thereto, are being manufactured and
marketed under a valid Section 510(k) clearance letter, or pre-market
application and approval ("PMA") issued by the FDA and SCHEDULE 5.15(a) hereto
lists each such 510(k) clearance letter and PMA and includes a copy thereof.
SCHEDULE 5.15(a) also lists those of the Products which are being marketed
without a valid Section 510(k) clearance letter or PMA issued by the FDA and
sets forth the reason why each such Product is being marketed without such
clearance or approval.
(b) Except as set forth on SCHEDULE 5.15(b):
(i) No false information or significant omission has been made in
any products application or products-related submission to the FDA or any
other Governmental Entity by or on behalf of any Seller or otherwise
relating to any of the Products.
(ii) Any PMA or 510(k) documents and related documents (including
any equivalent documents that are required outside of the United States)
for each Product are in compliance, in all material respects, with
applicable Laws administered or promulgated by the FDA or any other
Governmental Entity and to the Best Knowledge of the Sellers, neither the
FDA nor any other Governmental Entity is considering limiting, suspending,
or revoking such approvals/clearances or changing the marketing
classification or labeling of any Product.
(iii) All preclinical and clinical studies, if any, have been
conducted by each Seller in accordance with recognized good clinical and
good laboratory practices in all material respects, and are in compliance
with applicable Laws administered or promulgated by the FDA or any other
Governmental Entity regarding preclinical and clinical studies in all
material respects.
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(iv) Each Seller has obtained all regulatory approvals from any
Governmental Entities (whether foreign or domestic) related to the Products
required in any jurisdiction where the Products are manufactured, marketed
or sold.
(v) SCHEDULE 5.15(b) sets forth an accurate list of written
information regarding internal audits concerning whether each Seller
complies with current good manufacturing practices including FDA Quality
System Regulation (the "FDA QSR"), ISO 9000 and Canadian standards and all
written reports or written information regarding the FDA QSR audits
conducted for each Seller by an outside auditor.
(vi) Each Seller is in substantial compliance with the FDA QSR and
any Laws of any other Governmental Entity regarding the testing of incoming
components and in process product, equipment validation and maintenance,
complaint file requirements, process validation, document retention, change
controls, and master file and device history file documentation.
(vii) Each Seller has signed up-to-date written policies that
reflect its actual FDA QSR procedures.
(viii) Each Seller has, in a timely manner, filed all medical
device reports ("MDRs") for deaths, serious injuries, and reportable
malfunctions required by the FDA and any other Governmental Entity. A list
of such reports and each Seller's written policy regarding MDR reporting is
attached as part of SCHEDULE 5.15(b).
(ix) No Seller has knowledge of any acts that furnish a reasonable
basis for a Warning Letter, Section 305 Notice, or other similar
communications from the FDA or any other Governmental Entity, and there
have been no recalls, field notifications, safety alerts (whether voluntary
or otherwise) or seizures requested or threatened, related to any Products.
(x) Each Seller has established a corporate compliance program
which is described as part of SCHEDULE 5.15(b) hereto.
5.16 INSURANCE.
(a) SCHEDULE 5.16(a) contains a true and complete list of all policies
of liability, theft, fidelity, life, fire, product liability, workers'
compensation, health and other forms of insurance held by any Seller for the
benefit of itself or any other Seller (specifying the insurer, amount of
coverage, type of insurance, policy number, Best's rating of the insurer and any
pending claims thereunder). Such insurance coverage has been maintained at all
times during the course of the operation of the business of each Seller insured
thereby, and such insurance coverage has been maintained on an occurrence (as
opposed to a claims made) basis. Each Seller is insured against all risks
usually insured against by Persons conducting similar businesses and operating
similar properties in the localities where the business of each Seller is
conducted and the properties of each Seller are located, under policies of such
types as are customarily carried by such Persons. The amounts of coverage under
such policies of insurance are adequate for the assets and properties of each
Seller insured thereby.
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(b) Except as set forth on SCHEDULE 5.16(b), with respect to each
policy of insurance listed on SCHEDULE 5.16(a):
(i) such policy is a valid and enforceable policy and is
outstanding and in full force and effect, all premiums with respect thereto
are currently paid and are not subject to adjustment, and no Seller is in
default in any respect with respect to its obligations under such policy,
and no basis exists that would give any insurer under any such policy the
right to cancel or unilaterally reduce or limit the stated coverage's
contained in such policy;
(ii) there are no outstanding claims currently pending under such
policy that could be expected to cause an increase in the insurance rates
of each Seller, and no facts or circumstances exist that might relieve the
insurer under such policy of its obligations to satisfy in full any claim
thereunder; and
(iii) no Seller has received any notice that such policy has been
or shall be canceled or terminated or will not be renewed on substantially
the same terms as are now in effect or the premium on such policy shall be
increased on the renewal thereof.
5.17 LABOR RELATIONS: EMPLOYEES.
(a) Except as set forth on SCHEDULE 5.17(a), (i) neither Leisegang nor
either of the Foreign Subsidiaries is delinquent in payments to any of its
employees for any wages, salaries, commissions, bonuses or other direct
compensation for any services performed by them to date or amounts required to
be reimbursed to such employees, (ii) upon termination of the employment of any
such employees, neither Leisegang nor either of the Foreign Subsidiaries will by
reason of anything done prior to the Closing be liable to any of such employees
for severance pay or any other payments, (iii) Leisegang and each Foreign
Subsidiary is in compliance in all material respects with all applicable Laws
respecting labor, employment and employment practices, terms and conditions of
employment and wages and hours, (iv) there is no unfair labor practice complaint
against either Leisegang or either of the Foreign Subsidiaries pending before
the National Labor Relations Board or any other Governmental Entity, (v) there
is no labor strike, material dispute or grievance, slowdown or stoppage actually
pending or, to the Best Knowledge of the Sellers , threatened against or
involving either of the Foreign Subsidiaries, (vi) no labor union currently
represents the employees of either of the Foreign Subsidiaries and, to the Best
Knowledge of the Sellers, no labor union has taken any action with respect to
organizing the employees of Leisegang GmbH and (vii) no workers' council exists
with respect to Leisegang GmbH.
(b) The severance payments that Leisegang is required by its corporate
policies in effect at the time of the Closing to make upon termination without
cause of employment of its employees (if such termination occurred at the
Closing) is set forth accurately on SCHEDULE 5.17(b).
5.18 ERISA COMPLIANCE.
(a) SCHEDULE 5.18(a) contains a true, complete and correct list of all
Employee Benefit Plans of Leisegang and the Foreign Subsidiaries (collectively,
the "Company Employee
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Plans") (i) that cover any employees of Leisegang and the Foreign Subsidiaries
(A) that are maintained, sponsored or contributed to by the Leisegang and the
Foreign Subsidiaries or (B) with respect to which Leisegang and the Foreign
Subsidiaries are obligated to contribute or has any actual or potential
liability or obligation, whether direct or indirect, or (ii) with respect to
which Leisegang and the Foreign Subsidiaries have any actual or potential
liability or obligation on account of the maintenance or sponsorship thereof or
contribution thereto by any present or former ERISA Affiliate (as defined below)
of Leisegang and the Foreign Subsidiaries. Except as set forth on SCHEDULE
5.18(b), each Company Employee Plan has been established, maintained, operated
and administered in accordance with its terms and in compliance in all respects
with the applicable Laws of each Governmental Entity having jurisdiction.;
(b) "Employee Benefit Plan" means (i) any qualified or non-qualified
Employee Pension Benefit Plan (as defined in Section 3(2) of ERISA), including
any Multiemployer Plan or Multiple Employer Plan, (ii) any Employee Welfare
Benefit Plan (as defined in Section 3(1) of ERISA), or (iii) any employee
benefit, fringe benefit, compensation, incentive, bonus or other plan, program
or arrangement, whether or not subject to ERISA and whether or not funded.
"ERISA Affiliate" means, with respect to any Person, any other Person that is a
member of a "controlled group of corporations" with, or is under "common
control" with, or is a member of the same "affiliated service group" with such
Person as defined in Section 414(b), 414(c), or 414(m) or 414(o) of the Code.
5.19 ENVIRONMENTAL MATTERS.
(a) Except for NetOptix with respect to the Massachusetts Facility and
the operations of unrelated businesses conducted there, and except as set forth
on SCHEDULE 5.19(a), no Seller is nor, to the Best Knowledge of the Sellers, is
or any of its past property or operations, subject to or the subject of, any
Proceeding, Order, settlement, or other Contract arising under any
Environmental, Health and Safety Laws, nor, to the Best Knowledge of the
Sellers, has any investigation been commenced or is any Proceeding threatened
against any Seller under any Environmental, Health and Safety Laws with regard
to either Foreign Subsidiary or the Business.
(b) Except as set forth on SCHEDULE 5.19(b), no Seller has received any
written or oral notice, report or other information that any Seller is
potentially responsible under any Environmental, Health and Safety Laws for
response costs or natural resource damages, as those terms are defined under the
Environmental, Health and Safety Laws, at any location and no Seller has
transported or disposed of, or allowed or arranged for any third party to
transport to or dispose of, any Hazardous Materials at any location included on
the National Priorities List, as defined under CERCLA, or any location proposed
for inclusion on that List, or any location included on the CERCLIS database
prepared under CERCLA or on any analogous list prepared by any Governmental
Entity.
(c) SCHEDULE 5.19(c) sets forth a complete and accurate list of all
properties and facilities previously owned or operated by each Seller or any
predecessor of such Seller. Except with respect to the Massachusetts Facility, a
location at which no operations related to the Business have been conducted
within the last three months and which is not commercially necessary for the
future operation of the Business, and except as set forth on SCHEDULE 5.19(c),
there has not been any release on any such properties or facilities or on the
leased property of
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Hazardous Materials in an amount exceeding a reportable quantity as defined
under, or in a manner that would support an Order by a Governmental Entity
under, any Environmental, Health and Safety Laws. There were and are no
hazardous waste treatment, storage or disposal facilities, as those terms are
defined under the Environmental, Health and Safety Laws, located on any such
properties or facilities or on the leased property. Neither is there now, nor to
the Best Knowledge of the Sellers, has there ever been, any asbestos-containing
material, underground storage tanks, above-ground storage tanks, landfill, waste
pile, surface impoundment, or article or equipment containing polychemical
biphenyls on or at any of the facilities used in the Business. No facts, events
or conditions relating to the past or present property, operations or the
Facilities (or any other Person for whom any Seller has assumed
environmental-related Liabilities) would prevent compliance by any Seller with,
or give rise to any Liability or corrective or remedial obligation of such
company under, any Environmental, Health and Safety Laws.
(d) Each Seller has provided the Purchaser with correct and complete
copies of all reports and studies within the possession or control of any Seller
with respect to past or present environmental conditions or events at any
properties or facilities previously owned or operated by any Seller or any
predecessor of any Seller including the leased property and to the Best
Knowledge of the Sellers but excluding the Massachusetts Facility and other
unrelated businesses of NetOptix, there are no other environmental reports or
studies with respect thereto, other than as contemplated hereby.
(e) As used herein, the following terms have the following meanings:
"Environmental, Health and Safety Laws" means all Laws, Permits and
Contracts with Governmental Entities relating to or addressing pollution or
protection of the environment, public health and safety, or employee health and
safety, including, if applicable, the Solid Waste Disposal Act, as amended, 42
U.S.C. Section 6901, et seq., the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq., the Emergency Planning and Community Right-to-Know Act, as
amended, 42 U.S.C. Section 11001 et seq., the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), as amended, 42 U.S.C.
Section 9601 et seq., the Hazardous Materials Transportation Uniform Safety Act,
as amended, 49 U.S.C. Section 1804 et seq., the Occupational Safety and Health
Act of 1970, as amended, the regulations promulgated thereunder, and any similar
Laws and other requirements having the force or effect of Law, and all Orders
issued or promulgated thereunder, and all related common law theories.
"CERCLIS" means the Comprehensive Environmental Response, Compensation,
and Liability Information System.
"Hazardous Materials" means any hazardous or toxic chemicals, materials
or substances, pollutants, contaminants, or crude oil or any fraction thereof
(as such terms are defined under any Environmental, Health and Safety Law).
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5.20 BROKERS.
Except as set forth on SCHEDULE 5.20, no Seller nor any of its
officers, directors, shareholders or employees has employed any broker or finder
or incurred any Liability for any brokerage fees, commissions or finders' fees
in connection with the transactions contemplated hereby. To the extent any
Seller has, based upon its acts, any Liability to pay for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated
hereby, it will be solely responsible for the payment of such commission or fee.
5.21 ACCOUNTS AND NOTES RECEIVABLE.
Except as set forth on SCHEDULE 5.21, all the accounts receivable and
notes receivable of the Sellers related to the Business owing to each Seller as
of the date hereof constitute, and as of the Closing shall constitute, valid and
enforceable claims arising from bona fide transactions in the ordinary course of
business, and there are no known or asserted claims, refusals to pay or other
rights of set-off against any thereof. Except as set forth on SCHEDULE 5.21,
there is (i) no account debtor or note debtor delinquent in its payment by more
than 90 days, (ii) no account debtor or note debtor that has refused or, to the
Best Knowledge of the Sellers, threatened to refuse to pay its obligations to
each Seller for any reason, (iii) to the Best Knowledge of the Sellers, no
account debtor or note debtor that is insolvent or bankrupt and (iv) no account
receivable or note receivable pledged to any third party by each Seller.
5.22 ACCOUNTS AND NOTES PAYABLE.
Except as set forth on SCHEDULE 5.22, all accounts payable and notes
payable by each Seller to third parties as of the date hereof arose, and as of
the Closing shall have arisen, in the ordinary course of business, and, except
as set forth on SCHEDULE 5.22, there is no such account payable or note payable
delinquent in its payment, except those contested in good faith and already
disclosed on SCHEDULE 5.22.
5.23 WARRANTIES OF PRODUCTS; PRODUCTS LIABILITY; REGULATORY COMPLIANCE.
(a) Except to the extent written down on the books of account of any
Seller or reserved against thereon, each group of products manufactured, sold,
distributed, used or held in inventory by any Seller (including, without
limitation, all documentation furnished in connection therewith) is, subject to
customary and reasonable tolerances, free from any significant defects in
workmanship and materials, and conforms in all material respects with all
customary and reasonable standards for products of such type.
(b) No Seller has become aware or otherwise been notified of or been
responsible for, subject to or does now have any actual or potential liability
or obligation, whether direct or indirect, arising out of, any injury to Persons
or property as a result of the ownership, possession or use of any product
manufactured, sold or distributed by any Seller.
(c) Neither the FDA nor any other Governmental Entity regulating the
marketing, testing or advertising of any of the Products currently manufactured,
sold, distributed or used in connection with the Business has requested that any
such product be removed from the market, that substantial new product testing be
undertaken as a condition to the continued manufacturing,
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selling, distribution or use of any such product or that such product be
modified in a way likely to have a Material Adverse Effect.
5.24 INVENTORIES.
Except as set forth on SCHEDULE 5.24, (i) the inventories of the
Products as of the date hereof are of good, useable and merchantable quality,
and (ii) such inventory includes no items which are below customary quality
control standards of the medical device industry and any applicable quality
control of any Governmental Entity and has been manufactured in compliance with
current good manufacturing practices including FDA QSR, ISO 9000 and Canadian
standards, or of a quantity not usable or salable in the normal course of
business, the aggregate value of which has not been written down on the Sellers'
books of account to realizable market value or with respect to which adequate
reserves have not been provided in accordance with GAAP.
5.25 SUPPLIERS, CONSULTANTS AND VENDORS.
Except in the ordinary course of business and except as set forth on
SCHEDULE 5.25, no material supplier, consultant or vendor to any Seller in
respect of the Business has canceled or otherwise terminated, or threatened to
cancel or otherwise terminate, its relationship with any Seller or has
decreased, limited or otherwise modified, or threatened to decrease, limit or
otherwise modify, the services, supplies or materials it provides to any Seller
and, to the Best Knowledge of the Sellers, the transactions contemplated by this
Agreement shall not affect the relationship of each Seller with any such
supplier, consultant or vendor.
5.26 CUSTOMERS.
Except to the extent any such business relationship is impaired solely
by virtue of an account or note receivable past 90 days due as disclosed on
SCHEDULE 5.26, the business relationship between each Seller and its customers
of the Business is generally good and no material disagreement or problem exists
between each Seller and any such customer. No such customer to which more than
$50,000 of annual sales are attributable has threatened, or has notified any
Seller that it intends, to terminate its relationship and dealings with any
Seller, whether as a result of the transactions contemplated by this Agreement
or otherwise.
5.27 REAL PROPERTY-OWNED OR LEASED.
(a) SCHEDULE 5.27(a) contains a list of all of the Facilities, except
for the Massachusetts Facility, and the name of the Seller which owns, leases,
subleases or otherwise occupies each such Facility is set forth opposite the
name of such Facility. The Facilities are all owned, leased, subleased or
otherwise occupied by the Sellers in the conduct of the Business. The
description of each such Facility subject to one or more leases (the "Leased
Property") includes the names of the lessor and the lessee and the basic terms
thereof. The real property listed on SCHEDULE 5.27(a) constitutes all real
property used or occupied by the Sellers in connection with the Business.
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(b) Except for the facts revealed in Schedule B of the Title Commitment
dated ________, 1999 (the "Title Commitment") issued by First American Title
Insurance Company to the Purchaser which is identified on SCHEDULE 5.27(b):
(i) no portion of the Canadian Manufacturing Facility is subject to
any pending condemnation Proceeding or Proceeding by any public or
quasi-public authority and, to the Best Knowledge of the Sellers, there is
no threatened condemnation or Proceeding with respect thereto;
(ii) the physical condition of the Canadian Manufacturing Facility
is sufficient to permit the continued conduct of the Business as presently
conducted thereon and as presently proposed to be conducted, subject to the
provision of usual and customary maintenance and repair performed in the
ordinary course with respect to similar properties of like age and
construction;
(iii) Galenica has good, valid and marketable title to the Canadian
Manufacturing Facility free and clear of all Encumbrances;
(iv) Leisegang and the Foreign Subsidiaries are tenants under the
leasehold estates purported to be granted by leases to the Florida,
Canadian Office and the Berlin Facilities, as applicable;
(v) there are no Contracts, written or oral, to which the Sellers
or any of their respective Affiliates is a party, granting to any party or
parties the right of use or occupancy of any portion of any of the
Facilities;
(vi) there are no parties (other than the Sellers) in possession of
the Facilities; and
(vii) no notice of any increase in the assessed valuation of the
Canadian Manufacturing Facility and no notice of any contemplated special
assessment thereof has been received by any Seller, and to the Best
Knowledge of the Sellers, there is no threatened increase in assessed
valuation or threatened special assessment pertaining to such Facility.
5.28 YEAR 2000.
(a) Each Seller has made reasonable investigation into whether its
Information Technology is Year 2000 Compliant, including the following: each
Seller has taken inventory of all such material Information Technology of such
Seller and assessed, to the extent reasonably ascertainable, whether such
Information Technology is Year 2000 Compliant. Except as set forth on SCHEDULE
5.28, each Seller's Information Technology is Year 2000 Compliant. The failure
of any Seller's or its suppliers' or customers' Information Technology to be
Year 2000 Compliant will not have a Material Adverse Effect.
(b) Capitalized terms used in paragraph (a) above have the following
definitions:
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"Year 2000 Compliant" with respect to any Information
Technology of each Seller means that such Information Technology is designed to
be used prior to, during, and after the calendar year 2000, and such Information
Technology used during each such time period, when unmodified by the end user
and used in accordance with its documentation, will accurately receive, provide
and process date/time data (including calculating, comparing and sequencing such
data) from, into and between the 20th and 21st centuries, including the years
1999 and 2000, and leap year calculations during such periods, and will not
malfunction, cease to function, or provide invalid or incorrect results as a
result of date/time data, to the extent that products or Information Technology
of third parties, used in combination with any Seller's Information Technology,
properly exchange date/time data with such Information Technology.
"Information Technology" means computer software, computer
firmware, computer hardware (whether general or specific purpose) or equipment
or systems with components comprised of any of the foregoing, and other similar
or related items of automated, computerized and/or software systems, whether
leased or owned (other than standard "shrink wrapped, off the shelf,"
commercially available, third party software), used by any Seller in the conduct
of the Business.
5.29 SUFFICIENCY OF ASSETS.
The sale of the Purchased Assets by the Asset Sellers and the Share by
NetOptix to the Purchaser pursuant to this Agreement will effectively convey to,
or provide the license to, the Purchaser the entire Business of, and all of the
tangible and intangible property used in the conduct of the Business by the
Sellers (whether owned, leased or held under license by any Seller) and
necessary to, the conduct of the Business as conducted by the Sellers except for
the Excluded Assets.
5.30 DISCLOSURE.
Neither this Agreement, including the schedules, attachments or
exhibits, nor any other written material delivered to the Purchaser or any of
their respective directors, officers, employees, representatives or agents
contains any untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein, taken as a whole,
in light of the circumstances in which they were made, not misleading. There is
no fact that has not been disclosed to the parties referred to above of which
each Seller or any of the officers or directors of any Seller is aware and which
constitutes or could reasonably be anticipated to result in a Material Adverse
Effect. Each schedule to this SECTION 5 separately sets forth the disclosure of
information for each Seller.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇.
The Purchaser represents and warrants to the Sellers as follows:
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6.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER.
The Purchaser is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation, has all
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as is now being conducted.
6.2 AUTHORITY; CORPORATE ACTION; AUTHORITY; NO CONFLICT.
The Purchaser and the Parent each have all the requisite corporate
power and authority to enter into this Agreement and each Related Document to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance by the Purchaser and the Parent of this Agreement and
each Related Document to which it is a party, and the consummation of the
transactions contemplated hereby and thereby by the Purchaser and the Parent
have been duly and validly authorized by all necessary corporate action on the
part of the Purchaser and the Parent. This Agreement and each Related Document
to which each of the Purchaser and the Parent is a party have been duly and
validly executed and delivered by each of the Purchase and the Parent and is the
valid and binding obligation of each of the Purchaser and the Parent,
enforceable against each of the Purchaser and the Parent in accordance with its
terms. The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and thereby will not (i) conflict with or
result in any violation of, or cause a default (with or without notice or lapse
of time, or both) under, or give rise to any right of termination, amendment,
cancellation or acceleration of any obligation contained in, or the loss of any
benefit under, or result in the creation of any Encumbrance upon any of the
respective assets or properties of the Purchaser or the Parent under any term,
condition or provision of the Charter or By-laws of the Purchaser or the Parent
or (ii) violate any Law applicable to the Purchaser or the Parent or any of its
respective properties or assets.
6.3 LITIGATION, ETC.
Except for workers' compensation claims made in the ordinary course of
business and Proceedings involving claims covered by insurance, since the filing
of the Parent's SEC report on Form 10-Q for the fiscal quarter ended September
30, 1999 and any Form 8-K filed thereafter, there are no (i) Proceedings pending
or, to the Best Knowledge of the Purchaser, threatened against the Parent or any
of its subsidiaries, whether at law or in equity, or before or by any
Governmental Entity or arbitrator or (ii) Orders of any Governmental Entity or
arbitrator against the Parent or any of its subsidiaries, in each case which is
likely to have a material adverse effect on the financial condition or results
of operations of the consolidated business of the Parent and its subsidiaries
taken as a whole.
6.4 BROKERS.
Neither the Purchaser nor any of its respective officers, directors,
shareholders or employees (or any Affiliate of any of the foregoing) has
employed any broker or finder or incurred any Liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby, except for ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Associates. To the extent the
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Purchaser has, based upon its acts, any Liability to pay any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated
hereby, it will be solely responsible for the payment of such commission or fee,
including any such commission or fee payable to ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Associates.
6.5 CONSENT.
No provision of the Charter or By-laws of the Purchaser or the Parent
or any Contract to which the Purchaser or the Parent is a party or by which any
of its properties is bound, requires the consent or authorization of any other
Person as a condition precedent to the consummation of the transactions
contemplated by this Agreement or any of the Related Documents to which the
Purchaser or the Parent is a party, which consent or authorization, if not
obtained, would have a material adverse effect on the consummation by the
Purchaser or the Parent of the transactions contemplated by this Agreement or
any of such Related Documents.
6.6 PURCHASE FOR INVESTMENT.
The Share will be acquired by the Purchaser for its own account, for
investment and not with any present intention of distributing the Share.
6.7 LICENSES; AUTHORIZATIONS
Prior to the Closing, the Purchaser shall have obtained all material
licenses or other material authorizations required for its conduct of the
Business and the operation of the Purchased Assets, including the licenses
required under the Canadian Goods and Services Tax and Quebec Sales Tax laws.
ARTICLE VII
CONDUCT AND TRANSACTIONS PRIOR TO AND AT CLOSING
7.1 ACCESS TO INFORMATION.
From and after the date hereof until the Closing (the "Pre-Closing
Period"), each Seller shall afford to the Purchaser and its Representatives free
and full access upon reasonable notice and during normal business hours (but
without interruption of the business of each Seller) to the customers, suppliers
and vendors of the each Seller and to all of the books and records, tax Returns,
work papers and other documents and information and to the Facilities and
personnel of each Seller related to the Business and the Purchased Assets as may
be reasonably requested.
7.2 CONDUCT OF EACH SELLER.
During the Pre-Closing Period, each Seller shall:
(a) conduct its business only in the ordinary course consistent
with past practice;
(b) not dispose of any of the Purchased Assets or, with respect to
Leisegang GmbH, any assets, except sales of inventories or other assets in
the ordinary course of business;
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(c) use reasonable efforts to maintain its business, assets,
relations with employees, customers and suppliers, licenses and operations
in accordance with past custom and practice;
(d) except with the written consent of the Purchaser, not increase
or promise to increase the compensation payable to employees of Leisegang
and the Foreign Subsidiaries (other than normal compensation reviews and
raises consistent with past practices) or form or support formation of a
workers' council with respect to Leisegang GmbH;
(e) not reclassify, combine, split, subdivide or redeem or
otherwise repurchase any capital stock, or issue, deliver, pledge or
encumber any additional capital stock or other securities equivalent to or
exchangeable for capital stock of Leisegang GmbH;
(f) not acquire or agree to acquire by merging or consolidating
with, or by purchasing any material portion of the capital stock,
partnership interests or assets of, or by any other manner, any business or
any Person, except in the case of NetOptix;
(g) not pay, discharge or satisfy any material claims, Liabilities
or obligations of Leisegang or the Foreign Subsidiaries (whether absolute,
accrued, contingent or otherwise), other than the payment, discharge or
satisfaction of Liabilities in the ordinary course of business consistent
with its past practice;
(h) not change in any material respect the accounting methods or
practices followed by it, including any material change in any assumption
underlying, or method of calculating, any bad debt, contingency or other
reserve, except as may be required by changes in GAAP;
(i) not amend or modify in any way the Charter or By-laws or
similar documents of Leisegang or the Foreign Subsidiaries; and
(j) not pay any dividend or distribution with respect to the
capital stock of Leisegang GmbH; and
(k) with respect to Leisegang GmbH, enter into any contract or
Liability except in the ordinary course of business.
7.3 EFFORTS TO CONSUMMATE.
Subject to the terms and conditions of this Agreement, each party shall
use reasonable efforts to take or cause to be taken all actions and do or cause
to be done all things required under all applicable Laws or this Agreement, in
order to consummate the transactions contemplated hereby.
7.4 EXCLUSIVITY.
(a) The Sellers acknowledges that substantial time of the Purchaser and
substantial out-of-pocket expenses (including attorneys' and accountants' fees
and expenses) have been and will continue to be expended and incurred in
connection with conducting legal,
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business and financial due diligence investigations of the Business, drafting
and negotiating this Agreement and the Related Documents and other related
expenses (collectively, "Acquisition Expenses"). Until the Closing Date (unless
this Agreement is sooner terminated), each Seller shall not, and shall use its
best efforts to not permit any of the Representatives of any Seller to: (i)
unless following consultation with outside legal counsel, NetOptix's Board of
Directors determines in good faith that it is required to do so in order to
discharge properly its fiduciary duties, enter into any written or oral
agreement or understanding with any Person (other than the Purchaser) regarding
Another Transaction (as defined below); (ii) unless following consultation with
outside legal counsel, NetOptix's Board of Directors determines in good faith
that it is required to do so in order to discharge properly its fiduciary
duties, enter into or continue any negotiations or discussions with any Person
(other than the Purchaser) regarding the possibility of Another Transaction; or
(iii) unless following consultation with outside legal counsel, NetOptix's Board
of Directors determines in good faith that it is required to do so in order to
discharge properly its fiduciary duties, provide any non-public financial or
other confidential or proprietary information regarding the Business or the
Purchased Assets (including this Agreement and any other materials containing
the Purchaser's proposed terms and any other financial information, projections
or proposals regarding the Business or the Purchased Assets) to any Person
(other than to the Purchaser or its Representatives) who any Seller knows, or
has reason to believe, would have any interest in participating in Another
Transaction. Nothing contained in this SECTION 7.4 shall (i) prevent NetOptix's
Board of Directors from taking and disclosing to its stockholders a position
with regard to a tender offer or exchange offer contemplated by Rules 14d-9 and
14e-2(a) promulgated under the Securities Exchange Act, and making such
disclosure to the stockholders as may be required under applicable Law;
provided, that the Board of Directors shall not recommend that such stockholders
tender their shares of NetOptix's common stock in connection with such tender or
exchange offer unless the Board of Directors determines in good faith, after
consultation with outside legal counsel, that making such recommendation is
required in order to discharge properly its fiduciary duties, or (ii) prevent
NetOptix from negotiating or discussing with third parties the merger of
NetOptix or sale of capital stock of NetOptix. As used herein, the term "Another
Transaction" means (A) the sale of the Share, the Business or any of the
Purchased Assets, other than the sale of inventories in the ordinary course
consistent with past practice, or (B) the sale (whether by sale of stock,
merger, consolidation or otherwise) of more than 50% of the voting securities of
any Seller. Each Seller represents that it is not a party to, or bound by, any
agreement with respect to Another Transaction other than this Agreement.
(b) NetOptix shall disclose to the Purchaser the terms of Another
Transaction that any Seller negotiates or discusses, as permitted under this
SECTION 7.4, with any Person other than the Purchaser (including the identity of
such Person).
(c) Each party recognizes and acknowledges that a breach of this
SECTION 7.4 will cause irreparable and material loss and damage for the
Purchaser, which cannot be adequately compensated for in damages by an action at
law. Therefore, each Seller agrees that the Purchaser shall be entitled, in
addition to any other remedies and damages available, to the equitable remedies
of injunction and specific performance with respect to each Seller's obligations
hereunder
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7.5 SPECIAL PAYMENT TO PURCHASER BASED ON ANOTHER TRANSACTION.
In the event that NetOptix's Board of Directors determines in good
faith, after consultation with outside legal counsel, that it is required, in
order to discharge properly its fiduciary duties, to consider the unsolicited
offer of a Person (other than the Purchaser or any of its Affiliates or
Representatives) to enter into Another Transaction, NetOptix may terminate this
Agreement pursuant to ARTICLE 10 under circumstances not involving a breach by
the Sellers of the provisions of this Agreement solely for the purpose of
entering into Another Transaction with such Person. At the time and as a
condition to such termination by NetOptix of this Agreement, the Sellers shall
pay $300,000 to the Purchaser and, conditioned upon there not having been a
breach by any Seller of the provisions of this Agreement including without
limitation the provisions of SECTION 7.4, such payments shall fully satisfy the
Sellers' obligations to the Purchaser under this Agreement
7.6 PUBLIC ANNOUNCEMENTS.
The Purchaser and NetOptix will consult with each other before issuing
and, to the extent reasonably practicable, give each other the opportunity to
review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement or any Related
Document and no party to this Agreement shall issue any such press release or
make any such public statement prior to such consultation, except as may be
required by applicable Law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or national securities
quotation system. The initial press release to be issued with respect to the
Sale shall be in the form heretofore agreed to by the Purchaser and NetOptix.
7.7 CONSENTS.
Each party shall use its best efforts, and the other parties shall
cooperate with such efforts, to obtain any consents and approvals of, or effect
the notification of or filing with, each Person, whether private or
governmental, whose consent or approval is required in order to permit the
consummation of the transactions contemplated hereby.
7.8 NOTICE OF PROSPECTIVE BREACH; SUPPLEMENT TO SCHEDULES.
(a) NetOptix shall immediately notify the Purchaser in writing upon the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be reasonably likely to cause (i) any representation or warranty of
any Seller contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Closing as
if such representation and warranty were made at such time or (ii) any material
failure of any Seller to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement. the
Purchaser shall immediately notify NetOptix of the occurrence or failure to
occur of any event, which occurrence or failure to occur would be reasonably
likely to cause (x) any representation or warranty of the Purchaser contained
in this Agreement to be untrue or inaccurate in any material respect at any
time from the date of this Agreement to the Closing as if such representation
and warranty were made at
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such time or (y) any material failure of the Purchaser to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement.
(b) From time to time prior to the Closing, the Sellers will supplement
or amend with reasonable frequency the information contained in the Schedules
hereto with respect to any matter hereafter arising, which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in any Schedule hereto.
7.9 EXCHANGE OF PROCEEDS.
If during the Pre-Closing Period any Asset Seller receives any proceeds
in consideration for the exchange of any of its assets that constitute Purchased
Assets or Leisegang GmbH receives any proceeds in consideration for the exchange
of any of its assets, whether from the sale of any such assets (other than sales
of inventory in the ordinary course of business consistent with past practice),
from insurance proceeds payable on account of any loss or casualty to such
assets, any proceeds from the taking of such assets pursuant to the power of
eminent domain, or any other proceeds from whatever source relating to the
disposition of such assets (the "Exchange Proceeds"), NetOptix shall promptly
notify the Purchaser of such receipt of Exchange Proceeds and shall consult with
the Purchaser with respect to the application of any such Exchange Proceeds.
7.10 EMPLOYEE MATTERS.
(a) (i) The Purchaser shall offer employment as of the Closing Date to
no less than ten (10) employees of Leisegang working in the Florida Facility, on
terms and conditions that are comparable to similarly situated employees of the
Purchaser. On or prior to the Closing, the Purchaser shall provide NetOptix with
a list of such employees of Leisegang to whom the Purchaser plans to offer
employment (the "Leisegang Employees"). Effective as of the Closing, NetOptix
shall terminate, or cause Leisegang to terminate within 60 days of the Closing
Date, the employment of the Leisegang Employees. The Purchaser shall credit
employees of Leisegang hired at the Closing by the Purchaser with past service
at Leisegang for purposes of the severance payments specified on SCHEDULE
5.17(b). The Purchaser shall be responsible for the severance payments specified
on SCHEDULE 5.17(b) for those employees of Leisegang not offered employment with
the Purchaser commencing at the Closing, but only if employment of such
employees by Leisegang is terminated within 60 days of the Closing by Leisegang.
Leisegang shall pay a retention bonus to each Leisegang Employee in an amount
determined in consultation with the Purchaser. Leisegang shall pay up to a
maximum amount of $192,000 of the amount of retention bonus up to $250,000 and
any excess of such retention bonus over $250,000 and the Purchaser shall pay up
to $58,000 of such retention bonus of $250,000. Leisegang shall pay 30% of each
employee's retention bonus prior to the Closing and agree with its employees in
a manner reasonably approved by the Purchaser, to pay the remaining 70% of each
employee's retention bonus within 90 days after the Closing. Leisegang shall
submit an invoice to the Purchaser at the end of such 90 day period after the
Closing setting forth the actual amount of the retention bonus paid to such
employees and, if applicable, requesting reimbursement of up to $58,000. The
Purchaser shall pay such balance promptly after receipt of such invoice.
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(ii) Except as hereafter provided, the Purchaser shall offer
employment as of the Closing Date to the employees of Galenica working in
its Canadian Manufacturing and Office Facilities on terms and conditions
comparable to similarly situated employees of the Purchaser. Galenica shall
terminate as of the Closing Date the employment of those employees the
Purchaser is employing, other than ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇. The employment
agreements with (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇") dated February 1, 1998
and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇ ("Godin") dated February 1, 1998 shall be Assigned
Contracts, subject to such agreements being modified to delete Section 2.2
and all other provisions respecting equity or option based compensation and
the confirmation of ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, respectively, as to the assignment
thereof to the Purchaser. NetOptix shall reimburse the Purchaser for
one-half of the amount accruing from and after the Closing to be paid by
the Purchaser to ▇▇▇▇▇▇▇▇ under such employment agreement, including
compensation, benefits (including employee benefit plans, vacation and car
allowance) and termination costs. The Purchaser shall submit monthly
invoices setting forth the amount actually paid and requesting for
reimbursement one-half of such amount. NetOptix shall, prior to the
Closing, enter into agreements reasonably acceptable to the Purchaser and
at the sole cost and expense of NetOptix, with ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, which shall provide for incentives for each such individual to
renew with the Purchaser through July 31, 2000.
(iii) Leisegang represents and warrants that it has terminated, is
terminating or will terminate by the Closing Date nine (9) employees of
Leisegang GmbH listed on SCHEDULE 7.10(a)(iii). Leisegang GmbH shall, after
the Closing, inform NetOptix of any negotiations and/or court proceedings
in connection with such terminations and shall consult with NetOptix in
connection therewith.
(b) As of the Closing Date, employees of Leisegang to whom the
Purchaser has offered employment and who have accepted such offer of employment
shall be eligible to participate in each of the Purchaser's Employee Welfare
Benefit Plans and its 401(k) retirement plan in the same manner and to the same
extent as other similarly situated employees of the Purchaser. Such employees
hired by the Purchaser shall be given credit for service with Leisegang for
purposes of eligibility, vesting and benefits to participate in the Purchaser's
Employee Welfare Benefit Plans (as defined in Section 3(1) of ERISA), other than
the Purchaser's post-retirement medical benefits program. The Purchaser shall
waive (or cause to be waived) any pre-existing condition limitations under its
Employee Welfare Benefit Plans that would otherwise apply to an employee hired
by the Purchaser.
(c) To the extent employees of Leisegang GmbH are covered by any
existing Employee Benefit Plans of NetOptix, such coverage shall be terminated
as of the Closing.
(d) Notwithstanding any action or inaction of the Sellers, the
Purchaser shall have no obligation with respect to any Employee Benefit Plans
maintained by the Sellers or any ERISA Affiliate thereof.
(e) NetOptix, Leisegang and Galenica will cooperate with the Purchaser
in the Purchaser's efforts to employ the employees of Leisegang which Purchaser
has designated and
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the Galenica employees, provided that Seller makes no representation as to
whether any of such persons will accept such employment.
7.11 SUBLEASE.
Leisegang and the Purchaser shall, prior to Closing, agree upon the
form of Sublease to be entered into at the Closing
7.12 QUEBEC BULK SALES LAW.
Subject to the provisions set forth in SECTION 9.1(a)(vii), the parties
hereto agree not to comply with Quebec Bulk Sales Law.
7.13 PRODUCTS.
The list of Products on SCHEDULE1.1(a)(i) shall be amended to provide
greater detail based on catalogues and the Sellers' numbering of the Products.
ARTICLE VIII
CLOSING CONDITIONS.
8.1 CONDITIONS TO OBLIGATIONS OF PURCHASER.
The obligations of Purchaser under this Agreement to purchase the Share
and the Purchased Assets and to assume the Assumed Liabilities are subject to
the satisfaction, on or prior the Closing, of the following conditions unless
waived (to the extent such conditions can be waived) by Purchaser:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Sellers and each of them in this Agreement and the
Related Documents (without giving effect to any qualification contained therein
as to materiality, including without limitation, the phrases "material", "in all
material respects", and "Material Adverse Effect") shall be true and correct in
all material respects on and as of the Closing Date with the same effect as if
such representations and warranties had been made at and as of the Closing Date,
except for those representations and warranties which address matters only as of
a particular date (which shall be true and correct as of such date).
(b) PERFORMANCE OF OBLIGATIONS. Each Seller shall have performed or
complied in all material respects with all agreements, obligations and covenants
required to be performed by it under this Agreement and the Related Documents on
or as of the Closing Date.
(c) AUTHORIZATION. All action necessary to authorize the execution,
delivery and performance of this Agreement and the Related Documents by each
Seller and the consummation of the transactions contemplated hereby and thereby,
including requisite stockholder approvals, shall have been duly and validly
taken by each Seller and each Seller shall have full power and right to
consummate the transactions contemplated hereby and thereby on the terms
provided herein.
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(d) OPINION OF THE SELLER'S COUNSEL. The Purchaser shall have received
the following opinions dated the Closing Date: (i) opinions of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
LLP, counsel to the Sellers, substantially in the form of EXHIBIT D and EXHIBIT
E hereto, (ii) an opinion of ▇▇▇▇▇▇▇ Philips & Vineberg, counsel to Galenica,
substantially in the form of EXHIBIT F hereto and (iii) an opinion of CMS ▇▇▇▇▇▇
▇▇▇▇▇ Eschenlohr ▇▇▇▇▇▇▇, counsel to Leisegang GmbH, substantially in the form
of EXHIBIT G hereto.
(e) CONSENTS AND APPROVALS. The Purchaser shall have received duly
executed copies of all consents and approvals required for or in connection with
the execution and delivery by each Seller of this Agreement and each of the
Related Documents to which any of them may be parties, the consummation of the
transactions contemplated hereby and thereby, and the continued conduct of the
Business as previously conducted, in form and substance satisfactory to
Purchaser.
(f) GOVERNMENT CONSENTS, AUTHORIZATIONS, ETC. All consents,
authorizations, Orders and approvals of, filings or registrations with and the
expiration of all waiting periods imposed by, any third Person, including any
Governmental Entity which are required for or in connection with the execution
and delivery by the parties of this Agreement and the Related Documents to which
they may be parties and the consummation by the parties of the transactions
contemplated hereby and thereby and in order to permit or enable the Purchaser
to conduct the Business after the Closing in substantially the same manner as
previously conducted by the Sellers shall have been obtained or made, in form
and substance reasonably satisfactory to the Purchaser, and shall be in full
force and effect.
(g) ACTIONS AND PROCEEDINGS. No Proceeding shall be pending before any
court or other Governmental Entity, or threatened, which may result in the
restraint or prohibition of the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents or which could
result in damages payable by the Purchaser in connection therewith or which
could adversely affect any Seller or result in a divestiture by the Purchaser of
all or a substantial part of the capital stock of Leisegang GmbH or assets of
any Seller, and no court of competent jurisdiction shall have issued an
injunction with respect to the consummation of the transactions contemplated by
this Agreement and the Related Documents that shall not be stayed or dissolved
at the time of Closing.
(h) STATUTES. No action shall have been taken or threatened, and no Law
shall have been enacted, promulgated or issued or deemed applicable to the
transactions contemplated hereby by any Governmental Entity that would (i) make
the consummation of the transactions contemplated hereby illegal or
substantially delay the consummation of any material aspect of the transactions
contemplated hereby, (ii) render any party unable to consummate the transactions
contemplated hereby, or (iii) impair the ability of the Purchaser to own or
conduct the Business as previously conducted, whether directly or indirectly.
(i) RELATED DOCUMENTS. Each of the documents set forth below (each, a
"Related Document", and collectively, the "Related Documents") shall have been
executed and delivered by the following parties thereto:
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(i) NON-COMPETITION AGREEMENT. NetOptix, Leisegang and Galenica
shall have executed and delivered a non-competition agreement substantially
in the form of EXHIBIT H hereto (the "Non-Competition Agreement");
(ii) ESCROW AGREEMENT. NetOptix, Leisegang and Galenica shall have
executed and delivered the Escrow Agreement;
(iii) BILLS OF SALE. Each U.S. Seller and Galenica shall have
executed and delivered the Bills of Sale;
(iv) SUBLEASE. Leisegang shall have executed and delivered the
Sublease and the landlord of the subleased premises shall have consented
thereto;
(v) SHARE TRANSFER AGREEMENT. NetOptix shall have executed and
delivered in Germany a separate share transfer agreement to be delivered at
the Closing substantially in a form acceptable to all of the parties hereto
(the "Share Transfer Agreement"), to transfer the Share and the Purchaser
shall have received the related transfer instruments as contemplated by
SECTION 1.3(a); and
(vi) DEED AND TITLE REPORT, ETC. Galenica shall have delivered to
the Purchaser a deed of sale in customary form for the Canadian
Manufacturing Facility and a survey for such facility and the Purchaser
shall have received at the Seller's expense an owner's title insurance
policy from the company issuing the Title Commitment showing no change in
the conditions of title of such Facility from the conditions of such title
in the Title Commitment and containing no survey exception.
(j) CONSENT OF LENDER; RELEASE OF ENCUMBRANCES. The Purchaser shall
have received from NetOptix (i) evidence satisfactory to the Purchaser that
NetOptix's lender, Deutsche Financial Services Corporation, has consented
to the Sale and released its Encumbrance on the Purchased Assets and Share
and any pledge with respect to the Share shall also be released, (ii)
evidence satisfactory to the Purchaser that NetOptix's former lenders,
BankBoston, N.A. and BancBoston Leasing Inc., have consented to the Sale
and released their Encumbrances on the Purchased Assets, (iii) a release
from each Seller of all Liabilities owing to it from any other Seller,
including a release from NetOptix of any indebtedness owing between
Leisegang GmbH and Galileo Corporation (the prior name of NetOptix), (iv)
the consent of each of Business Development Bank of Canada and Caisse
Populaire de St.-Luboire to the Purchaser's assumption of each of the
mortgages on the Canadian Manufacturing Facility with no change therein to
the extent that the amount of such assumption does not exceed the
limitation set forth in SECTION 2.1(c) and an estoppel certificate from
holders of such Canadian Mortgages indicating the amount due thereon, and
(v) evidence satisfactory to the Purchaser of the release or termination of
all other Encumbrances on the Purchased Assets, other than Permitted
Encumbrances (except as set forth above), including all UCC-3 termination
statements.
(k) RELATED CERTIFICATES. Each of the following certificates shall
have been executed and/or delivered, as the case may be, by the Person who
or which is the subject thereof:
(i) a certificate of the secretary of each Seller dated as of the
Closing Date, certifying (A) that true and complete copies of each Seller's
Charter and By-laws as
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in effect on the Closing Date are attached thereto, (B) as to the
incumbency and genuineness of the signatures of each officer of each
Seller executing this Agreement or any of the Related Documents on
behalf of each Seller; and (C) the genuineness of the resolutions
(attached thereto) of the board of directors of each Seller authorizing
the execution, delivery and performance of this Agreement and the
Related Documents to which each Seller is a party and the consummation
of the transactions contemplated hereby and thereby;
(ii) certificates of the secretaries of state or other appropriate
officers of the states or other jurisdictions in which each Seller is
organized or qualified to do business dated as of the Closing Date,
certifying as to the good standing and, to the extent available,
nondelinquent tax status of each Seller; and
(iii) a certificate of the principal executive officer of each
Seller dated as of the Closing Date, certifying as to (A) the accuracy
of the representations and warranties of each Seller contained herein,
as contemplated by SECTION 8.1(a), and (B) the performance of the
covenants of each Seller contained herein, as contemplated by SECTION
8.1(b).
(iv) a certificate jointly executed by a principal executive
officer of NetOptix and Leisegang, dated as of the Closing Date,
certifying that such Seller is not a foreign person within the meaning
of Section 1445 of the Code.
(l) ENVIRONMENTAL REPORTS. The Purchaser shall have received a
Phase I report from an environmental consultant satisfactory to it that
there is, in connection with the Canadian Manufacturing Facility and the
Berlin Facility, no violation of Environmental Health and Safety Laws and
no Hazardous Materials which could, in the judgement of the Purchaser, have
a Material Adverse Effect.
(m) RESIGNATION OF OFFICERS AND DIRECTORS. The Purchaser shall have
received such resignations as it may request prior to Closing of all
officers, directors and statutory auditors of Leisegang GmbH.
8.2 CONDITIONS TO OBLIGATIONS OF EACH SELLER.
The obligations of NetOptix to sell the Share, the Asset Sellers to
sell the Purchased Assets and the Sellers to take the other actions required to
be taken by each Seller at the Closing are subject to the satisfaction, at or
prior the Closing, of the following conditions unless waived (to the extent such
conditions can be waived) by NetOptix:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Purchaser in this Agreement and the Related Documents
(without giving effect to any qualification contained therein as to materiality,
including without limitation, the phrases "material", "in all material
respects", and "Material Adverse Effect") shall be true and correct in all
material respects on and as of the Closing Date with the same effect as if such
representations and warranties had been made at and as of the Closing Date,
except for those representations and warranties which address matters only as of
a particular date (which shall be true and correct as of such date).
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(b) PERFORMANCE OF OBLIGATIONS. The Purchaser shall have performed in
all material respects its respective agreements, obligations and covenants
required to be performed by it under this Agreement on or as of the Closing
Date.
(c) AUTHORIZATION. All action necessary to authorize the execution,
delivery and performance of this Agreement and the Related Documents by the
Purchaser and the Parent and the consummation of the transactions contemplated
hereby and thereby, shall have been duly and validly taken by the Purchaser and
the Parent and the Purchaser shall have full power and right to consummate the
transactions contemplated hereby and thereby on the terms provided herein.
(d) OPINION OF THE PURCHASER'S COUNSEL. The Sellers shall have received
an opinion of ▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, counsel for the Purchaser, dated
the Closing Date substantially in the form of EXHIBIT I hereto.
(e) CONSENTS AND APPROVALS. Each Seller shall have received duly
executed copies of all consents and approvals required for or in connection with
the execution and delivery by the Purchaser and the Parent of this Agreement and
each of the Related Documents to which any of them may be parties and the
consummation of the transactions contemplated hereby and thereby, in form and
substance satisfactory to NetOptix.
(f) GOVERNMENT CONSENTS, AUTHORIZATIONS, ETC. All consents,
authorizations, Orders and approvals of, filings or registrations with and the
expiration of all waiting periods imposed by, any third Person, including any
Governmental Entity, which are required for or in connection with the execution
and delivery by the parties of this Agreement and the Related Documents to which
they may be parties and the consummation by the parties of the transactions
contemplated hereby and thereby shall have been obtained or made and shall be in
full force and effect.
(g) ACTIONS AND PROCEEDINGS. No Proceeding shall be pending before any
court or other Governmental Entity, or threatened, which may result in the
restraint or prohibition of the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents or which could
result in damages payable to the Sellers in connection therewith or which could
adversely affect the Sellers and no court of competent jurisdiction shall have
issued an injunction with respect to the consummation of the transactions
contemplated by this Agreement and the Related Documents that shall not be
stayed or dissolved at the time of Closing.
(h) STATUTES. No action shall have been taken or threatened, and no Law
shall have been enacted, promulgated or issued or deemed applicable to the
transactions contemplated hereby by any Governmental Entity that would (i) make
the consummation of the transactions contemplated hereby illegal or
substantially delay the consummation of any material aspect of the transactions
contemplated hereby, (ii) render any party unable to consummate the transactions
contemplated hereby, or (iii) impair the ability of the Purchaser to own or
conduct the Business as previously conducted, whether directly or indirectly.
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(i) RELATED DOCUMENTS. Each of the documents to be executed and
delivered by the Purchaser shall have been so executed and delivered and the
transactions contemplated thereby consummated or effected, as the case may be,
in accordance with the terms thereof.
(j) RELATED CERTIFICATES. Each of the following certificates shall have
been executed and/or delivered, as the case may be, by the Person who or which
is the subject thereof.
(i) a certificate of the secretary of the Purchaser dated as of the
Closing Date, certifying (A) that true and complete copies of the
respective Charters and By-laws of the Purchaser as in effect on the
Closing Date are attached thereto, (B) as to the incumbency and genuineness
of the signatures of each officer of the Purchaser executing this Agreement
or any of the Related Documents on behalf of the Purchaser; and (C) the
genuineness of the resolutions (attached thereto) of the board of directors
of the Purchaser and the Parent authorizing the execution, delivery and
performance of this Agreement and the Related Documents to which the
Purchaser or the Parent is a party and the consummation of the transactions
contemplated hereby and thereby;
(ii) certificates of the secretary of state of the states in which
the Purchaser is organized dated as of the Closing Date, certifying as to
the good standing and nondelinquent tax status of the Purchaser;
(iii) a certificate signed by an officer of the Purchaser, dated as
of the Closing Date, certifying as to (A) the accuracy of the
representations and warranties of the Purchaser contained herein, as
contemplated by SECTION 8.2(a), and (B) the performance of the covenants of
the Purchaser contained herein, as contemplated in SECTION 8.2(b).
ARTICLE IX
INDEMNIFICATION.
9.1 INDEMNIFICATION GENERALLY; ETC.
(a) The Seller Indemnifying Persons, jointly and severally, shall
indemnify the Purchaser Indemnified Persons for, and hold each of them harmless
from and against, any and all Purchaser Losses arising from or in connection
with any of the following:
(i) the untruth, inaccuracy or breach of any representation or
warranty of any Seller contained in SECTION 5, or in the Schedules, any
Exhibit hereto or any certificate delivered in connection herewith on or
before the Closing Date (or any facts or circumstances constituting any
such untruth, inaccuracy or breach);
(ii) the breach of any agreement or covenant of any Seller
contained in this Agreement (including the Schedules and the Exhibits
attached hereto);
(iii) the Excluded Assets;
(iv) the Excluded Liabilities;
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(v) notwithstanding the disclosure of any such Liability in this
Agreement, on any Schedule, or otherwise, all Liabilities (contingent or
otherwise and including Liability for response costs, personal injury,
property damage or natural resource damage), other than the Assumed
Liabilities and Liabilities reflected on the Statement of Assets and
Liabilities, which arise out of events that occurred, or products sold or
services performed by any Seller prior to the Closing (notwithstanding that
the date on which such Liability arose or became manifest is after the
Closing), including the assertion of any claim, demand or Liability against
the Purchaser arising from or in connection with the assertion against the
Purchaser by any stockholder of any claim with respect to any actions or
the transactions of or involving any Seller prior to or at Closing
(including the actions and transactions contemplated by this Agreement);
(vi) assertion of any claim, demand or Liability against the
Purchaser arising from or in connection with Environmental, Health and
Safety Laws, including those relating to the handling, treatment, storage,
disposal, release or threatened release of Hazardous Substances at, onto or
from any real property, or any offsite waste treatment or storage disposal
facility associated with the Business (including any such property or
facility associated with Leisegang GmbH), except for any such Liabilities
reflected in the Statement of Assets and Liabilities the facts or
circumstances underlying which are caused solely by the operation of the
Business after the Closing Date;
(vii) non-compliance by any Seller with any applicable "bulk sales
laws";
(viii) assertion of any claim, demand or Liability against the
Purchaser arising from or in connection with the NetOptix Inventory (as
defined in SECTION 11.4);
(ix) any Special Tax Losses.
(b) "Special Tax Losses" means and includes any and all Losses
sustained, suffered or incurred by any Purchaser Indemnified Persons arising
from or in connection with Taxes payable by any Seller or any Affiliate thereof
with respect to any period ending on or prior to the Closing Date (or the
portion ending on the Closing Date of any period that includes but does not end
on the Closing Date) which is not reflected on the Statement of Assets and
Liabilities or the inaccuracy or breach of the representations and warranties of
any Seller contained in SECTION 5.9.
(c) The Purchaser Indemnifying Persons shall indemnify the Seller
Indemnified Persons for, and hold each of them harmless from and against, any
and all Seller Losses arising from or in connection with any of the following:
(i) the untruth, inaccuracy or breach of any representation or
warranty of the Purchaser contained in SECTION 6 or any certificate
delivered in connection herewith on or prior to the Closing Date (or any
facts or circumstances constituting any such untruth, inaccuracy or
breach);
(ii) the breach of any agreement or covenant of the Purchaser
contained in this Agreement;
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(iii) the Assumed Liabilities; and
(iv) the conduct by the Purchaser of the Business or the ownership
or use of the Purchased Assets after the Closing.
9.2 ASSERTION OF CLAIMS.
No claim shall be brought under SECTION 9.1 hereof unless the
Indemnified Persons, or any of them, at any time prior to the applicable
Survival Date, give the Indemnifying Persons (a) written notice of the existence
of any such claim, specifying the nature and basis of such claim and the amount
thereof, to the extent known or (b) written notice pursuant to SECTION 9.3 of
any third party claim, the existence of which might give rise to such a claim.
Upon the giving of such written notice as aforesaid, the Indemnified Persons, or
any of them, shall have the right to commence legal proceedings subsequent to
the Survival Date for the enforcement of their rights under SECTION 9.1.
9.3 NOTICE AND DEFENSE OF CLAIMS.
The obligations and liabilities of an Indemnifying Person with respect
to Losses resulting from the assertion of liability by third parties (each, a
"Third Party Claim") shall be subject to the following terms and conditions:
(a) The Indemnified Persons shall promptly give written notice to the
Indemnifying Persons of any Third Party Claim which might give rise to any Loss
by the Indemnified Persons, stating the nature and basis of such Third Party
Claim, and the amount thereof to the extent known. Such notice shall be
accompanied by copies of all relevant documentation with respect to such Third
Party Claim, including, without limitation, any summons, complaint or other
pleading which may have been served, any written demand or any other document or
instrument.
(b) If the Indemnifying Persons shall acknowledge in a writing
delivered to the Indemnified Persons that the Indemnifying Persons shall be
obligated under the terms of their indemnification obligations hereunder in
connection with such Third Party Claim, then the Indemnifying Persons shall have
the right to assume the defense of any Third Party Claim at their own expense
and by their own counsel, which counsel shall be reasonably satisfactory to the
Indemnified Persons; provided, however, that the Indemnifying Persons shall not
have the right to assume the defense of any Third Party Claim, notwithstanding
the giving of such written acknowledgment, if (i) the Indemnified Persons shall
have been advised by counsel that there are one or more legal or equitable
defenses available to them which are different from or in addition to those
available to the Indemnifying Persons, and, in the reasonable opinion of the
Indemnified Persons, counsel for the Indemnifying Persons could not adequately
represent the interests of the Indemnified Persons because such interests could
be in conflict with those of the Indemnifying Persons or (ii) such action or
proceeding involves, or could have a material effect on, any material matter
beyond the scope of the indemnification obligation of the Indemnifying Persons.
(c) If the Indemnifying Persons shall assume the defense of a Third
Party Claim (under circumstances in which the proviso to the first sentence of
SECTION 9.3(b) is not applicable), the Indemnifying Persons shall not be
responsible for any legal or other defense
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costs subsequently incurred by the Indemnified Persons in connection with the
defense thereof. If the Indemnifying Persons do not exercise their right to
assume the defense of a Third Party Claim by giving the written acknowledgement
referred to in SECTION 9.3(b), or are otherwise restricted from so assuming by
the proviso to the first sentence of SECTION 9.3(b), the Indemnifying Persons
shall nevertheless be entitled to participate in such defense with their own
counsel and at their own expense; and in any such case, the Indemnified Persons
shall assume the defense of the Third Party Claim, with counsel which shall be
reasonably satisfactory to the Indemnifying Persons, and shall act reasonably
and in accordance with their good faith business judgment and shall not effect
any settlement without the consent of the Indemnifying Persons, which consent
shall not unreasonably be withheld or delayed.
(d) If the Indemnifying Persons exercise their right to assume the
defense of a Third Party Claim, they shall not make any settlement of any claims
without the written consent of the Indemnified Persons, which consent shall not
be unreasonably withheld; provided, however, that in the event the Indemnifying
Persons shall propose the settlement of any claim which is capable of settlement
by the payment of money only and shall demonstrate to the reasonable
satisfaction of the Indemnified Persons the ability to pay such amount, and the
Indemnified Persons shall not consent thereto within 20 days after the receipt
of written notice thereof, any Losses incurred by the Indemnified Persons in
excess of such proposed settlement shall be at the sole expense of the
Indemnified Persons.
(e) Any claim by an Indemnified Person on account of a Loss which does
not result from a Third Party Claim (a "Direct Claim") will be asserted by
giving the Indemnifying Person reasonably prompt written notice thereof, and the
Indemnifying Person will have a period of 30 calendar days within which to
respond in writing to such Direct Claim. If the Indemnifying Person does not so
respond within such 30 calendar day period, the Indemnifying Person shall be
deemed to have rejected such claim, in which event the Indemnified Person shall
be free to pursue such remedies as may be available to the Indemnified Person.
(f) A failure to give timely notice as provided in this SECTION 9.3
shall not affect the rights or obligations of any party hereunder except and
only to the extent that, as a result of such failure, any party which was
entitled to receive such notice was deprived of its right to recover any payment
under its applicable insurance coverage or was otherwise directly and materially
damaged as a result of such failure.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Subject to the further provisions of this SECTION 9.4, the
representations and warranties of the Parties contained in this Agreement or in
any certificate or other writing delivered in connection with this Agreement
shall survive the Closing Date until the first anniversary of the Closing Date.
Representations and Warranties contained in SECTION 5.9, the first sentence of
SECTION 5.10, SECTION 5.15, 5.18 and 5.19 shall survive until the expiration of
the applicable statute of limitations. The covenants and other agreements of the
Sellers and the Purchaser contained in this Agreement shall survive the Closing
Date until they are otherwise terminated by their terms. For convenience of
reference, the date upon which any representation or warranty contained herein
shall terminate, if any, is referred to herein as the "Survival Date".
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9.5 LIMITATIONS ON INDEMNIFICATION.
(a) From and after the Closing, the Purchaser Indemnified Persons shall
not have the right to be indemnified for breaches of representations and
warranties of any Seller pursuant to SECTION 9.1(a)(i) and the Seller
Indemnified Persons shall not have the right to be indemnified for breaches of
representations and warranties of the Purchaser pursuant to SECTION 9.1(c)(i)
unless and until the Indemnified Persons (or any of them) shall have incurred on
a cumulative basis aggregate Losses in an amount exceeding $150,000; provided,
however, that in no event shall the limitations set forth in this SECTION 9.5
apply with respect to any willful or knowing breach of such representations or
warranties. Once aggregate Losses under SECTION 9.1(a)(i) or SECTION 9.1(c)(i),
as applicable, exceed $150,000, the Purchaser Indemnified Persons and the Seller
Indemnified Persons shall be entitled to indemnification for the amount of all
Losses, including the amount of Losses less than $150,000.
(b) Neither the Purchaser Indemnified Persons nor the Seller
Indemnified Persons may recover Losses under this Agreement for breaches of
representations and warranties which in the aggregate exceed the amount of
$1,000,000 under SECTION 9.1(a)(i) or SECTION 9.1(c)(i), as applicable.
9.6 DEFINITIONS.
As used herein the following terms have the following respective
meanings:
"Purchaser Indemnified Persons" means and includes (A) before the
Closing, the Purchaser, its Affiliates, successors and assigns, and the
respective officers and directors of each of the foregoing and (B) after the
Closing, the Purchaser and its Affiliates including Leisegang GmbH and their
respective successors and assigns, and the respective officers and directors of
each of the foregoing.
"Purchaser Indemnifying Persons" means and includes (A) before the
Closing, the Purchaser and its Affiliates and (B) after the Closing, the
Purchaser and its Affiliates including Leisegang GmbH and their respective
successors and assigns.
"Purchaser Losses" means any and all Losses sustained, suffered or
incurred by any the Purchaser Indemnified Person arising from or in connection
with any such matter which is the subject of indemnification under SECTION
9.1(a).
"Indemnified Persons" means and includes the Seller Indemnified Persons
or the Purchaser Indemnified Persons, as the case may be.
"Indemnifying Persons" means and includes the Seller Indemnifying
Persons or the Purchaser Indemnifying Persons, as the case may be.
"Seller Indemnified Persons" means and includes (A) before the Closing,
each Seller, its Affiliates and their respective successors and assigns, and the
respective officers and directors of each of the foregoing and (B) after the
Closing, NetOptix, Leisegang and Galenica and their respective Affiliates,
successors and assigns, and the respective officers and directors of each of the
foregoing.
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"Seller Indemnifying Persons" means and includes (A) before the
Closing, each Seller and their respective Affiliates and (B) after the Closing,
NetOptix, Leisegang and Galenica and their respective Affiliates, successors
and assigns.
"Seller Losses" means any and all Losses sustained, suffered or
incurred by any Seller Indemnified Person arising from or in connection with
any matter which is the subject of indemnification under Section 9.1(c).
9.7 Payments from Escrow Fund.
Claims by Purchaser Indemnified Persons for indemnification hereunder
shall first be satisfied from any balance in the Escrow Fund. Any excess over
such balance shall be paid by NetOptix.
ARTICLE X
TERMINATION; EFFECT OF TERMINATION.
10.1 Termination.
This Agreement may be terminated at any time prior to the Closing by:
(a) the mutual consent of the Purchaser and NetOptix; or
(b) the Purchaser, if:
(i) there has been a willful breach by any Seller or of any
representation, warranty, covenant or agreement set forth in this
Agreement which is material and which such Seller fails to cure within 10
Business Days after notice thereof is given by the Purchaser (except no
cure period shall be provided for a breach by any Seller which by its
nature cannot be cured);
(ii) the conditions set forth in Section 8.1 shall not have been
satisfied or waived (to the extent they may be waived) by January 31,
2000; or
(iii) the matters contained in a supplement or amendment of any
Schedule of this Agreement by the Sellers constitute a Material Adverse
Effect;
(c) NetOptix, if:
(i) there has been a willful breach by the Purchaser of any
representation, warranty, covenant or agreement set forth in this
Agreement which is material and which the Purchaser fails to cure within
10 Business Days after notice thereof is given by NetOptix (except no cure
period shall be provided for a breach by the Purchaser which by its nature
cannot be cured); or
(ii) if the conditions set forth in Section 8.2 shall not have been
satisfied or waived (to the extent they may be waived) by January 31,
2000;
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(d) the Purchaser or NetOptix, if any permanent injunction or other Order
of a court or other Governmental Entity preventing the Closing shall have become
final and nonappealable;
provided, however, that NetOptix shall not be entitled to terminate this
Agreement pursuant to Section 10.1(c)(ii) if any Seller's intentional breach of
this Agreement has prevented the satisfaction of a condition and the Purchaser
shall not be entitled to terminate the Agreement pursuant to Section 10.1(b)(ii)
if the Purchaser's intentional breach of this Agreement has prevented the
satisfaction of all conditions.
10.2 Termination Procedures.
Any termination pursuant to Section 10.1(a) shall be effected by a written
instrument signed by the Purchaser and NetOptix, and any other termination
pursuant to this Section 10.1 shall be effected by written notice from the party
or parties so terminating to the other parties hereto, which notice shall
specify the Section of this Agreement pursuant to which this Agreement is being
terminated.
10.3 Effect of Termination.
In the event of the termination of this Agreement as provided in Section
10.1, this Agreement shall be of no further force or effect, except for Section
5.20, Section 6.4, this Section 10.3 and Section 12.6, each of which shall
survive the termination of this Agreement; provided, however, that the Liability
of any party for any breach by such party of the representations, warranties,
covenants or agreements of such party set forth in this Agreement occurring
prior to the termination of this Agreement shall survive the termination of this
Agreement and, in addition, in the event of any action for breach of contract in
the event of a termination of this Agreement, the prevailing party shall be
reimbursed by the other party to the action for reasonable attorneys' fees and
expenses relating to such action.
ARTICLE XI
POST CLOSING COVENANTS
11.1 Access to Records.
The Asset Sellers shall, for the longer of three years after the Closing
or the period required by applicable Law, give to the Purchaser and its
authorized Representatives, upon reasonable notice and during normal business
hours, access to the books and records being retained by the Asset Sellers,
which in any way relate to the Business and the Purchaser shall for the same
period give to NetOptix and its authorized Representatives, upon reasonable
notice and during normal business hours, access to the books and records of
Leisegang GmbH and of the Business which are acquired by the Purchaser from the
Asset Sellers relating to the period up to the Closing Date. The Purchaser and
NetOptix shall each be entitled, at its own expense, to make extracts and copies
of such books and records and shall cooperate in connection with accomplishing
the same. The Purchaser and the Asset Sellers shall, during such period,
preserve and maintain such books and records held by them and shall not,
subsequent to such period, destroy or cause to be destroyed any such books or
records without first obtaining the written
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consent of the other or giving to the other the opportunity to take delivery of
the books and records to be destroyed. If the Purchaser or NetOptix, as the case
may be (a "Requesting Party"), promptly notifies the other Party that it desires
or requires any of such books or records to be retained for any longer period,
such books and records shall be either retained by the party in possession of it
or be shipped promptly to the Requesting Party at the expense of the Requesting
Party.
11.2 Physical Transfer of Purchased Assets.
(a) The tangible Purchased Assets shall be deemed delivered to the
Purchaser at the time of Closing at the location of each Asset Seller or, if not
located at the premises of the Asset Seller, wherever located. Title and risk of
loss of the designated Purchased Assets shall pass to the Purchaser at the time
of Closing.
(b) The Purchaser shall have sixty (60) days after the Closing to remove
from that portion of the Florida Facility not covered by the Sublease (the
"Non-Subleased Premises") any tangible Purchased Assets located on the
Non-Subleased Premises at Closing. Such Non-Subleased Premises shall be
available for such sixty (60) day period at no cost to the Purchaser, provided
that (i) Seller may use such Non-Subleased Premises for its own assets and
activities, (ii) access by the Purchaser shall be limited to normal business
hours upon reasonable notice, and (iii) none of the Sellers shall have any
Liability or obligation with respect to any Purchased Assets located on the
Non-Subleased Premises, except for gross negligence or willful misconduct.
11.3 Collection of Accounts Receivable.
(a) The Purchaser and Leisegang GmbH shall each use its reasonable
efforts, exercised in good faith, to collect all of the Receivables, the
collection practices of the Purchaser and Leisegang GmbH prior to the date
hereof being deemed to be an acceptable standard.
(b) Unless otherwise designated by the Debtor, any payment from a Debtor
(other than a payment with respect to a Disputed Receivable) received subsequent
to the Closing shall, for purposes of this Agreement, be applied against the
Receivables of such Debtor other than Disputed Receivables, in the order of the
oldest amounts owing. Payments from Debtors with respect to Disputed Receivables
shall be applied against such Disputed Receivables. NetOptix and the Purchaser
shall each timely notify the other of any Disputed Receivable.
(c) On or promptly after the 180th day following the Closing Date, the
Purchaser shall notify NetOptix of all Receivables remaining uncollected as of
such date, which notice shall identify each such Receivable by name of Debtor.
(d) The Asset Sellers (i) guaranty to the Purchaser that the Receivables
will be collectible in the ordinary course of business up to the aggregate
amount of the Net Receivables shown on the Closing Statements as finally
determined or settled pursuant to Section 3.3 (the "Net Receivables Amount") and
(ii) NetOptix shall, at the option of the Purchaser, pay to the Purchaser an
amount equal to the excess of the Net Receivables Amount over the amount of the
Receivables collected by the date of the Purchaser's written exercise of such
option, which shall not be sooner than the 180th day following the Closing. If
NetOptix is requested to make a
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payment to the Purchaser with respect to the uncollected Receivables pursuant to
this Section 11.3(d), the Purchaser shall, upon receipt of such payment, (i)
assign, transfer, convey and deliver to NetOptix all of the Purchaser's or
Leisegang GmbH's right, title and interest to and under such Receivables not so
collected (including without limitation all documentation related to such
Receivables), free and clear of Encumbrances due to the acts or omissions of the
Purchaser and (ii) provide NetOptix with the existing collection history of the
Purchaser or Leisegang GmbH for such Receivables. Payment shall be made first
from the Escrow Fund, to the extent available, and by NetOptix to the extent of
any payments required in excess of the amount available in the Escrow Fund and,
if made by NetOptix, by wire transfer in immediately available funds to an
account designated by the Purchaser. The Purchaser shall deliver monthly to
NetOptix all amounts subsequently collected by the Purchaser or Leisegang GmbH
on Receivables which have been so purchased by NetOptix.
(e) As used herein the following terms have the following respective
meanings:
"Claim" means a claim, refusal to pay or other set-off against a
Receivable arising out of the goods or services to which the Receivable is
related.
"Debtor" means a debtor or an obligor of a Receivable or Foreign
Receivable.
"Disputed Receivable" means a Receivable as to which the Debtor has
communicated a Claim to a Seller or the Purchaser.
"Receivables" means the Net Receivables.
11.4 Sale of NetOptix Inventory.
(a) At, and from time to time after the Closing, NetOptix shall assemble,
package and prepare at NetOptix' location, for delivery to the Purchaser at the
location or locations designated by the Purchaser, the items of inventory of
NetOptix specified on Schedule 11.4 to be delivered prior to the Closing (the
"NetOptix Inventory"). The standard cost at Closing on the books of NetOptix of
the NetOptix Inventory determined in accordance with GAAP shall be provided by
NetOptix to the Purchaser. NetOptix shall deliver the NetOptix Inventory to the
Purchaser F.O.B. the Purchaser's location by carrier designated by NetOptix.
Risk of loss of the NetOptix Inventory shall pass to the Purchaser upon proper
delivery of such inventory by NetOptix to the Purchaser's location. Title to the
NetOptix Inventory shall remain with NetOptix.
(b) From and after the Closing Date (but in no event after the second
anniversary of the Closing Date), the Purchaser shall use its commercially
reasonable efforts to sell for NetOptix, without warranty or recourse to the
Purchaser, the NetOptix Inventory. The Purchaser shall have no obligation or
liability to NetOptix or any other Seller if the Purchaser fails to sell all or
any part of the NetOptix Inventory or, as to any such inventory sold, if the
Purchaser fails to obtain any minimum price for the NetOptix Inventory.
Notwithstanding the foregoing, the Purchaser shall not sell any NetOptix
Inventory at a price which is less than 40% of NetOptix's standard cost of such
inventory without the consent of NetOptix.
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(c) On or before July 31, 2000, with respect to the period ending on June
30, 2000, and within 30 days after each such successive calendar quarter
thereafter, the Purchaser shall pay to NetOptix in respect of sales by the
Purchaser of NetOptix Inventory during the preceding quarterly period an amount
equal to the lesser of (i) proceeds received by the Purchaser during such period
from such sales of NetOptix Inventory minus the Incremental Sales Costs incurred
by the Purchaser during such period and (ii) the standard cost of the NetOptix
Inventory so sold during such period minus the Incremental Sales Costs incurred
by the Purchaser during such period. Each such payment shall be accompanied by
the Purchaser's statement of such sales and Incremental Sales Costs.
(d) For purposes of this Section 11.4, the "Incremental Sales Cost" means
the incremental warehousing, marketing, sales, packaging and shipping costs
incurred by the Purchaser in connection with NetOptix Inventory.
(e) The Seller Indemnifying Persons shall indemnify and hold the Purchaser
harmless from any and all Liabilities incurred or sustained by or against the
Purchaser with respect to or arising out of the NetOptix Inventory as provided
Section 9.1(a).
(f) All sales of NetOptix inventory by the Purchaser shall be made on an
"as is" basis, without representation or warranty of any kind, express or
implied, by statute or otherwise (including warranties of fitness for any
purpose or merchantability). The Purchaser shall use reasonable commercial
efforts to assure that all such sales are in compliance with applicable Laws of
the United States and other jurisdictions.
(g) THE PURCHASER DOES NOT BY THIS SECTION 11.4 MAKE ANY WARRANTIES,
EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, REGARDING ANY PRODUCT PRODUCED BY
NETOPTIX AND SOLD BY THE PURCHASER UNDER THIS SECTION 11.4, ITS FITNESS FOR ANY
PURPOSE, ITS QUALITY, ITS MERCHANTABILITY OR OTHERWISE.
(h) The Purchaser, effective as of the Closing, authorizes NetOptix to
use, to the extent of the Purchaser's interest therein and without warranty from
or recourse to the Purchaser, solely in connection with the sale of NetOptix
Inventory, the trademark "Leisegang" and any other intellectual property related
to the NetOptix Inventory.
11.5 Escrow Agreement.
(a) The interest, earnings and proceeds from the Escrow Amount is called
the "Escrow Income". The Escrow Fund shall be paid by the Escrow Agent as
follows:
(i) from time to time, to the Purchaser, such amounts as it may
certify it is entitled to be paid under the provisions of this Agreement;
provided, however, that if NetOptix objects thereto, the Escrow Agent
shall continue to hold such amounts in escrow under the Escrow Agreement;
(ii) pursuant to the joint written instructions of the Purchaser
and NetOptix;
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(iii) on the first anniversary of the Closing Date, to NetOptix,
the balance in the Escrow Fund, less all amounts claimed under this
Agreement but not theretofore paid from the Escrow Fund to Purchaser
Indemnified Persons (such amounts to be paid to NetOptix or Purchaser
Indemnified Persons as claims are resolved); or
(iv) as determined by the final order, decree or judgement (a
"Final Decree") of a court of competent jurisdiction, (the time for appeal
having expired with no appeal being taken) in a proceeding to which the
Purchaser and NetOptix are parties upon the Escrow Agent's receipt from
the Purchaser or NetOptix of a written notice, accompanied by a certified
copy of such Final Decree.
(b) Taxable Escrow Income shall be allocated, and the interest on the
Escrow Fund shall be paid quarterly, to NetOptix commencing on April 1, 2000 and
on the first day of each calendar quarter thereafter.
NetOptix and the Purchaser shall provide instructions to the Escrow
Agent to implement the provisions of this Agreement and the Escrow Agreement.
11.6 Apportionments.
(a) Utilities. The Purchaser, NetOptix and Galenica shall jointly instruct
the utilities servicing the Canadian Manufacturing Facility, the Canadian Office
Facility and the space in the Florida Facility to be subleased by the Purchaser
to prepare final bills as of the closing of business on the day preceding the
Closing Date for all utility services to the premises to be occupied by the
Purchaser from and after the Closing and to transfer to NetOptix the deposit and
to continue utility service in the Purchaser's name commencing at such time. The
parties shall arrange that all telephone numbers used in connection with the
Canadian Facilities and all telephone numbers at the Florida Facility used in
connection with the Business be transferred to the Purchaser.
(b) Salaries. The Seller shall be responsible for and pay compensation and
any related expenses, including fringe benefits, taxes, etc. of the employees of
Galenica incurred to the end of the last shift on the day preceding the Closing
Date and the Purchaser shall be responsible for compensation for such employees
accruing from and after the Closing Date.
(c) Taxes. Taxes accrued on real estate and personal property of Galenica
in Canada shall be pro-rated to the day preceding the Closing, whether or not
such taxes are then due. Special assessments, if any, for work relating to the
Canadian Manufacturing Facility which accrue prior to the Closing Date and which
are payable in installments shall be paid by the owner of the Canadian
Manufacturing Facility when the installments are due.
(d) Miscellaneous Proration. All water, fuel, sewer expense, licensing and
permit fees, costs and rentals on equipment which are part of the Purchased
Assets and service contracts which are part of the Purchased Assets shall be
apportioned to the day preceding the Closing.
(e) Implementation. At the time of Closing or as soon thereafter as is
practicable, representatives of the Purchaser and NetOptix shall examine the
books and records of the Business as of the time of Closing to make a
determination of the apportionment referred to in
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this Section 11.6. Payments in respect thereof shall be made, where possible, by
good check at the Closing or within forty days after the Closing or, if the
determinations are disputed and such dispute is not resolved within forty five
days after the Closing, within ten days after resolution of the dispute.
11.7 Corporate Name Change.
Immediately after the Closing, Leisegang shall take all steps necessary to
change its corporate name to a name sufficiently dissimilar from its current
name so that the Purchaser immediately may commence use of the Leisegang name
and, in the reasonable judgment of the Purchaser, there will be no confusion of
the public.
ARTICLE XII
MISCELLANEOUS PROVISIONS.
12.1 Amendment.
This Agreement shall not be altered or otherwise amended except pursuant
to an instrument in writing signed by each Seller and the Purchaser, except that
NetOptix may waive any obligation owed by any Seller under this Agreement to the
Purchaser. No waiver by any Seller or the Purchaser of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
12.2 Extension; Waiver.
At any time prior to the Closing, (a) the Purchaser may (i) extend the
time for the performance of any of the obligations or other acts of any Seller,
(ii) waive any inaccuracies in the representations and warranties of any Seller
contained in this Agreement or in any document delivered pursuant to this
Agreement and (iii) waive compliance by any Seller with any of the agreements or
conditions contained in this Agreement and (b) NetOptix may (i) extend the time
for the performance of any of the obligations or other acts of the Purchaser or
the Parent, (ii) waive any inaccuracies in the representations and warranties of
the Purchaser or the Parent contained in any document delivered pursuant to this
Agreement and (iii) waive compliance by the Purchaser or the Parent with any of
the agreements or conditions contained in this Agreement. Any such waiver shall
not operate or be construed as a waiver of any subsequent breach by the other
party.
12.3 Entire Agreement.
This Agreement and the Related Documents (including the schedules and the
exhibits attached hereto) contain all of the agreements among the parties hereto
with respect to the transactions contemplated hereby and supersede all prior
agreements or understandings, whether written or oral, among the parties with
respect thereto including the letter agreement dated October 29, 1999 between
the Parent and NetOptix.
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12.4 SEVERABILITY.
The parties desire that the provisions of this Agreement be enforced to
the fullest extent permissible under the Law and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, in the event that any
provision of this Agreement would be held in any jurisdiction to be invalid,
prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction. Notwithstanding the foregoing, if such
provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12.5 BENEFITS OF AGREEMENT.
All the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Sellers and the Purchaser and the Parent and their
respective successors and permitted assigns. Anything contained herein to the
contrary notwithstanding, this Agreement shall not be assigned by (i) any Seller
without the prior written consent of the Purchaser or (ii) the Purchaser without
the prior written consent of NetOptix, except that the Purchaser may, without
the consent of NetOptix, assign its rights under this Agreement to one or more
of its Affiliates; provided that no such assignment shall relieve the Purchaser
or the Parent of its obligations hereunder.
12.6 FEES AND EXPENSES.
Each Seller and the Purchaser shall bear and pay its own respective legal,
accounting and broker fees, costs and expenses that have been incurred or that
are in the future incurred by, on behalf of or for the benefit of such party in
connection with: (i) the negotiation, preparation and review of any summary of
terms or similar document relating to the Sale; (ii) the negotiation,
preparation and review of this Agreement and the Related Documents (including
any disclosure schedule), and all bills of sale, assignments, certificates, and
other instruments and documents delivered or to be delivered in connection with
the Sale; (iii) the obtaining of any consent required to be obtained in
connection with the Sale; (iv) the investigation and review conducted by the
Purchaser with respect to the business of the Sellers and (iv) the consummation
of the transactions contemplated by this Agreement and the Related Documents.
12.7 HEADINGS.
Descriptive headings are for convenience only and shall not control or
affect in any way the meaning or construction of any provision of this
Agreement.
12.8 NOTICES.
Any notice or other communication required or permitted to be delivered to
any party under this Agreement shall be in writing and shall be deemed properly
delivered, given and received, if delivered during business hours on a Business
Day, when delivered (by hand, by registered mail, by courier or express delivery
service or by facsimile) to the address or facsimile
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telephone number set forth beneath the name of such party below (or to such
other address or facsimile telephone number as such party shall have specified
in a written notice given to the other party hereto) or, if not delivered during
business hours on a Business Day, on the next succeeding business day:
(a) if to the Sellers, to NetOptix:
NetOptix Corporation
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
(b) if to the Purchaser, to:
CooperSurgical Acquisition Corp.
c/o The ▇▇▇▇▇▇ Companies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, V.P., Legal Affairs
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇;
with a copy to:
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇.
12.9 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.
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12.10 GOVERNING LAW.
This Agreement will be governed by and construed in accordance with the
domestic laws of the State of New York, without giving effect to any choice of
law or conflicting provision or rule (whether of the State of New York, or any
other jurisdiction) that would cause the laws of any jurisdiction other than the
State of New York to be applied. in furtherance of the foregoing, the internal
law of the State of New York will control the interpretation and construction of
this agreement, even if under such jurisdiction's choice of law or conflict of
law analysis, the substantive law of some other jurisdiction would ordinarily
apply.
12.11 INCORPORATION OF EXHIBITS AND SCHEDULES.
The EXHIBITS and SCHEDULES identified in this Agreement are incorporated
herein by reference and made a part hereof.
12.12 INDEPENDENCE OF COVENANTS AND REPRESENTATIONS AND WARRANTIES.
All covenants hereunder shall be given independent effect so that if a
certain action or condition constitutes a default under a certain covenant, the
fact that such action or condition is permitted by another covenant shall not
affect the occurrence of such default, unless expressly permitted under an
exception to such initial covenant. In addition, all representations and
warranties hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached shall not affect the incorrectness of or a breach
of a representation and warranty hereunder.
12.13 INTERPRETATION; CONSTRUCTION.
"Agreement" means this agreement together with all schedules and exhibits
hereto, as the same may from time to time be amended, modified, supplemented or
restated in accordance with the terms hereof. "Best Knowledge" of any Person
means (i) the actual knowledge of such Person and (ii) that knowledge which
should have been acquired by such Person after making such due inquiry and
exercising such due diligence as a prudent businessperson would have made or
exercised in the management of his or her business affairs, including due
inquiry of those key employees and professional advisers (including attorneys,
accountants and consultants) of the Person who could reasonably be expected to
have actual knowledge of the matters in question. The use in this Agreement of
the term "including" means "including, without limitation." The words "herein",
"hereof", "hereunder", "hereby", "hereto", "hereinafter", and other words of
similar import refer to this Agreement as a whole, including the schedules and
exhibits, as the same may from time to time be amended, modified, supplemented
or restated, and not to any particular ARTICLE, section, subsection, paragraph,
subparagraph or clause contained in this Agreement. All references to ARTICLES,
sections, subsections, clauses, paragraphs, schedules and exhibits mean such
provisions of this Agreement and the schedules and exhibits attached to this
Agreement, except where otherwise stated. The title of and the ARTICLE, section
and paragraph headings in this Agreement are for convenience of reference only
and shall not govern or affect the interpretation of any of the terms or
provisions of this Agreement. The use herein of the masculine, feminine or
neuter forms shall also denote the
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other forms, as in each case the context may require. Where specific language is
used to clarify by example a general statement contained herein, such specific
language shall not be deemed to modify, limit or restrict in any manner the
construction of the general statement to which it relates. The language used in
this Agreement has been chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party.
Accounting terms used but not otherwise defined herein shall have the meanings
given to them under GAAP. The use of the sign "$" (without further currency
identification) within this Agreement shall refer only to currency of the United
States of America.
12.14 DEFINITIONS.
As used herein, the following terms have the following meanings:
"Affiliate" means, with respect to any Person (i) a director,
officer or shareholder of such Person, (ii) a spouse, parent, sibling or
descendant of such Person (or spouse, parent, sibling or descendant of any
director or executive officer of such Person), and (iii) any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
Controlled by, or is under common Control with, such Person..
"Business Day" means any day that is not a Saturday, Sunday or a
day on which banking institutions in New York, New York are not required to be
open.
"Encumbrances" means any security interests, mortgages, deeds of
trust, liens, pledges, charges, claims, easements, reservations, restrictions,
clouds, equities, rights of way, options, rights of first refusal, grants of
power to confess judgment, conditional sales and title retention agreements
(including any lease in the nature thereof) and all other encumbrances whether
or not relating to the extension of credit or the borrowing of money.
"Control" means, with respect to any Person, the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.
"Florida Facility Lease" means the Commercial Lease dated August
26, 1993 between Catexor Limited Partnership and Leisegang.
"GAAP" means generally accepted accounting principles in the United
States consistently applied (and in the case of Galenica and Leisegang GmbH, the
local domestic equivalent of GAAP).
"Law" means any law, statute, treaty, rule, directive or regulation
or Order of any Governmental Entity.
"Liability" means any liability or obligation, whether known or
unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued,
liquidated or unliquidated and whether due or to become due, regardless of when
asserted.
"Litigation Expense" means any out-of-pocket expenses incurred in
connection with investigating, defending or asserting any claim, legal or
administrative action, suit or
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Proceeding incident to any matter indemnified against hereunder including,
without limitation, court filing fees, court costs, arbitration fees or costs,
witness fees and fees and disbursements of outside legal counsel, investigators,
expert witnesses, accountants and other professionals.
"Losses" means any and all losses, claims, shortages, damages,
Liabilities, expenses (including reasonable attorneys' and accountants' and
other professionals' fees and Litigation Expenses), assessments, Tax
deficiencies, Taxes (including interest or penalties thereon) and insurance
premium increases arising from or in connection with any such matter that is the
subject of indemnification under ARTICLE IX, in each instance after deduction of
the amount of any insurance proceeds recovered and net of any tax benefit
actually realized as a result of the Loss by the Indemnified Person in the year
in which the claim for indemnification for such Loss was made pursuant to this
Agreement or, in the case of a corporation, net of any tax benefit actually
realized in such year by a member of an affiliated group of such corporation
within the meaning of Section 1504 of the Code.
"Material Adverse Effect" means a material adverse effect on (i)
the financial condition, business, results of operations or prospects of the
Business taken as a whole, (ii) the financial condition, business or results of
operations or prospects of Leisegang GmbH or Galenica, (iii) on the Purchased
Assets taken as a whole or (iv) on the ability of each Seller to perform its
obligations under or to consummate the Sale; provided, however, that in no event
shall any of the following constitute a Material Adverse Effect: (x) any
effects, changes, events, circumstances or conditions generally affecting the
industry in which any Seller operates or arising from changes in general
business or economic conditions (including litigation, delays in customer
orders, a reduction in sales, a disruption in business relationships or a loss
of employees); and (y) any effects, changes, events, circumstances or conditions
resulting from (A) compliance by any Seller with the terms of, or the taking of
any action contemplated or permitted by, this Agreement or any Related Document;
(B) the voluntary resignation or other departure of any sales representatives or
employee dedicated to sales of the Asset Sellers located in the United States;
(C) the voluntary resignation or departure of that number of employees of the
Asset Sellers that does not in the aggregate prevent the Business from being
conducted by the Purchaser as it is currently being conducted; or (D) the
termination or threatened termination of any non-material customer or supplier
relationship, in each case of clauses (B), (C) and (D) above, such actions
occurring as a result of the identity of the Purchaser or its Affiliates.
"Orders" means judgments, writs, decrees, compliance agreements,
injunctions or orders of any Governmental Entity or arbitrator.
"Permits" means all permits, licenses, authorizations,
registrations, franchises, approvals, certificates, variances and similar rights
obtained, or required to be obtained, from Governmental Entities.
"Permitted Encumbrances" means (i) Encumbrances set forth on
SCHEDULE 5.10(b), (ii) Encumbrances for Taxes not yet due and payable or being
contested in good faith by appropriate proceedings and for which there are
adequate reserves on the books, (iii) workers or unemployment compensation liens
arising in the ordinary course of business; and (iv) mechanic's, materialman's,
supplier's, vendor's or similar liens arising in the ordinary course of business
securing amounts that are not delinquent.
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"Person" shall be construed broadly and shall include an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization or a Governmental Entity.
"Proceedings" means actions, suits, claims, investigations or legal
or administrative or arbitration proceedings.
"Representative" means officers, directors, employees, agents,
attorneys, accountants and financial advisors of the Purchaser and the Sellers,
as the case may be.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Sublease" means a sublease agreement under which Leisegang
subleases to the Purchaser each of (i) Suites 110 and 116 located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, for the period from the Closing Date until
the end of the current lease term in 2001, and (ii) Suites 110 and 116 located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, for the period ending six months
from the Closing Date, in each case on the same terms and conditions and the
same costs as such suites are leased to Leisegang under the Florida Facility
Lease.
12.15 REMEDIES.
THE PARTIES SHALL EACH HAVE AND RETAIN ALL RIGHTS AND REMEDIES EXISTING IN
THEIR FAVOR UNDER THIS AGREEMENT, AT LAW OR EQUITY, INCLUDING RIGHTS TO BRING
ACTIONS FOR SPECIFIC PERFORMANCE AND INJUNCTIVE AND OTHER EQUITABLE RELIEF
(INCLUDING, WITHOUT LIMITATION, THE REMEDY OF RESCISSION) TO ENFORCE OR PREVENT
A BREACH OR ANY VIOLATION OF THIS AGREEMENT. ALL SUCH RIGHTS AND REMEDIES SHALL
BE CUMULATIVE AND THE EXISTENCE, ASSERTION, PURSUIT OR EXERCISE OF ANY THEREOF
BY A PARTY SHALL NOT PRECLUDE THE ASSERTION, PURSUIT OR EXERCISE BY SUCH PARTY
OF ANY OTHER RIGHTS OR REMEDIES AVAILABLE TO IT.
ARTICLE XIII
NETOPTIX AS REPRESENTATIVE
By signing this Agreement, each Seller, for itself and its successors and
assigns, hereby irrevocably authorizes NetOptix to execute and deliver and to
take all action required or permitted under this Agreement (including the giving
and receiving of all waivers, notices and consents, the receipt of service of
process and the execution and delivery of all documents and agreements
hereunder, including any amendments, waivers and consents which any Seller may
provide hereunder, taking any action concerning the Escrow Fund including the
bringing of any
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action and the settlement of any disputes and any releases in connection with
the settlement of disputes or claims).
Without limiting the generality of the foregoing paragraph, NetOptix is
hereby irrevocably authorized by each Seller as its authorized agent to take all
action or to refrain from taking any action which a Seller can take or refrain
from taking under this Agreement or any Related Document, to accept and
acknowledge on its behalf service of any and all legal process which may
lawfully be served upon any Seller in any action, suit or proceeding under or
relating to this Agreement in any court in the City and State of New York. Each
Seller hereby irrevocably consents to the jurisdiction of any such court in any
such action, suit or proceeding and agrees that service of such process upon it
may be made on NetOptix, that such service shall be deemed in every respect
effective service of process upon such Seller in any such action, suit or
proceeding and shall be valid personal service whether or not such Seller shall
then be doing, or at any time shall have done, business within the State of New
York or then be present in person, or at any time shall have been present in
person within such State, and any such service of process shall be of the same
force and validity as if service were made upon him or it according to the Laws
governing the validity of such service in such State. Each Seller hereby
irrevocably waives all claims of error in respect of any such service.
The authorization by Leisegang GmbH as provided for in this Article
XIII shall terminate at the Closing.
ARTICLE XIV
JURISDICTION
14.1 MUTUAL WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS
ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON
AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN ARBITRATION RULES),
THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES
UNDER THIS AGREEMENT OR ANY RELATED DOCUMENTS.
14.2 EXCLUSIVE JURISDICTION.
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS FOR ITSELF AND
ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK COUNTY, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
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ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE
COURT BY SUCH FEDERAL COURT. EACH PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY HAVE OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN NEW YORK COUNTY. EACH PARTY IRREVOCABLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THE PURCHASER:
COOPERSURGICAL ACQUISITION CORP.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President, Treasurer
and Chief Financial Officer
THE PARENT HEREBY GUARANTEES, AS PRIMARY AND
NOT AS SECONDARY OBLIGOR, ALL OBLIGATIONS OF
THE PURCHASER UNDER THIS AGREEMENT:
THE ▇▇▇▇▇▇ COMPANIES, INC.
By: _____________________________________
Name:
Title:
THE SELLERS:
NETOPTIX CORPORATION
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
LEISEGANG MEDICAL, INC.
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
79
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THE PURCHASER:
COOPERSURGICAL ACQUISITION CORP.
By:
_____________________________________
Name:
Title:
THE PARENT HEREBY GUARANTEES, AS PRIMARY AND
NOT AS SECONDARY OBLIGOR, ALL OBLIGATIONS OF
THE PURCHASER UNDER THIS AGREEMENT:
THE ▇▇▇▇▇▇ COMPANIES, INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: V.P. Corporate Development
THE SELLERS:
NETOPTIX CORPORATION
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
LEISEGANG MEDICAL, INC.
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
80
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THE PURCHASER:
COOPERSURGICAL ACQUISITION CORP.
By:
_____________________________________
Name:
Title:
THE PARENT HEREBY GUARANTEES, AS PRIMARY AND
NOT AS SECONDARY OBLIGOR, ALL OBLIGATIONS OF
THE PURCHASER UNDER THIS AGREEMENT:
THE ▇▇▇▇▇▇ COMPANIES, INC.
By:
_____________________________________
Name:
Title:
THE SELLERS:
NETOPTIX CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
LEISEGANG MEDICAL, INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
81
GALENICA INC.
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory
LEISEGANG FEINMECHANIK-OPTIK GMBH
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
_____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Authorized Signatory