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ASSET PURCHASE AGREEMENT
Dated as of July 31, 1998,
Between
IMATION CORP.
And
▇▇▇▇▇▇▇ KODAK COMPANY
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TABLE OF CONTENTS
Page
ARTICLE I
Purchase and Sale; Ferrania Facility Payment
SECTION 1.01. Purchase and Sale of Acquired Assets .................. 1
SECTION 1.02. Acquired Assets and Excluded Assets ................... 3
SECTION 1.03. Assumption of Certain Liabilities ..................... 8
SECTION 1.04. Nonassignability of Assets ............................ 11
SECTION 1.05. Additional Acquisitions ............................... 13
SECTION 1.06. Closing Working Capital ............................... 13
ARTICLE II
The Closing; Post-Closing Payments
SECTION 2.01. Closing Date .......................................... 17
SECTION 2.02. Transactions To Be Effected at the
Closing .............................................. 17
SECTION 2.03. Cemax-Icon Payments ................................... 18
SECTION 2.04. Ferrania Facility Payment ............................. 21
ARTICLE III
Representations and Warranties of Seller
SECTION 3.01. Organization, Standing and Power ...................... 21
SECTION 3.02. Authority; Execution and Delivery;
Enforceability ....................................... 22
SECTION 3.03. No Conflicts; Consents ................................ 22
SECTION 3.04. Financial Statements ................................ 24
SECTION 3.05. Assets Other than Real Property
Interests ............................................ 25
SECTION 3.06. Real Property ......................................... 25
SECTION 3.07. Intellectual Property ................................. 26
SECTION 3.08. Contracts ............................................. 28
SECTION 3.09. Cemax-Icon Shares ..................................... 31
SECTION 3.10. Investments ........................................... 31
SECTION 3.11. Permits ............................................... 31
SECTION 3.12. Insurance ............................................. 32
SECTION 3.13. Sufficiency of Acquired Assets ........................ 32
SECTION 3.14. Taxes ................................................. 33
SECTION 3.15. Proceedings ........................................... 36
SECTION 3.16. Benefit Plans ......................................... 36
SECTION 3.17. Compliance with Laws .................................. 39
SECTION 3.18. Employee and Labor Matters ............................ 41
SECTION 3.19. Brokers or Finders .................................... 42
SECTION 3.20. Absence of Certain Changes ............................ 42
Page
SECTION 3.21. Products .............................................. 42
SECTION 3.22. Customers ............................................. 45
SECTION 3.23. Suppliers ............................................. 46
SECTION 3.24. No Territorial Restrictions ........................... 46
ARTICLE IV
Limitations on Representations and Warranties of Seller
SECTION 4.01. LIMITATIONS AND EXCLUSIONS TO
REPRESENTATIONS, WARRANTIES, ETC. .................... 46
SECTION 4.02. NO ADDITIONAL REPRESENTATIONS ......................... 47
ARTICLE V
Representations and Warranties of Purchaser
SECTION 5.01. Organization, Standing and Power ...................... 47
SECTION 5.02. Authority; Execution and Delivery;
Enforceability ....................................... 48
SECTION 5.03. No Conflicts; Consents ................................ 48
SECTION 5.04. Litigation ............................................ 49
SECTION 5.05. Availability of Funds ................................. 49
SECTION 5.06. Brokers or Finders .................................... 49
ARTICLE VI
Covenants
SECTION 6.01. Covenants of Seller, Seller Subs and
Cemax-Icon Relating to Conduct of
Businesses ........................................... 50
SECTION 6.02. No Solicitation ....................................... 53
SECTION 6.03. Access to Information ................................. 53
SECTION 6.04. Confidentiality ....................................... 54
SECTION 6.05. Antitrust ............................................. 55
SECTION 6.06. Best Efforts .......................................... 56
SECTION 6.07. Fees and Expenses ..................................... 57
SECTION 6.08. Notices of Certain Events ............................. 57
SECTION 6.09. Employee Matters; WARN Act ............................ 58
SECTION 6.10. Post-Closing Cooperation .............................. 64
SECTION 6.11. Publicity ............................................. 64
SECTION 6.12. Records ............................................... 65
SECTION 6.13. Agreement Not To Compete .............................. 65
SECTION 6.14. Bulk Transfer Laws .................................... 67
SECTION 6.15. Further Assurances .................................... 67
SECTION 6.16. Purchase Price Allocation ............................. 67
Page
SECTION 6.17. Supplies .............................................. 68
SECTION 6.18. Insurance ............................................. 68
SECTION 6.19. Cemax-Icon ............................................ 69
SECTION 6.20. Pine City Relocation .................................. 70
SECTION 6.21. Negotiation of Transition Services
Agreement and Shared Facilities
Agreement ............................................ 70
SECTION 6.22. Insurance Proceeds .................................... 70
SECTION 6.23. CB Coater ............................................. 70
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation ................. 71
SECTION 7.02. Conditions to Obligation of Purchaser ................. 72
SECTION 7.03. Conditions to Obligation of Seller and
Seller Subs .......................................... 73
SECTION 7.04. Frustration of Closing Conditions ..................... 74
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination ........................................... 74
SECTION 8.02. Effect of Termination ................................. 75
SECTION 8.03. Amendments and Waivers ................................ 76
ARTICLE IX
Indemnification
SECTION 9.01. Indemnification by Seller ............................. 76
SECTION 9.02. Indemnification by Purchaser .......................... 82
SECTION 9.03. Calculation of Losses; No Punitive
Damages, etc. ........................................ 83
SECTION 9.04. Termination of Indemnification ........................ 84
SECTION 9.05. Procedures Relating to Indemnification ................ 85
SECTION 9.06. Procedures Relating to Tax
Indemnification ...................................... 89
SECTION 9.07. Survival of Representations ........................... 90
Page
ARTICLE X
Tax Matters
SECTION 10.01. Preparation and Filing of Tax Returns
and Amendments ....................................... 90
SECTION 10.02. Cooperation ........................................... 91
SECTION 10.03. Refunds and Credits ................................... 92
SECTION 10.04. Transfer Taxes ........................................ 94
SECTION 10.05. Purchaser Activity on Closing Date .................... 94
SECTION 10.06. Purchaser Activity Post-Closing ....................... 94
SECTION 10.07. Tax Sharing Agreements ................................ 95
SECTION 10.08. Employee Withholding and Reporting
Matters .............................................. 95
SECTION 10.09. Seller's Obligations with Respect to
Cemax-Icon Payments .................................. 95
SECTION 10.10. Seller's Obligations with Respect to
R&D Credit Information................................ 96
SECTION 10.11. Italian Tax Certificates .............................. 96
ARTICLE XI
General Provisions
SECTION 11.01. Assignment ............................................ 96
SECTION 11.02. No Third-Party Beneficiaries .......................... 97
SECTION 11.03. Notices ............................................... 97
SECTION 11.04. Interpretation; Exhibits and Schedules;
Certain Definitions .................................. 98
SECTION 11.05. Counterparts .......................................... 107
SECTION 11.06. Entire Agreement ...................................... 108
SECTION 11.07. Severability .......................................... 108
SECTION 11.08. Consent to Jurisdiction ............................... 108
SECTION 11.09. Dispute Resolution; Pre-Closing Waiver
of Consequential and Punitive Damages ................ 109
SECTION 11.10. Governing Law ......................................... 112
SCHEDULES
Schedule 1.02(a)(i) - Acquired Assets--Real Property
Schedule 1.02(a)(viii) - Acquired Assets--Contracts
Schedule 1.02(a)(ix) - Acquired Assets--Investments
Schedule 1.02(b)(i) - Excluded Assets--Real Property
Schedule 1.02(b)(ii) - Excluded Assets--3M Machinery,
Equipment and Tools
Schedule 1.02(b)(x) - Excluded Assets--Others
Schedule 1.03(b)(xviii) - Excluded Liabilities--Others
Schedule 1.06 - Working Capital Initiatives
Schedule 3.03(a) - Conflicts or Consents
Schedule 3.03(b) - Governmental Consents or Permits
Schedule 3.04(a) - Financial Statements
Schedule 3.04(b) - Undisclosed Liabilities--GAAP
Schedule 3.04(c) - Undisclosed Liabilities--Others
Schedule 3.05 - Liens
Schedule 3.06 - Real Property
Schedule 3.07(a) - Patents and Trademarks
Schedule 3.07(b) - Restrictions on Seller or Seller
Sub Intellectual Property
Schedule 3.07(c) - Restrictions on Cemax-Icon
Intellectual Property
Schedule 3.07(d) - Infringement or Misappropriation
Schedule 3.07(e) - Infringement or Misappropriation
of Transferred Intellectual
Property
Schedule 3.08 - Contracts
Schedule 3.09(a) - Cemax-Icon Shares
Schedule 3.09(b) - Liens on Options and Warrants on
Cemax-Icon Shares
Schedule 3.10 - Investments
Schedule 3.11 - Permits
Schedule 3.12 - Insurance
Schedule 3.13 - Sufficiency of Acquired Assets
Schedule 3.14 - Taxes
Schedule 3.15 - Proceedings
Schedule 3.16 - Benefit Plans
Schedule 3.17(a) - Compliance with Laws
Schedule 3.17(b) - Environmental Matters
Schedule 3.18 - Employee and Labor Matters
Schedule 3.20 - Absence of Certain Changes
Schedule 3.21 - Products Liability
Schedule 3.22 - Customers
Schedule 3.23 - Suppliers
Schedule 3.24 - No Territorial Restrictions
Schedule 6.01 - Conduct of Businesses
Schedule 6.06(b) - Commercially Reasonable Efforts
Procedures
Schedule 6.09 - Eligible Employees
Schedule 6.09(a)(ii) - Stay Bonus Program
Schedule 6.13(c) - No-Hire
Schedule 6.16 - Purchase Price Allocation
Schedule 6.18 - Seller Existing CGL Policies
Schedule 7.02(d) - Required Consents
Schedule 11.04 - Seller Subs
EXHIBITS
Exhibit A-1 - Form of Opinion of Cravath, Swaine & ▇▇▇▇▇
Exhibit A-2 - Form of Opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger
Exhibit A-3 - Form of Opinion of Seller's General Counsel
Exhibit B-1 - Form of Opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit B-2 - Form of Opinion of Purchaser's General
Counsel
Exhibit C - Forms of Shared Facilities Agreements
Exhibit D - Form of Transition Services Agreement
Exhibit E - Form of Private Label Supply Agreement
Exhibit F - Form of Seller Intellectual Property
Agreement
Exhibit G - Form of License Agreement
Exhibit H- Form of X-ray/ Wet Laser Supply Agreement
ASSET PURCHASE AGREEMENT dated as of July 31, 1998,
between IMATION CORP., a Delaware corporation ("Seller"),
and ▇▇▇▇▇▇▇ KODAK COMPANY, a New Jersey corporation
("Purchaser").
Seller desires to sell, assign, transfer, convey, license and
lease to Purchaser, and Purchaser desires to purchase, license, lease and
assume from Seller, the assets and liabilities (other than the Excluded
Assets and the Excluded Liabilities) of the following businesses currently
operated or owned by Seller and Seller Subs: (i) the medical DryView(TM)
laser imaging systems businesses, (ii) the conventional x-ray systems and
wet laser imaging systems businesses, (iii) the medical imaging services
businesses for the medical DryView(TM) laser imaging systems businesses,
the conventional x-ray systems business and the wet laser imaging systems
business, (iv) the dry imagesetting equipment and film business, (v) the
document imaging sales and servicing business in Germany, (vi) all contract
manufacturing services being performed for business units of Minnesota
Mining and Manufacturing Company ("3M") or other persons by Seller at its
manufacturing facility in White City, Oregon and (vii) the picture
archiving businesses, communication systems businesses, teleradiology
systems businesses and all other businesses of Cemax-Icon (such businesses
described in clauses (i) through (vii) above, collectively, the
"Businesses"), upon the terms and subject to the conditions of this
Agreement.
Accordingly, in consideration of the premises and the mutual
representations, warranties, covenants and undertakings contained herein,
and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
ARTICLE I
Purchase and Sale; Ferrania Facility Payment
SECTION 1.01. Purchase and Sale of Acquired Assets. (a) On the
terms and subject to the conditions of this Agreement, at the Closing,
Seller and Seller Subs shall sell, assign, transfer, convey, license and
lease to Purchaser and/or one or more Purchaser Buyers, as designated by
Purchaser in accordance with and subject to the provisions of Section 1.05,
and Purchaser shall, and shall cause any Purchaser Buyers so designated to,
purchase,
license, lease and assume from Seller and Seller Subs all the right, title
and interest, as of the Closing, of Seller and Seller Subs in, to and under
the Acquired Assets, for (i) an aggregate purchase price equal to the sum
of (x) $499,300,000 (the "Closing Date Purchase Price"), payable as set
forth in Section 2.02, and (y) an amount equal to the sum of the amount of
the 1998 Payment and the 1999 Payment (as each such term is defined in the
Cemax-Icon Merger Agreement), (collectively, the "Cemax-Icon Payments"),
payable as set forth in Section 2.03 (the Closing Date Purchase Price and
the Cemax-Icon Payments are hereinafter sometimes referred to collectively
as the "Purchase Price"), and (ii) the assumption of the Assumed
Liabilities. The purchase and sale of the Acquired Assets and the
assumption of the Assumed Liabilities is referred to in this Agreement as
the "Acquisition".
(b) Ferrania Facility Payment. Upon termination of the X-ray/Wet
Laser Supply Agreement, if Seller has not prior to that date sold or
otherwise transferred the Ferrania Facility, Purchaser shall pay to Seller
an amount equal to $25,000,000. If Seller sells or otherwise transfers the
Ferrania Facility prior to the termination of the X-ray/Wet Laser Supply
Agreement then (i) in the event that Seller shall have received from such
sale or other transfer less than $25,000,000 in Net Proceeds, Purchaser
shall deliver to Seller, at the time of consummation of such sale or other
transfer, payment in an amount equal to the difference between $25,000,000
and the Net Proceeds received by Seller and (ii) in the event that Seller
shall have received from such sale or other transfer more than $25,000,000
in Net Proceeds, Seller shall deliver to Purchaser, at the time of
consummation of such sale or other transfer, payment in an amount equal to
50% of the difference between the Net Proceeds received by Seller and
$25,000,000. If Seller sells or otherwise transfers the Ferrania Facility
after termination of the X-ray/Wet Laser Supply Agreement but before the
fifth anniversary of the Closing and Purchaser shall have made to Seller
the $25,000,000 payment referred to in the first sentence of this Section
1.01(b), then (i) in the event that Seller shall have received from such
sale or other transfer less than $25,000,000 in Net Proceeds, Seller shall
deliver to Purchaser, at the time of consummation of such sale or other
transfer, payment in an amount equal to such Net Proceeds and (ii) in the
event that Seller shall have received from such sale or other transfer more
than $25,000,000 in Net Proceeds, Seller shall deliver to Purchaser, at the
time of consummation of such sale or other transfer, payment in an amount
equal to the sum of $25,000,000 and 50% of the difference between the Net
Proceeds received by Seller and $25,000,000. Any payment required to be
made under this
Section 1.01(b) shall be referred to as a "Ferrania Facility Payment". For
purposes of this Section 1.01(b), "Net Proceeds" means the gross value of
all consideration received by Seller and its subsidiaries for the sale or
other transfer of the Ferrania Facility (whether such value is paid
directly with respect to the sale of the Ferrania Facility or indirectly
through other payments from the Purchaser to the Seller or any of its
subsidiaries) less the sum of (i) the fees, expenses and out-of-pocket
disbursements of outside advisors and experts paid by Seller and its
subsidiaries, (ii) ordinary closing costs and fees (including filing,
registration and similar fees) paid by Seller and its subsidiaries and
(iii) any transaction- related Taxes (other than income Taxes and other
than any interest, penalties, additions to tax or additional amounts due
with respect to the underlying Taxes) paid by Seller and its subsidiaries.
In calculating any U.S. Dollar amount for purposes of this Section 1.01(b),
all non-U.S. currency values shall be converted to U.S. Dollar values at
the rate of exchange for foreign currencies per U.S. Dollar on the date of
consummation of sale or other transfer, as reported in the Wall Street
Journal (Eastern Edition). For purposes of the calculation of Net Proceeds,
Seller shall, within a reasonable time (but not later than 30 days)
following execution of any agreement for the sale or other transfer of the
Ferrania Facility, disclose to Purchaser the gross value of all
consideration to be received by Seller and its subsidiaries for the sale or
other transfer of the Ferrania Facility and all other material economic
terms of all agreements entered into contemporaneously therewith between
Seller and the purchaser of the Ferrania Facility; provided that Seller and
its subsidiaries may elect, for any valid reason, not to disclose the
material economic terms of all such agreements, and in such event Purchaser
shall appoint an independent third party, reasonably acceptable to Seller,
to which Seller shall disclose, subject to a confidentiality agreement
acceptable to Seller, all other material economic terms; provided, however,
that such independent third party's review shall be limited to reviewing
all such documents and information as are reasonably necessary to verify
the calculation of the amount of Net Proceeds and disclosing to Purchaser
Net Proceeds. Seller also shall provide Purchaser with reasonably detailed
documentation supporting the fees, costs, expenses, disbursements and Taxes
required to be taken into account in computing Net Proceeds.
SECTION 1.02. Acquired Assets and Excluded Assets. (a) The term
"Acquired Assets" means all the properties, assets, goodwill and rights of
Seller and Seller Subs of whatever kind and nature, real, personal or
mixed, tangible or intangible, that are owned, leased or licensed
by Seller or any Seller Sub on the Closing Date and which are Related to
the Businesses, other than the Excluded Assets, including:
(i) all real property, leaseholds and other interests in
real property of Seller or any Seller Sub listed in Schedule
1.02(a)(i), in each case together with Seller's and Seller Subs'
right, title and interest in all buildings, improvements and
fixtures thereon and all other appurtenances thereto (the
"Premises");
(ii) all raw materials, work-in-process, supplies (other
than any raw materials, work-in-process and supplies located at
the Ferrania Facility), finished goods (including jumbo rolls
located at the Ferrania Facility that (A) have been sensitized
and (B) are in transit or ready for shipment to Seller's White
City, Oregon facility or Florida Facility pursuant to a purchase
order issued by either such facility prior to the Closing),
parts, spare parts and other inventories of Seller or any Seller
Sub, held at any location or facility of Seller or any Seller
Sub, in transit to Seller or any Seller Sub, or on consignment or
in the possession of any third party, in each case that are
Related to the Businesses (the "Inventory");
(iii) all machinery, equipment, tools, furniture,
furnishings, vehicles, computers and other tangible personal
property of Seller or any Seller Sub, held at any location or
facility of Seller or any Seller Sub or any other person, in each
case that are Related to the Businesses (the "Personal
Property");
(iv) all trade accounts and notes receivable and other
miscellaneous receivables of Seller or any Seller Sub on the
Closing Date arising out of the sale or other disposition of
goods or services Related to the Businesses or otherwise arising
out of the operation or conduct of the Businesses, including
amounts owing to Seller or any Seller Sub on the Closing Date
from any Transferred Employee (the "Receivables");
(v) subject to and on the terms and conditions set forth in
the Intellectual Property Agreements, all claims of patents
(including all reissues, divisions, continuations and extensions
thereof), patent applications, patent rights, trademarks,
trademark registrations, trademark applications, servicemarks,
trade names, trade dress, business names, brand names,
copyrights, copyright registrations, works of authorship,
designs, design registrations, mask work,
computer software, programs, documentation and databases and all
rights to any of the foregoing ("Intellectual Property") and, of
Seller or any Seller Sub that are used, or held primarily for
use, on the Closing Date, in the operation or conduct of the
Businesses (such Intellectual Property being the "Transferred
Intellectual Property");
(vi) subject to and on the terms and conditions set forth in
the Intellectual Property Agreements, all trade secrets,
inventions, know-how, formulae, processes, procedures, research
records, records of inventions, test information, databases,
market surveys and marketing know-how ("Technology") of Seller or
any Seller Sub that are used, or held primarily for use, on the
Closing Date, in the operation or conduct of the Businesses (the
"Transferred Technology");
(vii) to the extent transferable, all Permits of Seller or
any Seller Sub that are Related to the Businesses (the "Assigned
Permits");
(viii) all contracts, leases, subleases, indentures,
licenses, agreements, commitments and all other legally binding
arrangements, whether oral or written ("Contracts"), to which
Seller or any Seller Sub is a party or by which Seller or any
Seller Sub is bound that are listed in Schedule 1.02(a)(viii),
all Contracts, bids, quotes, proposals, purchase orders and sales
orders in part Related to the Businesses and in part related to
other businesses of Seller or any Seller Sub but only to the
extent such Contracts, bids, quotes, proposals, purchase orders
and sales orders are Related to the Businesses, and all other
Contracts, bids, quotes, proposals, purchase orders and sales
orders to which Seller or any Seller Sub is a party or by which
Seller or any Seller Sub is bound that are Related to the
Businesses or to which the Acquired Assets are subject, including
those expired or terminated Contracts with continuing rights
and/or obligations (collectively, the "Assigned Contracts");
provided, however, that, in the case of those Contracts that have
been entered into on or before the Spin-Off Date, the Assigned
Contracts shall include only those Contracts that have been
transferred to Seller or any Seller Subs;
(ix) all partnership interests or any other equity interest
in any corporation, company, limited liability company,
partnership, joint venture, trust or other business association
("Investments") listed in Schedule 1.02(a)(ix), including all the
issued and
outstanding shares of common stock, par value $0.001 per share,
of Cemax-Icon (the "Cemax-Icon Shares") and all other Investments
that are Related to the Businesses;
(x) all rights in and to products or goods sold or leased
(including products returned after the Closing and rights of
rescission, replevin and reclamation) in the operation or conduct
of the Businesses;
(xi) all credits, prepaid expenses, deferred charges (other
than any charges relating to Taxes), advance payments, security
deposits and prepaid items that are Related to the Businesses;
(xii) all rights, claims, credits, Proceedings and Judgments
to the extent relating to any Acquired Asset or any Assumed
Liability, including any such items arising under guarantees,
warranties, indemnities and similar rights in favor of Seller or
Seller Subs in respect of any Acquired Asset or any Assumed
Liability;
(xiii) subject to Section 6.12, all books of account,
ledgers, claim files (whether open or closed, but if such files
have been closed before the Spin-Off Date, only to the extent
such files are in the possession of Seller or any Seller Sub),
financial, accounting and tax records and all general and
personnel records, files, invoices, customers' and suppliers'
lists, other distribution and mailing lists, price lists,
reports, plans, advertising materials, catalogues, billing
records, sales and promotional literature, manuals, customer and
supplier correspondence (in all cases, in any form or medium), of
Seller or any Seller Sub that are Related to the Businesses (the
"Records");
(xiv) all goodwill generated by, associated with or
attributable to the Businesses;
(xv) all assets of the Benefit Plans sponsored by Cemax-Icon
and the portion of the assets of any Seller Foreign Benefit Plan
that becomes the obligation of Purchaser pursuant to Section
6.09(d)(i), in each case net of any loans to Transferred
Employees; and
(xvi) except as otherwise provided herein, assets to satisfy
any unfunded liabilities under Seller Foreign Benefit Plans that
become the obligation of Purchaser pursuant to Section
6.09(d)(i).
(b) The term "Excluded Assets" means:
(i) (A) the Ferrania Facility, (B) the Florida Facility, (C)
the real property, leaseholds and other interests in real
property listed on Schedule 1.02(b)(i) (the real property
interests referred to in clauses (A), (B) and (C); collectively,
the "Retained Premises"), including all Seller's and Seller Subs'
right, title and interest in all buildings, improvements and
fixtures on the Retained Premises and all other appurtenances to
the Retained Premises and all Personal Property located at the
Retained Premises;
(ii) the machinery, equipment and tools owned by 3M or any
affiliate of 3M and located at Seller's manufacturing facility in
White City, Oregon for use in contract manufacturing services
being performed for certain business units of 3M by Seller listed
on Schedule 1.02(b)(ii);
(iii) except as and to the extent provided in the
Intellectual Property Agreements, (A) all trade names, business
names and trade dresses incorporating "Imation" and Imation logos
and (B) all Intellectual Property and Technology retained by
Seller and the Seller Subs under the Intellectual Property
Agreements, including the Excluded Intellectual Property and any
Proceedings or Judgments related thereto;
(iv) all cash and cash equivalents of Seller or any Seller
Sub;
(v) all rights, claims, credits, Proceedings and Judgments
of Seller or any Seller Sub to the extent relating to any
Excluded Asset or any Excluded Liability, including any such
items arising under insurance policies and all guarantees,
warranties, indemnities and similar rights in favor of Seller or
any Seller Sub in respect of any Excluded Asset or any Excluded
Liability;
(vi) except as provided in Section 6.18 and Section 6.22,
all insurance policies and insurance contracts insuring the
Businesses or the Acquired Assets, together with any claim,
action or other right Seller or any of its subsidiaries may have
for insurance coverage under any past and present policies and
insurance contracts insuring the Businesses or the Acquired
Assets, in each case including any proceeds received from any
such policy or contract after the Closing;
(vii) (A) subject to Section 6.12, all Records of Seller or
any Seller Sub which Seller or any Seller Sub is required by Law
to retain, (B) all Records prepared in connection with the sale
of the Businesses to Purchaser and (C) subject to Section 6.12,
all financial and tax Records relating to the Businesses that
either (1) form part of Seller's general ledger or (2) relate to
the Pre-Closing Tax Period (other than copies of any portion of
such records relating to Cemax-Icon);
(viii) all the assets of any Seller U.S. Pension Plan unless
the sponsorship of such Seller U.S. Pension Plan is assumed by
Purchaser;
(ix) all rights of Seller or any Seller Sub under any
Transaction Document; and
(x) all assets and businesses identified on Schedule
1.02(b)(x).
For the avoidance of doubt, the term "Acquired Assets" does not
include any property, asset, goodwill or right of Cemax-Icon of whatever
kind or nature (it being understood and agreed, however, that all
properties, assets, goodwill and rights of Cemax-Icon shall be sold,
assigned, transferred, conveyed, licensed and leased to Purchaser and
purchased, licensed, leased and assumed by Seller in accordance with
Section 1.01 through the acquisition by Purchaser of the Cemax-Icon
Shares).
SECTION 1.03. Assumption of Certain Liabilities. (a) Upon the
terms and subject to the conditions of this Agreement, Purchaser shall
assume, effective as of the Closing, and from and after the Closing,
Purchaser shall pay, perform and discharge when due, all liabilities,
obligations and commitments of Seller and any Seller Sub of any nature
whatsoever, whether known or unknown, asserted or unasserted, whether due
or to become due ("liabilities") Related to the Businesses (the "Assumed
Liabilities"), other than any Excluded Liabilities, including:
(i) all liabilities of Seller or any Seller Sub under the
Assigned Contracts;
(ii) all accounts payable of Seller or any Seller Sub to the
extent Related to the Businesses;
(iii) all liabilities in respect of any and all products,
goods or services sold by the Businesses at any time, including
liabilities for refunds,
adjustments, allowances, repairs, exchanges, returns and
warranty, merchantability and other claims;
(iv) all liabilities to the extent arising as a result of at
any time being the owner or occupant of, or the operator of the
activities conducted at, the Premises included in the Acquired
Assets or any other real property owned or leased at any time by
Seller or any Seller Sub for use primarily in the Businesses,
including all liabilities relating to personal injury, property
damage, the environment and on-site or off-site waste disposal;
(v) all liabilities relating to the employment or
termination of employment of any Transferred Employee or any
former employee of Cemax-Icon at any time, including any payroll
or employment taxes, unused vacation time and liabilities under
corporate credit cards issued to any Transferred Employee;
(vi) all liabilities for Taxes (A) attributable to the
Acquired Assets (other than Excluded Taxes), (B) of Cemax-Icon
for any taxable period (other than Excluded Taxes) and (C)
attributable to a Purchaser Tax Act;
(vii) all liabilities in respect of Proceedings, pending or
threatened, whether or not presently asserted, that are Related
to the Businesses; and
(viii) (x) all liabilities under any Benefit Plan sponsored
by Cemax-Icon and (y) any Non-U.S. Benefit Plan liability that
becomes the obligation of Purchaser under Section 6.09.
For the avoidance of doubt, the term "Assumed Liabilities" does
not include any liability of Cemax-Icon (it being understood and agreed
that all liabilities of Cemax-Icon shall be assumed by Purchaser as a
result of the acquisition by Purchaser of the Cemax-Icon Shares).
(b) Notwithstanding any other provision of this Agreement,
Purchaser shall not assume or be responsible for, and Seller or the
respective Seller Sub shall retain and be responsible for, the following
liabilities of Seller and Seller Subs (the "Excluded Liabilities"):
(i) any liability of Seller or any Seller Sub, arising out
of the operation or conduct by Seller or any of its affiliates of
any business other than the Businesses;
(ii) any liability of Seller or any Seller Sub that relates
to, or that arises out of, any Excluded Asset;
(iii) any liability for Excluded Taxes;
(iv) any Pre-Closing Environmental Liabilities;
(v) any liability related to the Transferred Employees that
is specifically retained by Seller or any Seller Sub pursuant to
Section 6.09;
(vi) all liabilities to any employees of Seller or any
Seller Sub (other than Cemax-Icon) other than (x) Transferred
Employees or (y) Eligible Employees with respect to liabilities
arising from Purchaser's breach of Section 6.09;
(vii) all liabilities to employees of Seller or any Seller
Sub with respect to options to acquire the common stock of Seller
or any Seller Sub;
(viii) all liabilities (a) under any Benefit Plan (other
than those of Cemax-Icon), whether arising from violation of any
Law or otherwise, except as otherwise required by applicable Law
or this Agreement; or (b) for collection of COBRA premiums or
compliance with COBRA notice requirements for any Transferred
Employee (other than those of Cemax-Icon) who does not accept
employment with Purchaser;
(ix) other than with respect to employees or former
employees of Cemax-Icon, any claims by any employee of Seller or
any Seller Sub for benefits incurred (as defined in Section 6.09)
before the Closing Date;
(x) any indebtedness (whether as obligor, guarantor or
otherwise) to third parties for borrowed money (other than
accounts payable incurred in the ordinary course of business),
whether or not Related to the Businesses, other than any
indebtedness described under items 1 and 2 of clause (a)(ix)(B)
of Schedule 3.08;
(xi) any direct cost or expense incurred before or after the
Closing Date to the extent arising out of, resulting from or
incurred in connection with any of the following actions but only
to the extent such actions take place prior to the Closing: (A)
any restructuring of Seller or any of its subsidiaries (whether
corporate-wide or with respect to European operations, Ferrania
operations, Cemax-Icon or otherwise); (B) any termination of any
European
distributors; and (C) termination of the dry imagesetting
program;
(xii) any direct cost or expense arising out of, resulting
from or incurred in connection with any of the following: (A)
closure of the Florida Facility; (B) subject to Section 1.01(b),
sale or transfer of the Ferrania Facility; and (C) the relocation
described in Section 6.20;
(xiii) any direct cost or expense arising out of, resulting
from or incurred in connection with the termination of the
Consulting Agreement dated January 14, 1997, as amended, between
Seller and Itasca Ventures, LLC;
(xiv) any liability for checks drawn on bank accounts of
Seller and its subsidiaries, in each case that have been issued
but not cleared as of the Closing Date;
(xv) any liability under Seller's Success Sharing Plan for
Transferred Employees to the extent (A) attributable to the
corporate performance component of such Plan and (B) incurred,
arising or relating to services performed prior to the Closing;
(xvi) any liability to Seller or any Seller Sub, including
liabilities of Cemax-Icon payable to Seller or any Seller Sub,
except in any case liabilities incurred, arising or relating to
goods or services sold or provided by Seller or any Seller Sub to
the Businesses in the ordinary course of business consistent with
past practice;
(xvii) other than with respect to employees of Cemax- Icon
on the Closing Date, any worker's compensation liability with
respect to any actual or alleged work- related injury, disease or
illness to any employee or former employee which is determined to
have occurred prior to the Closing Date; and
(xviii) any liability of Seller or any Seller Sub identified
on Schedule 1.03(b)(xviii).
SECTION 1.04. Nonassignability of Assets. (a) Notwithstanding
anything in this Agreement to the contrary, this Agreement shall not
constitute an agreement to sell, assign, transfer, convey, license or lease
any asset if such sale, assignment, transfer, conveyance, license or lease
is prohibited by any applicable Law or would require the Consent of any
Governmental Entity or
other person and such Consent is not obtained prior to Closing, the Closing
shall proceed without the sale, assignment, transfer, conveyance, license
or lease of such asset; provided, however, if such failure causes a failure
of any of the conditions to the Purchaser's obligations as set forth in
Section 7.02(d), the Closing shall proceed only if Purchaser shall waive
such condition, in its sole discretion. In the event that the Closing
proceeds without the sale, assignment, transfer, conveyance, license or
lease of any such asset, then following the Closing, the parties shall use
their reasonable best efforts, and cooperate with each other, to obtain
promptly such Consents; provided, however, that none of Seller, the Seller
Subs, Cemax-Icon, Purchaser or any Purchaser Buyer shall be required to pay
any consideration for such Consent other than filing, recordation or
similar fees which, except as expressly provided in Section 10.04 of this
Agreement or Section 3.2 or 10.3 of the Seller Intellectual Property
Agreement, shall be paid by the party who is required by applicable Law or
course of dealing to do so. Pending receipt of such Consent, the parties
shall cooperate with each other in any mutually agreeable, reasonable and
lawful arrangements designed to provide to Purchaser or the Purchaser
Buyers, as the case may be, the benefits of use of such asset and to Seller
or the Seller Subs the benefits, including any indemnities, that they would
have obtained had the asset been conveyed to Purchaser or the Purchaser
Buyers, as the case may be, at the Closing. Once Consent for the sale,
assignment, transfer, conveyance, license or lease of any such asset not
sold, assigned, transferred, conveyed, licensed or leased at the Closing is
obtained, Seller shall or shall cause a Seller Sub to sell, assign,
transfer, convey, license and lease such asset to Purchaser or the
Purchaser Buyers, as the case may be, at no additional cost to Purchaser or
the Purchaser Buyers (subject, however, to Section 1.05). To the extent
that any such asset cannot be provided to Purchaser or the Purchaser
Buyers, as the case may be, following the Closing pursuant to this Section
1.04, the Purchaser and Seller shall enter into such arrangements
(including subleasing, sublicensing or subcontracting) to provide to the
parties the economic (taking into account Tax costs and benefits) and
operational equivalent, to the extent permitted, of obtaining such Consent
and the performance by Purchaser or the Purchaser Buyers, as the case may
be, of the obligations thereunder. Seller and the Seller Subs shall hold in
trust for and pay to Purchaser or the Purchaser Buyers, as the case may be,
promptly upon receipt thereof, all income, proceeds and other monies
received by Seller or any Seller Subs in connection with its use of any
asset (net of the net Tax and any other costs imposed upon Seller or any
Seller Subs) in connection with the arrangements under this Section 1.04
and Purchaser and
the Purchaser Buyers shall indemnify Seller and Seller Subs for (i) the net
Tax and any other costs imposed upon Seller and Seller Subs in connection
with its use of any such asset.
SECTION 1.05. Additional Acquisitions. (a) Notwithstanding
anything to the contrary contained in this Agreement, Purchaser may elect
to have any or all of the Acquired Assets transferred, assigned, conveyed,
licensed and leased to, or any of the Assumed Liabilities assumed by, one
or more of the Purchaser Buyers; provided, however, that no such election
shall result in any net greater cost or obligation (including net greater
costs arising from (i) exchange risks and transfer restrictions on the
movement of funds imposed by countries in which particular Purchaser Buyers
are domiciled and (ii) the imposition of any additional Taxes) than Seller
or any of the Seller Subs would otherwise have had such assets or
liabilities been transferred to Purchaser or to a Purchaser Buyer domiciled
within the jurisdiction in which such assets or liabilities are located,
whichever is greater; provided, further, however, that no such election
shall relieve Purchaser of any of its obligations to Seller and its
affiliates hereunder with respect to the Assumed Liabilities or otherwise.
(b) Subject to Section 1.05(a), if mutually agreed by Seller and
Purchaser, any transfer made pursuant to the foregoing clause (a) may be
effected pursuant to separate Local Asset Purchase Agreements.
Notwithstanding the foregoing, if a Local Asset Purchase Agreement is to be
executed in any country where notification of or consultation with a works
council or similar entity is required, then such Local Asset Purchase
Agreement shall not become binding upon the parties until such time as such
notification or consultation is completed.
SECTION 1.06. Closing Working Capital. (a)(i) Except with the
express prior written consent of Purchaser and other than as set forth on
Schedule 6.01, Seller agrees that, between the date hereof and the Closing
Date, it will, and will cause the Seller Subs and Cemax-Icon to, conduct
the Businesses in accordance with Seller's ordinary course of business
consistent with past practice with respect to the components of Working
Capital, including those practices relating to (A) collection of trade
receivables (it being understood that none of Seller, any Seller Sub or
Cemax-Icon shall factor, sell or engage in any similar practice with
respect to trade receivables), (B) payment of trade accounts payables, (C)
terms of sale, including price, discounts, rebates, equipment loans,
allowances and warranties (except in accordance with current
industry practice or in response to changes in market prices or other terms
of sale offered by competitors of Seller), (D) return, credit or trade
practices and (E) inventory levels.
(ii) Notwithstanding the foregoing, this Section 1.06(a) shall
not be deemed to have been breached by Seller, any Seller Sub or Cemax-Icon
because of any of the actions or conduct set forth in Schedule 1.06.
(iii) The term "Working Capital" means (A) the sum of (1) all
trade Receivables (net of allowances for doubtful accounts, returns and
allowances, cash discounts, and sales rebates) and (2) all Inventories
(other than raw materials, work-in-process and supplies located at the
Ferrania Facility) minus (B) all trade accounts payable, in each case of
the Businesses.
(b) If it is determined pursuant to the procedures set forth in
this Section 1.06 that Seller shall not have complied with Section 1.06(a)
in one or more instances (whether such failure to comply results in an
increase or a decrease in Working Capital) and that the net impact of all
such failures to comply, taken as a whole, results in a net reduction in
the amount of Working Capital transferred to Purchaser as of the Closing
(the amount of such net reduction, to the extent resulting from such
failures to comply, a "Working Capital Shortfall"), Seller shall, within 30
days following the date the amount of the Working Capital Shortfall, if
any, shall become final and binding upon Seller and Purchaser pursuant to
Section 1.06(e), pay to the Purchaser the total amount of such Working
Capital Shortfall, if any, in immediately available funds, plus interest on
such net amount at LIBOR from the Closing Date to the date of payment.
(c) Within 60 days after the Closing Date (the "Initial 60-Day
Period"), Purchaser may give written notice to Seller (the "Working Capital
Election Notice") of Purchaser's intent to conduct an in-depth
investigation to determine whether Seller has complied with Section
1.06(a). If Purchaser does not deliver a Working Capital Election Notice
within the Initial 60-Day Period, Seller shall have no liability under this
Section 1.06. If Purchaser delivers a Working Capital Election Notice
within the Initial 60-Day Period, Purchaser shall complete its
investigation within 90 days following expiration of the Initial 60-Day
Period. In connection with Purchaser's right under this Section 1.06,
Purchaser and its independent public accountants will be permitted to
review the accounting records of the Seller and such additional financial
information as Purchaser or Purchaser's independent public
accountants shall reasonably request for the purpose of determining whether
Seller has complied with Section 1.06(a). In connection with any such
investigation, Seller and Purchaser and their respective independent public
accountants shall cooperate with each other.
(d) If during the 90-day period following the Initial 60-Day
Period (the "Investigation Period") Purchaser determines that it has reason
to believe that Seller did not comply with Section 1.06(a), Purchaser may
give Seller a written notice to such effect at any time prior to the
expiration of the Investigation Period (the "Notice of Working Capital
Breach"). If such Notice of Working Capital Breach is not delivered to
Seller prior to the expiration of the Investigation Period, Seller will not
have any liability under this Section 1.06. The Notice of Working Capital
Breach shall (i) include a statement (the "Statement") setting forth the
Working Capital as of the close of business on the Closing Date prepared in
accordance with GAAP on a basis consistent with the Seller Financial
Statements, (ii) specify in reasonable detail the basis for the Purchaser's
belief that the Seller has failed to comply with Section 1.06(a), (iii)
specify the Working Capital Shortfall, including a reasonably detailed
calculation thereof, and (iv) specify in reasonable detail the basis for
the Purchaser's belief that the Working Capital Shortfall resulted from the
Seller's breach of Section 1.06(a). The Notice of Working Capital Breach
shall be accompanied by a report of Purchaser's independent public
accountants, without exception or qualification, to the effect that (x) the
Statement has been prepared in accordance with the provisions of this
Section 1.06, and (y) it concurs with each of the positions taken by
Purchaser in the Notice of Working Capital Breach, provided that it is
understood and agreed that this provision shall not be deemed or construed
to require Purchaser's independent public accountants to audit the
Statement.
(e) During the 90-day period following Seller's receipt of the
Notice of Working Capital Breach, Seller and its independent public
accountants shall be permitted to review the working papers of Purchaser
and Purchaser's independent public accountants relating to the Notice of
Working Capital Breach and any other information reasonably requested by
Seller or Seller's independent public accountants. The amount of the
Working Capital Shortfall shall become final and binding upon the parties
on the 90th day following delivery thereof, unless Seller gives written
notice of its disagreement with the Notice of Working Capital Breach (a
"Notice of Disagreement") to Purchaser prior to such date. Any Notice of
Disagreement shall specify in reasonable detail the nature of any
disagreement so asserted and, to the extent practicable, the adjustments to
the amount of the Working Capital Shortfall which Seller believes should be
made. If a Notice of Disagreement is received by Purchaser in a timely
manner, then the amount of the Working Capital Shortfall (as revised in
accordance with this sentence) shall become final and binding upon Seller
and Purchaser on the earlier of (A) the date Seller and Purchaser resolve
in writing any differences they have with respect to the matters specified
in the Notice of Disagreement and (B) the date any disputed matters are
finally resolved in writing by the Accounting Firm. During the 60-day
period following the delivery of a Notice of Disagreement, Seller and
Purchaser shall seek in good faith to resolve in writing any differences
that they may have with respect to the matters specified in the Notice of
Disagreement. At the end of such 60-day period, Seller and Purchaser shall
submit to an independent accounting firm (the "Accounting Firm") for
arbitration any and all matters that remain in dispute and were properly
included in the Notice of Disagreement. The Accounting Firm shall be
mutually agreed upon by the parties hereto in writing. Seller and Purchaser
shall agree to use reasonable efforts to cause the Accounting Firm to
render a decision resolving the matters submitted to the Accounting Firm
within 30 days following submission. Judgment may be entered upon the
determination of the Accounting Firm in any court having jurisdiction over
the party against which such determination is to be enforced. The cost of
any arbitration (including the fees and expenses of the Accounting Firm and
reasonable attorney fees and expenses of the parties) pursuant to this
Section 1.06 shall be borne by Purchaser and Seller in inverse proportion
as they may prevail on matters resolved by the Accounting Firm, which
proportionate allocations shall also be determined by the Accounting Firm
at the time the determination of the Accounting Firm is rendered on the
merits of the matters submitted. The fees and disbursements of Seller's
independent public accountants incurred in connection with their review of
any Notice of Disagreement shall be borne by Seller, and the fees and
disbursements of Purchaser's independent public accountants incurred in
connection with their certification of the Statement and review of any
Notice of Disagreement shall be borne by Purchaser.
(f) Following the Closing, Purchaser shall take no actions with
respect to the accounting books and records of the Businesses for the
period on or prior to the Closing Date on which the Notice of Working
Capital Breach is to be based that would obstruct or prevent the
preparation of the Notice of Disagreement and the determination of the
Working Capital as of the Closing Date.
ARTICLE II
The Closing; Post-Closing Payments
SECTION 2.01. Closing Date. The closing of the Acquisition (the
"Closing") shall take place at the offices of Cravath, Swaine & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the second
business day following the satisfaction (or, to the extent permitted, the
waiver) of the conditions set forth in Section 7.01, or, if on such day any
condition set forth in Section 7.02 or 7.03 has not been satisfied (or, to
the extent permitted, waived by the party entitled to the benefit thereof),
as soon as practicable after all the conditions set forth in Article VII
have been satisfied (or, to the extent permitted, waived by the parties
entitled to the benefits thereof), or at such other place, time and date as
shall be agreed between Seller and Purchaser. The date on which the Closing
occurs is referred to in this Agreement as the "Closing Date".
SECTION 2.02. Transactions To Be Effected at the Closing. At the
Closing:
(a) Seller and Seller Subs shall deliver to Purchaser or a
Purchaser Buyer, as the case may be, such appropriately executed
quit-claim deeds (in recordable form), bills of sale, assignments
and other instruments of transfer (including one or more separate
bills of sale, assignments and other instruments of transfer with
respect to transfers in the United States and each other country
where assets are being transferred) relating to the Acquired
Assets (other than the Cemax-Icon Shares) in form and substance
reasonably satisfactory to Purchaser and its counsel;
(b) Seller shall deliver to Purchaser certificates
representing the Cemax-Icon Shares, duly endorsed in blank or
accompanied by stock powers duly endorsed in blank in proper form
for transfer, with appropriate transfer stamps, if any, affixed;
(c) Seller shall deliver to Purchaser evidence of the
obtaining of or the filing with respect to, each Consent required
to be obtained pursuant to Section 7.02(d) or which otherwise was
obtained by Seller or any Seller Sub or Cemax-Icon in connection
with consummation of the Acquisition;
(d) Seller shall deliver to Purchaser the certificates,
opinions and other documents and agreements to be delivered
pursuant to Section 7.02;
(e) Purchaser shall deliver to Seller the certificates,
opinions and other documents and agreements to be delivered
pursuant to Section 7.03; and
(f) Purchaser and any Purchaser Buyers, as the case may be,
shall deliver to Seller or Seller Subs, as the case may be, (i)
payment, by one or more wire transfers to such bank accounts
designated in writing by Seller (such designation to be made at
least two business days prior to the Closing Date) in immediately
available funds in an amount equal to the sum of (A) the Closing
Date Purchase Price and (B) all 1998 Payments and all 1999
Payments made or deposited in escrow by Seller prior to Closing
as provided in Section 2.03; provided, however, that if any such
payment is to be made to an account outside the United States
pursuant to the mutual agreement of Seller and Purchaser or
because such payment shall be required by applicable Law, such
payment shall be made to an account in the relevant country where
the assets being transferred are located in U.S. Dollars or, if
mutually agreed by Seller and Purchaser or required by applicable
Law, in the relevant local currency and (ii) such appropriately
executed assumption agreements and other instruments of
assumption (including one or more assumption agreements and other
instruments of assumption with respect to transfers in the United
States and each other country where assets are being transferred)
providing for the assumption of the Assumed Liabilities in form
and substance reasonably satisfactory to Seller and its counsel.
SECTION 2.03. Cemax-Icon Payments. (a) Not later than five
business days prior to the date on which (i) any portion of the 1998
Payment which is not in dispute is required to be paid and/or (ii) any
portion of the 1998 Payment which is in dispute is required to be deposited
into escrow, in each case as provided in the Cemax-Icon Merger Agreement,
Seller shall deliver to Purchaser a certificate (a "1998 Cemax-Icon
Certificate") setting forth (x) the amount of such undisputed portion of
the 1998 Payment to be paid and/or such disputed portion of the 1998
Payment to be deposited into escrow, as the case may be, (y) a reasonably
detailed description of the calculation thereof and (z) the date on which
such payment and/or deposit is required to be made (a "1998 Payment Date").
(b) In the case of any 1998 Payment Date that occurs prior to the
Closing Date, subject to clause (i) below, Purchaser shall deliver to
Seller on the Closing Date as contemplated by Section 2.02(f) payment, by
wire transfer
to a bank account to be designated in writing by the Seller (such
designation to be made at least two business days prior to the Closing
Date), in U.S. Dollars in immediately available funds in an amount equal to
the relevant portion of the 1998 Payment made or deposited on such 1998
Payment Date as set forth in such 1998 Cemax-Icon Certificate. If all or
any portion of any 1998 Payment (or portion thereof) paid to Seller by
Purchaser in accordance with this Section 2.03(b) is released from escrow
and returned to Seller, Seller shall promptly and in any event within five
business days deliver such returned amount (including, to the extent
returned or released to Seller, all earnings and other amounts added
thereto) to Purchaser.
(c) In the case of any 1998 Payment Date that occurs on or after
the Closing Date, subject to clause (i) below, Purchaser shall pay or
deposit any such amount required to be paid or deposited on such 1998
Payment Date, as set forth in such 1998 Cemax-Icon Certificate, directly
to, or for the account of, the Holders in accordance with the terms and
conditions applicable to such payment or deposit set forth in the
Cemax-Icon Merger Agreement.
(d) If the Closing Date occurs on or prior to July 14, 1999,
Purchaser shall comply with all obligations of Seller with respect to the
1999 Payment, the 1999 Earn- Out Statement and the 1999 Earn-Out under the
Cemax-Icon Merger Agreement in accordance with the terms thereof, including
calculation of the amount of 1999 Payment (it being agreed that all
references to Seller therein shall be deemed to be references to
Purchaser).
(e) If the Closing Date shall not have occurred on or prior to
July 14, 1999, not later than five business days prior to the date on which
(i) any portion of the 1999 Payment which is not in dispute is required to
be paid and/or (ii) any portion of the 1999 Payment which is in dispute is
required to be deposited into escrow, in each case as provided in the
Cemax-Icon Merger Agreement, Seller shall deliver to Purchaser a
certificate (a "1999 Cemax-Icon Certificate") setting forth (x) the amount
of such undisputed portion of the 1999 Payment to be paid and/or such
disputed portion of the 1999 Payment to be deposited into escrow, as the
case may be, (y) a reasonably detailed description of the calculation
thereof and (z) the date on which such payment and/or deposit is required
to be made (a "1999 Payment Date").
(f) In the case of any 1999 Payment Date that occurs prior to the
Closing Date, subject to clause (i) below, Purchaser shall deliver to
Seller on the Closing Date as contemplated by Section 2.02(f) payment, by
wire
transfer to a bank account to be designated in writing by the Seller (such
designation to be made at least two business days prior to the Closing
Date), in U.S. Dollars in immediately available funds in an amount equal to
the relevant portion of the 1999 Payment made or deposited on such 1999
Payment Date as set forth in such 1999 Cemax-Icon Certificate. If all or
any portion of any 1999 Payment (or portion thereof) paid to Seller by
Purchaser in accordance with this Section 2.03(f) is released from escrow
and returned to Seller, Seller shall promptly and in any event within five
business days deliver such returned amount (including, to the extent
returned or released to Seller, all earnings and other amounts thereto) to
Purchaser.
(g) In the case of any 1999 Payment Date that occurs on or after
the Closing Date, subject to clause (i) below, Purchaser shall pay or
deposit any such amount required to be paid or deposited on such 1999
Payment Date, as set forth in such 1999 Cemax-Icon Certificate, directly
to, or for the account of, the Holders in accordance with the terms and
conditions applicable to such payment or deposit set forth in the
Cemax-Icon Merger Agreement.
(h) Seller shall be responsible for all objections, disputes and
arbitration proceedings in connection with or relating to the amount of any
1998 Payment or any 1999 Payment, any Earn-Out Statement or any Earn-Out.
Purchaser shall cooperate with Seller, and shall cause its officers,
employees, agents, auditors and representatives to cooperate with Seller,
in connection with any objection, dispute or arbitration proceedings in
connec tion with or relating to any 1998 Payment, any 1999 Payment, any
Earn-Out Statement or any Earn-Out, including affording Seller and any
accountants, counsel or financial advisors retained by Seller reasonable
access to all accounting books, working papers and records of Purchaser and
its affiliates relevant to the calculation of 1999 Gross Revenues and
executing and delivering or causing to be executed and delivered all such
documents and instruments as Seller may reasonably deem necessary in
connection with such objection, dispute or arbitration proceedings.
(i) Purchaser acknowledges that under the terms of the Cemax-Icon
Merger Agreement Seller is obligated to make the Cemax-Icon Payments (or
portions thereof) in cash or Common Stock, at the election of each of the
Holders. For purposes of this Section 2.03:
(A) with respect to the amount of any Cemax-Icon Payment (or
portion thereof) to be paid by Purchaser to Seller pursuant to
clause (b) or (f) of this Section 2.03, as the case may be, on
the Closing Date,
such amount will be calculated based on the assumption that all
Holders elected to receive cash with respect to such Cemax-Icon
Payment (or portion thereof); and
(B) with respect to the amount of any Cemax-Icon Payment (or
portion thereof) to be paid or deposited by Purchaser pursuant to
clause (c) or (g) of this Section 2.03, if any Holder elects to
receive Common Stock with respect to such Cemax-Icon Payment (or
portion thereof) (1) Seller shall issue and deliver the relevant
number of shares of Common Stock to each such Holder as provided
for in the Cemax-Icon Merger Agreement, and (2) the full amount
of such Cemax-Icon Payment to be paid or deposited in cash shall
be calculated as if all Holders had elected to receive cash and
such amount shall be paid or deposited directly by Purchaser
pursuant to clause (c) or (g), as the case may be.
(j) For purposes of this Section 2.03 and Sections 2.02(f) and
9.02, capitalized terms used herein but not defined herein shall have the
respective meanings assigned to such terms in the Cemax-Icon Merger
Agreement.
SECTION 2.04. Ferrania Facility Payment. In accordance with
Section 1.01(a), Purchaser or Seller, as applicable, upon the earlier of
the termination of the X-ray/ Wet Laser Supply Agreement and the time of
consummation of the sale of the Ferrania Facility, shall deliver to the
other the Ferrania Facility Payment, by wire transfer to a bank account
designated in writing by Seller or Purchaser, as applicable (such
designation to be made at least two business days prior to the relevant
date of payment), in U.S. Dollars in immediately available funds.
ARTICLE III
Representations and Warranties of Seller
Seller represents and warrants to Purchaser as follows:
SECTION 3.01. Organization, Standing and Power. Each of Seller,
each Seller Sub and Cemax-Icon is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized
and has full corporate power and authority and possesses all governmental
franchises, licenses, permits, authorizations and approvals necessary to
enable it to own, lease or otherwise hold its properties and assets and to
conduct the Businesses and its other businesses as presently conducted,
other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, have not had and are not reasonably likely to have a material
adverse effect on the Acquired Assets or the business, financial condition
or results of operations of the Businesses, taken as a whole, that results
or is reasonably likely to result in a Loss of $2,000,000 or more or a
material adverse effect on Seller's ability to consummate the transactions
contemplated by this Agreement (a "Seller Material Adverse Effect"). Each
of Seller, each Seller Sub and Cemax-Icon is duly qualified to do business
as a foreign corporation in each jurisdiction where the character of the
Acquired Assets held by it or the nature of the Businesses make such
qualification necessary for it to conduct the Businesses as currently
conducted by it except for such failures that, individually or in the
aggregate, have not had and are not reasonably likely to have a Seller
Material Adverse Effect. Seller has delivered to Purchaser true and
complete copies of the respective certificates of incorporation and by-laws
of Seller, Seller Subs and Cemax-Icon, in each case as amended through the
date of this Agreement; the certificate of incorporation and by-laws of
Cemax-Icon so delivered are in full force and effect.
SECTION 3.02. Authority; Execution and Delivery; Enforceability.
Each of Seller and each Seller Sub has full corporate power and authority
to execute this Agreement and the Transaction Documents to which it is, or
is specified to be, a party and to consummate the Acquisition and the other
transactions contemplated hereby and thereby. The execution and delivery by
Seller of this Agreement and by each of Seller and each Seller Sub of the
Transaction Documents to which it is, or is specified to be, a party and
the consummation by each of Seller and each Seller Sub of the Acquisition
and the other transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action and no other corporate action
is required on the part of Seller, any Seller Sub or Cemax-Icon in order to
authorize the execution, delivery and performance of this Agreement or any
of the Transaction Documents. Seller has duly executed and delivered this
Agreement and prior to the Closing each of Seller and each Seller Sub will
have duly executed and delivered each Transaction Document to which it is,
or is specified to be, a party, and this Agreement constitutes, and each
other Transaction Document to which it is, or is specified to be, a party
will after the Closing constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
SECTION 3.03. No Conflicts; Consents. (a) Except as provided in
Schedule 3.03(a), the execution and delivery by Seller of this Agreement do
not, the execution and delivery by Seller and each Seller Sub of each
other Transaction Document to which it is, or is specified to be, a party
will not, and the consummation of the Acquisition and the other
transactions contemplated hereby and thereby and compliance by Seller and
Seller Subs with the terms hereof and thereof will not result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration
of any obligation or to loss of a material benefit under or result in the
creation of any Lien upon any of the properties or assets of Seller or any
of its subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws of Seller, any Seller Sub or Cemax-Icon, (ii) any
Contract to which Seller, any Seller Sub or Cemax-Icon is a party or by
which any of their respective properties or assets is bound or (iii) any
judgment, order, injunction, writ, award, decree, ruling or other
restriction of any court ("Judgment") or statute, law, ordinance, rule or
regulation ("Law") applicable to Seller, any Seller Sub or Cemax-Icon or
their respective properties or assets, other than, in the case of clauses
(ii) and (iii) above, any such items that, individually or in the
aggregate, have not had and are not reasonably likely to have a Seller
Material Adverse Effect.
(b) Except as provided in Schedule 3.03(b), no consent, approval,
license, permit, order or authorization ("Consent") of, or registration,
declaration or filing with, any Federal, state, local or foreign government
or any court of competent jurisdiction, administrative agency or commission
or other governmental or regulatory authority or instrumentality, domestic
or foreign (a "Governmental Entity") is required to be obtained or made by
or with respect to Seller, any Seller Sub or Cemax-Icon in connection with
the execution, delivery and performance of this Agreement or any other
Transaction Document or the consummation of the Acquisition or the other
transactions contemplated hereby and thereby, other than (I) compliance
with and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"),
the European Union Merger Control Regulation and under the antitrust or
competition laws of any applicable country outside the United States of
America (collectively, the "Non-U.S. Competition Laws"), (II) compliance
with and filings under Section 13(a) of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), (III) those that may be required solely by reason of Purchaser's (as
opposed to any other third party's) participation in the Acquisition and
the other transactions contemplated hereby and by the other Transaction
Documents, (IV) those that may be required by the rules and regulations of
the works councils governing
the relationships of those Seller Subs domiciled in Europe with their
employees and (V) those the failure of which to obtain or make,
individually or in the aggregate, are not reasonably likely to have a
Seller Material Adverse Effect.
SECTION 3.04. Financial Statements. (a) Schedule 3.04(a) sets
forth a consolidated balance sheet of the Businesses as of December 31,
1997 (the "Balance Sheet"), and a consolidated statement of operating
revenues and expenses of the Businesses for the year ended December 31,
1997 (the "Statement of Operating Revenues and Expenses" and, together with
the Balance Sheet and the notes to the Balance Sheet and the Statement of
Operating Revenues and Expenses, "Businesses Financial Statements"). The
Businesses Financial Statements (i) have been prepared on the basis of
presentation described in the notes to the Businesses Financial Statements,
(ii) are derived from the audited consolidated financial statements of
Seller and its subsidiaries as of and for the year ended December 31, 1997
(the "Seller Financial Statements"), (iii) fairly present in all material
respects the financial position of the Businesses as of the date of such
Businesses Financial Statements and the results of operations of the
Businesses for the periods covered by the Businesses Financial Statements
and (iv) have been prepared in conformity with GAAP applied on a consistent
basis with the Seller Financial Statements, except in the case of clauses
(iii) and (iv), (A) as described in the notes to the Businesses Financial
Statements and (B) that the Businesses Financial Statements (1) are not a
complete set of the financial statements required by GAAP, (2) do not have
full footnote disclosure required by GAAP and (3) are based on a
materiality threshold determined for Seller and its subsidiaries, taken as
a whole, and not for the Businesses.
(b) The Businesses do not have any liabilities of a nature
required by GAAP to be reflected on a consolidated balance sheet of the
Businesses or in the notes thereto that, individually or in the aggregate,
have had or are reasonably likely to have an adverse impact on the Acquired
Assets or the business, financial condition or results of operations of the
Businesses, taken as a whole, that results or is reasonably likely to
result in a Loss of $10,000,000 or more, except (i) as disclosed, reflected
or reserved against in the Balance Sheet or the notes thereto, (ii) for
items set forth in Schedule 3.04(b), (iii) for liabilities incurred in the
ordinary course of the Businesses consistent with past practice since the
date of the Balance Sheet and not in violation of this Agreement, (iv) for
Taxes and (v) for Excluded Liabilities. This representation shall not be
deemed breached as a result of a change in Law or in GAAP after the Closing
Date.
(c) To the Knowledge of Seller, the Businesses do not have any
liabilities that, individually or in the aggregate, have had or are
reasonably likely to have an adverse impact on the Acquired Assets or the
business, financial condition or results of operations of the Businesses,
taken as a whole, that results or is reasonably likely to result in a Loss
of the Acquired Assets of $10,000,000 or more, except (i) as disclosed,
reflected or reserved against in the Balance Sheet or the notes thereto,
(ii) for items set forth in Schedule 3.04(c), (iii) for liabilities
incurred in the ordinary course of the Businesses consistent with past
practice since the date of the Balance Sheet and not in violation of this
Agreement, (iv) for Taxes and (v) for Excluded Liabilities. This
representation shall not be deemed breached as a result of a change in Law
or in GAAP after the Closing Date.
SECTION 3.05. Assets Other than Real Property Interests. (a)
Seller and/or Seller Subs have good and valid title to all the Acquired
Assets, in each case free and clear of all mortgages, liens, security
interests, charges, easements, leases, subleases, covenants, rights of way,
options, restrictions or encumbrances of any kind (collectively, "Liens"),
except (i) such as are set forth in Schedule 3.05, (ii) mechanics',
carriers', workmen's, repairmen's or other like Liens arising or incurred
in the ordinary course of business, (iii) Liens arising under original
purchase price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business, (iv) Liens for
Taxes that are not due and payable and (v) other imperfections of title or
encumbrances, if any, that do not and are not reasonably likely to,
individually or in the aggregate, materially impair the continued use and
operation of the assets to which they relate in the conduct of the
Businesses as presently conducted (the Liens described above, together with
the Liens referred to in clauses (b) through (f) of Section 3.06, are
referred to collectively as "Permitted Liens").
(b) This Section 3.05 does not relate to real property or
interests in real property, such items being the subject of Section 3.06,
or to Intellectual Property, such items being the subject of Section 3.07,
or to the Cemax-Icon Shares, such items being the subject of Section 3.09.
SECTION 3.06. Real Property. Schedule 3.06 sets forth a complete
list of all real property and interests in real property owned in fee by
Seller, Seller Subs or Cemax-Icon and Related to the Businesses, other than
any such property or interest constituting an Excluded Asset (individually,
an "Owned Property"). Schedule 3.06 sets
forth a complete list of all real property and interests in real property
leased or subleased by Seller or Seller Subs and Related to the Businesses,
other than any such property or interest constituting an Excluded Asset
(individually, a "Leased Property"). Seller has good and insurable fee
title to all Owned Property and good and valid title to the leasehold
estates in all Leased Property (an Owned Property or Leased Property being
sometimes referred to herein, individually, as a "Business Property"), in
each case free and clear of all Liens, except (a) Liens described in clause
(ii), (iii), (iv) or (v) of Section 3.05(a), (b) such as are set forth in
Schedule 3.06, (c) leases, subleases and similar agreements set forth in
Schedule 3.08, (d) easements, covenants, rights-of-way and other similar
restrictions publicly recorded or shown by a title report or other similar
report or listing provided to Purchaser by Seller prior to the date hereof,
(e) any condition that may be shown by a current, accurate survey or
physical inspection of any Business Property made prior to Closing and (f)
(i) zoning, building and other similar restrictions, (ii) Liens that have
been placed by any developer, landlord or other third party on property
over which Seller, any Seller Sub or Cemax-Icon has easement rights or on
any Leased Property and subordination or similar agreements relating
thereto and (iii) unrecorded easements, covenants, rights-of-way and other
similar restrictions. None of the items set forth in clauses (d), (e) or
(f) above, individually or in the aggregate, materially impairs or is
reasonably likely materially to impair the continued use and operation of
the property to which they relate in the conduct of the Businesses as
presently conducted or have had or are reasonably likely to have a Seller
Material Adverse Effect.
SECTION 3.07. Intellectual Property. (a) Schedule 3.07(a) sets
forth a true and complete list of all patents, patents applications,
trademarks, trademark applications and trademark registrations that
constitute Transferred Intellectual Property or Cemax-Icon Intellectual
Property other than those that, individually and in the aggregate, are not
material to the operation or conduct of the Businesses as presently
conducted (the "Section 3.07 Intellectual Property"). With respect to all
Section 3.07 Intellectual Property that is registered or subject to an
application for registration, Schedule 3.07(a) sets forth a list of all
jurisdictions in which Section 3.07 Intellectual Property is registered or
registrations have been applied for and all registration and application
numbers.
(b) Except as set forth in Schedule 3.07(b) and except as
provided in the Intellectual Property Agreements, Seller or the relevant
Seller Sub is the owner or licensee
of, and Seller and Seller Subs have the right to assign or license, as
applicable, the Transferred Intellectual Property to Purchaser on the terms
and conditions set forth in the Intellectual Property Agreements, and the
consummation of the Acquisition and the other transactions contemplated
hereby does not and will not conflict with, alter or impair any such
rights.
(c) Except as set forth in Schedule 3.07(c), Cemax-Icon is the
owner, licensee of or has the right to license all Cemax-Icon Intellectual
Property, and the consummation of the Acquisition and the other
transactions contemplated hereby does not and will not conflict with, alter
or impair any such rights.
(d) Except as set forth in Schedule 3.07(d), as of the date of
this Agreement, since the Relevant Date (to the Knowledge of Seller, with
respect to the period prior to the Spin-Off Date) none of Seller, any
Seller Sub or Cemax-Icon has received written notice of a Proceeding that
is pending, and, to the Knowledge of Seller, there is no Proceeding
threatened, nor to the Knowledge of Seller is there a reasonable basis
therefor, which is material to the Businesses that (a) challenges the
rights of Seller or any Seller Sub in respect of any Transferred
Intellectual Property or Cemax-Icon Intellectual Property or (b) asserts
that with respect to the Businesses, Seller, any Seller Sub or Cemax-Icon
is infringing or misappropriating any Intellectual Property or is, except
as set forth in Schedule 3.07(d), required to pay any royalty, license fee,
charge, or other amount with regard to any Intellectual Property. Except as
set forth in Schedule 3.07(d), as of the date of this Agreement, none of
the Transferred Intellectual Property or Cemax-Icon Intellectual Property
is subject to any Judgment by or with any Governmental Entity, or has been
the subject of any litigation since the Relevant Date (to the Knowledge of
Seller, with respect to the period prior to the Spin-Off Date), whether or
not resolved in favor of Seller or any Seller Sub other than for such
Judgments that, individually and in the aggregate, have not had and are not
reasonably likely to have a Seller Material Adverse Effect.
(e) To the Knowledge of Seller, none of the Transferred
Intellectual Property or Cemax-Icon Intellectual Property is being
infringed upon, misappropriated or otherwise violated in any material
respect by any other person except as set forth in Schedule 3.07(e).
(f) For purposes of this Section 3.07, "Cemax-Icon Intellectual
Property" means all Intellectual Property
used, or held by Cemax-Icon for use, in the operation or conduct of the
businesses of Cemax-Icon.
(g) Notwithstanding anything to the contrary in this Agreement or
in the Seller Intellectual Property Agreement, the Seller does not make any
representation or warranty relating to the Intellectual Property referred
to in Section 2.3 of the Seller Intellectual Property Agreement or to
intellectual property rights being provided directly by 3M pursuant to
Sections 3.1 and 4.1 of the 3M Intellectual Property Agreement.
SECTION 3.08. Contracts. (a) Except as set forth in Schedule
3.08, (x) no Contract that constitutes an Acquired Asset and (y) Cemax-Icon
is not a party or bound by any Contract that, in each case is:
(i) a written employment agreement or employment contract
that has an aggregate future liability in excess of $300,000 and
is not terminable by Seller by notice of not more than 60 days
for a cost of less than $300,000;
(ii) a collective bargaining agreement or other Contract
with any labor organization, union or association;
(iii) or contains a covenant not to compete (other than
pursuant to any radius restriction contained in any lease,
reciprocal easement or development, construction, operating or
similar agreement) that materially limits the conduct of the
Businesses as presently conducted or that would be applicable
following the Closing to the conduct or operation of the
businesses of Purchaser and its affiliates (other than the
Businesses);
(iv) a lease, sublease or similar Contract for an annual
rent in excess of $300,000 with any person under which Seller,
any Seller Sub or Cemax-Icon is a lessor or sublessor of, or
makes available for use to any person, (A) any Business Property
or (B) any portion of any premises otherwise occupied by
Cemax-Icon;
(v) a lease, sublease or similar Contract with any person
under which (A) Seller, any Seller Sub or Cemax-Icon is lessee
of, or holds or uses, any machinery, equipment, vehicle or other
tangible personal property owned by any person or (B) Seller, any
Seller Sub or Cemax-Icon is a lessor or sublessor of, or makes
available for use by any person, any tangible personal property
owned or leased by Seller, Seller Sub or
Cemax-Icon, in any such case has an aggregate future liability or
receivable, as the case may be, in excess of $300,000 and is not
terminable by Seller, any Seller Sub or Cemax-Icon by notice of
not more than 60 days for a cost of less than $300,000;
(vi) (A) a continuing Contract for the future purchase by
Seller, any Seller Sub or Cemax-Icon of materials, supplies,
equipment or services (other than purchase orders for inventory
in the ordinary course of business consistent with past practice
and calling for performance within six months of the date of such
order), (B) a management, consulting or other similar Contract
for services to be provided to Seller, any Seller Sub or
Cemax-Icon or (C) an advertising agreement or arrangement, in any
such case that has an aggregate future liability to any person in
excess of $300,000 and is not terminable by Seller, any Seller
Sub or Cemax-Icon by notice of not more than 60 days for a cost
of less than $300,000;
(vii) a material license, option or other Contract relating
in whole or in part to the Transferred Intellectual Property
(including any license or other Contract under which Seller, any
Seller Sub or Cemax-Icon is licensee or licensor of any
Transferred Intellectual Property);
(viii) (A) a Contract under which Seller, any Seller Sub or
Cemax-Icon has borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any person, in
any such case that, individually, is in excess of $300,000 or (B)
any other note, bond, debenture or other evidence of indebtedness
issued to any person, in any such case that, individually, is in
excess of $300,000;
(ix) a Contract (including any so-called take-or-pay or
keepwell agreement) under which (A) any person has directly or
indirectly guaranteed indebtedness, liabilities or obligations of
Seller, any Seller Sub or Cemax-Icon or (B) Seller, any Seller
Sub or Cemax-Icon has directly or indirectly guaranteed
indebtedness, liabilities or obligations of any other person (in
each case other than endorsements for the purpose of collection
in the ordinary course of business), in any such case that,
individually, is in excess of $100,000;
(x) a Contract under which Seller, any Seller Sub or
Cemax-Icon has, directly or indirectly, made any advance, loan,
extension of credit or capital contribution to, or other
investment in, any person
(other than Seller, any Seller Sub or Cemax-Icon and other than
extensions of trade credit in the ordinary course of the
Businesses), in any such case that, individually, is in excess of
$100,000;
(xi) a Contract granting a Lien upon any Business Property
or any other Acquired Asset;
(xii) a Contract that will be assumed by the Businesses
after the Closing with (A) Seller, any Seller Sub or any
shareholder or affiliate of Seller, or (B) any officer, director
or employee of Seller or any of its affiliates (other than
employment agreements covered by clause (i) above);
(xiii) a Contract with 3M or any of its subsidiaries that
(A) has an aggregate future liability to any person in excess of
$300,000 and is not terminable by Seller, Seller Sub or
Cemax-Icon, as the case may be, by notice of not more than 60
days for a cost of less than $300,000 or (B) involves the
provision of services, raw materials or Intellectual Property
that in each case are necessary for and essential to the
operation of the Businesses as conducted on the date of this
Agreement;
(xiv) a Contract for any joint venture, partnership or
similar arrangement;
(xv) a Contract providing for the services of any dealer,
distributor, sales representative, franchisee or similar
representative that are reasonably likely to involve the payment
or receipt over the life of such Contract in excess of $300,000
by Seller, any Seller Sub or Cemax-Icon, other than customer
contracts (including with original equipment manufacturers)
entered into in the ordinary course of business and consistent
with past practices;
(xvi) a Contract providing for or relating to any exchange
or hedge of risks relating to the prices or level of currencies,
commodities or interest rates; or
(xvii) a Contract other than as set forth above to which
Seller, any Seller Sub or Cemax-Icon is a party or by which it or
any of its assets or businesses is bound or subject that is
material to the Businesses or the use or operation of the
Acquired Assets, other than customer contracts (including with
original equipment manufacturers) entered into in the ordinary
course of business and consistent with past practices.
(b) Except as set forth in Schedule 3.08, to the Knowledge of
Seller, as of the date of this Agreement, all Contracts listed in the
Schedules are valid, binding and in full force and effect, and except for
such failures to be valid, binding, in full force and effect that,
individually or in the aggregate, have not had and are not reasonably
likely to have a Seller Material Adverse Effect. Except as set forth in
Schedule 3.08, Seller Subs and Cemax-Icon have performed all material
obligations required to be performed by them to date under the Assigned
Contracts, and they are not (with or without the lapse of time or the
giving of notice, or both) in breach or default in any material respect
thereunder and, to the knowledge of Seller, no other party to any Assigned
Contract is (with or without the lapse of time or the giving of notice, or
both) in breach or default in any material respect thereunder, except for
such noncompliance, breaches and defaults that, individually or in the
aggregate, have not had and are not reasonably likely to have a Seller
Material Adverse Effect.
SECTION 3.09. Cemax-Icon Shares. Except as described in Schedule
3.09(a), Seller, directly or through one or more wholly owned subsidiaries,
has good and valid title to the Cemax-Icon Shares, free and clear of any
Liens. Except as described in Schedule 3.09(b), there are no outstanding or
authorized (i) shares of capital stock of Cemax-Icon other than the
Cemax-Icon Shares, (ii) securities convertible into or exchangeable for any
of the Cemax-Icon Shares or (iii) options, warrants, preemptive rights or
other rights to acquire any of the Cemax-Icon Shares. Assuming Purchaser
has the requisite power and authority to be the lawful owner of the
Cemax-Icon Shares, upon delivery to Purchaser at the Closing of
certificates representing the Cemax-Icon Shares, duly endorsed by Seller
for transfer to Purchaser, and upon Seller's receipt of the Closing Date
Purchase Price relating to the Cemax-Icon Shares, good and valid title to
the Cemax-Icon Shares will pass to Purchaser, free and clear of any Liens.
Other than this Agreement, the Cemax-Icon Shares are not subject to any
voting trust arrangement or other contract, agreement or arrangement
relating to the voting, dividend rights or disposition of the Cemax-Icon
Shares.
SECTION 3.10. Investments. Schedule 3.10 sets forth all
Investments (other than Investments that are Excluded Assets) owned
directly or indirectly by Seller, any Seller Sub or Cemax-Icon on the date
of this Agreement that are Related to the Businesses.
SECTION 3.11. Permits. Schedule 3.11 sets forth all material
certificates, licenses, permits, authorizations and approvals ("Permits")
issued or granted to Seller, any
Seller Sub or Cemax-Icon by Governmental Entities that are Related to the
Businesses. Seller, each Seller Sub and Cemax-Icon have been issued or
granted by Governmental Entities all Permits that are necessary for the
conduct of the Businesses except for such Permits, the lack of which,
individually or in the aggregate, have not had and are not reasonably
likely to have a Material Adverse Effect. Except as set forth in Schedule
3.11, (a) all such Permits are validly held by Seller, Seller Subs or
Cemax-Icon, and Seller, relevant Seller Sub or Cemax-Icon has complied in
all material respects with all terms and conditions thereof, other than
such Permits the absence of which or such non- compliances which,
individually or in the aggregate, have not had or are not reasonably likely
to have a Seller Material Adverse Effect, (b) since the Relevant Date (to
the Knowledge of Seller, with respect to the period prior to the Spin-Off
Date), neither Seller nor any Seller Sub or Cemax- Icon has received
written notice of any Proceedings relating to the revocation or
modification of any such Permits the loss of which, individually or in the
aggregate, has had and is reasonably likely to have a Seller Material
Adverse Effect, and (c) to the Knowledge of Seller, none of such Permits
will be subject to suspension, modification, revocation or non-renewal as a
result of the execution and delivery of this Agreement or the consummation
of the Acquisition, other than such suspensions, modifications, revocations
or non-renewals which, individually or in the aggregate, have not had or
are not reasonably likely to have a Seller Material Adverse Effect.
SECTION 3.12. Insurance. Seller, each Seller Sub and Cemax-Icon
maintain policies of fire and casualty, liability and other forms of
insurance with respect to the Businesses and the Acquired Assets in such
amounts, with such deductibles and against such risks and losses as are, in
Seller's judgment, reasonable for the Businesses. The material insurance
policies maintained by Seller, Seller Subs and Cemax-Icon with respect to
the Businesses are listed in Schedule 3.12. All policies are in full force
and effect, all premiums due and payable thereon have been paid (other than
retroactive or retrospective premium adjustments that are not yet, but may
be, required to be paid with respect to any period ending prior to the
Closing Date), and no notice of cancelation or termination has been
received with respect to any such policy which has not been replaced on
substantially similar terms prior to the date of such cancelation.
SECTION 3.13. Sufficiency of Acquired Assets. (a) Except as set
forth in Schedule 3.13, the Acquired Assets (together with the Excluded
Assets and the facilities, services and supplies to be provided pursuant to
the Shared Facilities Agreement and the Transition Services Agreement)
comprise all the assets, properties and rights primarily used or primarily
held for use by Seller or Seller Subs in connection with the Businesses.
Except as set forth in Schedule 3.13, the Acquired Assets (together with
the Excluded Assets and the facilities, services and supplies to be
provided by Seller and Seller Subs pursuant to the Shared Facilities
Agreement and the Transition Services Agreement) constitute all the assets,
properties and rights necessary for the conduct of Businesses immediately
following the Closing in all material respects as currently conducted by
Seller and Seller Subs.
(b) All material Acquired Assets that are classified as capital
assets on the Balance Sheet (other than any such capital assets disposed of
in the ordinary course (or as may be contemplated or permitted by Section
3.20 and Section 6.01 and the related Schedules) subsequent to the date of
the Balance Sheet and prior to the execution of this Agreement and other
than any Excluded Assets) are in satisfactory condition and working order,
except for ordinary wear and tear, for use in the Businesses in the
ordinary course of business consistent with past practices.
SECTION 3.14. Taxes. (a) For purposes of this Agreement:
"Tax" means any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including any tax imposed under Subtitle A
of the Code and any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, value-added, transfer,
franchise, profits, license, withholding tax on amounts paid, payroll,
employment, excise, severance, stamp, capital stock, occupation, property,
environmental or windfall profit tax, premium, custom, duty or other tax),
together with any interest, penalty, addition to tax or additional amount
due, imposed by any Governmental Entity (domestic or foreign) responsible
for the imposition of any such tax (a "Taxing Authority").
"Code" means the Internal Revenue Code of 1986, as amended.
"Tax Return" means any return, declaration, report, form, claim
for refund, information return or statement relating to Taxes, any
estimated return and any schedule or attachment to any of the foregoing,
and any amendment to any of the foregoing.
(b) Except as set forth in Schedule 3.14,
(i) all Tax Returns required to be filed on or before the
date of this Agreement (taking into account applicable
extensions) by or with respect to Cemax-Icon have been duly filed
and such returns are accurate and complete;
(ii) all Taxes shown to be due on such Tax Returns or
otherwise due by or with respect to Cemax-Icon have been timely
paid and Cemax-Icon has maintained adequate provision on its
books for such Taxes that have accrued but are not yet due;
(iii) no deficiencies or claims for any Taxes have been
proposed, asserted, or assessed against or with respect to
Cemax-Icon (and are currently pending) and no such claims are
reasonably anticipated;
(iv) Cemax-Icon is not currently the subject of any Tax
audit or examination and no correspondence has been received from
any Taxing Authority indicating that any such Tax audit or
examination is being proposed, planned or threatened;
(v) there are no outstanding waivers or agreements extending
the applicable statute of limitations for any period with respect
to the assessment or collection of any Taxes proposed, asserted
or assessed against or with respect to Cemax-Icon;
(vi) Cemax-Icon will not be required, as a result of (A) a
change in accounting method for a Tax period beginning on or
before the Closing, to include any adjustment under Section
481(c) of the Code (or any similar provision of state, local or
foreign law) in taxable income for any Tax period beginning on or
after the Closing Date, or (B) any "closing agreement" as
described in Section 7121 of the Code (or any similar provision
of state, local or foreign Tax law), to include any item of
income in or exclude any item of deduction from any Tax period
beginning on or after the Closing;
(vii) there are no Liens on any of the Acquired Assets or
any of the assets of Cemax-Icon that arose in connection with any
failure (or alleged failure) to pay any Tax;
(viii) Cemax-Icon is not obligated to make, nor is it a
party to any agreement that under certain circumstances could
obligate it to make, any payments
that will not be deductible under Section 280G of the Code (or
any similar provision of state, local or foreign law) and none of
the Assumed Liabilities constitutes such a payment;
(ix) Cemax-Icon is not a party to any Tax allocation or
sharing agreement;
(x) no Acquired Asset that constitutes a "United States real
property interest" within the meaning of Section 897 of the Code
is being transferred by a person that is a "foreign person"
within the meaning of the Code or is subject to withholding under
Section 1445 of the Code;
(xi) Cemax-Icon has never been a member of an affiliated,
combined, consolidated or unitary Tax group for purposes of
filing any Tax Return, other than, for purposes of filing
consolidated U.S. Federal income tax returns, a group the common
parent of which was Seller or Cemax-Icon;
(xii) no closing agreements, private letter rulings,
technical advice memoranda or similar agreement or rulings have
been entered into or issued by any Taxing Authority with respect
to Seller or any affiliate in connection with the Businesses or
with respect to Cemax-Icon;
(xiii) set forth on Schedule 3.14 is each state in which
Cemax-Icon is registered for sales tax purposes;
(xiv) none of Seller, any of Seller's affiliates, Cemax-Icon
or any predecessor to Cemax-Icon has made with respect to Seller,
any Seller Sub, Cemax-Icon, any predecessor of Cemax-Icon, or any
assets of the Businesses any consent under Section 341 of the
Code;
(xv) Seller has made due inquiry, including reviewing
available Records and requesting information from the appropriate
persons (including outside service providers and advisors), and
found nothing indicating (A) that any disclosure statement
pursuant to Section 6662(c)(2) of the Code or a similar provision
of any state, local or foreign law has ever been filed by Seller
or any Seller Sub with respect to the ownership or operation of
the Businesses or the Acquired Assets or by or with respect to
Cemax-Icon or any entity that is or was a member of the same
consolidated, combined, affiliated or unitary Tax group as
Cemax-Icon, or (B) that any Taxing Authority has ever claimed or
asserted that Cemax-Icon may be subject
to a Tax for which it has not filed a corresponding Tax Return or
that any Tax for which no corresponding Tax Return was filed may
apply to Seller or any Seller Sub with respect to the ownership
of operation of the Businesses or the Acquired Assets;
(xvi) none of the Acquired Assets is an entity interest (or
an interest convertible or exchangeable into an equity interest)
in (A) a non-U.S. person or (B) any other person taxed in the
U.S. on a pass-thru basis (including, but not limited to, an
entity taxed as a partnership or branch);
(xvii) none of the Acquired Assets is "tax exempt use
property" within the meaning of Section 168(h) of the Code; and
(xviii) none of the Acquired Assets is a lease made pursuant
to Section 168(f)(8) of the Internal Revenue Code of 1954.
SECTION 3.15. Proceedings. Schedule 3.15 sets forth a list, as of
the date of this Agreement, of all pending, or to the knowledge of Seller,
threatened, suits, actions, demands, claims, hearings, investigations, or
proceedings ("Proceedings") related to the Businesses or against any
Acquired Asset and that (a) relate to or involve more than $250,000, (b)
seek any material injunctive relief or (c) may give rise to any legal
restraint on or prohibition against the transactions contemplated by this
Agreement. To the Knowledge of Seller, except as set forth in Schedule
3.15, as of the date of this Agreement, neither Seller nor any Seller Sub
is a party or subject to or in default under any Judgment applicable to the
conduct of the Businesses or any Acquired Asset or Assumed Liability, other
than for such Judgments that, individually and in the aggregate, has not
had and are not reasonably likely to have a Seller Material Adverse Effect.
Except for any Proceedings set forth in Schedule 3.15, there are no
Proceedings, that, individually or in the aggregate, have had or are
reasonably likely to have an adverse impact on the Acquired Assets or the
business, financial condition or results of operations of the Businesses,
taken as a whole, that results or is reasonably likely to result in a Loss
of $5,000,000 or more.
SECTION 3.16. Benefit Plans. (a) U.S. Benefits.
(i) Schedule 3.16 contains a list of all "employee pension
benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")),
maintained or contributed to by
Seller, any Seller Sub or Cemax-Icon for the benefit of any U.S.
Eligible Employees (as amended to date, "Seller U.S. Pension
Plans") and all "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA), bonus, stock option, stock purchase,
deferred compensation plans or arrangements and other employee
fringe benefit plans maintained, or contributed to, by Seller or
any of its affiliates for the benefit of any U.S. Eligible
Employees (all the foregoing, as amended to date, including
Seller U.S. Pension Plans, being herein called "Seller U.S.
Benefit Plans"). Seller has made available to Purchaser true,
complete and correct copies of (1) each Seller U.S. Benefit Plan
(or, in the case of any unwritten Seller U.S. Benefit Plans,
descriptions thereof) and (2) the most recent summary plan
description for each Seller U.S. Benefit Plan for which such a
summary plan description is required.
(ii) Each Seller U.S. Benefit Plan has been administered in
all material respects in accordance with (a) its terms and (b)
the applicable provisions of ERISA, the Code, all other Laws and
all applicable collective bargaining agreements. Except as set
forth in Schedule 3.16, there are no Proceedings pending, or, to
the Knowledge of Seller, threatened against or involving any
Seller U.S. Benefit Plan and, to the Knowledge of Seller, there
are no investigations by any Governmental Entity or other claims
(except routine claims for benefits payable in the normal
operation of the Seller U.S. Benefit Plans) pending or threatened
against or involving any Seller U.S. Benefit Plan or asserting
any rights to benefits under any Seller U.S. Benefit Plan, in
each case that could result in a material liability to the
Employees.
(iii) Except as set forth on Schedule 3.16, Cemax-Icon has
not at any time been required to contribute to any Seller U.S.
Pension Plan that is (a) a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA or (b) subject to Title IV
of ERISA.
(iv) Except as set forth on Schedule 3.16, none of the
Seller U.S. Benefit Plans provides post-retirement medical
benefits, post-retirement death benefits or other post-retirement
welfare benefits, except as required under Sections 601 through
609 of ERISA, Section 4980A of the Code or other applicable Laws
and neither Seller with respect to the U.S. Eligible Employees,
nor Cemax-Icon, has made any representation to any current or
former U.S. Eligible Employee regarding such post-retirement
benefits which
constitutes a contract or binding obligation other than those
that they may modify or discontinue at any time.
(v) All contributions to, and payments from, the Seller U.S.
Benefit Plans sponsored by Cemax-Icon which may have been
required to be made in accordance with such Plans and, when
applicable, Section 302 of ERISA or Section 412 of the Code, have
been timely made. All such contributions to the Seller U.S.
Benefit Plans sponsored by Cemax-Icon and all payments under the
Seller U.S. Benefit Plans sponsored by Cemax-Icon, except those
to a trust qualified under Section 401(a) of the Code, for any
period ending before the Closing Date that are not yet, but will
be, required to be made with respect to the U.S. Eligible
Employees of the Businesses are disclosed on Schedule 3.16.
Cemax-Icon has funded or will fund each Seller U.S. Benefit Plan
sponsored by Cemax-Icon in accordance with its terms through the
Closing, including the payment of applicable premiums on any
insurance contract funding a Seller U.S. Benefit Plan sponsored
by Cemax-Icon for coverage provided through the Closing.
(vi) No "prohibited transaction", as defined in Section 406
of ERISA and Section 4975 of the Code, has occurred in respect of
any Seller U.S. Benefit Plan sponsored by Cemax-Icon which could
give rise to any material liability or tax under ERISA or the
Code, and no civil or criminal action brought pursuant to Part 5
of Title I of ERISA is pending or, to the Knowledge of Seller,
threatened in writing or orally against any fiduciary of any
Seller U.S. Benefit Plan sponsored by Cemax-Icon.
(vii) All of the Seller U.S. Benefit Plans sponsored by
Cemax-Icon which are intended to qualify under Section 401(a) of
the Code have received favorable determination letters from the
IRS to the effect that such plans are so qualified. No
determination letter with respect to any such Seller U.S. Benefit
Plan sponsored by Cemax-Icon has been revoked nor, to the
Knowledge of Seller, has revocation of a determination letter
been threatened. No Seller U.S. Benefit Plan sponsored by
Cemax-Icon has been amended since the date of its most recent
determination letter or application therefor in any respect which
would adversely affect its qualification or materially increase
its cost, and no Seller U.S. Benefit Plan sponsored by Cemax-Icon
has been amended in a matter that would require security to be
provided in accordance with Section 401(a)(29) of the Code.
(viii) There have been no statements or communications made
or materials provided to any current or former U.S. Eligible
Employee by any person which constitutes a contract or binding
obligation on Seller to provide for any pension, welfare, or
other insurance-type benefits to any such employee or former
employee, whether before or after retirement, other than benefits
under the Benefits Plans.
(b) Foreign Benefits.
(i) Schedule 3.16 contains a list of each plan, program or
arrangement maintained or contributed to by Seller, any Seller
Sub or Cemax-Icon for the benefit of any Foreign Eligible
Employee that would be considered a Seller U.S. Benefit Plan if
it applied to U.S. Eligible Employees except for any such plan,
program or arrangement mandated by statute or regulation (all of
the foregoing being herein called the "Seller Foreign Benefit
Plans" and, together with the Seller U.S. Benefit Plans, the
"Benefit Plans"). Seller has made available to Purchaser true,
complete and correct copies of each Seller Foreign Benefit Plan
(or, in the case of any unwritten Seller Foreign Benefit Plan,
descriptions thereof).
(ii) Each Seller Foreign Benefit Plan has been administered
in all material respects in accordance with (a) its terms and (b)
all Laws and all applicable collective bargaining agreements.
Except as set forth in Schedule 3.16, there are no Proceedings
pending or, to the Knowledge of Seller, threatened against or
involving any Seller Foreign Benefit Plan and, to the Knowledge
of Seller, there are no investigations by any Governmental Entity
or other claims (except for routine claims for benefits payable
in the normal option of the Seller Foreign Benefit Plans) pending
or threatened against or involving any Seller Foreign Benefit
Plan or asserting any rights to benefits under any Seller Foreign
Benefit Plan in each case that could result in material liability
to the Businesses.
(c) Except as set forth in Schedule 3.16 or as set forth in this
Agreement, no Transferred Employee will become entitled to any bonus,
retirement, severance, job security or similar benefit or any enhanced
benefit solely as a result of the transactions contemplated hereby.
SECTION 3.17. Compliance with Laws. (a) Except as set forth in
Schedule 3.17(a), the Businesses are in compliance in all respects with all
Laws, except for instances of noncompliance that, individually or in the
aggregate, have not had and are not reasonably likely to have a Seller
Material Adverse Effect. As of the date of this Agreement, except as set
forth in Schedule 3.17(a), none of Seller and Seller Subs has received any
written communication since the Relevant Date (to the Knowledge of Seller,
with respect to the period prior to the Spin-Off Date) from a Governmental
Entity that alleges that the Businesses are not in compliance in any
material respect with any Laws. As of the date of this Agreement, neither
Seller nor any Seller Sub has received any written notice since the
Relevant Date (to the Knowledge of Seller, with respect to the period prior
to the Spin-Off Date) that any investigation or review by any Governmental
Entity with respect to any Acquired Asset is pending or that any such
investigation or review is contemplated. This Section 3.17(a) does not
relate to matters with respect to (i) Taxes, which are the subject of
Section 3.14, (ii) environmental matters, which are the subject of Section
3.17(b) or (iii) benefits and employment matters, which are the subject of
Sections 3.16 and 3.18.
(b) Except as set forth in Schedule 3.17(b), and except for those
matters that, individually or in the aggregate, are not reasonably likely
to have a Seller Material Adverse Effect, (i) the Businesses are in
compliance with Environmental Laws, (ii) neither Seller nor any Seller Sub
has received any written communication since the Spin-Off Date, or to the
Knowledge of Seller, written or oral communication since the Relevant Date
from a Governmental Entity or other person that alleges that the Businesses
are not in compliance with or are subject to liability under any
Environmental Laws or that any investigation or cleanup of Hazardous
Substances is requested or demanded with respect to the Businesses under
any Environmental Law, (iii) the Businesses are not the subject of any
written claim or notice regarding potential responsibility for Hazardous
Substance off-site disposal pursuant to the Federal Comprehensive
Environmental Response, Compensation, and Liability Act or any other
Environmental Law, (iv) to the Knowledge of Seller, no real property
currently or, since the Relevant Date, formerly owned or operated by the
Seller or Seller Subs is contaminated with any Hazardous Substance which
contamination requires investigation or remediation under Environmental
Law, and (v) Seller has delivered or made available to Purchaser copies of
all environmental reports, studies, assessments, sampling data and other
material environmental information in its possession relating to the
Business and its current or, since the Relevant Date (to the Knowledge of
Seller, with respect to the period prior to the Spin-Off Date), former
properties or operations.
The term "Environmental Laws" means all Judgments, Laws, permits,
authorizations, common law or enforceable agency requirements issued,
promulgated or entered into by any Governmental Entity, relating to: (A)
the protection, investigation or restoration of the environment, health,
safety or natural resources, (B) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance, or (C) noise,
odor, indoor air, employee exposure, wetlands, pollution, contamination or
any injury or threat of injury to persons or property relating to any
Hazardous Substance. The term "Hazardous Substances" means all explosive or
radioactive materials or substances, hazardous or toxic substances, wastes
or chemicals, petroleum (including crude oil or any fraction thereof),
asbestos or asbestos containing materials, and all other materials or
chemicals regulated pursuant to any Environmental Law.
SECTION 3.18. Employee and Labor Matters. (a) Except as set forth
in Schedule 3.18: (i) there is not any, and since the Relevant Date (to the
Knowledge of Seller, with respect to the period prior to the Spin-Off Date)
there has not been any, labor strike, work stoppage or lockout pending, or,
to the Knowledge of Seller, threatened, against the Businesses; (ii) there
are not any unfair labor practice charges or complaints against Seller or
any Seller Sub pending, or, to the Knowledge of Seller, threatened, in
connection with the conduct of the Businesses which there is a reasonable
possibility of adverse determination and that, if so determined,
individually or in the aggregate, are reasonably likely to have a Seller
Material Adverse Effect; (iii) there are not any pending, or, to the
Knowledge of Seller, threatened, union or work council grievances against
Seller or any Seller Sub in connection with the conduct of the Businesses
as to which there is a reasonable possibility of adverse determination and
that, if so determined, individually or in the aggregate, are reasonably
likely to have a Seller Material Adverse Effect; (iv) there are not any
pending, or, to the Knowledge of Seller, threatened, charges in connection
with the conduct of the Businesses against the Seller or any Seller Sub or
any current or former employee of the Businesses before any Federal, state,
local or foreign agency responsible for the prevention of unlawful
employment practices which there is a reasonable possibility of adverse
determination and that, if so determined, individually or in the aggregate,
are reasonably likely to have a Seller Material Adverse Effect; (v) Seller
with respect to the Businesses and Cemax-Icon has complied in all material
respects with all labor and employment laws, including provisions thereof
relating to wages, hours, equal opportunity, collective bargaining, the
Americans With Disabilities Act, the Family and Medical Leave Act and the
payment of social security and other taxes; (vi) Seller has heretofore made
available to Buyer a list of all Eligible Employees on short-term
disability or other medical or non-medical leaves of absence with a
description of the reason for the absence and expected return date; (vii)
to the Knowledge of Seller, no Eligible Employee is subject to any
noncompetition, nondisclosure, confidentiality, employment, consulting or
similar agreement with persons other than Seller or Cemax-Icon that would
prevent the employee from working in the capacity in which he or she is
currently employed for the Businesses; (viii) there is no pending or, to
the Knowledge of Seller, threatened union organization activity by or among
any Eligible Employees; (ix) there is no charge, complaint or other action
pending against Seller with respect to the Businesses, or to the Knowledge
of Seller, any investigation commenced or threatened against Seller with
respect to the Occupational Safety and Health Act or comparable Laws of any
other Governmental Entity ("OSHA").
SECTION 3.19. Brokers or Finders. Seller represents, as to itself
and its affiliates, that no agent, broker, investment banker or other firm
or person is or will be entitled to any broker's or finder's fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement, except, as to Seller and its affiliates,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, whose fees and expenses will be paid by
Seller.
SECTION 3.20. Absence of Certain Changes. Except as disclosed on
Schedule 3.20, since the date of the Balance Sheet, Seller, the Seller Subs
and Cemax-Icon have conducted the Businesses in the ordinary course
consistent with past practice. As of the date of this Agreement, except as
disclosed in Schedule 3.20, since the date of the Balance Sheet, there has
not been any event or occurrence (i) that has had or is reasonably likely
to have a Material Adverse Effect or (ii) of the type set forth in Sections
6.01(a) (ii), (iii), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii) and
(xiii).
SECTION 3.21. Products. Except as disclosed in Schedule 3.21:
(a)(i) Each of the products, goods and services Related to the
Businesses ("Products") currently produced or sold by Seller, any Seller
Sub or Cemax-Icon ("Current Products") (A) is in compliance in all material
respects with all applicable Laws and (B) except in the case of Current
Products produced or sold by Cemax-Icon, conforms in all material respects
to any promises or affirmations of
fact made on the container or label or in the product specifications for
such Current Product.
(ii) To the Knowledge of Seller, each of the Products (other than
Current Products) produced or sold at any time by Seller, any Seller Sub or
Cemax-Icon (or any of their respective predecessors, including 3M and its
subsidiaries) that is currently supported and serviced by Seller, any
Seller Sub or Cemax-Icon (the "Former Products") (A) was, at the time of
its production or sale, in compliance in all material respects with all
then applicable Laws and (B) except in the case of Former Products produced
or sold by Cemax-Icon, conformed in all material respects to any promises
or affirmations of fact made on the container or label or in the product
specifications for such Former Product.
(b) To the Knowledge of Seller, there is no material design
defect with respect to any Current Product (other than any Current Product
produced or sold by Cemax-Icon).
(c)(i) Each Current Product contains warnings in accordance with
applicable Laws and current industry practice with respect to its contents
and use.
(ii) To the Knowledge of Seller, each Former Product contained,
at the time of its production or sale, warnings in accordance with then
applicable Laws and then current industry practice with respect to its
contents and use.
(d) To the Knowledge of Seller, no facts exist which would
reasonably be expected to furnish a substantial basis for the recall,
withdrawal or suspension by Seller, any Seller Sub or Cemax-Icon of any
material Current Product or material Former Product as a result of, or in
order to comply with, any U.S. federal, state or local law, regulation or
rule or order of any Governmental Entity.
(e)(i) All Current Products sold under all licenses and approvals
granted by or pending with any Governmental Entity in any country to market
any Current Product ("Product Registrations") are (A) manufactured and (B)
to the Knowledge of Seller, in the case of Current Products sold directly
by Seller, any Seller Sub or Cemax- Icon to end-users, marketed, in each
case in all material respects in accordance with the specifications and
standards contained in the Product Registrations. Except in the case of
Current Products that are integrated into or used as a component in a
system that is produced or sold by others, (i) Seller, Seller Subs and
Cemax-Icon have the sole rights
under the Product Registrations in the United States and (ii) such
registrations are in full force and effect.
(ii) To the Knowledge of Seller, all Former Products sold under
all licenses and approvals granted by or pending with any Governmental
Entity in any country to market any Former Product ("Former Product
Registrations") were manufactured and, in the case of Former Products sold
directly by Seller, any Seller Sub or Cemax-Icon to end-users, marketed in
all material respects in accordance with the specifications and standards
contained in the Former Product Registrations.
(f)(i) As of the date hereof, there are no pending and
unsatisfied statements, citations, warning letters, FDA Forms 483, or
decisions by any Governmental Entity that any Current Product is defective
or fails to meet any applicable standards promulgated by any such
Governmental Entity. As of the date hereof, there is no proceeding by the
FDA or any other Governmental Agency, including a grand jury investigation,
a 405 hearing or a civil penalty proceeding, pending, or to the Knowledge
of Seller threatened, against Seller, any Seller Sub or Cemax- Icon
relating to the safety or efficacy of the Current Products and, to the
Knowledge of Seller, there is no substantial basis for such a proceeding
with respect to any material Current Product.
(ii) As of the date hereof, to the Knowledge of Seller, there are
no pending and unsatisfied statements, citations, warning letters, FDA
Forms 483, or decisions by any Governmental Entity that any Former Product
is defective or fails to meet any applicable standards promulgated by any
such Governmental Entity. As of the date hereof, to the Knowledge of
Seller, there is no proceeding by the FDA or any other Governmental Agency,
including a grand jury investigation, a 405 hearing or a civil penalty
proceeding, pending or threatened against Seller, any Seller Sub or
Cemax-Icon relating to the safety or efficacy of the Former Products and,
to the Knowledge of Seller, there is no substantial basis for such a
proceeding with respect to any material Former Product.
(g)(i) To the Knowledge of Seller, no material Current Product
that is sold directly by Seller, any Seller Sub or Cemax-Icon to end-users
is being sold anywhere in the world without Product Registrations where the
existence of such Product Registrations is a prerequisite to or otherwise
required in connection with the sale of such Current Product under
applicable Law.
(ii) To the Knowledge of Seller, no material Former Product that
was sold directly by Seller, any Seller Sub or Cemax-Icon to end-users was
sold anywhere in the world without Former Product Registrations where the
existence of such Former Product Registrations was, at the time of such
sale, a prerequisite to or otherwise required in connection with the sale
of such Former Product under then applicable Law.
(h) Schedule 3.21 sets forth, as of the date of this Agreement,
(i) all products liability suits, actions, proceedings or claims made
against Seller, any Seller Sub or Cemax-Icon with respect to any Current
Product or Former Product since the Relevant Date (to the Knowledge of
Seller, with respect to the period prior to the Spin-Off Date) and (ii) any
recall, withdrawal or suspension by Seller, any Seller Sub or Cemax-Icon of
any Current Product or Former Product since the Relevant Date (to the
Knowledge of Seller, with respect to the period prior to the Spin-Off
Date).
(i) To the Knowledge of Seller, no facts exist which would
reasonably be expected to furnish the basis for any material liability with
respect to the sale of any Current Product or Former Product (other than
any such Product produced or sold by Cemax-Icon) based upon a claim that
Seller or any Seller Sub has breached any express warranty or implied
warranty of merchantability or fitness for any particular purpose or any
similar warranty in connection with such sale in an amount that,
individually or in the aggregate, is in excess of the warranty reserve
reflected in the Businesses Financial Statements.
(j) To the Knowledge of Seller (which Knowledge shall be limited
to the period subsequent to January 1, 1995), (i) there is no material
design defect with respect to any Current Product produced or sold by
Cemax-Icon and (ii) no facts exist which would reasonably be expected to
furnish the basis for any material liability with respect to the sale of
any Current Product or Former Product produced or sold by Cemax-Icon based
upon a claim that Cemax-Icon has breached any express warranty or implied
warranty of merchantability or fitness for any particular purpose or any
similar warranty in connection with such sale in an amount that,
individually or in the aggregate, is in excess of the warranty reserve
reflected int he Businesses Financial Statements, except for any such
design defect or facts that, individually or in the aggregate, are not
reasonably likely to have a Material Adverse Effect.
SECTION 3.22. Customers. Schedule 3.22 sets forth the 20 largest
customers of the Businesses by revenue for the year ended December 31,
1997. As of the date of
this Agreement, to the Knowledge of Seller, neither Seller nor any Seller
Sub has received any actual notice that any significant customer of the
Businesses (other than any customer of Cemax-Icon) (i) has ceased, or will
cease, to use the Products of the Businesses or (ii) has substantially
reduced, or will substantially reduce, the use of Products of the
Businesses.
SECTION 3.23. Suppliers. Schedule 3.23 sets forth the 20 largest
suppliers to the Businesses by purchase amount for the year ended December
31, 1997. As of the date of this Agreement, to the Knowledge of Seller,
none of Seller, any Seller Sub or Cemax-Icon has received any actual notice
that there has been any material change in the price of the raw materials,
supplies, merchandise or other goods or services provided by such
suppliers, or that any such supplier will not sell raw materials, supplies,
merchandise and other goods to the Purchaser after the Closing on terms and
conditions similar to those used in its current sales to Seller or any
Seller Sub.
SECTION 3.24. No Territorial Restrictions. Except as set forth on
Schedule 3.24, Seller, Seller Subs and Cemax-Icon are not restricted in any
material respect by any agreement or understanding with any other person
from carrying on the Businesses anywhere in the world.
ARTICLE IV
Limitations on Representations and Warranties of Seller
SECTION 4.01. LIMITATIONS AND EXCLUSIONS TO REPRESENTATIONS,
WARRANTIES, ETC. (A) PURCHASER ACKNOWLEDGES THAT, SHOULD THE CLOSING OCCUR,
PURCHASER SHALL ACQUIRE THE ACQUIRED ASSETS WITHOUT ANY REPRESENTATION OR
WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, IN AN
"AS IS" CONDITION AND ON A "WHERE IS" BASIS, EXCEPT AS REPRESENTED OR
WARRANTED PURSUANT TO SECTION 3.04 WITH RESPECT TO THE PREPARATION OF THE
BUSINESSES FINANCIAL STATEMENTS IN CONFORMITY WITH GAAP AND AS OTHERWISE
EXPRESSLY REPRESENTED OR WARRANTED IN THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS.
(B) NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT, EXCEPT AS SHALL RESULT OR
ARISE OUT OF ANY WILFUL OR INTENTIONAL BREACH OF ANY OF SELLER'S OR SELLER
SUB'S COVENANTS OR AGREEMENTS CONTAINED IN THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT, NO REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT OF
SELLER AND SELLER SUBS CONTAINED IN THIS AGREEMENT (INCLUDING UNDER SECTION
7.01(E)) SHALL BE
BREACHED OR DEEMED BREACHED AS A RESULT OF, AND SELLER AND SELLER SUBS
SHALL NOT HAVE ANY LIABILITY FOR, ANY OF THE FOLLOWING: (I) ANY NEGATIVE
IMPACT ON THE BUSINESSES ARISING OUT OF OR RELATING TO ANY DISRUPTION (IN
WORKFORCE, PRODUCTION OR OTHERWISE) AT THE FERRANIA FACILITY OR ANY
REDUCTION OR CESSATION OF PRODUCTS BY ITALIAN CUSTOMERS OF PRODUCTS
MANUFACTURED OR ASSEMBLED AT THE FERRANIA FACILITY ON OR AFTER THE
ANNOUNCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT, (II) LOSS OF SELLER'S CUSTOMERS TO PURCHASER
BETWEEN DECEMBER 31, 1997 AND THE CLOSING DATE AND (III) CONTRACTS
TERMINATED BY THE COUNTERPARTIES THERETO BECAUSE OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
(C) NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS
AGREEMENT, NO REPRESENTATION, WARRANTY, COVENANT OR AGREEMENT IN THIS
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR OTHERWISE SHALL BE DEEMED TO
HAVE BEEN MADE WITH RESPECT TO THE YEAR 2000 DATE FUNCTIONALITY COMPLIANCE
STATUS OF ANY PRODUCTS PRODUCED OR SOLD AT ANY TIME BY SELLER, ANY SELLER
SUB OR CEMAX-ICON (OR ANY OF THEIR RESPECTIVE PREDECESSORS, INCLUDING 3M
AND ITS SUBSIDIARIES), ANY INTERNAL INFORMATION TECHNOLOGY OR NON-
INFORMATION TECHNOLOGY SYSTEMS OF SELLER, ANY SELLER SUB OR CEMAX-ICON OR
ANY SUPPLIER OF GOODS OR SERVICES TO SELLER, ANY SELLER SUB OR CEMAX-ICON
OR ANY DISTRIBUTOR OR OTHER PERSON WITH WHOM SELLER, ANY SELLER SUB OR
CEMAX-ICON HAS A BUSINESS RELATIONSHIP.
SECTION 4.02. NO ADDITIONAL REPRESENTATIONS. PURCHASER
ACKNOWLEDGES THAT NONE OF SELLER, ANY SELLER SUB, CEMAX-ICON NOR ANY OTHER
PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO
THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING THE BUSINESSES
AND THE ACQUIRED ASSETS FURNISHED OR MADE AVAILABLE TO PURCHASER AND ITS
REPRESENTATIVES, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR THE
SCHEDULES HERETO.
ARTICLE V
Representations and Warranties of Purchaser
Purchaser hereby represents and warrants to Seller as follows:
SECTION 5.01. Organization, Standing and Power. Purchaser is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and
authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted, other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, have not had and are not reasonably likely to have a material
adverse effect on the ability of Purchaser to consummate the Acquisition
and the other transactions contemplated hereby (a "Purchaser Material
Adverse Effect"). Purchaser has delivered to Seller true and complete
copies of the certificate of incorporation and by-laws of Purchaser, in
each case as amended through the date of this Agreement.
SECTION 5.02. Authority; Execution and Delivery; Enforceability.
Purchaser has full power and authority to execute this Agreement and the
other Transaction Documents to which it is, or is specified to be, a party
and to consummate the Acquisition and the other transactions contemplated
hereby and thereby. Purchaser has full power and authority to grant to
Seller the rights set forth in the License Agreement. The execution and
delivery by Purchaser of this Agreement and the other Transaction Documents
to which it is, or is specified to be, a party and the consummation by
Purchaser of the Acquisition and the other transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action.
Purchaser has duly executed and delivered this Agreement and prior to the
Closing will have duly executed and delivered each other Transaction
Document to which it is, or is specified to be, a party, and this Agreement
constitutes, and each other Transaction Document to which it is, or is
specified to be, a party will after the Closing constitute, its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
SECTION 5.03. No Conflicts; Consents. (a) The execution and
delivery by Purchaser of this Agreement do not, the execution and delivery
by Purchaser of each other Transaction Document to which it is, or is
specified to be, a party will not, and the consummation of the Acquisition
and the other transactions contemplated hereby and thereby and compliance
by Purchaser with the terms hereof and thereof will not result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration
of any obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of Purchaser or
any of its subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws of the Purchaser or any of its subsidiaries, (ii)
any Contract to which Purchaser or any of its
subsidiaries is a party or by which any of their respective properties or
assets is bound or (iii) any Judgment or Law applicable to Purchaser or any
of its subsidiaries or their respective properties or assets, other than,
in the case of clauses (ii) and (iii) above, any such items that,
individually or in the aggregate, have not had and are not reasonably
likely to have a Purchaser Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with,
any Governmental Entity is required to be obtained or made by or with
respect to Purchaser or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement or any other
Transaction Document or the consummation of the Acquisition or the other
transactions contemplated hereby and thereby, other than (A) compliance
with and filings under the HSR Act and the Non-U.S. Competition Laws, (B)
compliance with and filings under Section 13(a) of the Exchange Act, and
(C) those that may be required solely by reason of the participation of
Seller and Seller Subs (as opposed to any other third party) in the
Acquisition and other transactions contemplated hereby and by the other
Transaction Documents).
SECTION 5.04. Litigation. There are not any (a) outstanding
Judgments against or affecting Purchaser or any of its subsidiaries, (b)
Proceedings pending or, to the knowledge of Purchaser, threatened against
or affecting Purchaser or any of its subsidiaries or (c) investigations by
any Governmental Entity that are, to the knowledge of Purchaser, pending or
threatened against or affecting Purchaser or any of its subsidiaries that,
in any case, individually or in the aggregate, have had or are reasonably
likely to have a Purchaser Material Adverse Effect.
SECTION 5.05. Availability of Funds. On the Closing Date,
Purchaser shall have sufficient funds available to enable it to consummate
the Acquisition.
SECTION 5.06. Brokers or Finders. Purchaser represents, as to
itself and its affiliates, that no agent, broker, investment banker or
other firm or person is or will be entitled to any broker's or finder's fee
or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement, except, as to Purchaser and
its affiliates, ▇▇▇▇▇▇ Brothers and McKinsey & Co., whose fees and expenses
will be paid by Purchaser.
ARTICLE VI
Covenants
SECTION 6.01. Covenants of Seller, Seller Subs and Cemax-Icon
Relating to Conduct of Businesses.
(a) Except for matters set forth in Schedule 6.01 or otherwise
expressly permitted by the terms of this Agreement, from the date of this
Agreement to the Closing Date, Seller shall, and shall cause Seller Subs
and Cemax-Icon to, (i) conduct the Businesses in the ordinary course, (ii)
use commercially reasonable efforts to preserve the Businesses and (iii)
use commercially reasonable efforts to keep material relationships with
material customers and suppliers and with employees intact. In addition
(and without limiting the generality of the foregoing), except as set forth
in Schedule 6.01 or otherwise expressly permitted or required by the terms
of this Agreement, Seller shall not, and shall cause Seller Subs and
Cemax-Icon not to, do any of the following in connection with the
Businesses without the prior written consent of Purchaser, which consent
shall not be unreasonably withheld or delayed:
(i) adopt or amend in any material respect any Benefit Plan (or
any plan that would be a Benefit Plan if adopted) or enter into,
adopt, extend (beyond the Closing Date), renew or amend any collective
bargaining agreement or other Contract with any labor organization,
union or association, except in each case as required by Law;
(ii) grant to any executive officer or employee any increase in
compensation or benefits, except (A) in the ordinary course of
business and consistent with past practice, (B) as may be required
under existing agreements, (C) for any increases for which Seller
shall be solely obligated or (D) in connection with the Stay Bonus
Program;
(iii) except pursuant to the Bank Credit Agreements, incur or
assume any liabilities, obligations or indebtedness for borrowed money
or guarantee any such liabilities, obligations or indebtedness, in
each case in excess of $100,000;
(iv) except pursuant to the Bank Credit Agreements, permit, allow
or suffer any Acquired Asset to become subjected to any Lien of any
nature whatsoever that would have been required to be set forth in
Schedule 3.05, 3.06 or 3.09 if existing on the date of this Agreement;
(v) (A) cancel any indebtedness other than in the ordinary course
of business consistent with past practice (but in each case in an
amount not exceeding $100,000) or (B) waive any claims or rights other
than in the ordinary course of business consistent with past practice
(but in each case involving claims or rights with a value not in
excess of $250,000);
(vi) make any change in any method of accounting or accounting
practice or policy other than those required by GAAP or the applicable
Tax law;
(vii) acquire by merging or consolidating with, or by purchasing
a substantial portion of the assets of, or by any other manner, any
business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire any
assets (other than inventory) that are material, individually or in
the aggregate, to the Businesses;
(viii) except for intercompany transactions in the ordinary
course of business consistent with past practice and except for
transactions pursuant to Contracts in effect on the date of this
Agreement (or any renewal thereof permitted by the terms of this
Agreement), pay, loan or advance any amount to, or sell, transfer or
lease any of its assets to, or enter into any agreement or arrangement
with, Seller or any of its affiliates or 3M, in each case in excess of
$300,000;
(ix) make or incur any capital expenditure that (i) is other than
in accordance with Seller's current capital spending plan or (ii)
individually, is in excess of $500,000 or make or incur any such
expenditures which, in the aggregate, are in excess of $1,500,000;
(x) sell, lease, license, transfer or otherwise dispose of any of
its assets except (A) inventory and obsolete or excess equipment or
other assets sold or disposed of in the ordinary course of business
and consistent with past practice, (B) any Excluded Asset described in
Section 1.02(b) or (C) other assets with an aggregate fair market
value not in excess of $3,000,000 sold in arms-length transactions;
(xi) enter into any material lease of real property, except any
renewals of existing leases in the ordinary course of business;
(xii) enter into, renew, amend or modify any Contract with
respect to the CB coater at Seller's White City, Oregon facility,
other than any such Contract entered into on arms-length terms and
which does not provide for an initial term or any extension thereof at
the option of the counterparty thereto that extends beyond December
31, 2000;
(xiii) enter into, terminate or renew or amend or modify in any
material respect any Contract, except a Contract entered into,
terminated, renewed, amended or modified in the ordinary course of
business consistent with past practice which Contract would not have
been required to be listed on Schedule 3.08 pursuant to (A) Section
3.08(a)(i), (iii), (iv), (v) or (xiv) if such Contract had been
entered into prior to the date of this Agreement, (B) Section
3.08(a)(vii) if such Contract had been entered into prior to the date
of this Agreement, except, in the case of this clause (B) for any
Contract that does not affect in any material respect the rights
granted to Purchaser in the Transferred Intellectual Property pursuant
to the Seller Intellectual Property Agreement, (C) Section 3.08(a)(vi)
if such Contract had been entered into prior to the date of this
Agreement except for any such Contract entered in connection with any
trade shows sponsored by the Radiological Society of North America
Inc., (D) Section 3.08(a)(xiii) if such Contract had been entered into
prior to the date of this Agreement, except in the case of this clause
(D), for any renewal of any such Contract necessary for the continued
operation and conduct of the Business, provided that any such Contract
shall not be extended for a term in excess of one year, (E) Section
3.08(a)(xv) if such Contract had been entered into prior to the date
of this Agreement and such Contract is not terminable by Seller, any
Seller Sub or Cemax-Icon by notice of not more than 60 days for a cost
of less than $300,000 or (F) Section 3.08(a)(xvii) if such Contract,
in Seller's good faith judgment would have been required to be listed
on Schedule 3.08 if such Contract had been entered into prior to the
date of this Agreement and such Contract is not terminable by Seller,
any Seller Sub or Cemax- Icon by notice of not more than 60 days for a
cost of less than $300,000;
(xiv) (A) cancel any of the insurance policies listed in Schedule
3.12 or (B) permit any of the insurance policies listed in Schedule
3.12 to expire without replacing the coverage available under any such
policy with substantively comparable coverage under
another policy, provided that such coverage is available on
commercially reasonable terms; or
(xv) authorize any of, or commit or agree to take, whether in
writing or otherwise, to do any of, the foregoing actions.
SECTION 6.02. No Solicitation. From the date of this Agreement to
the Closing Date, Seller and Seller Subs shall not, nor shall any of them
authorize or permit any subsidiary, officer, director, employee, affiliate
or agent of any of them to, directly or indirectly, in any manner, (i)
solicit, initiate or encourage the submission of, any acquisition proposal,
(ii) enter into any Contract with respect to any acquisition proposal or
(iii) participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or
may reasonably be expected to lead to, any acquisition proposal. As used in
this Section 6.02, "acquisition proposal" shall mean any proposal for a
merger or other business combination involving Seller or any of its
subsidiaries that owns any Acquired Assets or any proposal or offer to
acquire in any manner, directly or indirectly, an equity interest in or any
voting securities of Seller, any Seller Sub or Cemax-Icon or all or any
portion of the Acquired Assets, other than (A) the transactions
contemplated by this Agreement, (B) the sale of Inventory in the ordinary
course of business, (C) the sale or any transaction involving any Excluded
Asset, (D) any sale, transfer or other disposition in the ordinary course
of business, (E) any sale or other transaction involving the Ferrania
Facility or the Florida Facility, (F) any acquisition of voting securities
of Seller under stock repurchase programs publicly announced prior to the
date hereof and (G) exercises of options for voting securities of Seller
under Seller U.S. Benefit Plans.
SECTION 6.03. Access to Information. (a) Seller, the Seller Subs
and Cemax-Icon shall afford to Purchaser and its accountants, counsel and
other representatives reasonable access, during normal business hours
during the period from the date of this Agreement to the Closing Date, to
all the properties, Contracts, commitments, Tax Returns, work papers of
auditors, books and records and financial and operating data of or relating
to the Businesses (other than the Excluded Assets), and, during such period
shall furnish promptly to Purchaser any information concerning the
Businesses (other than the Excluded Assets) as Purchaser may reasonably
request and shall instruct the employees, counsel and financial advisors of
Seller and Seller Subs to cooperate with Purchaser in its
investigation of the Businesses; provided, however, that such access does
not unreasonably disrupt the normal operations of Seller or the Businesses;
provided, further, however, that prior to the Closing, the Purchaser shall
not conduct any environmental audit or investigation on the Businesses or
the Acquired Assets, including any Phase I or Phase II environmental
assessment. No investigation pursuant to this Section 6.03 or otherwise
conducted by or on behalf of Purchaser shall affect any representation or
warranty given by Seller hereunder.
(b) From the date of this Agreement to the Closing Date, Seller
shall provide to the Purchaser management reports showing the following
(and setting forth the currency exchange rates used or assumed in the
calculation thereof):
(i) net revenues, gross margin and operating costs in deriving
operating income by commodity (DryView medical, conventional x-ray,
wet electronics, medical service, medical solutions, dry image setting
and contract manufacturing) and region (U.S., Europe and "Most of
World") for the Businesses, such reports to be delivered within 60
days after the last day of the quarter ended June 30, 1998, and within
45 days after the last day of each succeeding quarter;
(ii) net revenues by commodity (DryView medical, conventional
x-ray, wet electronics, medical service, medical solutions, dry image
setting and contract manufacturing) and region (U.S., Europe and "Most
of World") for the Businesses, such reports to be delivered within 60
days after the last day of the month of June, and within 30 days after
the last day of each succeeding month; and
(iii) (A) accounts receivable; (B) inventories; and (C) accounts
payable, in each case for (x) the Businesses located in the United
States calculated and prepared in the same manner as the Businesses
Financial Statements and (y) Seller and its subsidiaries excluding the
U.S. (i.e. consolidated non-U.S. balances), such reports to be
delivered within 60 days after the last day of the quarter ended June
30, 1998, and within 45 days after the last day of each succeeding
quarter.
SECTION 6.04. Confidentiality. Purchaser acknowledges that the
information being provided to it in connection with the Acquisition and the
consummation of the other transactions contemplated hereby is subject to
the terms of a confidentiality agreement between Purchaser and
Seller, dated October 28, 1997, as amended from time to time (the
"Confidentiality Agreement"), the terms of which are incorporated herein by
reference. Effective upon, and only upon, the Closing, the Confidentiality
Agreement shall terminate with respect to information relating solely to
the Businesses (other than the Excluded Assets); provided, however, that
Purchaser acknowledges that any and all other information provided to it by
Seller or Seller's representatives concerning Seller and its affiliates
shall remain subject to the terms and conditions of the Confidentiality
Agreement after the Closing Date.
SECTION 6.05. Antitrust. Each of Seller and Purchaser shall, (i)
as promptly as practicable, but in no event later than five business days
following the execution and delivery of this Agreement file with the United
States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and report form pursuant
to the HSR Act, if any, required for the transactions contemplated hereby
and (ii) as promptly as practicable, make all filings under the Non-U.S.
Competition Laws of any country or the European Union under which any
clearance, consent, authorization, registration, declaration or other
action with respect to the transactions contemplated hereby is required.
Each of Seller and Purchaser shall as promptly as practicable (i)
substantially comply with any request for additional information and
documents pursuant to the HSR Act and (ii) provide any supplemental
information requested pursuant to any Non-U.S. Competition Law. Each of
Purchaser and Seller shall furnish to the other such information and
assistance as the other may reasonably request in connection with its
preparation of any filing, submission or other act that is necessary or
advisable under the HSR Act and the relevant Non-U.S. Competition Laws.
Seller and Purchaser shall keep each other timely apprised of the status of
any communications with, and any inquiries or requests for additional
information from, the FTC, the DOJ and the relevant non-U.S. antitrust or
competition authorities, and shall comply promptly with any such inquiry or
request. Each of Seller and Purchaser shall use its best efforts to obtain
any clearance under the HSR Act and the relevant Non-U.S. Competition Laws
required for the consummation of the transactions contemplated hereby. For
purposes of this Section 6.05, the "best efforts" of Purchaser shall
include Purchaser's agreement to litigate any motion for a preliminary
injunction until such motion shall have been granted or denied by a court
of competent jurisdiction; provided that Purchaser shall not be required
(i) to pay any amounts of money to third parties to secure any such
clearance (other than costs incurred in connection with the prosecution of
any such litigation and the payment of any
filing, application, registration, notarial and similar fees and related
expenses) or (ii) to agree to any request or requirement of any
Governmental Entity, whether involving the Businesses or the Acquired
Assets or Purchaser's other assets or businesses, if such payment or
compliance with any such request or requirement, individually or in the
aggregate, would impair or diminish the economic value of the Businesses or
the Acquired Assets and/or of Purchaser, individually or in the aggregate,
in an amount greater than or equal to an amount that would constitute a
material impairment or diminution of the economic value of the Businesses
in the aggregate (collectively, a "Material Impairment").
SECTION 6.06. Best Efforts. (a) On the terms and subject to the
conditions of this Agreement, each party shall cooperate and use its best
efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, appropriate or advisable under Law to cause
the Closing to occur, as promptly as practicable, including taking all
reasonable actions necessary to comply promptly with all legal requirements
that may be imposed on it or any of its affiliates with respect to the
Closing.
(b) Prior to the Closing each party shall, and shall cause its
affiliates to, cooperate and use its best efforts (at its own expense) to
take all actions necessary, appropriate or advisable to secure, as promptly
as practicable, and use (i) its best efforts to obtain Consents listed on
Schedule 7.02(d) and (ii) its commercially reasonable efforts to obtain the
Consents listed on Schedules 3.03(a) and 3.03(b) and all other Consents
from Governmental Entities and other persons necessary, appropriate or
advisable to permit the transfer of the Acquired Assets to, and the
assumption of the Assumed Liabilities by, Purchaser. For purposes of this
Section 6.06(b), Seller shall be deemed to have used "commercially
reasonable efforts to obtain Consents" if it shall have complied with the
procedures set forth in Schedule 6.06(b).
(c) Notwithstanding anything to the contrary in Section 6.06(a)
or (b), (i) neither party shall be required to make any payment (other than
de minimis filing, application, registration, notarial and similar fees and
related expenses), grant any accommodation (financial or otherwise) or
initiate or defend any litigation in connection with such best efforts, and
(ii) Seller shall notify Purchaser as promptly as practicable if, after use
of such best efforts, Seller fails to obtain any Consent listed in Schedule
3.03(a) or (b) or 7.02(d) and shall cooperate with and enter into good
faith discussions with Purchaser
regarding whether such Consent should continue to be pursued and the
appropriate course of action to be taken to obtain such Consent.
(d) This Section 6.06 does not relate to antitrust matters, which
are the subject of Section 6.05. Except as provided in Section 6.05 and
this Section 6.06, Purchaser and Seller shall use their respective best
efforts to cause the Closing to occur on or prior to December 31, 1998;
provided, however, that such best efforts obligation shall not require
either Seller or Purchaser to waive any right or condition in this
Agreement or any other Transaction Document.
SECTION 6.07. Fees and Expenses. (a) Whether or not the Closing
takes place, and except as expressly set forth in this Agreement or any
Transaction Document, all costs and expenses incurred in connection with
this Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby shall be paid by the party incurring such
expense, including all costs and expenses incurred pursuant to Sections
1.04 and 6.05. No costs or expenses incurred in connection with this
Agreement and the other Transaction Documents and the transactions
contemplated hereby and thereby (i) shall be allocated by Seller to the
Acquired Assets or the Businesses or (ii) shall constitute Assumed
Liabilities, except for both (i) and (ii), as otherwise expressly agreed in
this Agreement and the other Transaction Documents.
(b) If a Termination Event shall have occurred, Purchaser shall
reimburse Seller upon demand in immediately available funds Seller's
reasonable costs and expenses incurred in connection with this Agreement
and the Transaction Documents and the transactions contemplated hereby and
thereby (including all reasonable fees and expenses of counsel, investment
banking firms, accountants, experts and consultants to Seller
(collectively, the "Expenses")) in an amount not to exceed $5,000,000 in
the aggregate.
SECTION 6.08. Notices of Certain Events. From the date of this
Agreement to the Closing Date, Seller, Seller Subs and Cemax-Icon shall
promptly notify Purchaser of, and Purchaser shall promptly notify Seller
of:
(a) any written notice or other written communication from any
person alleging that the Consent of such person is or may be required
in connection with the transactions contemplated by this Agreement
(other than notice in respect of a Consent disclosed in any Schedule);
(b) any written notice or other written communication from any
Governmental Entity in connection with the transactions contemplated
by this Agreement;
(c) any developments or changes in the status of any matter
covered by Section 3.14 or otherwise included in Schedule 3.14; and
(d) any Proceedings commenced or, to the Knowledge of Seller or
the knowledge of Purchaser, as applicable, threatened, (i) against,
relating to or involving or otherwise affecting Seller, any Seller Sub
or Cemax-Icon, that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.15 or
(ii) that are of the type described in Section 7.01(b) or 7.02(j).
SECTION 6.09. Employee Matters; WARN Act.
(a) Eligible Employees.
(i) Schedule 6.09 sets forth a list of all Eligible Employees and
provides the following information with respect to each such Eligible
Employee: (w) current base salary or compensation, (x) job title and
(y) country. Seller may modify the list of Eligible Employees after
the date hereof (i) to fill vacancies created by employment
terminations, retirement, death or disability or (ii) to identify
specific individuals to fill vacant positions set forth on Schedule
6.09; provided, however, that after each such modification the list is
comprised only of individuals who are actively employed by Seller or
Seller Subs at the Closing Date and who fall into one of the following
categories (A) employees (other than customer service, support and
corporate staff) who perform at least 80% of their services for the
Businesses; (B) customer service and support employees ("CSS
Employees") who perform at least 75% of their services for the
Businesses; (C) 406 CSS Employees (minus the number of such employees
in (B), above) mutually selected by Seller and Purchaser (taking into
account the need of the Businesses to have customer service and
support employees who are geographically and functionally dispersed)
from a pool of employees who perform at least 50% of their services
for the Businesses; (D) employees of Cemax-Icon; (E) 115 contract
employees who perform at least 75% of their services for the
Businesses ("Contract Employees"); (F) 11 employees employed in
Germany in the document imaging business (the "German Document Imaging
Employees"); (G) 75 corporate staff employees ("corporate staff
employees") of Seller mutually selected by Seller and Purchaser and
(H) 17 employees at the Ferrania facility ("Ferrania Employees") who
(a) are not primarily employed in the Business and (b) are required by
Law to be transferred to Purchaser; provided, further, however, that
(i) Seller may not remove any individual from Schedule 6.09 if, as of
the date hereof, such individual falls into category (A), (B), (C),
(D) or (G) and (ii) the number of Eligible Employees (after any
modification by Seller to Schedule 6.09) shall not exceed (u) 1602
employees in categories (A), (B), (C), (D) and (G), (v) 115 Contract
Employees, (w) 11 German Document Imaging Employees, (x) 406 CSS
Employees, (y) 75 Corporate Staff Employees and (z) 17 Ferrania
Employees. Employees of Seller or Seller Subs who (a) return to active
employment within one year of the Closing Date from a leave of absence
(other than a long-term disability leave of absence), (b) have a right
of reinstatement under the plan or program of Seller or Seller Subs
under which they left active service and (c) are capable of working in
accordance with Seller's or Seller Subs' policies, practices and
procedures shall be considered Eligible Employees if (x) they
satisfied the requirements of (A), (B) or (D), above, on the date
their leave of absence commenced or (y) Purchaser has not employed the
required number of employees under (C), (E), (F) or (G) above, and
such employees satisfied the requirements of (C), (E), (F) or (G)
above, on the date their leave of absence commenced. For purposes of
the Agreement, "U.S. Eligible Employees" means Eligible Employees
primarily employed in the United States and "Foreign Eligible
Employees" means all other Eligible Employees (such U.S. Eligible
Employees and Foreign Transferred Employees being collectively
referred to herein as the "Eligible Employees").
(ii) Between the date hereof and the Closing Date, a stay bonus
program (the "Stay Bonus Program") will be established, as set forth
in Schedule 6.09(a)(ii). Purchaser shall bear the cost of the Stay
Bonus Program.
(b) Transferred Employees.
(i) On or before the Closing Date (or, if later, the date an
individual is considered an Eligible Employee), Purchaser will offer
employment to each Eligible Employee in a position substantially
similar to such Eligible Employee's current position with Seller or
any Seller Sub, as the case may be, at
compensation levels no less favorable than that provided by Seller or
Seller Subs as of the Closing Date and with pension and other benefit
arrangements that are no less favorable in the aggregate than those in
which such Eligible Employee participated as of the Closing Date;
provided, however, that Purchaser will comply with any applicable law,
rules and regulations in making employment offers to Eligible
Employees. U.S. Eligible Employees and Foreign Eligible Employees who
accept Purchaser's offer of employment together with those employees
whose employment is transferred by operation of law and all employees
of Seller Subs that are being acquired by Purchaser shall be referred
to as "U.S. Transferred Employees" and "Foreign Transferred
Employees", respectively, and shall be collectively referred to as
"Transferred Employees".
(ii) For a period of no less than one year following the Closing
Date (the "Continuation Period"), Purchaser shall provide, or cause to
be provided, to each U.S. Transferred Employee (a) compensation at
levels no less favorable than that provided by Seller or Seller Subs
as of the Closing Date and (b) pension and other benefits arrangements
that are no less favorable in the aggregate than those in which such
U.S. Transferred Employee participated as of the Closing Date;
provided, however, that Seller agrees that the provisions of
subsection (b), above, shall be satisfied if such U.S. Transferred
Employees continue to participate on the same terms and conditions in
the applicable pension and other benefit arrangements of Seller or
Sellers Subs or they are eligible to participate on the same terms and
conditions in all plans available to similarly situated employees of
Purchaser.
(iii) Seller will not amend or terminate (other than as required
by law) any Transferred Employee's employment agreement and shall, at
Purchaser's request, assign any such agreement to Purchaser.
(c) U.S. Transferred Employees.
(i) During the Continuation Period, U.S. Transferred Employees
shall be eligible for severance benefits that are no less favorable
than those provided to similarly situated employees of Seller.
(ii) Seller shall provide, or cause to be provided, defined
benefit pension benefits and eligibility for retiree health care
benefits to Grandfathered Employees that are substantially similar to
those that would have
been provided to such employees as a result of being considered
grandfathered employees for purposes of 3M's defined benefit pension
plans ("3M Pension Plans") and 3M's retiree health care plans ("3M
Health Care Plans") if such employees had remained employed by Seller
and Seller Subs during the period they are actually employed by
Purchaser; provided that Seller shall not be required (i) to provide,
or cause to be provided, the defined benefit pension accrual provided
to employees of Seller who are not considered Grandfathered Employees
or (ii) to provide, or cause to be provided, benefits more favorable
than those available to similarly situated employees of Seller who
would be considered Grandfathered Employees. "Grandfathered Employees"
means (i) with respect to defined benefit pension benefits, those U.S.
Transferred Employees who are considered Grandfathered Employees with
respect to benefits under 3M Pension Plans, and (ii) with respect to
retiree health care benefits, those U.S. Transferred Employees who are
considered Grandfathered Employees with respect to benefits under 3M
Health Care Plans.
(iii) Purchaser shall provide relocation benefits to U.S.
Transferred Employees, if required, in accordance with Purchaser's
employee relocation policy. U.S. Transferred Employees (other than
employees of Cemax- Icon) will be credited with accumulated service
with Seller or any Seller Sub, as the case may be, 3M and their
affiliates for eligibility, vesting and benefit purposes under all
plans or programs maintained by Purchaser and its affiliates after the
Closing Date (including all severance plans); provided that (a) no
such service shall be credited under Purchaser's plans providing
retiree welfare benefits and (b) no such service shall be credited for
benefits purposes under Purchaser's defined benefit pension plans.
Service recognized prior to the Closing Date under Cemax-Icon benefit
programs will continue to be taken into account under such benefit
programs. For a period of four years following the Closing Date,
Purchaser shall appropriately compensate each U.S. Transferred
Employee whose vacation entitlement under the applicable programs of
Purchaser is less than such U.S. Transferred Employee's vacation
entitlement under the applicable programs of Seller as of the Closing
Date; it being understood that Purchaser shall either continue to
provide such greater entitlement to the affected U.S. Transferred
Employee or pay the U.S. Transferred Employee the cash value of the
difference between such vacation entitlements at Purchaser's option.
(iv) Seller will retain liability for (i) all unfunded pension
liabilities with respect to the U.S. Transferred Employees and (ii)
all claims under Seller's or Seller Subs' (other than Cemax-Icon)
employee benefit plans incurred with respect to the U.S. Transferred
Employees before the Closing Date. Purchaser will be responsible for
all claims under Benefit Plans sponsored by Cemax-Icon and all claims
incurred with respect to the U.S. Transferred Employees after the
Closing Date. For purposes of this Section 6.09, (i) claims for
medical, dental and vision benefits are incurred when the relevant
services are rendered, (ii) claims for life insurance benefits are
incurred on the date of death, (iii) claims for disability benefits
are incurred on each date such benefits become payable under the terms
of the applicable disability program and (iv) all other claims are
incurred upon the occurrence of the last event giving rise to the
entitlement to benefits.
(v) U.S. Transferred Employees shall be entitled to use after the
Closing Date, or to receive the value of, all unused vacation benefits
earned before the Closing Date.
(vi) Seller shall retain responsibility for providing group
health coverage required by Section 4980B of the Code ("Continuation
Coverage") to those U.S. Eligible Employees who do not accept
employment with Purchaser and who elected such Continuation Coverage
prior to the Closing Date (other than employees of Cemax-Icon, who
shall continue to be the responsibility of Cemax-Icon). Purchaser
shall provide Continuation Coverage to U.S. Transferred Employees or
their dependents only (other than employees of Cemax-Icon) with
respect to "qualifying events" as defined in Code Section 4980B(f)(3)
which occur on and after the Closing Date, to the extent required by
Applicable Law.
(d) Foreign Transferred Employees. (i) Except as provided herein,
Seller will be responsible for the portion of any liabilities (A) that
are calculated with reference to a Foreign Transferred Employee's
length of service with Seller or Seller Subs and (B) that are
attributable to pre-Closing Date service with 3M or Seller (the
"Foreign Service Liability"). The amount of the Foreign Service
Liability shall be equal to the sum of (i) the Foreign Service
Liability determined as of the Closing Date on an "accumulated benefit
obligation" basis (the "ABO Amount") and (ii) 50% of the difference
between the amount of the Foreign
Service Liability determined as of the Closing Date on a "projected
benefit obligation" and the ABO Amount. "Accumulated benefit
obligation" and "projected benefit obligation" shall be calculated
consistently with the principles set forth in SFAS 87. In the event
any Foreign Service Liability is fully funded by dedicated or
set-aside assets (a "Funded Foreign Service Liability"), Seller shall
transfer to Purchaser (and Purchaser will assume and indemnify Seller
and Seller Subs against) such Foreign Service Liabilities along with
an equivalent amount of assets. Seller may, at its election, satisfy
any unfunded or partially funded Foreign Service Liability (an
"Underfunded Foreign Service Liability") by: (A) transferring to
Purchaser the Foreign Service Liability along with an equivalent
amount of assets, (B) retaining the Underfunded Foreign Service
Liability or (C) transferring to Purchaser the Underfunded Foreign
Service Liability and reducing the Purchase Price by an equivalent
amount; provided, however, that (x) Seller shall comply with all
applicable laws in making its election hereunder and (y) the Purchaser
and Seller shall mutually agree before the Closing Date upon a method
for determining the Underfunded Foreign Service Liability.
(ii) The asset and liability transfers described in the Section
6.09(d)(i) (the "Transfers") shall be effected in accordance with the
following principles: (i) the Transfers shall be effected as soon as
reasonably practicable after the Closing Date, (ii) the actual assets
to be transferred to Purchaser shall be the appropriate proportionate
share of the actual pool of assets set aside to fund a particular
Foreign Service Liability or cash if there is no such pool, (iii) the
amount of the assets transferred to Purchaser shall be increased (or
decreased, as appropriate) by the compound rate of return for the
period from the Closing Date to the date of transfer for the pool of
assets set aside to fund a particular Foreign Service liability or, if
there is no such pool, LIBOR.
(iii) If Seller transfers dedicated or set-aside transfers in
excess of any individual Funded Foreign Service Liability, the amount
of such excess (the "Excess Assets) shall reduce, on a
dollar-for-dollar basis, Seller's obligation to transfer additional
assets equal to the aggregate Underfunded Foreign Service Liabilities
transferred to Purchaser. If the aggregate amount of Excess Assets
exceeds Seller's aggregate unfunded obligation with respect to all
Underfunded Foreign Service Liabilities transferred to Purchaser,
Purchaser shall make a cash payment to
Seller in an amount equal to such excess. Purchaser will be
responsible for all (A) accrued vacation pay for Foreign Transferred
Employees and (B) liabilities related to the Foreign Transferred
Employees that are determined without reference to such employees'
length of service with Seller or Purchaser.
(iv) Seller shall notify and consult with the works councils or
similar employee representatives as required by Law with respect to
the transfers contemplated by this Agreement.
(v) Seller (A) shall cause the benefits of all Transferred
Employees under non-U.S. defined contribution and defined benefit
pension plans to be fully vested as of the Closing Date or (B)
continue to credit service with Purchaser for vesting purposes with
respect to such benefits.
(e) Seller and Purchaser agree to cooperate and consult with each
other in connection with any communications with Eligible Employees
regarding the Acquisition and the employment by Purchaser of such Eligible
Employees.
SECTION 6.10. Post-Closing Cooperation. Purchaser and Seller
shall cooperate with each other, and shall cause their officers, employees,
agents, auditors and representatives to cooperate with each other, for a
period of 90 days after the Closing and, in the case of the services set
forth in the Transition Services Agreement, until the termination in all
respects of such relevant service, to ensure the orderly transition of the
Businesses from Seller to Purchaser and to minimize any disruption to the
Businesses and the other respective businesses of Seller and Purchaser that
might result from the transactions contemplated hereby. After the Closing,
upon reasonable written notice, Purchaser and Seller shall furnish or cause
to be furnished to each other and their employees, counsel, auditors and
representatives access, during normal business hours, to such information
and assistance relating to the Businesses (to the extent within the control
of such party) as is reasonably necessary for financial reporting,
accounting and Tax matters.
SECTION 6.11. Publicity. From the date of this Agreement to the
Closing Date, no public release or announcement concerning the transactions
contemplated hereby shall be issued by any party or any of its advisors
without the prior consent of the other parties (which consent shall not be
unreasonably withheld), except as such release or announcement may be
required by Law of any United States or
foreign securities exchange, in which case the party required to make the
release or announcement shall allow the other party reasonable time to
comment on such release or announcement in advance of such issuance;
provided, however, that each of Seller and Purchaser may make internal
announcements to their respective employees and to 3M, bank lenders or
parties to Contracts under which they have disclosure obligations, that are
consistent with the parties' prior public disclosures regarding the
transactions contemplated hereby after reasonable prior notice to and
consultation with the other party.
SECTION 6.12. Records. Seller shall deliver originals of all
Records that are part of the Acquired Assets (or, in the case of Records
relating to Cemax-Icon, including the portions of any consolidated,
combined or unitary Tax Returns that relate to Cemax-Icon or Records that
are described in Section 1.02(b)(vii) (A) or (C), copies of such Records)
to Purchaser at the locations where such Records are currently maintained
if such Records are maintained at a facility that is an Acquired Asset or
is to be leased to Purchaser under the Shared Facilities Agreement or
otherwise to Purchaser as soon as practicable but in no event later than 60
days after Closing at such location or locations to be mutually agreed.
Purchaser recognizes that certain Records may contain incidental
information relating primarily to subsidiaries or divisions of Seller other
than the Businesses and that Seller may retain copies of the relevant
portions thereof.
SECTION 6.13. Agreement Not To Compete. (a) Seller understands
that Purchaser shall be entitled to protect and preserve the going concern
value of the Businesses to the extent permitted by Law and that Purchaser
would not have entered into this Agreement absent the provisions of this
Section 6.13 and, therefore, for a period of seven years from the Closing,
Seller shall not, and shall cause each of its subsidiaries not to, directly
or indirectly, compete against Purchaser in the Businesses in the medical
imaging market or any other line of business that competes with the
Businesses in the medical imaging market (including inkjet printing, direct
radiography, dry laser printing, dry thermal printing or any other medical
imaging equipment, interfaces, components or hard copy output or media, in
each case only to the extent used in the medical imaging market or for
medical imaging applications) ("Competitive Activities"), except (i) the
activities and businesses operated at the Ferrania Facility to the extent
contemplated by the X-ray/Wet Laser Supply Agreement, (ii) the activities
and businesses operated at the Ferrania Facility as contemplated by the
Intellectual Property Agreement and the License Agreement, (iii) the
manufacture
and sale into the medical imaging market of Data Storage Media sold by the
businesses of Seller or any of its subsidiaries, (iv) the manufacture and
sale into the medical imaging market of any other products, goods or
services sold by the businesses of Seller or any of its subsidiaries in
existence at any time if such products, goods and services are not either
(A) promoted by Seller or any of its subsidiaries for medical imaging uses
through (1) the use of internal or external written promotional materials
or (2) paid advertisements, or (B) registered as medical devices with the
FDA or any similar regulatory body; (v) the manufacture or sale into the
medical imaging market of any products, goods or services by Seller or any
of its subsidiaries to be used as components or parts of items sold by
third parties in the medical imaging industry; provided, however, that such
products, goods or services do not contain an Imation name, brand or logo,
except for any such Imation name, brand or logo displayed in a manner that
indicates that such product, good or service is being used as a component
or supply item in another product, good or service; (vi) the document
imaging business in Germany; and (vii) the assignment, lease, sublicense or
other transfer of any Intellectual Property, Technology or other
proprietary information owned or licensed by Seller or any of its
subsidiaries to any third party. For purposes of this Section 6.13, "Data
Storage Media" means all data storage media, equipment, systems and
subsystems and related software and services, other than paper and film in
each case used for imaging purposes (including uncoated film of diagnostic
quality).
(b) Section 6.13(a) shall be deemed not breached as a result of
the ownership by Seller or any of its subsidiaries of: (i) less than an
aggregate of 2% of any class of publicly traded equity securities of a
person engaged, directly or indirectly, in Competitive Activities; (ii)
less than 10% in value of any instrument of indebtedness (publicly traded
or issued in accordance with Rule 144, Rule 144A or Regulation S of the
Securities Exchange Commission) of a person engaged, directly or
indirectly, in Competitive Activities; (iii) a person that engages,
directly or indirectly, in Competitive Activities if such Competitive
Activities account for less than 10% of such person's consolidated annual
revenues or (iv) more than otherwise permitted by clauses (i), (ii) or
(iii) above if any such excess is sold within one year from the date it was
first acquired.
(c) Seller understands that Purchaser would not have entered into
this Agreement absent the provisions of this Section 6.13(c) and,
therefore, for a period of two years from the Closing, Seller shall not,
and shall cause
each of its subsidiaries not to, directly or indirectly, without
Purchaser's prior written consent, hire any Transferred Employee listed on
Schedule 6.13(c), or induce any Transferred Employee to leave the employ of
Purchaser.
SECTION 6.14. Bulk Transfer Laws. Seller and Purchaser each
hereby waives compliance by the other with the provisions of any so-called
"bulk transfer law" of any jurisdiction in connection with the sale of the
Acquired Assets to Purchaser.
SECTION 6.15. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to
be executed and delivered, all such documents and instruments and shall
take, or cause to be taken, all such further or other actions (subject to
Section 6.05 and Section 6.06), as such other party may reasonably deem
necessary to consummate the transactions contemplated by this Agreement,
including, in the case of Seller and Seller Subs, executing and delivering
to Purchaser such assignments, deeds, bills of sale, consents and other
instruments as Purchaser or its counsel may reasonably request as necessary
for such purpose.
SECTION 6.16. Purchase Price Allocation. (a) Seller and Purchaser
shall mutually determine the amount of the total consideration transferred
by Purchaser and its affiliates in exchange for the Acquired Assets, which
amount will consist of the Purchase Price plus the amount of the Assumed
Liabilities, and will not include any amount paid pursuant to the Supply
Agreement, and will mutually determine the allocation of such total
consideration among the Acquired Assets and Assumed Liabilities in
accordance with their relative fair market values in the manner required by
Section 1060 of the Code, the regulations thereunder and any applicable
provisions of any U.S. state or local or foreign law. The extent to which
the parties have agreed on such determination or allocation as of the date
hereof is set forth on Schedule 6.16.
(b) Purchaser and Seller agree to act in accordance with the
allocations as finally determined pursuant to Section 6.16(a) (including
any modification required to reflect any adjustments to the Purchase Price
pursuant to Section 1.06) in any relevant Tax Returns, including any such
Tax Returns required to be filed pursuant to Section 1060 of the Code, the
regulations promulgated thereunder or any provisions of local, state and
foreign law (including IRS Form 8594), and to cooperate in the preparation
of any such Tax Returns and to file timely such Tax Returns in the manner
required by applicable law.
(c) The parties agree to cooperate and work together to cause all
relevant Taxing Authorities to accept the allocation agreed upon pursuant
to this Section 6.16. If the agreed upon allocation is successfully
challenged by any Taxing Authority, the parties agree to work together to
cause other Taxing Authorities to agree to conforming adjustments, to the
extent such adjustments will decrease the overall Tax costs to all parties,
and to share any Tax savings that result from any of the foregoing changes
to the allocation.
SECTION 6.17. Supplies. Purchaser shall not use stationery,
purchase order forms or other similar paper goods or supplies
(collectively, the "Supplies"), that state or otherwise indicate thereon
that any Business is a division or unit of Seller or any Seller Sub more
than 90 days after the Closing Date without first crossing out or marking
over such statement or indication or otherwise clearly indicating on such
Supplies that the division is no longer a division or unit of Seller or
Seller Sub, as applicable. Purchaser shall not reorder any Supplies which
state or otherwise indicate thereon that the division is a division or unit
of Seller or any Seller Sub.
SECTION 6.18. Insurance. (a) From the date of this Agreement to
the date that is 90 days after the Closing Date, Seller shall use its best
efforts to have Purchaser named as an additional insured party under each
of the insurance policies issued to Seller listed on Schedule 6.18 ("Seller
Existing CGL Policies"), which best efforts shall include seeking the
consent, if required, of the underwriters under each Seller Existing CGL
Policy; provided, however, that (i) in connection with seeking to have
Purchaser named as an additional insured party under Seller Existing CGL
Policies, Seller shall not be required to make any payment or grant any
accommodation (financial or otherwise) to any person or to take any action
that could impair or diminish Seller rights or benefits under Seller
Existing CGL Policies and (ii) any additional cost or expense associated
with Purchaser's being named an additional insured party under Seller
Existing CGL Policies shall be borne in full by Purchaser and (iii) Seller
shall involve a representative of Purchaser in all substantive
communications (written or oral) with any underwriter with respect to
having Purchaser named as an additional insured party under any Seller
Existing CGL Policy. Seller shall not obligate Purchaser to incur or assume
any cost or expense in connection with being named an additional insured
party without Purchaser's prior written consent hereto; provided, however,
that any decision of Purchaser not to incur or assume any such cost or
expense for whatever reason
shall not result in Seller not being in compliance with any of its
obligations under this Section.
(b) For a period of three years following the Closing, Seller
shall not, without the prior written consent of Purchaser, which consent
shall not be unreasonably withheld or delayed, (i) exclude the Businesses
or Acquired Assets as "divested operations" from coverage under any Seller
Existing CGL Policy, (ii) amend or waive any of its rights with respect to
the scope of coverage (including coverage exclusions), policy limits or
co-payments under any Seller Existing CGL Policy, (iii) terminate any
Seller Existing CGL Policy or (iv) increase Seller self-insured retention
or deductibles under any Seller Existing CGL Policy.
SECTION 6.19. Cemax-Icon. (a) On or prior to Closing, Seller
shall cause Cemax-Icon to cancel or repay all indebtedness (whether as
obligor, guarantor or otherwise) to third parties for borrowed money (other
than accounts payable incurred in the ordinary course of business) of
Cemax-Icon outstanding on the Closing Date, other than any such
indebtedness set forth in clause (a)(viii)(A) & (B) and item 3 under clause
(a)(ix)(b) of Schedule 3.08 and other than the Cemax-Icon Payments.
(b) (i) During the period from July 1, 1998 until the Closing,
Seller shall comply in all material respects with its obligations under the
Cemax-Icon Merger Agreement, including Section 6.08 of the Cemax-Icon
Merger Agreement. Without limiting the generality of the foregoing, between
July 1, 1998 and the Closing, Seller shall spend on a consolidated basis in
connection with the objectives referenced in Section 6.08 of the Cemax-Icon
Merger Agreement an amount equal to the product of (a) $20,000,000 and (b)
the number of days from and including July 1, 1998 to and including the
Closing Date divided by 365.
(ii) During the period from the Closing until June 30, 1998,
Purchaser shall comply with the obligations of Seller set forth in 6.08 of
the Cemax-Icon Merger Agreement. Without limiting the generality of the
foregoing, between the Closing and June 30, 1999, Purchaser shall spend on
a consolidated basis in connection with the objectives referenced in
Section 6.08 of the Cemax-Icon Merger Agreement an amount equal to the
product of (a) $20,000,000 and (b) the number of days from but excluding
the Closing Date to and including June 30, 1999 divided by 365.
(c) If at any time Dominion Fund IV or any other holder of
Cemax-Icon's Senior Subordinated Convertible
Promissory Note dated October 30, 1996 (or any portion thereof), shall
exercise its right to convert any portion of such Note into Warrants
pursuant thereto, Purchaser shall on the date of any such conversion pay to
Seller, to an account designated in writing by Seller, an amount in cash in
U.S. dollars equal to the then outstanding principal amount, accrued
interest and other amounts owed with respect to the applicable portion of
such Note so converted. For purposes of this paragraph (c), all capitalized
terms used herein but not defined herein shall have the respective meanings
assigned to such terms in such Note or in any of the related agreements
described in item 1 of Schedule 3.09(b).
SECTION 6.20. Pine City Relocation. On or prior to Closing,
Seller shall, or shall cause the Seller Subs to, relocate the Inventories
related to the refurbishing of used laser components and screen and
cassette businesses located at the Seller's Pine City, Minnesota facility
to the Seller's Columbia, Minnesota or White City, Oregon facility.
SECTION 6.21. Negotiation of Transition Services Agreement and
Shared Facilities Agreement. Seller and Purchaser mutually agree to
negotiate in good faith toward the execution on or prior to the Closing
Date of a definitive Transition Services Agreement and a definitive Shared
Facilities Agreement on substantially the terms set forth in Exhibits C and
D, respectively.
SECTION 6.22. Insurance Proceeds. Seller shall, or shall cause
the appropriate Seller Sub to, use their respective reasonable commercial
efforts to seek any insurance proceeds to the extent covered by third-party
insurance policies with respect to events or occurrences prior to Closing
(other than insurance proceeds related to Pre-Closing Environmental
Liabilities) that have destroyed or damaged or otherwise reduced the value
of any Acquired Assets having an aggregate fair market value of at least
$2,000,000 and to promptly pay over to Purchaser any such proceeds to the
extent paid to Seller or a Seller Sub.
SECTION 6.23. CB Coater. From the date of this Agreement to the
Closing Date, Seller shall use its reasonable commercial efforts to
identify, contact, solicit indications of interest from and conduct
negotiations with third parties regarding supply contracts between Seller
and such third parties pursuant to which such third parties would purchase
coated products manufactured on the CB coater located at Seller's White
City, Oregon facility following consummation of the Acquisition.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation. The
obligation of the parties hereto to consummate the Acquisition are subject
to the satisfaction or waiver on or prior to the Closing of the following
conditions:
(a) Governmental Approvals. All material filings and approvals
set forth on Schedules 3.03(b) shall have been made or obtained, and all
relevant waiting periods under U.S. Antitrust Laws and Non-U.S. Competition
Laws if applicable to the consummation of the Acquisition, shall have
expired or been earlier terminated and any Governmental Entity that has
power under or authority to enforce such Laws, shall have approved, cleared
or decided not to intervene in respect of the Acquisition to the extent
such approval, clearance or decision is required to effect the Acquisition.
(b) No Proceedings. (i) No Governmental Entity shall have
entered, enacted, issued, enforced or promulgated any Law or Judgment that
would prohibit the Acquisition and (ii) no Proceeding for such a Law or
Judgment that could have the effect set forth in subclause (i) of this
clause (b) shall have been instituted (x) by any Governmental Entity, (y)
by any person with respect to any nonfrivolous Proceeding that seeks relief
under U.S. Antitrust Laws or Non-U.S. Competition Laws or (z) by any person
with respect to any Proceeding that is reasonably likely to succeed on the
merits.
(c) Settlement Agreement. The Settlement Agreement shall remain
in full force and effect and shall not have been modified, amended or
terminated.
(d) Intellectual Property Agreements. The Intellectual Property
Agreements shall remain in full force and effect and shall not have been
modified, amended or terminated.
(e) Supply Agreements. The Supply Agreements shall remain in full
force and effect and shall not have been modified, amended or terminated
(it being agreed that Seller's inability to perform under the X-ray/Wet
Laser Supply Agreement as a result of any disruption (in workforce,
production or otherwise) at the Ferrania Facility shall not constitute
Seller's failure to comply with this closing condition).
(f) License Agreement. The License Agreement shall remain in full
force and effect and shall not have been modified, amended or terminated.
SECTION 7.02. Conditions to Obligation of Purchaser. The
obligation of Purchaser to consummate the Acquisition is subject to the
satisfaction (or waiver by Purchaser) on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller in this Agreement and the other Transaction Documents
that are qualified as to materiality shall be true and correct, and those
not so qualified shall be true and correct in all material respects, as of
the date hereof and the Closing Date as though made on the Closing Date,
except (i) the extent such representations and warranties expressly relate
to an earlier date (in which case such representations and warranties shall
be true and correct in all material respects, on and as of such earlier
date) and (ii) that, for purposes of determining whether the
representations and warranties set forth in Section 3.04(c) and in the last
sentence of Section 3.15, respectively, shall be true and correct, as of
the date hereof and the Closing Date as though made on the Closing Date,
the $10,000,000 amount set forth in Section 3.04(c) and the $5,000,000
amount set forth in Section 3.15 each shall be deemed to be $20,000,000.
Purchaser shall have received a certificate dated the Closing Date and
signed by an authorized officer of Seller to such effect.
(b) Performance of Obligations of Seller and Seller Subs. Each of
Seller and Seller Subs shall have performed or complied in all material
respects with all obligations and covenants required by this Agreement and
under the Letter Agreement dated as of the date hereof between Seller and
Purchaser to be performed or complied with by Seller by the time of the
Closing, and Purchaser shall have received a certificate dated the Closing
Date and signed by an authorized officer of Seller to such effect.
(c) Opinions of Seller's Counsel. Purchaser shall have received
opinions each dated the date of this Agreement and the Closing Date of
Cravath, Swaine & Moore, Richards, ▇▇▇▇▇▇ & Finger, and Seller's General
Counsel, substantially in the forms of Exhibits ▇-▇, ▇-▇, and A-3,
respectively.
(d) Consents. There shall have been obtained (i) all Consents
listed on Schedule 7.02(d) and (ii) any other Consent from any third party
if (x) such Consent is
not listed on Schedule 3.03(a) or 3.03(b) and (y) the failure to obtain
such Consent has had or is reasonably likely to have a Seller Material
Adverse Effect.
(e) Local Asset Purchase Agreements. Seller shall have executed
and delivered, or shall have caused its relevant subsidiaries to execute
and deliver, any Local Asset Purchase Agreements that Seller and Purchaser
have agreed to execute and deliver.
(f) Transition Services Agreements. Seller shall have executed
and delivered the Transition Services Agreement.
(g) Shared Facilities Agreement. Seller shall have executed and
delivered the Shared Facilities Agreement.
(h) Release of Liens. Seller shall have taken, or cause to be
taken, all steps necessary to effect a release of the Liens on the Acquired
Assets under the Bank Credit Agreements, including delivery of lien
releases in form and substance reasonably satisfactory to Purchaser's
counsel, including Forms UCC-3.
(i) FIRPTA Certificate. Seller and each Seller Sub shall have
executed and delivered a certificate to Purchaser certifying under
penalties of perjury that such person is not a foreign person, in the form
required by Treas. Regs. ss.1.1445-2(b)(2)(iii), or certifying that such
person is not transferring beneficial ownership of any asset that
constitutes a "United States real property interest" within the meaning of
Section 897 of the Code.
(j) No Material Impairment. No Governmental Entity shall have
entered, enacted, issued, enforced or promulgated any Law or Judgment that
would result in a Material Impairment.
SECTION 7.03. Conditions to Obligation of Seller and Seller Subs.
The obligation of Seller and the Seller Subs to consummate the Acquisition
is subject to the satisfaction (or waiver by Seller) on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Purchaser made in this Agreement and the other Transaction
Document that are qualified as to materiality shall be true and correct,
and those not so qualified shall be true and correct in all material
respects, as of the date hereof and the Closing Date as though made on the
Closing Date. Seller shall have
received a certificate dated the Closing Date and signed by an authorized
officer of Purchaser to such effect.
(b) Performance of Obligations of Purchaser. Purchaser shall have
performed or complied in all material respects with all obligations and
covenants required by this Agreement to be performed or complied with by
Purchaser by the time of the Closing, and Seller shall have received a
certificate signed by an authorized officer of Purchaser to such effect.
(c) Opinions of Purchaser's Counsel. Seller shall have received
opinions dated the Closing Date of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and Purchaser's
General Counsel substantially in the forms of Exhibits B-1 and B-2.
(d) Local Asset Purchase Agreements. Purchaser shall have
executed and delivered, or shall have caused its relevant subsidiaries to
execute and deliver, any Local Asset Purchase Agreements that Purchaser and
Seller have agreed to execute and deliver.
(e) Transition Services Agreements. Purchaser shall have executed
and delivered the Transitional Services Agreement.
(f) Shared Facilities Agreement. Purchaser shall have executed
and delivered the Shared Facilities Agreement.
SECTION 7.04. Frustration of Closing Conditions. Neither
Purchaser nor Seller may rely on the failure of any condition set forth in
this Article VII to be satisfied if such failure was caused by such party's
failure to act in good faith or to use such efforts to cause the Closing to
occur, as required by Section 6.05 or Section 6.06.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. (a) Notwithstanding anything to the
contrary in this Agreement, this Agreement may be terminated and the
Acquisition and the other transactions contemplated by this Agreement
abandoned at any time prior to the Closing:
(i) by mutual written consent of Seller and Purchaser;
(ii) by Seller if any of the conditions set forth in Sections
7.01 or 7.03 shall have become incapable of fulfillment, and shall not
have been waived by Seller;
(iii) by Purchaser if any of the conditions set forth in Sections
7.01 or 7.02 shall have become incapable of fulfillment, and shall not
have been waived by Purchaser; provided that if required by Section
6.07(b) Purchaser shall have fully paid the Expenses pursuant thereto;
or
(iv) by Seller or Purchaser if the Closing does not occur on or
prior to the first anniversary of the date of this Agreement; or
(v) by Seller or Purchaser if there shall be in effect any
preliminary Judgment (on antitrust grounds), any non-appealable
Judgment (on other than antitrust grounds) or any Law that prohibits
the Acquisition;
provided, however, that the party seeking termination pursuant to clause
(ii), (iii), (iv) or (v) is not then in breach of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
(b) In the event of termination by Seller or Purchaser pursuant
to this Section 8.01, written notice thereof shall forthwith be given to
the other and the transactions contemplated by this Agreement shall be
terminated, without further action by any party. If the transactions
contemplated by this Agreement are terminated as provided herein:
(i) at Seller's request, Purchaser shall return all documents and
other material received from Seller, any Seller Sub or Cemax-Icon
relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to Seller; and
(ii) all confidential information received by Purchaser with
respect to the businesses of Seller, any Seller Sub or Cemax-Icon
shall be treated in accordance with the Confidentiality Agreement,
which shall remain in full force and effect notwithstanding the
termination of this Agreement.
SECTION 8.02. Effect of Termination. (a) If this Agreement is
terminated and the transactions contemplated hereby are abandoned as
described in Section 8.01, this Agreement shall become null and void and of
no further force and effect, except for the provisions of (i) Section 6.04
relating to the obligation of Purchaser to
keep confidential certain information and data obtained by it from Seller
or any Seller Sub, (ii) Section 6.07 relating to the Expenses and certain
other expenses, (iii) Section 6.08 relating to finder's fees and broker's
fees, (iv) Section 8.01 and this Section 8.02, (v) Section 6.11 relating to
publicity and (vi) Article XI to the extent applicable to the provisions in
clauses (i) through (v) of this Section 8.02.
(b) Nothing in this Section 8.02 shall be deemed to release any
party from any liability for any breach by such party of the terms and
provisions of this Agreement or to impair the right of any party to compel
specific performance by any other party of its obligations under this
Agreement.
SECTION 8.03. Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing Purchaser, on the one hand, or
Seller, on the other hand, may waive compliance by the other party with any
term or provision of this Agreement that such other party was or is
obligated to comply with or perform. Except as otherwise expressly provided
in this Agreement, no failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
Except as otherwise expressly provided herein, the rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by Law or equity.
ARTICLE IX
Indemnification
SECTION 9.01. Indemnification by Seller. (a) From and after the
Closing, Seller shall indemnify Purchaser and its affiliates (including
Cemax-Icon) and each of their respective officers, directors, employees,
stockholders, agents and representatives (each, a "Purchaser Indemnified
Party") against, and hold them harmless from, against and in respect of any
loss, liability, claim, damage, charge, cost or expense (including
reasonable legal fees and expenses) ("Losses"), imposed on, sustained,
incurred or suffered by any Purchaser Indemnified Party
(payable promptly upon written request), to the extent relating to, arising
out of or resulting from:
(i) any breach of any representation or warranty of Seller that
survives the Closing and is contained in this Agreement or in the
certificates delivered pursuant to Section 7.02(a) or (b) hereto or in
any other certificate delivered pursuant hereto;
(ii) any breach of any covenant of Seller contained in this
Agreement (other than any covenant contained in Section 1.06);
(iii) any Excluded Liability;
(iv) any Pre-Closing Environmental Liability. The term
"Pre-Closing Environmental Liability" means any Loss relating to any
Environmental Law (in effect as of the Closing) to the extent arising
out of acts or omissions occurring, or conditions existing (whether
known or unknown), at or before the Closing in connection with the
ownership or operation of the Businesses at any time at or before the
Closing, including before the Spin-Off Date, whether such Loss arises
before or after the Closing and whether arising on-site or off-site,
including all Losses in connection with (A) bringing the Businesses or
the Acquired Assets into compliance with Environmental Laws (in effect
as of the Closing), (B) Seller's involvement at the White City
facility in the Oregon State voluntary cleanup program and (C) the
former wastewater retention basin at the White City facility;
provided, however, that such Pre-Closing Environmental Liability shall
not include (1) any costs of investigation of the environmental
quality, condition or environmental compliance status of the
Businesses (other than the Excluded Assets) or the Acquired Assets,
except for such investigations that are in response to (x) a written
request or demand by a Governmental Entity having jurisdiction over
the matter, (y)(i) any Proceeding brought under a citizen's suit
provision of any Environmental Law to the extent it is alleged in such
Proceeding that the Businesses or the Acquired Assets were not in
compliance with Environmental Law at any time prior to the Closing
Date or (ii) any notice or written communication by a third party to
the extent alleging personal injury or property damage from an alleged
release of or exposure to any Hazardous Substance arising from the
operation of the Businesses prior to the Closing Date or any condition
existing with respect to the Acquired Assets as of the Closing Date
(but only to the extent such Losses are reasonably
required in connection with the investigation or remediation of a
release directly related to a notice or written communication that
might reasonably be expected to result in a Proceeding), or (z)
investigations that are required pursuant to Environmental Law, (2)
any costs that are unreasonable and inconsistent with industrial use
of the applicable property as of the Closing and are not required to
bring the Businesses (other than the Excluded Assets) into compliance
with Environmental Law or the requirements of the Governmental Entity
having jurisdiction over the matter (in either case, as such may be in
effect as of the Closing), or (3) any Losses related to a change in
the Businesses (other than the Excluded Assets) after the Closing,
including the expansion of operations in excess of production levels
as of the Closing, modification or reconfiguration of any process
units or the cessation of all or part of the operations of the
Businesses (other than the Excluded Assets), except to the extent such
Losses relate to soil, sediment or groundwater contamination in
existence as of the Closing; and
(v) any fees, expenses or other payments incurred or owed by
Seller to any brokers, financial advisors or other comparable persons
retained or employed by it in connection with the transactions
contemplated by this Agreement or any Transaction Document; and
(vi) the termination of any Ferrania Employee.
(b) Seller shall not be required to indemnify any person, and
shall not have any liability:
(i) under clauses (i) and (ii) of Section 9.01(a) (other than the
representation and warranty set forth in the second sentence of
Section 3.02) unless the aggregate of all Losses for which Seller
would, but for this clause (i), be liable exceeds on a cumulative
basis an amount equal to $5,000,000, and then only to the extent of
any such excess;
(ii) under clauses (i) and (ii) of Section 9.01(a) (other than
the representation and warranty set forth in the second sentence of
Section 3.02) for any individual occurrence, event, circumstance, act
or omission where the Loss relating thereto, arising out thereof or
resulting therefrom is less than $20,000 and such Losses shall not be
aggregated for purposes of clause (i) of this Section 9.01(b) (it
being agreed, however, that the dollar value of Losses relating to,
arising out of or resulting from "individual"
occurrences, events, circumstances, acts or omissions that relate to,
arise out of or result from the same set of facts will be aggregated
for purposes of this clause (ii) of this Section 9.01(b));
(iii) under clauses (i) and (ii) of Section 9.01(a) for any
breach to the extent Section 7.04 is applicable to such breach;
(iv) under clauses (i) and (ii) of Section 9.01(a) (other than
the representation and warranty set forth in the second sentence of
Section 3.02) in excess of $150,000,000 of direct indemnity payments
from Seller to the Purchaser Indemnified Parties; provided that to the
extent the amount of any Loss for which indemnification is provided
under clause (i) or (ii) of Section 9.01(a), (x) is directly paid by
Seller to Purchaser and (y) is recovered by Seller under any Seller
Existing CGL Policy, such amount shall be excluded from the
calculation of the $150,000,000 limitation on direct payments set
forth in this clause (iv);
(v) under clauses (i) and (ii) of Section 9.01(a) (other than the
representation and warranty set forth in the second sentence of
Section 3.02) in excess of $300,000,000 of payments received by the
Purchaser Indemnified Parties with respect to Losses for which
indemnification is provided thereunder (1) from direct indemnity
payments by Seller to any of them plus (2) insurance proceeds payments
to Purchaser or any of its affiliates or any of its respective
officers, directors, employees, stockholders, agents or
representatives under Seller Existing CGL Policies; and
(vi) under Section 9.01(a) to the extent the liability or
obligation arises as a result of any wilful or intentional breach by
Purchaser or any of its affiliates (including any of their respective
directors, officers, employees, agents and representatives) prior to
the Closing of any of their respective obligations under the
Confidentiality Agreement, the Exclusivity Agreement dated April 25,
1998, as amended from time to time, this Agreement or any other
Transaction Document.
(c) Purchaser shall have the right to make claims under Seller
Existing CGL Policies with respect to which
Purchaser is an additional insured party (each, a "Purchaser Claim") only
in the following circumstances:
(i) prior to making any Purchaser Claim, Purchaser shall provide
Seller with at least 30-day prior written notice of Purchaser's intent
to make a Purchaser Claim ("Purchaser Notice");
(ii) such Purchaser Claim shall relate solely to Losses to the
extent related to, arising out of or resulting from occurrences,
events, circumstances, acts or omissions prior to Closing, to the
extent covered by the applicable Existing Seller CGL Policy;
(iii) such Purchaser Claim shall relate solely to Losses related
to product liability claims (as defined in the Applicable Seller CGL
Policy) to the extent covered by the applicable Existing Seller CGL
Policy;
(iv) such Purchaser Claim shall be made solely in respect of any
Loss for which indemnification is provided under subclause (i) of
clause (a) of Section 9.01; and
(v) such Purchaser Claim shall be subject to the limitations set
forth in clause (b) of Section 9.01 and all limitations otherwise set
forth in any other provision of this Article IX.
(d) In connection with any claim for indemnification by Purchaser
for which Purchaser intends to make a Purchaser Claim under any Seller
Existing CGL Policy on its behalf or, if permitted by the applicable Seller
Existing CGL Policy, on behalf of the relevant Purchaser Indemnified Party,
Purchaser shall include in its Purchaser Notice a reasonable detailed
description of the Purchaser Claim, together with a statement that
Purchaser intends to make such claim together with certification that such
Purchaser Claim satisfies the conditions set forth in subclauses (ii),
(iii), (iv) and (v) of clause (c) of this Section 9.01. Within 30 days
following Seller's receipt of the Purchaser Notice, Seller shall either (1)
notify Purchaser that Seller agrees that such proposed Purchaser Claim
satisfies the conditions set forth in subclauses (ii), (iii), (iv) and (v)
of clause (c) of this Section 9.01, and that Purchaser may proceed to file
the Purchaser Claim under the applicable Seller Existing CGL Policies or
(2) notify Purchaser that Seller believes that such proposed Purchaser
Claim does not satisfy one or more of the conditions set forth in
subclauses (ii), (iii), (iv) and (v) of clause (c) of this Section 9.01,
and Seller shall describe in reasonable detail its reasons therefor. If
Seller notifies
Purchaser that Seller believes that such proposed Purchaser Claim does not
satisfy one or more of the conditions set forth in subclauses (ii), (iii),
(iv) and (v) of clause (c) of this Section 9.01, Seller and Purchaser shall
proceed expeditiously to resolve such disagreement in accordance with
Section 11.08. If following completion of the procedures set forth in
subclauses (1) and (2) of this clause (d), Purchaser files the applicable
Purchaser Claim under the applicable Seller Existing CGL Policies and is
unable to recover the full amount of such Purchaser Claim due to (x)
exhaustion of the coverage limits under such Policies or (y) denial of the
Purchaser Claim by the relevant insurers on the basis that the Purchaser
Claim was time barred under the applicable Seller Existing CGL Policies
(provided, however, that such denial was not based on the fact that
Purchaser has filed the Purchaser Claim outside the required period under
the applicable Seller Existing CGL Policy) then Seller shall pay directly
to Purchaser any Losses in an amount equal to the lesser of (x) the portion
of the Purchaser Claim not paid by the insurers because of the exhaustion
of coverage limits or, subject to the proviso above, the application of
such time bar and (y) the aggregate amount paid under the relevant Seller
Existing CGL Policies to or for the benefit of Seller with respect to
claims filed by any person after the date on which Seller shall have
received the Purchaser Notice (less all amounts otherwise payable by Seller
to Purchaser pursuant to this subclause (y), which has previously been paid
by Seller to Purchaser with respect to any other Purchaser Claims filed by
Purchaser). Any direct payment from Seller to Purchaser made pursuant to
the immediately preceding sentence shall not be counted towards the
$150,000,000 limitation on direct payments set forth in the first clause of
subclause (iv) of clause (b) of Section 9.01, but such direct payment shall
be counted towards the $300,000,000 limitation set forth in subclause (v)
of clause (b) of Section 9.01.
(e) Purchaser shall have the right to seek payment of any Loss
for which indemnification is provided under subclause (i) of clause (a) of
Section 9.01 directly from Seller, subject to the limitations set forth in
clause (b) of Section 9.01, for any portion of Purchaser Claims not
satisfied by the applicable insurers or Seller's payment to Purchaser
pursuant to the penultimate sentence of clause (d) of this Section 9.01.
(f) Seller shall cooperate with Purchaser with respect to any
Purchaser Claim properly made by Purchaser under any other Existing CGL
Policy.
(g) Except as otherwise specifically provided in this Agreement
or in the Conveyance Documents, Purchaser acknowledges that its sole and
exclusive remedy after the Closing with respect to any and all claims
relating to this Agreement and the Conveyance Documents, the Acquisition
and the other transactions contemplated hereby and thereby, the Businesses,
the Acquired Assets, the Assumed Liabilities and the Excluded Liabilities
(other than claims of, or causes of action arising from, fraud or wilful
breach) shall be pursuant to the indemnification provisions set forth in
this Article IX; provided, however, that the only remedy provided for any
and all claims arising under Section 1.06 is provided in Section 1.06. In
furtherance of the foregoing, Purchaser hereby waives, from and after the
Closing, any and all rights, claims and causes of action (other than claims
of, or causes of action arising from, fraud or wilful breach) it may have
against Seller arising under or based upon any Law (including any relating
to environmental matters) or arising under or based upon common law or
otherwise (except pursuant to the indemnification provisions set forth in
this Section 9.01).
SECTION 9.02. Indemnification by Purchaser. From and after the
Closing, Purchaser shall indemnify Seller and its affiliates and each of
their respective officers, directors, employees, stockholders, agents and
representatives (each, a "Seller Indemnified Party") against, and hold them
harmless from, against and in respect of any Loss, imposed on, sustained,
incurred or suffered by any Seller Indemnified Party (payable promptly upon
written request), to the extent arising out of or resulting from:
(i) any breach of any representation or warranty of Purchaser
contained in this Agreement or in the certificates delivered pursuant
to Section 7.03(a) or (b) hereto or in any other certificate delivered
pursuant hereto;
(ii) any breach of any covenant of Purchaser contained in this
Agreement;
(iii) any Assumed Liability or any liability of Cemax-Icon
(except for any Pre-Closing Environmental Liability or any liability
that is an Excluded Tax);
(iv) any fees, expenses or other payments incurred or owed by
Purchaser to any brokers, financial advisors or other comparable
persons retained or employed by it in connection with the transactions
contemplated by this Agreement or any other Transaction Document;
(v) for any severance obligations other than those obligations
that are considered Excluded Liabilities arising out of any claims or
actions brought by any U.S. Transferred Employees that are (a) based
upon a constructive termination theory in connection with the amount
of compensation and pension and other benefit paid or made available
by Purchaser to such U.S. Transferred Employees or (b) attributable to
Purchaser's failure to offer employment to a U.S. Eligible Employee on
terms consistent with Section 6.09;
(vi) all severance obligations mandated by local law or
collective bargaining agreements with respect to Foreign Eligible
Employees that are incurred as a result of (i) events occurring after
a Foreign Eligible Employee accepts Purchaser's offer of employment,
(ii) Purchaser's request that a Foreign Eligible Employee relocate to
a Purchaser facility that is (X) outside such Foreign Eligible
Employee's current country of employment or (Y) is not a current
Purchaser facility or (iii) Purchaser's failure to offer employment to
a Foreign Eligible Employee on terms consistent with this Agreement;
(vii) 50% of all severance obligations mandated by local law or
collective bargaining agreements with respect to Foreign Eligible
Employees who decline an offer of employment by Purchaser that is
consistent with Section 6.09(b); provided that Purchaser shall not be
responsible for any such mandatory severance obligations (i) that
arise as a result of the transactions contemplated by this Agreement
for any reason other than those enumerated in this Section 9.02 or
(ii) with respect to any customer service and support employees to
whom Purchaser has made such an offer of employment (which offer was
declined) if Purchaser in fact hires 406 customer service and support
employees as contemplated by clauses (iii) of Section 6.09(a). Seller
and Purchaser agree to cooperate in good faith to minimize any
severance liabilities mandated by local law or collective bargaining
agreement related to the Foreign Eligible Employees; or
(viii) all liabilities of Seller with respect to the 1998 Payment
and the 1999 Payment as set forth in Section 2.03.
SECTION 9.03. Calculation of Losses; No Punitive Damages, etc.
(a) The amount of any Loss for which indemnification is provided under this
Article IX shall be
net of any amounts actually recovered by the indemnified party under
insurance policies with respect to such Loss (which amounts, however, shall
be subject to subrogation by the indemnified party's insurer) and shall be
(i) increased to take account of any net Tax cost incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net
Tax benefit realized by the indemnified party arising from the incurrence
or payment of any such Loss. In computing the amount of any such Tax cost
or Tax benefit, the indemnified party shall be deemed to recognize all
other items of income, gain, loss deduction or credit before recognizing
any item arising from the receipt of any indemnity payment hereunder or the
incurrence or payment of any indemnified Loss. The amount of the Loss
arising out of any item included as a liability in calculating Closing
Working Capital shall be calculated net of the amount so included. The
amount of the Loss arising out of any reduction in value of any Current
Asset acquired at the Closing shall be calculated net of the reported value
of such Current Asset used in calculating Closing Working Capital. The term
"Current Assets" means the current assets of the Businesses, calculated in
the same way, using the same methods, as the line items on the Balance
Sheet, subject only to adjustment in accordance with Exhibit B.
(b) Notwithstanding anything to the contrary contained herein, no
indemnified party shall be entitled to indemnification from any
indemnifying party under this Article IX in respect of any punitive damages
except for indemnification for punitive damages that are recoverable Losses
and are paid by an indemnified party to a third party; provided, however,
that this Section 9.03(b) shall not be interpreted to limit the provisions
of Section 9.01(g) with respect to claims or causes of action resulting
from fraud or wilful breach.
SECTION 9.04. Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (i) pursuant to Section 9.01(a)(i)
or 9.02(i), shall terminate when the applicable representation or warranty
terminates pursuant to Section 9.07, (ii) pursuant to Section 9.01(a)(iv),
shall terminate on the close of business on the tenth anniversary of the
Closing Date and (iii) pursuant to the other clauses of Sections 9.01 and
9.02 shall not terminate; provided, however, that such obligations to
indemnify and hold harmless shall not terminate with respect to any item as
to which the person to be indemnified shall have, before the expiration of
the applicable period, previously made a claim by delivering a notice of
such claim (in accordance with the terms of
Section 9.05) to the party to be providing the indemnification.
SECTION 9.05. Procedures Relating to Indemnification. (a) In
order for a party (the "indemnified party"), to be entitled to any
indemnification provided for under this Agreement in respect of, arising
out of or involving a claim made by any person against the indemnified
party (other than a Tax Claim) (a "Third Party Claim"), such indemnified
party must notify the indemnifying party in writing (and in reasonable
detail) of the Third Party Claim promptly (but in no event more than 30
days) following receipt by such indemnified party of notice of the Third
Party Claim. The failure by any indemnified party so to notify the
indemnifying party shall not relieve the indemnifying party from any
liability that it may have to such indemnified party under Section 9.01 or
9.02, except to the extent that the indemnifying party demonstrates that it
has been actually prejudiced by such failure. Thereafter, the indemnified
party shall deliver to the indemnifying party, promptly following the
indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the
Third Party Claim.
(b) If a Third Party Claim is made against an indemnified party,
the indemnifying party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the indemnifying party; provided, however, that such counsel is
not reasonably objected to by the indemnified party. Should the
indemnifying party so elect to assume the defense of a Third Party Claim,
the indemnifying party shall not be liable to the indemnified party for any
legal expenses subsequently incurred by the indemnified party in connection
with the defense thereof. If the indemnifying party assumes such defense,
the indemnified party shall have the right to participate in the defense
thereof and to employ counsel (not reasonably objected to by the
indemnifying party) at its own expense separate from the counsel employed
by the indemnifying party (it being understood that the indemnifying party
shall control such defense). The indemnifying party shall be liable for and
shall reimburse the indemnified party for all costs, fees and expenses
(including the fees and expenses of counsel employed by the indemnified
party) for any period during which the indemnifying party has not assumed
the defense thereof (other than during any period in which the indemnified
party shall have failed to give notice of the Third Party Claim as provided
above). If the indemnifying party chooses to defend or prosecute a Third
Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution
thereof. Such cooperation shall include the retention and (upon the
indemnifying party's request) the provision to the indemnifying party of
records and information that are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis during
normal business hours to provide additional information and explanation of
any material provided hereunder. Whether or not the indemnifying party
assumes the defense of a Third Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge,
such Third Party Claim without the indemnifying party's prior written
consent (which consent shall not be unreasonably withheld). Whether or not
the indemnifying party assumes the defense of a Third Party Claim, the
indemnifying party shall not, without the indemnified party's prior written
consent, admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim on a basis that would result in (i) the
imposition of a Judgment that would restrict the future activity or conduct
of the indemnified party or any subsidiary or affiliate thereof, or (ii)
any monetary liability of the indemnified party that will not be paid or
reimbursed by the indemnifying party.
(c) Other Claims. In the event any indemnified party should have
a claim against any indemnifying party under Section 9.01 or 9.02 that does
not involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver
notice of such claim promptly (but in no event more than 30 days) following
discovery by the indemnified party of such claim to the indemnifying party.
The failure by any indemnified party so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may
have to such indemnified party under Section 9.01 or 9.02, except to the
extent that the indemnifying party demonstrates that it has been prejudiced
by such failure. If the indemnifying party does not notify the indemnified
party within 30 calendar days following its receipt of such notice that the
indemnifying party disputes its liability to the indemnified party under
Section 9.01 or 9.02, such claim specified by the indemnified party in such
notice shall be conclusively deemed a liability of the indemnifying party
under Section 9.01 or 9.02 and the indemnifying party shall pay the amount
of such liability to the indemnified party on demand or, in the case of any
notice in which the amount of the claim (or any portion thereof) is
estimated, on such later date when the amount of such claim (or such
portion thereof) becomes finally determined. If the indemnifying party has
timely disputed its liability with respect to such claim, as provided
above, the indemnifying party and the
indemnified party shall proceed in good faith to resolve such dispute in
accordance with Section 11.09 hereof.
(d) Environmental Claims. (i) Without limiting the other
provisions of this Section 9.05, if Purchaser has a claim against Seller
for a Pre-Closing Environmental Liability, Seller shall have the right but
not the obligation to manage any investigation, remediation, corrective
action or other activities ("Remedial Action") required to address the
conditions giving rise to such claim. If Seller elects to manage any
Remedial Action, Seller shall (A) provide Purchaser the opportunity to
review in advance such Remedial Action to be taken or implemented and the
form and substance of any plan, report or submission to be transmitted to
any Governmental Entity regarding such Remedial Action, and (B) provide
Purchaser quarterly (or more frequently if reasonably requested by
Purchaser) written reports regarding the status of such Remedial Action,
including any correspondence with any Governmental Entity regarding such
Remedial Action. Seller and Purchaser shall negotiate in good faith to
reach an agreement as to the scope of work regarding any Remedial Action.
If Seller and Purchaser cannot agree as to such scope of work and the cost
of implementing Purchaser's desired Remedial Action is in excess of that of
Seller's desired Remedial Action, Seller shall implement Purchaser's
desired Remedial Action; provided, however, that Seller's liability
therefor shall be limited to the amount necessary to undertake and
implement Seller's desired Remedial Action; provided, however, that
Seller's Remedial Action does not materially impair the operation of the
Businesses or value of the Acquired Assets; provided, further, however,
that Remedial Actions involving reasonable engineering controls,
institutional controls or site use restrictions shall not be considered
material impairments of value (such amount, "Seller's Remedial Cost") and
Purchaser shall be liable for any and all amounts in excess of Seller's
Remedial Cost. Seller's Remedial Cost shall be determined by submitting
requests for proposals and cost estimates based upon the scope of work for
Seller's desired Remedial Action to three nationally recognized
environmental remediation consultants/contractors (as reasonably selected
by the Seller); Seller's Remedial Cost shall be the least cost alternative
based upon such competitive bidding procedure.
(ii) Purchaser and Seller shall maintain as confidential, except
as otherwise required by Law, any non- public information exchanged or
obtained in connection with any Remedial Action. Each party shall retain
and, upon the other party's request, provide the requesting party any
records and information which are reasonably relevant to such Remedial
Action. Purchaser shall provide Seller,
during normal business hours and upon prior request, reasonable access to
any area on the Acquired Assets related to any such Remedial Action and to
employees of Purchaser to provide additional information and explanation of
any material provided hereunder.
(iii) Any Remedial Action undertaken by Seller hereunder shall
not materially interfere with the operation of the Businesses by Purchaser
and shall not materially impair the operation or value of the Acquired
Assets; provided, however, that Remedial Actions involving reasonable
engineering controls, institutional controls or site use restrictions shall
not be considered material impairments of value. Seller hereby indemnifies
and holds Purchaser harmless against any Losses associated with, resulting
from or arising out of the undertaking of any Remedial Action that Seller
controls or manages pursuant to this Section 9.05(d) including any Losses
arising out of Seller's access to or activities involving any Acquired
Asset in connection therewith.
(iv) If Seller does not elect to manage a Remedial Action,
Purchaser shall assume such obligation. Thereafter, Purchaser shall (A)
provide Seller the opportunity to approve (which approval shall not be
unreasonably withheld or delayed) in advance such Remedial Action to be
taken or implemented and the form and substance of any plan, report or
submission to be transmitted to any Governmental Entity regarding such
Remedial Action, and (B) provide Seller quarterly (or more frequently if
reasonably requested by Seller) written reports regarding the status of
such Remedial Action, including a reasonably detailed accounting of
expenditures related to such Remedial Action and any correspondence with
any Governmental Entity regarding such Remedial Action.
(e) Detailed Notice. Any claim for indemnification under this
Agreement shall describe the claim in reasonable detail, include copies of
any available material written evidence thereof and indicate the estimated
amount of such claim and, in the case of a claim related to an
environmental matter, shall include details regarding the precise nature
and scope of the Loss together with any technical information such as
sampling or testing results.
(f) Mitigation. Purchaser and Seller shall cooperate with each
other with respect to resolving any claim or liability with respect to
which one party is obligated to indemnify the other party hereunder,
including by making commercially reasonable efforts to mitigate or resolve
any such claim or liability after such party becomes aware of such claim or
liability. In the event that an
indemnified party shall fail to make such commercially reasonable efforts
to mitigate or resolve any claim or liability after such party becomes
aware of such claim or liability then notwithstanding anything else to the
contrary contained herein, the indemnifying party shall not be required to
indemnify any person for any Loss that could reasonably be expected to have
been avoided if the indemnified party had made such efforts.
SECTION 9.06. Procedures Relating to Tax Indemnification. (a) If
Purchaser receives notification of a claim being made by any Taxing
Authority, which, if successful, might result in an indemnity payment to a
Purchaser Indemnified Party pursuant to Section 9.01, Purchaser shall
promptly notify Seller in writing of such claim (a "Tax Claim"). If after
Purchaser receives notification of a Tax Claim, notice of such Tax Claim is
not given to Seller within a sufficient period of time to allow Seller to
effectively contest such Tax Claim, or in reasonable detail to apprise
Seller of the nature of the Tax Claim, in each case taking into account the
facts and circumstances with respect to such Tax Claim, Seller shall not be
liable to Purchaser, any of its affiliates or any of their respective
officers, directors, employees, stockholders, agents or representatives to
the extent that Seller's position is actually prejudiced as a result
thereof. If Seller receives notification of a Tax Claim, Seller shall
promptly notify Purchaser of such claim.
(b) With respect to any Tax Claim (other than a Tax Claim
relating solely to Taxes of Cemax-Icon for a Straddle Period or a
Post-Closing Tax Period), Seller shall control all proceedings taken in
connection with such Tax Claim (including selection of counsel) and,
without limiting the foregoing, may in its sole discretion pursue or forego
any and all administrative appeals, proceedings, hearings and conferences
with any Taxing Authority with respect thereto, and may, in its sole
discretion, either pay the Tax claimed and ▇▇▇ for a refund where
applicable law permits such refund suits or contest the Tax Claim in any
permissible manner; provided, however, that, in the case of a Tax Claim
that relates to Cemax-Icon, with respect to each of the foregoing matters,
Seller shall keep Purchaser informed concerning all material aspects of
such proceedings, and shall pursue resolution of the Tax Claim diligently
and in good faith, taking into account Seller's obligations under Section
9.01; and provided, further, however, that, if in the case of a Tax Claim
that relates to Cemax-Icon, Purchaser reasonably determines that any of the
foregoing conditions are not satisfied, Purchaser may at its option take
complete control of the proceedings; provided, further, however, that if
Purchaser takes control of the
proceedings, Purchaser shall keep Seller informed concerning all material
aspects of such proceedings. Seller and Purchaser shall jointly control all
proceedings taken in connection with any Tax Claim relating solely to Taxes
of Cemax-Icon for a Straddle Period.
(c) Purchaser, Cemax-Icon and each of their respective affiliates
shall cooperate with Seller in contesting any Tax Claim, which cooperation
shall include the retention and (upon Seller's request) the provision to
Seller of records and information which are reasonably relevant to such Tax
Claim, and making their employees available on a mutually convenient basis
to provide additional reasonably relevant information or explanation of any
material provided hereunder or to testify at proceedings relating to such
Tax Claim.
(d) In no case shall Purchaser, Cemax-Icon or any of their
respective officers, directors, employees, stockholders, agents or
representatives settle or otherwise compromise any Tax Claim without
Seller's prior written consent. Neither party shall settle a Tax Claim to
the extent relating to Taxes of Cemax-Icon for a Straddle Period without
the other party's prior written consent.
SECTION 9.07. Survival of Representations. The representations
and warranties contained in this Agreement and in any document delivered in
connection herewith shall, subject to clauses (i) through (iii) below,
survive the Closing solely for purposes of Article IX, (i) in the case of
the representations and warranties contained in Sections 3.02, 3.09 and
3.16, they shall terminate at the close of business on the third
anniversary of the Closing Date, (ii) in the case of the representations
and warranties contained in Sections 3.14 and 3.17(b), they shall terminate
on the Closing Date and (iii) in the case of all other representations and
warranties contained in this Agreement, they shall terminate at the close
of business on the second anniversary of the Closing Date.
ARTICLE X
Tax Matters
SECTION 10.01. Preparation and Filing of Tax Returns and
Amendments. (a) For any taxable period of Cemax-Icon that includes (but
does not end on) the Closing Date, (i) Seller shall timely prepare and file
with the appropriate authorities all Tax Returns required to be filed prior
to the Closing and shall pay all Taxes due with respect to such Tax
Returns, and (ii) Purchaser shall timely
prepare and file with the appropriate authorities all Tax Returns required
to be filed after the Closing and shall pay all Taxes due with respect to
such Tax Returns; provided, however, that Purchaser shall reimburse Seller
and Seller shall reimburse Purchaser (each in accordance with the
procedures set forth in Section 9.06) for any amount owed by Purchaser or
Seller, respectively, pursuant to Section 9.01 with respect to the taxable
periods covered by such Tax Returns. To the extent such Tax Returns relate
to Cemax- Icon, the party responsible for preparing and filing such Tax
Returns shall furnish such Tax Returns to the other party for such other
party's approval (which approval shall not be unreasonably delayed or
withheld) at least 15 calendar days prior to the due date for filing such
returns.
(b) For any taxable period of Cemax-Icon that ends on or before
the Closing Date, Seller shall timely prepare and file with the appropriate
authorities all Tax Returns required to be filed, and shall pay all Taxes
due with respect to such Tax Returns; provided, however, that Seller shall
not take any position on such returns that could result in a detriment to
Purchaser or its affiliates (including Cemax-Icon after the Closing) except
to the extent such position is consistent with past practice.
(c) Purchaser and Seller agree to cause Cemax- Icon to file all
Tax Returns for the period including the Closing Date on the basis that the
relevant taxable period ended as of the close of business on the Closing
Date, unless the relevant Taxing Authority will not accept a Tax Return
filed on that basis.
(d) Notwithstanding any other provision in this Agreement, Seller
shall be responsible for filing any amended or consolidated, combined or
unitary Tax Returns for taxable years ending on or prior to the Closing
Date which are required as a result of examination adjustments made by the
relevant Taxing Authority for such taxable years as finally determined. For
those jurisdictions in which separate Tax returns are filed by Cemax-Icon,
any required amended returns resulting from such examination adjustments,
as finally determined, shall be prepared by Seller and furnished to
Cemax-Icon, for its approval (which approval shall not be unreasonably
delayed or withheld), signature and filing at least 30 days prior to the
due date for filing such Tax returns.
SECTION 10.02. Cooperation. (a) Seller, Cemax- Icon and Purchaser
shall reasonably cooperate, and shall cause their respective affiliates,
officers, employees, agents, auditors and representatives reasonably to
cooperate, including maintaining and making available to each other all
records necessary, in connection with Taxes (including in connection with
preparing and filing all Tax Returns and in resolving all disputes and
audits with respect to all taxable periods relating to Taxes). Except as
otherwise provided herein, the party requesting assistance or cooperation
shall bear the other party's out-of-pocket expenses in complying with such
request to the extent that those expenses are attributable to fees and
other costs of unaffiliated third-party service providers.
(b) Purchaser and Seller recognize that Seller and its affiliates
will need access, from time to time, after the Closing Date, to certain
accounting and Tax records and information held by Cemax-Icon to the extent
such records and information relate to the Pre-Closing Tax Periods;
therefore, subject to the following sentence, Purchaser agrees, and agrees
to cause Cemax-Icon, (i) to use their best efforts properly to retain and
maintain such records until such time as Seller reasonably agrees that such
retention and maintenance is no longer necessary and (ii) to allow Seller
and its agents and representatives (and agents or representatives of any of
its affiliates), at times and dates mutually acceptable to the parties, to
inspect, review and make copies of such records as Seller may deem
necessary or appropriate from time to time, such activities to be conducted
during normal business hours and at Seller's expense. Purchaser and Seller
recognize that after the Closing records maintained by Cemax-Icon may
contain competitive proprietary information which Purchaser will want to
keep confidential from Seller and its affiliates and, accordingly, the
parties agree to work together to provide Seller and its affiliates with
information that they reasonably require without divulging any information
that Purchaser considers competitive proprietary or confidential
information.
(c) Purchaser shall retain the books and records of Seller and
Seller Subs included in the Acquired Assets for a period of seven years
after the Closing. After the end of such seven-year period and before
disposing of such books or records, Purchaser shall give notice to such
effect to Seller and give Seller, at Seller's cost and expense, an
opportunity to remove and retain all or any part of such books or records
as Seller may select.
SECTION 10.03. Refunds and Credits. Any refunds or credits of
Taxes attributable to the Acquired Assets or of Cemax-Icon for any taxable
period ending on or before the Closing Date shall be for the account of
Seller to the extent that any such refund can be obtained or any such
credit utilized without considering income, loss or any
other item arising in any Post-Closing Tax Period of Cemax-Icon or any
taxable period of Purchaser or any other affiliate of Purchaser. Any
refunds or credits of Taxes attributable to the Acquired Assets or of
Cemax-Icon for any taxable period or portion thereof beginning after the
Closing Date shall be for the account of Purchaser. Any refunds or credits
of Taxes attributable to the Acquired Assets or of Cemax-Icon for any
Straddle Period shall be equitably apportioned between Seller and Purchaser
except that Seller shall be entitled to share only in the portion of any
such refund which can be obtained or the portion of any such credit which
can be utilized without considering income, loss or any other item arising
in any Post-Closing Tax Period of Cemax-Icon. If Seller so requests and at
Seller's expense, Purchaser shall, and shall cause Cemax- Icon to, file for
and obtain any refunds or credits to which Seller is entitled under this
Section 10.03; provided, however, that Cemax-Icon will not be required to
take any position that could result in a detriment to Purchaser or its
affiliates except to the extent such position is consistent with past
practice and Seller shall indemnify Purchaser and its affiliates for any
losses resulting from Purchaser (or Cemax-Icon) taking any position, at
Seller's request under this provision, that is not consistent with past
practice. Purchaser shall permit Seller to control the prosecution of any
such refund claim and, where deemed appropriate by Seller, shall, and shall
cause Cemax-Icon to, authorize by appropriate powers of attorney such
persons as Seller shall designate to represent Purchaser or Cemax-Icon with
respect to such refund claim; provided, however, that, with respect to each
of the foregoing matters, Seller shall keep Purchaser informed concerning
all material aspects of the prosecution of the claim and all related
proceedings and shall pursue resolution of the claim diligently and in good
faith taking into account Seller's obligations under the preceding
sentence. Purchaser shall, and shall cause Cemax- Icon to forward to Seller
any such refund within 10 days after the refund is received (or reimburse
Seller for any such credit within 10 days after the credit is allowed or
applied against other Tax liability); provided, however, that any such
amounts payable to Seller shall be net of any net Tax cost to Purchaser or
any affiliate of Purchaser including Cemax-Icon attributable to the receipt
of such refund and/or the payment of such amounts to Seller. Seller and
Purchaser shall treat any payments under the preceding sentence that Seller
shall receive pursuant to this Section 10.03 as an adjustment to the
Purchase Price for United States Federal income Tax purposes, unless a
final determination (which shall include the execution of a Form 870-AD or
successor form) with respect to Purchaser or any of its affiliates causes
any such payment not to be treated as an adjustment to the Purchase Price.
For
purposes of computing the net Tax cost to Purchaser or any affiliate of
Purchaser referred to above, a Tax benefit shall be taken into account only
to the extent that such person has realized an actual Tax savings which
such person would not otherwise have realized, assuming such person
recognized all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt and payment of such
amounts hereunder; and for the avoidance of doubt, such savings shall not
include the Tax refund which Purchaser or its affiliate is obligated to pay
over to Seller hereunder. Notwithstanding the foregoing, the control of the
prosecution of a claim for refund of Taxes paid pursuant to a deficiency
assessed subsequent to the Closing Date as a result of an audit shall be
governed by the provisions of Section 9.06.
SECTION 10.04. Transfer Taxes; Value Added Taxes. All Transfer
Taxes applicable to the conveyance and transfer from Seller and Seller Subs
to Purchaser of the Acquired Assets in an amount not exceeding $6,000,000
shall be equally shared by Seller and Purchaser; any of the foregoing in
excess of $6,000,000 shall be borne by Seller. All Value Added Taxes
applicable to the conveyance and transfer from Seller and Seller Subs to
Purchaser of the Acquired Assets that shall not be recovered by Purchaser
or the applicable Purchaser Buyer after Purchaser shall have used
commercially reasonable best efforts to recover such Value Added Taxes
("Unrecovered Value Added Taxes") in an aggregate amount up to $2,000,000
shall be borne by Purchaser and all such Unrecovered Value Added Taxes in
excess of $2,000,000 shall be shared equally by Seller and Purchaser.
Seller shall cooperate with Purchaser in connection with Purchaser's
efforts to recover any Value Added Taxes. Each Party shall use reasonable
efforts to avail itself of any available exemptions from any such Transfer
Taxes and Value Added Taxes, and to cooperate with the other parties in
providing any information and documentation that may be necessary to obtain
such exemptions.
SECTION 10.05. Purchaser Activity on Closing Date. On the Closing
Date, Purchaser shall cause Cemax-Icon to conduct its business in the
ordinary course in substantially the same manner as presently conducted and
on the Closing Date shall not permit Cemax-Icon to effect any extraordinary
transactions (other than any such transactions expressly required by
applicable law or by this Agreement) that could result in Tax liability to
Cemax-Icon in excess of Tax liability associated with the conduct of its
business in the ordinary course.
SECTION 10.06. Purchaser Activity Post-Closing. (a) Purchaser
shall not, with respect to any Pre-Closing
Tax Period, (i) file any amended Tax Return with respect to Cemax-Icon;
(ii) carry back any loss or other Tax attribute of Cemax-Icon; or (iii)
take any position with respect to Taxes of Cemax-Icon that would have the
effect of shifting income from a Post-Closing Tax Period to a Pre-Closing
Tax Period unless, in each case, Seller shall have consented in writing to
such action by Purchaser.
(b) Purchaser shall not make any election under Section 338 of
the Code, or other comparable election under state, local or foreign law
with respect to the acquisition by Purchaser of the Cemax-Icon Shares.
(c) Seller shall make an election under Treasury Regulation ss.
1.1502-32(b)(4) to waive all losses attributable to Cemax-Icon which are
carried to the first taxable year of Cemax-Icon following the closing date
of the acquisition of the stock of Cemax-Icon by Seller. Purchaser shall
make an election under Treasury Regulation ss. 1.1502-32(b)(4) to waive all
losses attributable to Cemax- Icon which are carried to the first taxable
year of Cemax- Icon following the Closing Date, which shall include a
protective election to waive any of the losses referred to in the previous
sentence to the extent not effectively waived by Seller's election;
provided, that Purchaser makes no representations, warranties, covenants or
guarantees of any kind as to the effectiveness or effect of such election
(including such protective election).
SECTION 10.07. Tax Sharing Agreements. Seller shall cause the
provisions of any Tax sharing agreement between Seller and any of its
affiliates (other than Cemax-Icon), on the one hand, and Cemax-Icon, on
the other, to be terminated on or before the Closing Date and no amounts
shall be due and payable thereunder.
SECTION 10.08. Employee Withholding and Reporting Matters. With
respect to the Transferred Employees, Purchaser shall, in accordance with
and to the extent permitted pursuant to Revenue Procedure 96-60, 1996-2
C.B. 399, assume all responsibility for preparing and filing Form W-2, Wage
and Tax Statement, Form W-3, Transmittal of Income and Tax Statements, Form
941, Employer's Quarterly Federal Tax Return, Form W-4, Employee's
Withholding Allowance Certificate, and Form W-5, Earned Income Credit
Advance Payment Certificate. The Seller and Purchaser agree to comply with
the procedures described in Section 5 of Revenue Procedure 96-60.
SECTION 10.09. Seller's Obligations with Respect to Cemax-Icon
Payments. Seller shall comply with all Tax information reporting and
withholding obligations in
connection with any payment made by Seller pursuant to the Cemax-Icon
Merger Agreement and upon request shall provide Purchaser, reasonably
promptly, with documentary proof of such compliance.
SECTION 10.10. Seller's Obligations with Respect to R&D Credit
Information. In order for Purchaser to comply with Section 41(f)(3) of the
Code and any Treasury Regulations issued thereunder, Seller shall provide
Purchaser, reasonably promptly, with the relevant information, including
all supporting documentation necessary for Purchaser to establish that it
has complied in all respects with such provisions; provided, however, that
Seller shall provide Purchaser with such information at least 60 days
before the relevant Tax Returns of the Purchaser are required to be filed
(taking into account all extensions thereof).
SECTION 10.11. Italian Tax Certificates. Seller shall use its
commercially reasonable efforts to obtain, or cause to be obtained, from
the Italian taxing authorities tax certificates, relating to (i) income
taxes, (ii) value-added taxes and (iii) any other material taxes for which
such certificates may be requested, certifying that no deficiencies or
claims for taxes covered by such certificates are pending with the
applicable Italian taxing authority as of the date of such certificates;
provided, that Seller shall initially request, or cause to be requested,
such certificates promptly following the execution of this Agreement and
shall use its commercially reasonable efforts to obtain, or cause to be
obtained, such certificates through the date of Closing; provided, further,
however, that Seller makes no representations, warranties, covenants or
guarantees of any kind whatsoever as to the effect, if any, of such
certificates.
ARTICLE XI
General Provisions
SECTION 11.01. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable, transferable or delegable by
Purchaser or Seller (other than by operation of law in connection with a
merger or consolidation of Purchaser or Seller) without the prior written
consent of the other parties hereto; provided, however, that Purchaser may,
subject to the conditions set forth in Section 1.05 but otherwise in its
sole discretion, assign its rights to purchase specified Acquired Assets
and to assume specified Assumed Liabilities (it being agreed that the
specified Acquired Assets and Assumed Liabilities shall be assigned
thereafter to the same Purchaser Buyer) to
any Purchaser Buyer. Any attempted assignment in violation of this Section
11.01 shall be null and void.
SECTION 11.02. No Third-Party Beneficiaries. Except as provided
in Article IX, this Agreement is for the sole benefit of the parties hereto
and their permitted assigns and nothing herein expressed or implied shall
give or be construed to give to any person, other than the parties hereto
and such assigns, any legal or equitable rights hereunder.
SECTION 11.03. Notices. All notices or other communications
required or permitted to be given hereunder shall be in writing and shall
be delivered by hand or sent by facsimile or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier
service and shall be deemed given when received, as follows:
(i) if to Purchaser,
▇▇▇▇▇▇▇ Kodak Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)-▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, Esq.; and
(ii) if to Seller or any Seller Sub,
Imation Corp.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)-▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)-▇▇▇-▇▇▇▇
Attention: Chief Executive Officer and
President
Imation Corp.
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)-▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)-▇▇▇-▇▇▇▇
Attention: General Counsel
with copies to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)-▇▇▇-▇▇▇▇
Telecopy: (▇▇▇)-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
SECTION 11.04. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Exhibit
or Schedule hereto and in the table of contents to this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter set forth in any provision,
subprovision, section or subsection of any Schedule shall be deemed set
forth for all purposes of any other Schedule to the extent that the context
reasonably makes clear the applicability of such matter to such other
Schedule. Notwithstanding the foregoing, no matter shall be deemed set
forth for purposes of Schedule 3.03, Schedule 3.04 or Schedule 3.20 unless
set forth in such Schedule. All Exhibits and Schedules annexed hereto or
referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Any capitalized terms used in any
Schedule or Exhibit but not otherwise defined therein, shall have the
meaning as defined in this Agreement. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.
(b) For all purposes hereof the following defined terms have the
meanings set forth below:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first person.
"Bank Credit Agreements" means (A) the Credit Agreement among
Seller, the Lenders named therein and Citicorp USA, Inc., as Agent, dated
as of July 1, 1996, as amended as of September 10, 1997, as further amended
as of March 30, 1998, and (B) the Loan Agreement between Cemax-Icon and
Dominion Fund IV, a Delaware Limited Partnership, dated as of October 30,
1996, and any agreements restating, amending or refinancing either of the
foregoing.
"business day" means any day other than a Saturday, a Sunday or a
day on which banks in New York, New
York are authorized or obligated by law or executive order to close.
"Cemax-Icon" means Cemax-Icon, Inc., a Delaware corporation.
"Cemax-Icon Merger Agreement" means the Agreement and Plan of
Merger dated as of May 13, 1997, among Seller, CI Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of Seller, and Cemax-Icon.
"Commercial Documents" means the Supply Agreements, the Shared
Facilities Agreement and the Transition Services Agreement.
"Conveyance Documents" means the Intellectual Property
Agreements, the Local Asset Purchase Agreements and the separate deeds,
contracts/bills of sale, assignments and other transfer instruments
executed and delivered in accordance with Section 2.02 and in connection
with this Agreement.
"Document Imaging Supply Agreement" means the supply agreement
between Seller and Purchaser, substantially in the form of Exhibit F,
pursuant to which Purchaser agrees to sell to Seller products sold by
Seller's Document Imaging business unit that are manufactured or assembled
at facilities included in the Acquired Assets being sold hereunder.
"Excluded Intellectual Property" means U.S. Patent Nos. 5,254,480
and 5,525,527 (process for producing solid state radiation detectors) and
any other issued patents or pending patent applications based on U.S.
Patent Applications Serial No. 839,268, filed February 20, 1992, or
claiming priority therefrom, any of their counterpart patents and patent
applications in countries outside the United States, and any claims for
infringement of the aforementioned patent rights including, but not limited
to, claims pending in Imation Corp. ▇. ▇▇▇▇▇▇▇▇ Diagnostic Imaging, Inc.,
Civil No. 97-2475 ▇▇▇/JUL in the U.S. District Court, District of
Minnesota, Third Division and Sterling Diagnostic Imaging, Inc. and Direct
Radiography Corp. v. Imation Corp., Civil No. 97-637 in U.S. District Court
for the District of Delaware.
"Excluded Taxes" means (i) any Taxes imposed on or with respect
to Seller, any Seller Sub or any entity that is or was an affiliate of any
of the foregoing at any time (other than Cemax-Icon), including any Taxes
imposed pursuant to Treas. Regs. ss. 1.1502-6 or a similar provision of any
state, local or foreign income tax law imposing joint
and several liability upon the members of a consolidated, combined,
affiliated or unitary group and any liability as a result of any express or
implied obligation of such person to indemnify any other person for any
Taxes, (ii) any Taxes imposed on or with respect to Cemax-Icon (A) for or
in respect of any Pre-Closing Tax Period or (B) pursuant to Treas. Regs.
ss. 1.1502-6 or a similar provision of any state, local or foreign income
tax law imposing joint and several liability upon the members of a
consolidated, combined, affiliated or unitary group as a result of having
been a member of such a group during any Pre-Closing Period, and any
liability of Cemax-Icon as a result of any express or implied obligation to
indemnify any other person for any Taxes, (iii) any Taxes arising from or
related to the ownership or operation of the Acquired Assets for any Pre-
Closing Tax Period, (iv) any Transfer Taxes or Value Added Taxes
attributable to the Acquisition (which shall be governed by Section 10.04)
and (v) any Taxes attributable to a Seller Tax Act. For purposes of this
definition, in the case of any Straddle Period, (i) Property Taxes for the
Pre- Closing Tax Period shall be equal to the amount of such Property Taxes
for the entire Straddle Period multiplied by a fraction, the numerator of
which is the number of days during the Straddle Period that are in the
Pre-Closing Tax Period and the denominator of which is the number of days
in the Straddle Period and (ii) Taxes (other than Property Taxes) for the
Pre-Closing Tax Period shall be computed as if such taxable period ended as
of the close of business on the Closing Date except that any exemption,
allowances, credits or deductions that are calculated on an annual basis
shall be prorated in the same manner as Property Taxes.
"Existing 3M Intellectual Property Agreement" means the
Intellectual Property Rights Agreement dated as of July 1, 1996, between
Seller and 3M.
"Ferrania Facility" means the facility in Ferrania, Italy owned
and operated by Imation or any affiliate of Imation.
"Florida Facility" means the facility in Florida, Argentina owned
and operated by Imation or any affiliate of Imation.
"GAAP" means generally accepted accounting principles in the
United States.
"including" means including, without limitation.
"Intellectual Property Agreements" means the Seller Intellectual
Property Agreement and the 3M Intellectual Property Agreement.
"Knowledge" means with respect to Seller, the actual knowledge of
Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
Wales, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, Remy Labreuil (limited to the
Knowledge of Mr. Labreuil with respect to the Businesses in Europe), ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, and, in addition, (i) with respect to
Section 3.17(b) only, ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, (ii) with respect to Sections 3.16
and 3.18 only, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, (iii) with respect to Section 3.07 only,
Messrs. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and (iv) with respect to Sections
3.04(c), 3.17(a) and 3.21 only, Messrs. ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇;
provided, however, that with respect to the period prior to the Spin-Off
Date, "Knowledge" shall mean the actual knowledge of Messrs. Cliff ▇▇▇▇▇▇,
▇▇▇▇▇ Wales and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and with respect to Section 3.17(b) only,
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇.
"LIBOR" means the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by The Chase Manhattan Bank from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
business days prior to the date of payment, as the rate for dollar deposits
with a maturity comparable to such period between the Closing Date and the
applicable date of payment or transfer, as the case may be.
"License Agreement" means the agreement between Seller and
Purchaser, substantially in the form of Exhibit G.
"Local Asset Purchase Agreements" means the asset purchase
agreements between Seller and Purchaser (or their respective relevant
subsidiaries), the form of which shall be negotiated in good faith by the
parties, pursuant to which certain Acquired Assets shall be sold pursuant
to the terms of such agreements.
"Operating Agreement" means the Operating Agreement between 3M
and General Electric Capital Corporation dated as of December 6, 1995.
"ordinary course of business and consistent with past practices"
means the Seller's ordinary course of business after the Spin-Off Date.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or
other entity or body.
"Portfolio Purchase Agreement" means the Portfolio Purchase
Agreement between 3M and General Electric Capital Corporation dated as of
December 6, 1995, as amended by the Agreement Relating to Portfolio
Purchase Agreement and Operating Agreement dated July 1, 1996, among
General Electric Corporation, 3M and Seller.
"Pre-Closing Tax Period" means any taxable period ending on or
before the Closing Date and the portion ending on the Closing Date of any
taxable period that includes (but does not end on) such day.
"Post-Closing Tax Period" means any taxable period or a portion
thereof that is not included in a Pre-Closing Tax Period.
"Property Taxes" means real, personal and intangible property
Taxes (other than any such Taxes imposed in connection with a net income,
gain or franchise tax), including any penalties, interest and additions to
Tax.
"Purchaser Buyer" means any wholly owned subsidiary of Purchaser.
"Purchaser Tax Act" means any action (including any election made
or deemed made under Section 338 of the Code with respect to Cemax-Icon)
taken (other than any such action expressly required or permitted by this
Agreement) or the failure to take any action required under this Agreement
after the Closing by Purchaser, any of its affiliates (including
Cemax-Icon), or any transferee of Purchaser or any of its affiliates .
"Related to the Businesses" means (a) in the case of any Acquired
Assets, used primarily in, or held for use primarily in, the operation or
conduct of the Businesses as operated or conducted by Seller and Seller
Subs as of the Closing Date and (b) in the case of any Assumed Liabilities,
relating to or arising out of the operation of conduct of the Businesses at
any time prior to, at or following the Closing. For purposes of this
definition, "primarily" means at least 50%.
"Relevant Date" means July 30, 1993.
"Seller Intellectual Property Agreement" means the agreement
between Seller and Purchaser, substantially in the form of Exhibit F.
"Seller Subs" means those subsidiaries of Seller listed on
Schedule 11.04.
"Seller Tax Act" means any action (including any election made or
deemed made under Section 338 of the Code with respect to Cemax-Icon) taken
(other than any such action expressly required or permitted by this
Agreement) or the failure to take any action required under this Agreement
by Seller, any of its affiliates, or any transferee or successor of Seller
or any of its affiliates (other than Purchaser or any of its affiliates).
"Settlement Agreement" means the release agreement among Seller,
Purchaser and 3M, dated the date hereof.
"Shared Facilities Agreement" means the one or more shared
facilities agreements between Seller and Purchaser, which shall reflect the
terms provided for in Exhibit C and shall be substantially in the forms
included as part of Exhibit C.
"Spin-Off Agreement" means the Transfer and Distribution
Agreement between 3M and Seller dated as of June 18, 1996.
"Spin-Off Date" means the date of the spin-off of Seller from 3M
on July 1, 1996.
"Straddle Period" means any taxable period that includes (but
does not end on) the Closing Date.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which) is owned directly
or indirectly by such first person.
"Supply Agreements" mean the X-ray/ Wet Laser Supply Agreement
and the Document Imaging Supply Agreement.
"Termination Event" means any of the following: (a) Seller or
Purchaser terminates this Agreement because a court of competent
jurisdiction issues a preliminary Judgment that prohibits the Acquisition
(or a portion thereof) on antitrust grounds, (b) at any time on or after
the one-year anniversary of this Agreement, all required antitrust
clearances (or similar acts) shall not have been obtained and Purchaser
terminates this Agreement or (c) at any time on or after the one-year
anniversary of this Agreement (i) all required antitrust clearances (or
similar
acts) shall not have been obtained, (ii) Purchaser shall not be actively
contesting any motion by any regulatory authority for a preliminary
Judgment prohibiting the Acquisition (or a portion thereof) on antitrust
grounds and (iii) Seller terminates this Agreement.
"3M Intellectual Property Agreement" means the agreement dated
the date hereof among 3M, Seller and the Purchaser.
"Transaction Documents" means this Agreement, the Conveyance
Documents and the Commercial Documents.
"Transfer Taxes" means transfer, documentary, sales, use,
registration and other similar Taxes (including all applicable real estate
transfer Taxes and real property transfer gains Taxes) and filing or
recording fees, and related amounts (including any penalties, interest and
additions to Tax) incurred in connection with this Agreement, the
Acquisition and the other transactions contemplated hereby and thereby;
provided, that Transfer Taxes shall not include Value Added Taxes.
"Transition Services Agreement" means the transition services
agreement between Seller and Purchaser, substantially in the form of
Exhibit D.
"United States" means United States of America.
"U.S. Antitrust Laws" means and includes the ▇▇▇▇▇▇▇ Antitrust
Act, as amended, the ▇▇▇▇▇▇▇ Antitrust Act, as amended, the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, the
Federal Trade Commission Act, as amended, and all other United States
Federal and state statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines, and other Laws, that are designed or
intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization, restraint of trade or lessening of competition.
"Value Added Tax" means any Tax imposed on the incremental value
added upon the supply of property or services (the "Supplied Property or
Services") computed as a percentage of the value or price of such Supplied
Property or Services, where by law such Tax paid by a purchaser to a
supplier is subject to recovery by a refund or a credit against the
corresponding Tax collected by such purchaser upon the subsequent supply by
such purchaser of (i) such Supplied Property or Services or (ii) any
property or services into which such Supplied Property of Services are
considered to have been input.
"X-ray/Wet Laser Supply Agreement" means the supply agreement
between Seller and Purchaser, substantially in the form of Exhibit H,
pursuant to which Purchaser agrees to purchase from Seller specified X-ray
and Wet Laser imaging products.
(c) For all purposes hereof the following defined terms have the
meaning set forth in the relevant Section referred to below:
ABO Amount 6.09(d)(i)
Accounting Firm 1.06(e)
Acquired Assets 1.02
Acquisition 1.01(a)
acquisition proposal 6.02
Assigned Contracts 1.02(a)(viii)
Assigned Permits 1.02(a)(vii)
Assumed Liabilities 1.03(a)
Balance Sheet 3.04(a)
Benefit Plans 3.16(b)(i)
Business Day 11.09(a)(i)
Business Property 3.06
Businesses Preamble
Businesses Financial Statements 3.04(a)
Cemax-Icon Intellectual Property 3.07(e)
Cemax-Icon Payments 1.01(a)
Cemax-Icon Shares 1.02(a)(ix)
Closing 2.01
Closing Date 2.01
Closing Date Purchase Price 1.01(a)
Code 3.14(a)
Competitive Activities 6.13(a)
Confidentiality Agreement 6.04
Consent 3.03(b)
Continuation Coverage 6.09(c)(vi)
Continuation Period 6.09(b)(ii)
Contract Employees 6.09(a)(i)
Contracts 1.02(a)(viii)
corporate staff employees 6.09(a)(i)
CSS Employees 6.09(a)(i)
Current Assets 9.03(a)
Current Products 3.21(a)(i)
Data Storage Media 6.13(a)
DOJ 6.05
Dispute 11.09(a)
Dispute Notice 11.09(a)(i)
Eligible Employees 6.09(a)(i)
Environmental Laws 3.17(b)
ERISA 3.16(a)(i)
Excess Assets 6.09(d)(iii)
Exchange Act 3.03(b)(II)
Excluded Assets 1.02(b)
Excluded Liabilities 1.03(b)
Expenses 6.07(b)
Ferrania Employees 6.09(a)(i)
Ferrania Facility Payment 1.01(b)
Foreign Eligible Employees 6.09(a)(i)
Foreign Service Liability 6.09(d)(i)
Foreign Transferred Employees 6.09(b)(i)
Former Products 3.21(a)(ii)
Former Product Registrations 3.21(e)(ii)
FTC 6.05
Funded Foreign Service Liability 6.09(d)(i)
German Document Imaging Employees 6.09(a)(i)
Governmental Entity 3.03(b)
Grandfathered Employees 6.09(c)(ii)
Hazardous Substances 3.17(b)
HSR Act 3.03(b)(I)
indemnified party 9.05(a)
Initial 60-Day Period 1.06(b)
Intellectual Property 1.02(a)(v)
Inventory 1.02(a)(ii)
Investigation Period 1.06(c)
Investments 1.02(a)(ix)
Judgment 3.03(a)
Law 3.03(a)
Leased Property 3.06
liabilities 1.03(a)
Liens 3.05(a)
Losses 9.01(a)
Material Impairment 6.05
Mediation Notice 11.09(a)(iv)(A)
Net Proceeds 1.01(b)
1998 Cemax-Icon Certificate 2.03(a)
1999 Cemax-Icon Certificate 2.03(e)
1998 Payment Date 2.03(a)
1999 Payment Date 2.03(e)
Non-U.S. Competition Laws 3.03(b)(I)
Notice of Disagreement 1.06(e)
Notice of Working Capital Breach 1.06(d)
Officers 11.09(a)(iii)(A)
OSHA 3.18(a)(ix)
Owned Property 3.06
Permits 3.11
Permitted Liens 3.05(a)
Personal Property 1.02(a)(iii)
Pre-Closing Environmental
Liability 9.01(a)(iv)
Premises 1.02(a)(i)
Proceedings 3.15
Products 3.21(a)(i)
Product Registrations 3.21(e)(i)
Purchase Price 1.01(a)
Purchaser Preamble
Purchaser Claim 9.01(c)
Purchaser Indemnified Party 9.01(a)
Purchaser Material
Adverse Effect 5.01
Purchaser Notice 9.01(c)(i)
Receivables 1.02(a)(iv)
Records 1.02(a)(xiii)
Remedial Action 9.05(d)(i)
Response 11.09(a)(i)
Retained Premises 1.02(b)(i)
Section 3.07 Intellectual
Property 3.07(a)
Seller Preamble
Seller Existing CGL Policies 6.18(a)
Seller Financial Statements 3.04(a)
Seller Foreign Benefit Plans 3.16(b)(i)
Seller Indemnified Party 9.02
Seller Material Adverse Effect 3.01
Seller's Remedial Cost 9.05(d)(ii)
Seller U.S. Benefit Plans 3.16(a)(i)
Seller U.S. Pension Plans 3.16(a)(i)
Senior Manager 11.09(a)(i)
Statement 1.06(d)
Statement of Operating Revenues
and Expenses 3.04(a)
Stay Bonus Program 6.09(a)(ii)
Supplies 6.17
Tax 3.14(a)
Tax Claim 9.06(a)
Tax Return 3.14(a)
Taxing Authority 3.14(a)
Technology 1.02(a)(vi)
Third Party Claim 9.05(a)
3M Preamble
3M Pension Plans 6.09(c)(ii)
3M Health Care Plans 6.09(c)(ii)
Transfers 6.09(d)(ii)
Transferred Employees 6.09(b)(i)
Transferred Intellectual Property 1.02(a)(v)
Transferred Technology 1.02(a)(vi)
Underfunded Foreign Service
Liability 6.09(d)(i)
Unrecovered Value Added Taxes 10.04
U.S. Eligible Employees 6.09(a)(i)
U.S. Transferred Employees 6.09(b)(i)
Working Capital 1.06(a)(iii)
Working Capital Election Notice 1.06(c)
Working Capital Shortfall 1.06(b)
SECTION 11.05. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become
effective when one or more such counterparts have been signed by each of
the parties and delivered to the other party.
SECTION 11.06. Entire Agreement. This Agreement, the other
Transaction Documents, the Confidentiality Agreement and the Letter
Agreement dated as of the date hereof between Seller and Purchaser, along
with the Schedules and Exhibits hereto and thereto, contain the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to
any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein or in the other Transaction Documents or the Confidentiality
Agreement.
SECTION 11.07. Severability. If any provision of this Agreement
(or any portion thereof) or the application of any such provision (or any
portion thereof) to any person or circumstance shall be held invalid,
illegal or unenforceable in any respect by a court of competent
jurisdiction, (i) a suitable and equitable provision shall be substituted
therefore in order to carry out, so far as may be valid and enforceable,
the intent or purpose of such invalid, illegal or unenforceable provision
(or portion thereof) and (ii) such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the
remaining portion thereof) or the application of such provision to any
other persons or circumstances.
SECTION 11.08. Consent to Jurisdiction. Each of Purchaser and
Seller irrevocably submits to the jurisdiction of (a) the Supreme Court of
the State of New York, New York County or (b) the United States District
Court for the Southern District of New York, for the purposes of any suit,
action or other proceeding arising out of this Agreement, any other
Transaction Document or any transaction contemplated hereby or thereby.
Each of Purchaser and Seller agrees to commence any such action, suit or
proceed ing in (i) the United States District Court for the Southern
District of New York or (ii) if such suit, action or other proceeding may
not be brought in either such court for jurisdictional reasons, in the
Supreme Court of the State of New York, New York County. Each of Purchaser
and Seller further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set
forth in Section 11.03 hereof shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which
it has submitted to jurisdiction in this Section 11.08. Each of Purchaser
and Seller irrevocably and unconditionally waives any objection to the
laying of venue of any action, suit or proceeding arising out of this
Agreement, any other Transaction Document or the transactions contemplated
hereby and thereby in (i) the Supreme Court of the State of New York, New
York County or (ii) the United States District Court for the Southern
District of New York and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum. EACH PARTY HERETO WAIVES ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY ACTION RELATED TO OR ARISING OUT OF THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 11.09. Dispute Resolution; Pre-Closing Waiver of
Consequential and Punitive Damages. (a) Except as otherwise expressly set
forth in this Agreement, all controversies, claims or disputes that arise
out of or relate to this Agreement or the construction, interpretation,
performance, breach, termination, enforceability or validity of this
Agreement, or the commercial, economic or other relationship of the parties
thereto, whether such claim is based on rights, privileges or interests
recognized by or based upon statute, contract, tort, common law or
otherwise and whether such claim existed prior to or arises on or after the
date of this Agreement (a "Dispute") shall be resolved in accordance with
the provisions of this Section 11.09.
(i) Dispute Notice and Response. A party may give another party
written notice (a "Dispute Notice") of any Dispute which has not been
resolved in the normal course of business. Within 15 Business Days (as
defined below) after delivery of the Dispute Notice, the receiving
party shall submit to the other party a written response (the
"Response"). The Dispute Notice and the Response shall each include
(A) a statement setting forth the position of the party giving such
notice, a summary of the arguments supporting such position and, if
applicable, the relief sought and (B) the name and title of a senior
manager of such party who has authority to settle the Dispute and will
be responsible for the negotiations related to the settlement of the
Dispute (the "Senior Manager"). For purposes of this Section 11.09, a
"Business Day" shall mean any day that is not a Saturday, Sunday or a
holiday on which national banks in New York City, New York or St.
▇▇▇▇, Minnesota are closed for business.
(ii) Negotiation Between Senior Managers. (A) Within 10 days
after delivery of the Response provided for in clause (i), the Senior
Managers of both parties shall meet or communicate by telephone at a
mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, and shall negotiate in good faith to
attempt to resolve the Dispute that is the subject of such Dispute
Notice. If such Dispute has not been resolved within 30 days after
delivery of the Dispute Notice, then the parties shall attempt to
settle the Dispute pursuant to clause (iii).
(B) All negotiations between the Senior Managers pursuant to this
clause (ii) shall be treated as compromise and settlement
negotiations. Nothing said or disclosed, nor any document produced, in
the course of such negotiations which is not otherwise independently
discoverable shall be offered or received as evidence or used for
impeachment or for any other purpose in any current or future
arbitration or litigation.
(iii) Negotiation Between Senior Officers. (A) If the Dispute
Notice has been delivered and the Dispute has not been resolved by
negotiation between the Senior Managers pursuant to clause (ii), then
within 10 Business Days after the expiration of the 30 day period
provided in clause (ii), the President and Chief Operating Officer of
the Purchaser and the Chief Executive Officer of the Seller (the
"Officers") shall meet or communicate by telephone at a mutually
acceptable time and place, and thereafter as often as they reasonably
deem necessary, and shall negotiate in good faith to attempt to
resolve the Dispute that is the subject of such Dispute Notice. If
such Dispute has not been resolved within 20 Business Days after the
expiration of the 30-day period provided in clause (ii), then either
party may refer the Dispute to mediation in accordance with clause
(iv).
(B) All negotiations between the Officers pursuant to this clause
(iii) shall be treated as compromise and settlement negotiations.
Nothing said or disclosed, nor any document produced, in the course of
such negotiations which is not otherwise independently discoverable
shall be offered or received as evidence or used for impeachment or
for any other purpose in any current or future arbitration or
litigation.
(iv) Mediation. (A) If the Dispute Notice is delivered at or
after the Closing and the Dispute has not been resolved by negotiation
between the Senior Managers pursuant to clause (ii) or the Officers
pursuant to clause (iii), then within five Business Days after the
expiration of the 20 Business Day period provided in clause (iii), any
party may initiate non-binding mediation hereunder by giving a notice
of mediation (a "Mediation Notice") to any other party.
(B) Selection of Mediator. The mediator shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇
unless either party by written notice to the other party requests that
a mediator other than ▇▇. ▇▇▇▇▇▇▇▇ be selected. In the event that ▇▇.
▇▇▇▇▇▇▇▇ will not act as mediator as provided in the preceding
sentence, or is not available to act as mediator, or either party
objects to ▇▇. ▇▇▇▇▇▇▇▇ as mediator, then the mediator shall be
jointly appointed by the parties; provided, however, that in the event
the parties cannot reach agreement, the mediator shall be designated
by the Center for Public Resources. The parties intend that the
mediator be independent and impartial. To this end, the mediator shall
disclose to the parties any professional or social relationships,
present or past, with any party (or its affiliates), including any
party's (or its affiliates') directors, officers and supervisory
personnel and counsel.
(C) Location. Any non-binding mediation that takes place pursuant
to this clause (iv) shall be conducted in New York City, New York,
unless otherwise agreed.
(D) Governing Law. The Model ADR Procedures for Mediation of
Business Disputes of the Center for Public Resources, Inc., either as
written or as modified by mutual agreement of the parties, shall
govern any non-binding mediation pursuant to this clause (iv).
(E) Mediation Process.
(1) All non-binding mediation that takes place pursuant
to this clause (iv) shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any
document produced, in the course of such non-binding
mediation which is not otherwise independently discoverable
shall be offered or received as evidence or used for
impeachment or for any other purpose in any current or
future arbitration or litigation.
(2) In the mediation, each party shall be represented
by an executive officer. No party shall be obligated to
attend mediation proceedings for more than an aggregate of
five days.
(v) Disputes; Consent to Jurisdiction.
(A) Except as otherwise expressly provided in this Agreement, no
party shall be entitled to commence or maintain any action, suit or
other proceeding against any other party regarding any Dispute.
(B) Notwithstanding anything in this Agreement or this Section
11.09 to the contrary, either party to this Agreement may at any time
seek from (i) the Supreme Court of the State of New York, New York
County or (ii) the United States District Court for the Southern
District of New York in accordance with Section 11.08, any interim,
provisional or injunctive relief that may be necessary to protect the
rights or property of such party or maintain the status quo before,
during or after the pendency of the negotiation process or the
arbitration proceeding or any other proceeding contemplated by this
Agreement.
(b) Notwithstanding anything to the contrary in this Agreement,
if the Closing shall not occur, each of the Seller and Purchaser hereby
waive the right to seek any form of punitive, special, indirect or
consequential damages against the other party or any subsidiary or
affiliate of the other party; provided, however, that the foregoing waiver
shall not apply to any party to the extent that the Closing did not occur
or this Agreement was terminated primarily as a result of or based on an
intentional or wilful breach by the other party and such damages are based
upon, relate to or arise out of such intentional or wilful breach.
SECTION 11.10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
IN WITNESS WHEREOF, Seller and Purchaser have duly executed this
Agreement as of the date first written above.
IMATION CORP.,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive
Officer
▇▇▇▇▇▇▇ KODAK COMPANY,
by /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
Title: Vice President