ASSET PURCHASE AGREEMENT
Agreement dated as of July 9, 1997, by and between Bruker Instruments,
Inc., a Massachusetts corporation ("Buyer") and Conductus, Inc., a Delaware
corporation ("Seller").
This Agreement sets forth the terms and conditions upon which Buyer will
purchase from Seller, and Seller will sell to Buyer, all the assets of Seller's
HTS NMR Probe business (other than the Retained Assets, as hereinafter defined)
and the business and goodwill of such business as a going concern, subject to
those liabilities of Seller which are specifically hereinafter described, for
the consideration provided herein.
In consideration of the foregoing, the mutual representations, warranties
and covenants set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties to
this Agreement hereby agree as follows:
1.0 DEFINITIONS
1.1 DEFINITIONS. For the purposes of this Agreement, all capitalized
words or expressions used in this Agreement shall have the meanings specified in
this Article I (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"AFFILIATE" means when used with respect to any Person if such Person is a
corporation, any officer or director thereof and any Person which is, directly
or indirectly, the beneficial owner (by itself or as part of any group) of more
than five percent (5%) of any class of any Equity Security thereof, and, if such
beneficial owner is a partnership, any general or limited partner thereof, or if
such beneficial owner is a corporation, any Person controlling, controlled by or
under common control with such beneficial owner, or any officer or director of
such beneficial owner or of any corporation occupying any such control
relationship.
"AGREEMENT" means this Asset Purchase Agreement (together with all Exhibits
and Schedules hereto) as in effect from time to time.
"BUSINESS" means Seller's NMR probe business operated by Buyer through the
use of the Purchased Assets, including, without limitation, all business
activities of Seller used in or for systems, subunits (E.G., NMR probes,
cryogenic systems, preamplifiers, etc.) and accessories (a) for NMR
spectroscopy, and (b) for all NMR microscopy on any sample or specimen other
than in-vivo NMR microscopy on human patients. "Business"
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does not include MRI and/or in-vivo NMR microscopy on human patients in
magnets of any geometry.
"BUSINESS DAY" means any day, excluding Saturday, Sunday and any other day
on which commercial banks in Boston, Massachusetts are authorized or required by
law to close.
"CHARTER" means the Certificate of Incorporation, Articles of Incorporation
or Organization or other organizational document of a corporation, as amended
and restated through the date hereof.
"CLAIM" means an action, suit, proceeding, hearing, investigation,
litigation, charge, complaint, claim or demand.
"CODE" means the Internal Revenue Code of 1986, and the regulations,
rulings, and court decisions in respect thereof, all as the same shall be in
effect at the time.
"ERISA" means the Employee Retirement Income Security Act of 1974, and any
similar or successor federal statute, and the rules, regulations and
interpretations thereunder, all as the same shall be in effect at the time.
"GAAP" means generally accepted accounting principles, consistently
applied.
"HTS NMR PROBE" includes the HTS coil(s), the probe body, the transfer line
to the probe body, probe connections to the cryogenic system, and heat sink if
it is incorporated into the probe body, but does not include the preamplifier
module(s), refrigeration components, heat exchanger, coldhead, or the vacuum
components outside the probe body.
"IRS" means the Internal Revenue Service.
"LIEN" means, with respect to any asset, any mortgage, deed of trust,
pledge, hypothecation, assignment, security interest, lien, charge, restriction,
adverse claim by a third party, title defect or encumbrance of any kind.
"MATERIAL ADVERSE EFFECT" means a material adverse impact or effect on the
business, operations, assets, liabilities, prospects or condition (financial or
otherwise) of the Business.
"MRI" means magnetic resonance imaging.
"NMR" means nuclear magnetic resonance.
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"OFFICER'S CERTIFICATE" means a certificate signed in the name of a
corporation by its President, Chief Executive Officer, Treasurer, Chief
Financial Officer, or, if so specified, the Clerk or Secretary, acting in his or
her official capacity.
"PERSON" means any individual, firm, partnership, association, trust,
corporation, limited liability company, governmental body or other entity.
"PURCHASE DOCUMENTS" means this Agreement and any other certificate,
document, instrument or agreement executed in connection therewith.
"TAX" means any federal, state, local or foreign tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not.
"TAX RETURN" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"TRANSFERRED TECHNOLOGY" means patents, patent applications, inventions and
designs which are included in the Purchased Assets.
2.0 PURCHASE AND SALE OF ASSETS
2.1 PURCHASE OF ASSETS. Upon the terms and subject to the conditions
contained in this Agreement, at the Closing (as defined in Section 2.7 hereof),
Seller shall sell, assign, transfer and convey to Buyer, and Buyer shall
purchase, acquire and accept from Seller, the Business, including those of
Seller's assets used in connection with Seller's operation of the Business as
set forth in SCHEDULE 2.1 attached hereto (the "Purchased Assets") (other than
those assets included in the Retained Assets as defined in Section 2.2 hereof),
and subject only to the liabilities and obligations of Buyer which are defined
in Section 2.3 hereof (the "Assumed Liabilities").
2.2 RETAINED ASSETS. Seller will retain ownership of all of Seller's
assets other than the Purchased Assets (the "Retained Assets"), including,
without limitation, the patents listed in SCHEDULE 2.2.
2.3 ASSUMED LIABILITIES. Buyer shall assume and pay, perform and
discharge the Assumed Liabilities, and will pay, perform and discharge the
Assumed Liabilities as they become due. The Assumed Liabilities shall consist
solely of the liabilities of Buyer listed on SCHEDULE 2.3 attached hereto.
2.4 RETAINED LIABILITIES. The liabilities and obligations which shall be
retained by Seller (the "Retained Liabilities") shall consist of all liabilities
of Seller other than the Assumed Liabilities, including, without limitation, the
following:
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(a) all liabilities of Seller relating to indebtedness for borrowed
money;
(b) Subject to Section 10.5(c), all liabilities of Seller resulting
from, constituting or relating to a breach of any of the representations,
warranties, covenants or agreements of Seller under this Agreement except to the
extent that they relate to the Business for periods after the Closing Date;
(c) all liabilities of Seller for Taxes, including any gain and
income from the sale of the Purchased Assets and other transactions contemplated
herein;
(d) all liabilities for all environmental, ecological, health,
safety, products liability or other claims pertaining to the Business or the
Purchased Assets which relate to time periods or events occurring on or prior to
the Closing Date;
(e) all liabilities of Seller arising in connection with its
operations unrelated to the Business and all liabilities (including any
liability pursuant to any claim, litigation or proceeding) in connection with
the operation of the Business arising prior to the Closing except as otherwise
specifically provided herein and any liability of Seller based on its tortious
or illegal conduct;
(f) any liability or obligation incurred by Seller in connection with
the negotiation, execution or performance of this Agreement, including, without
limitation, all legal, accounting, brokers', finders' and other professional
fees and expenses;
(g) all liabilities incurred by Seller after the Closing Date;
(h) all liabilities or obligations associated with the Business
Employees (as hereinafter defined), including, but not limited to, any liability
or obligation under or with respect to any collective bargaining agreement,
employment agreement, unemployment or workers' compensation laws, sales
commissions (other than on orders shipped and billed after the Closing Date), or
any liability or obligation arising from any decision of Buyer not to offer
employment to any Business Employee; and
(i) all liabilities and obligations arising out of, resulting from,
or relating to any employee benefit plan, program, or arrangement maintained or
contributed to by Seller or any entity which is or has been aggregated with
Seller for purposes of section 414 of the Code or section 4001 of ERISA.
2.5 PURCHASE PRICE. Upon the terms and subject to the conditions
contained in this Agreement, and in consideration of the sale, assignment,
transfer and delivery of the Purchased Assets and covenants not to compete
received from Seller, Buyer will pay, by
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wire transfer of immediately available funds, to Seller,
.
2.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets and the covenants not to compete received from Seller
as set forth in SCHEDULE 2.6 attached hereto. Seller and Buyer shall be bound
by such allocation for all purposes and to account for and report the purchase
and sale contemplated hereby for all financial, accounting and Tax purposes in
accordance with such allocation.
2.7 TIME AND PLACE OF CLOSING. The closing of the transactions described
in Sections 2.1 through 2.6 hereof (the "Closing") shall take place at the
offices of Seller at 9:00 a.m. on July 16, 1997, or at such other place or
time as the parties hereto may agree. The date and time at which the Closing
actually occurs is hereinafter referred to as the "Closing Date."
2.8 EXECUTION AND DELIVERY OF DOCUMENTS OF TITLE BY SELLER. At the
Closing, Seller shall execute and deliver to Buyer a ▇▇▇▇ of sale and such
deeds, conveyances, bills of sale, certificates of title, assignments,
assurances and other instruments and documents as Buyer may reasonably request
in order to effect the sale, conveyance, and transfer of the Purchased Assets
from Seller to Buyer. Such instruments and documents shall be sufficient to
convey to Buyer good and merchantable title in all of the Purchased Assets.
Seller will, from time to time after the Closing Date, take such additional
actions and execute and deliver such further documents as Buyer may reasonably
request in order more effectively to sell, transfer and convey the Purchased
Assets to Buyer and to place Buyer in position to operate and control all of the
Purchased Assets.
2.9 EXECUTION AND DELIVERY OF DOCUMENTS BY BUYER. At the Closing, Buyer
shall execute and deliver to Seller an Assumption Agreement and such other
documents as Seller may reasonably request in order to evidence Buyer's
assumption of the Assumed Liabilities. Buyer will, from time to time after the
Closing Date, take such additional action and deliver such further documents as
Seller may reasonably request in order effectively to assume the Assumed
Liabilities.
2.10 After the Closing, Buyer shall pay a share of Net Revenue (as
hereinafter defined) to Seller as follows:
(a) For the first three (3) years after the Closing Date, Buyer
shall pay Seller of the Net Revenue from the sale of HTS
NMR Probes which are based, in whole or in substantial part, on Transferred
Technology.
(b) For the fourth and fifth years after the Closing Date, Buyer
shall pay Seller of the Net Revenue from the sale of HTS NMR
Probes which are based, in whole or in substantial part, on Transferred
Technology.
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(c) For the sixth through the tenth years after the Closing Date,
Buyer shall pay Seller of the Net Revenue from the sale of
HTS NMR Probes which are based in whole or in substantial part, on
Transferred Technology.
(d) For the first 3 years after the Closing Date, Buyer shall pay
Seller 2% of the Net Revenue from the sale of cryogenics for HTS NMR Probes
which are based in whole or in substantial part, on Transferred Technology.
(e) For purposes of this Section 2.10, "Net Revenue" shall mean the
net amounts received by Buyer from its distributors, less separately stated
amounts such as sales, value added and similar taxes and governmental charges,
transportation, installation, duties, insurance and similar charges, provided
that for system sales when the HTS NMR Probe price is not separately stated, Net
Revenue shall be equal to the then current list price for such HTS NMR Probe or
cryogenics less twenty five percent (25%).
(f) Payments shall be made by Buyer no later than forty-five (45)
days after the end of each calendar quarter accompanied by a report setting
forth the calculation of the payment then due. Sufficient records to support
such reports shall be kept for six (6) years following the due date for the
report relating to the reporting period to which such records pertain.
(g) Seller shall have the right to have an independent certified
public accountant audit, at Seller's expense, Buyer's royalty calculations no
more than once every two (2) years. At least ten (10) days notice of any such
audit shall be provided to Buyer, such accountant shall execute a standard Buyer
non-disclosure agreement prior to any such audit and the results of such audit
may be disclosed only to Seller. If such an audit uncovers a deficiency greater
than 5% in reporting or payments, Buyer shall bear the expenses of the audit.
2.11 SCHEDULES. This Agreement has been executed without all Schedules
attached. Mutually agreeable schedules shall be attached no later than July 15,
1997.
3.0 REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND QUALIFICATION. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller has full power and authority to own, use and lease its
properties and to conduct its business as currently conducted. The copies of
Seller's Charter and By-Laws, as amended to date, certified by its Secretary and
delivered to Buyer's counsel prior to the Closing, are true, complete and
correct.
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3.2 AUTHORITY; NO VIOLATION. Seller has all requisite corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by Seller has been duly and validly authorized and approved by all
necessary corporate action. This Agreement constitutes the legal and binding
obligation of Seller, enforceable against it in accordance with its terms.
To Seller's knowledge, and without having conducted any special
investigation, the entering into of this Agreement by Seller does not, and
the consummation by Seller of the transactions contemplated hereby, including
specifically the transfer of the Purchased Assets to Buyer by Seller, will
not violate the provisions of (a) any applicable federal, state, local or
foreign laws, (b) Seller's Charter or By-Laws, or (c) any provision of, or
result in a default or acceleration of any obligation under, or result in any
change in the rights or obligations of Seller under, any Lien, contract,
agreement, license, lease, instrument, indenture, order, arbitration award,
judgment, or decree to which Seller is a party or by which it is bound, or to
which any property used in the Business is subject, except where such
default, acceleration, or change would not have a material adverse effect.
3.3 FINANCIAL STATEMENTS. (omitted intentionally)
3.4 ABSENCE OF UNDISCLOSED LIABILITIES. To Seller's knowledge and without
having conducted any special investigation, there are no undisclosed Liabilities
of the Business.
3.5 ABSENCE OF CERTAIN CHANGES. Except as otherwise disclosed in SCHEDULE
3.5 attached hereto, since APRIL 1ST, 1997, there has not been:
(a) any material change in the business, operations, assets,
liabilities, prospects or condition (financial or otherwise) of the Business;
(b) any obligation or liability incurred by Seller with respect to
the Business other than obligations and liabilities incurred in the ordinary
course of business for an amount not more than $5,000.00 in each case or
$25,000.00 in the aggregate;
(c) any Liens placed on any of the Purchased Assets which in the
aggregate exceed $5,000.00 remain in existence on the date hereof; such amount
of any Liens, if any, in existence on the Closing Date shall be deducted from
the Purchase Price;
(d) any purchase, sale, lease, assignment, transfer or other
disposition, or any agreement or other arrangement for the purchase, sale,
lease, assignment, transfer or other disposition, of any part of Seller's
properties or assets used in the Business, other than purchases and sales in the
ordinary course of business, and except for fixed assets purchased or other
capital expenditures made in amounts not exceeding $5,000 for any single item
and $25,000 in the aggregate for all such items;
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(e) any damage, destruction or loss, whether or not covered by
insurance, which has a Material Adverse Effect on Seller's properties, assets or
business used in the Business;
(f) any labor dispute or claim of unfair labor practices involving
Seller; any change in the employment contracts of or compensation payable or to
become payable by Seller to any of its current or former officers, directors,
employees, consultants, or agents with respect to the Business or any bonus
payment, loan or arrangement made to or with respect to any of such officers,
directors, employees, consultants, or agents; or any change in coverage vesting,
or benefits available, under any Plan described in Section 3.14 hereof with
respect to the Business;
(g) any change with respect to the Business' management or
supervisory personnel;
(h) any contracts, licenses, leases or agreements entered into by
Seller with respect to the Business which are outside the ordinary course of
business or which obligate Seller for more than $5,000 in any one case or more
than $25,000 in the aggregate or any cancellation, termination, modification, or
acceleration by any party to any contract, license, lease or agreement involving
more than $25,000 with respect to the Business to which Seller is a party or by
which it is bound;
(i) any postponement or delay in payment of any accounts payable or
other liability of Seller with respect to the Business except in the ordinary
course of business consistent with prior practices;
(j) any cancellation, waiver, compromise or release of any right or
claim with respect to the Business either involving more than $25,000 or outside
the ordinary course of business consistent with prior practices; or
(k) any other occurrence, action, failure to act or transaction
involving the Business other than transactions in the ordinary course of
business consistent with prior practices.
3.6 TITLE, SUFFICIENCY AND CONDITION OF ASSETS. Seller has good and
marketable title to, or a valid leasehold interest in, all of the Purchased
Assets, free and clear of all Liens and the sale and delivery of the Purchased
Assets to Buyer pursuant hereto shall vest in Buyer good and marketable title
thereto, free and clear of any and all Liens which in the aggregate exceed
$5,000.00 or defects, other than as disclosed in SCHEDULE 3.6 hereto or as may
be created by Buyer. Except as disclosed in SCHEDULE 3.6, or as provided in
Section 3.9 with respect to intellectual Property Seller owns or leases all
property and assets necessary for the conduct of the Business as the Business is
presently conducted
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and is proposed to be conducted, and all such property and assets are
included in the Purchased Assets. To the knowledge of Seller, all tangible
properties and assets owned or leased by Seller and contained in the
Purchased Assets are in good operating condition and repair, ordinary wear
and tear excepted, have been well maintained, and conform with all applicable
laws, statutes, ordinances, rules and regulations.
3.7 REAL ESTATE. (omitted intentionally)
3.8 CURRENT ASSETS. (omitted intentionally)
3.9 INTELLECTUAL PROPERTY. All patents, patent applications, proprietary
designs, copyrights, trade names, service marks, trademarks and trademark
applications which are owned by or licensed to Seller with respect to the
Business are listed in SCHEDULE 2.1 attached hereto ("Intellectual Property").
To its knowledge, and without having conducted any special investigation or
patent or trademark search, the Intellectual Property's use does not require the
consent of any other Person and it is freely transferable and owned exclusively
by Seller, free and clear of any Liens. Except as set forth in SCHEDULE 2.1,
(a) no other Person has an interest in or right or license to use, or the right
to license any other Person to use, any of the Intellectual Property, (b) Seller
has received no claims or demands of any other Person pertaining thereto and
has not received notice that any proceedings have been instituted, or are
pending or, to the knowledge of Seller, threatened, which challenge Seller's
rights in respect thereof, (c) Seller is unaware of any infringement of the
Intellectual Property by another Person or that the Intellectual Property is
subject to any outstanding order, decree, ruling, charge, injunction, judgment
or stipulation, and (d) no Claim has been received by Seller, or, to Seller's
knowledge threatened charging the Seller with infringement of any adversely
held intellectual property. Buyer acquires no right to the trademark
"Conductus", but shall be permitted to use technical documentation existing at
the Closing Date and including the name "Conductus" for up to six months after
the Closing Date.
3.10 CONTRACTS. Except for contracts, commitments, leases, licenses, plans
and agreements described in SCHEDULES 3.10 attached hereto, Seller with respect
to the Business is not a party to or subject to:
(a) any plan or contract regarding or providing for bonuses,
pensions, options, stock purchases, deferred compensation, severance benefits
retirement payments, profit sharing, stock appreciation, collective bargaining
or the like, or any contract or agreement with any labor union;
(b) any employment or consulting contract or contract for personal
services not terminable at will by Seller without penalty to Seller;
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(c) any contract or agreement for the purchase of any commodity,
product, material, supplies, equipment or other personal property, or for the
receipt of any service, other than purchase orders entered into in the ordinary
course of business for less than $1,000 each and which in the aggregate do not
exceed $10,000;
(d) any contract or agreement for the purchase or lease of any fixed
asset, whether or not such purchase or lease is in the ordinary course of
business, for a price in excess of $5,000;
(e) any contract or agreement for the sale of any commodity, product,
material, equipment, or other personal property, or the furnishing by Seller of
any service, other than contracts with customers entered into in the ordinary
course of business for a price in excess of $5,000;
(f) any contract or agreement providing for the purchase of all or
substantially all of its requirements of a particular product from a supplier,
or for periodic minimum purchases of a particular product from a supplier;
(g) any contract or agreement with any sales agent, distributor or
OEM of products of the Business;
(h) any contract or agreement concerning a partnership or joint
venture with one or more Persons;
(i) any confidentiality agreement or any non-competition agreement or
other contract or agreement containing covenants limiting the Business' freedom
to compete in any line of business or in any location or with any Person;
(j) any license agreement (as licensor or licensee);
(k) any contract or agreement with any present or former officer,
director, consultant, agent or stockholder of Seller or with any Affiliate of
any of them;
(l) any loan agreement, indenture, note, bond, debenture or any other
document or agreement evidencing a capitalized lease obligation or Indebtedness
to any Person;
(m) any agreement of guaranty, indemnification, or other similar
commitment with respect to the obligations or liabilities of any other Person
(other than lawful indemnification provisions contained in the Charter and
By-Laws of Seller; or
(n) any other agreement or contract (or group or related agreements
or contracts) under which the consequences of a default or termination could
have a Material
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Adverse Effect or the performance of which involves consideration paid or
received by Seller in excess of $ 5,000.
Copies of all such written contracts, commitments, plans, leases, licenses
and agreements have been provided to Buyer prior to the execution of this
Agreement, and all such copies are true, correct and complete and have been
subject to no amendment, extension or other modification as of the date hereof,
except such as are described in SCHEDULE 3.10. Except as listed and described
in SCHEDULE 3.10, Seller, or to the knowledge of Seller, any other Person, is
not in default under any such contract, commitment, plan, lease, license or
agreement.
3.11 CUSTOMERS AND SUPPLIERS. Except as set forth in SCHEDULE 3.11, no
supplier is a material sole source of supply to the Business. The relationships
of the Business with its suppliers and customers are good commercial working
relationships and, neither (i) any of the twenty (20) largest suppliers and
customers of the Business, nor (ii) any supplier who at any time during 1996 or
1997 was or is the sole source of supply of any item, has canceled or otherwise
terminated, or threatened to cancel or otherwise terminate, its relationship
with the Business or has during the last twelve (12) months decreased materially
or threatened to decrease or limit materially, its services, supplies or
materials to the Business or its usage or purchase of the services or products
of the Business.
3.12 COMPLIANCE WITH LAWS. To the best of its knowledge, Seller has, with
respect to the Business, conducted and is conducting its business in compliance
with applicable federal, state, local or foreign laws, statutes, ordinances,
regulations, rules or orders or other requirements of any governmental,
regulatory or administrative agency or authority or court or other tribunal
relating to it. Seller is not now charged with, and to the knowledge of Seller
is not now under investigation with respect to, any possible violation of any
applicable law, statute, ordinance, regulation, rule, order or requirement
relating to any of the foregoing. Seller, with respect to the Business, has all
licenses, permits, franchises, orders, approvals, accreditations, written
waivers and other authorizations as are necessary in order to enable it to own
and conduct its business as currently conducted and as proposed to be conducted
and to occupy and use its real and personal properties without incurring any
material liability ("Necessary Permits"), except where the failure to do so
would not have a Material Adverse Effect. No registration, filing, application,
notice, transfer, consent, approval, order, qualification, waiver or other
action of any kind is required by virtue of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby to effect
the transfer to Buyer of the Necessary Permits. The Business is in full
compliance with the terms and conditions of all Necessary Permits.
3.13 TAXES. There are no Liens or other problems with unpaid Taxes with
respect to the Purchased Assets.
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3.14 EMPLOYEE BENEFIT PLANS. (intentionally omitted)
Seller has disclosed its employee benefit plans to Buyer.
3.15 ENVIRONMENTAL MATTERS. To the best of Seller's knowledge, its
operation of the Business is in compliance with applicable environmental laws.
3.16 EMPLOYEES. Except as disclosed in SCHEDULE 3.16, Seller with respect
to the Business is not a party to any written or oral employment, consulting,
service, severance or pension agreement. Seller enjoys good relations with its
employees and there is no pending or, to the knowledge of Seller, threatened
labor dispute with or effort to organize any of its employees, and there has
been no such labor dispute or, to the knowledge of Seller, effort to organize
during the past five (5) years.
3.17 LITIGATION. Except as disclosed on SCHEDULE 3.17 attached hereto, (a)
there is no Claim pending or, to the knowledge of Seller threatened (or, to the
knowledge of Seller, any facts which are reasonably likely to lead to such a
Claim) by, against, affecting or regarding the Business or the properties or
assets used in the Business, at law or in equity, before any federal, state,
local or foreign court or any other governmental or administrative agency or
tribunal or any arbitrator or arbitration panel which is likely to have a
Material Adverse Effect, and (b) there are no judgments, orders, rulings,
charges, decrees, injunctions, notices of violation or other mandates against or
affecting the Business or the properties or assets used in the Business which is
likely to have a Material Adverse Effect. Nothing listed on SCHEDULE 3.17,
either individually or when aggregated with other listings on such Schedule,
would reasonably be expected to have a Material Adverse Effect.
3.18 BROKERS. Neither Seller or anyone acting on its behalf, has engaged,
retained, or incurred any liability to any broker, investment banker, finder or
agent or has agreed to pay any brokerage fees, commissions, finder's fees or
other fees with respect to the sale of the Purchased Assets, this Agreement or
the transactions contemplated hereby.
3.19 DISCLOSURE OF MATERIAL INFORMATION. Neither this Agreement (including
the Schedules and Exhibits hereto) nor any document, certificate or instrument
furnished in connection therewith contains, with respect to Seller or the
Business, any untrue statement of a material fact or omits to state a material
fact necessary to made the statements therein not misleading. To its knowledge,
and without having conducted any special inquiry, there is no fact known to
Seller which has or would reasonably be expected in the future to result in a
Material Adverse Effect and which has not been set forth in this Agreement or in
written materials furnished to Buyer for purposes of its due diligence review.
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4.0 REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
4.1 ORGANIZATION AND QUALIFICATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, with full power and authority to own, use or
lease its properties and to conduct its business as such properties are owned,
used or leased and as such business is conducted.
4.2 AUTHORITY. Buyer has the requisite corporate power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by Buyer
have been duly and validly authorized and approved by all necessary corporate
action on the part of Buyer, and this Agreement constitutes the legal and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms. Assuming the accuracy of the representations and warranties of Seller
hereunder and to the best knowledge of Buyer, the entering into of this
Agreement by Buyer does not, and the consummation by Buyer of the
transactions contemplated hereby will not, violate the provisions of (a) any
applicable laws of the United States or any other state or jurisdiction in
which Buyer does business, (b) the Charter or By-Laws of Buyer, or (c) any
provision of, or result in a default or acceleration of any obligation under,
or result in any change in the rights or obligations of Buyer under, any
mortgage, Lien, lease, agreement, contract, instrument, order, arbitration
award, judgment, or decree to which Buyer is a party or by which Buyer is
bound, or to which any property of Buyer is subject.
4.3 BROKERS. Neither Buyer nor anyone acting on its behalf has engaged,
retained or incurred any liability to any broker, investment banker, finder or
agent or has agreed to pay any brokerage fees, commissions, finder's fees or
other fees with respect to the purchase of Purchased Assets, this Agreement or
the transactions contemplated hereby.
5.0 COVENANTS
5.1 COVENANTS OF SELLER. Seller shall keep, perform and fully discharge
the following covenants and agreements:
(a) INTERIM CONDUCT OF BUSINESS. From the date hereof until the
Closing, Seller shall operate the Business as a going concern consistent with
prior practice and in the ordinary course of business. Without limiting the
generality of the foregoing, from the date hereof until the Closing, except for
transactions contemplated by this Agreement or expressly approved in writing by
Buyer, Seller shall not with respect to the Business:
13
(i) enter into or amend any employment, bonus, severance, or
retirement contract or arrangement, or increase any compensation payable or
to become payable to any person other than in the ordinary course of
business consistent with prior practice;
(ii) purchase, lease or otherwise acquire any real estate or any
interest therein;
(iii) sell, lease or otherwise dispose of or agree to sell, lease
or otherwise dispose of any of its assets, properties, rights or claims,
whether tangible or intangible, except in the ordinary course of business
consistent with prior practice;
(iv) incur any liability, guaranty or obligation (fixed or contingent)
other than in the ordinary course of business consistent with prior
practice or make any investment in excess of $10,000, whether singly or in
the aggregate, in property, plant and equipment and other items of capital
expenditure;
(v) place or permit to be placed any Lien on any of its assets or
properties, other than statutory Liens arising in the ordinary course of
business;
(vi) accelerate receivables or delay or postpone payment of any
accounts payable or other liability, except in the ordinary course of
business consistent with prior practice; or
(vi) abandon any part of the Business.
(b) ACCESS. Seller shall, upon reasonable notice, give Buyer and its
representatives full and free access to all properties, assets, books,
contracts, commitments and records of Seller with respect to the Business during
reasonable business hours and shall promptly furnish Buyer with all financial
and operating data and other information as to the history, ownership,
Affiliates, business, operations and properties of the Business as Buyer may
from time to time reasonably request. Simultaneously with the execution hereof,
the parties shall enter into a non-disclosure agreement in form and substance as
set forth in SCHEDULE 5.1(b) attached hereto.
(c) TRANSFER OF NECESSARY PERMITS. From and after the date hereof to
the Closing Date and following the Closing Seller will use commercially
reasonable efforts to effect the transfer to Buyer of all of the Necessary
Permits and all other permits, licenses, and leases which are associated with
the Business as presently conducted, to the extent the same are by their terms
transferable.
14
(d) RETAINED LIABILITIES. From and after the date hereof to the
Closing Date and following the Closing Seller shall pay, perform and fully
discharge all of the Retained Liabilities as they come due.
(e) SATISFACTION OF CONDITIONS. Seller shall use good faith efforts
to accomplish the satisfaction of the conditions precedent to Closing contained
in Section 6.1 hereof on or prior to the Closing Date.
(f) NO SOLICITATION, CONFIDENTIALITY, ETC. Prior to the Closing or
the termination of this Agreement pursuant to Section 7.0 hereof, Seller will
not (i) solicit or negotiate with respect to any inquiries or proposals relating
to (x) the possible direct or indirect acquisition of all or a portion of the
Purchased Assets or Business, or (y) any merger, consolidation, joint venture or
business combination of Seller, or (ii) discuss or disclose either this
Agreement or other confidential information pertaining to the Business with any
Person (except as may be required by law or except as may be required in
connection with the transactions contemplated by this Agreement to Affiliates,
officers, directors, employees and agents of Seller).
(g) ACCURACY OF REPRESENTATIONS AND WARRANTIES. Without the prior
written consent of Buyer, Seller will not take any action from the date hereof
to the Closing Date, that would cause any representation or warranty of Seller
contained in this Agreement to become untrue or cause the breach of any
agreement hereof or covenant contained herein. Seller will promptly bring to
the attention of Buyer any facts which come to its attention that would cause
any of the representations and warranties of Seller to be untrue or materially
misleading in any respect.
(h) TAX MATTERS. Seller shall be responsible for and shall cause to
be prepared and duly filed all Tax Returns relating to Taxes of Seller due for
periods through and until the Closing. Seller shall be responsible for and
shall, jointly and severally, indemnify and hold harmless Buyer with respect to
all Taxes of Seller due for periods through and until the Closing. Buyer shall
be responsible for and shall cause to be prepared and duly filed all Tax Returns
relating to Taxes of Buyer due for periods at or after Closing. Buyer shall be
responsible for and shall indemnify and hold harmless Seller with respect to all
Taxes of Buyer due for periods at or after the Closing.
5.2 COVENANTS OF BOTH PARTIES. The parties hereto shall keep, perform and
fully discharge the following covenants and agreements:
(a) WAIVER OF COMPLIANCE WITH THE BULK SALES ACT. In connection with
the transactions contemplated hereby, the parties shall waive compliance with
the provisions of Article 6 of the Uniform Commercial Code - Bulk Transfers and
the Bulk Sales Act and any other applicable bulk sales act or statute ("Bulk
Sales Acts"). Seller
15
shall satisfy all creditors in connection with Seller's operation of the
Business prior to the Closing, except as contemplated by the Assumed
Liabilities, and shall remove any and all Liens against the Purchased Assets
as a result of payments made by Seller to others. Seller shall indemnify and
hold Buyer harmless from and against any and all liabilities under the Bulk
Sales Acts.
(b) EMPLOYEES. Following the execution of this Agreement and prior
to the Closing Date, Buyer shall be allowed to discuss with employees currently
or previously employed or otherwise compensated by Seller in connection with the
Business ("Business Employees") the possibility of employment with Buyer and
shall be allowed to employ such persons effective as of the Closing Date on such
terms and conditions as may be negotiated among Buyer and such persons.
(c) WARN ACT AND COBRA. Seller shall be responsible for any notice
required under or liability associated with the Worker Adjustment and Retraining
Notification Act (29 U.S.C. Sections 2101-2109), COBRA group health plan
continuation coverage (29 U.S.C. Sections 601-608 and 26 U.S.C. Section 4980B)
and any applicable state or local plant closing, mass layoff, relocation, or
severance, or continuation coverage laws associated with the Business Employees
which takes place or arises on or before the Closing Date, and Buyer shall be
responsible for any such notice or liability associated with the persons hired
by Buyer on or after the Closing Date which takes place or arises after the
Closing Date.
6.0 CLOSING CONDITIONS
6.1 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate this Agreement and the transactions contemplated hereby are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations and warranties of Seller contained in this Agreement shall
remain true and correct at the Closing Date as fully as if made on the Closing
Date; Seller shall have performed, on or before the Closing Date, all of its
obligations under this Agreement and the other Purchase Documents which by the
terms thereof are to be performed on or before the Closing Date; and Seller
shall have delivered to Buyer an Officer's Certificate dated the Closing Date of
Seller to such effect.
(b) NO PENDING ACTION. No legislation, order, rule, ruling or
regulation shall have been proposed, enacted or made by or on behalf of any
governmental body, department or agency, and no legislation shall have been
introduced in either House of Congress or in the legislature of any state, and
no investigation by any governmental authority shall have been commenced or
threatened, and no action, suit, investigation or proceeding shall have been
commenced before, and no decision shall have been rendered
16
by, any court or other governmental authority or arbitrator, which, in any
such case, in the reasonable judgment of Buyer could adversely affect,
restrain, prevent or rescind the transactions contemplated by this Agreement
(including, without limitation, the purchase and sale of the Purchased
Assets) or result in a Material Adverse Effect.
(c) PURCHASE PERMITTED BY APPLICABLE LAWS; LEGAL INVESTMENT. Buyer's
purchase of and payment for the Purchased Assets (a) shall not be prohibited by
any applicable law or governmental order, rule, ruling, regulation, release or
interpretation, (b) shall not constitute a fraudulent or voidable conveyance
under any applicable law, and (c) shall be permitted by all applicable laws,
statutes, ordinances, regulations and rules of the jurisdictions to which Buyer
is subject.
(d) PROCEEDINGS SATISFACTORY. All proceedings taken in connection
with the purchase and sale of the Purchased Assets, all of the other Purchase
Documents and all documents and papers relating thereto, shall be in form and
substance reasonably satisfactory to Buyer.
(e) CONSENTS - PERMITS. Seller shall have received (and there shall
be in full force and effect) all material consents, approvals, licenses,
permits, orders and other authorizations of, and shall have made (and there
shall be in full force and effect) all such filings, registrations,
qualifications and declarations with, any Person pursuant to any applicable law,
statute, ordinance, regulation or rule or pursuant to any agreement, order or
decree to which Seller with respect to the Business is a party or to which it is
subject, in connection with the transactions contemplated by this Agreement and
the sale of the Purchased Assets.
(f) CORPORATE DOCUMENTS. Seller shall have delivered to Buyer:
(i) an Officer's Certificate of the Secretary of Seller
certifying (x) the incumbency and genuineness of signatures of all officers of
Seller executing this Agreement, any document delivered by Seller at the Closing
and any other document, instrument or agreement executed in connection herewith,
(y) the truth and correctness of resolutions of Seller authorizing the entry by
Seller into this Agreement and the transactions contemplated hereby, and (z) the
truth, correctness and completeness of the By-Laws of Seller;
(ii) the Charter of Seller certified as of a recent date by the
Secretary of State of the State of Delaware; and
(iii) certificates of corporate and tax good standing and
legal existence of Seller as of a recent date from the Secretary of State of the
State of Delaware.
(g) OPINION OF COUNSEL. (intentionally omitted)
17
(h) PAYMENT OF INDEBTEDNESS. All indebtedness for borrowed money
with respect to the Business shall have been paid and discharged in full, and
the holders of such indebtedness shall have terminated any security interests
covering the Purchased Assets.
(i) TRANSFER OF NECESSARY PERMITS. All of the Necessary Permits
shall have been transferred to or obtained by Buyer on or before the Closing
Date.
(j) EMPLOYEES.
shall have agreed to become employees of Buyer as of the Closing Date.
6.2 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate this Agreement and the transactions contemplated hereby are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of Buyer in this Agreement shall remain true and correct at the
Closing Date, and Buyer shall, on or before the Closing Date, have performed all
of its obligations under this Agreement and the other Purchase Documents which
by the terms thereof are to be performed by it on or before the Closing Date;
and Buyer shall have delivered an Officer's Certificate to Seller dated the
Closing Date to such effect.
(b) NO PENDING ACTION. No legislation, order, rule, ruling or
regulation shall have been proposed, enacted or made by or on behalf of any
governmental body, department or agency, and no legislation shall have been
introduced and no investigation by any governmental authority shall have been
commenced or threatened, and no action, suit, investigation or proceeding shall
have been commenced before, and no decision shall have been rendered by, any
court or other governmental authority or arbitrator, which, in any such case,
was not known by Seller on the date hereof or which could adversely affect,
restrain, prevent or rescind the transactions contemplated by this Agreement
(including, without limitation, the purchase and sale of the Purchased Assets)
or result in a Material Adverse Effect.
(c) PROCEEDINGS SATISFACTORY. All proceedings taken in connection
with the assumption of Assumed Liabilities, all of the other Purchase Documents
and all documents and papers relating thereto, shall be in form and substance
reasonably satisfactory to Seller.
(d) CONSENTS - PERMITS. Buyer shall have received (and there shall
be in full force and effect) all material consents, approvals, licenses,
permits, orders and other authorizations of, and shall have made (and there
shall be in full force and effect) all such filings, registrations,
qualifications and declarations with, any Person pursuant to
18
any applicable law, statute, ordinance, regulation or rule or pursuant to any
agreement, order or decree to which Buyer with respect to the Business is a
party or to which it is subject, in connection with the transactions
contemplated by this Agreement, the purchase of the Purchased Assets and the
assumption of Assumed Liabilities.
(e) OPINION OF COUNSEL. (Intentionally omitted).
6.3 THIRD PARTY AGREEMENTS. Unless specifically agreed in writing, no
third-party agreements, collaborations, supplier purchase orders or the like
concerning the Business are assigned by Seller to Buyer, and Buyer does not
accept any assignment of such third party agreements. Prior to the Closing
Date, Seller shall inform Buyer of the existence and relevant terms of such
third party agreements concerning the Business. To the extent such
agreements are assignable, Buyer shall have the option to have Seller assign
them to Buyer. Seller will use its best efforts to cancel any non-assignable
agreements prior to Closing.
7.0 TERMINATION
7.1 TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby may (at the option of the party having the right to do so)
be terminated at any time on or prior to the Closing Date as follows:
(a) MUTUAL CONSENT. By mutual written consent of Buyer and Seller;
(b) COURT ORDER. By Buyer or Seller if any court of competent
jurisdiction shall have issued an order pursuant to the request of a third party
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement;
(c) FAILURE TO MUTUALLY AGREE TO SCHEDULES. By Buyer or Seller if
the Schedules or Exhibits hereto have not been mutually agreed to on or before
July 15, 1997.
(d) FAILURE TO CLOSE. By Buyer or Seller if the transactions
contemplated hereby shall not have been consummated on or before July 31, 1997;
provided, however, that such right to terminate this Agreement shall not be
available to any party whose failure to fulfill any obligation of this Agreement
has been the cause of, or resulted in, the failure of the transactions
contemplated hereby to be consummated on or before such date;
(e) TERMINATION BY SELLER. By Seller upon notice to Buyer, if as of
the Closing (i) a condition to the performance of Seller set forth in Section
6.2 hereof shall not be fulfilled at the time specified for the fulfillment
thereof, (ii) a default under or a breach of this Agreement shall be made by
Buyer, or (iii) any representation or warranty set
19
forth in this Agreement or in any instrument delivered by Buyer pursuant
hereto shall be false or misleading; or
(f) TERMINATION BY BUYER. By Buyer by notice to Seller at any time
prior to the Closing if (i) a condition to the performance of Buyer set forth in
Section 6.1 hereof shall not be fulfilled at the time specified for the
fulfillment thereof, (ii) a default under or a breach of this Agreement shall be
made by Seller, (iii) any representation set forth in this Agreement or in any
instrument delivered by Seller pursuant hereto shall be false or misleading, or
(iv) the results of Buyer's due diligence of the Business shall not be
satisfactory to Buyer.
7.2 EFFECT OF TERMINATION AND RIGHT TO PROCEED. If this Agreement is
terminated pursuant to this Section 7.0, all further obligations of Buyer and
Seller under this Agreement shall terminate without further liability of Buyer
or any Affiliate thereof to Seller or of Seller to Buyer or any Affiliate
thereof. If any of the conditions to obligations of Buyer specified herein have
not been satisfied, Buyer, in addition to any other rights which it may have,
shall have the right to waive its rights to have such conditions satisfied and
elect to proceed with the transactions contemplated hereby and, if any of the
conditions to the obligations of Seller specified herein have not been
satisfied, Seller in addition to any other rights which may be available to it,
shall have the right to waive its rights to have such conditions satisfied and
elect to proceed with the transactions contemplated hereby.
8.0 INDEMNIFICATION
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each and every such
representation and warranty set forth in this Agreement shall survive until the
first anniversary of the Closing Date.
8.2 INDEMNIFICATION BY SELLER. Seller shall indemnify, defend and hold
Buyer, its officers, directors, employees, owners, agents and Affiliates,
harmless from and in respect of any and all losses, damages, costs and expenses
of any kind and nature whatsoever (including, without limitation, interest and
penalties, reasonable expenses of investigation and court costs, reasonable
attorneys' fees and disbursements and the reasonable fees and disbursements of
other professionals) which may be sustained or suffered by any of them
(collectively "Losses"), arising out of, resulting from or pertaining to any
Retained Liability, any breach or inaccuracy of any representation or warranty
or the breach of or failure to perform any warranty, covenant, undertaking or
other agreement of Seller contained in this Agreement or any other Purchase
Document.
8.3 INDEMNIFICATION BY BUYER. Buyer shall indemnify, defend and hold
Seller and its officers, directors, employees, consultants, owners, agents and
Affiliates, harmless from and in respect of any and all Losses which may be
sustained or suffered by any
20
of them arising out of or resulting from or pertaining to any breach or
inaccuracy of any representation or warranty or the breach of or failure to
perform any warranty, covenant, undertaking or other agreement of Buyer
contained in this Agreement or any other Purchase Document or all liabilities
(other than Retained Liabilities) for all environmental, ecological, health,
safety, products liability or other claims pertaining to the Business or the
Purchased Assets which relate to time periods or events occurring after the
Closing Date.
8.4 NOTICE AND OPPORTUNITY TO DEFEND. If there occurs an event which a
party asserts is an indemnifiable event pursuant to Section 8.2 or 8.3, the
party seeking indemnification (the "Claiming Party") shall promptly notify the
other party obligated to provide indemnification (the "Indemnifying Party"). If
such event involves (a) any Claim, or (b) the commencement of any action, suit
or proceeding by a third person, the Claiming Party will give the Indemnifying
Party prompt written notice of such Claim or the commencement of such action,
suit or proceeding, PROVIDED, HOWEVER, that the failure to provide prompt notice
as provided herein will relieve the Indemnifying Party of its obligations
hereunder only to the extent that such failure prejudices the Indemnifying Party
hereunder. In case any such action, suit or proceeding shall be brought against
a Claiming Party and it shall notify the Indemnifying Party of the commencement
thereof, the Indemnifying Party shall be entitled to participate therein and, to
the extent that it desires to do so, to assume the defense thereof, with counsel
reasonably satisfactory to the Claiming Party and, after notice from the
Indemnifying Party to the Claiming Party of such election so to assume the
defense thereof, the Indemnifying Party shall not be liable to the Claiming
Party hereunder for any attorneys' fees or any other expenses, in each case
subsequently incurred by the Claiming Party, in connection with the defense of
such action, suit or proceeding. The Claiming Party shall cooperate fully with
the Indemnifying Party and its counsel in the defense against any such action,
suit or proceeding. In any event, the Claiming Party shall have the right to
participate at its own expense in the defense of such action, suit or
proceeding. In no event shall an Indemnifying Party be liable for any
settlement or compromise effected without its prior consent.
8.5 PAYMENT. Payment of amounts owing by the Indemnifying Party pursuant
to Sections 8.2 through 8.4 with respect to a third party claim shall be made
within thirty days after the later of (i) settlement of the third party claim,
or (ii) the expiration of the period for appeal of a final adjudication of such
third party claim.
8.6 TAX BENEFITS; INSURANCE PROCEEDS. In determining the amount of any
damages for which any party is entitled to indemnification under this Agreement,
the gross amount thereof will be reduced by any correlative tax benefit or
insurance proceeds realized or to be realized by such party; provided, however,
that any increase in insurance premiums or taxes or the like caused by the
damages or payment thereof shall be taken into consideration and utilized to
offset the reduction in damages.
21
8.7 DISPUTE RESOLUTION. In the event that a dispute arises between the
parties as to any claim for Indemnification under Sections 8.1 through 8.4
hereof, the Presidents of each party hereto shall, for a period of ten (10)
days, discuss the matter in question to see if it is capable of a resolution
without invoking the provisions of 8.1 through 8.5 hereof. In the event that
the matter has not been so resolved upon the conclusion of such ten (10) day
period, during the next thirty (30) days the parties shall engage in good faith
non-binding mediation with a mutually agreeable third party mediator in an
effort to resolve such matter. If the Claiming Party is the Seller, the
mediation shall occur in Boston, Massachusetts. If the Claiming Party is the
Buyer, the mediation shall occur in San Jose, California.
9.0 POST CLOSING MATTERS
9.1 LICENSE TO BUYER. At the Closing, Seller shall execute and deliver to
Buyer a non-exclusive, royalty free, perpetual, worldwide license to make, use
and sell products for the fields of NMR spectroscopy and NMR microscopy under
all of Seller's existing patents, patent applications and inventions relating to
the Business which are not included in the Purchased Assets in the form set
forth in EXHIBIT 9.1.
9.2 LICENSE TO SELLER. At the Closing, Buyer shall execute and deliver to
Seller a non-exclusive, royalty free, perpetual, worldwide license to make, use
and sell products for all fields except NMR spectroscopy and NMR microscopy
under all patents, patent applications and inventions, which are included in the
Purchased Assets in the form set forth in EXHIBIT 9.2.
9.3 CIRCUITS. The fabrication line to manufacture HTS rf circuits on
wafers is not included in the Purchased Assets. Seller shall supply Buyer with
processed, etched high quality HTS rf circuits ("Circuits") in accordance with
the following:
[
22
]
9.4 NON-COMPETITION. Seller shall not, directly or indirectly and in any
capacity of any nature whatsoever, manufacture, sell, re-enter or otherwise
participate in the business of cryogenic or HTS probes, preamplifiers or
cryogenic systems for NMR spectroscopy or NMR microscopy for a period of ten
(10) years after the Closing Date. Without limiting the generality of the
foregoing, Seller shall not, directly or indirectly and in any capacity of any
nature whatsoever, act as a foundry for HTS or other electronics for any Person
other than Buyer for NMR spectroscopy or microscopy for a period of ten (10)
years after the Closing Date.
9.5 NON-SOLICITATION. For a period of five (5) years after the Closing
Date, Seller shall not, directly or indirectly and in any capacity of any nature
whatsoever, retain or hire as an employee or consultant or in any other
capacity, including, without limitation, through a supplier to Seller, any
Business Employee hired by Buyer within thirty (30) days before or after the
Closing, provided that (a) such restriction shall not apply to any such Business
Employee who has ceased employment with Buyer for any reason at least twelve
(12) months prior to an offer of employment by Seller, and (b) Buyer may waive
such restriction, in its sole discretion, on a case-by-case basis.
9.6 PROJECTS. The parties intend to work together on NMR spectroscopy and
NMR microscopy projects in government funding opportunities limited to small
businesses, such as the Small Business Innovative Research programs of agencies
such as the National Science Foundation, the National Institutes of Health and
the Department of Defense. Seller, with Buyer's consent, will apply as the
prime contractor and Buyer will participate as a subcontractor to the maximum
amount permitted by applicable regulations (e.g., 33% in Phase 1 and 49% in
Phase 2). As part of such projects, Seller will be generally responsible for
HTS technology and cryogenic technology, while Buyer will be responsible for NMR
circuits, electronics, probes, systems integration and NMR applications testing.
9.7 USE OF CERTAIN TOOLS. For a period of up to three (3) years after the
Closing Date, Seller will provide Buyer with reasonable access to those of
Seller's tools, as listed in SCHEDULE 9.7, which are used by Seller in its core
businesses, but which are also required for Buyer's designs and manufacture of
NMR Probes, provided such tools continue to be available to Seller and Buyer
gives reasonable notice for scheduling such access.
9.8 CONFIDENTIALITY. To the extent permitted by applicable law, the
parties agree to keep the purchase price, royalties, and other material terms
and conditions of this
23
Agreement confidential for ten (10) years. Seller will request confidential
treatment of purchase price and royalty percentages in any filing required
with a regulatory agency.
10.0 MISCELLANEOUS
10.1 FEES AND EXPENSES. Each of the parties hereto will pay and discharge
its own expenses and fees in connection of with the negotiation of and entry
into this Agreement and the consummation of the transactions contemplated
hereby.
10.2 NOTICES. All notices, requests, demands, consents and communications
necessary or required under this Agreement or any other Purchase Document shall
be made in the manner specified, or, if not specified, shall be delivered by
hand or sent by registered or certified mail, return receipt requested, or by
telecopy (receipt confirmed) to:
if to Buyer:
Bruker Instruments, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Ph.D.
President
Facsimile Transmission Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller:
Conductus, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
Facsimile Transmission Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
24
Conductus, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Manager, Legal Affairs
Facsimile Transmission Number: ▇▇▇-▇▇▇-▇▇▇▇
All such notices, requests, demands, consents and other communications
shall be deemed to have been duly given or sent two (2) days following the date
on which mailed, or on the date on which delivered by hand or by facsimile
transmission (receipt confirmed), as the case may be, and addressed as
aforesaid.
10.3 SUCCESSORS AND ASSIGNS. All covenants and agreements set forth in
this Agreement and made by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the successors and assigns of such party, whether or
not so expressed, except that Seller may not assign or transfer any of its
rights or obligations under this Agreement without the consent in writing of
Buyer.
10.4 COUNTERPARTS, ETC. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
together shall constitute one and the same instrument, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart. The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement. If any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason in any
jurisdiction, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions hereof shall not be in any
way impaired or affected, it being intended that each of parties' rights and
privileges shall be enforceable to the fullest extent permitted by law, and any
such invalidity, illegality and unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
10.5 TAX MATTERS.
(a) Seller will timely file all federal, state, local and foreign tax
reports and returns for any period which ends on or prior to the Closing Date
and which are required to be filed to reflect the operations of the Business.
All such reports and returns will be prepared and filed using tax accounting
methods and principles which are substantially consistent with those used in the
returns and reports of taxes for the Business for preceding tax periods unless
Buyer agrees otherwise. Any item of income, deduction or credit to be included
in any such tax return or report shall be based on the
25
permanent records (including work papers) of Seller. Buyer shall prepare and
file on behalf of the Business all federal, state, local and foreign tax
reports and returns for any period which ends after the Closing Date and
which are required to be filed to reflect the operations of the Business
attributable to a period prior to the Closing Date. Any tax returns or
reports filed by Buyer and Seller shall be consistent with the provisions of
this Agreement.
(b) All refunds of taxes attributable to any or all years or periods
(or portions thereof) ending prior to the Closing Date or attributable to any
taxable year or period which ends at or after the Closing Date, to the extent
that the refund is attributable to the operations of the Business up to the
Closing Date (as determined on the basis of the permanent records of Seller),
shall belong to and be retained by Seller.
(c) The parties hereto shall provide such necessary information as
any other party hereto may reasonably request in connection with the preparation
of such parties' Tax Returns, or to respond to or contest any audit, prosecute
any claim for refund or credit or otherwise satisfy any requirements relating to
Taxes of Seller.
(d) Buyer shall pay all transfer Taxes, sales Taxes, documentary
stamp Taxes, recording charges and other similar Taxes resulting from, arising
under or in connection with the transfer of the Purchased Assets or any other
related transaction under the Agreement.
(e) The obligations of Buyer and Seller set forth in the Agreement
relating to Taxes shall, except as otherwise agreed in writing, be unconditional
and absolute and shall remain in effect without limitation as to time or amount
of recovery by Seller or Buyer until thirty (30) days after the expiration of
the applicable statute of limitations governing the Taxes to which such
obligations relate (after giving effect to any agreement extending or tolling
such statute of limitations).
10.6 GOVERNING LAW. This Agreement, including the validity hereof and the
rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be performed entirely in such state (without
giving effect to the conflicts of laws provisions thereof).
10.7 ENTIRE AGREEMENT. This Agreement, including the Schedules referred to
herein, is complete, and all promises, representations, understandings,
warranties and agreements with reference to the subject matter hereof, and all
inducements to the making of this Agreement relied upon by all the parties
hereto, have been expressed herein or in said Schedules or Exhibits. This
Agreement may not be amended except by an instrument in writing signed on behalf
of Seller and Buyer.
26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first set forth above.
ATTEST: BRUKER INSTRUMENTS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------- ------------------------
Title: President
---------------------
ATTEST: CONDUCTUS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------- ------------------------
7/9/97 Title: Manager, Legal Affairs
--------------------------
27
SCHEDULE 2.1
Purchased Assets
Seller shall deliver to Buyer the following:
1. All inventory of the Business, including Seller's inventory of the Business
located either in the hands of distributors or at customer sites, as listed in
Exhibit 2.1.1.
2. The tools and test equipment of the Business as listed in Exhibit 2.1.2,
including computers used by hired employees, software for computer-aided design
or engineering, Business documents, spreadsheets, databases and the like, but
excluding Government-owned tools and test equipment used in the Business and
test equipment that is shared by other operations of Seller.
3. All documents, drawings and similar materials of the Business in hard copy
and electronic form (where available)
4. Seller's interest in all intellectual property of the Business, including,
without limitation, the following:
a. U.S. Patent No. 5,508,613, for "Apparatus for Cooling NMR Coils"
(co-owned with ▇▇▇▇▇▇ ▇▇▇▇▇, licensed to Varian);
b. U.S. Patent No. 5,585,723, for "Inductively Coupled Superconducting
Coil Assembly" (co-owned with Varian);
c. U.S. Patent No. 5,572,127, for "Inhomogeneities In Static Magnetic
Fields Near Superconducting Coils" (licensed to Varian);
d. U.S. Patent No. 5,565,778, for "Nuclear Magnetic Resonance Probe Coil"
(licensed to Varian);
e. U.S. Patent No. 5,594,342, for "Nuclear Magnetic Resonance Probe Coil
with Enhanced Current-Carrying Capability;"
f. U.S. Patent No. 5,619,140, "Method of Making Nuclear Magnetic
Resonance Probe Coil;"
[
28
]
n. Any foreign patents or U.S. or foreign patent applications,
continuations-in-part or other similar rights corresponding to
the foregoing;
o. All trademarks used in the Business;
p. All copyrights used in the Business;
q. All know-how used in the Business; and
r. All designs developed by the Business.
5. Other assets used in the Business.
29
Exhibit 2.2.1 Inventory
[]
30
Exhibit 2.1.2 Fixed Assets
[]
31
SCHEDULE 2.2
Retained Assets
Seller shall retain ownership of the following assets:
1. Accumulated losses of the Business;
2. All issued and pending U.S. and foreign Patents of Seller not listed
in Schedule 2.1;
3. Equipment not listed in SCHEDULE 2.1 which is used in operations of
Seller other than the Business.
32
SCHEDULE 2.3
Assumed Liabilities
1. Buyer shall be responsible for the following:
a. Ongoing factory service for out-of-warranty customers of HTS NMR
Probes sold by the Business, as listed in Exhibit 2.3.1 hereto.
b. Warranty service, including existing upgrade options, for
accepted NMR Probes sold by the Business which are still covered by their
original warranty, as listed in Exhibit 2.3.1 hereto.
c. Installation and acceptance for HTS NMR Probes which have been
delivered by the Business but not yet installed or accepted as of the Closing,
provided that Seller will exercise its good faith efforts to minimize the number
of HTS NMR Probes which are delivered to customers, but have not yet been
accepted and entered warranty at Closing, as listed in Exhibit 2.3.1. It is
noted, however, that there are no HTS NMR Probes which have been delivered, but
are not installed or accepted on or before the Closing Date.
Notwithstanding the foregoing, for HTS NMR probes manufactured by the
Business which were sold by Varian or Nalorac, Buyer shall have no
responsibility for in-warranty or post-warranty field service or installation
except that Buyer will offer factory-repair services to such distributors at
commercially reasonable rates and conditions.
2. Buyer shall be responsible for the manufacturing, testing and delivery
of HTS NMR Probes to distributors of the Business which, as of the Closing Date,
have been ordered by such distributors but which have not yet been delivered by
the Business. An amount equal to any downpayments made with respect to such
probes prior to the Closing will be subtracted from the Purchase Price, and
Buyer shall have the right to receive any other amounts due for any such probes,
whether or not a downpayment has been made. All probes for which probes have
been ordered but not yet delivered as of the Closing Date are listed in Exhibit
2.3.2. It is noted, however, that at the time of execution of this Agreement
there are no HTS NMR Probes on order, but not yet delivered.
3. If, despite the good faith efforts of Buyer, the specifications on NMR
probes of the Business cannot be met under Paragraphs 1 or 2 of this Schedule
2.3, or if a customer rejects and returns an HTS NMR Probe, sold by Seller prior
to Closing, Seller will be responsible for accepting the return of such probe
for a refund or for negotiating some other form of a settlement with such
customer.
33
Exhibit 2.3.1 Warranty Status
[
]
34
Schedule 2.6 Allocation of Purchase Price
[
]
35
Schedule 3.5 Changes
[
]
36
SCHEDULE 3.6
TITLE, SUFFICIENCY AND CONDITION OF ASSETS
No exceptions.
37
SCHEDULE 3.10
CONTRACTS
Seller is subject to the following contracts with respect to the Business:
(a)
1. Employees of the Business are currently eligible for health, dental, life
and long and short term disabliity insurance, 401K plan, Section 125 plan,
incentive stock options and an employee stock purchase plan.
(b)
1. NIH Grant 5 R44 RR09244-03 for "Superconducting Probe for Clinical
Microscopy"
a) Subgrant under this award to Duke University;
b) Conductus has agreed to deliver a probe to Duke University as part of
this program. Title of the probe will transfer to Bruker upon completion
of the grant performance;
c) Conductus has contracted to loan a probe to NCI under this program for
a period of six months. Title to the probe will transfer to Bruker upon
completion of the grant performance.
2. NIH Grant 5 R44 RR09757-03 for "Superconducting Probe for NMR
Spectroscopy."
(c) None.
(d) None.
(e) None.
(f) None.
(g)
1. Sales and Licensing Agreement with Varial dated January 1, 1996; and
2. OEM Distribution Agreement with Nalorac dated November 4, 1996.
(h)
1. Joint Development Agreement with CTI Cryogenics dated September 19, 1995
(expired); and
2. Varian dated August 1, 1994 (superceded by Sales Agreement.
(i) None.
(j)
1. License Agreement with Duke University under Subgrant listed above;
2. License to government of several patents and applications under various
contracts; and
38
3. License to Varian (as indicated in Schedule 2.13).
(k) None as relates directly to the Business. Seller has numerous contracts
with consultants and former officeers, including nondisclosure agreements and
proprietary rights agreements.
(l) None
(m) None
(n) None
39
SCHEDULE 3.11
CUSTOMERS AND SUPPLIERS
1. CTI-Cryogenics is the sole source of supply for cryocoolers.
40
SCHEDULE 3.16
EMPLOYEES
See Schedule 3.5(f).
41
SCHEDULE 3.17
LITIGATION
None.
42
EXHIBIT 9.1
LICENSE AGREEMENT
This License Agreement is effective August 4, 1997, by and between Conductus,
Inc., a Delaware corporation ("Licensor") and Bruker Instruments, Inc., a
Massachusetts corporation ("Licensee").
WHEREAS, Licensor and Licensee have entered into an Asset Purchase Agreement
whereby Licensor transferred the assets of its HTS NMR probe business to
Licensee;
WHEREAS, Licensor is the owner by assignment or right to assignment of certain
patents, patent applications and inventions which are or may be useful in the
Business; and
WHEREAS, Licensee desires to acquire and Licensor desires to grant a license,
under the terms and conditions contained herein, to the patents, patent
applications and inventions listed below.
NOW, THEREFORE, in consideration of the agreements and covenants contained
hereunder, the parties agree as follows:
DEFINITIONS.
Unless otherwise provided herein, the definitions contained in the Asset
Purchase Agreement between Bruker Instruments, Inc. and Conductus, Incorporated,
dated July 9, 1997, which is incorporated herein by reference, apply hereto.
"License Agreement means this agreement and any schedules and exhibits thereto;
"Licensee" means Bruker Instruments, Inc. and its Affiliates;
"Licensor" means Conductus, Inc. and its successors and assigns;
"Licensed Field of Use" means systems, subunits (E.G., NMR probes, cryogenic
systems, preamplifiers, etc.) and accessories (a) for NMR spectroscopy, and (b)
for all NMR microscopy on any sample or specimen other than in-vivo NMR
microscopy on human patients, but does not include MRI and/or in-vivo NMR
microscopy on human patients in magnets of any geometry;
"Licensed Product" means a product which embodies or uses any or all of the
elements or steps or their equivalents recited in one or more claims, of any
patent which is in existence or may issue from the Licensed Technology, or which
is manufactured by the use of any or all of the steps or their equivalents
recited in one or more claims of any patent which may issue from the Licensed
Technology;
"Licensed Technology" means those patents, patent applications and inventions
listed in Exhibit 1 hereto.
GRANT OF LICENSE.
Subject to the terms of this License Agreement, Licensor grants Licensee a
worldwide, royalty-free, unrevocable, perpetual, fully paid, nonexclusive
license without right of sublicense to make, have made, import, use, distribute,
sell and otherwise transfer Licensed Products in the Licensed Field of Use.
COVENANT NOT TO ▇▇▇.
Licensor hereby grants Licensee immunity from any claims by Licensor, in law or
equity of infringement of any Letters Patent which may be granted to Licensor
arising from inventions first made by Licensor prior to the effective date of
this License Agreement. This immunity shall not apply to (a) any activity
outside of the Licensed Field of Use or (b) any infringement related to any
filter component or ▇▇▇▇▇▇▇▇▇ junction device whether in the Licensed Filed of
Use or not.
WARRANTY.
4.1 Licensor represents and warrants that (a) it has the full right and power
to grant the license set forth in Section 2, and that there are no outstanding
agreements, assignments, or encumbrances inconsistent with the provisions of
said license or with any other provisions of this License Agreement, and (b)
that to the best of its knowledge, Exhibit 1 is a full and complete list of all
patents, patent applications and inventions of Licensor applicable to the
Licensed Field of Use. Licensor makes no other representations or warranties,
express or implied, nor does Licensor assume any liability in respect of any
infringement of patents or other rights of third parties due to Licensee's
operation under the license herein granted.
4.2 Licensor does not warrant, nor does it represent that Licensee will not
require a license under other patents to make, use, import, lease, sell or
otherwise transfer products.
43
PATENT MARKING.
Licensee agrees to affix to each Licensed Product for which a United States
patent has issued the following notice:
"Lic. U.S. ▇▇▇. No. ________."
TRADE SECRETS, KNOW-HOW, COPYRIGHTS AND TRADEMARKS.
Except as expressly provided, no license or other right is granted herein to
either party directly or by implication, estoppel or otherwise, with respect to
any trade secret or know-how, and no such license or other right shall arise
from the consummation of this License Agreement or from any acts, statements or
dealings leading to such consummation. Except as specifically provided herein,
neither party is required hereunder to furnish or disclose to the other any
technical or other information.
RIGHT TO ENFORCE PATENT RIGHTS AGAINST THIRD PARTIES.
Licensor shall have the sole right to enforce the rights granted hereunder,
including any patent rights against infringement by third parties.
TRADEMARKS.
Neither the granting of the license herein nor the acceptance of payments
hereunder shall constitute an approval of or acquiescence in Licensor's or
Licensee's practices with respect to trademarks, trade names, corporation names,
advertising, or similar practices with respect to any product.
MISCELLANEOUS.
9.1 This License Agreement represents the entire agreement of the parties
regarding the subject matter hereof and supersedes all prior agreements,
understandings and negotiations regarding the same. This License Agreement may
not be changed, modified, amended or supplemented except by a written instrument
signed by both parties. Furthermore, it is the intention of the parties that
this License Agreement be controlling over any order, confirmation, invoice or
similar document, even if accepted in writing by both parties, and that waivers
and amendments shall be effective only if made by non-preprinted agreements
clearly understood by both parties to be an amendment or waiver.
9.2 Neither party shall be required hereunder to file any patent application,
or to secure any patent or patent rights, or to maintain any patent in force.
9.3 This License Agreement or any part hereof may not be assigned by either
Licensee without the prior consent of Licensor; provided, however, that Licensee
may assign this License Agreement to any entity which acquires substantially all
of its assets or business, provided that the assignor remains obligated
hereunder. This License Agreement, and the Licensed Technology may be freely
assigned by Licensor, provided that the assignor remains obligated hereunder.
9.4 If any provision of this License Agreement shall be held illegal or
unenforceable, that provision shall be limited or eliminated to the minimum
extent necessary so that this License Agreement shall otherwise remain in full
force and effect and enforceable.
9.5 All notices, consents or approvals required by this License Agreement shall
be in writing sent by certified or registered air mail, postage prepaid or by
facsimile or cable (confirmed by such certified or registered mail) to the
parties at the addresses first specified above or such other addresses as may be
designated in writing by the respective parties.
9.6 Both parties are independent contractors under this License Agreement.
Nothing contained in this License Agreement is intended nor is to be construed
so as to constitute the parties as partners, agents or joint ventures with
respect to this License Agreement. Neither party hereto shall have any express
or implied right or authority to assume or create any obligations on behalf of
or in the name of the other party or to bind the other party to any contract,
agreement or undertaking with any third party
9.7 The waiver by either party of a breach of any provisions contained herein
shall be in writing and shall in no way be construed as a waiver of any
succeeding breach of such provision or the waiver of the provision itself.
9.8 NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER PARTY
WILL BE OBLIGATED OR LIABLE WITH RESPECT TO ANY SUBJECT
44
MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR
OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES, OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR
SERVICES.
9.9 Licensee shall comply with all export laws and restrictions and regulations
of the Department of Commerce or other United States or foreign agency or
authority, and not to export, or allow the export or reexport of any Licensed
Technology or any direct product thereof in violation of any such restrictions,
laws or regulations, or to any countries for which the United States Government
or any agency thereof at the time of export requires an export license or other
governmental approval. Licensee will notify its customers of the obligation to
comply with such export laws and regulations.
9.10 This License Agreement shall be effective upon closing of the Asset
Purchase Agreement. In the event that the Asset Purchase Agreement is
terminated, this License Agreement shall be without effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day
and year first above written in multiple counterparts, each of which shall be
considered an original.
Conductus: Bruker:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------- ----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President and CEO Title: President
Date: 8/1/97 Date: 8/1/97
---------------------------- ----------------------------
45
EXHIBIT 1
LICENSED TECHNOLOGY
1. U.S. Patent No. 5,130,294 for "High Temperature Superconductor-Calcium
Titanate Sapphire Structures;"
2. U.S. Patent No. 5,132,282 for "High Temperature Superconductor-Strontium
Titanate Sapphire Structures;"
3. U.S. Patent No. 5,207,884 for "Superconductor Deposition System;"
4. U.S. Patent No. 5,432,151 for "Process for Ion-assisted Laser Deposition of
Biaxially Textured Intermediate Layer for Forming Superconducting Thin
Films on Substrates;"
5. U.S. Patent No. 5,351,007 for "Superconducting Magnetic Resonance Probe
Coil;"
6. U.S. Patent No. 5,276,398 for "Superconducting Magnetic Resonance Probe
Coil;"
7. [
8.
]
9. All other non-listed corresponding or counterpart patents to the patents
and patent applications listed in items 1-8 above;
10. All patents which are reissues, reexaminations, divisions, continuations or
extensions of any of the forgoing patents, patent applications and
inventions.
46
SCHEDULE 9.7
EXHIBIT TOOLS
[
]
47