EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
DATED AS OF NOVEMBER 17, 1997
BY AND AMONG
UL AMERICA, INC.,
XXXXX ELECTRONICS, INC.
AND
PCD INC.
APPENDICES
Appendix A - Certain Definitions
Appendix B - Documents to Be Delivered by Seller at the
Closing
Appendix C - Documents to Be Delivered by Buyer at the
Closing
SCHEDULES
Schedule 3.2(A) - Incorporation, Subsidiaries, Branches
Schedule 3.2(B) - Financial Statements
Schedule 3.2(C) - Undisclosed Liabilities
Schedule 3.2(D) - Taxes
Schedule 3.2(E) - Real Property
Schedule 3.2(F) - Tangible Personal Property
Schedule 3.2(G) - Intellectual Property
Schedule 3.2(H) - Litigation
Schedule 3.2(I) - Contracts
Schedule 3.2(J) - Employees and Employee Benefits
Schedule 3.2(K) - Compliance With Environmental Laws
Schedule 3.2(L) - Compliance With Other Laws
Schedule 3.2(N) - Insurance
Schedule 4.4(J) - Powers of Attorney
SHARE PURCHASE AGREEMENTS
SHARE PURCHASE AGREEMENT (this "Purchase Agreement"), dated
as of November 17, 1997, by and among UL AMERICA, INC.
("Seller"), a Delaware corporation, Xxxxx Electronics, Inc. (the
"Company"), an Indiana Corporation, and PCD Inc. ("Buyer"), a
Massachusetts corporation.
RECITALS
A. The Company is engaged in the business (the "Business")
of developing, designing, manufacturing, selling, and servicing
burn-in/test sockets and plastic carriers (the "Products") for
the global semiconductor industry;
B. Seller owns all of the issued and outstanding common
stock of the Company (the "Shares");
C. Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, all of the Shares on and subject to the
terms and conditions contained in this Purchase Agreement; and
X. Xxxxx PLC has agreed to guaranty the obligations of
Seller and the Company hereunder.
TERMS AND CONDITIONS
In consideration of the matters recited above and for other
good and valuable consideration, and intending to be legally
bound by this Purchase Agreement, Buyer, the Company and Seller
hereby agree as follows:
ARTICLE I
GENERAL PROVISIONS
1.1 DEFINITIONS. Appendix A sets forth the definitions of
certain terms used in this Purchase Agreement. Those terms shall
have the meanings set forth in Appendix A where used in this
Purchase Agreement and identified with initial capital letters.
1.2 OTHER DEFINITIONS AND MEANINGS; INTERPRETATION. For
purposes of this Purchase Agreement, the term "parties" means
Buyer, the Company and Seller (except where the context otherwise
requires); and the term "person" includes any natural person,
firm, association, partnership, corporation, limited liability
company or partnership, governmental agency, or other entity
other than the parties. The Table of Contents and the headings
of the Articles and Sections of this Purchase Agreement have been
included in this Purchase Agreement for convenience of reference
only and shall not be deemed to affect the meaning of the
operative provisions of this Purchase Agreement. All dollar
amounts referred to in this Purchase Agreement are in United
States Dollars.
ARTICLE II
PURCHASE AND SALE
2.1 TRANSACTION. On and subject to the terms and
conditions of this Purchase Agreement
(A) At the Closing, Buyer will purchase from Seller,
and Seller will sell, transfer, and assign to Buyer, all of
the Shares; and
(B) Buyer will pay Seller the Purchase Price as
provided in Section 2.2.
2.2 PURCHASE PRICE. For the purposes of this purchase
agreement, the term "purchase price" means one hundred and thirty
million dollars ($130,000,000) plus or minus the amount of the
adjustment
2.3 ADJUSTMENT.
(A) Preparation of Closing Balance Sheet. Within 40
days after the Closing Date, Buyer will prepare, in
cooperation with Seller, and deliver to the Seller a draft
consolidated balance sheet (the "Draft Closing Date Balance
Sheet") for the Company as of the close of business on the
Closing Date. The Draft Closing Date Balance Sheet (as well
as the Closing Date Balance Sheet referred to below) will be
prepared (except as specified in Section 2.3(F)) in
accordance with U.K. GAAP applied on a basis consistent with
and subject to those used in the preparation of the
financial statements included in Schedule 3.2(B), it being
understood and agreed that there shall be no significant
changes in the reserves, except for changes occurring in the
ordinary course of business, it being understood and agreed
that the computation of reserves will be on a basis
consistent with the September 30, 1997 balance sheet, a copy
of which is annexed hereto; and it being further understood
that the application of the accounting principles, practices
and procedures specified in the Xxxxx Financial Controller
Manual, attached hereto as a part of Schedule 3.2(B), shall
not result in any material differences from the results
under U.K. GAAP
(B) Informal Negotiations; Dispute Resolution. If
the Seller believes that the Draft Closing Date Balance
Sheet has not been prepared as required, it will deliver a
detailed statement describing its objections to Buyer within
30 days after receiving the Draft Closing Date Balance
Sheet. Buyer and Seller will use reasonable efforts to
resolve amicably any such objections themselves. If the
parties do not obtain a final resolution within 30 days
after Buyer has received the statement of objections,
however, Buyer and Seller will select an accounting firm
- 2 -
mutually acceptable to them to resolve any remaining
objections (after excluding their respective regular
outside accounting firms). If the parties are unable
to mutually select such accounting firm within 15 days after
the expiration of the 30 day period specified in the
immediately preceding sentence, the accounting firm shall be
selected by the President of the American Arbitration
Association. The determination of any accounting firm so
selected will be made within 30 days following the selection
of such firm, will be set forth in writing and will be
conclusive and binding upon the parties. Buyer will revise
the Draft Closing Date Balance Sheet as appropriate to
reflect the resolution of any objections thereto pursuant to
this Section 2.3(B). The "Closing Date Balance Sheet" shall
mean the Draft Closing Date Balance Sheet together with any
revisions thereto pursuant to this Section 2.3(B).
(C) Fees and Expenses. In the event the parties
submit any unresolved objections to an accounting firm for
resolution as provided in Section 2.3(B) above, the Buyer
and Seller will share responsibility for the fees and
expenses of the accounting firm as follows:
(1) if the accounting firm resolves
substantially all of the remaining objections in favor
of the Buyer, Seller will be responsible for all of the
fees and expenses of the accounting firm;
(2) if the accounting firm resolves
substantially all of the remaining objections in favor
of Seller, Buyer will be responsible for all of the
fees and expenses of the accounting firm; and
(3) if the accounting firm resolves certain
substantial objections in favor of Buyer and other
substantial objections in favor of Seller, the fees and
expenses of the accounting firm will be borne by the
Buyer and Seller in such proportion as the accounting
firm deems equitable.
(D) Access. Buyer will make the work papers and
back-up materials used in preparing the Draft Closing Date
Balance Sheet, and the books, records, and financial staff
of the Company, available to the Seller and its accountants
and other representatives at reasonable times and upon
reasonable notice at any time during (1) the preparation by
Buyer of the Draft Closing Date Balance Sheet, (2) the
review by the Seller of the Draft Closing Date Balance
Sheet, and (3) the resolution by the parties of any
objections thereto.
(E) Base-Line Net Worth. The "Base-Line Net Worth"
will be an amount equal to Twenty Two Million Fifty Eight
Thousand Dollars ($22,058,000).
(F) Determination of Closing Net Worth. The
"Closing Net Worth" will be an amount equal to the
aggregate book value of the Company's assets minus the
- 3 -
aggregate book amount of the Company's liabilities as of the
Closing, as shown on the Closing Date Balance Sheet. It is
understood and agreed (i) that the liabilities shown on the
Closing Date Balance Sheet will reflect, based on U.K. GAAP
principles, any unpaid liabilities of the Company or any
Company Subsidiary for bonuses or other incentive payments,
sales commissions, unfunded pension obligations (including
without limitation the Japanese and Korean retirement
allowances) and unfunded disability obligations allocable
with respect to periods ending on or prior to the Closing
Date and (ii) that there shall be no proration or allocation
to periods after the Closing Date with respect to any
bonuses payable, including bonuses payable by reason of the
sale of the Company, to the following six individuals:
Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxx
Xxxxx, Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxx. Notwithstanding
the foregoing, the Seller in lieu of recording such
liability on the Closing Date Balance Sheet may retain the
obligation to make payment of such amounts, in which case,
it shall execute an assumption of liability and retainer
agreement in customary form reasonably satisfactory to the
Buyer.
(G) Amount of the Adjustment. If the Closing Net
Worth is equal to the Base-Line Net Worth, then the
Adjustment will equal zero. If the Closing Net Worth is
more than the Base-Line Net Worth, then the Adjustment will
be a positive amount equal to the amount by which the
Closing Net Worth is more than the Base-Line Net Worth. If
the Closing Net Worth is less than the Base-Line Net Worth,
then the Adjustment will be a negative amount equal to the
amount by which the Closing Net Worth is less than the Base-
Line Net Worth, provided that the Seller and its affiliates
will not contribute assets to the Company for the purpose of
causing the Closing Net Worth to exceed the Base-Line Net
Worth (or contribute assets which are not cash or cash
equivalents without the prior written consent of the Buyer
as to the identity and valuation of such assets); and
provided further that except as permitted pursuant to
Section 4.4(J), the Seller will not remove assets used or
held for use in the conduct of the Business. The Purchase
Price will finally be determined on the date the amount of
the Adjustment is finally determined, provided that the
positive amount of such Adjustment will not be greater than
$2,750,000 plus any cash or cash equivalents left in the
Business as of the Closing Date if the Closing occurs on or
before December 31, 1997, and if the Closing occurs after
December 31, 1997, then the positive adjustment will not be
greater than the sum of $2,750,000 (and said cash or cash
equivalents) and any net income of the Business from January
1, 1998 to the date of the Closing.
2.4 PAYMENT OF PURCHASE PRICE. Buyer has paid and will
pay the Purchase Price as follows:
(A) Payment at Closing. At the Closing, Buyer will
pay Seller One Hundred Thirty Million Dollars($130,000,000).
- 4 -
(B) Payment of the Adjustment. If the Adjustment is
a positive amount, then Buyer will pay Seller the amount of
the Adjustment, together with interest thereon at the Prime
Rate compounded monthly for the period from the Closing Date
through and including the date on which the Adjustment is
paid, within five (5) business days after the final
determination of the Adjustment pursuant to Section 2.3(G).
2.5 REFUND OF THE ADJUSTMENT. If the Adjustment is a
negative amount, then Seller will refund to Buyer the amount of
the Adjustment, together with interest thereon compounded monthly
at the Prime Rate for the period from the Closing Date through
and including the date on which the Adjustment is paid, within
five (5) business days after the final determination of the
Adjustment pursuant to Section 2.3(G).
2.6 METHOD OF PAYMENT. All payments under this Purchase
Agreement shall be made by delivery to the payee as follows:
(A) Directed Payments. If a party which is entitled
to a payment under this Purchase Agreement provides the
other party three (3) days' advance written designation of a
bank and account number into which the payee wishes payment
to be made, then the payer will make such payment by wire
transfer (in immediately available funds) to the designated
account of the payee.
(B) Other Payments. In all other cases, the party
obligated to make a payment under this Purchase Agreement
will do so by making such payment by wire transfer (in
immediately available funds) to the designated account of
the payee.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 SELLER'S GENERAL REPRESENTATIONS AND WARRANTIES.
Seller and the Company, jointly and severally, hereby represent
and warrant to Buyer that the following are true and correct:
(A) Organization and Existence. Seller is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware. Guarantor
is a corporation duly organized, validly existing, and in good
standing under the laws of the United Kingdom.
(B) Power and Authority. The Seller has all
necessary corporate power and authority to enter into this
Purchase Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby, and
the Guarantor has all necessary corporate power and
authority to execute, deliver and perform the Guaranty.
This Purchase Agreement constitutes the valid and legally
- 5 -
binding obligation of Seller, enforceable in accordance with
its terms and conditions, subject to the effect of any
applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditor's rights
generally and subject, as to enforceability, to the effect
of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(C) No Conflict. Neither the execution and the
delivery by Seller of this Purchase Agreement or the
Guarantor of the Guaranty, nor the consummation of the
transactions contemplated hereby or thereby, will (i)
violate or conflict with the Certificate of Incorporation or
By-laws (or equivalent constitutional documents) of
Guarantor, the Company or Seller, (b) conflict with or
violate any law or governmental order applicable to
Guarantor, the Company or Seller, or (c) result in any
breach of, or constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement to
which the Company is a party, or result in the creation of
any encumbrance on the Shares or on any of the assets or
properties of the Company, except, in the case of clause
(c), as would not, individually or in the aggregate, have a
material adverse effect on the Business Condition or have a
material adverse effect on the ability of Seller to
consummate the transactions contemplated by this Purchase
Agreement.
(D) Capitalization. The entire authorized capital
stock of the Company consists of 13,500 shares of common
stock, of which 7,825 shares are issued and outstanding and
no shares are held in treasury. All of the Shares have been
validly issued, are fully paid, and are nonassessable.
There are no restrictions of any kind on Seller's right,
power, or authority to sell, transfer, and assign all of the
Shares to Buyer as provided in this Purchase Agreement and
no such restrictions will exist before the Closing. Neither
Seller nor the Company has granted to, and there are not
outstanding in favor of, any person any option, warrant, or
other right of any kind to acquire any of the Shares or any
other equity securities of the Company and no such rights
will be granted to or outstanding in favor of any person
before the Closing.
(E) Brokers. With the sole exception of Xxxxxx
Xxxxxxx, neither Seller nor the Company has engaged and
neither is directly or indirectly obligated to any person
acting as a broker or finder, or a person acting in a
similar capacity, in connection with the transactions
contemplated by this Purchase Agreement.
3.2 REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.
Seller and the Company, jointly and severally, hereby represent
and warrant to Buyer that, except as set forth in the disclosure
schedules delivered by Seller to Buyer in connection herewith
(the "Disclosure Schedules"), the following are true and correct:
- 6 -
(A) Incorporation, Subsidiaries, Branches. Attached
at Schedule 3.2(A) is a true and complete copy of the
Company's Articles of Incorporation and Code of By-laws, as
last amended and/or restated, a chart showing all companies
(the "Company Subsidiaries") in which the Company has a
direct or indirect equity ownership interest and the
percentage ownership interest in each such company, and a
chart showing all jurisdictions in which the Company or any
Company Subsidiary operates a branch. The Company is an
Indiana corporation with full corporate power and authority
to own its properties and conduct the Business as the same
has been and is being conducted and is qualified to do
business and is in good standing in each jurisdiction in
which the nature of its activities and/or ownership of
property requires it to be qualified to do business. Only
two of the Company Subsidiaries are actively engaged in the
conduct of the Business, namely, Xxxxx Japan Kabushiki
Kaisha (nee: Xxxxx Japan Co., Ltd.) ("Xxxxx Japan"), a
Japanese limited stock company (kabushiki kaisha), and Xxxxx
Electronics Asia Pte. Limited ("Xxxxx Singapore"), a
Singapore limited liability company. Each of the Company
Subsidiaries has the full corporate power and authority to
own its respective properties and conduct the Business as
the same has been and is being conducted by them. Each of
the Company Subsidiaries is qualified to do business and in
good standing in each jurisdiction in which the nature of
their respective activities and/or ownership of property
requires them to be so qualified, except where failure to be
so qualified and in good standing would not have a material
adverse effect on the Business Condition. Neither Seller,
the Company nor any of the Company Subsidiaries has granted
to, and there are not outstanding in favor of any person,
any option, warrant, or other right of any kind to acquire
any equity securities of the Company Subsidiaries and no
such rights will be granted to or outstanding in favor of
any person before the Closing.
(B) Financial Statements. Attached hereto as
Schedule 3.2(B) are the following financial statements of
the Company and the Company Subsidiaries: consolidated
statements of income and cash flow for the periods from May
29, 1994 to June 3, 1995, from June 4, 1995 to June 1, 1996,
from May 3, 1996 to April 5, 1997, and from April 6, 1997 to
September 30, 1997 and consolidated balance sheets as of
June 3, 1995, June 1, 1996, April 5, 1997 and September 30,
1997. The financial statements contained in Schedule 3.2(B)
have been prepared in accordance with U.K. GAAP applied on a
consistent basis and fairly present, in all material
respects, the financial position and results of operations
of the Company as of the dates and for the periods therein
set forth, subject in the case of the September 30, 1997
financial statements only to normal year-end adjustments
(which are not expected to be material and adverse in the
aggregate), and subject in all cases to the Company's
standard financial accounting principles, practices and
procedures as described in Schedule 3.2(B) (applied on a
consistent basis except as described in any footnotes
thereto); provided, that the application of the principles,
practices and procedures set forth in the Xxxxx Financial
- 7 -
Controller Manual, attached hereto as a part of Schedule
3.2(B), shall not result in any material differences from
the results under U.K. GAAP.
(C) Undisclosed Liabilities. The Company has no
liabilities or obligations of any nature (whether accrued,
absolute or contingent) which are required under U.K. GAAP
to be reflected in the September 30, 1997 financial
statements of the Company except (i) as reflected in
Schedule 3.2(B) and the financial statements attached
thereto and (ii) for liabilities and obligations incurred in
the ordinary course of business since the date of the most
recent balance sheet, none of which, individually or in the
aggregate, shall constitute a Material Event.
(D) Taxes. All federal, state, local and foreign tax
returns required to be filed with respect to the Company and
the Company Subsidiaries have been filed in a timely manner,
and all taxes (whether or not shown thereon) have been paid,
except where the failure to so file or pay, individually or
in the aggregate, would not have a material adverse effect
on the Business Condition. The Company and the Company
Subsidiaries are not currently the beneficiary of any
extension of time within which to file such returns. No
deficiencies for any taxes in respect of the Company or any
of the Company Subsidiaries have been asserted in writing
against the Company or any of the Company Subsidiaries which
remain unpaid and which individually or in the aggregate
have a material adverse effect on the Business Condition.
No waivers of statutes of limitation are in effect in
respect of foreign, federal or state income taxes of the
Company or the Company Subsidiaries. Neither the Company
nor any of the Company Subsidiaries has received from the
Internal Revenue Service or from the tax authorities of any
state, county, local or other jurisdiction (foreign or
domestic) any written notice of underpayment of income taxes
which has not been paid or reflected on the Closing Date
Balance Sheet. No audits relating to taxes are presently
being conducted and neither the Company nor Seller has
received written notice of any such future audits. All
taxes of any kind which are required to be paid by the
Company or the Company Subsidiaries for all periods ending
on or prior to the Closing Date have been paid or will be
provided for in the Closing Date Balance Sheet, except for
taxes due to the actions of Buyer.
(E) Real Property. Schedule 3.2(E) sets forth a list
of real properties owned by the Company, a list of all real
properties leased to the Company by other persons, and a
list of all real properties owned or leased by the Company
that are leased or subleased to other persons by the
Company. The Company or one of the Company Subsidiaries Owns
all of the real properties listed as "owned" on Schedule
3.2(E). The leases under which the real property listed as
"leased" on Schedule 3.2(E) are leased are valid and
subsisting, and neither the Company nor any of the Company
Subsidiaries is in Default under any lease of any such real
- 8 -
properties in any manner materially adverse to the Business
Condition. The Company has furnished true and complete
copies of each such lease to Buyer.
(F) Tangible Personal Property. Schedule 3.2(F) sets
forth for the Company and each Company Subsidiary (1) a list
as of September 30, 1997, of all machinery and equipment
owned by the Company or such Company Subsidiary having a
book value of more than $30,000; (2) a list as of
September 30, 1997, of all furniture, office equipment, and
similar items owned by the Company or such Company
Subsidiary having a book value of more than $5,000; (3) a
list as of September 30, 1997, of all cars, trucks, and
other vehicles owned by the Company or such Company
Subsidiary having a book value of more than $5,000; and (4)
a list as of September 30, 1997, of all items of tangible
personal property leased by the Company or such Company
Subsidiary having a capitalized book value of more than
$5,000. The Company or one of the Company Subsidiaries Owns
all tangible personal property listed as "owned". The
leases under which the tangible personal property listed as
"leased" on Schedule 3.2(F) are valid and subsisting, and
neither the Company nor any of the Company Subsidiaries is
in Default under any lease of any such tangible property in
any manner materially adverse to the Business Condition.
The Company has furnished to Buyer true and complete copies
of each such lease. Each of the Company and the Company
Subsidiaries currently owns, leases or otherwise is entitled
to use, under valid and subsisting agreements (copies of
which are listed on Schedule 3.2(F) and have been furnished
to Buyer), all assets, real or personal, which are used or
held by the Company or any Company Subsidiary for use in the
operation of the Business; no such agreement will or may be
terminated by any party thereto by reason of the
transaction described in this Purchase Agreement; all such
assets are sufficient to permit the operation of the
Business as currently operated; and no such assets are
owned, leased or otherwise furnished to the Company or any
Company Subsidiary by the Seller, Xxxxx, or any affiliate of
the Seller or Xxxxx.
(G) Intellectual Property. The Company Owns or has
valid and subsisting licenses to all Intellectual Property
used or necessary in connection with the Business as
presently conducted or planned to be conducted. Schedule
3.2(G) sets forth a list as of September 30, 1997 of (1) all
patents (domestic and foreign) owned by the Company or any
Company Subsidiary (specifying for each the country of
issuance, expiration date, patent number, inventor, and
title of patent); (2) all pending patent applications
(domestic and foreign) owned by the Company or any Company
Subsidiary (specifying for each the country of application,
application date, application number, inventor, and title of
invention); (3) all trademarks (domestic and foreign) owned
by the Company or any Company Subsidiary (specifying for
each the country of registration, renewal date, registration
number, xxxx registered, and goods covered); (4) all
trademark applications (domestic and foreign) owned by the
- 9 -
Company or any Company Subsidiary (specifying for each the
country of application, application date, application
number, xxxx to which registration relates, and goods
covered); and (5) all material Intellectual Property owned
by other persons which is used in the conduct of the
Business by the Company or any Company Subsidiary under
license, technology, or other similar agreements. The
Company or a Company Subsidiary Owns all of the Intellectual
Property listed as "owned" on Schedule 3.2(G). The license,
technology, or similar agreements to employ the Intellectual
Property listed as "licensed" on Schedule 3.2(G) are valid
and subsisting agreements, and the Company has furnished
true and complete copies of each such agreement to Buyer.
Neither the Company nor any of the Company Subsidiaries is
in Default under any licenses or other agreements listed on
Schedule 3.2(G) in any manner materially adverse to the
Business Condition. Neither the Company nor any of the
Company Subsidiaries has granted any rights or interest to
any person in connection with any of the Intellectual
Property described in Schedule 3.2(G). Except as set forth
on Schedule 3.2(H), there is no pending or, to the Company's
or Seller's Knowledge, threatened litigation by or before
any governmental authority alleging any infringement or
other violation by any other person or entity of the
Intellectual Property; and there is not now, and there has
not been during the past five years, any asserted claim of
infringement or other violation of any other intellectual
property right of any person or entity outside the Company
resulting from the conduct of the Company, and neither the
Company nor Seller has any Knowledge that any such
infringement or violation exists or will be alleged. All of
the individuals set forth on Schedule 3.2(G) have signed the
"Agreement Re: Inventions and Other Confidential Matters,"
the form of which has been previously delivered to Buyer.
(H) Litigation. Schedule 3.2(H) contains a
description of all litigation at law or in equity pending as
of September 30, 1997 against the Company or relating to the
Company's conduct of the Business and a description of all
writs, injunctions, orders, and decrees of courts, agencies,
and other governmental authorities, domestic or foreign, to
which the Company is subject. There exists no litigation,
proceedings, actions, claims, or investigations at law or in
equity pending or to the Company's or Seller's Knowledge
threatened against the Company or a Company Subsidiary that
is, in the Company's or Seller's management's judgment,
likely to be materially adverse to the Business Condition,
and neither the Company nor a Company Subsidiary is subject
to any writ, injunction, order, or decree of any court,
agency, or other governmental authority materially adversely
affecting the Business.
(I) Contracts. Schedule 3.2(I) sets forth (1) a list
as of September 30, 1997 of each outstanding order,
contract, or commitment for the purchase by the Company or
any Company Subsidiary of capital and tooling involving a
financial commitment of $30,000 or more; (2) a list as of
- 10 -
September 30, 1997 of each outstanding order, contract, or
commitment for the purchase by the Company or any Company
Subsidiary of products, supplies, and services involving a
financial commitment of $30,000 or more; and (3) a list as
of September 30, 1997 of each outstanding order, contract,
or commitment for the sale by the Company or any Company
Subsidiary of products or services involving projected
revenues of $30,000 or more. Each of the contracts,
commitments, and other obligations listed on Schedule 3.2(I)
is a valid and binding obligation of the Company or a
Company Subsidiary and the other party or parties thereto.
True and correct copies of each such order, contract or
commitment have been furnished by the Seller to Buyer.
Neither the Company nor any of the Company Subsidiaries nor
any other party thereto has terminated, canceled, or
substantially modified any contract, commitment, or other
obligation identified in Schedule 3.2(I) in any manner
materially adverse to the Business Condition, and neither
the Company nor any of the Company Subsidiaries is in
Default under any contract, commitment, or other obligation
identified in Schedule 3.2(I) in any manner materially
adverse to the Business Condition; and none of such
contracts for which Seller has not provided Buyer a complete
English translation contains any substantial restriction on
the operations of the Business, or contains a right of
termination, cancellation or modification by reason of the
consummation of this Purchase Agreement which would be
materially adverse to the Business Condition.
(J) Employees and Employee Benefits. Schedule 3.2(J)
sets forth (1) a list of the ten (10) highest paid employees
of the Company and the Company Subsidiaries during the
fiscal year ended March 31, 1997 together with the dollar
amount paid to each such employee during such year; and (2)
a list of the ten (10) highest paid employees of the Company
and the Company Subsidiaries as of September 30, 1997
together with the base salary rate and bonus or other
incentive compensation of each such employee as of that
date. Also attached at Schedule 3.2(J) are true and
complete copies of the summary plan descriptions of all
pension, retirement, profit-sharing, deferred compensation,
employee stock option or stock purchase, bonus, incentive
compensation, and other employee pension plans or
arrangements currently maintained by the Company or the
Company Subsidiaries (collectively, "Benefit Plans"); and
true and complete copies of summary plan descriptions of all
employee health, dental, vision, life insurance, long-term
and short-term disability, vacation, tuition reimbursement,
and severance plans and other employee welfare plans or
arrangements (collectively, "Welfare Plans") currently
maintained by the Company or the Company Subsidiaries.
Except as set forth on Schedule 3.2(J), neither the Company
nor any of the Company Subsidiaries are parties to any
employment, consulting, collective bargaining or severance
agreements or arrangements ("Employment Agreements"),
neither the Company nor any of the Company Subsidiaries have
any Benefit Plans or Welfare Plans relating and applicable
to the Company or any Company Subsidiary, its Business or
its employees. Each such Benefit Plan and Welfare Plan
- 11 -
which is subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") has been maintained and
operated in substantial compliance with ERISA. None of the
Benefit Plans is a so-called "defined benefit plan" or
"multiemployer plan," as defined in ERISA. True and
complete copies of each Benefit Plan, Welfare Plan and
Employment Agreement have been furnished by the Seller to
Buyer.
(K) Compliance With Environmental, Health and Safety
Laws.
(i) Each of the Company and the Company Subsidiaries
is currently in compliance in all material
respects with all Environmental, Health and
Safety Laws.
(ii) Without limiting the generality of the foregoing,
each of the Company, the Company Subsidiaries and
their respective affiliates currently maintains,
and is in compliance with, all permits, licenses
and other authorizations that are required
pursuant to Environmental, Health and Safety Laws
for the occupation of its facilities and the
operation of its business; a list of all such
permits, licenses and other authorizations is set
forth on the attached Schedule 3.2(K).
(iii) None of the Company or the Company Subsidiaries,
or their respective predecessors or affiliates
has received, to the Knowledge of the Company's
Chief Executive Officer, any written or oral
notice, report or other information regarding any
actual or alleged violation of Environmental,
Health and Safety Laws, or any liabilities or
potential liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective
obligations, relating to any of them or its
facilities arising under Environmental, Health
and Safety Laws.
(iv) None of the Company, the Company Subsidiaries, or
their respective predecessors or affiliates, has
treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled,
or released any substance, including without
limitation any hazardous substance, or owned or
operated any property or facility (and no such
property or facility is contaminated by any such
substance) in a manner that has given or would
give rise to liabilities, including any liability
for response costs, corrective action costs,
personal injury, property damage or natural
resources damages, pursuant to the Comprehensive
Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"),
- 12 -
the Solid Waste Disposal Act, as amended
("SWDA") or any other Environmental, Health and
Safety Laws.
(v) Neither this Purchase Agreement nor the
consummation of the transaction that is the
subject of this Purchase Agreement would
reasonably be expected to, after consultation
with counsel, result, in any obligations for site
investigation or cleanup, or notification to or
consent of government agencies or third parties,
pursuant to any of the so-called "transaction-
triggered" or "responsible property transfer"
Environmental, Health and Safety Laws.
(vi) None of the Company, the Company Subsidiaries, or
any of their respective predecessors or
affiliates has, has, either expressly or by
operation of law, assumed or undertaken any
liability of any other person under any
Environmental, Health and Safety Laws, including
without limitation any obligation for corrective
or remedial action.
(vii) No facts, events or conditions relating to the
current, or to the knowledge of the Company and
the Company Subsidiaries, former facilities,
properties or operations of the Company, the
Company Subsidiaries, or any of their respective
predecessors or affiliates would reasonably be
expected to, after consultation with counsel,
give rise to any investigatory, remedial or
corrective obligations pursuant to Environmental,
Health and Safety Laws, or would reasonably be
expected to, after consultation with counsel,
give rise to any other liabilities (whether
accrued, absolute, contingent, unliquidated or
otherwise) pursuant to Environmental, Health and
Safety Laws, including without limitation any
obligations or liabilities relating to onsite or
offsite releases or threatened releases of
hazardous materials, substances or wastes,
personal injury, property damage or natural
resources damage.
(L) Compliance With Other Laws. Schedule 3.2(L) sets
forth (1) a list of all material permits, approvals and
qualifications of any government or governmental unit,
agency, board, body, or instrumentality issued to or applied
for by the Company and used by the Company in its conduct of
its Business; (2) a description of all written claims that
the Company has received during the calendar years from 1990
through 1997, inclusive, from any government or governmental
unit, agency, board, body, or instrumentality alleging
- 13 -
noncompliance by the Company with any laws, rules,
regulations, ordinances, orders or decrees (other than
Environmental Laws) in connection with Company's conduct of
the Business. Insofar as is material to the Business
Condition, the Company and the Company Subsidiaries are in
substantial compliance with all statutes, ordinances,
regulations, and other governmental requirements applicable
to the conduct of the Business.
(M) Absence of Certain Changes or Events Subsidiaries
Since September 30, 1997, the Company and each of the
Company Subsidiaries has operated in the ordinary course of
business and there has not been (i) any material damage,
destruction or other casualty loss with respect to property
owned or leased by the Company or any of the Company
Subsidiaries, whether or not covered by insurance, or any
strike, work stoppage or slowdown or other labor trouble
involving the Company or any of the Company Subsidiaries; or
(ii) any Material Event.
(N) Insurance. Schedule 3.2(N) sets forth the
following information with respect to each insurance policy
(including policies providing property, casualty, liability,
and workers' compensation coverage and bond and surety
arrangements) to which any of the Company and the Company
Subsidiaries has been a party, a named insured, or otherwise
the beneficiary of coverage at any time within the past 1
year:
(i) the name address, and telephone number of the
agent;
(ii) the name of the insurer, the name of the
policyholder, and the name of each covered
insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the
coverage was on a claims made, occurrence, or
other basis) and amount (including a description
of how deductibles and ceilings are calculated
and operate) of coverage; and
(v) a description of any retroactive premium
adjustments or other loss-sharing arrangements.
With respect to each such insurance policy: (a) the policy is
legal, valid, binding, enforceable, and in full force and effect;
(b) the policy will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms
following the consummation and the transactions contemplated
hereby; (c) neither any of the Company and the Company
Subsidiaries nor any other party to the policy is in breach or
default (including with respect to the payment of premiums or the
giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default,
- 14 -
or permit termination, modification, or acceleration, under the
policy; and (d) no party to the policy has repudiated any
provision thereof. Schedule 3.2(N) describes any self-insurance
arrangements affecting any of the Company and the Company
Subsidiaries.
3.3 DISCLAIMER. EXCEPT AS SET FORTH IN SECTION 3.1 AND
SECTION 3.2, SELLER AND THE COMPANY AND THEIR AFFILIATES MAKE NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED CONCERNING THE
BUSINESS OR ITS ASSETS (INCLUDING THOSE REFERRED TO IN SECTION 2-
312 OF THE INDIANA UNIFORM COMMERCIAL CODE OR IN ANY STATUTE
APPLICABLE TO REAL PROPERTY).
3.4 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer hereby
represents and warrants to Seller the following:
(A) Organization and Existence. Buyer is a
corporation duly organized, validly existing, and in good
standing under the laws of the Commonwealth of
Massachusetts.
(B) Power and Authority. Buyer has all necessary
corporate power and authority to enter into this Purchase
Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. This
Purchase Agreement constitutes the valid and legally binding
obligation of Buyer, enforceable in accordance with its
terms and conditions, subject to the effect of any
applicable bankruptcy, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to the effect
of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
(C) No Conflict. Neither the execution and the
delivery of this Purchase Agreement, nor the consummation of
the transactions contemplated hereby, will (i) violate or
conflict with the Articles of Organization or By-laws of
Buyer, (b) conflict with or violate any law or governmental
order applicable to Buyer, or (c) result in any breach of,
or constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default)
under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement to
which Buyer is a party, or result in the creation of any
encumbrance on any of the assets or properties of Buyer,
except, in the case of clause (c), as would not,
individually or in the aggregate, have a material adverse
effect on the Business Condition or have a material adverse
effect on the ability of Buyer to consummate the
transactions contemplated by this Purchase Agreement.
(D) Brokers. Buyer has not engaged and is not
directly or indirectly obligated to any person acting as a
broker or finder, or a person acting in a similar capacity
- 15 -
in connection with the transactions contemplated by this
Purchase Agreement.
(E) Buyer's Net Worth. Buyer currently has and will
maintain through Closing a net worth of at least $33 Million
Dollars ($33,000,000) and at Closing will have sufficient
funds to pay the Purchase Price in full.
(F) Purchase for Investment. Buyer is purchasing the
Shares for investment and not with a view to any public
resale or other distribution thereof, except in compliance
with applicable securities laws.
ARTICLE IV
ACTIONS BEFORE CLOSING
4.1 GENERAL. Each of the parties will use its reasonable
best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate promptly and make
effective the transactions contemplated by this Purchase
Agreement (including satisfaction, but not waiver, of the closing
conditions set forth in Article V below).
4.2 ACCESS TO RECORDS. Seller hereby covenants to Buyer
that the Company will afford duly authorized representatives of
Buyer full access during normal business hours and in a manner so
as not to interfere with the normal business operations of the
Company, to all of the assets, properties, books, and non-
privileged records of the Company and of the Business and will
permit such representatives to make abstracts from, or take
copies of, such books, records, or other documentation, or to
obtain temporary possession of any thereof as may be reasonably
required by Buyer. Buyer will not use any of such information
except in connection with this Purchase Agreement, and, if the
Purchase Agreement is terminated for any reason whatsoever will
return to Seller all tangible embodiments (and all copies) of
such information in its possession and control.
4.3 INTERIM CONDUCT OF THE BUSINESS. Seller and the
Company hereby covenant to Buyer that, from today until the
Closing, the Company will (i) conduct the Business only in the
ordinary and usual course (it being understood and agreed that
the Company and each Company Subsidiary will make reasonable
efforts to ship products in accordance with (and to arrive via
shipping methods normally used by the Company or such Company
Subsidiary no sooner than) reasonably requested customer delivery
dates), subject to Buyer's approval of certain transactions
pursuant to Section 4.4., except as Buyer may otherwise approve
(which approval shall not be unreasonably withheld) or as may
otherwise be required or permitted under this Purchase Agreement,
(ii) use its reasonable efforts to preserve the goodwill of
customers and others having business relations with the Company
or the Company Subsidiaries, (iii) maintain the properties of the
- 16 -
Company and the Company Subsidiaries in substantially the same
working order and condition as such properties are in as of
today's date, reasonable wear and tear excepted, (iv) keep in
force at no less than their present limits all existing policies
of insurance or comparable replacements thereof insuring the
Company, the Company Subsidiaries and their respective
properties, and (v) promptly advise Buyer in writing of any
matters arising or of which the Company becomes aware after
today's date that, if existing or known on today's date, would be
required to be set forth or described in this Purchase Agreement
or the Schedules hereto.
4.4 BUYER'S APPROVAL OF CERTAIN TRANSACTIONS. Seller and
the Company hereby covenant to Buyer that, except as may
otherwise be required under this Purchase Agreement, from today
until the Closing, the Company will not do, or permit any Company
Subsidiary to do, any of the following without the prior approval
of Buyer, which approval shall not be unreasonably withheld:
(A) Incur or permit the incurrence of any debt for
borrowed money or incur any obligation or other liability,
except in the ordinary course of business;
(B) Purchase or dispose of any real property or real
property interest or, except in the ordinary course of
business, any personal property;
(C) Enter into any lease of real or personal property
or any renewals thereof involving a term of more than one (1)
year or rental obligation exceeding Thirty Thousand
Dollars ($30,000) per annum in any single case;
(D) Permit to be incurred any Encumbrances on any of
the assets or properties of the Company or any Company
Subsidiary, except in the ordinary course of business;
(E) Except for normal merit or cost-of-living
increases in accordance with the Company's past practices,
increase the rate of compensation for any of the employees
of the Company or any Company Subsidiary or otherwise enter
into or alter any employment, consulting, or managerial
services agreement primarily affecting the Company or any
Company Subsidiary;
(F) Commence, enter into, or alter any pension,
retirement, profit-sharing, employee stock option or stock
purchase, bonus, deferred compensation, incentive
compensation, life insurance, health insurance, fringe
benefit, severance, or other employee benefit plan or
arrangement affecting employees of the Company, any Company
Subsidiary or the Business, or grant any option or other
right to acquire any of the capital stock of the Company or
any Company Subsidiary, or issue or retire any shares of
capital stock of the Company or any Company Subsidiary;
- 17 -
(G) Make any single new commitment or increase any
single previous commitment for capital expenditures in an
amount of more than Thirty Thousand Dollars ($30,000);
(H) Accelerate or delay the sale of Products except
as may be necessary in the ordinary course of business;
(I) Sell, assign, transfer, license, or convey any of
the Intellectual Property; or
(J) Except as specified on Schedule 4.4(J), make any
changes in the banking or similar authorizations of the
Company or any Company Subsidiary; make any payments or
distributions of any property (other than normal sales of
inventory for fair value in the ordinary course of business)
to any affiliate of the Company; or grant any powers of
attorney; except that nothing herein shall restrict the
Company and Seller from continuing their current cash
management policies and distributing the cash, cash
equivalents and, to the extent appropriate to adjust Closing
Net Worth so that it does not exceed the Base Line Net
Worth, accounts receivable of the Company and the Company
Subsidiaries to the Seller and its affiliates; provided that
such distributions shall not cause the Closing Date Balance
Sheet to be materially less than the Base-Line Net Worth or
the cash balances of the Company or any Company Subsidiary
to be insufficient to cover outstanding checks or other
orders for payment drawn on the Company's accounts or those
of any Company Subsidiary; and provided further that if
accounts receivable are so distributed to the Seller and its
affiliates, Seller and its affiliates shall communicate with
the obligors of such accounts receivable after the Closing
only through the Company or any Company subsidiary, as agent
for the Seller.
4.5 CONSENTS TO ASSIGNMENT. Seller hereby covenants to
Buyer that from the date hereof until the Closing, Seller will
use its reasonable efforts to cause the Company to obtain the
consents or approvals (or effective waivers thereof) of all other
persons whose consents or approvals are required for the
continuation of the Company's rights under material contracts,
leases, licenses and permits.
4.6 COORDINATION OF PUBLIC ANNOUNCEMENTS. From today
until the Closing, the parties will cooperate in the planning,
preparation, and publication of any and all public announcements
concerning this Purchase Agreement and the transactions
contemplated by this Purchase Agreement.
4.7 XXXX-XXXXX-XXXXXX NOTIFICATION. Seller hereby
covenants to Buyer, and Buyer hereby covenants to Seller, that
the parties each will (i) promptly proceed with the filing of any
required notification and report forms that it may be required to
file with the Federal Trade Commission and the Antitrust Division
of the United States Department of Justice under the Xxxx-Xxxxx-
Xxxxxx Act, and will make any further filings and take any
- 18 -
further actions pursuant thereto that may be necessary, proper,
or advisable in connection therewith, and (ii) use its best
efforts to avoid the entry of, and to have vacated, eliminated or
terminated, any decree, order, proceeding, judgment,
investigation or impediment that would restrain, prevent or delay
the Closing.
4.8 OTHER REGULATORY APPROVALS. Seller hereby covenants
to Buyer, and Buyer hereby covenants to Seller, that immediately
after the execution and delivery of this Purchase Agreement the
parties will promptly proceed with the preparation and filing of
any required filings necessary in order to obtain the approval or
authorization of those governmental agencies or instrumentalities
whose approval or authorization is necessary in order to
consummate the transactions contemplated by this Purchase
Agreement.
4.9 SECTION 338 ELECTION BY SELLER. Seller will join with
Buyer in making an election under Section 338(h)(10) of the Code
(and any corresponding elections under state, local, or foreign
tax law) with respect to the purchase and sale of the Shares
hereunder. Seller will pay any tax attributable to the making of
such election and will indemnify Buyer, the Company and the
Company Subsidiaries against any adverse consequences arising out
of any failure to pay such tax. Seller will also pay any state,
local, or foreign tax (and indemnify Buyer, the Company and the
Company Subsidiaries against any adverse consequences arising out
of any failure to pay such tax) attributable to an election under
state, local, or foreign law corresponding to the election
available under Section 338(g) of the Code (or which results from
the making of an election under Section 338(g) of the Code) with
respect to the purchase and sale of the Shares hereunder. The
Purchase Price (and other relevant items) shall be allocated
among the assets of the Company and its Subsidiaries (in
accordance with the regulations under Section 338 of the Code) as
Buyer and Seller shall agree, and the parties shall prepare all
relevant tax returns and reports consistent with such allocation.
4.10 EMPLOYEE AGREEMENTS. The Company will use its best
efforts (but without incurring any additional costs or expenses)
to get the following employees to sign the Agreement re
Inventions and Other Confidential Matters referred to in the last
sentence of Section 3.2(G): Xxxxxxx Xxxxxxxxx; Sales Manager of
Xxxxx Japan; Engineering Manager of Xxxxx Japan; Xxxxxxx Xxxxxx;
Xxxxx Asia Staff; Xxxxx Europe Staff; Xxxxx Blossom; Xxxx
Xxxxxxxxx; Xxxx Xxxxxxx; Xxxx Xxxx; Xxxxxx Xxxxx; Xxxxx Xxxx;
Xxxxxxx Xxxxxxxx; Xxx Xxxxxxxx; Xxxxx Xxxxxxxxx.
ARTICLE V
CONDITIONS
5.1 CONDITIONS TO BUYER'S OBLIGATIONS. The obligation of
Buyer to consummate the transactions contemplated by this
Purchase Agreement is subject to the satisfaction of the
following conditions at or before the Closing:
- 19 -
(A) The representations and warranties of Seller and
the Company contained in Section 3.1 of this Purchase
Agreement shall be true and correct as of the date of this
Purchase Agreement and as of the Closing Date (except with
respect to the effect of transactions contemplated or
permitted by this Purchase Agreement and except to the
extent that such failure shall not have a material adverse
effect on the Business Condition) and the representations
and warranties of Seller and the Company contained in
Section 3.2 of this Purchase Agreement shall be true and
correct as of the date of this Purchase Agreement and as of
the Closing Date (except with respect to the effect of
transactions contemplated or permitted by this Purchase
Agreement and with respect to the effect of the passage of
time upon dated material set forth in the Schedules (but
only to the extent that such effect upon the Schedules does
not constitute a material adverse effect on the Company or
the Company Subsidiaries) and except to the extent that such
failure shall not have a material adverse effect on the
Business Condition);
(B) Seller and the Company shall have performed and
complied in all material respects with all agreements and
covenants required by this Purchase Agreement to be
performed or satisfied by Seller and/or the Company, and
Seller and the Company shall have delivered to Buyer all
documents, certificates, and instruments required to be
delivered by Seller and/or the Company under the terms of
this Purchase Agreement, including, without limitation, the
documents referred to on Appendix B;
(C) All corporate and other proceedings or actions
required to be taken by Seller or the Company in connection
with the transactions contemplated by this Purchase
Agreement shall have been taken;
(D) All material governmental approvals and
authorizations necessary for consummation of the
transactions contemplated by this Purchase Agreement shall
have been duly issued or granted except for any failure
which would not have a material adverse effect on the
Business Condition, and the waiting period (and any
extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall
have expired or otherwise been terminated;
(E) There shall not have been issued and in effect
any injunction or similar legal order prohibiting or
restraining consummation of any of the transactions
contemplated in this Purchase Agreement;
(F) Since today's date, there shall not have been any
change or changes in the Business Condition which
individually or in the aggregate constitute a Material
Event;
(G) Buyer shall have received an opinion of counsel
for the Seller and the Company in customary from reasonably
acceptable to Buyer;
- 20 -
(H) To the extent that any of the financial
statements or information referred to in Section 7.5 is
available on or before the Closing Date, the Seller shall
have delivered the same to Buyer;
(I) Buyer shall have received the resignations of the
directors of the Company; and
(J) To the extent that any of the financial books and
records of the Company or any Company Subsidiary are in the
possession of anyone other than the Company or a Company
Subsidiary, such books and records shall have been delivered
to the Company or such Company Subsidiary.
5.2 CONDITIONS TO SELLER'S OBLIGATIONS. The obligation of
Seller to consummate the transactions contemplated by this
Purchase Agreement is subject to the satisfaction of the
following conditions at or before the Closing:
(A) The representations and warranties of Buyer
contained in Section 3.4 shall be true and correct as of the
date of this Purchase Agreement and as of the Closing Date
(except with respect to the effect of transactions
contemplated or permitted by this Purchase Agreement and
except to the extent that such failure shall not have a
material adverse effect on the Business Condition);
(B) Buyer shall have performed and complied with all
agreements and covenants required by this Purchase Agreement
to be performed or satisfied by Buyer, and Buyer shall have
delivered all documents, certificates, and instruments
required to be delivered by Buyer under the terms of this
Purchase Agreement, including, without limitation, the
documents referred to on Appendix C;
(C) Buyer shall have taken all corporate and other
proceedings to be taken by it in connection with the
transactions contemplated by this Purchase Agreement;
(D) All material governmental approvals and
authorizations necessary for consummation of the
transactions contemplated by this Purchase Agreement shall
have been duly issued or granted except for any failure
which would not have a material adverse effect on the
Business Condition, and the waiting period (and any
extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall
have expired or otherwise been terminated; and
(E) There shall not have been issued and in effect
any injunction or similar legal order prohibiting or
restraining consummation of any of the transactions
contemplated in this Purchase Agreement.
- 21 -
ARTICLE VI
CLOSING
6.1 THE CLOSING. For purposes of this Purchase Agreement,
the term "Closing" means the time at which the transactions
contemplated by this Purchase Agreement will be consummated after
satisfaction or waiver of the conditions set forth in Article V
of this Purchase Agreement.
6.2 TIME, DATE, AND PLACE OF CLOSING. The Closing will
occur at 10:00 a.m. (New York City time) on the later of December
26, 1997 or the fifth business day after satisfaction of the
conditions set forth in Section 5.1(D) of this Purchase
Agreement, or such other date as the parties may agree in writing
(the "Closing Date"). The Closing will take place at the New
York office of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, or at
such other place as the parties may agree in writing. The
Closing will be deemed to have occurred as of 11:59 p.m. on the
Closing Date.
6.3 BUYER'S OBLIGATIONS. At the Closing, Buyer will
deliver to Seller the following:
(A) The documents, certificates, and other items
referred to in Section 5.2(B); and
(B) The amount specified in Section 2.4(A).
6.4 SELLER'S OBLIGATIONS. At the Closing, Seller will
deliver to Buyer the following:
(A) The documents, certificates, and other items
referred to in Section 5.1(B); and
(B) Certificates representing the Shares, duly
endorsed in blank, with signature guaranteed.
ARTICLE VII
ACTIONS AFTER CLOSING
7.1 FURTHER CONVEYANCES. After the Closing, Seller will,
without further cost or expense to Buyer, execute and deliver to
Buyer (or cause to be executed and delivered to Buyer), such
additional instruments of conveyance, and Seller will take, and
will cause its attorneys, accountants and other advisers to take,
such other and further actions as Buyer may reasonably request
and which are ordinarily provided by a Seller, more completely to
sell, transfer, and assign to Buyer and vest in Buyer Ownership
of the Shares and to transition the Company to Buyer's attorneys,
accountants and other advisers.
- 22 -
7.2 ACCESS TO FORMER BUSINESS RECORDS. For a period of
seven (7) years after the Closing, Buyer will afford duly
authorized representatives of Seller free and full access to pre-
Closing books and records of the Company and will permit such
representatives, at Seller's expense, to make abstracts from, or
to take copies of any of such records, or, at reasonable times
and for reasonable periods, to obtain temporary possession of any
thereof as may be reasonably required by Seller. During such
period, Buyer will cooperate with Seller, and cause employees of
the Company to cooperate with Seller, in furnishing information,
evidence, testimony, and other assistance in connection with any
action, proceeding, or investigation relating to the Company's
conduct of the Business before the Closing.
7.3 ACCESS TO FORMER EMPLOYEES. After the Closing, Buyer
will make available to Seller, at reasonable times and for
reasonable periods, employees of the Company whom Seller may
reasonably need in order to defend or prosecute any legal or
administrative action to which Seller is a party. Seller will
pay or reimburse the Company for all reasonable expenses which
may be incurred by such employees in connection therewith,
including, without limitation, all travel, lodging, and meal
expenses, and Seller will compensate the Company for the number
of whole business days spent by each such employee in providing
such services at the rate of one hundred percent (100%) of the
average daily gross pay per business day (excluding the value of
employee benefits) of such employee during the calendar month in
which such services are performed.
7.4 DISPUTE RESOLUTION. If the parties ever have a
dispute involving their respective rights and obligations under
this Purchase Agreement (other than with respect to the final
determination of the amount of the Adjustment), or the breach
thereof, then the parties will resolve such dispute as follows:
(A) Dispute Notice. Either Buyer or Seller may at
any time deliver to the other a written dispute notice
setting forth a brief description of the issues for which
such notice initiates the dispute resolution mechanism set
forth in this Section 7.4. Such dispute notice shall also
specify the provision or provisions of this Purchase
Agreement and the facts or circumstances that are the
subject matter of the dispute.
(B) Informal Negotiations. During the sixty (60) day
period following delivery of a dispute notice described in
Section 7.4(A), the parties will cause their representatives
to meet and seek to resolve the disputed items cordially
through informal negotiations.
(C) Dispute Resolution Proceedings. If
representatives of the parties are unable to resolve
disputed items through the informal negotiations described
in Section 7.4(B), then within thirty (30) days after the
- 23 -
informal negotiation period the parties will refer the
disputed issues to a dispute resolution panel for final
resolution as follows:
(1) Designation of Representatives. Within
seven (7) days after such informal negotiation period,
Buyer and Seller will each designate one representative
to serve on the dispute resolution panel. (If either
party fails or refuses to designate a representative,
then the other party will be entitled to have a
representative appointed, for such party by the
American Arbitration Association.)
(2) Selection of Neutral. Within thirty (30)
days after they have been designated, the designated
representatives will meet and select a neutral person
(the "Neutral") to serve as the third member of the
dispute resolution panel. If the designated
representatives of parties cannot agree on a Neutral,
then either representative may request the American
Arbitration Association to select the Neutral.
(3) Procedures and Process. At the time the
matter is referred to the dispute resolution panel,
Buyer and Seller will jointly establish the procedures,
including timing, scope of discovery, if any, and
confidentiality of evidence and the proceedings, to be
followed with respect to the presentation of the
parties' respective positions and the process by which
the dispute resolution panel will reach and render its
decision on the disputed issues. Such procedures and
processes will assure that -
(a) Each party will have the right to
submit evidence to the dispute resolution panel,
(b) Each party will have the right to
present a written statement concerning that
party's position with respect to the disputed
item,
(c) Before reaching a decision concerning
the disputed item, the dispute resolution panel
will convene a hearing at which both parties may
be represented, and
(d) The parties and the dispute
resolution panel will use their respective
reasonable best efforts to resolve any dispute
within 90 days following the date of selection
of the Neutral.
If Buyer and Seller cannot agree on such procedures and
processes, then the Neutral will establish such
procedures and process which will, in all events, be
consistent with the foregoing.
- 24 -
(4) Decision. The dispute resolution panel will
act by majority vote. The dispute resolution panel
will base its decision on applicable provisions of this
Purchase Agreement or, if the provisions of this
Purchase Agreement do not resolve the matter, on
general principles of substantive Delaware law. (The
dispute resolution panel may, if it so desires, seek
the opinion of an attorney licensed to practice law in
the State of Delaware on any matter of substantive
Delaware law on which the panel desires clarification.)
(D) Equitable Relief. Notwithstanding any other
provision of this Section 7.4, either party may seek from a
court of competent jurisdiction interim injunctive relief in
order to maintain the status quo or protect such party's
rights under this Purchase Agreement pending resolution of a
dispute pursuant to this Section 7.4.
(E) Binding Effect. The decisions of the dispute
resolution panel under this Section 7.4 will be binding on
both Seller and Buyer and will be neither appealable,
contestable, or subject to collateral attack by Seller or
Buyer.
7.5 FINANCIAL STATEMENTS.
(A) As soon as reasonably practicable, but in no event
later than 25 days following the Closing Date, the Seller shall
cause to be prepared by its independent accounting firm, and shall
deliverto Buyer, the following consolidated audited financial
statements for the Company and the Company Subsidiaries: statements
of income and cash flow for the periods from May 29, 1994 to June 3,
1995, from June 4, 1995 to May 2, 1996 and from May 3, 1996 to May 3,
1997 and consolidated balance sheets as of May 2, 1996 and May 3,
1997. Seller shall use its best efforts to cause its independent
accounting firm to permit Buyer's independent accounting firm to
review the work papers and other preparatory materials used in
connection with the preparation of the financial statements
referred to in this Section 7.5(A).
(B) As soon as reasonably practicable, but in no event
later than 40 days following the Closing Date (assuming full
cooperation from the Buyer and the Company), the Seller shall
cause to be prepared by its independent accounting firm, and
shall deliver to Buyer, the following financial statements and
other information for the Company and the Company Subsidiaries:
(i) audited statements of income and cash flow for
the periods from May 4, 1997 through the Closing Date and an
audited balance sheet as of the Closing Date;
(ii) net sales and net income for the years ended May
31, 1993 and May 31, 1994, total assets as of May 31, 1993,
May 31, 1994 and May 31, 1995 and such other selected
financial data as defined in Regulation S-K (or any
- 25 -
successor provision or regulation promulgated by the
Securities and Exchange Commission) for such periods as
Buyer shall reasonably request; and
(iii) statement of post-closing adjustments to the
Company's books and records made in connection with the
purchase of Unitech by Xxxxx plc.
(C) For a period of one year following the Closing Date,
the Seller shall use its best efforts to cause to be prepared by
its independent accounting firm, and shall deliver to Buyer, such
other financial information for the Company and the Company
Subsidiaries as Buyer shall reasonably request. For such period,
Seller shall use its best efforts to cause its independent
accounting firm to cooperate with Buyer and Buyer's independent
accounting firm in the preparation and certification of financial
statements and other information regarding the Company and the
Company Subsidiaries in connection with a public offering of
Buyer's securities, including, without limitation, the provision
of "comfort" letters customarily requested by the underwriters of
such an offering. Buyer shall bear the fees and costs incurred
in connection with the services provided by such accounting firm
pursuant to this Section 7.5(C).
(D) All financial statements and information furnished
pursuant to this Section 7.5 shall be prepared on a consolidated
basis from the books and records of the Company and the Company
Subsidiaries. The financial statements shall be prepared in
accordance with U.S. GAAP and Regulation S-X (or any successor
provision or regulation promulgated by the Securities and
Exchange Commission) applied on a consistent basis throughout the
periods covered thereby and, in the case of the financial
statements referred to in Section 7.5 (A), shall be certified by
such independent accounting firm.
7.6 TAX RETURNS.
Buyer shall cause the Company (and its Subsidiaries) to
consent to join, for all taxable periods of the Company ending on
or before the Closing Date for which the Company (or such
Subsidiary) is eligible to do so, in any consolidated or combined
income tax returns with Seller. Buyer shall, and shall cause the
Company and its Subsidiaries to, cooperate with Seller in the
preparation of the portions of such income tax returns pertaining
to the Company and its Subsidiaries, including, without
limitation, by promptly providing Seller with all information
regarding the Company and its Subsidiaries reasonably requested
by Seller to enable Seller to prepare and file such income tax
returns. All taxes of any kind payable by reason of the
operations or activities of the Company on or prior to the
Closing Date shall be paid by Seller, unless set forth as
liabilities on the Closing Date Balance Sheet, in which case they
shall be paid by Buyer.
- 26 -
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION OF SELLER. Subject to the limitations
set forth in Section 8.4, Section 8.5 and Section 8.6, Buyer will
indemnify and defend (in the case of third party claims) Seller,
and hold Seller harmless, from and against the actual amount of
any and all liabilities, damages, claims, losses, out of pocket
costs and expenses (including reasonable attorneys' fees) arising
out of or resulting from -
(A) Any misrepresentation or breach of warranty by
Buyer for which notice is given by Seller within the period
specified in Section 8.6; or
(B) Nonperformance by Buyer of any obligations to be
performed on the part of Buyer under this Purchase
Agreement.
8.2 INDEMNIFICATION OF BUYER. Subject to the limitations
set forth in Section 8.4, Section 8.5 and Section 8.6, Seller
will indemnify and defend (in the case of third party claims)
Buyer, and hold Buyer and the Company harmless, from and against
the actual amount of any and all liabilities, damages, claims,
losses, out of pocket costs and expenses (including reasonable
attorneys' fees) arising out of or resulting from -
(A) Any misrepresentation or breach of warranty or
covenant by Seller or the Company for which notice is given
by Buyer within the period specified in Section 8.6; or
(B) Nonperformance by Seller or the Company of any
obligation to be performed on the part of Seller under this
Purchase Agreement.
8.3 CLAIMS. If either party desires to make a claim
against the other under Section 8.1 or 8.2 which does not involve
a claim by any person other than the parties, then such party
shall make such claim by promptly delivering written notice to
the other. If either Buyer or Seller (the "Claimant") desires to
make a claim against the other (the "Indemnitor") under Section
8.1 or 8.2 which involves a claim by a person other than the
parties, then such claim will be made in the following manner and
be subject to the following terms and conditions:
(A) Notice. The Claimant will give prompt notice to
the Indemnitor of any demand, claim, or threat of litigation
or the actual institution of any action, suit, or proceeding
(collectively, a "Claim") at any time served on or
instituted against the Claimant with respect to which the
Claimant believes it would have a right of indemnification
under Section 8.1 or 8.2. In providing such notice, the
Claimant shall only state the existence of such Claim and
shall not admit or deny the validity of the facts or
circumstances out of which such Claim arose. Solely for
purposes of determining whether the Claimant is entitled to
- 27 -
indemnification under Section 8.1 or 8.2, the alleged facts
or circumstances on which such Claim is based shall be
treated as if they were true pending final resolution of the
facts and circumstances out of which such Claim arose.
(B) Responsibility for Defense. Within thirty (30)
days after receipt of any such notice, but not less than
five (5) working days before the time the Claimant is
required to respond to a Claim, the Indemnitor will, by
giving written notice to the Claimant, have the right to
assume responsibility for the defense of the Claim in the
name of the Claimant or otherwise as the Indemnitor may
elect; provided that the Indemnitor also agrees that it does
or might have responsibility to indemnify the Claimant with
respect to such Claim. Otherwise, the Claimant will have
responsibility for the defense of the Claim. Subject to the
provisions of subsections 8.3(C) and (D) below, the party
having responsibility for defense of a Claim (the "Defending
Party") will have the full authority to defend, cure,
adjust, compromise, or settle such Claim or appeal any
judgment or ruling of a court or other tribunal in
connection with such Claim in its own name and/or in the
name of the other party.
(C) Right to Participate. Notwithstanding a
Defending Party's responsibility for the defense of a Claim,
the other party shall have the right to participate, at its
own expense and with its own counsel, in the defense of a
Claim and the Defending Party will consult with the other
party from time to time on matters relating to the defense
of such Claim. The Defending Party will provide the other
party with copies of all pleadings and material
correspondence relating to such Claim.
(D) Settlement. A Defending Party will provide the
other party with timely written notice of any proposed
adjustment, compromise, or other settlement, including
equitable or injunctive relief, of a Claim which the
Defending Party intends to propose or accept. If the other
party fails to provide the Defending Party with timely
written notice of objection to such settlement, then the
Defending Party shall have the authority to propose or
accept such settlement and enter into any agreement, in its
own name and/or in the name of the other party, giving legal
effect to all aspects of such settlement. If the other
party objects to such settlement, then the Defending Party
may, if it so elects, tender the defense to the other party
by paying to such other party the amount of money proposed
to be paid in settlement of the Claim, in which case the
Defending Party shall have no further liability to the other
party under this Purchase Agreement with respect to such
Claim and the other party shall have full authority for the
future defense of such Claim and full responsibility for any
and all liabilities, obligations, costs, and expenses
resulting therefrom.
- 28 -
8.4 DISPUTED RESPONSIBILITY. If, after receiving a
written indemnification notice under Section 8.3(A), the party
receiving such notice disputes -
(A) The fact that such party in fact made a
misrepresentation or breach a warranty under this Purchase
Agreement giving rise to the claim to which the notice
relates or that any such misrepresentation or breach in fact
gave rise to the liabilities, damages, claims, costs, or
expenses for which the other party seeks indemnification
under this Article VIII; or
(B) The fact that such party in fact failed to
perform any obligation to be performed on the part of that
party under this Purchase Agreement giving rise to the claim
to which the notice relates or that any such failure in fact
gave rise to the liabilities, damages, claims, costs, or
expenses for which the other party seeks indemnification
under this Article VIII;
then such party will have the right to initiate the dispute
resolution mechanism set forth in Section 7.4, in which case the
dispute will be finally resolved as provided in Section 7.4. In
such case, however, pending final resolution of the disputed
item, the parties will proceed as if the party receiving the
indemnification notice had in fact made a misrepresentation,
breached a warranty, or failed to perform an obligation to be
performed on the part of that party under this Purchase Agreement
and as if such act or failure in fact gave rise to the
liabilities, damages, claims, costs, or expenses for which the
other party seeks indemnification under this Article VIII. If the
disputed item is resolved in whole or in part in favor of the
party receiving the indemnification notice, then such party will
be entitled to an equitable reimbursement from the other party of
any amounts expended or incurred in carrying out the receiving
party's indemnification obligations under this Article VIII.
8.5 DOLLAR LIMITATION ON INDEMNIFICATION. Notwithstanding
the provisions of Sections 8.1(A) and 8.2(A) but subject to
Section 8.7, neither Seller nor Buyer will be obligated to
indemnify, defend, or hold the other party harmless from or
against any liability, damage, claim, cost, or expense (including
attorneys' fees) arising out of a misrepresentation or breach of
warranty by such party pursuant to Section 8.1(A) or 8.2(A)
unless and to the extent (A) a given claim (or claims, to the
extent such claims relate to the same facts or circumstances)
exceeds $25,000 and (B) the amount by which all claims in excess
of such amount exceeds $2,000,000. In no event will the parties
have liability for consequential or punitive damages. In all
events, in determining the damages for any particular loss
suffered, the amount of the indemnity will be net of any tax
benefits and recoveries from insurance or otherwise received by
the indemnitee.
8.6 TIME LIMITATIONS ON INDEMNIFICATION. Notwithstanding
the provisions of Section 8.1 (A) and 8.2(A) but subject to
Section 8.7, neither party will have any liability to the other
arising out of a breach of any representation or warranty
- 29 -
contained in Article III of this Purchase Agreement, and any
cause of action based thereupon shall expire and terminate,
unless the party claiming that such breach occurred delivers to
the other party written notice and a reasonably full explanation
of the alleged breach on or before 5:00 p.m. (Eastern Standard
Time) on March 31, 1999, except for claims relating to Section
3.2(D), which shall survive until the relevant statute of
limitations (including any extension thereof by Seller or the
Company) has run, and claims relating to Section 3.2(K), for
which such notice must be given prior to the fourth annual
anniversary of the Closing.
8.7 EXCLUSIVE REMEDY. Seller and Buyer acknowledge and
agree that, absent fraud, the foregoing indemnification
provisions shall be the sole and exclusive remedy of Seller and
Buyer with respect to any inaccuracy or breach of any
representation, warranty or covenant made by Seller or Buyer in
this Purchase Agreement. The parties agree that no indemnity
shall be paid with respect to a liability that is shown on the
Closing Date Balance Sheet.
ARTICLE IX
AMENDMENT, WAIVER,
TERMINATION, AND CANCELLATION
9.1 AMENDMENT. The parties may amend this Purchase
Agreement at any time before the Closing, but only by written
instrument executed by both parties.
9.2 WAIVER. Either party may at any time waive compliance
by the other with any covenants or conditions contained in this
Purchase Agreement but only by written instrument executed by the
party waiving such compliance. No such waiver, however, shall be
deemed to constitute the waiver of any such covenant or condition
in any other circumstance or the waiver of any other covenant or
condition.
9.3 TERMINATION. The parties may terminate this Purchase
Agreement at any time before the Closing, but only by written
instrument signed by both parties. This Purchase Agreement will
terminate automatically, and without further action by any party,
if the Closing has not occurred by January 31, 1998, unless the
parties otherwise extend this Purchase Agreement by a written
instrument executed by the parties. Termination of this Purchase
Agreement pursuant to the preceding sentence will be without
prejudice to any claim either party may have at law or in equity
against the other party for any misrepresentation or breach of
warranty or covenant by under this Purchase Agreement which arose
at or before the termination under such sentence.
- 30 -
ARTICLE X
MISCELLANEOUS
10.1 COOPERATION. Each of Buyer and Seller will cooperate
with the other party, at the other party's request and expense,
in furnishing information, testimony, and other assistance in
connection with any actions, proceedings, arrangements, and
disputes with other persons or governmental inquiries or
investigations involving Seller's conduct of the Company's
business or the transactions contemplated by this Purchase
Agreement.
10.2 SEVERABILITY. If any provision of this Purchase
Agreement shall finally be determined to be unlawful, then such
provision will be deemed to be severed from this Purchase
Agreement and replaced by a lawful provision which carries out,
as closely as possible, the intention of the parties and
preserves the economic bargain contemplated by this Purchase
Agreement and, in such case, each and every other provision of
this Purchase Agreement will remain in full force and effect.
10.3 COSTS AND EXPENSES. Each party will bear its own
expenses incurred in connection with this Purchase Agreement and
the transactions contemplated by this Purchase Agreement, whether
or not the transactions are consummated, it being understood and
agreed that the expenses of the Seller shall be deemed to include
the expenses of any broker referred to in Section 3.1(E), the
fees and expenses of the attorneys, accountants and other
advisers of the Seller and the Company in connection with the
transactions contemplated by this Purchase Agreement, and the
amount of any severance or similar payments required to be made
by the Company following the Closing Date by reason of
termination of employment at or prior to the Closing Date (and
such payments in respect of employees whom Buyer advises Seller
at or prior to the Closing that Buyer does not wish to retain)
pursuant to severance or similar agreements by which the Company
is bound on the Closing Date.
10.4 NOTICES. All notices, requests and other
communications under this Purchase Agreement shall be in writing
and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic
transmission (with confirmation by mail or courier), or, if sent
by courier, two (2) days after delivery to an international
courier service with guaranteed two-day delivery, addressed or
communicated as follows:
- 31 -
If to Buyer, to: PCD Inc.
0 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Chairman of the Board
Telefax: (000) 000-0000
With a copy to: Hill & Xxxxxx,
a Professional Corporation
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telefax: (000) 000-0000
If to Seller, to: UL America, Inc.
c/o Siebe Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Vice President Finance
Telefax: (000) 000-0000
With copies to: Xxxxx plc
Saxon House
0-0 Xxxxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxx
Attention: Secretary
Telefax: 44.1753.622.030
- 32 -
Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telefax: (000) 000-0000
Either party may change its notice address above to a different
address by giving the other party written notice of such change.
10.5 ASSIGNMENT. This Purchase Agreement will be binding
upon and inure to the benefit of the successors of each of the
parties hereto, but shall not be assignable by either party
without the prior written consent of the other.
10.6 NO THIRD PARTIES. Neither this Purchase Agreement
nor any provisions set forth in this Purchase Agreement is
intended to, or shall, create any rights in or confer any
benefits upon any person other than the parties to this Purchase
Agreement and their respective successors and permitted assigns.
10.7 INCORPORATION BY REFERENCE. The Appendices and
Schedules to this Purchase Agreement constitute integral parts of
this Purchase Agreement and are hereby incorporated into this
Purchase Agreement by this reference.
10.8 GOVERNING LAW. This Purchase Agreement will be
governed by and construed in accordance with the internal
substantive laws of the State of Delaware.
10.9 COUNTERPARTS. More than one counterpart of this
Purchase Agreement may be executed by the parties hereto, and
each fully executed counterpart shall be deemed an original
without production of the others.
10.10 COMPLETE AGREEMENT. This Purchase Agreement sets
forth the entire understanding of the parties hereto with respect
to the subject matter of this Purchase Agreement and supersedes
all prior letters of intent, agreements, covenants, arrangements,
communications, representations, or warranties, whether oral or
written, by any officer, employee, or representative of either
party relating thereto.
10.11 POST-CLOSING COVENANTS. For a period of five years
after the Closing Date, neither Seller nor any parent, subsidiary
or other affiliate of Seller, including, without limitation,
Xxxxx plc, shall:
(A) directly or indirectly engage in any Competitive
Business (as defined below);
- 33 -
(B) directly or indirectly induce or attempt to
induce any employee, consultant, independent contractor,
supplier, customer, or licensor of the Company or any
Company Subsidiary to terminate his or her employment or
other relationship with the Company or any Company
Subsidiary; or
(C) except as otherwise permitted pursuant to
Sections 7.2 and 7.3 hereof, use for its own benefit or
disclose to or use for the benefit of any person or entity
other than the Buyer or any subsidiary or other affiliate of
Buyer, including without limitation, the Company, any
information not already lawfully available to the public
concerning any Buyer Intellectual Property (as defined
below).
For purposes of this Section 10.11, (i) "Competitive
Business" shall mean any business or activity which is
competitive with the development, design, manufacture, sale, or
servicing of burn-in/test sockets and plastic carriers as such
business is as of the Closing Date conducted or proposed to be
conducted by the Company or the Company Subsidiaries; and (ii)
"Buyer Intellectual Property" shall mean the Company's rights as
of the Closing consisting of, conferred by or otherwise relating
to any of the following: (v) patents and patent applications
(including all renewals, extensions or modifications thereof);
(w) trade secrets (including, without limitation, know-how,
inventions, computerized data and information, computer programs,
business records, files and data, discoveries, formulae,
production outlines, product designs, mask works, manufacturing
information, processes and techniques, testing and quality
control processes and techniques, drawings and customer lists);
(x) trademarks, service marks, and applications therefor;
(y) copyrights; and (z) trade names. Notwithstanding the
foregoing, nothing herein shall be deemed to affect the ability
of the Seller or its affiliates to (a) acquire up to 10% of any
class of securities of any issuer that is traded on a recognized
stock exchange or (b) to acquire securities or assets of any
entity if the revenues derived by such entity from a Competitive
Business constitutes less than 50% of the consolidated revenues
of such entity, and the Seller and its affiliates (i) seek in
good faith to dispose of such Competitive Business for fair value
as promptly as practicable after such acquisition and (ii) do not
disclose any Buyer Intellectual Property to such Competitive
Business.
- 34 -
IN WITNESS WHEREOF, the duly authorized officers or
representatives of the parties hereto have duly executed this
Purchase Agreement as of the date first written above.
UL AMERICA, INC.
By:/S/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: President
XXXXX ELECTRONICS, INC.
By:/S/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
PCD INC.
By:/S/ XXXX X. XXXXXX, XX.
Name: Xxxx X. Xxxxxx, Xx.
Title: Chairman of the Board
- 35 -
GUARANTY
The undersigned hereby (i) joins the representations
and warranties applicable to Guarantor under Section 3.1 of the
foregoing Purchase Agreement, (ii) agrees to be bound by the
provisions of Section 10.11 of the foregoing Purchase Agreement
and (iii) unconditionally guaranties the full and punctual
performance by the Seller and/or the Company of all of the
obligations and liabilities of the Seller and/or the Company
under or in respect of the foregoing Purchase Agreement. The
obligations of the undersigned under this Guaranty are primary,
and no recourse need be had by Buyer against the Seller or the
Company before proceeding against the undersigned. The
undersigned hereby waives presentment, protest, demand or notice
of any kind, and all other suretyship defenses, and consents that
no extension or other indulgence granted to the Seller or the
Company, and no discharge or release of the Seller or the Company
or any other party primarily liable under the Purchase Agreement,
shall discharge or affect the liability of the undersigned. The
undersigned hereby submits to the jurisdiction of the courts of
the Commonwealth of Massachusetts and the United States District
Court for the District of Massachusetts, in each case sitting in
Boston, Massachusetts, in any action or proceeding arising out of
or relating to this Guaranty. The undersigned hereby waives any
objection it may have to venue to any such action or proceeding
and to the defense of an inconvenient forum with respect thereto.
The undersigned consents to service of process in the manner
provided for notices in the foregoing Purchase Agreement.
XXXXX PLC
By:/S/ XXXXX X. XXXXXX
Name: Xxxxx X. Xxxxxx
Title: Director of Planning
- 36 -
APPENDIX A
CERTAIN DEFINITIONS
The following terms have the meanings set forth below where
used in the Purchase Agreement and identified with initial
capital letters.
TERM DEFINITION
Buyer As defined in the Preamble to the
Purchase Agreement.
Adjustment As determined under Section 2.3 of
the Purchase Agreement.
Base-Line Net Worth As defined in Section 2.3(E) of the
Purchase Agreement.
Business As defined in Recital A to the
Purchase Agreement.
Business Condition The financial and operating
condition of the Company and the
Company Subsidiaries taken as a
whole.
Chief Executive Officer Xxxxxxx X. Xxxxxx
Claim As defined in Section 8.3(A) of the
Purchase Agreement.
Claimant As defined in Section 8.3 of the
Purchase Agreement.
Closing As defined in Section 6.1 of the
Purchase Agreement.
Closing Date As defined in Section 6.2 of the
Purchase Agreement.
Closing Date Balance Sheet As defined in Section 2.3(B) of the
Purchase Agreement.
Closing Net Worth As defined in Section 2.3(F) of the
Purchase Agreement.
Company Xxxxx Electronics, Inc.
Company Subsidiaries As defined in Section 3.2(B) of the
Purchase Agreement.
- 1 -
APPENDIX A
DOCUMENTS TO BE DELIVERED
BY SELLER AT CLOSING
(continued)
Default An occurrence which constitutes a
breach or default under a contract,
order, or other commitment, after
the expiration of any grace period
provided without cure.
Defending Party As defined in Section 8.3(B) of the
Purchase Agreement.
Draft Closing Date Balance As defined in Section 2.3 of the
Sheet Purchase Agreement.
Encumbrance Any encumbrance or lien, including,
without limitation, any mortgage,
judgment lien, materialman's lien,
mechanic's lien, security interest,
encroachment, easement, or other
restriction, in each case having an
adverse effect on possession, use,
or enjoyment of the thing or right
so encumbered.
Environmental, Health and All applicable federal, state,
Safety Laws local and foreign statutes,
regulations, By-laws rules and
ordinances, judicial and
administrative orders, contractual
obligations and common laws
concerning human health and safety,
or pollution or protection of the
environment, including without
limitation all those relating to
(a) personal injury or property
damage arising from actual, alleged
or potential environmental
contamination, or (b) the presence,
use, production, generation,
handling, transportation,
treatment, storage, disposal,
distribution, labeling, testing,
processing, discharge, release,
threatened release, control, or
cleanup of any Hazardous Materials
each as amended and as in effect as
of the date hereof.
Guarantor Xxxxx plc
Xxxx-Xxxxx-Xxxxxx Act The Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as
amended, and the rules and
regulations thereunder, as amended.
- 2 -
APPENDIX A
DOCUMENTS TO BE DELIVERED
BY SELLER AT CLOSING
(continued)
Hazardous Materials Any material or condition defined as
"hazardous" under an
Environmental, Health and Safety
Law, including without limitation,
the following:
(1) Asbestos;
(2) "[H]azardous substances,"
"pollutants" or
Comprehensive Environmental
Response, Compensation and
Liability Act;
(3) "[H]"azardous air
pollutants" under Section
112(b) of the Clean Air Act;
(4) "[I]mminently hazardous
chemical substances" under
Section 7 of the Toxic
Substances Control Act; and
(5) "[H]"azardous waste" under
Section 1004(5) of the Solid
Waste Disposal Act or under
Section 6003(5) of the
Resource Recovery and
Conservation Act.
Indemnitor As defined in Section 8.3 of the
Purchase Agreement.
Intellectual Property Rights consisting of, conferred by,
or otherwise relating to -
(1) Patents and patent
applications (including all
renewals, extensions, or
modifications thereof);
(2) Trade secrets, including
without limitation, know-how,
inventions, computerized data
and information, computer
programs, business records,
files and data, discoveries,
formulate, production
outlines, product designs,
mask works, manufacturing
information, processes and
techniques, testing and
quality control processes and
techniques, drawings and
customer lists;
- 3 -
APPENDIX A
DOCUMENTS TO BE DELIVERED
BY SELLER AT CLOSING
(continued)
(3) Trademarks, service marks,
and applications therefor;
(4) Copyrights; and
(5) Trade names.
Knowledge Means actual knowledge, without
independent investigation.
Material Event Any event, condition, circumstance,
or occurrence which has had a
material and adverse effect on the
Company and the company
Subsidiaries, taken as a whole.
Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx & Co., Incorporated
Neutral As defined in Section 7.4(C)(2) of
the Purchase Agreement.
Owns or Ownership Such ownership as confers upon the
party or person having a good and
marketable title to and control
over the thing or right owned, free
and clear of any and all
Encumbrances except Permitted
encumbrances.
Prime Rate The per annum rate of interest
published as such from time to time
in the Money Rates column of The
Wall Street Journal (Eastern
Edition). For all purposes of this
Purchase Agreement, interest at the
Prime Rate shall be calculated on
the basis of the actual number of
days elapsed in the relevant period
over a year of 365 or 366 days, as
the case may be.
Products As defined in Recital A to the
Purchase Agreement.
Purchase Price As defined in Section 2.2 of the
Purchase Agreement.
Purchase Agreement As defined in the Preamble to the
Purchase Agreement.
Seller As defined in the Preamble to the
Purchase Agreement.
- 4 -
APPENDIX A
DOCUMENTS TO BE DELIVERED
BY SELLER AT CLOSING
(continued)
Shares As defined in Recital B to the
Purchase Agreement.
U.K. GAAP United Kingdom generally accepted
accounting principles as in effect
on the date hereof.
U.S. GAAP United States generally accepted
accounting principles as in effect
on the date hereof.
Xxxxx Japan As defined in Section 3.2(A) of the
Purchase Agreement.
Xxxxx Singapore As defined in Section 3.2(A) of the
Purchase Agreement.
- 5 -
APPENDIX B
DOCUMENTS TO BE DELIVERED
BY SELLER AT THE CLOSING
1. Certificate as to the good standing of Seller (as of the
date not earlier than ten (10) days prior to the Closing)
in the State of Delaware.
2. A certificate signed by the Secretary or an Assistant
Secretary of Seller verifying the authorization of the
execution, delivery, and performance of the Purchase
Agreement by Seller and the consummation of the
transactions contemplated by the Purchase Agreement.
3. A certificate signed by the Secretary or an Assistant
Secretary of Seller dated as of the Closing Date as to the
incumbency and signatures of officers of Seller.
4. A certificate signed by the President or any Vice
President and the Secretary or any Assistant Secretary of
Seller dated as of the Closing Date confirming that all of
the representations and warranties of Seller contained in
Sections 3.1 and 3.2 of the Purchase Agreement were true,
accurate, and complete as of the date of the Purchase
Agreement and as of the Closing Date (as if such
representations and warranties had been made anew as of
the Closing except with respect to the effect of
transactions contemplated or permitted by the Purchase
Agreement).
5. A certificate signed by the President or any Vice
President and the Secretary or any Assistant Secretary of
the Company dated as of the Closing Date confirming that
all of the representations and warranties of the Company
contained in Sections 3.1 and 3.2 of the Purchase
Agreement were true, accurate, and complete as of the date
of the Purchase Agreement and as of the Closing Date (as
if such representations and warranties had been made anew
as of the Closing except with respect to the effect of
transactions contemplated or permitted by this Purchase
Agreement and with respect to the effect of the passage of
time and ordinary course conduct of business upon dated
material in the Disclosure Schedules) (but only to the
extent that such effect upon the Schedules do not
constitute a material adverse effect on the Company or the
Company Subsidiaries)).
6. Certificate as to the good standing of the Company (as of
the date not earlier than ten (10) days prior to the
Closing Date) in the State of Indiana.
7. Evidence of Section 338 election.
8. Opinion of counsel.
9. Resignations.
10. Section 7.5 financial statements, if available
- 1 -
APPENDIX B
DOCUMENTS TO BE DELIVERED
BY SELLER AT THE CLOSING
(continued)
11. Evidence of Section 4.10 Agreements, if obtained.
- 2 -
APPENDIX C
DOCUMENTS TO BE DELIVERED
BY BUYER AT THE CLOSING
1. Certificate as to the good standing of Buyer (as of the
date not earlier than ten (10) days prior to the Closing)
in the Commonwealth of Massachusetts.
2. A certificate signed by the Clerk or an Assistant Clerk of
Buyer verifying the authorization of the execution,
delivery, and performance of the Purchase Agreement by
Buyer and the consummation of the transactions
contemplated by the Purchase Agreement.
3. A certificate signed by the Clerk or an Assistant Clerk of
Buyer dated as of the Closing Date as to the incumbency
and signatures of officers of Buyer.
4. A certificate signed by the President or any Vice
President and the Clerk or any Assistant Clerk of Buyer
dated as of the Closing Date confirming that all of the
representations and warranties of Buyer contained in
Section 3.3 of the Purchase Agreement were true, accurate,
and complete as of the date of the Purchase Agreement and
as of the Closing Date (as if such representations and
warranties had been made anew as of the Closing Date
except with respect to the effect of transactions
contemplated or permitted by the Purchase Agreement).
- 1 -
TABLE OF CONTENTS
PREAMBLE. . . . . . . . .. . . . . . . . . . . . . . . . . . .1
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
TERMS AND CONDITIONS. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I GENERAL PROVISIONS. . . . . . . . . . . . . . . . .1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . .1
1.2 Other Definitions And Meanings; Interpretation. . . 1
ARTICLE II PURCHASE AND SALE. . . . . . . . . . . . . . . . .2
2.1 Transaction. . . . . . . . . . . . . . . . . . . . .2
2.2 Purchase Price. . . . . . . . . . . . . . . . . . . 2
2.3 Adjustment. . . . . . . . . . . . . . . . . . . . . 2
(A) Preparation of Closing Balance Sheet. . . .. 2
(B) Informal Negotiations; Dispute Resolution. . 2
(C) Fees and Expenses. . . . . . . . . . . . . . 3
(D) Access. . . . . . . . . . . . . . . . . . . .3
(E) Base-Line Net Worth. . . . . . . . . . . . . 3
(F) Determination of Closing Net Worth. . . . . .3
(G) Amount of the Adjustment. . . . . . . . . . .4
2.4 Payment of Purchase Price. . . . . . . . . . . . . .4
(A) Payment at Closing. . . . . . . . . . . . . .4
(B) Payment of the Adjustment. . . . . . . . . . 5
2.5 Refund of the Adjustment. . . . . . . . . . . . . . 5
2.6 Method of Payment. . . . . . . . . . . . . . . . . .5
(A) Directed Payments. . . . . . . . . . . . . . 5
(B) Other Payments. . . . . . . . . . . . . . . .5
ARTICLE III REPRESENTATIONS AND WARRANTIES. . . . . . . . . .5
3.1 Seller's General Representations and Warranties. . .5
(A) Organization and Existence. . . . . . . . . .5
(B) Power and Authority. . . . . . . . . . . . . 5
(C) No Conflict. . . . . . . . . . . . . . . . . 6
(D) Capitalization. . . . . . . . . . . . . . . .6
- i -
(E) Brokers. . . . . . . . . . . . . . . . . . . 6
3.2 Representations and Warranties Concerning
the Company. . . . . . . . . . . . . . . . . . . .6
(A) Incorporation, Subsidiaries, Branches. . . . 7
(B) Financial Statements. . . . . . . . . . . . .7
(C) Undisclosed Liabilities. . . . . . . . . . . 8
(D) Taxes. . . . . . . . . . . . . . . . . . . . 8
(E) Real Property. . . . . . . . . . . . . . . . 8
(F) Tangible Personal Property. . . . . . . . . 9
(G) Intellectual Property. . . . . . . . . . . . 9
(H) Litigation. . . . . . . . . . . . . . . . . 10
(I) Contracts. . . . . . . . . . . . . . . . . .10
(J) Employees and Employee Benefits. . . . . . .11
(K) Compliance With Environmental, Health
and Safety Laws. . . . . . . . . . . . . .12
(L) Compliance With Other Laws. . . . . . . . . 13
(M) Absence of Certain Changes or Events. . . . 14
(N) Insurance. . . . . . . . . . . . . . . . . .14
3.3 Disclaimer. . . . . . . . . . . . . . . . . . . . .15
3.4 Buyer's Representations and Warranties. . . . . . .15
(A) Organization and Existence. . . . . . . . . 15
(B) Power and Authority. . . . . . . . . . . . .15
(C) No Conflict. . . . . . . . . . . . . . . . .15
(D) Brokers. . . . . . . . . . . . . . . . . . .15
(E) Buyer's Net Worth. . . . . . . . . . . . . .16
(F) Purchase for Investment. . . . . . . . . . .16
ARTICLE IV ACTIONS BEFORE CLOSING. . . . . . . . . . . . . .16
4.1 General. . . . . . . . . . . . . . . . . . . . . . 16
4.2 Access to Records. . . . . . . . . . . . . . . . . 16
4.3 Interim Conduct of the Business. . . . . . . . . . 16
4.4 Buyer's Approval of Certain Transactions. . . . . .17
4.5 Consents to Assignment. . . . . . . . . . . . . . .18
4.6 Coordination of Public Announcements. . . . . . . .18
4.7 Xxxx-Xxxxx-Xxxxxx Notification. . . . . . . . . . .18
4.8 Other Regulatory Approvals. . . . . . . . . . . . .19
4.9 Section 338 Election by Seller. . . . . . . . . . .19
4.10 Employee Agreements. . . . . . . . . . . . . . . . 19
ARTICLE V CONDITIONS. . . . . . . . . . . . . . . . . . . . 19
5.1 Conditions to Buyer's Obligations. . . . . . . . . 19
- ii -
5.2 Conditions to Seller's Obligations. . . . . . . . .21
ARTICLE VI CLOSING. . . . . . . . . . . . . . . . . . . . . 22
6.1 The Closing. . . . . . . . . . . . . . . . . . . . 22
6.2 Time, Date, and Place Of Closing. . . . . . . . . .22
6.3 Buyer's Obligations. . . . . . . . . . . . . . . . 22
6.4 Seller's Obligations. . . . . . . . . . . . . . . .22
ARTICLE VII ACTIONS AFTER CLOSING. . . . . . . . . . . . . .22
7.1 Further Conveyances. . . . . . . . . . . . . . . . 22
7.2 Access to Former Business Records. . . . . . . . . 23
7.3 Access to Former Employees. . . . . . . . . . . . .23
7.4 Dispute Resolution. . . . . . . . . . . . . . . . .23
(A) Dispute Notice. . . . . . . . . . . . . . . 23
(B) Informal Negotiations. . . . . . . . . . . .23
(C) Dispute Resolution Proceedings. . . . . . . 23
(1) Designation of Representatives. . . .24
(2) Selection of Neutral. . . . . . . . .24
(3) Procedures and Process. . . . . . . .24
(4) Decision. . . . . . . . . . . . . . .25
(D) Equitable Relief. . . . . . . . . . . . . . 25
(E) Binding Effect. . . . . . . . . . . . . . . 25
7.5 Financial Statements. . . . . . . . . . . . . . . .25
7.6 Tax Returns. . . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII INDEMNIFICATION. . . . . . . . . . . . . . . . 27
8.1 Indemnification of Seller. . . . . . . . . . . . . 27
8.2 Indemnification of Buyer. . . . . . . . . . . . . .27
8.3 Claims. . . . . . . . . . . . . . . . . . . . . . .27
(A) Notice. . . . . . . . . . . . . . . . . . . 27
(B) Responsibility for Defense. . . . . . . . . 28
(C) Right to Participate. . . . . . . . . . . . 28
(D) Settlement. . . . . . . . . . . . . . . . . 28
8.4 Disputed Responsibility. . . . . . . . . . . . . . 29
8.5 Dollar Limitation on Indemnification. . . . . . . .29
8.6 Time Limitations on Indemnification. . . . . . . . 29
8.7 Exclusive Remedy. . . . . . . . . . . . . . . . . .30
ARTICLE IX AMENDMENT, WAIVER, TERMINATION, AND
CANCELLATION. . . . . . . . . . . . . . . . . . . . . . 30
- iii -
9.1 Amendment. . . . . . . . . . . . . . . . . . . . . 30
9.2 Waiver. . . . . . . . . . . . . . . . . . . . . . 30
9.3 Termination. . . . . . . . . . . . . . . . . . . . 30
ARTICLE X MISCELLANEOUS. . . . . . . . . . . . . . . . . . 31
10.1 Cooperation. . . . . . . . . . . . . . . . . . . . 31
10.2 Severability. . . . . . . . . . . . . . . . . . . .31
10.3 Costs and Expenses. . . . . . . . . . . . . . . . .31
10.4 Notices. . . . . . . . . . . . . . . . . . . . . . 31
10.5 Assignment. . . . . . . . . . . . . . . . . . . . .33
10.6 No Third Parties. . . . . . . . . . . . . . . . . .33
10.7 Incorporation By Reference. . . . . . . . . . . . .33
10.8 Governing Law. . . . . . . . . . . . . . . . . . . 33
10.9 Counterparts. . . . . . . . . . . . . . . . . . . .33
10.10 Complete Agreement. . . . . . . . . . . . . . . . .33
10.11 Post-Closing Covenants. . . . . . . . . . . . . . .33
- iv -
