ASSET PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, made and entered into as of this 24th day of May, 1999
(the "Effective Date") between Galileo Corporation, a Delaware corporation
having its office at Galileo Park, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Seller")
and IPG Photonics Corporation, a Delaware corporation having its xxxxxx xx
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Buyer");
W I T N E S S E T H:
WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to buy from
Seller the following assets: (i) certain assets relating to the Seller's
telecommunications business unit (the "Business") and (ii) certain intellectual
property rights relating to the Business, upon the terms and conditions set
forth herein;
WHEREAS, Buyer has, since December 15, 1998, had access to and use of
the assets of the Business and has used the Assets (as herein defined) and
manufactured products of the Business since such date pursuant to an oral
agreement between Buyer and Seller (the "Buyer Prior Use"); and
WHEREAS, simultaneously with execution of this Agreement, Seller and
Buyer are entering into a Lease Agreement (the "Lease") under which Seller as a
lessor will lease to Buyer as a lessee that portion of the building, fixtures
and other improvements located on the land known as Galileo Park, Sturbridge,
Massachusetts, as set forth in the Lease, and Seller agrees to share with Buyer
certain facilities and services and share the costs associated therewith, all as
set forth in the Lease, to enable Buyer to operate the Business and exercise
ownership of the Assets.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, Buyer and Seller do
hereby covenant and agree as follows:
1. Assets.
1.1 Assets Purchased. Subject to the terms and conditions contained
herein, Buyer agrees to buy and Seller agrees to sell to Buyer the following
property and rights (collectively, the "Assets"), in each case free and clear of
all liens, charges, pledges, security interests or other encumbrances except as
may be set forth in Schedule 5.1(b) (the "Liens"):
(a) Certain tangible assets owned by the Seller and used or held
for use or sale in the Business, including, without limitation, certain
machinery, equipment, inventory, work-in progress and other items, including
without limitation, laboratory fixtures and furniture, office furniture, small
tools and other property currently located on the premises or the property owned
by the Seller and used or held for use or sale in the Business, all of which are
identified on Schedule A annexed hereto (the "Business Assets"), and
(b) Certain intellectual property rights and other intangible
assets owned by the Seller and used or held for use or sale in the Business as
set forth on Schedule B annexed hereto (the "Intellectual Property").
1.2 Assumption of Liabilities. Except for the liabilities expressly
disclosed on Schedule 1.2 hereto (the "Assumed Liabilities"), which Assumed
Liabilities Buyer hereby agrees to assume and perform as of the date of
execution of this Agreement, Buyer assumes no obligations or liabilities of
Seller in connection with this transaction, the Business or the Assets. Without
limiting the generality of the foregoing, Seller shall be solely responsible for
payment of all amounts at any time owing by Seller at the time of the Closing
(other than the Assumed Liabilities and amounts incurred by Buyer from December
15, 1998, with respect to the Business, Assets or this transaction), whether
accrued or contingent, known or unknown, including, without limitation,
liabilities arising out of the provision by Seller of goods or services prior to
the Closing, obligations for any payments that may be due to employees of Seller
and obligations for any of Seller's Taxes. As used herein, "Tax" and "Taxes"
refer to any and all taxes, duties, levies, fines, license fees or other
monetary charges imposed by any governmental or regulatory entity.
1.3 Instruments of Transfer. The transfer of the Assets to Seller at
the Closing shall be effected by a Xxxx of Sale and Patent and Trademark
Assignments in the forms attached hereto as Exhibits X-0, X-0 and A-3.
1.4 Instrument of Assumption of Liabilities. The assumption of the
Assumed Liabilities by the Buyer at the Closing shall be effected by an
instrument of Assumption of Liabilities in the form attached hereto as Schedule
1.4.
1.5 Use of Assets and Intellectual Property Prior to Closing. Seller
has previously loaned the Assets to Buyer and Buyer, with Seller's permission,
has made and will continue to make use of such Assets prior to the Closing or
until earlier termination of this Agreement. Seller agrees that all proceeds
from such use of such Assets shall be the sole and exclusive property of Buyer.
2. Purchase Price.
2.1 Purchase Price. Buyer shall pay to Seller, in consideration of the
transfer of the Assets, a purchase price (the "Purchase Price") of ONE MILLION
FIVE-HUNDRED THOUSAND DOLLARS ($1,500,000) in cash payable by Buyer to Seller by
wire transfer in immediately available funds to an account designated by Seller
to be paid at the Closing.
2.2 In preparation for payment of the Purchase Price, Buyer agrees to
transfer to an escrow account (the "Escrow Account") to be held by Xxxxx, Xxxx &
Xxxxx, LLP as escrow agent (the "Escrow Agent") the following sums which will be
held in escrow in accordance with the terms of this Agreement:
(a) The sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000) (the "First
Deposit") will be paid into the Escrow Account on the Effective Date, and
(b) The sum of ONE MILLION DOLLARS ($1,000,000) (the "Second
Deposit") shall be paid into the Escrow Account prior to the Closing.
2.3 Deferred Payments. Within thirty (30) days after the end of each
calendar quarter over the ten (10) year period following the Closing Date (the
"Deferred Payment Period"), Buyer shall make the additional payments to Seller
as specified in Schedule 2.3 attached hereto (the "Deferred Payments").
2.4 Escrow Account.
(a) The First Deposit, the Second Deposit, and all accrued interest
thereon (the "Deposit") shall be held in escrow by Escrow Agent, subject to the
terms of this Agreement and shall be duly accounted for at the time of the
Closing or other termination of this Agreement. All such deposits shall be
invested to the extent practicable in Qualified Investments by the Escrow Agent.
For the purposes hereof, unless otherwise agreed in writing by Seller and Buyer,
"Qualified Investments" shall mean United States Treasury bills or notes having
a maturity date which is not more than 21 days after the date of purchase. All
interest and other income earned on the Deposit shall be paid to Buyer.
(b) The liability of the Escrow Agent to the parties hereto shall
be only as set forth in this Agreement. The Escrow Agent shall not be liable for
any mistake or error of judgment in the discharge of its functions hereunder,
but shall be liable only for bad faith or gross negligence. Without limiting the
generality of the foregoing, the Escrow Agent shall not incur any liability with
respect to any action taken or omitted in reliance upon any instrument, not only
as to its due execution and delivery and the validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information contained
therein, which the Escrow Agent shall in good faith believe to be genuine, to
have been signed or presented by a proper person or persons and to conform with
the provisions of this Agreement.
(c) Notwithstanding anything contained in this Agreement to the
contrary, should any dispute arise with respect to the disposition of any sum or
any document held by the Escrow Agent pursuant to the terms hereof, the Escrow
Agent shall retain the disputed sum or document (or make delivery to a court in
accordance with the immediately succeeding sentence) and the Escrow Agent shall
have no liability to any party hereto for retaining any portion of such sum or
any document until such dispute shall have been settled by either a mutual
written agreement between the parties or a final order, decree or judgment by a
court of competent jurisdiction in the United States of America (and no such
order, decree or judgment shall be deemed to be "final" unless and until the
time for appeal has expired and no appeal has been perfected), and the Escrow
Agent shall deliver such sum or such document in accordance with such mutual
agreement or final order, decree or judgment. In the event that there shall be
any action or legal proceeding arising out of this Agreement, to which action or
legal proceeding the Escrow Agent is or may be a party, whether directly, as
counsel to the Buyer or otherwise, the Escrow Agent shall be entitled, at any
time, in its sole discretion, to deliver the moneys or documents held by it
hereunder, or any portion thereof, into court, and upon so doing, it shall be
relieved of any further responsibility or liability as to said moneys or
documents, as the case may be, and as an Escrow Agent under this Agreement. In
no event shall the Escrow Agent be under any duty whatsoever to institute,
defend or actively participate in any such proceeding. Each party acknowledges
and agrees that Escrow Agent has rendered, and may continue to render, legal
services to Buyer in connection with the preparation of this Agreement and the
consummation of the transactions to which it relates.
(d) Upon receipt of a joint written notice from Buyer and Seller
directing Escrow Agent to deliver any sum or document held in the Escrow
Account, the Escrow Agent shall make delivery as directed by such written notice
unless otherwise directed by a court or administrative agency.
(e) Seller and Buyer agree to indemnify the Escrow Agent and to
hold it harmless from and against any and all losses, claims, damages,
liabilities and expenses (including, without limitation, costs of investigation,
disbursements and attorneys' fees) which may be imposed upon or incurred by the
Escrow Agent pursuant to this Agreement or in the performance of its duties
hereunder, or in connection with any arbitration or litigation arising from this
Agreement or involving the subject matter hereof.
3. Closing. Subject to the terms and conditions of this Agreement,
Seller shall deliver to Buyer the documents specified in Section 7, and Buyer
shall (i) deliver the documents specified in Section 8 and (ii) instruct the
Escrow Agent to use the Deposit to pay the Purchase Price to Seller in
accordance with Section 2.1 hereof (or to BankBoston, pursuant to the terms of
the letter agreement (the "BankBoston Letter") attached hereto as Schedule 3) at
a closing (the "Closing") which shall take place on June 15, 1999, or such other
date as may be mutually agreed upon by the parties (the "Closing Date"), at the
offices of Xxxxx, Xxxx & Xxxxx LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx. It is agreed that time is of the essence of this Agreement.
4. Seller's Obligations. Between the date hereof and the Closing Date,
Seller hereby agrees that:
(a) Leases. Seller shall not enter into any leases, lease
amendments or other agreements (written or oral) relating to any portion of the
Assets without in each case obtaining the prior written consent of Buyer.
(b) Contracts. Seller shall not enter into any management or other
agreements in any way relating to the Assets without obtaining the prior written
consent of Buyer.
(c) Consent to Governmental Action. Seller shall not request or
apply for any action by any federal, state or local agency or authority
involving the Assets without obtaining the prior written consent of Buyer, which
consent shall not be withheld or delayed unless in Buyer's reasonable judgment
such action by Seller will or could materially adversely affect Buyer. Seller
shall provide notice to Buyer of any proposed action by any federal, state or
local agency or authority involving the Assets and shall provide not less than
five days' prior notice to Buyer of its proposed consent to any such action.
(d) No Sales. Seller shall not sell or otherwise transfer, or enter
into any agreement to sell or otherwise transfer, the Assets or any portion
thereof.
(e) No Encumbrances. Seller shall not pledge or affirmatively grant
any Lien on the Assets or any portion thereof.
(f) Compliance with Laws. Seller shall comply in all material
respects with all applicable laws, rules, orders and regulations relating to the
Assets or the Business.
5. Representations and Warranties.
5.1 By Seller. Seller represents, warrants and agrees as follows:
(a) Authority. Seller is a corporation duly organized and validly
existing under the laws of the State of Delaware, qualified to do business in
The Commonwealth of Massachusetts, with full capacity, power and authority to
enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Seller. This Agreement constitutes the legal, valid
and binding obligation of the Seller, enforceable against Seller in accordance
with its terms.
(b) Title to the Assets. Absence of Liens and Encumbrances. Except
as set forth on Schedule 5.1(b) hereto, Seller has the full right to sell,
transfer, and assign all of the Assets to Buyer, and has good title thereto,
free and clear of all Liens whatsoever. Following the Closing, Buyer will be the
lawful owner of, and have good title to, the Assets, free and clear of any Liens
whatsoever other than the Assumed Liabilities. The Assets include all of the
assets and properties, tangible and intangible, necessary for Buyer to conduct
the Business substantially as Seller has conducted its business in the past.
None of the Assets is in the possession, custody or control of any person other
than Seller or Buyer.
(c) Condition. Each item of tangible personal property included in
the Business Assets is in good operating condition, repair and calibration in
light of its age, ordinary wear and tear excepted.
(d) Inventory. Not less than 90% of inventory included in the
Business Assets is saleable in the ordinary course of business.
(e) Rights in Intellectual Property. Except as set forth on
Schedule 5.1(e), the Seller owns the Intellectual Property free and clear of any
liens or other encumbrances. Except as set forth on Schedule 5.1(e), to the
Seller's knowledge, the use of the Intellectual Property by Buyer will not
infringe or violate or constitute the misappropriation of any proprietary rights
of any other person or entity and no other person or entity is infringing or
violating or misappropriating any proprietary rights of Seller in such
Intellectual Property. Except as set forth on Schedule 5.1(e), Seller has not
received notice of any claim that the conduct of the Business infringes any
patent, invention, trademark, service xxxx, trade name or other property right
of any other person or entity or notice of any claim of any other person or
entity relating to the Intellectual Property and Seller does not know of any
basis for any such claim. Except as set forth on Schedule 5.1(e), all of
Seller's rights in and to the Intellectual Property are freely transferable.
Seller has granted no licenses or other rights to use any of the Intellectual
Property to any other person or entity. Except as set forth on Schedule 5.1(e),
no royalties or other amounts are payable by the Seller to any other person or
entity by reason of the ownership or use of the Intellectual Property. The
Seller has made available to the Buyer correct and complete copies of all
written documentation evidencing ownership of each patent and registered xxxx
and any claims or disputes relating to each item of Intellectual Property.
(f) Contracts. Schedule 5.1(f) attached hereto sets forth a true,
correct and complete list of all outstanding management and other agreements
(collectively, the "Contracts") relating to the Assets to which Seller is a
party or by which Seller or the Assets are bound.
(g) Year 2000. Except as disclosed in Schedule 5.1(g), (1) no
change of date, including, but not limited to, the change of date from December
31, 1999 to January 1, 2000, will have any material adverse impact on the
performance or use of any of the Assets; and (2) any of the Assets with date
processing functions will be able to perform such functions to the same extent
and with the same accuracy notwithstanding any change of date, including but not
limited to the change of date from December 31, 1999 to January 1, 2000,
provided in each case that all other technology used in combination with the
Assets properly exchanges date data with the Assets.
(h) Violations. This Agreement and the performance hereof by Seller
will not, with or without the passage of time or the giving of notice, or both,
contravene any law, judgment, order, injunction, or decree, the Seller's
Certificate of Incorporation or By-Laws, or any contractual restriction or other
arrangement binding on Seller or by which any of Seller's assets or properties
may be affected.
(i) Consents. No consent, approval, order or authorization of any
court or other governmental entity or any third party, other than that of
BankBoston, N.A. and British Telecommunications PLC, is required to be obtained
by Seller in connection with the execution and delivery of this Agreement or the
performance hereof by Seller.
(j) Violation of Laws. Except as disclosed in Schedule 5.1(j)
annexed hereto, Seller has not received any notice from any governmental entity
of any violation of any statutes, ordinances, rules, regulations, orders or
requirements of any federal, state or local authority or of any other
governmental entity having jurisdiction relating to or affecting the Assets or
any portion thereof and, to the best of Seller's knowledge, no such violation
now exists, and no event has occurred and is continuing which with the giving of
notice or the passage of time or both, would constitute such a violation.
(k) Pending or Threatened Proceedings. There is no pending or, to
the best of Seller's knowledge, threatened action or proceeding before any
court, governmental agency or arbitrator relating to or arising out of the
ownership of the Assets or any portion thereof, or which may adversely affect
Seller's ability to perform this Agreement, or which may affect the Assets or
any portion thereof.
(l) Outstanding Agreements. There are no outstanding options,
purchase and sale agreements or other agreements, other than as set forth as
Schedule 5.1(b), Schedule 5.1(f) and the license dated December 23, 1992 by and
between Seller and British Telecommunications PLC (the "BT Agreement") with
respect to the Assets or any portion thereof.
(m) Full Disclosure. To the best knowledge of the Seller, neither
this Agreement nor any written statement, report or other document furnished by
Seller pursuant to this Agreement with respect to the Assets contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which it was made, not false or misleading. There is no fact known to the Seller
which the Seller has not disclosed to Buyer in writing that materially adversely
affects or so far as the Seller can now reasonably foresee will materially
adversely affect (i) the ability of Seller to perform this Agreement or the
consummation of the transactions contemplated hereby, or (ii) the use of the
Assets by Buyer.
(n) Tax Matters. Within the time and in the manner prescribed by
law, (a) all Tax returns that were or are required to be filed with respect to
the Assets or the Business have been filed and all Taxes that have become due or
have been assessed with respect to the Assets or the Business have been timely
paid in full unless otherwise identified on Schedule 5.1(n); (b) no Tax liens
have been filed with respect to the Assets and no material claims are being
asserted or have been threatened with respect to any of such Taxes; and (c)
Seller has withheld, collected and paid to the proper governmental agencies all
amounts which it has been required by law to withhold or collect with respect to
the Assets and the Business.
5.2 By Buyer. Buyer represents, warrants and agrees as follows:
(a) Authority. Buyer is a corporation duly organized and validly
existing under the laws of the State of Delaware, qualified to do business in
The Commonwealth of Massachusetts, with full capacity, power and authority to
enter into this Agreement and to perform all of its obligations hereunder. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action on the part of the Buyer. This Agreement constitutes a legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms.
(b) No Violations. This Agreement and the performance hereof by
Buyer will not, with or without the passage of time or the giving of notice, or
both, contravene any law, judgment, order, injunction, or decree, the Buyer's
Certificate of Incorporation or By-Laws, or any contractual restriction or other
arrangement binding on Buyer or by which any of Buyer's assets or properties may
be affected.
(c) Consents. No consent, approval, order or authorization of any
court or other governmental entity or any third party is required to be obtained
by Buyer in connection with the execution and delivery of this Agreement or the
performance hereof by Buyer.
(d) Financial Resources. The Buyer has sufficient financial
resources to complete the transactions contemplated by this Agreement and the
ancillary agreements.
(e) Full Disclosure. To the best knowledge of Buyer, neither this
Agreement nor any written statement, report or other document, taken as a whole,
furnished by Buyer pursuant to this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which it was made,
not false or misleading. There is no fact known to the Buyer which the Buyer has
not disclosed to Seller in writing that materially adversely affects or so far
as the Buyer can now reasonably foresee will materially adversely affect the
ability of Buyer to perform this Agreement or the consummation of the
transactions contemplated hereby.
(f) Pending and Threatened Proceedings. There is no pending or, to
the best of Buyer's knowledge, threatened, action or proceeding before any
court, governmental agency or arbitrator which will or could adversely affect
Buyer's ability to perform this Agreement and/or the ancillary agreements or the
transactions contemplated hereby and/or thereby.
6. Termination of Agreement.
6.1 Termination. This Agreement may be terminated at or prior to the
Closing:
(a) by mutual agreement of Buyer and Seller;
(b) by the Seller by written notice stating the reasons therefor
(provided that the Seller is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements or any of the
representations or warranties contained in this Agreement on the part of the
Buyer, which breach is either not cured by the earlier of (a) 30 days after
receipt of such notice or (b) the Closing Date, or which cannot be cured prior
to the Closing Date; provided, however, that the Seller shall not have the right
to terminate this Agreement pursuant to this subsection because of the breach of
any representation or warranty unless such breach, together with all such other
breaches, would entitle the Seller not to consummate the transactions
contemplated hereby under Section 8.1(a);
(c) by the Buyer by written notice stating the reasons therefor
(provided that the Buyer is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the covenants or agreements or any of the
representations or warranties contained in this Agreement on the part of the
Seller, which breach is either not cured by the earlier of (a) 30 days after
receipt of such notice or (b) the Closing Date, or which cannot be cured prior
to the Closing Date; provided, however, that the Buyer shall not have the right
to terminate this Agreement pursuant to this subsection because of the breach of
any representation or warranty unless such breach, together with all such other
breaches, would entitle the Buyer not to consummate the transactions
contemplated hereby under Section 7.1(a).
6.2 Effect of Termination. Each party's rights of termination under
Section 6.1 is in addition to any other rights it may have under this Agreement
or otherwise and the exercise of a right of termination will not be an election
of remedies. Upon any termination of this Agreement, all obligations of the
parties hereto shall cease, other than under Section 2.4 and this Section 6, and
this Agreement shall be void and without recourse to the parties hereto;
provided, however, that nothing in this Section 6.2 shall relieve any party from
liability for any breach of this Agreement occurring before such termination.
Upon any termination of this Agreement, Buyer shall pay to Seller (i) the amount
of the Deferred Payments set forth on Schedule 2.3, Item 1, calculated through
the termination date, (ii) restitution for actual damage caused to the Assets
(which shall not include any damages for any ordinary wear and tear or
consequential, incidental, exemplary or other damages), (iii) payment of unpaid
rent and unpaid operating costs for the premises being occupied by Buyer for the
period beginning March 1, 1999 through the date of termination; and (iv) if such
termination is not resulting from Seller's non-performance or from the material
breach by Seller of any of its covenants or agreements or any of its
representations or warranties contained in this Agreement, $25,000 for Buyer's
Prior Use. Upon any termination, the Deposit will be returned to the Buyer, less
moneys, if any, due to the Seller pursuant to the immediately preceding
sentence, which moneys, upon joint notice from Buyer and Seller, shall be
transferred from the Escrow Account by Escrow Agent to Seller.
7. Buyer's Closing Requirements.
7.1 Buyer Closing Conditions. The obligations of Buyer hereunder shall
be subject to the fulfillment prior to or at the Closing, of each of the
following conditions (any or all of which may be waived, in writing, by Buyer in
its sole discretion):
(a) The representations and warranties made by Seller in this
Agreement shall be true and correct in all material respects on and as of the
date of the Closing (except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date, which shall remain true and correct as of such particular
date) with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date, and Seller shall have
performed and complied with in all material respects all covenants,
undertakings, obligations and conditions required by this Agreement to be
performed or complied with by Seller at or prior to the Closing. Seller shall
have delivered to Buyer a certificate dated the Closing Date executed by the
President or a Vice President of Seller to such effect.
(b) The novation of the BT Agreement, in the form attached hereto
as Schedule 7.2(f), shall have been duly executed and delivered by British
Telecommunications PLC.
7.2 Buyer Closing Documents. At the Closing, Seller shall deliver to
Buyer the following documents:
(a) A certificate, dated as of the Closing Date, duly executed by
the Seller's Secretary, certifying as to (i) the signing authority, incumbency
and specimen signature of the signatory of this Agreement and the other
documents signed on behalf of the Seller in connection herewith, (ii) the
resolutions adopted by the Board of Directors of Seller authorizing and
approving the execution, delivery and performance of this Agreement and the
other documents executed in connection herewith and the consummation of the
transactions contemplated hereby and thereby and stating that such resolutions
have not been modified, amended, revoked or rescinded and remain in full force
and effect, and (iii) the Certificate of Incorporation and By-Laws of Seller.
(b) A recently dated legal existence and good standing certificate
issued by the Secretary of State of Delaware.
(c) A recently dated certificate of Seller's qualification to do
business in Massachusetts issued by the Secretary of the Commonwealth of
Massachusetts.
(d) The Xxxx of Sale and the Patent and Trademark Assignments, duly
executed by Seller, each in the form attached hereto as Exhibits X-0, X-0 xxx
X-0, respectively.
(e) An assignment, duly executed by Seller, of Seller's right,
title and interest in and to all assignable guarantees and warranties, if any,
issued in connection with the Assets, together with the original of each such
guaranty or warranty, if such original is in the possession or control of
Seller.
(f) The novation of the BT Agreement duly executed by Seller, in
the form attached hereto as Schedule 7.2(f).
(g) A Non-Disturbance Agreement, duly executed by BankBoston, in
the form attached hereto as Schedule 7.2(g).
(h) The original of each certificate, license, permit,
authorization and approval required by law with respect to the Assets and issued
by any governmental authority having jurisdiction, the absence of which would
have a material adverse effect on the operation of the Business, together with
an assignment thereof, duly executed by Seller, if any of the same are
assignable.
(i) All files and records relating to the continuing operation and
maintenance of the Assets.
(j) All books and records relating to or constituting part of the
Business Assets.
(k) Such other informational instruments, documents and other
materials in the possession of Seller as may be necessary or desirable for, or
incidental to, the consummation of the sale provided for herein, as Buyer may
reasonably request, provided however that Seller shall not be required to give
any indemnities or undertake any obligation not specifically contemplated
herein.
(l) Instruments, in form and substance reasonably acceptable to
Buyer, releasing or sufficient to release the Assets from all liens, charges,
pledges, security interests and other encumbrances, including, but not limited
to, the Liens.
8. Seller's Closing Requirements.
8.1 Seller Closing Conditions. The obligations of Seller hereunder
shall be subject to the fulfillment prior to or at the Closing of each of the
following conditions (any or all of which may be waived in writing by the Seller
in its sole discretion):
(a) The representations and warranties made by Buyer in this
Agreement shall be true and correct in all material respects on and as of the
date of the Closing (except for changes contemplated by this Agreement and
except for those representations and warranties that address matters only as of
a particular date, which remain true and correct as of such particular date)
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date, and Buyer shall have performed and
complied with in all material respects all covenants, undertakings, obligations
and conditions required by this Agreement to be performed or complied with by
Buyer prior to or at the Closing. Buyer shall have delivered to Seller a
certificate dated the Closing Date executed by the Buyer's President to such
effect. (b) The novation of the BT Agreement, in the form attached hereto as
Schedule 7.2(f), shall have been duly executed and delivered by British
Telecommunications PLC.
8.2 Seller Closing Documents. At the Closing, Buyer shall deliver the
following to Seller (unless otherwise indicated):
(a) The Purchase Price to Seller or BankBoston.
(b) A certificate, dated the Closing Date, duly executed by its
Secretary certifying as to (i) the signing authority, incumbency and specimen
signature of the signatory of this Agreement and the other documents signed on
behalf of such entity in connection herewith and (ii) the resolutions adopted by
the sole Director of Buyer authorizing the execution, delivery and performance
of this Agreement and the documents executed in connection herewith and the
consummation of the transactions contemplated hereby and thereby and stating
that such resolutions have not been modified, amended, revoked or rescinded and
remain in full force and effect, and (iii) the Certificate of Incorporation and
Bylaws of Buyer.
(c) A recently dated legal existence and good standing certificate
issued by the Secretary of State of Delaware.
(d) A recently dated certificate of Buyer's qualification to do
business in Massachusetts issued by the Secretary of the Commonwealth of
Massachusetts.
(e) The instrument of Assumption of Liabilities duly executed by
Buyer in the form attached hereto as Schedule 1.4.
(f) The novation of the BT Agreement, duly executed by Buyer, in
the form attached hereto as Schedule 7.2(f).
(g) All amounts due to Seller for rent during the period of Buyer's
Prior Use.
9. Closing Costs. The cost and expense of or related to any
documentary, transfer or sales tax payable in connection with the delivery of
any instrument or document provided in or contemplated by this Agreement, and
the cost of recording any discharges or other documents necessary to comply with
Seller's obligations hereunder, shall be paid by Seller. Each party shall pay
its own attorneys' fees and other costs incurred in connection with the
transactions contemplated hereby.
10. Seller's Performance. The acceptance of the certificates and
documents to be delivered pursuant to the provisions of this Agreement by Seller
to Buyer at the Closing shall be deemed to be a full performance and discharge
of every agreement and obligation on the part of Seller to be performed pursuant
to the provisions of this Agreement, except those which are herein specifically
stated to survive the Closing.
11. Failure to Perform.
(a) If Seller is unable to give title or deliver possession of the
Assets, all as herein stipulated, or if, at the Closing, the Assets do not
conform with the provisions hereof or any other condition to Buyer's obligation
to purchase the Assets is not satisfied, then Seller shall use its good faith
efforts and due diligence to remove any defects in title or to deliver
possession as provided herein or to make the Assets conform to the provisions
hereof or to satisfy such closing conditions, as the case may be, and the
Closing Date, at Buyer's option, shall be postponed for a period of up to thirty
(30) days. If at the expiration of the extended xxxx Xxxxxx shall have failed to
remove such defects, deliver possession or make the Assets conform or to satisfy
such closing conditions, as the case may be, then subject to the provisions of
subsections (b) and (c) below, this Agreement may be terminated by Buyer,
whereupon the Deposit shall be forthwith repaid in full to Buyer and all other
obligations of the parties hereto shall cease and this Agreement shall be void
and without recourse to the parties hereto.
(b) Buyer shall have the election, without waiving any other rights
it may have, at either the original or any extended time for Closing, to accept
such title as Seller can deliver to the Assets or to accept the Assets in their
then condition or to waive any other obligation of Seller and to pay therefor
the full Purchase Price without deduction, in which case Seller shall transfer
such title; provided, however, that Buyer may use the Deposit to terminate any
and all liens on the Assets held by BankBoston, as provided in BankBoston
Letter.
(c) In the event of a breach of any of Seller's agreements,
representations or warranties under this Agreement, Buyer shall be entitled to
all of its rights and remedies under applicable law, including, without
limitation the right to specific performance of this Agreement.
12. Certain Additional Covenants
(a) Access to Information. Seller shall give Buyer and its
representatives, upon reasonable prior notice to Seller, access during normal
business hours to the facilities, properties, books, financial statements,
records, directors, officers, employees and agents of Seller with respect to the
Assets and shall permit Buyer to confirm with contractual partners and other
third parties the title to any Assets. Seller shall furnish to Buyer all such
reasonable information concerning the Business or the Assets as Buyer or its
representatives may reasonably request.
(b) Covenant of Further Assurances. Seller shall, at any time and
from time to time after the Closing, execute, acknowledge, seal and deliver all
such instruments and documents, and do all such further things, as Buyer may
reasonably request to perfect the transfer and delivery to Buyer of any and all
of the Assets or to transfer to or otherwise obtain for Buyer any consent,
license, permit, registration or approval necessary or desirable to accomplish
the purchase of the Assets or to enable Buyer, fully and without restriction, to
use the Assets.
(c) Buyer Patent Covenant. Buyer shall make commercially reasonable
efforts to maintain all of the patents, including the payment of all maintenance
fees, until the end of the Deferred Payment Period.
(d) BT Royalty Payments. Seller shall be responsible for and shall
pay all royalty payments due to BT for sales made prior to December 15, 1998. In
accordance with the Novation of the BT Agreement, the Buyer shall be responsible
for and shall pay all royalty payments due to BT after December 15, 1998.
13. Notices. Any notice pursuant to this Agreement shall be in writing
and shall be delivered by hand, by facsimile transmission with receipt confirmed
by telephone or automatic transmission report, sent by registered or certified
mail, send by the registered or certified mail, return-receipt requested,
postage prepaid or by Federal Express or other recognized commercial overnight
courier, addressed as follows:
If to Seller to: Galileo Corporation
X.X. Xxx 000
Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Vice President
Fax: (000) 000-0000
With copies to: Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx Xx., Esquire
Fax: (000) 000-0000
If to Buyer to: Xx. Xxxxxxxx Xxxxxxxxx
IPG Laser GmbH
Xxxxxxxxxxxxxx 0,
Xxxxxxx
X-00000 Xxxxxxx
Fax:
and to: Xx. Xxxxx Xxxxxx
00 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxxxx XX00 0XX
Xxxxxx Xxxxxxx
With copies to: Xxxxx, Xxxx & Xxxxx LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esquire
Fax: (000) 000 0000
and
IPG Photonics Corporation
000 Xxxx Xxxxxx, X. X. Xxx 000
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxxxx Xxxxxxxx
Fax:
Notice shall be deemed effective on the date of receipt thereof.
Either party may from time to time change the address to which notices may be
sent by giving the other party notice of such change in accordance herewith.
14. Indemnification.
14.1 By Seller. Seller hereby agrees to defend, indemnify, and hold
harmless Buyer and its officers, directors, employees, agents, successors and
assigns from and against any and all liability, loss, cost, damage, penalties,
fines, expenses and causes of action, including but not limited to, personal
injury, property damage, damage to natural resources, investigation, and
reasonable attorneys' and consultants' fees and disbursements ("Losses") arising
from or relating to:
(a) any breach of Seller's representations, warranties, or
covenants contained in this Agreement or made in any document delivered pursuant
to this Agreement;
(b) any claim, action or proceeding asserted or brought against
Buyer which arises in whole or in part out of, or in connection with, Seller's
conduct of the Business before or after the Closing;
(c) any claim, action or proceeding asserted or brought against the
Buyer which arises out of, or in connection with, Seller's failure to pay, when
due, any amount owing with respect to Seller's conduct of the Business or use of
Assets prior to the Closing (other than the Assumed Liabilities, if any);
(d) any claim, action or proceeding asserted or brought against the
Buyer asserting that the manufacture, sale or use of Products (as defined
herein) infringes U.S. Patent No. 5,309,452 identified on Schedule 5.1(e), up to
the total amount of $250,000 for all losses under this Section 14.1(d). For the
purposes of this Section 14.1(d), "Products" shall mean (i) single stage
amplifiers using Praseodymium (Pr3+) dopant in an optical fiber producing
optical gain within wavelength range 1.25 to 1.34 microns such as the XxxxxxXxx
0000X, (ii) multi stage amplifiers using Praseodymium (Pr3+) dopant within an
optical fiber such as the XxxxxxXxx 0000, (xxx) broadband light sources using
amplified spontaneous emission from Praseodymium (Pr3+) dopant in an optical
fiber producing light within the wavelength range 1.25 to 1.34 microns such as
the FluoroLight, (iv) tunable and fixed laser light sources using Praseodymium
(Pr3+) dopant in an optical fiber producing light within the wavelength range
1.25 to 1.34 microns, and (v) all modified and substituted versions of (i)
through (iv) above that incorporate, rely on or are based upon any of the
Intellectual Property.
(e) any claim, action or proceeding asserted or brought against the
Buyer which arises out of, or in connection with, Seller's failure to pay, when
due, any Tax, fee or other charge assessed against Seller which shall become due
or shall have accrued (i) on account of Seller's use, acquisition or ownership
of any of the Assets or (ii) on account of the transactions contemplated hereby.
14.2 By Buyer. Buyer agrees to defend, indemnify and hold harmless
Seller and its officers, directors, employees, agents, successors and assigns
from and against any and all Losses arising from or relating to:
(a) any breach of Buyer's covenants, warranties or representations
contained in this Agreement or made in any document delivered pursuant to this
Agreement;
(b) any claim, action or proceeding asserted or brought against
Seller which arises in whole or in part out of, or in connection with, Buyer's
conduct of the Business before or after the Closing;
(c) any claim, action or proceeding asserted or brought against the
Seller which arises out of, or in connection with, Buyer's failure to pay, when
due, any amount owing with respect to Buyer's conduct of the Business before or
after the Closing or use of the Assets after the Closing or during Buyer's Prior
Use;
(d) any claim, action or proceeding asserted or brought against the
Seller which arises out of, or in connection with, Buyer's failure to pay, when
due, any Tax, fee or other charge assessed against Buyer which shall become due
or shall have accrued on account of Buyer's use, acquisition or ownership of any
of the Assets.
14.3 Survival. Any claim alleging (i) that any representation or
warranty contained in this Agreement or any document delivered in connection
with the transactions contemplated hereby was false when made, or (ii) the
breach of any representation or warranty or agreement contained in this
Agreement or any document delivered in connection with the transactions
contemplated hereby, or (iii) any right of indemnification under this Section 14
shall be brought within two (2) years after the Closing Date, except that
Seller's indemnification obligation pursuant to Section 14.1(d) shall be brought
within five (5) years after the Closing Date.
14.4 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder with respect to a liability or obligation owed or
asserted to be owed to a third party, the party seeking indemnification (the
"Indemnified Party") shall promptly notify (in accordance with Section 13) the
party from whom indemnification is sought (the "Indemnifying Party") of the
claim and, when known, the facts constituting the basis for such claim;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
liability or obligation hereunder except to the extent of any damage or
liability caused by or arising out of such failure (except that the Indemnifying
Party shall not be liable for any expenses, including attorneys' fees, incurred
during the period in which the Indemnified Party failed to give such notice). In
the event of any such claim for indemnification hereunder resulting from or in
connection with any claim or legal proceedings by a third party, the notice to
the Indemnifying Party shall specify, if known, the amount or an estimate of the
amount of the liability arising therefrom. The Indemnified Party shall not
settle or compromise any claim by a third party for which it is seeking
indemnification hereunder without the prior written consent of the Indemnifying
Party (which shall not be unreasonably withheld).
14.5 Defense by the Indemnifying Party. In connection with any claim
for indemnification hereunder resulting from or arising out of any claim or
legal proceeding by a third party, the Indemnifying Party at its sole cost and
expense may, upon written notice to the Indemnified Party given within twenty
(20) days after the date of the notice of the claim from the Indemnified Party
pursuant to Section 14.4, assume the defense of such claim or legal proceeding.
If the Indemnifying Party so assumes such defense, the Indemnified Party shall
be entitled to participate in (but not control) such defense, with its counsel
and at its own expense. In addition, if the Indemnifying Party so assumes such
defense, it shall take all steps necessary in the defense or settlement thereof;
provided, however, that the Indemnifying Party shall not consent to any
settlement or to the entry of any judgment with respect to a claim or legal
proceeding which does not include a complete release of the Indemnified Party
from all liability with respect thereto or which imposes any liability on the
Indemnified Party without the written consent of the Indemnified Party. If the
Indemnifying Party does not assume the defense of any such claim or legal
proceeding, the Indemnified Party may defend against such claim or legal
proceeding (with the Indemnifying Party responsible for the reasonable fees and
expenses of counsel for the Indemnified Party) in such manner as it may deem
appropriate, and the Indemnifying Party shall be entitled to participate (but
not control) the defense of such action, with its counsel and at its own
expense.
14.6 Limitation. The indemnification provided for in this Agreement
shall not apply unless and until the aggregate Losses for which the Indemnified
Party seeks indemnification (a) with respect to claims solely between Buyer and
Seller, exceeds $15,000, exclusive of legal fees; and (b) with respect to third
party claims, exceeds or is reasonably expected to exceed, $15,000, including
legal fees; when either case (a) or (b) applies, the Indemnifying Party will be
liable for all Losses (including amounts less than $15,000), except as such
liability is limited by Section 14.1(d) hereof. Notwithstanding the foregoing,
(i) the maximum liability of the Indemnifying Party to the Indemnified Party
shall not exceed the Purchase Price and (ii) the Losses shall be reduced by (A)
any tax benefit received by the Indemnified Party in connection with such Losses
and (B) any insurance proceeds received by the Indemnified Party with respect to
such Losses. No party shall be liable for any special, exemplary, indirect,
reliance, incidental, or consequential damages, including, without limitation,
loss of profits, even if the Indemnifying Party was advised of the possibility
of such damages. No party shall have a right to recovery against any party (or
any officer, director, employee or agent of a party) other than through the
exercise of the indemnification rights set forth in this Section 14, which shall
constitute the sole and exclusive remedy after the Closing Date for any breach
by a party of any representation, warranty, covenant or agreement contained
herein or in any certificate or other instrument delivered pursuant hereto.
15. Entire Agreement. This Agreement sets forth all of the prior
promises, representations, agreements, conditions and understandings, whether
oral or written, between the parties and there exist no promises,
representations, agreements, conditions or understandings which have not been
expressed herein with respect to the subject matter hereof. This Agreement
cannot be changed orally, and no agreement shall be effective to waive, amend or
modify this Agreement or any provision hereof, or discharge either party hereto
in whole or in part, unless such agreement is in writing and signed by both
parties.
16. Binding Effect. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their respective legal representatives,
successors and assigns and upon any successor or assign of the Business or the
Assets.
17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same agreement.
18. Schedules. All Schedules annexed hereto and referred to herein
shall constitute part of this Agreement.
19. Governing Law. This Agreement shall be construed in accordance
with the substantive laws of The Commonwealth of Massachusetts, provided that if
the principles of conflict of laws would apply the substantive law of another
jurisdiction, the substantive law of Massachusetts will be applied nevertheless.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, under seal, as of the day and year first above written.
GALILEO CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
IPG PHOTONICS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xx. Xxxxxxxx X. Xxxxxxxxx
Title: President
For the purposes of Section 2.4 only:
XXXXX, XXXX & XXXXX LLP,
as ESCROW AGENT
By: /s/ Xxxx X. Xxxxxx
---------------------------------
A Partner
Schedule of Omitted Exhibits
Schedule A - Business Assets
Appendix A-1 - Machinery and Equipment
Appendix A-2 - Furniture
Appendix A-3 - Inventory
Appendix A-4 - Computer Software
Schedule B - Intellectual Property
Exhibit B-1 - Patents & Foreign Patent Applications
Appendix B-2 - Trademarks
Exhibit B-3 - Third Party License Agreements
Exhibit B-4 - British Telecommunications PLC License Agreement
Exhibit B-5 - Employee Agreements
Schedule 1.2 - Assumed Liabilities
Schedule 1.4 - Form of Assumption of Liabilities
Schedule 2.3 - Deferred Payments
Schedule 3 - BankBoston Letter Agreement
Schedule 5.1(b) - Liens and Encumbrances
Schedule 5.1(e) - Rights in Intellectual Property; Disclaimers and Limitations
Schedule 5.1(f) - Contracts
Schedule 5.1(g) - Year 2000 Compliance Exceptions
Schedule 5.1(j) - Violation of Laws
Schedule 5.1(n) - Tax Matters
Schedule 7.2(f) - BT Novation Agreement
Schedule 7.2(g) - Non-Disturbance Agreement
Exhibit A-1 - Form of Xxxx of Sale
Exhibit A-2 - Form of Patent Assignment
Exhibit A-3 - Form of Trademark Assignment
