Exhibit 2.2
EXECUTION COPY
AMENDMENT AND SUPPLEMENTAL AGREEMENT
This Amendment and Supplemental Agreement, made as of August 1, 2001
(the "Amendment and Supplemental Agreement"), between Agilent Technologies,
Inc. ("Agilent") and Koninklijke Philips Electronics N.V. ("Philips").
WHEREAS, Agilent and Philips are parties to an Asset Purchase
Agreement, dated as of November 17, 2000 (the "Purchase Agreement"; terms
defined in the Purchase Agreement and not otherwise defined herein shall have
the respective meanings set forth in the Purchase Agreement); and
WHEREAS, in connection with the closing of the transactions under
the Purchase Agreement, Agilent and Philips wish to set forth (i) their
agreement with respect to certain supplemental arrangements relating to the
transactions contemplated by the Purchase Agreement; and (ii) certain
amendments to the Purchase Agreement.
NOW, THEREFORE, in consideration of these premises and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Employee Vacation Time. Reference is made to Section 6.6(f) of
the Purchase Agreement. Notwithstanding anything to the contrary set forth in
the Purchase Agreement, in the event any U.S. Transferred Employee elects to
roll over accrued unused vacation time to Philips, Philips agrees that, no
later than 30 days following the Closing Date (or 30 days following the
Transfer Date in the case of employees retained pursuant to the Retained
Employees Agreement dated as of July 25, 2001, by and between Agilent and
Philips), to the extent that any U.S. Transferred Employee has accrued unused
vacation time in excess of 240 hours, Philips will pay in cash to each such
U.S. Transferred Employee an amount equal to such accrued vacation time in
excess of 240
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hours. Agilent and Philips agree that no U.S. Transferred
Employee shall be entitled to any unused accrued vacation time in excess of
240 hours other than to the extent of the cash payment described in the
preceding sentence.
2. Termination and Rehire of Certain Employees. Reference is made to
Sections 6.6 and 6.7 of the Purchase Agreement. Notwithstanding anything to
the contrary set forth in the Purchase Agreement, Agilent and Philips hereby
agree that to the extent that there is no automatic transfer of employees in
any of Chile, Brazil and Mexico, Philips will reimburse Agilent for any and
all costs (including any severance obligations) that Agilent may incur as a
result of the termination by Agilent of such employees, as agreed in the
relevant Local Asset Transfer Agreements and as described in Annex C hereto.
Agilent and Philips also agree that to the extent that there is no employer
substitution in Venezuela, Philips will reimburse Agilent for any and all
costs (excluding severance obligations) that Agilent may incur as a result of
the termination by Agilent of such employees. With respect to severance
obligations relating to employees in Venezuela, Philips will reimburse Agilent
for such severance obligations in an amount equal to 50% of such obligations,
as described in Annex C hereto, as agreed in the relevant Local Asset Transfer
Agreement.
3. Purchase Price Payments. Notwithstanding anything to the contrary
set forth in the Purchase Agreement, Agilent and Philips hereby agree as
follows:
(a) To the extent that the purchase price set forth in any
Local Asset Transfer Agreement needs to be adjusted to
conform to the Allocation Schedule described in Section
3.4 of the Purchase Agreement, such adjustment will be
effected by internal bookkeeping entries or corrections
effected by Agilent and Philips; provided, however, that
to the extent that the adjustment of any such local
purchase price requires a payment in local currency or
otherwise, Agilent and Philips will cooperate with each
other to
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accomplish such local payments in accordance with local
laws; provided, however, that any such local payments
shall not affect the aggregate Purchase Price; provided,
further, that any such payments shall not be made until
such time as any payments required pursuant to Section 3.3
of the Purchase Agreement are made or until such time as
it is determined that no such payments are to be made; and
provided, further, that any such amount payable in any
local payment jurisdictions shall be equal to the
difference in United States dollars, converted into local
currency based on the Mid Rate of WM/Reuters Closing Spot
Rate (as shown on xxxx://xxx.xxxxxxxxx.xxx) on the date
that is two Business Days prior to the payment date
described in paragraph (b) below, or based on any other
conversion rate explicitly set forth in the Local Asset
Transfer Agreements for Brazil and Russia. To the extent
that such adjustment in any such local purchase price
changes the amount of Transfer Taxes paid or payable in
connection with the transfer of the Purchased Assets, the
effects of such changes shall be borne equally by Agilent
and Philips.
(b) Reference is made to Section 3.3 of the Purchase
Agreement. To the extent that, in connection with
determining whether any payment is required to be made by
a party pursuant to Section 3.3(f) of the Purchase
Agreement, Agilent and Philips agree (or it is determined
by the Arbitrator) that the purchase price set forth in
any Local Asset Transfer Agreement should be adjusted as a
result thereof, such adjustments will be effected by
internal bookkeeping entries or corrections effected by
Agilent and Philips; provided, however, that to the extent
that the adjustment of any such local purchase price
requires a local payment in local currency or otherwise,
Agilent and Philips shall cooperate with each other to
accomplish any such local payments in accordance with
local laws; provided, however, that any such local
payments shall not affect the aggregate payment required
by Section 3.3(f); provided, that the interest required to
be paid pursuant to Section 3.3(f) shall be allocated to
such local payment in proportion to the proportion that
such local payment represents of the total payment
required by Section 3.3(f). Any amount payable in any
local payment jurisdictions shall be equal to the
difference in United States dollars, converted into local
currency based on the Mid Rate of WM/Reuters Closing Spot
Rate (as shown on xxxx://xxx.xxxxxxxxx.xxx) on the date
that is two Business Days prior to the payment date, or
based on any other conversion rate explicitly set forth in
the Local Asset Transfer Agreements for Brazil and Russia.
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(c) The Local Purchase Price set forth in each Local Asset
Transfer Agreement for each relevant country has been
prepared and provided for informational purposes only to
comply with requirements of applicable local law. Agilent
makes no representation as to the accuracy of the
valuation report of Deloitte & Touche, LLP for any
purposes whatsoever. Agilent and Philips agree that the
valuation of the various Local Businesses conducted by
Deloitte & Touche, LLP has been performed solely for the
purpose of facilitating the allocation of the Purchase
Price in accordance with Section 3.4 of the Purchase
Agreement and shall not be binding upon Agilent or Philips
for purposes of Section 3.3 of the Purchase Agreement.
4. Deferred Payment Amendment.
(a) Amendment to Section 3.2 of the Purchase Agreement. Section 3.2
of the Purchase Agreement is hereby deleted and replaced with the following:
"On the Closing Date: (i)(A) Purchaser shall pay for itself
(where it is acting as Purchaser) and otherwise as agent for
and on behalf of each of the relevant Designees to Seller for
its own account (where it is acting as Seller) and otherwise as
agent for each of the relevant Other Sellers $1,600,000,000
(One Billion, Six Hundred Million Dollars) of the Purchase
Price. Such amount shall be payable in the amounts and
currencies set forth in Annex 3.2(a) hereto, in immediately
available funds in the case of the payment to be made in the
United States, to such bank account or accounts as shall be
designated by Seller no later than the second Business Day
prior to the Closing."
(b) Amendment to Section 8.2(a) of the Purchase Agreement. Section
8.2(a) of the Purchase Agreement is hereby deleted and replaced with the
following:
"One Billion Six Hundred Million Dollars ($1,600,000,000) of
the Purchase Price, as provided in Section 3.2 hereof;"
(c) New Section 3.6 of the Purchase Agreement. The Purchase
Agreement shall be amended by adding a new Section 3.6 thereto immediately
following Section 3.5 thereof, having the terms set forth in Annex D hereto.
5. Local Asset Transfer Agreements. Reference is made to Section 2.3
of the Purchase Agreement. Notwithstanding anything to the contrary set forth
in the Purchase
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Agreement, Agilent and Philips hereby agree that the
instruments used to convey the Purchased Assets and Assumed Liabilities in
France shall be in the forms agreed by the parties and not in the form
attached to the Purchase Agreement as Exhibit C.
6. Settlement of Accounts Payable.
(a) Agilent will pay any invoices ("Invoices") it has in hand
to the extent relating to all accounts payable of Agilent
or its Subsidiaries incurred in connection with the
operation of the Business prior to the Closing Date,
except that with respect to Invoices relating to the
operation of the Business on or following the Closing
Date, Agilent will forward to Philips for payment all such
Invoices.
(b) With respect to Invoices received by Agilent after the
Closing Date and relating solely to accounts payable of
Agilent or its Subsidiaries incurred in connection with
the operation of the Business prior to the Closing Date,
Agilent will pay all such Invoices. With respect to
Invoices received by Agilent after the Closing Date and
relating to both accounts payable incurred in connection
with the operation of the Business prior to the Closing
Date and accounts payable incurred in connection with the
operation of the Business on or following the Closing
Date, Agilent will return any such Invoice to the vendor,
requesting that separate invoices be sent to Agilent and
Philips as follows: (i) one invoice to Agilent in respect
of accounts payable incurred in connection with the
operation of the Business prior to the Closing Date, and
(ii) one invoice to Philips in respect of accounts payable
incurred in connection with the operation of the Business
on or following the Closing Date. With respect to Invoices
received by Agilent after the Closing Date and relating
solely to accounts payable incurred in connection with the
operation of the Business on or following the Closing
Date, Agilent will forward all such Invoices to Philips
for payment.
(c) With respect to Invoices received by Philips or its
Subsidiaries, (i) Philips will pay all such Invoices
relating solely to accounts payable incurred in connection
with the operation of the Business on or following the
Closing Date, and (ii) Philips will forward to Agilent for
payment any such Invoices relating solely to accounts
payable incurred in connection with
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the operation of the Business prior to the Closing Date.
With respect to Invoices received by Philips or its
Subsidiaries relating to both accounts payable incurred in
connection with the operation of the Business prior to the
Closing Date and accounts payable incurred in connection
with the operation of the Business on or following the
Closing Date, Philips will return any such Invoice to the
vendor, requesting that separate Invoices be sent to
Agilent and Philips as follows: (i) one invoice to Agilent
in respect of accounts payable incurred in connection with
the operation of the Business prior to the Closing Date,
and (ii) one invoice to Philips in respect of accounts
payable incurred in connection with the operation of the
Business on or following the Closing Date.
(d) It is understood and agreed by Agilent and Philips that to
the extent that any of the foregoing Sections 6(a) through
(c) are inconsistent with the allocation of Liabilities
set forth in Sections 2.2(a) and (b) of the Purchase
Agreement, such sections of the Purchase Agreement shall
control.
7. Closing Date; Final Closing Statement of Purchased Net Assets;
Amendments to Section 3.3(b) of the Purchase Agreement.
(a) Reference is made to Section 8.1 of the Purchase
Agreement. Notwithstanding anything to the contrary set
forth in the Purchase Agreement, Agilent and Philips
hereby agree that the Closing shall take place on August
1, 2001.
(b) Reference is made to Section 3.3 of the Purchase
Agreement. Notwithstanding anything to the contrary set
forth in the Purchase Agreement, the Final Closing
Statement of Purchased Net Assets shall be prepared as of
11:59 p.m. on July 31, 2001, and in furtherance of the
foregoing, all references in Section 3.3 of the Purchase
Agreement to "as of the close of business on the Closing
Date" are hereby deemed to be amended and restated to
refer to "as of 11:59 p.m. on July 31, 2001".
8. Bank Guarantees and Performance Bonds. As soon as practicable
following the Closing Date, but no later than four weeks following assignment
of the relevant Assumed Contract, Purchaser shall ensure that any performance
bond, guarantee or similar instrument issued by a third party on behalf of
Seller or one of its Subsidiaries for the benefit of the customer or any other
party to the relevant Assumed Contract to secure the performance of Seller's
or one of its Subsidiaries' obligations under such Assumed Contract
("Instruments") is replaced with a performance bond, guarantee or similar
instrument that releases or is capable of
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releasing Seller or such Subsidiary from all of its obligations under such
Instruments. If a replacement of Instruments is not possible for reasons
beyond the control of Purchaser, Purchaser will put in place, or cause to be
put in place, an arrangement the effect of which will be that Seller is
released from its obligations under the Instruments.
9. Treatment of Litigation; Escrow Claims.
(a) Reference is made to Sections 2.2(a), 2.2(b) and 4.9 of
the Purchase Agreement. Agilent and Philips hereby agree
that the Liabilities with respect to outstanding
litigation are to be allocated in accordance with the
Purchase Agreement pursuant to meetings between the
parties to be held promptly following the Closing, but in
any event no later than August 7, 2001. In furtherance of
the foregoing, Agilent proposes that the Liabilities with
respect to outstanding litigation be allocated in
accordance with the Purchase Agreement in the manner set
forth in Annex A to this Amendment and Supplemental
Agreement.
(b) Notwithstanding anything in Section 2.2(a)(v) to the
contrary, Agilent and Philips hereby agree that the
pending escrow claims described in Annex B hereto shall be
allocated in accordance with Annex B.
10. [Reserved.]
11. International Pensions. Reference is made to Schedule 6.7(d) to
the Purchase Agreement. Notwithstanding anything in the Purchase Agreement to
the contrary, Agilent and Philips have agreed as follows:
(a) Philips shall be released from its obligation in paragraph
3.2 of Schedule 6.7(d) to the Purchase Agreement in
relation to the Transferred Employees in Argentina,
Mexico, India and China, subject to the conditions set out
in this Section 11.
(b) Instead, Philips shall be required to provide a cash
payment in respect of each Transferred Employee in
Argentina, Mexico, India and China in respect of service
on and from the Closing Date which is the equivalent to
the value of such Transferred Employee's Retirement
Benefit Rights immediately before the Closing Date, as set
forth in paragraphs (c) and (d) below.
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(c) In particular, in respect of the five-year period
following the Closing Date (the "Five-Year Period"),
Philips shall pay to each Transferred Employee in
Argentina, Mexico and India a lump sum cash payment
(payable in accordance with the terms of the Local Asset
Transfer Agreements in Argentina, Mexico or India,
whichever applies) equal to the value of (i) (in relation
to defined benefit Agilent plans) the Retirement Benefit
Rights which that Transferred Employee would have accrued
under the relevant Agilent plan during and in respect of
the Five-Year Period, but treated as fully and immediately
vested; or (ii) (in relation to defined contribution
Agilent plans) the individual defined contribution account
which that Transferred Employee would have accumulated
under the relevant Agilent plan during the Five-Year
Period, but treating the relevant Transferred Employee's
rights and entitlements in respect of that account as
fully and immediately vested and taking account of any
loss of employer contributions. Such cash payment shall be
grossed up to compensate the Transferred Employee for
resulting negative tax treatment, if any, due to the
payment being made in cash instead of as retirement
benefits.
(d) In addition, in respect of the two-year period following
the Closing Date (the "Two-Year Period"), Philips shall
pay to each Transferred Employee in China a lump sum cash
payment (payable in accordance with the terms of the Local
Asset Transfer Agreement in China) equal to the value of
the individual defined contribution account which that
Transferred Employee would have accumulated under Agilent
China's supplemental pension plan during the Two-Year
Period, but treating the relevant Transferred Employee's
rights and entitlements in respect of that account as
fully and immediately vested and taking account of any
loss of employer contributions. However, in the event that
Philips establishes a Non-US Benefit Plan in China within
the Two-Year Period (the "New Philips Plan"), Philips
shall offer each Transferred Employee the option of (i)
joining the New Philips Plan with effect from the expiry
of the Two-Year Period; or (ii) joining the New Philips
Plan with immediate effect, but with the remaining balance
of their lump sum cash payment being reduced to take
account of the value of the benefits payable to the
relevant Transferred Employee under the New Philips Plan.
(e) The above paragraphs (a) through (d) shall not affect any
other provisions of the Purchase Agreement, in particular
Section 6.6 thereof.
12. Payments in Respect of Employees in Germany.
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(a) Philips confirms that Philips Medizinsysteme Boblingen
GmbH will pay to each Transferred Employee a lump-sum in
the amount of half of such employee's monthly salary
pursuant to Section 17 paragraph 1, first and second
sentence, of the Balance of Interest Agreement between
Agilent Technologies Deutschland GmbH and the Joint Works
Council of Agilent Technologies Deutschland GmbH dated 6
July 2001 (the "Balance of Interest Agreement"). Agilent
Technologies Deutschland GmbH is not obliged to reimburse
Philips for any or all of the payments made to the
Transferred Employees under Section 17 of the Balance of
Interest Agreement.
(b) If a Transferred Employee claims this compensatory amount
under Section 17 of the Balance of Interest Agreement from
Agilent and Agilent is required to make any payments under
local laws, Philips shall indemnify and hold Agilent
harmless with regard to such amounts paid.
13. Value of Agilent's Interest in QIC Holding Corp. Philips hereby
agrees to purchase from Agilent for an aggregate purchase price of $4,000,000
the 2,330,000 shares of Series A Preferred Stock and the 19 shares of Class A
Common Stock of QIC Holding Corp. to be sold to Philips pursuant to the
Purchase Agreement. Agilent and Philips make no representation as to the value
of such shares for any purposes whatsoever. Agilent and Philips agree that the
$4,000,000 purchase price shall not be binding upon Agilent or Philips for
purposes of Section 3.3 of the Purchase Agreement.
14. Allocation of Purchase Price in Malaysia. Reference is made to
Section 3.4 of the Purchase Agreement. Notwithstanding anything in the
Purchase Agreement to the contrary, Agilent and Philips hereby agree that the
allocation of the purchase price for tax purposes for Malaysia will be 4.7
million Malaysian Ringgits (which is equal to US $1,236,842, using a
conversion rate of 3.8 Malaysian Ringgit for US $1, as agreed by Agilent and
Philips) and not the amount on the Allocation Schedule. In the event that any
adjustment to the local purchase price in Malaysia would otherwise give rise
to a payment in local currency pursuant to
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Section 3.3 or 3.4 of the Purchase Agreement, any such adjustment payment will
be effected in the United States in United States dollars between Agilent and
Philips.
15. Counterparts. This Amendment and Supplemental Agreement may be
executed in two or more 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
instrument. Copies of executed counterparts transmitted by telecopy, telefax
or other electronic transmission service shall be considered original executed
counterparts for purposes of this Section 15, provided that receipt of copies
of such counterparts is confirmed.
16. Governing Law. This Amendment and Supplemental Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York.
17. Third Parties. This Amendment and Supplemental Agreement does
not contain any rights, claims or benefits inuring to any person that is not a
party hereto nor create or establish any third party beneficiary hereto.
18. Miscellaneous. The provisions of Sections 11.1, 11.2, 11.4,
11.5, 11.8 - 11.10, 11.13 and 11.16 shall apply mutatis mutandis
to this Amendment and Supplemental Agreement.
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Except as aforesaid, all terms of the Purchase Agreement shall remain
in full force and effect.
Signed this 1st day of August 2001.
AGILENT TECHNOLOGIES, INC.
By: /s/ XXXXXX X. XXXXXXXXX
____________________________________
Name:
Title:
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ XXXXXXXXX XXXXXXXX
____________________________________
Name:
Title:
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Annex A
Allocation of Liabilities with Respect to Outstanding Litigation
Suggested
Matter Name Matter No en Date Matter Type Status Allocation
----------- --------- ------- ----------- ------ ------------
Agilent v. American Heartsavers, Inc. 2001-0002 11/06/00 Collection/Bankruptcy Settled None
Agilent v. Steadfast Insurance 2000-0024 06/02/00 Insurance Coverage Active Agilent
Chu Caen 2000-0034 07/14/00 Contract Active See Philips
Section
2.2(a)(iii)
of the
APA
Clatt v. Memorial Hermann et al 2000-0048 08/25/00 Product Liability Active Agilent
Customs/FDA Investigation 2000-0044 07/31/00 Other, Comment Active Agilent
DOJ/VA Investigation v. HP 1997-0111 07/23/97 Regulatory (Product) Active Agilent
INSTRUMENTACION v. AGILENT/HP 2001-0033 03/20/01 Contract Active See Section Philips
2.2(a)(iii)
of the
APA
Xxxxx, G. Xxxxxx, v. Advocate Health 2001-0020 01/03/01 Product Liability Active Agilent
Medicare/Greece v. HP Europe BV 2000-0031 07/11/00 Contract Active See Section Philips
2.2(a)(iii)
of the APA
MedSearch v. HP 2001-0029 01/13/01 Contract Active See Section Philips
2.2(a)(iii)
of the APA
Xxxxx, Xxxxxxxxx vs. HP 1997-0098 05/23/97 Product Liability Active Agilent
Xxxxxxx Inst. v. Agilent 2000-0069 10/20/00 Contract Active See Section Philips
2.2(a)(iii)
of the APA
Xxxxxx, Xxxxxxxx x. HP 1998-0280 10/01/98 Employment Discrimination Settled None
Stilke v. Little Company of
Xxxx Hospital 2000-0038 07/20/00 Product Liability Settled None
et al
Xxxxxxx, Xxxxxxx vs. HP 1994-0065 10/03/94 Product Liability Active Agilent
UGAP in France 2000-0055 08/31/00 Collection/Bankruptcy Settled None
Xxxxxxx Technologies Inc. v. HP 2000-0027 06/21/00 Contract Settled None
Xxxxx Xxxxxxxxxx of Belgium 2000-0056 09/05/00 Employment Active Agilent
Xxxxxx, Xxxxxx x. HP 2001-0019 01/03/01 Product Liability Active Agilent
Floppy Disk Controller
Chips Investigation 2000-0042 07/31/00 Product Performance Activ Agilent
Xxxxxxx, Xxxxxxx x. HP 1997-0128 08/29/97 Employment Discrimination (Not Active Agilent
Litigation)
Xxxxxxx, Xxxxx x. HP 2000-0054 06/08/00 Employment Discrimination (Not Active Agilent
Litigation)
American Airlines N/A 08/01/00 Trademark (Not Litigation) Settled None
Xx. Xxxxxxxx Xxxxxxx N/A 07/18/00 Patent (Not Litigation) Active See Section Philips
2.2(a)(iv)
of the APA
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Xxxxxxx Lifesciences LLC N/A 08/07/00 Patent (Not Litigation) Active See Section Philips
2.2(a)(iv)
of the APA
Masimo N/A 05/03/99 Trademark & Patent Active See Section Philips
(Not Litigation) 2.2(a)(iv)
of the APA
Alliance Pharmaceutical N/A 09/23/99 Patent (Not Litigation) Resolved None
Healthdyne Technologies, Inc N/A 04/01/01 Trademark (Not Litigation) Active See Section Philips
2.2(a)(iv)
of the APA
A & S MediTeam N/A
Xxxxxx Xxxxxxx N/A
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Annex B
Pending Escrow Claims
To the extent that Philips assumes responsibility for the Liabilities
relating to (1) the Zymed Puerto Rico tax audit for the taxable year
ended June 30, 1999 and the liabilities associated therewith and (2)
unpaid taxes payable to the California Franchise Tax Board in respect
of Zymed One, Agilent's claim against the Zymed escrow account
relating to such Liabilities shall be a Purchased Asset. To the
extent that Agilent retains responsibility for the Liabilities
relating to (1) the Zymed Puerto Rico tax audit for the taxable year
ended June 30, 1999 and the liabilities associated therewith and (2)
unpaid taxes payable to the California Franchise Tax Board in respect
of Zymed One, Agilent's claim against the Zymed escrow account
relating to such Liabilities shall be an Excluded Asset.
To the extent that Philips assumes the Xxxxxxx litigation in
accordance with Agilent's proposed litigation allocation schedule set
forth in Annex A hereto, the escrow claim related thereto will be
transferred to Philips.
The portion of the Zymed escrow claim relating to the "Subject
Contracts" (as that term is defined in the Zymed Merger Agreement)
will be transferred to Philips.
Annex C
Costs Related to Termination of Employees in Chile, Brazil, Mexico and
Venezuela
-------------------------------------------------------------------------------
Brazil: US$168,000
Chile: Ch$4,853,874
Mexico: US$870,000 minus the amount defined in the Local Asset
Transfer Agreement for Mexico as the "Provision Amount"
Venezuela US$164,562 (equal to 50% of the total severance costs)
Payment details are set forth in the relevant Local Asset Transfer Agreements.
Costs related to the termination of Retained Employees in Brazil, Mexico and
Venezuela will be reimbursed on an indemnity basis. Details are set forth in
the relevant Local Asset Transfer Agreements.
Annex D
New Section 3.6 of the Purchase Agreement
3.6 Deferred Purchase Price.
-----------------------
(a) General. Seller and Purchaser agree that the full
payment by Purchaser of One Hundred Million Dollars ($100,000,000) of the
Purchase Price (the "Deferred Purchase Price") shall be deferred until the
Targets and the Systems Connectivity Conditions have been satisfied, all in
accordance with this Section 3.6.
(b) Target Deferred Purchase Price. Seller and Purchaser
agree that the full payment by Purchaser of Eighty Million Dollars
($80,000,000) of the Deferred Purchase Price (the "Target Deferred Purchase
Price") shall be deferred until the Targets have been satisfied, and shall be
paid in installments as provided in this Section 3.6(b). Subject to the
disagreement resolution provisions of this Section 3.6(b), Seller and
Purchaser agree that Xx. Xxxx Xxxxxx and Xx. Xxx Xxxxxx, or (if any such
individual is unavailable) substitutes for such individuals designated by
Purchaser (collectively, the "Target Team"), will determine whether Purchaser
believes that each Target has been achieved as of any Assessment Date, or the
related Grace Date, as the case may be. In making any such determination, the
Target Team shall apply reasonable business judgment.
(i) Target Memoranda. Purchaser shall cause the
Target Team to transmit by e-mail to Xx. Xxxx Xxxx, or (if he is
unavailable) a substitute designated by Seller, within 10 calendar
days following each Assessment Date, a brief memorandum (each, a
"Target Memorandum") stating, with respect to each Target, whether
the Purchaser believes such Target has been satisfied as of the
related Assessment Date. If any Target Memorandum states that any
Target has not been so satisfied, such Target Memorandum shall
include a reasonably detailed explanation of the factual basis for
the Target Team's determination that such Target has not been
satisfied. If and to the extent that a Target Memorandum states that
any Target has not been satisfied, Purchaser shall cause the Target
Team to evaluate whether the Purchaser believes such Target has been
satisfied as of the close of business on the fifth Business Day
following the Target Team's dispatch of such Target Memorandum (such
date, the "Grace Date"), and to transmit by e-mail to Xx. Xxxx a
brief message (a "Grace Message") stating whether such Target has
been so satisfied. At any time following the Closing Date, if
Purchaser (including Xx. Xxxxxx) becomes aware of any event or
circumstance which, in Purchaser's (or in Xx. Xxxxxx'x) judgment, is
reasonably likely to jeopardize the satisfaction of any of the
Targets, Purchaser (or Xx. Xxxxxx) shall so notify Xx. Xxxx by e-mail
within 24 hours of becoming aware of such event or circumstance.
(ii) Periodic Payment of Target Deferred Purchase
Price. Unless the relevant Target Memorandum or Grace Message states
that a particular Target has been satisfied, Purchaser shall retain
the Target Amount with respect to such Target, subject to Section
3.6(b)(v). In the event that the relevant Target Memorandum or Grace
Message states that a particular Target has been satisfied, Purchaser
shall pay to Seller, by wire transfer effected not later than the
second Business Day following the date of the Target
Memorandum or the related Grace Message, as the case may be, the
Target Amount for such Target.
(iii) Disagreements. In the event that Seller
disagrees with any of the Target Team's determinations concerning
whether a Target has been satisfied, Seller shall transmit to the
Target Team and Purchaser by e-mail a message stating the
determination with which it disagrees and including a reasonably
detailed explanation of the factual basis for Seller's disagreement.
Within 24 hours following Purchaser's receipt of such message, Seller
shall cause Mr. Xxx Xxxxxx, and Purchaser shall cause Xx. Xxx
Xxxxxxxxx, to discuss the matter in good faith and attempt to resolve
the matter within five Business Days following Purchaser's receipt of
such message (such period, the "Initial Discussion Period"). If
Messrs. Xxxxxx and Xxxxxxxxx resolve the disagreement during the
Initial Discussion Period, Purchaser and Seller will cause them to
issue joint instructions setting forth such resolution, and Seller
and Purchaser shall take such actions (which may include the payment
by Purchaser of (if Purchaser has not made any escrow deposit), the
execution of joint instructions for disbursement by the Escrow Agent
of (if Purchaser has made an escrow deposit), and/or the retention by
Purchaser or the Escrow Agent of, all or a portion of any Target
Amount or the undertaking of remedial measures by Seller or
Purchaser) as may be set forth therein. In the event that Messrs.
Xxxxxx and Xxxxxxxxx fail to resolve the disagreement during the
Initial Discussion Period, Seller shall cause Xx. Xxx Xxxxxxxx, and
Purchaser shall cause Xx. Xxxx Xxxxxxx, to discuss the matter in good
faith and attempt to resolve the matter within 10 Business Days
following the expiration of the Initial Discussion Period (such
period, the "Executive Discussion Period"). If Messrs. Xxxxxxxx and
Whybrow resolve the disagreement during the Executive Discussion
Period, Purchaser and Seller will cause them to issue joint
instructions setting forth such resolution, and Seller and Purchaser
shall take such actions (which may include the payment by Purchaser
of (if Purchaser has not made any escrow deposit), the execution of
joint instructions for disbursement by the Escrow Agent of (if
Purchaser has made an escrow deposit), and/or the retention by
Purchaser or the Escrow Agent of, all or a portion of any Target
Amount or the undertaking of remedial measures by Seller or
Purchaser) as may be set forth therein.
In the event that Messrs. Xxxxxxxx and Whybrow fail
to resolve the disagreement during the Executive Discussion Period,
such dispute shall be resolved by an independent arbitrator with
technical expertise in business operations and information technology
systems (the "Arbitrator") in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the
"AAA"); provided, that if the parties cannot agree to an arbitrator,
one will be appointed by the AAA; provided, further, that the
Arbitrator, once selected, shall serve as Arbitrator for all
subsequent disagreements and disputes to be arbitrated pursuant to
this Section 3.6. Any such arbitration shall be conducted in New
York, New York, such proceedings shall be in English, and any such
arbitration shall be administered by the AAA in accordance with its
Commercial Arbitration Rules and Title 9 of the United States Code.
The Arbitrator shall be instructed to act promptly to resolve any
dispute in accordance with the terms of this Agreement, it being
understood that the sole issues for the Arbitrator shall be (i)
whether the Target in question was satisfied as of the date in
question and (ii) if so, what
2
amount(s), if any, are payable to Seller. The Arbitrator shall
issue its written decision promptly, and the Arbitrator's decision
shall be final, binding and conclusive on both Purchaser and Seller.
Purchaser and Seller shall cooperate with the Arbitrator in
connection with this Section 3.6 (b)(iii). Without limiting the
generality of the foregoing, Purchaser and Seller shall each
provide, or cause to be provided, to the Arbitrator all information,
and to make available at the arbitration proceeding all personnel,
as the Arbitrator shall determine are reasonably necessary to
resolve any disputes pursuant to this Section 3.6 (b)(iii). The
expenses of the Arbitrator in resolving any disputes under this
Section 3.6 (b)(iii) shall be borne equally by Purchaser and Seller.
(iv) Arbitrator's Decision. In the event that the
Arbitrator issues a written decision stating that the relevant Target
had not been satisfied as of the relevant Assessment Date, Purchaser
shall retain the relevant Target Amount until such time as the
Targets have been satisfied, subject to Section 3.6(b)(v). In the
event that the Arbitrator issues a written decision stating that the
relevant Target had been satisfied as of the relevant date, Purchaser
shall either (i) pay the relevant Target Amount to Seller by wire
transfer effected on the second Business Day following Purchaser's
receipt of the Arbitrator's decision, or (ii) if the Purchaser has
theretofore deposited into the Escrow Account (as defined in Section
3.6(b)(v)) a Target Amount in respect of such Target, shall deliver
to the Escrow Agent joint written instructions, executed by Purchaser
and Seller, instructing the Escrow Agent to disburse to Seller the
Target Amount that should have been paid by Purchaser by the second
Business Day following the relevant Grace Date.
(v) Escrow. In the event that the Target Memorandum
or Grace Message with respect to the last Assessment Date of November
1, 2001 states that any Target has not been satisfied, Purchaser
shall deposit the Target Amount for such Target into an escrow
account (the "Escrow Account") with The Chase Manhattan Bank, as
escrow agent (the "Escrow Agent"), by wire transfer effected not
later than the second Business Day following the related Grace Date.
The escrow agreement governing the Escrow Account (i) shall be in the
form of the Escrow Agent's preprinted standard form, (ii) shall
specify that the Escrow Agent shall release funds from the Escrow
Account only in accordance with joint written instructions executed
by Purchaser and Seller (unless otherwise specified herein) or in
accordance with written instructions furnished to the Escrow Agent by
the Arbitrator, (iii) shall specify that funds in the Escrow Account
shall be invested in seven-day certificates of deposit of the Escrow
Agent or in a United States government securities fund managed by the
Escrow Agent or one of its affiliates and approved by Purchaser and
Seller, and (iv) shall specify the Escrow Agent's fees and
disbursements shall be borne equally by Seller and Purchaser.
(vi) Target Losses. Any other provision of this
Agreement notwithstanding, Seller agrees that Purchaser may recover
from Seller, either as a deduction from the payment of any Target
Amount or out of any amounts remaining in the Escrow Account, as the
case may be, Purchaser's losses, damages, liabilities, costs and
expenses (including, without limitation, lost profits and mitigation
expenses) that are the direct consequences of the failure of any
Target to be satisfied (collectively, "Target
3
Losses"); provided, that to the extent that Purchaser is compensated
for a Target Loss pursuant to this Section 3.6(b), it shall not be
deemed to have suffered a loss for purposes of exercising any other
remedies that it may have. Purchaser shall use its commercially
reasonable efforts (consistent with those it would exercise in the
absence of this Section 3.6(b)(vi)) to preserve customer
relationships and to mitigate any Target Losses, including, without
limitation, entering into arrangements with customers to minimize
the impact of the failure of any Target to be satisfied. The
limitations set forth in Section 9.2(b) shall not apply to Target
Losses and no recovery for Target Losses shall count against the cap
set forth in Section 9.2(a). Purchaser shall not be entitled to
multiple recoveries for the same Target Loss, and Purchaser's
recovery for a Target Loss shall not affect Purchaser's other rights
under this Agreement, the Transition Services Agreement or the
Master Service Level Agreement, except as set forth above. The fact
that Purchaser exercises any such other rights shall not, in and of
itself, be deemed to constitute evidence that Purchaser has incurred
a Target Loss. For the avoidance of doubt, the maximum amount of
Target Losses for which Purchaser shall be eligible to recover in
respect of the calendar month preceding any Assessment Date shall be
$8,888,889 per Target.
(vii) Resolution of Target Losses. If it has been
determined that any Target has not been satisfied, Seller shall cause
Mr. Xxx Xxxxxx, and Purchaser shall cause Xx. Xxx Xxxxxxxxx, to
discuss in good faith and attempt to reach agreement within 30 days
following the later of the deposit of funds into the Escrow Account
and the resolution of the last to be resolved of the Satisfaction
Disagreements (such 30-day period, the "First Target Losses
Discussion Period") concerning the amount, if any, of the Target
Losses. If Messrs. Xxxxxx and Xxxxxxxxx reach such an agreement
during the First Damages Discussion Period, Purchaser and Seller will
cause them to issue joint instructions setting forth such agreement,
and Seller and Purchaser shall take such actions (which may include
the whole or partial retention or payment of the related Target
Amount or the execution of joint instructions for release from the
Escrow Account of escrowed funds) as may be set forth therein. In the
event that Messrs. Xxxxxx and Xxxxxxxxx fail to reach such an
agreement during the First Target Damages Discussion Period, Seller
shall cause Xx. Xxx Xxxxxxxx, and Purchaser shall cause Xx. Xxxx
Xxxxxxx, to discuss the matter in good faith and attempt to reach
such an agreement within 10 Business Days following the expiration of
the First Target Damages Discussion Period (such period, the "Second
Target Damages Discussion Period"). If Messrs. Xxxxxxxx and Whybrow
reach such an agreement during the Second Target Damages Discussion
Period, Purchaser and Seller will cause them to issue joint
instructions setting forth such agreement, and Seller and Purchaser
shall take such actions (which may include the whole or partial
retention or payment of the related Target Amount or the execution of
joint instructions for release from the Escrow Account of escrowed
funds) as may be set forth therein. In the event that Messrs.
Xxxxxxxx and Whybrow fail to reach such an agreement, the amount of
Target Losses, if any, shall be determined by the arbitration
procedures set forth in Section 3.6(b)(iii). The Arbitrator shall be
instructed to act promptly to resolve any dispute in accordance with
the terms of this Agreement, it being understood that the sole issue
for the Arbitrator shall be the amount of Target
4
Losses, if any. The Arbitrator shall issue a written decision
promptly, including written instructions to the Escrow Agent
concerning the disposition of the escrowed funds.
In the event that the Arbitrator determines that there are
Target Losses, the Arbitrator's written decision shall provide for
the Target Losses to be reimbursed either by means of the whole or
partial retention of the related Target Amount or by means of a
disbursement to Purchaser from the Escrow Account in which case
Purchaser and Seller shall issue joint written instructions to that
effect; provided, that the maximum amount of Target Losses for which
Purchaser shall be eligible to recover in respect of the calendar
month preceding any Assessment Date shall be $8,888,889 per Target.
The decision and instructions of the Arbitrator shall be final,
binding and conclusive on both Purchaser and Seller. Purchaser and
Seller shall cooperate with the Arbitrator in connection with this
Section 3.6 (b)(vii). Without limiting the generality of the
foregoing, Purchaser and Seller shall each provide, or cause to be
provided, to the Arbitrator all information, and to make available at
the arbitration proceeding all personnel, as the Arbitrator shall
determine are reasonably necessary to permit the Arbitrator to
ascertain the amount of Target Losses pursuant to this Section 3.6
(b)(vii). The expenses of the Arbitrator in evaluating the Target
Losses in accordance with this Section 3.6 (b)(vii) shall be borne
equally by Purchaser and Seller. In the event that the Target Losses
are determined to be less than the balance in the Escrow Account, the
excess of such balance over such Target Losses will be distributed to
Seller.
(viii) Certain Payment Obligations. Notwithstanding
any other provision of this Agreement, the failure to be satisfied of
any Target as of any Assessment Date (or the related Grace Date, as
the case may be) shall not affect Purchaser's obligation to pay a
Target Amount with respect to another Target that has been satisfied
as of such Assessment Date (or the related Grace Date, as the case
may be), or affect Purchaser's obligation to pay a Target Amount with
respect to the satisfaction of such Target with respect to any future
Assessment Date (or the related Grace Date, as the case may be) as of
which such Target may be satisfied. Any other provision of this
Agreement notwithstanding, (i) the aggregate of Target Base Amounts
paid to Seller in respect of any Target shall not exceed $26,666,667,
and (ii) the aggregate of Target Base Amounts paid to Seller in
respect of all satisfied Targets shall not exceed the Target Deferred
Purchase Price; it being understood that the "Target Base Amount"
concept excludes the interest otherwise payable on such amounts
pursuant to this Section.
(c) Systems Connectivity Deferred Purchase Price. Seller and
Purchaser agree that the full payment by Purchaser of Twenty Million Dollars
($20,000,000) of the Deferred Purchase Price (the "Systems Connectivity
Deferred Purchase Price") shall be deferred until the Systems Connectivity
Conditions have been satisfied, and shall be paid in installments as provided
in this Section 3.6(c).
(i) Release of Systems Connectivity Deferred
Purchase Price. Purchaser shall pay to Seller the sum of (x) Ten
Million Dollars ($10,000,000) of the Systems Connectivity Deferred
Purchase Price, plus (y) interest on such amount for the number of
days from and including the Closing Date to but excluding the payment
date at a rate equal to the Treasury Rate, calculated on the basis of
actual days elapsed over a
5
365-day year, by wire transfer effected on the second Business Day
following the satisfaction of the First Systems Connectivity
Condition. Purchaser shall pay to Seller the sum of (p)Ten Million
Dollars ($10,000,000) of the Systems Connectivity Deferred Purchase
Price, plus (q) interest on such amount for the number of days from
and including the Closing Date to but excluding the payment date at
a rate equal to the Treasury Rate, calculated on the basis of actual
days elapsed over a 365-day year, by wire transfer effected on the
second Business Day following the satisfaction of the Second Systems
Connectivity Condition.
(ii) Agreement on Day Two Plan. During the period
following the Closing Date and prior to September 1, 2001, Purchaser
and Seller shall discuss in good faith and attempt to agree upon a
specific technical approach and high level project plan for the
development and implementation (including the cost estimates for the
reimbursement of Seller's expenses on a time and material basis) for
a systems connectivity approach bridging Purchaser's SAP environment
to Seller's HSG factory systems environment (such plan, as agreed to
by Seller and Purchaser, the "Day Two Plan"). Purchaser and Seller
shall discuss in good faith, and attempt to apply, Alternative 6 (or,
if Alternative 6 is impracticable, a reasonable alternative) as the
basis for the Day Two Plan. By no later than October 1, 2001,
Purchaser and Seller will complete the technical design for the
agreed approach and will complete the deliverables as described in
Attachment "Deliverables," unless agreed to by both parties.
(iii) Development and Testing. Following the
adoption of the Day Two Plan, Purchaser and Seller shall use
commercially reasonable efforts to develop and test the Day Two Plan
on or prior to November 15, 2001, or such other date as is agreed to
in the Day Two Plan, and in connection therewith will cooperate in
performing the activities, procedures and tests set forth under the
heading "Development and Testing" in the Deliverables. To the extent
that Agilent's responsibilities for such activities, procedures and
tests shall not have been completed by November 15, 2001, or such
other date as the parties agree, the terms of the relevant Service
Level Agreements shall be extended, as provided in the Master Service
Level Agreement.
(iv) Assistance. During and following the
development, testing, implementation and "go live" of the systems
connectivity solution contemplated by the Day Two Plan, Seller shall
provide to Purchaser such assistance as is necessary for live data
conversions and the implementation of solution into production state
and the monitoring of the live system. Such assistance will be
provided according to the Day Two Plan. To the extent that such
assistance exceeds basic data extraction, documentation, advice and
training, such assistance will be provided on a "time and materials"
reimbursement basis.
(d) No Alteration of Obligations, Rights or Remedies. The deferral of the
Deferred Purchase Price shall not limit, modify, amend, waive or affect any of
Seller's or Purchaser's rights or remedies under this Agreement, any
agreement, arrangement or instrument to which Seller or Purchaser or any of
their respective affiliates is a party, or under law or in equity. Each of
Seller and Purchaser agree to use commercially reasonable efforts to cause the
Targets to be satisfied as of each Assessment Date and the Systems
Connectivity Conditions to
6
be satisfied as soon as reasonably practicable following the Closing, it being
understood that the sole remedy for a breach by Seller or Purchaser of its
obligations under this Section 3.6(d) shall be the retention or payment by
Purchaser of the relevant Target Amount or the Systems Connectivity Deferred
Purchase Price, as the case may be. Notwithstanding the fact that the Target
Team shall not be required to transmit any Target Memorandum prior to the 10th
calendar day following the related Assessment Date, each of Seller and
Purchaser shall cooperate and communicate promptly concerning any conditions
or circumstances that could adversely affect the performance of the systems
measured by the Targets or any conditions or circumstances that could cause
the Targets to fail to be satisfied.
(e) Definitions.
"Alternative 6" means, subject to modifications to be consistent with
the Day Two Plan, a systems connectivity approach based on country rollout of
the PMS integrated client with an EDI link to Seller's WWOMS, and HSG present
factory system environment (on Seller's side by the TIBCO interface).
"Assessment Date" means any of September 1, 2001, October 1, 2001 and
November 1, 2001, and "Assessment Dates" means such days collectively.
The "First Systems Connectivity Condition" will be satisfied if and
when Seller and Purchaser have agreed to Seller's deliverables under the Day
Two Plan.
The "Second Systems Connectivity Condition" will be satisfied if and
when Seller has completed the development of Seller's interface portion of the
Day Two Plan and demonstrated to Purchaser that Seller's interface portion is
complete and operational.
"Systems Connectivity Conditions" means, collectively, the First
Systems Connectivity Condition and the Second Systems Connectivity Condition.
"Target" means any of Target A, Target B or Target C, and "Targets"
means Target A, Target B and Target C, collectively.
"Target A" measures the systems performance and data flow associated
with an order moving from quote through to manufacturing. This data flow will
be checked at three connection points: 1) a quote is generated, consistent
with the data as entered, with the appropriate logo/letterhead; 2) the order,
when acknowledged in the factory systems, is consistent with the data as
entered; and 3) the factory systems allow the order to be scheduled and built.
This target will be satisfied if and when the activity for each Target Country
measured in the above connection points is 98% complete for the calendar month
preceding the relevant Assessment Date.
"Target Amount" means, with respect to any Target and any Assessment
Date (or the related Grace Date, as the case may be), the sum of (i) the sum
(such sum, the "Target Base Amount") of (A) $8,888,889, plus (B) the product,
if any, of (x) $8,888,889, multiplied by (y) the number of Assessment Dates
preceding such Assessment Date with respect to which no Target Amount was paid
with respect to such Target, plus (ii) interest on the Target Base Amount for
7
the number of days from and including the Closing Date to but excluding the
payment date at a rate equal to the Treasury Rate, calculated on the basis of
actual days elapsed over a 365-day year.
"Target B" measures the systems performance and data flow associated
with the generation of shipping documentation and product invoices. This data
flow will be checked at three connection points: 1) shipping documents are
generated, consistent with the data as entered, with the appropriate
logo/letterhead; 2) a product invoice is generated, consistent with the data
as entered, with the appropriate logo/letterhead; and 3) any accounts
receivable booked during the assessment period are booked consistent with the
data as entered. This target will be satisfied if and when the activity for
each Target Country measured in the above connection points is 98% complete
for the calendar month preceding the relevant Assessment Date.
"Target C" measures the systems performance and data flow associated
with the dispatching of CEs, the shipment of parts and supplies and the
generation of service invoices. This data flow will be checked at three
connection points: 1) the systems allow the CSO to be closed; 2) the parts and
supplies systems allow the order to be scheduled; and 3) a service invoice is
generated, consistent with the data as entered, with the appropriate
logo/letterhead. This target will be satisfied if and when the activity for
each Target Country measured in the above connection points is 98% complete
for the calendar month preceding the relevant Assessment Date.
"Target Country" means any of the United States, Canada, Germany, the
United Kingdom, France (as of the commencement of invoicing in France pursuant
to Purchaser's request), Italy, Brazil (as of and following Purchaser's
receipt from governmental authorities of product authorizations), Japan and
the People's Republic of China (as of and following Purchaser's receipt from
governmental authorities of product authorizations).
"Treasury Rate" means a rate of interest equal to the yield on 90 day
Treasury Bills as published in the Wall Street Journal on the Closing Date
which represents the yield as of close of business on the prior day.
ATTACHMENT
Deliverables
General Framework for the Planning and Design Phase
1. Defined Systems architecture for flow of transactions and data including
shared data between the respective environments
(a) Front end Agilent order processing
(b) Back end HSG manufacturing
8
(c) Philips SSD Systems
Definition of the data files that would be shared and those that would be
passed back and forth between environments
Definition of specific transaction codes i.e.: order change, shipment
High level process flow and issue resolution for inter-company transactions
including invoicing and taxation
Definition of incremental infrastructure-printers, bandwidth, etc.
Definition of country by country data extraction and conversion requirements
and methodology
Definition of data to be transported (a) to a PMS operational environment, (b)
to a PMS archive environment or where data need can be covered by giving
access, (c) to PMS to the Agilent environment after Day Two
Approved design and committed resources by Agilent and PMS
2. Schedule/ timeline/ work plan/ physical location of development teams/
physical locations and specifications of the development environment and
assignment of resources of the development, testing, and implementation
of the design
General Framework for Phase Two Development and Testing -Detailed technical
design and testing of interface components
Development of required interfacing transactions and any required program
extensions, including any unique extensions required by specific countries,
e.g.: tax
Build data extraction tools, data conversion tools and data import tools
Unit test and systems integration test
User acceptance test
Development of operational procedures and training
Development of any infrastructure modifications or extensions
General Framework for Phase Three Implementation and Go-live and
further production integration test, operational support, maintenance and hand
over Agilent provides assistance for implementation of interface solution into
production state
Agilent provides assistance for live data conversions according to the PMS
Exit plan
9
Monitoring of live system
Assistance would continue to be applied on country by country basis as country
conversions are implemented
10
Annex 3.2(a)
Purchase Price Payments
-------------------------- -------------------------------------------------
Jurisdiction Purchase Price
-------------------------- -------------------------------------------------
Russia US $463,640 (including value added tax)
Payable in local currency
Korea US $1,940,600
Brazil US $4,462,300 Payable in local currency
Poland US $2,666,600 Payable in local currency
China US $7,663,300 Payable in local currency
India US $9,744,000 Payable in local currency
Malaysia 4.7 million Ringgit = US $1,236,842
Payable in local currency
United States US $1,571,880,758
Total Payment US $1,600,058,040
(including value
added tax in Russia)
