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STOCK AND ASSET PURCHASE AGREEMENT
among:
Molecular Devices Corporation,
a Delaware corporation;
Skatron Instruments AS,
a Norwegian company;
Skatron Instruments, Inc.,
a Virginia corporation;
and
Helge Skare, Wiel Skare, Steinar Faanes and Sten Skare,
being all of the Stockholders of Skatron Instruments AS, a Norwegian company
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Dated as of May 17, 1999
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TABLE OF CONTENTS
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Section 1. Sale and Purchase of Shares and Assets; Related Transactions; Noncompetition....................1
1.1 Sale and Purchase of Shares and Assets..........................................................1
(a) Sale of Assets of Skatron Instruments, Inc. to the Purchaser...........................1
(b) Sale of Stock of Skatron Instruments, Inc. to Helge Skare or Assigns...................1
(c) Sale of Stock of Skatron to the Purchaser..............................................1
1.2 Consideration...................................................................................2
(a) Consideration for Sale of Assets of Skatron Instruments, Inc...........................2
(b) Consideration for Sale of Shares of Skatron............................................2
(i) Share Purchase Price..........................................................2
(ii) Payment at Closing............................................................2
(iii) Escrow Amount.................................................................2
(c) Allocation of Purchase Price...........................................................2
1.3 Closing.........................................................................................2
1.4 Noncompetition, Confidentiality, etc............................................................4
Section 2. Representations and Warranties of the Principal Stockholders....................................5
2.1 Due Organization; No Subsidiaries; Etc..........................................................6
2.2 Charter Documents; Records......................................................................6
2.3 Capitalization, Etc.............................................................................6
2.4 Financial Statements............................................................................7
2.5 Absence of Changes..............................................................................7
2.6 Assets..........................................................................................9
2.7 Bank Accounts...................................................................................9
2.8 Receivables; Major Customers....................................................................9
2.9 Inventory......................................................................................10
2.10 Real Property..................................................................................10
2.11 Proprietary Assets.............................................................................10
2.12 Contracts......................................................................................10
2.13 Liabilities....................................................................................11
2.14 Compliance With Legal Requirements.............................................................11
2.15 Governmental Authorizations....................................................................12
2.16 Employee and Labor Matters.....................................................................12
2.17 Benefit Plans..................................................................................13
i.
TABLE OF CONTENTS
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2.18 Tax Matters....................................................................................13
2.19 Environmental Matters..........................................................................14
2.20 Sale of Products; Performance of Services......................................................14
2.21 Insurance......................................................................................14
2.22 Related Party Transactions.....................................................................15
2.23 Proceedings; Orders............................................................................15
2.24 Authority; Binding Nature of Agreements........................................................15
2.25 Non-Contravention; Consents....................................................................16
2.26 Brokers........................................................................................17
2.27 Selling Stockholders...........................................................................17
2.28 Full Disclosure................................................................................17
Section 3. Representations and Warranties of the Purchaser and Skatron....................................18
(a) Authority; Binding Nature of Agreement................................................18
(b) Brokers...............................................................................18
Section 4. Post-Closing Covenants.........................................................................18
Section 5. Indemnification, etc...........................................................................18
5.1 Survival of Representations and Covenants......................................................18
5.2 Indemnification by Principal Stockholders......................................................19
5.3 Threshold and Maximum Amount of Indemnification Obligation.....................................19
5.4 No Contribution................................................................................19
5.5 Setoff.........................................................................................20
5.6 Exclusivity of Indemnification Remedies........................................................20
5.7 Defense of Third Party Claims..................................................................20
(a) Notice................................................................................20
(b) Defense of Claim.....................................................................20
5.8 Exercise of Remedies by Indemnitees Other Than Purchaser.......................................21
Section 6. Miscellaneous Provisions.......................................................................21
6.1 Joint and Several Liability....................................................................21
6.2 Further Assurances.............................................................................22
6.3 Dispute Resolution.............................................................................22
6.4 Arbitration....................................................................................22
(a) Agreement to Arbitrate................................................................22
(b) Notice of Arbitration.................................................................22
ii.
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(c) Selection of the Arbitral Panel.......................................................22
(d) Certain Procedures; Confidentiality...................................................22
(e) Interim Relief........................................................................23
(f) Arbitral Award........................................................................23
(g) Judgment on Award.....................................................................23
(h) Expenses of Arbitration; Attorneys' Fees..............................................23
(i) Law Applicable........................................................................23
6.5 Fees and Expenses..............................................................................23
6.6 Attorneys' Fees................................................................................24
6.7 Notices........................................................................................24
6.8 Publicity......................................................................................24
6.9 Time of the Essence............................................................................25
6.10 Headings.......................................................................................25
6.11 Counterparts...................................................................................25
6.12 Force Majeure..................................................................................25
6.13 Governing Law; Venue...........................................................................25
6.14 Successors and Assigns.........................................................................25
6.15 Remedies Cumulative; Specific Performance......................................................25
6.16 Waiver.........................................................................................26
6.17 Amendments.....................................................................................26
6.18 Severability...................................................................................26
6.19 Parties in Interest............................................................................26
6.20 Entire Agreement...............................................................................26
6.21 Construction...................................................................................26
iii.
EXHIBITS
Exhibit A: Certain Definitions
Exhibit B: Instrument of Assignment and Assumption
Exhibit C: Bill of Sale
Exhibit D: Form of Indemnification Escrow Agreement
Exhibit E: Form of Consulting Agreement
iv.
STOCK AND ASSET PURCHASE AGREEMENT
THIS STOCK AND ASSET PURCHASE AGREEMENT is entered into as of May 17,
1999, between and among (i) MOLECULAR DEVICES CORPORATION, a Delaware
corporation (the "Purchaser"); (ii) Skatron Instruments AS, a Norwegian company
("Skatron"); (iii) SKATRON INSTRUMENTS, INC., a Virginia corporation and a
wholly-owned subsidiary of Skatron; and (iv) the following parties: HELGE SKARE
and WIEL SKARE (the "Principal Stockholders"), and STEINAR FAANES and STEN SKARE
(together with the Principal Stockholders, the "Selling Stockholders"). Certain
capitalized terms used in this Agreement are defined on Exhibit A.
RECITALS
A. Skatron Instruments, Inc. wishes to sell certain assets to the
Purchaser, and the Purchaser is willing to purchase such assets, on the terms
set forth in this Agreement.
B. Skatron wishes to sell to Helge Skare or assigns, and Helge
Skare is willing to purchase from Skatron, one hundred percent (100%) of the
issued and outstanding shares of Skatron Instruments, Inc. on the terms set
forth in this Agreement.
C. The Selling Stockholders collectively own 314,400 shares (the
"Shares") of the common stock of Skatron, which constitute one hundred percent
(100%) of the outstanding share capital of Skatron.
D. The Selling Stockholders wish to sell the Shares to the
Purchaser and the Purchaser is willing to purchase the Shares on the terms set
forth in this Agreement.
AGREEMENT
The Purchaser and the Selling Stockholders, intending to be legally
bound, agree as follows:
SECTION 1. SALE AND PURCHASE OF SHARES AND ASSETS; RELATED TRANSACTIONS;
NONCOMPETITION
1.1 Sale and Purchase of Shares and Assets.
(a) Sale of Assets of Skatron Instruments, Inc. to, and
Assumption of Certain Liabilities by, the Purchaser. At the Closing, Skatron
Instruments, Inc. shall convey, sell, transfer, assign and deliver to the
Purchaser all of Skatron Instruments, Inc.'s right, title and interest in and to
certain accounts receivable and certain inventory and other assets, and the
Purchaser shall purchase the same from Skatron Instruments, Inc., on the terms
and subject to the conditions set forth in this Agreement. The Purchaser shall
not assume or have any liabilities with respect to any obligation or Liability
of Skatron Instruments, Inc., except for the Assumed Liabilities, unless the
Purchaser expressly assumes such obligations, in writing, after the Closing
Date.
(b) Sale of Stock of Skatron Instruments, Inc. to Helge Skare
or Assigns. At the Closing, Skatron shall sell, assign, transfer and deliver one
hundred percent of the issued and outstanding stock of Skatron Instruments, Inc.
to Helge Skare or his assign(s), and Helge Skare or his assign(s) shall purchase
the same from Skatron, on the terms and subject to the conditions set forth in
this Agreement.
1.
(c) Sale of Stock of Skatron to the Purchaser. At the Closing,
the Selling Stockholders shall sell, assign, transfer and deliver the Shares to
the Purchaser, and the Purchaser shall purchase the Shares from the Selling
Stockholders, on the terms and subject to the conditions set forth in this
Agreement.
1.2 Consideration.
(a) Consideration for Sale of Assets and Assumption of Certain
Liabilities of Skatron Instruments, Inc. The aggregate consideration for the
conveyance, sale, transfer and assignment of the Accounts Receivable and the
Inventory from Skatron Instruments, Inc. to the Purchaser shall be Five Hundred
Ten Thousand United States Dollars (US$510,000) (the "Asset Purchase Price").
The Asset Purchase Price shall be paid by the Purchaser to Skatron Instruments,
Inc. by delivery at Closing of a promissory note made by the Purchaser payable
to the order of Skatron Instruments, Inc.
(b) Consideration for Sale of Shares of Skatron
(i) Share Purchase Price. The aggregate purchase
price payable by the Purchaser for the Shares shall be Seven Million United
States Dollars (US$7,000,000), reduced by the aggregate amount of all debt owed
by Skatron to Helge Skare as of the Closing Date, if any, and further reduced by
the aggregate amount of all debt owed by Skatron to any other Person (other than
Short Term Trade Debt incurred in the Ordinary Course of Business) in excess of
an amount equal to One Hundred Thousand United States Dollars (US$100,000) (the
"Share Purchase Price"). The Share Purchase Price shall be paid by the Purchaser
to the Selling Stockholders as set forth in this Section 1.2(b).
(ii) Payment at Closing. At the Closing (as
hereinafter defined), the Purchaser will pay to the Selling Stockholders the
Share Purchase Price, minus the Escrow Amount (the "Cash Share Purchase Price").
(iii) Escrow Amount. At the Closing, the Purchaser
will deliver to an independent third party escrow agent in the United States
(the "Escrow Agent") the amount of Six Hundred Thousand United States Dollars
(US$600,000) (the "Escrow Amount"), which shall form the balance of the Purchase
Price. The Escrow Agent shall release the Escrow Amount only in accordance with
the terms of the Indemnification Escrow Agreement.
(c) Allocation of Purchase Price. The Cash Share Purchase
Price shall be allocated among the Selling Stockholders as follows:
Helge Skare US$ 3,029,890
Wiel Skare US$ 2,408,091
Steinar Faanes US$ 621,800
Sten Skare US$ 158,219
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TOTAL US$ 6,218,000
1.3 Closing.
(a) The closing of the sale of the Shares to the Purchaser
(the "Closing") shall take place at the offices of Cooley Godward LLP, 3000 El
Camino Real, Palo Alto, CA 94306, at 10:00 a.m. (local time) on May 17, 1999, or
at such other place or time as the parties may jointly designate. For purposes
of this Agreement: "Scheduled Closing Time" shall mean the time and date as of
which the
2.
Closing is required to take place pursuant to this Section 1.3(a); and "Closing
Date" shall mean the time and date as of which the Closing actually takes place.
(b) At the Closing, the parties will take the following
actions, and execute and deliver the following documents, in the sequence set
forth below:
In connection with the sale of the Accounts
Receivable and the Inventory by Skatron Instruments,
Inc. to the Purchaser:
(i) Skatron Instruments, Inc. will execute and
deliver to the Purchaser an Instrument of Assignment and Assumption in the form
of Exhibit B, conveying, selling, transferring and assigning to the Purchaser
the accounts receivable listed on Schedule 1 thereto (the "Accounts
Receivable"), and evidencing the assumption by the Purchaser of all product
service, warranty and repair obligations associated with the Inventory (the
"Assumed Liabilities").
(ii) Skatron Instruments, Inc. will execute and
deliver to the Purchaser a Bill of Sale in the form of Exhibit C, conveying,
selling, transferring and assigning to the Purchaser the inventory and other
assets identified and listed on Schedule 1 thereto (the "Inventory");
(iii) The Purchaser will deliver to Skatron
Instruments, Inc. a promissory note in the principal amount of Six Hundred
Twelve Thousand United States Dollars (US$612,000)] made in favor of Skatron
Instruments, Inc., in consideration for the Accounts Receivable and the
Inventory;
In connection with the payment in full of the
intercompany debt owed by Skatron Instruments, Inc.
to Skatron as of the Closing Date:
(iv) Skatron Instruments, Inc. will assign to Skatron
the promissory note received from the Purchaser pursuant to Section 1.3(b)(iii)
and deliver the same to Skatron in full satisfaction of the intercompany debt
Skatron Instruments, Inc. to Skatron in the same amount;
(v) Skatron will execute and deliver to Skatron
Instruments, Inc. a document acknowledging payment in full of such intercompany
debt;
In connection with sale of one hundred percent (100%)
of the stock of Skatron Instruments, Inc. by Skatron
to Helge Skare:
(vi) Skatron will deliver to Helge Skare stock
certificate(s) representing one hundred percent (100%) of the issued and
outstanding stock of Skatron Instruments, Inc., duly endorsed (or accompanied by
duly executed stock powers) sufficient to transfer legal and beneficial
ownership of such shares to Helge Skare at the Closing;
(vii) Helge Skare will pay Skatron an amount equal to
one Norwegian Krone (NOK 1) in consideration for the sale of the shares of
Skatron Instruments, Inc. as contemplated by this Agreement;
(viii) [intentionally omitted]
In connection with the sale of one hundred
percent(100%) of the stock of Skatron by the Selling
Stockholders to the Purchaser:
3.
(ix) the Selling Stockholders will deliver to the
Purchaser the stock certificates representing the Shares, constituting one
hundred percent of the issued and outstanding shares of Skatron and comprised of
228,000 "A-shares" and 86,400 "B-shares," each such certificate duly endorsed
(or accompanied by duly executed stock powers) sufficient to transfer legal and
beneficial ownership of the Shares to the Purchaser at Closing;
(x) the Purchaser shall pay the Cash Share Purchase
Price to the Selling Stockholders as contemplated by Section 1.2(b), and shall
deposit the Escrow Amount with the Escrow Agent pursuant to the Indemnification
Escrow Agreement as contemplated by Section 1.2(c);
(xi) the parties will execute and deliver to each
other the Indemnification Escrow Agreement in the form of Exhibit D, duly
executed by the Escrow Agent;
(xii) the Selling Stockholders will deliver to the
Purchaser an opinion of counsel in a form reasonably acceptable to counsel to
Purchaser;
(xiii) the Selling Stockholders will deliver to the
Purchaser resignations of each director and officer of Skatron resigning their
positions, effective as of the Closing Date;
(xiv) immediately following the Closing, the
shareholder of Skatron will conduct an extraordinary stockholder's meeting to
accept the resignations of the members of the board of directors delivered
pursuant to Section 1.3(b)(vii) and elect new members of the board of directors
in their place;
(xv) immediately following the extraordinary
stockholder's meeting pursuant to Section 1.3(b)(viii), the board of directors
of Skatron will meet and (A) elect a chairman of the board, (B) accept the
resignations of the officers delivered pursuant to Section 1.3(b)(vii), and (C)
appoint new officers to serve in their place;
In connection with other related transactions between
certain of the parties to this Agreement:
(xvi) Skatron will pay in full the aggregate amount
of all debt owed by Skatron to Helge Skare, by delivery of immediately available
funds at Closing; and
(xvii) Helge Skare will execute and deliver to the
Purchaser a Consulting Agreement in the form of Exhibit F;
1.4 Noncompetition, Confidentiality, etc. In consideration for and as
an inducement to the Purchaser to enter into the transactions contemplated by
this Agreement, Helge Skare covenants and agrees as follows:
(a) For a period ending five (5) years after the Closing Date,
he shall not engage in any activity which Competes with the Business of the
Purchaser or any of its affiliates, provided, however, that it shall not be a
breach of the covenant contained in this Section 1.4 if: (i) he purchases or
otherwise acquires up to two percent (2%) of the outstanding capital stock of
any publicly traded Competing Entity; or (ii) renders services to any Competing
Entity if the services rendered, or his primary responsibilities to such
Competing Entity, do not relate to any activities of such Competing Entity which
compete with the Business of the Purchaser or any of its affiliates.
4.
(b) For a period ending five (5) years after the Closing Date,
he agrees not to interfere with the Business of the Purchaser by, directly or
indirectly, either for himself or any other person (i) soliciting, attempting to
solicit, inducing, or otherwise causing any employee of the Purchaser to
terminate his or her employment in order to become an employee, consultant, or
independent contractor to or for him or any third party; (ii) inducing or
attempting to induce any customer, client, vendor, supplier, licensee,
distributor or business relation thereof to cease doing business with the
Purchaser or any Affiliate; or (iii) soliciting the business of any customer,
client, vendor, or distributor of the Purchaser or any Affiliate, whether or not
the Purchaser or any Affiliate had personal contact with such person, with
respect to products or activities which compete with the Business of the
Purchaser or any Affiliate. He agrees that this restriction is reasonably
necessary to protect the Purchaser's legitimate business interest in its
substantial relationships with employees, specific customers and others referred
to above, and its valuable confidential business information.
(c) He acknowledges (i) that the Business of the Purchaser and
its affiliates is international in scope; (ii) that Competing Entities are or
could be located in any part of the world; (iii) that the Purchaser has required
that he make the covenants set forth in this Section 1.4 as a condition to its
purchase of the Shares owned by him; (iv) that the provisions of this Section
1.4 are reasonable and necessary to protect and preserve the Purchaser's
business, (v) that the Purchaser would be irreparably damaged if the
Noncompeting Party were to breach the covenants set forth in this Section 1.4,
and (vi) in the event of any such breach, the Company will be entitled to
injunctive relief in addition to any other remedies it may have at law or in
equity.
(d) He acknowledges and agrees that he has stood in a position
of trust and confidence with respect to Skatron prior to the date hereof and has
gained knowledge concerning Confidential Information belonging to the Purchaser
and its affiliates. He acknowledges and agrees that all Confidential Information
known or obtained by him, whether before or after the date hereof, is the
property of the Purchaser or one of the Affiliates of the Purchaser. He agrees
that he will not, at any time, disclose to any unauthorized persons or use for
his own account or for the benefit of any third party any Confidential
Information, whether or not embodied in writing or other physical form, without
the prior written consent of the Purchaser, unless and to the extent that the
Confidential Information is or becomes generally known to and available for use
by the public other than as a result of his fault or the fault of any other
person bound by a duty of confidentiality to the Purchaser. He agrees to deliver
to the Purchaser at the time of execution of this Agreement, and at any other
time the Purchaser or any Affiliate of the Purchaser may request, all documents,
memoranda, notes, plans, records, reports, and other documentation, models,
components, devices, or computer software, whether embodied in a disk or in
other form (and all copies of all of the foregoing), relating to the businesses,
operations, or affairs of the Purchaser and its Affiliates which contain
Confidential Information and any other Confidential Information that he may then
possess or have under his control.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE PRINCIPAL STOCKHOLDERS.
Except as disclosed in the Disclosure Schedule under a "Part"
corresponding to the subsection of this Section 2 to which an exception is
taken, the Principal Stockholders jointly and severally represent and warrant,
to and for the benefit of the Indemnitees, as of the date of this Agreement, as
follows:
2.1 Due Organization; No Subsidiaries; Etc.
(a) Skatron is a Norwegian company duly organized and validly
existing under the laws of Norway and has all necessary power and authority: (i)
to conduct its business in the manner in
5.
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Skatron Contracts.
(b) As of the Closing Date, Skatron has no subsidiaries except
for Skatron Instruments, Inc, and Skatron has never owned, beneficially or
otherwise, any shares or other securities of, or any direct or indirect interest
of any nature in, any Entity other than Skatron Instruments, Inc.
2.2 Charter Documents; Records.
(a) Skatron has delivered to the Purchaser (i) accurate and
materially complete copies of Skatron's charter documents and bylaws, including
all amendments thereto; (ii) accurate and complete copies of the current stock
records of Skatron covering the years 1996, 1997 and 1998; and (iii) accurate
and materially complete copies of the minutes and other records of the meetings
and other proceedings for the years 1996, 1997 and 1998 (including any actions
taken by written consent or otherwise without a meeting) of the stockholders of
Skatron, the board of directors of Skatron and all committees of the board of
directors of Skatron. There have been no official meetings or other proceedings
of the stockholders of Skatron, the board of directors of Skatron or any
committee of the board of directors of Skatron that are not fully reflected in
such minutes or other records.
(b) There has not been any violation of any of the provisions
of Skatron's charter documents or bylaws or of any resolution adopted by
Skatron's stockholders, Skatron's board of directors or any committee of
Skatron's board of directors; and no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a violation, the consequence
of which would constitute a Material Adverse Effect.
(c) The books of account, stock records, minute books and
other records of Skatron are accurate, up-to-date and complete, and have been
maintained in accordance with applicable Legal Requirements and customary
business practices.
2.3 Capitalization, Etc.
(a) The authorized share capital of Skatron consists of NOK
3,144,000, with 314,400 shares issued and outstanding, constituting all of the
Shares. The Selling Stockholders have, and the Purchaser will acquire at the
Closing, good and valid title to the Shares free and clear of any Encumbrances.
Of the Shares, the following individuals own, beneficially and of record, the
number of shares, constituting the percentage of the total number of issued and
outstanding shares, set forth next to each of their names:
"A-Shares" "B-Shares" Percent
---------- ---------- -------
Helge Skare 114,000 39,200 48.8%
Wiel Skare 82,560 39,200 38.7%
Steinar Faanes 31,440 -- 10.0%
Sten Skare -- 8,000 2.5%
------- ------ ------
TOTAL 228,000 86,400 100.0%
(b) All of the Shares (i) have been duly authorized and
validly issued, (ii) are fully paid and non-assessable, and (iii) have been
issued in full compliance with all applicable securities laws and other
applicable Legal Requirements. There are no options, warrants, rights
outstanding, agreements or contracts that could obligate Skatron to issue
additional shares of the capital stock or other securities of
6.
Skatron. The Selling Stockholders have delivered to the Purchaser accurate and
complete copies of the stock certificates evidencing the Shares.
2.4 Financial Statements. Skatron has delivered to the Purchaser the
following financial statements and notes (collectively, the "Skatron Financial
Statements"), all of which are accurate and complete in all material respects,
present fairly the consolidated financial position of Skatron and Skatron
Instruments, Inc. as of their respective dates and for the periods covered
thereby, and have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered:
(a) the audited consolidated balance sheets of Skatron and
Skatron Instruments, Inc. as of December 31, 1997 and December 31, 1998, and the
related audited consolidated statements of operations, changes in stockholders'
equity and cash flows of Skatron for the years then ended, together with the
notes thereto and the unqualified report and certification of Ernst & Young AS
relating thereto; and
(b) the unaudited balance sheets of Skatron Instruments, Inc.
as of December 31, 1997 and December 31, 1998, and the related audited
statements of operations, changes in stockholders' equity and cash flows of
Skatron Instruments, Inc. for the years then ended, as reviewed by Yount, Hyde &
Barbour, P.C. for the year 1998 and by Jim Downes for the year 1997;
2.5 Absence of Changes. Except as set forth in Part 2.5 of the
Disclosure Schedule, since December 31, 1998:
(a) there has not been any adverse change in Skatron's
business, condition, assets, liabilities, operations, financial performance or
net income (or in any aspect or portion thereof), and no event has occurred that
might have an adverse effect on Skatron's business, condition, assets,
liabilities, operations, financial performance or net income (or on any aspect
or portion thereof), the consequence of which would constitute a Material
Adverse Effect;
(b) there has not been any loss, damage or destruction to, or
any interruption in the use of, any of Skatron's assets (whether or not covered
by insurance), which would constitute a Material Adverse Effect;
(c) Skatron has not (i) declared, accrued, set aside or paid
any dividend or made any other distribution in respect of any shares of capital
stock, or (ii) repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;
(d) Skatron has not sold or otherwise issued any shares of
capital stock or any other securities;
(e) Skatron has not amended its charter documents and has not
effected or been a party to any Acquisition Transaction, recapitalization,
reclassification of shares, stock split, reverse stock split or similar
transaction;
(f) Skatron has not purchased or otherwise acquired any asset
from any other Person, except for assets acquired by Skatron in the Ordinary
Course of Business, and has not Skatron has not leased or licensed any asset
from any other Person except for leases of office equipment and similar items
involving less than an amount equal to US$10,000 in the aggregate.
(g) Skatron has not made any capital expenditures in excess of
an amount equal to US$10,000 in the aggregate.
7.
(h) Skatron has not sold or otherwise transferred, and has not
leased or licensed, any asset to any other Person except for products sold by
Skatron from its inventory in the Ordinary Course of Business;
(i) Skatron has not written off as uncollectible, or
established any extraordinary reserve with respect to, any account receivable or
other indebtedness;
(j) Skatron has not pledged or hypothecated any of its assets
or otherwise permitted any of its assets to become subject to any Encumbrance;
(k) Skatron has not made any loan or advance to any other
Person except for the extension of credit to its customers in the Ordinary
Course of Business;
(l) Skatron has not (i) established or adopted any Employee
Benefit Plan, (ii) paid any bonus or made any profit-sharing or similar payment
to, or increased the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its directors, officers
or employees, or (iii) otherwise paid any amounts to any Person other than in
the Ordinary Course of Business.
(m) Skatron has not entered into, and neither Skatron nor any
of the assets owned or used by Skatron has become bound by, any Contract that is
not an Excluded Contract;
(n) no Contract by which Skatron or any of the assets owned or
used by Skatron is or was bound, or under which Skatron has or had any rights or
interest, has been amended or terminated other than by its terms;
(o) Skatron has not incurred, assumed or otherwise become
subject to any Liability, other than accounts payable (of the type required to
be reflected as current liabilities in the "liabilities" column of a balance
sheet prepared in accordance with GAAP) or other liabilities incurred by Skatron
in the Ordinary Course of Business;
(p) Skatron has not discharged any Encumbrance or discharged
or paid any indebtedness or other Liability, except for (i) accounts payable
that are reflected as current liabilities in the "liabilities" column of the
Skatron Financial Statements or have been incurred by Skatron since December 31,
1998 in the Ordinary Course of Business, and (ii) those that have been
discharged or paid in the Ordinary Course of Business;
(q) Skatron has not forgiven any debt or otherwise released or
waived any right or claim;
(r) Skatron has not changed any of its methods of accounting
or accounting practices in any material respect;
(s) Skatron has not entered into any transaction or taken any
other action outside the Ordinary Course of Business; and
(t) Skatron has not agreed, committed or offered (in writing
or otherwise), and has not attempted, to take any of the actions referred to in
clauses "(c)" through "(s)" above.
8.
2.6 Assets.
(a) Skatron owns, and has good, valid and marketable title to,
all assets purported to be owned by it. Part 2.6 of the Disclosure Schedule
identifies (i) all assets having a book value equal to US$5,000 or more that are
owned or by Skatron, and (ii) all assets that are being leased or licensed to
Skatron. Except as set forth in Part 2.6 of the Disclosure Schedule, all of the
assets listed as owned by Skatron are owned free and clear of any Encumbrances.
(b) Each item of equipment, furniture, fixtures, improvements
and other tangible assets identified or required to be identified in Part 2.6 of
the Disclosure Schedule is structurally sound, free of defects and deficiencies
and in good condition and repair (ordinary wear and tear excepted), complies in
all material respects with, is being operated and otherwise used in material
compliance with, all applicable Legal Requirements, and is adequate for the uses
to which it is being put.
2.7 Bank Accounts. Part 2.7 of the Disclosure Schedule accurately sets
forth, with respect to each account maintained by or for the benefit of Skatron
at any bank or other financial institution: (a) the name and location of the
institution at which such account is maintained; (b) the name in which such
account is maintained and the account number of such account; (c) a description
of such account and the purpose for which such account is used; (d) the current
balance in such account; (e) the rate of interest being earned on the funds in
such account; and (f) the names of all individuals authorized to draw on or make
withdrawals from such account. There are no safe deposit boxes or similar
arrangements maintained by or for the benefit of Skatron.
2.8 Receivables; Major Customers.
(a) Part 2.8 of the Disclosure Schedule provides an accurate
and complete breakdown and aging of all accounts receivable, notes receivable
and other receivables of Skatron as of April 12, 1999, and of Skatron
Instruments, Inc. as of March 31, 1998.
(b) Except as set forth in Part 2.8 of the Disclosure
Schedule, all notes and accounts receivable shown on the Skatron Financial
Statements arose in the Ordinary Course of Business and have been collected or
are collectible in the book amounts thereof, less an amount not in excess of the
allowance for doubtful accounts provided for in such Financial Statements.
Allowances for doubtful accounts and warranty returns are adequate and have been
prepared in accordance with GAAP consistently applied and in accordance with the
past practices of Skatron. All of the Accounts Receivable of Skatron
Instruments, Inc. assigned to the Purchaser pursuant to the transaction
contemplated by Section 1.1(a) arose in the Ordinary Course of Business are
collectible in the aggregate amount of US$180,749.19. None of the receivables of
Skatron, and none of the Accounts Receivable, is subject to any material claim
of offset, recoupment, setoff or counterclaim and the Principal Stockholders
have no Knowledge of any specific facts or circumstances (whether asserted or
unasserted) that could give rise to any such claim. No material amount of
receivables is contingent upon the performance by Skatron (in the case of
Skatron's accounts receivable) or Skatron Instruments, Inc. (in the case of the
Accounts Receivable) of any obligation or contract other than normal warranty
repair and replacement in amounts specified in Part 2.8 of the Disclosure
Schedule. Except as disclosed in Part 2.8 of the Disclosure Schedule, none of
those accounts and notes receivable are due from any Person or Entity related by
ownership or otherwise to Skatron.
(c) Part 2.8 of the Disclosure Schedule accurately identifies,
and provides, for the years 1997 and 1998, an accurate and complete breakdown
of: (i) the revenues received by Skatron from each customer or other Person ,
and (ii) the revenues received by Skatron Instruments, Inc. in respect of
substantially all products and each state of the United States. Skatron has not
received any notice or other
9.
communication (in writing or otherwise), and has not received any other
information, indicating that any customer or other Person identified in Part 2.8
of the Disclosure Schedule may cease dealing with Skatron or may otherwise
reduce the volume of business transacted by such Person with Skatron below
historical levels.
2.9 Inventory.
(a) Except as set forth therein, Part 2.9 of the Disclosure
Schedule provides a breakdown of all inventory (including raw materials, work in
process and finished goods) of Skatron as of December 31, 1998, that is accurate
and complete in all material respects. All of Skatron's existing inventory
(including all inventory that is reflected on the Skatron Financial Statements
and that has not been disposed of by Skatron since December 31, 1995) and all of
the Inventory sold by Skatron Instruments, Inc. to the Purchaser hereunder: (a)
is of such quality and quantity as to be usable and saleable in the Ordinary
Course of Business; (b) has been priced at the lower of cost or market value
using the "first-in, first-out" method; (c) is free of any Encumbrance; and (d)
is free of any defect or deficiency except where any such defect or deficiency
is adequately covered by applicable warranties from third-party suppliers of the
same.
(b) The inventory levels maintained by Skatron are not
excessive in light of Skatron's normal operating requirements, and are adequate
for the conduct of Skatron's operations in the Ordinary Course of Business.
(c) The Inventory has a book value of US$342,931.89.
2.10 Real Property. Skatron does not own any real property or any
interest in real property, except for the leaseholds created under the real
property leases identified in Part 2.10 of the Disclosure Schedule. Part 2.10 of
the Disclosure Schedule provides an accurate and complete description of the
premises covered by said leases and the facilities located on such premises.
Skatron enjoys peaceful and undisturbed possession of such premises.
2.11 Proprietary Assets. Part 2.11 of the Disclosure Schedule provides
an accurate and complete description of all Proprietary Assets that are owned by
or licensed to Skatron or that are otherwise used or useful in connection with
Skatron's business. Skatron is not infringing, and neither Skatron nor Skatron
Instruments, Inc. has at any time infringed or received any notice or other
communication (in writing or otherwise) of any actual, alleged, possible or
potential infringement of, any Proprietary Asset owned or used by any other
Person. To the best of the Knowledge of Skatron and the Selling Stockholders, no
other Person is infringing, and no Proprietary Asset owned or used by any other
Person infringes or conflicts with, any Proprietary Asset owned or used by
Skatron. The Proprietary Assets identified in Part 2.11 of the Disclosure
Schedule constitute all of the Proprietary Assets necessary to enable Skatron to
conduct its business in the manner in which its business is currently being
conducted. Skatron Instruments, Inc. has no rights or proprietary interest in or
to the name "Skatron" or any trade mark, trade name, or service mark or name
including the name "Skatron."
2.12 Contracts.
(a) Part 2.12 of the Disclosure Schedule identifies and
provides an accurate and complete description of each Skatron Contract, except
for any Excluded Contract. Skatron has delivered to the Purchaser accurate and
complete copies of all Skatron Contracts identified in Part 2.12 of the
Disclosure Schedule, including all amendments thereto.
10.
(b) Each Skatron Contract is valid and in full force and
effect, and is enforceable by Skatron in accordance with its terms. To the best
of the Knowledge of the Principal Stockholders, each Person against which
Skatron has or may acquire any rights under any Skatron Contract is solvent and
is able to satisfy all of such Person's current and future monetary obligations
and other obligations and Liabilities to Skatron. No Person is renegotiating, or
has the right to renegotiate, any amount paid or payable to Skatron under any
Skatron Contract or any other material term or provision of any Skatron Contract
unless specified in the contract.
(c) Except as set forth in Part 2.12 of the Disclosure
Schedule, (i) no Person has materially violated or breached, or declared or
committed any default under, any Skatron Contract; (ii) no event has occurred,
and no circumstance or condition exists, that might (with or without notice or
lapse of time) (A) result in a material violation or breach of any of the
provisions of any Skatron Contract, (B) give any Person the right to declare a
default or exercise any remedy under any Skatron Contract, (C) give any Person
the right to accelerate the maturity or performance of any Skatron Contract, or
(D) give any Person the right to cancel, terminate or modify any Skatron
Contract; (iii) none of the Companies has received any notice or other
communication (in writing or otherwise) regarding any actual, alleged, possible
or potential violation or breach of, or default under, any Skatron Contract; and
(iv) Skatron has not waived any material rights under any Skatron Contract.
(d) Any agreement, contract or understanding between Skatron
and Camo Ltd. in connection with the distribution or sale of any products or
services of Skatron in the United Kingdom terminates on its terms on June 30,
1999 without any further action or notice required of Skatron, and may be
terminated upon no less than ninety (90) days' notice delivered to Camo Ltd.
without liability to Skatron.
2.13 Liabilities.
(a) Skatron has no Liabilities, except for: (i) liabilities
identified as such in the "liabilities" column of the Skatron Financial
Statements; (ii) liabilities incurred by Skatron in the Ordinary Course of
Business since December 31, 1998; and (iii) Skatron's obligations under the
Contracts listed in Part 2.13 of the Disclosure Schedule and under Excluded
Contracts, to the extent that the existence of such obligations is ascertainable
solely by reference to such Contracts.
(b) Part 2.13 of the Disclosure Schedule sets forth,
accurately and completely, (i) a list of Skatron's accounts payable as of
December 31, 1998; (ii) a list of all customer deposits and other deposits held
by Skatron as of the date of this Agreement; and (iii) a list of Skatron's
long-term debt as of the date of this Agreement.
(c) Skatron has no debt to any Related Party except for debt
to Helge Skare in the amount of NOK 1,369,861, and no debt to any other parties,
other than (i) short-term debt payable in full within one year from the date of
this Agreement, and (ii) a debt to Christiania Bank og Kreditkasse in the amount
not exceeding US$100,000.
2.14 Compliance With Legal Requirements.
(a) Except as set forth in Part 2.14 of the Disclosure
Schedule, Skatron is in full compliance with each Legal Requirement that is
applicable to it or to the conduct of its business or the ownership or use of
any of its assets; and Skatron has not received, at any time, any notice or
other communication (in writing or otherwise) from any Governmental Body or any
other Person regarding (A) any actual, alleged, possible or potential violation
of, or failure to comply with, any Legal Requirement, or (B) any actual,
alleged, possible or potential obligation on the part of Skatron to
11.
undertake, or to bear all or any portion of the cost of, any cleanup or any
remedial, corrective or response action of any nature, except where the failure
to be in full compliance with such Legal Requirements, individually or in the
aggregate, would not constitute a Material Adverse Effect.
2.15 Governmental Authorizations.
(a) Part 2.15 of the Disclosure Schedule identifies: (i) each
material Governmental Authorization that is held by Skatron; and (ii) each other
Governmental Authorization that, to the best of the Knowledge of Skatron and the
Selling Stockholders, is held by any of Skatron's employees and relates to
Skatron's business. Skatron has delivered to the Purchaser accurate and complete
copies of all of the Governmental Authorizations identified in Part 2.15 of the
Disclosure Schedule, including all renewals thereof and all amendments thereto.
Each Governmental Authorization identified or required to be identified in Part
2.15 of the Disclosure Schedule is valid and in full force and effect, except
for such failures which, individually or in the aggregate, would not constitute
a Material Adverse Effect.
(b) Except as set forth in Part 2.15 of the Disclosure
Schedule, and except for such failures which, individually or in the aggregate,
would not constitute a Material Adverse Effect: (i) Skatron and its employees
are in full compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified in Part 2.15
of the Disclosure Schedule; and (ii) no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time) (A)
constitute or result directly or indirectly in a violation of or a failure to
comply with any term or requirement of any Governmental Authorization identified
or required to be identified in Part 2.15 of the Disclosure Schedule, or (B)
result directly or indirectly in the revocation, withdrawal, suspension,
cancellation, termination or modification of any Governmental Authorization
identified or required to be identified in Part 2.15 of the Disclosure Schedule.
2.16 Employee and Labor Matters.
(a) Part 2.16 of the Disclosure Schedule accurately sets
forth, with respect to each employee of Skatron (including any employee of
Skatron who is on a leave of absence or on layoff status): (i) the name, date of
birth and the date as of which such employee was originally hired by Skatron or
any predecessor Entity of Skatron; (ii) such employee's title; (iii) the
aggregate amount of the compensation (including wages, salary, commissions,
director's fees, fringe benefits, bonuses, profit-sharing payments and other
payments or benefits of any type) received by such employee from Skatron with
respect to services performed in Skatron 's most recent fiscal year; (iv) such
employee's annualized compensation as of the date of this Agreement; and (v)
each Benefit Plan in which such employee participates or is eligible to
participate.
(b) Except as set forth in Part 2.16 of the Disclosure
Schedule, Skatron is not a party to or bound by, and Skatron has not ever been a
party to or bound by (i) any employment agreement during the period 1995 through
the present, or (ii) any union contract, collective bargaining agreement or
similar Contract.
(c) The employment of each of Skatron's employees subject only
to the requirements of the collective bargaining agreement identified in Part
2.16 of the Disclosure Schedule and the requirements mandated by applicable
laws. Skatron has delivered to the Purchaser accurate and complete copies of all
employee manuals and handbooks, disclosure materials, policy statements and
other materials relating to the employment of the current and former employees
of Skatron. Skatron has complied at all times with applicable labor laws and
regulations and with the provisions of applicable collective bargaining
agreements.
12.
(d) Except as set forth in Part 2.16 of the Disclosure
Schedule, Skatron is not engaged, and Skatron has not ever been engaged, in any
unfair labor practice of any nature. There has never been any slowdown, work
stoppage, labor dispute or union organizing activity, or any similar activity or
dispute, affecting Skatron or any of its employees. There is not now pending,
and to the Knowledge of the Principal Stockholders, no Person has threatened to
commence, any such slowdown, work stoppage, labor dispute or union organizing
activity or any similar activity or dispute. No event has occurred, and no
condition or circumstance exists, that might directly or indirectly give rise to
or provide a basis for the commencement of any such slowdown, work stoppage,
labor dispute or union organizing activity or any similar activity or dispute.
2.17 Benefit Plans. Part 2.18 of the Disclosure Schedule identifies and
provides an accurate description of each Benefit Plan. Skatron and the Selling
Stockholders have caused to be delivered to the Purchaser accurate and complete
copies of all documents relating to each Benefit Plan. Each Benefit Plan is
being and has at all times been operated and administered in full compliance
with the provisions thereof. Each contribution or other payment that is required
to have been accrued or made under or with respect to any Benefit Plan has been
duly accrued and made on a timely basis. Each Benefit Plan has at all times
complied and been operated and administered in full compliance with all
applicable Legal Requirements.
2.18 Tax Matters.
(a) Except as set forth in Part 2.18 of the Disclosure
Schedule, each Tax required to have been paid, or claimed by any Governmental
Body to be payable, by any of the Companies (whether pursuant to any Tax Return
or otherwise) has been duly paid in full or on a timely basis. Any Tax required
to have been withheld or collected by any of the Companies has been duly
withheld and collected; and (to the extent required) each such Tax has been paid
to the appropriate Governmental Body.
(b) Part 2.18 of the Disclosure Schedule accurately identifies
all Tax Returns required to be filed by or on behalf of any of the Companies
with any Governmental Body with respect to any taxable period ending on or
before the Closing Date ("Skatron Returns"). All Skatron Returns (i) have been
or will be filed when due, and (ii) have been, or will be when filed, accurately
and completely prepared in full compliance with all applicable Legal
Requirements. All amounts shown on the Skatron Returns to be due on or before
the Closing Date, and all amounts otherwise payable in connection with the
Skatron Returns on or before the Closing Date, have been or will be paid on or
before the Closing Date. Skatron has delivered to the Purchaser accurate and
complete copies of all Skatron Returns filed since December 31, 1995.
(c) The Skatron Financial Statements fully accrue all actual
and contingent liabilities for Taxes with respect to all periods through the
dates thereof in accordance with GAAP. Skatron will establish, in the Ordinary
Course of Business, reserves adequate for the payment of all Taxes for the
period from December 31, 1995 through the Closing Date, and Skatron will
disclose the dollar amount of such reserves to the Purchaser on or prior to the
Closing Date.
(d) Each Skatron Return relating to income Taxes that has been
filed with respect to any period ended on or prior to December 31, 1995 has
either (i) been examined and audited by all relevant Governmental Bodies, or
(ii) by virtue of the expiration of the limitation period under applicable Legal
Requirements, is no longer subject to examination or audit by any Governmental
Body. Part 2.18 of the Disclosure Schedule accurately identifies each
examination or audit of any Skatron Return that has been conducted since
December 31, 1988. Skatron has delivered to the Purchaser accurate and complete
copies of all audit reports and similar documents (to which Skatron has access)
relating to Skatron
13.
Returns. Except as set forth in Part 2.18 of the Disclosure Schedule, no
extension or waiver of the limitation period applicable to any of the Skatron
Returns has been granted (by any of the Companies or any other Person), and no
such extension or waiver has been requested from any of the Companies.
(e) Except as set forth in Part 2.18 of the Disclosure
Schedule, no claim or other Proceeding is pending or has been threatened against
or with respect to any of the Companies in respect of any Tax. There are no
unsatisfied Liabilities for Taxes (including liabilities for interest, additions
to tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by any of the Companies.
2.19 Environmental Matters. Skatron is not liable or potentially liable
for any response cost or natural resource damages at or with respect to any
site. Skatron has not ever received any notice or other communication (in
writing or otherwise) from any Governmental Body or other Person regarding any
actual, alleged, possible or potential Liability arising from or relating to the
presence, generation, manufacture, production, transportation, importation, use,
treatment, refinement, processing, handling, storage, discharge, release,
emission or disposal of any Hazardous Material. No Person has ever commenced or,
to the Knowledge of the Principal Stockholder, threatened to commence any
contribution action or other Proceeding against Skatron in connection with any
such actual, alleged, possible or potential Liability; and no event has
occurred, and no condition or circumstance exists, that may directly or
indirectly give rise to, or result in Skatron becoming subject to, any such
Liability.
2.20 Sale of Products; Performance of Services.
(a) Each product that has been sold by any of the Companies to
any Person: (i) conformed and complied in all respects with the terms and
requirements of any applicable warranty or other Contract and with all
applicable Legal Requirements; and (ii) was free of any design defects,
construction defects or other defects or deficiencies at the time of sale except
for those covered by warranty. All repair services and other services that have
been performed by the Companies were performed properly and in full conformity
with the terms and requirements of all applicable warranties and other Contracts
and with all applicable Legal Requirements.
(b) Skatron will not incur or otherwise become subject to any
Liability arising directly or indirectly from any product manufactured or sold,
or any repair services or other services performed by, any of the Companies on
or at any time prior to the Closing Date, except to the extent covered by
warranty.
(c) Except as listed in Part 2.20 of the Disclosure Schedule,
no product manufactured or sold by any of the Companies has been the subject of
any recall involving more than one unit of a similar type or other similar
action; and no event has occurred, and no condition or circumstance exists, that
might (with or without notice or lapse of time) directly or indirectly give rise
to or serve as a basis for any such recall or other similar action relating to
any such product.
(d) No customer or other Person has ever asserted or, to the
Knowledge of the Selling Stockholders, threatened to assert any claim against
Skatron or Skatron Instruments, Inc. (i) under or based upon any warranty
provided by or on behalf of any of the Companies, or (ii) under or based upon
any other warranty relating to any product sold by any of the Companies or any
services performed by either of them, other than those reflected in the service
records maintained by the Companies in the Ordinary Course of Business. To the
best of the Knowledge of Skatron and the Selling Stockholders, no event has
occurred, and no condition or circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give rise to or serve as a basis
for the assertion of any such claim.
14.
2.21 Insurance. Part 2.21 of the Disclosure Schedule accurately sets
forth, with respect to each insurance policy maintained by or at the expense of,
or for the direct or indirect benefit of, Skatron and its Board of Directors and
Administrative Director. Each of such policies is valid, enforceable and in full
force and effect. All of the information contained in the applications submitted
in connection with said policies was (at the times said applications were
submitted) accurate and complete in all material respect, and all premiums and
other amounts owing with respect to said policies have been paid in full or on a
timely basis. The nature, scope and amounts of the insurance coverage provided
by said policies are sufficient to adequately insure Skatron's business, assets,
operations, key employees, services and potential liabilities.
2.22 Related Party Transactions. Except as set forth in Part 2.22 of
the Disclosure Schedule: (a) no Related Party has, and no Related Party has at
any time since December 31, 1996 had, any direct or indirect interest of any
nature in any asset used in or otherwise relating to the business of any of the
Companies; (b) no Related Party is, or has at any time since December 31, 1996
been, indebted to any of the Companies; (c) since December 31, 1994, no Related
Party has entered into, or has had any direct or indirect financial interest in,
any Contract, transaction or business dealing of any nature involving any of the
Companies; (d) no Related Party is competing, or has at any time since December
31, 1994 competed, directly or indirectly, with any of the Companies in any
market served by any of the Companies; (e) no Related Party has any claim or
right against Skatron; and (f) no event has occurred, and no condition or
circumstance exists, that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a basis for any claim or right
in favor of any Related Party against Skatron.
2.23 Proceedings; Orders.
(a) Except as set forth in Part 2.23 of the Disclosure
Schedule, there is no pending Proceeding, and to the Knowledge of the Principal
Stockholders, no Person has threatened to commence any Proceeding: (i) that
involves Skatron or that otherwise relates to or might affect Skatron's business
or any of the assets owned or used by Skatron (whether or not Skatron is named
as a party thereto); or (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the
Transactions. Except as set forth in Part 2.23 of the Disclosure Schedule, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that might directly or indirectly give rise to or serve as a basis for
the commencement of any such Proceeding.
(b) There is no Order to which Skatron, or any of the assets
owned or used by Skatron, is subject; and none of the Principal Stockholders is
subject to any Order that relates to Skatron's business or to any of the assets
owned or used by Skatron.
(c) To the best of the Knowledge of Skatron and the Principal
Stockholders, no officer or employee of Skatron is subject to any Order that
prohibits such officer or employee from engaging in or continuing any conduct,
activity or practice relating to Skatron's business.
2.24 Authority; Binding Nature of Agreements.
(a) Each of Skatron and Skatron Instruments, Inc. has the
absolute and unrestricted right, power and authority to enter into and to
perform its respective obligations under this Agreement; and the execution,
delivery and performance by Skatron and Skatron Instruments, Inc. of this
Agreement have been duly authorized by all necessary action on the part of such
entity and its respective stockholders, board of directors and officers. This
Agreement constitutes the legal, valid and binding obligation of Skatron and
Skatron Instruments, Inc., enforceable against them in accordance with its
terms.
15.
(b) Each Selling Stockholder has the absolute and unrestricted
right, power and capacity to enter into and to perform such Selling
Stockholder's obligations under each of the Transactional Agreements to which
such Selling Stockholder is a party. This Agreement constitutes the legal, valid
and binding obligation of each of the Selling Stockholders, enforceable against
each of the Selling Stockholders in accordance with its terms. Upon the
execution of each of the other Transactional Agreements at the Closing, each of
such other Transactional Agreements will constitute the legal, valid and binding
obligation of each Selling Stockholder who is a party thereto, and will be
enforceable against such Selling Stockholder in accordance with its terms.
2.25 Non-Contravention; Consents. Except as set forth in Part 2.25 of
the Disclosure Schedule, neither the execution and delivery of any of the
Transactional Agreements, nor the consummation or performance of any of the
Transactions contemplated therein or thereby, including the payment to Helge
Skare of all debt owed to him by Skatron as of the Closing Date, will directly
or indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i)
any of the provisions of the certificate of incorporation or bylaws of Skatron
or Skatron Instruments, Inc., or (ii) any resolution adopted by the
stockholders, board of directors or any committee of the board of directors of
Skatron or Skatron Instruments, Inc.;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body or other Person the right to challenge any of the
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which Skatron, Skatron Instruments, Inc. or any of
the Selling Stockholders, or any of the assets owned or used by Skatron, is
subject, except where the same would not constitute a Material Adverse Effect;
(c) cause Skatron, the Purchaser or any affiliate of the
Purchaser to become subject to, or to become liable for the payment of, any Tax
other than any Tax generally applicable to the sale of the stock of a Norwegian
company to a foreign Person;
(d) [intentionally omitted]
(e) contravene, conflict with or result in a violation of any
of the terms or requirements of, or give any Governmental Body the right to
revoke, withdraw, suspend, cancel, terminate or modify, any Governmental
Authorization that is held by Skatron or any of its employees or that otherwise
relates to Skatron's business or to any of the assets owned or used by Skatron;
(f) contravene, conflict with or result in a violation or
breach of, or result in a default under, any provision of any Skatron Contract;
(g) give any Person the right to (i) declare a default or
exercise any remedy under any Skatron Contract, (ii) accelerate the maturity or
performance of any Skatron Contract, or (iii) cancel, terminate or modify any
Skatron Contract;
(h) contravene, conflict with or result in a violation or
breach of or a default under any provision of, or give any Person the right to
declare a default under, any Contract to which any of the Selling Stockholders
is a party or by which any of the Selling Stockholders is bound; or
(i) result in the imposition or creation of any Encumbrance
upon or with respect to any asset owned or used by Skatron, or upon or with
respect to any asset sold by Skatron Instruments, Inc. to the Purchaser
hereunder.
16.
Except as set forth in Part 2.25 of the Disclosure Schedule, neither
Skatron nor any of the Selling Stockholders was, is or will be required to make
any filing with or give any notice to, or to obtain any Consent from, any Person
in connection with the execution and delivery of any of the Transactional
Agreements or the consummation or performance of any of the Transactions.
2.26 Brokers. Neither Skatron nor any of the Selling Stockholders has
agreed or become obligated to pay, or has taken any action that might result in
any Person claiming to be entitled to receive, any brokerage commission,
finder's fee or similar commission or fee in connection with any of the
Transactions.
2.27 Selling Stockholders.
(a) Each Selling Stockholder has the capacity and financial
capability to comply with and perform all of such Selling Stockholder's
covenants and obligations under each of the Transactional Agreements to which
such Selling Stockholder is a party.
(b) No Selling Stockholder has, at any time: (i) made a
general assignment for the benefit of creditors, (ii) filed, or had filed
against such Selling Stockholder, any bankruptcy petition or similar filing,
(iii) suffered the attachment or other judicial seizure of all or a substantial
portion of such Selling Stockholder's assets, (iv) been convicted of, or pleaded
guilty to, any felony, or (v) taken or been the subject of any action that may
have an adverse effect on such Selling Stockholder's ability to comply with or
perform any of such Selling Stockholder's covenants or obligations under any of
the Transactional Agreements.
(c) No Selling Stockholder is subject to any Order that may
have an adverse effect on such Selling Stockholder's ability to comply with or
perform any of such Selling Stockholder's covenants or obligations under any of
the Transactional Agreements. There is no Proceeding pending, and to the
Knowledge of the Selling Stockholders, no Person has threatened to commence any
Proceeding, that may have an adverse effect on the ability of any Selling
Stockholder to comply with or perform any of such Selling Stockholder's
covenants or obligations under any of the Transactional Agreements. No event has
occurred, and no claim, dispute or other condition or circumstance exists, that
might directly or indirectly give rise to or serve as a basis for the
commencement of any such Proceeding.
2.28 Full Disclosure.
(a) None of the Transactional Agreements contains any untrue
statement of fact; and none of the Transactional Agreements omits to state any
fact necessary to make any of the representations, warranties or other
statements or information contained therein not misleading.
(b) Except as set forth in Part 2.28 of the Disclosure
Schedule, there is no fact within the Knowledge of Skatron or any of the
Principal Stockholders (other than publicly known facts relating exclusively to
political or economic matters of general applicability that will adversely
affect all comparable businesses) that (i) may have an Material Adverse Effect
on Skatron or on the ability of Skatron or any of the Selling Stockholders to
comply with or perform any covenant or obligation under any of the Transactional
Agreements, or (ii) may have the effect of preventing, delaying, making illegal
or otherwise interfering with any of the Transactions.
(c) All of the information set forth in the Disclosure
Schedule, and, to the Knowledge of the Principal Stockholders, all other
information regarding Skatron and Skatron Instruments, Inc. (and their business,
condition, assets, liabilities, operations, financial performance, net
17.
income and prospects) that has been furnished to the Purchaser or any of its
Representatives by or on behalf of Skatron or any of Skatron's Representatives,
is accurate and complete in all material respects.
(d) Skatron and the Principal Stockholders have provided the
Purchaser and the Purchaser's Representatives with full and complete access to
all of Skatron's records and other documents and data and to all records and
other documents and data of Skatron Instruments, Inc.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND SKATRON.
3.1 The Purchaser represents and warrants, to and for the benefit of
the Selling Stockholders, as of the date of this Agreement, as follows:
(a) Authority; Binding Nature of Agreement. The Purchaser has
the absolute and unrestricted right, power and authority to enter into and
perform its obligations under this Agreement, the execution, delivery and
performance of this Agreement by the Purchaser has been duly authorized by all
necessary action on the part of the Purchaser and its board of directors, and
this Agreement constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
(b) Brokers. The Purchaser has not agreed or become obligated
to pay, and has not taken any action that might result in any Person claiming to
be entitled to receive, any brokerage commission, finder's fee or similar
commission or fee in connection with any of the Transactions.
3.2 Neither Skatron nor the Purchaser makes any representations or
warranties of any kind to Helge Skare with respect to Skatron Instruments, Inc.,
the shares of that entity sold to Helge Skare pursuant to this Agreement, the
operations, financial condition, business or prospects of Skatron Instruments,
Inc., and any Liabilities which Skatron Instruments, Inc. may or may not have of
any type whatsoever. The sale of Skatron Instruments, Inc. to Helge Skare
pursuant to this Agreement is made on an "as is" basis and by his signature
hereto Helge Skare acknowledges that no representations or warranties of any
kind have been made to him with regard to the matters set forth in this Section
3.2.
3.3 Purchaser agrees to continue to carry insurance for the benefit of
the Board of Directors and the General Manager of Skatron, on terms and in
amounts which are reasonable and customary under the circumstances, for at least
twenty-four (24) months after the Closing.
SECTION 4. POST-CLOSING COVENANTS.
4.1 Transfer of GSA Contract. The parties covenant and agree to use
commercially reasonable efforts (a) to assign that certain agreement between
Skatron Instruments, Inc. and the United States Government Services Agency (the
"GSA Contract") to the Purchaser with the consent of each other party thereto,
or (b) otherwise to transfer to the Purchaser all of the rights, benefits and
obligations of Skatron Instruments, Inc. thereunder. Until such time as the GSA
Contract is assigned to Purchaser, the Purchaser covenants to prove such
information to Skatron Instruments, Inc. as may be necessary to comply with
Skatron Instruments Inc.'s quarterly or other periodic reporting obligations
under that Contract.
SECTION 5. INDEMNIFICATION, ETC.
18.
5.1 Survival of Representations and Covenants.
(a) The representations, warranties, covenants and obligations
of each party shall survive (without limitation): (i) the Closing and the sale
of the Accounts Receivable, the Inventory and the Shares to the Purchaser; (ii)
any sale or other disposition of any or all of the Shares by the Purchaser; and
(iii) any Acquisition Transaction effected by or otherwise involving the
Purchaser or Skatron. All of said representations, warranties, covenants and
obligations shall remain in full force and effect and shall survive for a period
of one year from the Closing Date, except for representations regarding tax
matters, employee benefits and environmental issues contained in Sections 2.17,
2.18 and 2.19, which representations and warranties shall survive for a period
of ten (10) years.
(b) For purposes of this Agreement, each statement or other
item of information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Principal Stockholders in this Agreement.
5.2 Indemnification by Principal Stockholders.
(a) Subject to the survival periods set forth in Section 5.1,
the Principal Stockholders, jointly and severally, shall hold harmless and
indemnify each of the Indemnitees from and against, and shall compensate and
reimburse each of the Indemnitees for, any Damages which are directly or
indirectly suffered or incurred by any of the Indemnitees or to which any of the
Indemnitees may otherwise become subject at any time (regardless of whether or
not such Damages relate to any third-party claim) and which arise directly or
indirectly from or as a direct or indirect result of, or are directly or
indirectly connected with and of the following, or to any Proceeding relating
directly or indirectly to any of the following (including any Proceeding
commenced by any Indemnitee for the purpose of enforcing any of its rights under
this Section 5):
(i) any Breach of any representation or warranty made
by Skatron or any of the Selling Stockholders in this Agreement;
(ii) any Breach of any representation, warranty,
statement, information or provision contained in the Disclosure Schedule;
(iii) any Breach of any covenant or obligation of any
of the Selling Stockholders; or
(iv) any Tax owed by Skatron Instruments, Inc.
relating to the period prior to the Closing Date.
The Principal Stockholders acknowledge and agree that, if Skatron shall
suffer any Damages as a result of any of the matters set forth in Section
5.2(a), then the Purchaser itself shall be deemed, by virtue of its ownership of
common stock of Skatron, to have incurred Damages as a result thereof. Nothing
contained in this Section 5.2(b) shall have the effect of (i) limiting the
circumstances under which the Purchaser may otherwise be deemed to have incurred
Damages for purposes of this Agreement, (ii) limiting the other types of Damages
that the Purchaser may be deemed to have incurred (whether in connection with
any such Breach or Liability or otherwise), or (iii) limiting the rights of
Skatron or any of the other Indemnitees under this Section 5.2.
19.
5.3 Threshold and Maximum Amount of Indemnification Obligation.
(a) Subject to Section 5.3(b), the Selling Stockholders shall
not be required to make any indemnification payment pursuant to Section 5.2 for
any Breach of any of their representations and warranties until such time as the
total amount of all Damages (including the Damages arising from such Breach and
all other Damages arising from any other Breaches of any representations or
warranties) that have been directly or indirectly suffered or incurred by any
one or more of the Indemnitees, or to which any one or more of the Indemnitees
has or have otherwise become subject, exceeds $100,000 in the aggregate. At such
time as the total amount of such Damages exceeds $100,000 in the aggregate, the
Indemnitees shall be entitled to be indemnified against the full amount of such
Damages (and not merely the portion of such Damages exceeding $100,000),
provided, however, that the obligations of the Principal Stockholders to defend,
indemnify and hold harmless the Indemnitees shall terminate when the Selling
Stockholders (and not only the Principal Stockholders) shall have paid an
aggregate of Seven Million United States Dollars (US$7,000,000) in respect of
Damages under this Section 5.
(b) The limitation on the Selling Stockholders'
indemnification obligations that is set forth in Section 5.3(a) shall not apply
to Damages arising from willful Breach or fraud.
5.4 No Contribution. Each Selling Stockholder waives, and acknowledges
and agrees that such Selling Stockholder shall not have and shall not exercise
or assert or attempt to exercise or assert, any right of contribution or right
of indemnity or any other right or remedy against Skatron in connection with any
indemnification obligation or any other Liability to which such Selling
Stockholder may become subject under any of the Transactional Agreements or
otherwise in connection with any of the Transactions.
5.5 Setoff. In addition to any rights of setoff or other rights that
the Purchaser or any of the other Indemnitees may have at common law or
otherwise, the Purchaser shall have the right to set off the amount of any award
which may be received as a result of an arbitration proceeding pursuant to
Section 6.4 against any amount otherwise payable by any Indemnitee to any of the
Selling Stockholders.
5.6 Exclusivity of Indemnification Remedies. Except in the case of
fraud or willful breach of any of the representations, warranties or covenants
of the Principal Stockholders, and except in the case of any breach of the
covenants contained in Section 1.4 hereof, the rights of the Indemnitees under
this Section 5 shall constitute their exclusive remedy in respect of any Damages
arising, directly or indirectly, from the matters set forth in Section 5.2(a).
5.7 Defense of Third Party Claims. In this Section 5.7, Indemnities
shall be referred to at times as the "Indemnified Parties" or "Indemnified
Party" and Principal Stockholders shall be referred to at times herein as the
"Indemnifying Party". If a third party shall notify an Indemnified Party with
respect to any matter that may give rise to a claim for indemnification under
the indemnity set forth above, the procedure set forth below shall be followed.
(a) Notice. The Indemnified Party shall give to the
Indemnifying Party written notice of any claim, suit, judgment, or matter for
which indemnity may be sought promptly, but in any event within fifteen (15)
days after the Indemnified Party receives notice thereof; provided, however,
that failure by Indemnified Party to give such notice shall not relieve
Indemnifying Party from any liability it shall otherwise have pursuant to this
Agreement except to the extent Indemnifying Party is actually prejudiced by such
failure. Such notice shall set forth in reasonable detail (i) the basis for such
potential claim, (ii) the Sections of the Agreement pursuant to which the claim
is made, and (iii) the dollar amount of such claim, and shall be given in
accordance with Section 6.6 below.
20.
(b) Defense of Claim. The Indemnified Party shall have the
right to be represented by counsel of its choice and to defend or otherwise
control the handling of any claim or Proceeding for which indemnity is sought.
Notwithstanding the foregoing, the Indemnifying Party may elect (by written
notice within fifteen (15) days after receipt of written notice under Section
5.9(a)) to assume the defense of or otherwise control the handling of any such
claim or Proceeding for which indemnity is sought subject to the imitations
provided herein and, in the case of the Selling Shareholders, subject to the sum
of (x) the funds remaining in escrow pursuant to the Escrow Agreement not
already reserved for resolution of other claims of indemnification and (y) any
other funds placed in escrow pursuant to an agreement in form and substance
acceptable to the Indemnified Party and payable to the Indemnified Party in the
event of any judgment or settlement in respect of the claim or Proceeding, in
which case the Indemnifying Party shall and hereby does indemnify and hold
harmless the Indemnified Party from and against any and all Damages,
notwithstanding the fact that the Indemnifying party may not have been so liable
to the Indemnified Party had the Indemnifying Party not elected to assume the
defense of or to otherwise control the handling of such claim, suit judgment or
other matter.
If the Indemnifying Party so elects to assume the defense of any such
claim or Proceeding:
(i) The Indemnifying Party shall proceed to defend
such claim or Proceeding in a diligent manner with counsel reasonably
satisfactory to the Indemnified Party, it being agreed that for proceedings
conducted in the United States, the firm of Wilson Sonsini Goodrich & Rosati
P.C., and for proceedings conducted in Norway, the firm of Wiersholm Mellbye and
Bech, are satisfactory to the Indemnified Parties;
(ii) the Indemnified Party shall make available to
the Indemnifying Party any documents and materials in the possession of the
Indemnified party that may be necessary to the defense of such claim or
Proceeding;
(iii) the Indemnifying party shall keep the
Indemnified Party informed of all material developments and events relating to
such claim or Proceeding;
(iv) the Indemnified Party shall have the right to
participate in the defense of such claim or Proceeding; and
(v) the Indemnifying Party shall not settle, adjust
or compromise such claim or Proceeding without the prior written consent of the
Indemnified party, which consent shall not unreasonably be withheld. If the
Indemnifying Party does not (or cannot) elect to designate to assume the defense
of any such claim or Proceeding, the Indemnified Party may proceed with the
defense of such claim or Proceeding on its own. If the Indemnified Party so
proceeds with the defense of any such claim or Proceeding on its own:
(vi) All expenses relating to the defense of such
claim or Proceeding (whether or not incurred by the Indemnified Party) shall be
included within the definition of "Damages" for purposes of this Section 5.;
(vii) the Indemnifying Party shall make available to
the Indemnified Party any documents and materials in the possession or control
of any of the Indemnifying Party that may be necessary to the defense of such
claim or Proceeding;
21.
(viii) the Indemnified Party shall keep the
Indemnifying Party informed of all material developments and events relating to
such claim or Proceeding; and
(ix) the Indemnified Party shall not have the right
to settle, adjust or compromise such claim or Proceeding without the prior
written consent of the Indemnifying Party, which consent shall not unreasonably
be withheld.
5.8 Exercise of Remedies by Indemnitees Other Than Purchaser. No
Indemnitee (other than the Purchaser or any successor thereto or assign thereof)
shall be permitted to assert any indemnification claim or exercise any other
remedy under this Agreement unless the Purchaser (or any successor thereto or
assign thereof) shall have consented to the assertion of such indemnification
claim or the exercise of such other remedy.
SECTION 6. MISCELLANEOUS PROVISIONS.
6.1 Joint and Several Liability. Subject to Section 5.5, each Selling
Stockholder agrees that such Selling Stockholder shall be jointly and severally
liable with each of the other Selling Stockholders for the due and timely
compliance with and performance of each of the covenants and obligations of such
other Selling Stockholders set forth in this Agreement, provided, however, that
under no circumstances shall Steinar Faares or Sten Skare have any liability for
representations and warranties made by the Principal Stockholders herein.
6.2 Further Assurances. Each party hereto shall execute and/or cause to
be delivered to each other party hereto such instruments and other documents,
and shall take such other actions, as such other party may reasonably request
(prior to, at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions. Such actions shall include, but not be
limited to, (a) the Purchaser assuming financial responsibility for the
telephones at the Skatron Instruments, Inc. premises from and after the Closing
Date and the Principal Stockholders cooperating in transferring such telephones
to the Purchaser, if the Purchaser so requests; (b) the Purchaser removing the
purchased Inventory from the Skatron Instruments, Inc. premises as quickly as
commercially reasonable; (c) the Purchaser filling all unfilled orders accepted
by Skatron Instruments, Inc. for Skatron products from and after the Closing
Date; and (d) the Purchaser accepting and discharging warranty and service
obligations for Skatron products in the field for which Skatron Instruments,
Inc. had responsibility prior to the Closing Date.
6.3 Dispute Resolution. The parties recognize that disputes between the
parties may from time to time arise relating to the parties' rights and/or
obligations under this Agreement. It is the objective of the parties to
establish procedures to facilitate the resolution of such disputes in an
expedient manner by mutual cooperation. The parties therefore agree that, before
any arbitration or other proceeding (a "Proceeding") may be commenced under this
Agreement, the parties involved in the dispute to be submitted to a Proceeding
shall discuss their differences during a period of no less than sixty (60) days
in an attempt to reach a resolution of the dispute without the institution of a
Proceeding. If the dispute is not resolved through those discussions, either
party may proceed under the terms of Section 6.4.
6.4 Arbitration.
(a) Agreement to Arbitrate. The parties agree that any
dispute, controversy or claim arising out of or relating to this Agreement, or
to the interpretation, performance, breach, termination or invalidity thereof,
where the parties have failed to reach agreement according to Section 6.3, shall
be resolved by binding arbitration in accordance with the UNCITRAL Arbitration
Rules in effect on the date hereof. The arbitration will be administered by the
American Arbitration Association ("AAA") in San Francisco, California, United
States of America in accordance with its "Procedures for
22.
Cases Under the UNCITRAL Arbitration Rules". The arbitration will be conducted
in the city of San Francisco, California, United States of America, unless the
parties agree in writing to another location. The number of arbitrators will be
three (3). The language to be used in all arbitral proceedings and documents
submitted to or presented before the arbitrator will be in English or translated
into English by a court-certified translator.
(b) Notice of Arbitration. The arbitration will begin on the
date on which the notice of demand for arbitration is delivered to the
responding party or parties (collectively, the "Respondent") at the address
appearing for that party in Section 6.7. The party or parties giving notice of
demand for arbitration (collectively, the "Complainant") will deliver a copy of
such notice to the AAA. The notice of demand for arbitration will include the
following and any other information required by the AAA: (i) a demand that the
dispute be submitted to arbitration; (ii) the names and domiciles of the parties
to the arbitration (the "parties"); (iii) a reference to this Agreement and this
arbitration provision; and (iv) a summary of the claim being submitted to
arbitration and a statement of the amount being claimed. The notice of demand
for arbitration may be delivered by the method set forth in Section 6.6 or by
any other method of service of process permitted by the law of the place where
such delivery is made.
(c) Selection of the Arbitral Panel. Within thirty (30) days
of the date on which notice of demand for arbitration is delivered to the
Respondent and the AAA, the AAA will appoint the arbitral panel ("Arbitral
Panel"), which shall be comprised of lawyers familiar with international
transactions.
(d) Certain Procedures; Confidentiality. The Respondent will
have thirty (30) days from the date on which the notice of demand of arbitration
is served in order to respond to the demand. If Respondent does not answer the
demand within such time period, it will be deemed to have denied all of the
assertions made by the Complainant in the demand. The arbitrator will provide
notice to the parties at least sixty (60) days in advance of the date on which
the hearing will be conducted for purposes of presenting evidence and arguments,
which notice shall indicate the date and time for the hearing. The hearing will
be commenced within ninety (90) days of the selection of the arbitrator, and
will be completed within twenty (20) days of commencing, unless the arbitrator
determines that a longer period is required. At least ten (10) days prior to the
date of the hearing, the parties will deliver to the arbitrator: (i) the names
and addresses of any witness that they intend to present and an affidavit or
declaration under penalty of perjury, duly signed by each witness, which will
detail the content of his or her testimony; (ii) the documents that will be
submitted at the hearing; and (iii) a description of any other evidence to be
presented in the arbitration. The parties agree to continue performing their
respective obligations under this Agreement and any other agreement between them
during the resolution of any dispute submitted to arbitration hereunder, unless
ordered otherwise by a court of competent jurisdiction or the arbitrator. All
the matters regarding or submitted to the arbitrator during any arbitration
proceeding herein will be treated as "confidential information" and the parties
together with any and all arbitrators will maintain its confidentiality.
(e) Interim Relief. The parties expressly agree that prior to
the selection of the arbitrator, nothing in this Agreement shall prevent the
parties from applying to a court that would otherwise have jurisdiction for
provisional or interim measures. After the arbitrator is selected, the
arbitrator shall have sole jurisdiction to hear such applications.
(f) Arbitral Award. The arbitrator's award will be issued no
later than thirty (30) days after the conclusion of the arbitration hearing. The
arbitrator will issue his or her decision in writing, and shall set forth the
reasons for that decision and any award made in favor of any of the parties
appearing before the arbitrator. The award of the arbitrator will be final and
binding, without additional recourse, and will be the exclusive remedy of the
parties for all claims, counterclaims, issues or
23.
accountings presented or pleaded to the arbitrator. The arbitrator will render
the award strictly in accordance with this Agreement and shall not have
authority to change or diverge from any provision of this Agreement. The
arbitral award will be granted and paid in United States Dollars, exclusive of
any tax, deduction or offset.
(g) Judgment on Award. Judgment upon the arbitral award may be
entered in any court of competent jurisdiction. Any additional costs, fees or
expenses incurred in enforcing the arbitral award shall be charged against the
party that resists its enforcement.
(h) Expenses of Arbitration; Attorneys' Fees. In any
arbitration proceeding hereunder, all costs of arbitration, including, without
limitation, the fees and expenses of the arbitrator, expenses of witnesses, the
cost of the record or transcripts thereof, if any, the cost of translating
documents into English for use in the course of the arbitration, administrative
fees, the attorneys' fees of the parties, and all other fees and costs shall be
allocated to the parties as determined by the arbitrator.
(i) Law Applicable. Notwithstanding anything to the contrary
contained herein, the law applicable to the validity of this Section 6.4, the
conduct of the arbitration, including any resort to a court for provisional or
interim remedies, the enforcement of any award and any other question of
arbitration law or procedure, shall be the United States Federal Arbitration
Act, 9 U.S.C. ss 1, et seq.
6.5 Fees and Expenses. The parties shall each bear and pay all of their
own fees, costs and expenses, including all legal fees and expenses payable to
their respective legal, tax and accounting advisors ("Expenses") that have been
incurred or that are in the future incurred by them in connection with the
negotiation, consummation and performance of the Transactions and all
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the Transactions, provided, however, that the
Purchaser shall reimburse the Principal Stockholders for any such Expenses
reasonably incurred, up to a maximum of US$50,000. Any amount of such Expenses
incurred or paid by Skatron shall be applied toward such maximum amount, and, to
the extent such maximum amount is met or exceeded, any excess amount incurred or
paid by Skatron shall constitute a claim of the Purchaser against the Escrow
Account under the terms of the Indemnification Escrow Agreement. For purposes of
this Section 6.3, "Expenses" shall not include any fees, costs or expenses
incurred by the Principal Stockholders or Skatron in connection with the
preparation of its audited financial statements or in the Ordinary Course of
Business.
6.6 Attorney's Fees. If any legal action or other legal proceeding
relating to any of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought against any party
hereto, the prevailing party shall be entitled to recover reasonable attorneys'
fees, costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
6.7 Notices. All notices, requests, demands or other communications
provided herein shall be made in writing and shall be deemed to have been duly
delivered (i) if delivered personally overnight, including by reputable
international courier service five (5) Business Days after delivery to the
courier or, if earlier, upon delivery against a signed receipt therefor or (ii)
upon transmission by facsimile or telecopier, which transmission is confirmed,
in either case addressed to the party to be notified at the address set forth
below or at such other address as such party shall have notified the other
parties hereto, by notice given in conformity with this Section 6.6:
24.
if to the Selling Stockholders:
Helge Skare
Tord Pedersens gt 38
3014 Drammen
Norway
Wiel Skare
Tord Pedersens gt 38
3014 Drammen
Norway
Sten Skare
Tord Pedersens gt 38
3014 Drammen
Norway
Steinar Faanes
HB Haraldsengate 64A
3188 Horten
Norway
with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94306
Attn: Roger E. George
Facsimile: 650-845-5000
if to the Purchaser:
Molecular Devices Corporation
1311 Orleans Drive
Sunnyvale, CA 94089
Attn: President
Facsimile: 408-747-3601
with a copy to:
Cooley Godward LLP
3000 El Camino Real
Palo Alto, CA 94306
Attn: Thomas M. Shoesmith
Facsimile: 650-857-0663
6.8 Publicity. During a period of one year following date of this
Agreement, the Purchaser shall not make any press release or other public
announcement relating to the Transactions contemplated by this Agreement without
advance notice to the Principal Stockholders of its intention to make such
release or public announcement, providing to such parties a reasonable
opportunity to comment thereon. The Selling Stockholders shall not make any
press release or other public announcement relating to the
25.
Transactions contemplated by this Agreement without the prior written consent of
the Purchaser, which consent will not be unreasonably withheld. The parties
acknowledge and agree that any such release or public announcement shall not
disclose the consideration paid for any Transaction hereunder unless the
disclosing party reasonably concludes that such disclosure is required by the
securities laws of the jurisdiction to which the disclosing party is subject.
The Purchaser shall timely make all disclosures relating to the Transactions
required under Norwegian law.
6.9 Time of the Essence. Time is of the essence of this Agreement.
6.10 Headings. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
6.11 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
6.12 Force Majeure. No party shall be liable to any other party
hereunder for any Breach caused by government action, war, fire, explosion,
flood, strike, lockout, earthquake, embargo, act of God, or any other similar
cause beyond the control of the breaching party, provided that such party has
exerted all reasonable efforts to avoid or remedy such causes.
6.13 Governing Law; Venue. This Agreement shall be construed in
accordance with, and governed in all respects by, the internal laws of the State
of California (without giving effect to principles of conflicts of laws), except
that any provision of this Agreement relating to or concerning hazardous
materials or environmental protection laws shall be construed with reference to,
and governed by, the laws of the jurisdiction in which such hazardous materials
are found. Subject to the provisions of Section 6.4, any lawsuit between the
parties connected with this Agreement shall be submitted to the sole
jurisdiction of the courts of the State of California, County of Santa Clara,
or, if it has or can acquire jurisdiction, in the United States District Court
for the Northern District of California, except that any legal action or
proceeding for the recognition or enforcement of any judgment obtained from such
court or any arbitral panel may be brought in any court of competent
jurisdiction. Each of the parties consent to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or proceeding and
waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world.
6.14 Successors and Assigns. This Agreement shall be binding upon:
Skatron and its successors and assigns (if any); the Selling Stockholders and
their respective personal representatives, executors, administrators, estates,
heirs, successors and assigns (if any); and the Purchaser and its successors and
assigns (if any). This Agreement shall inure to the benefit of: Skatron; the
Selling Stockholders; the Purchaser; the other Indemnitees and the respective
successors and assigns (if any) of the foregoing. The Purchaser may freely
assign any or all of its rights under this Agreement (including its
indemnification rights under Section 5), in whole or in part, to any other
Person without obtaining the consent or approval of any other party hereto or of
any other Person.
6.15 Remedies Cumulative; Specific Performance. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). Each Selling
Stockholder agrees that: (a) in the event of any Breach or threatened Breach by
such Selling Stockholder of any covenant, obligation or other provision set
forth in this Agreement, the Purchaser shall be entitled (in addition to any
other remedy that may be available to it) to (i) a decree or order of specific
performance or mandamus to enforce the observance and performance of such
covenant, obligation or other provision, and (ii) an injunction restraining such
Breach or threatened Breach; and (b) neither the Purchaser nor any other
Indemnitee
26.
shall be required to provide any bond or other security in connection with any
such decree, order or injunction or in connection with any related action or
Proceeding.
6.16 Waiver.
(a) No failure on the part of any Person to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of any Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
6.17 Amendments. This Agreement may not be amended, modified, altered
or supplemented other than by means of a written instrument duly executed and
delivered on behalf of each party affected thereby.
6.18 Severability. In the event that any provision of this Agreement,
or the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
6.19 Parties in Interest. Except for the provisions of Section 5
hereof, none of the provisions of this Agreement is intended to provide any
rights or remedies to any Person other than the parties hereto and their
respective successors and assigns (if any).
6.20 Entire Agreement. The Transactional Agreements set forth the
entire understanding of the parties relating to the subject matter thereof and
supersede all prior agreements and understandings among or between any of the
parties relating to the subject matter thereof.
6.21 Construction.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
(b) The parties hereto agree that all parties have cooperated
in the drafting of this Agreement and therefore any rule of construction to the
effect that ambiguities are to be resolved against a drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
27.
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Agreement and Exhibits to this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
28.
The parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.
"PURCHASER": MOLECULAR DEVICES CORPORATION,
a Delaware corporation
By: /s/Joseph D. Keegan
----------------------------------------
Print Name: Joseph D. Keegan
"SELLING STOCKHOLDERS":
/s/ Helge Skare
----------------------------------------
HELGE SKARE
/s/ Wiel Skare
----------------------------------------
WIEL SKARE
/s/ Steinar Faanes
----------------------------------------
STEINAR FAANES
/s/ Sten Skare
----------------------------------------
STEN SKARE
"SKATRON": SKATRON INSTRUMENTS AS,
a Norwegian company
By: /s/Helge Skare
----------------------------------------
Print Name: Helge Skare
"SKATRON INSTRUMENTS, INC.": SKATRON INSTRUMENTS, INC.,
a Virginia corporation
By: /s/Helge Skare
----------------------------------------
Print Name: Helge Skare
[SIGNATURE PAGE TO STOCK AND ASSET PURCHASE AGREEMENT]
SIGNATURE PAGE
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Accounts Receivable. "Accounts Receivable" shall mean the accounts
receivable sold, assigned and transferred to the Purchaser pursuant to this
Agreement, as more specifically defined in Section 1.3(b)(i).
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of all or any portion of
Skatron's business or assets (other than in the Ordinary Course of
Business);
(b) the issuance, sale or other disposition of (i) any capital
stock of Skatron, (ii) any option, call, warrant or right (whether or
not immediately exercisable) to acquire any capital stock of Skatron,
or (iii) any security, instrument or obligation that is or may become
convertible into or exchangeable for any capital stock of Skatron; or
(c) any merger, consolidation, business combination, share
exchange, reorganization or similar transaction involving Skatron.
Affiliate. Affiliate means any person or entity directly or indirectly
controlling by or under common control with either party, where "control" means
the direct or indirect ownership of fifty percent (50%) or more of the
outstanding voting securities of an entity, or the right to receive fifty
percent (50%) or more of the profits or earnings of any entity, or the ability
to control management of an entity.
Agreement. "Agreement" shall mean the Stock Purchase Agreement to which
this Exhibit A is attached (including the Disclosure Schedule), as it may be
amended from time to time.
Asset Purchase Price. "Asset Purchase Price" shall have the meaning
assigned to that term in Section 1.2(a).
Breach. There shall be deemed to be a "Breach" of a representation,
warranty, covenant, obligation or other provision if there is or has been (a)
any inaccuracy in or breach of, or any failure to comply with or perform, such
representation, warranty, covenant, obligation or other provision, or (b) any
claim (by any Person) or other circumstance that is inconsistent with such
representation, warranty, covenant, obligation or other provision; and the term
"Breach" shall be deemed to refer to any such inaccuracy, breach, failure, claim
or circumstance.
Business. "Business" means the current field of business of the
Purchaser and any of its affiliates, together with any prospective field of
business thereof which is the subject of a public announcement by the Purchaser
or of which Helge Skare actually becomes aware.
Cash Share Purchase Price. "Cash Share Purchase Price" shall have the
meaning specified in Section 1.2(b).
Closing. "Closing" shall have the meaning specified in Section 1.3(a)
of the Agreement.
Closing Date. "Closing Date" shall have the meaning specified in
Section 1.3(a) of the Agreement.
Companies. "Companies" shall mean Skatron and Skatron Instruments, Inc.
Company Plan. "Company Plan" shall mean any Current Benefit Plan or
Past Benefit Plan.
Competing Entity. "Competing Entity" means a corporation or other
entity that Competes.
Compete. "Compete" shall mean to directly or indirectly, engage or
invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, or control of, be employed by, consult for, or
render services or advice to, any entity or any business unit of any entity
whose business competes in whole or in part with the Business of the Purchaser
or any affiliate.
Confidential Information. "Confidential Information" means any and all
trade secrets concerning the business and affairs of Skatron, the Purchaser or
any affiliate of either, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information, historical financial
statements, financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials, any and all notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Molecular Devices Group containing or based, in whole or in part, on any
information included in the foregoing, and any other information, however
documented, of Skatron, the Purchaser or any Affiliate that is a trade secret.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral, implied or other
agreement, contract, understanding, arrangement, instrument, note, guaranty,
indemnity, representation, warranty, deed, assignment, power of attorney,
certificate, purchase order, work order, insurance policy, benefit plan,
commitment, covenant, assurance or undertaking of any nature.
Current Benefit Plan. "Current Benefit Plan" shall mean any Employee
Benefit Plan that is currently in effect and:
(a) that was established or adopted by any of the Companies or
any ERISA Affiliate or is maintained or sponsored by Skatron;
(b) in which Skatron participates;
(c) with respect to which Skatron or any ERISA Affiliate is or
may be required or permitted to make any contribution; or
(d) with respect to which Skatron or any ERISA Affiliate is or
may become subject to any Liability.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, Liability, claim, demand, settlement, judgment, award, fine, penalty,
Tax, fee (including the reasonable amount of any legal fee, expert fee,
accounting fee or advisory fee), charge, cost (including the reasonable cost of
any investigation) or expense of any nature, together with interest on such
Damages as determined by the Arbitral Panel.
Disclosure Schedule. "Disclosure Schedule" shall mean the schedule
(dated as of the date of the Agreement) delivered to the Purchaser on behalf the
Principal Stockholders, a copy of which is attached to the Agreement and
incorporated in the Agreement by reference.
Employee Benefit Plan. "Employee Benefit Plan" shall have the meaning
specified in Section 3(3) of ERISA.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of possession, lease, tenancy, license,
encroachment, covenant, infringement, interference, Order, proxy, option, right
of first refusal, preemptive right, community property interest, legend, defect,
impediment, exception, reservation, limitation, impairment, imperfection of
title, condition or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society,
political party, union, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization or
entity.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974.
ERISA Affiliate. "ERISA Affiliate" shall mean any Person that is, was
or would be treated as a single employer with any of the Companies under Section
414 of the Code.
Excluded Contract. "Excluded Contract" shall mean any Skatron Contract
that:
(a) Skatron has entered into in the Ordinary Course of
Business;
(c) has a term of less than 90 days or may be terminated by
Skatron (without penalty) within 90 days after the delivery of a
termination notice by Skatron; and
(d) does not contemplate or involve the payment of cash or
other consideration in an amount or having a value in excess of
$10,000.
GAAP. "GAAP" shall mean generally accepted accounting principles,
applied on a basis consistent with the basis on which the Skatron Financial
Statements were prepared in the country in which they were prepared
Governmental Authorization. "Governmental Authorization" shall mean
any:
(a) permit, license, certificate, franchise, concession,
approval, consent, ratification, permission, clearance, confirmation,
endorsement, waiver, certification, designation, rating, registration,
qualification or authorization that is or has been issued, granted,
given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement; or
(b) right under any Contract with any Governmental Body.
Governmental Body. "Governmental Body" shall mean any:
(a) nation, principality, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any
nature;
(b) federal, state, local, municipal, foreign or other
government;
(c) governmental or quasi-governmental authority of any nature
(including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality,
officer, official, representative, organization, unit, body or Entity
and any court or other tribunal);
(d) multi-national organization or body; or
(e) individual, Entity or body exercising, or entitled to
exercise, any executive, legislative, judicial, administrative,
regulatory, police, military or taxing authority or power of any
nature.
Hazardous Material. "Hazardous Material" shall include:
(a) any petroleum, waste oil, crude oil, asbestos, urea
formaldehyde or polychlorinated biphenyl;
(b) any waste, gas or other substance or material that is
explosive or radioactive;
(c) any "hazardous substance," "pollutant," "contaminant,"
"hazardous waste," "regulated substance," "hazardous chemical" or
"toxic chemical" as designated, listed or defined (whether expressly or
by reference) in any statute, regulation or other Legal Requirement
(including CERCLA, any other so-called "superfund" or "superlien" law,
the Resource Conservation Recovery Act, the Federal Water Pollution
Control Act, the Toxic Substances Control Act, the Emergency Planning
and Community Right-to-Know Act and the respective regulations
promulgated thereunder);
(d) any other substance or material (regardless of physical
form) or form of energy that is subject to any Legal Requirement which
regulates or establishes standards of conduct in connection with, or
which otherwise relates to, the protection of human health, plant life,
animal life, natural resources, property or the enjoyment of life or
property from the presence in the environment of any solid, liquid,
gas, odor, noise or form of energy; and
(e) any compound, mixture, solution, product or other
substance or material that contains any substance or material referred
to in clause "(a)", "(b)", "(c)" or "(d)" above.
Indemnitees. "Indemnitees" shall mean the following Persons:
(a) the Purchaser;
(b) the Purchaser's current and future Affiliates (including
Skatron);
(c) the respective Representatives of the Persons referred to
in clauses "(a)" and "(b)" above; and
(d) the respective successors and assigns of the Persons
referred to in clauses "(a)", "(b)" and "(c)" above;
provided, however, that (i) Skatron shall not be entitled to exercise any rights
as an Indemnitee prior to the Closing, and (ii) the Selling Stockholders shall
not be deemed to be "Indemnitees."
Inventory. "Inventory" shall mean the inventory and other assets to be
sold, conveyed and transferred to the Purchaser pursuant to the terms of this
Agreement, as more specifically defined in Section 1.3(b)(ii).
Knowledge. An individual shall be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or other
matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonable investigation concerning the truth or existence
of such fact or other matter.
Skatron shall be deemed to have "Knowledge" of a particular fact or other matter
if any officer of Skatron has Knowledge of such fact or other matter.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, legislation, constitution,
principle of common law, resolution, ordinance, code, edict, decree,
proclamation, treaty, convention, rule, regulation, ruling, directive,
pronouncement, requirement, specification, determination, decision, opinion or
interpretation that is or has been issued, enacted, adopted, passed, approved,
promulgated, made, implemented or otherwise put into effect by or under the
authority of any Governmental Body.
Liability. "Liability" shall mean any debt, obligation, duty or
liability of any nature (including any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect, conditional, implied, vicarious,
derivative, joint, several or secondary liability), regardless of whether such
debt, obligation, duty or liability would be required to be disclosed on a
balance sheet prepared in accordance with generally accepted accounting
principles and regardless of whether such debt, obligation, duty or liability is
immediately due and payable.
Material Adverse Effect. An event or events, or any other matter, shall
constitute a Material Adverse Effect if it has had, or may reasonably be
expected to have, a material adverse effect on the
business, operations, properties or financial condition of any entity(ies) in
connection with which the term is used, taken as a whole.
Order. "Order" shall mean any:
(a) order, judgment, injunction, edict, decree, ruling,
pronouncement, determination, decision, opinion, verdict, sentence,
subpoena, writ or award that is or has been issued, made, entered,
rendered or otherwise put into effect by or under the authority of any
court, administrative agency or other Governmental Body or any
arbitrator or arbitration panel; or
(b) Contract with any Governmental Body that is or has been
entered into in connection with any Proceeding.
Ordinary Course of Business. An action taken by or on behalf of Skatron
shall not be deemed to have been taken in the "Ordinary Course of Business"
unless:
(a) such action is recurring in nature, is consistent with
Skatron's past practices and is taken in the ordinary course of
Skatron's normal operations;
(b) such action is taken in accordance with reasonable and
customary business practices;
(c) such action is not required to be authorized by Skatron's
stockholders, Skatron's board of directors or any committee of
Skatron's board of directors and does not require any other separate or
special authorization of any nature; and
(d) such action is similar in nature and magnitude to actions
customarily taken, without any separate or special authorization, in
the ordinary course of the normal operations of Skatron's business.
Past Benefit Plan. "Past Benefit Plan" shall mean any Employee Benefit
Plan (other than a Current Benefit Plan):
(a) of which any of the Companies or any ERISA Affiliate has
ever been a "plan sponsor" (as defined in Section 3(16)(B) of ERISA) or
that otherwise has at any time been established, adopted, maintained or
sponsored by any of the Companies or by any ERISA Affiliate;
(b) in which any of the Companies or any ERISA Affiliate has
ever participated;
(c) with respect to which any of the Companies or any ERISA
Affiliate has ever made, or has ever been required or permitted to
make, any contribution; or
(d) with respect to which any of the Companies or any ERISA
Affiliate has ever been subject to any Liability.
Person. "Person" shall mean any individual, Entity or Governmental
Body.
Proceeding. "Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding and any informal
proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination
or investigation that is or has been commenced, brought, conducted or heard by
or before, or that otherwise has involved or may involve, any Governmental Body
or any arbitrator or arbitration panel.
Proprietary Asset. "Proprietary Asset" shall mean any patent, patent
application, trademark (whether registered or unregistered and whether or not
relating to a published work), trademark application, trade name, fictitious
business name, service mark (whether registered or unregistered), service mark
application, copyright (whether registered or unregistered), copyright
application, trade secret, know-how, franchise, system, computer software,
invention, design, blueprint, proprietary product, technology, proprietary right
or other intellectual property right or intangible asset.
Purchaser. "Purchaser" shall mean Molecular Devices Corporation, a
Delaware corporation.
Related Party. Each of the following shall be deemed to be a "Related
Party":
(a) each of the Selling Stockholders;
(b) each individual who is, or who has at any time been, an
officer of Skatron or of Skatron Instruments, Inc.;
(c) each member of the family of each of the individuals
referred to in clauses "(a)" and "(b)" above; and
(d) any Entity (other than Skatron) in which any one of the
individuals referred to in clauses "(a)", "(b)" and "(c)" above holds
(or in which more than one of such individuals collectively hold),
beneficially or otherwise, a material voting, proprietary or equity
interest.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives. The
Selling Stockholders and all other Related Parties shall be deemed to be
"Representatives" of Skatron.
Scheduled Closing Time. "Scheduled Closing Time" shall have the meaning
specified in Section 1.3(a) of the Agreement.
Selling Stockholders. "Selling Stockholders" shall have the meaning
specified in the introductory paragraph of the Agreement.
Share Purchase Price. "Share Purchase Price" shall have the meaning
specified in Section 1.2(b) of the Agreement.
Shares. "Shares" shall have the meaning specified in Recital "A" to the
Agreement.
Short Term Trade Debt. "Short Term Trade Debt" shall mean trade debt
payable within twelve (12) months.
Skatron Contract. "Skatron Contract" shall mean any Contract:
(a) to which Skatron is a party;
(b) by which Skatron or any of its assets is or may become
bound or under which Skatron has, or may become subject to, any
obligation; or
(c) under which Skatron has or may acquire any right or
interest.
Skatron Financial Statements. "Skatron Financial Statements" shall have
the meaning specified in Section 2.4 of the Agreement.
Skatron Returns. "Skatron Returns" shall have the meaning specified in
Section 2.18(a) of the Agreement.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, estimated tax, gross receipts tax, value-added tax, surtax,
excise tax, ad valorem tax, transfer tax, stamp tax, sales tax, use tax,
property tax, business tax, occupation tax, inventory tax, occupancy tax,
withholding tax or payroll tax), levy, assessment, tariff, impost, imposition,
toll, duty (including any customs duty), deficiency or fee, and any related
charge or amount (including any fine, penalty or interest), that is or has been
(a) imposed, assessed or collected by or under the authority of any Governmental
Body, or (b) payable pursuant to any tax-sharing agreement or similar Contract.
Tax Return. "Tax Return" shall mean any return (including any
information return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information that
is, has been or may in the future be filed with or submitted to, or required to
be filed with or submitted to, any Governmental Body in connection with the
determination, assessment, collection or payment of any Tax or in connection
with the administration, implementation or enforcement of or compliance with any
Legal Requirement relating to any Tax.
Transactional Agreements. "Transactional Agreements" shall mean the
agreements and other documents specified in Section 1.3(b) of this Agreement.
Transactions. "Transactions" shall mean (a) the execution and delivery
of the respective Transactional Agreements, and (b) all of the transactions
contemplated by the respective Transactional Agreements, including:
(i) the sale of the Shares by the Selling
Stockholders to the Purchaser in accordance with the Agreement; and
(ii) the performance by Skatron, the Selling
Stockholders and the Purchaser of their respective obligations under
the Transactional Agreements and the exercise by Skatron, the Selling
Stockholders and the Purchaser of their respective rights under the
Transactional Agreements; and
(iii) the transfer of the Accounts Receivable and the
Inventory from Skatron Instruments, Inc. to the Purchaser.
EXHIBIT B
INSTRUMENT OF ASSIGNMENT AND ASSUMPTION
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, (i) Skatron Instruments, Inc., a Virginia corporation ("Seller"),
hereby sells, transfers, conveys and assigns to Molecular Devices Corporation, a
Delaware corporation ("Buyer"), all of Seller's right, title and interest in and
to the full benefit of all of the accounts receivable listed on Annex A hereto;
and (ii) Buyer assumes each and every liability and obligation of Seller for
product service, warranty and repair relating to the Inventory, warrants and
covenants that it is authorized, willing and able to satisfy all obligations and
duties thereunder, and holds Seller harmless from any claims of third parties
therefor.
This Instrument of Assignment and Assumption is subject to the terms and
conditions of that certain Stock and Asset Purchase Agreement dated as of May
17, 1999 ("Purchase Agreement") between Buyer and Seller (the capitalized terms
used herein which are not otherwise defined herein have the meanings assigned to
them in the Purchase Agreement). The obligations of the Seller under the
Contracts are assigned to Buyer under this Instrument of Assignment and
Assumption without recourse and without any representation or warranty
whatsoever except as provided in the Purchase Agreement.
This Instrument of Assignment and Assumption shall be governed by and construed
and enforced in accordance with the laws of the State of California and shall be
binding upon and inure to the benefit of Seller and Buyer and their respective
successors and assigns.
IN WITNESS WHEREOF, Seller and Buyer have caused this Instrument of Assignment
and Assumption to be executed and delivered as of this 17th day of May, 1999.
SKATRON INSTRUMENTS, INC.
By: ____________________________________
Its:
MOLECULAR DEVICES CORPORATION
By: ____________________________________
Its:
9.
EXHIBIT C
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, Skatron Instruments, Inc., a Virginia corporation ("Seller"),
hereby sells, transfers, conveys and assigns to Molecular Devices Corporation, a
Delaware corporation ("Buyer"), all of Seller's right, title and interest in and
to the following assets and properties listed and only the following assets and
properties:
(a) the property listed on Annex A hereto, together with all of
Seller's right, title and interest in and to the name
"Skatron," including any and all right, title and interest of
the Seller in and to any trade mark, trade name or other
proprietary mark or designation containing the word "Skatron,"
except that Seller shall retain the right to use its corporate
name in connection with resolution of any liabilities
remaining after the Closing and in connection with the winding
up, dissolution and liquidation of the Seller after the
Closing (the "Personal Property");
(b) all causes of action and rights of enforcement of all
representations, warranties, guaranties, indemnities,
undertakings, certificates, covenants, agreements and the like
made by any vendor, manufacturer or contractor and all
security therefor received by Seller for the purchase or other
acquisition of any part of the Personal Property, which are
described above or in the Instrument of Assignment and
Assumption entered into by and among Seller and Buyer on the
date hereof, and which are being sold, transferred, conveyed
and assigned to Buyer under that certain Stock and Asset
Purchase Agreement dated May 17, 1999 ("Purchase Agreement")
between Buyer and Seller (the capitalized terms used herein
which are not otherwise defined herein are used herein as
defined in the Purchase Agreement).
The sale of the Personal Property is subject to the terms and conditions of the
Purchase Agreement. The Personal Property is sold, transferred, conveyed,
assigned and delivered to Buyer under this Bill of Sale free and clear of all
liens, encumbrances and interests of third parties in "as is" condition and
without any representation or warranty whatsoever except as provided in the
Purchase Agreement. Seller makes no representation, express or implied, as to
the quality, condition or fitness of any of the Personal Property for any
purpose except as set forth in the Asset Purchase Agreement.
This Bill of Sale shall be governed by and construed and enforced in accordance
with the laws of the State of California and shall be binding upon and inure to
the benefit of Seller and Buyer, and their respective successors and assigns.
IN WITNESS WHEREOF, Seller has executed and delivered this Bill of Sale as of
this 17th day of May, 1999.
SKATRON INSTRUMENTS, INC.
By: ________________________________
10.
Its:
11.
EXHIBIT C
INDEMNIFICATION ESCROW AGREEMENT
THIS INDEMNIFICATION ESCROW AGREEMENT ("Escrow Agreement") is entered
into effective as of May 17, 1999 ("Effective Date"), by and among (i) MOLECULAR
DEVICES CORPORATION., a corporation organized and existing under the laws of
State of Delaware, United States of America ("Purchaser"); (ii) HELGE SKARE AND
WIEL SKARE individuals and residents of Norway (collectively, the "Principal
Stockholders"); and (iii) GREATER BAY TRUST COMPANY ("Escrow Agent"), with
reference to the following facts:
RECITALS
A. The Purchaser and the Selling Stockholders have entered into a Stock
and Asset Purchase Agreement and related agreements dated as of May 17, 1999
(collectively, the "Stock and Asset Purchase Agreement"), pursuant to which the
Purchaser has agreed to purchase from the Selling Stockholders, and the Selling
Stockholders have agreed to sell, convey, transfer, assign and deliver, 314,400
shares of the capital stock of Skatron Instruments AS, a Norwegian company,
representing one hundred percent (100%) of the issued and outstanding shares of
capital stock of that company.
B. Pursuant to Section 1.2(c) of the Stock and Asset Purchase
Agreement, the Purchaser has agreed to deposit with the Escrow Agent an amount
(the "Escrow Amount"), to be held and applied by the Escrow Agent as provided in
this Escrow Agreement, equal to Six Hundred Thousand United States Dollars
(US$600,000).
C. The parties desire that the Escrow Amount shall be held in escrow by
the Escrow Agent and distributed in accordance with the provisions of this
Escrow Agreement and the Stock and Asset Purchase Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 7. Definitions
Capitalized terms used in this Escrow Agreement without definition
shall have the respective meanings given to them in the Stock and Asset Purchase
Agreement.
SECTION 8. Appointment of the Escrow Agent
The Purchaser and the Principal Stockholders hereby appoint the Escrow
Agent as escrow agent hereunder on the terms and conditions set forth herein,
and the Escrow Agent hereby accepts such appointment on such terms and
conditions.
SECTION 9. Establishment of Escrow
12.
9.1 Deposit of Escrow Amount. Pursuant to Section 1.2(c) of the Stock
and Asset Purchase Agreement, the Purchaser is depositing the Escrow Amount with
the Escrow Agent in immediately available funds. The Escrow Agent shall maintain
the Escrow Amount, as it may be reduced from time to time in accordance with the
terms of this Agreement, in an account maintained by it (the "Escrow Account")
until disbursed by the Escrow Agent in accordance with the terms of this
Agreement.
9.2 Acceptance of Appointment. The Escrow Agent hereby agrees to act as
escrow agent and to hold, safeguard and disburse the Escrow Amount pursuant to
the terms and conditions hereof.
SECTION 10. Investment of Funds
Except as the Purchaser and the Principal Stockholders may from time to
time jointly instruct the Escrow Agent in writing, the Escrow Amount shall be
invested from time to time, to the extent possible, in an interest bearing
investment account approved by the Purchasers and the Principal Stockholders
with the Escrow Agent, until disbursement of the entire Escrow Amount. The
Escrow Agent is authorized to liquidate in accordance with its customary
procedures any portion of the Escrow Amount consisting of investments to provide
for payments required to be made under this Escrow Agreement. All profit derived
from any investment of any part of the Escrow Amount, together with all interest
earned on the Escrow Amount, shall be included within the definition of the term
"Escrow Amount" for purposes of this Escrow Agreement.
SECTION 11. Retention of Escrow Amount
The Escrow Agent shall hold the Escrow Amount in escrow to secure the
obligations of the Principal Stockholders set forth in the Stock and Asset
Purchase Agreement and shall release the Escrow Amount, and any part thereof,
only in accordance with the provisions of this Escrow Agreement.
SECTION 12. Notice and Payment of Claims: Retention and Release of Amounts in
Escrow
12.1 Purchaser's Notice. At any time during the period commencing on
the date hereof and ending six (6) months thereafter (the "Holdback Period"),
the Purchasers may deliver a notice signed by an officer of the Purchaser (a
"Notice") to the Principal Stockholders and the Escrow Agent (i) stating that
the Principal Stockholders are obligated to make a payment to the Purchaser
pursuant to Section 5 of the Stock and Asset Purchase Agreement in respect of
any loss, damage, deficiency, liability or obligation included within the
definition of "Damages" or otherwise the subject of Section 5 of the Stock and
Asset Purchase Agreement (each, a "Damage"), and identifying which of those
Sections gives rise to the Principal Stockholders' obligation; (ii) specifying
in reasonable detail the nature, the underlying facts, and, to the extent
determinable at the time of such Notice, the dollar amount or a good faith
approximation thereof; together with the Purchaser's calculations with respect
thereto (a "Claim Amount") of any claim for indemnification (a "Claim") it may
have under Section 5 of the Stock and Asset Purchase Agreement; and (iii)
confirming that such Claim is not subject to the limitations on the Principal
Stockholders' indemnification obligations set forth in Section 5.3 of the Stock
and Asset Purchase Agreement. The Purchasers may make more than one claim with
respect to any underlying state of facts, but shall only be entitled to a single
recovery in respect of any single Damage or amount which is the subject of
Section 5 of the Stock and Asset Purchase Agreement. The Escrow Agent shall not
inquire into or consider whether a Claim complies with the requirements of the
Stock and Asset Purchase Agreement.
12.2 Principal Stockholders' Counter Notice. Within ninety (90) days of
receipt of a Notice, the Principal Stockholders may deliver to the Purchasers
and to the Escrow Agent a notice (a "Counter Notice") signed by each Principal
Stockholder delivering such Counter Notice (i) setting forth their
13.
acquiescence to or rejection of the Claim in its totality, or of their partial
acceptance of the Claim; (ii) specifying that part of the Claim to which
acquiescence is made and that part which is rejected; (iii) as to each part of
the Claim which is rejected, specifying whether the Principal Stockholders
reject their obligation to indemnify the Purchasers in respect thereof, whether
the Principal Stockholders accept their obligation to indemnify the Purchasers
in respect thereof but reject the amount of the Claim or both; provided,
however, that if the Principal Stockholders have waived their right to dispute
their obligation to indemnify the Purchasers in respect of any Claim under the
terms of the Stock and Asset Purchase Agreement, they shall not have the right
to reject any Claim on the basis of any such asserted waiver; and (iv) setting
forth in reasonable detail the nature of and the facts underlying their
rejection of any part of the Claim.
12.3 Accepted Claims. Any Claim or portion of any Claim which is not
disputed in a Counter Notice timely delivered by the Principal Stockholders
shall be referred to as "Accepted." Failure by the Principal Stockholders timely
to deliver a Counter Notice in response to any Notice shall be deemed to be an
acceptance of the validity of the Claim set forth in such Notice and a waiver of
any right to contest the validity or amount of such Claim, and the amount of the
entire Claim shall be deemed "Accepted."
12.4 Unresolved Claims. Any Claim or portion of a Claim which is
disputed in a Counter Notice shall be resolved in accordance with Section 7,
and, pending such resolution, shall be referred to as "Unresolved." The entire
amount of any Claim shall be deemed "Unresolved" between the date of the Notice
setting forth such Claim, and (i) the date on which a Counter Notice is
delivered in respect of such Claim, and (ii) the last date on which a Counter
Notice may be delivered in respect of such Claim under Section 6.2, whichever is
earlier.
12.5 Retention of Escrow Amount. Except as set forth in Section 6.6,
the Escrow Agent shall retain a portion of the Escrow Amount sufficient to pay
the amount of all Unresolved Claims.
12.6 Release of Escrow Amounts. The Escrow Agent shall: (i) pay to the
Purchasers, on the ninety-fifth (95th) day after receipt of any Notice, the
Accepted amount of the Claim set forth in such Notice; (ii) make such payments
to the Purchasers or the Principal Stockholders as required under Section 7; and
(iii) release to the Principal Stockholders at the termination of the Holdback
Period the Escrow Amount, if any, in excess of the aggregate amount of any
Claims which are then Unresolved.
SECTION 13. Unresolved Claims
The Escrow Agent shall not pay any amounts in respect of any Claim or
portion thereof which is Unresolved except in accordance with the following:
13.1 Joint or Counterpart Instructions for Payment of Unresolved
Claims. If the Purchasers and the Principal Stockholders resolve their
differences by negotiation as to the portion of any Claim which is Unresolved,
they shall deliver joint or counterpart instructions to the Escrow Agent setting
forth the agreement between them. The Escrow Agent shall be entitled to rely on
any such joint or counterpart instructions and shall promptly pay amounts to the
Purchasers or to the Principal Stockholders as set forth in the joint or
counterpart instructions.
13.2 Arbitral or Judicial Decision with Respect to Unresolved Claims.
If the Purchasers and the Principal Stockholders are not able to resolve their
differences as to the portion of any Claim which is Unresolved within fifteen
(15) days of receipt by the Purchasers of the Counter Notice identifying such
Unresolved Claim amount, either of the Purchasers or the Principal Stockholders
may initiate arbitration to resolve those differences under Section 13. The
Escrow Agent shall pay amounts in respect of any such Unresolved Claim only upon
receipt of (i) joint or counterpart instructions setting
14.
forth an agreement between the Purchasers and the Principal Stockholders with
respect to the payment of such Unresolved Claim or part thereof, or (ii) an
arbitration decision or a final non-appealable judgment or court order presented
by the Purchasers or the Principal Stockholders stating whether the Principal
Stockholders have an obligation to indemnify the Purchasers and specifying the
dollar amount of such indemnity obligation. The Escrow Agent shall promptly
provide written notice to the non-presenting party of such arbitration decision
or court judgment or order upon receipt thereof, and five (5) Business Days
thereafter shall pay amounts to the Purchasers or to the Principal Stockholders
as set forth in the arbitration decision or final non-appealable judgment or
court order, unless otherwise enjoined from so doing. Any arbitration decision
or court order shall be accompanied by a legal opinion by counsel for the
presenting party satisfactory to the Escrow Agent to the effect that the
arbitration decision or order is final and non-appealable. The Escrow Agent
shall act on such arbitration decision or court order and legal opinion as
provided herein without further question.
SECTION 14. Termination of Escrow
This Escrow Agreement shall terminate when the entire Escrow Amount has
been distributed in accordance with the provisions of this Escrow Agreement.
SECTION 15. Duties of the Escrow Agent
15.1 The Escrow Agent shall not be under any duty to give the Escrow
Amount held by it hereunder any greater degree of care than it gives its own
similar property and shall not be required to invest any funds held hereunder
except as directed in this Escrow Agreement. Uninvested funds held hereunder
shall not earn or accrue interest.
15.2 The Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the other parties hereto shall jointly and severally
as to 50% each indemnify and hold harmless the Escrow Agent (and any successor
to the Escrow Agent) from and against any and all losses, liabilities, claims,
actions, damages and expenses, including reasonable attorneys' fees and
disbursements, arising out of and in connection with this Agreement. Without
limiting the foregoing, the Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash held by it hereunder
in good faith, in accordance with the terms hereof, including, without
limitation, any liability for any delays (not resulting from its gross
negligence or willful misconduct) in the investment or reinvestment of the
Escrow Amount, or any loss of interest incident to any such delays.
15.3 The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that the person purporting
to give receipt or advice or make any statement or execute any document in
connection with the provisions hereof has been duly authorized to do so. The
Escrow Agent may conclusively presume that the undersigned representative of any
party hereto which is an entity other than a natural person has full power and
authority to instruct the Escrow Agent on behalf of that party unless written
notice to the contrary is delivered to the Escrow Agent.
15.4 The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to t. his Escrow Agreement and shall not be
liable for any action taken or omitted by it in good faith in accordance with
such advice.
15.
15.5 The Escrow Agent does not have any interest in the Escrow Amount
deposited hereunder but is serving as escrow holder only and having only
possession thereof. Any payments of income from the Escrow Amount shall be
subject to withholding regulations then in force with respect to United States
Taxes. The parties hereto will provide the Escrow Agent with appropriate
Internal Revenue Service Forms W-9 for tax identification number certification
or Forms W-8 for foreign status certification. This Section 9.5 and Section 9.2
shall survive notwithstanding any termination of this Escrow Agreement or the
resignation of the Escrow Agent.
15.6 The Escrow Agent (and any successor to the Escrow Agent) may at
any time resign as such by delivering the Escrow Amount to any successor to the
Escrow Agent jointly designated by the other parties hereto in writing, or to
any court, whereupon the Escrow Agent shall be discharged of and from any and
all further obligations arising in connection with this Agreement. The
resignation of the Escrow Agent will take effect on the earlier of (i) the
appointment of a successor escrow agent (which may include a court of law) or
(ii) the day which is sixty (60) days after the date of delivery of its written
notice of resignation to the other parties hereto. If at that time the Escrow
Agent has not received a designation of a successor escrow agent, the Escrow
Agent's sole responsibility after that time shall be to retain and safeguard the
Escrow Amount until receipt of a designation of successor escrow agent or a
joint written disposition instruction by the other panics hereto or a final
non-appealable order of a court of law.
15.7 In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the Escrow
Amount, or any portion thereof, or in the event that the Escrow Agent is in
doubt as to what action it should take hereunder, the Escrow Agent shall be
entitled to retain such portion of the Escrow Amount corresponding to such
adverse claims or as to which it is in doubt as to what action it should take
(the "Amount in Question") until it has received (i) joint or counterpart
instructions setting forth an agreement between the Purchasers and the Principal
Stockholders with respect to the disposition of the Amount in Question, or (ii)
an arbitration decision or a final non-appealable judgment or court order
presented by the Purchasers or the Principal Stockholders setting forth the
disposition of the Amount in Question. The Escrow Agent shall promptly provide
written notice to the non-presenting party of any arbitration decision or final
non-appealable judgment or court order upon receipt thereof, and five (5)
Business Days thereafter shall pay amounts to the Purchasers or to the Principal
Stockholders as set forth in the arbitration decision or final non-appealable
judgment or court order, unless otherwise enjoined from so doing. Any
arbitration decision or court order shall be accompanied by a legal opinion by
counsel for the presenting party satisfactory to the Escrow Agent to the effect
that the arbitration decision or order is final and non-appealable. The Escrow
Agent shall act on such arbitration decision or court order and legal opinion as
provided herein without further question.
15.8 The Escrow Agent's fees and expenses for acting as the Escrow
Agent hereunder are set forth in Schedule A hereto. Except as may be provided
elsewhere in this Escrow Agreement, the Escrow Agent's fees and expenses shall
be shared equally by the Purchasers and the Principal Stockholders.
15.9 Except as required by law, no printed or other matter in any
language (including, without limitation, prospectuses, notices, reports and
promotional material) that mentions the Escrow Agent's name or the rights,
powers, or duties of the Escrow Agent shall be issued by the other parties
hereto or on such parties' behalf unless the Escrow Agent shall first have given
its specific written consent thereto.
SECTION 16. Limited Responsibility
This Escrow Agreement expressly sets forth all the duties of the Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties or
obligations shall be read into this Escrow
16.
Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the
provisions of any agreement among the other parties hereto except this Escrow
Agreement.
SECTION 17. Ownership for Tax Purposes
The Principal Stockholders and the Purchasers agree that, for purposes
of any Taxes based on income, the Principal Stockholders shall be treated as the
owner of the Escrow Amount, and that the Principal Stockholders will report all
income, if any, that is earned on, or derived from, the Escrow Amount as income
in the taxable year or years in which such income is properly includible and pay
any taxes attributable thereto.
SECTION 18. Notices 18
All notices, requests, demands or other communications provided herein
shall be made in writing and shall be deemed to have been duly delivered (i) if
delivered personally overnight, including by reputable international courier
service five (5) Business Days after delivery to the courier or, if earlier,
upon delivery against a signed receipt therefor or (ii) upon transmission by
facsimile or telecopier, which transmission is confirmed, in either case
addressed to the party to be notified at the address set forth below or at such
other address as such party shall have notified the other Party hereto, by
notice given in conformity with this Section 12.
if to the Purchasers: Molecular Devices Corporation
1311 Orleans Drive
Sunnyvale, CA 94089
Attn: President
Facsimile: 408-747-3601
with required copies to: Cooley Godward llp
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
Attention: Thomas M. Shoesmith
Facsimile: 650-857-0663
if to the Principal Stockholders: Helge Skare
Weil Skare
Tord Pedersens gt 38
3014 Drammen
Norway
with required copies to: Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94306
Attn: Roger E. George
Facsimile: 650-845-5000
if to the Escrow Agent: Greater Bay Trust Company
P.O. Box 1740
Palo Alto, CA 94302
Attn: Anna Paiva
Fax: 650-473-1326
17.
SECTION 19. Dispute Resolution and Arbitration
Any dispute, controversy or claim between the Purchaser and the
Principal Stockholders arising out of or relating to this Escrow Agreement or
the performance, breach or termination thereof will be settled in accordance
with the process described in Sections 6.3 and 6.4 of the Stock and Asset
Purchase Agreement.
SECTION 20. Jurisdiction; Service of Process
This Agreement shall be construed in accordance with, and governed in
all respects by, the internal laws of the State of California (without giving
effect to principles of conflicts of laws). Subject to the provisions of Section
13, any dispute between the parties connected with this Agreement shall be
submitted to the sole jurisdiction of the courts of the State of California,
County of Santa Clara, or, if it has or can acquire jurisdiction, in the United
States District Court for the Northern District of California. Each of the
parties consent to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world.
SECTION 21. Counterparts
This Escrow Agreement may be executed in one or more counterparts, each
of which will be deemed to be an original and all of, which, when taken
together, will be deemed to constitute one and the same.
SECTION 22. Section Headings
The headings of sections in this Escrow Agreement are provided for
convenience only and will not affect its construction or interpretation.
SECTION 23. Waiver
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Escrow Agreement or the
documents referred to in this Escrow Agreement will operate as a waiver of, such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (i) no claim or right arising
out of this Escrow Agreement or the documents referred to in this Escrow
Agreement can be discharged by one party, in whole or in part, by a waiver or
renunciation of, the claim or right unless in writing signed by the other party;
(ii) no waiver that may be given by a party will be applicable except in the
specific instance for which it is given; and (iii) no notice to or demand on one
party will be deemed to be a waiver of any obligation of such party or of the
right of, the party giving such notice or demand to take further action without
notice or demand as provided in this Escrow Agreement or the documents referred
to in this Escrow Agreement.
SECTION 24. Exclusive Agreement and Modification; Nonassignability
This Escrow Agreement, together with the Stock and Asset Purchase
Agreement, supersedes all prior agreements among the parties with respect to the
subject matter thereof and those agreements constitute (along with the documents
referred to therein), a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Escrow
Agreement may not
18.
be amended except by a written agreement executed by the Purchasers, the
Principal Stockholders and the Escrow Agent. This Escrow Agreement may not be
assigned by any of the Purchasers or the Principal Stockholders, except by will,
the laws of intestacy, or by other operation of law.
SECTION 25. Successors and Assigns
The provisions of this Escrow Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
MOLECULAR DEVICES CORPORATION: THE PRINCIPAL STOCKHOLDERS:
By: ___________________________ By: _______________________________
Its: Helge Skare
By: _______________________________
Wiel Skare
ESCROW AGENT:
Greater Bay Trust Company
By: ___________________________
Its:
[SIGNATURE PAGE TO INDEMNIFICATION ESCROW AGREEMENT]
19.
SCHEDULE "A"
Schedule of Fees of Escrow Agent
Annual Fee: $2,500.00
Fee per disbursement: $ 25.00
Note: additional fees may be required in the event of unusual
occurrences or requests for assistance on the part of Greater Bay Trust Company.
20.
EXHIBIT D
Skatron Instruments AS
Dolasletta 3, P. O. Box 8
N-3401 Lier
NORWAY
_________, 1999
Dr. Helge Skare
Skatron Instruments AS
Dolasletta 3, P. O. Box 8
N-3401 Lier, NORWAY
Re: Consulting Agreement with Skatron Instruments AS
Dear Helge:
On behalf of Skatron Instruments AS (the "Company"), I am pleased to offer you a
consulting arrangement, as an independent contractor to the Company, under the
terms and conditions set forth below (the "Agreement"). Capitalized terms not
defined in the body of this letter Agreement have the meanings set forth on
Exhibit "A."
SECTION 26. Term. The term of this Agreement (the "Term") is three years,
commencing on July 7, 1999.
SECTION 27. Consulting Services. During the Term of this Agreement, the
Company will request you to perform consulting services (the
"Consulting Services") for a maximum of 165 days per year. The
principal focus of the Consulting Services to be requested by
the Company will be with regard to the development of existing
and future products of the Molecular Devices Group. You agree
to perform the Consulting Services requested by the Company to
the best of your ability. You will be based in Drammen,
Norway, and the Company will not require you to travel away
from Drammen more than 60 days in any year.
SECTION 28. Compensation. Your compensation for providing the Consulting
Services under this Agreement shall be US$125,000 per year,
invoiced in equal monthly amounts of US$10,416.67 each. As an
independent contractor, you will not be entitled to any of the
benefits which the Company may make available to its
employees, such as group insurance, profit-sharing or
retirement benefits. Any travel required of you by the Company
will be arranged for by the Company at its expense, including
lodging associated with such travel, and the Company will
reimburse you for reasonable expenses incidental to such
travel in accordance with the policies of the Molecular
Devices Group. Except for what is stated in this Agreement,
the compensation provided for in this Section 3 shall cover
all of your costs.
21.
SECTION 29. Royalties.
29.1 The Company shall pay you a royalty of 2.5% of Total Sales to end
users of New Skatron Products during the Term of this Agreement and for a period
of nine years thereafter. The royalty shall be calculated on the basis of Total
Sales for each calendar quarter and shall be paid to you not later than sixty
(60) days after the end of such calendar quarter. All royalty payments will be
calculated and made in United States Dollars. For purposes of this Agreement,
"Total Sales" means revenue actually received by the Company or any Affiliate
from the sale of products and related services to unaffiliated third parties,
less any sales, use and excise taxes and shipping charges included in those
revenues; and "New Skatron Products" shall mean the Embla 1536 Washer and any
products developed after December 31, 1998 on which you lead and complete the
development process through the production of an operating prototype. If you
contribute in part to the development of a product manufactured and sold for the
first time by the Company or any Affiliate after the date of this Agreement, we
agree to discuss an appropriate royalty amount to be paid to you which reflects
your contribution to the development of such product.
29.2 The Company and its Affiliates shall keep complete and accurate
records pertaining to the sale of the New Skatron Products. Such records shall
be maintained as required under applicable law. Any royalty payments made by the
Company in accordance with the above shall be followed by a statement providing
the following dates; gross sales, Total Sales and calculated royalty by
territory and New Skatron Products. Such statement shall be provided by the
Company even if no sales where made during the relevant calendar quarter.
29.3 You are entitled to engage an independent, certified public
accountant reasonably acceptable to the Company and its corporate parent, at
your sole cost and expense except as otherwise provided in this Section 4(c), to
examine the books and records of the Company and any relevant Affiliate from
time to time to verify the correctness of any royalty payments according to this
Section 4. If any such audit reveals an underpayment to you exceeding 10% of the
correct amount of royalties due hereunder, such audit expenses shall be for the
account of the Company.
SECTION 30. Independent Contractor. Nothing in this Agreement creates a
partnership, joint venture, or employer-employee relationship
between the Company and you. As an independent contractor, the
manner and means by which you choose to complete your services
are in your sole discretion and control. You agree to exercise
your highest degree of professionalism, and to utilize your
expertise and creative talents in completing your assignments.
You may not subcontract or otherwise delegate your obligations
under this Agreement without the Company's prior written
consent. You are not authorized to make any representation,
contract, or commitment on behalf of the Company.
SECTION 31. Taxes and Compliance with Laws. You responsible for all tax
returns and payments required to be filed with or made to any
tax authority with respect to your performance of services and
receipt of compensation under this Agreement. The Company will
not withhold or make payments for social security; make
unemployment insurance or disability insurance contributions;
or obtain worker's compensation insurance on your behalf. You
agree to accept exclusive liability for complying with all
applicable laws governing self-employed individuals, and you
will indemnify and defend the Company against any and all such
taxes or contributions, including penalties and interest
SECTION 32. Noncompetition, Confidentiality, etc. In consideration for and
as an inducement to us to enter into the transactions
contemplated by this Agreement, you covenant and agree as
follows:
22.
(a) During the Term of this Agreement and for a period of two
(2) years thereafter, you will not engage in any activity which Competes with
the Business of the Company or any of its Affiliates, provided, however, that it
shall not be a breach of the covenant contained in this Section 7 if: (i) you
purchase or otherwise acquire up to two percent (2%) of the outstanding capital
stock of any publicly traded Competing Entity; or (ii) render services to any
Competing Entity if the services rendered, or your primary responsibilities to
such Competing Entity, do not relate to any activities of such Competing Entity
which compete with the Business of the Company or any of its Affiliates.
(b) During the Term of this Agreement and for a period of two
(2) years thereafter, you agree not to interfere with the Business of the
Company by, directly or indirectly, either for yourself or any other person (i)
soliciting, attempting to solicit, inducing, or otherwise causing any employee
of the Company to terminate his or her employment in order to become an
employee, consultant, or independent contractor to or for you or any third
party; (ii) inducing or attempting to induce any customer, client, vendor,
supplier, licensee, distributor or business relation thereof to cease doing
business with the Company or any Affiliate; or (iii) soliciting the business of
any customer, client, vendor, or distributor of the Company or any Affiliate,
whether or not the Company or any Affiliate had personal contact with such
person, with respect to products or activities which compete with the Business
of the Company or any Affiliate. You agree that this restriction is reasonably
necessary to protect the Company's legitimate business interest in its
substantial relationships with employees.
(c) You acknowledge (i) that the Business of the Company and
its Affiliates is international in scope; (ii) that Competing Entities are or
could be located in any part of the world; (iii) that the Company has required
that you make the covenants set forth in this Section 7 as a condition to its
purchase of the shares of Skatron owned by you; (v) the provisions of this
Section 7 are reasonable and necessary to protect and preserve the Company's
business, (vi) the Company would be irreparably damaged if you were to breach
the covenants set forth in this Section 7, and (vi) in the event of any such
breach, the Company will be entitled to injunctive relief in addition to any
other remedies it may have at law or in equity.
(d) You acknowledge and agree that, in the course of providing
the Consulting Services, you will stand in a position of trust and confidence
with respect to the Company and may gain knowledge concerning Confidential
Information belonging to the Company and its Affiliates. You acknowledge and
agree that all Confidential Information known or obtained by you, whether before
or after the date hereof, is the property of the Company or one of the
Affiliates of the Company. You agree that you will not, at any time, disclose to
any unauthorized persons or use for your own account or for the benefit of any
third party any Confidential Information, whether or not embodied in writing or
other physical form, without the prior written consent of the Company, unless
and to the extent that the Confidential Information is or becomes generally
known to and available for use by the public other than as a result of your
fault or the fault of any other person bound by a duty of confidentiality to the
Company. You agree to deliver to the Company at the time of execution of this
Agreement, and at any other time the Company or any Affiliate of the Company may
request, all documents, memoranda, notes, plans, records, reports, and other
documentation, models, components, devices, or computer software, whether
embodied in a disk or in other form (and all copies of all of the foregoing),
relating to the businesses, operations, or affairs of the Company and its
Affiliates which contain Confidential Information and any other Confidential
Information that you may then possess or have under your control.
(e) For purposes of this Agreement, you acknowledge and agree
that if any Affiliate of the Company shall suffer any damages as a result of any
of the matters set forth in this Section 7 or otherwise under this Agreement,
then the Company itself shall be deemed to have incurred such damages.
23.
SECTION 33. Termination.
33.1 Termination for cause. This Agreement shall terminate in the event
of your death and may also be terminated by the Company upon the occurrence of
any of the following: (i) your permanent physical or mental disability, which
shall be defined as your inability to perform your duties pursuant to this
Agreement for a continuous period of ninety (90) days by reason of physical or
mental illness or incapacity; (ii) the commission of any fraudulent act or
conduct, including, but not limited to, fraudulent misrepresentations committed
by you while acting as an consultant to the Company. Notwithstanding any
termination of this Agreement pursuant to this Section 8(a), the provisions of
Section 4 shall continue in effect, except that the Company will have no
obligations after any such termination to pay any amounts to you in respect of
royalties on sales of the Embla 1536. To the extent permitted applicable law may
prohibit the termination of this Agreement at the time or times set forth in
this Section 8(a), then this Agreement shall terminate at the first time after
the occurrence of the relevant event which is permitted under such applicable
law.
33.2 Termination Other Than For Cause. Either party may terminate this
Agreement at any time upon thirty (30) days written notice to the other party.
If the Company terminates this Agreement other than for cause pursuant to this
Section 8(b), the provisions of Sections 3 and 4 shall continue in effect,
except that you will not be obligated to provide any Consulting Services to the
Company after the effective date of such termination. If you terminate this
Agreement other than for cause pursuant to this Section 8(b), you will not be
entitled to any compensation under Section 3 after the effective date of such
termination, but the provisions of Section 4 shall continue in effect, except
that the Company will have no obligations after any such termination to pay any
amounts in respect of royalties on sales of the Embla 1536. In both events your
obligations under Section 7 will continue in effect until the expiration of two
(2) years after the date on which this Agreement would have expired pursuant to
Section 1 had it not been earlier terminated pursuant to this Section 8(b).
SECTION 34. Remedies. If you breach the agreements set forth in Section 7
of this Agreement, the Company and its Affiliates will be
entitled to damages, and in addition to its right to damages
and any other rights the Company may have, to obtain
injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the
provisions of Section 7 of this Agreement, it being agreed
that money damages alone would be inadequate to compensate the
Company and would be an inadequate remedy for such breach. The
rights and remedies of the parties to this Agreement are
cumulative and not alternative.
SECTION 35. General Provisions.
35.1 Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including personal
delivery by fax) or the third day after mailing by first-class mail to the
Company at its primary office location and to you at the address below.
35.2 Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision or term of this Agreement is held to be invalid, illegal,
or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or any other jurisdiction, but the Agreement will be
reformed to the extent necessary to render such provision or term enforceable
or, if it is not possible to render such provision or term enforceable, to
remove such provision or term, and shall then be construed and enforced in such
jurisdiction as so reformed.
24.
35.3 If either party should waive any breach of any provisions of the
Agreement, that party shall not hereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of your Agreement.
35.4 This Agreement shall be governed by Norwegian Law. Any dispute
arising out of this Agreement shall be finally determined by arbitration in Oslo
according to chapter 32 in the Norwegian Civil Procedure Act before a board of
three arbitrators. The arbitration board shall consist of one arbitrator
appointed by you and one appointed by the Company and one chairman by the two so
chosen. Failing agreement among the arbitrators, the chairman shall be appointed
by the Lord of Chief Justice of the Oslo City Court. The arbitration proceedings
shall be conducted in the Norwegian language. The parties hereby agree to accept
the award resulting from the arbitration proceedings described herein as final
and binding upon both parties. The non-prevailing party shall pay the prevailing
party's costs and attorneys' fees incurred in the arbitration.
35.5 To the extent either party has recourse to judicial, as opposed to
arbitral, relief under this Agreement, any proceeding seeking such relief shall
be brought against in the courts of Oslo, Norway. and each of the parties
consents to the jurisdiction of such court (and of the appropriate appellate
court) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
35.6 This Agreement, together with its Exhibit(s), constitutes the
entire agreement between you and the Company with respect to the subject matter
hereof. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in a writing signed by you and an officer of the Company.
35.7 This Agreement may be executed in separate counterparts, any one
of which need not contain signatures of more than one party, but all of which
taken together will constitute one and the same Agreement.
35.8 The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning hereof.
35.9 This Agreement is intended to bind and inure to the benefit of and
be enforceable by you and the Company, and your respective successors, assigns,
heirs, executors and administrators, except that you may not assign any of your
duties hereunder and you may not assign any of your rights hereunder without the
written consent of the Company, which shall not be withheld unreasonably. The
Company may assign its rights and delegate its duties under this Agreement (i)
to any other member of the Molecular Devices Group or any successor in interest
to Skatron in the context of the sale or disposition of the business of Skatron
or of substantially all of its assets, or (ii) to any other member of the
Molecular Devices Group in the course of any dissolution or liquidation of
Skatron.
35.10 This Agreement shall be executed in two copies, one for each
party.
[REMAINDER OF PAGE INENTIONALLY LEFT BLANK]
25.
If you choose to accept our offer under the terms described above, please sign
this Agreement in the space provided below and return it to me.
SKATRON INSTRUMENTS AS ACCEPTED AND AGREED THIS
_______ DAY OF ______________, 1999
By: _______________________________
Print Name: _______________________
___________________________________
Date: _____________________________ HELGE SKARE
Address:
MOLECULAR DEVICES CORPORATION, as
guarantor of the obligations of Skatron ___________________________________
Instruments AS under this Agreement
___________________________________
By: _______________________________
Print Name: _______________________ ___________________________________
Date: _____________________________
[SIGNATURE PAGE TO CONSULTING AGREEMENT]
26.
EXHIBIT A
CERTAIN DEFINITIONS
As used in this Agreement, the following terms have the meanings set forth
below:
"Affiliate" means any person or entity directly or indirectly controlling by or
under common control with either party, where "control" means the direct or
indirect ownership of fifty percent (50%) or more of the outstanding voting
securities of an entity, or the right to receive fifty percent (50%) or more of
the profits or earnings of any entity, or the ability to control management of
an entity.
"Business" means the current field of business of the Molecular Devices Group,
together with any prospective field of business of the Molecular Devices Group
which is the subject of a public announcement by MDC or of which you become
aware in the course of performing the Consulting Services or by reason of actual
notice delivered to you by the Company.
"Competing Entity" means a corporation or other entity that Competes.
"Compete" shall mean to directly or indirectly, engage or invest in, own,
manage, operate, finance, control, or participate in the ownership, management,
operation, or control of, be employed by, consult for, or render services or
advice to, any entity or any business unit of any entity whose business competes
in whole or in part with the Business of the Molecular Devices Group.
"Confidential Information" means any and all trade secrets concerning the
business and affairs of the Molecular Devices Group, product specifications,
data, know-how, formulae, compositions, processes, designs, sketches,
photographs, graphs, drawings, samples, inventions and ideas, past, current and
planned research and development, current and planned manufacturing and
distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies, systems, structures and architectures (and related
processes, formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information, historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, the names and backgrounds
of key personnel, personnel training and techniques and materials, any and all
notes, analysis, compilations, studies, summaries, and other material prepared
by or for the Molecular Devices Group containing or based, in whole or in part,
on any information included in the foregoing, and any other information, however
documented, of the Molecular Devices Group that is a trade secret.
"Molecular Devices Group" means the Company and any Affiliate of the Company,
including its parent corporation, Molecular Devices Corporation.
D-1.