1
EXECUTION COPY
PURCHASE AGREEMENT
DATED AS OF AUGUST 14, 1996
AMONG
FAIREY INVESTMENTS, INC.,
FUSION UV SYSTEMS, INC.,
FAIREY OVERSEAS DEVELOPMENT LIMITED
AND
FUSION UV SYSTEMS LIMITED,
ON THE ONE HAND
AND
FUSION SYSTEMS CORPORATION,
FUSION UV CURING SYSTEMS CORPORATION,
FUSION TECHNOLOGY INTERNATIONAL, INC.,
AND
FUSION EUROPE LIMITED,
ON THE OTHER HAND
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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ARTICLE II
PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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2.1. Purchased Assets and Purchase of Shares . . . . . . . . . . . . . . . . . . . 13
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2.2. Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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2.3. Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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2.4. Excluded Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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ARTICLE III
PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.1. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.2. Closing Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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3.3. Purchase Price Adjustment and Allocation; Intercompany
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Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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3.4 Allocation Among Purchased Assets . . . . . . . . . . . . . . . . . . . . . . 21
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ARTICLE IV
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.1. Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.2. Payment on the Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.3. Buyers' Additional Deliveries . . . . . . . . . . . . . . . . . . . . . . . . 22
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4.4. Sellers' Deliveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS . . . . . . . . . . . . . . . . . . . 26
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5.1. Organization and Capital Structure of the Companies . . . . . . . . . . . . . 26
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5.2. Subsidiaries and Investments . . . . . . . . . . . . . . . . . . . . . . . . 26
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5.3. Authority of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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5.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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5.5. Operations Since Balance Sheet Date . . . . . . . . . . . . . . . . . . . . . 28
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5.6. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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5.8. Availability of Assets; Assets
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and Liabilities Transferred . . . . . . . . . . . . . . . . . . . . . . . . . 31
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5.9. Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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5.10. Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.11. Real Property Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.12. Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.13. Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.14. Personal Property Leases . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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5.15. Intellectual Property; Software . . . . . . . . . . . . . . . . . . . . . . 34
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5.16. Accounts Receivable; Inventories . . . . . . . . . . . . . . . . . . . . . . 35
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5.17. Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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5.18. Employees and Related Agreements; ERISA . . . . . . . . . . . . . . . . . . 36
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5.19. Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.20. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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5.21. Status of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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5.22. No Violation, Litigation or Regulatory Action . . . . . . . . . . . . . . . 41
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5.23. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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5.24. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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5.25. Customers and Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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5.26. Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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5.27. Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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5.28. No Finder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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5.29. Limitation on Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYERS . . . . . . . . . . . . . . . . . . . 45
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6.1. Organization of Buyers . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.2. Authority of Buyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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6.3. No Finder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
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ARTICLE VII
ACTION PRIOR TO THE CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . 46
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7.1. Investigation of the Business by Buyers . . . . . . . . . . . . . . . . . . . 46
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7.2. Preserve Accuracy of Representations and Warranties . . . . . . . . . . . . . 46
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7.3. Consents of Third Parties; Governmental Approvals . . . . . . . . . . . . . . 47
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7.4. Operations Prior to the Closing Date . . . . . . . . . . . . . . . . . . . . 47
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7.5. Notification by Sellers of Certain Matters . . . . . . . . . . . . . . . . . 48
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7.6. Antitrust Law Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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7.7. Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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7.8. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
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ARTICLE VIII
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
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8.1. Covenant Not to Compete or Solicit Business . . . . . . . . . . . . . . . . . 50
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8.2. Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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8.4. Employees and Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . 58
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8.5. Change in Corporate Name . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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8.6. Transfer of Certain Assets and Liabilities . . . . . . . . . . . . . . . . . 60
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8.7. Transfer of Certain Employees . . . . . . . . . . . . . . . . . . . . . . . . 61
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8.8. Product Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 61
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8.9. Reimbursement for Severance Liabilities. . . . . . . . . . . . . . . . . . . 61
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYERS . . . . . . . . . . . . . . . . . . 63
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9.1. No Misrepresentation or Breach of
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Covenants and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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9.2. No Changes or Destruction of Property . . . . . . . . . . . . . . . . . . . . 63
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9.3. No Restraint or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.4. Necessary Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . 64
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9.5. Transfer of Certain Assets and Certain Liabilities . . . . . . . . . . . . . 64
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9.6. Transfer of Certain Employees . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.7. Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.8. Assignment of Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.9. Transition Services Agreement . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.10. The Lighting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.11. The Bulb Shop Sublease Agreement . . . . . . . . . . . . . . . . . . . . . . 64
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9.12. The Cross-License Agreements . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.13. Trademark Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.14. Trade Name and Logo Consent . . . . . . . . . . . . . . . . . . . . . . . . 64
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9.15. Product Liability Endorsement . . . . . . . . . . . . . . . . . . . . . . . 65
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9.16. Transfer of Fusion Japan Shares . . . . . . . . . . . . . . . . . . . . . . 65
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9.17. Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS . . . . . . . . . . . . . . . . 65
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10.1. No Misrepresentation or Breach of
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Covenants and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 65
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10.2. No Restraint or Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 65
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10.3. Necessary Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . 65
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ARTICLE XI
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
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11.1. Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . 66
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11.2. Indemnification by Buyers . . . . . . . . . . . . . . . . . . . . . . . . . 68
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11.3. Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
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11.4. Third Person Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
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11.5. Indemnification Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . 71
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11.7. Tax Effect of Indemnification Payments . . . . . . . . . . . . . . . . . . . 71
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ARTICLE XII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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12.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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12.2. Notice of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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12.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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ARTICLE XIII
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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13.1. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . 72
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13.2. Confidential Nature of Information . . . . . . . . . . . . . . . . . . . . . 72
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13.3. No Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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13.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
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13.5. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
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13.6. Access to Records after Closing . . . . . . . . . . . . . . . . . . . . . . 75
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13.7. Entire Agreement; Amendments . . . . . . . . . . . . . . . . . . . . . . . . 75
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13.8. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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13.9. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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13.10. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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13.11. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
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13.12. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 76
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13.13. Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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13.14. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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13.15. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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13.16. Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 77
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13.17. Guaranty of Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
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Exhibit Description
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A Form of Agreement Regarding Confidentiality
B Form of Bulb Shop Sublease Agreement
C Form of Consent Agreement
D-1, D-2 Forms of respective Cross License Agreements
E Form of Employment Agreement
F Form of Instrument of Assignment
G Form of Instrument of Assumption
H Form of Lighting Agreement
I Form of Patent Assignment
J Form of Trademark Assignment
K Form of Trade Name and Logo Consent
L Form of Transition Services Agreement
M Form of Opinion(s) of Counsel to Buyers
N Form of Opinion(s) of Counsel to Sellers
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of August 14, 1996 among Fairey
Investments, Inc., a Delaware corporation ("FII"), Fusion UV Systems, Inc., a
Delaware corporation ("Sub"), Fairey Overseas Development Limited, a
corporation organized under the laws of England and Wales ("Overseas"), and
Fusion UV Systems Limited, a corporation organized under the laws of England
and Wales ("UK Sub"), (FII, Sub, Overseas and UK Sub, together, "Buyers") on
the one hand, and Fusion Systems Corporation, a Delaware corporation
("Fusion"), Fusion UV Curing Systems Corporation, a Maryland corporation
("Curing"), Fusion Technology International, Inc., a Delaware corporation
("Fusion Technology"), and Fusion Europe Limited, a corporation organized under
the laws of England and Wales ("Fusion Europe"), (together, "Sellers"), on the
other hand.
WHEREAS, Fusion is, among other things, engaged in the
business of designing, manufacturing, marketing and servicing ultraviolet
curing systems used in manufacturing, printing and coating applications in
numerous industries (the "UV Curing Business"); and
WHEREAS, Fusion's UV Curing Business is conducted through two
of its wholly-owned subsidiaries, Curing and Fusion Japan, KK, a corporation
organized under the laws of Japan ("Fusion Japan"), and through three of its
indirectly wholly-owned subsidiaries, (i) Fusion Aetek UV Systems, Inc., a
Delaware corporation ("Aetek"), which is wholly-owned by Curing, (ii) Fusion
Europe and (iii) Fusion VuS GmbH, a corporation organized under the laws of the
Federal Republic of Germany ("Fusion Germany"), each of (ii) and (iii) of which
is wholly-owned by Fusion Technology which is in turn wholly-owned by Fusion
(such UV Curing Business as it is currently conducted by Fusion through its
direct and indirect subsidiaries is herein referred to as the "Business"); and
WHEREAS, Fusion is the record and beneficial owner of all of
the issued and outstanding shares of capital stock of (i) Fusion Japan (the
"Fusion Japan Shares") and (ii) Fusion Technology; and
WHEREAS, Fusion desires to sell to Overseas, and Overseas
desires to purchase from Fusion, the Fusion Japan Shares, all on the terms and
subject to the conditions set forth herein; and
WHEREAS, Fusion Technology is the record and beneficial owner
of all of the issued and outstanding shares of capital stock of Fusion Germany
(the "Fusion Germany Shares") and of Fusion Europe; and
WHEREAS, Fusion Technology desires to sell to Overseas, and
Overseas desires to purchase from Fusion Technology, the
10
Fusion Germany Shares, all on the terms and subject to the conditions set forth
herein; and
WHEREAS, Fusion Europe desires to sell to UK Sub, and UK Sub
desires to purchase from Fusion Europe, substantially all of the assets,
properties and business of Fusion Europe related to the Business, subject to
certain Business-related liabilities, all on the terms and subject to the
conditions set forth herein; and
WHEREAS, Fusion is the record and beneficial owner of all of
the issued and outstanding capital stock of Curing and Curing is the record and
beneficial owner of all of the issued and outstanding shares of capital stock
of Aetek (the "Aetek Shares"); and
WHEREAS, Fusion and Curing desire to sell to Sub, and Sub
desires to purchase from Fusion and Curing, substantially all of the assets,
properties and business of Curing (excluding the Aetek Shares) related to the
Business, subject to certain Business-related liabilities, all on the terms and
subject to the conditions set forth herein; and
WHEREAS, Curing desires to sell to FII, and FII desires to
purchase from Curing the Aetek Shares, all on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed among Fusion, Fusion
Technology, Fusion Europe and Curing, on the one hand, and FII, Sub, Overseas
and UK Sub on the other hand, as follows:
ARTICLE I
DEFINITIONS
1.1. DEFINITIONS. In this Agreement, the following terms
have the meanings specified or referred to in this Section 1.1 and shall be
equally applicable to both the singular and plural forms. Any agreement
referred to below shall mean such agreement as amended, supplemented and
modified from time to time to the extent permitted by the applicable provisions
thereof and by this Agreement.
"AETEK" has the meaning specified in the second recital of
this Agreement.
"AETEK PURCHASE AGREEMENT" means the Purchase Agreement dated
December 30, 1993 between GEO International Corp. and Curing relating to the
purchase by Curing of the Aetek business.
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"AFFILIATE" means: any person or entity (i) that directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, the person or entity involved, including,
without limitation, officers and directors, (ii) that directly or beneficially
owns or holds 35% or more of any equity interest in the person or entity
involved, or (iii) 35% or more of whose voting securities (or in the case of a
person which is not a corporation, 35% or more of an equity interest) is owned
directly or beneficially by the person or entity involved. As used herein, the
term "control" shall mean possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a person or
entity, whether through ownership of securities, by contract or otherwise.
Lighting (as hereinafter defined) shall not be deemed an "Affiliate" of any of
the Sellers for purposes hereof by agreement of the parties hereto.
"AFTER-TAX BASIS" means, with respect to any amount which is
to be paid hereunder on an "After-Tax Basis," an amount which, after
subtraction of the amount of all federal, state and foreign Taxes payable by
the recipient thereof as a result of the receipt or accrual of such payment,
and after taking into account (A) the increase in federal, state, local and
foreign Taxes (including estimated Taxes) payable by such recipient for all
affected taxable years as a result of the event or occurrence giving rise to
such payment (the "Indemnified Event"), and (B) the reduction in federal,
state, local and foreign Taxes (including estimated Taxes) payable by the
recipient for all taxable years ending on or before the end of the taxable year
in which such payment is made as a result of the Indemnified Event, shall be
sufficient as of the date of payment to compensate the recipient for such
Indemnified Event.
"AGREEMENT REGARDING CONFIDENTIALITY" means the Agreement
Regarding Confidentiality, Non-Competition, and Intellectual Property with
Buyer(s) in substantially the form attached hereto as Exhibit A.
"ALLOCATION SCHEDULES" has the meaning specified in Section
3.4.
"ASSUMED LIABILITIES" has the meaning specified in Section
2.3.
"BALANCE SHEET" has the meaning specified in Section 5.4.
"BALANCE SHEET DATE" has the meaning specified in Section 5.4.
"BULB SHOP SUBLEASE AGREEMENT" means the Sublease between
Fusion and Sub, effective as of the Closing, in substantially the form of
Exhibit B.
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"BUSINESS" has the meaning specified in the second recital of
this Agreement.
"BUSINESS DAY" means any day which is not a Saturday, Sunday
or statutory holiday in the State of New York or in England.
"BUSINESS PROPERTY" means any real or personal property,
plant, building, facility, structure, underground storage tank, equipment or
unit, or other asset owned, leased or operated primarily by the Business.
"BUYER" or "BUYERS" has the meaning specified in the first
paragraph of this Agreement.
"BUYER ANCILLARY AGREEMENTS" means all agreements, instruments
and documents being or to be executed and delivered by Buyers under this
Agreement or in connection herewith.
"BUYER ARENA" means the development, manufacture, use,
marketing or sale of ultraviolet lamps or ultraviolet lamp systems used for (i)
photopolymerization of certain inks, coatings or adhesives; (ii) surface
treatment; (iii) photochemical production of certain commercial products; (iv)
sterilization of water or waste streams for industrial, retail or any other
markets; or (v) proximity imaging of film printing plates.
"BUYER GROUP MEMBER" means Buyers and their respective
Affiliates, and their respective successors and assigns.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section Section 9601 et seq., as
amended, and any regulations promulgated thereunder.
"CLAIM NOTICE" has the meaning specified in Section 11.3(a).
"CLOSING" means the closing of the transfer of the Shares and
the Purchased Assets from Sellers to Buyers.
"CLOSING DATE" has the meaning specified in Section 4.1.
"CLOSING BALANCE SHEET" has the meaning specified in Section
3.2.
"CLOSING NET WORTH" means the total assets of the Business
less the total Assumed Liabilities as shown on the Closing Balance Sheet.
"CODE" means the Internal Revenue Code of 1986, as amended.
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"COMPANY" or "COMPANIES" means Curing, Aetek, Fusion Japan,
Fusion Europe and Fusion Germany.
"COMPANY GROUP" means any "affiliated group" (as defined in
Section 1504(a) of the Code without regard to the limitations contained in
Section 1504(b) of the Code) that, at any time on or before the Closing Date,
includes or has included any of the Companies or any predecessor of or
successor to any of the Companies (or another such predecessor or successor),
or any other group of corporations that, at any time on or before the Closing
Date, files or has filed Tax Returns on a combined, consolidated or unitary
basis with any of the Companies or any predecessor or successor to any of the
Companies.
"CONFIDENTIALITY AGREEMENT" means the Confidentiality
Agreement dated April 22, 1996, as amended, between Fairey Group plc and
Fusion.
"CONSENT AGREEMENT" means the Consent Agreement between Fusion
and Lighting effective as of the Closing, in substantially the form of Exhibit
C.
"CONTAMINANT" means any waste, pollutant, hazardous or toxic
substance or waste, petroleum, petroleum-based substance or waste, special
waste, or any constituent of any such substance or waste.
"COPYRIGHTS" means United States and foreign copyrights,
whether registered or unregistered, and pending applications to register the
same.
"COURT ORDER" means any judgment, order, award or decree of
any foreign, federal, state, local or other court or tribunal and any award in
any arbitration proceeding.
"CROSS LICENSE AGREEMENTS" means the Cross-License Agreement
between Fusion and Sub, and the Cross License Agreement between Lighting and
Sub, each effective as of the Closing, substantially in the form of Exhibit D-1
and D-2, respectively.
"CURING" has the meaning specified in the first paragraph of
this Agreement.
"CURING BALANCE SHEET" means the unaudited balance sheet of
Curing, excluding any balances relating to Aetek, as of June 30, 1996, prepared
in accordance with GAAP consistently applied.
"CURING BUSINESS" means the UV Curing Business engaged in by
Curing (exclusive of that engaged in by Aetek) and Fusion Europe.
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"EMPLOYMENT AGREEMENTS" means the Employment Agreements to be
effective as of the Closing between Sub and each of the Executives, in
substantially the form of Exhibit E.
"ENCUMBRANCE" means any lien, claim, charge, security
interest, mortgage, pledge, easement, conditional sale or other title retention
agreement, defect in title, covenant or other restrictions of any kind.
"ENVIRONMENTAL ENCUMBRANCE" means a lien in favor of any
Governmental Body for (i) any liability under any Environmental Law, or (ii)
damages arising from, or costs incurred by such Governmental Body in response
to, a Release or threatened Release of a Contaminant into the environment.
"ENVIRONMENTAL LAW" means all Requirements of Laws derived
from or relating to all federal, state and local laws or regulations relating
to or addressing the environment, health or safety, including but not limited
to CERCLA, OSHA and RCRA and any state equivalent thereof.
"ENVIRONMENTAL PERMIT" has the meaning specified in Section
5.9.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" means (i) any corporation which at, or at
any time before, the Closing Date is or was a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Code) as
Fusion or any of the Companies; (ii) any partnership, trade or business
(whether or not incorporated) which at, or at any time before, the Closing Date
is or was under common control (within the meaning of Section 414(c) of the
Code) with Fusion or any of the Companies; and (iii) any entity, which at, or
at any time before, the Closing Date is or was a member of the same affiliated
service group (within the meaning of Section 414(m) of the Code) as Fusion or
any of the Companies, any corporation described in clause (i) or any
partnership, trade or business described in clause (ii).
"EXCLUDED ASSETS" has the meaning specified in Section 2.2.
"EXECUTIVES" means the executives listed on Schedule 1.1.
"EXEMPT EMPLOYEE" means an employee who is "exempt" under the
Fair Labor Standards Act, 29 U.S.C. 201 et seq.
"EXPENSES" means any and all expenses incurred in connection
with investigating, defending or asserting any claim,
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action, suit or proceeding incident to any matter indemnified against hereunder
(including, without limitation, court filing fees, court costs, arbitration
fees or costs, witness fees, and reasonable fees and disbursements of legal
counsel, investigators, expert witnesses, consultants, accountants and other
professionals).
"FAIREY, INC." means Fairey, Inc., a Delaware corporation and
wholly-owned subsidiary of Overseas.
"FINANCIAL STATEMENTS" has the meaning specified in Section
5.4.
"FUSION" has the meaning specified in the first paragraph of
this Agreement.
"FUSION ASSETS" means all of the assets and properties used
primarily in the Business, including without limitation, the Purchased Assets.
"FUSION EUROPE" has the meaning specified in the first
paragraph of this Agreement.
"FUSION EUROPE BALANCE SHEET" means the unaudited balance
sheet of Fusion Europe, excluding any balances that do not relate to the Curing
Business, as of June 30, 1996 prepared in accordance with GAAP consistently
applied.
"FUSION GERMANY" has the meaning specified in the second
recital of this Agreement.
"FUSION GERMANY SHARES" has the meaning specified in the fifth
recital of this Agreement.
"FUSION TECHNOLOGY" has the meaning specified in the first
paragraph of this Agreement.
"FUSION JAPAN" has the meaning specified in the second recital
of this Agreement.
"FUSION JAPAN SHARES" has the meaning specified in the third
recital of this Agreement.
"GAAP" means United States generally accepted accounting
principles.
"GOVERNMENTAL BODY" means any foreign, federal, state, local
or other governmental authority or regulatory body.
"GOVERNMENTAL PERMITS" has the meaning specified in Section
5.9.
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"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"INSTRUMENT OF ASSIGNMENT" means the Instrument of Assignment
in the form of Exhibit F.
"INSTRUMENT OF ASSUMPTION" means the Instrument of Assumption
in the form of Exhibit G.
"INTELLECTUAL PROPERTY" means Copyrights, Patent Rights,
Trademarks and Trade Secrets.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE OF SELLER" OR "KNOWN TO SELLER" or words of like
import, as used herein, mean actual knowledge, after due inquiry and reasonable
investigation by the relevant operational persons, of any officer or director
of the entity whose knowledge is referred to in such representation or warranty
and any officer or director of the Company to which such representation or
warranty applies.
"LIGHTING" means Fusion Lighting, Inc., a Delaware
corporation.
"LIGHTING AGREEMENT" means the Agreement between Lighting and
FII, effective as of the Closing, in substantially the form of Exhibit H.
"LOSSES" means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines, penalties, damages,
expenses, deficiencies or other charges.
"MANAGEMENT INCENTIVE PLAN" means the Management Incentive
Plan of Fusion.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Business taken as a whole.
"MINIMUM NET WORTH" has the meaning specified in Section 3.3.
"NON-EXEMPT EMPLOYEE" means an employee who is not "exempt"
under the Fair Labor Standards Act, 29 U.S.C. 201 et. seq.
"NON-COMPETITION COVENANT" means the non-competition covenant
set forth in Section 8.1.
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"OSHA" means the Occupational Safety and Health Act, 29 U.S.C.
Section Section 651 et seq., as amended, and any regulations promulgated
thereunder.
"PATENT ASSIGNMENT" means the Assignment of Patents, effective
as of the Closing, in substantially the form of Exhibit I.
"PATENT RIGHTS" means United States and foreign patents,
patent applications, continuations, continuations-in-part, divisions, reissues,
patent disclosures, inventions (whether or not patentable) or improvements
thereto.
"PERMITTED ENCUMBRANCES" means (i) liens for taxes and other
governmental charges and assessments which are not yet due and payable or which
are not material in amount, (ii) liens of landlords and liens of carriers,
warehousemen, mechanics and materialmen and other like liens arising in the
ordinary course of business for sums not yet due and payable or which are not
material in amount, (iii) Encumbrances relating to real property that are
matters of public record, and (iv) other liens or imperfections on property
which are not material in amount or do not materially detract from the value of
or materially impair the existing use of the property affected by such lien or
imperfection.
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Body.
"PRODUCT LIABILITY ENDORSEMENT" has the meaning specified in
Section 8.8.
"PURCHASE PRICE" has the meaning specified in Section 3.1.
"PURCHASED ASSETS" has the meaning specified in Section 2.1.
"RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C. Section Section 6901 et seq., as amended, and any regulations
promulgated thereunder.
"REGULATIONS" means the Transfer of Undertakings (Protection
of Employment) Regulations 1981 (as amended).
"RELEASE" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the environment or into or out of any Business Property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or Business Property.
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"REMEDIAL ACTION" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the environment; (ii)
prevent the Release or threatened Release or minimize the further Release of
Contaminants or (iii) investigate and determine if a remedial response is
needed and to design such a response and post-remedial investigation,
monitoring, operation and maintenance and care.
"REQUIREMENTS OF LAWS" means any foreign, federal, state and
local laws, statutes, regulations, rules, codes or ordinances enacted, adopted,
issued or promulgated by any Governmental Body (including, without limitation,
those pertaining to electrical, building, zoning, environmental and
occupational safety and health requirements) or common law.
"SECTION 338(h)(10) ELECTIONS" has the meaning specified in
Section 8.3(g).
"SECTION 338 ALLOCATION SCHEDULE" has the meaning specified in
Section 8.3(g)(ii).
"SECTION 338 TAXES" means any Taxes that would not have been
imposed but for the Section 338(h)(10) Elections or any elections under state,
local or other tax law that are required to be made or deemed to be made as a
result of any Section 338(h)(10) Election.
"SELLER" or "SELLERS" has the meaning set forth in the first
recital to this Agreement.
"SELLER AGREEMENTS" has the meaning specified in Section 5.21.
"SELLER ARENA" means the development, manufacture, use,
marketing or sale of equipment used to fabricate precision microdevices,
including integrated circuits, flat-panel display elements (excluding curing of
the photochromic characteristic), microchip modules and micro-machined parts,
including such equipment incorporating ultraviolet lamps and ultraviolet lamp
systems. The term "ultraviolet lamp" as used herein, means a lamp in which 50%
or more of the radiated power at or below 800 nanometers is in the portion of
the spectrum below 430 nanometers.
"SELLER ANCILLARY AGREEMENTS" means all agreements,
instruments and documents being or to be executed and delivered by any Company
under this Agreement or in connection herewith.
"SELLER GROUP MEMBER" means Sellers and their respective
Affiliates and their respective successors and assigns.
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"SEMICONDUCTOR" means Fusion Semiconductor Systems
Corporation, a Maryland corporation and wholly-owned subsidiary of Fusion.
"SEVERANCE AGREEMENTS" means the agreements identified at item
2 on Schedule 5.18(B).
"SHARES" means the Fusion Japan Shares and the Fusion Germany
Shares together with the Aetek Shares.
"SOFTWARE" means computer software programs and software
systems, including, without limitation, all databases, compilations, tool sets,
compilers, higher level or "proprietary" languages, related documentation and
materials, whether in source code, object code or human readable form.
"STRADDLE PERIOD" means any taxable year or period beginning
before and ending after the Closing Date.
"TAX (and, with Correlative Meaning, "TAXES" and "TAXABLE")
means:
(i) any federal, state, local or foreign net income,
alternative or add-on minimum, gross income, gross receipts, property, sales,
use, transfer, gains, license, excise, windfall profit, severance, production,
franchise, ad valorem, value-added, stamp, employment, payroll, withholding or
minimum tax, or any other tax custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or any
penalty, addition to tax or additional amount imposed by any Governmental Body;
and
(ii) any liability of any of the Companies for the payment of
amounts with respect to payments of a type described in clause (i) as a result
of being a member of an affiliated, consolidated, combined or unitary group, or
as a result of any obligation of any of the Companies under any Tax Sharing
Arrangement or Tax indemnity arrangement.
"TAX RETURN" means any return, report or similar statement
required to be filed with respect to any Taxes (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return and declaration of estimated Tax.
"TAX SHARING ARRANGEMENT" shall mean any written or unwritten
agreement or arrangement for the allocation or payment of Tax liabilities or
payment for Tax benefits with respect to a consolidated, combined or unitary
Tax Return which Tax Return includes any of the Companies.
"TERMINATION FOR CAUSE" means the termination (which may be
immediate) of an employee ("Employee") by an employer
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("Employer") if, in Employer's reasonable determination: Employee fails to
satisfactorily perform his or her duties or responsibilities; Employee "grossly
neglects" his or her duties; Employee engages in "misconduct"; or Employee
refuses to sign or violates any confidentiality, non-competition or
intellectual property agreement. "Gross neglect" means the failure to perform
the essential functions of Employee's job or the failure to carry out
Employer's reasonable directions with respect to material duties. "Misconduct"
means: embezzlement or misappropriation of corporate or other funds or other
acts of fraud, dishonesty, theft, or self-dealing; willful refusal to perform
assigned duties; violation of Employer's policy(ies) or practice(s); any
significant violation of any statutory or common law duty of loyalty to
Employer; or conviction of a felony.
"TRADEMARK ASSIGNMENT" means the Assignment of Trademarks
between Fusion and Sub, effective as of Closing, in substantially the form of
Exhibit J.
"TRADEMARKS" means United States, state and foreign
trademarks, service marks, logos, trade dress and trade names, whether
registered or unregistered, and pending applications to register the foregoing.
"TRADE NAME AND LOGO CONSENT" means the Trade Name and Logo
Consent, effective as of Closing, substantially in the form attached hereto as
Exhibit K.
"TRADE SECRETS" means confidential ideas, trade secrets,
know-how, concepts, methods, processes, formulae, reports, data, customer
lists, mailing lists, business plans, or other proprietary information.
"TRANSFERRED EMPLOYEES" has the meaning specified in Section
8.4.
"TRANSITION SERVICES AGREEMENT" means the Transition Services
and Bulb Supply Agreement among, Fusion, Semiconductor, Sub and Overseas,
effective as of Closing, in substantially the form of Exhibit L.
"UV CURING BUSINESS" has the meaning specified in the first
recital of this Agreement.
"VATA" means the U.K. Value Added Tax Act 1994 and where
appropriate "VAT" shall mean value added tax as defined in VATA.
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ARTICLE II
PURCHASE AND SALE
2.1. PURCHASED ASSETS AND PURCHASE OF SHARES. Upon the terms
and subject to the conditions of this Agreement, on the Closing Date (i) Fusion
shall sell, transfer, assign, convey and deliver to Overseas, and Overseas
shall purchase from Fusion, the Fusion Japan Shares, (ii) Fusion Technology
shall sell, transfer, assign, convey and deliver to Overseas, and Overseas
shall purchase from Fusion Technology, the Fusion Germany Shares, (iii) Curing
shall sell, transfer, assign, convey and deliver to FII, and FII shall purchase
from Curing, the Aetek Shares, and (iv) Fusion, Curing and Fusion Europe shall
sell, transfer, assign, convey and deliver to Sub and UK Sub, respectively, and
Sub and UK Sub, respectively, shall purchase from Curing and Fusion Europe,
free and clear of all Encumbrances (except for Permitted Encumbrances), all of
the assets and properties of Curing and Fusion Europe of every kind and
description, wherever located, real, personal or mixed, tangible or intangible,
which are used primarily in connection with the Curing Business as the same
shall exist on the Closing Date (herein collectively called the "Purchased
Assets"), including, without limitation, all right, title and interest of
Curing and Fusion Europe in, to and under:
(a) all of the assets reflected (i) on the Curing Balance
Sheet and (ii) on the Fusion Europe Balance Sheet, in each case,
except those disposed of or converted into cash after the Balance
Sheet Date in the ordinary course of business;
(b) all cash, bank deposits and cash equivalents;
(c) all notes and accounts receivable generated by the Curing
Business;
(d) all raw materials, supplies, work-in-process finished
goods, goods on consignment, and other materials included in the
inventory of the Curing Business;
(e) the Environmental Permits of Curing and Fusion Europe
listed in Schedule 2.1;
(f) the real estate leases and leasehold improvements of
Fusion, Curing and Fusion Europe listed or described at items 2
through 9 (inclusive) on Schedule 5.11;
(g) the machinery, equipment, vehicles, furniture and other
personal property of Curing and Fusion Europe listed or referred to in
Schedule 5.13;
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(h) the personal property leases of Curing and Fusion Europe
listed in Schedule 5.14;
(i) the Copyrights, Patent Rights and Trademarks (and all
goodwill associated therewith), and the agreements, contracts,
licenses, sublicenses, assignments and indemnities, in each case, of
Curing and Fusion Europe listed on Schedule 5.15(a)(i);
(j) the contracts, agreements or understandings of Curing and
Fusion Europe listed or described in Schedule 5.20;
(k) all Trade Secrets and other proprietary or confidential
information used primarily in the Curing Business;
(l) all of Curing's and Fusion Europe's rights, claims or
causes of action against third parties relating to the assets,
properties, business or operations of Curing and Fusion Europe arising
out of transactions occurring prior to the Closing Date;
(m) the name "Fusion UV Curing Systems," "Fusion UV Systems,"
"Fusion UV Curing," "Fusion UV," "Fusion UV Japan," "Fusion UV Curing
Japan," "Fusion UV Germany," or "Fusion UV Curing Germany" (and any
such name that includes "Inc." or any derivation thereof or GmbH or
any similar designation) and no other variations thereof;
(n) all security deposits under Fusion's, Curing's and Fusion
Europe's leases of real or personal property relating to the Business;
and
(o) Curing's and Fusion Europe's interest in and to all
telephone, telex and telephone facsimile numbers and other directory
listings utilized primarily in connection with the Curing Business.
2.2. EXCLUDED ASSETS. Notwithstanding the provisions of
Section 2.1, the Purchased Assets shall not include the following (herein
referred to as the "Excluded Assets"):
(a) Curing's and Fusion Europe's rights, claims or causes of
action against third parties relating to the assets, properties,
business or operations of Curing or Fusion Europe which may arise in
connection with the discharge by Curing or Fusion Europe of the
Excluded Liabilities;
(b) all contracts and policies of insurance of Curing and
Fusion Europe;
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(c) all corporate minute books and stock transfer books and
the corporate seals of Curing and Fusion Europe;
(d) any and all employee benefit agreements, plans or
arrangements listed in Schedule 5.18(A) or otherwise maintained by a
Seller on behalf of persons employed by Curing or Fusion Europe;
(e) any and all employment agreements, employment- related
contracts and employment-related understandings with any employee of
the Business, (including, without limitation those listed in Schedule
5.18(B));
(f) all refunds of any Tax for which Sellers are liable
pursuant to Section 8.3(a)(i)(C);
(g) [intentionally omitted];
(h) any Purchased Assets sold or otherwise disposed of in
the ordinary course of the operations of the Curing Business and in
accordance with this Agreement during the period from the Balance
Sheet Date until the Closing Date;
(i) except as provided in Section 2.1(m) and except to
the extent provided in the Trade Name and Logo Consent, the name
"Fusion" or any related or similar trade names, trademarks, service
marks and logos, to the extent the same incorporate the name "Fusion"
or any variation thereof;
(j) all books and records (including all data and other
information stored on discs, tapes or other media) of Curing and
Fusion Europe relating to the assets, properties, business and
operations of Curing and Fusion Europe (it being agreed that Buyers
may inspect and may retain copies of any or all of same for their
records); and
(k) the Computer Associates ASK management information
software used in the Business.
2.3. ASSUMED LIABILITIES. On the Closing Date, Buyers shall
deliver to Curing and Fusion Europe the Instrument of Assumption pursuant to
which the relevant Buyers shall assume and agree to discharge the following
obligations and liabilities of Curing and Fusion Europe in accordance with
their respective terms and subject to the respective conditions thereof:
(a) all liabilities of Curing reflected in the Curing Balance
Sheet as a dollar amount to the extent so reflected and all
liabilities of Fusion Europe reflected in the Fusion Europe Balance
Sheet as a dollar amount to the extent so reflected;
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(b) all liabilities and obligations of Curing and Fusion
Europe, other than Excluded Liabilities, arising out of or relating
exclusively to the Curing Business and incurred in the ordinary course
of business since the Balance Sheet Date, except in each case, to the
extent such liabilities and obligations, but for a breach or default
by Curing or Fusion Europe, would have been paid, performed or
otherwise discharged on or prior to the Closing Date or to the extent
the same arise out of any such breach or default;
(c) all liabilities and obligations of Curing, Fusion Europe
and Fusion (with respect to the leases and other agreements identified
at items 3, 4, 6, and 7 on Schedule 5.11 only (the "Fusion Leases")),
other than Excluded Liabilities, arising under the leases and other
contracts included in the Purchased Assets and those contracts not
required by the terms of Sections 5.14 or 5.20 or otherwise to be
listed in the Disclosure Schedule, except in each case, to the extent
such liabilities and obligations, but for a breach or default by
Curing or Fusion Europe or, with respect to any Fusion Lease, Fusion,
would have been paid, performed or otherwise discharged on or prior to
the Closing Date or to the extent the same arise out of any such
breach or default;
(d) all liabilities in respect of Taxes for which Buyers
are liable pursuant to Section 8.3;
(e) any warranty or other obligations to provide parts and
service on, or to repair or replace, any products manufactured,
distributed or sold by Curing or Fusion Europe on or prior to the
Closing Date;
(f) subject to Section 8.8, any product liability or claims
for injury to person or property, regardless of when made or asserted,
relating to products manufactured, distributed or sold by Curing or
Fusion Europe or services performed by Curing or Fusion Europe on or
prior to the Closing Date; and
(g) any recalls on or after the Closing Date mandated by any
Governmental Body of the products manufactured, distributed or sold by
Curing or Fusion Europe on or prior to the Closing Date;
All of the foregoing liabilities and obligations to be assumed by Buyers
hereunder (excluding any Excluded Liabilities) are referred to herein as the
"Assumed Liabilities."
2.4. EXCLUDED LIABILITIES. Buyers shall not assume or be
obligated to pay, perform or otherwise discharge any liability or obligation of
Curing or Fusion Europe, direct or indirect, known or unknown, absolute or
contingent, not expressly assumed
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by the relevant Buyers pursuant to the Instrument of Assumption (all such
liabilities and obligations not being assumed being herein called the "Excluded
Liabilities") and, notwithstanding anything to the contrary in Section 2.3,
none of the following shall be Assumed Liabilities for purposes of this
Agreement:
(a) any liabilities in respect of Taxes for which Curing or
Fusion Europe are liable pursuant to Section 8.3;
(b) any costs and expenses incurred by Curing or Fusion
Europe incident to their negotiation and preparation of this Agreement
and their performance and compliance with the agreements and
conditions contained herein;
(c) any liabilities or obligations in respect of any Excluded
Assets;
(d) any liabilities in respect of the claims or proceedings,
if any, relating to Curing or Fusion Europe or the Curing Business
described in Schedule 5.22;
(e) any accrued liability of any kind, contingent or
otherwise required to be reflected as a dollar amount on the Curing
Balance Sheet or on the Fusion Europe Balance Sheet which were not
reflected thereon as a dollar amount or which exceed, as of the
Balance Sheet Date, the amount reflected to the extent of such excess;
(f) any liabilities and obligations related to, associated
with or arising out of (i) the occupancy, operation, use or control by
any Company of the Business Property on or prior to the Closing Date
or (ii) the operation of the Curing Business on or prior to the
Closing Date, in any case under (i) or (ii), to the extent incurred
or imposed by any Environmental Law as a result of any Release of any
Contaminant by, on behalf of or at the direction of any Company or any
agent of any Company on, at or from the Business Property, including,
without limitation, all facilities, improvements, structures and
equipment thereon, surface water thereon or adjacent thereto and soil
or groundwater thereunder, or any conditions whatsoever on, under or
in the vicinity of such real property during any Company's ownership,
occupancy or use thereof, or (2) any Release of any Contaminant at,
on, to or from any real property or facility owned by a third Person
to which Contaminants generated by the Curing Business were sent prior
to the Closing Date;
(g) [intentionally omitted]
(h) any obligations or liabilities to any employee of the
Business or to any other Person which arise as a result
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of the transactions contemplated by this Agreement (provided that this
subparagraph (h) shall not impair the obligations of Buyers under
Section 8.9);
(i) any obligations or liabilities under the Severance
Agreements to any employee of the Business (provided that this
subparagraph (i) shall not impair the obligations of Buyers under
Section 8.9);
(j) the Transfer Liabilities (as defined in Section 8.6);
(k) the Employee Liabilities (as defined in Section 8.7); and
(l) any obligation or liability of any Seller, Company or
any Person acting on behalf of a Seller or a Company in respect of any
fee or commission to any finder or intermediary for or an account of
the transactions contemplated by this Agreement, including, without
limitation, any such obligation or liability identified on Schedule
5.28.
ARTICLE III
PURCHASE PRICE
3.1. PURCHASE PRICE. The total consideration to be paid by
Buyers shall be (i) $121,000,000 in cash, subject to adjustment as provided in
Section 3.3, paid as provided in Sections 4.2 and 3.3, and (ii) the assumption
of the Assumed Liabilities (the "Purchase Price").
3.2. CLOSING BALANCE SHEET. (a) As soon as practicable
following the Closing Date, Buyers shall cause the accounting personnel who
prepared the Financial Statements and the Balance Sheet to prepare and deliver
to Sellers a consolidated balance sheet of the Business as of the close of
business on the Closing Date, and separate balance sheets showing the net book
value of each of Fusion Japan, Aetek, Fusion Germany, and the portion of the
Purchased Assets attributable to Fusion Europe (such consolidated balance sheet
and such separate balance sheets, collectively the "Closing Balance Sheet").
The Closing Balance Sheet shall be prepared in accordance with GAAP consistent
with the accounting principles and procedures employed in the preparation and
presentation of the Financial Statements.
(b) Sellers shall have twenty-one (21) days after receipt of
the Closing Balance Sheet to advise Buyers in writing as to whether Sellers
dispute any amounts reflected in the Closing Balance Sheet, specifying in
reasonable detail each item of disagreement and the amount thereof. In the
event Sellers so
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notify Buyers in writing within such twenty-one day time period of any such
disputes, Buyers and Sellers shall attempt to resolve all such disputes, and
the Closing Balance Sheet shall be adjusted to reflect any such resolution. If
Buyers and Sellers are unable to resolve all such disputes within fifteen (15)
days after such notification from Sellers to Buyers, then independent public
accountants of recognized national standing (other than an accounting firm that
is either the auditor of Buyers or of Sellers), shall be engaged to resolve all
remaining points of disagreement with respect to the Closing Balance Sheet
within thirty (30) days, which resolution shall be final and binding upon
Buyers and Sellers, and the Closing Balance Sheet shall be adjusted to reflect
any such resolution.
(c) The Closing Balance Sheet shall be final and binding upon
Buyers and Sellers and shall provide the basis for the final determination of
the Closing Net Worth unless Sellers shall dispute the same in writing within
the twenty-one (21) day time period referred to in subparagraph (b) of this
Section 3.2, in which case the Closing Balance Sheet, as finally adjusted,
shall be final and binding upon Buyers and Sellers and shall provide the basis
for the final determination of the Closing Net Worth.
(d) Each party shall bear the fees and expenses of its own
independent public accountants in connection with the preparation and review of
the statements and calculations referred to in this Section 3.2. All fees and
disbursements of the arbitrating accountants designated in accordance with
subparagraph (c) of this Section 3.2 shall be paid one-half by Sub and one-half
by Sellers.
(e) Notwithstanding anything contained herein to the
contrary, the Closing Balance Sheet shall reflect as liabilities:
(i) An accrual in respect of the Management Incentive Plan
liability for the Transferred Employees participating in the Management
Incentive Plan for the period from January 1, 1996 to the Closing Date,
calculated in accordance with the Management Incentive Plan provisions using
the following variables:
(A) in respect of the projected consolidated profits of
Fusion for 1996, the forecast presented to the audit committee of the
board of directors of Fusion at its meeting on July 22, 1996;
(B) in respect of the projected profits of the Business for
1996, the amount of $11,900,000;
(C) in respect of performance goals, an assumption that these
would be 100% achieved;
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(ii) An accrual in respect of the profit sharing
contribution under the Fusion Systems Profit Sharing Plan in respect of the
Transferred Employees for the period from January 1, 1996 to the Closing Date
calculated in accordance with the established formula of Fusion applied pro
rata to the forecasted consolidated sales and profits presented to the audit
committee of the board of directors of Fusion at its meeting on July 22, 1996
as shown on Schedule 3.2.
3.3. PURCHASE PRICE ADJUSTMENT AND ALLOCATION; INTERCOMPANY
ACCOUNTS. (a) In the event that, upon final determination of the Closing
Balance Sheet pursuant to Section 3.2, (i) the Closing Net Worth is less than
$26,250,000 (the "Minimum Net Worth"), Curing agrees to pay Sub the amount
equal to the difference between the Minimum Net Worth and, the Closing Net
Worth or (ii) the Closing Net Worth is greater than the Minimum Net Worth, Sub
agrees to pay Curing the amount by which the Closing Net Worth exceeds the
Minimum Net Worth (in either case, the "Net Worth Adjustment").
(b) If the net book value of any of Fusion Japan, Aetek,
Fusion Germany or the portion of the Purchased Assets attributable to Fusion
Europe, as determined in accordance with Section 3.2, is (i) greater than the
amount allocable thereto as set forth on Schedule 4.2 (which shall be mutually
agreed to and delivered at Closing), then the Buyer with respect thereto shall
pay to the related Seller the amount by which such book value exceeds such
amount allocable thereto, or (ii) less than the amount allocable thereto as set
forth on Schedule 4.2 (which shall be mutually agreed to and delivered at
Closing), then the Seller with respect thereto shall pay to the related Buyer
the amount by which such book value is less than such amount allocable thereto.
(c) If, pursuant to Section 3.3(b), there is a net payment
from Buyers to Sellers, then Curing shall pay Sub an amount equal to such net
payment. If, pursuant to Section 3.3(b), there is a net payment from Sellers
to Buyers, then Sub shall pay Curing an amount equal to such net payment. (In
each case the intent being that nothing in Section 3.3(b) or this Section
3.3(c) shall alter the Purchase Price).
(d) Any payment pursuant to this Section 3.3 shall be made as
follows:
(i) Such payment shall be made at a mutually convenient
time and place (i) within 30 days after Buyers' delivery of the
Closing Balance Sheet if no notice of disagreement with respect to the
Closing Balance Sheet is delivered by Sellers or (ii) if a notice of
disagreement with respect to the Closing Balance Sheet is delivered
then within 10 days after the earlier of (A) agreement of Buyers and
Sellers pursuant to Section 3.2(b) with respect to the
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determination of Closing Net Worth, or (B) delivery of the calculation
of Closing Net Worth by the independent accountants pursuant to
Section 3.2(b).
(ii) Such payment shall be made by delivery by a Seller or
Buyer, as the case may be, of a wire transfer of same day funds to the
respective Buyer or Seller, as the case may be, or by causing such
payments to be credited to such account of Seller or Buyer as may be
designated by such Seller or Buyer. The amount of such payment shall
bear interest from and including the Closing Date to but excluding the
date of payment at a rate per annum equal to the rate publicly
announced from time to time by the First National Bank of Boston as
its base lending rate in Boston, Massachusetts in effect from time to
time during the period from the Closing Date to the date of payment.
Such interest shall be payable at the same time as the payment to
which it relates and shall be calculated daily on the basis of a year
of 365 days and the actual number of days for which due.
(e) The allocation of the Purchase Price among Fusion Japan,
Aetek, Fusion Germany, the portion of the Purchased Assets attributable to
Fusion Europe, and the portion of the Purchased Assets attributable to Curing,
determined based on the initial allocation set forth in Schedule 4.2 and the
adjustments required by Section 3.3(a), (b), and (c), is hereinafter referred
to as the "Purchase Price Allocation." Each of the Buyers and the Sellers
agree to file (and cause their respective Affiliates to file) all federal,
state, local and foreign Tax Returns in accordance with the Purchase Price
Allocation.
(f) Within three (3) Business Days following the final
determination of the Closing Balance Sheet, the intercompany accounts shall be
paid in full by the appropriate parties to the appropriate parties as reflected
on the Closing Balance Sheet.
3.4. ALLOCATION AMONG PURCHASED ASSETS. Within 30 days
following the final determination of the Closing Balance Sheet, Sub and UK Sub,
respectively, shall deliver to Curing and Fusion Europe, respectively,
schedules (the "Allocation Schedules") allocating the portion of the Purchase
Price paid to each of Curing and Fusion Europe, respectively, (determined in
accordance with the Purchase Price Allocation and including, for purposes of
this Section 3.4, any other consideration paid to Curing or Fusion Europe
including the Assumed Liabilities) among the portion of the Purchased Assets
attributable to each of Curing and Fusion Europe, respectively. The Allocation
Schedule with respect to Curing shall be reasonable and shall be prepared in
accordance with Section 1060 of the Code and the regulations thereunder.
Curing and Fusion Europe, respectively, each agree that promptly after
receiving such Allocation Schedule it shall review the same and either return
an executed copy thereof to Curing and Fusion Europe, respectively, or propose
reasonable
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changes thereto. In the event Curing and Sub or Fusion Europe and UK Sub
cannot agree on an Allocation Schedule, Curing and Sub or Fusion Europe and UK
Sub, as the case may be, shall jointly appoint a mutually acceptable
independent public accountant to prepare the Allocation Schedule. Sub and
Curing each agrees to file Internal Revenue Service Form 8594 and to provide
the other promptly with any other information required to complete Form 8594,
and Sub, UK Sub, Curing and Fusion Europe each agrees to file all federal,
state, local and foreign Tax Returns, in accordance with the Allocation
Schedule.
ARTICLE IV
CLOSING
4.1. CLOSING DATE. The Closing shall be consummated at the
close of business on the third business day following the expiration or
termination of the waiting period under the HSR Act or such later date as may
be agreed upon by Buyer and Sellers after the conditions set forth in Articles
IX and X have been satisfied, at the offices of Sidley & Austin in Chicago,
Illinois, or at such other place or at such other time as shall be agreed upon
by Buyer and Sellers. The time and date on which the Closing is actually held
are sometimes referred to herein as the "Closing Date."
4.2. PAYMENT ON THE CLOSING DATE. Subject to fulfillment or
waiver of the conditions set forth in Article IX, at Closing each of the Buyers
shall pay to its respective Seller the amount set forth on Schedule 4.2 by wire
transfer of immediately available funds in each case to the accounts specified
by such Seller in writing to such Buyer at least two business days prior to the
Closing.
4.3. BUYERS' ADDITIONAL DELIVERIES. Subject to fulfillment
or waiver of the conditions set forth in Article IX, at Closing Buyers shall
deliver to Sellers all the following:
(a) Copies of each Buyer's charter or, with respect to
non-U.S. companies, other similar organization documents, in each case
certified as of a recent date by an appropriate official;
(b) Certificates of good standing of each Buyer issued as of
a recent date by the Secretary of State of such company's state of
incorporation, or, with respect to non-U.S. companies, other similar
document certified by an appropriate official;
(c) Certificates of the secretary or an assistant secretary
of each Buyer dated the Closing Date, in form and substance reasonably
satisfactory to Sellers, as to (i) no
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amendments to the Certificate of Incorporation or other comparable
authority of such Buyer since a specified date; (ii) the by-laws or
comparable organizational document of Buyer; (iii) the resolutions of
the Board of Directors or comparable authority of Buyer authorizing
the execution and performance of this Agreement and the transactions
contemplated hereby; and (iv) incumbency and signatures of the
officers or comparable authority of Buyers executing this Agreement
and any Buyer Ancillary Agreement;
(d) Opinion of counsel or comparable authority to Buyers
substantially in the form contained in Exhibit M;
(e) The Instrument of Assumption relating to the Assumed
Liabilities duly executed by Sub and U.K. Sub;
(f) The certificate contemplated by Section 10.1, duly
executed by the President or any Vice President or comparable
authority of Buyers;
(g) The Transition Services Agreement duly executed by Sub;
(h) The Lighting Agreement duly executed by Overseas and Sub,
having been delivered at or prior to the execution hereof;
(i) The Employment Agreements duly executed by Sub;
(j) The Bulb Shop Sublease Agreement duly executed by Sub;
(k) The assignments of leases listed on Schedule 4.3 duly
executed by the relevant Buyer(s);
(l) The landlords consents listed on Schedule 4.3 that are
obtained on or prior to the Closing duly executed by the relevant
parties;
(m) The Trade Name and Logo Consent duly executed by the
relevant Buyer(s);
(n) The two Cross License Agreements duly executed by
Sub; and
(o) The Patent Assignment duly executed by Sub.
4.4. SELLERS' DELIVERIES. Subject to fulfillment or waiver
of the conditions set forth in Article X, at Closing Sellers shall deliver to
Buyers all the following:
(a) Copies of Fusion's and each Company's charter or, with
respect to non-U.S. Companies, other similar
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organizational documents, in each case certified as of a recent date
by an appropriate official;
(b) Certificate of good standing of Fusion and each Company
issued as of a recent date by the Secretary of State of the State of
such Company's incorporation or, with respect to non-U.S. Companies,
other similar document certified by an appropriate official;
(c) Certificate of the secretary or an assistant secretary of
each Seller, dated the Closing Date, in form and substance reasonably
satisfactory to Buyer, as to (i) no amendments to the Certificate of
Incorporation or other comparable authority of such Seller since a
specified date; (ii) the by-laws or other comparable organizational
document of such Seller; (iii) the resolutions of the Board of
Directors or other comparable authority of such Seller authorizing the
execution and performance of this Agreement and the transactions
contemplated hereby; and (iv) incumbency and signatures of the
officers or other comparable authority of such Seller executing this
Agreement and any Seller Ancillary Agreement;
(d) Certificates representing the Fusion Japan Shares,
together with duly executed and witnessed stock powers (in blank)
attached thereto, and with respect to the Fusion German Shares, a
notarial deed, duly executed and notarized;
(e) The relevant minute books, stock record ledgers and
corporate seals of Aetek, Fusion Japan and Fusion Germany;
(f) Opinions of counsel to Sellers substantially in the form
contained in Exhibit N;
(g) The Instrument of Assignment relating to the Purchased
Assets duly executed by Curing and Fusion Europe;
(h) Certificates of title or origin (or like documents) with
respect to any vehicles or other equipment included in the Purchased
Assets for which a certificate of title or origin is required in order
to transfer title;
(i) All consents, waivers or approvals required to be
obtained by Sellers with respect to the Purchased Assets or the
consummation of the transactions contemplated by this Agreement;
(j) The Transition Services Agreement duly executed by Fusion
and Semiconductor;
(k) The Lighting Agreement duly executed by Lighting, having
been delivered at or prior to the execution hereof;
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(l) The Employment Agreements duly executed by the
Executives;
(m) The Bulb Shop Sublease Agreement duly executed by Fusion;
(n) The two Cross License Agreements duly executed by Fusion
and Lighting, respectively;
(o) The Consent Agreement, duly executed by Fusion and
Lighting;
(p) The certificates contemplated by Sections 9.1 and 9.2,
duly executed by the authorized officer of each Seller;
(q) The Patent Assignment, duly executed by Fusion;
(r) The Trade Name and Logo Consent duly executed by Fusion;
(s) The Trademark Assignment duly executed by Fusion;
(t) The Product Liability Endorsement (as defined in Section
8.8) duly issued by the Sellers' Product Liability Policy insurer;
(u) An assignment, in recordable form, with respect to each
of the leases of real estate of Curing, Fusion Europe and Fusion
described in Schedule 5.11 (except for item 1), duly executed by
Curing, Fusion Europe and Fusion, respectively, and in form and
substance reasonably satisfactory to Buyers;
(v) A Bill of Sale conveying all personal property contained
within the Purchased Assets duly executed by the applicable Seller,
and such other bills of sale, assignments and other instruments of
transfer or conveyance as Buyers may reasonably request to evidence
and effect the sale, assignment, transfer, conveyance and delivery of
the Purchased Assets to Buyers; and
(w) Documentation deemed adequate by Buyers evidencing the
effective transfer of the Transfer Assets and the Transfer Liabilities
as required under Section 8.6.
In addition to the above deliveries, Sellers shall take all steps and actions
as Buyers may reasonably request or as may otherwise be necessary to put Buyers
in actual possession or control of the Purchased Assets.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
As an inducement to Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Sellers, as to
themselves and as to each of the Companies, represents and warrants to Buyers
and agrees as follows, except as set forth on the Disclosure Schedule attached
hereto (the "Disclosure Schedule") (Any references herein to a "Schedule" shall
be a reference to that particular Schedule in the Disclosure Schedule):
5.1. ORGANIZATION AND CAPITAL STRUCTURE OF THE COMPANIES.
Each of Fusion, Fusion Technology and each Company is a corporation duly
organized, validly existing and, with respect to the U.S. Companies and Fusion
Europe, in good standing under the laws of the jurisdiction indicated on
Schedule 5.1(A). Each of Fusion, Fusion Technology and each Company is duly
qualified to transact business and, with respect to the U.S. Companies and
Fusion Europe, is in good standing in each of the jurisdictions where the
character of the property owned or leased by it or the nature of its activities
make such qualification necessary. Each of Fusion, Fusion Technology and each
Company has full power and authority to own or lease and to operate and use its
assets and properties and to carry on the Business in all material respects as
now conducted.
True and complete copies of the charter or other relevant
organizational documents and all amendments thereto and of the By-laws or other
relevant documents, as amended to date, of Fusion, Fusion Technology and each
Company have been delivered to Buyer.
Schedule 5.1(B) sets forth the authorized capital stock of
Fusion Technology and each Company and indicates the number of issued and
outstanding shares of capital stock, the record and beneficial owner of such
shares of issued and outstanding capital stock, the number of issued shares of
capital stock held as treasury shares and the number of shares of capital stock
unissued and not reserved for any purpose of Fusion Technology and each
Company.
5.2. SUBSIDIARIES AND INVESTMENTS. None of the Sellers,
directly or indirectly, (i) owns, of record or beneficially, any outstanding
voting securities or other equity interests in any corporation, partnership,
joint venture or other entity which is involved in or relates to the Business
or (ii) controls any corporation, partnership, joint venture or other entity
which is involved in or relates to the Business.
Except for this Agreement, there are no agreements,
arrangements, options, warrants, calls, rights or commitments of
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any character relating to the issuance, sale, purchase or redemption of any
shares of capital stock of any of the Companies. All of the outstanding shares
of capital stock of each of the Companies are validly issued, fully paid and
nonassessable. All of the outstanding shares of capital stock of each of the
Companies are owned of record and beneficially free from all Encumbrances.
5.3. AUTHORITY OF SELLERS. Each Seller has full power and
authority to execute, deliver and perform this Agreement and all of the
relevant Seller Ancillary Agreements. The execution, delivery and performance
of this Agreement and the relevant Seller Ancillary Agreements by Sellers have
been duly authorized and approved by each Seller's board of directors and by
Curing stockholders and by Fusion Europe stockholders and do not require any
further authorization or consent of any Seller or its respective stockholders.
This Agreement has been duly authorized, executed and delivered by each Seller
and is the legal, valid and binding obligation of each Seller enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and general
principles of equity, regardless of whether considered in a proceeding in
equity or at law (the "Bankruptcy Exception") and each of the Seller Ancillary
Agreements has been duly authorized by each Seller and upon execution and
delivery by each Seller will be a legal, valid and binding obligation of such
Seller enforceable in accordance with its terms subject to the Bankruptcy
Exception.
Neither the execution and delivery of this Agreement or any of
the Seller Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:
(i) materially conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a default, an event
of default or an event creating rights of acceleration, termination or
cancellation or a loss of rights under, or result in the creation or
imposition of any Encumbrance upon any of the Fusion Assets or the
Shares, under (1) the respective charters or By-laws of the Sellers,
(2) any Seller Agreement, (3) any other material note, instrument,
agreement, mortgage, lease, license, franchise, permit or other
material authorization, right, restriction or obligation to which any
Seller is a party or any of the Fusion Assets is subject or by which
any Seller is bound, (4) any Court Order to which any Seller is a
party or any of the Fusion Assets is subject or by which any Seller is
bound, or (5) any Requirements of Laws affecting any Seller or the
Fusion Assets; or
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(ii) require the approval, consent, authorization or act of,
or the making by any Company of any declaration, filing or
registration with, any Person, except as provided under the HSR Act.
5.4. FINANCIAL STATEMENTS. Schedule 5.4 of the Disclosure
Schedule contains (i) the unaudited consolidated balance sheet of the Business
as of December 31, 1995 and the related statement of income for the year then
ended (the "Financial Statements") and (ii) the unaudited consolidated balance
sheet (the "Balance Sheet") of the Business as of June 28, 1996 (the "Balance
Sheet Date") and the related statement of income for the six-months then ended.
Except as set forth therein or in the notes thereto, such balance sheet and
statement of income have been prepared in conformity with GAAP consistently
applied, and such balance sheet and related statement of income present fairly
the financial position and results of operations of the Business as of their
respective dates and for the respective periods covered thereby.
5.5. OPERATIONS SINCE BALANCE SHEET DATE. (a) Since the
Balance Sheet Date, there has been:
(i) no material adverse change in the Purchased Assets or the
operations, liabilities, profits or condition (financial or otherwise)
of the Business and, to Sellers' knowledge, no fact or condition
exists which might reasonably be expected to cause such a change in
the future; and
(ii) no material damage, destruction, loss or claim, whether
or not covered by insurance, or condemnation or other taking adversely
affecting any of the Purchased Assets, or the Business taken as a
whole.
(b) Since the Balance Sheet Date, the Business has been
conducted only in the ordinary course and in conformity with past practice.
Without limiting the generality of the foregoing, since the Balance Sheet Date,
neither Fusion nor any Company has:
(i) sold, leased (as lessor), transferred or otherwise
disposed of (including any transfers from a Company to any of its
Affiliates), or mortgaged or pledged, or imposed or suffered to be
imposed any Encumbrance on, any of the assets reflected on the Balance
Sheet in excess of $100,000 in the aggregate or any assets acquired by
the Business after the Balance Sheet Date in excess of $100,000 in the
aggregate, except for inventory and minor amounts of personal property
sold or otherwise disposed of for fair value in the ordinary course of
the Business consistent with past practice and except for Permitted
Encumbrances;
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(ii) canceled any debts in excess of $100,000 in the
aggregate owed to or claims held by the Business (including the
settlement of any claims or litigation) other than in the ordinary
course of the Business consistent with past practice;
(iii) paid any claims in excess of $100,000 in the aggregate
against the Business (including the settlement of any claims or
litigation against the Business or the payment or settlement of and
obligations or liabilities of the Business) other than in the ordinary
course of business consistent with past practice;
(iv) created, incurred, guaranteed or assumed, or agreed to
create, incur, guaranty or assume, any indebtedness in excess of
$100,000 in the aggregate for borrowed money in respect of the
Business (other than money borrowed or advances from Fusion or any of
its Affiliates in the ordinary course of the Business consistent with
past practice) or entered into, as lessee, any capitalized lease
obligations (as defined in Statement of Financial Accounting Standards
No. 13); or
(v) prepared or filed any Tax Return inconsistent with past
practice or, on any such Tax Return, taken any position, made any
election, or adopted any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods (including, without limitation,
positions, elections or methods which would have the effect of
deferring income to periods for which Buyers are liable pursuant to
Section 8.3(a)(ii) or accelerating deductions to periods for which
Sellers are liable pursuant to Section 8.3(a)(i)).
(vi) accelerated or delayed collection of notes or accounts
receivable generated by the Business in advance of or beyond their
regular due dates or the dates when the same would have been collected
in the ordinary course of the Business consistent with past practice;
(vii) delayed or accelerated payment of any account payable
or other liability of the Business beyond or in advance of its due
date or the date when such liability would have been paid in the
ordinary course of the Business consistent with past practice;
(viii) allowed the levels of raw materials, supplies,
work-in-process, finished goods or other materials included in the
inventory of the Business to vary in any material respect from the
levels customarily maintained in the Business;
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(ix) made, or agreed to make, any payment of cash or
distribution of assets to a Seller or any of its Affiliates (other
than cash realized upon collection of receivables in the ordinary
course of the Business); or
(x) granted or committed to grant any bonus or other special
compensation or increased or committed to increase the compensation or
benefits payable or to become payable to any directors, officers or
employees of the Business except, in the case of employees, for
increases in the normal course of operations consistent with past
compensation practice, or instituted or committed to institute any
bonus, incentive deferred compensation, insurance, pension,
retirement, medical, hospital disability, welfare or other employee
benefit plan except for increases required by law;
(xi) made any change in the accounting principles and
practices used by the Business from those applied in the preparation
of the Balance Sheet and the related statements of income and cash
flow for the period then ended;
(xii) sold, assigned or transferred any Intellectual Property
or other intangible assets, or disclosed any proprietary or
confidential information to any Person (other than Buyers or their
Affiliates and agents);
(xiii) entered into any new employment agreement; or
(xiv) agreed or committed to do or authorized any of the
foregoing.
5.6. [Intentionally Omitted].
5.7 TAXES. (a)(i) Each of the Companies and each Company
Group has filed all Tax Returns which are required to be filed and have paid
all Taxes which have become due pursuant to such Tax Returns or pursuant to any
assessment which has become payable; (ii) all such Tax Returns are complete and
disclose all Taxes required to be paid by each of the Companies and each
Company Group, and all such Taxes shown to be due on such Tax Returns have been
timely paid; (iii) all Taxes (whether or not shown on any Tax Return) owed by
any of the Companies or any Company Group have been timely paid; (iv) all
deficiencies asserted or assessments made as a result of any examination of the
Tax Returns referred to in clause (i) have been paid in full or a proper
reserve therefor has been included on the Balance Sheet; (v) each of the
Companies has made sufficient estimated income tax payments such that no
additional income taxes will be owed by such Company for any period up through
and including the Closing Date; (vi) there is no action, suit, investigation,
audit, claim or assessment pending or known by Sellers to be proposed or
threatened with respect to Taxes of any Company or any Company Group; (vii) all
Tax Sharing Arrangements and Tax
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indemnity arrangements will terminate prior to the Closing Date and none of the
Companies will have any liability thereunder on or after the Closing Date;
(viii) none of the Companies nor any member of any Company Group has waived or
been requested to waive any statute of limitations in respect of Taxes; (ix)
all Taxes which any of the Companies or any Company Group are required by law
to withhold or collect for payment (including from employees for income Tax and
social security and other payroll Taxes) have been duly withheld or collected,
and have been paid or accrued, reserved against and entered on the books of
such Company or such Company Group; (x) each of the Companies is properly
treated as the owner, for all federal, state, local and other income Tax
purposes, of all property of which it is the lessor; (xi) there are no liens
for Taxes on the assets of any of the Companies except liens related to current
Taxes not yet due; and (xii) none of the Companies has been a member of any
Company Group other than the Company Group of which it is a member as of the
date hereof.
(b) No transaction contemplated by this Agreement is subject
to withholding under Section 1445 of the Code (relating to "FIRPTA").
(c) In connection with the transactions contemplated by this
Agreement, there will be no payment, nor will there be any acceleration of the
vesting of any options, payments or other benefits, in each case that will be
(or under Section 280G of the Code and the Treasury Regulations thereunder will
be presumed to be) an "excess parachute payment" to a "disqualified individual"
as those terms are defined in Section 280G of the Code and the Treasury
Regulations thereunder, without regard to whether such payment or acceleration
is reasonable compensation for personal services performed or to be performed
in the future.
5.8. AVAILABILITY OF ASSETS; ASSETS AND LIABILITIES
TRANSFERRED. (a) Except for the Excluded Assets, the assets acquired by
Overseas or FII pursuant to their purchase of the Shares together with the
Purchased Assets constitute all the assets used in the Business (other than
those being provided pursuant to the Transition Services Agreement) and are
conveyed to Buyers in "as is" condition. Such assets, together with the
services being provided pursuant to the Transition Services Agreement, are
sufficient for the operation of the Business as previously conducted consistent
with past practice. Except with respect to matters that would not reasonably
be expected to have a Material Adverse Effect, (i) all such assets and their
uses conform to all applicable laws, regulations, rules, ordinances, codes,
licenses, franchises and permits (other than Environmental Laws) (including,
without limitation, all electrical, building, zoning, and occupational safety
and health Requirements of Laws (other than Environmental Laws)), and (ii) the
Sellers have no knowledge of any existing
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violation of any such matters relating to such assets or their use, and no
notice of any existing violation of any of such matters relating to such assets
or their use has been received in writing by any Company.
(b) Other than the services to be provided under the
Transition Services Agreement and other than general and administrative
services, no material services are provided by Fusion, Fusion Technology, any
Company, or any Affiliate thereof, with respect to the Business utilizing
either (i) assets not included in the Purchased Assets or the assets acquired
by Overseas or FII pursuant to their purchase of the Shares or (ii) employees
not listed in Schedule 5.18(G) (other than those employees not listed by reason
of clause (iii) of Section 5.18(g)).
(c) As of the Closing, Fusion has fully complied with and
fulfilled its covenants and obligations under Section 8.6 and as of and after
Closing, no Buyer will have any obligation or liability under or with respect
to any Transfer Liabilities (as defined in Section 8.6).
(d) As of the Closing, Fusion has fully complied with and
fulfilled its covenants and obligations under Section 8.7 and as of and after
Closing no Buyer will have any obligations or liability under or with respect
to any Transfer Employee or any Employee Liabilities (each as defined in
Section 8.7).
5.9. GOVERNMENTAL PERMITS. Except with respect to
environmental, health and safety Governmental Permits ("Environmental Permits")
which are addressed in Section 5.23, each Company owns, holds or possesses all
material licenses, franchises, permits, privileges, immunities, approvals and
other authorizations from a Governmental Body which are necessary to entitle it
to own or lease, operate and use its assets and to carry on and conduct the
Business substantially as currently conducted (herein collectively called
"Governmental Permits"). Schedule 5.9 sets forth a list of each Governmental
Permit. Complete and correct copies of all of the Governmental Permits have
heretofore been delivered to Buyers by Sellers.
Except with respect to matters that would not reasonably be
expected to have a Material Adverse Effect, (i) each Company has fulfilled and
performed its obligations under each of the relevant Governmental Permits, and
no event has occurred or condition or state of facts is known by any Seller to
exist which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any such Governmental Permit or which
permits or, after notice or lapse of time or both, would permit revocation or
termination of any such Governmental Permit, or which might adversely affect
the rights of any Company under any such Governmental Permit; (ii) no notice of
cancellation, of default or of any dispute concerning any Governmental Permit,
or of any event, condition or state of facts described in the preceding clause,
is known to, or has been
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received in writing by, any Company; and (iii) each of the Governmental Permits
is valid, subsisting and in full force and effect and may be assigned and
transferred to Buyers in accordance with this Agreement and will continue in
full force and effect thereafter, in each case without (x) the occurrence of
any breach, default or forfeiture of rights thereunder, or (y) the consent,
approval, or act of, or the making of any filing with, any Governmental Body.
5.10. REAL PROPERTY. None of the Companies own any real
property and no Company, since the date of its inception, has owned any real
property.
5.11. REAL PROPERTY LEASES. Schedule 5.11 sets forth a list
of each lease or similar agreement under which (i) Fusion or any Company is
lessee of, or holds or operates, any real property owned by any third Person
and used in or relating to the Business or (ii) any Company is lessor of any of
the Curing Real Property (the "Leased Real Property"). Except as set forth on
such Schedule, there are no subleases, tenancies or other rights of occupancy
affecting all or any part of such Leased Real Property which could reasonably
be expected to have a material adverse effect on the Leased Real Property or a
Material Adverse Effect. Except as set forth in such Schedule, Fusion or such
Company, as the case may be, has the right to quiet enjoyment of all the real
property described in such Schedule for the full term of each such lease or
similar agreement (and any renewal option related thereto) relating thereto,
and the leasehold or other interest of Fusion or such Company in such real
property is not subject or subordinate to any Encumbrance except for Permitted
Encumbrances.
5.12. CONDEMNATION. To the knowledge of Sellers, neither the
whole nor any part of any real property leased, used or occupied in connection
with the Business is subject to any pending suit for condemnation or other
taking by any public authority, and, to the knowledge of Sellers, no such
condemnation or other taking is threatened or contemplated.
5.13. PERSONAL PROPERTY. Schedule 5.13 contains a list as of
the Balance Sheet Date of all machinery, equipment, vehicles, furniture and
other personal property owned by the Companies having an original cost of
$25,000 or more and used in or relating to the Business. The machinery,
equipment, vehicles and other tangible assets of the Business are usable in the
ordinary course of the Business.
5.14. PERSONAL PROPERTY LEASES. Schedule 5.14 contains a
list of each written lease or other agreement or right, under which Fusion or
any Company is lessee of, or holds or operates, any machinery, equipment,
vehicle or other tangible personal property owned by a third Person and used in
or relating to the Business, in each case (i) having an annual rental in
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excess of $20,000 and having a termination date after December 31, 1997 or (ii)
which cannot be terminated by Fusion or such Company except by the payment of
an amount equivalent to $20,000 or more of the rent.
5.15. INTELLECTUAL PROPERTY; SOFTWARE. (a) Schedule 5.15(a)
contains a list of all Copyrights, Patents and Trademarks (including all
assumed or fictitious names under which the Business is being conducted or has
been conducted or has within the previous five years) owned by, licensed to or
used in connection with the conduct of the Business.
(b) No Software is owned by, licensed to or used in the
conduct of the Business other than (i) Software licensed to a Company that is
available in consumer retail stores and subject to "shrink-wrap" license
agreements and (ii) the Computer Associates ASK management information software
used in the Business.
(c) Schedule 5.15(c) contains a list of all agreements,
contracts, licenses, sublicenses, assignments and indemnities which relate to
any Copyrights, Patent Rights or Trademarks listed in Schedule 5.15(a).
(d) Seller either: (i) owns the entire right, title and
interest in and to the Intellectual Property used in the Business, free and
clear of any Encumbrance; or (ii) has the perpetual, royalty-free right to use
the same.
(e) (i) all registrations for Copyrights, Patent Rights and
Trademarks identified in Schedule 5.15(a) as being owned by Fusion or any
Company are valid and in force; (ii) all applications to register any
unregistered Copyrights, Patent Rights and Trademarks so identified are pending
and in good standing all without challenge of any kind to the knowledge of
Fusion or any Company; (iii) the Intellectual Property owned by Fusion, Fusion
Technology and each Company is valid and enforceable; and (iv) Fusion has the
sole and exclusive right to bring actions for infringement or unauthorized use
of the Intellectual Property and Software owned by Fusion and used in the
Business, and to the knowledge of Sellers, there is no basis for any such
action. Complete copies of: (x) registrations for all registered Copyrights,
Patent Rights and Trademarks identified in Schedule 5.15(a)(i) as being owned
by Fusion, or any Company; and (y) all pending applications to register
unregistered Copyrights, Patent Rights and Trademarks identified in Schedule
5.15(a)(i) as being owned by a Company have heretofore been delivered by
Sellers to Buyer.
(f) No infringement of any Intellectual Property Right of any
other Person has occurred or has resulted in any way from the operations of the
Business, no claim of any infringement of any Intellectual Property Right of
any other Person has been made
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or asserted in respect of the operations of the Business, and Sellers have not
had notice of, or knowledge of any basis for, a claim that the operations,
activities, products, software, equipment, machinery or processes of the
Business infringe any Intellectual Property Right of any other Person.
(g) All employees, agents, consultants or contractors who
have contributed to or participated in the creation or development of any
copyrightable, patentable or trade secret material on behalf of Fusion, Fusion
Technology or any Company or any predecessor in interest thereto either: (i)
is a party to a "work-for-hire" agreement under which such Company is deemed to
be the original owner/author of all property rights therein; or (ii) has
executed an assignment or an agreement to assign in favor of Fusion, Fusion
Technology or such Company (or such predecessor in interest, as applicable) of
all right, title and interest in such material.
5.16. ACCOUNTS RECEIVABLE; INVENTORIES. All accounts
receivable of the Business have arisen from bona fide transactions by a Company
in the ordinary course of the Business and are not subject to counterclaims or
setoffs not accrued for on the Balance Sheet. All accounts receivable
reflected in the Balance Sheet are reflected in accordance with GAAP and are
good and collectible in the ordinary course of the Business at the aggregate
recorded amounts thereof, net of any applicable allowance for doubtful accounts
reflected in the Balance Sheet.
The inventories of the Business (including raw materials,
supplies, work-in-process, finished goods and other materials) (i) are in good
and useable condition, except to the extent reserved therefor on the Balance
Sheet, (ii) are reflected in the Balance Sheet and will be reflected in the
Closing Balance Sheet in accordance with GAAP at the lower of cost or market
value and (iii) are, in the case of finished goods, of a quality and quantity
saleable in the ordinary course of the Business and, in the case of all other
inventories are of a quality and quantity useable in the ordinary course of the
Business. The inventory obsolescence policies of the Business are appropriate
for the nature of the products sold and the marketing methods used by the
Business, and the reserve for inventory obsolescence contained in the Balance
Sheet fairly reflects the amount of obsolete inventory as of the Balance Sheet
Date. All of the inventories of the Business are held at the Leased Real
Property listed on Schedule 5.11. No inventory is held on consignment by or
for any Company.
5.17. TITLE TO PROPERTY. Curing and Fusion Europe each have
good and marketable title to, or a valid leasehold interest in, all of their
respective tangible assets, free and clear of all Encumbrances, except for
Permitted Encumbrances. Upon delivery to Buyers on the Closing Date of the
instruments of transfer contemplated by Section 4.4, Sellers will transfer to
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Buyers good and marketable title to, or a valid leasehold interest in, the
Purchased Assets, subject to no Encumbrances, except for Permitted
Encumbrances.
5.18. EMPLOYEES AND RELATED AGREEMENTS; ERISA. (a) Set
forth in Schedule 5.18(A) is a complete list of each "employee pension benefit
plan" (as such term is defined in Section 3(2) of ERISA) maintained by Fusion,
Fusion Technology, a Company or an ERISA Affiliate, or with respect to which
Fusion, Fusion Technology, a Company or an ERISA Affiliate is or will be
required to make any payment, or which provides or will provide benefits to
present or prior employees of Fusion, Fusion Technology, a Company or an ERISA
Affiliate due to such employment (the "Pension Plans"). Set forth in Schedule
5.18(A) is a complete list of each "employee welfare benefit plan" (as such
term is defined in Section 3(1) of ERISA) maintained by Fusion, Fusion
Technology or a Company, or with respect to which Fusion, Fusion Technology or
a Company is or will be required to make any payment, or which provides or will
provide benefits to present or prior employees of Fusion, Fusion Technology or
a Company due to such employment (the "Welfare Plans") (the Pension Plans and
Welfare Plans being the "ERISA Benefit Plans").
(b) Other than those listed in Schedule 5.18(A), set forth in
Schedule 5.18(B) is a complete list of each of the following to which Fusion,
Fusion Technology or a Company is a party and which relates to the Business or
any employee(s) of the Business or with respect to which Fusion, Fusion
Technology or a Company is or will be required to make any payment with respect
to the Business or any employee(s) of the Business (the "Non-ERISA
Commitments"):
(i) each retirement, savings, profit sharing, deferred
compensation, severance, stock ownership, stock purchase, stock
option, performance, bonus, incentive, vacation or holiday pay,
hospitalization or other medical, disability, life or other insurance,
or other welfare, benefit or fringe benefit plan, policy, trust,
understanding or arrangement of any kind, whether written or oral; and
(ii) each employee collective bargaining agreement and each
agreement, understanding or arrangement of any kind, whether written
or oral, with or for the benefit of any present or prior officer,
director, employee or consultant (including without limitation, each
employment, compensation, deferred compensation, severance or
consulting Agreement or arrangement and any agreement or arrangement
associated with a change in ownership of Fusion, Fusion Technology or
a Company).
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Sellers have delivered or have caused to be delivered to Buyers complete copies
of (i) all written Non-ERISA Commitments and (ii) all insurance and annuity
policies and contracts and other documents relevant to any Non-ERISA
Commitment. Schedule 5.18(B) contains a complete and accurate description of
all oral Non-ERISA Commitments.
(c) Sellers have delivered or have caused to be delivered to
Buyers with respect to the ERISA Benefit Plans complete copies, where
applicable, of (A) all plan documents and amendments thereto, trust agreements
and amendments thereto and insurance and annuity contracts and policies, (B)
the current summary plan description, (C) the Annual Reports (Form 5500 series)
and accompanying schedules, as filed, for the most recently completed three
plan years for which such reports were required to be filed, (D) the financial
statements for the most recently completed three plan years for which such
statements have been prepared, (E) the most recent determination letter issued
by the IRS and the application submitted with respect to such letter and (F)
all correspondence with the IRS, Department of Labor or Pension Benefit
Guaranty Corporation concerning any outstanding controversy.
(d) None of Fusion, Fusion Technology, the Companies or any
ERISA Affiliate has ever made any contribution to, or had any potential
liability (whether direct, indirect, contingent or otherwise) with respect to
(i) any multiemployer plan (within the meaning of Section 3(37) of ERISA) or
(ii) any other "employee pension benefit plan" (as such term is defined in
Section 3(2) of ERISA) ever subject to Section 302 of ERISA. Each Pension Plan
which is intended to qualify under Section 401(a) of the Code has been
determined to be so qualified by the IRS, and no circumstance has occurred or
exists which might cause such plan to cease being so qualified.
(e) There is no pending or, to the knowledge of the Sellers,
threatened claim in respect of any of the ERISA Benefit Plans other than claims
for benefits in the ordinary course of business. Each of the ERISA Benefit
Plans (i) has been administered in accordance with its terms and (ii) complies
in form, and has been administered in accordance, with the requirements of
ERISA and, where applicable, the Code. The Sellers, the Companies and the
ERISA Affiliates have complied with the group health plan requirements of Part
6 of Title I of ERISA. None of the Sellers or the Companies has an obligation
under any ERISA Benefit Plan or otherwise to provide health or other welfare
benefits to any prior employees or any other person, except as required by Part
6 of Title I of ERISA. The consummation of the transactions contemplated by
this Agreement will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any compensation or
benefits payable to or in respect of any participant. Each Seller and each
Company is in compliance with
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the requirements of the Workers Adjustment and Retraining Notification Act
("WARN") and has no liabilities pursuant to WARN.
(f) None of the Sellers or the Companies nor, to their
knowledge, any other "disqualified person" (within the meaning of Section 4975
of the Code) or "party in interest" (within the meaning of Section 3(14) of
ERISA) has taken any action with respect to any ERISA Benefit Plan which could
subject any such plan (or its related trust) or any of the Sellers or the
Companies or any officer, director or employee of any of the foregoing to the
penalty or tax under Section 502(i) or Section 502(l) of ERISA or Section 4975
of the Code.
(g) Schedule 5.18(G) contains: (i) a list of all employees
or commission salespersons of the Business as of August 14, 1996; (ii) the then
current fringe benefits (other than those generally available to employees of
the Companies) provided by any Company to any such employees or salespersons;
(iii) a list of all present or former employees or commission salespersons of
the Business who have terminated or given notice of their intention to
terminate their relationship with the Business since June 30, 1995; (iv) a list
of any increase, effective after December 31, 1995, in the rate of compensation
of any employees or commission salespersons if such increase exceeds 5% of the
previous annual salary of such employee or commission salesperson; and (v) a
list of all substantial changes in job assignments of, or arrangements with, or
promotions or appointments of, any employees or commission salespersons since
January 1, 1996. Sellers have heretofore delivered to Buyers a complete list
of the base compensation and wage levels of each of the Affected Employees as
of August 14, 1996.
(h) To the knowledge of Sellers, (i) the Business is not
involved in any transaction or other situation with any employee, officer,
director or Affiliate of a Seller or a Company which may be generally
characterized as a "conflict of interest", including, but not limited to,
direct or indirect interests in the business of competitors, suppliers or
customers of the Business, and (ii) there are no situations with respect to the
Business which involved or involves (A) the use of any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to political activity, (B) the making of any direct or indirect unlawful
payments to government officials or others from corporate funds or the
establishment or maintenance of any unlawful or unrecorded funds, (C) the
violation of any of the provisions of The Foreign Corrupt Practices Act of
1977, or any rules or regulations promulgated thereunder, (D) the receipt of
any illegal discounts or rebates or any other violation of the antitrust laws
or (E) any investigation by the Securities and Exchange Commission or any other
federal, foreign, state or local government agency or authority.
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5.19. EMPLOYEE RELATIONS. Fusion, with respect to the
Business, and each of Fusion Technology and Company have complied in respect of
the Business in all material respects with all applicable laws, rules and
regulations which relate to wages, hours, discrimination in employment and
collective bargaining and to the operation of the Business and is not liable
for any arrears of wages or any taxes or penalties for failure to comply with
any of the foregoing. Sellers believe that their and each of the Company's
relations with the employees of the Business are satisfactory. None of Fusion,
Fusion Technology or any Company is a party to, and the Business is not
affected by, or, to the knowledge of the Sellers, threatened with, any dispute
or controversy with a union or with respect to unionization or collective
bargaining involving the employees of the Business. None of the employees of
Fusion, Fusion Technology or any Company is party to a union or collective
bargaining agreement relating to such employee's employment with Fusion, Fusion
Technology or any Company. Neither Fusion, with respect to the Business,
Fusion Technology nor any Company is a party to, and the Business is not
affected by or, to the knowledge of the Sellers, threatened with, any dispute
or controversy with a union or with respect to unionization or collective
bargaining involving the employees of the Business. None of Fusion, Fusion
Technology, any Company or the Business is materially affected by any dispute
or controversy with a union or with respect to unionization or collective
bargaining involving any supplier or customer of the Business. Schedule 5.19
sets forth a description of any union organizing or election activities
involving any non-union employees of the Business which have occurred since
January, 1996 or, to the knowledge of Sellers, are threatened as of the date
hereof.
5.20. CONTRACTS. None of Fusion, Fusion Technology or any
Company is, with respect to the Business, a party to or bound by:
(a) any contract for the purchase, sale or lease of real
property or any option to purchase or sell real property;
(b) any contract in excess of $25,000 which relates to the
purchase, licensing or development of any computer software, hardware
or data bases used or to be used by the Business;
(c) any purchase order, agreement or commitment obligating
such company to purchase or sell any products or services and which
(i) is not terminable by such Company without payment or penalty upon
90 days' (or less) notice, and (ii) relates to purchases or sales in
an aggregate amount exceeding $25,000 or (iii) is presently expected
to result in a loss upon completion or performance thereof in an
amount in excess of $15,000;
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(d) any indebtedness, obligation or liability for borrowed
money, or liability for the deferred purchase price of property in
excess of $25,000 (excluding normal trade payables), or any instrument
guaranteeing any indebtedness, obligation or liability, or any
obligation to incur any indebtedness, obligation or liability;
(e) any joint venture, partnership or other arrangement
involving a sharing of profits;
(f) any guarantee of the obligations of customers, suppliers,
officers, directors, employees or Affiliates or others;
(g) any consignment, distributor, dealer, manufacturer's
representative, sales agency, advertising representative or
advertising or public relations contract;
(h) any contract not made in the ordinary course of the
Business, including, without limitation, any agreement limiting the
Business's or a Company's ability to engage in any business anywhere
in the world, any contract with an officer or other employee of a
Company and any consulting agreement;
(i) any other contract, agreement, commitment, understanding
or instrument which is material to the Business; or
(j) any agreement which provides for, or relates to, the
incurrence by the Business of debt in excess of $250,000 for borrowed
money (including, without limitation, any interest rate or foreign
currency swap, cap, collar, hedge or insurance agreements, or options
or forwards on such agreements, or other similar agreements for the
purpose of managing the interest rate and/or foreign exchange risk
associated with its financing).
5.21. STATUS OF CONTRACTS. Each of the leases, contracts and
other agreements listed in Schedules 5.11, 5.14, 5.15, 5.18 and 5.20
(collectively, the "Seller Agreements"), constitutes a valid and binding
obligation of the parties thereto and is in full force and effect and (except
for those Seller Agreements which by their terms will expire prior to the
Closing Date or are otherwise terminated prior to the Closing Date in
accordance with the provisions hereof) may be transferred to Buyers pursuant to
this Agreement and will continue in full force and effect thereafter, in each
case without breaching the terms thereof or resulting in the forfeiture or
impairment of any rights thereunder and without the consent (other than the
consent of the other party thereto), approval or act of, or the making of any
filing with, any other party. The Company that is a party thereto has
fulfilled and performed its obligations under each of
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the relevant Seller Agreements in all material respects, and neither Fusion nor
any Company is in, or alleged to be in, breach or default under, nor is there
or is there alleged to be any basis for termination of, any of the Seller
Agreements, and no other party to any of the Seller Agreements has breached or
defaulted thereunder to the knowledge of Sellers, and no event has occurred and
no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would to the knowledge of Sellers, constitute such a
default or breach by Seller or by any such other party. No Company is
currently renegotiating any of the Seller Agreements or paying liquidated
damages in lieu of performance thereunder. Complete copies of each of the
Seller Agreements or standard forms thereof, including any Seller Agreement
which differs in any material respect from the standard form thereof, have
heretofore been delivered to Buyers by Sellers.
5.22. NO VIOLATION, LITIGATION OR REGULATORY ACTION. Subject
to the last proviso of this Section 5.22, except with respect to matters that
would not reasonably be expected to have a Material Adverse Effect:
(i) the Purchased Assets and their uses comply with all
applicable Requirements of Laws and Court Orders;
(ii) each Company has complied with all Requirements of Laws
and Court Orders which are applicable to such Company, the Purchased
Assets or the Business;
(iii) there are no lawsuits, claims, suits, proceedings or
investigations pending or, to the knowledge of Sellers, threatened
against or affecting the Business or any Company, and there are no
lawsuits, suits or proceedings pending in which any Company is the
plaintiff or claimant and which relate to the Purchased Assets or the
Business;
(iv) there is no action, suit or proceeding pending or, to
the knowledge of Sellers, threatened which questions the legality or
propriety of the transactions contemplated by this Agreement;
(v) to the knowledge of Sellers, no legislative or regulatory
proposal has been adopted or is pending which could adversely affect
the Business; and
(vi) none of Fusion, Fusion Technology or any Company has
taken any action that would require notification of the employees of
any of the Companies pursuant to the provisions of the WARN Act or
that would cause Fusion, any of the Companies or, after the Closing,
Buyers, to have any liability thereunder;
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provided, however, that for purposes of this Section 5.22 only, the term
"Requirements of Laws" shall be deemed to exclude Environmental Laws.
5.23. ENVIRONMENTAL MATTERS.
(i) to the knowledge of Sellers, the operations of the
Business comply in all material respects with all applicable Environmental
Laws;
(ii) Fusion and each Company have, in respect of the
Business, obtained all Environmental Permits necessary for their operation, and
all such Governmental Permits are in good standing, to the knowledge of
Sellers, and Fusion and each Company are in material compliance with all terms
and conditions of such permits;
(iii) none of Sellers, with respect to the Business, nor any
of the present Business Property or operations, or, to the knowledge of
Sellers, with respect to the past Business Property or operations, is subject
to any ongoing investigation by, order from or claim by any Person (including
without limitation any prior owner or operator of Business Property) respecting
(i) any Environmental Law, (ii) any Remedial Action or (iii) any claim of
Losses and Expenses arising from the Release or threatened Release of a
Contaminant into the environment;
(iv) Neither Fusion nor any Company is, with respect to
the Business, subject to any judicial or administrative proceeding, order,
judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law;
(v) Neither Fusion nor any Company has with respect to
the Business:
(a) reported a Release of a hazardous substance
pursuant to Section 103(a) of CERCLA, or any state equivalent;
(b) filed a notice pursuant to Section 103(c) of
CERCLA; or
(c) filed any notice under any applicable
Environmental Law reporting a substantial violation of any
applicable Environmental Law;
(vi) there is not now with respect to the operations of
the Business, nor to the knowledge of Sellers has there ever been, on or in any
Business Property:
(a) any treatment, recycling, storage or disposal
of any hazardous waste, as that term is defined under
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40 CFR Part 261 or any state equivalent, that requires or
required a Governmental Permit pursuant to Section 3005 of
RCRA; or
(b) any underground storage tank or surface
impoundment or landfill or waste pile.
(vii) there is not now on or in any Business Property any
polychlorinated biphenyls (PCB) used in the operations of the Business in
pigments, hydraulic oils, electrical transformers or other equipment;
(viii) Neither Fusion nor any Company has received any notice
or claim to the effect that it is or may be liable to any Person, nor are there
any facts or conditions that would reasonably be expected to have a Material
Adverse Effect, as a result of the Release or threatened Release of a
Contaminant generated by the Business;
(ix) no Environmental Encumbrance has attached to any
Business Property;
(x) to the actual knowledge of Sellers (as opposed to the
"knowledge of Sellers" as defined), any asbestos-containing material which is
on or part of any Business Property is in good repair according to the current
standards and practices governing such material, and its presence or condition
does not violate any currently applicable Environmental Law; and
(xi) none of the products Fusion or any Company manufactures,
distributes or sells in connection with the Business, now or in the past,
contains asbestos or asbestos-containing material.
5.24. INSURANCE. The Business maintains, and has maintained
for the three years prior to the date hereof, insurance on the Fusion Assets
and the Business in such amounts and covering such risks as is reasonable for
the Business and customary for similar businesses in the industries in which
the Business operates. Schedule 5.24 sets forth a list (including the loss
experience for the most recent two years with respect to each type of coverage
prepared by Fusion's insurance company or companies for the U.S. Companies) of
all policies of insurance maintained, owned or held by Fusion or any Company on
the date hereof with respect to the Fusion Assets or the Business. The
Companies shall keep or cause such insurance or comparable insurance to be kept
in full force and effect through the Closing Date. Fusion and each Company
have complied with each of its insurance policies and have not failed to give
any notice or present any claim thereunder in a due and timely manner. There
are no outstanding unpaid claims under any of such insurance policies or
binders and neither Fusion nor any Company has received any notice of
cancellation or non-renewal of any such
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policy or binder. All premiums due and payable under any such insurance
policies or binders have been duly paid. Sellers have delivered to Buyers
correct and complete copies of the most recent inspection reports, if any,
received from insurance underwriters as to the condition of any of the Fusion
Assets.
5.25. CUSTOMERS AND SUPPLIERS. Set forth in Schedule 5.25 is
(i) a list of names and addresses of each customer of the Business that
accounted for 3% or more of the revenues of the Business during the six-month
period ended June 28, 1996; and (ii) copies of the forms of purchase order for
inventory and other supplies and sales contracts for finished goods used by
Fusion or any Company in respect of the Business. There exists no actual or,
to the knowledge of Sellers, threatened termination, cancellation or limitation
of, or any modification or change in, the business relationship of Fusion or
any Company with any customer or group of customers listed in Schedule 5.25,
and, to the knowledge of Sellers, there exists no condition or state of facts
or circumstances involving customers, suppliers or sales representatives which
Sellers can now reasonably foresee would have a Material Adverse Effect or
prevent the conduct of the Business after the consummation of the transactions
contemplated by this Agreement in essentially the same manner in which it has
heretofore been conducted.
5.26. BUDGETS. Schedule 5.26 sets forth (a) the 1996
Operating and Capital Expenditure Budget of the Business for the fiscal year
ending December 31, 1996 prepared by Fusion in the ordinary course of business
and (b) the total capital expenditures, if any, for the six-month period ended
June 28, 1996.
5.27. WARRANTIES. Schedule 5.27 sets forth (i) a specimen
copy of the form of written warranties covering products sold by the Business
which have not yet expired and (ii) a summary of the warranty expense incurred
by the Business during each of its last three fiscal years.
5.28. NO FINDER. No Seller, nor any Person acting on behalf
of a Seller, has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement other than to the parties listed on Schedule
5.28, whose fees and expenses, to the extent payable, shall be paid by Sellers.
5.29. LIMITATION ON WARRANTIES. Except as otherwise
expressly provided herein, Sellers make no express or implied warranty of any
kind whatsoever, including, without limitation, any representation as to
physical condition, value of any of the assets of Curing or Fusion Europe or
the future profitability or future earnings performance of the Business. All
implied warranties of merchantability and fitness for a particular purpose are
expressly excluded.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYERS
As an inducement to Sellers to enter into this Agreement and
to consummate the transactions contemplated hereby, each Buyer hereby
represents and warrants to Sellers and agrees as follows:
6.1. ORGANIZATION OF BUYERS. Each Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has full corporate power and authority to
own or lease and to operate and use its properties and assets and to carry on
its business as now conducted.
6.2. AUTHORITY OF BUYERS. Each Buyer has full power and
authority to execute, deliver and perform this Agreement and all of the
relevant Buyer Ancillary Agreements. The execution, delivery and performance
of this Agreement and the relevant Buyer Ancillary Agreements by Buyers have
been duly authorized and approved by each Buyer's board of directors and do not
require any further authorization or consent of any Buyer or its stockholders.
This Agreement has been duly authorized, executed and delivered by each Buyer
and is the legal, valid and binding agreement of each Buyer enforceable in
accordance with its terms, and each of the Buyer Ancillary Agreements has been
duly authorized by the relevant Buyers and upon execution and delivery by the
relevant Buyers will be a legal, valid and binding obligation of such Buyers
enforceable in accordance with its terms subject to the Bankruptcy Exception.
Neither the execution and delivery of this Agreement or any of
the Buyer Ancillary Agreements or the consummation of any of the transactions
contemplated hereby or thereby nor compliance with or fulfillment of the terms,
conditions and provisions hereof or thereof will:
(i) conflict with, result in a breach of the terms,
conditions or provisions of, or constitute a default, an event of
default or an event creating rights of acceleration, termination or
cancellation or a loss of rights under (1) the respective charter or
By-laws of Buyers, (2) any material note, instrument, agreement,
mortgage, lease, license, franchise, permit or other authorization,
right, restriction or obligation to which any Buyer is a party or any
of its properties is subject or by which any Buyer is bound, (3) any
Court Order to which any Buyer is a party or by which it is bound or
(4) any Requirements of Laws affecting Buyers; or
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(ii) require the approval, consent, authorization or act of,
or the making by Buyers of any declaration, filing or registration
with, any Person, except as provided under the HSR Act.
6.3. NO FINDER. Neither Buyers nor any Person acting on
their behalf have paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.
ARTICLE VII
ACTION PRIOR TO THE CLOSING DATE
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the Closing Date:
7.1. INVESTIGATION OF THE BUSINESS BY BUYERS. Sellers shall
afford and cause the Companies to afford to the officers, employees and
authorized representatives of Buyers (including, without limitation,
independent public accountants and attorneys) complete access (subject to the
terms of the Confidentiality Agreement) during normal business hours to the
offices, properties, employees and business and financial records (including
computer files, retrieval programs and similar documentation and such access
and information that may be necessary in connection with an environmental
audit) of the Business to the extent Buyers shall deem necessary or desirable
and shall furnish to Buyers or their authorized representatives such additional
information concerning the Purchased Assets and the Business as shall be
reasonably requested, including all such information as shall be necessary to
enable Buyers or their representatives to verify the accuracy of the
representations and warranties contained in this Agreement, to verify that the
covenants of Sellers contained in this Agreement have been complied with and to
determine whether the conditions set forth in Article IX have been satisfied.
Buyers agree that such investigation shall be conducted in such a manner as not
to interfere unreasonably with the operations of Fusion, the Companies or the
Business.
7.2. PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES.
Each of the parties hereto shall refrain and shall cause its subsidiaries to
refrain from taking any action which could reasonably be expected to render any
representation or warranty contained in Article V or VI of this Agreement
inaccurate as of the Closing Date. Each party shall promptly notify the other
of any action, suit or proceeding that shall be instituted or threatened
against such party (and, with respect to Sellers, against any Company) to
restrain, prohibit or otherwise challenge the legality of any transaction
contemplated by this Agreement. Sellers shall promptly notify Buyers of any
lawsuit, claim,
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proceeding or investigation that may be threatened, brought, asserted or
commenced against Fusion or any Company which would have been listed in
Schedule 5.22 if such lawsuit, claim, proceeding or investigation had arisen
prior to the date hereof.
7.3. CONSENTS OF THIRD PARTIES; GOVERNMENTAL APPROVALS. (a)
Sellers will act diligently and reasonably to secure, before the Closing Date,
the consent, approval or waiver, in form and substance reasonably satisfactory
to Buyers, from any party to any Seller Agreement required to be obtained to
assign or transfer any such Seller Agreements to Buyers; provided that neither
Sellers nor Buyers shall have any obligation to offer or pay any consideration
in order to obtain any such consents or approvals; and provided, further, that
Sellers shall not make any agreement or understanding affecting the Purchased
Assets or the Business as a condition for obtaining any such consents or
waivers except with the prior written consent of Buyers. During the period
prior to the Closing Date, Buyers shall act diligently and reasonably to
cooperate with Sellers to obtain the consents, approvals and waivers
contemplated by this Section 7.3(a), and shall, without limitation furnish
publicly-available financial and other information reasonably requested in
order to facilitate obtaining such consent, approval or waiver.
(b) During the period prior to the Closing Date, Sellers
and Buyers shall act diligently and reasonably, and shall cooperate with each
other, to secure any consents and approvals of any Governmental Body required
to be obtained by them in order to assign or transfer any Governmental Permits
to Buyers, to permit the consummation of the transactions contemplated by this
Agreement, or to otherwise satisfy the conditions set forth in Section 9.4;
provided that Sellers shall not make any agreement or understanding affecting
the Purchased Assets or the Business as a condition for obtaining any such
consents or approvals except with the prior written consent of Buyers.
7.4. OPERATIONS PRIOR TO THE CLOSING DATE. (a) Sellers
shall, and shall cause the Companies, on and after the date hereof and until
the Closing Date to operate and carry on the Business only in the ordinary
course and substantially as presently operated. Consistent with the foregoing,
Sellers shall keep and maintain the Fusion Assets in their current condition
(at a minimum) and shall use their best efforts consistent with good business
practice to maintain the business organization of the Business intact and to
preserve the goodwill of the suppliers, employees, customers, distributors and
others having business relations with the Business. In connection therewith,
Sellers shall not (i) transfer or cause to be transferred from the Business any
employee, (ii) offer alternative employment outside of the Companies after the
Closing Date to any such employee or (iii) otherwise attempt to persuade any
such person to terminate his or her relationship with the Business.
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(b) Notwithstanding Section 7.4(a), except as expressly
contemplated by this Agreement or except with the express written approval of
Buyers, Sellers shall not and shall cause the Companies not to:
(i) make any capital expenditure with respect to the Business
or enter into any contract or commitment therefor, other than capital
expenditures or commitments for capital expenditures referred to in
the applicable budget contained in Schedule 5.26;
(ii) except as contemplated by Schedule 5.26, enter into any
contract, agreement, undertaking or commitment which would have been
required to be set forth in Schedule 5.20 if in effect on the date
hereof or enter into any contract which cannot be assigned to Buyer or
a permitted assignee of Buyer under Section 13.5;
(iii) enter into any contract for the purchase of real
property to be used by the Business or for the sale of any real
property or exercise any option to purchase real property listed or
any option to extend a lease;
(iv) take or authorize any of the actions set forth in
Section 5.5(b) (except to the extent referred in Section 5.5(b));
(v) issue or sell any shares of capital stock of such Company
of any class, or issue or sell any securities convertible into or
options with respect to, or warrants to purchase or rights to
subscribe to, any shares of capital stock of such Company of any
class, or make any commitment to issue or sell any such shares or
securities; or
(vi) prepare or file any Tax Return inconsistent with past
practice or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods (including, without limitation,
positions, elections or methods which would have the effect of
deferring income to periods for which Buyers are liable pursuant to
Section 8.3(a)(ii) or accelerating deductions to periods for which
Sellers are liable pursuant to Section 8.3(a)(i)).
7.5. NOTIFICATION BY SELLERS OF CERTAIN MATTERS. During the
period prior to the Closing Date, Sellers will promptly advise Buyers in
writing of (i) any material adverse change in the condition of any Fusion Asset
that is material to the Business, or the Business as a whole, of which Sellers
have
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knowledge, (ii) any notice or other communication from any third Person
alleging that the consent of such third Person is or may be required in
connection with the transactions contemplated by this Agreement, and (iii) any
material default under any Seller Agreement or event which, with notice or
lapse of time or both, would become such a default on or prior to the Closing
Date and of which Sellers have knowledge.
7.6. ANTITRUST LAW COMPLIANCE. As promptly as practicable
after the date hereof, Buyers and Sellers shall file with the Federal Trade
Commission and the Antitrust Division of the Department of Justice the
notifications and other information required to be filed under the HSR Act, or
any rules and regulations promulgated thereunder, with respect to the
transactions contemplated hereby. Each party warrants that all such filings by
it will be, as of the date filed, true and accurate and in accordance with the
requirements of the HSR Act and any such rules and regulations. Each of Buyers
and Sellers agrees to make available to the other such information as each of
them may reasonably request relative to its business, assets and property
(including, in the case of Sellers, the Business) as may be required of each of
them to file any additional information requested by such agencies under the
HSR Act and any such rules and regulations.
7.7. PRORATIONS. All real estate and personal property
taxes and all rents, additional rents and other charges under any leases and
any utilities and other charges relating to, or payable by the owner of, any of
the Purchased Assets relating to a time period beginning prior to, and ending
after, the Closing Date shall be prorated on a daily basis (subject to the
following sentence, based on the most recent available tax statement, latest
tax valuation and latest bills) as of the Closing Date. If the Closing Date
occurs before the tax amount is fixed for the then current fiscal or calendar
year, whichever is applicable, the proration of the corresponding taxes shall
be on the basis of 100% of the tax amount for the last preceding year. The
estimated accrued liability (to the Closing Date) of the Business for any of
the above-described taxes and charges that are due and payable after the
Closing shall be a credit against the amount payable at the Closing Date by
Buyers, except to the extent of any adjustments being made pursuant to Section
3.3.
7.8. CONSENTS. Sellers shall use their best efforts (which
shall not be deemed to require Sellers to make any additional payments) to
obtain, by instruments in form and substance reasonably satisfactory to Buyers,
all consents and approvals required to be obtained by Seller(s) in respect of
the Seller Agreements. If any such consent is not obtained, or if an attempted
assignment thereof would be ineffective, Sellers and Buyers will cooperate in a
mutually agreeable arrangement under which Buyers would obtain the benefits of
such agreement and assume the obligations thereunder in accordance with this
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Agreement. If any consent is not obtained prior to the Closing Date, Sellers
shall, to the extent reasonably possible, keep the agreement in effect and
shall give Buyers the benefit of the agreement following the Closing Date to
the same extent as if Sellers had not been prevented from assigning such
agreement to Buyers, including enforcement for the benefit of Buyers of any and
all rights of Sellers against any third party arising out of breach or
cancellation by such third party, and Buyers shall perform the obligations and
assume the liabilities under the agreement relating to the benefit obtained by
Buyers. Nothing in this Agreement shall be construed as an attempt to assign
any agreement or other instrument that is by its terms not assignable without
the consent of the other party and such consent is not obtained.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1. COVENANT NOT TO COMPETE OR SOLICIT BUSINESS. (a) In
furtherance of the sale of the Purchased Assets and the Business to Buyers
hereunder by virtue of the transactions contemplated hereby and more
effectively to protect the value and goodwill of the Purchased Assets and the
Business so sold, each Seller and Semiconductor covenants and agrees that, with
respect to clauses (i) and (iii) of this Section 8.1(a), for a period
ending on the tenth anniversary of the Closing Date, and with respect to clause
(ii) of this Section 8.1(a), for a period ending on the first anniversary of
the relevant employee's effective date of termination of employment with the
Buyer Arena Business (as hereinafter defined) with respect to Exempt Employees
and for a period ending on the six-month anniversary of the relevant employee's
effective date of termination of employment with the Buyer Arena Business with
respect to Non-Exempt Employees, none of Sellers or any of their Affiliates nor
Semiconductor will:
(i) directly or indirectly (whether as principal, agent,
independent contractor, partner or otherwise) own, manage, operate,
control, participate in, perform services for, or otherwise carry on,
a business similar to or competitive with the Buyer Arena (any such
business as conducted by Buyers or their Affiliates anywhere in the
world being herein referred to as the "Buyer Arena Business") (it
being understood by the parties hereto that the Buyer Arena Business
is not limited to any particular region of the world and that the
Buyer Arena Business may be engaged in effectively from any location
in the world);
(ii) without the prior written consent of the President of
Sub, and except as otherwise provided in the
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Transition Services Agreement, solicit the employment of or hire
or otherwise engage the services, as employee, consultant or other
similar capacity, of any employee of the Buyer Arena Business; or
(iii) induce or attempt to persuade any employee, agent,
vendor or customer of the Buyer Arena Business to terminate such
employment, agency or business relationship in order to enter into any
such relationship on behalf of any other business organization in
competition with the Buyer Arena.
and (b) each Buyer covenants and agrees that, with respect to clauses (w) and
(y) of this Section 8.1(b), for a period ending on the tenth anniversary of the
Closing Date, with respect to clause (z) of this Section 8.1(b), for a period
ending on the third anniversary of the Closing Date, and with respect to clause
(x) of this Section 8.1(b), for a period ending on the first anniversary of the
relevant employee's effective date of termination of employment with the Seller
Arena Business (as hereinafter defined) with respect to Exempt Employees and
for a period ending on the six-month anniversary of the relevant employee's
effective date of termination of employment with the Seller Arena Business with
respect to Non-Exempt Employees, none of Buyers nor any of their Affiliates:
(w) directly or indirectly (whether as principal, agent,
independent contractor, partner or otherwise) own, manage, operate,
control, participate in, perform services for, or otherwise carry on,
a business similar to or competitive with the Seller Arena (any such
business as conducted by Sellers or their Affiliates anywhere in the
world being herein referred to as the "Seller Arena Business") (it
being understood by the parties hereto that such Seller Arena Business
is not limited to any particular region of the world and that the
Seller Arena Business may be engaged in effectively from any location
in the world);
(x) without the prior written consent of the President of
Fusion, solicit the employment of or hire or otherwise engage the
services, as employee, consultant or other similar capacity, of any
employee of the Seller Arena Business;
(y) induce or attempt to persuade any employee, agent, vendor
or customer of the Seller Arena Business to terminate such employment,
agency or business relationship in order to enter into any such
relationship on behalf of any other business organization in
competition with the Seller Arena; or
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(z) without the prior written consent of the President of
Fusion, hire or otherwise engage the services, as employee, consultant
or other similar capacity, of any Affected Employee that is not a
Transferred Employee.
provided, however, that nothing set forth in this Section 8.1 shall prevent a
Seller or its Affiliates or a Buyer or its Affiliates from owning not in excess
of 5% in the aggregate of any class of capital stock of any corporation if such
stock is publicly traded and listed on any national or regional stock exchange
or on The Nasdaq Stock Market. Each Seller covenants and agrees that neither
it nor any of its Affiliates will divulge or make use of any trade secrets or
other confidential information used primarily in the Buyer Arena Business other
than to disclose such secrets and information to Buyers or their Affiliates or
otherwise as permitted in the Cross-License Agreements. Each Buyer covenants
and agrees that neither it nor any of its Affiliates will divulge or make use
of any trade secrets or other confidential information used in the Seller Arena
Business other than to disclose such secrets and information to Sellers or
their Affiliates or otherwise as permitted in the Cross-License Agreements. In
the event a party or any Affiliate of a party violates any of its obligations
under this Section 8.1, the other party may proceed against it in law or in
equity for such damages or other relief as a court may deem appropriate. Each
party acknowledges that a violation of this Section 8.1 may cause the other
party irreparable harm which may not be adequately compensated for by money
damages. Each party therefore agrees that in the event of any actual or
threatened violation of this Section 8.1, the other party may be entitled, in
addition to other remedies that it may have, to a temporary restraining order
and to preliminary and final injunctive relief against such party or such
Affiliate of such party to prevent any violations of this Section 8.1, without
the necessity of posting a bond. The prevailing party in any action commenced
under this Section 8.1 shall also be entitled to receive reasonable attorneys'
fees and court costs. It is the intent and understanding of each party hereto
that if, in any action before any court or agency legally empowered to enforce
this Section 8.1, any term, restriction, covenant or promise in this Section
8.1 is found to be unreasonable and for that reason unenforceable, then such
term, restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or agency;
provided, further that nothing in this Section 8.1 shall alter the extent of
the limitations on uses of technology or other intellectual property rights as
provided in any Buyer Ancillary Agreements or Seller Ancillary Agreements.
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8.2. ACQUISITION PROPOSALS. Neither Sellers nor any of their
respective subsidiaries nor any of the respective officers and directors of the
Sellers or their respective subsidiaries shall, and Sellers will use their best
efforts to cause their employees, agents, and representatives (including,
without limitation, any investment banker, attorney or accountant retained by
such Seller or any of its subsidiaries) and the employees, agents and
representatives of Sellers' respective subsidiaries not to, initiate or
solicit, directly or indirectly, any inquiries or the making of any proposal
with respect to a merger, consolidation, share exchange or similar transaction
involving any of the Sellers or any of their respective subsidiaries, or any
purchase of all or any significant portion of the assets of any Company, or any
equity interest in any Company, other than the transactions contemplated hereby
(an "Acquisition Proposal"), or engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any person relating to an Acquisition Proposal or otherwise facilitate any
effort or attempt to make or implement an Acquisition Proposal; provided, that
the term "Acquisition Proposal" shall not include the issuance or sale of
securities in connection with: (i) the conversion rights of Fusion's
outstanding convertible securities, (ii) Fusion's existing employee benefit and
stock option plans in respect of currently outstanding options and (iii) the
Rights Agreement dated as of September 8, 1994, and amended as of April 19,
1995, between Fusion and The First National Bank of Boston, as Rights Agent.
Sellers will promptly notify Buyers of any Acquisition Proposal, including the
material terms and conditions thereof and the identity of the person or group
making such proposal or offer. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in this section by
any executive officer of a Seller or any of its subsidiaries or any investment
banker or other adviser or representative of a Seller or its subsidiaries,
whether or not such person is purporting to act on behalf of such entity or
otherwise, shall be deemed to be a breach of this paragraph by such Seller.
8.3. TAXES. (a) Liability for Taxes. (i) Sellers shall
be liable for, and indemnify Buyers against, all (A) Taxes imposed on any
Company Group or member thereof (other than Fusion Japan, Fusion Germany and
Aetek) for any taxable year that ends on or before the Closing Date and, with
respect to any Straddle Period, the portion of such Straddle Period ending on
and including the Closing Date (including, without limitation, Taxes imposed on
Fusion Japan, Fusion Germany or Aetek pursuant to Treas. Reg. Section 1.1502-6
or similar provisions of state, local or foreign law as a result of having been
a member of any Company Group), (B) Taxes imposed on Fusion Japan, Fusion
Germany or Aetek or for which these Companies may otherwise be liable for any
taxable year or period that ends on or before the Closing Date and, with
respect to any Straddle Period, the portion of such Straddle Period ending on
and including the Closing Date
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(including without limitation, any obligation to contribute to the payment of
Tax determined on a consolidated, combined or unitary basis with respect to any
Company Group and any Taxes resulting from Fusion Japan, Fusion Germany or
Aetek ceasing to be a member of any Company Group), (C) Taxes (whether assessed
or unassessed) applicable to the Business, the Purchased Assets and the Assumed
Liabilities, in each case, attributable to any taxable year or period that ends
on or before the Closing Date and, with respect to any Straddle Period, the
portion of such Straddle Period ending on and including the Closing Date, and
(D) any Section 338 Taxes.
(ii) Buyers shall be liable for, and indemnify Seller against,
(A) Taxes imposed on Fusion Japan, Fusion Germany or Aetek for any taxable year
or period that begins after the Closing Date and, with respect to any Straddle
Period, the portion of such Straddle Period beginning after the Closing Date
and (B) all Taxes (whether assessed or unassessed) applicable to the Business,
the Purchased Assets and the Assumed Liabilities, in each case, attributable to
any taxable year or period that begins after the Closing Date and, with respect
to any Straddle Period, the portion of such Straddle Period beginning after the
Closing Date.
(iii) For purposes of paragraphs (a)(i) and (a)(ii), whenever
it is necessary to determine the liability for Taxes for a Straddle Period, the
determination of the Taxes for the portion of the Straddle Period ending on and
including, and the portion of the Straddle Period beginning after, the Closing
Date shall be determined by assuming that the Straddle Period consisted of two
taxable years or periods, one which ended at the close of the Closing Date and
the other which began at the beginning of the day following the Closing Date,
and items of income, gain, deduction, loss or credit for the Straddle Period
shall be allocated between such two taxable years or periods on a "closing of
the books" basis; provided however, that exemptions, allowances or deductions
that are calculated on an annual basis, such as the deduction for depreciation,
shall be apportioned between such two taxable years or periods on a daily basis
and that Sellers shall in all events be liable for any Section 338 Taxes.
(iv) If Sellers become entitled to a refund or credit of
Taxes for which they are liable under paragraph (a)(i) to indemnify Buyers, and
such Taxes are attributable to the carryback of losses, credits or similar
items from a taxable year or period that begins after the Closing Date and are
attributable to Aetek, Fusion Japan or Fusion Germany, Sellers shall promptly
pay to the Buyers the amount of such refund or credit together with any
interest thereon. In the event that any refund or credit of Taxes for which a
payment has been made to Buyers is subsequently reduced or disallowed, Buyers
shall indemnify and
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hold harmless Sellers for any Tax assessed against Sellers by reason of the
reduction or disallowance.
(b) Transfer Taxes. Notwithstanding anything herein to the
contrary, Buyers will pay, and will indemnify Sellers against any sales Tax,
VAT, use Tax, real property transfer or gains Tax, documentary stamp Tax, stock
transfer Tax or similar Tax imposed on the transactions contemplated by this
Agreement. Sellers agree to timely sign and deliver such certificates or forms
as may be necessary or appropriate to establish an exemption from (or otherwise
reduce), or make a report with respect to, such Taxes.
(c) Reimbursement of Taxes. Sellers or Buyers, as the case
may be, shall provide reimbursement for any Tax paid by one party all or a
portion of which is the responsibility of the other party in accordance with
the terms of this Section 8.3. Within a reasonable time prior to the payment
of any said Tax, the party paying such Tax shall give notice to the other party
of the Tax payable and the portion which is the liability of each party,
although failure to do so will not relieve the other party from its liability
hereunder.
(d) Tax Returns. Sellers shall file or cause to be filed
when due all Tax Returns that are required to be filed by or with respect to
Aetek, Fusion Japan and Fusion Germany for taxable years or periods ending on
or before the Closing Date and Sellers shall remit (or cause to be remitted)
any Taxes due in respect of such Tax Returns, and Buyers shall file or cause to
be filed when due all Tax Returns that are required to be filed by or with
respect to Aetek, Fusion Japan and Fusion Germany for taxable years or periods
ending after the Closing Date and Buyers shall remit (or cause to be remitted)
any Taxes due in respect of such Tax Returns. A Tax Return filed by Buyers
which includes a Straddle Period shall be submitted to Sellers for review
within at least 30 days prior to its due date and Sellers shall submit comments
to Buyers within 15 days of such due date, which comments shall be accepted by
Buyers if reasonable. Sellers or Buyers shall reimburse the other party for
the Taxes for which Sellers or Buyers are liable pursuant to Section 8.3(a) but
which are payable with any Tax Return to be filed by the other party pursuant
to the previous sentence upon the written request of the party entitled to
reimbursement setting forth in detail the computation of the amount owed by
Sellers or Buyers, as the case may be, but in no event earlier than 10 days
prior to the due date for the filing of such Tax Return. All Tax Returns which
Sellers are required to file or cause to be filed in accordance with this
paragraph (d) shall be prepared and filed in a manner consistent with past
practice and, on such Tax Returns, no position shall be taken, elections made
or method adopted that is inconsistent with positions taken, elections made or
methods used in preparing and filing similar Tax Returns in prior periods
(including, but not limited to, positions which would have the
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effect of deferring income to periods for which Buyers are liable or
accelerating deductions to periods for which Sellers are liable).
(e) Contest Provisions. Buyers shall notify Sellers in
writing upon receipt by Buyers, any of its Affiliates, or, after the Closing
Date, Aetek, Fusion Japan or Fusion Germany, of notice of any pending or
threatened federal, state, local or foreign Tax audits or assessments which may
materially affect the Tax liabilities of any Company for which Sellers would be
required to indemnify Buyers pursuant to Section 8.3(a), provided that failure
to comply with this provision shall not affect Buyers' right to indemnification
hereunder except to the extent such failure materially impairs Sellers' ability
to contest any such Tax liabilities.
Sellers shall have the sole right to represent Aetek's, Fusion
Japan's and Fusion Germany's interests in any Tax audit or administrative or
court proceeding relating to taxable periods ending on or before the Closing
Date, and to employ counsel of its choice at its expense, provided, however,
that Buyers and their representatives shall be permitted, at Buyers' expense,
to be present at, and participate in, any such audit or proceeding.
Notwithstanding the foregoing, neither Sellers nor any Affiliate of Sellers
shall be entitled to settle, either administratively or after the commencement
of litigation, any claim for Taxes which could adversely affect the liability
for Taxes of the Buyers, Aetek, Fusion Japan, Fusion Germany or any Affiliate
thereof for any period after the Closing Date to any extent (including, but not
limited to, the imposition of income Tax deficiencies, the reduction of asset
basis or cost adjustments, the lengthening of any amortization or depreciation
periods, the denial of amortization or depreciation deductions, or the
reduction of loss or credit carryforwards) without the prior written consent of
Buyers, which consent may be withheld in the sole discretion of Buyers unless
Sellers have indemnified the Buyers in a manner acceptable to Buyers against
the effects of any such settlement.
(f) Assistance and Cooperation. After the Closing Date,
each of the Sellers and Buyers shall (and cause their respective Affiliates
to):
(i) timely sign and deliver such certificates or forms as may
be necessary or appropriate to establish an exemption from (or
otherwise reduce), or file Tax Returns or other reports with respect
to, Taxes described in Section 8.3(b) (relating to sales, transfer and
similar Taxes);
(ii) assist the other party in preparing any Tax Returns
which such other party is responsible for preparing and filing in
accordance with Section 8.3(d);
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(iii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the
Companies;
(iv) make available to the other and to any taxing authority
as reasonably requested all information, records, and documents
relating to Taxes of the Companies;
(v) provide timely notice to the other in writing of any
pending or threatened Tax audits or assessments of the Companies for
taxable periods for which the other may have a liability under this
Section 8.3; and
(vi) furnish the other with copies of all correspondence
received from any taxing authority in connection with any Tax audit or
information request with respect to any such taxable period.
(g) Election Under Section 338(h)(10). (i) At FII's
election, Curing and FII shall make a joint election for Aetek under Section
338(h)(10) of the Code and under any applicable similar provisions of state or
foreign law with respect to the purchase of the Shares of Aetek (collectively,
the "Section 338(h)(10) Elections"). Curing represents that an election under
Section 338(h)(10) of the Code is available for Aetek. Curing and FII shall
within 90 days after the Closing Date exchange completed and executed copies of
Internal Revenue Service Form 8023-A, required schedules thereto, and any
similar state and foreign forms. If any changes are required in these forms as
a result of information which is first available after these forms are
prepared, the parties will promptly agree on such changes.
(ii) In the event FII elects to make such election, within 90
days following the Closing Date, FII shall deliver to Curing a schedule (the
"Section 338 Allocation Schedule") allocating the Modified Adjusted Deemed
Sales Price, as defined in Treas. Reg. Section 1.338(h)(10)-1(f), for Aetek
among the assets of Aetek. The Section 338 Allocation Schedule shall be
reasonable and shall be prepared in accordance with Section 338(h)(10) of the
Code and the regulations thereunder. Curing agrees that promptly upon
receiving said Section 338 Allocation Schedule it shall review the same and
either sign the Section 338 Allocation Schedule and return an executed copy
thereof to FII or propose reasonable changes thereto. FII and Curing each
agrees to file all federal, state, local and foreign Tax Returns in accordance
with the Section 338 Allocation Schedule and not to take, or cause to be taken,
any action that would be inconsistent with or prejudice any Section 338(h)(10)
Elections.
(h) Any payments made pursuant to this Section 8.3 shall be
treated by Buyers and Sellers as an adjustment to the Purchase Price and, to
the extent any payment cannot be so treated, shall be made on an After-Tax
Basis.
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(i) Fusion Europe and UK Sub shall use reasonable efforts
to ensure that the sale of the Curing Business is deemed to be a transfer of a
business as a going concern for the purposes of the VATA, s 49 and schedule 4
paragraph 8(1)(a).
8.4. EMPLOYEES AND EMPLOYEE BENEFIT PLANS. (a) Offers of
Employment. Sub and UK Sub shall offer employment (at the base compensation
and wage levels as Sub and UK Sub shall determine, but in any event, at an
initial level not less than such employee's base compensation and wage levels
in effect on the date hereof) to (i) each of the employees of the Curing
Business who are actively at work as of the Closing Date and who are identified
on Schedule 8.4 and (ii) the other individuals identified on Schedule 8.4 who
provide certain services to the Curing Business as of the Closing Date
(collectively, the "Affected Employees"); provided, however, Buyers shall not
be required to offer employment to any person who has not signed an Agreement
Regarding Confidentiality. Those Affected Employees who accept such offer of
employment and those employees referred to in the last sentence of this
paragraph who accept offers of employment are referred to herein as
"Transferred Employees." Buyers further agree that they will use reasonable
efforts to obtain signatures from Affected Employees to an Agreement Regarding
Confidentiality. Notwithstanding anything herein to the contrary, nothing in
this Agreement shall create any obligation on the part of Sub and UK Sub to
continue the employment of any employee or other individual for any definite
period following the Closing. Sub and UK Sub shall offer employment (at the
base compensation and wage levels as Sub and UK Sub shall determine, but in any
event, at an initial level not less than such employee's base compensation and
wage levels in effect on the date hereof) to any individual who was an employee
of Curing or Fusion Europe in respect of the Curing Business and who is
receiving sick-leave or short-term disability benefits under Curing's or Fusion
Europe's sick-leave or short-term disability program or who is on an approved
leave of absence as of the Closing and who is entitled to reinstatement under
applicable federal or state laws subject to the following conditions (except to
the extent that such conditions are not applicable to the reason for such
person's absence): (i) such individual is released by his or her physician to
return to active employment; and (ii) such individual actually returns to
active employment immediately upon such release; provided, however, that no
individual shall be offered employment under this provision after six months
following the Closing or any applicable period as required by law, if longer;
provided, however, Buyers shall not be required to offer employment to any
person who has not signed an Agreement Regarding Confidentiality.
Buyers agree that during the nine-month period immediately
following the Closing, Buyers shall not terminate any Transferred Employees
other than Terminations for Cause. Where
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feasible and not inconsistent with Employer's business interests and judgement
about Employee's ability to sufficiently improve performance, Employer shall
give Employee notice, written or otherwise, that Employee's performance is not
satisfactory and shall allow Employee an opportunity to improve, prior to
terminating such employee for cause.
(b) Benefits. Buyers initially shall provide the
Transferred Employees medical, life and disability insurance and vacation
benefits, in each case reasonably comparable to that provided to such
Transferred Employees by or through Sellers as of the date hereof. Buyers will
credit Transferred Employees with their previous service with Sellers for the
purpose of calculating their vacation allotment under Buyers' vacation policy.
In addition, effective as of the Closing Date, Buyers shall establish or
maintain a defined contribution plan with a qualified cash or deferred
arrangement ("Buyers Plan") for the benefit of the Transferred Employees and
the employees of Aetek who immediately prior to the Closing Date were
participants in the Fusion Systems Profit Sharing Plan. The calculation of the
profit sharing element of the Buyers Plan shall be reasonably comparable to the
Fusion Systems Profit Sharing Plan. Buyers shall continue to provide such
insurance and Buyers Plan and provide such other plans, programs, agreements or
arrangements on behalf of the Transferred Employees as the Buyers determine in
their sole discretion. In the event Buyers pay severance to a departing
employee, (i) one factor, among others, that Buyers agree to consider in
determining eligibility for severance benefits will be whether there was a
Termination For Cause, and (ii) one factor, among others, that Buyers agree to
consider in determining severance amounts will be years of service rendered by
Transferred Employees to Sellers. Notwithstanding anything herein to the
contrary, (1) nothing in this Agreement shall affect Buyers' rights to
terminate any employment relationship for cause or without cause; (2) nothing
in this Agreement shall preclude Buyers from altering, amending, or terminating
any of its employee benefit plans or policies, or the participation of any of
its employees in such plans, at any time; and (3) Curing and Fusion Europe
shall retain all obligation and liability for all benefits (including, but not
limited to, severance benefits and continuation coverage under Part 6 of Title
I of ERISA) under ERISA Benefit Plans and Non-ERISA Commitments with respect to
the Transferred Employees and their beneficiaries.
(c) Welfare Benefits. With respect to each Affected
Employee, Sellers and Fusion Europe shall retain the obligation and liability
for claims by any such individual (or his or her covered dependent or
beneficiary) under the ERISA Benefit Plans and the Non-ERISA Commitments,
whether incurred prior to, on or after the Closing Date. Buyers shall
recognize the service credited to Transferred Employees on or prior to the
Closing Date to the extent recognized under ERISA Benefit Plans as if such
service had been rendered to a Buyer or one of its Affiliates in
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connection with any welfare benefit plan (within the meaning of Section 3(1) of
ERISA) for purposes of any waiting period and eligibility purposes only.
Nothing contained in this Agreement shall require Buyers to provide for the
waiver under its employee welfare benefit plans covering Transferred Employees
on and after the Closing Date of any conditions to coverage with respect to
pre-existing medical conditions. Buyers shall credit Transferred Employees
with any amounts paid prior to the Closing Date under the ERISA Benefit Plans
which are health plans toward satisfaction of the applicable deductible amounts
and copayment minimums under the corresponding welfare benefit plans of Buyers,
but only to the extent such payment would have been taken into account under
the ERISA Benefit Plans.
(d) Workers' Compensation. With respect to each Affected
Employee, Sellers shall retain the obligation and liability for any workers'
compensation or similar workers' protection claims with respect to any such
individual, whether incurred prior to, on or after the Closing Date which are
the result of an injury or illness originating prior to the Closing Date.
(e) Third-Party Rights. No provision of this Section 8.4
shall create any third-party beneficiary rights in any employee or former
employee (including any beneficiary or dependent thereof) of a Seller or a
Company, any of their respective Affiliates, Buyer or any Affiliates of the
Buyer in respect of continued employment (or resumed employment) for any
specified period of any nature or kind whatsoever, and no provision of this
Section 8.4 shall create such third-party beneficiary rights in any such
persons in respect of any benefits that may be provided, directly or
indirectly, under any employee benefit plan or arrangement, including the
currently existing Benefit Plans and Non-ERISA Commitments.
8.5. CHANGE IN CORPORATE NAME. Curing agrees promptly after
the Closing Date to change its corporate name to a name that does not include
the term "Fusion UV Curing Systems," "Fusion UV Systems," or variations thereof
which include or incorporate the term "UV," "Curing," or "UV Curing." Buyers
agree promptly after the Closing Date to cause each of Fusion Japan, KK and
Fusion VuS GmbH to change their respective corporate names to a name permitted
under Section 2.1(m) and the Trade Name and Logo Consent or otherwise.
8.6. TRANSFER OF CERTAIN ASSETS AND LIABILITIES.
Notwithstanding anything in this Agreement to the contrary, prior to the
Closing Date Fusion shall transfer and dispose of, or cause to be transferred
and disposed of, any right, title or interest held by any Company in or to any
of the assets listed on Schedule 8.6 (the "Transfer Assets") and all the
liabilities and obligations of any Company under or with respect to any of the
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obligations or liabilities listed on Schedule 8.6 (the "Transfer Liabilities").
8.7. TRANSFER OF CERTAIN EMPLOYEES. Notwithstanding anything
in this Agreement to the contrary, prior to the Closing, Fusion shall terminate
or transfer, or cause to be terminated or transferred, the employees listed on
Schedule 8.7 hereto (the "Transfer Employees") and the obligations and
liabilities relating to such Transfer Employees (the "Employee Liabilities") so
that as of the Closing such Transfer Employees are not employees of any Company
and such Transfer Liabilities are not liabilities of any Company.
8.8. PRODUCT LIABILITY INSURANCE. Sellers agree to maintain
and keep in force, from the date hereof through the second anniversary of the
date hereof, Sellers' current $1,000,000 (per occurrence) general liability
insurance policy (the "Product Liability Policy"), covering claims for injury
to person or property, regardless of when made or asserted, relating to
products distributed or sold by Curing or Fusion Europe on or prior to the
Closing Date. Sellers shall add and maintain Sub as an additional named
insured under such Product Liability Policy which shall be reflected on an
endorsement thereof (the "Product Liability Endorsement").
8.9. REIMBURSEMENT FOR SEVERANCE LIABILITIES.
Notwithstanding anything herein to the contrary, Buyers agree to reimburse
Sellers for severance liabilities of Sellers or the Business to any person
employed by the Business immediately prior to Closing that arise from the
purchase transactions contemplated by this Agreement (the "Severance
Liabilities") as follows:
(a) in the event Sellers incur, are obligated to pay and
do pay between $1.00 and $250,000 in Severance Liabilities, Buyers
shall reimburse Sellers for 50% of the portion of such Severance
Liabilities incurred and actually paid by Sellers;
(b) in the event Sellers incur, are obligated to pay and
do pay between $250,001 and $500,000 in Severance Liabilities Buyers
shall reimburse Sellers (i) $125,000 of the first $250,000 of such
Severance Liabilities incurred and actually paid by Sellers and (ii)
none of the next $250,000 (or portion thereof) of such Severance
Liabilities; and
(c) in the event Sellers incur, are obligated to pay and
do pay in excess of $500,000 in Severance Liabilities, Buyers shall
reimburse Sellers (i) $125,000 of the first $250,000 of such Severance
Liabilities incurred and actually paid by Sellers (ii) none of the
next $250,000 of such Severance Liabilities incurred and actually paid
by Sellers
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and (iii) all of the next $250,000 (or portion thereof) of Severance
Liabilities incurred and actually paid by Sellers;
provided that, any reimbursement obligations of Buyers under this Section 8.9
shall be offset by the amount of Losses and Expenses incurred by Buyers
relating to Severance Liabilities for which Sellers are obligated to indemnify
any Buyer Group Member(s) hereunder, to the extent Sellers have not so
indemnified such Buyer Group Member(s); and
provided further that, Sellers agree to defend any claim relating to Severance
Liabilities for which Buyers are obligated to reimburse Sellers hereunder to
the same extent they would if the obligations were solely those of Sellers.
Buyers shall not be obligated to reimburse Sellers for any
Severance Liabilities other than as provided in this Section 8.9.
8.10 SARTOMER CONSENT. Buyer(s) agree to attempt in good
faith to obtain from Sartomer Company a consent to the license of the
proprietary know-how, technical data, and information developed by the Business
pertaining to photoinitiator-free polymerization processes and compounds by
Buyer(s) (i) to Fusion for use in the Fusion Field of Use and (ii) to Lighting
for use in the Lighting Field of Use (each as defined in the Cross-License
Agreements).
8.11 UK TRANSFER. (a) Fusion Europe and UK Sub acknowledge
and agree that the sale, transfer and assignment of the Business as conducted
by Fusion Europe comprises a relevant transfer within the meaning of the
Regulations and that the contracts of employment of the employees of Fusion
Europe immediately prior to the Closing (the "Fusion Europe Employees") and
Fusion Europe's rights, powers, duties and liabilities under or in connection
with such contracts will be transferred to UK Sub pursuant to the Regulations
with effect from the Closing Date on substantially the same terms and
conditions (excluding pensions but including previous periods of continuous
employment) as those on which they were previously employed by Fusion Europe.
(b) Fusion Europe agrees that it will comply with the
provisions of regulation 10 of the Regulations prior to the Closing Date. UK
Sub agrees that it will comply with the provisions of regulation 10(3) of the
Regulations prior to the Closing Date.
(c) All salaries and other emoluments, including holiday pay,
tax and national insurance payments and contributions to retirement benefit
schemes, relating to the Fusion Europe Employees shall be borne by Fusion
Europe up to the Closing Date and all necessary apportionments shall be made.
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(d) All amounts payable to or in relation to any of the
Fusion Europe Employees (including but not limited to wages and salaries,
insurances, pension contributions, taxes and national insurance contributions)
in respect of any period prior to the Closing Date shall be borne by Fusion
Europe and on and after the Closing Date shall be borne by UK Sub.
(e) If for any reason the contracts of employment of the
Fusion Europe Employees are not transferred to and/or otherwise assumed by UK
Sub with effect from the Closing Date, by virtue of the Regulations, UK Sub
shall take such action as may be necessary to ensure that all Fusion Europe
Employees are employed by it forthwith on terms that are reasonably comparable
to (excluding pensions) those on which the Fusion Europe Employees are
currently employed by Fusion Europe and the Fusion Europe Employees should be
treated as though their employment with UK Sub was deemed to be continuous
employment.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYERS
The obligations of Buyers under this Agreement shall, at the
option of Buyers, be subject to the satisfaction, on or prior to the Closing
Date, of the following conditions:
9.1. NO MISREPRESENTATION OR BREACH OF COVENANTS AND
WARRANTIES. There shall have been no material breach by any Seller in the
performance of any of its covenants and agreements herein which shall not have
been remedied or cured; each of the representations and warranties of Sellers
contained or referred to herein shall be true and correct in all material
respects on the Closing Date as though made on the Closing Date (except to the
extent that they expressly relate to an earlier date), except for changes
therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Buyers or any transaction
permitted by Section 7.4; and there shall have been delivered to Buyers a
certificate to such effect, dated the Closing Date, signed on behalf of each
Seller by the President or other equivalent authority of such Seller.
9.2. NO CHANGES OR DESTRUCTION OF PROPERTY. Between the date
hereof and the Closing Date, there shall have been no material damage to the
Fusion Assets by fire, flood, casualty, act of God or the public enemy or other
cause, regardless of insurance coverage for such damage; and there shall have
been delivered to Buyers a certificate to such effect, dated the Closing Date
and signed on behalf of each Seller by the President or any Vice President or
other equivalent authority of such Seller.
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9.3. NO RESTRAINT OR LITIGATION. The waiting period under
the HSR Act shall have expired or been terminated, and no injunction shall be
issued prohibiting or otherwise challenging the legality or validity of the
transactions contemplated hereby.
9.4. NECESSARY GOVERNMENTAL APPROVALS. The parties shall
have received all consents, waivers, approvals and actions of or by all
Governmental Bodies which are necessary to consummate the transactions
contemplated hereby, all of which are known to Sellers or Buyers to be
required.
9.5. TRANSFER OF CERTAIN ASSETS AND CERTAIN LIABILITIES.
Fusion shall have performed and complied with the covenants and agreements
contained in Section 8.6 with respect to the Transfer Assets and Transfer
Liabilities.
9.6. TRANSFER OF CERTAIN EMPLOYEES. Fusion shall have
performed and complied with the covenant and agreements contained in Section
8.7.
9.7. EMPLOYMENT AGREEMENTS. Each of the Executives shall
have duly executed and delivered prior to the Closing Date their respective
Employment Agreements.
9.8. ASSIGNMENT OF PATENTS. The Assignment of Patents shall
have been duly executed and delivered by the parties thereto.
9.9. TRANSITION SERVICES AGREEMENT. The Transition Services
Agreement shall have been duly executed and delivered by all of the parties
thereto.
9.10. THE LIGHTING AGREEMENT. The Lighting Agreement shall
have been duly executed and delivered by all of the parties thereto.
9.11. THE BULB SHOP SUBLEASE AGREEMENT. The Bulb Shop
Sublease Agreement shall have been duly executed and delivered by all of the
parties thereto.
9.12. THE CROSS-LICENSE AGREEMENTS. Each of the
Cross-License Agreements shall have been duly executed and delivered by all of
the respective parties thereto.
9.13. TRADEMARK ASSIGNMENT. The Trademark Assignment shall
have been duly executed and delivered by the parties thereto.
9.14. TRADE NAME AND LOGO CONSENT. The Trade Name and Logo
Consent shall have been duly executed and delivered by all of the parties
thereto.
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9.15. PRODUCT LIABILITY ENDORSEMENT. The Product Liability
Endorsement (as defined in Section 8.8) shall have been delivered by Sellers.
9.16. TRANSFER OF FUSION JAPAN SHARES. Sellers shall have
taken all actions that are necessary to allow the Fusion Japan Shares to be
transferred to Overseas as provided hereunder, including without limitation the
issuance of share certificates and the preparation of a shareholder ledger.
9.17. PERFORMANCE OF COVENANTS. Fusion and each Company
shall have performed and complied with all the covenants and agreements
contained in this Agreement pertaining to Fusion or such Company and satisfied
all of the conditions required by this Agreement to be satisfied by it or them
prior to the Closing Date.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of Sellers under this Agreement shall, at the
option of Sellers, be subject to the satisfaction, on or prior to the Closing
Date, of the following conditions:
10.1. NO MISREPRESENTATION OR BREACH OF COVENANTS AND
WARRANTIES. There shall have been no material breach by any Buyer in the
performance of any of its covenants and agreements herein which shall not have
been remedied or cured; each of the representations and warranties of Buyers
contained or referred to in this Agreement shall be true and correct in all
material respects on the Closing Date as though made on the Closing Date
(except to the extent that they expressly relate to an earlier date), except
for changes therein specifically permitted by this Agreement or resulting from
any transaction expressly consented to in writing by Sellers or any transaction
contemplated by this Agreement; and there shall have been delivered to Sellers
a certificate to such effect, dated the Closing Date and signed on behalf of
Buyers by the President or any Vice President or other equivalent authority of
Buyers.
10.2. NO RESTRAINT OR LITIGATION. The waiting period under
the HSR Act shall have expired or been terminated, and no injuntion shall be
issued prohibiting or otherwise challenging the legality or validity of the
transactions contemplated hereby.
10.3. NECESSARY GOVERNMENTAL APPROVALS. The parties shall
have received all approvals and actions of or by all Governmental Bodies which
are necessary to consummate the transactions contemplated hereby, all of which
are known to Sellers or Buyers to be required.
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ARTICLE XI
INDEMNIFICATION
11.1. INDEMNIFICATION BY SELLERS. (a) Fusion and each Seller
jointly and severally agree to indemnify and hold harmless each Buyer Group
Member from and against any and all Loss and Expense incurred by such Buyer
Group Member in connection with or arising from:
(i) any breach by a Seller of any of its covenants in this
Agreement or in any Seller Ancillary Agreement;
(ii) any failure of a Seller to perform any of its
obligations in this Agreement or in any Seller Ancillary Agreement;
(iii) any breach of any warranty or the inaccuracy of any
representation of a Seller contained or referred to in this Agreement
or any certificate delivered by or on behalf of a Seller pursuant
hereto;
(iv) the failure of Sellers to assume full responsibility
for any Excluded Liability;
(v) any obligation or liability of a Company to any employee
of the Business which arises as a result of the transactions
contemplated by this Agreement; or
(vi) any breach by a Company of any provision contained in any
Seller Agreement relating to the confidentiality and/or non-disclosure
by a Company of information, documents and/or records;
provided, however, that Fusion and Sellers shall not be required to indemnify
and hold harmless under clauses (i), (ii) and (iii) of this sentence with
respect to Loss and Expense incurred by Buyer Group Members (other than Loss
and Expense incurred as a result of inaccuracies of the representations and
warranties contained in the first paragraph of Section 5.1, the first paragraph
of Section 5.3, and Sections 5.7, 5.17 and 5.28, and other than Loss and
Expense incurred as a result of a breach by a Seller of its covenants and
obligations set forth in Sections 3.4 and 8.3, as to which this proviso shall
have no effect) unless (i) the aggregate amount of any one such Loss and
Expense is $15,000 or more and (ii) the cumulative aggregate amount of such
Loss and Expense exceeds $250,000, provided further that the aggregate amount
required to be paid by Sellers pursuant to this Section 11.1 shall not exceed
$9,000,000 with respect to claims made on or prior to March 31, 1997 and shall
be reduced to $3,000,000 with respect to claims made thereafter (inclusive of
claims made during the period from Closing through March 31, 1997).
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(b) The indemnification provided for in this Section 11.1
shall terminate on December 31, 1997 (and no claims shall be made by any Buyer
Group Member under this Section 11.1 thereafter), except that the
indemnification by Seller shall continue as to:
(i) the obligations and representations of Curing and Fusion
Europe under the Instrument of Assignment, as to which no time
limitation shall apply;
(ii) the representations and warranties set forth in Sections
5.7 and 5.18, the covenants set forth in Sections 3.4, 8.3, 8.4, and
8.7, and the failure of Sellers to assume full responsibility for the
Excluded Liabilities identified in Section 2.4(h), (i) and (k), which
shall survive until 60 days after the expiration of the applicable
statute of limitations;
(iii) the representations and warranties set forth in the
first paragraph of Section 5.1, the first paragraph of Section 5.3,
and Section 5.17 as to which no time limitation shall apply;
(iv) the representations and warranties set forth in Section
5.23 and the covenants of Sellers set forth in Sections 13.2, 13.6 and
13.13, which shall terminate on the sixth anniversary of the Closing
Date;
(v) the covenant set forth in Section 8.1, as to which the
indemnification provided for in this Section 11.1 shall terminate 60
days after the expiration of the noncompetition period provided for
therein;
(vi) the representations and warranties contained in
Section 5.15(e)(i) and (iii) and Section 5.15(f) to which the
indemnification provided for in this Section 11.1 shall terminate on
March 31, 1997; and
(vii) any Loss or Expense of which any Buyer Group Member has
notified Sellers in accordance with the requirements of Section 11.3
on or prior to the date such indemnification would otherwise terminate
in accordance with this Section 11.1, as to which the obligation of
Sellers shall continue until the liability of Sellers shall have been
determined pursuant to this Article XI, and Sellers shall have
reimbursed all Buyer Group Members for the full amount of such Loss
and Expense in accordance with this Article XI.
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11.2. INDEMNIFICATION BY BUYERS. (a) Buyers agree to jointly
and severally indemnify and hold harmless each Seller Group Member from and
against any and all Loss and Expense incurred by such Seller Group Member in
connection with or arising from:
(i) any breach by a Buyer of any of its covenants or
agreements in this Agreement or in any Buyer Ancillary Agreement;
(ii) any failure by a Buyer to perform any of its obligations
in this Agreement or in any Buyer Ancillary Agreement;
(iii) any breach of any warranty or the inaccuracy or alleged
inaccuracy of any representation of Buyers contained or referred to in
this Agreement or in any certificate delivered by or on behalf of
Buyers pursuant hereto;
(iv) the failure of Buyers to assume full responsibility for
the Assumed Liabilities;
provided, however, that Buyers shall not be required to indemnify and hold
harmless under this Section 11.2 with respect to Loss and Expense incurred by
Seller Group Members (other than Loss and Expense incurred as a result of a
Buyer's failure to pay, perform or discharge any of the Assumed Liabilities and
other than Loss and Expense incurred as a result of inaccuracies of the
representations and warranties contained in Section 6.3 and other than Loss and
Expense incurred as a result of a breach by a Buyer of its covenants and
obligations set forth in Sections 3.5 and 8.3, as to which this proviso shall
have no effect) unless (i) the aggregate amount of any one such Loss and
Expense is $15,000 or more and (ii) the cumulative aggregate amount of such
Loss and Expense exceeds $250,000, provided further that the aggregate amount
required to be paid by Buyers pursuant to this Section 11.2 shall not exceed
$9,000,000 with respect to claims made on or prior to March 31, 1997 and shall
be reduced to $3,000,000 with respect to claims made thereafter (inclusive of
claims made during the period from Closing through March 31, 1997).
(b) The indemnification provided for in this Section 11.2
shall terminate on December 31, 1997 (and no claims shall be made by Seller
under this Section 11.2 thereafter), except that the indemnification by Buyers
shall continue as to:
(i) the covenants of Buyers set forth in Sections 3.4 and
8.3, which shall survive until 60 days after the expiration of the
applicable statute of limitations;
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(ii) the covenants of Buyers set forth in Sections 13.2, 13.6
and 13.13 which shall terminate on the sixth anniversary of the
Closing Date;
(iii) the covenant set forth in Section 8.1, as to which the
indemnification provided for in this Section 11.2 shall terminate 60
days after the expiration of the noncompetition period provided for
therein; and
(iv) any Loss or Expense of which any Seller Group Member has
notified Buyers in accordance with the requirements of Section 11.3 on
or prior to the date such indemnification would otherwise terminate in
accordance with this Section 11.2, as to which the obligation of
Buyers shall continue until the liability of Buyers shall have been
determined pursuant to this Article XI, and Buyers shall have
reimbursed all Seller Group Members for the full amount of such Loss
and Expense in accordance with this Article XI.
11.3. NOTICE OF CLAIMS. (a) Any Buyer Group Member or Seller
Group Member (the "Indemnified Party") seeking indemnification hereunder shall
give to the party obligated to provide indemnification to such Indemnified
Party (the "Indemnitor") a notice (a "Claim Notice") describing in reasonable
detail the facts giving rise to any claim for indemnification hereunder and
shall include in such Claim Notice (if then known) the amount or the method of
computation of the amount of such claim, and a reference to the provision of
this Agreement or any other agreement, document or instrument executed
hereunder or in connection herewith upon which such claim is based; provided,
that a Claim Notice in respect of any action at law or suit in equity by or
against a third Person as to which indemnification will be sought shall be
given promptly after the action or suit is commenced; provided further that
failure to give such notice shall not relieve the Indemnitor of its obligations
hereunder except to the extent it shall have been prejudiced by such failure.
(b) In calculating any Loss or Expense there shall be
deducted (i) any insurance recovery in respect thereof (and no right of
subrogation shall accrue hereunder to any insurer) and (ii) the amount of any
tax benefit to the Indemnified Party (or any of its Affiliates) with respect to
such Loss or Expense (after giving effect to the tax effect of receipt of the
indemnification payments).
(c) After the giving of any Claim Notice pursuant hereto, the
amount of indemnification to which an Indemnified Party shall be entitled under
this Article XI shall be determined: (i) by the written agreement between the
Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any
court of competent jurisdiction; or (iii) by any other means to which the
Indemnified Party and the Indemnitor shall agree.
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The judgment or decree of a court shall be deemed final when the time for
appeal, if any, shall have expired and no appeal shall have been taken or when
all appeals taken shall have been finally determined. The Indemnified Party
shall have the burden of proof in establishing the amount of Loss and Expense
suffered by it.
11.4. THIRD PERSON CLAIMS. (a) In the case of Loss or
Expense asserted against, resulting to, imposed upon, or suffered by any
Indemnified Party by reason of any claim by any third party (a "Third Party
Claim"), the Indemnified Party shall provide a Claim Notice as provided in
Section 11.3.
(b) Upon receipt of a Claim Notice in respect of a Third Party
Claim, the Indemnitor may, in its sole discretion, undertake the defense
thereof by counsel of its own choosing, which counsel shall be reasonably
satisfactory to the Indemnified Party (it being understood, in the event the
Indemnitor undertakes such defense, the defense, compromise or settlement of
such claim shall be for the account of, and at the risk of, the Indemnitor);
provided, however, that the Indemnified Party shall have the right at its own
expense to participate in the defense thereof and to employ counsel at its own
expense to assist in such defense; and provided further, that if in the
Indemnified Party's reasonable judgment upon the advice of outside counsel, a
substantive conflict of interest exists between such Indemnified Party and the
Indemnitor with respect to such Third Party Claim, such Indemnified Party shall
be entitled to select counsel of its own choosing, in which event Indemnitor
shall be obligated to pay the reasonable fees and expenses of such counsel.
(c) If the Indemnified Party has not, within fifteen (15)
days after a claim with respect to any Third Party Claim is made, received
written notice from the Indemnitor stating that the Indemnitor elects to assume
the defense of such Third Party Claim, the Indemnified Party shall have the
right, with counsel reasonably acceptable to the Indemnitor, to undertake and
control the defense, compromise or settlement of such Third Party Claim. In
the event that the Indemnitor elects not to assume the defense of any Third
Party Claim, the Indemnitor shall pay the reasonable fees and disbursements of
the Indemnified Party's counsel.
(d) Anything in this Section 11.4 to the contrary
notwithstanding, the Indemnitor shall not, without the prior written consent of
each Indemnified Party against whom a Third Party Claim is asserted, settle or
compromise any claim or consent to the entry of any judgment relating to or
cease to defend any such Third Party Claim, unless such settlement, compromise
or judgment includes as an unconditional term thereof the giving by the
claimant or by the plaintiff to each Indemnified Party against whom a Third
Party Claim is asserted, a release from all liabilities in respect of such
Third Party Claim and does not result in the imposition on the Indemnified
Party of any remedy other than monetary damages.
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(e) The Indemnitor shall, at its expense, provide each
Indemnified Party against whom a Third Party Claim is asserted with reasonable
access to all records and documents of the Indemnitor relating to any Third
Party Claim. The Indemnified Party shall, at the expense of the Indemnitor,
provide the Indemnitor with reasonable access to all records and documents of
the Indemnified Party relating to any Third Party Claim.
(f) With regard to Third Party Claims for which
indemnification for Loss or Expense is payable hereunder, such indemnification
shall be paid by the Indemnitor promptly upon (i) the entry of a judgment
against the Indemnified Party or (ii) a settlement of the Third Party Claim.
Notwithstanding the foregoing, Expenses of the Indemnified Party shall be
reimbursed on a quarterly basis by the Indemnifying Party.
11.5. INDEMNIFICATION EXCLUSIVE REMEDY. Indemnification
pursuant to the provisions of this Article XI shall be the exclusive remedy of
the parties for any misrepresentation or breach of any warranty or covenant
contained herein. The only legal action which may be asserted by any party
with respect to any matter which is the subject of this Article XI shall be a
contract action to enforce, or to recover damages for the breach of, this
Article XI. Without limiting the generality of the preceding sentence, no
legal action sounding in tort or strict liability may be maintained by any
party, except for actions based on intentional misrepresentation and/or fraud.
11.7. TAX EFFECT OF INDEMNIFICATION PAYMENTS.
(a) In determining the amount of claims against an
Indemnifying Party pursuant to this Article XI, there shall be added (in the
case of a tax detriment) or deducted (in the case of a tax benefit) to or from
the amounts to be paid by the Indemnifying Party an amount equal to the net
present value of any tax benefit or tax detriment (federal, state, local or
foreign) realized or expected by the independent public accountants of Sellers
to be realized by the Indemnified Party by reason of such claim and the receipt
of any indemnity payment pursuant to this Article XI.
(b) For purposes of this Section 11.7, "present value" shall
be calculated using the applicable annual Federal mid-term rate, as that term
is defined in the Code, as in effect for the month in which the payment is to
be made. For purposes of this Section 11.7, "tax benefit" and "tax detriment"
shall be calculated using the actual effective tax rate with respect to the
taxable period or periods for which the tax benefit or the tax detriment, as
the case may be, is realized or incurred, or expected by the independent public
accountants of Sellers to be realized or incurred, as the case may be.
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ARTICLE XII
TERMINATION
12.1. TERMINATION. Anything contained in this Agreement to
the contrary notwithstanding, this Agreement may be terminated at any time
prior to the Closing Date:
(a) by the mutual consent of Buyers and Sellers;
(b) by Buyers or Sellers if the Closing shall not have
occurred on or before November 14, 1996 (or such later date as may be
mutually agreed to by Buyers and Sellers);
(c) by Buyers in the event of any material breach by a Seller
of any of such Seller's agreements, representations or warranties
contained herein and the failure of such Seller to cure such breach
within seven days after receipt of notice from Buyers requesting such
breach to be cured; or
(d) by Sellers in the event of any material breach by a Buyer
of any of such Buyer's agreements, representations or warranties
contained herein and the failure of such Buyer to cure such breach
within seven days after receipt of notice from Sellers requesting such
breach to be cured.
12.2. NOTICE OF TERMINATION. Any party desiring to terminate
this Agreement pursuant to Section 12.1 shall give notice of such termination
to the other parties to this Agreement.
12.3. EFFECT OF TERMINATION. In the event that this
Agreement shall be terminated pursuant to this Article XII, all further
obligations of the parties under this Agreement (other than Sections 13.2 and
13.10) shall be terminated without further liability of any party to the other,
provided that nothing herein shall relieve any party from liability for its
willful breach of this Agreement.
ARTICLE XIII
GENERAL PROVISIONS
13.1. [INTENTIONALLY OMITTED]
13.2. CONFIDENTIAL NATURE OF INFORMATION. Each party agrees
that it will treat in confidence all documents, materials and other information
which it shall have obtained regarding the other party during the course of the
negotiations leading to the consummation of the transactions contemplated
hereby (whether obtained before or after the date of this Agreement), the
investigation provided for herein and the preparation of this Agree-
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ment and other related documents, and, in the event the transactions
contemplated hereby shall not be consummated, at the request of the disclosing
party each party will return to the other party all copies of nonpublic
documents and materials which have been furnished in connection therewith.
Such documents, materials and information shall not be communicated to any
third Person (other than, in the case of Buyers, to their counsel, accountants,
financial advisors or lenders, and in the case of Sellers, to their counsel,
accountants or financial advisors). No other party shall use any confidential
information in any manner whatsoever except solely for the purpose of
evaluating the proposed purchase and sale of the Purchased Assets and the
Business; provided, however, that after the Closing, Buyers may use or disclose
any confidential information included in the Purchased Assets or otherwise
reasonably related to the Business or the Purchased Assets. The obligation of
each party to treat such documents, materials and other information in
confidence shall not apply to any information which (i) is or becomes available
to such party from a source other than the disclosing party, (ii) is or becomes
available to the public other than as a result of disclosure by such party or
its agents, (iii) is required to be disclosed under applicable law or judicial
process, but only to the extent it must be disclosed, or (iv) such party
reasonably deems necessary to disclose to obtain any of the consents or
approvals contemplated hereby.
13.3. NO PUBLIC ANNOUNCEMENT. Neither Buyers nor Sellers
shall, without the approval of the other, make any press release or other
public announcement concerning the transactions contemplated by this Agreement
(including, without limitation, the issuance of press releases upon the
execution of this Agreement), except as and to the extent that any such party
shall be so obligated by law or the rules of any stock exchange or the Nasdaq
National Market, in which case the other party shall be advised and the parties
shall use their best efforts to cause a mutually agreeable release or
announcement to be issued; provided that the foregoing shall not preclude
communications or disclosures necessary to implement the provisions of this
Agreement or to comply with the accounting and disclosure obligations of the
Securities and Exchange Commission or London Stock Exchange.
13.4. NOTICES. All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered when delivered personally (which shall be deemed to include delivery
via express courier such as Federal Express) by telex or telecopier (if
confirmed) or three (3) days after having been sent by registered or certified
mail or by private courier addressed as follows:
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If to Buyers, to:
Fairey Investments, Inc.
Willow Springs Circle
York, Pennsylvania 17402-9805
Telecopy: 011-44-178-443-9519
Attention: Paul V. Boughton
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Telecopy: (312) 853-7036
Attention: Deirdre M. von Moltke
If to Sellers, to:
Fusion Systems Corporation
7600 Standish Place
Rockville, Maryland 20855-2798
Telecopy: (301) 309-0783
Attention: Leslie S. Levine, President
with a copy to:
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, Massachusetts 02110
Telecopy: (617) 248-7100
Attention: Gordon H. Hayes, Jr., Esq.
or to such other address as such party may indicate by a notice delivered to
the other party hereto.
13.5. SUCCESSORS AND ASSIGNS. (a) This Agreement may not be
assigned, by operation of law or otherwise, except that Buyers may assign their
rights under this Agreement to an affiliate of Buyers.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. The successors and permitted assigns hereunder shall include without
limitation, in the case of Buyers, any permitted assignee as well as the
successors in interest to such permitted assignee (whether by merger,
liquidation (including successive mergers or liquidations) or otherwise).
Nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any Person other than the parties and successors and
assigns permitted by this
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Section 13.5 any right, remedy or claim under or by reason of this Agreement.
13.6. ACCESS TO RECORDS AFTER CLOSING. For a period of six
years after the Closing Date, Fusion and its representatives shall have
reasonable access to all of the books and records of the Business transferred
to Buyers hereunder to the extent that such access may reasonably be required
by Fusion in connection with matters relating to or affected by the operations
of the Business prior to the Closing Date. Such access shall be afforded by
Buyers upon receipt of reasonable advance notice and during normal business
hours. Fusion shall be solely responsible for any costs or expenses incurred
by them pursuant to this Section 13.6. If Buyers shall desire to dispose of
any of such books and records prior to the expiration of such six-year period,
Buyers shall, prior to such disposition, give Fusion a reasonable opportunity,
at Fusion's expense, to segregate and remove such books and records as Sellers
may select.
For a period of six years after the Closing Date, Buyers and
their representatives shall have reasonable access to all of the books and
records relating to the Business which Sellers or any of their respective
Affiliates may retain after the Closing Date. Such access shall be afforded by
Sellers and their respective Affiliates upon receipt of reasonable advance
notice and during normal business hours. Buyers shall be solely responsible
for any costs and expenses incurred by them pursuant to this Section 13.6. If
Sellers or any of their respective Affiliates shall desire to dispose of any of
such books and records prior to the expiration of such six-year period, Sellers
shall, prior to such disposition, give Buyers a reasonable opportunity, at
Buyers' expense, to segregate and remove such books and records as Buyers may
select. If Sellers or any of their respective Affiliates shall desire to
dispose of any of such books and records referred to in Section 2.2(j), Sellers
shall, prior to such disposition, give Buyers a reasonable opportunity, at
Buyers' expense, to segregate and remove such books and records as Buyers may
select.
Prior to December 31, 1997, Sellers shall be given reasonable
access to the accounts payable records of the Business for review for the sole
purpose of assessing potential indemnifiable claims under this Agreement.
13.7. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
Exhibits and the Disclosure Schedule referred to herein, the Confidentiality
Agreement, the Buyer Ancillary Agreements, the Seller Ancillary Agreements and
the other documents delivered pursuant hereto contain the entire understanding
of the parties hereto with regard to the subject matter contained herein or
therein, and supersede all prior agreements, understandings or letters of
intent between or among any of the parties hereto, including without limitation
the Confidentiality Agreement. This
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Agreement shall not be amended, modified or supplemented except by a written
instrument signed by an authorized representative of each of the parties
hereto.
13.8. INTERPRETATION. Article titles and headings to
sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. The Schedules and Exhibits referred to herein shall be construed
with and as an integral part of this Agreement to the same extent as if they
were set forth verbatim herein.
13.9. WAIVERS. Any term or provision of this Agreement may
be waived, or the time for its performance may be extended, by the party or
parties entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such provision, nor in any
way to affect the validity of this Agreement or any part hereof or the right of
any party thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any other
or subsequent breach.
13.10. EXPENSES. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and to
its performance and compliance with all agreements and conditions contained
herein on its part to be performed or complied with, including the fees,
expenses and disbursements of its counsel and accountants.
13.11. PARTIAL INVALIDITY. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such invalid, illegal or unenforceable provision or provisions
or any other provisions hereof, unless such a construction would be
unreasonable.
13.12. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be considered an
original instrument, but all of which shall be considered one and the same
agreement, and shall become binding when one or more counterparts have been
signed by each of the parties hereto and delivered to each of the Sellers and
Buyers.
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13.13. BULK SALES LAW. Buyers hereby waive compliance by
Sellers with the provisions of the "bulk sales," "bulk transfer" or similar
laws of any state.
13.14. FURTHER ASSURANCES. On the Closing Date Sellers shall
(i) deliver to Buyers such other bills of sale, deeds, endorsements,
assignments and other good and sufficient instruments of conveyance and
transfer, in form reasonably satisfactory to Buyers and their counsel, as
Buyers may reasonably request or as may be otherwise reasonably necessary to
vest in Buyers all the right, title and interest of Sellers in, to or under any
or all of the Purchased Assets, and (ii) take all steps as may be reasonably
necessary to put Buyers in actual possession and control of all the Purchased
Assets. From time to time following the Closing, Sellers shall execute and
deliver, or cause to be executed and delivered, to Buyers such other
instruments of conveyance and transfer as Buyers may reasonably request or as
may be otherwise necessary to more effectively convey and transfer to, and vest
in, Buyers and put Buyers in possession of, any part of the Purchased Assets,
and, in the case of licenses, certificates, approvals, authorizations,
agreements, contracts, leases, easements and other commitments included in the
Purchased Assets (a) which cannot be transferred or assigned effectively
without the consent of third parties which consent has not been obtained prior
to the Closing, to cooperate with Buyers at its request in endeavoring to
obtain such consent promptly, and if any such consent is unobtainable, to use
its best efforts to secure to Buyers the benefits thereof in some other manner,
or (b) which are otherwise not transferable or assignable, to use its best
efforts jointly with Buyers to secure to Buyers the benefits thereof in some
other manner (including the exercise of the rights of Sellers, thereunder);
provided, however, that nothing herein shall relieve Sellers of their
obligations under Section 7.3. Notwithstanding anything in this Agreement to
the contrary, this Agreement shall not constitute an agreement to assign any
license, certificate, approval, authorization, agreement, contract, lease,
easement or other commitment included in the Purchased Assets if an attempted
assignment thereof without the consent of a third party thereto would
constitute a breach thereof.
13.15. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (as opposed to the conflicts of
law provisions) of the State of New York.
13.16. SUBMISSION TO JURISDICTION. (a) Each party hereto
hereby irrevocably submits in any suit, action or proceeding arising out of or
related to this Agreement or any of the transactions contemplated hereby or
thereby to the jurisdiction of any courts of the United States of America
located in the State of New York.
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(b) Each party hereto irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any
such court, any claim that any such suit, action or proceeding brought in such
a court has been brought in an inconvenient forum and the right to object, with
respect to any such suit, action or proceeding brought in any such court, that
such court does not have jurisdiction over such party or any other party.
(c) In any such suit, action or proceeding, each party hereto
waives, to the fullest extent it may effectively do so, personal service or any
summons, complaint or other process and agrees that the service thereof may be
made by certified or registered mail accompanied by first class prepaid
ordinary postage, addressed to such party at its address.
(d) Each party agrees that a final non-appealable judgment in
any such suit, action or proceeding brought in such a court shall be conclusive
and binding.
13.17. GUARANTY OF LEASES. Fairey Inc. and Sub hereby
jointly and severally unconditionally guaranty due payment, performance and
fulfillment of all liabilities and obligations under the leases covering
property located in the United States assumed by Buyers pursuant to Section
2.3(c), it being understood that the obligations set forth in this Section
13.17 shall not be subject to the monetary or time limitations set forth in
Section 11.2.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year first above written.
FAIREY INVESTMENTS, INC.
By: /s/ PAUL BOUGHTON
-----------------------------
Name: Paul Boughton
Title: Vice President
FUSION UV SYSTEMS, INC.
By: /s/ PAUL BOUGHTON
----------------------------
Name: Paul Boughton
Title: Vice President
FAIREY OVERSEAS DEVELOPMENT
LIMITED
By: /s/ PAUL BOUGHTON
----------------------------
Name: Paul Boughton
Title: Director
FUSION UV SYSTEMS LIMITED
By: /s/ PAUL BOUGHTON
----------------------------
Name: Paul Boughton
Title: Director
AS TO THE PROVISIONS OF
SECTION 13.17 OF THIS
AGREEMENT
FAIREY INC.
By: /s/ PAUL BOUGHTON
----------------------------
Name: Paul Boughton
Title: Vice President
88
FUSION SYSTEMS CORPORATION
By: /s/ JOSEPH F. GREEVES
---------------------------
Name: Joseph F. Greeves
Title: Vice President
FUSION UV CURING SYSTEMS
CORPORATION
By: /s/ JOSEPH F. GREEVES
---------------------------
Name: Joseph F. Greeves
Title: Vice President
FUSION TECHNOLOGY
INTERNATIONAL, INC.
By: /s/ JOSEPH F. GREEVES
---------------------------
Name: Joseph F. Greeves
Title: Treasurer
FUSION EUROPE LIMITED
By: /s/ LESLIE S. LEVINE
---------------------------
Name: Leslie S. Levine
Title: Director
AS TO THE PROVISIONS OF
SECTION 8.2 OF THIS AGREEMENT
FUSION SEMICONDUCTOR SYSTEMS
By: /s/ JOSEPH F. GREEVES
---------------------------
Name: Joseph F. Greeves
Title: Treasurer