ASSET PURCHASE AGREEMENT
BETWEEN
DEXTER CORPORATION
AND
LOCTITE CORPORATION
Dated as of June 20, 2000
ARTICLE I
CERTAIN DEFINITIONS.................................................1
ARTICLE II
THE CLOSING........................................................11
2.1 Time and Place of Closing.....................11
2.2 Purchase and Sale of the Business Assets......12
2.3 Consideration for the Assets..................12
2.4 Deliveries by the Seller......................12
2.5 Delivery by the Buyer.........................14
2.6 Post-Closing Adjustment.......................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER.......................18
3.1 Organization; Qualification...................18
3.2 Capital Stock.................................19
3.3 Equity Investments............................19
3.4 Authority Relative to this Agreement..........20
3.5 No Violation..................................20
3.6 Financial Statements..........................21
3.7 Absence of Undisclosed Liabilities............21
3.8 Absence of Certain Changes or Events..........21
3.9 Title and Related Matters.....................22
3.10 Contracts.....................................22
3.11 Leases........................................23
3.12 Patents, Trademarks and Similar Rights........23
3.13 Legal Proceedings, etc........................24
3.14 Employee Benefit Plans; ERISA.................24
3.15 Assets Necessary to Business..................25
3.16 Governmental Authorizations and Regulations...25
3.17 Disclosure....................................26
3.18 Accounts Receivable...........................26
3.19 Taxes.........................................26
3.20 Insurance....................................26
3.21 Environmental Matters.........................27
3.22 Brokers.......................................28
3.23 Computer Systems..............................28
3.24 Product Warranty..............................29
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER........................29
4.1 Organization..................................29
4.2 Authority Relative to this Agreement..........29
4.3 No Violation..................................29
4.4 Disclosure....................................30
4.5 Financing.....................................30
4.6 Brokers.......................................30
ARTICLE V
COVENANTS OF THE PARTIES...........................................31
5.1 Conduct of Business of the Seller.............31
5.2 Current Information...........................33
5.3 Access to Information.........................33
5.4 Expenses......................................34
5.5 Reasonable Best Efforts.......................34
5.6 Further Assurances............................35
5.7 Disclosure Supplements........................35
5.8 Public Announcements..........................36
5.9 Sales and Transfer Taxes and Fees.............36
5.10 Use of Name...................................36
5.11 Insurance Subsidiaries........................37
ARTICLE VI
SELLER EMPLOYEES...................................................37
6.1 Employment....................................37
6.2 Assumption of Plans...........................38
ARTICLE VII
CLOSING CONDITIONS.................................................40
7.1 Conditions to Each Party's Obligations to
Effect the Transactions Contemplated Hereby...40
7.2 Conditions to the Obligations of the
Seller to Effect the Transactions Con-
templated Hereby...............................41
7.3 Conditions to the Obligations of the
Buyer to Effect the Transactions
Contemplated Hereby............................42
7.4 Certificates...................................43
ARTICLE VIII
CERTAIN TAX MATTERS................................................43
8.1 Tax Matters...................................43
8.2 Indemnity for Taxes...........................46
ARTICLE IX
TERMINATION AND ABANDONMENT........................................49
9.1 Termination...................................49
9.2 Procedure and Effect of Termination...........49
ARTICLE X
MISCELLANEOUS PROVISIONS...........................................50
10.1 Delivery of Schedules and Related Documents...50
10.2 Amendment and Modification....................50
10.3 Waiver of Compliance; Consents................51
10.4 Notices.......................................51
10.5 Assignment....................................52
10.6 Parent and Designated Affiliates and
Subsidiaries..................................52
10.7 Governing Law.................................52
10.8 Counterparts..................................52
10.9 Interpretation................................52
10.10 Entire Agreement..............................53
10.11 Severability..................................53
10.12 Bulk Sales Law................................53
ARTICLE XI
SURVIVAL OF REPRESENTATIONS........................................53
ARTICLE XII
INDEMNIFICATION....................................................54
12.1 Indemnity by Seller...........................54
12.2 Conditions to Indemnification.................54
12.3 Method and Manner of Paying Claims............55
ARTICLE XIII
NONCOMPETITION.....................................................55
13.1 Noncompete; No Solicitation of Employees......55
13.2 Tolling of Period.............................56
13.3 Enforcement...................................56
13.4 Irreparable Damage; Injunctive Relief.........56
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of June 20, 2000 (the
"Agreement"), between Dexter Corporation, a Connecticut corporation (the
"Seller"), and Loctite Corporation, a Delaware corporation (the "Buyer").
WHEREAS, the Buyer wishes to acquire from the Seller
substantially all of the Business Assets from the Seller; and
WHEREAS, the Seller is willing to transfer the Business
Assets (other than the Business Assets owned or held by the Business
Subsidiaries, the capital stock of which is being transferred directly or
indirectly by the Seller to the Buyer) to the Buyer in exchange for the
assumption by the Buyer of the Business Liabilities and the payment to the
Seller by the Buyer of the Purchase Price.
NOW, THEREFORE, in consideration of the foregoing premises
and the respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound hereby,
the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
As used in this Agreement each of the following terms shall
have the following meaning:
1.1 "affiliate" shall have the meaning ascribed thereto in
Section 10.9.
1.2 "Agreement" shall have the meaning ascribed thereto in
the Introduction.
1.3 "APBO" shall have the meaning ascribed thereto in
Section 6.2(b).
1.4 "Assumed Plans" shall have the meaning ascribed thereto
in Section 6.2(a).
1.5 "Authorizations" shall have the meaning ascribed thereto
in Section 3.16(a).
1.6 "Bill of Sale" shall have the meaning ascribed thereto
in Section 2.4(c).
1.7 "Business" shall mean the business of the Seller and its
subsidiaries engaged in developing, using, manufacturing and selling (i)
electronic materials and magnetic materials for use in certain markets,
including without limitation those in the semiconductor devices,
microelectronic assemblies, electrical and electronic components, power
supply systems, semiconductor manufacturing equipment, electronics and
automotive markets and (ii) adhesive and mold release products for use in
certain markets, including but not limited to those in the aerospace,
automotive, marine assembly, furniture and wood, general industrial
assembly, and recreational markets.
1.8 "Business Assets" shall mean:
(a) all of the property and assets of the Business
necessary to carry on the Business as of the date of this Agreement and
those primarily used in the Business, whether or not reflected in the
Business Balance Sheet, including, without limitation, the Business Real
Properties, the Business Intellectual Property, the Business Inventory,
cash and cash equivalents of the Foreign Business Subsidiaries, plants,
machinery, equipment, tools, supplies, spare parts, furniture, fixtures,
leasehold improvements, motor vehicles, accounts and notes receivable
(including intercompany receivables and notes) and prepaid expenses (and
including all items which would be included on the Business Balance Sheet
except for the fact that such items are fully depreciated or expensed),
plus all items of a nature customarily carried as assets in the accounts of
the Business which have been or will be acquired in the ordinary course of
the Business consistent with past practice between the date of the Business
Balance Sheet and the Effective Time, less any items which have been or
will be disposed of or consumed in the ordinary course of the Business
consistent with past practice between the date of the Business Balance
Sheet and the Effective Time;
(b) the Business Bank Accounts;
(c) the Business Books and Records;
(d) the Business Contracts;
(e) the Business Leases;
(f) all of the outstanding capital stock of the
Business Subsidiaries; and
(g) all rights, claims and privileges of the Seller
and its subsidiaries (including rights to recovery under all insurance
policies of the Seller to the extent they relate to the Business Assets or
the Business Liabilities which are in effect prior to the Effective Time
and which are not being assigned to the Buyer hereunder) arising out of or
relating to the Business or to any of the Business Assets.
Notwithstanding the foregoing, the Business Assets shall not mean or
include the Excluded Assets.
1.9 "Business Balance Sheet" shall have the meaning ascribed
thereto in Section 3.6.
1.10 "Business Bank Accounts" shall mean all of the bank
accounts of the Seller and its subsidiaries utilized for the Business which
are listed on Schedule 1.10.
1.11 "Business Books and Records" shall mean all of the
original books and records of the Seller and its subsidiaries primarily
relating to the operations of the Business, as well as copies of those
books and records of the Seller and its subsidiaries that are necessary to
the operation of the Business, including, without limitation, all books and
records relating to the employees, the purchase of materials, supplies and
services, financial, Tax (other than any combined, joint, consolidated or
unitary Tax return information), legal, environmental, software licenses,
operating keys for any proprietary software or source codes, accounting and
operations matters, product engineering, research and development,
manufacture and sale of products and dealings with vendors, suppliers,
governmental entities, third parties and customers of the Business. As used
herein, books and records shall include but not be limited to all
computerized books and records and other computerized storage media and the
software used in connection therewith.
1.12 "Business Contracts" shall mean all contracts,
agreements and commitments of the Seller and its subsidiaries only to the
extent any relate to the Business, including, without limitation, (a) the
contracts, agreements and commitments listed in Schedule 3.10(a) referred
to in Section 3.10(a), and (b) all contracts, agreements and commitments of
the Seller relating to the Business which are entered into between the date
of this Agreement and the Effective Time and expressly permitted by this
Agreement, excluding, however, all contracts, agreements and commitments
which (1) expire in accordance with their terms prior to the Effective Time
or are terminated in the ordinary course of the Business or (2) are listed
in Schedule 1.12.
1.13 "business day" shall have the meaning ascribed thereto
in Section 10.9.
1.14 "Business Employees" shall have the meaning ascribed
thereto in Section 6.1(a).
1.15 "Business Financial Statements" shall have the meaning
ascribed thereto in Section 3.6.
1.16 "Business Intellectual Property" shall mean all letters
patent, patents, trademarks, trade names, service marks, copyrights
(including registrations and applications for any of the foregoing),
licenses, technology, know-how, trade secrets, tangible or intangible
proprietary information or material, formulae and inventions owned or
licensed by the Seller or any of its subsidiaries that are used in or
relate to any extent to the Business including, without limitation, (a) all
items listed in Schedule 3.12 referred to in Section 3.12 and (b) all such
items which are acquired or developed for use to any extent in the business
of the Business between the date of this Agreement and the Effective Time,
excluding, however, all such items which expire in accordance with their
terms in the ordinary course of the Business prior to the Effective Time.
Notwithstanding the foregoing, the Business Intellectual Property shall not
include the name and mark "Dexter."
1.17 "Business Inventory" shall mean all inventories owned
by the Seller or its subsidiaries relating to the Business or the Business
Assets, wherever located, including all packaging, finished goods, raw
materials, supplies, work in process, spare parts and other miscellaneous
items of tangible property normally considered part of "inventory" under
GAAP, consistently applied.
1.18 "Business Leases" shall mean all leases of the Seller
and its subsidiaries exclusively relating to the Business (whether entered
into as lessor or lessee), including, without limitation, (a) the leases
listed in Schedule 3.11 referred to in Section 3.11, and (b) all leases of
the Seller and its subsidiaries relating to the Business that are entered
into between the date of this Agreement and the Effective Time and
expressly permitted by this Agreement, excluding, however, all leases which
will expire in accordance with their terms prior to the Effective Time.
1.19 "Business Liabilities" shall mean:
(a) all of the obligations and liabilities of the
Seller and its subsidiaries specifically accrued or reserved against in the
Business Balance Sheet (including intercompany payables and loans) which
have not been or will not be satisfied or discharged at or prior to the
Effective Time;
(b) all of the obligations and liabilities of the
Seller and its subsidiaries relating to the Business of the type
customarily accrued, reserved against or reflected in the accounts of the
Business, arising between the date of the Business Balance Sheet and the
Effective Time in the ordinary course of the Business, which have not been
or will not be satisfied or discharged at or prior to the Effective Time;
(c) all claims against and liabilities of the Seller,
including, compensatory, punitive damages, known or unknown, direct or
indirect, including all cost and expenses relating thereto, arising before
or after the Effective Time out of the Business Assets or the Business but
only to the extent related to such Assets or Business as heretofore
currently or hereafter conducted, including those related to (i) product
liability, (ii) general tort liability, and (iii) any contract, agreement,
commitment, lease, license or other instrument or obligation of the Seller
or any of its subsidiaries included within the Business Assets and then
only to the extent assumed by Buyer;
(d) the obligations and liabilities being assumed by
the Buyer pursuant to Article VI; and
(e) the obligations and liabilities listed on
Schedule 3.7 referred to in Section 3.7.
1.20 "Business Real Properties" shall mean all of the real
properties of the Seller and its subsidiaries used to operate the Business
which are listed in Schedule 3.9 referred to in Section 3.9.
1.21 "Business Subsidiaries" shall mean the subsidiaries
listed on Schedule 1.21.
1.22 "Business Subsidiaries' Intercompany Payables" shall
have the meaning set forth in Section 2.6(f).
1.23 "Business Subsidiaries' Intercompany Receivables" shall
have the meaning set forth in Section 2.6(f).
1.24 "Buyer" shall have the meaning ascribed thereto in the
Introduction.
1.25 "Buyer Returns" shall have the meaning ascribed thereto
in Section 8.1(a).
1.26 "Claim" shall have the meaning ascribed thereto in
Section 12.2.
1.27 "Closing" shall mean the consummation of the
transactions contemplated by Article II of this Agreement in accordance
with the terms and upon the conditions set forth in Article II.
1.28 "Closing Date" shall mean the third business day
following the later to occur of (i) the expiration or termination of all
waiting periods, including any extensions thereof, if any, which are
applicable to the transactions contemplated by this Agreement pursuant to
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act") and (ii)
the satisfaction of all of the conditions to each party's obligations
hereunder or the waiver thereof by the party entitled to the benefit
thereof; or such other date as the parties hereto agree upon in writing.
1.29 "Closing Date Balance Sheet" shall have the meaning
ascribed thereto in Section 2.6(a)(iv).
1.30 "Code" shall mean the Internal Revenue Code of 1986, as
amended.
1.31 "Computer Systems" shall have the meaning ascribed
thereto in Section 3.23.
1.32 "Consideration" shall have the meaning ascribed thereto
in Section 2.3(a).
1.33 "Consolidated Income Tax Returns" shall mean (i) a
consolidated United States federal income Tax return within the meaning of
Section 1501 of the Code and the Treasury Regulations under Section 1502 of
the Code, including the computation of separate taxable income for each
member of the consolidated group and preparation of any pro forma company
Tax returns, and (ii) any other combined, joint, consolidated or unitary
income Tax return, report and form required to be filed with any Tax
authority, other than any Tax return, report or form that includes only the
Business Subsidiaries.
1.34 "Dexter Acquisition Proposal" shall mean a written
proposal for the acquisition of the Seller as an entirety (whether by way
of merger, consolidation, share exchange, tender offer, sale of all or
substantially all the assets of the Seller or otherwise) and shall include
any tender offer or exchange offer to the Seller's shareholders which
proposes to acquire all outstanding shares of the Seller.
1.35 "Dexter Acquisition Transaction" shall mean any
business combination transaction in which (x) the Seller is merged with or
into another corporation and all of the outstanding shares of the Seller
are purchased or acquired or (y) at least a majority of the outstanding
shares of the Seller are purchased or acquired in a tender offer or an
exchange offer.
1.36 "Department of Justice" shall have the meaning ascribed
thereto in Section 5.5(a).
1.37 "Dexter Name License Agreement" shall have the meaning
ascribed thereto in Section 5.10.
1.38 "Draft Allocation" shall have the meaning ascribed
thereto in Section 8.1(e).
1.39 "Effective Time" shall mean the close of business on
the Closing Date at which time the Closing and all transactions
contemplated thereby shall be deemed to have occurred simultaneously;
provided that the Closing has actually occurred.
1.40 "Environmental Claim" shall have the meaning ascribed
thereto in Section 3.21(d)(1).
1.41 "Environmental Law" shall have the meaning ascribed
thereto in Section 3.21(d)(2).
1.42 "Environmental Permits" shall have the meaning ascribed
thereto in Section 3.21(a).
1.43 "ERISA" shall have the meaning ascribed thereto in
Section 3.14(a).
1.44 "ERISA Affiliate" shall have the meaning ascribed
thereto in Section 3.14(a).
1.45 "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.46 "Excluded Assets" shall mean (i) cash and cash
equivalents (other than cash and cash equivalents of the Foreign Business
Subsidiaries); (ii) all of the rights, claims and privileges of the Seller
relating to liabilities other than the Business Liabilities; (iii) all
contracts of insurance (but not including rights to recovery thereunder
included in the Business Assets); (iv) all rights to all refunds of any
Taxes (except to the extent such refunds have been accrued and included on
the Closing Date Balance Sheet); (v) those contracts, agreements, leases
and other assets listed in Schedule 1.46; and (vi) all property and assets
of the Business that are not primarily used or to be used in the Business,
including the name and mark "Dexter."
1.47 "Final Allocation" shall have the meaning ascribed
thereto in Section 8.1(e).
1.48 "Foreign Business Subsidiaries" shall mean the Business
Subsidiaries listed on Schedule 1.48.
1.49 "FTC" shall have the meaning ascribed thereto in
Section 5.5(a).
1.50 "GAAP" shall mean United States generally accepted
accounting principles.
1.51 "Governmental Entity" shall have the meaning ascribed
thereto in Section 3.5.
1.52 "Hazardous Materials" shall have the meaning ascribed
thereto in Section 3.21(d)(3).
1.53 "Henkel" shall have the meaning ascribed thereto in
Section 4.2.
1.54 "HSR Act" shall have the meaning ascribed thereto in
Section 1.10.
1.55 "Indemnified Party" shall have the meaning ascribed
thereto in Section 12.2(a).
1.56 "Indemnifying Party" shall have the meaning ascribed
thereto in Section 12.2(a).
1.57 "Indemnification Period" shall have the meaning
ascribed thereto in Article XI.
1.58 "Independent Accountants" shall have the meaning
ascribed thereto in Section 2.6(a)(iv).
1.59 "Intercompany Accounts" shall have the meaning set
forth in Section 2.6(f)(ii).
1.60 "Law" shall have the meaning ascribed thereto in
Section 3.5.
1.61 "Lien" shall have the meaning ascribed thereto in
Section 3.3(b).
1.62 "Losses" shall have the meaning ascribed thereto in
Section 12.1.
1.63 "Material Adverse Effect" shall mean any state of
facts, event, change or effect having a material adverse effect on the
assets, financial condition, business, liabilities (contingent or
otherwise) or results of operations or future prospects of the Business,
taken as a whole, excluding any such effect resulting from or arising in
connection with (A) this Agreement, the transactions contemplated hereby or
the announcement thereof or (B) changes that generally affect the adhesives
industry.
1.64 "Net Asset Value" shall have the meaning ascribed
thereto in Section 2.6(d).
1.65 "Permitted Exceptions" shall mean as of the date of
this Agreement only (i) those exceptions to title to the Business Assets
listed in Schedule 3.9 referred to in Section 3.9; (ii) Liens that secure
debt that is reflected as a Specialty Polymer Liability on the Business
Balance Sheet with respect to which no default or potential for
acceleration exists; (iii) Liens securing all or a portion of the purchase
price of a Business Asset which arose in connection with the purchase of
such Business Asset after the date of the Business Balance Sheet but only
to the extent specifically listed on Schedule 1.41; (iv) statutory Liens
for Taxes not yet due or delinquent or the validity of which is being
contested in good faith by appropriate proceedings and reserved on the
Business Balance Sheet; (v) recorded Liens of carriers', warehousemen's,
mechanics' and materialmen's and other like Liens arising in the ordinary
course of the Business consistent with past practice for sums not yet due
and payable or delinquent or the validity of which is being contested in
good faith by appropriate proceedings and reserved on the Business Balance
Sheet; (vi) all exceptions, restrictions, easements, rights of way and
encumbrances set forth in the title insurance policies listed in Schedule
3.20 referred to in Section 3.20; and (vii) other Liens that are not
material in amount or do not materially detract from the value of or
materially impair the use of the property affected by such Lien.
1.66 "person" shall have the meaning ascribed thereto in
Section 10.9.
1.67 "Plans" shall have the meaning ascribed thereto in
Section 3.14(a).
1.68 "Preliminary Closing Date Balance Sheet" shall have the
meaning ascribed thereto in Section 2.6(a)(i).
1.69 "Potential Grow-In Employees" shall have the meaning
ascribed thereto in Section 6.2(b).
1.70 "Purchase Price" shall have the meaning ascribed
thereto in Section 2.3(b).
1.71 "Retirees" shall have the meaning ascribed thereto in
Section 6.2(b).
1.72 "Section 338(h)(10) Election" shall have the meaning
ascribed thereto in Section 8.1(f).
1.73 "Seller" shall have the meaning ascribed thereto in the
Introduction.
1.74 "subsidiary" shall have the meaning ascribed thereto in
Section 10.9.
1.75 "Target Net Asset Value" shall have the meaning
ascribed thereto in Section 2.6(d).
1.76 "Tax Indemnified Party" shall have the meaning ascribed
thereto in Section 8.2(e).
1.77 "Tax Indemnifying Party" shall have the meaning
ascribed thereto in Section 8.2(e).
1.78 "Tax Third Party Claim" shall have the meaning ascribed
thereto in Section 8.2(e).
1.79 "Taxes" shall mean all taxes, however denominated,
including any interest, penalties or additions to tax that may become
payable in respect thereof, imposed by any government, which taxes shall
include without limitation, all income taxes, payroll and employee
withholding taxes, gross receipt taxes, occupation taxes, real and personal
property taxes, stamp taxes, transfer taxes, workers' compensation taxes
and other obligations of the same or a similar nature, whether arising
before, on or after the Effective Time; and "Tax" shall mean any one of the
foregoing.
1.80 "Third Party Claim" shall have the meaning ascribed
thereto in Section 12.2(a).
1.81 "Transferred Employees" shall have the meaning ascribed
thereto in Section 6.1(a).
1.82 "Undertaking and Indemnity Agreement" shall have the
meaning ascribed thereto in Section 2.3(a).
1.83 "Vested Eligible Employees" shall have the meaning
ascribed thereto in Section 6.2(b).
1.84 "WARN" shall have the meaning ascribed thereto in
Section 6.2(e).
1.85 "WARN Obligations" shall have the meaning ascribed
thereto in Section 6.2(e).
ARTICLE II
THE CLOSING
2.1 Time and Place of Closing. Subject to the terms and
conditions of this Agreement, the Closing will take place at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New
York, at 9:30 A.M. (local time) on the Closing Date or at such other place
or time or both as the parties may agree.
2.2 Purchase and Sale of the Business Assets. Subject to the
terms and conditions of this Agreement (or, with respect to any condition
not satisfied, the written waiver thereof by the party for whose benefit
the condition exists) the Seller will sell, convey, assign, transfer and
deliver, or cause to be sold, conveyed, assigned, transferred and delivered
all of its direct or indirect right, title and interest at the Effective
Time in and to the Business Assets, (other than the Business Assets owned
or held by the Business Subsidiaries, the capital stock of which is being
transferred directly or indirectly by the Seller to the Buyer), and the
Buyer will purchase, acquire, accept and pay for, as hereinafter provided,
the Business Assets (other than the Business Assets owned or held by
Business Subsidiaries, the capital stock of which is being transferred
directly or indirectly by the Seller to the Buyer) and will assume the
Business Liabilities.
2.3 Consideration for the Assets.
(a) Total Consideration. The aggregate consideration
(the "Consideration") for the Business Assets (other than the Business
Assets owned or held by Business Subsidiaries, the capital stock of which
is being transferred directly or indirectly by the Seller to the Buyer)
shall consist of (i) the assumption by the Buyer of the Business
Liabilities and the indemnification of the Seller by the Buyer with respect
to the Business Liabilities, in each case pursuant to an Undertaking and
Indemnity Agreement substantially in the form of Exhibit A to this
Agreement (the "Undertaking and Indemnity Agreement"), and (ii) payment or
delivery of the Purchase Price by the Buyer to the Seller.
(b) Amount of Purchase Price. The portion of the
Consideration constituting the purchase price (the "Purchase Price") shall
be an amount in cash equal to $400,000,000. The Purchase Price shall be
subject to the adjustment set forth in Section 2.6.
2.4 Deliveries by the Seller. At the Closing, the Seller
shall deliver or cause to be delivered the following to the Buyer:
(a) Stock certificates representing all of the shares
of capital stock of each of the Business Subsidiaries, in each case
accompanied by stock powers duly executed in blank or duly executed
instruments of transfer and all minute books, corporate records, corporate
authorizations, and other documentation pertaining or related to the
formation, existence, or organization of each Business Subsidiary, which to
the extent such books, records, authorizations and documentation reside at
the principal executive office of such Business Subsidiary shall be deemed
delivered by delivery of the stock certificates of such Subsidiary.
(b) Special warranty deeds (subject to Permitted
Exceptions), in recordable form, with respect to the Business Real
Properties owned by the Seller or any of its subsidiaries (other than the
Business Subsidiaries), togther with all currently existing surveys and
title insurance policies for the Business Real Properties.
(c) A duly executed bill of sale substantially in the
form of Exhibit B to this Agreement (the "Bill of Sale"), together with
such other appropriate instruments of transfer as the Buyer may reasonably
request, transferring to the Buyer all of the personal and intangible
property owned or held by the Seller as of the Effective Time which is
included in the Business Assets (other than the Business Assets owned or
held by Business Subsidiaries, the capital stock of which is being
transferred directly or indirectly by the Seller to the Buyer).
(d) Duly executed instruments of assignment
(including original consents to all such assignments obtained in accordance
with Section 5.5(a)(i)) of the Business Leases to which the Seller or any
of its subsidiaries (other than the Business Subsidiaries) is a party, in
recordable form if and to the extent necessary with respect to those
relating to real property or interests therein.
(e) Duly executed instruments of assignment
(including original consents to all such assignments obtained in accordance
with Section 5.5(a)(i)) of the Business Contracts to which the Seller or
any of its subsidiaries (other than the Business Subsidiaries) is a party.
(f) Duly executed instruments of assignment or
transfer of the Business Intellectual Property owned or held by the Seller
or any of its subsidiaries (other than the Business Subsidiaries), in form
suitable for recording in the appropriate office or bureau, and the
original certificates, if available, of such Business Intellectual Property
together with any powers of attorney necessary to make the conveyance
effective.
(g) Duly executed counterpart of the Dexter Name
License Agreement substantially in the form attached as Exhibit D hereto.
(h) Duly executed instruments of assignment of the
Business Bank Accounts, including a complete list of such accounts with
balances as of a recent date.
(i) All consents obtained as contemplated by Sections
5.5(a)(i) and 7.3(d).
(j) The Undertaking and Indemnity Agreement,
substantially in the form attached hereto as Exhibit A, duly executed by
the Seller.
(k) Such other and further instruments of conveyance,
assignment and transfer as the Buyer may reasonably request for the
effective conveyance and transfer of any of the Business Assets.
(l) The certificates contemplated by Sections 7.3 and
7.4.
(m) Duly executed resignations of the officers and
directors of the Business Subsidiaries.
(n) The Business Books and Records, which to the
extent reside at the principal executive office of a Business Subsidiary,
shall be deemed delivered by delivery of the stock certificates
contemplated by Section 2.4(a) or if located at a facility of the Business
such books and records shall be deemed delivered by transfer of the
facility pursuant hereto.
2.5 Delivery by the Buyer. At the Closing, the Buyer shall
deliver the following to the Seller.
(a) The Purchase Price by (i) the wire transfer of
immediately available funds to a bank account designated in writing by the
Seller at least two business days prior to the Closing Date in any bank in
the continental United States or (ii) such means as are otherwise agreed in
writing upon by the Buyer and the Seller.
(b) All consents obtained as contemplated by Section
5.5(a)(i) and 7.2(d).
(c) Duly executed counterpart of the Dexter Name
License Agreement, substantially in the form attached hereto as Exhibit D.
(d) The Undertaking and Indemnity Agreement duly
executed by the Buyer, substantially in the form attached hereto as Exhibit
A.
(e) The certificates contemplated by Sections 7.2 and
7.4.
2.6 Post-Closing Adjustment.
(a) (i) Within 45 days following the Effective Time,
the Seller shall prepare and deliver a balance sheet of the Business as of
the Closing Date (the "Preliminary Closing Date Balance Sheet"). The
Preliminary Closing Date Balance Sheet will present fairly the consolidated
financial position of the Business as of the Closing Date and will be in
conformity with GAAP applied on a basis consistent with the Business
Balance Sheet and shall include the same line item classifications as are
set forth in the Business Balance Sheet; provided, however, that the
following principles shall in any event govern the preparation of the
Preliminary Closing Date Balance Sheet:
(1) The Preliminary Closing Date Balance Sheet shall be
determined in United States dollars on a going concern basis
in accordance with GAAP applied on a basis consistent with
the Business Balance Sheet and shall include all Business
Assets and Business Liabilities required by GAAP applied on
a basis consistent with the Business Balance Sheet to be
included therein, except as otherwise specified in Schedule
2.6(a)(i)(1) or in this Section 2.6(a), including, without
limitation, using the same account classifications, useful
lives and depreciation/amortization schedules for
depreciable/amortizable assets, closing procedures and
levels of materiality.
(2) There shall be recorded on the Preliminary Closing Date
Balance Sheet an asset in respect of the amount of cash and
cash equivalents of the Foreign Business Subsidiaries
reflected on the Business Books and Records as of the
Closing Date.
(3) There shall be recorded on the Preliminary Closing Date
Balance Sheet an asset or liability, as the case may be, for
the net Intercompany Accounts reflected on the Business
Books and Records as of the Closing Date for the Business.
(4) For purposes of determining the Preliminary Closing Date
Balance Sheet, amounts in excess of 2% for any of the
specific line items shall be considered material.
(ii) The Preliminary Closing Date Balance Sheet shall
be accompanied by an audit report (in the form previously agreed to by the
parties) of PricewaterhouseCoopers LLP, independent public accountants,
stating that the Preliminary Closing Date Balance Sheet and the Net Asset
Value appearing on the Preliminary Closing Date Balance Sheet were
determined in accordance with this Section 2.6.
(iii) Upon receipt of the Preliminary Closing Date
Balance Sheet, the Buyer and its independent certified public accountants
shall have the right during the succeeding 20-day period to review, at the
Buyer's expense, the Preliminary Closing Date Balance Sheet and to examine
and review all records and work papers and other supporting documents used
to prepare such Preliminary Closing Date Balance Sheet. The Buyer shall
notify the Seller, in writing, on or before the last day of the 20-day
period, of any good faith objections to the Preliminary Closing Date
Balance Sheet, setting forth a reasonably specific description of the
Buyer's objections and the dollar amount of each objection. If the Buyer
does not deliver such notice within such 20-day period, the Preliminary
Closing Date Balance Sheet shall be deemed to have been accepted by the
Buyer.
(iv) If the Buyer in good faith objects to the
Preliminary Closing Date Balance Sheet, the Seller and the Buyer shall
attempt to resolve any such objections within 10 days of the Seller's
receipt of the Buyer's objections. If the Seller and the Buyer are unable
to resolve the matter within such 10-day period, they shall jointly
appoint an impartial nationally recognized independent certified public
accounting firm (the "Independent Accountants") mutually acceptable to the
Buyer and the Seller (or, if they cannot agree on a mutually acceptable
firm, they shall cause their respective accounting firms to select such
firm) within 2 days of the end of such 10-day period. The Seller and the
Buyer shall provide to the Independent Accountants full cooperation. The
Independent Accountants shall be instructed to reach their conclusion
regarding the dispute within 10 days or within such longer time period as
the parties may otherwise agree. Any such resolution shall be conclusive
and binding on the Buyer and the Seller and shall be made applying the
principles set forth in Section 2.6(a)(i). The Preliminary Closing Date
Balance Sheet after the acceptance thereof by the Buyer or the resolution
of all disputes in connection therewith is referred to herein as the
"Closing Date Balance Sheet."
(v) All fees payable to the Independent Accountants
as a result of any objections raised to the Preliminary Closing Date
Balance Sheet shall be divided equally between the Buyer and the Seller.
(b) If the amount of the Net Asset Value as reflected
in the Closing Date Balance Sheet is less than the amount of the Target Net
Asset Value, then the Purchase Price shall be reduced by the amount of such
deficit. Any adjustments in the Purchase Price pursuant to this Section
2.6(b) shall be paid by the Seller by wire transfer of immediately
available funds to an account designated in writing by the Buyer. Any
payments required pursuant to this Section 2.6(b) shall be made within 2
business days after the Closing Date Balance Sheet becomes final and
binding on the parties.
(c) If the amount of the Net Asset Value as reflected
in the Closing Date Balance Sheet exceeds the amount of the Target Net
Asset Value, then the Purchase Price shall be increased by the amount of
such excess. Any adjustments in the Purchase Price pursuant to this Section
2.6(c) shall be paid by the Buyer by wire transfer of immediately available
funds to an account designated in writing by the Seller. Any payments
required pursuant to this Section 2.6(c) shall be made within 2 business
days after the Closing Date Balance Sheet becomes final and binding on the
parties.
(d) For purposes of this Section 2.6, "Net Asset
Value" shall mean "Net Equity" as shown on the Closing Date Balance Sheet,
less the sum of the amounts shown thereon for "Patents, net" and "Goodwill,
net," in each case determined in a manner consistent with the preparation
of the Business Balance Sheet, and "Target Net Asset Value" shall equal
$121,090,000.
(e) If the adjustment in the Purchase Price pursuant
to Section 2.6(b) or Section 2.6(c) exceeds $100,000 interest shall be paid
on the amount of the adjustment from the Closing Date to the date of
payment at the rate prescribed by J.P. Morgan & Company Incorporated as its
"prime rate" on the Closing Date.
(f) (i) All Intercompany Accounts will be deemed
fully paid and discharged as of the Effective Time through the adjustment
to the payment provided for in this Section 2.6, which, as between the
Seller and the Buyer, shall constitute a final settlement of all such
Intercompany Accounts. The Seller and the Buyer shall each be responsible
for settling such Intercompany Accounts with their respective subsidiaries.
For purposes of determining the Net Asset Value, the amount of the
Intercompany Accounts owed to the Business Subsidiaries immediately prior
to the Effective Time (the "Business Subsidiaries' Intercompany
Receivables") shall be offset against the amount of all Intercompany
Accounts owed by the Business Subsidiaries immediately prior to the
Evaluation Time ("Business Subsidiaries' Intercompany Payables"), and the
difference shall be an adjustment to the Net Asset Value as follows:
(A) The Net Asset Value shall be reduced by
the amount, if any, by which the Business
Subsidiaries' Intercompany Receivables immediately
prior to the Effective Time exceeded the Business
Subsidiaries' Intercompany Payables; or
(B) The Net Asset Value shall be increased by
the amount, if any, by which the Business
Subsidiaries' Intercompany Payables immediately prior
to the Effective Time exceeded the Business
Subsidiaries' Intercompany Receivables.
(ii) For the purposes of this Section 2.6,
"Intercompany Accounts" shall mean all amounts, regardless of their nature,
that are (a) owed by any of the Business Subsidiaries to the Seller or any
other subsidiary of the Seller, other than another of the Business
Subsidiaries, or (b) owed by the Seller or any subsidiary of the Seller,
other than one of the Business Subsidiaries, to any of the Business
Subsidiaries.
(g) Unless otherwise required by Law, the parties
shall treat any adjustment made pursuant to Section 2.6(b) or Section
2.6(c) as an adjustment to the Purchase Price for federal, state and local
income Tax purposes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
3.1 Organization; Qualification.
(a) Each of the Seller and the Business Subsidiaries
is a corporation duly organized, validly existing and, in good standing
under the laws of the jurisdiction of its incorporation (to the extent
applicable in the case of the Foreign Business Subsidiaries) and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted or as
presently contemplated to be conducted.
(b) Each of the Seller and the Business Subsidiaries
is duly qualified or licensed and in good standing to do business (to the
extent applicable in the case of the Foreign Business Subsidiaries) in each
jurisdiction in which the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
except in those jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not, individually or in the aggregate,
have a Material Adverse Effect.
(c) The Seller has heretofore made available to the
Buyer complete and correct copies of the Certificate of Incorporation and
By-laws (or other similar charter, by-law or other organizational
documents), as currently in effect, of the Seller and each of the Business
Subsidiaries (domestic or foreign).
3.2 Capital Stock. The authorized, issued and outstanding
capital stock of each of the Business Subsidiaries is set forth in Schedule
1.21. All the outstanding shares of capital stock of each of the Business
Subsidiaries are duly authorized, validly issued, fully paid and
non-assessable. Except for the transactions contemplated by this Agreement
and except as set forth on Schedule 1.21, (1) there are no shares of
capital stock of any of the Business Subsidiaries authorized or as of the
date of this Agreement issued or outstanding, (2) as of the date of this
Agreement there are no authorized or outstanding options, warrants, calls,
preemptive rights, subscriptions or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital
stock of the Business Subsidiaries, obligating any Business Subsidiary to
issue, transfer or sell or cause to be issued, transferred or sold any
shares of capital stock or other equity interest in it or any other
Business Subsidiary or securities convertible into or exchangeable for such
shares or equity interests, or obligating any Business Subsidiary to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment, and (3) there are no
outstanding contractual obligations of any Business Subsidiary to
repurchase, redeem or otherwise acquire any capital stock of any of the
Business Subsidiaries or to provide funds to make any investment (in the
form of a loan, capital contribution or otherwise) in any other entity.
Seller has actual possession directly or indirectly of 100% of the issued
and outstanding shares of capital stock of each Business Subsidiary
(domestic or foreign) other than director qualifying or similar shares, and
Seller will transfer and deliver to Buyer 100% of the issued and
outstanding shares of capital stock of each Business Subsidiary at Closing.
3.3 Equity Investments.
(a) Schedule 3.3(a) sets forth: (i) the name of each
corporation, partnership, joint venture or other entity (other than the
Business Subsidiaries) in which the Seller has, or pursuant to any
agreement has the right to acquire by any means, directly or indirectly, an
equity interest or investment and which, in each case, is a Business Asset;
(ii) in the case of each of such person described in the foregoing clause
(i), either (x) a listing of the relevant agreement or agreements pursuant
to which the Seller has acquired such right or such interest or investment
or (y) (A) the jurisdiction of incorporation and (B) the authorized and
outstanding capitalization thereof and the percentage of each class of
voting capital stock owned, directly or indirectly, by the Seller.
(b) Except as set forth in Schedule 3.3(b), the
Seller's interest in each of the persons listed on Schedule 3.3(a) which
are stated to be owned directly or indirectly by the Seller (except for
directors' qualifying shares, if any, which the Seller will cause to be
transferred at the Effective Time to nominees of the Buyer), will, after
giving effect to the transactions contemplated hereby, be owned by the
Buyer, directly or indirectly, in each case; free and clear of all liens,
pledges, charges, security interests and other encumbrances (each a
"Lien").
3.4 Authority Relative to this Agreement. The Seller has the
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of Directors of
the Seller and no other corporate proceedings on the part of the Seller are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Seller and constitutes, assuming this Agreement
constitutes a valid and binding agreement of the Buyer, a valid and binding
agreement of the Seller, enforceable against it in accordance with its
terms.
3.5 No Violation. Except for the filings, permits,
authorizations, consents and approvals set forth in Schedule 3.5 or as may
be required under the applicable requirements of the HSR Act or the
anti-competition laws or regulations of the European Union or any foreign
jurisdiction in which the Seller or the Buyer (directly or through
subsidiaries, in each case) has material assets or conducts material
operations and any applicable "bulk sales" laws, none of the execution,
delivery or performance of this Agreement by the Seller, the consummation
by the Seller of the transactions contemplated hereby or compliance by the
Seller with any of the provisions hereof will (i) conflict with or result
in any breach of any provision of the certificate of incorporation, bylaws
or similar organizational documents of the Seller or any of the Business
Subsidiaries (domestic or foreign), (ii) require any filing with, or
permit, authorization, consent or approval of, any federal, regional, state
or local court, arbitrator, tribunal, administrative agency or commission
or other governmental or other regulatory authority or agency, whether U.S.
or foreign (a "Governmental Entity"), (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation
or acceleration) under, or result in the creation of a Lien on any Business
Asset (domestic or foreign) pursuant to, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which the Seller
or any of its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound, or (iv) violate any order, writ,
injunction, decree, judgment, permit, license, ordinance, law, statute,
rule or regulation ("Law") applicable to the Seller, any of the Business
Subsidiaries (domestic or foreign) or any of the Business Assets, excluding
from the foregoing clauses (ii), (iii) and (iv) such filings, permits,
authorizations, consents, approvals, violations, breaches, defaults or
Liens which are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect.
3.6 Financial Statements. The Seller has previously
furnished to the Buyer (i) an unaudited consolidated balance sheet and
statement of income of the Business for the fiscal year ended December 31,
1999, and (ii) an unaudited consolidated balance sheet and statement of
income of the Business as of March 31, 2000, and for the year-to-date
period then ended. The financial statements referred to in Section 3.6(i)
and Section 3.6(ii) are hereinafter referred to herein as the "Business
Financial Statements" and the unaudited consolidated balance sheet of the
Business as of March 31, 2000, a copy of which is attached hereto as
Exhibit C, is referred to herein as the "Business Balance Sheet." Except as
set forth in Schedule 3.6, the Business Financial Statements and the
Business Balance Sheet have been prepared from the books and records of the
Business, have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each balance sheet included therein
presents fairly the financial position of the Business Business as of the
date thereof, and each statement of income included therein presents fairly
the results of operations of the Business for the respective periods
therein set forth, except that the interim financial statements are subject
to normal recurring year-end adjustments and are in a condensed
presentation format and do not contain footnotes.
3.7 Absence of Undisclosed Liabilities. Except as set forth
in Schedule 3.7, there is no liability or obligation (whether absolute,
accrued, contingent or otherwise) that is a Business Liability, and no
Business Subsidiary (foreign or domestic) has any liability or obligation,
(whether absolute, accrued, contingent or otherwise), in each case of a
nature required by GAAP to be reflected or reserved against in a balance
sheet or disclosed in the notes thereto, except such liabilities,
obligations or contingencies (i) that are adequately reflected, accrued or
reserved against in the Business Balance Sheet or reflected in the notes
thereto, (ii) which were incurred after the date of the Business Balance
Sheet in the ordinary course of the Business consistent with past practice,
or (iii) which individually or in the aggregate will not have a Material
Adverse Effect.
3.8 Absence of Certain Changes or Events. Except as set
forth in Schedule 3.8 or as otherwise contemplated by this Agreement, since
the date of the Business Balance Sheet, there has not been: (a) any
Material Adverse Effect; or (b) any state of facts, event, change or
condition (which is not attributable to adverse economic, market and
industry conditions generally applicable to the Business Business),
including any adverse changes with respect to employees, customers,
suppliers or products, which could reasonably be expected to cause a
Material Adverse Effect.
3.9 Title and Related Matters. Except as set forth in
Schedule 3.9 and subject to Permitted Exceptions: (a) the Seller or a
Business Subsidiary has, and immediately after the Effective Time, the
Buyer or a Business Subsidiary will have, good and valid title to, or a
valid leasehold or contractual interest in, free and clear of all Liens,
all of the Business Assets (other than the Business Real Properties); and
(b) the Seller or a Business Subsidiary has, and immediately after the
Effective Time, the Buyer or a Business Subsidiary will have, good and
marketable title (such as any reputable title insurance company licensed to
do business in the jurisdiction in which such Business Real Property is
located will approve and insure at customary market rates subject only to
Permitted Exceptions) to all of the Business Real Properties. Schedule 3.9
contains (x) a complete and correct list of all Business Real Properties,
(y) a complete and correct list of each title insurance policy insuring
title to any of the Business Real Properties and (z) violations of any
zoning or Environmental Laws that are actually known by any directors or
executive officers of the Seller or, to the best knowledge of the Seller,
suspected.
3.10 Contracts.
(a) Schedule 3.10(a) sets forth a complete and
correct list of each Business Contract which, as of the date hereof, (i) is
a collective bargaining agreement or any agreement that contains any
severance pay liabilities or obligations; (ii) is an employment or
consulting agreement or contract with an employee or individual consultant
or a consulting agreement or contract with a consulting firm or other
organization (other than employment agreements that are created as a matter
of Law); (iii) is a note, bond or debenture or other agreement or
instrument relating to borrowed money or an agreement of guarantee or
indemnification running to any person other than a Business Subsidiary;
(iv) is an agreement or contract containing any covenant limiting the
freedom of the Seller or any of its subsidiaries to engage in any line of
business or compete with any person; (v) provides for aggregate future
payments of more than $250,000; (vi) provides for aggregate future payments
in excess of $100,000, has a term exceeding one year and which may not be
cancelled upon 90 or fewer days' notice without any liability, penalty or
premium (other than a nominal cancellation fee or charge); or (vii) is
material to the business, operations or financial condition of the Business
taken as a whole; provided that Schedule 3.10(a) does not list any Business
Contract for the purchase or sale of goods or services entered into in the
ordinary course of the Business which may be cancelled on 90 or fewer days'
notice without any liability, penalty or premium (other than a nominal
cancellation fee or charge).
(b) Except as set forth in Schedule 3.10(b), (i) each
Business Contract is in full force and effect, and (ii) there is not, with
respect to the Business Contracts, any existing default, or event of
default, or event which with or without due notice or lapse of time or both
would constitute a default or event of default, on the part of the Seller
or any Business Subsidiary or to the best knowledge of the Seller any other
party thereto, except where the failure to be in full force and effect or
where such default or event of default would not have a Material Adverse
Effect.
3.11 Leases. Schedule 3.11 sets forth a complete and correct
list of each Business Lease which (i) relates to real property; (ii)
provides for aggregate future payments of more than $250,000; (iii)
provides for aggregate future payments in excess of $100,000, has a term
exceeding one year and which may not be cancelled upon 90 or fewer days'
notice without any liability, penalty or premium (other than a nominal
cancellation fee or charge); or (iv) is material to the business,
operations or financial condition of the Business taken as a whole. Except
as set forth in Schedule 3.11, there is not with respect to the Business
Leases, any existing default, or event of default, or event which with or
without due notice or lapse of time or both would constitute a default or
an event of default, on the part of the Seller or any Business Subsidiary
or, to the best knowledge of the Seller, any other party thereto, except
for such defaults or events of default which individually or in the
aggregate would not have a Material Adverse Effect. At the Effective Time
and upon receipt of any necessary consents with respect thereto (which
shall be provided to the Buyer by the Seller at Closing as may be required
pursuant to Section 5.5(a)(i) or Section 7.3(d)), the Business Leases will
be valid, binding and enforceable by the Buyer, one of its subsidiaries
designated pursuant to Section 10.6 as the assignee thereof or a Business
Subsidiary in accordance with their respective terms, except for those
Business Leases as to which the failure to be valid, binding and
enforceable would not have a Material Adverse Effect.
3.12 Patents, Trademarks and Similar Rights. Schedule 3.12
sets forth a complete and correct list of worldwide patents, trademarks,
trade names, service marks, copyrights, copyright registrations and
applications, together with appropriate registration numbers that are
included in the Business Intellectual Property. Subject to the licenses and
other restrictions listed in Schedule 3.12, the Seller or one of its
subsidiaries owns or holds, and, at the Effective Time, the Buyer or a
Business Subsidiary will own or hold, the Business Intellectual Property in
each case free and clear of all Liens, pledges, charges, security interests
and other encumbrances, except where the failure to so own or hold would
not have a Material Adverse Effect. Except as set forth in Schedule 3.12,
the Seller has not received written notice to the effect that: (i) any
Business Intellectual Property presently being sold or employed by the
Business infringes upon or conflicts with any rights owned or held by any
other person; (ii) any person is infringing any Business Intellectual
Property; or (iii) there is pending or, to the best knowledge of the
Seller, threatened any claim or litigation against the Seller or any of its
subsidiaries contesting the rights of the Seller or any of its subsidiaries
to the Business Intellectual Property, except for any claims or litigation
which would not have a Material Adverse Effect.
3.13 Legal Proceedings, etc. As of the date hereof, except
as set forth in Schedule 3.13 and except for matters involving only
monetary recovery in which the damages sought to be imposed do not exceed
$200,000 individually or $1 million in the aggregate, there are no legal,
administrative, arbitration or other proceedings or governmental
investigations pending or, to the best knowledge of the Seller, threatened
against the Business or the Business Assets.
3.14 Employee Benefit Plans; ERISA.
(a) Schedule 3.14(a) contains a complete and correct
list of each deferred compensation, incentive compensation or equity
compensation plan; "welfare" plan, fund or program (within the meaning of
section 3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")); "pension" plan, fund or program (within the meaning of
section 3(2) of ERISA); each employment, termination or severance agreement
(other than employment agreements that are created as a matter of Law); and
each other material employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to
or required to be contributed to by the Seller or by any trade or business
(other than Plans of the foreign Business Subsidiaries maintained or
required by applicable Law), whether or not incorporated (an "ERISA
Affiliate"), that together with the Seller would be deemed a "single
employer" within the meaning of section 4001(b) of ERISA, for the benefit
of any employee or former employee employed in the Business (the "Plans").
(b) No liability under Title IV or section 302 of
ERISA has been incurred by the Seller or any ERISA Affiliate with respect
to any of the Plans that has not been satisfied in full, and no condition
exists that presents a material risk to the Seller or any ERISA Affiliate
of incurring any such liability, other than liability for premiums due the
Pension Benefit Guaranty Corporation (which premiums have been paid when
due).
(c) Each Plan has been operated and administered in
accordance with its terms and applicable law, including but not limited to
ERISA and the Code, except as would not have a Material Adverse Effect, and
to the best knowledge of Seller each Plan intended to be "qualified" within
the meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the
Code.
(d) Schedule 3.14(d) sets forth each Plan under which
as a result of the consummation of the transactions contemplated by this
Agreement, either alone or in combination with another event, (A) any
current or former employee or officer of the Seller or any ERISA Affiliate
may become entitled to severance pay or any other payment which is a
Business Liability, except as expressly provided in this Agreement, or (B)
any compensation due any such employee or officer from the Business may be
increased or the time of payment or vesting may become accelerated.
(e) Except as disclosed set forth in Schedule
3.14(e), there are no pending, or to the best knowledge of the Seller,
threatened claims by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan, or otherwise involving any such
Plan (other than routine claims for benefits).
3.15 Assets Necessary to Business. Except as set forth in
Schedule 3.15 and the Excluded Assets, the Business Assets constitute all
the assets and properties utilized in or necessary to carry on the business
and operations of the Business as presently conducted in all material
respects. All such Business Assets that are material to the Business are in
good condition, reasonable wear and tear excepted, to conduct the Business
as presently conducted.
3.16 Governmental Authorizations and Regulations.
(a) All licenses, franchises, permits, registrations,
approvals and other authorizations or consents held by the Seller and its
subsidiaries to operate the business of the Business Business (herein
collectively called "Authorizations") are valid and sufficient to conduct
in all material respects the Business conducted by them in the manner
presently being conducted in all jurisdictions, domestic and foreign,
except where the failure to hold such Authorizations would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Except as set forth in Schedule 3.16(b), and for
such violations which individually or in the aggregate do not and will not
have a Material Adverse Effect, the Business is not being conducted in
violation of any applicable Law of any Governmental Entity relating to the
operation, conduct or ownership of the Business (provided that no
representation or warranty is made in this Section 3.16(b) with respect to
Environmental Laws).
3.17 Disclosure. The representations and warranties by the
Seller in this Agreement and the statements contained in the schedules,
certificates and other writings furnished and to be furnished by the Seller
to the Buyer pursuant to this Agreement, when considered as a whole and
giving effect to any supplements or amendments thereof prior to the time of
signing on the date hereof, do not and will not contain any untrue
statement of a material fact and do not and will not omit to state any
material fact necessary to make the statements herein or therein not
misleading, it being understood that as used in this Section 3.17
"material" means material to the Business.
3.18 Accounts Receivable. Except as provided in a reserve
for doubtful accounts, the notes and accounts receivable included in the
Business Assets are genuine and represent the legal, valid and binding
obligation of the obligor thereon, enforceable in accordance with their
terms, subject to any applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally.
3.19 Taxes. Except as and to the extent shown in Schedule
3.19, the Seller has or will have timely filed (or caused to be filed) all
returns of income Taxes and all material returns of other Taxes required to
be filed by it with respect to the Business, including any required filings
of the Business Subsidiaries (domestic or foreign), and the Business Assets
on or prior to the Effective Time, and has timely and fully paid or
provided for all Taxes shown to be due on such returns, except such as are
being contested in good faith by appropriate proceedings. Except as and to
the extent shown in Schedule 3.19, all deficiencies for Taxes asserted or
assessments made as a result of such examinations have been fully paid,
settled or fully reflected on the books of the Seller. Except as set forth
in Schedule 3.19, neither the United States Internal Revenue Service, nor
any other taxing authority or agency, whether domestic or foreign has
asserted in writing or, to the best knowledge of the Seller, is threatening
to assert any material deficiency or claim for additional Taxes against the
Business or the Business Assets. Except as set forth in Schedule 3.19, the
Seller has not granted any waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax in
respect of the Business.
3.20 Insurance. Schedule 3.20 contains a complete and
correct description of all policies of property, fire and casualty, product
liability, workers' compensation and other forms of insurance owned or held
by the Seller covering the Business or the Business Assets. The coverage
provided under such policies of insurance is reasonable in scope and amount
in light of the risks attendant to the business and activities of the
Business.
3.21 Environmental Matters.
(a) Each of the Seller and its subsidiaries has
obtained all licenses, permits, authorizations, approvals and consents from
Governmental Entities which are required under any applicable Environmental
Law and necessary for it to carry on the Business as now conducted
("Environmental Permits"), except for such failures to have Environmental
Permits which, individually or in the aggregate, would not have a Material
Adverse Effect. Each of such Environmental Permits is in full force and
effect, and each of the Seller and its subsidiaries is in compliance with
the terms and conditions of all such Environmental Permits and with all
applicable Environmental Laws, except for such failures to be in full force
and effect or to be in compliance which, individually or in the aggregate,
would not have a Material Adverse Effect.
(b) There are no Environmental Claims with respect to
the Business pending, or to the best knowledge of the Seller, threatened,
against the Seller or any of its subsidiaries, or, to the best knowledge of
the Seller, any person whose liability for any such Environmental Claim the
Seller or any of its subsidiaries has or may have retained or assumed
either contractually or by operation of law that is included in the
Business Liabilities for which adequate reserves have not been established
in accordance with GAAP on the Business Books and Records, except such
Environmental Claims that, individually or in the aggregate, would not have
a Material Adverse Effect.
(c) To the best knowledge of the Seller, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, threatened release
or presence of any Hazardous Material, that would form the basis of any
Environmental Claim relating to the Business against the Seller or any of
its subsidiaries, or for which the Seller or any of its subsidiaries is
liable, and that is included in the Business Liabilities except for such
liabilities which, individually or in the aggregate, would not have a
Material Adverse Effect.
(d) As used in this Agreement:
(1) "Environmental Claim" means any claim,
action, lawsuit or proceeding by any person which seeks to impose liability
(including, without limitation, liability for investigatory costs, cleanup
costs, governmental response costs, natural resources, damages, property
damages, personal injuries or penalties) arising out of, based on or
resulting from (A) the presence, or release or threatened release, of any
Hazardous Materials at any location, whether or not owned or operated by
the Seller or any of its subsidiaries, or (B) circumstances which would
give rise to any violation, or alleged violation, of any Environmental Law.
(2) "Environmental Law" means any law or order
of any Governmental Entity relating to (A) the generation, treatment,
storage, disposal, use, handling, manufacturing, transportation or shipment
of, or (B) the environment or to emissions, discharges, releases or
threatened releases of, Hazardous Materials, into the environment, and
includes, without limitation, the Clean Air Act, 42 U.S.C.ss.7401 et seq.;
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C.ss.9601 et seq.; Emergency Planning and Community Right to Know Act,
42 U.S.C.ss.11000 et seq.; Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. ss.136 et seq.; Clean Water Act, 33 U.S.C.ss.1251 et seq.;
Oil Pollution Act, 33 U.S.C. ss.2701 et seq.; Resource Conservation and
Recover Act, 42 U.S.C.ss.6901 et seq.; Safe Water Drinking Act, 42
U.S.C.ss.300f et seq.; Toxic Substance Control Act, 15 U.S.C. ss.2601 et
seq.; and Occupational Safety and Health Act 29 U.S.C.ss.651 et seq and,
without limiting the generality of the foregoing, any foreign counterparts
to the foregoing acts.
(3) "Hazardous Materials" means (A) any
petroleum or petroleum products, radioactive materials or friable asbestos;
(B) any chemicals or other materials or substances which are now defined as
or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," or "toxic pollutants" under any
Environmental Law; and (C) pesticides.
3.22 Brokers. Except for Lehman Brothers Inc., no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Seller, that
is or will be payable by the Seller. The Seller is solely responsible for
all fees and expenses of Lehman Brothers Inc. payable in connection with
the transactions contemplated by this Agreement.
3.23 Computer Systems. The Seller has all required computer
hardware and software systems ("Computer Systems") necessary to conduct the
Business as presently conducted. The Seller's Computer Systems are adequate
to conduct the Business. All of the Seller's Computer Systems operate
pursuant to valid licenses except where the failure to have such valid
licenses would not have a Material Adverse Effect. Seller has installed
commercially available "virus protection software" on its Computer Systems.
3.24 Product Warranty. Except as set forth in Schedule 3.24,
the products sold by the Business have been manufactured in material
compliance with applicable specifications, are or were fit for the purposes
intended and are or were substantially free from defects and are
merchantable.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
4.1 Organization. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation and has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be in good standing or to have
such power and authority would not have a material adverse effect on the
ability of the Buyer to consummate the transactions contemplated by this
Agreement.
4.2 Authority Relative to this Agreement. The Buyer has the
corporate power and authority to execute and deliver this Agreement and the
Undertaking and Indemnity Agreement and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this
Agreement and the Undertaking and Indemnity Agreement and the consummation
of the transactions contemplated hereby and thereby have been duly and
validly authorized by the Board of Directors of the Buyer and no other
corporate proceedings on the part of the Buyer are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby except
for authorization by the Shareholder's Committee of Henkel KGaA, Buyer's
parent corporation ("Henkel"). Buyer shall present this Agreement to
solicit Shareholder's Committee approval as expeditiously as possible but
in no event later than June 29, 2000. Upon approval of the Shareholder's
Committee approval, this Agreement will have been duly and validly executed
and delivered by the Buyer and shall constitute a valid and binding
agreement of the Buyer, enforceable against the Buyer in accordance with
its terms. The Undertaking and Indemnity Agreement will be, upon the due
and valid execution and delivery thereof, a valid and binding agreement of
the Buyer, enforceable against the Buyer in accordance with its terms.
4.3 No Violation. Except for the filings, permits,
authorizations, consents and approvals set forth in Schedule 4.3 or as may
be required under, and other applicable requirements of the HSR Act or the
anti-competition laws or regulations of the European Union or any foreign
jurisdiction in which the Seller or the Buyer (directly or through
subsidiaries, in each case) has material assets or conducts material
operations and any applicable "bulk sales" laws, none of the execution,
delivery or performance of this Agreement or the Undertaking and Indemnity
Agreement by the Buyer, the consummation by the Buyer of the transactions
contemplated hereby or compliance by the Buyer with any of the provisions
hereof will (i) conflict with or result in any breach of any provision of
the certificate of incorporation, bylaws or similar organizational
documents of the Buyer or any of its subsidiaries, (ii) require any filing
with, or permit, authorization, consent or approval of, any Governmental
Entity, (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, or
result in the creation of a Lien on any property or assets owned by the
Buyer or any of its subsidiaries pursuant to, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which the Buyer or
any of its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or (iv) violate any order, writ,
injunction, decree, judgment, permit, license, ordinance, law, statute,
rule or regulation applicable to the Buyer, any of its subsidiaries or any
of their properties or assets, excluding from the foregoing clauses (ii),
(iii) and (iv) such filings, permits, authorizations, consents, approvals,
violations, breaches, defaults or Liens which are not, individually or in
the aggregate, reasonably likely to materially adversely affect the
consummation of the transactions contemplated by this Agreement.
4.4 Disclosure. The representation and warranties by the
Buyer in this Agreement and the statements contained in the documents
(including disclosure schedules), certificates and other writing furnished
by the Buyer to the Seller pursuant to this Agreement, when considered as a
whole, and giving effect to any supplements or amendments thereof prior to
the time of signing on the date hereof do not and will not contain any
untrue statement of a material fact and do not and will not omit to state
any material fact necessary to make the statements herein or therein not
misleading, it being understood that as used in this Section 4.4 "material"
means material to Loctite Corporation.
4.5 Financing. At or prior to the Closing Date, the Buyer
will have sufficient cash resources available to pay the Purchase Price.
4.6 Brokers. Except for Warburg Dillon Read, no broker,
finder or investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Buyer, that
is or will be payable by the Buyer. The Buyer is solely responsible for
fees and expenses of Warburg Dillon Read payable in connection with the
transactions contemplated by this Agreement.
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Conduct of Business of the Seller. Except as otherwise
contemplated by this Agreement, during the period from the date of this
Agreement to the Effective Time, the Seller will, and will cause the
Business Subsidiaries to, (1) conduct the Business only in the ordinary and
usual course of business, (2) use its reasonable best efforts to preserve
intact all rights, privileges, franchises and other authority adequate or
necessary for the conduct of the Business as currently conducted, (3) keep
available the services of the key Business Employees, and (4) maintain good
relationships with licensors, licensees, suppliers, contractors,
distributors, customers and others having significant business
relationships with the Business. Without limiting the generality of the
foregoing and, except as otherwise expressly provided in this Agreement,
prior to the Effective Time without the prior written consent of the Buyer
which will not be unreasonably withheld or delayed the Seller will not
permit either the Business or any Business Subsidiary (foreign or domestic)
to:
(a) (i) create, incur or assume any long-term debt
(including obligations in respect of capital leases), or, except in the
ordinary course of the Business under existing lines of credit, create,
incur or assume any short-term debt if, in either such case, such long-term
debt or short-term debt, would constitute a Business Liability; (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other person if such assumption, guarantee, endorsement or other liability
would constitute a Business Liability; provided that the Business
Subsidiaries may endorse negotiable instruments in the ordinary course of
the Business;
(b) (i) increase in any manner the compensation of
any of the Business Employees, except such increases as are granted in the
ordinary course of the Business in accordance with its customary practices
(which shall include normal periodic performance reviews and related
compensation and benefit increases but not any general across-the-board
increases); (ii) pay or agree to pay any pension, retirement allowance or
other employee benefit not required or permitted by any existing plan,
agreement or arrangement to any such Business Employee, whether past or
present; or (iii) commit itself to any additional Plans or, except as
otherwise expressly required or permitted by Article VI, to amend or
terminate any of such Plans or any of such agreements in existence on the
date hereof;
(c) permit any of its current insurance (or
reinsurance) policies to be cancelled or terminated or any of the coverage
thereunder to lapse if such policy covers any Business Assets or insures
risks, contingencies or liabilities which could result in a Business
Liability, unless simultaneously with such termination, cancellation or
lapse, replacement policies providing coverage equal to or greater than the
coverage remaining under those cancelled, terminated or lapsed are in full
force and effect (it being understood that there shall be no obligation to
extend such insurance policies after the Effective Time);
(d) except in the ordinary course of the Business
consistent with past practice, (i) sell, transfer, or otherwise dispose of
or agree to sell, transfer, or otherwise dispose of, any Business Assets
which have a sales price in excess of $100,000, individually or in the
aggregate, or (ii) mortgage, pledge or otherwise encumber any Business
Assets except for such mortgages or encumbrances which constitute Permitted
Exceptions;
(e) except in the ordinary course of the Business
consistent with past practice, sell, transfer, license, abandon or
otherwise dispose of, or agree to sell, transfer, license or otherwise
dispose of, any of the Business Intellectual Property;
(f) enter into any agreements, commitments or
contracts relating to the Business, except agreements, commitments or
contracts made in the ordinary course of the Business consistent with past
practice;
(g) voluntarily consent to the termination of any
Business Contract or Business Lease by any other party thereto, or
voluntarily withdraw any application for, or permit the expiration of any
renewable rights with respect to, any Business Intellectual Property;
(h) amend its charter documents in a manner that
adversely affects the transactions contemplated hereby;
(i) change the accounting principles used in
connection with the Business unless required by GAAP and disclosed to the
Buyer prior to instituting such changes; and
(j) enter into any agreement, contract, commitment or
arrangement to do any of the foregoing.
Notwithstanding the provisions of the Section 5.1, nothing
in this Agreement shall be construed or interpreted to prevent the Seller
or any Business Subsidiary from (i) paying or making regular or special
dividends or other distributions consisting of cash, marketable securities
or property that is not a Business Asset or any combination thereof upon
prior notice to the Buyer; (ii) making, accepting or settling intercompany
loans or advances in the ordinary course of the Business or (iii) engaging
in any other transaction incident to the normal cash management procedures
of the Seller and its subsidiaries, including short-term investments in
time-deposits, certificates or deposit and banker's acceptances made in the
ordinary course of the Business.
5.2 Current Information.
(a) Between the date of this Agreement and the
Effective Time the Seller will cause one or more of its designated
representatives to consult as requested by the Buyer on a regular basis
with one or more designated representatives of the Buyer and to discuss the
general status of ongoing operations of the Business.
(b) The Seller will promptly notify the Buyer of any
significant change in the normal course of business or in the operations of
the Business and of any material complaints, investigations or hearings (or
communications indicating that the same may be contemplated) of any
Governmental Entity or third party, in each case involving the Business,
and will keep the Buyer informed of such events and permit the Buyer's
representatives access to all materials prepared in connection therewith
prior to submittal to any Governmental Entity.
(c) The Seller shall promptly notify the Buyer of any
product claims in excess of $10,000 regarding the performance or
non-performance of any product or service of the Business or the Business
Subsidiaries and provide the Buyer with copies of all written directions to
correct any non-performance.
5.3 Access to Information.
(a) Between the date of this Agreement and the
Effective Time the Seller will (i) give the Buyer and its authorized
representatives reasonable access to all plants, offices, warehouses and
other facilities and properties used in the Business and to the Business
Books and Records, (ii) permit the Buyer to make such inspection thereof as
the Buyer may reasonably request, and (iii) cause its officers to furnish
the Buyer with such financial and operating data and other information with
respect to the Business as the Buyer may from time to time reasonably
request; provided, however, that any such investigation shall be conducted
in such a manner as not to interfere materially with the operation of the
Business and the Seller shall have no obligation to disclose the details of
any trade secret included in the Business Intellectual Property.
(b) Between the date of this Agreement and the
Effective Time the Buyer will hold and will cause its officers, directors,
employees, representatives, consultants and advisors to hold in strict
confidence in accordance with the terms of the Confidentiality Agreement,
dated March 1, 2000, between the Buyer and the Seller, all documents and
information furnished to the Buyer by or on behalf of the Seller in
connection with the transactions contemplated by this Agreement. If the
transactions contemplated by this Agreement are not consummated, such
confidence shall be maintained in accordance with such Confidentiality
Agreement.
(c) No investigation pursuant to this Section 5.3
shall affect any representations and warranties of the parties herein or
the conditions to the obligations of the parties hereto.
5.4 Expenses. Except as otherwise provided by this
Agreement, whether or not the transactions contemplated hereby are
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby will be paid by the
party incurring such costs and expenses. Notwithstanding the foregoing, the
Seller shall reimburse the Buyer for the documented reasonable fees and
disbursements of one law firm retained by the Buyer in connection with any
litigation challenging the transactions contemplated by this Agreement
commenced by International Specialty Products Inc. or any of its
affiliates.
5.5 Reasonable Best Efforts.
(a) Subject to the terms and conditions of this
Agreement and applicable Law, each of the parties shall act in good faith
and use reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
to consummate and make effective the transactions contemplated by this
Agreement as soon as practicable. Without limiting the foregoing, the
parties shall, and shall cause their respective subsidiaries, and use
reasonable best efforts to cause their (and their respective subsidiaries')
directors, officers, employees, agents, attorneys, accountants and
representatives, to (i) obtain all consents, approvals, waivers, licenses,
permits, authorizations, registrations, qualifications or other permissions
or actions by, and give all necessary notices to, and make all filings with
and applications and submissions to, any Governmental Entity (including
promptly filing with the United States Federal Trade Commission (the "FTC")
and the Antitrust Division of the United States Department of Justice (the
"Department of Justice") pursuant to the HSR Act all requisite documents
and notifications in connection with the transactions contemplated by this
Agreement) or other person necessary in connection with the consummation of
the transactions contemplated by this Agreement as soon as reasonably
practicable; (ii) provide all such information concerning such party, its
subsidiaries and its officers, directors, employees, partners and
affiliates as may be necessary or reasonably requested in connection with
any of the foregoing; (iii) avoid the entry of, or have vacated or
terminated, any injunction, decree, order, or judgment that would restrain,
prevent, or delay the consummation of the transactions contemplated hereby,
including but not limited to defending through litigation on the merits any
claim asserted in any court by any person; and (iv) take any and all
reasonable steps necessary to avoid or eliminate every impediment under any
antitrust, competition, or trade regulation law that is asserted by any
Governmental Entity with respect to the transactions contemplated hereby so
as to enable the consummation of such transactions to occur as
expeditiously as possible.
(b) The Seller and the Buyer shall keep the other
reasonably apprised of the status of matters relating to the completion of
the transactions contemplated hereby, including promptly furnishing the
other with copies of notices or other communications received by either of
them or by any of their respective subsidiaries, from any third party
and/or any Governmental Entity with respect to the transactions
contemplated by this Agreement.
5.6 Further Assurances. From time to time including
following the Closing Date, without further consideration, the Seller will,
at its own expense, execute and deliver such documents (including any
Business Books and Records that may not have been actually delivered at the
Closing) to the Buyer as the Buyer may reasonably request in order
effectively to consummate the transactions contemplated hereby and to vest
in the Buyer or a Business Subsidiary title to the Business Assets
(including, without limitation, assistance in the reduction to possession
of any thereof). From time to time, without further consideration, the
Buyer will, at its own expense, execute and deliver such documents as the
Seller may reasonably request in order effectively to consummate the
transactions contemplated hereby and to perfect the assumption by the Buyer
of the Business Liabilities. In addition, following the Effective Time the
Seller will assist the Buyer in closing any or all of the Specialty Polymer
Bank Accounts as the Buyer may reasonably request.
5.7 Disclosure Supplements. From time to time after the date
of this Agreement and prior to the Effective Time, the Seller will promptly
supplement or amend the schedules referred to in Article III with respect
to any matter hereafter arising which, if existing or occurring at or prior
to the date of this Agreement, would have been required to be set forth or
described in a schedule or which is necessary to correct any information in
a schedule or in any representation and warranty of the Seller that has
been rendered inaccurate thereby. From time to time after the date of this
Agreement and prior to the Effective Time, the Buyer will promptly
supplement or amend the schedules referred to in Article IV with respect to
any matter hereafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set forth or
described in a schedule or which is necessary to correct any information so
previously disclosed or in any representation and warranty of the Buyer
which has been rendered inaccurate thereby. For purposes of determining the
accuracy of the representations and warranties of the Seller contained in
Article III and the accuracy of the representations and warranties of the
Buyer contained in Article IV in order to determine the fulfillment of the
conditions set forth in Sections 7.3(a) and 7.2(a), respectively, the
schedules delivered by the Seller and the schedules delivered by the Buyer
shall be deemed to include only that information contained therein on the
date of this Agreement and shall be deemed to exclude any information
contained in any subsequent supplement or amendment thereto.
5.8 Public Announcements. The Buyer and the Seller agree
that neither one of them will issue any press release or otherwise make any
public statement or respond to any press inquiry with respect to this
Agreement or the transactions contemplated hereby without prior
consultation with the other party, except as may be required by applicable
Law or the rules of any stock exchange on which such party's securities are
listed.
5.9 Sales and Transfer Taxes and Fees. The parties agree
that all sales and transfer Taxes and related fees (including all real
estate, patent and trademark transfer taxes and recording fees, if any)
incurred in connection with this Agreement and the transactions
contemplated hereby will be borne one-half by the Seller and one-half by
the Buyer, and the Buyer will file all necessary Tax returns and other
documentation with reasonable assistance from Seller's employees, at no
additional expense to Buyer, with respect to all such sales, transfer and
recording Taxes and fees (including, without limitation, reseller or other
certificates of the Buyer reasonably requested by the Seller), and, if
required by applicable Law, the Seller will join in the execution of any
such Tax returns or other documentation.
5.10 Use of Name. Effective upon the Effective Time, the
Buyer shall have the exclusive, worldwide, royalty-free right to use the
name and mark "Dexter" solely in connection with its conduct of the
Business following the Effective Time substantially upon the terms and
conditions of the License Agreement attached hereto as Exhibit D (the
"Dexter Name License Agreement").
5.11 Insurance Subsidiaries. The Seller will continue to
operate its two wholly owned captive insurance subsidiaries, Kettlebrook
Insurance Company Ltd. and Dexter Environmental Assurance Ltd., in the
ordinary course consistent with past practice, pending a sale of the shares
of such companies. The Seller shall not permit either company to take any
action that would improperly dissipate their reserves or their assets. In
addition, in the event that the Seller sells the shares of either
Kettlebrook Insurance Company Ltd. or Dexter Environmental Assurance Ltd.,
the purchaser of such shares shall agree that neither Kettlebrook Insurance
Company Ltd. or Dexter Environmental Assurance Ltd., as the case may be,
will take any action that would dissipate its reserves or assets below an
amount required to satisfy any outstanding claims. The Buyer and the Seller
will cooperate with each other in order to pursue the possibility of
transferring the assets of Kettlebrook Insurance Company Ltd. and Dexter
Environmental Assurance Ltd. to the captive insurance company of the Buyer
or a financially viable third party and the Buyer shall have the right to
elect that such a transfer be effected; provided that any such transfer be
made on a tax efficient basis and on other terms and conditions
satisfactory to both the Buyer and the Seller.
5.12 Transitional Service Agreement. The Seller and the
Buyer shall, to the extent needed in the reasonable judgment of the
parties, negotiate in good faith the terms and conditions of a transitional
services agreement pursuant to which the parties will agree to provide
certain services to each other for an agreed-upon period of time.
ARTICLE VI
SELLER EMPLOYEES
6.1 Employment.
(a) Effective as of the Effective Time, each employee
of the Seller employed in the Business immediately prior to the Effective
Time (the "Business Employees") shall cease to be an employee of the Seller
and the Buyer shall offer or cause to be offered employment, on an at-will
basis, to all Business Employees. The Buyer shall assume and be solely
responsible for and shall indemnify the Seller against any severance
liability attributable to the termination of employment of the Business
Employees employed by the Seller as of the Effective Time. Effective as of
the Effective Time and until December 31, 2001, the Buyer shall cause each
Business Employee who accepts and commences employment with the Buyer or a
subsidiary of the Buyer as of the Effective Time (the "Transferred
Employees") to be provided with compensation and employee benefit
arrangements that shall, in the aggregate, be substantially equivalent to
the compensation and benefits provided by the Seller to such Transferred
Employee immediately prior to the Effective Time.
(b) The Buyer shall cause the Transferred Employees
to be given full credit for all service with the Seller or any subsidiary
of the Seller prior to the Effective Time for purposes of eligibility,
vesting and determination of the level of benefits under any employee
benefit plans or arrangements of the Buyer or any subsidiary of the Buyer
in which such Transferred Employees' participate from and after the
Effective Time, to the same extent such service was recognized by the
Seller or any subsidiary of the Seller immediately prior to the Effective
Time. Neither the Buyer nor any subsidiary of the Buyer shall require any
Transferred Employee to undergo a physical examination or provide other
proof of insurability. The Buyer shall, or shall cause a subsidiary of the
Buyer to, (i) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to Transferred Employees under any welfare plan in
which such employees may be eligible to participate after the Effective
Time, other than limitations or waiting periods that are already in effect
with respect to such employees and that have not been satisfied as of the
Effective Time under any welfare plan of the Seller or any subsidiary of
the Seller in which Transferred Employees participate immediately prior to
the Effective Time, and (ii) provide each Transferred Employee with credit
for any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under
any welfare plans in which such employees are eligible to participate after
the Effective Time, as if those deductibles or co-payments had been paid
under the welfare plans in which such employees are eligible to participate
after the Effective Time.
(c) Subject to Section 6.2, the Seller shall remain
responsible for, and shall indemnify and hold harmless the Buyer against,
any and all claims, losses, damages, costs and expenses and other
liabilities (other than those constituting Business Liabilities) relating
to or arising out of any of its Plans or obligations thereunder accrued
prior to the Effective Time. Buyer shall be responsible for, and shall
indemnify and hold harmless the Seller against, any and all claims, losses,
damages, costs and expenses and other liabilities relating to or arising
out of any of the Buyer's employee benefit arrangements or obligations
thereunder accrued on or after the Effective Time.
6.2 Assumption of Plans.
(a) Effective as of the Effective Time, the Buyer
shall assume The Dexter Pension Plan and Dexter's Magnetic's Employees
Retirement Income Trust Plan (collectively, the "Assumed Plans"). The Buyer
and the Seller shall take all such action as may be necessary or
appropriate in order to establish the Buyer as a successor to the Seller as
to all rights, duties, liabilities and obligations under, or with respect
to, each of the Assumed Plans including, but not limited to, the Seller's
rights, duties, liabilities and obligations under, or with respect to any
and all annuity or insurance contracts, or trust agreements, that form a
part of such plans, together with the assets relating thereto.
(b) Following the Effective Time, the Buyer shall, or
shall cause a Buyer subsidiary to, (i) provide to those former employees of
the Business Business whose employment terminated prior to the Effective
Time (and eligible dependents of such former employees) (collectively,
"Retirees") post-retirement welfare benefits substantially equivalent (both
in terms of the benefits provided and the cost of such benefits to a
Retiree) to those provided to such individuals under the post-retirement
welfare benefit program of the Seller as in effect immediately prior to the
Effective Time, (ii) continue an arrangement pursuant to which such
post-retirement welfare benefits shall be provided, upon any termination of
employment with the Buyer or a Buyer subsidiary, to those Transferred
Employees (and their eligible dependents) who elect to receive such
benefits (substantially in accordance with procedures currently utilized by
the Seller) and who immediately prior to the Effective Time would be
eligible for such benefits upon a termination of employment with the Seller
(collectively, "Vested Eligible Employees") and (iii) continue an
arrangement pursuant to which such post-retirement welfare benefits shall
be provided to those individuals (and their eligible dependents) who are
not Retirees or Vested Eligible Employees, and who, as of the Effective
Time, had attained the age of 50 and had been credited with at least five
years of service with the Seller (collectively, "Potential Grow-In
Employees"), but only if, at the time of any termination with the Buyer or
a Buyer subsidiary, (A) such Potential Grow-In Employee would have been
eligible to receive such post-retirement welfare benefits under the
Seller's post-retirement welfare benefit program as in effect immediately
prior to the Effective Time (crediting service with the Buyer or a Buyer
subsidiary as service with the Seller) and (B) such Potential Grow-In
Employee elects to receive such benefits (substantially in accordance with
procedures currently utilized by the Seller). In connection with the
performance of Buyer's obligations hereunder, at the Effective Time the
Seller shall cause to be transferred to a "VEBA" established under Section
501(c)(9) of the Code (or to be established) by the Buyer an amount equal
to the portion of the Seller's accumulated post-retirement welfare benefit
obligations as of December 31, 1999 ("APBO") attributable to Retirees,
Vested Eligible Employees and Potential Grow-In Employees (such amount to
be adjusted to reflect any changes in the individuals comprising the
Retirees, Vested Eligible Employees and Potential Grow-In Employees as of
the Effective Time) as set forth in the report prepared for the Seller by
PricewaterhouseCoopers LLP and previously delivered to the Buyer, plus
interest thereon at the rate of 7.75% per annum from January 1, 2000
through the date on which occurs the Effective Time. The Buyer shall not
terminate or modify in any adverse manner the post-retirement welfare
benefit it has agreed to provide to Retirees, Vested Eligible Employees and
Potential Grow-in Employees pursuant to this Section 6.2(b).
(c) The Buyer shall assume all liabilities and
obligations of the Seller with respect to the Business Employees arising
under (i) the Dexter Corporation Special Severance Plan (as such plan has
been modified by employee communications described in Schedule 6.2(c)(i)),
except for the liabilities arising under Sections 2(e) and 2(f) of such
plan, (ii) the pay-to-stay arrangements described in Schedule 6.2(c)(ii)
and (iii) the severance agreements (described in Schedule 6.2(c)(iii)) to
provide continuation of "Employee Benefits" that are welfare benefits as
described in Section 4(a)(ii) of the severance agreements.
(d) The Buyer shall provide severance benefits to any
Business Employee who (i) voluntarily terminates his or her employment for
"good reason" (as defined in Schedule 6.2(d)) within twelve months of the
Effective Time or (ii) is involuntarily terminated (other than for cause)
by the Buyer or a Buyer subsidiary within twelve months following the
Effective Time. The severance benefits provided in accordance with this
Section 6.2(d) shall not be less favorable than the severance benefits that
a Business Employee would have been entitled to had his or her employment
been terminated by the Seller or a Business Subsidiary (as the case may be)
immediately prior to the Effective Time. No severance benefits shall be
provided pursuant to this Section 6(d) to a Business Employee who
immediately prior to the Effective Time, is (i) a party to a severance
agreement described in Section 6.2(c) or (ii) a participant in the Dexter
Corporation Special Severance Plan.
(e) To the extent that any obligations might arise
under the Worker Adjustment Retraining Notification Act ("WARN"), 29 U.S.C.
Section 2101 et seq., or under any similar provision of any federal, state,
regional, foreign, or local law, rule, or regulation (hereinafter referred
to collectively as "WARN Obligations") as a consequence of the transactions
contemplated by this Agreement, the Seller shall be responsible for any
WARN Obligations arising as a result of any employment losses occurring
prior to the Effective Time, and the Buyer shall be responsible for any
WARN Obligations arising as a result of any employment losses occurring
upon or after the Effective Time.
(f) On or prior to the Effective Time, the Seller
shall establish a defined benefit pension plan and trust intended to
qualify under Section 401(a) and Section 501(a) of the Code(the "Coatings
Pension Plan") for Coatings Employees and Coatings Retirees (each listed in
Schedule 6.2(f)). The Coatings Pension Plan shall be substantially
identical to the Dexter Pension Plan. As soon as practicable after the
Effective Time, the Seller shall cause the trustee of the Dexter Pension
Plan to transfer cash from the trust under the Dexter Pension Plan to the
trust under the Coatings Pension Plan, in an amount determined by the
certified actuary of the Seller (the "Seller's Actuary") to be equal to the
product of (a) the fair market value of the assets held under the Dexter
Pension Plan as of June 30, 2000(the "Valuation Date") and (b) a fraction,
the numerator of which is equal to the present value of all accrued
benefits, including all ancillary benefits, under the Dexter Pension Plan
as of the Effective Time in respect of the Coatings Employees and Coatings
Retirees (each as defined in Schedule 6.2(f)) and the denominator of which
is equal to the present value of all accrued benefits, including all
ancillary benefits, under the Dexter Pension Plan as of the Effective Time.
The calculation of the present value of such benefits shall be performed by
the Seller's Actuary in consultation with an actuary designated by the
Buyer. The calculation shall be performed in accordance with Section 414(1)
of the Code and the regulations promulgated thereunder and in all cases
utilizing the assumptions used by the Seller for reporting accumulated
benefit obligations under FAS No. 87. The Seller's Actuary shall provide
the actuary designated by the Buyer with all the documentation reasonably
necessary for the Buyer to verify the determination made by the Seller's
Actuary. From the Valuation Date to the date of transfer, the assets to be
transferred shall be credited with interest at the rate of 7.75% per annum
and an amount equal to such interest shall be transferred to the trust
under the Coatings Pension Plan on the date the transfer of assets occurs.
Effective as of the effective date of the Coatings Pension
Plan, Coatings Employees shall cease to accrue benefits under the Dexter
Pension Plan and shall commence to accrue benefits under the Coatings
Pension Plan. Effective as of the Effective Time, and conditioned upon the
transfer of the assets pursuant to this Section 6.2(f), the Buyer shall
assume the Dexter Pension Plan and all liabilities and obligations
thereunder, and the Buyer shall indemnify and hold harmless the Seller, its
officers, directors, employees and agents and affiliates from and against
any and all liabilities arising out of or related to the Dexter Pension
Plan; provided, however, the Buyer shall not indemnify or hold harmless
such parties with respect to those costs, damages, losses, expenses, or
other liabilities that result, directly or indirectly, from the acts or
omissions of such parties, which acts or omissions occurred or should have
occurred prior to the Effective Time. Effective as of the Effective Time,
and conditioned upon the transfer of the assets pursuant to this Section
6.2(f), the Seller shall indemnify and hold harmless the Buyer, its
officers, directors, employees and agents and affiliates from and against
any and all liabilities arising out of or related to the Coatings Pension
Plan; provided, however, the Seller shall not indemnify or hold harmless
such parties with respect to those costs, damages, losses, expenses, or
other liabilities that result, directly or indirectly, from the acts or
omissions of such parties, which acts or omissions occurred or should have
occurred during the period from the Effective Time to the date upon which
the transfer of assets pursuant to this Section 6.2(f) occurs.
(g) Effective as of the Effective Time, the Buyer
shall establish or designate a defined contribution plan and trust intended
to qualify under Section 401(a) and Section 501(a) of the Code (the "Buyer
Savings Plan"). Upon receipt of an opinion, satisfactory to the Seller's
counsel that the terms of the Buyer Savings Plan and related trust qualify
under Section 401(a) and Section 501(a) of the Code, the Seller shall
direct the trustee of the Dexter 401(k) Plan to transfer, to the trustee of
the Buyer Savings Plan, as of the Effective Time, the cash value of the
account balances under the Dexter 401(k) in respect of Transferred
Employees. Upon such transfer, the Buyer Savings Plan shall assume all
liabilities for accrued benefits under the Dexter 401(k) Plan in respect of
Transferred Employees and the Dexter 401(k) Plan shall be relieved of all
such liabilities. The parties shall cooperate in the filing of the
documents required by the transfer of assets and liabilities described
herein. Notwithstanding anything contained herein to the contrary, no such
transfer shall take place until the 31st day following the filing of all
required Forms 5310-A in connection therewith.
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the
Transactions Contemplated Hereby. The respective obligations of each party
to effect the transactions contemplated hereby shall be subject to the
fulfillment at or prior to the Effective Time of the following conditions:
(a) To the extent required by applicable Law, each of
the Seller and the Buyer and any other person (as defined in the HSR Act)
required in connection with the transactions contemplated hereby to file a
Notification and Report Form for Certain Mergers and Acquisitions with the
Department of Justice and the FTC pursuant to the HSR Act shall have made
such filing and all applicable waiting periods with respect to each such
filing (including any extensions thereof) shall have expired or been
terminated.
(b) To the extent required by applicable Law, each of
the Seller and the Buyer and any other person required in connection with
the transactions contemplated hereby to file all necessary filings with any
Governmental Entity outside the U.S. shall have made such filings and such
Governmental Entities outside the U.S. shall have approved or cleared such
filing and all such approvals or clearances shall have been received.
(c) No statute, rule, regulation, executive order,
decree, ruling or injunction (temporary, preliminary or permanent) shall
have been enacted, entered, promulgated or enforced by any Governmental
Entity which prohibits the consummation of the transactions contemplated
hereby substantially on the terms contemplated hereby or has the effect of
making the acquisition of the Business by the Buyer or any of its
affiliates illegal.
7.2 Conditions to the Obligations of the Seller to Effect
the Transactions Contemplated Hereby. The obligations of the Seller to
effect the transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Effective Time of the following conditions,
any one or more of which may be waived by the Seller in writing:
(a) The representations or warranties of the Buyer
set forth in the Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Buyer set forth in the Agreement that are not so
qualified shall be true and correct in all material respects, in each case,
as if such representations or warranties were made as of such time on or
after the date of the Agreement (except to the extent such representations
and warranties speak as of a specific date or as of the date hereof, in
which case such representations and warranties shall be so true and correct
or true and correct in all material respects, as the case may be, as of
such specific date or as of the date hereof, respectively).
(b) The Buyer shall have performed and complied in
all material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(c) The Buyer shall have furnished a certificate of
an executive officer of the Buyer to evidence compliance with the
conditions set forth in Sections 7.2(a) and (b) of this Agreement.
(d) The Seller and the Buyer, respectively, shall
have obtained all of the permits, authorizations, consents or approvals
listed on Schedule 7.2(d).
7.3 Conditions to the Obligations of the Buyer to Effect the
Transactions Contemplated Hereby. The obligations of the Buyer to effect
the transactions contemplated hereby shall be further subject to the
fulfillment at or prior to the Effective Time of the following conditions,
any one or more of which may be waived by the Buyer in writing:
(a) The representations or warranties of the Seller
set forth in the Agreement that are qualified by materiality or Material
Adverse Effect shall be true and correct, and the representations and
warranties of the Seller set forth in the Agreement that are not so
qualified shall be true and correct in all material respects, in each case,
as if such representations or warranties were made as of such time on or
after the date of the Agreement (except to the extent such representations
and warranties speak as of a specific date or as of the date hereof, in
which case such representations and warranties shall be so true and correct
or true and correct in all material respects, as the case may be, as of
such specific date or as of the date hereof, respectively).
(b) The Seller shall have performed and complied in
all material respects with all agreements and obligations required by this
Agreement to be performed and complied with by it on or prior to the
Closing Date.
(c) The Seller shall have furnished a certificate of
an executive officer of the Seller to evidence compliance with the
conditions set forth in Sections 7.3(a) and (b) of this Agreement.
(d) The Seller and the Buyer, respectively, shall
have obtained all permits, authorizations, consents or approvals listed on
Schedule 7.3(d).
(e) The Buyer shall have obtained from Henkel, the
approval of Henkel's Shareholders Committee, to enter into, consummate, and
deliver this Agreement, and any contract or commitment set forth in this
Agreement, each according to the terms set forth herein.
7.4 Certificates. Each of the parties hereto will furnish to
the other party such certificates of such party's officers or others and
such other documents to evidence fulfillment of the conditions set forth in
this Article VII as the other party may reasonably request.
ARTICLE VIII
CERTAIN TAX MATTERS
8.1 Tax Matters.
(a) The Buyer shall timely prepare and file (or cause
such preparation and filing) with the appropriate authorities all income
Tax returns, reports and forms (other than any Consolidated Income Tax
Returns of the Seller) with respect to the Business (including the Business
Subsidiaries) of which the original due date (without regard to any
extensions) is after the date of the Effective Time ("Buyer Returns"), and
will pay (or cause to be paid) all income Taxes due with respect to such
Buyer Returns. Buyer shall make available to Seller any Buyer Returns and
related workpapers with respect to any taxable period that ends on or
before, or includes, the date of the Effective Time for Seller's review and
comment at least 25 business days prior to the respective due dates of such
Buyer Returns, and Seller shall provide Buyer with Seller's comments no
later than 10 business days before the respective due dates of such Buyer
Returns. Such Buyer Returns shall be subject to Seller's approval, such
approval not to be unreasonably withheld, before the applicable Buyer
Return is filed with the appropriate authority. The Seller shall timely
prepare and file (or cause such preparation and filing) with the
appropriate authorities (i) all Consolidated Income Tax Returns (other than
any Consolidated Income Tax Returns of the Buyer) with respect to the
Business (including the Business Subsidiaries), and (ii) all other income
Tax returns, reports and forms with respect to the Business (including the
Business Subsidiaries) of which the original due date (without regard to
any extensions) is on or before the date of the Effective Time, and will
pay (or cause to be paid) all income Taxes due with respect to such
returns, reports and forms (except to the extent such Taxes are included in
the Business Liabilities or otherwise reserved for on the Closing Date
Balance Sheet, in which case such Taxes shall be paid by the Buyer).
(b) The Buyer shall timely prepare and file (or cause
such preparation and filing) with the appropriate authorities all
non-income Tax returns, reports and forms required to be filed with respect
to the Business (including the Business Subsidiaries) and the Business
Assets, when such returns, reports and forms are required to be filed,
subject to any applicable extensions, after the Effective Time, and will
pay (or cause to be paid) all non-income Taxes due with respect to such
returns, reports and forms.
(c) The Seller and the Buyer shall reasonably
cooperate in preparing and filing all returns, reports and forms relating
to Taxes, including maintaining and making available to each other all
records reasonably necessary in connection with Taxes and in resolving all
disputes and audits with respect to all taxable periods relating to Taxes.
The Buyer shall prepare (or cause such preparation) within 90 days of the
date of the Effective Time, usual and customary Business Subsidiaries' Tax
return reporting packages with respect to the taxable period beginning
January 1, 2000 and ending as of the date of the Effective Time. Seller
will provide Buyer with Seller's determination of the appropriate portion
of the Seller's historical qualified research expenses and gross receipts
pertaining to the Business in accordance with Section 41(f)(3) of the Code.
(d) For a period of six years after the Closing Date,
the Seller and its representatives shall have reasonable access to the
Business Books and Records transferred to the Buyer hereunder (including,
without limitation, the right to make extracts thereof) to the extent that
the Business Books and Records relate to Taxes and to the extent that such
access may reasonably be required by the Seller in connection with matters
relating to or affected by the operation of the Business (including the
Business Subsidiaries) or the Business Assets prior to the Closing Date.
Such access shall be afforded by the Buyer upon receipt of reasonable
advance notice and during normal business hours. The Seller shall be solely
responsible for any reasonable out-of-pocket costs or expenses incurred by
it pursuant to this Section 8.1(d). If the Buyer shall desire to dispose of
any of such books and records prior to the expiration of such six-year
period, the Buyer shall, prior to such disposition, give the Seller a
reasonable opportunity, at the Seller's expense, to segregate and remove
such books and records as the Seller may select. In addition to the
foregoing, the parties agree to cooperate with each other with respect to
the defense of any claims or litigation relating to Taxes pertaining to the
Business (including the Business Subsidiaries) or the Business Assets,
provided that the party requesting such cooperation shall reimburse the
other party for the other party's reasonable out-of-pocket costs and
expenses of furnishing such cooperation.
(e) Subject to the mutual agreement of the parties
with regard to the time for completion hereto, the Buyer shall prepare (or
cause to be prepared) and submit to the Seller for the Seller's review and
approval, which shall not be unreasonably withheld, a draft allocation of
the Purchase Price and the Business Liabilities among the Business Assets,
including the capital stock of the Business Subsidiaries, to be purchased
hereunder, which allocation shall be reflected in Schedule 8.1(e) (the
"Draft Allocation"). The Draft Allocation shall be revised and finalized by
the parties in conjunction with the post-closing adjustment pursuant to
Section 2.6 (the "Final Allocation"). The Draft Allocation and the Final
Allocation shall be made in accordance with Section 1060 of the Code and
applicable Treasury regulations as well as under any analogous provisions
of foreign Law. Each of the Seller and the Buyer shall (i) be bound by the
Final Allocation for purposes of determining any Taxes, (ii) prepare and
file, and cause its affiliates to prepare and file, its Tax returns on a
basis consistent with the Final Allocation and (iii) take no position, and
cause its affiliates to take no position, inconsistent with the Final
Allocation on any applicable Tax return, in any proceeding before any
taxing authority or otherwise. In the event that the Final Allocation is
disputed by any taxing authority, the party receiving notice of the dispute
shall promptly notify the other party hereto concerning resolution of the
dispute.
(f) The Buyer shall not (i) make an election, with
the effective date of such election being on or before the date of the
Effective Time, to treat any of the Business Subsidiaries as a disregarded
entity (or as a partnership) for federal, state or local income Tax
purposes pursuant to Treasury Regulations Sections 301.7701-1 through
301.7701-3, (ii) make any dividend or other distributions to shareholders
from any of the Business Subsidiaries at any time on or after the Effective
Time until January 1, 2001, or (iii) make an election under Section 338 of
the Code with respect to any of the Foreign Business Subsidiaries without
the prior written consent of the Seller. However, upon the Buyer's timely
request, the Seller will join with the Buyer in making a timely election
under Section 338(h)(10) of the Code (and any comparable provisions of
state or local Tax law) (collectively, a "Section 338(h)(10) Election")
with respect to the purchase and sale of the stock of any of the Business
Subsidiaries that is a U.S. corporation. If the Buyer and Seller make a
Section 338(h)(10) Election with respect to the purchase and sale of the
stock of any such Business Subsidiary, the Final Allocation prepared by the
parties pursuant to Section 8.1(e) hereof shall allocate an amount equal to
the sum of the Purchase Price allocable to the stock of such Business
Subsidiary plus the liabilities of such Business Subsidiary assumed by the
Buyer among the assets of such Business Subsidiary in accordance with
Section 338 of the Code and the applicable Treasury regulations.
(g) The Seller and the Buyer agree that the Buyer has
purchased substantially all the property used in the Business in the United
States, and in connection therewith, the Buyer shall employ individuals who
immediately before the Effective Time were employed in such trade or
business by the Seller. Accordingly, pursuant to Rev. Proc. 96-60, 1996-2
C.B. 399, the Buyer shall furnish a United States Internal Revenue Service
Form W-2 to each employee employed by the Buyer who had been employed by
the Seller, disclosing all wages and other compensation paid for such
calendar year, and taxes withheld therefrom, and the Seller shall be
relieved of the responsibility to do so.
(h) Any Tax sharing agreement between Seller and any
of the Business Subsidiaries is terminated as of the Closing Date and will
have no further effect for any taxable year (whether the current year,
future year, or a past year).
8.2 Indemnity for Taxes.
(a) The Seller hereby agrees to indemnify the Buyer,
Henkel and its affiliates and subsidiaries, and the Business against and
hold them harmless, on an after-Tax basis, from all liability for (i) all
income Taxes of the Business attributable to taxable periods (or portions
thereof) ending on or before the Effective Time, (ii) income Taxes of any
of the businesses of the Seller other than the business of the Business
attributable to all taxable periods, and (iii) income Taxes incurred as a
result of any other transactions undertaken by the Seller, including
without limitation (x) the sale of the Business to Buyer; and (y) the
liquidation and dissolution of the Seller; provided, however, the Seller
shall not indemnify the Buyer for any Taxes included in the Business
Liabilities or otherwise reserved for in the Closing Date Balance Sheet.
(b) (i) The Seller agrees to indemnify the Buyer and
the Business against and hold them harmless, on an after-Tax basis, from
all income Taxes, expenses or other losses arising out of the failure of
the Seller to perform any of the agreements it is required to perform under
Section 5.9 or Section 8.1 and (ii) the Buyer agrees to indemnify the
Seller and hold it harmless, on an after-Tax basis, from all Taxes,
expenses or other losses arising out of the failure by the Buyer to perform
any of the agreements it is required to perform under Section 5.9 or
Section 8.1.
(c) The Buyer and the Seller agree to treat any
payment under this Section 8.2 as an adjustment to the Purchase Price.
(d) The obligation of the Seller to indemnify and
hold harmless the Buyer and the Business, on the one hand, and any of the
obligations of the Buyer to indemnify and hold harmless the Seller, on the
other hand, pursuant to this Section 8.2, shall terminate upon the
expiration of the applicable statutes of limitations with respect to the
Tax liabilities in question (giving effect to any waiver, mitigation or
extension thereof).
(e) A party seeking indemnification provided for
under this Section 8.2 (a "Tax Indemnified Party") in respect of Taxes,
arising out of or involving a claim or demand made by any persons, firm,
governmental authority or corporation against such party (a "Tax Third
Party Claim") must notify the party from whom such indemnification is
sought (the "Tax Indemnifying Party") in writing of the Tax Third Party
Claim as promptly as possible but in no event later than 30 days after
receipt by the Tax Indemnified Party of written notice of the Tax Third
Party Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to the
extent the Tax Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Tax Indemnifying Party shall not be
liable for any expenses incurred during the period in which the Tax
Indemnified Party failed to give such notice). Thereafter, the Tax
Indemnified Party shall deliver to the Tax Indemnifying Party, as promptly
as possible but in no event later than 30 days after the Tax Indemnified
Party's receipt thereof, copies of all notices and documents (including
court papers) received by the Tax Indemnified Party, relating to the Tax
Third Party Claim.
If a Tax Third Party Claim is made against the Tax
Indemnified Party, the Tax Indemnifying Party will be entitled to
participate in the defense thereof and to assume the defense thereof with
counsel or other tax advisors selected by the Tax Indemnifying Party and
satisfactory to the Tax Indemnified Party provided, however, that the Tax
Indemnifying Party shall not be entitled to assume the defense of any such
contest unless the Tax Indemnifying Party at its option has either provided
bond or other security for its obligations under this Section 8.2
satisfactory to the Tax Indemnified Party or paid the Tax Third Party
Claim. If the Tax Indemnifying Party assumes such defense, the Tax
Indemnifying Party will not be liable to the Tax Indemnified Party for
legal or other expenses subsequently incurred by the Tax Indemnified Party
in connection with the defense thereof. If the Tax Indemnifying Party
assumes such defense, the Tax Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel or other tax
advisors, at its own expense separate from the counsel or other tax
advisors employed by the Tax Indemnifying Party. The Tax Indemnifying Party
shall be liable for all reasonable fees and expenses of counsel or other
tax advisors employed by the Tax Indemnified Party for any period
subsequent to the date the Tax Indemnified Party notifies the Tax
Indemnifying Party pursuant to this Section 8.2(e) and during which the Tax
Indemnifying Party has not assumed the defense thereof. Whether or not the
Tax Indemnifying Party chooses to defend or prosecute any Tax Third Party
Claim, all of the parties hereto shall reasonably cooperate in the defense
or prosecution thereof. Such cooperation shall include the provision to the
Tax Indemnifying Party of records and information which are reasonably
relevant to such Tax Third Party Claim, and making employees available on a
mutually convenient basis to provide additional information and explanation
of any material provided hereunder. Whether or not the Tax Indemnifying
Party shall have assumed the defense of a Tax Third Party Claim, the Tax
Indemnified Party shall not admit any liability with respect to, or settle,
compromise or discharge, such Tax Third Party Claim without the Tax
Indemnifying Party's prior written consent, which consent shall not be
unreasonably withheld.
(f) Without the prior written consent of the Buyer,
which consent shall not be unreasonably withheld, if a Material Adverse
Effect on the liability for Taxes of the Buyer with respect to or arising
from the Business or Business Assets will result therefrom, neither the
Seller nor any of its affiliates shall make or change any election, change
an accounting period, adopt or change any accounting method, file any
amended Tax return or report, enter into any closing agreement, settle any
Tax claim or assessment relating to the Business or the Business Assets,
surrender any right to claim a refund of Taxes or consent to any extension
or waiver of the limitations period applicable to any Tax claim or
assessment relating to any of the Business or the Business Assets.
(g) If a Tax Indemnified Party receives a refund or
credit with respect to Taxes which it would be indemnified for under this
Section 8.2, the Tax Indemnified Party shall pay over such refund or credit
to the Tax Indemnifying Party; provided, however, that the amount of such
refund or credit which the Tax Indemnified Party is required to pay over to
the Tax Indemnifying Party shall be computed on an after-Tax basis.
ARTICLE IX
TERMINATION AND ABANDONMENT
9.1 Termination. Subject to the parties' obligations as
provided in Section 5.5, this Agreement may be terminated at any time prior
to the Effective Time:
(a) by mutual consent of the Seller and the Buyer;
(b) by the Buyer, at the Buyer's sole discretion, at
any time after October 31, 2000;
(c) by the Seller or the Buyer (i) at any time after
November 30, 2000 if the conditions set forth in Article VII shall not have
been satisfied or waived; (ii) if a statute, rule, regulation or executive
order shall have been enacted, entered or promulgated prohibiting the
consummation of the transactions contemplated by this Agreement on the
terms contemplated hereby; (iii) if an order, decree, ruling or injunction
shall have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement on the terms contemplated hereby and such order, decree, ruling
or injunction shall have become final and non-appealable; provided, that
the party seeking to terminate this Agreement pursuant to this Section
9.1(b)(iii) shall have used its reasonable best efforts to remove such
order, decree, ruling or injunction and shall not be in violation of
Section 5.5; or (iv) Henkel's Shareholders Committee shall fail to approve
the acquisition of the Seller's Business substantially in accordance with
the terms and conditions set forth herein;
(d) by the Buyer, if there has been a material
violation or breach by the Seller of any agreement, representation or
warranty contained in this Agreement that has rendered the satisfaction of
any condition to the obligations of the Buyer impossible and such violation
or breach has not been waived by the Buyer; or
(e) by the Seller, if there has been a material
violation or breach by the Buyer of any agreement, representation or
warranty contained in this Agreement that has rendered the satisfaction of
any condition to the obligations of the Seller impossible and such
violation or breach has not been waived by the Seller.
9.2 Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions
contemplated hereby by either or both of the parties pursuant to Section
9.1, written notice thereof shall forthwith be given to the other party and
this Agreement shall terminate and the transactions contemplated hereby
shall be abandoned, without further action by either of the parties hereto.
If this Agreement is terminated as provided herein:
(a) upon request therefor, each party will redeliver
all documents, work papers and other material of any other party relating
to the transactions contemplated hereby, whether obtained before or after
the execution hereof, to the party furnishing the same;
(b) each party hereto will use its best efforts to
prevent disclosure to third persons of all information received by either
party with respect to the business of the other party or its subsidiaries
(other than information which is a matter of public knowledge or which has
heretofore been or is hereafter published in any publication for public
distribution or filed as public information with any Governmental Entity
except (i) as may be required by Law; and (ii) as is permitted by this
Agreement;
(c) neither party hereto shall have any liability or
further obligation to the other party to this Agreement pursuant to this
Agreement except as stated in this Section 9.2 and in Sections 5.3(b) and
5.4, provided that nothing herein shall relieve any party from liability
for its willful breach of this Agreement; and
(d) if after the date hereof Seller receives a Dexter
Acquisition Proposal which proposes that the Seller's shareholders receive
consideration with a fair market value per share exceeding $45 and which
includes a condition that this Agreement be terminated and if for any
reason the Seller's shareholders are asked to approve this Agreement and
such approval is denied, and this Agreement is subsequently terminated,
then within 2 business days following such termination the Seller shall pay
the Buyer a fee of $8 million; and
(e) upon any termination of this Agreement other than
pursuant to Section 9.1(e) and upon request by the Buyer, the Seller shall
promptly, but in no event later than 2 business days following the date of
such request, reimburse the Buyer for its out-of-pocket cash expenses
(including without limitation, fees and expenses of accountants, counsel,
investment bankers and consultants and all travel related expenses)
incurred in connection with this Agreement and the transactions
contemplated hereby (whether incurred prior to or subsequent to the
execution of this Agreement); provided that the Seller shall in no event be
responsible for more than $500,000 in respect of this paragraph (e).
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Delivery of Schedules and Related Documents. The
schedules and related documents required to be delivered pursuant to this
Agreement are being delivered simultaneously with the execution and
delivery of this Agreement.
10.2 Amendment and Modification. Subject to applicable Law,
and unless otherwise expressly set forth herein, this Agreement may be
amended, modified or supplemented only by written agreement of the Seller
and the Buyer at any time prior to the Effective Time with respect to any
of the terms contained herein.
10.3 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of either of the parties to comply
with any obligation, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to,
any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of a party, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 10.3.
10.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or
mailed by registered or certified mail (return receipt requested), postage
prepaid, telecopied (which is confirmed) or sent by reputable courier
(providing proof of delivery) to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice,
provided that notices of a change of address shall be effective only upon
receipt thereof):
(a) if to the Seller, to
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: General Counsel
Telecopy: (860) 292-7669
with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: J. Michael Schell, Esq.
Margaret L. Wolff, Esq.
Telecopy: (212) 735-2000
(b) if to the Buyer, to
Loctite Corporation
1001 Trout Brook Crossing
Rocky Hill, Connecticut 06067
Attention: President
Telefax: (860) 371-2433
10.5 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by either of the parties hereto without the prior written
consent of the other party which shall not be unreasonably withheld and
with respect to any continuing obligation to indemnify shall be granted
instanter. The Buyer may assign its rights to purchase the Business Assets
to one or more of its wholly owned subsidiaries or those of Henkel, as
provided in Section 10.6.
10.6 Parent and Designated Affiliates and Subsidiaries.
Anything in this Agreement to the contrary notwithstanding, the Seller
agrees that the Buyer may cause its ultimate parent, Henkel, or one or more
of the affiliates or wholly owned subsidiaries of Henkel designated by the
Buyer to carry out all or part of the transactions contemplated by this
Agreement or own or take possession of any Business Assets or the stock of
any of the Foreign Business Subsidiaries at the discretion of the Buyer or
its parent without further approval of the Seller; provided, however, that
no such designation shall affect or diminish the liability of the Buyer
under this Agreement.
10.7 Governing Law. This Agreement shall be governed by the
laws of the State of Connecticut (regardless of the laws that might
otherwise govern under applicable principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction,
effect, performance and remedies.
10.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.9 Interpretation. The article and section headings
contained in this Agreement are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect
the meaning or interpretation of this Agreement. As used in this Agreement:
(i) the term "person" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and
a government or any department or agency thereof; (ii) the term
"subsidiary" when used in reference to any other person shall mean any
corporation of which outstanding securities having ordinary voting power to
elect a majority of the Board of Directors of such corporation are owned
directly or indirectly by such other person; (iii) the term "affiliate"
shall have the meaning set forth in Rule 12b-2 of the General Rules and
Regulations promulgated under the Exchange Act; and (iv) the term "business
day" means each day which is not a day on which banking institutions in New
York, New York are authorized or obligated by law or executive order to
close.
10.10 Entire Agreement. This Agreement, including the
exhibits hereto and the documents, schedules, certificates and instruments
referred to herein, and the Confidentiality Agreement, dated March 1, 2000
between the Buyer and the Seller, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein or therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such transactions.
10.11 Severability. If for any reason any term or provision
of this Agreement is held to be invalid or unenforceable, all other valid
terms and provisions hereof shall remain in full force and effect, and all
of the terms and provisions of this Agreement shall be deemed to be
severable in nature. If for any reason any term or provision containing a
restriction set forth herein is held to cover an area or to be for a length
of time which is unreasonable, or in any other way is construed to be too
broad or to any extent invalid, such term or provision shall not be
determined to be null, void and of no effect, but to the extent the same is
or would be valid or enforceable under applicable law, any court of
competent jurisdiction shall construe and interpret or reform this
Agreement to provide for a restriction having the maximum enforceable area,
time period and other provisions (not greater than those contained herein)
as shall be valid and enforceable under applicable Law.
10.12 Bulk Sales Law. The Buyer waives compliance by the
Seller with any bulk sales or similar laws, and the Seller agrees to
indemnify from any liability resulting from such noncompliance.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS
The representations and warranties of the parties hereto
contained in this Agreement or made in any certificate, schedule or exhibit
delivered pursuant to this Agreement shall survive the Closing and continue
in full force and effect for a period of time (the "Indemnification
Period") equal to the shorter of 12 months following the Closing Date and
the date of any Dexter Acquisition Transaction; provided, however, that the
Indemnification Period shall be for at least 5 months following the Closing
Date.
ARTICLE XII
INDEMNIFICATION
12.1 Indemnity by Seller. Seller agrees to indemnify and
hold the Buyer, Henkel and its affiliates and subsidiaries harmless from
and with respect to any and all claims, liabilities, losses, damages, costs
and expenses, including without limitation the reasonable fees and
disbursements of counsel, net of insurance proceeds actually received
(collectively, the "Losses") related to or arising directly out of any
inaccuracies in any representation or warranty made by Seller in or
pursuant to this Agreement; provided that solely for purposes of this
Article XII, for any of the representations and warranties of the Seller
that are qualified by an exception for the absence of a Material Adverse
Effect, the term "Material Adverse Effect" shall also mean any state of
facts, event, change, or effect which gives rise to a liability not
previously accrued of $25,000, which shall be deemed conclusively to be a
Material Adverse Effect; and provided further that the Seller shall have no
liability with respect to any Losses pursuant to this Section 12.1 unless
and until the aggregate of all Claims for Losses hereunder exceeds $6
million and shall thereafter be liable only for such Losses as exceed such
$6 million in amount.
12.2 Conditions to Indemnification.
(a) Any party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other party obligated to
provide indemnification hereunder (" the Indemnifying Party") of any
action, suit, proceeding, demand or breach (a "Claim") with respect to
which the Indemnified Party claims indemnification hereunder, provided the
failure of the Indemnified Party to give such notice shall not relieve any
Indemnifying Party of its obligations under this Section 12 except to the
extent, if at all, that such Indemnifying Party shall have been prejudiced
thereby. If such Claim relates to any action, suit, proceeding or demand
instituted against the Indemnified Party by a third party (a "Third Party
Claim"), upon receipt of such notice from the Indemnifying Party, the
Indemnifying Party shall be entitled to participate in the defense of such
Third Party Claim, if and only if each of the following conditions is
satisfied, and the Indemnifying Party may assume the defense of such Third
Party Claim and, in the case of such an assumption, the Indemnifying Party
shall have the authority to negotiate, compromise and settle such Third
Party Claim: (i) the Indemnifying Party confirms in writing that it is
obligated hereunder to indemnify the Indemnified Party with respect to such
Third Party Claims; and (ii) the Indemnified Party does not give the
Indemnifying Party written notice that it has determined, in the exercise
of its reasonable discretion, that a conflict of interest makes separate
representation by the Indemnified Party's own counsel advisable. The
Indemnified Party shall cooperate fully in the defense of any Third Party
Claim as and to the extent reasonably requested by the Indemnifying Party.
(b) In the event of any claims under Section 12.1
hereof, the Indemnified Party shall advise the Indemnifying Party in
writing of the amount and circumstances surrounding such claim. With
respect to liquidated Claims, if within 30 days the Indemnifying Party has
not contested such claim in writing, the Indemnifying Party will pay the
full amount thereof within 10 days after the expiration of such a period.
12.3 Method and Manner of Paying Claims. Subject to the
Indemnifying Party's right pursuant to section 12.2 hereof to defend,
negotiate, compromise and settle a Third Party Claim, the amount of any
Claim shall be paid by the Indemnifying Party forthwith on demand. If the
Indemnifying Party fails to pay any such Claim forthwith on demand, the
Indemnified Party may both: (i) proceed directly against the Indemnifying
Party to recover the amount of such claim and (ii) set off the amount of
such claim against amounts owed by the Indemnified Party to the
Indemnifying Party, if any.
ARTICLE XIII
NONCOMPETITION
13.1 Noncompete; No Solicitation of Employees. Upon the
terms and subject to the conditions set forth in this Section 13, the
Seller covenants and agrees that, as a material consideration running to
Buyer for the Buyer's payments hereunder, for a period of five years from
and after the Closing Date, the Seller will neither engage in nor permit
the "Dexter" name to be used by any business directly or indirectly in
competition with the Business as carried on by the Seller or any of its
subsidiaries or affiliates on the Closing Date, in the United States of
America, or in any country or political subdivision of the world in which
the Business is located or conducts business. Seller further covenants and
agrees that for a period of five years from and after the Closing Date,
Seller will not recruit, hire, assist others in recruiting or hiring,
discuss employment with, or refer to others concerning employment, any
Transferred Employee or any employee of the Buyer or a subsidiary or
affiliate of either.
13.2 Tolling of Period. The term of the covenants contained
in Section 13.1 hereof shall be tolled for the period commencing on the
date any successful action is filed for injunctive relief or damages
arising out of a breach by Seller of Section 13.1 hereof and ending upon
final adjudication (including appeals) of such action.
13.3 Enforcement. If, in any judicial proceeding, the court
shall refuse to enforce the covenants contained in Section 13.1 hereof
because the time limit is too long, it is expressly understood and agreed
between the parties hereto that for purposes of such proceeding such time
limitation shall be deemed reduced to the extent necessary to permit
enforcement of such covenants. If, in any judicial proceeding, the court
shall refuse to enforce covenants contained in Section 13.1 hereof because
they are more extensive (whether as to geographic area, scope of business
or otherwise) than necessary to protect the business and goodwill of Buyer,
it is expressly understood and agreed between the parties hereto that for
purposes of such proceeding the geographic area, scope of business or other
aspect shall be deemed reduced to the extent necessary to permit
enforcement of such covenants.
13.4 Irreparable Damage; Injunctive Relief. Seller
acknowledges that a breach of Section 13.1 hereof would cause irreparable
damage to Buyer, and in the event of Seller's actual or threatened breach
of the provisions of Section 13.1 hereof, Buyer shall be entitled to a
temporary restraining order and an injunction restraining Seller from
breaching such covenants without the necessity of posting bond or proving
irreparable harm, such being conclusively admitted by Seller. Nothing shall
be construed as prohibiting Buyer from pursuing any other available
remedies for such breach or threatened breach, including the recovery of
damages from Seller.
IN WITNESS WHEREOF, the Seller and the Buyer have caused
this Agreement to be signed by their respective duly authorized officers as
of the date first above written.
LOCTITE CORPORATION
By: /s/ Steven T. Merkel
_________________________
Name: Steven T. Merkel
Title: Vice President
DEXTER CORPORATION
By: /s/ K. Grahame Walker
________________________
Name: K. Grahame Walker
Title: Chairman and CEO