BRUKER BIOSCIENCES CORPORATION
PROXY STATEMENT
TABLE OF CONTENTS
|
|
Page
|
SUMMARY TERM SHEET
|
|
1
|
QUESTIONS AND ANSWERS ABOUT THE COMBINATION
|
|
3
|
TRANSACTION SUMMARY
|
|
7
|
THE COMPANIES
|
|
7
|
Structure of The Transactions And Operations After The Combination
|
|
9
|
Purchase Price
|
|
9
|
Recommendation of The Board of Directors And Opinion of Financial Advisors
|
|
10
|
The Stockholder Meeting
|
|
10
|
Interests of Directors And Executive Officers in The Combination
|
|
10
|
Material U.S. Federal Income Tax Consequences
|
|
11
|
Conditions to the Completion of The Combination
|
|
11
|
Termination of the Transaction Agreements
|
|
12
|
Expenses
|
|
12
|
"No Solicitation" Provisions
|
|
13
|
Accounting Treatment of the Combination
|
|
13
|
Regulatory Matters
|
|
13
|
Completion and Effectiveness of the Transactions
|
|
13
|
Bruker BioSpin Group Selected Combined Financial Data
|
|
13
|
Selected Unaudited Pro Forma Condensed Combined Financial Data
|
|
14
|
Comparative Per Share Information
|
|
16
|
Per Share Market Price Data and Dividend Information
|
|
17
|
RISK FACTORS
|
|
19
|
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
|
|
22
|
STOCKHOLDER MEETING
|
|
24
|
Date, Time and Place of Stockholder Meeting
|
|
24
|
Purpose
|
|
24
|
Record Date
|
|
25
|
Vote Required for Approval
|
|
25
|
Voting of Proxies; Quorum; Abstentions and Broker Non-Votes
|
|
26
|
Solicitation of Proxies
|
|
26
|
Recommendations of the Board of Directors
|
|
26
|
PROPOSALS 1 THROUGH 3: THE TRANSACTIONS AND THE ISSUANCE OF SHARES IN CONNECTION WITH THE COMBINATION
|
|
27
|
General
|
|
27
|
Proposals
|
|
27
|
Background of the Combination
|
|
27
|
Reasons for the Combination
|
|
32
|
Recommendation of the Board of Directors and Special Committee
|
|
34
|
Opinion of the Special Committee's Financial Advisor
|
|
35
|
Other Considerations
|
|
42
|
Sources of Funds
|
|
43
|
Interests of Certain Directors and Executive Officers in the Combination
|
|
44
|
Completion and Effectiveness of the Combination
|
|
45
|
Structure of the Transaction and Operations Post-Combination
|
|
45
|
Material United States Federal Income Tax Consequences of the Combination
|
|
46
|
Accounting Treatment of the Acquisition
|
|
46
|
Regulatory Matters
|
|
46
|
No Appraisal Rights
|
|
46
|
Foreign Regulatory Requirements
|
|
47
|
Restrictions on Sales of Shares Issued in Connection with the Combination
|
|
47
|
DESCRIPTION OF THE TRANSACTION AGREEMENTS
|
|
49
|
The Stock Purchase Agreement with Bruker BioSpin Inc.
|
|
49
|
General
|
|
49
|
Closing Date
|
|
49
|
Purchase Price-Payment
|
|
49
|
Escrow
|
|
49
|
Representations and Warranties
|
|
49
|
Covenants
|
|
52
|
Conditions to the Acquisition
|
|
54
|
Indemnification
|
|
56
|
Termination of the U.S. Stock Purchase Agreement
|
|
57
|
Expenses
|
|
58
|
Amendment and Waiver
|
|
58
|
The German Share Purchase Agreement with Bruker Physik GmbH and Techneon AG
|
|
58
|
General
|
|
58
|
Closing Date
|
|
58
|
Purchase Price-Payment
|
|
59
|
Escrow
|
|
59
|
Representations and Warranties
|
|
59
|
Covenants
|
|
61
|
Conditions to the Acquisition
|
|
64
|
Indemnification
|
|
66
|
Termination of the German Share Purchase Agreement
|
|
67
|
Expenses
|
|
67
|
Amendment and Waiver
|
|
68
|
The Swiss Merger Agreement with Bruker BioSpin Invest AG
|
|
68
|
General
|
|
68
|
Closing Date
|
|
68
|
Purchase Price-Payment
|
|
68
|
Dividend
|
|
68
|
Escrow
|
|
68
|
Representations and Warranties
|
|
69
|
Covenants
|
|
71
|
Conditions to the Acquisition
|
|
74
|
Indemnification
|
|
76
|
Termination of the Swiss Merger Agreement
|
|
78
|
Expenses
|
|
78
|
Amendment and Waiver
|
|
78
|
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
|
|
79
|
INFORMATION ABOUT THE BRUKER BIOSPIN GROUP
|
|
90
|
Business Overview
|
|
90
|
Bruker BioSpin Group Supplementary Financial Information
|
|
92
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
93
|
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
|
|
93
|
RESULTS OF OPERATIONS
|
|
94
|
LIQUIDITY AND CAPITAL RESOURCES
|
|
99
|
TRANSACTIONS WITH RELATED PARTIES
|
|
101
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
102
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
|
105
|
DESCRIPTION OF BRUKER BIOSCIENCES CAPITAL STOCK
|
|
110
|
PROPOSAL NO. 4: APPROVAL OF THE CHARTER AMENDMENT TO INCREASE OUR AUTHORIZED SHARES
|
|
111
|
PROPOSAL NO. 5: APPROVAL OF AN AMENDMENT TO THE STOCK OPTION PLAN TO INCREASE THE NUMBER OF AUTHORIZED SHARES
|
|
113
|
PROPOSAL NO. 6: APPROVAL OF THE CHARTER AMENDMENT TO CHANGE OUR NAME TO BRUKER CORPORATION
|
|
117
|
PROPOSAL NO. 7: THE ELECTION OF DIRECTORS
|
|
118
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
143
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
|
146
|
STOCKHOLDER COMMUNICATIONS
|
|
146
|
TIME FOR SUBMISSION OF STOCKHOLDER PROPOSALS
|
|
146
|
OTHER MATTERS
|
|
146
|
WHERE YOU CAN FIND MORE INFORMATION
|
|
147
|
VOTING PROXIES
|
|
148
|
INDEX TO FINANCIAL STATEMENTS
|
|
F-1
|
|
ANNEX A-1 U.S. stock purchase agreement
|
|
|
|
ANNEX A-2 German share purchase agreement
|
|
|
|
ANNEX A-3 Swiss merger agreement
|
|
|
|
ANNEX B Opinion of Bear, Stearns & Co. Inc.
|
|
|
|
ANNEX C Proposed Amendment to the Certificate of Incorporation of Bruker BioSciences Corporation
|
|
|
|
ANNEX D Bruker BioSciences Amended and Restated 2000 Stock Option Plan
|
|
|
|
ANNEX E Charter of the Compensation Committee of the Board of Directors
|
|
|
|
APPENDIX A Proxy Card
|
|
|
SUMMARY TERM SHEET
The following is a summary of the proposed transactions among Bruker BioSciences Corporation and Bruker BioSpin Inc., Bruker
BioSpin Invest AG, Bruker Physik GmbH and Techneon AG (which we sometimes refer to collectively as the Bruker BioSpin Group), in which Bruker BioSciences proposes to acquire all of the capital stock
of the companies comprising the Bruker BioSpin Group. The transactions contemplated will constitute a business combination of companies under common control as the five largest Bruker BioSciences
stockholders, Frank H. Laukien, President, Chief Executive Officer and Chairman of the board of directors of Bruker BioSciences, Dirk D. Laukien, Senior Vice President of Bruker BioSciences and
President of its subsidiary Bruker Optics Inc., Joerg Laukien, a director of Bruker BioSciences, Marc Laukien and Isolde Laukien-Kleiner, who are all related as family members, are also,
together with Robyn Laukien, the shareholders of each of the companies within the Bruker BioSpin Group. Bruker BioSciences is seeking stockholder approval of the transactions necessary to effect the
combination and the issuance of Bruker BioSciences common stock to the Bruker BioSpin Group Shareholders.
This term sheet is a summary and does not contain all of the information that may be important to you. You should carefully read this entire document, including
the appendices and the other documents to which this document refers you, for a more complete understanding of the matters relating to the transactions and the issuance of Bruker BioSciences common
stock. See "Where You Can Find More Information" beginning on page 147.
On
December 2, 2007 Bruker BioSciences entered into definitive agreements with each of the companies of the Bruker BioSpin Group, which we refer to collectively as the transaction
agreements, to acquire all of the equity of each of the Bruker BioSpin Group companies. In connection with the proposed transactions and business combination:
-
-
Bruker
BioSciences, under the terms of the U.S. stock purchase agreement, will acquire 100% of the common stock of Bruker BioSpin Inc., a Delaware corporation.
-
-
Bruker
BioSciences, under the terms of the German share purchase agreement, will acquire, directly and indirectly, 100% of the share capital of each of Bruker Physik GmbH, a
German limited liability company, and Techneon AG, a Swiss stock corporation.
-
-
Bruker
BioSciences, under the terms of the Swiss merger agreement, will acquire through various of its indirect subsidiaries via merger the equity interest of Bruker BioSpin
Invest AG, a corporation organized under the laws of Switzerland.
-
-
Upon
completion of the transactions, the companies of the Bruker BioSpin Group will become wholly owned subsidiaries of our company.
-
-
The
aggregate total purchase price payable by Bruker BioSciences to the holders of all of the equity of the Bruker BioSpin Group is payable in cash and stock.
-
-
This
consideration will be paid to the shareholders of the Bruker BioSpin Group approximately pro rata in accordance with their respective ownership of the shares of each of
the Bruker BioSpin Group companies.
-
-
There
will be a cash payment to the shareholders of the Bruker BioSpin Group of $388 million.
-
-
Bruker
BioSciences expects to issue 57,544,872 restricted shares of its common stock, which have a market value as of January 14, 2008 of $666.9 million, to
the shareholders of the Bruker BioSpin Group as the stock portion of the aggregate purchase price. The amount of 57,544,872 shares was based upon an agreed amount of $526 million of stock
consideration and the trailing ten trading day average closing price of our common stock ending two trading days prior to the signing of the transaction agreements of $9.14 per share which, combined
with the approximately
1
2
QUESTIONS AND ANSWERS ABOUT THE COMBINATION
-
Q:
-
Why is Bruker BioSciences proposing the transactions and the combination?
-
A:
-
We
are proposing to enter into the transactions and to combine with the companies of the Bruker BioSpin Group because we believe that the Bruker BioSpin Group business complements the
business of our three existing direct operating subsidiaries, Bruker AXS, Bruker Daltonics and Bruker Optics. We expect that adding the products of the Bruker BioSpin Group will increase our sales
opportunities and increase our presence in various markets, providing Bruker BioSciences with an extra competitive edge as we become a more broadly based company.
-
Q:
-
How much is Bruker BioSciences paying for the companies comprising the Bruker BioSpin Group?
-
A:
-
Bruker
BioSciences has agreed to pay the shareholders of the Bruker BioSpin Group $388 million in cash and 57,544,872 Bruker BioSciences shares, which as of January 14,
2008 have a market value of approximately $666.9 million, for all of the outstanding shares of the Bruker BioSpin Group companies. The amount of 57,544,872 shares was based upon an agreed
amount of $526 million of stock consideration and the trailing ten trading day average closing price of our common stock ending two trading days prior to the signing of the transaction
agreements of $9.14 per share which, combined with the approximately $388 million of cash consideration, reflected a total purchase price for the Bruker BioSpin Group of $914 million.
-
Q:
-
How will Bruker BioSciences pay for the shares of Bruker BioSpin Group?
-
A:
-
Bruker
BioSciences will purchase the Bruker BioSpin Group companies' stock using a combination of cash and newly issued shares of Bruker BioSciences common stock. Bruker BioSciences
will finance the cash component of the combination consideration from its available cash and with borrowings under new credit facilities to be entered into in connection with the combination. The new
credit facilities are expected to have an aggregate borrowing capacity of $380 million, which, together with available cash, will be available for the following purposes: (1) to finance
approximately $388 million of cash consideration to be paid to shareholders of the Bruker BioSpin Group companies; (2) to finance expenses of the combination; (3) to provide
working capital; and (4) for general corporate purposes, including the financing of future acquisitions, if any.
-
Q:
-
What will happen to my shares of Bruker BioSciences common stock in the combination?
-
A:
-
The
shares of Bruker BioSciences common stock that you hold will not change as a result of the combination. However, you should be aware that the issuance of shares of our common stock
to the shareholders of the Bruker BioSpin Group will cause a reduction in the relative percentage interests of current Bruker BioSciences stockholders in earnings, voting, liquidation value and book
value.
-
Q:
-
What am I voting on in connection with the combination and why?
-
A:
-
You
are voting to approve Bruker BioSciences' combination with the Bruker BioSpin Group companies as well as the issuance of the shares of our common stock which will be used a part of
the consideration for the acquisition.
To
consummate the combination, you are being asked to vote on the following items necessary to effectuate the transaction:
-
-
A
proposal to purchase Bruker BioSpin Inc. (Proposal 1);
-
-
A
proposal to purchase Bruker Physik and Techneon (Proposal 2);
-
-
A
proposal to approve Bruker BioSciences' acquisition, via merger, of the equity interests of Bruker BioSpin Invest AG and the related issuance of shares (Proposal 3). You
are asked to
3
vote
on the related issuance of shares to consummate this transaction because our common stock is quoted on the NASDAQ Global Select Market. NASDAQ Marketplace
Rule 4350(i)(1)(C)(i) requires stockholder approval of the issuance of common stock in connection with the acquisition because various of our officers and directors have greater than a
5% equity interest in each of the Bruker BioSpin Group companies, and the shares of our common stock issued in connection with the acquisition will result in a greater than 5% increase in Bruker
BioSciences outstanding common stock and voting power;
-
-
A
proposal to approve a charter amendment to increase the number of authorized shares that may be issued by the company from 200,000,000 to 260,000,000 (Proposal 4);
-
-
A
proposal to approve an amendment to the Bruker BioSciences amended and restated stock option plan to increase the number of shares of common stock for which options may be
granted from 8,000,000 to 10,000,000 (Proposal 5);
-
-
A
proposal to approve a charter amendment to change to our name from Bruker BioSciences Corporation to Bruker Corporation (Proposal 6); and
-
-
A
proposal to approve the election of one Class II Director to hold office until the 2008 Annual Meeting of Stockholders and one Class III Director to hold
office until the 2009 Annual Meeting of Stockholders (Proposal 7).
The board of directors recommends that you vote "FOR" each of the proposals set forth above.
-
Q:
-
What stockholder approvals are needed in connection with the combination?
-
A:
-
The
affirmative vote of the holders of a majority of the outstanding shares of Bruker BioSciences common stock present or represented by proxy and entitled to vote at the Special
Meeting is required to approve the transactions contemplated by the transaction agreements, including the issuance of shares of Bruker BioSciences common stock to be used as part of the consideration.
Each holder of common stock is entitled to one vote per share. As of the record date, Bruker BioSciences directors and executive officers and their affiliates owned approximately 38.1% of the
outstanding shares. The five largest stockholders of Bruker BioSciences, including Frank H. Laukien, are also five of the six shareholders of the companies of the Bruker BioSpin Group and are parties
to the transaction agreements. These six shareholders have covenanted in the transaction agreements that they will vote in favor of the acquisition. The shares held by these six shareholders represent
approximately 52% of the voting power of Bruker BioSciences capital stock entitled to vote at the stockholder meeting, and are sufficient, under our bylaws and NASDAQ rules, to approve the
transactions contemplated by the transaction agreements, including the share issuance.
The
terms of the transaction agreements also provide that the transactions contemplated by the stock purchase and merger agreements are subject to approval by holders of shares of Bruker BioSciences
common stock who are unaffiliated with the Bruker BioSpin Group Shareholders and who represent at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting. This
condition cannot be waived. As a result, if the proposed transactions are not approved by a majority of votes cast at the Special Meeting by holders of shares of Bruker BioSciences common stock who
are unaffiliated with the Bruker BioSpin Group Shareholders, the transactions will not be completed and the combination with the Bruker BioSpin Group will not occur.
-
Q:
-
What stockholder approvals are required to approve the charter amendments and the amendment to our stock option plan?
-
A:
-
The
affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock outstanding as of the record date is required to adopt and approve (i) the
amendment to the
4
certificate
of incorporation to increase the number of shares of common stock authorized for issuance from 200,000,000 to 260,000,000 and (ii) the amendment to the certificate of incorporation
to change our name to Bruker Corporation.
The
affirmative vote of a majority of our shares present or represented at the Special Meeting is required to approve the amendment to our stock option plan to increase the number of shares of common
stock for which options and restricted stock may be granted under the stock option plan from 8,000,000 to 10,000,000.
-
Q:
-
What stockholder approvals are required to elect the new directors to the board?
-
A:
-
Our
directors are elected by a plurality of the shares of common stock present in person or represented by proxy at the Special Meeting and entitled to vote. This means that the two
candidates for election as directors at the Special Meeting who receive the highest number of affirmative votes will be elected.
-
Q:
-
Has the board of directors appointed a special committee in connection with the combination?
-
A:
-
Yes,
the board of directors of Bruker BioSciences appointed a special committee consisting of independent directors unaffiliated with the Bruker BioSpin Group Shareholders for the
purpose of considering the advisability of the combination, negotiating its terms on behalf of Bruker BioSciences and recommending to the board of directors of Bruker BioSciences whether the
combination was in the best interests of the stockholders of Bruker BioSciences who are not affiliated with the Bruker BioSpin Group Shareholders. The terms of the transaction agreements require that
the transaction itself, rather than just the share issuance as required under NASDAQ Marketplace Rule 4350(i)(l)(C)(i), be approved by the holders of shares of Bruker BioSciences common stock
who are unaffiliated with the Bruker BioSpin Group Shareholders and who represent at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting.
-
Q:
-
Will the shares of common stock to be issued as part of the consideration for the purchase of the shares of the Bruker BioSpin Group companies be
registered?
-
A:
-
No,
the shares of Bruker BioSciences common stock to be issued in connection with the transactions will not be registered under the Securities Act of 1933 and thus will not be freely
transferable under the Securities Act of 1933. Bruker BioSpin Group Shareholders receiving shares of Bruker BioSciences common stock in the transactions may sell these shares pursuant to any
applicable exemption under the Securities Act except that, pursuant to the terms of the transaction agreements, they are prohibited from selling the shares for a period of one year after the closing
date of the transactions, except for certain permitted transfers of stock from one Bruker BioSpin Group Shareholder to another.
-
Q:
-
What are the material U.S. federal income tax consequences of the transactions?
-
A:
-
The
transactions are not expected to result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders.
-
Q:
-
When do you expect the transactions to be completed?
-
A:
-
We
are working to complete the combination as quickly as possible. We expect to complete the transactions during the first quarter of 2008.
-
Q:
-
Do I have any dissenters' rights?
-
A:
-
No.
There are no rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon pursuant to this proxy statement.
5
-
Q:
-
What do I need to do now?
-
A:
-
After
carefully reading and considering the information contained in this proxy statement, please respond by completing, signing and dating your proxy card or voting instructions and
returning it in the enclosed postage paid envelope, or by submitting your proxy or voting instructions by telephone or through the internet, as soon as possible so that your shares may be represented
at the stockholder meeting.
-
Q:
-
What if I don't vote?
-
A:
-
If
you fail to respond, it will have the same effect as a vote against the two proposals to amend the certificate of incorporation, although it will have no effect on the other
proposals.
If
you respond and do not indicate how you want to vote, your proxy will be counted as a vote in favor of all of the proposals.
If
you respond and abstain from voting, your proxy will have the same effect as a vote against all of the proposals, other than the election of directors.
-
Q:
-
Can I change my vote after I have delivered my proxy?
-
A:
-
Yes.
You can change your vote at any time before your proxy is voted at the stockholder meeting. You can do this in one of three ways. You can revoke your proxy, submit a new proxy or,
if you are a holder of record, you can attend the Special Meeting and vote in person. If you choose to revoke your proxy or submit a new proxy, you must submit your notice of revocation or your new
proxy to the secretary of Bruker BioSciences before the Special Meeting. If your shares are held in an account at a brokerage firm or bank, you should contact your brokerage firm or bank to change
your vote. Also, if you submit your proxy electronically through the internet or by telephone, you can change your vote by submitting a proxy at a later date, using the same procedures, in which case
your later submitted proxy will be recorded and your earlier proxy revoked.
-
Q:
-
Who can help answer my questions?
-
A:
-
If
you have any questions about the proposals or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions,
you should contact:
6
TRANSACTION SUMMARY
This summary highlights selected information about the transactions and the related issuance of shares and may not contain all of the information that is
important to you. You should carefully read this entire proxy statement and the other documents we refer to, in their entirety, for a more complete understanding of the transactions. In particular,
you should read the documents attached to this proxy statement, including the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement, which are attached as
Annexes A-1 through A-3. In addition, this proxy statement incorporates important business and financial information about Bruker BioSciences from other documents that may not
be included in or delivered with this proxy statement. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in the section
entitled "Where You Can Find More Information" that begins on page 147 of this proxy statement.
THE COMPANIES
Bruker BioSciences Corporation
40 Manning Road
Billerica, Massachusetts 01821
(978) 663-3660
http://www.bruker-biosciences.com
Bruker
BioSciences Corporation designs, manufactures, services and markets analytical and life science systems and associated products to address the evolving needs of our customers in
life science research, pharmaceutical, biotechnology and molecular diagnostics research, as well as in chemicals and materials analysis in various industries in government applications. We are the
publicly traded parent of our three main operating subsidiaries: Bruker AXS Inc., Bruker Daltonics Inc. and Bruker Optics Inc.
Bruker AXS
Bruker AXS is a leading developer and provider of life science and advanced materials research tools based on X-ray technology tools for advanced
X-ray and spark-OES instrumentation used in non-destructive molecular materials and elemental analysis in academic, research and industrial applications.
Bruker Daltonics
Bruker Daltonics is a leading developer and provider of innovative life science tools based on mass spectrometry and also develops and provides a broad range of
field analytical systems for chemical, biological, radiological and nuclear (CBRN) detection.
Bruker Optics
Bruker Optics is a leading developer and provider of research, analytical and process analysis instruments and solutions based on infrared and Raman molecular
spectroscopy technology.
The
companies of the Bruker BioSpin Group develop, manufacture and distribute life science analytical instrumentation and solutions based on magnetic resonance core technology. The
companies' products include tools developed for nuclear magnetic resonance, or NMR, electron paramagnetic resonance, or EPR, magnetic resonance imaging, or MRI. The Bruker BioSpin Group also designs
and develops superconducting wire materials that can be used in a variety of applications including power
7
cables,
motors, generators and superconducting magnets. Products and solutions developed by the Bruker BioSpin Group are utilized in a wide variety of applications, including:
-
-
life
science applications including the structure and function determination of large biomolecules such as proteins and membrane proteins;
-
-
pharmaceutical
and biotech research and manufacturing to identify new compounds, observe the interaction of drugs with a target protein, study the toxicology of drug
candidates and identify properties of the final product;
-
-
metabolic
profiling and fingerprinting, where patterns can be evaluated using spectroscopic techniques combined with multivariate statistical methods to gain insight into
the response of a biological system to perturbations in a time-related manner;
-
-
non-invasive
magnetic resonance imaging aimed at detecting the origins of disease related pathways and targets by combining the use of molecular biomarkers;
-
-
structure
determination and elucidation for application in organic and inorganic synthesis;
-
-
materials
research for the design and characterization of materials such as polymers, catalysts, fuel cell materials, etc.;
-
-
food,
beverage and agricultural analysis for the monitoring of the production and distribution cycle of products to ensure their origin, authenticity, safety and
reliability; and
-
-
superconducting
magnets for use in magnetic resonance, imaging and physics experiments.
Magnetic
resonance is the core technology of the Bruker BioSpin Group. Magnetic resonance is a natural phenomenom occurring when a molecule, placed in a magnetic field, gives off a radio
frequency signature. The signature is characteristic of the particular molecule and this leads to a multitude of precise chemical and structural information. A typical magnetic resonance instrument
includes a radio frequency source and transmitter, one or more very sensitive detectors, a magnet sized for the particular application and operating and analysis software.
When
magnetic resonance is used to analyze the resonance effect of various atoms, it is known as NMR. NMR is a widely used analytical technique by academia, pharmaceutical and
biotechnology companies and other industrial users in life sciences and materials science research.
When
an image is reconstructed by localizing the origin of the NMR signal, this is known as MRI. The Bruker BioSpin Group's MRI products focus on pre-clinical applications,
mainly research on small animals for disease studies and drug discovery by pharmaceutical companies and academia.
When
the magnetic resonance signals arise from the electrons contained in a molecule, this is known as EPR. EPR is used mainly in academia for research purposes. All three magnetic
resonance techniques employ strong magnetic fields which are typically reached through the use of superconducting magnets. The Bruker BioSpin Group is a leader in superconducting magnet technology and
also owns a developer and manufacturer of the specialty superconducting wires needed for magnetic resonance magnets.
The
Bruker BioSpin Group's magnetic resonance product line is complimented with a number of accessories. These accessories include a wide array of sample handling devices for automation
and high throughput applications, as well as advanced data management and analysis software. These accessories permit the Bruker BioSpin Group to tailor its products for specific customers.
In
addition to these magnetic resonance instruments, the Bruker BioSpin Group also manufactures bench-top instruments for process control, quality assurance and quality
control applications. The Bruker BioSpin Group typically sells these bench-top instruments to the pharmaceutical industry, the food industry and other industrial customers.
8
The
Bruker BioSpin Group includes research and manufacturing facilities in Germany, Switzerland, France and the U.S., as well as numerous sales, applications and service offices
throughout the U.S., Europe, Asia and South America. The Bruker BioSpin Group employs approximately 1,850 people throughout the world.
Bruker BioSpin Inc.
(see page 91)
15 Fortune Drive
Billerica, Massachusetts 01821
(978) 439-9899
http://www.bruker.com
Bruker
BioSpin Inc. was incorporated in Delaware in June 2000, originally as Bruker BioSpec Inc., later changing its name to Bruker BioSpin Inc. Bruker
BioSpin Inc. is a privately held company, wholly owned by the Bruker BioSpin Group Shareholders. Bruker BioSpin Inc. is the holding company for the U.S. operations of the Bruker BioSpin
Group.
Bruker
Physik GmbH was incorporated in 1960 in Germany. It is a holding company that includes the German Bruker BioSpin Group companies as well as European Advanced Superconductors
GmbH & Co. KG, or EAS, and European High Temperature Superconductors GmbH & Co. KG, or EHTS. Bruker Physik is a privately held company, ultimately wholly owned by the Bruker BioSpin
Group Shareholders.
Bruker BioSpin Invest AG
(see page 91)
Aegeristrasse 52
Postfach 351
6301 Zug Switzerland
http://www.bruker.com
Bruker
BioSpin Invest AG was incorporated in Switzerland in 1986. It is a holding company that includes the Swiss Bruker BioSpin Group companies. Bruker BioSpin Invest AG is a privately
held company, wholly owned by the Bruker BioSpin Group Shareholders.
STRUCTURE OF THE TRANSACTIONS AND OPERATIONS AFTER THE COMBINATION
Bruker BioSciences is acquiring all of the outstanding stock of the companies comprising the Bruker BioSpin Group in three transactions through which Bruker
BioSciences will: (1) acquire all of the common stock of Bruker BioSpin Inc., (2) acquire all of the share capital of Bruker Physik and Techneon, and (3) acquire the equity
of Bruker BioSpin Invest AG through a reverse triangular merger. Following the completion of these transactions, we intend to operate the Bruker BioSpin Group companies as wholly owned subsidiaries
alongside Bruker AXS, Bruker Daltonics and Bruker Optics.
PURCHASE PRICE
(see pages 49, 59 and 68)
The aggregate total purchase price payable by Bruker BioSciences for the stock of the companies of the Bruker BioSpin Group in the three transactions is
$388 million payable in cash and 57,544,872 shares of Bruker BioSciences stock which, as of January 14, 2008, have a market value of approximately $666.9 million. The amount of
57,544,872 shares was based upon an agreed amount of $526 million of stock consideration and the trailing ten trading day average closing price of our common stock ending two trading days prior to the
signing of the transaction agreements of $9.14 per share which, combined
9
with
the approximately $388 million of cash consideration, reflected a total purchase price for the Bruker BioSpin Group of $914 million.
This
consideration will be paid to the shareholders of the Bruker BioSpin Group approximately pro rata in accordance with their respective ownership of the shares of each of the Bruker
BioSpin Group companies. As described in more detail later in this proxy statement, the transaction agreements prohibit the sale of the Bruker BioSciences shares issued as part of the combined
purchase price for a period of one year after the closing date, except for various permitted transfers of stock from one Bruker BioSpin Group Shareholder to another, under cash-share
exchange agreements entered into among the Bruker BioSpin Group Shareholders in order to allow them to achieve their desired individual cash and share percentage elections from the aggregate proceeds
of the three transactions. Bruker BioSciences will finance the cash component of the combination consideration from its available cash and with borrowings under new credit facilities to be entered
into in connection with the combination. The new credit facilities are more fully described in this proxy statement. See "Source of Funds" on page 43.
RECOMMENDATION OF THE BOARD OF DIRECTORS AND OPINION OF FINANCIAL ADVISORS
(see pages 26 and 35)
Recommendation of Bruker BioSciences' Board of Directors.
Upon recommendation of the independent special committee of the
board of directors, and after careful consideration, the board of directors of Bruker BioSciences unanimously determined that each of the stock purchase agreements and the merger agreement and the
transactions contemplated by these transaction agreements, including the issuance of shares, are advisable and voted to approve each of the U.S. stock purchase agreement, the
German share purchase agreement and the Swiss merger agreement and recommended that the stockholders vote FOR each of the transactions and the issuance of shares of Bruker BioSciences common stock in
connection with the combination.
Opinion of the Special Committee's Financial Advisor.
Bear, Stearns & Co. Inc. has rendered a written opinion
to the special committee of the board of directors of Bruker BioSciences that, as of December 2, 2007, and based upon and subject to the assumptions, qualifications and limitations set forth
therein, the aggregate consideration to be issued in the transactions was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences
shares who also own shares of the Bruker BioSpin Group companies. The full text of the written opinion, dated December 2, 2007, is attached as Annex B. We encourage you to read the opinion
carefully and in its entirety to understand the procedures followed, assumptions made, matters considered and limitations on the review undertaken by Bear Stearns in providing its opinion.
THE STOCKHOLDER MEETING
(see page 24)
The Bruker BioSciences Special Meeting will be held at the offices of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts on February 25,
2008, starting at 9:00 a.m., local time.
INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE COMBINATION
(see page 44)
Some of the directors and executive officers of Bruker BioSciences may have interests in the acquisition that are different from, or are in addition to, the
interests of Bruker BioSciences' stockholders, including financial interests as shareholders of the companies of the Bruker BioSpin Group. The Bruker BioSpin Group Shareholders control 100% of the
shares of the Bruker BioSpin Group being acquired by Bruker BioSciences. The five Laukien family members who comprise the largest shareholders of the companies within the Bruker BioSpin Group are also
the five largest Bruker BioSciences stockholders. In addition, while Frank Laukien serves as Chairman, CEO and President of Bruker BioSciences, Dirk Laukien serves as the Senior Vice President of
Bruker BioSciences and
10
Joerg Laukien
serves as a Director of Bruker BioSciences, Frank Laukien and Dirk Laukien also serve under an informal arrangement as Co-CEOs of the Bruker BioSpin Group, and Joerg
Laukien also serves as the European COO of the Bruker BioSpin Group.
The
table below summarizes the consideration to be received by the three Laukien family members who are also Bruker BioSciences directors and/or officers and by the five Laukien family
members as a whole.
|
|
Cash
|
|
Number of Shares
of Bruker
BioSciences
Common Stock
|
|
Value of
Shares(1)
|
|
Total
Consideration(1)
|
Frank H. Laukien, Chairman, CEO and President
|
|
$
|
69,672,194
|
|
10,034,387
|
|
$
|
91,714,298
|
|
$
|
161,386,491
|
Dirk D. Laukien, Senior Vice President and Director Nominee
|
|
|
72,890,637
|
|
10,789,664
|
|
|
98,617,524
|
|
|
171,508,161
|
Joerg C. Laukien, Director
|
|
|
72,890,637
|
|
10,789,664
|
|
|
98,617,524
|
|
|
171,508,161
|
Laukien family member directors and executive officers as a group
|
|
|
215,453,467
|
|
31,613,714
|
|
|
288,949,347
|
|
|
504,402,814
|
Laukien family members as a group
|
|
$
|
384,821,426
|
|
56,789,596
|
|
$
|
519,056,904
|
|
$
|
903,878,330
|
-
(1)
-
The
value of the shares received as part of the total consideration is calculated based on the trailing ten trading day average closing price of our common stock ending two trading
days prior the signing of the agreements, or $9.14 per share. Under cash-stock exchange agreements entered into amongst the Bruker BioSpin Group Shareholders, the Laukien family members have agreed to
enter into purchase and sale transactions amongst themselves to allow each to achieve his or her desired proportion of cash and Bruker BioSciences common stock following the closing of the proposed
combination. The allocations of cash and stock reflected above will change upon execution of these purchase and sale transactions. See "Cash-Stock Exchange Agreements" beginning on page 47 of this
proxy statement.
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
(see page 46)
The transactions are not expected to result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders, excluding the holders of
Bruker BioSciences shares who also own shares of the Bruker BioSpin Group companies.
CONDITIONS TO THE COMPLETION OF THE COMBINATION
(see pages 54, 64, and 74)
Under the terms of each of the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement, the completion of the
combination is subject to:
-
-
the
approval of the transactions contemplated by the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement by the holders of
shares of Bruker BioSciences common stock who are unaffiliated with the Bruker BioSpin Group Shareholders who represent at least a majority of the total votes cast by these unaffiliated holders at the
Special Meeting; and
-
-
the
approval of the transactions contemplated by the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement by the holders of
Bruker BioSciences common stock who represent at least a majority of the total votes cast at the Special Meeting. This approval is guaranteed since the Bruker BioSpin Group Shareholders, who own in
the aggregate approximately 52% of the outstanding Bruker BioSciences common stock as of January 14, 2008, have agreed in each of the transaction agreements to vote to approve all of
these transactions.
11
The
completion of the transactions contemplated by the transaction agreements is also subject to the satisfaction or waiver of other conditions, including, among others, the expiration
or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The required waiting period under the Hart-Scott-Rodino
Act expired on January 14, 2008. See "Conditions to the Acquisition" on pages 54, 64, and 74.
TERMINATION OF THE TRANSACTION AGREEMENTS
(see pages 57, 67 and 78)
The transaction agreements may be terminated at any time prior to closing by the mutual written consent of Bruker BioSciences and the sellers. In addition, either
Bruker BioSciences or the applicable sellers may terminate the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement at any time prior to closing if:
-
-
any
governmental entity shall have issued an order permanently restraining, enjoining, or otherwise prohibiting the completion of the transactions and such order is final
and nonappealable;
-
-
we
do not receive stockholder approval for the transactions;
-
-
either
the U.S. stock purchase agreement, the German share purchase agreement or the Swiss merger agreement is terminated; or
-
-
the
closing has not occurred by June 30, 2008, unless a breach of an agreement by the party seeking termination is the cause of or results in the failure of the
acquisition to be completed.
Bruker
BioSciences may terminate each of the agreements at any time prior to closing if the sellers or Bruker BioSpin Inc., Bruker Invest, Techneon or Bruker Physik breach any of
their respective covenants, representations and warranties, or other agreements contained in the agreements and the breach would give rise to the failure of a condition to Bruker BioSciences'
obligation to complete the acquisition and the breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of the breach has been delivered to the
breaching party.
The
applicable sellers may terminate the agreements at any time prior to closing if Bruker BioSciences breaches any of its covenants, representations and warranties, or other agreements
contained in the agreements and the breach would give rise to the failure of a condition to the sellers' obligation to complete the acquisition and the breach is not curable or, if curable, is not
cured or waived within 20 calendar days after written notice of the breach has been delivered to Bruker BioSciences.
EXPENSES
(see pages 58, 67 and 78)
The transaction agreements provide generally that regardless of whether the combination is consummated, all fees and expenses incurred by the parties will be paid
by the party incurring such fees and expenses. With respect to fees due in connection with filings made pursuant to the Hart-Scott-Rodino Act, Bruker BioSciences shall be responsible for
all fees relating to its own filing and the Bruker BioSpin Group shall be responsible for all fees relating to filings made by it or any of the selling shareholders. In addition, Bruker BioSciences
shall be responsible for the payment of all transfer, documentary, sales, use, registration and other such taxes incurred in connection with the transaction, including all applicable German and other
real estate transfer or gains taxes and stock transfer taxes, which may exceed, in the aggregate, $3.6 million.
12
"NO SOLICITATION" PROVISIONS
(see pages 53, 63, and 73)
The Bruker BioSpin Group companies have agreed to, and to cause their subsidiaries to, and the selling shareholders have agreed to, and to cause the companies of
the Bruker BioSpin Group and their subsidiaries to, cause each of its officers, managers, employees, subsidiaries, affiliates, agents and other representatives to, as of the execution of the
transaction agreements, cease any existing discussions or negotiations with respect to any inquiry or proposal regarding the sale, consolidation, merger or other similar transaction regarding the
Bruker BioSpin Group and not to initiate any such discussions or negotiations (other than with Bruker BioSciences) concerning any such inquiry or
proposal. The selling shareholders and the companies of the Bruker BioSpin Group are obligated to immediately disclose to Bruker BioSciences any such third party inquiries or proposals, including the
terms thereof.
ACCOUNTING TREATMENT OF THE COMBINATION
(see page 46)
The combination represents a business combination of companies under common control due to the majority ownership of all companies by the Bruker BioSpin Group
Shareholders as an affiliated stockholder group. As a result, the transactions will be accounted for at historical carrying value.
REGULATORY MATTERS
(see page 46)
Under U.S. antitrust laws, the companies may not complete the Bruker BioSpin Inc. transaction until Bruker BioSciences has notified the Antitrust Division
of the Department of Justice and the Federal Trade Commission of the transaction and filed the necessary report forms, and until a required waiting period has ended. Bruker BioSciences filed the
required information and materials to notify the Department of Justice and the Federal Trade Commission of the transactions on December 14, 2007 and the required waiting period expired on
January 14, 2008. In addition, Bruker BioSciences must obtain any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules of the NASDAQ and make
such filings and approvals as are required to be made or obtained under the securities or "Blue Sky" laws of various states in connection with the issuance of Bruker BioSciences common stock.
We
cannot assure you that we will obtain all regulatory approvals to complete the acquisition or that the granting of these approvals will not involve the imposition of conditions on the
completion of the acquisition or require changes to the terms of the acquisition. These conditions or changes could result in the conditions to the acquisition not being satisfied.
COMPLETION AND EFFECTIVENESS OF THE TRANSACTIONS
(see page 45)
We will complete the transactions when all of the conditions to completion of each of the transaction agreements are satisfied or waived in accordance with the
relevant agreement. We expect to complete the transactions and the combination of businesses during the first calendar quarter of 2008.
BRUKER BIOSPIN GROUP SELECTED COMBINED FINANCIAL DATA
The following selected combined financial information of the Bruker BioSpin Group is provided to aid your analysis of the financial aspects of the transactions.
We derived this information from unaudited combined financial statements for the nine months ended September 30, 2007 and 2006, and from audited combined financial statements for the years
ended December 31, 2006, 2005, 2004, 2003 and 2002. This information is only a summary, and you should read it in conjunction with the Bruker BioSpin Group's historical combined financial
statements and the related notes and Management's
13
Discussion
and Analysis of Financial Conditions and Results of Operations contained in this proxy statement. See "Where You Can Find More Information" on page 147.
|
|
Nine Months Ended
September 30,
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
|
(in thousands)
|
Condensed Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
351,893
|
|
$
|
313,487
|
|
$
|
446,954
|
|
$
|
445,235
|
|
$
|
487,329
|
|
$
|
390,742
|
|
$
|
296,408
|
Cost of revenue
|
|
|
210,026
|
|
|
180,989
|
|
|
246,309
|
|
|
253,019
|
|
|
288,164
|
|
|
212,365
|
|
|
150,790
|
Gross profit
|
|
|
141,867
|
|
|
132,498
|
|
|
200,645
|
|
|
192,216
|
|
|
199,165
|
|
|
178,377
|
|
|
145,618
|
Operating expenses
|
|
|
93,012
|
|
|
89,213
|
|
|
123,914
|
|
|
98,397
|
|
|
157,014
|
|
|
118,153
|
|
|
93,587
|
Operating income
|
|
|
48,855
|
|
|
43,285
|
|
|
76,731
|
|
|
93,819
|
|
|
42,151
|
|
|
60,224
|
|
|
52,031
|
Net income
|
|
$
|
43,528
|
|
$
|
30,467
|
|
$
|
56,574
|
|
$
|
75,226
|
|
$
|
23,656
|
|
$
|
39,985
|
|
$
|
35,330
|
During 2004, the Bruker BioSpin Group recorded a pre-tax charge against operating income of $28.5 million to cover litigation expenses and probable liabilities associated with alleged patent
infringement litigation by a competitor against the Bruker BioSpin Group. The related accrual was included in long-term other liabilities on the condensed consolidated balance sheet as of December 31,
2004. During 2005, a favorable settlement agreement was signed for various magnet patent litigation cases, which released the Bruker BioSpin Group from any infringement liabilities and, as a result, a
pre-tax amount of $25.8 million of this liability was reversed, and this contributed positively to operating income in 2005.
|
|
|
|
As of December 31,
|
|
|
As of September 30, 2007
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
|
(in thousands)
|
Condensed Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
268,819
|
|
$
|
259,094
|
|
$
|
248,782
|
|
$
|
237,758
|
|
$
|
181,489
|
|
$
|
195,598
|
Working capital
|
|
|
350,331
|
|
|
328,184
|
|
|
281,057
|
|
|
340,675
|
|
|
307,420
|
|
|
232,761
|
Total assets
|
|
|
792,292
|
|
|
762,669
|
|
|
727,893
|
|
|
797,616
|
|
|
739,881
|
|
|
612,219
|
Total debt
|
|
|
9,674
|
|
|
12,802
|
|
|
23,306
|
|
|
42,184
|
|
|
45,037
|
|
|
8,864
|
Other long-term liabilities
|
|
|
51,450
|
|
|
45,485
|
|
|
37,513
|
|
|
91,098
|
|
|
61,156
|
|
|
44,116
|
Total shareholders' equity
|
|
$
|
410,761
|
|
$
|
385,735
|
|
$
|
335,160
|
|
$
|
339,166
|
|
$
|
321,531
|
|
$
|
269,730
|
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA
We are providing the following selected Unaudited Pro Forma Condensed Combined Financial Data to provide you with a better understanding of what the results of
operations and financial position of Bruker BioSciences might have been had the combination been completed at an earlier date. The Unaudited Pro Forma Condensed Combined Statements of Operations data
for the nine months ended September 30, 2007 and 2006 and for the years ended December 31, 2006, 2005 and 2004 give effect to the combination as if it had been completed on
January 1, 2004. The Unaudited Pro Forma Condensed Combined Balance Sheet data as of September 30, 2007 give effect to the combination as if it had been completed on that date.
14
We
have prepared the selected Unaudited Pro Forma Condensed Combined Financial Data based on available information using assumptions that management believes are reasonable. For details
about the assumptions used, see footnotes 3 and 4 to the unaudited pro forma condensed combined financial statements on pages 87 and 88. The selected Unaudited Pro Forma Condensed Combined
Financial Data are being provided for informational purposes only. They do not purport to represent Bruker BioSciences' actual financial position or results of operations had the combination occurred
on the dates specified nor do they project Bruker BioSciences' results of operations or financial position for any future period or date.
The
selected Unaudited Pro Forma Condensed Combined Statements of Operations data do not reflect any adjustments for nonrecurring items or anticipated operating synergies resulting from
the combination. In addition, pro forma adjustments are based on certain assumptions and other information that is subject to change as additional information becomes available. Accordingly, the
adjustments included in Bruker BioSciences' financial statements published after the completion of the combination will vary from the adjustments included in the unaudited pro forma condensed combined
financial data included in this proxy statement.
The
selected Unaudited Pro Forma Condensed Combined Data does not include any adjustments for liabilities resulting from integration planning, as management of Bruker BioSciences and the
Bruker BioSpin Group are in the process of making these assessments, and estimates of these costs, if any, are not currently known.
The
selected Unaudited Pro Forma Condensed Combined Financial Data should be read in conjunction with the Bruker BioSciences and the Bruker BioSpin Group audited and unaudited historical
financial statements and related notes as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations." See "Where You Can Find More Information" on page 147.
|
|
Nine Months Ended
September 30,
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
(in thousands, except per share data)
|
Unaudited Pro Forma Condensed Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
689,377
|
|
$
|
589,462
|
|
$
|
850,476
|
|
$
|
787,846
|
|
$
|
811,823
|
Cost of revenue
|
|
|
381,223
|
|
|
320,859
|
|
|
450,853
|
|
|
429,841
|
|
|
461,624
|
Gross profit
|
|
|
308,154
|
|
|
268,603
|
|
|
399,623
|
|
|
358,005
|
|
|
350,199
|
Operating expenses
|
|
|
233,715
|
|
|
210,651
|
|
|
292,586
|
|
|
241,954
|
|
|
301,274
|
Operating income
|
|
|
74,439
|
|
|
57,952
|
|
|
107,037
|
|
|
116,051
|
|
|
48,925
|
Net income
|
|
|
47,054
|
|
|
25,428
|
|
|
56,452
|
|
|
66,485
|
|
|
1,547
|
Net income per sharebasic and diluted
|
|
$
|
0.29
|
|
$
|
0.16
|
|
$
|
0.35
|
|
$
|
0.42
|
|
$
|
0.01
|
During 2004, the Bruker BioSpin Group recorded a pre-tax charge against operating income of $28.5 million to cover litigation expenses and probable liabilities associated with alleged patent
infringement litigation by a competitor against the Bruker BioSpin Group. The related accrual was included in long-term other liabilities on the condensed consolidated balance sheet as of December 31,
2004. During 2005, a favorable settlement agreement was signed for various magnet patent litigation cases, which released the Bruker BioSpin Group from any infringement liabilities and, as a result, a
15
pre-tax
amount of $25.8 million of this liability was reversed, and this contributed positively to operating income in 2005.
|
|
As of
September 30, 2007
|
|
|
(in thousands)
|
Unaudited Pro Forma Condensed Consolidated Balance Sheet:
|
|
|
|
Cash and cash equivalents
|
|
$
|
195,623
|
Working capital
|
|
|
369,400
|
Total assets
|
|
|
1,162,261
|
Total debt
|
|
|
400,051
|
Other long-term liabilities
|
|
|
82,771
|
Total stockholders' equity
|
|
|
184,070
|
COMPARATIVE PER SHARE INFORMATION
The following table sets forth selected historical per share information of Bruker BioSciences and the Bruker BioSpin Group and unaudited pro forma consolidated
per share information as of the nine months ended September 30, 2007 and 2006 and for the years ended December 31, 2006, 2005 and 2004, giving effect to the transactions described in the
transaction agreements as if they had occurred on January 1, 2004.
The
historical book value per share is computed by dividing stockholders' equity by the actual common stock outstanding. The pro forma per share net income (loss) from continuing
operations is computed by dividing the pro forma net income (loss) from continuing operations by the pro forma weighted average number of shares outstanding, assuming Bruker BioSciences had acquired
the Bruker BioSpin Group at the beginning of the earliest period presented. The pro forma combined book value per share is computed by dividing total pro forma stockholders' equity by the pro forma
number of common shares outstanding, assuming the combination had occurred on that date.
The
following information should be read in conjunction with the separate audited historical consolidated financial statements and related notes of Bruker BioSciences and the Bruker
BioSpin Group, the unaudited pro forma condensed combined financial information and related notes of Bruker BioSciences and the selected historical and selected unaudited pro forma financial data,
either included or incorporated by reference into this proxy statement. See "Where You Can Find More Information" beginning on page 147 and "Bruker BioSpin Management's Discussion and Analysis
of Financial Condition and Results of Operations" beginning on page 93. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if the combination of the Bruker BioSpin Group had been consummated as of the beginning of the earliest period presented, nor is it necessarily
indicative of the future operating results or financial position of the combined company.
|
|
Nine Months Ended
September 30,
|
|
Year Ended December 31,
|
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
HISTORICAL BRUKER BIOSCIENCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Net Income (loss) from continuing operations per share
|
|
$
|
0.17
|
|
$
|
0.09
|
|
$
|
0.18
|
|
$
|
0.10
|
|
$
|
(0.04
|
)
|
$
|
(0.17
|
)
|
Diluted Net Income (loss) from continuing operations per share
|
|
$
|
0.16
|
|
$
|
0.09
|
|
$
|
0.18
|
|
$
|
0.10
|
|
$
|
(0.04
|
)
|
$
|
(0.17
|
)
|
Book value per share at the end of the period
|
|
$
|
2.24
|
|
$
|
1.73
|
|
$
|
1.87
|
|
$
|
2.27
|
|
$
|
2.36
|
|
$
|
2.32
|
|
16
|
|
Nine Months Ended
September 30,
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
HISTORICAL BRUKER BIOSPIN GROUP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value at the end of the period* (in thousands)
|
|
$
|
410,761
|
|
$
|
355,442
|
|
$
|
385,735
|
|
$
|
335,160
|
|
$
|
339,166
|
|
$
|
321,531
|
-
*
-
Aggregate
book value of the combined Bruker BioSpin Group has been presented as the structure of the equity capitalization of certain Bruker BioSpin Group companies makes per share
calculations impracticable.
|
|
Nine Months Ended
September 30,
|
|
Year Ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
UNAUDITED BRUKER BIOSCIENCES PRO FORMA COMBINED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Net Income from continuing operations per shareBasic and Diluted
|
|
$
|
0.29
|
|
$
|
0.16
|
|
$
|
0.35
|
|
$
|
0.42
|
|
$
|
0.01
|
Pro forma book value per share at the end of the period
|
|
$
|
1.12
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE MARKET PRICE DATA AND DIVIDEND INFORMATION
Bruker BioSciences common stock has been traded on the NASDAQ Global Select Market since August 4, 2000. There was no public market for Bruker BioSciences
common stock prior to that date. The Bruker BioSpin Group companies' common stock is not, and has never been, traded publicly. The following table sets forth, for the periods indicated, the high and
low per share prices for Bruker BioSciences common stock as reported on the NASDAQ Global Select Market. The prices reflect inter-dealer prices and do not include retail markups, markdowns or
commissions.
|
|
Bruker BioSciences Common Stock Price
|
|
|
For the Fiscal Year
Ended December 31,
2007
|
|
For the Fiscal Year
Ended December 31,
2006
|
|
For the Fiscal Year
Ended December 31,
2005
|
|
|
High
|
|
Low
|
|
High
|
|
Low
|
|
High
|
|
Low
|
First Quarter
|
|
$
|
10.90
|
|
$
|
7.07
|
|
$
|
5.45
|
|
$
|
4.24
|
|
$
|
4.14
|
|
$
|
3.16
|
Second Quarter
|
|
$
|
11.56
|
|
$
|
8.08
|
|
$
|
6.26
|
|
$
|
4.52
|
|
$
|
4.49
|
|
$
|
3.07
|
Third Quarter
|
|
$
|
9.29
|
|
$
|
6.30
|
|
$
|
7.33
|
|
$
|
5.19
|
|
$
|
4.69
|
|
$
|
3.86
|
Fourth Quarter
|
|
$
|
13.49
|
|
$
|
8.42
|
|
$
|
8.47
|
|
$
|
6.70
|
|
$
|
5.60
|
|
$
|
3.97
|
Recent Share Price
On November 30, 2007, the last trading day before the combination was announced, the closing price of Bruker BioSciences common stock as reported on the
NASDAQ Global Select Market was $9.29 per share. The closing sale price of Bruker BioSciences common stock as reported on the NASDAQ Global Select Market on January 14, 2008 was $11.59 per
share. As of that date there were 118 holders of record of Bruker BioSciences common stock based on information provided by our transfer agent. The number of stockholders of record does not
reflect the actual number of individual or institutional stockholders that own Bruker BioSciences common stock because most stock is held in the name of nominees. There are a substantially greater
number of beneficial owners of Bruker BioSciences common stock.
17
The
information above shows only historical prices. No assurances can be given as to the market prices of Bruker BioSciences common stock at any other time before or after the
consummation of the combination.
Dividend Information
We have not declared or paid any dividends on Bruker BioSciences' common stock since our inception and do not intend to pay any dividends on our common stock in
the foreseeable future. We currently intend to retain available funds for use in our business. Any determination to pay dividends in the future will be at the discretion of our board of directors and
will depend upon, among other things, our financial condition, results of operations and capital requirements. The terms of some of our outstanding indebtedness and new credit facilities prohibit us
from paying cash dividends.
Historically,
the companies of the Bruker BioSpin Group have from time to time declared and paid dividends to shareholders from retained earnings. In accordance with German and Swiss
law, dividends from the German and Swiss companies have been declared and paid only from retained earnings (after deduction of certain reserves) shown in the companies' local statutory financial
statements, which differs from that shown on U.S. GAAP financial statements as a result of different bases of accounting.
In
November 2007, Bruker BioSpin Invest declared a dividend to shareholders of 75 million Swiss Francs. The dividend was paid on December 21, 2007. Based on the exchange
rate of $0.86 U.S. Dollars per Swiss Franc as of the payment date, the dividend was equivalent to approximately $64.8 million. In
July 2007, Bruker BioSpin Inc. declared and paid dividends to shareholders of $5.0 million. In April 2007, Bruker BioSpin Invest declared and paid dividends to shareholders
of $37.6 million.
In
2006 and 2005, Bruker BioSpin Invest declared and paid dividends of approximately $28.9 million and $22.2 million, respectively. In 2006 and 2005, Bruker
BioSpin Inc. declared and paid dividends of $0 and $5.0 million respectively. In 2006 and 2005, Bruker Physik declared and paid dividends of approximately $0.5 million and
$6.4 million, respectively.
The
following table sets forth dividends declared by the combined Bruker BioSpin Group during the nine months ended September 30, 2007 and 2006, and for the fiscal years ended
December 31, 2007, 2006, 2005, 2004, 2003 and 2002.
Bruker BioSpin Group
Dividends Declared
(in thousands)
Nine Months
Ended
September 30,
2007
|
|
Nine Months
Ended
September 30,
2006
|
|
Year Ended December 31,
|
|
2006
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
$
|
42,641
|
|
$
|
29,518
|
|
$
|
29,518
|
|
$
|
33,640
|
|
$
|
38,882
|
|
$
|
25,929
|
|
$
|
28,730
|
18
RISK FACTORS
In addition to the other information included or incorporated by reference in this proxy statement, including the Risk Factors contained in Bruker BioSciences'
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, you should carefully consider the matters described below relating to the proposed combination in
deciding whether or not to vote for the proposals presented in this proxy statement. Additional risks and uncertainties not presently known to Bruker BioSciences or that are not currently believed to
be material, if they occur, also may adversely affect the proposed combination of the Bruker BioSpin Group and/or the combined company post-combination.
Although Bruker BioSciences expects that the combination with the Bruker BioSpin Group will result in benefits to Bruker BioSciences, the combined
company may not realize those benefits because of integration difficulties and other challenges.
The
success of the combination with the Bruker BioSpin Group will depend, in part, on the ability of Bruker BioSciences to realize the potential synergies, cost savings and growth
opportunities from integrating the business of the Bruker BioSpin Group with the business of Bruker BioSciences. Bruker BioSciences' success in realizing these benefits and the timing of this
realization depends upon the successful integration of the operations of the Bruker BioSpin Group. The difficulties of combining the operations of the companies of the Bruker BioSpin Group with those
of Bruker BioSciences' operating subsidiaries, Bruker AXS, Bruker Daltonics and Bruker Optics, include, among others:
-
-
consolidating
research and development operations while preserving the research and development activities and important relationships of each of the operating subsidiaries;
-
-
retaining
key employees;
-
-
consolidating
corporate and administrative infrastructures;
-
-
integrating
and managing the technology of the companies; and
-
-
minimizing
the diversion of management's attention from ongoing business concerns.
Bruker
BioSciences cannot assure you that the integration of the Bruker BioSpin Group will result in the realization of the full benefits which the company anticipates will result from
the combination.
The market price of Bruker BioSciences common stock may decline as a result of the combination with the Bruker BioSpin Group.
The market price of Bruker BioSciences' common stock may decline as a result of the combination with the Bruker BioSpin Group if:
-
-
Bruker
BioSciences does not achieve the perceived benefits of the combination as rapidly as, or to the extent anticipated by, financial or industry analysts; or
-
-
The
effect of the combination on Bruker BioSciences' financial results is not consistent with the expectations of financial or industry analysts. Accordingly, investors may
experience a loss as a result of a decreasing stock price and Bruker BioSciences may not be able to raise future capital, if necessary, in the equity markets.
As a result of the transactions, our overall debt level will increase, which may limit our ability to obtain future financing and may affect the growth
of our business.
As a result of the transactions, our overall debt level will increase from approximately $48.7 million at September 30, 2007, to approximately
$400.0 million at such date on a pro forma basis after giving effect to the transactions. After the completion of the transactions, our level of debt and
19
other
obligations could have significant adverse consequences on the business and future prospects of the combined company, including the following:
-
-
the
combined company may not be able to obtain financing in the future for working capital, capital expenditures, acquisitions, debt service requirements or other purposes;
-
-
less
levered competitors could have a competitive advantage because they have lower debt service requirements; and
-
-
the
combined company may be less able to take advantage of significant business opportunities and to react to changes in market or industry conditions than its competitors
due to payments required on its credit facilities.
Some directors and executive officers of Bruker BioSciences have interests in the transactions that may differ from or are in addition to the interests
of Bruker BioSciences stockholders, including, if the transactions are completed, the receipt of financial and other benefits.
Our chief executive officer and chairman of the board, Frank H. Laukien, and the other members of the Bruker BioSpin Group Shareholders own stock in both Bruker
BioSciences and the Bruker BioSpin Group. Bruker BioSpin Group Shareholders own or control 100% of the shares of the Bruker BioSpin Group. 57,544,872 shares of Bruker BioSciences common stock will be
issued to the Bruker BioSpin Group Shareholders, in connection with the combination. Following the combination, the Bruker BioSpin Group Shareholders, would own, in the aggregate, approximately 69% of
the outstanding shares of common stock of Bruker BioSciences. The Bruker BioSpin Group Shareholders will also receive $388 million in cash as part of the transaction consideration. In addition,
on December 21, 2007,
the Bruker BioSpin Group companies made a one time 75 million Swiss Franc dividend payment (approximately $64.8 million based on the exchange rate of $0.86 U.S. Dollars per Swiss Franc
on the dividend payment date) to the Bruker BioSpin Group Shareholders. Although the Bruker BioSciences board of directors appointed an independent special committee to determine the advisability of
and to negotiate the terms of the transactions, you should take the potential conflicts of interest of the Bruker BioSpin Group Shareholders into account when determining whether to approve the
proposed transactions.
The combination with the Bruker BioSpin Group is subject to the receipt of consents and approvals from government entities that may not be received or
that may impose conditions that could have an adverse effect on Bruker BioSciences following the completion of the transactions.
We cannot complete the combination with the Bruker BioSpin Group unless we and the Bruker BioSpin Group receive various consents, orders, approvals and clearances
from antitrust and other authorities in the United States and possibly other countries. While we believe we will receive the requisite regulatory approvals from these authorities, there can be no
assurance of this. In addition, the authorities may impose conditions on the completion of the transactions or require changes to the terms of the combination. For example, the authorities may require
divestiture of certain assets as a condition of closing any or all of the transactions. Bruker BioSciences is not obligated to agree to divest material assets in order to obtain regulatory approval of
the proposed combination with the Bruker BioSpin Group. While Bruker BioSciences does not currently expect that any such conditions or changes would be imposed, there can be no assurance that they
will not be, and such conditions or changes could have the effect of delaying completion of the combination with the Bruker BioSpin Group or imposing additional costs on Bruker BioSciences.
20
The issuance of 57,544,872 shares of Bruker BioSciences common stock to the shareholders of the Bruker BioSpin Group companies in the combination will
substantially reduce the percentage interests of Bruker BioSciences stockholders.
If the transactions are completed, 57,544,872 million shares of Bruker BioSciences common stock will be issued to current shareholders of the Bruker
BioSpin Group, and former Bruker BioSpin Group shareholders will own approximately 69% of the outstanding common stock of Bruker BioSciences after the transactions. The issuance of these shares to
current shareholders of the Bruker BioSpin Group will cause a reduction in the relative percentage interests of current Bruker BioSciences stockholders in earnings, voting, liquidation value and book
and market value. The issuance of shares of Bruker BioSciences common stock at any implied premium would likely result in dilution to the market price of Bruker BioSciences common stock. The issuance
of additional shares in future transactions could
further reduce the percentage interests of current Bruker BioSciences stockholders and Bruker BioSpin Group shareholders.
The Bruker BioSpin Group operates in a mature market and has achieved a high market share and, as a result, the potential for future growth may be
limited.
The markets for NMR, research MRI and EPR are well established. The Bruker BioSpin Group has a high market share and, as a result, future growth may be limited to
the growth of the overall market for NMR, research MRI and EPR products. While this growth has been steady, when measured over long time periods, future growth may depend on new applications developed
by academic and industrial customers, and in most cases outside the control of the Bruker BioSpin Group.
The increasing prices of metal raw materials and superconducting wire could adversely affect the gross margins and profitability of the Bruker BioSpin
Group and its superconducting wire business.
The last few years have seen sharp increases in the prices for various raw materials, in part due to high demand from developing countries. The Bruker BioSpin
Group relies on some of these materials for the production of its products. In particular, for the Bruker BioSpin Group's superconducting magnet production, both for the horizontal and vertical magnet
series, the Bruker BioSpin Group relies on the availability of copper, steel and the metallic raw materials for traditional low-temperature superconducting wires. Higher prices for these
commodities will increase the production cost of superconducting wires and superconducting magnets and may adversely affect gross margins.
The
price of copper has increased significantly over the last decade. Since copper is a main constituent of low temperature superconductors, this may affect the price of superconducting
wire. This type of increase would have an immediate effect on the production costs of superconducting magnets and may negatively affect the profit margins for those products. In addition, an increase
in raw material cost affects the production cost of the superconducting wire produced by the Bruker BioSpin Group.
The emerging risk of liquid helium becoming scarce and significantly more expensive could dampen the demand for NMR and research MRI products.
The demand for helium has risen sharply over the last decade. The superconducting magnets used in magnetic resonance rely on liquid helium for their operation.
The high global demand, in combination with a shortage in supply, has caused prices for liquid helium to rise significantly. This has an adverse
effect on the operating costs for magnetic resonance equipment, and may dampen demand for NMR, EPR and research MRI magnets in the future.
21
The Bruker BioSpin Group has always operated as a private company and does not have in place the financial organization, reporting and controls
necessary for a public company.
Since its formation, the Bruker BioSpin Group has always operated as a private company. It has never put in place the financial organization, reporting and
controls which are required for a U.S. public company. The cost of implementing this type of financial organization, reporting and controls may be significant, and compliance with U.S. public company
requirements, including those implemented as part of the Sarbanes-Oxley Act 2002, may have an adverse effect on the operations of the Bruker BioSpin Group. If those limitations caused Bruker
BioSciences to miss a reporting deadline or otherwise not comply with an applicable law or regulation, Bruker BioSciences might, among other things, be unable to use a Form S-3 registration statement
for twelve months, have a material weakness in its internal controls or violate its bank covenants.
The Bruker BioSpin Group develops and manufactures superconducting magnets with significant product liability risks.
The nuclear magnetic resonance (NMR), research magnetic resonance imaging (MRI), Fourier transform mass spectrometry (FTMS), and certain electron paramagnetic
resonance (EPR) magnets of the Bruker BioSpin Group utilize high magnet fields and cryogenics to operate at approximately 4 Kelvin, the temperature of liquid helium. There is an inherent risk of
potential product liability due to the existence of these high magnetic fields, associated stray fields outside the magnet, and the handling of the cryogens associated with superconducting magnets.
The Bruker BioSpin Group depends on various sole source suppliers.
The Bruker BioSpin Group obtains various components for its products from sole or limited source suppliers. There are limited, if any, available alternatives to
these suppliers. The existence of shortages of these components or the failure of delivery with regard to these components could have a material adverse effect upon the Bruker BioSpin Group's revenues
and margins. In addition, price increases
from these suppliers could have a material adverse effect upon the gross margins of the Bruker BioSpin Group.
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company's future
prospects and make informed investment decisions. This proxy statement contains such "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements may be made directly in this proxy statement, and they may also be made a part of this proxy statement by reference to other documents filed with the Securities and Exchange Commission by
Bruker BioSciences, which is known as "incorporation by reference." These statements may include statements regarding the period following completion of the transactions. Words such as "anticipate,"
"estimate," "expects," "projects," "intends," "plans," "believes" and words and terms of similar substance used in connection with any discussion of future operating or financial performance, or the
combination with the Bruker BioSpin Group, identify forward-looking statements. All forward-looking statements are management's present expectations of future events and are subject to a number of
factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the risks described under "Risk Factors" in this proxy
statement and in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Stockholders are cautioned not to place undue reliance on the forward-looking
statements, which speak only as of the date of this proxy statement or the date of the document incorporated by reference in this proxy statement. Bruker BioSciences is not under any obligation, and
expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.
22
For
additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the quarterly reports on
Form 10-Q and the annual reports on Form 10-K that Bruker BioSciences has filed with the Securities and Exchange Commission.
All
subsequent forward-looking statements attributable to Bruker BioSciences or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section.
23
STOCKHOLDER MEETING
This proxy statement and the enclosed Proxy Card are furnished in connection with the solicitation of proxies by the board of directors of Bruker BioSciences for
use at the 2008 Special Meeting of Stockholders and at any adjournment thereof. The approximate date on which this proxy statement and form of proxy are first being sent to stockholders is
January 24, 2008.
Date, Time and Place of Stockholder Meeting
As set forth in the notice of meeting, the Bruker BioSciences 2008 Special Meeting of Stockholders is scheduled to be held on Monday, February 25,
2008 at 9:00 a.m. at the office of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts.
Purpose
The stockholder meeting is being held so that stockholders may consider and vote on:
-
-
a
proposal to approve the transactions contemplated by the U.S. stock purchase agreement, dated as of December 2, 2007, by and among Bruker BioSciences, Bruker
BioSpin Inc. and the stockholders of Bruker BioSpin Inc. relating to the acquisition of Bruker BioSpin Inc. by Bruker BioSciences;
-
-
a
proposal to approve the transactions contemplated by the German share purchase agreement, dated as of December 2, 2007, by and among Bruker BioSciences, Bruker
Physik, Bruker Optik, Bruker Daltonik, SciTec, Techneon and the shareholders of Bruker Physik and Techneon relating to the acquisition of Bruker Physik by Bruker BioSciences;
-
-
a
proposal to approve the transactions contemplated by the Swiss merger agreement, dated as of December 2, 2007, by and among Bruker BioSciences, Bruker BioSpin
Invest, Bruker BioSpin Beteiligungs and the shareholders of Bruker BioSpin Invest relating to the merger of Bruker BioSpin Beteiligungs with and into Bruker BioSpin Invest, and to approve the issuance
of shares of Bruker BioSciences common stock in connection with the merger;
-
-
a
proposal to amend the Bruker BioSciences certificate of incorporation to increase the number of shares of common stock authorized for issuance from 200,000,000 to
260,000,000;
-
-
a
proposal to amend the Bruker BioSciences amended and restated stock option plan to increase the number of shares of common stock for which options and restricted stock may
be granted under the stock option plan from 8,000,000 to 10,000,000;
-
-
a
proposal to amend the Bruker BioSciences certificate of incorporation to change the name of Bruker BioSciences Corporation to Bruker Corporation;
-
-
a
proposal to elect one Class II Director to hold office until the 2008 Annual Meeting of Stockholders and one Class III Director to hold office until the 2009
Annual Meeting of Stockholders; and
-
-
to
transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
Although
the first through the third transaction proposals are separate matters to be voted upon by Bruker BioSciences' stockholders, each is expressly conditioned upon the approval of
the other two transaction proposals. Even if our stockholders approve one of these three proposals, Bruker BioSciences will not complete the transaction contemplated by that proposal unless the Bruker
BioSciences stockholders also approve each of the other two transaction proposals by the requisite vote, so that all transactions can be completed as described in this proxy statement.
The
fourth through seventh proposals listed above are separate matters to be voted upon by the stockholders of Bruker BioSciences, but are expressly conditioned upon the approval of each
of the first three transaction proposals listed above. This means that even if the stockholders of Bruker
24
BioSciences
approve one or more of proposals 4 through 7, Bruker BioSciences will not complete the transaction contemplated by that proposal unless the stockholders also approve each of the first
three proposals described above, so that all transactions can be completed as described in this proxy statement.
Record Date
Only stockholders of record at the close of business on January 11, 2008 are entitled to notice of and to vote at the Special Meeting. On
January 11, 2008, Bruker BioSciences had outstanding and entitled to vote 105,670,237 shares of common stock. Each outstanding share of common stock entitles the record holder to one vote.
Votes will be tabulated by our transfer agent and the inspector of elections, who will be one of our employees or one of our attorneys.
Vote Required for Approval
Transactions and Share Issuance.
The transactions contemplated by each of the U.S. stock purchase agreement, the German share
purchase agreement and the Swiss merger agreement, including the share issuance, must be approved by the affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock
present or represented by proxy at the Special Meeting and entitled to vote. The transactions contemplated by the U.S. stock purchase agreement, the German share purchase agreement and the Swiss
merger agreement must also be approved by the affirmative vote of holders of shares of Bruker BioSciences common stock who are unaffiliated with the Bruker BioSpin Group Shareholders and who represent
at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting.
Proposals to Amend our Certificate of Incorporation.
The affirmative vote of the holders of a majority of the shares of
Bruker BioSciences common stock outstanding as of the record date is required to adopt and approve each of the proposals to amend our certificate of incorporation.
Amendment to Stock Option Plan.
The affirmative vote of the holders of a majority of the shares of Bruker BioSciences common
stock present or represented by proxy at the Special Meeting and entitled to vote is required to approve the amendment to the Amended and Restated 2000 Stock Option Plan.
Elections of Directors.
Directors shall be elected by a plurality of the votes of the shares of common stock present in
person or represented by proxy at the Special Meeting and entitled to vote. This means that the two candidates for election as directors at the Special Meeting who receive the highest number of
affirmative votes will be elected.
As
of the record date, Bruker BioSciences directors and executive officers and their affiliates owned approximately 52% of the outstanding shares of Bruker BioSciences' common stock. The
Bruker BioSpin Group Shareholders, including Frank H. Laukien, Dirk Laukien and Joerg Laukien, who are parties to the U.S. stock purchase agreement, the German share purchase agreement and the Swiss
merger agreement, have covenanted under the terms of those agreements to vote all of their shares of Bruker BioSciences in favor of the transactions and related share issuance. These shares represent
approximately 52% of the voting power of Bruker BioSciences entitled to vote at the stockholder meeting and, under our bylaws and NASDAQ rules, are sufficient to approve the proposals regarding the
transactions and related share issuance. However, the terms of each transaction agreement provide that the transactions contemplated by the transaction agreements are subject to approval by holders of
shares of Bruker BioSciences common stock who are unaffiliated with the Bruker BioSpin Group Shareholders and who represent at least a majority of the total votes cast by these unaffiliated holders at
the Special Meeting.
25
Voting of Proxies; Quorum; Abstentions and Broker Non-Votes
If the enclosed Proxy Card is properly executed and returned, it will be voted in the manner directed by the stockholder. If no instructions are specified with
respect to any particular matter to be acted upon, proxies will be voted in favor of such matter. In addition, if other matters come before the meeting, the persons named in the accompanying proxy and
acting thereunder will have discretion to vote on those matters in accordance with their best judgment. Any person signing the enclosed form of proxy has the power to revoke it by voting in person at
the meeting, by giving written notice of revocation to the Secretary of Bruker BioSciences at 40 Manning Road, Billerica, Massachusetts 01821 at any time before the proxy is exercised or by granting a
subsequently dated proxy. Please note, however, that if your shares are held of record by a broker, bank or nominee and you wish to vote at the meeting, you will not be permitted to vote in person
unless you first obtain a proxy issued in your name from the record holder.
The
holders of a majority in interest of all of the Bruker BioSciences common stock, par value $.01 per share, issued, outstanding and entitled to vote are required to be present in
person or be represented by proxy at the Special Meeting in order to constitute a quorum for the transaction of business. Each share of common stock outstanding on the record date will be entitled to
one vote on all matters.
Because
abstentions with respect to any matter are treated as shares present or represented and entitled to vote for the purposes of determining whether that matter has been approved by
the stockholders, abstentions have the same effect as negative votes for each proposal other than the vote to elect directors. Broker non-votes are not deemed to be present or represented
for purposes of determining whether stockholder approval of that matter has been obtained, but they are counted as present for purposes of determining the existence of a quorum at the Special Meeting.
Solicitation of Proxies
Bruker BioSciences will bear the cost of the solicitation. Although it is expected that the solicitation will be primarily by mail, regular employees or
representatives of Bruker BioSciences (none of whom will receive any extra compensation for their activities) may also solicit proxies by telephone, telecopier and in person and arrange for brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy materials to their principals at the expense of Bruker BioSciences.
Recommendations of the Board of Directors
The board of directors of Bruker BioSciences unanimously determined that each of the transaction agreements and the transactions contemplated by the transaction
agreements including the combination with the Bruker BioSpin Group are advisable, voted to approve each of the transaction agreements and recommends that the stockholders vote:
-
-
FOR
Proposal No. 1, the purchase of Bruker BioSpin Inc.;
-
-
FOR
Proposal No. 2, the purchase of Bruker Physik and Techneon;
-
-
FOR
Proposal No. 3, the approval of a merger agreement with Bruker BioSpin Invest to acquire the equity of Bruker BioSpin Invest;
-
-
FOR
Proposal No. 4, the amendment to the certificate of incorporation to increase the number of shares of common stock authorized for issuance from 200,000,000 to
260,000,000;
-
-
FOR
Proposal No. 5, the amendment to the amended and restated stock option plan to increase the number of shares of common stock for which options and restricted
stock may be granted under the stock option plan from 8,000,000 to 10,000,000;
-
-
FOR
Proposal No. 6, the amendment to the certification of incorporation to change our name to Bruker Corporation; and
-
-
FOR
the election of each of the directors nominated for election in Proposal No. 7.
Bruker
BioSciences' principal executive offices are located at 40 Manning Road, Billerica, Massachusetts 01821, and our telephone number is (978) 663-3660.
26
PROPOSALS 1 THROUGH 3: THE TRANSACTIONS AND THE ISSUANCE OF SHARES IN CONNECTION WITH THE COMBINATION
This section of the proxy statement describes material aspects of each of the proposed transactions, including the U.S. stock purchase agreement, the German share
purchase agreement and the Swiss merger agreement and the related issuance of Bruker BioSciences shares of common stock. While we believe that the following description covers the material terms of
the combination, this summary may not contain all of the information that is important to you. You should read this entire proxy statement and the other documents which are attached or incorporated by
reference carefully for a more complete understanding of the combination.
General
Bruker BioSciences' board of directors is using this proxy statement to solicit proxies from the holders of Bruker BioSciences common stock for use at the Bruker
BioSciences 2008 Special Meeting.
Proposals
At the Special Meeting, holders of Bruker BioSciences common stock are being asked to vote on, among other items, the acquisitions of Bruker BioSpin Inc.,
Bruker Physik, and Techneon and the merger of Bruker BioSpin Beteiligungs with and into Bruker BioSpin Invest, and the issuance of shares of Bruker BioSciences common stock in connection with the
transactions.
The combination will not be completed unless Bruker BioSciences' stockholders approve each of the transactions and the issuance of shares of Bruker BioSciences
common stock in connection with the transactions.
Background of the Combination
From time to time, the board of directors of Bruker BioSciences and the Bruker BioSpin Group Shareholders, each have separately considered strategic alternatives
and business combinations.
During
January, February and March 2007, the Bruker BioSpin Group Shareholders considered the possibility of a business combination with Bruker BioSciences. While the Bruker
BioSpin Group Shareholders did not reach any conclusion during their discussions, the Bruker BioSpin Group Shareholders agreed that they would continue their internal deliberations.
On
April 2, 2007, during a telephonic meeting of the board of directors of Bruker BioSciences, Frank Laukien, the Chairman, Chief Executive Officer and President of Bruker
BioSciences, who is also one of the owners of the Bruker BioSpin Group and an officer and director of various of the Bruker BioSpin Group of companies, informed the Bruker BioSciences board of
directors of the possible interest of the Bruker BioSpin Group Shareholders in considering a business combination. The board discussed the possibility of a potential transaction and various
considerations relating to such a transaction. The board considered the establishment of a special committee to deal with such a possible transaction, but determined that the topic should be deferred
pending further consideration at the next board meeting.
After
the April 2, 2007 Bruker BioSciences Board telephonic meeting, the independent directors of Bruker BioSciences established an informal working group of independent directors
to consider the possibility of a future business combination with the Bruker BioSpin Group. William Linton, the lead director of Bruker BioSciences, was joined on the informal working group by Collin
D'Silva and Richard Kniss.
In
April 2007, the independent working group established informal contacts with three investment banks in order to obtain their initial reaction and informal views on a potential
acquisition of the
27
Bruker
BioSpin Group. Two investment banks were invited to give telephonic presentations to the informal working group in April 2007, including strategic rationale, potential investor
perception and potential valuation ranges.
At
a May 2, 2007 board of directors meeting of Bruker BioSciences, Mr. Linton presented the board with an update of the informal working group's views on a potential
business combination with the Bruker BioSpin Group, assuming the Bruker BioSpin Group Shareholders would be interested in
pursuing such a transaction. Frank Laukien and William Knight, the Bruker BioSciences Chief Financial Officer, also informed the board that several significant financial investors in Bruker
BioSciences during recent visits to the company and during phone conversations had urged Bruker BioSciences to very seriously consider and explore a potential combination with the Bruker BioSpin
Group.
During
April, May, June and July 2007, the Bruker BioSpin Group Shareholders continued their deliberations concerning the desirability of a potential combination with Bruker
BioSciences while the independent working group of the Board had various discussions with Frank Laukien regarding the possible transaction.
On
July 18, 2007, four of the owners of the Bruker BioSpin Group met and decided that the feasibility, desirability and structural/tax consequences of a business combination with
Bruker BioSciences should be more seriously explored and that discussions of that topic with the independent directors on the board of Bruker BioSciences should be initiated.
On
August 1, 2007, at a meeting of the Bruker BioSciences board of directors, Frank Laukien informed the Board of this more serious interest from the owners of the Bruker BioSpin
Group. The board engaged in an extensive discussion regarding the rationale for a possible business combination and strategic alternatives. Among the topics discussed were the benefit to customers,
the impact on the public stockholders of Bruker BioSciences, synergies, the Bruker BioSpin Group financial results and the Bruker BioSpin Group forecast. The various conflicts present in connection
with a possible transaction with the Bruker BioSpin Group were also discussed. The board decided that if the matter were to proceed, it should do so under the auspices of the independent directors. As
a result, the board of directors created a special committee of independent directors, consisting of Messrs. Linton, D'Silva and Kniss, and chaired by lead director William Linton.
All
members of the special committee are independent directors within the meaning of the listing standards of the NASDAQ Stock Market, and are unaffiliated with the Bruker BioSpin Group
Shareholders. The tasks of the special committee were: (i) to consider the advisability of the proposed acquisition of the Bruker BioSpin Group, (ii) if it concluded that the acquisition
was advisable, to negotiate on behalf of Bruker BioSciences, (iii) to negotiate the terms of the acquisition, and (iv) to recommend to the board of directors of Bruker BioSciences
whether the acquisition was in the best interest of the stockholders of Bruker BioSciences who are not affiliated with the Bruker BioSpin Group Shareholders. The special committee was authorized to
retain its own financial and legal advisers to assist it in discharging those responsibilities. The board received presentations on the Bruker BioSpin Group by Barbara Burgess, the Vice President of
Finance and Chief Accounting Officer of the Bruker BioSpin Group companies located in the United States, Mark Chaykovsky, the Executive Vice President of U.S. NMR Sales for the Bruker BioSpin Group
and Werner Maas, an Executive Vice President of the Bruker BioSpin Group.
During
the August 1, 2007 board meeting, the owners of the Bruker BioSpin Group also communicated that Dirk Laukien and Joerg Laukien together would be the designated negotiators
for the Bruker BioSpin Group, and that Bernhard Wangler would in particular represent the interests of the Bruker BioSpin Group's largest shareholder Isolde Laukien-Kleiner. It was also determined
that for the purposes of a potential Bruker BioSciences acquisition of the Bruker BioSpin Group, Frank Laukien, as well as director and counsel Richard Stein and his law firm Nixon Peabody LLP,
would
28
support
all parties in the process in a neutral fashion with information, due diligence, tax and structure advice and logistical support, but would not be negotiating for either party.
On
August 13, 2007, the special committee held its first meeting. At that meeting, the committee retained Dewey & LeBoeuf LLP to act as its legal advisor. Dewey Ballantine
LLP, a predecessor of Dewey & LeBoeuf, previously acted as legal advisor to the special committee of Bruker BioSciences' board of directors in connection with the acquisition of Bruker
Optics Inc. in 2006 and as advisor to the special committee of Bruker Daltonics' board of directors in connection with its merger with Bruker AXS in 2003. Also at that meeting, the committee
members reviewed their qualifications and confirmed that they were free from conflicts of interest with respect to the Bruker BioSpin Group owners. Representatives of Dewey & LeBoeuf briefed
the committee on its fiduciary duties and the anticipated operation of the special committee process.
On
August 16, 2007, the special committee interviewed potential financial advisors. The committee subsequently determined to retain Bear, Stearns & Co. Inc. as its
financial advisor. Bear Stearns previously acted as financial advisor to the special committee of Bruker BioSciences' board of directors in connection with the acquisition of Bruker Optics Inc.
and as financial advisor to the special committee of Bruker Daltonics' board of directors in connection with its merger with Bruker AXS.
Throughout
the period from mid-August through the end of November 2007, members of Bruker BioSpin Group management, members of the special committee and their
respective financial, legal and tax advisors in the United States, Germany and Switzerland engaged in a series of meetings, telephone conference calls and email exchanges to consider and discuss
various valuation, structural, due diligence and tax issues related to the proposed business combination, including those meetings referred to below.
On
September 4, 2007, representatives of the Bruker BioSpin Group presented a corporate and financial overview of the Bruker BioSpin Group to Bruker BioSciences management, Bear
Stearns and Dewey & LeBoeuf.
On
September 12, 2007, the special committee met with its advisors to receive a report of the results of the September 4, 2007 meeting and to discuss the structure of the
transaction proposed by Bruker BioSciences and Bruker BioSpin Group management. At this meeting, Bear Stearns provided the
special committee with its preliminary views regarding financial information relating to the Bruker BioSpin Group.
On
September 14, 2007, representatives of the Bruker BioSpin Group delivered a telephonic and powerpoint webex presentation to the special committee and its advisors regarding the
Bruker BioSpin Group's business and historical financial results.
On
September 19, 2007, the special committee met with its advisors. At this meeting, the committee and Bear Stearns discussed the preliminary, pre-due diligence
valuation of the Bruker BioSpin Group and the special committee's perspectives as to the strategic rationale for the combination. The special committee directed Bear Stearns to propose to the owners
of the Bruker BioSpin Group a purchase price offer range of between $800 million and $850 million for all capital stock of the Bruker BioSpin Group, all subject to an assessment of the
strategic rationale of the proposed acquisition, further financial and tax analysis, and satisfactory completion of due diligence.
That
same day, representatives of Bear Stearns met with Dirk Laukien, Joerg Laukien, Frank Laukien and William Knight, the Chief Financial Officer of Bruker BioSciences. At that meeting,
Bear Stearns presented the special committee's purchase price offer range of between $800 million and $850 million for all capital stock of the Bruker BioSpin Group.
On
September 30, 2007, on behalf of the special committee, Mr. Linton met in person and telephonically with Dirk Laukien, Joerg Laukien and Bernhard Wangler to discuss the
purchase price
29
for
the proposed acquisition. At this meeting, the representatives of Bruker BioSpin estimated the value of the Bruker BioSpin Group to be in excess of $1.2 billion. Mark Chaykovsky and William
Knight were also in attendance. Frank Laukien was also present during this discussion but did not actively participate.
On
October 2, 2007, representatives of Bear Stearns and William Knight met with Dirk Laukien to discuss the proposed valuation of the Bruker BioSpin Group, potential synergies
arising from a combination of Bruker BioSciences and the Bruker BioSpin Group and Bruker BioSciences' strategic rationale for the combination. At this meeting, Dirk Laukien advised Bear Stearns that
the owners of Bruker BioSpin Group intended to cause the Bruker BioSpin Group to pay a dividend of approximately $66 million (later modified to 75 million Swiss Francs) prior to the
closing of any transaction, with the understanding that the purchase price would be reduced to reflect the payment of such dividend. At this meeting Dirk Laukien also stated that the owners of the
Bruker BioSpin Group would not accept a purchase price of less than $980 million, on a pre-dividend basis (or $914 million, on a post-dividend basis). Frank Laukien was present during
this discussion but did not actively participate.
On
October 3, 2007, the special committee met with its advisors and Bruker BioSciences management. At this meeting, Mr. Linton reported the results of the
September 30, 2007 meeting and representatives of Bear Stearns reported the results of the October 2, 2007 meeting. Bruker BioSciences management delivered to the special committee an
analysis of Bruker BioSciences' strategic rationale for the possible combination and potential synergies arising from such combination. The special committee discussed the proposed valuation of the
Bruker BioSpin Group with its advisors and authorized Mr. Linton to convey to the owners of the Bruker BioSpin Group the special committee's updated offer to acquire the Bruker BioSpin Group for a
purchase price of $900 million in cash and stock, on a post-dividend basis. Also at that meeting, representatives of Dewey & LeBoeuf led a discussion of the special committee's fiduciary
duties.
On
October 4, 2007, on behalf of the special committee, Mr. Linton met with Dirk Laukien to discuss, among other things, the special committee's view as to the valuation of
the Bruker BioSpin Group. Frank Laukien was also present during this discussion but did not actively participate. The following day, the owners of the Bruker BioSpin Group reiterated their view to the
special committee that they would be willing to sell the Bruker BioSpin Group for a purchase price of $914 million in cash and stock, on a post-dividend basis.
On
October 9, 2007, the special committee met with its advisors to review the status of the negotiations with the owners of the Bruker BioSpin Group regarding valuation. After a
thorough review of the prospects of the Bruker BioSpin Group and potential synergies from the combination, the special committee authorized Mr. Linton to convey an updated offer for the
acquisition of the Bruker BioSpin Group for a purchase price of $914 million in cash and stock, on a post-dividend basis.
On
October 11, 2007, a proposed letter of intent was presented to the owners of the Bruker BioSpin Group by Dewey & LeBoeuf on behalf of the special committee.
On
October 12, 2007, a non-binding letter of intent was executed by all parties. The letter of intent provided, among other things, for a purchase price of
$388 million in cash, a number of Bruker BioSciences shares equal to $526 million based on the trailing ten trading day average closing price of Bruker BioSciences common stock ending
two trading days prior to the signing of the transaction agreement, provided that the average closing price was between $8.25 and $9.15 per share, a pre-closing dividend payable by Bruker
BioSpin Group to its shareholders of $66 million (later modified to 75 million Swiss Francs) and commitments by these shareholders to negotiate exclusively with Bruker BioSciences and to
grant Bruker BioSciences and its advisors full access to its operations to conduct due diligence. The letter of intent also provided that the execution of definitive agreements for the transaction
would be conditioned on delivery of satisfactory Bruker BioSpin Group financial
30
statements
as of and for the periods ended September 30, 2007 and 2006 and the satisfactory completion by Bruker BioSciences of its financial, legal and business due diligence investigation of
the Bruker BioSpin Group.
The
special committee's advisors initially met with representatives of the Bruker BioSpin Group to commence their due diligence investigation on October 16, 2007. During the
following weeks, the special committee's advisors met with Bruker BioSpin Group representatives on numerous occasions, reviewed legal and financial documents and conducted site visits at Bruker
BioSpin Group facilities.
On
behalf of the special committee, Dewey & LeBoeuf transmitted the initial draft of the U.S. stock purchase agreement on November 7, 2007, and on November 14, 2007
Dewey & LeBoeuf transmitted the initial drafts of the Swiss agreement and plan of merger and the German share purchase agreement. On November 19, 2007, the special committee received
comments to the stock purchase agreements and the merger agreement from the Bruker BioSpin Group owners. From November 19, 2007 to December 1, 2007, Dewey & LeBoeuf conducted
numerous conference calls with representatives of the Bruker BioSpin Group owners and representatives of the special committee during which the comments of the parties were discussed and resolved.
On
November 9, 2007, the special committee met with its advisors to receive an update on the progress of the due diligence efforts of Bear Stearns, Dewey & LeBoeuf and
Pestalozzi Lachenal Patry, counsel in Switzerland to the special committee.
On
November 13, 2007, Bear Stearns presented to the special committee the preliminary results of its review of the financial aspects of the proposed combination. Also at that
meeting, Dewey & LeBoeuf updated the special committee on their legal due diligence findings.
At
a meeting of the special committee on November 16, 2007, Bruker BioSciences' financial management reported to the special committee its observations with respect to the
internal controls, accounting policies and financial reporting function of the Bruker BioSpin Group.
On
November 19, 2007, the special committee met to receive an update on the status of the negotiations and ongoing due diligence review of the Bruker BioSpin Group. Independent
directors of Bruker BioSciences who were not members of the special committee also participated in the meeting. At that meeting, Bear Stearns presented a draft of its financial analysis related to the
proposed acquisition of the Bruker BioSpin Group.
On
November 30, 2007, the special committee met with its advisors to discuss the status of the negotiation of the transaction agreements.
On
December 1, 2007, the Bruker BioSpin Group unaudited financial statements as of and for the periods ended September 30, 2007 and 2006 and the audited financial
statements as of and for the
periods ended December 31, 2006 and 2005 were distributed to the Bruker BioSciences board of directors.
On
December 2, 2007, the special committee met with its advisors, representatives of Ernst & Young LLP, the independent auditors of the Bruker BioSpin Group, and
representatives of Bruker BioSpin and Bruker BioSciences management to discuss the financial statements of the Bruker BioSpin Group and the results of the Ernst & Young audit of the annual
statements and its review of the September 30, 2007 and 2006 statements. Independent directors of Bruker BioSciences who were not members of the special committee also participated in the
meeting.
Also
at this meeting, Bear Stearns delivered its oral opinion, which was subsequently confirmed in writing, that as of December 2, 2007, and based upon and subject to the
assumptions, qualifications and limitations set forth in the written opinion, the aggregate consideration to be issued in the transactions was fair, from a financial point of view, to the holders of
Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own shares of the Bruker BioSpin Group companies.
31
Dewey &
LeBoeuf provided a summary of the terms of the transaction. The special committee then voted unanimously to approve the transaction and to recommend its approval by the full board of
Bruker BioSciences.
A
meeting of the Bruker BioSciences board of directors was convened immediately after the adjournment of the special committee meeting, at which the special committee reported on its
vote, after which the independent members of the board also unanimously voted in favor of the transaction and recommended that it be approved and adopted by the stockholders of Bruker BioSciences.
Reasons for the Combination
The Bruker BioSciences board of directors and the Bruker BioSciences special committee considered a number of factors and additional benefits for Bruker
BioSciences' stockholders that could result from the combination. These factors and potential benefits include:
-
-
The
complementary nature of the businesses of Bruker BioSciences' subsidiaries, Bruker AXS, Bruker Daltonics and Bruker Optics, with that of the Bruker BioSpin Group would
allow for potential strategic benefits, including enhancing Bruker BioSciences' position as a leading tools
supplier for life science and materials research, offering a broader technology base, and providing an increased distribution, sales and service infrastructure;
-
-
Acquiring
the Bruker BioSpin Group would allow Bruker BioSciences to increase its critical mass competitively and improve its worldwide geographical distribution coverage in
the Americas, Europe and Asia;
-
-
The
combined companies, with expected 2007 pro forma revenues of greater than $900 million, together will be able to better leverage the excellent "Bruker" brand
recognition among customers, and will make the combined company a large player in the analytical instruments and life-science tools industry; the nearly doubled larger overall combined
company size may positively affect certain customer vendor selections in cases where customers prefer to buy from large companies in the industry.
-
-
The
sales groups of Bruker BioSciences' subsidiaries and the Bruker BioSpin Group will be able to offer jointly each other's products, providing opportunities to supply
customers with unique equipment packages that have a broader range of applications and value. In selected locations, Bruker BioSciences' products can be showcased together with the Bruker BioSpin
Group's products, providing greater visibility to customers and emphasizing the synergies among the products;
-
-
The
combination offers certain cost savings in areas of marketing through the use of joint representation at trade shows and other events. In addition, lead generation can
increase for the integrated company as customer databases are integrated;
-
-
Joint
R&D projects can offer opportunities to provide new solution strategies for customers;
-
-
The
NMR technologies of the Bruker BioSpin Group and the accurate-mass electrospray time-of-flight (ESI-TOF) mass
spectrometers of Bruker Daltonics are particularly complementary in small molecule analysis applications in metabolomics, nutritional research, toxicology, forensics, and small molecule biomarker
research and validation;
-
-
The
ultra-high field NMR technologies of the Bruker BioSpin Group and the single-crystal diffraction X-ray spectrometers of Bruker AXS are
particularly complementary in small molecule and protein three-dimensional structure determination;
-
-
The
combined Bruker BioSpin and Bruker Daltonics operating companies will post-closing explore a combined effort in clinical research systems, molecular
diagnostics and molecular imaging, drawing primarily on NMR, research MRI and mass spectrometry technologies;
32
-
-
The
established corporate governance, as well as the financial and controlling organizations of Bruker BioSciences, can assist the Bruker BioSpin Group in NASDAQ and SEC
compliance, introduction of Sarbanes-Oxley control processes, etc. in a cost-effective manner, and without significant expected increases in the general and administrative expenses of the
Bruker BioSpin Group;
-
-
The
transaction on a pro forma basis is highly accretive for Bruker BioSciences shareholders for the year 2006 and for the nine-month period ending
September 30, 2007;
-
-
The
debt leverage planned after the closing of the transaction and the funding of the planned senior credit facility is considered conservative, the interest spreads
achieved are considered favorable, the planned debt push-down structure is considered reasonably tax effective, and the combined expected cash-flow profile of the combined
companies is expected to allow steady interest payments and significant principal repayments over the five year term of the senior credit facility;
-
-
Various
financial investors in Bruker BioSciences in 2007 have expressed a strong preference for a potential acquisition by Bruker BioSciences of the Bruker BioSpin Group,
if done for a reasonable valuation and parameters; these financial investors, not affiliated with the shareholders of the Bruker BioSpin Group, urged the Bruker BioSciences management to pursue this
transaction, as the investors expect additional opportunities to increase shareholder value from the combination; and
-
-
The
oral opinion of Bear Stearns to the Bruker BioSciences special committee on December 2, 2007, subsequently confirmed by a written opinion, also dated
December 2, 2007, that, as of December 2, 2007, and based upon and subject to the assumptions, qualifications, and limitations set forth therein, the aggregate consideration to be issued
in the transactions was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own shares of the Bruker BioSpin
Group companies. The full text of Bear Stearns' written opinion, dated December 2, 2007, which sets forth the assumptions made, matters considered and limitations on the review undertaken by
Bear Stearns, is attached as
Annex B
and is incorporated into this proxy statement by reference.
In
addition, the Bruker BioSciences' board of directors took into consideration the unanimous recommendation of the Bruker BioSciences' special committee.
The
Bruker BioSciences' board of directors and the Bruker BioSciences' special committee also identified a number of risks and uncertainties in its deliberations concerning the
acquisition, including the following:
-
-
The
need to integrate the Bruker BioSpin Group into Bruker BioSciences' financial and information systems;
-
-
The
risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to implement the combination;
-
-
The
risk that the combination would not be consummated; and
-
-
The
risks associated with incurring long-term debt obligations in connection with the financing of the transactions.
The
foregoing discussion of the factors considered by the Bruker BioSciences board of directors and the special committee is not intended to be exhaustive but summarizes the material
factors considered by the Bruker BioSciences board of directors and the special committee in making its recommendation. In view of the wide variety of factors considered by the Bruker BioSciences
board of directors and special committee, neither found it practical to and did not quantify or assign any relative or specific weights to the preceding factors or determine that any factor was of
particular importance,
33
nor
did it specifically characterize any factor as positive or negative, except as described above. The Bruker BioSciences board of directors and the special committee viewed its decision and
recommendation as being based on the totality of the information presented. In addition, individual members of the Bruker BioSciences board of directors and the special committee may have given
differing weights to differing factors and may have viewed certain factors more positively or negatively than others. Throughout its deliberations, the Bruker BioSciences board of directors and the
special committee consulted with Bruker BioSciences management and their respective legal and financial advisors.
The
Bruker BioSciences board of directors and the special committee each concluded that certain of these risks could be managed or mitigated and others were unlikely to occur or have a
material impact on the combined company or the transactions, and that, on balance, the potential benefits of the combination outweighed the risks of the combination. For these reasons, the Bruker
BioSciences board of directors and the special committee determined the stock purchase agreements and the merger agreement and the transactions contemplated by them, including the issuance of Bruker
BioSciences shares as a part of the consideration, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, including unaffiliated stockholders, approved (or, in
the case of the Bruker BioSciences special committee, recommended approval of) the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement and recommended
that holders of Bruker BioSciences common stock approve the transactions contemplated by the U.S. and German purchase agreements and the Swiss merger agreement, including the issuance of Bruker
BioSciences common stock in connection with the combination with the Bruker BioSpin Group.
Recommendation of the Board of Directors and Special Committee
By unanimous vote of the Bruker BioSciences special committee, the Bruker BioSciences special committee determined that the U.S. stock purchase agreement, the
German share purchase agreement and the Swiss merger agreement and the transactions contemplated by each of them, including the issuance of Bruker BioSciences shares as a part of the consideration for
the combination, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, including unaffiliated stockholders, voted to recommend approval of the U.S. and German
purchase agreements and the Swiss merger agreement by the board of directors of Bruker BioSciences. By the unanimous vote of the members of the board of directors present at the board meeting and who
voted on the transaction (all non-independent directors, namely Frank H. Laukien, Joerg Laukien, Bernhard Wangler and Richard Stein, recused themselves from voting) at the board meeting at
which the transaction
agreements were considered and voted upon, the Bruker BioSciences board of directors determined that the U.S. and German purchase agreements and the Swiss merger agreement as proposed and the
transactions contemplated by them, including the combination and related issuance of shares, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, approved the
U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement and recommended that holders of Bruker BioSciences common stock vote FOR the transactions contemplated
by the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement, including the issuance of Bruker BioSciences common stock as part of the consideration for the
combination with the Bruker BioSpin Group.
In
considering the recommendation of the Bruker BioSciences board of directors with respect to the combination with the Bruker BioSpin Group and related issuance of shares, you should be
aware that certain directors and executive officers of Bruker BioSciences may have interests in the combination that are different from, or are in addition to, the interests of Bruker BioSciences
stockholders. Please see the section entitled "Interests of Certain Directors and Executive Officers in the Combination" that begins on page 44 of this proxy statement.
34
Opinion of the Special Committee's Financial Advisor
Pursuant to an engagement letter dated September 6, 2007, the Bruker BioSciences special committee retained Bear Stearns to act as its financial advisor
with respect to a possible transaction with the Bruker BioSpin Group. In selecting Bear Stearns, the Bruker BioSciences special committee considered the fact that Bear Stearns is an internationally
recognized investment banking firm with substantial experience advising companies in the healthcare industry as well as substantial experience providing strategic advisory services. Bear Stearns, as
part of its investment banking business, is continuously engaged in the evaluation of businesses and their debt and equity securities in connection with mergers and acquisitions; underwritings,
private placements and other securities offerings; senior credit financings; valuations; and general corporate advisory services.
At
the December 2, 2007 meeting of the Bruker BioSciences special committee, Bear Stearns delivered its oral opinion, which was subsequently confirmed in writing, that, as of
December 2, 2007, and based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the aggregate consideration to be issued in the transactions
was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own shares in the Bruker BioSpin Group companies.
The full text of Bear Stearns' written opinion is attached as Annex B to this proxy statement and you should read the opinion carefully and in its entirety. The
opinion sets forth the assumptions made, some of the matters considered and qualifications to and limitations of the review undertaken by Bear Stearns. The Bear Stearns opinion, which was authorized
for issuance by the Fairness Opinion and Valuation Committee of Bear Stearns, is subject to the assumptions and conditions contained in the opinion and is necessarily based on economic, market and
other conditions and the information made available to Bear Stearns as of the date of the Bear Stearns opinion. Bear Stearns has no responsibility for updating or revising its opinion based on
circumstances or events occurring after the date of the rendering of the opinion.
In
reading the discussion of the fairness opinion set forth below, you should be aware that Bear Stearns' opinion:
-
-
was
provided to the Bruker BioSciences special committee for its benefit and use in connection with its consideration of the acquisition;
-
-
did
not constitute a recommendation to the board of directors of Bruker BioSciences or the Bruker BioSciences special committee;
-
-
does
not constitute a recommendation to any shareholder of Bruker BioSciences as to how to vote in connection with the acquisition of the Bruker BioSpin Group or otherwise;
and
-
-
did
not address Bruker BioSciences' underlying business decision to pursue the acquisition of the Bruker BioSpin Group, the relative merits of the acquisition as compared to
any alternative business or financial strategies that might exist for Bruker BioSciences, the financing of the acquisition or the effects of any other transaction in which Bruker BioSciences might
engage.
Bruker
BioSciences did not provide specific instructions to, or place any limitations on, Bear Stearns with respect to the procedures to be followed or factors to be considered by it in
performing its analyses or providing its opinion.
In
connection with rendering its opinion, Bear Stearns:
-
-
reviewed
drafts of the transaction agreements in substantially final form;
35
-
-
reviewed
the Bruker BioSpin Group's restated Combined Financial Statements for the years ended December 31, 2004, 2005 and 2006, as audited by Ernst & Young
LLP, and its Combined Financial Statements for the nine months ended September 30, 2006 and 2007, as reviewed by Ernst & Young LLP;
-
-
reviewed
Bruker BioSciences' Annual Reports to Shareholders and Annual Reports on Form 10-K for the years ended December 31, 2004, 2005 and 2006,
its Quarterly Reports on Form 10-Q for the periods ended March 31, 2007, June 30, 2007 and September 30, 2007 and its Current Reports on
Form 8-K filed since December 31, 2006;
-
-
reviewed
certain operating and financial information relating to the Bruker BioSpin Group's business and prospects, including projections for the five years ended
December 31, 2012, all as prepared and provided to us by Bruker BioSpin Group's management (which are referred to as the Bruker BioSpin Group projections);
-
-
met
with certain members of the Bruker BioSpin Group's senior management to discuss the Bruker BioSpin Group's business, operations, historical financial results and future
prospects and the Bruker BioSpin Group projections;
-
-
reviewed
certain operating and financial information relating to Bruker BioSciences' and the Bruker BioSpin Group's businesses and prospects, including projections for each
of Bruker BioSciences and the Bruker BioSpin Group for the five years ended December 31, 2012, all as prepared and provided to us by Bruker BioSciences' management (which are referred to as the
Bruker BioSciences projections and the adjusted Bruker BioSpin Group projections, respectively);
-
-
reviewed
certain estimates of revenue enhancements, cost savings and other combination benefits expected to result from the transaction, all as prepared and provided to us
by Bruker BioSciences' management (which are referred to as the potential synergies);
-
-
met
with certain members of Bruker BioSciences' senior management to discuss Bruker BioSciences' and the Bruker BioSpin Group's businesses, operations, historical financial
results and future prospects, the Bruker BioSciences projections, the Bruker BioSpin Group projections, the adjusted Bruker BioSpin Group projections and the potential synergies;
-
-
reviewed
the historical prices, trading multiples and trading volume of the common stock of Bruker BioSciences;
-
-
reviewed
certain publicly available financial data, stock market performance data and trading multiples of companies which we deemed generally comparable to Bruker
BioSciences and the Bruker BioSpin Group;
-
-
reviewed
the terms of certain relevant mergers and acquisitions involving companies which we deemed generally comparable to the Bruker BioSpin Group;
-
-
performed
discounted cash flow analyses based on the Bruker BioSciences projections, the adjusted Bruker BioSpin Group projections and the pro forma combined projections of
Bruker BioSciences and the Bruker BioSpin Group including the potential synergies;
-
-
reviewed
the pro forma financial results, financial condition and capitalization of Bruker BioSciences, giving effect to the transaction; and
-
-
conducted
such other studies, analyses, inquiries and investigations as we deemed appropriate.
In
connection with rendering its opinion, Bear Stearns further noted that:
-
-
Bear
Stearns relied upon and assumed, without independent verification, the accuracy and completeness of the financial and other information provided to or discussed with it
by Bruker
36
BioSciences
and the Bruker BioSpin Group or obtained by Bear Stearns from public sources, including, without limitation, the Bruker BioSciences projections, the Bruker BioSpin Group projections, the
adjusted Bruker BioSpin Group projections and the potential synergies referred to above.
-
-
With
respect to the Bruker BioSciences projections, the Bruker BioSpin Group projections, the adjusted Bruker BioSpin Group projections and the potential synergies, Bear
Stearns relied on representations that they had been reasonably prepared on bases reflecting the best then-currently available estimates and judgments of the senior management of Bruker
BioSciences and the Bruker BioSpin Group, as the case may be, as to the expected future performance of Bruker BioSciences and the Bruker BioSpin Group.
-
-
Bear
Stearns did not assume any responsibility for the independent verification of any information referred to above, including, without limitation, the Bruker BioSciences
projections, the Bruker BioSpin Group projections, the adjusted Bruker BioSpin Group projections and the potential synergies, Bear Stearns expressed no view or opinion as to the Bruker BioSciences
projections, the Bruker BioSpin Group projections, the adjusted Bruker BioSpin Group projections and the potential synergies and the assumptions upon which they were based and Bear Stearns further
relied upon the assurances of the senior management of Bruker BioSciences and the Bruker BioSpin Group, as the case may be, that they were unaware of any facts that would have made the information,
the Bruker BioSciences projections, the Bruker BioSpin Group projections, the adjusted Bruker BioSpin Group projections and the potential synergies incomplete or misleading.
-
-
In
arriving at its opinion, Bear Stearns did not perform or obtain any independent appraisal of the assets or liabilities (contingent or otherwise) of Bruker BioSciences and
the Bruker BioSpin Group, nor was Bear Stearns furnished with any such appraisals.
-
-
Bear
Stearns assumed that the transactions contemplated by the transaction agreements will be consummated in a timely manner and in accordance with the terms of the
transaction agreements without any limitations, restrictions, conditions, amendments or modifications, regulatory or otherwise, that collectively would have a material effect on Bruker BioSciences or
the Bruker BioSpin Group, and that the final form of the transaction agreements were substantially similar to the last drafts reviewed by it.
-
-
Bear
Stearns is not a legal, regulatory, tax or accounting expert and has relied on the assessments made by Bruker BioSciences, the Bruker BioSpin Group and their respective
advisors with respect to these issues.
-
-
Bear
Stearns did not express any opinion as to the price or range of prices at which the shares of common stock of Bruker BioSciences may trade subsequent to the
announcement or consummation of the acquisition.
Summary of Financial Analyses
The following is a summary of the principal financial and valuation analyses performed by Bear Stearns and presented to the Bruker BioSciences special committee
and Bruker BioSciences' board of directors in connection with rendering its fairness opinion.
Some
of the financial and valuation analyses summarized below include summary data and information presented in tabular format. In order to understand fully the financial and valuation
analyses, the summary data and tables must be read together with the full text of the summary. Considering the summary data and tables alone could create a misleading or incomplete view of Bear
Stearns' financial and valuation analyses.
37
Based on the purchase price of approximately $388.0 million in cash and 57,544,872 Bruker BioSciences shares, Bear Stearns calculated the implied equity
value and enterprise value of the Bruker BioSpin Group based on Bruker BioSciences closing share price of $9.29 on November 30, 2007.
Bruker BioSpin Group Implied Equity and Enterprise Value ($ in millions, except share and per share data)
|
|
|
|
|
Bruker BioSciences shares issued in transaction
|
|
|
57,544,872
|
|
Multiplied by Bruker BioSciences closing share price on November 30, 2007
|
|
$
|
9.29
|
|
|
|
|
|
|
|
Implied value of Bruker BioSciences shares issued in transaction
|
|
$
|
534.6
|
|
Plus:
|
|
Cash consideration in transaction
|
|
|
388.0
|
|
|
|
|
|
|
|
|
Implied equity value
|
|
$
|
922.6
|
|
Plus:
|
|
Debt and capital leases outstanding at September 30, 2007
|
|
|
9.7
|
|
Plus:
|
|
Swiss tax audit exposure (as estimated by Bruker BioSciences management)
|
|
|
1.3
|
|
Plus:
|
|
Pre-closing dividend to Bruker BioSpin Group shareholders
|
|
|
67.3
|
|
Minus:
|
|
Cash, cash equivalents and short-term investments at September 30, 2007
|
|
|
(281.6
|
)
|
|
|
|
|
|
|
|
Implied enterprise value
|
|
$
|
719.2
|
|
Bear Stearns' Financial Analyses
Comparable Public Companies Analysis.
Bear Stearns performed a comparable public companies analysis to assist the Bruker
BioSciences' special committee in valuing the Bruker BioSpin Group based on various financial multiples of selected comparable public companies in the life science instrumentation industry. In
performing this analysis, Bear Stearns reviewed certain financial information relating to the Bruker BioSpin Group and compared this information to the corresponding financial information of
publicly-traded life science instrumentation companies which Bear Stearns deemed to be generally comparable to the Bruker BioSpin Group.
Bear
Stearns compared the projected financial performance and the resulting multiples as of November 30, 2007 of Bruker BioSciences and the resulting multiples of the Bruker
BioSpin Group at the implied purchase price in the transaction of $922.6 million, based on BioSciences closing share price of $9.29 on November 30, 2007, to nine publicly traded life
science instrumentation companies, which it deemed generally comparable to the Bruker BioSpin Group. Based on the comparability of business dynamics relative to the Bruker BioSpin Group including
market focus, customer focus, geographic mix, business mix and projected growth rates, among other things, Bear Stearns divided the nine publicly traded companies into a Tier 1 set consisting
of five publicly traded companies and a Tier 2 set consisting of four publicly traded companies as follows:
|
|
Tier 1
|
|
Tier 2
|
|
|
|
|
Thermo Fisher Scientific
|
|
Agilent Technologies, Inc.
|
|
|
|
|
Waters Corporation
|
|
Mettler-Toledo International Inc.
|
|
|
|
|
Applied Biosystems Group
|
|
Techne Corporation
|
|
|
|
|
PerkinElmer, Inc.
|
|
Dionex Corporation
|
|
|
|
|
Varian, Inc.
|
|
|
|
|
Using
publicly available information and market data as of November 30, 2007, and in the case of Bruker BioSciences (Management) and the Bruker BioSpin Group, information based on
Bruker BioSciences management estimates and using Wall Street research projections for revenue and EBITDA and consensus estimates for EPS and EPS Growth for Bruker BioSciences (Wall Street) and the
above comparable companies, Bear Stearns calculated the following harmonic mean multiples for
38
the
above public comparable companies and compared the results to Bruker BioSciences at market and the Bruker BioSpin Group at deal price:
|
|
Tier 1
|
|
Tier 2
|
|
Comparable Company Harmonic Mean Multiples:
|
|
|
2007E
|
|
2008E
|
|
2007E
|
|
2008E
|
|
Enterprise Value/Revenue
|
|
2.75
|
x
|
2.54
|
x
|
3.82
|
x
|
3.56
|
x
|
Enterprise Value/EBITDA
|
|
14.2
|
|
12.6
|
|
17.1
|
|
15.5
|
|
Enterprise Value/EBITDA/Growth Rate
|
|
1.10
|
|
|
|
1.66
|
|
|
|
Share Price/EPS
|
|
24.4
|
|
21.1
|
|
27.3
|
|
23.6
|
|
Share Price/EPS/Growth Rate
|
|
|
|
1.47
|
|
|
|
1.64
|
|
|
|
Management
|
|
Wall Street
|
|
Bruker BioSciences at Market Multiples:
|
|
|
2007E
|
|
2008E
|
|
2007E
|
|
2008E
|
|
Enterprise Value/Revenue
|
|
2.06
|
x
|
1.87
|
x
|
1.93
|
x
|
1.73
|
x
|
Enterprise Value/EBITDA
|
|
17.1
|
|
14.2
|
|
16.8
|
|
14.0
|
|
Enterprise Value/EBITDA/Growth Rate
|
|
0.82
|
|
|
|
0.82
|
|
|
|
Share Price/EPS
|
|
35.9
|
|
28.9
|
|
36.1
|
|
26.7
|
|
Share Price/EPS/Growth Rate
|
|
|
|
1.00
|
|
|
|
0.89
|
|
Bruker BioSpin Group at Deal Multiples:
|
|
2007E
|
|
2008E
|
|
|
|
|
|
Enterprise Value/Revenue
|
|
1.55
|
x
|
1.45
|
x
|
|
|
|
|
Enterprise Value/EBITDA
|
|
8.0
|
|
7.5
|
|
|
|
|
|
Enterprise Value/EBITDA/Growth Rate
|
|
1.12
|
|
|
|
|
|
|
|
Equity Value/Net Income
|
|
15.8
|
|
13.8
|
|
|
|
|
|
Equity Value/Net Income/Growth Rate
|
|
|
|
1.50
|
|
|
|
|
|
"Harmonic
mean" is calculated by taking the inverse of the average reciprocals of the multiples and gives equal weight to equal dollar investments in the securities whose ratios are
being averaged. Bear Stearns utilizes the harmonic mean in averaging ratios in which price is the numerator. "Enterprise Value" is calculated as the sum of the value of the common equity on a fully
diluted basis and the value of net debt, any minority interest and preferred stock. "EBITDA" is a company's earnings before interest, taxes, depreciation and amortization. "EPS" is a company's
earnings per share. "Growth Rate" for EBITDA is the 2007 to 2008 growth in EBITDA. "Growth Rate" for EPS and net income is the consensus long term growth rate as provided by First Call for Bruker
BioSciences and the comparable companies, and for Bruker BioSciences (Management) and the Bruker BioSpin Group, the compounded annual growth rate from 2008 to 2012 in projected net income based on
Bruker BioSciences management estimates. "Bruker BioSciences at Market" is defined as Bruker BioSciences' enterprise value and share price based on the closing share price of the Bruker BioSciences
common stock as of November 30, 2007. "Bruker BioSpin Group at Deal" is defined as the Bruker BioSpin Group's implied enterprise value and equity value based on the purchase price in the
transaction of approximately $388 million in cash and 57,544,872 Bruker BioSciences shares and Bruker BioSciences closing share price on November 30, 2007 and the value of net debt, the
pre-closing dividend to the sellers and an estimated tax exposure.
Precedent M&A Transaction Analysis.
Bear Stearns performed a precedent transactions analysis to assist the Bruker
BioSciences' special committee in valuing the Bruker BioSpin Group based on various financial multiples of selected comparable precedent transactions in the life science instrumentation industry. In
performing this analysis, Bear Stearns reviewed certain financial information relating to the Bruker BioSpin Group and compared this information to the corresponding financial information of precedent
transactions involving life science instrumentation companies which Bear Stearns deemed to be generally comparable to the Bruker BioSpin Group.
39
Bear
Stearns compared the financial performance and the resulting multiples of the Bruker BioSpin Group's enterprise value and equity value based on the purchase price in the transaction
to six precedent transactions involving life science instrumentation companies, which it deemed generally comparable to the Bruker BioSpin Group. Such comparable precedent transactions consisted of:
Date
Announced
|
|
Target/Acquiror
|
01/29/07
|
|
Molecular Devices Corp. / MDS Inc.
|
06/20/06
|
|
Biacore International / GE Healthcare Ltd.
|
04/17/06
|
|
Bruker Optics Inc. / Bruker BioSciences
|
06/13/05
|
|
SPECTRO Beteiligungs GmbH / AMETEK, Inc.
|
01/19/05
|
|
Kendro Laboratory Products division of SPX Corporation / Thermo Electron Corporation
|
04/07/03
|
|
Bruker AXS / Bruker Daltonics
|
Using
publicly available information, and in the case of the Bruker BioSpin Group, information based on Bruker BioSciences management estimates for the years ending December 31,
2007, 2008 and 2009 and using Wall Street research projections for revenue, EBITDA and net income for the above target
companies, Bear Stearns calculated the following harmonic mean multiples for the above comparable precedent transactions:
|
|
Latest
Twelve
Months
|
|
Current
Year
|
|
Current
Year + 1
|
|
Precedent transactions Harmonic Mean Multiples:
|
|
|
|
|
|
|
|
Enterprise Value/Revenue
|
|
1.41
|
x
|
1.27
|
x
|
0.95
|
x
|
Enterprise Value/EBITDA
|
|
11.6
|
|
9.0
|
|
6.5
|
|
Enterprise Value/EBITDA/Growth Rate
|
|
0.42
|
|
|
|
|
|
Equity Value/Net Income
|
|
|
|
20.9
|
|
15.4
|
|
Equity Value/Net Income/Growth Rate
|
|
|
|
1.09
|
|
|
|
Bruker BioSpin Group/Bruker BioSciences at Deal Multiples:
|
|
|
|
|
|
|
|
Enterprise Value/Revenue
|
|
1.55
|
x
|
1.45
|
x
|
1.37
|
x
|
Enterprise Value/EBITDA
|
|
8.0
|
|
7.5
|
|
7.3
|
|
Enterprise Value/EBITDA/Growth Rate
|
|
1.12
|
|
|
|
|
|
Equity Value/Net Income
|
|
|
|
13.8
|
|
13.1
|
|
Equity Value/Net Income/Growth Rate
|
|
|
|
1.50
|
|
|
|
Discounted Cash Flow Analysis.
Based on cash flow projections for Bruker BioSciences, the Bruker BioSpin Group and the
potential synergies expected to result in the transaction all as prepared by Bruker BioSciences, Bear Stearns performed a discounted cash flow analysis to assist the Bruker BioSciences special
committee in valuing the Bruker BioSpin Group, Bruker BioSciences and the pro forma combined company.
In
performing its discounted cash flow analysis:
-
-
Bear
Stearns estimated Bruker BioSciences' weighted average cost of capital to be within a range of 11.0-13.0% based on, among other factors, (i) a review
of Bruker BioSciences' Bloomberg five-year historical adjusted beta, its Bloomberg two-year historical adjusted beta and its then-current Barra predicted beta (with
a bias toward more recent historical and predicted data to more appropriately reflect Bruker BioSciences' risk profile going forward) as well as similar beta information for the comparable companies,
(ii) Bear Stearns' estimate of the US equity risk premium, (iii) Bruker BioSciences' assumed target capital structure on a prospective basis and (iv) Bear Stearns' investment
banking and capital markets judgment and experience in valuing companies similar to Bruker BioSciences.
40
-
-
Bear
Stearns estimated the Bruker BioSpin Group's weighted average cost of capital to be within a range of 10.5-12.5% based on, among other factors, (i) a
review of the Bloomberg five-year historical adjusted beta, Bloomberg two-year historical adjusted beta and then-current Barra predicted betas for the comparable
companies, (ii) Bear Stearns' estimate of the US equity risk premium, (iii) the Bruker BioSpin Group's
assumed target capital structure on a prospective basis and (iv) Bear Stearns' investment banking and capital markets judgment and experience in valuing companies similar to the Bruker BioSpin
Group.
-
-
In
calculating Bruker BioSciences' and the Bruker BioSpin Group's terminal values for purposes of its discounted cash flow analyses, Bear Stearns used a reference range of
terminal enterprise value/trailing EBITDA multiples (based on estimated 2012 EBITDA) of 8.0 to 10.0x. The terminal values implied by the aforementioned terminal multiple reference ranges were
cross-checked for reasonableness by reference to implied perpetual growth rates in the terminal year free cash flow.
-
-
For
the potential synergies, Bear Stearns estimated the discount rate to be within a range of 10.5-12.5% and in calculating terminal value for purposes of its
discounted cash flow analyses, Bear Stearns used a reference range of perpetual growth rates in terminal free cash flow of 2.0-4.0%.
Discounted
cash flow valuations were calculated for the Bruker BioSpin Group on a stand-alone basis using the adjusted Bruker BioSpin Group projections, both including and excluding
potential synergies. Bear Stearns derived a range of implied equity values for the Bruker BioSpin Group as follows:
|
|
Range
|
($ in millions)
|
|
Low
|
|
|
|
High
|
Bruker BioSpin Group
|
|
|
|
|
|
|
|
|
Excluding Potential Synergies
|
|
$
|
1,062
|
|
|
|
$
|
1,282
|
Including Potential Synergies
|
|
|
1,172
|
|
|
|
|
1,415
|
The
ranges of implied equity values in the table above compare to the implied purchase price of $922.6 million based on Bruker BioSciences' closing share of $9.29 on
November 30, 2007.
Discounted
cash flow valuations were also calculated for Bruker BioSciences on a stand-alone basis using the Bruker BioSciences projections and for the pro forma combined company both
including and excluding the potential synergies.
Bear
Stearns derived a range of implied equity values per share for Bruker BioSciences and the pro forma combined company as follows:
|
|
Range
|
|
|
Low
|
|
|
|
High
|
Bruker BioSciences
|
|
|
|
|
|
|
|
|
|
Stand-alone
|
|
$
|
8.97
|
|
|
|
$
|
11.38
|
Combined Company
|
|
|
|
|
|
|
|
|
|
Excluding Potential Synergies
|
|
$
|
9.85
|
|
|
|
$
|
12.74
|
|
Including Potential Synergies
|
|
|
10.51
|
|
|
|
|
13.54
|
41
Pro Forma Transaction Analysis.
Bear Stearns performed a pro forma transaction analysis to assist the Bruker BioSciences
special committee in analyzing the financial impact of the transaction on Bruker BioSciences. Bear Stearns reviewed and analyzed certain pro forma financial impacts of the transaction on holders of
Bruker BioSciences based on the following, among other items:
-
-
a
purchase price of approximately $388.0 million in cash and 57,544,872 Bruker BioSciences shares;
-
-
the
financial projections provided to Bear Stearns by the management of Bruker BioSciences for both Bruker BioSciences and the Bruker BioSpin Group and the potential
synergies; and
-
-
an
assumption for analytical purposes that there would be no financial statement impact of potential restructuring costs or other one-time costs associated with
the transaction and that the transaction was effective as of January 1, 2008.
The
following table shows the projected per share accretion / (dilution) to Bruker BioSciences' standalone earnings, including and excluding the potential synergies for the years
presented.
Accretion / (Dilution) to Bruker BioSciences' Earnings per Share
|
|
2008E
|
|
2009E
|
|
2010E
|
Including Potential Synergies
|
|
$
|
0.25
|
|
$
|
0.24
|
|
$
|
0.22
|
Excluding Potential Synergies
|
|
|
0.22
|
|
|
0.21
|
|
|
0.19
|
Other Considerations
The preparation of a fairness opinion is a complex process and involves various judgments and determinations as to the most appropriate and relevant assumptions
and financial and valuation analyses and the application of those methods to the particular circumstances involved. A fairness opinion is therefore not readily susceptible to partial analysis or
summary description, and taking portions of the analyses set out above, without considering the analysis as a whole, would in the view of Bear Stearns create an incomplete and misleading picture of
the processes underlying the analyses considered in rendering the Bear Stearns opinion. In arriving at its opinion, Bear Stearns:
-
-
Based
its analyses on assumptions that it deemed reasonable, including assumptions concerning general business and economic conditions, capital markets considerations and
industry-specific and company-specific factors.
-
-
Did
not form a view or opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support
the Bear Stearns opinion.
-
-
Considered
the results of all its analyses and did not attribute any particular weight to any one analysis or factor.
-
-
Arrived
at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole and believed that the totality of the factors considered and
analyses performed by Bear Stearns in connection with its opinion operated collectively to support its determination as to the fairness, from a financial point of view, to the holders of Bruker
BioSciences shares, excluding the holders of Bruker BioSciences shares who also own shares in the Bruker BioSpin Group companies, of the aggregate consideration to be issued in the transactions.
Bear
Stearns also noted that:
-
-
The
analyses performed by Bear Stearns, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results,
which may be significantly more or less favorable than suggested by these analyses.
-
-
None
of the public companies used in the comparable company analysis described above are identical to Bruker BioSciences or Bruker BioSpin, and none of the precedent merger
and
42
The
type and amount of consideration payable in the acquisition were determined through negotiations between Bruker BioSciences and Bruker BioSpin and were approved by the Bruker
BioSciences special committee and board of directors. The decision to enter into the transaction agreements was solely that of the Bruker BioSciences special committee and board of directors. The Bear
Stearns opinion was just one of the many factors taken into consideration by the Bruker BioSciences special committee and board of directors. Consequently, Bear Stearns' analyses should not be viewed
as determinative of the decisions of the Bruker BioSciences special committee and board of directors with respect to the fairness, from a financial point of view, to the holders of Bruker BioSciences
shares, excluding the holders of BioSciences shares who also own shares in the Bruker BioSpin Group companies, of the aggregate consideration to be issued in the transactions.
Pursuant
to the terms of Bear Stearns' engagement letter, Bruker BioSciences has agreed to pay Bear Stearns a customary transaction fee, a substantial portion of which is payable upon
consummation of the transaction contemplated by the transaction agreements. A portion of Bear Stearns' compensation was paid upon delivery of its letter and may be credited against the fee payable
upon consummation of the acquisition. In addition, Bruker BioSciences has agreed to reimburse Bear Stearns for certain expenses and to indemnify Bear Stearns against certain liabilities arising out of
Bear Stearns' engagement.
Bear
Stearns has previously been engaged by Bruker BioSciences to provide certain investment banking and other services on matters unrelated to the acquisition, for which Bear Stearns
has received customary fees. Bear Stearns may seek to provide Bruker BioSciences and its respective affiliates with certain investment banking and other services unrelated to the acquisition in the
future.
Consistent
with applicable legal and regulatory requirements, Bear Stearns has adopted certain policies and procedures to establish and maintain the independence of Bear Stearns'
research departments and personnel. As a result, Bear Stearns' research analysts may hold views, make statements or investment recommendations and/or publish research reports with respect to Bruker
BioSciences, the acquisition and other participants in the acquisition that differ from the views of Bear Stearns' investment banking personnel.
In
the ordinary course of business, Bear Stearns and its affiliates may actively trade (for its own account and for the accounts of its customers) certain equity and debt securities,
bank debt and/or other financial instruments issued by Bruker BioSciences and its affiliates, as well as derivatives thereof, and, accordingly, may at any time hold long or short positions in these
securities, bank debt, financial instruments and derivatives.
Sources of Funds
Bruker BioSciences estimates that the total amount of funds necessary to consummate the combination (including payment of the aggregate cash consideration) will
be approximately $398.7 million, which includes $388 million to be paid to shareholders of the Bruker BioSpin Group companies, and the remainder to be applied to pay related fees and
expenses in connection with the
43
transactions
and the financing arrangements. These payments are expected to be funded from Bruker BioSciences' available cash, together with a debt financing which Bruker BioSciences expects will be
substantially on the terms described below. In connection with the execution and delivery of the stock purchase agreements and the merger agreement, Bruker BioSciences has entered into a commitment
letter with J.P. Morgan Securities Inc. and Citibank, N.A. Under this commitment letter, the lenders have proposed to provide up to $380 million in debt financing to Bruker BioSciences,
consisting of (i) a term loan facility in an aggregate principal amount of $150 million and (ii) a revolving credit facility in an aggregate principal amount of
$230 million, a portion of which will be available as a letter of credit subfacility. Advances under the credit facilities will be available to finance the combination, to pay related fees,
costs and expenses in connection with these transactions and to fund the general working capital needs of Bruker BioSciences and its subsidiaries following the combination. Bruker BioSciences'
material direct and indirect subsidiaries will guarantee all obligations of Bruker BioSciences, subject to tax considerations and financial assurance limitations, as applicable. In addition, the
credit facilities will be secured by all of the capital stock of Bruker BioSciences' domestic subsidiaries and by 65% of the capital stock of various of our foreign subsidiaries. The credit facilities
contemplated by the commitment letter are subject to customary closing conditions, including, among others:
-
-
the
execution of definitive credit documentation satisfactory to the lenders;
-
-
accounting
due diligence and the receipt of specified financial statements of Bruker BioSciences;
-
-
satisfactory
due diligence review of Bruker BioSciences and the Bruker BioSpin Group; and
-
-
receipt
of customary closing documents.
As
of the date of this proxy statement, no alternative financing arrangements or alternative financing plans have been made in the event this financing is not available as anticipated.
The documentation governing the financing has not been finalized and, accordingly, the actual terms may differ from those described in this proxy statement.
Interests of Certain Directors and Executive Officers in the Combination
In considering the recommendation of the board of directors of Bruker BioSciences to vote for the proposals to approve the combination with the Bruker BioSpin
Group and the issuance of shares of Bruker BioSciences common stock as part of the consideration for the combination, stockholders of Bruker BioSciences should be aware that some Bruker BioSciences
executive officers and directors may have interests in the acquisition that may be different from, or in addition to, those of Bruker BioSciences stockholders.
Following
the combination with the Bruker BioSpin Group, Frank H. Laukien, our president, chief executive officer and chairman of the board, and Dirk D. Laukien, currently Bruker
BioSciences' senior vice president, will continue in their roles at Bruker BioSciences and as co-chief executive officers of our Bruker BioSpin subsidiaries. If elected by stockholders at
the Special Meeting, Dirk Laukien will also become a director of Bruker BioSciences. Joerg Laukien, currently a director of Bruker BioSciences and European chief operating officer of the Bruker
BioSpin Group, will continue as European chief operating officer of our Bruker BioSpin subsidiary upon completion of the combination.
In
addition to their respective roles as executive officers and directors, Frank Laukien, Dirk Laukien and Joerg Laukien each own stock in both Bruker BioSciences and the companies of
the Bruker BioSpin Group. The Bruker BioSpin Group Shareholders control 100% of the shares of the Bruker BioSpin Group, and will receive all of the consideration issued by Bruker BioSciences as a
result of the transactions discussed in this proxy statement.
44
If
the acquisition of the Bruker BioSpin Group is approved by stockholders, our directors and officers who are also Bruker BioSpin Group shareholders will receive different amounts of
cash and stock as consideration in exchange for their interests in the Bruker BioSpin Group companies. Frank Laukien will receive $69.7 million of cash and 10,034,387 Bruker BioSciences shares
which, as of January 14, 2008, have a market value of approximately $116.3 million. Joerg Laukien will receive $72.9 million of
cash and 10,789,664 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately $125.1 million. Dirk Laukien will receive $72.9 million of cash
and 10,789,664 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately $125.1 million.
Upon
the completion of the purchases of Bruker BioSciences common stock pursuant to the cash-stock exchange agreement among Isolde Laukien-Kleiner, Marc Laukien, Joerg
Laukien, Frank Laukien and Robyn Laukien, and giving effect to the resulting reallocation of cash and share proceeds, Frank Laukien will have received net cash consideration of $19.2 million
and 15,554,574 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately $180.3 million. Also after giving effect to this agreement, Joerg Laukien
will have received net cash consideration of $68.6 million and 11,258,741 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately
$130.5 million. Under a separate cash-stock exchange agreement, completion of which is subject to certain conditions, Frank Laukien may purchase from Dirk Laukien an additional
1,219,733 shares of Bruker BioSciences common stock for approximately $11.1 million. If this transfer is completed, Frank Laukien will have received net cash consideration of
$8.1 million and 16,774,307 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately $194.4 million. If this transfer is completed, Dirk
Laukien will have received net cash consideration of $84.0 million and 9,569,930 Bruker BioSciences shares which, as of January 14, 2008, have a market value of approximately
$110.9 million. The cash-stock exchange agreements are more fully described below in the section of this proxy statement under the heading "Cash-Stock Exchange
Agreements" on page 47.
As
of January 14, 2008, the directors and executive officers of Bruker BioSciences beneficially owned 40,450,824 shares, including stock options exercisable within
60 days of January 14, 2008, representing approximately 39% of the outstanding shares of Bruker BioSciences common stock.
For
additional information relating to affiliations of various Bruker BioSciences officers, directors and stockholders, you should read the section entitled "Certain Relationships and
Related Party Transactions" beginning on page 105.
The
Bruker BioSciences board of directors was aware of these interests during its deliberation of the merits of the combination and in determining to recommend to the stockholders of
Bruker BioSciences that they vote for the proposal to approve the transactions contemplated by the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement,
including the related issuance of shares of Bruker BioSciences common stock.
Completion and Effectiveness of the Combination
The combination will be completed when and if all of the conditions to the completion of the transactions are satisfied or waived.
We
are working toward completing the combination as quickly as possible. We expect to complete the combination during the first calendar quarter of 2008.
Structure of the Transaction and Operations Post-Combination
The combination is structured so that (a) Bruker BioSciences will purchase all of the outstanding stock of Bruker BioSpin Inc., Bruker Physik and
Techneon from the shareholders of BioSpin Inc.,
45
Bruker
Physik and Techeon, respectively, in a private placement, and (b) Bruker BioSciences, through a reverse triangular merger agreement with Bruker BioSpin Invest, will indirectly acquire
the equity of the Bruker BioSpin Invest shareholders. Consideration for the shares of the companies of the Bruker BioSpin Group will consist of a combination of cash and shares of Bruker BioSciences
common stock. Bruker BioSciences intends to operate the Bruker BioSpin Group as a wholly owned operation alongside Bruker Daltonics, Bruker AXS and Bruker Optics.
Material United States Federal Income Tax Consequences of the Combination
The acquisitions are not expected to result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders, other than for the owners of
Bruker BioSciences shares who are also owners of shares of the Bruker BioSpin Group.
Accounting Treatment of the Acquisition
The combination represents a business combination of companies under common control due to the majority ownership of all companies by the Bruker BioSpin Group
Shareholders as an affiliated stockholder group. As a result, the combination will be accounted for at historical carrying value.
Regulatory Matters
We have summarized below the material regulatory requirements affecting the combination. Although we have not yet received all of the required approvals we
discuss, we anticipate that we will receive regulatory approvals sufficient to complete the combination during the first calendar quarter of 2008.
Antitrust Considerations.
The stock purchase of Bruker BioSpin Inc. is subject to the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which prevents certain merger or acquisition transactions from being completed until required information and materials
are furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and specified waiting periods are terminated or expire. Bruker BioSciences and Bruker
BioSpin Inc. filed the required information and materials to notify the Department of Justice and the Federal Trade Commission of the combination on December 14, 2007. The applicable HSR
waiting period expired on January 14, 2008.
The
Antitrust Division of the Department of Justice or the Federal Trade Commission may challenge on antitrust grounds, regardless of the fact that the waiting period expired without
comment. Accordingly, at any time before or after the completion of this stock purchase, either the Antitrust Division of the Department of Justice or the Federal Trade Commission could take action
under the antitrust laws as it deems necessary or desirable in the public interest, or other persons could take action under the antitrust laws, including seeking to enjoin this stock purchase or
seeking the divestiture of substantial assets of one of the parties to this stock purchase. Additionally, at any time before or after this stock purchase, notwithstanding that the applicable waiting
period expired or was terminated, a private party (including an individual state) may seek to take action under the antitrust laws as it deems necessary or desirable in the public interest. Although
we do not expect any conditions to be imposed by the Antitrust Division or the Federal Trade Commission, there can be no assurance that a challenge to this stock purchase will not be made or that, if
a challenge is made, we will prevail.
No Appraisal Rights
There are no rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon under this proxy statement. Delaware law does not
require that holders of Bruker BioSciences common stock who object to the share issuance and the transactions, and who vote against
46
or
abstain from voting in favor of the issuance and the transactions, be afforded any appraisal or dissenters' rights or the right to receive cash for their shares.
Foreign Regulatory Requirements
Bruker BioSciences is not aware of any material foreign governmental approvals or actions that are required to complete the combination. Bruker BioSciences and
the Bruker BioSpin Group conduct operations in a number of foreign countries, some of which have voluntary and/or post-acquisition notification systems. Should any approval or action be
required, Bruker BioSciences and the Bruker BioSpin Group currently plan to seek the approval or take the action required. Failure to obtain the approval or take the action is not anticipated to have
a material effect on the combination or on Bruker BioSciences.
The
transactions are subject to a binding ruling by the three relevant Swiss tax authorities, comprised of the Federal Tax Authorities and the cantonal Tax Authorities of the Cantons of
Zurich and Zug, that the amount of withholding taxes required under Swiss law as a result of the transactions will be based on a minimum pre-merger dividend under Swiss law set at
$50 million with withholding taxes imposed at a rate of 35% subject to a 20% tax refund. For purposes of obtaining the binding ruling, submitted on November 19, 2007 to the Swiss Federal
Tax Authorities for their review were information and materials pertaining to (i) the pre-merger dividend to be distributed; (ii) the acquisition of BBIO Invest AG (Zug) by
Bruker BioSciences; and (iii) the upstream merger of BBIO-AG (Zuerich) with and into BBIO Invest AG (Zug). BBIO Invest AG (Zug) is a holding company that contains various of the
foreign distribution companies of the Bruker BioSpin Group. BBIO-AG (Zuerich) is a subsidiary of Bruker BioSpin Invest AG, and is the main production and research and development center of
the Bruker BioSpin Group, focusing on the development and production of superconducting magnets, radio-frequency electronics, micro-imaging cryogenic and conventional probes, and high throughput
automation solutions. BBIO-AG (Zuerich) also provides applications and engineering support for customers in Switzerland and a number of other countries.
A
fully executed favorable binding ruling from the relevant Swiss federal and cantonal tax authorities was received on November 28, 2007 adopting a minimum pre-merger
dividend set at $50 million.
Restrictions on Sales of Shares Issued In Connection with the Combination
The shares of Bruker BioSciences common stock to be issued in connection with the combination will not be registered under the Securities Act of 1933 and they
will not be freely transferable under the Securities Act. Shareholders of the Bruker BioSpin Group receiving shares of Bruker BioSciences common stock in the transactions may sell these shares
pursuant to any applicable exemption under the Securities Act except that, pursuant to the terms of the transaction agreements, they are prohibited
from selling the shares for a period of one year after the closing date of the transactions, except for various permitted transfers of stock from one Bruker BioSpin Group Shareholder to another.
Cash-Stock Exchange Agreements
In connection with the execution of the three transaction agreements, and in order to allow each of the Bruker BioSpin Group Shareholders to achieve the desired
proportions of proceeds in cash and stock from the proposed transactions, the Bruker BioSpin Group Shareholders entered into cash-stock exchange agreements among themselves.
Dirk
Laukien and Frank Laukien have entered into a cash-stock exchange agreement under which, if at any time within the one year period immediately following the consummation
of the transactions, the daily closing price on the NASDAQ Global Select Market for Bruker BioSciences is at least $9.14 per share, Frank Laukien will purchase from Dirk Laukien 1,219,733 shares of
Bruker BioSciences
47
stock
for $11,148,362. The agreement may be terminated by Dirk Laukien prior to the anticipated closing date of the share purchase if the $9.14 per share price is achieved. In addition, the agreement
shall be null and void in any event if either the purchase under the agreement does not occur within one year after the closing under the transaction agreements or the consummation of the transactions
under the transaction agreements does not occur on or before December 31, 2008.
In
addition, a separate cash-stock exchange agreement was entered into among Isolde Laukien-Kleiner, Marc Laukien, Frank Laukien, Joerg Laukien and Robyn Laukien. Under this
agreement, the following purchases will be made immediately after the consummation of the transactions: (i) Frank Laukien will purchase from Marc Laukien 1,876,943 shares of Bruker BioSciences
stock for $17,151,148, and will purchase from Isolde Laukien-Kleiner 3,643,694 shares of Bruker BioSciences stock for $33,303,359, (ii) Robyn Laukien will purchase from Isolde Laukien-Kleiner
296,757 shares of Bruker BioSciences for $2,712,360, and (iii) Joerg Laukien will purchase from Isolde Laukien-Kleiner 469,078 shares of Bruker BioSciences stock for $4,287,372. This agreement
shall be null and void if the consummation of the transactions does not occur on or before December 31, 2008.
48
DESCRIPTION OF THE TRANSACTION AGREEMENTS
The following summary of the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement is qualified in its entirety by
reference to the complete text of the transaction agreements, which are incorporated by reference and attached as Annexes A-1 to A-3 to this proxy statement. We urge you to
read the full text of each of the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement.
The Stock Purchase Agreement with Bruker BioSpin Inc.
General
On December 2, 2007, Bruker BioSciences, Bruker BioSpin Inc. and the stockholders of Bruker BioSpin Inc. entered into a stock purchase
agreement, which we sometimes refer to in this proxy statement as the U.S. stock purchase agreement. Under the U.S. stock purchase agreement, Bruker BioSciences will purchase all of the outstanding
shares of Bruker BioSpin Inc. for an aggregate purchase price of $99,962,514, payable in cash.
Closing Date
Unless the parties agree otherwise, the closing of the stock purchase will take place on the later of January 23, 2008 or the first business day following
the satisfaction or waiver of all of the closing conditions.
Purchase Price-Payment
The U.S. stock purchase agreement provides that Bruker BioSciences shall purchase all of the outstanding shares of Bruker BioSpin Inc. for an aggregate
purchase price of $99,962,514, which, after the funding of the escrows described below, will be payable in cash at closing to the Bruker BioSpin Inc. stockholders pro rata in accordance with
their respective ownership of the Bruker BioSpin Inc. common stock.
Escrow
Working Capital Escrow.
At the closing, $6.75 million of the cash purchase price will be placed into escrow as
security for any potential adjustments to the purchase price that will be made if the net working capital of the Bruker BioSpin Group as of December 31, 2007 is less than $180 million.
If the net working capital of the Bruker BioSpin Group is less than $180 million, then the difference shall be paid from the working capital escrow. The unused portion of the working capital
escrow will be released to the sellers within 25 business days following receipt by Bruker BioSciences of the combined audited financial statements of the Bruker BioSpin Group for the fiscal year
ending December 31, 2007.
Indemnity Escrow.
At the closing, $92 million of the cash purchase price will be placed into escrow as security for
fulfillment by the sellers of their indemnification obligations set forth in the U.S. stock purchase agreement, the German share purchase agreement and the Swiss merger agreement. The unused portion
of the indemnity escrow will be released to the sellers within 30 business days of the later of (1) the 30th day following the receipt by Bruker BioSciences of the combined audited financial
statements of the Bruker BioSpin Group for the fiscal year ending December 31, 2008 or (2) the resolution of any claim for indemnification of which the sellers have received notice prior
to the conclusion of the 30-day period described in clause (1) of this sentence.
Representations and Warranties
The U.S. stock purchase agreement contains customary representations and warranties made by Bruker BioSpin Inc. and Bruker BioSpin Inc. stockholders
to Bruker BioSciences, subject, in some
49
cases,
to specified exceptions and qualifications contained in the stock purchase agreement or in the disclosure schedule delivered in connection therewith.
The
assertions embodied in those representations and warranties were made solely for purposes of the stock purchase agreement and may be subject to important qualifications and
limitations. For example, many of Bruker BioSpin Inc.'s representations and warranties are qualified by a Material Adverse Effect standard. For purposes of the stock purchase agreement, a
"Material Adverse Effect" means any circumstance, change or effect that, individually or in the aggregate with other circumstances, changes or effects, is or is reasonably likely to materially delay
or impede the consummation of the transactions contemplated by the stock purchase agreement or be materially adverse to the business, operations (including results of operations), prospects, assets,
liabilities, or financial condition of Bruker BioSpin Inc. and its subsidiaries taken as a whole; provided, however, that none of the following, either alone or in combination, shall be
considered in determining whether there has been a "Material Adverse Effect": (1) events, circumstances, changes or effects (including legal and regulatory changes) that generally affect the
industries in which each of Bruker BioSpin Inc. and its subsidiaries operate, other than such events, circumstances, changes or effects that disproportionately affect (relative to other
industry participants) Bruker BioSpin Inc. or its subsidiaries and (2) changes caused by a material worsening of current conditions caused by acts of terrorism or war occurring after the
date of the stock purchase agreement.
Some
of the representations and warranties in the stock purchase agreement may not be accurate or complete as of any specified date or may be subject to contractual standards of
materiality that differ from the standards of materiality under U.S. federal securities laws. For the foregoing reasons, you should not rely on the representations and warranties as statements of
factual information.
The
representations and warranties regarding Bruker BioSpin Inc. and its subsidiaries made to Bruker BioSciences by Bruker BioSpin Inc. and its stockholders relate to,
among other things:
-
-
corporate
organization, including due incorporation, good standing, corporate power and qualification to conduct business;
-
-
authorization,
execution, delivery and performance and the enforceability of the stock purchase agreement and related matters;
-
-
capital
structure;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the stock
purchase agreement;
-
-
identification
of required governmental filings and consents;
-
-
absence
of violations of any law, or necessity of any approval, as a result of the execution and delivery of, or consummation of the transactions contemplated by, the stock
purchase agreement;
-
-
compliance
with applicable laws and permits;
-
-
books
and records;
-
-
delivery
and accuracy of financial statements;
-
-
absence
of undisclosed material liabilities;
-
-
litigation
matters;
-
-
absence
of a Material Adverse Effect and certain other material changes or events since December 31, 2006;
-
-
disclosure
of certain contracts;
-
-
employee
matters, employee benefit plans, employment agreements, matters relating to the Employee Retirement Income Security Act of 1974, as amended, and labor relations;
50
-
-
absence
of default under material contracts;
-
-
transactions
with affiliates;
-
-
accounts
receivable;
-
-
owned
and leased property;
-
-
environmental
matters;
-
-
tax
matters;
-
-
intellectual
property matters;
-
-
information
technology matters;
-
-
bank
accounts;
-
-
inventory;
-
-
brokers'
and finders' fees;
-
-
customer
deposits;
-
-
insurance
policies; and
-
-
no
representation, warranty, statement or covenant contains an untrue statement of material fact or omits to state a material fact required to be stated in the stock
purchase agreement or necessary to make the statements contained in the merger agreement not misleading.
In
addition, each Bruker BioSpin Inc. stockholder made representations and warranties to Bruker BioSciences regarding:
-
-
authorization,
execution, delivery and performance and the enforceability of the stock purchase agreement and related matters;
-
-
absence
of conflicts with or violations of the stock purchase agreement or any ancillary agreements;
-
-
litigation
matters;
-
-
identification
of required filings and consents;
-
-
withholding
tax;
-
-
brokers'
and finders' fees; and
-
-
beneficial
ownership of Bruker BioSpin Inc. common stock.
The
representations and warranties regarding Bruker BioSciences made by Bruker BioSciences to the selling stockholders relate to, among other things:
-
-
corporate
matters, including due organization, good standing, corporate power and qualification;
-
-
authorization,
execution, delivery and performance and the enforceability of the stock purchase agreement and related matters;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the stock
purchase agreement;
-
-
brokers'
and finders' fees; and
-
-
investment
and accredited investor representations.
51
Covenants
Conduct of Bruker BioSpin Inc.'s Business.
During the period between the execution of the stock purchase agreement and
the closing, the businesses of Bruker BioSpin Inc. and its subsidiaries must be conducted in the ordinary course of business consistent with past practice. Bruker BioSpin Inc. is
obligated to, and the selling stockholders are obligated to cause Bruker BioSpin Inc. to, use commercially reasonable efforts to preserve Bruker BioSpin Inc.'s material properties,
assets and business organizations (including those of its subsidiaries). Specifically, Bruker BioSpin Inc. has agreed that, among other things and subject to certain exceptions, neither Bruker
BioSpin Inc. nor any of its subsidiaries may, and the selling stockholders have agreed to cause Bruker BioSpin Inc. and its subsidiaries not to, without Bruker BioSciences' written
consent:
-
-
amend
any of its organizational documents;
-
-
liquidate,
dissolve, recapitalize or otherwise wind up its business;
-
-
make
any distribution or declare, pay or set aside any dividend (in cash or property);
-
-
split,
combine, redeem, reclassify, purchase or otherwise acquire any equity interests or shares of capital stock of, or other equity or voting interest in, Bruker
BioSpin Inc. or any subsidiary, or make any other changes in the capital structure of Bruker BioSpin Inc. or any of its subsidiaries;
-
-
grant
any person any right or option to acquire any shares of its capital stock or engage in any discussions or negotiations regarding these matters;
-
-
enter
into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of its capital stock;
-
-
other
than in the ordinary course of business, acquire or dispose of any interest in any corporation, partnership or other person or assets comprising a business or any
other property or assets;
-
-
other
than in the ordinary course of business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition,
transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
-
-
sell,
assign, lease, license, transfer or otherwise dispose of, mortgage, pledge or encumber, any real property, or amend, terminate, modify or renew any real property
lease;
-
-
incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other person in excess of $600,000 in the aggregate;
-
-
cancel
any third-party indebtedness owed to Bruker BioSpin Inc.;
-
-
increase
the rate or terms of compensation or benefits of any of its directors, managers, officers, employees, consultants, agents, independent contractors or other
individual service providers;
-
-
hire
any new employees except in the ordinary course of business whose total compensation exceeds $150,000;
-
-
pay
or agree to pay any employee benefit not required or permitted by any existing employee benefit plan;
-
-
enter
into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired employees in the ordinary course of business with annual
compensation not to exceed $150,000;
-
-
except
as required to ensure that any benefit plan is not then out of compliance with applicable law, enter into or adopt any new, or increase benefits under or renew or
amend any existing, benefit plan or benefit arrangement or any collective bargaining agreement;
52
-
-
make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and employees) except in the
ordinary course of business;
-
-
commit
to make any capital expenditure or fail to make capital expenditures consistent with past practice;
-
-
fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the ordinary course of business or damage by fire or other unavoidable
casualty;
-
-
make,
revoke or change any tax election or change any tax accounting method, settle or compromise any tax liability, or waive or consent to the extension of any statute of
limitations for the assessment and collection of any tax;
-
-
except
as may be required as a result of a change in applicable law or GAAP, change any accounting principles or practices;
-
-
institute,
settle or dismiss any action or claim threatened against, relating to or involving Bruker BioSpin or any of its subsidiaries in connection with any business,
asset or property of Bruker BioSpin Inc. or any of its subsidiaries;
-
-
other
than various intercompany contracts and leases, enter into any large long-term contracts involving the payment or provision of goods or services in excess
of $500,000, except for the acceptance of customer purchase orders in the ordinary course of business with terms up to 24 months and individual amounts up to $5,000,000;
-
-
fail
to pay the accounts payable or other liabilities or fail to collect the accounts receivable or other indebtedness owed or take any action not consistent with past
practices that is designed to accelerate or has the effect of accelerating the receipt of any amounts of cash earlier than such cash would have been realized consistent with past practices; or
-
-
enter
into or renew, amend or otherwise modify or extend any contracts related to derivative instruments or hedging.
Reasonable Best Efforts.
Bruker BioSpin Inc. and its stockholders and Bruker BioSciences have each agreed to cooperate
with each other and use reasonable efforts to do or cause to be done all things necessary, proper or advisable to consummate the transactions contemplated by the stock purchase agreement, including to
use commercially reasonable efforts to obtain all consents and approvals of governmental authorities and third parties necessary to consummate the merger.
Voting Agreement.
Bruker BioSpin Inc. stockholders have agreed to vote in their capacity as holders of shares of
common stock of Bruker BioSciences in favor of the transactions contemplated by the stock purchase agreement.
No Solicitation.
Bruker BioSpin Inc. has agreed to, and to cause its subsidiaries to, and Bruker BioSpin Inc.'s
stockholders have agreed to, and to cause Bruker BioSpin Inc. and its subsidiaries to, cause each of its officers, managers, employees, subsidiaries, affiliates, agents and other
representatives to, as of the execution of the stock purchase agreement, cease any existing discussions or negotiations with respect to any inquiry or proposal regarding the sale, consolidation,
merger or other similar transaction regarding Bruker BioSpin Inc. and not to initiate any such discussions or negotiations (other than with Bruker BioSciences or its managers, officers,
employees, subsidiaries, agents or other affiliates) concerning any such inquiry or proposal. The selling stockholders and Bruker BioSpin Inc. are obligated to disclose immediately to Bruker
BioSciences any such third party inquiries or proposals, including the terms of any such inquiries or proposals.
Noncompetition and Nonsolicitation.
For a period of five years from the closing date, Bruker BioSpin Inc. stockholders
and their affiliates may not directly or indirectly: (1) engage in, hold an
53
interest
in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of less than 1% of a publicly traded security), joint venturer, partner, consultant or
employee, or otherwise engage or participate in, provide services to or be connected in any manner with or assist in any way any entity, person or business that engages in a business involving the
design, manufacture and distribution of (a) life science, process control and analytical research tools based on nuclear magnetic resonance, electron paramagnetic resonance, research magnetic
resonance imaging, superconducting magnets and wires for nuclear magnetic resonance, electron paramagnetic resonance or research magnetic resonance imaging, (b) cryogenic RF coil technologies
for nuclear magnetic resonance, electron paramagnetic resonance or research magnetic resonance imaging, or (c) other specialty power supply technologies; or (2) solicit for employment or
hire any employee of Bruker BioSpin Inc. or any of its subsidiaries without the prior written consent of Bruker BioSciences, unless the employee has replied or responded to either a general
solicitation or advertisement for employment by a Bruker BioSpin stockholder or their affiliates or to a solicitation made twelve months after the employee's employment had been terminated by Bruker
BioSpin Inc.
Access to Information.
Bruker BioSpin Inc. has agreed to allow Bruker BioSciences access to its properties, books,
assets, records and personnel.
Conditions to the Acquisition
The respective obligations of each party to effect the transactions contemplated by the stock purchase agreement are subject to the satisfaction, on or prior to
the closing, of the following conditions, which may be waived by Bruker BioSciences or the sellers:
-
-
the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated and all necessary consents
of any governmental authority required shall have been obtained;
-
-
the
waiting period instituted by the European Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals,
waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required for the
consummation of the acquisition under any corresponding requirements of the EU member states or competition regulatory authorities in other jurisdictions shall have been obtained; and
-
-
there
shall be no law in effect that restrains, enjoins or otherwise prevents the consummation of the transactions contemplated by the stock purchase agreement or any
ancillary agreements.
The
obligation of Bruker BioSciences to effect the transactions contemplated by the stock purchase agreement are subject to the satisfaction or waiver of the following conditions:
-
-
the
representations and warranties of the Bruker BioSpin Inc. stockholders (1) that are qualified as to materiality must be true and correct in all respects,
and (2) that are not qualified as to materiality must be true and correct in all material respects, in each case, between the time of the execution of the stock purchase agreement and as of the
closing (other than representations and warranties that speak as of another specific date or time prior to the date of the execution of the stock purchase agreement, which need only be true and
correct as of such date or time);
-
-
all
of the terms, covenants and conditions to be complied with and performed by the sellers on or prior to the closing shall have been complied with or performed in all
material respects;
54
-
-
Bruker
BioSciences shall have received certificates of the sellers certifying that all closing conditions have been satisfied;
-
-
the
absence of any action, suit or proceeding pending or threatened by or before any governmental authority or by any other person to enjoin, restrain, prohibit or obtain
damages in respect of any of the transactions contemplated by the stock purchase agreement or any ancillary agreement, or which would be reasonably likely to prevent or make illegal the consummation
of the transactions contemplated by the stock purchase agreement;
-
-
Bruker
BioSpin Inc. must have provided Bruker BioSciences with a certification relating to certain tax matters;
-
-
there
shall not have occurred since December 2, 2007 any events that have had, or are, individually or in the aggregate, reasonably likely to have a material adverse
effect on Bruker BioSpin Inc.;
-
-
Bruker
BioSciences shall have received evidence, to its reasonable satisfaction, of the receipt of all requisite third-party and governmental consents;
-
-
Bruker
BioSciences shall have obtained financing by reputable lenders at reasonable market interest rates and terms and conditions as determined by the special committee in
sufficient amounts to complete the transactions, all funds to be received by Bruker BioSciences pursuant to such financing arrangements shall be available pursuant to their terms, and all funds
contemplated to be received at closing to fund the transactions shall have been received;
-
-
certain
real property leases and other contracts of Bruker BioSpin Inc. or of a subsidiary shall have been amended in a manner reasonably acceptable to the special
committee;
-
-
the
approval of the transaction contemplated by the U.S. stock purchase agreement by the holders of at least a majority of the outstanding shares of common stock of
Bruker BioSciences who are unaffiliated with the Bruker BioSpin Group Shareholders, who represent at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting;
-
-
the
approval of the transactions contemplated by the U.S. stock purchase agreement by the holders of shares of capital stock of Bruker BioSciences representing at least a
majority of the total votes cast at a duly held meeting of stockholders; and
-
-
all
conditions precedent in the merger agreement regarding Bruker Biospin Invest and the German share purchase agreement regarding the acquisition of Bruker Physik and
Techneon shall have been satisfied or waived.
The
obligation of the selling stockholders to effect the transactions contemplated by the U.S. stock purchase agreement are subject to the satisfaction or waiver of the following
conditions:
-
-
the
representations and warranties of Bruker BioSciences that (1) are qualified as to materiality must be true and correct in all respects and (2) are not
qualified as to materiality must be true and correct in all material respects, in each case between the time of the execution of the stock purchase agreement and as of the closing (other than
representations and warranties that speak as of another specific date or time prior to the date of the execution of the stock purchase agreement, which need only be true and correct as of such date or
time);
-
-
all
of the terms, covenants and conditions to be complied with and performed by Bruker BioSciences on or prior to the date of the closing must have been complied with or
performed in all material respects;
-
-
sellers
shall have received a certificate from Bruker BioSciences certifying that certain closing conditions have been satisfied;
55
-
-
the
payment of the purchase price; and
-
-
the
deposit of the indemnity escrow and the working capital escrow.
Indemnification
Under the U.S. stock purchase agreement, the selling stockholders are obligated jointly and severally to indemnify, defend and hold harmless Bruker BioSciences
and any parent, subsidiary, associate, affiliate, director, manager, officer, stockholder, employee or agent thereof, and their respective representatives, successors and permitted assigns from and
against and pay on behalf of or reimburse such party in respect of, as and when incurred, all losses which any such party may actually incur, suffer, sustain or become subject to or accrue, as a
result of, in connection with, or relating to or by virtue of:
-
-
any
inaccuracy in, or breach of, any representation or warranty made by Bruker BioSpin Inc. or the selling stockholders under the stock purchase agreement or any
ancillary agreement (except with respect to certain representations regarding ownership of Bruker BioSpin Inc. shares, payment of withholding taxes, investment intent and transferability of the
shares of Bruker BioSpin Inc. stock to be issued as consideration, each of which are made by each selling stockholder in its individual capacity), without giving effect to any limitations or
qualifications as to "materiality" set forth within the stock purchase agreement;
-
-
any
breach or nonfulfillment of any covenant or agreement on the part of Bruker BioSpin Inc. or the selling stockholders in respect of pre-closing
covenants under the stock purchase agreement or any ancillary agreement;
-
-
any
fees, expenses or other payments incurred or owed by Bruker BioSpin Inc. or the selling stockholders to any agent, broker, investment banker or other firm or
person retained or
employed by Bruker BioSpin Inc. or the selling stockholders in connection with the transactions contemplated by the stock purchase agreement; or
-
-
any
liability for taxes arising out of or related to an inaccuracy in, or breach of, any tax representation or warranty in each of the U.S. stock purchase agreement, the
German share purchase agreement and the Swiss merger agreement, other than losses arising from criminal activity or fraud, in excess of $10 million; provided, however, that the
$3.25 million described in the limitations on indemnification below shall not apply to this tax liability.
Limitations on Indemnification
In general, the selling stockholders are not obligated to indemnify Bruker BioSciences with respect to losses suffered by Bruker BioSciences resulting from a
breach of any representations and warranties under the transaction agreements until the aggregate amount of the losses exceeds $3,250,000, at which time the sellers will be obligated to indemnify
Bruker BioSciences for the total amount of such losses. The sellers' representations and warranties shall survive the closing until the later of (1) the 30th day following the receipt by Bruker
BioSciences of the audited financial statements of the Bruker BioSpin Group for the fiscal year ended December 31, 2008 or (2) the resolution of any claim for indemnification of which
the sellers have received notice prior to the conclusion of the 30-day period described in clause (1) of this sentence, except with respect to:
The
following representations and warranties, which survive indefinitely:
-
-
ownership
of the shares of common stock of Bruker BioSpin Inc.;
-
-
the
capitalization of Bruker BioSpin Inc. and its subsidiaries; and
-
-
other
interests.
56
The
following representations and warranties, which survive for a period of three years:
-
-
no
misleading statements;
-
-
environmental;
-
-
employee
benefits; and
-
-
proprietary
rights.
The
following representations and warranties, which survive for a period of sixty calendar days following the expiration of the applicable statute of limitations (including any extension
thereof);
-
-
withholding
tax; and
-
-
taxes
and tax returns.
The
selling stockholders' aggregate indemnification obligations under the transaction agreements may not exceed $92 million, other than with respect to indemnification for losses
arising out of (i) criminal activity or fraud or (ii) breaches of the following representations and warranties:
-
-
ownership
of shares;
-
-
withholding
tax;
-
-
capitalization
of Bruker BioSpin Inc. and its subsidiaries;
-
-
taxes;
-
-
other
interests; and
-
-
environmental.
Termination of the U.S. Stock Purchase Agreement
The U.S. stock purchase agreement may be terminated at any time prior to closing by the mutual written consent of Bruker BioSciences and the selling stockholders.
In addition, either Bruker BioSciences or the selling stockholders may terminate the stock purchase agreement at any time prior to closing if:
-
-
any
governmental entity shall have issued an order permanently restraining, enjoining, or otherwise prohibiting the completion of the acquisition and such order is final and
nonappealable;
-
-
we
do not receive stockholder approval for the transaction;
-
-
either
the Swiss merger agreement with Bruker BioSpin Invest AG or the German share purchase agreement with Bruker Physik is terminated; or
-
-
the
closing has not occurred by June 30, 2008, unless a breach of the stock purchase agreement by the party seeking termination is the cause of or results in the
failure of the acquisition to be completed.
Bruker
BioSciences may terminate the U.S. stock purchase agreement at any time prior to closing if the selling stockholders or Bruker BioSpin Inc. breach any of their
respective covenants, representations and warranties, or other agreements contained in the U.S. stock purchase agreement and such breach would give rise to the failure of a condition to Bruker
BioSciences' obligation to complete the acquisition and such breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered
to the breaching party.
57
The
selling stockholders may terminate the U.S. stock purchase agreement at any time prior to closing if Bruker BioSciences breaches any of its covenants, representations and
warranties, or other agreements contained in the stock purchase agreement and such breach would give rise to the failure of a condition to the sellers' obligation to complete the acquisition and such
breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered to Bruker BioSciences.
Expenses
In general, expenses incurred in connection with the U.S. stock purchase agreement and the transactions contemplated thereby will be paid by the party
incurring such expenses. Expenses incurred in connection with any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, as a result of the
acquisition shall be paid by Bruker BioSciences with respect to its own filings and by Bruker BioSpin Inc. with respect to its and any selling stockholder's filings. In addition, Bruker
BioSciences shall be responsible for the payment of all transfer, documentary, sales, use, registration and other such taxes incurred in connection with the transaction, including all applicable
German and other real estate transfer or gains taxes and stock transfer taxes.
Amendment and Waiver
The U.S. stock purchase agreement may be amended by the parties at any time by written agreement. Either party may:
-
-
extend
the time for the performance of any of the obligations or other acts of the other parties;
-
-
waive
any inaccuracies in the representations and warranties contained in the stock purchase agreement or in any document delivered pursuant thereto;
-
-
waive
compliance with any of the agreements or conditions contained in the stock purchase agreement; or
-
-
waive
or modify the performance of any of the obligations of the other party to the stock purchase agreement.
The German Share Purchase Agreement with Bruker Physik GmbH and Techneon AG
General
On December 2, 2007, Bruker BioSciences and its indirect subsidiaries Bruker Daltonik GmbH and Bruker Optik GmbH entered into an agreement to acquire all
of the outstanding shares of Bruker Physik GmbH, a German limited liability company, and Techneon AG, a Swiss stock corporation, with
Bruker Physik, Techneon, SciTec GmbH & Co. KG, a German limited partnership, and the Bruker Physik shareholders. Techneon owns approximately 13% of the outstanding share capital of Bruker
Physik, while the other 87% is held by the Bruker BioSpin Group Shareholders. We sometimes refer to this agreement as the German share purchase agreement in this proxy statement.
In
connection with the German share purchase agreement, SciTec and Isolde Laukien-Kleiner have agreed to sell Bruker Optik GmbH, an affiliate of our company, certain real property held
by them for an aggregate purchase price of €1,416,250 in cash.
Closing Date
Unless the parties agree otherwise, the closing of the share purchase will take place on the later of January 23, 2008 or the first business day following
the satisfaction or waiver of all of the closing conditions.
58
Purchase Price-Payment
The German share purchase agreement provides that Bruker BioSciences (which will assign its purchase rights to Bruker BioSpin Corporation), Bruker Daltonik and
Bruker Optik shall purchase all of the outstanding shares of Bruker Physik and Techneon for an aggregate purchase price of $286.0 million, which will be payable in cash at closing to the Bruker
Physik and Techneon shareholders pro rata in accordance with their respective ownership. In addition, a parcel of real property owned equally by Scitek and Isolde Laukien-Kleiner will be sold to
Bruker Optik for €1,416,250.
Escrow
Indemnity Escrow.
A $92 million escrow fund established pursuant to the U.S. stock purchase agreement, and
discussed above, will serve as security for fulfillment by the sellers of their indemnification obligations set forth in the German share purchase agreement. See the discussion set forth above in "The
Stock Purchase Agreement with Bruker Biospin Inc.EscrowIndemnity Escrow" for additional information regarding the indemnity escrow fund.
Working Capital.
A $6.75 million escrow fund established pursuant to the U.S. stock purchase agreement, as discussed above, will
serve as security for fulfillment by the sellers of their obligations to deliver a specified amount of working capital in the Bruker BioSpin Group at closing. See the discussion set forth above in
"The Stock Purchase Agreement with Bruker Biospin Inc.EscrowWorking Capital" for additional information regarding the working capital escrow fund.
Representations and Warranties
The German share purchase agreement contains customary representations and warranties made by Bruker Physik, Techneon and Bruker Physik shareholders to Bruker
BioSciences, subject, in some cases, to specified exceptions and qualifications contained in the German share purchase agreement or in the disclosure schedule delivered in connection therewith.
The
assertions embodied in those representations and warranties were made solely for purposes of the German share purchase agreement and may be subject to important qualifications and
limitations. For example, many of Bruker Physik's and Techneon's representations and warranties are qualified by a Material Adverse Effect standard. For purposes of the German share purchase
agreement, a "Material Adverse Effect" means any circumstance, change or effect that, individually or in the aggregate with other circumstances, changes or effects, is or is reasonably likely to
materially delay or impede the consummation of the transactions contemplated by the German share purchase agreement or be materially adverse to the business, operations (including results of
operations), prospects, assets, liabilities, or financial condition of Bruker Physik, Techneon and their subsidiaries taken as a whole; provided, however, that none of the following, either alone or
in combination, shall be considered in determining whether there has been a "Material Adverse Effect": (1) events, circumstances, changes or effects (including legal and regulatory changes)
that generally affect the industries in which each of Bruker Physik, Techneon and their subsidiaries operate, other than such events, circumstances, changes or effects that disproportionately affect
(relative to other industry participants) Bruker Physik, Techneon or their subsidiaries and (2) changes caused by a material worsening of current conditions caused by acts of terrorism or war
occurring after the date of the German share purchase agreement.
Some
of the representations and warranties in the German share purchase agreement may not be accurate or complete as of any specified date or may be subject to contractual standards of
materiality that differ from the standards of materiality under U.S. federal securities laws. For the foregoing reasons, you should not rely on the representations and warranties as statements of
factual information.
59
The
representations and warranties regarding Bruker Physik and Techneon and their respective subsidiaries made to Bruker BioSciences, Bruker Optik and Bruker Daltonik by Bruker Physik
and Techneon and their respective shareholders relate to, among other things:
-
-
corporate
organization, including due incorporation, good standing, corporate power and qualification to conduct business;
-
-
authorization,
execution, delivery and performance and the enforceability of the share purchase agreement and related matters;
-
-
capital
structure;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the stock
purchase agreement;
-
-
identification
of required governmental filings and consents;
-
-
absence
of violations of any law, or necessity of any approval, as a result of the execution and delivery of, or consummation of the transactions contemplated by, the stock
purchase agreement;
-
-
compliance
with applicable laws and permits;
-
-
books
and records;
-
-
delivery
and accuracy of financial statements;
-
-
absence
of undisclosed material liabilities;
-
-
litigation
matters;
-
-
absence
of a Material Adverse Effect and certain other material changes or events since December 31, 2006;
-
-
disclosure
of certain contracts;
-
-
employee
matters, employee benefit plans, employment agreements, pensions and labor relations;
-
-
absence
of default under material contracts;
-
-
transactions
with affiliates;
-
-
accounts
receivable;
-
-
owned
and leased property;
-
-
environmental
matters;
-
-
brokers'
and finders' fees;
-
-
tax
matters;
-
-
intellectual
property matters;
-
-
information
technology matters;
-
-
bank
accounts;
-
-
inventory;
-
-
customer
deposits;
-
-
insurance
policies; and
-
-
no
representation, warranty, statement or covenant contains an untrue statement of material fact or omits to state a material fact required to be stated in the share
purchase agreement or necessary to make the statements contained in the merger agreement not misleading.
60
In
addition, Bruker Physik and Techneon shareholders made representations and warranties to Bruker BioSciences, Bruker Optik and Bruker Daltonik regarding:
-
-
authorization,
execution, delivery and performance and the enforceability of the German share purchase agreement and related matters;
-
-
absence
of conflicts with or violations of the German share purchase agreement or any ancillary agreements;
-
-
litigation
matters;
-
-
identification
of required filings and consents;
-
-
withholding
tax;
-
-
brokers'
and finders' fees;
-
-
beneficial
ownership of Bruker Physik and Techneon shares;
-
-
the
composition of the assets of SciTec; and
-
-
certain
representations pertaining to real property held by SciTec and Isolde Laukien-Kleiner.
The
representations and warranties regarding Bruker BioSciences made by Bruker BioSciences to the selling shareholders relate to, among other things:
-
-
corporate
matters, including due organization, good standing, corporate power and qualification;
-
-
authorization,
execution, delivery and performance and the enforceability of the share purchase agreement and related matters;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the share
purchase agreement;
-
-
brokers'
and finders' fees; and
-
-
accredited
investor status and investment intent of purchase.
Covenants
Conduct of Bruker Physik's and Techneon's Business.
During the period between the execution of the stock purchase agreement
and the closing, the businesses of Bruker Physik, Techneon and their respective subsidiaries must be conducted in the ordinary course of business consistent with past practice. Bruker Physik and
Techneon are obligated to, and the selling shareholders are obligated to cause Bruker Physik and Techneon to, use commercially reasonable efforts to preserve their material properties, assets and
business organizations (including those of its subsidiaries). Specifically, each of Bruker Physik and Techneon have agreed that, among other things and subject to certain exceptions, neither Bruker
Physik, Techneon and their respective subsidiaries may, and the selling shareholders have agreed to cause Bruker Physik, Techneon and their respective subsidiaries not to, without Bruker BioSciences'
written consent:
-
-
amend
any of its corporate documents;
-
-
liquidate,
dissolve, recapitalize or otherwise wind up its business;
-
-
make
any distribution or declare, pay or set aside any dividend (in cash or property);
-
-
split,
combine, redeem, reclassify, purchase or otherwise acquire any equity interests or shares of capital stock of, or other equity or voting interest in, Bruker Physik,
Techneon or any subsidiary, or make any other changes in the capital structure of Bruker Physik, Techneon or any of its subsidiaries;
-
-
grant
any person any right or option to acquire any shares of its capital shares or engage in any discussions or negotiations regarding these topics;
61
-
-
enter
into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of its capital stock;
-
-
other
than in the ordinary course of business, acquire or dispose of any interest in any corporation, partnership or other person or assets comprising a business or any
other property or assets;
-
-
other
than in the ordinary course of business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition,
transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
-
-
other
than with respect to the sale of certain property held by selling shareholders, sell, assign, lease, license, transfer or otherwise dispose of, mortgage, pledge or
encumber, any real property, or amend, terminate, modify or renew any real property lease;
-
-
incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other person in excess of €325,000 in the
aggregate;
-
-
cancel
any third-party indebtedness owed to Bruker Physik or Techneon;
-
-
increase
the rate or terms of compensation or benefits of any of its directors, managers, officers, employees, consultants, agents, independent contractors or other
individual service providers;
-
-
hire
any new employees except in the ordinary course of business whose total compensation exceeds €100,000;
-
-
pay
or agree to pay any employee benefit or pension commitment not required or permitted by any existing employee benefit plan;
-
-
enter
into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired employees in the ordinary course of business with annual
compensation not to exceed €100,000;
-
-
except
as required to ensure that any benefit plan is not then out of compliance with applicable law, enter into or adopt any new, or increase benefits under or renew or
amend any existing, benefit plan or benefit arrangement or any collective bargaining agreement;
-
-
make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and employees) except in the
ordinary course of business;
-
-
except
as specifically set forth in the agreement, commit to make any capital expenditure or fail to make capital expenditures consistent with past practice;
-
-
fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the ordinary course of business or damage by fire or other unavoidable
casualty;
-
-
except
as may be required as a result of a change in applicable tax or GAAP, make, revoke or change any tax election or change any tax accounting method, settle or
compromise any tax liability, or waive or consent to the extension of any statute of limitations for the assessment and collection of any tax;
-
-
except
as may be required as a result of a change in applicable law or GAAP, change any accounting principles or practices;
-
-
institute,
settle or dismiss any action or claim threatened against, relating to or involving Bruker Physik or Techneon or any of their respective subsidiaries in connection
with any business, asset or property of Bruker Physik or Techneon or any of their respective subsidiaries;
-
-
other
than various intercompany contracts and leases, enter into any long-term contracts involving the payment or provision of goods or services in excess of
€325,000, except for the
62
Reasonable Best Efforts.
The parties to the share purchase agreement have each agreed to cooperate with each other and use
reasonable efforts to do or cause to be done all things necessary, proper or advisable to consummate the transactions contemplated by the share purchase agreement, including to use commercially
reasonable efforts to obtain all consents and approvals of governmental authorities and third parties necessary to consummate the merger.
Voting Agreement.
Bruker Physik and Techneon shareholders have agreed to vote in favor of the transactions contemplated by
the German share purchase agreement.
No Solicitation.
Bruker Physik and Techneon have agreed to, and to cause their respective subsidiaries to, and the selling
shareholders have agreed to, and to cause Bruker Physik, Techneon and their respective subsidiaries to, cause each of its officers, managers, employees, subsidiaries, affiliates, agents and other
representatives to, as of the execution of the stock purchase agreement, cease any existing discussions or negotiations with respect to any inquiry or proposal regarding the sale, consolidation,
merger or other similar transaction regarding Bruker Physik and Techneon and not to initiate any such discussions or negotiations (other than with the company or their managers, officers, employees,
subsidiaries, agents or other affiliates) concerning any such inquiry or proposal. The selling
shareholders, Bruker Physik and Techneon are obligated to disclose immediately any such third party inquiries or proposals, including the terms of any such inquiries or proposals.
Noncompetition and Nonsolicitation.
For a period of five years from the closing date, Bruker BioSpin Inc. stockholders
and their affiliates may not directly or indirectly: (1) engage in, hold an interest in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of
less than 1% of a publicly traded security), joint venturer, partner, consultant or employee, or otherwise engage or participate in, provide services to or be connected in any manner with or assist in
any way any entity, person or business that engages in a business involving the design, manufacture and distribution of (a) life science, process control and analytical research tools based on
nuclear magnetic resonance, electron paramagnetic resonance, research magnetic resonance imaging, superconducting magnets and wires for nuclear magnetic resonance, electron paramagnetic resonance or
research magnetic resonance imaging, (b) cryogenic RF coil technologies for nuclear magnetic resonance, electron paramagnetic resonance or research magnetic resonance imaging, or
(c) other specialty power supply technologies; or (2) solicit for employment or hire any employee of Bruker Physik or Techneon or any of their respective subsidiaries without the prior
written consent of Bruker BioSciences, unless the employee has replied or responded to either a general solicitation or advertisement for employment by a Bruker BioSpin Group Shareholders or their
affiliates or to a solicitation made twelve months after the employee's employment had been terminated by Bruker Physik or Techneon.
No Election.
Bruker BioSciences Corporation and the other purchasers signing the German share purchase agreement will not
make an election under Section 338 of the Code with respect to Bruker Physik or Techneon, or any stock held, directly or indirectly, by either of them.
Compulsory Share Transfer.
As soon as possible after January 1, 2008, the selling shareholders and Techneon shall
cause certain shares of Bruker Physik and Techneon held of record by various directors
63
to
be transferred to SciTec, free and clear of any liens, and shall cause the share register of Techneon to be duly revised to reflect the record and beneficial ownership of these shares.
Conditions to the Acquisition
The respective obligations of each party to effect the transactions contemplated by the share purchase agreement are subject to the satisfaction, on or prior to
the closing, of the following conditions:
-
-
The
waiting periods (1) under the HSR Act applicable to the consummation of the Bruker BioSpin Inc. transaction shall have expired or been terminated and all
necessary consents of any governmental authority required for consummation of these transactions shall have been obtained and (2) applicable to the consummation of these transactions and
instituted by the European Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals, waiting or suspensory periods (and any
extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required for the consummation of these transactions under any
corresponding requirements of the European Union member states or competition regulatory authorities in other jurisdictions shall have been obtained;
-
-
there
shall not be in effect any law of any governmental authority of competent jurisdiction restraining, enjoining or otherwise preventing the consummation of the
transactions contemplated by the German share purchase agreement or any ancillary agreement;
-
-
the
closing contemplated by the U.S. stock purchase agreement between the company and Bruker BioSpin Inc. shall have occurred; and
-
-
the
closing contemplated by the merger agreement with Bruker BioSpin Invest shall have occurred.
The
obligation of the purchasers to effect the transactions contemplated by the German share purchase agreement are subject to the satisfaction or waiver of the following conditions:
-
-
the
representations and warranties of the Bruker Physik and Techneon shareholders (1) that are qualified as to materiality must be true and correct in all respects
and (2) that are not qualified as to materiality must be true and correct in all material respects, in each case, between the time of the execution of the stock purchase agreement and as of the
closing (other than representations and warranties that speak as of another specific date or time prior to the date of the execution of the stock purchase agreement, which need only be true and
correct as of such date or time);
-
-
all
of the terms, covenants and conditions to be complied with and performed by the sellers on or prior to the closing shall have been complied with or performed in all
material respects;
-
-
the
purchasers shall have received certificates from the sellers certifying that all closing conditions have been satisfied;
-
-
the
absence of any action, suit or proceeding pending or threatened by or before any governmental authority or by any other person to enjoin, restrain, prohibit or obtain
damages in respect of any of the transactions contemplated by the share purchase agreement or any ancillary agreement, or which would be reasonably likely to prevent or make illegal the consummation
of the transactions contemplated by the share purchase agreement;
-
-
there
shall not have occurred since December 2, 2007 any events that have had, or are, individually or in the aggregate, reasonably likely to have a material adverse
effect on Bruker Physik;
-
-
Bruker
BioSciences shall have received evidence, to its reasonable satisfaction, of the receipt of all requisite third-party and governmental consents;
64
-
-
Bruker
BioSciences shall have obtained financing by reputable lenders at reasonable market interest rates and terms and conditions as determined by the special committee in
sufficient amounts to complete the transactions, all funds to be received by Bruker BioSciences pursuant to such financing arrangements shall be available pursuant to their terms, and all funds
contemplated to be received at closing to fund the transactions shall have been received or will be made available during the closing;
-
-
the
approval of the transactions contemplated by the German share purchase agreement by the holders of at least a majority of the outstanding shares of common stock of
Bruker BioSciences who are unaffiliated with the Bruker BioSpin Group Shareholders, who represent at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting;
-
-
the
approval of the transactions contemplated by the German share purchase agreement by the holders of shares of capital stock of Bruker BioSciences representing at least a
majority of the total votes cast at a duly held meeting of stockholders;
-
-
some
selling shareholders have entered into an agreement to transfer real property held by those shareholders and all payments under that agreement have been fulfilled or
validly waived;
-
-
the
special committee shall have obtained adequate proof that no consent of any spouse of any of the Bruker BioSpin Group Shareholders is required for the entering into and
consummation of German share purchase agreement, or such consent shall have been granted;
-
-
the
special committee shall have obtained adequate proof that there are no claims of any of the selling shareholders against Bruker Physik, Techneon or their respective
subsidiaries (except for claims under the current service agreements of those selling shareholders that are employed by Bruker Physik, Techneon or their respective subsidiaries and except for certain
pension entitlements);
-
-
Bruker
Physik and Techneon shall have furnished to Bruker BioSciences and Bruker Physik, respectively, a certification in accordance with Treasury Regulation
Section 1.1445-2(c) and in the form provided in Treasury Regulation Section 1.897-2(h)(2); and
-
-
all
shares as part of the compulsory share transfer shall have been transferred, free and clear of any liens, and the share register of Techneon shall reflect the record and
beneficial ownership of such shares.
The
obligation of the selling shareholders to effect the transactions contemplated by the German share purchase agreement are subject to the satisfaction or waiver of the following
conditions:
-
-
the
representations and warranties of Bruker BioSciences that (1) are qualified as to materiality must be true and correct in all respects and (2) are not
qualified as to materiality must be true and correct in all material respects, in each case between the time of the execution of the stock purchase agreement and as of the closing (other than
representations and warranties that speak as of another specific date or time prior to the date of the execution of the stock purchase agreement, which need only be true and correct as of such date or
time);
-
-
the
sellers shall have received a certificate from the purchasers certifying that certain of the purchasers' closing conditions have been satisfied;
-
-
all
of the terms, covenants and conditions to be complied with and performed by Bruker BioSciences on or prior to the date of the closing must have been complied with or
performed in all material respects; and
-
-
the
payment of the purchase price.
65
Indemnification
Under the German share purchase agreement, the selling stockholders are obligated jointly and severally to indemnify, defend and hold harmless the subsidiaries of
the company that are parties to the share purchase agreement and any parent, subsidiary, associate, affiliate, director, manager, officer, stockholder, employee or agent thereof, and their respective
representatives, successors and permitted assigns from and against and pay on behalf of or reimburse such party in respect of, as and when incurred, all losses which any such party may actually incur,
suffer, sustain or become subject to or accrue, as a result of, in connection with, or relating to or by virtue of:
-
-
any
inaccuracy in, or breach of, any representation or warranty made by Bruker Physik or Techneon or the selling shareholders under the share purchase agreement or any
ancillary agreement, without giving effect to any limitations or qualifications as to "materiality" set forth within the German share purchase agreement;
-
-
any
breach or nonfulfillment of any covenant or agreement on the part of Bruker Physik, Techneon or the selling shareholders in respect of pre-closing covenants
under the share purchase agreement or any ancillary agreement;
-
-
any
fees, expenses or other payments incurred or owed by Bruker Physik, Techneon or the selling shareholders to any agent, broker, investment banker or other firm or person
retained or employed by Bruker Physik, Techneon or the selling shareholders in connection with the transactions contemplated by the German share purchase agreement; or
-
-
any
liability for taxes arising out of or related to an inaccuracy in, or breach of, any tax representation or warranty in each of the U.S. stock purchase agreement, the
German share purchase agreement and the Swiss merger agreement, other than losses arising from criminal activity or fraud, in excess of $10 million; provided, however, that the
$3.25 million described in the limitations on indemnification below shall not apply to this tax liability.
In general, the selling shareholders are not obligated to indemnify the purchasers with respect to losses resulting from a breach of any representations and
warranties under the transaction agreements until the aggregate amount of the losses exceeds $3,250,000, at which time the sellers will be obligated to indemnify for the total amount of such losses.
The sellers' representations and warranties shall survive the closing until the later of (1) the 30th day following the receipt by Bruker BioSciences of the audited financial statements of the
Bruker BioSpin Group for the fiscal year ended December 31, 2008 or (2) the resolution of any claim for indemnification of which the sellers have received notice prior to the conclusion
of the 30-day period described in clause (1) of this sentence, except with respect to:
The
following representations and warranties, which survive ten years:
-
-
ownership
of the shares of Bruker Physik and Techneon; and
-
-
the
capitalization of Bruker Physik, Techneon and their respective subsidiaries.
The
following representations and warranties, which survive for a period of three years:
-
-
environmental;
-
-
labor
relations and employee benefits;
-
-
no
misleading statements; and
-
-
proprietary
rights.
66
The
following representations and warranties, which survive for a period of sixty calendar days following the expiration of the applicable statute of limitations (including any extension
thereof);
-
-
withholding
tax; and
-
-
taxes
and tax returns.
The
selling shareholders' aggregate indemnification obligations under the transaction agreements may not exceed $92 million, other than with respect to indemnification for losses
arising out of (i) criminal activity or fraud or (ii) breaches of the following representations and warranties:
-
-
ownership
of shares;
-
-
withholding
tax;
-
-
capitalization;
-
-
other
interests;
-
-
environmental;
and
-
-
no
misleading statements.
Termination of the German Share Purchase Agreement
The German share purchase agreement may be terminated at any time prior to closing by the mutual written consent of the parties to the agreement. In addition,
either party may terminate the share purchase agreement at any time prior to closing if:
-
-
any
governmental entity shall have issued an order permanently restraining, enjoining, or otherwise prohibiting the completion of the acquisition and such order is final and
nonappealable;
-
-
stockholder
approval is not obtained for the transaction;
-
-
either
the Swiss merger agreement with Bruker BioSpin Invest or the U.S. stock purchase agreement with Bruker BioSpin Inc. is terminated; or
-
-
the
closing has not occurred by June 30, 2008, unless a breach of the German share purchase agreement by the party seeking termination is the cause of or results in
the failure of the acquisition to be completed.
We
may terminate the German share purchase agreement at any time prior to closing if the selling stockholders, Bruker Physik, or Techneon breach any of their respective covenants,
representations and warranties, or other agreements contained in the stock purchase agreement and the breach would give rise to the failure of a condition to our obligation to complete the acquisition
and the breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of the breach has been delivered to the breaching party.
The
selling stockholders may terminate the share purchase agreement at any time prior to closing if we breach any of the covenants, representations and warranties, or other agreements
contained in the share purchase agreement and the breach would give rise to the failure of a condition to the selling shareholders' obligation to complete the acquisition and the breach is not curable
or, if curable, is not cured or waived within 20 calendar days after written notice of the breach has been delivered to Bruker BioSciences.
Expenses
In general, expenses incurred in connection with the German share purchase agreement and the transactions contemplated thereby will be paid by the party incurring
such expenses. Expenses incurred in connection with any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of
67
1976,
as amended, as a result of the acquisition shall be paid by Bruker BioSciences with respect to its own filings and by Bruker Physik and Techneon with respect to their and any selling
stockholder's filings. In addition, Bruker BioSciences shall be responsible for the payment of all transfer, documentary, sales, use, registration and other such taxes incurred in connection with the
transaction, including all applicable German and other real estate transfer or gains taxes and stock transfer taxes.
Amendment and Waiver
The German share purchase agreement may be amended by the parties at any time by written agreement. Either party may:
-
-
extend
the time for the performance of any of the obligations or other acts of the other parties;
-
-
waive
any inaccuracies in the representations and warranties contained in the German share purchase agreement or in any document delivered pursuant thereto;
-
-
waive
compliance with any of the agreements or conditions contained in the German share purchase agreement; or
-
-
waive
or modify the performance of any of the obligations of the other party to the German share purchase agreement.
The Swiss Merger Agreement With Bruker Biospin Invest AG
General
On December 2, 2007, we entered into an Agreement and Plan of Merger with Bruker BioSpin Invest AG, which we sometimes refer to as BioSpin Invest in this
proxy statement, Bruker BioSpin Beteiligungs AG and the shareholders of BioSpin Invest relating to the merger of Bruker BioSpin Beteiligungs with and into BioSpin Invest and to approve the related
issuance of our common stock in connection with the merger. We sometimes refer to this agreement as the Swiss merger agreement in this proxy statement.
Closing Date
Unless the parties agree otherwise, the closing of the merger will take place on the later of January 23, 2008 or the first business day following the
satisfaction or waiver of all of the closing conditions.
Purchase Price-Payment
We will pay aggregate consideration of 57,544,872 shares to the BioSpin Invest shareholders, to be paid in restricted unregistered shares of our common stock,
which have a market value, as of January 14,
2008, of $666,945,067. Upon consummation of the merger, BioSpin Invest will become an indirect wholly-owned subsidiary of Bruker BioSciences.
Dividend
Prior to the signing of the Swiss merger agreement, BioSpin Invest declared a dividend in the amount of 75 million Swiss Francs (approximately
$64.8 million based on the exchange rate of $0.86 U.S. Dollars per Swiss Franc on December 21, 2007) to its shareholders. As permitted under the transaction agreements, this dividend was
paid on December 21, 2007.
Escrow
Indemnity Escrow.
A $92 million escrow fund established pursuant to the U.S. stock purchase agreement, and
discussed above, will serve as security for fulfillment by the sellers of their indemnification obligations set forth in the merger agreement. See the discussion set forth above in
68
"The
Stock Purchase Agreement with Bruker Biospin Inc.EscrowIndemnity Escrow" for additional information regarding the indemnity escrow fund.
Working Capital.
A $6.75 million escrow fund established pursuant to the U.S. stock purchase agreement, as discussed
above, will serve as security for fulfillment by the sellers of their obligations to deliver a specified amount of working capital in the Bruker BioSpin Group at closing. See the discussion set forth
above in "The Stock Purchase Agreement with Bruker Biospin Inc.EscrowWorking Capital Escrow" for additional information regarding the working capital escrow fund.
Representations and Warranties
The Swiss merger agreement contains customary representations and warranties made by BioSpin Invest and BioSpin Invest shareholders to Bruker BioSciences,
subject, in some cases, to specified
exceptions and qualifications contained in the merger agreement or in the disclosure schedule delivered in connection therewith.
The
assertions embodied in those representations and warranties were made solely for purposes of the merger agreement and may be subject to important qualifications and limitations. For
example, many of BioSpin Invest's representations and warranties are qualified by a Material Adverse Effect standard. For purposes of the Swiss merger agreement, a "Material Adverse Effect" means any
circumstance, change or effect that, individually or in the aggregate with other circumstances, changes or effects, is or is reasonably likely to materially delay or impede the consummation of the
transactions contemplated by the merger agreement or be materially adverse to the business, operations (including results of operations), prospects, assets, liabilities, or financial condition of
BioSpin Invest and its subsidiaries taken as a whole; provided, however, that none of the following, either alone or in combination, shall be considered in determining whether there has been a
"Material Adverse Effect": (1) events, circumstances, changes or effects (including legal and regulatory changes) that generally affect the industries in which each of BioSpin Invest and its
subsidiaries operate, other than such events, circumstances, changes or effects that disproportionately affect (relative to other industry participants) BioSpin Invest or its subsidiaries and
(2) changes caused by a material worsening of current conditions caused by acts of terrorism or war occurring after the date of the merger agreement.
Some
of the representations and warranties in the Swiss merger agreement may not be accurate or complete as of any specified date or may be subject to contractual standards of
materiality that differ from the standards of materiality under U.S. federal securities laws. For the foregoing reasons, you should not rely on the representations and warranties as statements of
factual information.
The
representations and warranties regarding BioSpin Invest and its subsidiaries made to Bruker BioSciences by BioSpin Invest and its shareholders relate to, among other things:
-
-
corporate
organization, including due incorporation, good standing, corporate power and qualification to conduct business;
-
-
authorization,
execution, delivery and performance and the enforceability of the merger agreement and related matters;
-
-
capital
structure;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the merger
agreement;
-
-
identification
of required governmental filings and consents;
-
-
absence
of violations of any law, or necessity of any approval, as a result of the execution and delivery of, or consummation of the transactions contemplated by, the merger
agreement;
-
-
compliance
with applicable laws and permits;
69
-
-
books
and records;
-
-
delivery
and accuracy of financial statements;
-
-
absence
of undisclosed material liabilities;
-
-
litigation
matters;
-
-
absence
of a Material Adverse Effect and certain other material changes or events since December 31, 2006;
-
-
disclosure
of certain contracts;
-
-
employee
matters, employee benefit plans, employment agreements, pensions and labor relations;
-
-
absence
of default under material contracts;
-
-
transactions
with affiliates;
-
-
accounts
receivable;
-
-
owned
and leased property;
-
-
environmental
matters;
-
-
brokers'
and finders' fees;
-
-
customer
deposits;
-
-
tax
matters;
-
-
intellectual
property matters;
-
-
information
technology matters;
-
-
bank
accounts;
-
-
inventory;
-
-
insurance
policies; and
-
-
no
representation, warranty, statement or covenant contains an untrue statement of material fact or omits to state a material fact required to be stated in the merger
agreement or necessary to make the statements contained in the merger agreement not misleading.
In
addition, each BioSpin Invest shareholder made representations and warranties to Bruker BioSciences regarding:
-
-
authorization,
execution, delivery and performance and the enforceability of the merger agreement and related matters;
-
-
absence
of conflicts with or violations of the merger agreement or any ancillary agreements;
-
-
litigation
matters;
-
-
identification
of required filings and consents;
-
-
withholding
tax;
-
-
brokers'
and finders' fees;
-
-
beneficial
ownership of BioSpin Invest shares;
70
-
-
the
acquisition of BioSpin Invest shares for investment purposes only and the shareholders' status as accredited investors; and
-
-
acknowledgement
of appropriate legends on stock certificates received in the merger.
The
representations and warranties regarding Bruker BioSciences made by Bruker BioSciences to the selling stockholders relate to, among other things:
-
-
corporate
matters, including due organization, good standing, corporate power and qualification;
-
-
capital
structure;
-
-
authorization,
execution, delivery and performance and the enforceability of the merger agreement and related matters;
-
-
absence
of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the merger
agreement;
-
-
brokers'
and finders' fees;
-
-
SEC
filings and financial statements; and
-
-
the
acquisition of BioSpin Invest shares for investment purposes only and the company's status as an accredited investor.
Covenants
Conduct of BioSpin Invest's Business.
During the period between the execution of the merger agreement and the closing, the
businesses of BioSpin Invest and its subsidiaries must be conducted in the ordinary course of business consistent with past practice. BioSpin Invest is obligated to, and the selling stockholders are
obligated to cause BioSpin Invest to, use commercially reasonable efforts to preserve BioSpin Invest's material properties, assets and business organizations (including those of its subsidiaries).
Specifically, BioSpin Invest has agreed that, among other things and subject to certain exceptions, neither BioSpin Invest nor any of its subsidiaries may, and the selling stockholders have agreed to
cause BioSpin Invest and its subsidiaries not to, without Bruker BioSciences' written consent:
-
-
amend
any of its organizational documents;
-
-
liquidate,
dissolve, recapitalize or otherwise wind up its business;
-
-
make
any distribution or declare, pay or set aside any dividend (in cash or property), except as set forth in the merger agreement;
-
-
split,
combine, redeem, reclassify, purchase or otherwise acquire any equity interests or shares of capital stock of, or other equity or voting interest in, BioSpin Invest
or any subsidiary, or make any other changes in the capital structure of BioSpin Invest or any of its subsidiaries;
-
-
grant
any person any right or option to acquire any shares of its capital stock or enter into any discussions or negotiations regarding these topics;
-
-
enter
into any agreement, understanding or arrangement with respect to the sale, voting, registration or repurchase of its capital stock;
-
-
other
than in the ordinary course of business, acquire or dispose of any interest in any corporation, partnership or other person or assets comprising a business or any
other property or assets;
-
-
other
than in the ordinary course of business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge, disposition,
transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
71
-
-
sell,
assign, lease, license, transfer or otherwise dispose of, mortgage, pledge or encumber, any real property, or amend, terminate, modify or renew any real property
lease;
-
-
incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other person in excess of $600,000 in the aggregate;
-
-
cancel
any third-party indebtedness owed to BioSpin Invest;
-
-
increase
the rate or terms of compensation or benefits of any of its directors, managers, officers, employees, consultants, agents, independent contractors or other
individual service providers;
-
-
hire
any new employees, except in the ordinary course of business, whose total compensation equals $150,000 or greater;
-
-
pay
or agree to pay any employee benefit not required or permitted by any existing employee benefit plan;
-
-
enter
into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired employees in the ordinary course of business with annual
compensation not to exceed $150,000;
-
-
except
as required to ensure that any benefit plan is not then out of compliance with applicable law, enter into or adopt any new, or increase benefits under or renew or
amend any existing, benefit plan or benefit arrangement or any collective bargaining agreement;
-
-
make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and employees) except in the
ordinary course of business;
-
-
commit
to make any capital expenditure or fail to make capital expenditures consistent with past practice;
-
-
fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the ordinary course of business or damage by fire or other unavoidable
casualty;
-
-
except
as may be required as a result of a change in applicable law or GAAP, make, revoke or change any tax election or change any tax accounting method, settle or
compromise any tax liability, or waive or consent to the extension of any statute of limitations for the assessment and collection of any tax;
-
-
except
as may be required as a result of a change in applicable law or GAAP, change any accounting principles or practices;
-
-
other
than any reasonable settlement, institute, settle or dismiss any action or claim threatened against, relating to or involving BioSpin Invest or any of its subsidiaries
in connection with any business, asset or property of BioSpin Invest or any of its subsidiaries;
-
-
other
than various intercompany contracts and leases, enter into any long-term contracts involving the payment or provision of goods or services in excess of
$500,000, except for the acceptance of customer purchase orders in the ordinary course of business with terms up to 24 months and individual amounts up to $5,000,000;
-
-
enter
into, renew or amend any contracts relating to derivative instruments or hedging transactions;
-
-
enter
into, or renew, amend or otherwise modify or extend, any contracts relating to derivative or hedging transactions or similar transactions, including currency
derivative or hedging contracts or transactions; or
72
-
-
fail
to pay the accounts payable or other liabilities or fail to collect the accounts receivable or other indebtedness owed.
Reasonable Best Efforts.
BioSpin Invest and its shareholders and Bruker BioSciences have each agreed to cooperate with each
other and use reasonable efforts to do or cause to be done all things necessary, proper or advisable to consummate the transactions contemplated by the merger agreement, including to use commercially
reasonable efforts to obtain all consents and approvals of governmental authorities and third parties necessary to consummate the merger.
Voting Agreement.
BioSpin Invest shareholders that are also Bruker BioSciences stockholders have agreed to vote in their
capacity as holders of shares of common stock of Bruker BioSciences in favor of the transactions contemplated by the merger agreement.
No Solicitation.
BioSpin Invest has agreed to, and to cause its subsidiaries to, and BioSpin Invest AG's shareholders have
agreed to, and to cause BioSpin Invest and its subsidiaries to, cause each of its officers, managers, employees, subsidiaries, affiliates, agents and other representatives to, as of the execution of
the merger agreement, cease any existing discussions or negotiations with respect to any inquiry or proposal regarding the sale, consolidation, merger or other similar transaction regarding BioSpin
Invest and not to initiate any such discussions or negotiations (other than with Bruker BioSciences or its managers, officers, employees, subsidiaries, agents or other affiliates) concerning any such
inquiry or proposal. The selling stockholders and BioSpin Invest are obligated to disclose immediately to Bruker BioSciences any such third party inquiries or proposals, including the terms of any
such inquiries or proposals.
Noncompetition and Nonsolicitation.
For a period of five years from the closing date, Bruker BioSpin Inc. stockholders
and their affiliates may not directly or indirectly: (1) engage in, hold an interest in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of
less than 1% of a publicly traded security), joint venturer, partner, consultant or employee, or otherwise engage or participate in, provide services to or be connected in any manner with or assist in
any way any entity, person or business that engages in a business involving the design, manufacture and distribution of (a) life science, process control and analytical research tools based on
nuclear magnetic resonance, electron paramagnetic resonance, research magnetic resonance imaging, superconducting magnets and wires for nuclear magnetic resonance, electron paramagnetic resonance or
research magnetic resonance imaging, (b) cryogenic RF coil technologies for nuclear magnetic resonance, electron paramagnetic resonance or research magnetic resonance imaging, or
(c) other specialty power supply technologies; or (2) solicit for employment or hire any employee of BioSpin Invest or any of its subsidiaries without the prior written consent of Bruker
BioSciences, unless the employee has replied or responded to either a general solicitation or advertisement for employment by a Bruker BioSpin Group Shareholder or their affiliates or to a
solicitation made twelve months after the employee's employment had been terminated by BioSpin Invest.
Access to Information.
BioSpin Invest has agreed to allow Bruker BioSciences access to its properties, books, assets, records
and personnel.
No Election.
Bruker BioSciences will not make an election under Section 338 of the Code with respect to BioSpin
Invest, or any stock held by BioSpin Invest.
Compulsory Share Transfer.
As soon as possible after January 1, 2008, the selling shareholders and BioSpin Invest
shall cause certain shares of BioSpin Invest to be transferred to Isolde Laukien-Kleiner, free and clear of any liens, and shall cause the share register of BioSpin Invest to be duly revised to
reflect the record and beneficial ownership these shares.
Compulsory Share Transfer Relating to Bruker AG and Bruker International.
As soon as possible after January 1, 2008,
BioSpin Invest shareholders and BioSpin Invest shall cause all compulsory shares
73
held
by the members of the board of directors of Bruker BioSpin AG and Bruker BioSpin International AG to be transferred to BioSpin Invest, free and clear of any liens, and shall cause the share
registers of Bruker BioSpin AG and Bruker BioSpin International AG to be duly revised to accurately reflect the record and beneficial ownership of all shares in these companies.
Share Transfer.
The selling shareholders and BioSpin Invest shall cause certain shares of BioSpin Invest held of record by
Wheeler & Co. for the benefit of Marc M. Laukien, to be transferred to Marc M. Laukien, free and clear of any liens, and shall cause the share register of BioSpin Invest to be
duly revised to reflect the record and beneficial ownership these shares.
Conditions to the Acquisition
The respective obligations of each party to effect the transactions contemplated by the merger agreement are subject to the satisfaction, on or prior to the
closing, of the following conditions, which may be waived by Bruker BioSciences or the sellers:
-
-
the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have expired or been terminated and all necessary consents
of any governmental authority required shall have been obtained;
-
-
the
waiting period instituted by the European Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals,
waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required for the
consummation of the acquisition under any corresponding requirements of the EU member states or competition regulatory authorities in other jurisdictions shall have been obtained;
-
-
the
closing of the transactions contemplated by the U.S. stock purchase agreement shall have occurred;
-
-
there
shall be no law in effect that restrains, enjoins or otherwise prevents the consummation of the transactions contemplated by the German share purchase agreement or any
ancillary agreements;
-
-
a
ruling on the merger from the commercial register of the Canton of Zug shall have been received, confirming that merger is in line with Swiss law and that the merger
agreement will be registered in the commercial register of the Canton of Zug upon filing;
-
-
a
confirmation of a specially qualified auditor pursuant to Article 25(2) of the Swiss Federal Act on Merger, Demerger, Transformation and Transfer of Assets shall
have been received; and
-
-
a
confirmation that consultation proceedings with employee representatives, pursuant to Article 28 of the Swiss Federal Act on Merger, Demerger, Transformation and
Transfer of Assets, have taken place.
The
obligation of Bruker BioSciences to effect the transactions contemplated by the merger agreement are subject to the satisfaction or waiver of the following conditions:
-
-
the
representations and warranties of the BioSpin Invest shareholders (1) that are qualified as to materiality must be true and correct in all respects and
(2) that are not qualified as to materiality must be true and correct in all material respects, in each case, between the time of the execution of the merger agreement and as of the closing
(other than representations and warranties
that speak as of another specific date or time prior to the date of the execution of the merger agreement, which need only be true and correct as of such date or time);
-
-
all
of the terms, covenants and conditions to be complied with and performed by the sellers on or prior to the closing shall have been complied with or performed in all
material respects;
74
-
-
Bruker
BioSciences shall have received certificates from the BioSpin Invest shareholders certifying that the closing conditions have been satisfied;
-
-
the
absence of any action, suit or proceeding pending or threatened by or before any governmental authority or by any other person to enjoin, restrain, prohibit or obtain
damages in respect of any of the transactions contemplated by the merger agreement or any ancillary agreement, or which would be reasonably likely to prevent or make illegal the consummation of the
transactions contemplated by the merger agreement;
-
-
BioSpin
Invest must have provided Bruker BioSciences with a certification relating to certain tax matters;
-
-
BioSpin
Invest shall have furnished Bruker BioSciences the Exchange Swiss Transfer Deed and the Cancellation Shares Transfer Deed;
-
-
there
shall not have occurred since December 2, 2007 any events that have had, or are, individually or in the aggregate, reasonably likely to have a material adverse
effect on BioSpin Invest;
-
-
Bruker
BioSciences shall have received evidence, to its reasonable satisfaction, of the receipt of all requisite third-party and governmental consents;
-
-
an
insurance policy between Bruker BioSpin and Winterthur Versicherungen, dated October 8, 2007 shall have been amended so that full insurance coverage is provided
under the policy before and after the consummation of the merger agreement;
-
-
all
members of the Board of Directors of Bruker AG and Bruker International shall have terminated their trust agreements relating to their compulsory shares and these shares
shall have been transferred to BioSpin Invest and the respective share registers amended accordingly;
-
-
condominium
ownership under standard terms and conditions shall have been established in the Bruker BioSpin AG building at Industriestrasse 26, CH8117
Fällanden, Switzerland and the top floor shall have been sold, at fair market value, to Isolde Laukien-Kleiner or an affiliate;
-
-
two
full-time employment agreements between Werner Schitenhelm and Bruker AG and Bruker International shall have been amended and terminated;
-
-
any
fees due to Joerg Laukien under the consulting agreement between Joerg Laukien and Bruker BioSpin AG shall as of the closing have been paid by Bruker BioSpin AG, or if
paid by Bruker BioSpin International AG, Bruker BioSpin AG shall have undertaken to reimburse Bruker BioSpin International AG for such costs in the future;
-
-
Bruker
BioSpin KK shall have issued a stock certificate representing BioSpin Invest's ownership of 960,000 shares of Bruker Biospin KK common stock;
-
-
the
approval of the transactions contemplated by the Swiss merger agreement by the holders of at least a majority of the outstanding shares of common stock of Bruker
BioSciences, who are unaffiliated with Bruker BioSpin Group Shareholders, who represent at least a majority of the total votes cast by these unaffiliated holders at the Special Meeting;
-
-
the
approval of the transactions contemplated by the Swiss merger agreement by the holders of shares of capital stock of Bruker BioSciences representing at least a majority
of the total votes cast at the Special Meeting;
-
-
all
conditions precedent in the German share purchase agreement and the U.S. stock purchase agreement and related ancillary agreements shall have been satisfied or waived;
75
-
-
Bruker
BioSciences Corporation and the special committee each shall have received an opinion from its Swiss counsel to the effect that, as a result of the operation of the
Swiss Federal Act on Merger, Demerger, Transformation and Transfer of Assets, the following events shall occur simultaneously at the effective time of the merger: (1) all of the assets and
liabilities of Bruker BioSpin Beteiligungs shall become the assets and liabilities of BioSpin Invest and (2) Bruker BioSpin Beteiligungs shall cease its separate legal existence for all
purposes;
-
-
all
compulsory share transfers shall have been transferred, free and clear of any liens, to their beneficial owners, and the share register of BioSpin Invest shall reflect
the record and beneficial ownership of such shares; and
-
-
all
shares held of record by Wheeler & Co. or any of its affiliates for the benefit of Marc M. Laukien shall have been transferred to Marc M. Laukien, free and clear
of any liens, and the share register of BioSpin Invest shall have been duly revised to accurately reflect the record and beneficial ownership of such shares.
The
obligation of the selling shareholders to effect the transactions contemplated by the Swiss merger agreement are subject to the satisfaction or waiver of the following conditions:
-
-
the
representations and warranties of Bruker BioSciences that (1) are qualified as to materiality must be true and correct in all respects and (2) are not
qualified as to materiality must be true and correct in all material respects, in each case between the time of the execution of the merger agreement and as of the closing (other than representations
and warranties that speak as of another specific date or time prior to the date of the execution of the merger agreement, which need only be true and correct as of such date or time);
-
-
the
sellers shall have received a certificate from Bruker BioSciences certifying that certain closing conditions are satisfied;
-
-
all
of the terms, covenants and conditions to be complied with and performed by Bruker BioSciences on or prior to the date of the closing must have been complied with or
performed in all material respects; and
-
-
the
payment of the merger consideration.
Indemnification
Under the Swiss merger agreement, the selling shareholders are obligated jointly and severally to indemnify, defend and hold harmless Bruker BioSciences and any
parent, subsidiary, associate, affiliate, director, manager, officer, stockholder, employee or agent thereof, and their respective representatives, successors and permitted assigns from and against
and pay on behalf of or reimburse such party in respect of, as and when incurred, all losses which any such party may actually incur, suffer, sustain or become subject to or accrue, as a result of, in
connection with, or relating to or by virtue of:
-
-
any
inaccuracy in, or breach of, any representation or warranty made by BioSpin Invest or the selling shareholders under the purchase agreement or any ancillary agreement,
without giving effect to any limitations or qualifications as to "materiality" set forth within the merger agreement;
-
-
any
breach or nonfulfillment of any covenant or agreement on the part of BioSpin Invest or the selling shareholders in respect of pre-closing covenants under the
merger agreement or any ancillary agreement;
-
-
any
fees, expenses or other payments incurred or owed by BioSpin Invest or the selling shareholders to any agent, broker, investment banker or other firm or person retained
or
76
Limitations on Indemnification
In general, the selling shareholders are not obligated to indemnify Bruker BioSciences with respect to losses suffered by Bruker BioSciences resulting from a
breach of any representations and warranties under the transaction agreements until the aggregate amount of the losses exceeds $3,250,000, at which time the selling shareholders will be obligated to
indemnify Bruker BioSciences for the total amount of such losses. The sellers' representations and warranties shall survive the closing until the later of (1) the 30th day following the receipt
by Bruker BioSciences of the audited financial statements of the Bruker BioSpin Group for the fiscal year ended December 31, 2008 or (2) the resolution of any claim for indemnification
of which the sellers have received notice prior to the conclusion of the 30-day period described in clause (1) of this sentence, except with respect to:
The
following representations and warranties, which survive for a period of ten years:
-
-
ownership
of the shares of BioSpin Invest; and
-
-
the
capitalization of BioSpin Invest and its subsidiaries, and other interests.
The
following representations and warranties, which survive for a period of three years:
-
-
environmental;
-
-
no
misleading statements;
-
-
employee
benefits; and
-
-
proprietary
rights.
The
following representations and warranties, which survive for a period of sixty calendar days following the expiration of the applicable statute of limitations (including any extension
thereof);
-
-
withholding
tax; and
-
-
taxes
and tax returns.
The
selling shareholders' aggregate indemnification obligations under the transaction agreements may not exceed $92 million, other than with respect to indemnification for losses
arising out of (i) criminal activity or fraud or (ii) breaches of the following representations and warranties:
-
-
ownership
of the shares;
-
-
withholding
tax;
-
-
taxes;
-
-
capitalization;
and
-
-
environmental.
77
Termination of the Swiss Merger Agreement
The Swiss merger agreement may be terminated at any time prior to closing by the mutual written consent of Bruker BioSciences and the selling shareholders. In
addition, either Bruker BioSciences or the selling shareholders may terminate the merger agreement at any time prior to closing if:
-
-
any
governmental entity shall have issued an order permanently restraining, enjoining, or otherwise prohibiting the completion of the acquisition and such order is final and
nonappealable;
-
-
we
do not receive stockholder approval for the transaction;
-
-
either
the U.S. stock purchase agreement or the German share purchase agreement is terminated; or
-
-
the
closing has not occurred by June 30, 2008, unless a breach of the merger agreement by the party seeking termination is the cause of or results in the failure of
the acquisition to be completed.
Bruker
BioSciences may terminate the merger agreement at any time prior to closing if the selling shareholders or BioSpin Invest breach any of their respective covenants, representations
and warranties, or other agreements contained in the merger agreement and such breach would give rise to the failure of a condition to Bruker BioSciences' obligation to complete the acquisition and
such breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered to the breaching party.
The
selling shareholders may terminate the merger agreement at any time prior to closing if Bruker BioSciences breaches any of its covenants, representations and warranties, or other
agreements contained in the merger agreement and such breach would give rise to the failure of a condition to the sellers' obligation to complete the acquisition and such breach is not curable or, if
curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered to Bruker BioSciences.
Expenses
In general, expenses incurred in connection with the merger agreement and the transactions contemplated thereby will be paid by the party incurring such expenses.
Expenses incurred in connection with any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or corresponding requirements of the European
Commission and/or the European Union member states agencies or competition regulatory authorities in other jurisdictions, as a result of the acquisition shall be paid by Bruker BioSciences with
respect to its own filings and by BioSpin Invest with respect to its and any selling shareholder's filings.
Amendment and Waiver
The Swiss merger agreement may be amended by the parties at any time by written agreement. Either party may:
-
-
extend
the time for the performance of any of the obligations or other acts of the other parties;
-
-
waive
any inaccuracies in the representations and warranties contained in the merger agreement or in any document delivered pursuant thereto;
-
-
waive
compliance with any of the agreements or conditions contained in the merger agreement; or
-
-
waive
or modify the performance of any of the obligations of the other party to the merger agreement.
78
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2007 and Statements of Operations for the nine months ended
September 30, 2007 and 2006 and for the years ended December 31, 2006, 2005 and 2004 include the historical consolidated statements of operations of the combined Bruker BioSciences and
the Bruker BioSpin Group, giving effect to the acquisitions as if they had occurred on January 1, 2004. This information is only a summary, and you should read it in conjunction with the Bruker
BioSciences historical consolidated financial statements and related notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the annual reports,
quarterly reports and other information on file with the Securities and Exchange Commission and the Bruker BioSpin Group historical consolidated financial statements and related notes and Management's
Discussion and Analysis of Financial Condition and Results of Operations contained elsewhere in this proxy (see page 93). See "Where You Can Find More Information" on page 147.
Both
Bruker BioSciences and the Bruker BioSpin Group are majority owned by the Bruker BioSpin Group Shareholders. As a result, the acquisition of the Bruker BioSpin Group by Bruker
BioSciences is considered a business combination of companies under common control. Accordingly, the acquisition of the Bruker BioSpin Group will be accounted for at historical carrying values.
We
have prepared the unaudited pro forma condensed combined financial statements based on available information, using assumptions that we believe are reasonable. For details about the
assumptions used, see footnotes 3 and 4 to the unaudited pro forma condensed combined financial statements. These unaudited pro forma condensed combined financial statements are being provided for
informational purposes only. They do not purport to represent our actual financial position or results of operations had the merger occurred on the dates specified nor do they project our results of
operations or financial position for any future period or date.
The
Unaudited Pro Forma Condensed Combined Statements of Operations do not reflect any adjustments for non-recurring items or anticipated operating synergies resulting from
the acquisition. Pro forma adjustments are based on certain assumptions and other information that are subject to change as additional information becomes available. Accordingly, the adjustments
included in our financial statements published after the completion of the acquisition may vary from the adjustments included in these unaudited pro forma condensed combined financial statements
included in this proxy statement.
79
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF SEPTEMBER 30, 2007
(in thousands)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Combined
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
38,904
|
|
$
|
268,819
|
|
$
|
|
|
$
|
307,723
|
|
$
|
(112,100
|
)(3a)(3f)
|
$
|
195,623
|
|
|
Short-term investments and restricted cash
|
|
|
|
|
|
12,794
|
|
|
|
|
|
12,794
|
|
|
|
|
|
12,794
|
|
|
Accounts receivable, net
|
|
|
85,840
|
|
|
70,030
|
|
|
|
|
|
155,870
|
|
|
|
|
|
155,870
|
|
|
Due from affiliated companies
|
|
|
6,366
|
|
|
8,389
|
|
|
(14,755
|
)(2a)
|
|
|
|
|
|
|
|
|
|
|
Note receivable from affiliate
|
|
|
|
|
|
188
|
|
|
(188
|
)(2a)
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
184,248
|
|
|
290,363
|
|
|
(922
|
)(2a)(2g)
|
|
473,689
|
|
|
|
|
|
473,689
|
|
|
Other current assets
|
|
|
28,082
|
|
|
28,124
|
|
|
|
|
|
56,206
|
|
|
(1,067
|
)(3b)(3e)
|
|
55,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
343,440
|
|
|
678,707
|
|
|
(15,865
|
)
|
|
1,006,282
|
|
|
(113,167
|
)
|
|
893,115
|
|
Property, plant and equipment, net
|
|
|
101,015
|
|
|
102,404
|
|
|
|
|
|
203,419
|
|
|
|
|
|
203,419
|
|
Intangibles and other assets
|
|
|
53,909
|
|
|
11,818
|
|
|
|
|
|
65,727
|
|
|
|
|
|
65,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
498,364
|
|
$
|
792,929
|
|
$
|
(15,865
|
)
|
$
|
1,275,428
|
|
$
|
(113,167
|
)
|
$
|
1,162,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
$
|
21,014
|
|
$
|
7,332
|
|
$
|
|
|
$
|
28,346
|
|
$
|
|
|
$
|
28,346
|
|
|
Accounts payable
|
|
|
31,103
|
|
|
24,297
|
|
|
|
|
|
55,400
|
|
|
|
|
|
55,400
|
|
|
Due to affiliated companies
|
|
|
7,526
|
|
|
7,134
|
|
|
(14,660
|
)(2a)
|
|
|
|
|
|
|
|
|
|
|
Customer deposits
|
|
|
44,345
|
|
|
191,612
|
|
|
|
|
|
235,957
|
|
|
|
|
|
235,957
|
|
|
Other current liabilities
|
|
|
106,462
|
|
|
98,001
|
|
|
(451
|
)(2g)
|
|
204,012
|
|
|
|
|
|
204,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
210,450
|
|
|
328,376
|
|
|
(15,111
|
)
|
|
523,715
|
|
|
|
|
|
523,715
|
|
|
Long-term debt
|
|
|
18,078
|
|
|
2,342
|
|
|
|
|
|
20,420
|
|
|
351,285
|
(3a)(3b)
|
|
371,705
|
|
|
Other long-term liabilities
|
|
|
31,321
|
|
|
51,450
|
|
|
|
|
|
82,771
|
|
|
|
|
|
82,771
|
|
|
Minority interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
1,047
|
|
|
89
|
|
|
|
|
|
1,136
|
|
|
486
|
(3c)
|
|
1,622
|
|
|
Treasury stock
|
|
|
(92
|
)
|
|
|
|
|
|
|
|
(92
|
)
|
|
92
|
|
|
|
|
|
Additional paid-in capital
|
|
|
169,864
|
|
|
31,273
|
|
|
|
|
|
201,137
|
|
|
(388,578
|
)(3d)
|
|
(187,441
|
)
|
|
Retained earnings (accumulated deficit)
|
|
|
34,227
|
|
|
285,218
|
|
|
(754
|
)(2g)
|
|
318,691
|
|
|
(76,452
|
)(3b)(3e)(3f)
|
|
242,239
|
|
|
Accumulated other comprehensive income
|
|
|
33,469
|
|
|
94,181
|
|
|
|
|
|
127,650
|
|
|
|
|
|
127,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
238,515
|
|
|
410,761
|
|
|
(754
|
)
|
|
648,522
|
|
|
(464,452
|
)
|
|
184,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
498,364
|
|
$
|
792,929
|
|
$
|
(15,865
|
)
|
$
|
1,275,428
|
|
$
|
(113,167
|
)
|
$
|
1,162,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2007
(in thousands, except per share data)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Combined
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
Product revenue
|
|
$
|
317,243
|
|
$
|
318,469
|
|
$
|
(26,349
|
)(2b)
|
$
|
609,363
|
|
$
|
|
|
$
|
609,363
|
|
Service revenue
|
|
|
46,169
|
|
|
31,492
|
|
|
|
|
|
77,661
|
|
|
|
|
|
77,661
|
|
Other revenue
|
|
|
421
|
|
|
1,932
|
|
|
|
|
|
2,353
|
|
|
|
|
|
2,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
363,833
|
|
|
351,893
|
|
|
(26,349
|
)
|
|
689,377
|
|
|
|
|
|
689,377
|
|
Cost of product revenue
|
|
|
166,525
|
|
|
190,658
|
|
|
(25,144
|
)(2d)
|
|
332,039
|
|
|
|
|
|
332,039
|
|
Cost of service revenue
|
|
|
29,816
|
|
|
19,368
|
|
|
|
|
|
49,184
|
|
|
|
|
|
49,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
196,341
|
|
|
210,026
|
|
|
(25,144
|
)
|
|
381,223
|
|
|
|
|
|
381,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
167,492
|
|
|
141,867
|
|
|
(1,205
|
)
|
|
308,154
|
|
|
|
|
|
308,154
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
74,909
|
|
|
35,909
|
|
|
|
|
|
110,818
|
|
|
|
|
|
110,818
|
|
General and administrative
|
|
|
23,666
|
|
|
18,769
|
|
|
|
|
|
42,435
|
|
|
|
|
|
42,435
|
|
Research and development
|
|
|
42,302
|
|
|
38,160
|
|
|
|
|
|
80,462
|
|
|
|
|
|
80,462
|
|
Acquisition related charges
|
|
|
370
|
|
|
174
|
|
|
|
|
|
544
|
|
|
(544
|
)(4a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
141,247
|
|
|
93,012
|
|
|
|
|
|
234,259
|
|
|
(544
|
)
|
|
233,715
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
26,245
|
|
|
48,855
|
|
|
(1,205
|
)
|
|
73,895
|
|
|
544
|
|
|
74,439
|
|
Interest and other income (expense), net
|
|
|
(825
|
)
|
|
5,369
|
|
|
|
|
|
4,544
|
|
|
(16,274
|
)(4b)
|
|
(11,730
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision and minority interest in consolidated subsidiaries
|
|
|
25,420
|
|
|
54,224
|
|
|
(1,205
|
)
|
|
78,439
|
|
|
(15,730
|
)
|
|
62,709
|
|
Income tax provision
|
|
|
7,655
|
|
|
10,696
|
|
|
(451
|
)(2f)
|
|
17,900
|
|
|
(2,500
|
)(4b)
|
|
15,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest in consolidated subsidiaries
|
|
|
17,765
|
|
|
43,528
|
|
|
(754
|
)
|
|
60,539
|
|
|
(13,230
|
)
|
|
47,309
|
|
Minority interest in consolidated subsidiaries
|
|
|
255
|
|
|
|
|
|
|
|
|
255
|
|
|
|
|
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
17,510
|
|
$
|
43,528
|
|
$
|
(754
|
)
|
$
|
60,284
|
|
$
|
(13,230
|
)
|
$
|
47,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common sharebasic
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.29
|
|
Net income per common sharediluted
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.29
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
103,806
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
161,351
|
|
|
Diluted
|
|
|
106,484
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
164,029
|
|
81
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006
(in thousands, except per share data)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Combined
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
Product revenue
|
|
$
|
264,104
|
|
$
|
284,817
|
|
$
|
(24,234
|
)(2b)
|
$
|
524,687
|
|
$
|
|
|
$
|
524,687
|
|
Service revenue
|
|
|
34,970
|
|
|
26,965
|
|
|
|
|
|
61,935
|
|
|
|
|
|
61,935
|
|
Other revenue
|
|
|
1,135
|
|
|
1,705
|
|
|
|
|
|
2,840
|
|
|
|
|
|
2,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
300,209
|
|
|
313,487
|
|
|
(24,234
|
)
|
|
589,462
|
|
|
|
|
|
589,462
|
|
Cost of product revenue
|
|
|
143,414
|
|
|
164,406
|
|
|
(24,177
|
)(2d)
|
|
283,643
|
|
|
|
|
|
283,643
|
|
Cost of service revenue
|
|
|
20,633
|
|
|
16,583
|
|
|
|
|
|
37,216
|
|
|
|
|
|
37,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
164,047
|
|
|
180,989
|
|
|
(24,177
|
)
|
|
320,859
|
|
|
|
|
|
320,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
136,162
|
|
|
132,498
|
|
|
(57
|
)
|
|
268,603
|
|
|
|
|
|
268,603
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
58,795
|
|
|
33,529
|
|
|
|
|
|
92,324
|
|
|
|
|
|
92,324
|
|
General and administrative
|
|
|
20,319
|
|
|
16,795
|
|
|
|
|
|
37,114
|
|
|
|
|
|
37,114
|
|
Research and development
|
|
|
36,495
|
|
|
38,889
|
|
|
|
|
|
75,384
|
|
|
|
|
|
75,384
|
|
Bruker Optics acquisition related charges
|
|
|
5,829
|
|
|
|
|
|
|
|
|
5,829
|
|
|
|
|
|
5,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
121,438
|
|
|
89,213
|
|
|
|
|
|
210,651
|
|
|
|
|
|
210,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
14,724
|
|
|
43,285
|
|
|
(57
|
)
|
|
57,952
|
|
|
|
|
|
57,952
|
|
Interest and other income (expense), net
|
|
|
3,522
|
|
|
2,687
|
|
|
|
|
|
6,209
|
|
|
(16,274
|
)(4b)
|
|
(10,065
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision and minority interest in consolidated subsidiaries
|
|
|
18,246
|
|
|
45,972
|
|
|
(57
|
)
|
|
64,161
|
|
|
(16,274
|
)
|
|
47,887
|
|
Income tax provision
|
|
|
9,398
|
|
|
15,505
|
|
|
(19
|
)(2f)
|
|
24,884
|
|
|
(2,500
|
)(4b)
|
|
22,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest in consolidated subsidiaires
|
|
|
8,848
|
|
|
30,467
|
|
|
(38
|
)
|
|
39,277
|
|
|
(13,774
|
)
|
|
25,503
|
|
Minority interest in consolidated subsidiaries
|
|
|
75
|
|
|
|
|
|
|
|
|
75
|
|
|
|
|
|
75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
8,773
|
|
$
|
30,467
|
|
$
|
(38
|
)
|
$
|
39,202
|
|
$
|
(13,774
|
)
|
$
|
25,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common sharebasic and diluted
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.16
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
101,635
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
159,180
|
|
|
Diluted
|
|
|
102,090
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
159,635
|
|
82
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
(in thousands, except per share data)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Restated
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
Product revenue
|
|
$
|
384,548
|
|
$
|
405,765
|
|
$
|
(32,312
|
)(2b)
|
$
|
758,001
|
|
$
|
|
|
$
|
758,001
|
|
Service revenue
|
|
|
49,930
|
|
|
37,943
|
|
|
|
|
|
87,873
|
|
|
|
|
|
87,873
|
|
Other revenue
|
|
|
1,356
|
|
|
3,246
|
|
|
|
|
|
4,602
|
|
|
|
|
|
4,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
435,834
|
|
|
446,954
|
|
|
(32,312
|
)
|
|
850,476
|
|
|
|
|
|
850,476
|
|
Cost of product revenue
|
|
|
206,628
|
|
|
222,974
|
|
|
(31,956
|
)(2d)
|
|
397,646
|
|
|
|
|
|
397,646
|
|
Cost of service revenue
|
|
|
29,872
|
|
|
23,335
|
|
|
|
|
|
53,207
|
|
|
|
|
|
53,207
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
236,500
|
|
|
246,309
|
|
|
(31,956
|
)
|
|
450,853
|
|
|
|
|
|
450,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
199,334
|
|
|
200,645
|
|
|
(356
|
)
|
|
399,623
|
|
|
|
|
|
399,623
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
84,007
|
|
|
48,931
|
|
|
|
|
|
132,938
|
|
|
|
|
|
132,938
|
|
General and administrative
|
|
|
28,982
|
|
|
21,326
|
|
|
|
|
|
50,308
|
|
|
|
|
|
50,308
|
|
Research and development
|
|
|
49,959
|
|
|
53,657
|
|
|
|
|
|
103,616
|
|
|
|
|
|
103,616
|
|
Bruker Optics acquisition related charges
|
|
|
5,724
|
|
|
|
|
|
|
|
|
5,724
|
|
|
|
|
|
5,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
168,672
|
|
|
123,914
|
|
|
|
|
|
292,586
|
|
|
|
|
|
292,586
|
|
|
Operating income
|
|
|
30,662
|
|
|
76,731
|
|
|
(356
|
)
|
|
107,037
|
|
|
|
|
|
107,037
|
|
Interest and other income (expense), net
|
|
|
3,758
|
|
|
958
|
|
|
|
|
|
4,716
|
|
|
(21,697
|
)(4b)
|
|
(16,981
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision and minority interest in consolidated subsidiaries
|
|
|
34,420
|
|
|
77,689
|
|
|
(356
|
)
|
|
111,753
|
|
|
(21,697
|
)
|
|
90,056
|
|
Income tax provision
|
|
|
15,931
|
|
|
21,115
|
|
|
(118
|
)(2f)
|
|
36,928
|
|
|
(3,332
|
)(4b)
|
|
33,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest in consolidated subsidiaries
|
|
|
18,489
|
|
|
56,574
|
|
|
(238
|
)
|
|
74,825
|
|
|
(18,365
|
)
|
|
56,460
|
|
Minority interest in consolidated subsidiaries
|
|
|
8
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
18,481
|
|
$
|
56,574
|
|
$
|
(238
|
)
|
$
|
74,817
|
|
$
|
(18,365
|
)
|
$
|
56,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common sharebasic and diluted
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.35
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
101,512
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
159,057
|
|
|
Diluted
|
|
|
102,561
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
160,106
|
|
During
2004, the Bruker BioSpin Group recorded a pre-tax charge against operating income of $28.5 million to cover litigation expenses and probable liabilities
associated with alleged patent infringement litigation by a competitor against the Bruker BioSpin Group. The related accrual was included in long-term other liabilities on the condensed consolidated
balance sheet as of December 31, 2004. During 2005, a favorable settlement agreement was signed for various magnet patent litigation cases, which released the Bruker BioSpin Group from any
infringement liabilities and, as a result, a pre-tax amount of $25.8 million of this liability was reversed, and this contributed positively to operating income in 2005.
83
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005
(in thousands, except per share data)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Combined
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
Product revenue
|
|
$
|
329,452
|
|
$
|
402,512
|
|
$
|
(29,642
|
)(2b)
|
$
|
702,322
|
|
$
|
|
|
$
|
702,322
|
|
Service revenue
|
|
|
40,471
|
|
|
36,370
|
|
|
|
|
|
76,841
|
|
|
|
|
|
76,841
|
|
Other revenue
|
|
|
2,330
|
|
|
6,353
|
|
|
|
|
|
8,683
|
|
|
|
|
|
8,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
372,253
|
|
|
445,235
|
|
|
(29,642
|
)
|
|
787,846
|
|
|
|
|
|
787,846
|
|
Cost of product revenue
|
|
|
178,831
|
|
|
230,651
|
|
|
(29,452
|
)(2d)
|
|
380,030
|
|
|
|
|
|
380,030
|
|
Cost of service revenue
|
|
|
27,443
|
|
|
22,368
|
|
|
|
|
|
49,811
|
|
|
|
|
|
49,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
206,274
|
|
|
253,019
|
|
|
(29,452
|
)
|
|
429,841
|
|
|
|
|
|
429,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
165,979
|
|
|
192,216
|
|
|
(190
|
)
|
|
358,005
|
|
|
|
|
|
358,005
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
70,458
|
|
|
45,176
|
|
|
|
|
|
115,634
|
|
|
|
|
|
115,634
|
|
General and administrative
|
|
|
25,601
|
|
|
23,795
|
|
|
|
|
|
49,396
|
|
|
|
|
|
49,396
|
|
Research and development
|
|
|
47,498
|
|
|
55,180
|
|
|
|
|
|
102,678
|
|
|
|
|
|
102,678
|
|
Special credit
|
|
|
|
|
|
(25,754
|
)
|
|
|
|
|
(25,754
|
)
|
|
|
|
|
(25,754
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
143,557
|
|
|
98,397
|
|
|
|
|
|
241,954
|
|
|
|
|
|
241,954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
22,422
|
|
|
93,819
|
|
|
(190
|
)
|
|
116,051
|
|
|
|
|
|
116,051
|
|
Interest and other income (expense), net
|
|
|
(780
|
)
|
|
8,003
|
|
|
|
|
|
7,223
|
|
|
(21,697
|
)(4b)
|
|
(14,474
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision and minority interest in consolidated subsidiaries
|
|
|
21,642
|
|
|
101,822
|
|
|
(190
|
)
|
|
123,274
|
|
|
(21,697
|
)
|
|
101,577
|
|
Income tax provision
|
|
|
11,855
|
|
|
26,596
|
|
|
(67
|
)(2f)
|
|
38,384
|
|
|
(3,332
|
)(4b)
|
|
35,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest in consolidated subsidiaries
|
|
|
9,787
|
|
|
75,226
|
|
|
(123
|
)
|
|
84,890
|
|
|
(18,365
|
)
|
|
66,525
|
|
Minority interest in consolidated subsidiaries
|
|
|
40
|
|
|
|
|
|
|
|
|
40
|
|
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
9,747
|
|
$
|
75,226
|
|
$
|
(123
|
)
|
$
|
84,850
|
|
$
|
(18,365
|
)
|
$
|
66,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common sharebasic and diluted
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.42
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
100,823
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
158,368
|
|
|
Diluted
|
|
|
101,130
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
158,675
|
|
84
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2004
(in thousands, except per share data)
|
|
Bruker
BioSciences
|
|
Bruker
BioSpin
|
|
Eliminations
|
|
Historical
Combined
|
|
Pro Forma
Adjustments
|
|
Pro Forma
Combined
|
|
Product revenue
|
|
$
|
317,269
|
|
$
|
456,526
|
|
$
|
(32,495
|
)(2b)
|
$
|
741,300
|
|
$
|
|
|
$
|
741,300
|
|
Service revenue
|
|
|
37,381
|
|
|
27,873
|
|
|
|
|
|
65,254
|
|
|
|
|
|
65,254
|
|
Other revenue
|
|
|
2,339
|
|
|
2,930
|
|
|
|
|
|
5,269
|
|
|
|
|
|
5,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
356,989
|
|
|
487,329
|
|
|
(32,495
|
)
|
|
811,823
|
|
|
|
|
|
811,823
|
|
Cost of product revenue
|
|
|
182,377
|
|
|
271,022
|
|
|
(32,675
|
)(2d)
|
|
420,724
|
|
|
|
|
|
420,724
|
|
Cost of service revenue
|
|
|
23,758
|
|
|
17,142
|
|
|
|
|
|
40,900
|
|
|
|
|
|
40,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
206,135
|
|
|
288,164
|
|
|
(32,675
|
)
|
|
461,624
|
|
|
|
|
|
461,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
150,854
|
|
|
199,165
|
|
|
180
|
|
|
350,199
|
|
|
|
|
|
350,199
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
72,716
|
|
|
48,330
|
|
|
|
|
|
121,046
|
|
|
|
|
|
121,046
|
|
General and administrative
|
|
|
23,180
|
|
|
26,360
|
|
|
|
|
|
49,540
|
|
|
|
|
|
49,540
|
|
Research and development
|
|
|
48,364
|
|
|
53,855
|
|
|
|
|
|
102,219
|
|
|
|
|
|
102,219
|
|
Special charges
|
|
|
|
|
|
28,469
|
|
|
|
|
|
28,469
|
|
|
|
|
|
28,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
144,260
|
|
|
157,014
|
|
|
|
|
|
301,274
|
|
|
|
|
|
301,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
6,594
|
|
|
42,151
|
|
|
180
|
|
|
48,925
|
|
|
|
|
|
48,925
|
|
Interest and other income (expense), net
|
|
|
(4,847
|
)
|
|
(6,760
|
)
|
|
|
|
|
(11,607
|
)
|
|
(21,697
|
)(4b)
|
|
(33,304
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax provision and minority interest in consolidated subsidiaries
|
|
|
1,747
|
|
|
35,391
|
|
|
180
|
|
|
37,318
|
|
|
(21,697
|
)
|
|
15,621
|
|
Income tax provision
|
|
|
5,533
|
|
|
11,735
|
|
|
69
|
(2f)
|
|
17,337
|
|
|
(3,332
|
)(4b)
|
|
14,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before minority interest in consolidated subsidiaries
|
|
|
(3,786
|
)
|
|
23,656
|
|
|
111
|
|
|
19,981
|
|
|
(18,365
|
)
|
|
1,616
|
|
Minority interest in consolidated subsidiaries
|
|
|
69
|
|
|
|
|
|
|
|
|
69
|
|
|
|
|
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
(3,855
|
)
|
$
|
23,656
|
|
$
|
111
|
|
$
|
19,912
|
|
$
|
(18,365
|
)
|
$
|
1,547
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common sharebasic and diluted
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.01
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
99,797
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
157,342
|
|
|
Diluted
|
|
|
99,797
|
|
|
|
|
|
|
|
|
|
|
|
57,545
|
(4c)
|
|
157,342
|
|
85
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. Description of Transaction and Basis of Presentation
Under the acquisition agreements, Bruker BioSciences will acquire all of the stock of the companies of the Bruker BioSpin Group. Approximately
$388.0 million (or 36.8% of the purchase price) will be paid in cash, while the stock component will consist of 57,544,872 shares of Bruker BioSciences shares, which have an aggregate market
value of approximately $666.9 million as of January 14, 2008 (or 63.2% of the purchase price). The cash component of the purchase price will be funded from approximately
$47.0 million of existing cash, and approximately $341.0 million from a planned senior credit facility. The number of Bruker BioSciences shares to be issued for the stock component of
the purchase price was determined by dividing $526.0 million by the trailing average of the Bruker BioSciences closing price per share, as reported in The Wall Street Journal, for the period of
ten (10) consecutive trading days ending two (2) trading days prior to the date of the signing of the transaction agreements, which was on December 2, 2007.
The
Bruker BioSpin Group Shareholders, who presently own approximately 52% of Bruker BioSciences on an undiluted basis, also own 100% of the stock of the Bruker Biospin Group. This
acquisition therefore is a related-party transaction. Pursuant to the acquisition agreements, the transactions are subject to the approval of both a majority of Bruker BioSciences shareholders, and a
majority of the non-affiliated Bruker BioSciences shareholders who vote on the transaction. The acquisition agreements were signed among Bruker BioSciences, the Bruker BioSpin Group and
all of the Bruker BioSpin Group Shareholders.
The
following pro forma adjustments are based on available information and various estimates and assumptions. Actual adjustments will differ from the pro forma adjustments. We believe
that these
assumptions provide a reasonable basis for presenting the significant effects of the merger and that the pro forma adjustments give appropriate effect to these assumptions and are properly applied in
the unaudited pro forma condensed combined financial statements.
The
unaudited pro forma statements of operations for the nine months ended September 30, 2007 and 2006 and for the years ended December 31, 2006, 2005 and 2004 combine the
historical consolidated statements of operations of Bruker BioSciences and the Bruker BioSpin Group and also reflect the elimination of intercompany transactions, giving effect to the acquisition as
if it had occurred on January 1, 2004. The unaudited pro forma condensed consolidated balance sheet gives effect to the acquisition as if it occurred on September 30, 2007.
2. Eliminations in the Combined Balance Sheet and Statements of Operations
The eliminations column in the restated combined financial statements reflects the elimination of all intercompany transactions, which include (in thousands):
-
(a)
-
Adjustment
to eliminate intercompany accounts receivables and payable balances at the end of the period.
-
(b)
-
Adjustment
to eliminate product sales between Bruker BioSciences and the Bruker BioSpin Group during the period presented.
-
(c)
-
Adjustment
to eliminate service sales between Bruker BioSciences and the Bruker BioSpin Group during the period presented.
-
(d)
-
Adjustment
to eliminate product cost of sales between Bruker BioSciences and the Bruker BioSpin Group during the period presented as well as profit in inventory on the balance sheet
at the end of each period.
86
-
(e)
-
Adjustment
to eliminate service cost of sales between Bruker BioSciences and the Bruker BioSpin Group during the period presented as well as profit in inventory on the balance sheet
at the end of each period.
-
(f)
-
Adjustment
to record the income tax provision (benefit) associated with the elimination of profit in inventory.
-
(g)
-
Adjustments
to eliminate profit included in inventory, to reduce the income taxes payable associated with the elimination of profit in inventory and to adjust retained earnings for
the period for the elimination of profit in inventory.
3. Pro Forma Adjustments to the Unaudited Pro Forma Condensed Consolidated Balance
Sheet
The unaudited pro forma condensed consolidated balance sheet gives effect to the acquisition as if it occurred on September 30, 2007. Pro forma adjustments
have been made and are described below (in thousands, except share and per share data)
-
(a)
-
The
estimated cash to be paid is 36.8% of the total consideration, or $388 million. We have assumed the following in calculating the pro forma cash adjustment:
-
i.
-
The
Bruker BioSpin Group Shareholders have elected to receive a combination of cash and stock. The percentage of cash and stock varies for each of the individual shareholders. Since
the trailing average of the Bruker BioSciences closing price per share for the period of ten consecutive trading days ending two trading days prior to the signing of the transaction agreements was
$9.14, the six shareholders will receive 57,544,872 shares of Bruker BioSciences, with a market value of $666.9 million as of January 14, 2008, and the remainder, $388 million, in
cash.
-
ii.
-
We
anticipate borrowing approximately $351 million under a senior credit facility to partially finance the acquisition of the Bruker BioSpin Group and related expenses, which
will increase our long-term debt at the date of the acquisition.
-
(b)
-
Adjustment
to record an additional draw-down on the anticipated revolving credit facility for estimated acquisition related costs of $10.8 million associated with
the transaction. Total acquisition related costs are estimated to be $11.2 million, of which $370,000 and $174,000, respectively, were accrued for on the books of Bruker BioSciences and the
Bruker BioSpin Group as of September 30, 2007. Acquisition related costs include investment banking, legal, accounting and antitrust regulation filing fees as well as compensation to be earned
by the special committee of the Company's Board of Directors and fees for establishing the senior credit facility. Of the $10.8 million of acquisition related charges referenced above,
$2.9 million relates to establishing the senior credit facility, which will be capitalized and amortized over the life of the facility. The remainder of the anticipated acquisition related
charges which were not accrued for as of September 30, 2007, or $7.9 million will be expensed as incurred.
-
(c)
-
Adjustment
to reflect the $0.01 per share par value associated with the 57,544,872 additional shares of Bruker BioSciences common stock to be issued to the Bruker BioSpin Group
87
4. Pro Forma Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations
The Unaudited Pro Forma Condensed Combined Statements of Operations give effect to the acquisition of the Bruker BioSpin Group as if it occurred on
January 1, 2004. Pro forma adjustments have been made and are described below:
-
(a)
-
We
estimate that Bruker BioSciences will incur merger related costs of $11.2 million related to the acquisition of the Bruker BioSpin Group. These costs include investment
banking, legal, accounting and antitrust regulation filing fees as well as compensation to be earned by the special committee of the Company's Board of Directors and fees for establishing the senior
credit facility. We will be required to expense all of these costs in the period incurred, except for the costs related to establishing the senior credit facility, which are estimated to be
$2.9 million. The costs associated with establishing the senior credit facility will be amortized ratably over the life of the senior credit facility, or five years. During the third quarter of
2007, Bruker BioSciences and the Bruker BioSpin Group in the aggregate incurred $370,000 of these acquisition related costs. These costs were removed as part of the pro forma adjustments as they are
material, non-recurring charges directly related to the merger. The merger related costs were not tax effected because Bruker BioSciences was in a net loss position for U.S. tax purposes,
the jurisdiction where the expenses were recorded.
-
(b)
-
Adjustment
reflects the impact of:
-
-
A
reduction of interest income related to the cash on hand of $47 million expected to be used to finance a portion of the acquisition. We estimate that we receive an
average interest rate of 3% on cash and short-term investments, which results in a reduction to interest income of $1.4 million on an annual basis and $1.1 million for nine
month periods. We have assumed this reduction in interest income would occur primarily in certain German operations, and accordingly, have recorded an associated tax benefit of $564,000 and $423,000,
respectively, for the annual and nine month periods.
-
-
A
reduction of interest income related to the dividend of approximately $64.8 million (75 million Swiss Francs at an exchange rate of $0.86 US Dollars per
Swiss Franc as of December 21, 2007). We estimate that we receive an average interest rate of 3% on cash
88
and
short-term investments, which results in a reduction to interest income of $2.0 million on an annual basis and $1.5 million for nine month periods. We have assumed this
reduction in interest income would occur primarily in certain Swiss operations, and accordingly, have recorded an associated tax benefit of $170,000 and $128,000, respectively, for the annual and nine
month periods.
-
-
An
increase in interest expense associated with the anticipated senior credit facility. We expect to borrow approximately $351 million at an average rate of 5.2% to
finance a portion of the Bruker BioSpin Group acquisition and to settle certain acquisition related charges, which results in an increase in interest expense of $18.3 million on an annual basis
and $13.7 million for nine month periods. The debt is to be incurred in the United States, Switzerland and Germany. The interest on the portion of the debt in the United States has not been tax
effected because Bruker BioSciences was in a net loss position for U.S. tax purposes as of the end of each period. We have recorded tax benefits of $3.2 million and $2.4 million,
respectively, for the annual and nine month periods for the portion of the debt to be incurred in our Swiss and German subsidiaries.
-
(c)
-
The
change in basic and diluted average shares outstanding reflects the adjustment for the additional shares of Bruker BioSciences common stock to be issued to the Bruker BioSpin
Group Shareholders upon consummation of the transaction.
89
INFORMATION ABOUT THE BRUKER BIOSPIN GROUP
Business Overview
The companies of the Bruker BioSpin Group develop, manufacture and distribute life science analytical instrumentation and solutions based on magnetic resonance
core technology. The companies' products include tools developed for nuclear magnetic resonance, or NMR, electron paramagnetic resonance, or EPR, magnetic resonance imaging, or MRI. The Bruker BioSpin
Group also designs and develops superconducting wire materials that can be used in a variety of applications including power cables, motors, generators and superconducting magnets. Products and
solutions developed by the Bruker BioSpin Group are utilized in a wide variety of applications, including:
-
-
life
science applications including the structure and function determination of large biomolecules such as proteins and membrane proteins;
-
-
pharmaceutical
and biotech research and manufacturing to identify new compounds, observe the interaction of drugs with a target protein, study the toxicology of drug
candidates and identify properties of the final product;
-
-
metabolic
profiling and fingerprinting, where patterns can be evaluated using spectroscopic techniques combined with multivariate statistical methods to gain insight into
the response of a biological system to perturbations in a time-related manner;
-
-
non-invasive
magnetic resonance imaging aimed at detecting the origins of disease related pathways and targets by combining the use of molecular biomarkers;
-
-
structure
determination and elucidation for application in organic and inorganic synthesis;
-
-
materials
research for the design and characterization of materials such as polymers, catalysts, fuel cell materials, etc.;
-
-
food,
beverage and agricultural analysis for the monitoring of the production and distribution cycle of products to ensure their origin, authenticity, safety and
reliability; and
-
-
superconducting
magnets for use in magnetic resonance, imaging and physics experiments.
Magnetic
resonance is the core technology of the Bruker BioSpin Group. Magnetic resonance is a natural phenomenom occurring when a molecule, placed in a magnetic field, gives off a radio
frequency signature. The signature is characteristic of the particular molecule and this leads to a multitude of precise chemical and structural information. A typical magnetic resonance instrument
includes a radio frequency source and transmitter, one or more very sensitive detectors, a magnet sized for the particular application and operating and analysis software.
When
magnetic resonance is used to analyze the resonance effect of various atoms, it is known as NMR. NMR is a widely used analytical technique by academia, pharmaceutical and
biotechnology companies and other industrial users in life sciences and materials science research.
When
an image is reconstructed by localizing the origin of the NMR signal, this is known as MRI. The Bruker BioSpin Group's MRI products focus on pre-clinical applications,
mainly research on small animals for disease studies and drug discovery by pharmaceutical companies and academia.
When
the magnetic resonance signals arise from the electrons contained in a molecule, this is known as EPR. EPR is used mainly in academia for research purposes. All three magnetic
resonance techniques
employ strong magnetic fields which are typically reached through the use of superconducting magnets. The Bruker BioSpin Group is a leader in superconducting magnet technology and also owns a
developer and manufacturer of the specialty superconducting wires needed for magnetic resonance magnets.
90
The
Bruker BioSpin Group's magnetic resonance product line is complimented with a number of accessories. These accessories include a wide array of sample handling devices for automation
and high throughput applications, as well as advanced data management and analysis software. These accessories permit the Bruker BioSpin Group to tailor its products for specific customers.
In
addition to these magnetic resonance instruments, the Bruker BioSpin Group also manufactures bench-top instruments for process control, quality assurance and quality
control applications. The Bruker BioSpin Group typically sells these bench-top instruments to the pharmaceutical industry, the food industry and other industrial customers.
The
Bruker BioSpin Group includes research and manufacturing facilities in Germany, Switzerland, France and the U.S., as well as numerous sales, applications and service offices
throughout the U.S., Europe, Asia and South America. The Bruker BioSpin Group employs approximately 1,850 people throughout the world.
Bruker BioSpin Inc.
15 Fortune Drive
Billerica, Massachusetts 01821
(978) 439-9899
http://www.bruker.com
Bruker
BioSpin Inc. was incorporated in Delaware in June 2000, originally as Bruker BioSpec Inc., later changing its name to Bruker BioSpin Inc. Bruker
BioSpin Inc. is a privately held company, wholly owned by the Bruker BioSpin Group Shareholders. Bruker BioSpin Inc. is the holding company for the U.S. operations of the Bruker BioSpin
Group.
Bruker
Physik GmbH was incorporated in 1960 in Germany. It is a holding company that includes the German Bruker BioSpin Group companies as well as European Advanced Superconductors
GmbH & Co. KG, or EAS, and European High Temperature Superconductors GmbH & Co. KG, or EHTS. Bruker Physik is a privately held company, ultimately wholly owned by the Bruker BioSpin
Group Shareholders.
Bruker
BioSpin Invest AG was incorporated in Switzerland in 1986. It is a holding company that includes the Swiss Bruker BioSpin Group companies. Bruker BioSpin Invest AG is a privately
held company, wholly owned by the Bruker BioSpin Group Shareholders.
91
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors
|
|
F-2
|
|
Combined Financial Statements
|
|
|
Combined Balance Sheets
|
|
F-3
|
Combined Statements of Income
|
|
F-4
|
Combined Statements of Shareholders' Equity
|
|
F-5
|
Combined Statements of Cash Flows
|
|
F-6
|
Notes to Combined Financial Statements
|
|
F-7
|
F-1
Report of Independent Auditors
The
Shareholders
Bruker BioSpin Group
We
have audited the accompanying combined balance sheets as of December 31, 2006 and 2005, of the companies listed in Note 1, and the related combined statements of income,
shareholders' equity and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the companies' management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the companies' internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the companies' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In
our opinion, the financial statements referred to above present fairly, in all material respects, the combined financial position at December 31, 2006 and 2005, of the
companies listed in Note 1, and the combined results of their operations and their cash flows for each of the three years in the period ended December 31, 2006 in conformity with U.S.
generally accepted accounting principles.
As
discussed in Notes 2 and 17 to the combined financial statements, in 2006 the companies adopted Statement of Financial Accounting Standards ("SFAS") No. 158,
Employers Accounting for Defined Benefit Pension and Other
Postretirement Plansan amendment of FASB Statements No. 87, 88, 106 and
132(R).
|
|
/s/ Ernst & Young LLP
|
November 30, 2007
Boston, Massachusetts
|
|
|
F-2
Bruker BioSpin Group
Combined Balance Sheets
(in thousands)
|
|
|
|
December 31
|
|
|
September 30
2007
|
|
|
2006
|
|
2005
|
|
|
(Unaudited)
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
268,819
|
|
$
|
259,094
|
|
$
|
248,782
|
|
Short-term investments and restricted cash
|
|
|
12,794
|
|
|
14,448
|
|
|
11,488
|
|
Trade accounts receivable, net of allowances for doubtful accounts of $2,779, $2,747 and $2,743 in 2007, 2006 and 2005
|
|
|
70,030
|
|
|
68,089
|
|
|
68,555
|
|
Accounts receivable from affiliated companies
|
|
|
8,389
|
|
|
4,392
|
|
|
6,722
|
|
Notes receivable from affiliated companies
|
|
|
188
|
|
|
194
|
|
|
|
|
Inventories
|
|
|
290,363
|
|
|
276,186
|
|
|
253,900
|
|
Deferred income taxes
|
|
|
16,143
|
|
|
18,517
|
|
|
19,690
|
|
Other current assets
|
|
|
11,981
|
|
|
11,909
|
|
|
10,909
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
678,707
|
|
|
652,829
|
|
|
620,046
|
Property, plant and equipment, net
|
|
|
102,404
|
|
|
100,093
|
|
|
93,768
|
Deferred income taxes
|
|
|
5,453
|
|
|
3,174
|
|
|
3,515
|
Intangible assets
|
|
|
2,133
|
|
|
2,678
|
|
|
1,821
|
Long-term restricted cash
|
|
|
373
|
|
|
304
|
|
|
883
|
Long-term taxes receivable
|
|
|
2,816
|
|
|
2,606
|
|
|
|
Other assets
|
|
|
1,043
|
|
|
985
|
|
|
7,860
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
792,929
|
|
$
|
762,669
|
|
$
|
727,893
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Short-term bank borrowings
|
|
$
|
845
|
|
$
|
|
|
$
|
1,697
|
|
Current portion of long-term debt
|
|
|
5,762
|
|
|
5,333
|
|
|
4,789
|
|
Current portion of capital lease
|
|
|
725
|
|
|
665
|
|
|
589
|
|
Trade accounts payable
|
|
|
24,297
|
|
|
23,305
|
|
|
19,167
|
|
Accounts payable to affiliated companies
|
|
|
7,134
|
|
|
8,747
|
|
|
6,122
|
|
Accrued expenses and other liabilities
|
|
|
56,191
|
|
|
51,346
|
|
|
48,853
|
|
Customer deposits
|
|
|
191,612
|
|
|
189,031
|
|
|
195,634
|
|
Deferred revenue
|
|
|
16,488
|
|
|
17,346
|
|
|
11,747
|
|
Deferred income taxes
|
|
|
13,181
|
|
|
22,113
|
|
|
25,976
|
|
Income taxes payable
|
|
|
12,141
|
|
|
6,759
|
|
|
24,415
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
328,376
|
|
|
324,645
|
|
|
338,989
|
Deferred revenue
|
|
|
28,981
|
|
|
27,153
|
|
|
25,475
|
Long-term debt
|
|
|
|
|
|
4,132
|
|
|
13,235
|
Long term capital lease obligation
|
|
|
2,342
|
|
|
2,672
|
|
|
2,996
|
Other liabilities
|
|
|
19,365
|
|
|
13,657
|
|
|
11,330
|
Deferred income taxes
|
|
|
3,104
|
|
|
4,675
|
|
|
708
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
Common shares, $0.01 par value, authorized 20,000 shares, issued and outstanding 8,869 shares
|
|
|
89
|
|
|
89
|
|
|
89
|
|
Share capital
|
|
|
22,492
|
|
|
22,492
|
|
|
22,492
|
|
Additional paid-in capital
|
|
|
8,781
|
|
|
8,781
|
|
|
8,781
|
|
Accumulated other comprehensive income
|
|
|
94,181
|
|
|
68,832
|
|
|
45,313
|
|
Retained earnings
|
|
|
285,218
|
|
|
285,541
|
|
|
258,485
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
410,761
|
|
|
385,735
|
|
|
335,160
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
792,929
|
|
$
|
762,669
|
|
$
|
$727,893
|
|
|
|
|
|
|
|
See accompanying notes.
F-3
Bruker BioSpin Group
Combined Statements of Income
(in thousands)
|
|
Nine Months Ended
September 30
|
|
Years Ended December 31
|
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Product revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Magnetic resonance products
|
|
$
|
336,211
|
|
$
|
302,288
|
|
$
|
430,984
|
|
$
|
422,710
|
|
$
|
467,558
|
|
|
Non-core products
|
|
|
13,750
|
|
|
9,494
|
|
|
12,724
|
|
|
16,172
|
|
|
16,841
|
|
|
Other revenue
|
|
|
1,932
|
|
|
1,705
|
|
|
3,246
|
|
|
6,353
|
|
|
2,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
351,893
|
|
|
313,487
|
|
|
446,954
|
|
|
445,235
|
|
|
487,329
|
|
Costs and operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue
|
|
|
210,026
|
|
|
180,989
|
|
|
246,309
|
|
|
253,019
|
|
|
288,164
|
|
|
Marketing and selling
|
|
|
35,909
|
|
|
33,529
|
|
|
48,931
|
|
|
45,176
|
|
|
48,330
|
|
|
Research and development
|
|
|
38,160
|
|
|
38,889
|
|
|
53,657
|
|
|
55,180
|
|
|
53,855
|
|
|
General and administrative
|
|
|
18,943
|
|
|
16,795
|
|
|
21,326
|
|
|
23,795
|
|
|
26,360
|
|
|
Special (credit) charge
|
|
|
|
|
|
|
|
|
|
|
|
(25,754
|
)
|
|
28,469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and operating expenses
|
|
|
303,038
|
|
|
270,202
|
|
|
370,223
|
|
|
351,416
|
|
|
445,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
48,855
|
|
|
43,285
|
|
|
76,731
|
|
|
93,819
|
|
|
42,151
|
|
Interest income, net
|
|
|
5,775
|
|
|
3,691
|
|
|
5,543
|
|
|
2,391
|
|
|
151
|
|
Other (expense) income, net
|
|
|
(406
|
)
|
|
(1,004
|
)
|
|
(4,585
|
)
|
|
5,612
|
|
|
(6,911
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
54,224
|
|
|
45,972
|
|
|
77,689
|
|
|
101,822
|
|
|
35,391
|
|
Provision for income taxes
|
|
|
10,696
|
|
|
15,505
|
|
|
21,115
|
|
|
26,596
|
|
|
11,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
43,528
|
|
$
|
30,467
|
|
$
|
56,574
|
|
$
|
75,226
|
|
$
|
23,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-4
Bruker BioSpin Group
Combined Statements of Shareholders' Equity
(in thousands)
|
|
Common
Shares
Par Value
|
|
Share
Capital
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
Shareholders'
Equity
|
|
Combined balance as of January 1, 2004
|
|
$
|
89
|
|
$
|
22,492
|
|
$
|
8,781
|
|
$
|
59,437
|
|
$
|
232,125
|
|
$
|
322,924
|
|
|
Dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(38,882
|
)
|
|
(38,882
|
)
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
142
|
|
|
|
|
|
142
|
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
31,326
|
|
|
|
|
|
31,326
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,656
|
|
|
23,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined balance as of December 31, 2004
|
|
|
89
|
|
|
22,492
|
|
|
8,781
|
|
|
90,905
|
|
|
216,899
|
|
|
339,166
|
|
|
Dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(33,640
|
)
|
|
(33,640
|
)
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
113
|
|
|
|
|
|
113
|
|
|
Minimum pension liability adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(414
|
)
|
|
|
|
|
(414
|
)
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
(45,291
|
)
|
|
|
|
|
(45,291
|
)
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,226
|
|
|
75,226
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined balance as of December 31, 2005
|
|
|
89
|
|
|
22,492
|
|
|
8,781
|
|
|
45,313
|
|
|
258,485
|
|
|
335,160
|
|
|
Dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29,518
|
)
|
|
(29,518
|
)
|
|
Effect of SFAS No. 158 adoption, net of tax provision of $1,950
|
|
|
|
|
|
|
|
|
|
|
|
(7,574
|
)
|
|
|
|
|
(7,574
|
)
|
|
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gains on available-for-sale securities
|
|
|
|
|
|
|
|
|
|
|
|
202
|
|
|
|
|
|
202
|
|
|
Reversal of SFAS No. 87 minimum pension liability, net of tax provision of $133
|
|
|
|
|
|
|
|
|
|
|
|
(61
|
)
|
|
|
|
|
(61
|
)
|
|
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
30,952
|
|
|
|
|
|
30,952
|
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,574
|
|
|
56,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined balance as of December 31, 2006
|
|
$
|
89
|
|
$
|
22,492
|
|
$
|
8,781
|
|
$
|
68,832
|
|
$
|
285,541
|
|
$
|
385,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes.
F-5
Bruker BioSpin Group
Combined Statements of Cash Flows
(in thousands)
|
|
Nine Months Ended
September 30
|
|
Years Ended December 31
|
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
43,528
|
|
$
|
30,467
|
|
$
|
56,574
|
|
$
|
75,226
|
|
$
|
23,656
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
11,323
|
|
|
11,011
|
|
|
14,897
|
|
|
14,687
|
|
|
16,879
|
|
|
|
Writedown of inventory to net realizable value
|
|
|
7,560
|
|
|
7,533
|
|
|
12,340
|
|
|
12,319
|
|
|
14,410
|
|
|
|
Deferred income taxes
|
|
|
(4,381
|
)
|
|
(4,456
|
)
|
|
4,052
|
|
|
(11,623
|
)
|
|
(1,788
|
)
|
|
|
Provision for loss on contracts
|
|
|
(1,164
|
)
|
|
220
|
|
|
1,441
|
|
|
290
|
|
|
258
|
|
|
|
Net gain on property and equipment sales
|
|
|
(50
|
)
|
|
89
|
|
|
(78
|
)
|
|
(73
|
)
|
|
(774
|
)
|
|
|
Special charge (credit)
|
|
|
|
|
|
|
|
|
|
|
|
(25,754
|
)
|
|
28,469
|
|
|
|
Charge for impairment of investments and goodwill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,832
|
|
|
|
Change in net unrealized gains on securities available for sale
|
|
|
336
|
|
|
406
|
|
|
(202
|
)
|
|
(113
|
)
|
|
(142
|
)
|
|
|
Net changes in fair value of derivative assets
|
|
|
|
|
|
|
|
|
271
|
|
|
1,563
|
|
|
258
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(2,102
|
)
|
|
13,930
|
|
|
7,357
|
|
|
(1,145
|
)
|
|
10,474
|
|
|
|
Inventories
|
|
|
(3,182
|
)
|
|
(3,974
|
)
|
|
(15,233
|
)
|
|
(9,280
|
)
|
|
(6,959
|
)
|
|
|
Other assets
|
|
|
180
|
|
|
(1,567
|
)
|
|
(499
|
)
|
|
4,914
|
|
|
4,135
|
|
|
|
Accounts payable
|
|
|
(2,655
|
)
|
|
(4,478
|
)
|
|
4,337
|
|
|
(7,884
|
)
|
|
6,624
|
|
|
|
Accrued expenses and other liabilities
|
|
|
1,707
|
|
|
(17,545
|
)
|
|
(30,528
|
)
|
|
29,839
|
|
|
2,709
|
|
|
|
Deferred revenue
|
|
|
(1,751
|
)
|
|
(569
|
)
|
|
3,614
|
|
|
1,124
|
|
|
(27
|
)
|
|
|
Restricted cash
|
|
|
(40
|
)
|
|
819
|
|
|
2,449
|
|
|
(723
|
)
|
|
(4,194
|
)
|
|
|
Customer deposits
|
|
|
(6,333
|
)
|
|
(23,728
|
)
|
|
(15,736
|
)
|
|
15,335
|
|
|
(9,272
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
42,976
|
|
|
8,158
|
|
|
45,056
|
|
|
98,702
|
|
|
86,548
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(6,716
|
)
|
|
(5,340
|
)
|
|
(13,380
|
)
|
|
(14,600
|
)
|
|
(13,599
|
)
|
Proceeds from property and equipment sales
|
|
|
190
|
|
|
1,201
|
|
|
1,674
|
|
|
2,329
|
|
|
1,136
|
|
Collection on (disbursement on) notes from affiliated companies
|
|
|
18
|
|
|
(466
|
)
|
|
(178
|
)
|
|
2,414
|
|
|
2,250
|
|
Net (purchase) proceeds of short-term investments
|
|
|
2,473
|
|
|
(3,746
|
)
|
|
(3,497
|
)
|
|
2,056
|
|
|
123
|
|
Earn out payments related to the acquisition of EAS business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(114
|
)
|
Proceeds (payments) related to acquisitions of Shapemetal and EAS
|
|
|
|
|
|
|
|
|
(1,643
|
)
|
|
|
|
|
594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(4,035
|
)
|
|
(8,351
|
)
|
|
(17,024
|
)
|
|
(7,801
|
)
|
|
(9,610
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments on short-term borrowings
|
|
|
779
|
|
|
(1,645
|
)
|
|
(1,337
|
)
|
|
(856
|
)
|
|
(2,171
|
)
|
Repayments of long-term debt and capital lease
|
|
|
(4,583
|
)
|
|
(1,754
|
)
|
|
(9,493
|
)
|
|
(14,087
|
)
|
|
(4,079
|
)
|
Payment of dividends
|
|
|
(42,641
|
)
|
|
(29,518
|
)
|
|
(29,518
|
)
|
|
(33,640
|
)
|
|
(38,882
|
)
|
Net cash used in financing activities
|
|
|
(46,445
|
)
|
|
(32,917
|
)
|
|
(40,348
|
)
|
|
(48,583
|
)
|
|
(45,132
|
)
|
Effects of exchange rate changes
|
|
|
17,229
|
|
|
3,388
|
|
|
22,628
|
|
|
(31,294
|
)
|
|
18,496
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
9,725
|
|
|
(29,722
|
)
|
|
10,312
|
|
|
11,024
|
|
|
50,302
|
|
Cash and cash equivalents at beginning of year
|
|
|
259,094
|
|
|
248,782
|
|
|
248,782
|
|
|
237,758
|
|
|
187,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year
|
|
$
|
268,819
|
|
$
|
219,060
|
|
$
|
259,094
|
|
$
|
248,782
|
|
$
|
237,758
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
|
|
|
|
$
|
1,121
|
|
$
|
1,671
|
|
$
|
2,206
|
|
|
Cash paid for taxes
|
|
|
|
|
|
|
|
|
43,259
|
|
|
15,705
|
|
|
20,434
|
|
See accompanying notes.
F-6
Bruker BioSpin Group
Notes to Combined Financial Statements
1. Description of Business and Basis of Presentation
These financial statements present the combined financial position of Bruker BioSpin Inc., Bruker Physik AG, Techneon AG, Bruker BioSpin Invest AG and all
of their wholly owned subsidiaries (the Bruker BioSpin Group or the Group). These companies represent companies under the control of common shareholders. All significant inter-group accounts and
transactions have been eliminated in the combined financial statements. The combined financial statements have been prepared in accordance with U.S. generally accepted accounting principles.
The
Bruker BioSpin Group designs, manufactures and distributes enabling life science tools based on its core technology, magnetic resonance. The Group's core technology platforms are
Nuclear Magnetic Resonance (NMR), Electro Paramagnetic Resonance (EPR), Magnetic Resonance Imaging (MRI), bench-top NMR and EPR, as well as advanced magnet technology and power supplies.
Bruker's NMR division is a worldwide leader in NMR spectroscopy, with design, manufacturing and application centers in Europe, North America and Japan, as well as application and customer support
facilities in most industrialized and developing countries. The Group also sells and services non-core products that are manufactured by non-combined Bruker-
affiliated entities. The Group's diverse customer base includes pharmaceutical companies, biotechnology companies, academic institutions and government agencies.
Effective
July 1, 2003, the Group acquired the operations of a superconducting wire manufacturer, European Advanced Superconductors (EAS) GmbH & Co KG in Hanau, Germany.
The superconducting wire manufacturer is also a wire supplier to the Group's magnet manufacturing sites. In March 2004, the Group acquired certain assets of ZFW, Gottingen, through a newly
formed Bruker subsidiary, European High Temperature Superconductors (EHTS) GmbH & Co. KG. This entity provides research and development of high temperature superconductors.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from such estimates.
Cash and Cash Equivalents
The Group considers all highly liquid investments with original maturities of 90 days or less at date of purchase to be cash equivalents. Certain of these
investments represent deposits which are not insured by the FDIC or any other United States government agency. Cash and cash equivalents are carried at cost, which approximates fair market value.
Restricted Cash
At December 31, 2006 and 2005, the Group had $4,095 and $5,931, respectively, that was subject to restrictions in connection with advance deposits made by
customers and bank performance-bid bonds. According to the terms of the various agreements, $3,791 of these funds will be released from restrictions within one year. The remaining $304
will be released at the discretion of certain
F-7
government
agencies and is designated as a long-term asset in the accompanying combined balance sheet at December 31, 2006.
Short-Term Investments
The Group accounts for its short-term investments in accordance with Statement of Financial Accounting Standards (SFAS) No. 115,
Accounting for Certain
Investments in Debt and Equity Securities
. The Group's investments consist of money market funds that are considered to be
available-for-sale and bond instruments that are considered to be trading securities at December 31, 2006 and 2005. The available-for-sale
securities are reported at fair value, with unrealized gains and losses, net of tax, included as a separate component of comprehensive income. The value of these securities, as of December 31,
2006 and 2005, were $7,233 and $5,723, respectively. Unrealized gains associated with the available-for-sale securities were $202, $113, and $142 for the years ended
December 31, 2006, 2005, and 2004 respectively. The bond instruments valued at $3,424 and $592 for the years ended December 31, 2006 and 2005 have maturity dates of September 2007
and February 2008. The unrealized gains from trading securities are recorded in other income.
Decreases
in market values of individual securities below cost for a duration of six to nine months are deemed indicative of other than temporary impairment. Other than temporary
impairments are recorded by writing down the carrying amount of the investments to market value through other income (expense). For the years ended December 31, 2006, 2005 and 2004, there were
no impairment charges.
Concentration of Credit Risk
Financial instruments that potentially subject the Group to concentrations of credit risk consist primarily of cash equivalents, short-term
investments and trade receivables. The risk
with respect to cash equivalents and short-term investments is minimized by the Group's policy of investing with high-quality financial institutions and monitoring the amount
of credit exposure to any one financial institution. The risk with respect to trade receivables is minimized by the creditworthiness and diversity of the Group's customer base. Management performs
periodic credit evaluations of its customers' financial condition, and generally requires an advanced deposit for a portion of the purchase price. The Group maintains allowances for potential credit
losses, which have been within management's expectations. For the years ended December 31, 2006, 2005, and 2004, no sales to or receivables from any single customer exceeded 10% of Bruker
BioSpin Group's product revenue or accounts receivables.
Inventories
Components of inventory include raw materials, work-in-process, demonstration units and finished goods. Demonstration units include units
which are located in the Group's demonstration laboratories and at potential customer sites and are considered available for sale. Finished goods include in-transit systems that have been
shipped to the Group's customers, but not yet installed and accepted by the customer. All inventories are stated at the lower of cost or market, cost determined principally by the
first-in, first-out ("FIFO") method. The Group reduces the carrying value of its inventories for differences between the cost and estimated net realizable value taking into
consideration usage in the preceding twelve months, expected demand, technological obsolescence and other information including the physical condition of demonstration and in-transit
inventories.
F-8
The
Group records as a charge to the cost of product revenue for the amount required to reduce the carrying value of inventory to net realizable value. Costs associated with the
procurement and warehousing of inventories, such as inbound freight charges and purchasing and receiving costs, are included in the cost of product revenue line item within the statement of
operations.
Software Costs
Purchased software is capitalized and amortized over the estimated useful life, generally three years. Costs incurred developing software for use in the Group's
products are expensed as incurred and classified as research and development expense.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized while expenditures for
maintenance, repairs, and minor improvements are charged to expense. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts
and any resulting gains or loss is reflected in the statement of operations. Depreciable assets are depreciated on a straight-line basis over the estimated useful lives of the assets as
follows:
Machinery and equipment
|
|
5-7 years
|
Furniture and equipment
|
|
3-5 years
|
Leasehold improvements
|
|
Lesser of 15 years or the lease term
|
Buildings
|
|
25-39 years
|
Intangible Assets
Intangible assets with a finite useful life are amortized on a straight-line basis over their estimated useful lives. Refer to Note 4 for
further discussion.
Long-Lived Assets
The Group reviews long-lived assets for impairment in accordance with SFAS No. 144,
Accounting for the Impairment or
Disposal of Long-Lived Assets
. Impairment losses are recorded on long-lived assets used in operations when indicators of impairment are present and the
quoted market price, if available, or the estimated undiscounted operating cash flows generated by those assets are less than the assets' carrying value. Impairment losses are charged to the
statement of operations for the difference between the fair value and carrying value of the asset. No impairment losses were recorded on long-lived assets during the years ended
December 31, 2006 and 2005. Due to the poor financial performance and uncertain outlook related to the Group's investment in Cengent, Inc. (formerly Geneformatics), management performed
an investment impairment analysis in 2004 and conduded that the investment had suffered an impairment that was deemed to be other than temporary. As such, the Group recorded a $349 charge to other
expense to write off the investment as of December 31, 2004.
F-9
Warranty Costs
The Group typically provides a one to two-year parts and labor warranty with the purchase of equipment. The anticipated cost for this warranty is
accrued upon recognition of the sale and is included as a liability on the accompanying combined balance sheets.
Changes
to the product warranty liability during the period were as follows:
|
|
|
|
December 31
|
|
|
|
September 30
2007
|
|
|
|
2006
|
|
2005
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Balance at beginning of period
|
|
$
|
9,994
|
|
$
|
10,081
|
|
$
|
12,182
|
|
|
Warranties issued during period
|
|
|
8,345
|
|
|
10,984
|
|
|
14,368
|
|
|
Setlements made during period
|
|
|
(7,239
|
)
|
|
(11,957
|
)
|
|
(15,225
|
)
|
|
Foreign currency impact
|
|
|
1,147
|
|
|
886
|
|
|
(1,244
|
)
|
|
|
|
|
|
|
|
|
Balance at end of period
|
|
$
|
12,247
|
|
$
|
9,994
|
|
$
|
10,081
|
|
|
|
|
|
|
|
|
|
Customer Deposits
Under the terms and conditions of its contracts, the Group often requires an advance deposit for a portion of the purchase price of its products. These deposits
are recorded as a liability until the associated revenue is recognized upon acceptance of the system.
Fair Value of Financial Instruments
The Group's financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable, short-term
bank borrowings, accounts payable, long-term debt, amounts due to and from Bruker-affiliated entities and notes receivable from Bruker-affiliated entities and derivative instruments. The
carrying value of the Group's cash and cash equivalents, short-term investments, accounts receivable, short-term bank borrowings, accounts payable and amounts due to and from
Bruker-affiliated entities approximate fair value due to their short-term nature. The carrying values of the notes receivable from Bruker-affiliated entities and long-term debt
approximate fair value, estimated using interest rates available to the Group for similar items.
Foreign Currency Translation and Transactions
In accordance with SFAS No. 52,
Foreign Currency Translation
, all balance sheet items of foreign
subsidiaries are translated into United States dollars at the current exchange rate at the balance sheet date. Results of operations of foreign subsidiaries are translated at the average exchange rate
prevailing throughout the year. Resulting translation adjustments are made directly to shareholders' equity and are included in accumulated other comprehensive income.
Gains
and losses resulting from the settlement of transactions denominated in currencies other then the functional currency of the operating entity are recorded in other income
(expenses).
F-10
Shipping and Handling Costs
The Group records costs incurred in connection with shipping and handling products as marketing and selling expenses. Amounts billed to customers in connection
with these costs are included in product revenue. Shipping and handling costs approximated $4,968, $5,132 and $5,388 in the years ended December 31, 2006, 2005 and 2004, respectively.
Advertising Costs
Advertising costs are expensed as incurred. Advertising expenses included in marketing and selling expenses approximated $2,477, $1,889 and $2,115 for the years
ended December 31, 2006, 2005 and 2004, respectively.
Revenue Recognition
The Group recognizes revenue from system sales when persuasive evidence of an arrangement exists, the price is fixed or determinable, title and risk of loss has
been transferred to the customer and collectibility of the resulting receivable is reasonably assured. Title and risk of loss is generally transferred to the customer upon receipt of a signed customer
acceptance for a system that has been shipped, installed, and for which the customer has been trained. As a result, the timing of customer acceptance or readiness could cause the Group's reported
revenues to differ materially from expectations. When products are sold through an independent distributor, a strategic distribution partner or an unconsolidated affiliated distributor, which assumes
responsibility for installation, the Group recognizes the system as revenue when the product has been shipped and title and risk of loss has been transferred. The Group's distributors do not have
price protection rights or rights to return; however, our products are warranted to be free from defects for a period of one to two years. Revenue is deferred until cash is received when a significant
portion of the fee is due over one year after delivery, installation and acceptance of the system. For arrangements with multiple elements, the Group
recognizes revenue for each element based on the fair value of the element provided when all other criteria for revenue recognition have been met. The fair value for each element provided in multiple
element arrangements is typically determined by referencing historical pricing policies when the element is sold separately. Changes in the Group's ability to establish the fair value for each element
in multiple element arrangements could affect the timing of revenue recognition.
Revenue
from the sale of accessories and parts is recognized upon shipment and service revenue is recognized as the services are performed.
Other
revenues are comprised of research grants and licensing agreements. Grant revenue is recognized as work is performed. Licensing revenue is recognized ratably over the term of the
related contract.
Research and Development
Research and development costs are expensed as incurred.
Income Taxes
The Group accounts for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes
. Under
this method, tax provisions and credits are recorded at statutory rates for taxable items
F-11
included
in the combined statement of operations regardless of the period in which such items are reported for income tax purposes. Deferred income taxes are recognized for temporary differences
between financial statement and income tax bases of assets and liabilities for which income tax benefits will be realized in future years. Valuation allowances are established when necessary to reduce
deferred tax assets to the amounts expected to be realized. There are no tax-sharing agreements among any of the companies comprising the Group. The tax provision, as well as the deferred
tax assets and liabilities in the combined financial statements, represents the aggregate of the income tax expense, deferred tax assets and deferred tax liabilities of the individual companies within
the Group.
Contingencies
The Group is subject to proceedings, lawsuits and other claims related to patents, products and other matters. Management assesses the likelihood of any adverse
judgments or outcomes of these matters, as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies are made after careful
analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach, such as a change in settlement strategy in dealing with
these matters.
Derivative Instruments
The Group manufactures and sells its products in a number of countries throughout the world and, as a result, is exposed to movements in foreign currency exchange
rates. The Group periodically enters into forward currency exchange contracts and options to hedge its exposure for product sales recorded in EURO (€) currency to be redeemed in U.S.
Dollars. The Group accounts for derivative financial instruments in accordance with SFAS No. 133,
Accounting for Derivative Instruments and Hedging
Activities
, as amended, which requires that all derivative instruments be reported on the balance sheet at fair value and establishes criteria for designation and effectiveness
of hedging relationships. Changes in the fair value of derivatives are recorded each period in current operations or in stockholders' equity as other comprehensive income depending upon whether the
derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction.
The
Group periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. In accordance with
SFAS 133, the Group accounts for these transactions separately valuing the "embedded derivative" component of these contracts. The derivative component is marked to market in the combined
balance sheet with subsequent changes in the fair value recorded in earnings.
Recent Accounting Developments
In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 159,
The Fair Value
Option for Financial Assets and Liabilities, Including an amendment of FASB Statement No. 115
, ("SFAS 159"). This Statement
permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. SFAS 159 is effective as of
the beginning of fiscal 2008. The Company is currently assessing the effect, if any, that the adoption of SFAS 159 will have on its results of operations and financial position.
F-12
In
September 2006, the FASB issued SFAS No. 158,
Employers Accounting for Defined Benefit Pension and Other Postretirement Plansan
amendment of FASB Statements No. 87, 88, 106 and 132(R).
This Statement requires an employer to recognize the over-funded or under-funded status of defined
benefit pension and other postretirement defined benefits plans, previously disclosed in the footnotes to the financial statements, as an asset or liability in its statement of financial position and
to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This Statement also requires an employer to measure the funded status of a plan as of
the date of its year end statement of financial position. In addition, this Statement will require disclosure of the effects of the unrecognized gains or losses, prior service costs and transition
asset or obligation on the next fiscal year's net periodic benefit cost. This Statement is effective for fiscal years ending after June 15, 2007. We have adopted SFAS No. 158 as of
December 31, 2006 because the information was readily available and it improves the transparency and understandability of our financial statements regarding the costs and obligations of our
pension plans. See Note 17 for further discussion of the effect of adopting SFAS No. 158 on the Group's combined financial statements.
In
September 2006, the FASB issued SFAS No. 157,
Fair Value Measurements
("SFAS 157"). This Statement is effective
for fiscal years beginning after November 15, 2007. SFAS 157 provides a common fair value hierarchy for companies to follow in determining fair value measurements in the preparation of
financial statements and expands disclosure requirements relating to how such fair value measurements were developed. SFAS 157 clarifies the principle that fair value should be based on the
assumptions that the marketplace would use when pricing an asset or liability, rather than company-specific data. The Company is currently assessing the impact that the adoption of SFAS 157
will have on its results of operations and financial position.
In
July 2006, the FASB issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes
. This Interpretation sets
forth a recognition threshold and valuation method to recognize and measure an income tax position taken, or expected to be taken, in a tax return. The evaluation is based on a two-step
approach. The first step requires an entity to evaluate whether the tax position would "more likely than not," based upon its technical merits, be sustained upon examination by the appropriate taxing
authority. The second step requires the tax position to be measured at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement. In
addition, previously recognized benefits from tax positions that no longer meet the new criteria would no longer be recognized. The application of this Interpretation will be considered a change in
accounting principle with the cumulative effect of the change recorded to the opening balance of retained earnings in the period of adoption. This Interpretation will be effective for the Company on
January 1, 2008. However, the Company adopted FIN 48 on January 1, 2007, and recorded a reduction of retained earnings of $1,211 effective January 1, 2007.
3. Acquisitions
The acquisitions were accounted for as a purchase in accordance with SFAS No. 141,
Business Combinations.
Under SFAS No. 141, the total consideration for the business acquisitions was first allocated to the assets acquired and liabilities assumed based on their respective fair values.
The
Group acquired the superconducting wire business unit of Morgan Crucible on July 1, 2003. The transaction was to facilitate more efficient production and decrease inventory
costs as the acquired business unit manufactures a primary component of the Group's magnetic resonance systems. The
F-13
terms
of the acquisition called for earn-out payments based on future net revenues through 2011 to a maximum payment of €48.0 million (approximately
$63.3 million at December 31, 2006). Earn-out payments of approximately $5, $5 and $114 were made for sales during the periods ended December 31, 2006, 2005, and 2004,
respectively. During 2004, the Group reached an agreement with the former owners, which resulted in a refund of $594. This refund resulted in a purchase price adjustment and a corresponding reduction
to goodwill.
In
March 2004, the Group acquired certain assets of ZFW, Gottingen, for an initial cash payment of approximately €350 (approximately $437 at March 1, 2004)
and earn-out payments of up to €1,200 (approximately $1.58 million at December 31, 2006) for sales between 2007 and 2014. The entire purchase price of $437
represented the fair value of the patents and fixed assets acquired. The business acquired provides research and development for high temperature superconductors.
The
Group entered into a Technology Transfer and Asset Purchase Agreement in December 2006 with ShapeMetal Innovation B.V., a former supplier, for a purchase price of
€1,500 due in three equal installments of €500. The Group had a pre-existing relationship with ShapeMetal. The initial cash payment of €500
(approximately $660 at December 1, 2006) and milestone payments of €1,000 (approximately $1.32 million at December 31, 2006) represented the fair value of the know
how and equipment acquired. The allocation of the purchase price has been made based upon management estimates. The equipment with an approximate fair value of €175 and know how with
an approximate fair value of €1,325 were acquired for the manufacturing of powder and powder in tube conductors.
4. Intangible Assets
The following is a summary of intangible assets subject to amortization as of December 31:
|
|
|
|
2006
|
|
2005
|
|
|
Useful
Lives
In Years
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
FX
effects
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
FX
effects
|
|
Net
Carrying
Amount
|
Patents
|
|
3
|
|
$
|
198
|
|
$
|
(178
|
)
|
$
|
(9
|
)
|
$
|
11
|
|
$
|
178
|
|
$
|
(113
|
)
|
$
|
4
|
|
$
|
69
|
Know How
|
|
4
|
|
|
3,378
|
|
|
(2,725
|
)
|
|
(204
|
)
|
|
449
|
|
|
3,033
|
|
|
(1,933
|
)
|
|
56
|
|
|
1,156
|
Patents
|
|
5
|
|
|
181
|
|
|
(121
|
)
|
|
(6
|
)
|
|
54
|
|
|
183
|
|
|
(87
|
)
|
|
2
|
|
|
98
|
Patents
|
|
7
|
|
|
862
|
|
|
(411
|
)
|
|
(20
|
)
|
|
431
|
|
|
775
|
|
|
(288
|
)
|
|
11
|
|
|
498
|
Know How
|
|
10
|
|
|
1,748
|
|
|
(14
|
)
|
|
(1
|
)
|
|
1,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total amortizable intangible assets
|
|
|
|
$
|
6,367
|
|
$
|
(3,449
|
)
|
$
|
(240
|
)
|
$
|
2,678
|
|
$
|
4,169
|
|
$
|
(2,421
|
)
|
$
|
73
|
|
$
|
1,821
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization
expense related to intangible assets was $1,028, $912 and $994 for the years ended December 31, 2006, 2005 and 2004, respectively.
F-14
Estimated
future amortization expense related to other intangible assets at December 31, 2006 is as follows:
Year ending:
|
|
|
|
|
2007
|
|
$
|
790
|
|
2008
|
|
|
340
|
|
2009
|
|
|
304
|
|
2010
|
|
|
243
|
|
2011
|
|
|
175
|
Thereafter
|
|
|
826
|
|
|
|
|
Total
|
|
$
|
2,678
|
|
|
|
5. Derivative Instruments and Hedging Activities
At December 31, 2005, the Group had option and forward currency exchange contracts with notional amounts aggregating $71,500 all maturing within the fiscal
year ended 2006. The contracts involved the purchase of EURO currency at fixed U.S. Dollar amounts. The notional amounts of the contracts were intended to hedge receivables in U.S. Dollars. These
transactions did not meet the documentation requirements for hedge accounting under SFAS No. 133. Accordingly, the instruments were marked-to market with the corresponding gains and
losses recorded in other income (expense) in the current period. As of December 31, 2005, these instruments had an unfavorable fair value of $2,807, which was recorded in accrued expenses and
other liabilities. No such contracts existed as of December 31, 2006.
The
Group had various unsettled contracts outstanding related to the purchase and delivery of certain products. The contracts, denominated in currencies other than the functional
currency of the transacting parties, amounted to $22,504 for the delivery of products and $122 for the purchase of products. The comparable amounts as of December 31, 2005 were $11,529 and
$421. The related net
fair value recorded in accrued expenses and other liabilities and other current assets was $282 and $379 as of December 31, 2006 and 2005, respectively.
6. Inventories
The components of inventory at December 31, 2006 and 2005 were as follows:
|
|
|
|
December 31
|
|
|
September 30
2007
|
|
|
2006
|
|
2005
|
|
|
(Unaudited)
|
|
|
|
|
Raw material
|
|
$
|
54,022
|
|
$
|
52,391
|
|
$
|
31,914
|
Work in process
|
|
|
94,981
|
|
|
78,470
|
|
|
87,486
|
Demonstration units
|
|
|
56,311
|
|
|
20,185
|
|
|
17,628
|
In Transit Inventory
|
|
|
67,451
|
|
|
81,369
|
|
|
79,294
|
Finished goods
|
|
|
17,598
|
|
|
43,771
|
|
|
37,578
|
|
|
|
|
|
|
|
Total inventory
|
|
$
|
290,363
|
|
$
|
276,186
|
|
$
|
253,900
|
|
|
|
|
|
|
|
F-15
Bruker BioSpin Group
Notes to Combined Financial Statements (Continued)
Demonstration units include systems located in the Group's demonstration laboratories and at potential customer sites and are considered available for sale.
Writedown of demonstration inventory to net realizable value was $12,340, $12,319 and $14,410 for the years ended December 31, 2006, 2005 and 2004, respectively, and is included in cost of
product revenue.
7. Property, Plant and Equipment
Property, plant and equipment, and related accumulated depreciation at December 31, 2006 and 2005, consisted of the following:
|
|
2006
|
|
2005
|
|
Land
|
|
$
|
13,506
|
|
$
|
12,438
|
|
Furniture and equipment
|
|
|
120,549
|
|
|
107,611
|
|
Buildings
|
|
|
78,259
|
|
|
68,319
|
|
Leasehold improvements
|
|
|
20,026
|
|
|
18,566
|
|
|
|
|
|
|
|
|
|
|
232,340
|
|
|
206,934
|
|
Less accumulated depreciation
|
|
|
(132,247
|
)
|
|
(113,166
|
)
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
$
|
100,093
|
|
$
|
93,768
|
|
|
|
|
|
|
|
Depreciation
expense, which includes the amortization of leasehold improvements, for the years ended December 31, 2006, 2005 and 2004 approximated $13,869, $13,775 and $15,885,
respectively.
8. Accrued Expenses and Other Liabilities
Accrued expenses and other liabilities at December 31, 2006 and 2005 consist of the following:
|
|
2006
|
|
2005
|
Accrued compensation
|
|
$
|
20,725
|
|
$
|
18,986
|
Accrued warranty
|
|
|
9,879
|
|
|
9,687
|
Fair value of derivative instruments
|
|
|
|
|
|
2,807
|
Embedded derivative liabilities
|
|
|
282
|
|
|
|
Provision for loss on contracts
|
|
|
1,809
|
|
|
290
|
Accrued expenses and other
|
|
|
18,651
|
|
|
17,083
|
|
|
|
|
|
Total accrued expenses and other current liabilities
|
|
$
|
51,346
|
|
$
|
48,853
|
|
|
|
|
|
F-16
9. Other (Expense) Income, Net
Other (expense) income at December 31, 2006, 2005 and 2004 consist of the following:
|
|
2006
|
|
2005
|
|
2004
|
|
Exchange gains (losses) on foreign currency transactions
|
|
$
|
(6,795
|
)
|
$
|
10,193
|
|
$
|
(7,628
|
)
|
Appreciation (depreciation) of the fair value of derivative financial instruments
|
|
|
2,094
|
|
|
(5,409
|
)
|
|
(221
|
)
|
Rental income
|
|
|
90
|
|
|
139
|
|
|
126
|
|
|
Net gain on sale of property and equipment
|
|
|
22
|
|
|
73
|
|
|
774
|
|
|
Impairment expense on investments
|
|
|
|
|
|
|
|
|
(349
|
)
|
|
Vendor recovery payments
|
|
|
|
|
|
|
|
|
345
|
|
|
Other
|
|
|
4
|
|
|
616
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income, net
|
|
$
|
(4,585
|
)
|
$
|
5,612
|
|
$
|
(6,911
|
)
|
|
|
|
|
|
|
|
|
10. Income Taxes
The components of income before provision for income taxes consisted of the following for the years ended December 31, 2006, 2005 and 2004:
|
|
2006
|
|
2005
|
|
2004
|
United States
|
|
$
|
3,202
|
|
$
|
1,200
|
|
$
|
5,409
|
Foreign
|
|
|
74,487
|
|
|
100,622
|
|
|
29,982
|
|
|
|
|
|
|
|
Total
|
|
$
|
77,689
|
|
$
|
101,822
|
|
$
|
35,391
|
|
|
|
|
|
|
|
Significant
components of the provision for income taxes for the years ended December 31, 2006, 2005 and 2004 were as follows:
|
|
2006
|
|
2005
|
|
2004
|
|
Current:
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
607
|
|
$
|
1,110
|
|
$
|
2,101
|
|
|
State
|
|
|
253
|
|
|
205
|
|
|
518
|
|
|
Foreign
|
|
|
16,093
|
|
|
36,936
|
|
|
10,815
|
|
|
|
|
|
|
|
|
|
Total current
|
|
|
16,953
|
|
|
38,251
|
|
|
13,434
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
135
|
|
|
(733
|
)
|
|
(157
|
)
|
|
State
|
|
|
41
|
|
|
(211
|
)
|
|
(46
|
)
|
|
Foreign
|
|
|
3,986
|
|
|
(10,711
|
)
|
|
(1,496
|
)
|
|
|
|
|
|
|
|
|
Total deferred
|
|
|
4,162
|
|
|
(11,655
|
)
|
|
(1,699
|
)
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
$
|
21,115
|
|
$
|
26,596
|
|
$
|
11,735
|
|
|
|
|
|
|
|
|
|
F-17
The
reconciliation of the United States federal statutory tax rate to the effective income tax rate for the years ended December 31, 2006, 2005 and 2004 was as follows:
|
|
2006
|
|
2005
|
|
2004
|
|
Income tax at statutory rate:
|
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
|
Add (deduct):
|
|
|
|
|
|
|
|
|
|
Foreign income taxes at differing rates
|
|
(5.5
|
)
|
(9.7
|
)
|
(11.8
|
)
|
|
|
Change in valuation allowance
|
|
1.6
|
|
1.0
|
|
6.0
|
|
|
|
Other
|
|
(3.9
|
)
|
(0.2
|
)
|
4.0
|
|
|
|
|
|
|
|
|
|
Effective income tax rate
|
|
27.2
|
%
|
26.1
|
%
|
33.2
|
%
|
|
|
|
|
|
|
|
|
The
components of the Group's deferred income taxes at December 31, 2006 and 2005 were as follows:
|
|
2006
|
|
2005
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Inventory
|
|
$
|
7,654
|
|
$
|
8,097
|
|
|
Deferred revenue
|
|
|
511
|
|
|
564
|
|
|
Net operating loss carryforward
|
|
|
4,885
|
|
|
3,555
|
|
|
Warranty accrual
|
|
|
798
|
|
|
953
|
|
|
Accrued payroll
|
|
|
85
|
|
|
692
|
|
|
Pension
|
|
|
1,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,949
|
|
|
13,861
|
|
Valuation allowance
|
|
|
(5,305
|
)
|
|
(3,636
|
)
|
|
|
|
|
|
|
Net deferred tax asset
|
|
|
9,644
|
|
|
10,225
|
|
Deferred tax liabilities:
|
|
|
|
|
|
|
|
|
Accrued expenses and other
|
|
|
(13,285
|
)
|
|
(10,896
|
)
|
|
Excess tax over book depreciation
|
|
|
(833
|
)
|
|
(1,306
|
)
|
|
Pension
|
|
|
|
|
|
(1,053
|
)
|
|
Allowance for doubtful accounts
|
|
|
(164
|
)
|
|
(122
|
)
|
|
Short-term investments
|
|
|
(459
|
)
|
|
(327
|
)
|
|
|
|
|
|
|
Total deferred tax liabilities
|
|
|
(14,741
|
)
|
|
(13,704
|
)
|
|
|
|
|
|
|
Net deferred tax liability
|
|
$
|
(5,097
|
)
|
$
|
(3,479
|
)
|
|
|
|
|
|
|
For
financial reporting purposes, a valuation allowance at December 31, 2006 and 2005 was recognized to offset deferred tax assets at companies in the Group where uncertainty
existed with respect to future realization of deferred tax assets.
As
of December 31, 2006, 2005 and 2004, net operating loss carryforwards approximating $30,837, $22,456 and $13,724, respectively, were available to reduce future foreign taxable
income. Portions of the net operating loss carryforwards have no expiration dates, and others expire at various dates through the year 2016.
F-18
No
provision for United States income taxes has been made in the accompanying combined financial statements for foreign entities' income since they are not subsidiaries of a United
States corporation.
11. Related-Party Transactions
Bruker BioSciences Corporation, SciTec GmbH and SciTec GmbH & Co. KG are related parties through common ownership with the Group. The Group and its
affiliates have entered into a sharing agreement which provides for the sharing of specified intellectual property rights, services, facilities, and other related items.
The
Group recognized sales to Bruker-affiliated entities of approximately $21,115, $17,074 and $13,294 during the years ended December 31, 2006, 2005 and 2004, respectively, and
made purchases from Bruker-affiliated entities of approximately $11,318, $13,029 and $17,088 during the years ended December 31, 2006, 2005 and 2004, respectively.
During
the years ended December 31, 2006, 2005 and 2004, the Group received net payments of $1,136, $2,613 and $3,388, respectively, from various Bruker-affiliated companies for
administrative and other services (including office space) provided to those entities in accordance with the terms of the shared services agreements. The amounts paid for services are based on
management's best estimates of the fair value of such services, and were recorded as a reduction of general and administrative expense in the combined financial statements.
The
Group rents office space from principal shareholders under multiple leases, which have expiration dates ranging from March 31, 2010 to December 31, 2015. Total rent
expense under these leases was $1,081, $1,078 and $1,143 for the years ended 2006, 2005 and 2004, respectively. The Group subleased a portion of office space from an affiliate during 2006, 2005 and
2004. The Group paid $32 and $29 and $120, respectively, in rental expense, which included charges for utilities and other occupancy cost.
As
of December 31, 2006 and 2005, the Group had outstanding notes receivable totaling $194 and $-0-, respectively, from other affiliated entities.
12. Financing Arrangements
The Group maintained several revolving lines of credit in 2006 and 2005, totaling $22,850 and $22,253, respectively, among various banks at interest rates ranging
between 0.89% and 11.5%. As of December 31, 2006 and 2005, $0 and $1,697 were outstanding against these revolving lines of credit, respectively. Outstanding balances under these revolving lines
of credit are due on demand, with interest payable monthly. The lines of credit are secured by inventory and accounts receivable, and are renewable annually.
F-19
13. Long-Term Debt
Long-term debt at December 31, 2006 and 2005 was as follows:
|
|
2006
|
|
2005
|
|
Euro bank loan for €28.3 million. Semi-annually interest payments, due and payable through June 30, 2008 (maturity), at a rate of 4.07%.
|
|
$
|
8,147
|
|
$
|
16,840
|
|
Euro bank loan for €1 million. Quarterly interest payments, due and payable through December 1, 2009 (maturity), at a rate of EURIBOR plus 30 basis points (approximately 3.94% at December 31, 2006).
|
|
|
1,318
|
|
|
1,184
|
|
|
|
|
|
|
|
|
9,465
|
|
|
18,024
|
Less current portion
|
|
|
5,333
|
|
|
4,789
|
|
|
|
|
|
Total long-term debt
|
|
$
|
4,132
|
|
$
|
13,235
|
|
|
|
|
|
The
above notes payable are secured by certain of the Group's assets. As of December 31, 2006 and 2005, the Group is in compliance with all debt covenants.
Annual
maturities of long-term non-related party debt are as follows:
Year ending:
|
|
|
|
|
2007
|
|
$
|
5,333
|
|
2008
|
|
|
2,813
|
|
2009
|
|
|
1,319
|
|
|
|
Total
|
|
$
|
9,465
|
|
|
|
Interest
expense for the years ended December 31, 2006, 2005 and 2004 was $847, $1,473 and $1,469, respectively.
14. Shareholders' Equity
Common Shares
The Group's shareholders' equity includes common shares and additional paid-in capital representing shares in Bruker BioSpin Inc., a company
incorporated in the United States. Each share is entitled to one vote.
Share Capital
The Group's shareholders' equity includes non-par share capital of Bruker BioSpin Invest AG, a Swiss non-stock company, Bruker Physik AG,
a German stock company and Techneon AG, a Swiss stock company. Share capital of the individual companies was as follows at both December 31, 2006 and 2005:
Bruker BioSpin Invest AG
|
|
$
|
10,011
|
Bruker Physik AG
|
|
|
7,475
|
Techneon AG
|
|
|
5,006
|
|
|
|
|
|
$
|
22,492
|
|
|
|
F-20
Dividends
Dividends from German and Swiss stock companies may only be declared and paid from retained earnings (after deduction of certain reserves) shown in the companies'
statutory financial statements. Retained earnings shown in the individual companies' statutory financial statements differ from that shown in the U.S. GAAP financial statements as a result of
different bases of accounting.
In
2006 and 2005, the Board of Directors of Bruker BioSpin Invest AG declared and paid dividends of approximately $28,956 and $22,236, respectively. In 2006 and 2005, the Board of
Directors of Bruker BioSpin Inc. declared and paid dividends of $0 and $5,000, respectively. In 2006 and 2005, the Board of Directors of Bruker Physik AG declared and paid dividends of
approximately $562 and $6,404, respectively.
15. Segment and Geographic Information
SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information
, establishes standards
for reporting information about operating segments in annual financial statements of public business enterprises. It also establishes standards for related disclosures about products and service,
geographic areas and major customers. The Group evaluated its business activities that are regularly reviewed by the Group's management, for which discrete financial information is available. As a
result of this evaluation, the Group determined that it has two reportable operating segments: analytical instruments and superconducting wire. The analytical instruments business manufactures and
distributes enabling life science tools based on its core technology, magnetic resonance. The superconducting wire business manufactures and distributes magnetic wire that is used in the manufacturing
of these enabling life science tools.
F-21
Total
revenue, cost of product revenue, operating income (loss), interest (expense) income, provision for income taxes, and depreciation and amortization for analytical instruments,
superconducting wire and the combined group are as follows:
|
|
September 30
|
|
December 31
|
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
330,988
|
|
$
|
290,605
|
|
$
|
417,665
|
|
$
|
400,553
|
|
$
|
445,505
|
|
|
Superconducting wire
|
|
|
20,905
|
|
|
22,882
|
|
|
29,289
|
|
|
44,682
|
|
|
41,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
351,893
|
|
$
|
313,487
|
|
$
|
446,954
|
|
$
|
445,235
|
|
$
|
487,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
191,593
|
|
$
|
158,252
|
|
$
|
217,542
|
|
$
|
207,007
|
|
$
|
247,000
|
|
|
Superconducting wire
|
|
|
18,433
|
|
|
22,737
|
|
|
28,767
|
|
|
46,012
|
|
|
41,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
210,026
|
|
$
|
180,989
|
|
$
|
246,309
|
|
$
|
253,019
|
|
$
|
288,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
53,685
|
|
$
|
49,898
|
|
$
|
85,348
|
|
$
|
106,849
|
|
$
|
51,880
|
|
|
Superconducting wire
|
|
|
(4,830
|
)
|
|
(6,613
|
)
|
|
(8,617
|
)
|
|
(13,030
|
)
|
|
(9,729
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
48,855
|
|
$
|
43,285
|
|
$
|
76,731
|
|
$
|
93,819
|
|
$
|
42,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense) income, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
5,881
|
|
$
|
4,192
|
|
$
|
6,140
|
|
$
|
3,770
|
|
$
|
1,883
|
|
|
Superconducting wire
|
|
|
(106
|
)
|
|
(501
|
)
|
|
(597
|
)
|
|
(1,379
|
)
|
|
(1,732
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
5,775
|
|
$
|
3,691
|
|
$
|
5,543
|
|
$
|
2,391
|
|
$
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30
|
|
December 31
|
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Provision for income taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
10,510
|
|
$
|
15,437
|
|
$
|
21,370
|
|
$
|
26,438
|
|
$
|
11,775
|
|
|
Superconducting wire
|
|
|
186
|
|
|
68
|
|
|
(255
|
)
|
|
158
|
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
10,696
|
|
$
|
15,505
|
|
$
|
21,115
|
|
$
|
26,596
|
|
$
|
11,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
9,366
|
|
$
|
8,871
|
|
$
|
12,085
|
|
$
|
12,048
|
|
$
|
14,220
|
|
|
Superconducting wire
|
|
|
1,957
|
|
|
2,140
|
|
|
2,812
|
|
|
2,639
|
|
|
2,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
11,323
|
|
$
|
11,011
|
|
$
|
14,897
|
|
$
|
14,687
|
|
$
|
16,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-22
Assets
for analytical instruments, superconducting wire and the combined group are provided below:
|
|
|
|
December 31
|
|
|
|
September 30
2007
|
|
|
|
2006
|
|
2005
|
|
|
|
(unaudited)
|
|
|
|
|
|
Property, plant and equipment, net:
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
95,294
|
|
$
|
93,890
|
|
$
|
87,851
|
|
|
Superconducting wire
|
|
|
7,110
|
|
|
6,203
|
|
|
5,917
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
102,404
|
|
$
|
100,093
|
|
$
|
93,768
|
|
|
|
|
|
|
|
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
5,112
|
|
$
|
11,884
|
|
$
|
13,117
|
|
|
Superconducting wire
|
|
|
1,604
|
|
|
1,496
|
|
|
1,483
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
6,716
|
|
$
|
13,380
|
|
$
|
14,600
|
|
|
|
|
|
|
|
|
|
Net deferred tax liability:
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
5,505
|
|
$
|
(5,097
|
)
|
$
|
(3,245
|
)
|
|
Superconducting wire
|
|
|
(194
|
)
|
|
|
|
|
(234
|
)
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
5,311
|
|
$
|
(5,097
|
)
|
$
|
(3,479
|
)
|
|
|
|
|
|
|
|
|
Total assets:
|
|
|
|
|
|
|
|
|
|
|
|
Analytical instruments
|
|
$
|
760,103
|
|
$
|
728,460
|
|
$
|
693,217
|
|
|
Superconducting wire
|
|
|
32,826
|
|
|
34,209
|
|
|
34,676
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
$
|
792,929
|
|
$
|
762,669
|
|
$
|
727,893
|
|
|
|
|
|
|
|
|
|
Net
income of companies in the Group outside of the United States was $54,485, $74,985 and $20,663 for the years ended December 31, 2006, 2005 and 2004, respectively.
Information
concerning principal geographic areas in which the Group operates is as follows:
|
|
2006
|
|
2005
|
|
2004
|
Total revenue:
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
$
|
281,249
|
|
$
|
258,585
|
|
$
|
277,995
|
|
North America
|
|
|
106,686
|
|
|
131,916
|
|
|
146,282
|
|
Asia
|
|
|
46,551
|
|
|
46,516
|
|
|
54,766
|
|
Rest of world
|
|
|
12,468
|
|
|
8,218
|
|
|
8,286
|
|
|
|
|
|
|
|
|
|
$
|
446,954
|
|
$
|
445,235
|
|
$
|
487,329
|
|
|
|
|
|
|
|
F-23
Bruker BioSpin Group
Notes to Combined Financial Statements (Continued)
Net revenues are attributed to the geographic area based on the location of the sales office receiving the customer order, and not necessarily the location of the
customers.
|
|
December 31
|
|
|
2006
|
|
2005
|
Long-lived assets (year end):
|
|
|
|
|
|
|
|
Europe
|
|
$
|
98,819
|
|
$
|
96,377
|
|
North America
|
|
|
5,574
|
|
|
6,218
|
|
Asia
|
|
|
4,525
|
|
|
4,519
|
|
Rest of world
|
|
|
922
|
|
|
733
|
|
|
|
|
|
|
|
$
|
109,840
|
|
$
|
107,847
|
|
|
|
|
|
Total assets:
|
|
|
|
|
|
|
|
Europe
|
|
$
|
601,108
|
|
$
|
585,999
|
|
North America
|
|
|
118,824
|
|
|
111,329
|
|
Asia
|
|
|
35,453
|
|
|
25,636
|
|
Rest of world
|
|
|
7,284
|
|
|
4,929
|
|
|
|
|
|
|
|
$
|
762,669
|
|
$
|
727,893
|
|
|
|
|
|
16. Restructuring Charges
During the fiscal years ended December 31, 2006 and 2005, the Company implemented restructuring programs in order to reduce costs and improve productivity
by eliminating redundant positions, streamlining productions and initiating several cost reduction programs in all operating areas. As a result, a $468 and $2,632 charge was recorded in the years
ended December 31, 2006 and 2005, respectively. Our superconducting wire segment in Germany recorded $468 and $1,843 for the years ended December 31, 2006 and December 31, 2005,
respectively. Our analytical instruments segment in the US recorded $0 and $789 for the years ended December 31, 2006 and December 31, 2005, respectively. No restructuring charges were
incurred in 2004.
F-24
The
following table summarizes the restructuring charge activity and the balance of the restructuring accrual as of December 31, 2006.
|
|
Employee
Workforce
Reductions
|
|
Inventory
|
|
Professional
and Facility
Related Fees
|
|
Total
|
|
Balance as of December 31, 2004
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
New charges
|
|
|
1,822
|
|
|
654
|
|
|
156
|
|
|
2,632
|
|
|
Cash payments
|
|
|
(118
|
)
|
|
|
|
|
(156
|
)
|
|
(274
|
)
|
|
Currency effects
|
|
|
(7
|
)
|
|
|
|
|
(1
|
)
|
|
(8
|
)
|
|
Non-cash charges
|
|
|
|
|
|
(654
|
)
|
|
|
|
|
(654
|
)
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2005
|
|
|
1,697
|
|
|
|
|
|
(1
|
)
|
|
1,696
|
|
|
New charges
|
|
|
468
|
|
|
|
|
|
|
|
|
468
|
|
|
Cash payments
|
|
|
(2,024
|
)
|
|
|
|
|
|
|
|
(2,024
|
)
|
|
Currency effects
|
|
|
15
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2006
|
|
$
|
156
|
|
$
|
|
|
$
|
(1
|
)
|
$
|
155
|
|
|
|
|
|
|
|
|
|
|
|
17. Employee Retirement Plans
Defined Benefit Plans
Substantially all of the Group's employees in Switzerland and Japan, as well as certain employees in Germany, are covered by Group-sponsored defined benefit
pension plans. Retirement benefits earned are generally based on years of service and compensation during active employment. Eligibility is generally determined in accordance with local statutory
requirements. However, the level of benefits and terms of vesting may vary among plans.
As
noted previously in Note 2, the Group adopted SFAS No. 158 on December 31, 2006. The adjustment to other comprehensive loss upon the adoption of SFAS
No. 158 represents the net unrecognized actuarial losses and unrecognized prior service costs as of the date of adoption. These amounts were previously netted against the plan's funded status
in our combined balance sheet. We will recognize these amounts in future periods as components of net periodic pension cost. The estimated net gain for the defined benefit pension plans that will be
amortized from other comprehensive income into net periodic benefit cost over the next fiscal year is approximately $226.
F-25
The
following table illustrates the incremental effect of applying SFAS 158 on individual line items on our balance sheet as of December 31, 2006.
|
|
Before Application of SFAS 158
|
|
Adjustments
|
|
After Application of SFAS 158
|
Other assets
|
|
$
|
9,104
|
|
$
|
(8,119
|
)
|
$
|
985
|
Total assets
|
|
|
770,788
|
|
|
(8,119
|
)
|
|
762,669
|
Accrued expenses and other liabilities
|
|
|
50,986
|
|
|
360
|
|
|
51,346
|
Other long term liabilities
|
|
|
12,612
|
|
|
1,045
|
|
|
13,657
|
Deferred income taxes
|
|
|
24,063
|
|
|
(1,950
|
)
|
|
22,113
|
Total liabilities
|
|
|
377,479
|
|
|
(545
|
)
|
|
376,934
|
|
Accumulated other comprehensive income
|
|
|
76,406
|
|
|
(7,574
|
)
|
|
68,832
|
Total shareholders' equity
|
|
$
|
393,309
|
|
$
|
(7,574
|
)
|
$
|
385,735
|
The
following table sets forth the funded status and amounts recognized in the combined financial statements for the various Group-sponsored defined benefit plans:
|
|
2006
|
|
2005
|
|
Change in benefit obligation
|
|
|
|
|
|
|
|
Beginning projected benefit obligation
|
|
$
|
72,574
|
|
$
|
74,044
|
|
Service cost
|
|
|
2,334
|
|
|
2,139
|
|
Interest cost
|
|
|
2,118
|
|
|
2,478
|
|
Plan participant contributions
|
|
|
1,940
|
|
|
1,954
|
|
Benefit payments
|
|
|
(1,788
|
)
|
|
(1,803
|
)
|
Actuarial (gain) loss
|
|
|
(470
|
)
|
|
4,550
|
|
Impact of foreign currency exchange rate changes
|
|
|
5,937
|
|
|
(10,788
|
)
|
|
|
|
|
|
|
Ending projected benefit obligation
|
|
$
|
82,645
|
|
$
|
72,574
|
|
|
|
|
|
|
|
Change in plan assets
|
|
|
|
|
|
|
|
Fair value at beginning of year
|
|
$
|
62,949
|
|
$
|
61,859
|
|
Actual return on plan assets
|
|
|
2,098
|
|
|
2,378
|
|
Contributions
|
|
|
4,065
|
|
|
5,540
|
|
Benefits paid
|
|
|
(1,779
|
)
|
|
(1,543
|
)
|
Impact of foreign currency exchange rate changes
|
|
|
5,075
|
|
|
(5,285
|
)
|
|
|
|
|
|
|
Fair value at end of year
|
|
$
|
72,408
|
|
$
|
62,949
|
|
|
|
|
|
|
|
Under-funded status of plan
|
|
$
|
(10,237
|
)
|
$
|
(9,625
|
)
|
Unrecognized loss
|
|
|
|
|
|
9,896
|
|
|
|
|
|
|
|
Net benefit asset (obligation)
|
|
$
|
(10,237
|
)
|
$
|
271
|
|
|
|
|
|
|
|
F-26
The
following amounts were recognized in the accompanying combined balance sheet for the Company's defined benefit plans at December 31, 2006 and 2005:
|
|
2006
|
|
2005
|
|
Non-current assets
|
|
$
|
|
|
$
|
7,173
|
|
Current liabilities
|
|
|
(360
|
)
|
|
|
|
Non-current liabilities
|
|
|
(9,877
|
)
|
|
(7,603
|
)
|
Accumulated other comprehensive income
|
|
|
|
|
|
701
|
|
|
|
|
|
|
|
Net benefit (obligation) asset
|
|
$
|
(10,237
|
)
|
$
|
271
|
|
|
|
|
|
|
|
The
following amounts were recognized in accumulated other comprehensive income (loss) in the accompanying combined balance sheet at December 31, 2006 and 2005:
|
|
2006
|
|
2005
|
|
Minimum pension liability, net of tax provision
|
|
$
|
(61
|
)
|
$
|
(414
|
)
|
Net actuarial loss, net of tax provision of $1,950
|
|
|
(7,574
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(7,635
|
)
|
$
|
(414
|
)
|
|
|
|
|
|
|
Weighted
average assumptions used in the calculation of the pension obligation and determining the net periodic pension cost were:
|
|
2006
|
|
2005
|
|
|
|
Germany
|
|
Others
|
|
Germany
|
|
Others
|
|
Annual discount rate
|
|
4.00-4.25
|
%
|
2.20-2.80
|
%
|
4.00-4.25
|
%
|
2.50-2.70
|
%
|
Expected return on plan assets
|
|
|
|
3.78
|
%
|
|
|
3.78
|
%
|
Expected rate of salary increases
|
|
2.50
|
%
|
1.50-2.50
|
%
|
2.50
|
%
|
1.50-2.50
|
%
|
To
determine the expected long-term rate of return on pension plan assets, we consider the current and expected asset allocations, as well as historical and expected returns
on various categories of plan assets. For the principal pension plans, we apply our expected rate of return to a market-related value of assets, which stabilizes variability in assets to which we
apply that expected return.
Net Periodic Pension Cost
The components of the Group's net periodic cost are as follows:
|
|
2006
|
|
2005
|
|
2004
|
|
Components of net periodic pension cost
|
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
$
|
2,334
|
|
$
|
4,093
|
|
$
|
3,960
|
|
|
Interest cost
|
|
|
2,118
|
|
|
2,478
|
|
|
2,277
|
|
|
Expected return on plan assets
|
|
|
(2,541
|
)
|
|
(2,378
|
)
|
|
(2,331
|
)
|
|
Amortization of prior service cost and actuarial gains and losses
|
|
|
614
|
|
|
442
|
|
|
233
|
|
|
|
|
|
|
|
|
|
Net periodic pension cost
|
|
$
|
2,525
|
|
$
|
4,635
|
|
$
|
4,139
|
|
|
|
|
|
|
|
|
|
F-27
At
December 31, 2006 and 2005, one of the Group's defined benefit pension plans has an accumulated benefit obligation of $67,319 and $61,037 and plan asset fair values totaling
$72,408 and $62,949, respectively. The remainder of the Group's plans are unfunded plans with an aggregate accumulated benefit obligation of $8,534 and $7,692 as of December 31, 2006 and 2005,
respectively.
As
required under SFAS No. 158, the Group's total defined benefit pension liability includes $1,400 related to a plan in Switzerland (Swiss Plan) at December 31, 2006. The
funding policy of the Swiss Plan is consistent with the local government and tax requirements. The Swiss Plan is not required to be funded pursuant to Swiss government and tax requirements.
Asset Allocations by Asset Category
The Group's weighted-average pension plan asset allocation at December 31, 2006 and 2005, by asset category, is as follows:
|
|
2006
|
|
2005
|
|
Debt securities
|
|
43
|
%
|
48
|
%
|
Equity securities
|
|
31
|
|
34
|
|
Cash
|
|
12
|
|
2
|
|
Property
|
|
8
|
|
9
|
|
Mortgages
|
|
6
|
|
7
|
|
|
|
|
|
|
|
Total
|
|
100
|
%
|
100
|
%
|
|
|
|
|
|
|
Plan
fiduciaries set investment policies and strategies for the trust. Long-term strategic investment objectives include preserving the funded status of the trust and
balancing risk and return. The plan fiduciaries oversee the investment allocation process, which includes selecting investment managers, setting long-term strategic targets and monitoring
asset allocations. Target allocation ranges are guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below a target range.
The
long-term investment strategy is to achieve a rate of return on assets of 4.5% a year. The investment strategy is limited to investing in a maximum of 35% in equity
securities and a maximum of 30% in foreign currencies.
The
Group expects to contribute approximately $1,976 to its pension plans during 2007.
F-28
Estimated Future Benefit Payments
The following benefit payments, which reflect future employee service as appropriate, are expected to be paid. The benefit payments are based on the same
assumptions used to measure the Group's benefit obligation at December 31, 2006.
2007
|
|
$
|
2,931
|
2008
|
|
|
964
|
2009
|
|
|
1,336
|
2010
|
|
|
1,460
|
2011
|
|
|
1,762
|
2012 and beyond
|
|
|
13,998
|
Other Plans
Employees in certain other countries are covered by defined contribution plans. Generally, contributions are based on a percentage of employees' salary. Employer
contributions charged to operations were approximately $750, $864 and $779 in the years ended December 31, 2006, 2005 and 2004, respectively.
18. Accumulated Other Comprehensive Income and Comprehensive Income
Comprehensive income (loss) includes net earnings and unrealized gains and losses from currency translation, marketable securities available for sale and minimum
pension liability adjustments, net of tax attributes. The components of the Company's comprehensive income (loss) and the effect on earnings for the periods presented are detailed in the accompanying
consolidated statement of stockholder's investment.
The
balances of each classification, net of tax attributes, within accumulated other comprehensive income (loss) as of the periods presented are as follows:
|
|
Unrealized
Gains on
Available
For Sale
Securities
|
|
SFAS No. 87
Minimum
Pension
Liability
Adjustment
|
|
SFAS No. 158
Pension
Liability
Adjustment
|
|
Foreign
Currency
Translation
|
|
Accumulated
Other
Comprehensive
Income
|
|
Balances at January 1, 2005
|
|
$
|
594
|
|
$
|
|
|
$
|
|
|
$
|
90,311
|
|
$
|
90,905
|
|
|
Other comprehensive income
|
|
|
113
|
|
|
(414
|
)
|
|
|
|
|
(45,291
|
)
|
|
(45,592
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2005
|
|
|
707
|
|
|
(414
|
)
|
|
|
|
|
45,020
|
|
|
45,313
|
|
|
Adoption of SFAS No. 158
|
|
|
|
|
|
475
|
|
|
(8,049
|
)
|
|
|
|
|
(7,574
|
)
|
|
Other comprehensive income
|
|
|
202
|
|
|
(61
|
)
|
|
|
|
|
30,952
|
|
|
31,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances at December 31, 2006
|
|
$
|
909
|
|
$
|
|
|
$
|
(8,049
|
)
|
$
|
75,972
|
|
$
|
68,832
|
|
|
|
|
|
|
|
|
|
|
|
|
|
F-29
The
following is a summary of comprehensive income for the periods presented below:
|
|
Nine Months Ended
September 30,
|
|
Year ended December 31,
|
|
|
2007
|
|
2006
|
|
2006
|
|
2005
|
|
2004
|
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
Net income
|
|
43,528
|
|
30,467
|
|
56,574
|
|
75,226
|
|
23,656
|
Foreign currency translation adj
|
|
25,013
|
|
18,925
|
|
30,952
|
|
(45,291
|
)
|
31,326
|
Unrealized gains on available for sale securities
|
|
336
|
|
406
|
|
202
|
|
113
|
|
142
|
Minimum pension liability adjustment
|
|
|
|
|
|
|
|
(414
|
)
|
|
Reveral of SFAS No. 87 minimum pension liability, net of tax provision of $133
|
|
|
|
|
|
(61
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
|
68,877
|
|
49,798
|
|
87,667
|
|
29,634
|
|
55,124
|
|
|
|
|
|
|
|
|
|
|
|
19. Commitments and Contingencies
Legal Proceedings
Certain companies within the Group have been parties to litigation alleging patent infringement against patents of their competitors. During 2004, the Group
recorded a charge of $28,469 to cover costs associated with loss and related legal fees to the extent such amounts were deemed both probable and estimable. The related accrual for these costs was
included in long-term other liabilities in the accompanying combined balance sheet at December 31, 2004. During 2005, a settlement agreement was signed for our various magnet patent
litigation cases, which released the Group from any losses. As a result, the Group reversed this obligation in the amount of $25,754 during 2005. Actual legal expenses incurred were $343 during 2005.
Operating Leases
The Group leases vehicles, office equipment and buildings under agreements expiring on various dates. Future minimum rental commitments under
non-cancelable operating leases at December 31, 2006 were as follows:
2007
|
|
$
|
1,865
|
2008
|
|
|
1,246
|
2009
|
|
|
793
|
2010
|
|
|
789
|
2011
|
|
|
560
|
Thereafter
|
|
|
1,513
|
|
|
|
Total minimum lease payments
|
|
$
|
6,766
|
|
|
|
Rental
expense under operating leases were $2,195, $2,821, and $3,276 in the years ended December 31, 2006, 2005, and 2004 respectively.
F-30
Capital Leases
The Group leases a building under an agreement that is classified as a capital lease. The cost of the building under capital lease is included in the combined
balance sheets as property, plant and equipment and was $4,880 and $4,382 at December 31, 2006 and December 31, 2005, respectively. Accumulated amortization of the leased building at
December 31, 2006 and December 31, 2005 was approximately $877 and $613, respectively. Amortization of assets under capital lease is included in depreciation expense. The future minimum
lease payments required under the capital lease as of December 31, 2006 are as follows:
2007
|
|
$
|
741
|
2008
|
|
|
737
|
2009
|
|
|
736
|
2010
|
|
|
464
|
2011
|
|
|
272
|
Thereafter
|
|
|
686
|
|
|
|
Total minimum lease payments
|
|
|
3,636
|
Less: Amount representing interest
|
|
|
299
|
|
|
|
Present value of net minimum lease payments
|
|
|
3,337
|
Less: Current maturities of capital lease obligations
|
|
|
665
|
|
|
|
Long-term capital lease obligations
|
|
$
|
2,672
|
|
|
|
License Agreements
The Group has entered into various technology cross-licensing agreements allowing other companies to utilize certain patents and related technologies over periods
ranging from 21 to 30 years. Income from these agreements for the years ended December 31, 2006, 2005, and 2004 was $2,101, $2,138, and $1,908, respectively, and is classified as other
revenues. The unearned portions of proceeds from these cross-licensing agreements are classified as short-term or long-term deferred revenue depending on when the revenue will
be earned. Licensing expense for 2006, 2005, and 2004 was $603, $756, and $900, respectively.
Grants
The Group is the recipient of grants from various European government authorities. The grants were made in connection with the Group's development of specific
magnetic resonance core technology
equipment. Amounts received under these grants during 2006, 2005,and 2004 totaled $1,093, $2,614, and $959, respectively, and are classified as other revenue. Total expenditures related to these
grants in 2006, 2005, and 2004 were $1,698, $5,120, and $2,195, respectively. Grant-related expenditures are classified in research and development.
Guarantees
The Group maintained bank guarantees of approximately $61,130 and $66,534 for several customers as of December 31, 2006 and 2005, respectively. These
arrangements guarantee the refund of
F-31
advance
payments received from customers in the event that the merchandise is not delivered in compliance with the terms of the contract. The sum of the guarantees is reduced by the values of the
deliveries upon submission of the shipping documents.
20. Subsequent Events
In April 2007, the Board of Directors of Bruker BioSpin Invest AG declared and paid dividends to shareholders of $37,641. In July 2007, the Board of
Directors of Bruker BioSpin Securities Corporation declared and paid dividends to shareholders of $5,000. In November 2007, the Board of Directors of Bruker BioSpin Invest AG declared dividends
to shareholders of $75,000 CHF or approximately $67,000.
F-32
Annex A-1
U.S. STOCK PURCHASE AGREEMENT
by
and among
BRUKER BIOSCIENCES CORPORATION
("BRKR")
and
BRUKER BIOSPIN INC.
("BioSpin U.S.")
and
DIRK D. LAUKIEN
FRANK H. LAUKIEN
ISOLDE LAUKIEN-KLEINER
JOERG C. LAUKIEN
MARC M. LAUKIEN
and
ROBYN L. LAUKIEN
("Sellers")
Dated as of December 2, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
Page
|
ARTICLE I
|
|
DEFINITIONS AND DEFINED TERMS
|
|
A-1-2
|
|
Section 1.1
|
|
|
|
Definitions
|
|
A-1-2
|
ARTICLE II
|
|
PURCHASE AND SALE OF SHARES; CLOSING
|
|
A-1-7
|
|
Section 2.1
|
|
|
|
Purchase and Sale of Shares
|
|
A-1-7
|
|
Section 2.2
|
|
|
|
Purchase Price
|
|
A-1-7
|
|
Section 2.3
|
|
|
|
The Closing
|
|
A-1-7
|
|
Section 2.4
|
|
|
|
Deliveries at Closing
|
|
A-1-7
|
|
Section 2.5
|
|
|
|
Indemnity Escrow
|
|
A-1-8
|
|
Section 2.6
|
|
|
|
Working Capital Escrow
|
|
A-1-8
|
|
Section 2.7
|
|
|
|
Working Capital Adjustment
|
|
A-1-8
|
|
Section 2.8
|
|
|
|
Withholding
|
|
A-1-9
|
ARTICLE III
|
|
REPRESENTATIONS AND WARRANTIES OF SELLERS
|
|
A-1-9
|
|
Section 3.1
|
|
|
|
Power and Authority
|
|
A-1-9
|
|
Section 3.2
|
|
|
|
Enforceability
|
|
A-1-9
|
|
Section 3.3
|
|
|
|
No Violation
|
|
A-1-9
|
|
Section 3.4
|
|
|
|
No Conflict
|
|
A-1-9
|
|
Section 3.5
|
|
|
|
Litigation
|
|
A-1-10
|
|
Section 3.6
|
|
|
|
No Other Agreement
|
|
A-1-10
|
|
Section 3.7
|
|
|
|
No Broker
|
|
A-1-10
|
|
Section 3.8
|
|
|
|
Ownership of the Shares
|
|
A-1-10
|
|
Section 3.9
|
|
|
|
Withholding Tax
|
|
A-1-10
|
ARTICLE IV
|
|
REPRESENTATIONS AND WARRANTIES REGARDING BIOSPIN U.S.
|
|
A-1-10
|
|
Section 4.1
|
|
|
|
Organization and Good Standing
|
|
A-1-10
|
|
Section 4.2
|
|
|
|
Authorization and Effect of Agreement
|
|
A-1-10
|
|
Section 4.3
|
|
|
|
Capitalization of BioSpin U.S.
|
|
A-1-11
|
|
Section 4.4
|
|
|
|
Capitalization of the Subsidiaries; Other Interests
|
|
A-1-11
|
|
Section 4.5
|
|
|
|
No Conflict
|
|
A-1-12
|
|
Section 4.6
|
|
|
|
Permits; Compliance with Law
|
|
A-1-12
|
|
Section 4.7
|
|
|
|
Books and Records
|
|
A-1-13
|
|
Section 4.8
|
|
|
|
Litigation
|
|
A-1-13
|
|
Section 4.9
|
|
|
|
Financial Statements; Undisclosed Liabilities
|
|
A-1-13
|
|
Section 4.10
|
|
|
|
Absence of Certain Changes
|
|
A-1-13
|
|
Section 4.11
|
|
|
|
Contracts
|
|
A-1-14
|
|
Section 4.12
|
|
|
|
Transactions with Affiliates
|
|
A-1-16
|
|
Section 4.13
|
|
|
|
Labor Relations
|
|
A-1-16
|
|
Section 4.14
|
|
|
|
Insurance
|
|
A-1-17
|
|
Section 4.15
|
|
|
|
Accounts Receivable
|
|
A-1-17
|
|
Section 4.16
|
|
|
|
Real Property; Leases
|
|
A-1-17
|
|
Section 4.17
|
|
|
|
Environmental
|
|
A-1-18
|
|
Section 4.18
|
|
|
|
No Broker
|
|
A-1-19
|
|
Section 4.19
|
|
|
|
Employee Benefits
|
|
A-1-19
|
|
Section 4.20
|
|
|
|
Employees
|
|
A-1-21
|
|
Section 4.21
|
|
|
|
Taxes and Tax Returns
|
|
A-1-21
|
A-1-i
|
Section 4.22
|
|
|
|
Proprietary Rights
|
|
A-1-23
|
|
Section 4.23
|
|
|
|
Information Technology
|
|
A-1-24
|
|
Section 4.24
|
|
|
|
Guarantees
|
|
A-1-25
|
|
Section 4.25
|
|
|
|
Bank Accounts
|
|
A-1-25
|
|
Section 4.26
|
|
|
|
Foreign Corrupt Practices and International Trade Sanctions
|
|
A-1-25
|
|
Section 4.27
|
|
|
|
Inventory
|
|
A-1-25
|
|
Section 4.28
|
|
|
|
Deposits
|
|
A-1-25
|
|
Section 4.29
|
|
|
|
No Misleading Statements
|
|
A-1-25
|
ARTICLE V
|
|
REPRESENTATIONS AND WARRANTIES OF BRKR
|
|
A-1-26
|
|
Section 5.1
|
|
|
|
Organization of BRKR; Authority
|
|
A-1-26
|
|
Section 5.2
|
|
|
|
Authorization; Enforceability
|
|
A-1-26
|
|
Section 5.3
|
|
|
|
No Conflict
|
|
A-1-26
|
|
Section 5.4
|
|
|
|
No Broker
|
|
A-1-27
|
|
Section 5.5
|
|
|
|
Investment Representation
|
|
A-1-27
|
|
Section 5.6
|
|
|
|
Accredited Investor
|
|
A-1-27
|
ARTICLE VI
|
|
COVENANTS
|
|
A-1-27
|
|
Section 6.1
|
|
|
|
Operation of BioSpin U.S. Pending the Closing
|
|
A-1-27
|
|
Section 6.2
|
|
|
|
Access
|
|
A-1-29
|
|
Section 6.3
|
|
|
|
Notification
|
|
A-1-29
|
|
Section 6.4
|
|
|
|
No Inconsistent Action
|
|
A-1-30
|
|
Section 6.5
|
|
|
|
Reasonable Best Efforts
|
|
A-1-30
|
|
Section 6.6
|
|
|
|
Further Assurances
|
|
A-1-30
|
|
Section 6.7
|
|
|
|
No Solicitation
|
|
A-1-30
|
|
Section 6.8
|
|
|
|
Tax Matters
|
|
A-1-31
|
|
Section 6.9
|
|
|
|
Release
|
|
A-1-31
|
|
Section 6.10
|
|
|
|
Voting Agreement
|
|
A-1-32
|
|
Section 6.11
|
|
|
|
Non-competition and Non-solicitation
|
|
A-1-32
|
ARTICLE VII
|
|
CLOSING CONDITIONS
|
|
A-1-32
|
|
Section 7.1
|
|
|
|
Conditions to Each Party's Obligations
|
|
A-1-32
|
|
Section 7.2
|
|
|
|
Conditions Precedent to Obligations of BRKR
|
|
A-1-33
|
|
Section 7.3
|
|
|
|
Conditions Precedent to Obligations of Sellers
|
|
A-1-34
|
ARTICLE VIII
|
|
TERMINATION
|
|
A-1-34
|
|
Section 8.1
|
|
|
|
Termination
|
|
A-1-34
|
|
Section 8.2
|
|
|
|
Procedure and Effect of Termination
|
|
A-1-35
|
ARTICLE IX
|
|
SURVIVAL; INDEMNIFICATION
|
|
A-1-35
|
|
Section 9.1
|
|
|
|
Survival of Indemnification Rights
|
|
A-1-35
|
|
Section 9.2
|
|
|
|
Indemnification Obligations
|
|
A-1-36
|
|
Section 9.3
|
|
|
|
Indemnification Procedure
|
|
A-1-37
|
|
Section 9.4
|
|
|
|
Calculation of Indemnity Payments
|
|
A-1-37
|
|
Section 9.5
|
|
|
|
Indemnification Amounts
|
|
A-1-37
|
|
Section 9.6
|
|
|
|
Exclusive Remedy
|
|
A-1-38
|
ARTICLE X
|
|
MISCELLANEOUS PROVISIONS
|
|
A-1-39
|
|
Section 10.1
|
|
|
|
Notices
|
|
A-1-39
|
|
Section 10.2
|
|
|
|
Expenses
|
|
A-1-39
|
A-1-ii
|
Section 10.3
|
|
|
|
Successors and Assigns
|
|
A-1-40
|
|
Section 10.4
|
|
|
|
Extension; Waiver
|
|
A-1-40
|
|
Section 10.5
|
|
|
|
Entire Agreement; Schedules
|
|
A-1-40
|
|
Section 10.6
|
|
|
|
Amendments, Supplements, Etc
|
|
A-1-40
|
|
Section 10.7
|
|
|
|
Applicable Law
|
|
A-1-40
|
|
Section 10.8
|
|
|
|
Waiver of Jury Trial
|
|
A-1-41
|
|
Section 10.9
|
|
|
|
Actions by Sellers
|
|
A-1-41
|
|
Section 10.10
|
|
|
|
Execution in Counterparts
|
|
A-1-41
|
|
Section 10.11
|
|
|
|
Titles and Headings
|
|
A-1-41
|
|
Section 10.12
|
|
|
|
Invalid Provisions
|
|
A-1-41
|
|
Section 10.13
|
|
|
|
Publicity
|
|
A-1-41
|
|
Section 10.14
|
|
|
|
Specific Performance
|
|
A-1-41
|
|
Section 10.15
|
|
|
|
Construction
|
|
A-1-42
|
|
Section 10.16
|
|
|
|
Actions by BRKR
|
|
A-1-42
|
EXHIBITS
|
|
|
|
|
|
|
Exhibit AFinancing Documents
|
|
|
Exhibit BIndemnity Escrow Agreement
|
|
|
Exhibit CWorking Capital Escrow Agreement
|
|
|
Exhibit DPress Release
|
|
|
These
exhibits are omitted in accordance with Item 601(b)(2) of Regulation S-K. The Registrant will furnish a copy of any omitted exhibit to the Securities and Exchange Commission
supplementally upon request.
A-1-iii
List of Schedules
Schedule 2.2
|
|
Seller U.S. SPA Consideration Allocation
|
Schedule 2.7(b)
|
|
Working Capital Escrow
|
Schedule 3.4
|
|
Required Filings, Consents, Approvals (Sellers)
|
Schedule 4.4(a)
|
|
Directly/Indirectly Owned Subsidiaries
|
Schedule 4.5(c)
|
|
Consents (BioSpin U.S.)
|
Schedule 4.6(a)
|
|
Business Permits
|
Schedule 4.7
|
|
Books and Records
|
Schedule 4.8
|
|
Litigation
|
Schedule 4.10
|
|
Absence of Certain Changes
|
Schedule 4.11(a)
|
|
Contracts
|
Schedule 4.11(b)
|
|
Other Contracts
|
Schedule 4.12
|
|
Transactions with Affiliates
|
Schedule 4.13
|
|
Labor Relations
|
Schedule 4.14
|
|
Insurance Policies
|
Schedule 4.16(b)(i)
|
|
Real Property Leases
|
Schedule 4.16(b)(ii)
|
|
Consents Necessary for Real Property Leases
|
Schedule 4.17(a)
|
|
Environmental Permits
|
Schedule 4.17(d)
|
|
Hazardous Substances
|
Schedule 4.19(a)
|
|
Employee Benefit Plans
|
Schedule 4.19(f)
|
|
Benefit Plan Contributions
|
Schedule 4.20(a)
|
|
Employee Compensation
|
Schedule 4.21
|
|
Taxes and Tax Returns
|
Schedule 4.22(a)
|
|
Proprietary Rights Not Owned by BioSpin U.S.
|
Schedule 4.22(b)
|
|
Proprietary Rights
|
Schedule 4.23(a)
|
|
Information Technology
|
Schedule 4.25
|
|
Bank Accounts
|
Schedule 5.3
|
|
Conflicts (BRKR)
|
Schedule 7.2(i)
|
|
Leases To Be Amended
|
Schedule 9.5
|
|
Maximum Indemnification Liability
|
A-1-iv
U.S. STOCK PURCHASE AGREEMENT
This U.S. STOCK PURCHASE AGREEMENT (this "
Agreement
" or "
U.S.
SPA
") is made and entered into as of December 2, 2007 by and among Bruker BioSciences Corporation, a Delaware corporation
("
BRKR
"), Bruker BioSpin Inc., a Delaware corporation ("
BioSpin U.S.
"), and Dirk D. Laukien,
Frank H. Laukien, Isolde Laukien-Kleiner, Joerg C. Laukien, Marc M. Laukien and Robyn L. Laukien (each a "
Seller
" and collectively,
"
Sellers
").
RECITALS
WHEREAS, Sellers own 8,869,830 shares of common stock, par value $0.01 per share, of BioSpin U.S. (the "
Shares
"),
which constitute all of the issued and outstanding capital stock of BioSpin U.S. as of the date hereof;
WHEREAS,
pursuant to this U.S. SPA, Sellers desire to sell to BRKR, and BRKR desires to purchase from Sellers, all of the Shares, upon the terms and subject to the conditions set forth
herein;
WHEREAS,
the Board of Directors of BRKR has appointed a Special Committee of independent directors (the "
Special Committee
") to consider
the acquisition of the Bruker BioSpin group of companies (the transactions effecting such acquisition, the "
Transactions
"), which is comprised of
BioSpin U.S., Bruker BioSpin Invest AG ("
Invest
"), Bruker Physik GmbH ("
Bruker Physik
") and Techneon AG
("
Techneon
"), and each of their respective Subsidiaries (together, the "
Subject Companies
");
WHEREAS,
reference is made to that certain Swiss Agreement and Plan of Merger, dated as of December 2, 2007, by and among BRKR, Bruker BioSpin Beteiligungs AG, a Swiss stock
corporation and a direct, wholly owned subsidiary of BRKR ("
Merger Sub
"), Sellers and Invest (the "
Swiss Merger
Agreement
"), wherein is contemplated the acquisition of Invest by BRKR by means of a share exchange, share cancellation and reverse subsidiary merger in which Merger Sub is
intended to be merged with and into Invest, with Invest surviving the merger and becoming a direct, wholly owned subsidiary of BRKR, solely in exchange for the delivery of shares of BRKR Stock to
Sellers;
WHEREAS,
reference is made to that certain German Share Purchase Agreement, dated as of December 2, 2007, by and among BRKR (or after the U.S. Closing and assignment of BRKR
rights and obligations under the German SPA, Bruker BioSpin Corporation), SciTec GmbH & Co. KG ("
SciTec
"), Techneon, Bruker Optik GmbH, Bruker
Daltonik GmbH, Sellers and Bruker Physik (the "
German SPA
"), wherein is contemplated (i) the acquisition of common shares of Bruker Physik in the
aggregate nominal amount of €2,167,500 from Sellers and the acquisition of common shares of Bruker Physik in the aggregate nominal amount of €5,227,500 from SciTec for
$143,460,000 in cash by, respectively, Bruker BioSpin Corporation (following the U.S. Closing) (shares in the aggregate of nominal €4,292,500), Bruker Daltonik GmbH (one share of
nominal €1,551,250) and Bruker Optik GmbH (one share of nominal €1,551,250), with one share of nominal €1,105,000 of Bruker Physik remaining in the
ownership of Techneon, a wholly owned subsidiary of SciTec, (ii) the subsequent acquisition of 100% of the common shares of Techneon from SciTec by Bruker Physik for $142,540,000 in cash, and
(iii) the purchase by Bruker Optik GmbH of one piece of real property in Ettlingen, Germany (registered as Nr. 4276 in the land register of Ettlingen) from SciTec and Isolde Laukien-Kleiner for
€1,416,250 in cash;
WHEREAS,
before the Closing Date, Invest will pay a special cash dividend of CHF 75,000,000 in the aggregate to be distributed to its holders, as of November 15, 2007, of
outstanding Invest common shares (the "
Special Dividend
");
WHEREAS,
after the consummation of the Transactions, BRKR intends to cause itself to be renamed "Bruker Corporation";
A-1-1
WHEREAS,
BRKR has received a commitment letter for an underwritten credit facility, which is required for the financing of the Transactions, from certain lenders as set forth in
Exhibit A
;
NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND DEFINED TERMS
Section 1.1
Definitions.
As used in this U.S. SPA, the following terms shall have the following meanings:
"
Affiliate
" shall mean with respect to any Person, any other Person who, directly or indirectly, controls, is controlled by or is under
common control with that Person. For purposes of this definition, a Person has control of another Person if it has the direct or indirect ability or power to direct or cause the direction of
management policies of such other Person or otherwise direct the affairs of such other Person, whether through ownership of at least fifty percent (50%) of the voting securities of such other Person,
by Contract or otherwise.
"
Ancillary Agreements
" shall mean the Indemnity Escrow Agreement and the Working Capital Escrow Agreement.
"
Audit Committee
" shall mean the Audit Committee of the Board of Directors of BRKR.
"
BioSpin U.S. IT Systems
" shall mean any and all information technology and computer systems (including software, hardware and other
equipment, firmware and embedded software) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information whether or not in
electronic format, which technology and systems are used in or necessary to the conduct of the business of BioSpin U.S. or the Subsidiaries.
"
BRKR Stock
" shall mean the common stock, par value $0.01 per share, of BRKR.
"
Business Day
" shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or
required by law to close.
"
Code
" shall mean the Internal Revenue Code of 1986, as amended.
"
Consent
" shall mean any consent, approval or authorization of, notice to, permit, or designation, registration, declaration or filing
with, any Person, including any consents and approvals from BRKR's and BioSpin U.S.'s (and their respective Subsidiaries) existing lenders.
"
Contract
" shall mean, whether written or oral, any note, bond, mortgage, indenture, contract, agreement, permit, license, lease, purchase
order, sales order, arrangement or other commitment, obligation or understanding (including any understanding with respect to pricing) to which a Person is a party or by which a Person or its assets
or properties are bound.
"
Dollars
" and "
$
" shall mean the lawful currency of the United States.
"
Employee
" shall mean any employee of BioSpin U.S., any of its Subsidiaries or any person providing services through a third-party
employee leasing or similar organization.
"
GAAP
" shall mean U.S. generally accepted accounting principles.
"
Governmental Authority
" shall mean any federal, state, local or foreign government or any subdivision, agency, instrumentality,
authority, quasi-governmental authority, department, commission, board or bureau thereof or any federal, state, local or foreign court, tribunal or arbitrator.
"
HSR Act
" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
A-1-2
"
Indemnity Escrow
" shall mean an amount in cash equal to Ninety Two Million Dollars ($92,000,000).
"
Indemnity Escrow Agent
" shall mean Nixon Peabody LLP.
"
Indemnity Escrow Agreement
" shall mean the agreement between the Indemnity Escrow Agent, BRKR and Sellers in the form set forth hereto as
Exhibit B
.
"
IRS
" shall mean the Internal Revenue Service.
"
Knowledge
" (including the word "
Known
" and the phrase "
to the
Knowledge of
" and words or phrases of similar import) as to Sellers or BioSpin U.S. shall mean the knowledge of (i) Sellers with respect to Sellers and
(ii) Barbara Burgess, Mark Chaykovsky, Arne Kasten, Werner Maas and Sellers with respect to BioSpin U.S. and its Subsidiaries, in all such cases, assuming reasonable inquiry.
"
Laws
" shall mean all federal, state, local or foreign laws, orders, writs, injunctions, decrees, ordinances, awards, stipulations,
treaty, statutes, judicial or administrative doctrines, rules or regulations enacted, promulgated, issued or entered by a Governmental Authority.
"
Liens
" shall mean all title defects or objections, mortgages, liens, claims, charges, pledges or other encumbrances of any nature
whatsoever, including licenses, leases, chattel or other mortgages, collateral security arrangements, pledges, title imperfections, defect or objection liens, security interests, conditional and
installment sales agreements, easements, encroachments or restrictions, of any kind and other title or interest retention arrangements, reservations or limitations of any nature.
"
Losses
" shall mean all losses, liabilities, demands, claims, actions or causes of action, costs, damages, judgments, debts, settlements,
assessments, deficiencies, Taxes, penalties, fines or expenses, whether or not arising out of any claims by or on behalf of a Third Party, including interest, penalties, reasonable attorneys' fees and
expenses and all reasonable amounts paid in investigation, defense or settlement of any of the foregoing;
provided
,
however
, that the term "Losses" shall
not be deemed to include any consequential, lost profits, punitive or incidental damages.
"
Material Adverse Effect
" shall mean any circumstance, change or effect that, individually or in the aggregate with other circumstances,
changes or effects, is or is reasonably likely to materially delay or impede consummation of the transactions contemplated by this U.S. SPA or be materially adverse to the business, operations
(including results of operations), prospects, assets, liabilities, or financial condition of BioSpin U.S. and the Subsidiaries taken as a whole;
provided
,
however
, that none of the following, either alone or in combination, shall be considered in
determining whether there has been a "Material Adverse Effect": (a) events, circumstances, changes or effects (including legal and regulatory changes) that generally affect the industries in
which each of BioSpin U.S. and the Subsidiaries operate, other than such events, circumstances, changes or effects that disproportionately affect (relative to other industry participants) BioSpin U.S.
or the Subsidiaries and (b) changes caused by a material worsening of current conditions caused by acts of terrorism or war occurring after the date hereof.
"
Nasdaq
" shall mean the NASDAQ Global Select Market.
"
Net Working Capital
" shall mean the amount of (i) all current assets of the Subject Companies on a consolidated basis, including
without limitation cash, accounts receivable (net of adequate reserves), inventory, prepaid expenses and other current assets,
less
(ii) all
current liabilities of the Subject Companies on a consolidated basis, including without limitation accounts payable, accrued salaries,
accrued vacations, payroll taxes, benefits, worker's compensation, insurance, deposits (whether or not refundable) made by customers on purchases from the Subject Companies and other current
liabilities.
"
Ordinary Course of Business
" shall mean the ordinary course of business of BioSpin U.S. and its Subsidiaries consistent with past
practice.
A-1-3
"
Organizational Documents
" shall mean (i) the articles or certificate of incorporation, the bylaws and any stockholders agreement
of a corporation, (ii) the partnership agreement and any statement of partnership of a general partnership, (iii) the limited partnership agreement and the certificate of limited
partnership of a limited partnership, (iv) the operating or limited liability company agreement and certificate of formation or organization of any limited liability company, (v) any
charter or similar document adopted or filed in connection with the creation, formation or organization of a Person and (vi) any amendment to any of the foregoing.
"
Parties
" shall mean BioSpin U.S., BRKR and Sellers.
"
Permits
" shall mean all permits, licenses, approvals, certifications, registrations, franchises, notices and authorizations issued by any
Governmental Authority that are used or held for use in, necessary or otherwise relate to the ownership, operation or other use of any business of BioSpin U.S. or its Subsidiaries.
"
Permitted Liens
" shall mean (i) mechanics', carriers', workmen's, repairmen's or other like Liens arising or incurred in the
Ordinary Course of Business for amounts which are not material and not yet due and payable and which secure an obligation of BioSpin U.S. or its Subsidiaries, (ii) Liens arising under Contracts
with Third Parties entered into in the Ordinary Course of Business in respect of amounts still owing, which Liens are reflected in the Financial Statements, and (iii) Liens for Taxes that are
not due and payable.
"
Person
" shall mean any individual, partnership, joint venture, corporation, trust, unincorporated organization, Governmental Authority or
other entity.
"
Schedule
" shall mean that schedule delivered to BRKR by Sellers prior to the execution of this U.S. SPA (each numbered Schedule of which
qualifies only the correspondingly numbered representation, warranty or covenant to the extent specified therein).
"
Significant Subsidiary
" shall mean a Subsidiary that meets any of the following conditions:
(i) BioSpin
U.S.'s and BioSpin U.S.'s other Subsidiaries' investments in and advances to the Subsidiary exceed ten percent (10%) of the total assets of BioSpin U.S. and the
Subsidiaries consolidated as of the end of the most recently completed fiscal year;
(ii) BioSpin
U.S.'s and BioSpin U.S.'s other Subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds ten percent
(10%) of the total assets of BioSpin U.S.'s and the Subsidiaries consolidated at the end of the most recently completed fiscal year; or
(iii) BioSpin
U.S. and BioSpin U.S.'s other Subsidiaries' equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a
change in accounting principle of the Subsidiary exceeds ten percent (10%) of such income of BioSpin U.S. and the Subsidiaries consolidated for the most recently completed fiscal year.
"
Subsidiary
" shall mean, with respect to any Person, any other corporation, partnership, limited liability company, joint venture or other
entity in which such Person (i) owns, directly or indirectly, fifty percent (50%) or more of the outstanding voting securities, equity securities, profits interest or capital interest,
(ii) is entitled to elect at least a majority of the board of directors or similar governing body or (iii) in the case of a limited partnership or limited liability company, is a general
partner or managing member, respectively. When used without reference to a particular entity, Subsidiary means a Subsidiary of BioSpin U.S.
"
Tax Return
" shall mean any report, return, election, notice, estimate, declaration, information statement or other form or document
(including all schedules, exhibits and other attachments thereto) relating to and filed or required to be filed with a Taxing Authority in connection with any Tax.
A-1-4
"
Taxes
" shall mean any and all federal, national, provincial, state, local and foreign taxes, assessments and other governmental charges,
duties, impositions, levies and liabilities (including, without limitation, taxes based upon or measured by gross premiums, receipts, income, profits, sales, use or occupation, and value added, ad
valorem, alternative or add-on minimum, transfer, gains, franchise, estimated, withholding, payroll, recapture, employment, excise, unemployment, insurance, social security, business
license, occupation, business organization, stamp, environmental and property taxes), together with all interest, penalties and additions imposed with respect to such amounts. "Taxes" shall
also mean any obligations under any agreements or arrangements with any Person with respect to the liability for, or sharing of, Taxes (including pursuant to Treasury Regulations
Section 1.1502-6 or comparable provisions of state, local or foreign tax Law) and any liability for Taxes as a transferee or successor, by contract or otherwise.
"
Taxing Authority
" shall mean any federal, national, provincial, foreign, state or local government, or any subdivision, agency,
commission or authority thereof exercising tax regulatory, enforcement, collection or other authority.
"
Third Party
" shall mean any Person not a party to this U.S. SPA, the Swiss Merger Agreement or the German SPA.
"
Treasury Regulations
" shall mean the regulations, including temporary regulations, promulgated under the Code, as the same may be amended
hereafter from time to time (including corresponding provisions of succeeding regulations).
"
U.S.
" shall mean the United States of America.
"
WARN Act
" shall mean Worker Adjustment and Retraining Notification Act, 29 U.S.C., Section 2101,
et
seq
.
"
Working Capital Escrow
" shall mean an amount in cash equal to Six Million Seven Hundred Fifty Thousand Dollars ($6,750,000).
"
Working Capital Escrow Agent
" shall mean Nixon Peabody LLP.
"
Working Capital Escrow Agreement
" shall mean the agreement between the Working Capital Escrow Agent, BRKR and Sellers in the form set
forth hereto as
Exhibit C
.
(b) Each
of the following terms is defined in the Section set forth opposite such term:
Term
|
|
Section
|
2007 Year-End Balance Sheet
|
|
2.7(a)
|
2007 Year-End Net Working Capital
|
|
2.7(a)
|
Accounts Receivable
|
|
4.15
|
Agreement
|
|
Preamble
|
Alternative Proposal
|
|
6.7(b)
|
Benefit Plan
|
|
4.19(a)
|
BioSpin Technologies
|
|
6.11(a)
|
BioSpin U.S.
|
|
Preamble
|
BioSpin U.S. Contract
|
|
4.11(b)
|
BioSpin U.S. Proprietary Rights
|
|
4.22(a)
|
BRKR
|
|
Preamble
|
BRKR Indemnified Parties
|
|
9.2
|
Bruker Physik
|
|
Recitals
|
Closing
|
|
2.3
|
Closing Cash
|
|
2.2
|
Closing Date
|
|
2.3
|
A-1-5
Cut-Off Date
|
|
2.5
|
Deposit
|
|
4.28
|
E&Y
|
|
2.5
|
Environmental Law
|
|
4.17(e)(ii)
|
Environmental Permits
|
|
4.17(e)(iii)
|
EPR
|
|
6.11(a)
|
ERISA
|
|
4.19(a)
|
ERISA Affiliate
|
|
4.19(d)
|
Financial Statements
|
|
4.9(a)
|
German SPA
|
|
Recitals
|
Hazardous Substances
|
|
4.17(e)(i)
|
Indemnity Cap
|
|
9.5(a)
|
Invest
|
|
Recitals
|
Leased Real Property
|
|
4.16(b)
|
Merger Sub
|
|
Recitals
|
Minimum Net Working Capital
|
|
2.7(b)
|
MRI
|
|
6.11(a)
|
NMR
|
|
6.11(a)
|
Owned Proprietary Rights
|
|
4.22(a)
|
Pension Plan
|
|
4.19(a)
|
Proceedings
|
|
3.5
|
Proprietary Rights
|
|
4.22(a)
|
Purchase Price
|
|
2.2
|
Real Property
|
|
4.16(b)
|
Real Property Leases
|
|
4.16(b)
|
Refund
|
|
4.28
|
Related Party
|
|
4.12
|
Release
|
|
4.17(e)(iv)
|
Representatives
|
|
6.2
|
SciTec
|
|
Recitals
|
Sellers
|
|
Preamble
|
Shares
|
|
Recitals
|
Special Committee
|
|
Recitals
|
Special Dividend
|
|
Recitals
|
Subject Companies
|
|
Recitals
|
Swiss Merger Agreement
|
|
Recitals
|
Tax Deductible
|
|
9.2(d)
|
Techneon
|
|
Recitals
|
Trade Secrets
|
|
4.22(a)
|
Transactions
|
|
Recitals
|
U.S. Closing
|
|
2.3
|
U.S. SPA
|
|
Preamble
|
Welfare Plan
|
|
4.19(a)
|
A-1-6
ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
Section 2.1
Purchase and Sale of Shares.
At the Closing, upon the terms and subject to the conditions set
forth herein, Sellers shall sell, transfer, convey, assign and deliver to BRKR, and cause any other Person holding Shares at the Closing, to sell, transfer, convey, assign and deliver their Shares to
BRKR, and BRKR shall purchase and acquire from Sellers, and any other Person holding Shares at the Closing, all of the Shares, free and clear of any Liens.
Section 2.2
Purchase Price.
The aggregate purchase price for all of the Shares shall be a cash payment in
the amount of Ninety Nine Million Nine Hundred Sixty Two Thousand Five Hundred Fourteen Dollars ($99,962,514) (the "
Purchase Price
"). The Purchase Price
payable to each Seller on the Closing Date shall be set forth opposite such Seller's name under the heading "Closing Cash" (such amounts, each such Seller's "
Closing
Cash
"), the amount of the Indemnification Escrow allocable to each Seller shall be set forth opposite such Seller's name under the heading "Indemnification Escrow", and the
amount of the Working Capital Escrow allocable to each Seller shall be set forth opposite such Seller's name under the heading "Working Capital Escrow", in each case on
Schedule 2.2
.
Section 2.3
The Closing.
The closing of the transactions contemplated by this U.S. SPA (the
"
Closing
" or "
U.S. Closing
") shall take place at the offices of Dewey & LeBoeuf LLP, 1301 Avenue
of the Americas, New York, New York, 10019, at 10:00 a.m., New York time, on the later of (i) January 23, 2008 and (ii) the first (1st) Business Day following the
satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions contemplated hereby (other than conditions which by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of those conditions) or such other date as BRKR and Sellers may mutually agree in writing (the "
Closing
Date
"). The Closing shall be deemed to have been consummated at 12:01 a.m., New York time, on the Closing Date.
Section 2.4
Deliveries at Closing.
At the Closing:
(a) Sellers
shall deliver the following documents and deliverables to BRKR:
(i) stock
certificates evidencing all of the shares of common stock of BioSpin U.S., including shares of common stock of BioSpin U.S., if any, held by Persons other than
Sellers, outstanding at the Closing, duly endorsed in blank, or accompanied by stock powers duly executed in blank and with all required stock transfer tax stamps affixed;
(ii) a
receipt to BRKR executed by each Seller for such Seller's Closing Cash;
(iii) an
executed counterpart of the Indemnity Escrow Agreement as executed by each Seller;
(iv) an
executed counterpart of the Working Capital Escrow Agreement as executed by each Seller; and
(v) all
other documents and instruments required to be delivered by Sellers pursuant to this U.S. SPA or any Ancillary Agreement to which Seller is or is required to be a
party, including those set forth in
Article VII
, and any other document or instrument reasonably requested by BRKR.
(b) BioSpin
U.S. shall deliver to BRKR all documents and instruments required to be delivered by BioSpin U.S. pursuant to this U.S. SPA or any Ancillary Agreement to which
BioSpin U.S. is or is required to be a party, including those set forth in
Article VII
, and any other document or instrument reasonably requested
by BRKR.
A-1-7
(c) BRKR
shall deliver the following documents and deliverables to each Seller:
(i) an
amount equal to such Seller's Closing Cash, by wire transfer to an account specified by such Seller in writing to BRKR no less than three (3) Business Days
prior to the Closing Date;
(ii) an
executed counterpart of the Indemnity Escrow Agreement as executed by BRKR;
(iii) an
executed counterpart of the Working Capital Escrow Agreement as executed by BRKR; and
(iv) all
other documents and instruments required to be delivered by BRKR pursuant to
Article VII
.
(d) BRKR
shall deliver the following to the Escrow Agent:
(i) an
amount equal to the Indemnity Escrow by wire transfer to an account specified by Escrow Agent in writing to BRKR no less than three (3) Business Days prior to
the Closing Date;
(ii) an
amount equal to the Working Capital Escrow by wire transfer to an account specified by Escrow Agent in writing to BRKR no less than three (3) Business Days
prior to the Closing Date.
Section 2.5
Indemnity Escrow.
At the Closing, (a) BRKR, Sellers and the Indemnity Escrow Agent
shall enter into the Indemnity Escrow Agreement and (b) the Indemnity Escrow shall be placed in escrow with the Indemnity Escrow Agent as security for fulfillment by Sellers of their
obligations pursuant to
Article IX
of this U.S. SPA, Article X of the Swiss Merger Agreement and Article IX of the German SPA until
the later of (x) the thirtieth (30th) day following the receipt by the Audit Committee of the combined GAAP financial statements of the Subject Companies audited by Ernst & Young LLP
("
E&Y
") as of December 31, 2008 and for the year then ended (such thirtieth (30th) day being referred to as the
"
Cut-Off Date
") and (y) the resolution of any claim for indemnification with respect to which any BRKR Indemnified Party has provided
Sellers notice of a claim for indemnification pursuant to
Section 9.3(a)
or the corresponding provisions of the Swiss Merger Agreement or the
German SPA prior to the Cut-Off Date. Within three (3) Business Days following the later of (x) and (y) above, the Indemnity Escrow Agent shall release to Sellers the
remaining Indemnity Escrow in accordance with the terms and conditions of the Indemnity Escrow Agreement. BRKR and Sellers shall each be responsible for fifty percent (50%) of the fees and expenses
charged by the Indemnity Escrow Agent.
Section 2.6
Working Capital Escrow.
At the Closing, (a) BRKR, Sellers and the Working Capital
Escrow Agent shall enter into the Working Capital Escrow Agreement and (b) the Working Capital Escrow shall be placed in escrow with the Working Capital Escrow Agent as security for any
potential post-Closing adjustments to the Purchase Price pursuant to
Section 2.7.
Within twenty-five (25) days
following their receipt of the 2007 Year-End Balance Sheet, after any payments to BRKR in accordance with
Section 2.7(b)
, the Working
Capital Escrow Agent shall release to Sellers the remaining Working Capital Escrow in accordance with the terms and conditions of the Working Capital Escrow Agreement. BRKR and Sellers shall each be
responsible for fifty percent (50%) of the fees and expenses charged by the Working Capital Escrow Agent.
Section 2.7
Working Capital Adjustment.
(a) BRKR
will deliver to Sellers, as soon as reasonably practicable, an E&Y audited combined balance sheet of the Subject Companies as of December 31, 2007 (the
"
2007 Year-End Balance Sheet
"). The 2007 Year-End Balance Sheet shall set forth the combined Net Working Capital of the Subject
Companies as of December 31, 2007 (the "
2007 Year-End Net Working Capital
").
A-1-8
(b) If
the 2007 Year-End Net Working Capital is less than $180,000,000 (the "
Minimum Net Working Capital
"),
Sellers shall cause the Working Capital Escrow Agent to pay the amount of any such difference to BRKR (in accordance with
Schedule 2.7(b)
) by
wire transfer in immediately available funds, to an account or accounts designated by BRKR, within twenty-five (25) days following their receipt of the 2007 Year-End
Balance Sheet, and the balance of the Working Capital Escrow, if any, to Sellers, pro rata to the Sellers' contributions to the Working Capital Escrow.
Section 2.8
Withholding.
BRKR shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this U.S. SPA such amounts as it reasonably determines it should deduct and withhold with respect to the making of such payment under the Code and the rules and Treasury
Regulations promulgated thereunder, or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld or paid over to or deposited with the relevant Governmental
Authority, including any Taxing Authority, such amounts shall be treated for all purposes of this U.S. SPA as having been paid to the Person in respect of which such deduction and withholding was made
by BRKR.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to BRKR (except with respect to the representations in
Sections
3.8
and
3.9
, which are made by each Seller in its individual capacity), as of
the date hereof and as of the Closing Date or, if a representation or warranty is made as of a specified date, as of such date, as follows:
Section 3.1
Power and Authority.
Sellers have all necessary power and authority to execute, deliver and
perform this U.S. SPA and, as of the Closing Date, the Ancillary Agreements, if any, to which it will become a party.
Section 3.2
Enforceability.
This U.S. SPA and, as of the Closing Date, each Ancillary Agreement to which
any Seller is a party have been duly executed and delivered by Sellers and (assuming due authorization, execution and delivery by BRKR), constitutes a legal, valid and binding obligation of Sellers,
enforceable against Sellers in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting
creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 3.3
No Violation.
Sellers' execution and delivery of this U.S. SPA and, as of the Closing Date,
any Ancillary Agreement to which any Seller is a party, the consummation of the transactions contemplated hereby or thereby or compliance by Sellers with any of the provisions hereof or thereof will
not (a) result in the creation of any Lien upon the Shares under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, agreement or any
other instrument or obligation to which any Seller is a party or by which Sellers or the Shares may be bound or affected, by Law or otherwise, (b) violate any Law applicable to Sellers or the
Shares or (c) conflict with, result in any breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, require any consent under any
Contract to which any of the Sellers a party or by which any of the Sellers may be bound.
Section 3.4
No Conflict.
The execution and delivery of this U.S. SPA or, as of the Closing Date, any
Ancillary Agreement by Sellers and the consummation of the transactions contemplated hereby or thereby, assuming all required filings, consents, approvals, authorizations and notices set forth on
Schedule 3.4
have been made, given or obtained, do not and shall not adversely affect the ability of Sellers or BioSpin U.S. to enter into,
perform their obligations under, and to consummate or materially
A-1-9
delay
the consummation of, the transactions contemplated by this U.S. SPA or any Ancillary Agreement.
Section 3.5
Litigation.
There is no action, proceeding, claim, suit, arbitration, opposition, challenge,
proceeding, charge or investigation (collectively, "
Proceedings
") pending or, to the Knowledge of Sellers, threatened that relates, directly or
indirectly, to this U.S. SPA, the Shares or any action taken or to be taken in connection with this U.S. SPA or any Ancillary Agreement.
Section 3.6
No Other Agreement.
No Seller has any obligation, absolute or contingent, to any other
individual, corporation, partnership, trust, limited liability company, association, joint venture or any similar entity to sell the Shares.
Section 3.7
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for Sellers in connection with this U.S. SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby or (b) is or will be
entitled to any broker's or finder's fee or any other commission or similar fee in connection with this U.S. SPA or, as of the Closing Date or the transactions contemplated hereby or thereby.
Section 3.8
Ownership of the Shares.
Each Seller has good and valid title to, and owns of record and
beneficially, Shares in the amount set forth next to such Seller's name under the caption "Shares of BioSpin U.S. Stock Owned" on
Schedule 2.2
,
free and clear of any Liens other than restrictions on transfer which may arise solely under applicable securities Laws.
Section 3.9
Withholding Tax.
Each Seller represents that no withholding of any U.S. federal Tax, German
Tax or any other Tax is required with respect to any payment to be made to such Seller in connection with the transactions contemplated by this U.S. SPA and each Seller agrees that it will provide to
BRKR in a timely manner such form or forms, accurately and completely filled out and executed, as may be necessary in the opinion of BRKR to establish such Seller's entitlement to exemption from any
such withholding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING BIOSPIN U.S.
BioSpin U.S. and Sellers, jointly and severally, hereby represent and warrant to BRKR, as of the date hereof and as of the Closing Date or, if a representation or
warranty is made as of a specified date, as of such date, as follows:
Section 4.1
Organization and Good Standing.
BioSpin U.S. and each Significant Subsidiary is duly
organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has the requisite corporate, partnership or limited liability company authority and power to
own, lease, operate and otherwise hold its property and assets and to conduct its business as currently being conducted. BioSpin U.S. and each Subsidiary is duly qualified to do business as a foreign
company and is in good standing in each jurisdiction where the property owned by BioSpin U.S. and each Subsidiary
or the nature of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have an adverse effect on BioSpin U.S. or any Subsidiary in
any material respect.
Section 4.2
Authorization and Effect of Agreement.
(a) The
execution and delivery by BioSpin U.S. of this U.S. SPA and, as of the Closing Date, the Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby or thereby on or prior to the Closing, have been duly and validly authorized and approved by all requisite action on the
part of BioSpin U.S. (including approval of the holders of all of the outstanding Shares), and no other
A-1-10
action
by BioSpin U.S. is necessary to authorize the transactions contemplated hereby or thereby or to consummate such transactions.
(b) This
U.S. SPA and, as of the Closing Date, the Ancillary Agreements to which BioSpin U.S. is a party have been duly executed and delivered by BioSpin U.S., and (assuming
due authorization, execution and delivery by BRKR and Sellers) this U.S. SPA and, as of the Closing Date, each such Ancillary Agreement constitutes a legal, valid and binding obligation of BioSpin
U.S., enforceable against BioSpin U.S. in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws
affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 4.3
Capitalization of BioSpin U.S.
(a) As
of the date hereof, the capital stock of BioSpin U.S. consists of 20,000,000 shares of common stock, par value $0.01 per share, of which 8,869,830 are issued and
outstanding on the date hereof and held of record and beneficially by Sellers as set forth on
Schedule 2.2
. There are no shares of preferred
stock authorized or outstanding. The Shares held by Sellers constitute all of the issued and outstanding shares of capital stock of BioSpin U.S. as of the date hereof and have been duly authorized and
are validly issued, fully paid and nonassessable and have not been issued and were not issued in violation of any preemptive or other similar right. Sellers have good and valid title to, own of record
and beneficially, the Shares, free and clear of any Liens other than restrictions on transfer which may arise solely under applicable securities Laws. Upon consummation of the transactions
contemplated by this U.S. SPA and registration of the Shares in the name of BRKR in the stock records of BioSpin U.S., BRKR will own all the Shares free and clear of all Liens other than restrictions
on transfer which may arise solely under applicable securities Laws. Upon consummation of the transactions contemplated by this U.S. SPA, the Shares will be fully paid and nonassessable.
(b) BioSpin
U.S. has not issued any securities in violation of any preemptive or similar rights and there are no options, warrants, calls, rights or other securities
convertible into or exchangeable or exercisable for equity securities of BioSpin U.S., any other commitments, arrangements, rights or agreements providing for the issuance or sale of additional equity
interests or the repurchase, redemption or other acquisition of equity interests of BioSpin U.S., and there are no agreements of any kind which may obligate BioSpin U.S. to issue, purchase, redeem or
otherwise acquire any of its equity interests. No shares of the issued and outstanding shares of common stock of BioSpin U.S. are held in the treasury of BioSpin U.S. There are no voting agreements,
shareholder's agreements, proxies or other similar agreements or understandings with respect to the equity interests of BioSpin U.S.
(c) The
stock register of BioSpin U.S. accurately records: (i) the name and address of each Person owning Shares and (ii) the certificate number of each
certificate evidencing shares of capital stock issued by BioSpin U.S., the number of shares evidenced by each such certificate, the date of issuance thereof and, in the case of cancellation, the date
of cancellation.
Section 4.4
Capitalization of the Subsidiaries; Other Interests.
(a)
Schedule 4.4(a)
sets forth each of BioSpin U.S.'s directly and indirectly owned Subsidiaries.
Schedule 4.4(a)
sets forth the designation, par value and the
number of authorized, issued and outstanding shares of capital stock or membership
interests for each Subsidiary and the number and percentage ownership interest of BioSpin U.S. (if direct) or of BioSpin U.S.'s Subsidiary (if indirect) in each such Subsidiary. All of the outstanding
shares of capital stock or membership interests of each Subsidiary (i) are duly authorized and are validly issued, fully paid and nonassessable and have not been issued and were not issued in
violation of any preemptive or other similar right and (ii) are owned of record and beneficially by BioSpin U.S. or the Subsidiary
A-1-11
set
forth on
Schedule 4.4(a)
, in each case, free and clear of any Lien other than Permitted Liens or restrictions on transfer which may arise
solely under applicable securities Laws.
(b) There
are no outstanding options, warrants, rights or other securities convertible into or exchangeable or exercisable for equity interests of the Subsidiaries, any
other commitments, arrangements, rights or agreements providing for the issuance or sale of additional equity interests or the repurchase or, redemption or other acquisition of equity interests of the
Subsidiaries, and there are no agreements of any kind which may obligate the Subsidiaries to issue, purchase, redeem or otherwise acquire any of their respective equity interests. There are no voting
agreements, shareholder's agreements, proxies or other similar agreements or understandings with respect to the equity interests of the Subsidiaries.
(c) Neither
BioSpin U.S. nor any Subsidiary owns, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited
liability company, joint venture, business, trust or other Person other than in a Subsidiary.
Section 4.5
No Conflict.
The execution and delivery by BioSpin U.S. of this U.S. SPA or any Ancillary
Agreement and the consummation by BioSpin U.S. of the transactions contemplated hereby and thereby do not and shall not:
(a) violate,
conflict with or result in the breach of any Organizational Document of BioSpin U.S.;
(b) violate
or conflict with any Law applicable to BioSpin U.S. or the Subsidiaries or any of their respective assets, properties or businesses or require any filing with,
consent, approval or authorization of, or notice to, any Governmental Authority, except for the applicable notification and waiting period requirements of the HSR Act and the requirements of the
antitrust laws of any relevant jurisdiction; or
(c) except
as described on
Schedule 4.5(c)
, (i) conflict with, result in any breach of, constitute a default
(or event which after notice or lapse of time or both, would become a default) under, require any consent under any Contract to which BioSpin U.S. or any Subsidiaries is a party or by which BioSpin
U.S. or any Subsidiaries may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of any Lien under any such Contract or (iv) constitute an
event which, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien;
except,
in the case of clause (c) above, for any conflict, breach, default, termination or Lien that would not reasonably be expected to (A) adversely affect in any material respect the
ability of BioSpin U.S. to enter into, perform its obligations under, and to consummate the transactions contemplated by, this U.S. SPA or (B) adversely affect in any material respect the
business, operations (including results of operations), assets, liabilities or financial condition of BioSpin U.S. and the Subsidiaries.
Section 4.6
Permits; Compliance with Law.
(a) BioSpin
U.S. and the Subsidiaries hold all Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of their respective
businesses as currently conducted under and pursuant to all applicable Laws.
Schedule 4.6(a)
sets forth a true and complete list of all such
Permits. All Permits have been legally obtained and maintained and are valid and in full force and effect. No outstanding violations are or have been recorded in respect of any such Permits. No
Proceeding is pending or, to the Knowledge of BioSpin U.S., threatened, to suspend, revoke, withdraw, modify or limit any Permit. The transactions contemplated by this U.S. SPA or any Ancillary
Agreement do not give rise to the requirement of any consent, approval or modification in order for each Permit to continue to be valid and in full force and effect following the Closing.
A-1-12
(b) BioSpin
U.S. and the Subsidiaries are and have been in compliance with and are not in default under any Law applicable to BioSpin U.S. or any of the Subsidiaries or any
of their respective properties, assets or businesses.
Section 4.7
Books and Records.
Except as set forth on
Schedule 4.7
, (i) true and complete copies of the Organizational
Documents of BioSpin U.S. and the Significant Subsidiaries, as currently
in effect, have heretofore been delivered to BRKR; (ii) the minute books of BioSpin U.S. and the Significant Subsidiaries accurately reflect in all material respects all actions taken at
meetings, or by written consent in lieu of meetings, of the stockholders, boards of directors (or other governing body) and all committees of the boards of directors (or other governing body) of
BioSpin U.S. and the Significant Subsidiaries, as the case may be, and (iii) all corporate actions and other actions taken by BioSpin U.S. and the Significant Subsidiaries, as the case may be,
have been duly authorized, and no such actions taken by BioSpin U.S. and the Significant Subsidiaries, as the case may be, have been taken in breach or violation of the Organizational Documents of
BioSpin U.S. and the Significant Subsidiaries.
Section 4.8
Litigation.
There are no Proceedings pending or, to the Knowledge of BioSpin U.S., threatened
that relate, directly or indirectly, to this U.S. SPA or any Ancillary Agreement to which BioSpin U.S. is a party, or any action taken or to be taken in connection with this U.S. SPA or any Ancillary
Agreement. Except as set forth on
Schedule 4.8
, there are no Proceedings pending or, to the Knowledge of BioSpin U.S., threatened that relate to
(a) BioSpin U.S. or any Subsidiary or their respective assets, properties or businesses or (b) the officers, directors, employees, stockholders or Affiliates of BioSpin U.S. (in their
capacity as such). There are no outstanding judgments, writs, injunctions, orders, decrees or settlements that apply, in whole or in part, to BioSpin U.S. or any Subsidiary or their respective assets,
properties or business.
Section 4.9
Financial Statements; Undisclosed Liabilities.
(a) BioSpin
U.S. has furnished BRKR true and complete copies of the audited combined balance sheet and the related audited combined statements of income, shareholders'
equity and cash flows of the Subject Companies as of and for each of the fiscal years ended as of December 31, 2005 and 2006, the related opinion of E&Y, the independent accountants of the
Subject Companies, and the unaudited combined balance sheet and the related unaudited combined statements of income, shareholders' equity and cash flows of the Subject Companies as of and for the nine
months ended September 30, 2007 and 2006 (collectively, together with the related notes thereto, the "
Financial Statements
").
(b) The
Financial Statements fairly present in all material respects the financial position and the results of operations of the Subject Companies as of the respective dates
thereof and for the respective
periods then ended. The Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise noted therein or in the notes thereto. The
Financial Statements have been prepared in accordance with the books and records of the Subject Companies consistent with past practice.
(c) Except
(i) as reflected or adequately reserved against in the Financial Statements and (ii) liabilities which have been incurred since December 31,
2006 in the Ordinary Course of Business, there are no liabilities or obligations, secured or unsecured (whether absolute, accrued, contingent or otherwise), matured or unmatured that are, or would
reasonably be expected to be, material to the Subject Companies or that would materially delay the consummation of the transactions contemplated by this U.S. SPA.
Section 4.10
Absence of Certain Changes.
Except as set forth on
Schedule 4.10
, since December 31, 2006, (a) BioSpin
U.S. and the Subsidiaries have been operated in the Ordinary Course of
Business, (b) neither BioSpin U.S. nor any Subsidiary has taken or agreed to take any of the actions
A-1-13
set
forth in
Section 6.1
, (c) there has not occurred any event or condition that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect, (d) there have been no actual or threatened cancellations or terminations by any material producer, agent, supplier, customer or contractor
of BioSpin U.S. or any Subsidiary and (e) there has been no material damage to or loss or theft of any of the material assets of BioSpin U.S. or any Subsidiary.
Section 4.11
Contracts.
(a)
Schedule 4.11(a)
sets forth a complete and accurate list of the following Contracts to which (x) BioSpin
U.S. or any Significant Subsidiary is a party or by which BioSpin U.S. or any Significant Subsidiary or any of their respective properties or assets is or may be bound or (y) any other
Subsidiary is a party or by which any such Subsidiary or any of its properties or assets is or may be bound which is material to BioSpin U.S. and the Subsidiaries taken as a whole:
(i) employment
Contracts with (a) any current officer, manager, director or Employee and (b) any former officer, manager, director or Employee with respect to
which BioSpin U.S. or any Subsidiary remains liable for any obligations thereunder (the name, position or capacity and rate of compensation of each such person and the expiration date of each such
Contract being set forth in accordance with this
Section 4.11(a)
), other than standard contracts required under local Law or custom;
(ii) all
Contracts (other than employment contracts) with any current or former officer, manager, director, stockholder, member, Employee, consultant, agent or other
representative or with an entity in
which any of the foregoing is a controlling person (excluding any Contracts with respect to which BioSpin U.S. and its Subsidiaries have no liabilities for any obligations thereunder);
(iii) all
lease, sublease, rental or other Contracts under which BioSpin U.S. or any Subsidiary is a lessor or lessee of any real property or the guarantee of any such
lease, sublease, rental or other Contracts;
(iv) all
collective bargaining or other labor or union Contracts;
(v) all
instruments relating to indebtedness for borrowed money, any note, bond, deed of trust, mortgage, indenture or agreement to borrow money, and any agreement relating
to the extension of credit or the granting of a Lien other than Permitted Liens, or any Contract of guarantee in favor of any Person or entity other than BioSpin U.S. or any Subsidiary;
(vi) all
confidentiality Contracts (other than standard materials transfer agreements or non-disclosure agreements for customer test sample measurements made in
the Ordinary Course of Business);
(vii) all
partnership or joint venture Contracts;
(viii) all
Contracts relating to licenses of trademarks, trade names, service marks or other BioSpin U.S. Proprietary Rights;
(ix) all
other Contracts material to the business of BioSpin U.S. or any Subsidiary, other than any Contracts having only Subject Companies as parties; and
(x) each
amendment, supplement and modification in respect of any of the foregoing.
A-1-14
(b)
Schedule 4.11(b)
sets forth a complete and accurate list of the following Contracts (x) to which BioSpin
U.S. or any Subsidiary is a party or (y) by which BioSpin U.S. or any Subsidiary or any of their respective properties or assets is or may be bound (such Contracts collectively, along with the
Contracts listed on
Schedule 4.11(a)
, the "
BioSpin U.S. Contracts
"):
(i) all
lease, sublease, rental, licensing use or similar Contracts with respect to personal property providing for annual rental license or use payments in excess of
$200,000 or the guarantee of any such lease, sublease, rental or other Contracts;
(ii) all
Contracts containing any covenant or provision limiting the freedom or ability of BioSpin U.S. or any Subsidiary to engage in any line of business, engage in
business in any geographical area or compete with any other Person;
(iii) all
Contracts (other than Contracts having only Subject Companies as parties) for the purchase or sale of materials, supplies or equipment (including computer hardware
and software), or the provision of services (including consulting services, data processing and management, project management services and clinical trial management), involving total payments in
excess of $1,000,000 or containing any escalation, renegotiation or redetermination provisions, which Contracts are not terminable at will without liability, premium or penalty by BioSpin U.S. or any
Subsidiary;
(iv) all
Contracts, purchase orders or service agreements relating to capital expenditures of BioSpin U.S. or any Subsidiary involving total payments in excess of $200,000;
(v) all
Contracts between or among (A) BioSpin U.S. or any Subsidiary, on the one hand, and (B) any Seller, Affiliate of any Seller, (other than the Subject
Companies) or any Related Party on the other hand;
(vi) all
Contracts (A) outside the Ordinary Course of Business for the purchase, acquisition, sale or disposition of any assets or properties or (B) for the
grant to any Person (excluding BioSpin U.S. or any Subsidiary) of any option or preferential rights to purchase any assets or properties;
(vii) all
Contracts (other than Contracts having only Subject Companies as parties) pursuant to which there is either a current or future obligation of BioSpin U.S. or any
Subsidiary to make payments or provide services for a value in excess of $200,000 in any twelve (12) month period;
(viii) all
Contracts under which BioSpin U.S. or any Subsidiary agrees to indemnify any Person (other than standard materials transfer agreements or
non-disclosure agreements for customer test sample measurements made in the Ordinary Course of Business);
(ix) all
noncompetition, nonsolicitation and any similar Contracts;
(x) all
"earn-out" agreements or arrangements or any similar Contracts;
(xi) each
amendment, supplement and modification in respect of any of the foregoing.
(c) (i) Each
BioSpin U.S. Contract (including, for purposes of this
Section 4.11(c)
, all Contracts that would
be deemed a "BioSpin U.S. Contract" but for the fact that a Subject Company is a party thereto) is legal, valid, binding and enforceable against BioSpin U.S. or the Subsidiary that is party thereto
and against each other party thereto, is in full force and effect and (ii) no party is in material breach or default, and no event has occurred which would constitute (with or without notice or
lapse of time or both) a material breach or default (or give rise to any right of termination, modification, cancellation or acceleration) or material loss of any benefits under any BioSpin U.S.
Contract.
A-1-15
Section 4.12
Transactions with Affiliates.
Except as set forth on
Schedule 4.12
, no Related Party, either currently or at any
time since December 31, 2003 (a) has or has had any interest in any
property (real or personal, tangible or intangible) that BioSpin U.S. or any Subsidiary uses or has used in or pertaining to the business of BioSpin U.S. or any Subsidiary or (b) has or has had
any business dealings, contracts, agreements, arrangements, understandings or any financial interest in any transaction with BioSpin U.S. or any Subsidiary or involving any assets or property of
BioSpin U.S. or any Subsidiary, other than business dealings or transactions conducted in the Ordinary Course of Business at prevailing market prices and on prevailing market terms. For purposes of
this U.S. SPA, the term "
Related Party
" shall mean as of any time: Sellers, any executive officer, member, manager or director, ten percent (10%)
stockholder (including any executive officers, members, managers or directors thereof) or Affiliate of BioSpin U.S. or any Subsidiary or at such time, any present or former known spouse, sibling,
parent or child of any such Sellers, executive officer, member, manager, director or Affiliate of BioSpin U.S. or any Subsidiary or any trust or other similar entity for the benefit of any of the
foregoing Persons;
provided
,
however
, that the term "Related Party" shall not be deemed to include any
Subject Company.
BRKR has been provided with true and complete copies of all documents listed on
Schedule 4.12
and any amendments thereto.
Section 4.13
Labor Relations.
(a) Except
as set forth on
Schedule 4.13
, (i) as of the date of this U.S. SPA, there is no labor dispute,
controversy, arbitration, grievance, strike, slowdown, lockout or work stoppage against BioSpin U.S. or any Subsidiary pending or threatened which may interfere with the business activities of BioSpin
U.S. or any Subsidiary. Neither BioSpin U.S. nor any Subsidiary is a party to, or bound by, any labor agreement, collective bargaining agreement, work rules or practices or any other labor-related
agreements or arrangements with any labor union, labor organization or works council, (ii) there are no labor agreements, collective bargaining agreements, work rules or practices or any other
labor-related agreements or arrangements that pertain to any Employees. None of the Employees is represented by any labor organization with respect to such Employees' employment or other service with
BioSpin U.S. or any Subsidiary, (iii) no labor union, labor organization, works council or group of Employees of BioSpin U.S. or any Subsidiary has made a pending demand for recognition or
certification, and there are no representation or certification proceedings or petitions seeking a representation proceeding presently pending or threatened in writing to be brought or filed with the
National Labor Relations Board or any other labor relations tribunal or authority, (iv) there are no organizational efforts presently being made involving any of the presently unorganized
Employees and (v) neither BioSpin U.S. nor any Subsidiary is a party to, or otherwise bound by, any order relating to Employees or employment practices.
(b) BioSpin
U.S. and each Subsidiary is in compliance in all material respects with all applicable Laws and orders applicable to such entities or the Employees or other
persons providing services to or on behalf of such entities, as the case may be, relating to the employment of labor, including all such Laws and orders relating to discrimination, civil rights,
immigration, safety and health, workers' compensation, wages, withholding, hours, and employment standards, including the WARN Act, Title VII of the Civil Rights Act of 1964, Age Discrimination in
Employment Act, Americans with Disabilities Act, Equal Pay Act, Health Insurance Portability and Accessibility Act, ERISA and Family and Medical Leave Act.
(c) BioSpin
U.S. and each Subsidiary has, in all material respects, properly classified the employment or other service status of all Employees, independent contractors and
other persons providing services to or on behalf of BioSpin U.S. or any Subsidiary for purposes of compliance with (i) all applicable Laws and (ii) the terms or tax qualification
requirements of any Benefit Plan or other benefit arrangement.
A-1-16
Section 4.14
Insurance.
Schedule 4.14
sets forth a
true and complete list of all insurance policies currently maintained relating to BioSpin U.S. and each Subsidiary, including those which pertain to BioSpin U.S.'s and each Subsidiary's assets,
directors, officers or employees or operations, and all such insurance policies are in full force and effect and all premiums due thereunder have been paid. There is no material claim outstanding
under any such insurance policies and there are no existing circumstances likely to give rise to a claim under any such insurance policies. BioSpin U.S. has not received notice of cancellation of any
such insurance policies. BioSpin U.S. has provided to BRKR true and complete copies of all insurance policies (including any amendments thereto) listed on
Schedule 4.14
.
Section 4.15
Accounts Receivable.
All accounts receivable, notes receivable and other indebtedness of
BioSpin U.S. and each Subsidiary (the "
Accounts Receivable
") reflected in the Financial Statements or which arose subsequent to December 31,
2006, represent bona fide, arm's-length transactions for the sale of goods or performance of services actually delivered in the Ordinary Course of Business and, in the case of Accounts Receivable,
have been billed or invoiced in the Ordinary Course of Business consistent with past practice. Except to the extent expressly reserved against or reflected on the Financial Statements (which reserves
are consistent with past practice) or paid prior to the Closing, the Accounts Receivable are or will be as of the Closing Date, collectible in the Ordinary Course of Business.
Section 4.16
Real Property; Leases.
(a) Neither
BioSpin U.S. nor any Subsidiary owns any real property.
(b)
Schedule 4.16(b)(i)
contains a complete and correct list of all leases of real property, occupancy agreements,
licenses, concessions or similar agreements (the "
Real Property Leases
") under which BioSpin U.S. or any Subsidiary is a lessee, sub-lessee,
tenant, licensee or assignee of any real property owned by any other Person (the "
Leased Real Property
" or the "
Real
Property
"). BioSpin U.S. has delivered to BRKR true, correct and complete copies of each Real Property Lease. With respect to each Real Property Lease, (i) there exists
no default under such Real Property Lease by BioSpin U.S. or any Subsidiary nor is there any event which, with notice or the passage of time or both, could ripen into a default and neither BioSpin
U.S. nor any Subsidiary has received written notice of any such default and (ii) to the Knowledge of BioSpin U.S., there exists no default by any other Person thereunder nor any event which,
with notice or the passage of time or both, could ripen into a default. Each Real Property Lease is a legal, valid and binding obligation of BioSpin U.S. and/or each Subsidiary, and, to the Knowledge
of BioSpin U.S., each other party thereto, enforceable against each such other party thereto in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general principles of equity. The consummation of the transactions contemplated by this U.S. SPA or any
Ancillary Agreement requires no Consents from any Person, except as set forth on
Schedule 4.16(b)(ii)
(which Consents have been obtained prior to
the date hereof), and will not result in any default, penalty, right to terminate, increase in the amounts payable under or modification to any Real Property Lease. BioSpin U.S. and the Subsidiaries
hold good and valid leasehold estates in the Leased Real Property and the Real Property constitutes all of the real property necessary for the conduct of BioSpin U.S.'s and the Subsidiaries respective
businesses.
(c) (i) There
is no pending or, to the Knowledge of BioSpin U.S., threatened condemnation (or similar proceedings) of all or any part of the Real Property, and
neither BioSpin U.S. nor any Subsidiary has assigned or sublet or granted any rights to use and occupy or created any limitations to or on its interests under any Real Property Lease to any Person,
(ii) to the Knowledge of BioSpin U.S., there are no zoning, building code, occupancy restriction or other land-use regulation proceedings or any proposed change in any applicable
Laws that could,
A-1-17
individually
or in the aggregate, result in a Material Adverse Effect, nor has BioSpin U.S. or any Subsidiary received any notice of any special assessment proceedings affecting any Real Property, or
applied for any change to the zoning or land use status of any Real Property, (iii) to the Knowledge of BioSpin U.S., there are no defects, structural or otherwise, with respect to any of the
Real Property (or any improvements located thereon), which could reasonably be anticipated to have a material adverse impact on the value or utility of any such parcel of Real Property and
(iv) there are no easements, Liens or other agreements (whether of record or not) affecting title to, or creating any Lien or charge upon, any of the Real Property.
Section 4.17
Environmental.
(a) BioSpin
U.S. and the Subsidiaries hold all Environmental Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of their
respective businesses as currently conducted under and pursuant to all applicable Laws;
Schedule 4.17(a)
sets forth a true and complete list of
all such Environmental Permits. All such Environmental Permits have been legally obtained and maintained and are valid and in full force and effect. No outstanding violations are or have been recorded
in respect of any such Environmental Permits. No Proceeding is pending or, to the Knowledge of BioSpin U.S., threatened, to suspend, revoke, withdraw, modify or limit any such Environmental Permit.
The transactions contemplated by this U.S. SPA or any Ancillary Agreement do not give rise to the requirement of any filing, consent, approval or modification in order for each Environmental Permit to
continue to be valid and in full force and effect following the Closing.
(b) BioSpin
U.S. and the Subsidiaries comply and have complied in all respects with and are not in default under any Environmental Law applicable to BioSpin U.S. or any of
its Subsidiaries or any of their respective properties or assets.
(c) There
are no Proceedings arising under any Environmental Law pending or, to the Knowledge of BioSpin U.S., threatened that relate to (i) BioSpin U.S. or any
Subsidiary or their respective assets, properties or businesses or (ii) the officers, directors, employees, stockholders or Affiliates of BioSpin U.S. (in their capacity as such). There are no
outstanding judgments, writs, injunctions, orders, decrees or settlements arising under any Environmental Law that apply, in whole or in part, to BioSpin U.S. or any Subsidiary or their respective
assets, properties or business.
(d) Except
as set forth on
Schedule 4.17(d)
, there has been no Release or threatened Release of any Hazardous
Substance from, and no Hazardous Substances are present at, on or beneath, any property currently or formerly owned, leased or operated by BioSpin U.S. or any Subsidiary or, except as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, at any other location, including any location at which any Hazardous Substances manufactured, used or
generated by BioSpin U.S. or any Subsidiary have been stored, treated or disposed.
(e) (i) "
Hazardous Substances
" shall mean any pollutant, contaminant, hazardous substance, hazardous waste,
medical waste, special waste, toxic substance, petroleum or petroleum-derived substance, waste or additive, radioactive material, or other compound, element, material or substances in any form
(including products) regulated, restricted or addressed by or under any applicable Environmental Law.
(ii) "
Environmental Law
" shall mean any Law relating to the environment, natural resources or the safety or health of human
beings or other living organisms, including the manufacture, distribution in commerce, use or presence of hazardous substances.
(iii) "
Environmental Permits
" shall mean all Permits required under Environmental Laws.
A-1-18
(iv) "
Release
" shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, migrating, dumping,
seepage, spill, leak, flow, discharge, disposal (except orderly offsite disposal via qualified hazardous waste disposal contractors) or emission.
Section 4.18
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for BioSpin U.S. in connection with this U.S. SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby or (b) is or will be
entitled to any broker's or finder's fee or any other commission or similar fee in connection with this U.S. SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby.
Section 4.19
Employee Benefits.
(a)
Schedule 4.19(a)
contains a list of: (i) each "employee pension benefit plan" (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("
ERISA
"), and referred to herein as a
"
Pension Plan
"), (ii) each "employee welfare benefit plan" (as defined in Section 3(1) of ERISA and referred to herein as a
"
Welfare Plan
") and (iii) each other material plan, fund, program,
arrangement or agreement (including any material employment or consulting agreement) to provide medical, health, disability, life, bonus, incentive, stock or stock-based right (option, ownership or
purchase), retirement, deferred compensation, severance, change in control, salary continuation, vacation, sick leave, fringe, incentive insurance or other benefits to any current or former Employee,
officer, manager or director of BioSpin U.S. or any Subsidiary (or any other individual providing non-professional services (directly or through a personal services corporation) as an
independent contractor, consultant or agent to BioSpin U.S.) that is maintained, or contributed to, or required to be contributed to, by BioSpin U.S., any Subsidiary or by any third-party leasing or
similar organization in respect of any Employees (each such plan, any Pension Plan and any Welfare Plan referred to herein as a "
Benefit Plan
").
(b) With
respect to each Benefit Plan, BioSpin U.S. has delivered to BRKR true, complete and correct copies of: (i) such Benefit Plan (or, in the case of an unwritten
Benefit Plan, a written description thereof), (ii) the three (3) most recent annual reports on Form 5500 filed with the IRS with respect to such Benefit Plan (if any such report
was required), (iii) the most recent summary plan description and all subsequent summaries of material modifications for such Benefit Plan (if a summary plan description was required),
(iv) each trust agreement and group annuity contract relating to such Benefit Plan, if any, (v) the most recent determination letter from the IRS with respect to such Benefit Plan, if
any, and (vi) the most recent actuarial valuation with respect to such Benefit Plan, if any. Except as specifically provided in the foregoing documents delivered to BRKR, there are no
amendments to any Benefit Plan that have been adopted or approved by BioSpin U.S. or any Subsidiary that are not reflected in the applicable Benefit Plan and neither BioSpin U.S. nor any Subsidiary
has undertaken to or committed to make any such amendments or to establish, adopt or approve any new Benefit Plan.
(c) Each
Benefit Plan has, in all material respects, been established, funded, maintained and administered in compliance with its terms and with the applicable provisions of
ERISA, the Code and all other applicable Laws. Each Benefit Plan and any trust established pursuant thereto intended to be qualified and tax exempt under Sections 401(a) and 501(a) have been the
subject of a favorable and up-to-date determination letter from the IRS, or a timely application therefor has been filed, to the effect that such Benefit Plan and trust are
qualified and exempt from federal income taxes under Section 401(a) and 501(a), respectively, of the Code, and no circumstances exist and no events have occurred that could adversely affect the
qualification of any Benefit Plan or the related trust.
(d) With
respect to each Benefit Plan, there has not occurred, and no person or entity is contractually bound to enter into, any nonexempt "prohibited transaction" within
the meaning of Section 4975 of the Code or Section 406 of ERISA. BioSpin U.S. does not sponsor or contribute
A-1-19
to
any "multiple employer welfare arrangement" as defined in Section 3(40) of ERISA. Neither BioSpin U.S., any Subsidiary nor any ERISA Affiliate of BioSpin U.S. has maintained, contributed to
or been required to contribute to (i) any plan in the past six (6) years that is subject to the provisions of Title IV of ERISA or (ii) any plan that is a "multiemployer plan" as
defined in Section 3(37) of ERISA. For purposes hereof, "
ERISA Affiliate
" means, with respect to any entity, trade or business, any other entity,
trade or business that is, or was at the relevant time, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that
includes or included the first entity, trade or business or that is, or was at the relevant time, a member of the same "controlled group" as the first entity, trade or business pursuant to
Section 4001(a)(14) of ERISA.
(e) (i) Neither
BioSpin U.S. nor any Subsidiary is obligated under any Welfare Plan to provide life, health, medical, death or other welfare benefits with respect to
any current or former Employee (or their beneficiaries or dependents) of BioSpin U.S., any Subsidiary or their respective predecessors after termination of employment or other service, except as
required under Section 4980B of the Code or Part 6 of Title I of ERISA or other applicable Law, (ii) BioSpin U.S. and each Subsidiary has complied in all material respects with
the notice and continuation coverage requirements, and all other requirements, of Section 4980B of the Code and Parts 6 and 7 of Title I of ERISA, and the regulations thereunder, and any other
applicable Law with respect to each Welfare Plan that is, or was during any taxable year for which the statute of limitations on the assessment of federal income taxes remains open, by consent or
otherwise, a group health plan within the meaning of Section 5000(b)(1) of the Code, and (iii) no Welfare Plan that is a group health plan, which is maintained, contributed to or
required to be contributed to by BioSpin U.S. or any Subsidiary, is a self-insured plan.
(f) Except
as set forth on
Schedule 4.19(f)
, (i) all contributions or premiums owed by BioSpin U.S. or any
Subsidiary with respect to Benefit Plans under Law, contract or otherwise have been made in full and on a timely basis, (ii) all material reports, returns and similar documents required to be
filed with any Governmental Authority or distributed to any plan participant have been duly and timely filed or distributed, (iii) all amounts that BioSpin U.S. or any Subsidiary is legally or
contractually required to deduct from the salaries of their Employees have been duly paid into the appropriate fund or funds and (iv) there are no pending or, to the Knowledge of BioSpin U.S.,
threatened, material claims, lawsuits, arbitrations or audits asserted or instituted against any Benefit Plan, any fiduciary (as defined by Section 3(21) of ERISA) of any Benefit Plan, BioSpin
U.S., any Subsidiary, any Employee, or administrator thereof, in connection with the existence, operation or administration of a Benefit Plan, other than routine claims for benefits.
(g) Neither
the execution and delivery of this U.S. SPA nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other
event) (i) cause or result in the accelerated vesting, funding or delivery of, or increase the amount or value of, any material payment or benefit to any manager, officer, Employee, consultant
or independent contractor of BioSpin U.S. or any Subsidiary, (ii) cause or result in the funding of any Benefit Plan or (iii) cause or result in a limitation on the right of BioSpin U.S.
to amend, merge, terminate or receive a reversion of assets from any
Benefit Plan or related trust. Without limiting the generality of the foregoing, no amount paid or payable by BioSpin U.S. or any Subsidiary in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in conjunction with any other event) will be an "excess parachute payment" within the meaning of Section 280G of the Code.
(h) Neither
BioSpin U.S., any Subsidiary nor any Person acting on behalf of BioSpin U.S. or any Subsidiary has made or entered into any legally binding commitment with any
current or former managers, officers, Employees, consultants or independent contractors of BioSpin U.S. or any Subsidiary to the effect that, following the date hereof, (i) any benefits or
compensation
A-1-20
provided
to such Persons under existing Benefit Plans or under any other plan or arrangement will be enhanced or accelerated, (ii) any new plans or arrangements providing benefits or
compensation will be adopted, (iii) any Benefit Plan will be continued for any period of time or cannot be amended or terminated at any time or for any reason, (iv) any Benefit Plan or
arrangement provided by BioSpin U.S. or any Subsidiary will be made available to such Persons, or (v) any trusts or other funding mechanisms will be required to be funded.
Section 4.20
Employees.
(a)
Schedule 4.20(a)
sets forth (i) the name, title and total compensation (payable by BioSpin U.S.) of each
officer, manager and director of BioSpin U.S. and the Subsidiaries and each other Employee and agent whose total compensation (so payable and including bonuses and commissions) for the year ended
December 31, 2006 equaled or exceeded $150,000 or who will receive compensation (including bonuses and commissions) for the year ending December 31, 2007 equal to or in excess of
$150,000, (ii) all bonuses and other incentive compensation received by such Persons since January 1, 2006 and any accrual for such bonuses and incentive compensation and
(iii) all Contracts or commitments by BioSpin U.S. or any Subsidiary to increase the compensation or to modify the conditions or terms of employment or other service of any of its officers,
managers, Employees, consultants and agents whose total compensation (including bonuses and commissions) exceeds $150,000 per annum.
(b) To
the Knowledge of BioSpin U.S., except with respect to BRKR, no officer, manager or director of BioSpin U.S. or any Subsidiary or any Employee, consultant or agent of
BioSpin U.S. or any Subsidiary is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, non-competition, or proprietary rights agreement,
between such Person and any other Person that will (i) materially affect the performance by such Person of such Person's duties to BioSpin U.S. or any Subsidiary or (ii) materially
affect the ability of BioSpin U.S. or any Subsidiary to conduct its business.
(c) No
executive, key Employee or significant group of Employees has given notice to BioSpin U.S. or any Subsidiary to terminate employment or service with BioSpin U.S. or
any Subsidiary during the next twelve (12) months.
Section 4.21
Taxes and Tax Returns.
Except as provided on
Schedule 4.21:
(a) All
Tax Returns required to be filed by or with respect to BioSpin U.S. or any Subsidiary or their respective assets and operations have been timely filed. All such Tax
Returns (i) were prepared in the manner required by applicable Law, (ii) are true, correct and complete in all material respects and (iii) accurately reflect the liability for
Taxes of BioSpin U.S. and each Subsidiary. All Taxes due and owing by any of BioSpin U.S. and any Subsidiary on or before the date hereof (whether or not shown on any Tax Returns) have been fully
paid, or have been adequately reserved for in accordance with applicable GAAP (including the recent pronouncement under FIN 48, Accounting for Uncertainty in Income Taxes) on the Financial Statements.
True, correct and complete copies of all federal, state, local and foreign Tax Returns of or including BioSpin U.S. and the Subsidiaries filed in the previous five (5) years have been provided
to BRKR prior to the date hereof.
(b) BioSpin
U.S. and the Subsidiaries have timely paid, or caused to be paid, all Taxes required to be paid, whether or not shown (or required to be shown) on a Tax Return,
and BioSpin U.S. and the Subsidiaries have accrued for the payment in full of all Taxes not yet due and payable on the balance sheet included in the Financial Statements for BioSpin U.S.'s fiscal year
ended December 31, 2006. Since December 31, 2006, neither BioSpin U.S. nor any Subsidiary has incurred any liability for Taxes other than Taxes incurred in the Ordinary Course of
Business.
A-1-21
(c) BioSpin
U.S. and the Subsidiaries have complied in all material respects with the provisions of the Code relating to the withholding and payment of Taxes, including the
withholding and reporting requirements under Sections 1441 through 1464, 3101 through 3510, and 6041 through 6053 of the Code and related Treasury Regulations, have complied in all material respects
with all provisions of state, local and foreign Law relating to the withholding and payment of Taxes, and have, within the time and in the manner prescribed by Law, withheld the applicable amount of
Taxes required to be withheld from amounts paid to any Employee, independent contractor or other third-party and paid over to the proper Governmental Authorities all amounts required to be so paid
over.
(d) None
of the Tax Returns of or relating to BioSpin U.S. or any Subsidiary has been examined by the IRS or any state, local or foreign Taxing Authorities and no adjustment
relating to any Tax Return of or including BioSpin U.S. or any Subsidiary or their respective assets or operations has been proposed or threatened formally or informally by any Taxing Authority.
Neither BioSpin U.S. nor any Subsidiary has entered into a closing agreement pursuant to Section 7121 of the Code (or an analogous provision of state, local or foreign Law). There are no
examinations or other administrative or court proceedings relating to Taxes in progress or pending, and there is no existing, pending or threatened claim, proposal or assessment against BioSpin U.S.
or any Subsidiary or relating to their assets or operations asserting any deficiency for Taxes.
(e) No
claim has ever been made by any Taxing Authority with respect to BioSpin U.S. or any Subsidiary in a jurisdiction where BioSpin U.S. or any Subsidiary does not file
Tax Returns that BioSpin U.S. or any Subsidiary is or may be subject to taxation by that jurisdiction. There are no security interests on any of the assets of BioSpin U.S. or any Subsidiary that arose
in connection with any failure (or alleged failure) to pay any Taxes and, except for liens for real and personal property Taxes that are not yet due and payable, there are no liens for any Taxes upon
any assets of BioSpin U.S. or any Subsidiary.
(f) No
extension of time with respect to any date by which a Tax Return was or is to be filed by or with respect to BioSpin U.S. or any Subsidiary is in force, and no waiver
or agreement by BioSpin U.S. or any Subsidiary is in force for the extension of time for the assessment or payment of any Taxes.
(g) Neither
BioSpin U.S. nor any of the Subsidiaries has granted a power of attorney to any Person with respect to any Taxes.
(h) Neither
BioSpin U.S. nor any Subsidiary is, or is a party to, and neither BioSpin U.S. nor any Subsidiary owns an interest in, a joint venture, partnership or other
arrangement or contract that could
be treated as a partnership for federal income tax purposes. Neither BioSpin U.S. nor any Subsidiary owns any membership or other equity interest, or any other interest, in any other Person.
(i) There
are no outstanding options, warrants, securities convertible into stock or other contractual obligations that might be treated for federal income tax purposes as
stock or another equity interest in BioSpin U.S. or any Subsidiary.
(j) Neither
BioSpin U.S. nor any Subsidiary is a party to any contract, agreement, plan or arrangement relating to allocating or sharing the payment of, indemnity for, or
liability for, Taxes.
(k) BioSpin
U.S. is not, and has not been, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(l) Neither
BioSpin U.S. nor any Subsidiary has participated in any "reportable transaction" within the meaning of Treasury Regulation Section 1.6011-4.
A-1-22
(m) At
all times during its existence, BioSpin U.S. has been a C corporation for federal income tax purposes and neither BioSpin U.S. nor any of the Subsidiaries has been
includible with any other entity in any consolidated, combined, unitary or similar return for any Tax period for which the statute of limitations has not expired (other than any such return with
respect to which BioSpin U.S. was the common parent).
(n) Neither
BioSpin U.S. nor any Subsidiary has constituted either a "distributing corporation" or a "controlled corporation" in a distribution of stock qualifying for
tax-free treatment under Section 355 of the Code (x) in the two (2) years prior to the date of this U.S. SPA or (y) in a distribution which could otherwise
constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the transactions contemplated by this U.S. SPA.
(o) Neither
BioSpin U.S. nor any Subsidiary has ever participated in an international boycott within the meaning of Section 999 of the Code.
(p) BioSpin
U.S. and the Subsidiaries have, in all material respects, properly and in a timely manner documented their transfer pricing methodology in compliance with
Sections 482 and 6662 (and any related sections) of the Code, the related Treasury Regulations, and any comparable provisions of state, local or foreign Tax Law or regulation.
(q) Neither
BioSpin U.S. nor any Subsidiary will be required to include any item of income, or exclude any item of deduction, from taxable income for any taxable period (or
portion thereof) ending after the Closing Date as a result of: (i) an installment sale or open transaction disposition on or before the Closing Date, (ii) any change in method of
accounting for a taxable period ending on or before the Closing Date, or (iii) any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of
the Code (or any comparable provision of state, local or foreign Tax law).
(r) Neither
BioSpin U.S. nor any Subsidiary would be required to include any amount in income under Section 951 or 956 or other "foreign" provisions of the Code with
respect to its foreign Subsidiaries were their taxable year deemed to close on the Closing Date.
(s) Neither
BioSpin U.S. nor any Subsidiary is subject to any gain recognition agreement under Section 367 of the Code.
(t) BioSpin
U.S. does not have an "overall foreign loss" (within the meaning of Section 904(f) of the Code).
Section 4.22
Proprietary Rights.
(a) (i) Except
as set forth on
Schedule 4.22(a)
, BioSpin U.S. or a Subsidiary is the sole owner of, free and
clear of any Lien (other than Permitted Liens), or has a valid license to (without the payment of any royalty, except with respect to off-the-shelf software licensed on
commercially reasonable terms), all U.S. and non-U.S. trademarks, service marks, logos, designs, trade names, internet domain names and corporate names, and the goodwill of the business
connected with and symbolized by the foregoing, patents, registered designs, copyrights, computer software (including all information systems, data files and databases, source and object codes, user
interfaces, manuals and other specifications and documentation related thereto and all intellectual property and proprietary rights incorporated therein), web sites and web pages and related items
(and all intellectual property and proprietary rights incorporated therein) and all trade secrets, research and development, formulae and know-how ("
Trade
Secrets
") and all other proprietary and intellectual property rights and information, including all grants, registrations and applications relating to any of the foregoing (all
of the foregoing to be collectively referred to as the "
Proprietary Rights
") used or held for use in, or necessary for the conduct of the business of
A-1-23
BioSpin
U.S. or the businesses of the Subsidiaries (such Proprietary Rights owned by or licensed to BioSpin U.S. or the Subsidiaries, collectively, the "
BioSpin U.S.
Proprietary Rights
"), (ii) the rights of BioSpin U.S. and the Subsidiaries in BioSpin U.S. Proprietary Rights are valid and enforceable, (iii) neither BioSpin
U.S. nor any Subsidiary has received any demand, claim, notice or inquiry from any Person in respect of BioSpin U.S. Proprietary Rights which challenges, threatens to challenge or inquires as to
whether there is any basis to challenge, the validity or enforceability of, or the rights of BioSpin U.S. or any Subsidiary in, any of BioSpin U.S. Proprietary Rights, and neither BioSpin U.S. nor any
Subsidiary has Knowledge of any facts which could form a reasonable basis for any such demand, claim, notice or inquiry, (iv) no act has been done or omitted to be done by BioSpin U.S.
or any Subsidiary, or any licensee thereof, which has had or could have the effect of impairing or dedicating to the public, or entitling any U.S. or foreign governmental authority or any other Person
to invalidate, render unenforceable or unpatentable, preclude issuance of, cancel, forfeit, modify or consider abandoned, any material BioSpin U.S. Proprietary Rights owned by BioSpin U.S. or a
Subsidiary (the "
Owned Proprietary Rights
"), or give any Person any rights with respect thereto (except pursuant to an agreement listed on
Schedule 4.22(b)
), (v) all necessary registration, maintenance and renewal fees in respect of the Owned Proprietary Rights have been paid
and all necessary documents and certificates have been filed with the relevant Governmental Authority for the purpose of maintaining such Owned Proprietary Rights, (vi) to the Knowledge of
BioSpin U.S. and its Subsidiaries, the respective businesses of BioSpin U.S. and the Subsidiaries as currently or in the past operated do not violate or infringe, and have not violated or infringed,
any Proprietary Rights of any other Person, (vii) to the Knowledge of BioSpin U.S. and its Subsidiaries, no Person is violating or infringing any of BioSpin U.S. Proprietary Rights,
(viii) BioSpin U.S. and the Subsidiaries have obtained from all individuals who participated (as Employees, consultants, employees of consultants or otherwise) in any respect in the invention,
development or authorship of any of the Owned Proprietary Rights effective waivers of any and all ownership rights of such individuals in such Proprietary Rights, and/or assignments to BioSpin U.S. or
the Subsidiaries, as the case may be, of all rights with respect thereto, and (ix) neither BioSpin U.S. nor the Subsidiaries have divulged, furnished to or made accessible to any Person, any
Trade Secrets without prior thereto having obtained an enforceable agreement of confidentiality from such Person.
(b)
Schedule 4.22(b)
contains a complete and accurate list of the material BioSpin U.S. Proprietary Rights (other than
Trade Secrets) and all licenses and other agreements relating thereto.
Section 4.23
Information Technology.
(a) Except
as set forth on
Schedule 4.23(a)
, the material BioSpin U.S. IT Systems have been properly maintained by
technically competent personnel in accordance with standards set by the manufacturers for proper operation, monitoring and use. The material BioSpin U.S. IT Systems are in good working condition to
effectively perform all information technology operations necessary for the conduct of its business as now conducted or as contemplated to be conducted. Neither BioSpin U.S. nor any Subsidiary has
experienced within the past twelve (12) months any material disruption to, or material interruption in, its conduct of its business attributable to a defect, bug, breakdown or other failure or
deficiency on the part of BioSpin U.S. IT Systems.
(b) Except
for scheduled or routine maintenance which would not reasonably be expected to cause any material disruption to, or material interruption in, the conduct of the
business, BioSpin U.S. IT Systems are available for use during normal working hours and other times when required to be available. BioSpin U.S. and the Subsidiaries have taken commercially reasonable
steps to provide for the backup and recovery of the data and information critical to the conduct of the business (including such data and information that is stored on magnetic or optical media in the
A-1-24
ordinary
course) without material disruption to, or material interruption in, the conduct of the business.
(c) BioSpin
U.S. and Subsidiaries have taken commercially reasonable actions, consistent with standards in the business, with respect to BioSpin U.S. IT Systems to detect
and prevent the disclosure to unauthorized persons of, and keep secure, any and all confidential information, trade secrets, or other proprietary information stored on BioSpin U.S. IT Systems
including the designs, policies, processes and procedures relating to the composition and structure of BioSpin U.S. IT Systems.
Section 4.24
Guarantees.
Neither BioSpin U.S. nor any Subsidiary is a guarantor or otherwise responsible
for any liability or obligation (including indebtedness) of any Person.
Section 4.25
Bank Accounts.
Schedule 4.25
contains
a true and complete list of (a) the names and locations of all banks, trust companies, securities brokers and other financial institutions at which (i) BioSpin U.S. or any Significant
Subsidiary has an account or safe deposit box or maintains a banking, custodial, trading or other similar relationship or (ii) any other Subsidiary has an account or safe deposit box or
maintains a banking, custodial, trading or other similar relationship which is material to BioSpin U.S. and the Subsidiaries taken as a whole, (b) a true and complete list and description of
each such account, box and relationship and (c) the name of every Person authorized to draw thereon or having access thereto.
Section 4.26
Foreign Corrupt Practices and International Trade Sanctions.
To the Knowledge of Sellers and
BioSpin U.S., neither BioSpin U.S., any Subsidiary nor any of their respective directors, officers, agents, employees or any other Persons acting on their behalf has, in connection with the operation
of the business of BioSpin U.S. or any Subsidiary, (a) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures relating
to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of applicable
Laws, (b) paid, accepted or received any unlawful contributions, payments, expenditures or gifts or (c) violated or operated in noncompliance with any applicable export restrictions,
anti-boycott regulations, embargo regulations or other applicable Laws.
Section 4.27
Inventory.
The inventories shown on the Financial Statements, net of inventory reserves
reflected thereon, for the period ended December 31, 2006 or acquired after December 31, 2006, were acquired and maintained in the Ordinary Course of Business, are of good and
merchantable quality, and consist of items of a quantity and quality usable or salable in the Ordinary Course of Business.
Section 4.28
Deposits.
No deposit received by a Subject Company prior to the Closing Date on a purchase
made by a customer from a Subject Company (a "
Deposit
") shall be required to be returned or refunded to such customer or otherwise be subject to any
adjustment in favor of such customer (each such return, refund or adjustment, a "
Refund
"), in each case other than (a) aggregate Refunds to the
extent the aggregate sum of which is less than $1,000,000 or (b) any Refund granted pursuant to a renegotiation between the parties to the Contract pursuant to which the Deposit subject to such
Refund was initially made that is (i) in an amount less than $500,000 and deemed by the Chief Financial Officer of BRKR to be neutral or beneficial to such Subject Company or (ii) in an
amount of $500,000 or more and deemed by the Special Committee or the Audit Committee to be neutral or beneficial to such Subject Company or (iii) in an amount less than $50,000 (which Refunds
shall be deemed to be in the Ordinary Course of Business).
Section 4.29
No Misleading Statements.
The representations and warranties made by Sellers and BioSpin
U.S. in this U.S. SPA, including in the exhibits and schedules hereto, do not include any untrue
A-1-25
statement
of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BRKR
BRKR represents and warrants to Sellers as of the date hereof and as of the Closing Date or, if a representation or warranty is made as of a specified date, as of
such date, as follows:
Section 5.1
Organization of BRKR; Authority.
BRKR is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has all necessary corporate power and authority to own, lease, operate and otherwise hold its properties and assets and to
carry on its business as presently conducted. BRKR is duly qualified or licensed to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the
business conducted by it or the assets or properties owned or leased by it requires qualification, except where the failure to be so qualified, licensed or in good standing could not, individually or
in the aggregate, be reasonably likely to have a material adverse effect on the ability of BRKR to consummate the transactions contemplated by this U.S. SPA or, as of the Closing Date, any Ancillary
Agreement to which it is a party.
Section 5.2
Authorization; Enforceability.
(a) The
execution and delivery by BRKR of this U.S. SPA and, as of the Closing Date, the Ancillary Agreements to which it is a party, the performance of its obligations
hereunder and thereunder and the consummation by BRKR of the transactions contemplated hereby and thereby, have been duly and validly authorized and approved by all requisite action on the part of
BRKR (subject to the approval of the holders of a majority of the outstanding shares of BRKR Stock and a majority of the outstanding shares of BRKR Stock not held by Sellers and their Affiliates and
present and voting at the meeting) and no other action by BRKR is necessary to authorize the transactions contemplated hereby or thereby or to consummate such transactions.
(b) This
U.S. SPA and, as of the Closing Date, the Ancillary Agreements to which BRKR is a party have been duly executed and delivered by BRKR, and (assuming the due
authorization, execution and delivery of this U.S. SPA by Sellers) this U.S. SPA and, as of the Closing Date, each such Ancillary Agreement constitutes a valid and binding obligation of BRKR,
enforceable against BRKR in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors' rights
generally and subject, as to enforceability, to general principles of equity.
Section 5.3
No Conflict.
The execution and delivery by BRKR of this U.S. SPA and, as of the Closing Date,
the Ancillary Agreements to which it is a party and the consummation by BRKR of the transactions contemplated hereby and thereby, assuming all required filings, consents, approvals authorizations and
notices set forth on
Schedule 5.3
have been made, given or obtained, do not and shall not:
(a) violate
or conflict with any Organizational Document of BRKR;
(b) violate
or conflict with, in any material respect, any Law applicable to Buyer or any of its assets, properties or businesses or require any filing with, consent,
approval or authorization of, or notice to, any Governmental Authority; or
(c) (i) conflict
with, result in any breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, or require
any consent under any Contract, to which BRKR is a party or by which BRKR may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of any Lien
(other than Permitted
A-1-26
Liens)
upon any of the properties or assets of BRKR or (iv) constitute an event which, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien
upon any of the properties or assets of Buyer;
except
in the case of clause (c) above, as would not reasonably be expected to have a material adverse effect on BRKR or the ability of BRKR to enter into and perform its obligations under, and
to consummate the transactions contemplated by, this U.S. SPA.
Section 5.4
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person,
other than Bear, Stearns & Co. Inc., the fees of which will be paid by BRKR, (a) has acted directly or indirectly for BRKR in connection with this U.S. SPA or any Ancillary
Agreement or the transactions contemplated hereby or thereby or (b) is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with this U.S.
SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby.
Section 5.5
Investment Representation.
BRKR is acquiring the Shares for investment purposes only, and not
with a view to, or for offer or sale in connection with, any resale or distribution thereof or any transaction which would be in violation of all applicable Laws, including U.S. federal securities
laws.
Section 5.6
Accredited Investor.
BRKR (a) is an "accredited investor" as such term is defined in
Rule 501(a) under the Securities Act of 1933, as amended, and (b) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and
risks of an investment in the Shares.
ARTICLE VI
COVENANTS
Section 6.1
Operation of BioSpin U.S. Pending the Closing.
BioSpin U.S. covenants and agrees that BioSpin
U.S. and the Subsidiaries will not (and BioSpin U.S. shall cause the Subsidiaries not to), and Sellers covenant and agree to cause BioSpin U.S. and the Subsidiaries not to, take any action with the
purpose of causing any of the conditions to BRKR's obligations set forth in
Article VII
to not be satisfied. Except with the prior written
consent of BRKR, during the period from the date of this U.S. SPA to the Closing, the businesses of BioSpin U.S. and the Subsidiaries shall be conducted in the Ordinary Course of Business and BioSpin
U.S. covenants and agrees, and Sellers agree to cause BioSpin U.S., to use all commercially reasonable efforts consistent therewith to preserve intact BioSpin U.S.'s material properties, assets and
business organizations (including those of its Subsidiaries). Except to the extent necessary to consummate the transactions contemplated by this U.S. SPA, without limiting the generality of the
foregoing, and except as otherwise provided in this U.S. SPA, BioSpin U.S. shall not and will not permit the Subsidiaries to, and Sellers shall cause BioSpin U.S. and the Subsidiaries not to, without
the prior written consent of BRKR:
(a) amend
any of its Organizational Documents;
(b) liquidate,
dissolve, recapitalize or otherwise wind up its business;
(c) make
any distribution or declare, pay or set aside any dividend in cash or property with respect to, or split, combine, redeem, reclassify, purchase or otherwise
acquire, directly or indirectly, any equity interests or shares of capital stock of, or other equity or voting interest in, BioSpin U.S. or any Subsidiary, or make any other changes in the capital
structure of BioSpin U.S. or any Subsidiary;
(d) authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (i) any equity interest or capital stock of BioSpin U.S. or any
Subsidiary, (ii) any equity rights in
A-1-27
respect
of, security convertible into, exchangeable for or evidencing the right to subscribe for or acquire either (x) any equity interest or shares of capital stock of BioSpin U.S. or any
Subsidiary or (y) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any shares of the capital stock of, or other equity or voting interest
in, BioSpin U.S. or any Subsidiary, (iii) any instruments of indebtedness (other than in the Ordinary Course of Business) or (iv) any derivative instruments (other than in the Ordinary
Course of Business);
(e) other
than in the Ordinary Course of Business, acquire or dispose of, whether by purchase, merger, consolidation or sale, lease, pledge or other encumbrance of stock or
assets or otherwise, any interest in any (i) corporation, partnership or other Person or (ii) assets comprising a business or any other property or assets, in a single transaction or in
a series of transactions;
(f) other
than in the Ordinary Course of Business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge,
disposition, transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
(g) other
than in the Ordinary Course of Business, lease, sell, assign, license, transfer or otherwise dispose of, mortgage, pledge or encumber, any real property, or amend,
terminate, modify or renew any real property lease;
(h) incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other Person in excess of $600,000 in the aggregate;
(i) cancel
any third-party indebtedness owed to BioSpin U.S.;
(j) (i) increase
in any manner the rate or terms of compensation or benefits of any of its directors, managers, officers, Employees, consultants, agents, independent
contractors or other individual service providers (including the grant of any stock options or any other award), except (A) as may be required under existing employment agreements or
(B) annual wage increases granted in the Ordinary Course of Business, (ii) hire any new Employees except in the Ordinary Course of Business with respect to Employees with an annual base
and incentive compensation opportunity not to exceed $150,000, (iii) pay or agree to pay any pension, retirement allowance or other employee benefit not required or permitted by any existing
Benefit Plan or other agreement or arrangement to any such director, manager, officer, Employee, consultant, agent, independent contractor or other individual service provider, whether past or
present, (iv) enter into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired Employees in the Ordinary Course of
Business with an annual base and incentive compensation opportunity not to exceed $150,000, or (v) except as required to ensure that any Benefit Plan is not then out of compliance with
applicable Law, enter into or adopt any new, or increase benefits under or renew or amend any existing, Benefit Plan or benefit arrangement or any collective bargaining agreement;
(k) make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and Employees), except in
the Ordinary Course of Business;
(l) commit
to make any capital expenditure or fail to make capital expenditures consistent with past practice;
(m) fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the Ordinary Course of Business or damage by fire or other
unavoidable casualty;
(n) except
as may be required as a result of a change in applicable Law or GAAP, make, revoke or change any Tax election or change any Tax accounting method, settle or
compromise any Tax liability, or waive or consent to the extension of any statute of limitations for the assessment and collection of any Tax;
A-1-28
(o) except
as may be required as a result of a change in applicable Law or GAAP, change any accounting principles or practices used by BioSpin U.S. or any Subsidiary;
(p) other
than in the Ordinary Course of Business, institute, settle or dismiss any action, claim, demand, lawsuit, proceeding, arbitration or grievance by or before any
court, arbitrator or governmental or regulatory body threatened against, relating to or involving BioSpin U.S. or any Subsidiary in connection with any business, asset or property of BioSpin U.S. or
any Subsidiary;
(q) enter
into any BioSpin U.S. Contracts or Contracts (in each case other than any Contracts having only Subject Companies as parties and other than Contracts covered by
Section 6.1(g)
) (i) having a
term in excess of twelve (12) months or (ii) involving the payment, or provision of goods or
services, in excess of $500,000 on an individual or aggregate basis, except for the acceptance of customer purchase orders in the Ordinary Course of Business with terms up to twenty-four
(24) months and individual amounts up to $5,000,000;
(r) either
fail to pay the accounts payable or other liabilities of BioSpin U.S. or any Subsidiary, or fail to collect the accounts receivable or other indebtedness owed to
BioSpin U.S. or any Subsidiary;
(s) enter
into, or renew, amend or otherwise modify or extend, any Contracts relating to derivative or hedging transactions or similar transactions, including currency
derivative or hedging Contracts or transactions; or
(t) agree
in writing to take any of the foregoing actions.
Section 6.2
Access.
BioSpin U.S. shall, and shall cause the Subsidiaries to, and Sellers shall cause
BioSpin U.S. and the Subsidiaries to, afford to officers, employees, accountants, counsel and other representatives ("
Representatives
") of BRKR
reasonable access to all of the assets, properties, personnel, books and records of BioSpin U.S. and the Subsidiaries.
Section 6.3
Notification.
(a) BioSpin
U.S. shall, and shall cause the Subsidiaries to, and Sellers shall cause BioSpin U.S. and the Subsidiaries to, promptly notify BRKR, and BRKR shall promptly
notify Sellers, of any Proceeding pending or, to their Knowledge, threatened against BioSpin U.S., BRKR or Sellers as the case may be, which challenges the transactions contemplated by this U.S. SPA
or any Ancillary Agreement.
(b) Sellers
shall provide prompt written notice to BRKR of any change in any of the information contained in the representations and warranties made by Sellers in
Article III
or
Article IV
or any exhibits or schedules referred to herein or attached
hereto and shall promptly furnish any information which BRKR may reasonably request in relation to such change;
provided
, that such notice shall not
operate in any way to modify or cure any breach of the representations and warranties made by Sellers in
Article III
or
Article IV
or any
exhibits or schedules referred to herein or attached hereto.
(c) BioSpin
U.S. shall and shall cause the Subsidiaries to, and Sellers shall cause BioSpin U.S. and the Subsidiaries to, provide prompt written notice to BRKR of any change
in any of the information contained in the representations and warranties made by BioSpin U.S. in
Article IV
or any exhibits or schedules
referred to herein or attached hereto and shall promptly furnish any information which BRKR may reasonably request in relation to such change;
provided
,
that such notice shall not operate in any way to modify or cure any breach of the representations and warranties made by BioSpin U.S. in
Article IV
or any exhibits or schedules referred to herein
or attached hereto.
A-1-29
Section 6.4
No Inconsistent Action.
Neither BioSpin U.S., BRKR nor Sellers will take any action which is
inconsistent with their respective obligations under this U.S. SPA.
Section 6.5
Reasonable Best Efforts.
(a) Upon
the terms and subject to the conditions of this U.S. SPA, each of the Parties shall use its 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 under applicable Laws to consummate and make effective the transactions contemplated by this U.S. SPA and the Ancillary Agreements
as promptly as practicable, including (i) the prompt preparation and filing of all forms, registrations and notices required to be filed to consummate the transactions contemplated by this U.S.
SPA and the Ancillary Agreements and the taking of such commercially reasonable actions as are necessary to obtain any requisite approvals, consents, orders, exemptions or waivers by any Governmental
Authority or any other Person and (ii) using reasonable best efforts to cause the satisfaction of all conditions to Closing;
provided
,
however
, that
nothing in this
Section 6.5
shall require or be construed to require BRKR or any
Affiliate of BRKR to offer or agree to (x) enter into any agreements, including agreements to sell, license or otherwise dispose of, or hold separate or otherwise divest itself of, all or any
portion of BRKR's or any Affiliate
of BRKR's businesses or assets or any portion of the businesses or assets of its Subsidiaries or any portion of the businesses or assets of BioSpin U.S. or its Subsidiaries, (y) to conduct its,
its Subsidiaries' or any of their respective Affiliates' businesses in a specified manner or (z) provide any compensation, benefits or other consideration to BioSpin U.S.'s Employees.
(b) Each
Party shall promptly consult with the other Parties with respect to, provide any necessary information with respect to and provide each other Party (or its counsel)
copies of, all filings made by such Party with any Governmental Authority or any other Person or any other information supplied by such Party to a Governmental Authority, lenders of the credit
facility to be used by BRKR or any other Person in connection with this U.S. SPA and the transactions contemplated hereby.
(c) Each
Party shall promptly inform the other Party of any communication from any Governmental Authority regarding any of the transactions contemplated by this U.S. SPA and
the Ancillary Agreements. If any Party or Affiliate thereof receives a request for additional information or documentary material from any such Governmental Authority with respect to the transactions
contemplated by this U.S. SPA, then such Party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other Party, an appropriate
response in compliance with such request.
Section 6.6
Further Assurances.
From time to time after the Closing, without additional consideration,
each Party will (or, if appropriate, cause its Affiliates to) execute and deliver such further instruments and take such other action as may be necessary or reasonably requested by each of the other
Parties to make effective the transactions contemplated by this U.S. SPA and to provide each other Party with the intended benefits of this U.S. SPA. Without limiting the foregoing, upon reasonable
request of BRKR, each of Sellers and BioSpin U.S. shall, or shall cause their respective Affiliates to, as applicable, execute, acknowledge and deliver all such further assurances, deeds, assignments,
consequences, powers of attorney and other instruments and paper as may be required to sell, transfer, assign, convey and deliver to BRKR all right, title and interest in, to and under the Shares.
Section 6.7
No Solicitation.
(a) BioSpin
U.S. shall, and shall cause the Subsidiaries to, and Sellers shall, and shall cause BioSpin U.S. and the Subsidiaries to, and each of the foregoing shall cause
each of its officers, managers, employees, subsidiaries, Affiliates, agents and other representatives to, immediately
A-1-30
cease
any existing discussions or negotiations with respect to any Alternative Proposal and will not, and shall cause such Persons not to, directly or indirectly, encourage, solicit, participate in,
initiate or facilitate discussions or negotiations with, or provide any information to, any corporation, partnership, Person or other entity or group (other than BRKR or its managers, officers,
employees, subsidiaries, agents or other Affiliates) concerning any Alternative Proposal. Sellers and BioSpin U.S. shall immediately communicate to BRKR any such inquiries or proposals regarding an
Alternative Proposal, including the terms thereof.
(b) "
Alternative Proposal
" shall mean any of the following involving BioSpin U.S. or any of its Subsidiaries (other than the
Transactions expressly contemplated by this U.S. SPA, the Swiss Merger Agreement and the German SPA): any inquiry or proposal relating to a sale of stock, any merger, consolidation, share exchange,
business combination, transfer of membership interests, partnership, joint venture, disposition of assets (or any interest therein) or other similar transaction.
Section 6.8
Tax Matters.
(a) All
transfer, documentary, sales, use, registration and other such Taxes (including all applicable German and other real estate transfer Taxes and stock transfer Taxes)
incurred in connection with this U.S. SPA and the transactions contemplated hereby shall be paid by BRKR. Each Party shall cooperate to the extent necessary in the timely making of all filings,
returns, reports and forms as may be required in connection therewith.
(b) All
contracts, agreements or arrangements under which BioSpin U.S. or any Subsidiary may at any time have an obligation to indemnify for or share the payment of or
liability for any portion of a Tax (or any amount calculated with reference to any portion of a Tax) shall be terminated with respect to BioSpin U.S. or any such Subsidiary, as applicable, as of the
Closing Date, and BioSpin U.S. or such Subsidiary, as applicable, shall thereafter be released from any liability thereunder.
(c) BioSpin
U.S., BRKR and Sellers shall, and shall each cause their Affiliates to, provide to the other cooperation and information, as and to the extent reasonably
requested, in connection with the filing of any Tax Return or in conducting any audit, litigation or other proceeding with respect to Taxes.
(d) Immediately
prior to the Closing, BioSpin U.S. shall deliver to BRKR a certification that stock in BioSpin U.S. is not a U.S. real property interest because BioSpin U.S.
is not, and has not been, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Such certification shall be in accordance with Treasury Regulation
Section 1.1445-2(c)(3)(i). BioSpin U.S. shall timely deliver to the IRS the notification required under Treasury Regulation Section 1.897-2(h)(2).
Section 6.9
Release.
In consideration for payment of the Purchase Price, as of and following the Closing
Date, each Seller (on its own behalf and on behalf of each of its Affiliates) knowingly, voluntarily and unconditionally releases, forever discharges, and covenants not to sue BRKR and its
Subsidiaries and their respective predecessors, successors, parents, Subsidiaries and other Affiliates, and all of their respective current and former officers, directors, managers, employees, agents,
attorneys and representatives from and for any and all claims, causes of action, demands, suits, debts, obligations, liabilities, damages, losses, costs, and expenses (including attorneys' fees) of
every kind or nature whatsoever, known or unknown, actual or potential, suspected or unsuspected, fixed or contingent, that any Seller or its respective Affiliates, as applicable, has or may have, now
or in the future, arising out of, relating to, or resulting from any act of commission or omission, errors, negligence, strict liability, breach of contract, tort, violations of law, matter or cause
whatsoever from the beginning of time to the
A-1-31
Closing
Date, with respect to, arising out of, or in connection with BioSpin U.S. or the Subsidiaries;
provided
,
however
, that such release shall not cover:
(a) any claims arising under this U.S. SPA, including the schedules and exhibits attached hereto, or
the agreements or documents executed and/or delivered in connection herewith, but excluding claims of a breach of fiduciary duties by any Sellers or BioSpin U.S. in connection with the transactions
contemplated by this U.S. SPA or (b) any claims against BioSpin U.S. or a Subsidiary in its capacity as a current or former director, manager, officer or employee of BioSpin U.S. or a
Subsidiary for indemnification under the Organizational Documents of BioSpin U.S. or such Subsidiary, as such documents are in effect immediately prior to the Closing Date.
Section 6.10
Voting Agreement.
To the extent applicable, each Seller covenants and agrees to vote in
her/his capacity as a holder of shares of BRKR Stock, all of the shares of BRKR Stock owned by such Seller in favor of the transactions contemplated by this U.S. SPA.
Section 6.11
Non-competition and Non-solicitation.
From the Closing and for a
period of five (5) years thereafter, Sellers will not, and will cause their Affiliates not to, directly or indirectly, except on behalf of BRKR or its Affiliates:
(a) engage
in, hold an interest in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of less than one percent (1%) of a
publicly traded security), joint venturer, partner, consultant or employee, or otherwise engage or participate in, provide services to or be connected in any manner with or assist in any way any
entity, person or business that engages in a business involving the design, manufacture or distribution of (i) life science, process control and analytical research tools based on nuclear
magnetic resonance ("
NMR
"), electron paramagnetic resonance ("
EPR
"), research magnetic resonance imaging
("
MRI
"), superconducting magnets and wires
for NMR, EPR or research MRI, (ii) cryogenic RF coil technologies for NMR, EPR or research MRI or (iii) other specialty power supply technologies (together, the
"
BioSpin Technologies
");
provided
, that such restriction shall not prohibit any Seller from accepting
employment with another company that utilizes the BioSpin Technologies so long as such Seller does not directly manage the BioSpin Technologies operations of such company or such BioSpin Technologies
operations account for less than ten percent (10%) of the overall revenues of such company; or
(b) solicit
for employment or hire any employee of BioSpin U.S. or any of its Subsidiaries without the prior written consent of BRKR. This provision shall not apply to any
employee of BioSpin U.S. who replies or responds to a general solicitation or advertisement for employment by a Seller or on a Seller's behalf or to solicitations of employees of BioSpin U.S. twelve
months after such employee's employment has been terminated by BioSpin U.S.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1
Conditions to Each Party's Obligations.
The respective obligation of each Party to effect the
transactions contemplated by this U.S. SPA is subject to the satisfaction, on or prior to the Closing Date, of the following conditions, which may be waived by BRKR or Sellers:
(a) The
waiting periods (i) under the HSR Act applicable to the consummation of the Transactions shall have expired or been terminated and all necessary Consents of
any Governmental Authority required for consummation of the Transactions shall have been obtained and (ii) applicable to the consummation of the Transactions and instituted by the European
Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers,
permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates
A-1-32
and
exemptions required for the consummation of the Transactions under any corresponding requirements of the European Union member states or competition regulatory authorities in other jurisdictions
shall have been obtained; and
(b) There
shall not be in effect any Law of any Governmental Authority of competent jurisdiction restraining, enjoining or otherwise preventing the consummation of the
transactions contemplated by this U.S. SPA or any of the Ancillary Agreements.
Section 7.2
Conditions Precedent to Obligations of BRKR.
The obligation of BRKR to effect the
transactions contemplated by this U.S. SPA is subject to the satisfaction or waiver of the following conditions:
(a) The
representations and warranties of Sellers in this U.S. SPA that are qualified as to materiality shall be true and correct in all respects and the representations and
warranties of Sellers that are not qualified as to materiality shall be true and correct in all material respects, in each case, as of the date hereof and at and as of the Closing with the same effect
as though such representations and warranties had been made at and as of such time, other than representations and warranties that speak as of another specific date or time prior to the date hereof
(which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by Sellers on or prior to the Closing Date shall have been complied with or performed in all
material respects;
(c) BRKR
shall have received certificates of Sellers, dated as of the Closing Date, certifying in such detail as BRKR may reasonably request that the conditions specified in
Sections 7.2(a)
and
7.2(b)
have been fulfilled;
(d) No
action, suit or proceeding shall be pending or threatened by or before any Governmental Authority or pending or threatened by any other Person to enjoin, restrain,
prohibit or obtain damages in respect of any of the transactions contemplated by this U.S. SPA or any Ancillary Agreement, or which would be reasonably likely to prevent or make illegal the
consummation of any transactions contemplated by this U.S. SPA or any Ancillary Agreement;
(e) BioSpin
U.S. shall have furnished to BRKR a certification in accordance with Treasury Regulation Section 1.1445-2(c) and in the form provided in
Treasury Regulation Section 1.897-2(h)(2), in a customary and standard form;
(f) There
shall not have occurred since the date hereof any events that have had, or are, individually or in the aggregate, reasonably likely to have a Material Adverse
Effect;
(g) BRKR
shall have received evidence, reasonably satisfactory to BRKR, of receipt of all requisite third-party and governmental Consents, including those set forth on
Schedule 4.5(c)
;
(h) BRKR
shall have obtained financing by reputable lenders at reasonable market interest rates and terms and conditions as determined by the Special Committee in sufficient
amounts to complete the Transactions, and all funds to be received by BRKR pursuant to such financing arrangements shall be available pursuant to the terms thereof and all funds contemplated to be
received at the Closing Date to fund the Transactions shall have been received or will be made available during the Closing;
(i) The
Contracts listed on
Schedule 7.2(i)
shall have been amended in a manner reasonably acceptable to the Special
Committee;
(j) The
approval of the transactions contemplated by this U.S. SPA by the holders of shares of BRKR Stock who are unaffiliated with Sellers representing at least a majority
of the total votes cast by such holders at a duly held meeting of the BRKR stockholders;
A-1-33
(k) The
approval of the transactions contemplated by this U.S. SPA by the holders of shares of BRKR Stock representing at least a majority of the total votes cast at a duly
held meeting of the BRKR stockholders; and
(l) All
conditions precedent contained in the Swiss Merger Agreement, the German SPA and the Ancillary Agreements (other than any conditions stating that the U.S. Closing
shall have occurred) have been satisfied or waived by the parties thereto.
Section 7.3
Conditions Precedent to Obligations of Sellers.
The obligation of Sellers to effect the
transactions contemplated by this U.S. SPA are subject to the satisfaction or waiver of the following conditions:
(a) The
representations and warranties of BRKR in this U.S. SPA that are qualified as to materiality shall be true and correct in all respects and the representations and
warranties of BRKR that are not qualified as to materiality shall be true and correct in all material respects, in each case, as of the date hereof and at and as of the Closing with the same effect as
though such representations and warranties had been made at and as of such time, other than representations and warranties that speak as of
another specific date or time prior to the date hereof (which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by BRKR on or prior to the Closing Date shall have been complied with or performed in all
material respects;
(c) Sellers
shall have received a certificate, dated as of the Closing Date, executed on behalf of BRKR by an authorized executive officer thereof, certifying in such detail
as Sellers may reasonably request that the conditions specified in
Section 7.3(a)
and
Section 7.3(b)
have been fulfilled;
(d) BRKR
shall have delivered the Purchase Price in accordance with the terms of
Section 2.4
;
(e) BRKR
shall have deposited the Indemnity Escrow in accordance with the terms of
Section 2.5
; and
(f) BRKR
shall have deposited the Working Capital Escrow in accordance with the terms of
Section 2.6
.
ARTICLE VIII
TERMINATION
Section 8.1
Termination.
This U.S. SPA may be terminated and the transactions contemplated by this U.S.
SPA may be abandoned at any time prior to the Closing:
(a) by
mutual written consent of BRKR and Sellers;
(b) by
Sellers or BRKR, if:
(i) a
Governmental Authority shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the Parties shall use reasonable best
efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this U.S. SPA and such order, decree, ruling or other action shall have
become final and nonappealable; or
A-1-34
(ii) the
Closing shall not have occurred on or before June 30, 2008 (other than due principally to the failure of the Party seeking to terminate this U.S. SPA to
perform any obligations under this U.S. SPA required to be performed by it at or prior to the Closing);
(iii) the
shareholder approvals of BRKR shall not have been obtained at the shareholders meeting or at any adjournment or postponement thereof; or
(iv) the
Swiss Merger Agreement or the German SPA shall have been terminated;
(c) by
BRKR, if there is a default or breach by BioSpin U.S. or any Seller with respect to the due and timely performance of any of their respective covenants or agreements
contained herein, or if the representations or warranties of BioSpin U.S. or any Seller contained in this U.S. SPA shall have become inaccurate, in either case such that the conditions set forth in
Section 7.2
would not be satisfied and such breach or default or inaccuracy is not curable or, if curable, has not been cured or waived within
twenty (20) calendar days after written notice to BioSpin U.S. or Sellers, as applicable, specifying, in reasonable detail, such claimed default, breach or inaccuracy and demanding its cure or
satisfaction; or
(d) by
Sellers, if there is a default or breach by BRKR with respect to the due and timely performance of any of its covenants or agreements contained herein, or if the
representations or warranties of BRKR contained in this U.S. SPA shall have become inaccurate, in either case such that the conditions set forth in
Section 7.3
would not be satisfied and such
breach or default or inaccuracy is not curable or, if curable, has not been cured or waived within
twenty (20) calendar days after written notice to BRKR specifying, in reasonable detail, such claimed default, breach or inaccuracy and demanding its cure or satisfaction.
Section 8.2
Procedure and Effect of Termination.
In the event of termination and abandonment of the
transactions contemplated by this U.S. SPA pursuant to
Section 8.1
, written notice thereof shall forthwith be given to the other Parties and this
U.S. SPA shall terminate (subject to the provisions of this
Section 8.2
) and the transactions contemplated by this U.S. SPA shall be abandoned, without further action by any of the Parties. If this
U.S.
SPA is terminated as provided herein:
(a) Upon
the written request therefor, each Party will (i) redeliver or (ii) destroy with certification thereto in form and substance reasonably satisfactory
to the other party, all documents, work papers and other materials of any other party relating to the transactions contemplated by this U.S. SPA, whether obtained before or after the execution hereof,
to the party furnishing the same;
provided
,
however
, that each Party shall be entitled to retain copies
of any such materials for record-keeping purposes or as required by Law; and
(b) Subject
to
Section 8.1
, in the event of the termination and abandonment of this U.S. SPA pursuant to
Section 8.1
, this U.S. SPA shall forthwith become
void and have no effect, without any liability on the part of any Party or its Affiliates,
directors, managers, officers or stockholders, other than the provisions of
Sections 8.1
,
10.1
,
10.2
,
10.3
,
10.7
,
10.8
,
10.9
,
10.12
and
10.16
. Nothing contained in this
Section 8.2
shall relieve any party from liability for any
breach of this U.S. SPA.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
Section 9.1
Survival of Indemnification Rights.
Subject to the limitations and other provisions of this
U.S. SPA, the representations and warranties of Sellers in
Article III
and of BioSpin U.S. and Sellers in
Article IV
shall survive the Closing
and remain in full force and effect until the later of the Cut-Off Date and the resolution of
any claim for indemnification with respect to which any BRKR Indemnified Party has provided Sellers notice of a claim for indemnification pursuant to
Section 9.3(a)
A-1-35
prior
to the Cut-Off Date;
provided
,
however
, that the following representations and
warranties shall survive and remain in full force and effect for the period indicated:
(a)
Section 3.8
(Ownership of the Shares),
Section 4.3
(Capitalization of BioSpin U.S.), and
Section 4.4
(Capitalization of the Subsidiaries; Other Interests), indefinitely;
(b)
Section 4.17
(Environmental),
Section 4.19
(Employee
Benefits) and
Section 4.22
(Proprietary Rights) and
Section 4.29
(No Misleading
Statements), three (3) years following the Closing Date; and
(c)
Section 3.9
(Withholding Tax) and
Section 4.21
(Taxes and
Tax Returns), until sixty (60) calendar days after expiration of the applicable statute of limitations (including any extension thereof);
and
with respect to clauses (b) and (c), if a claims notice has been provided by such date, shall remain in full force and effect until final resolution thereof.
The
covenants and agreements of Sellers and BioSpin U.S. contained in this U.S. SPA shall survive and remain in full force and effect for the applicable period specified therein, or if
no such period is specified, indefinitely. The provisions of this
Article IX
shall survive for so long as any other Section of this U.S. SPA
shall survive.
Section 9.2
Indemnification Obligations.
Sellers agree to jointly and severally indemnify, defend and
hold harmless BRKR and any parent, Subsidiary, associate, Affiliate, director, manager, officer, stockholder, employee or agent thereof, and their respective representatives, successors and permitted
assigns (all of the foregoing are collectively referred to as the "
BRKR Indemnified Parties
") from and against, and pay on behalf of or reimburse such
party in respect of, as and when incurred, all Losses which any such party may actually incur, suffer, sustain or become subject to or accrue, as a result of, in connection with, or relating to or by
virtue of:
(a) any
inaccuracy in, or breach of, any representation or warranty made by BioSpin U.S. or Sellers under this U.S. SPA or any Ancillary Agreement, other than any
representation or warranty in
Section 4.21
(Taxes and Tax Returns), it being understood that such representations and warranties shall be
interpreted without giving effect to any limitations or qualifications as to "materiality" (including the word "material" or "Material Adverse Effect") set forth therein;
(b) any
breach or nonfulfillment of any covenant or agreement on the part of Sellers or BioSpin U.S. in respect of pre-Closing covenants, under this U.S. SPA or
any Ancillary Agreement;
(c) any
fees, expenses or other payments incurred or owed by Sellers or BioSpin U.S. to any agent, broker, investment banker or other firm or Person retained or employed by
Sellers or BioSpin U.S. in connection with the transactions contemplated by this U.S. SPA; or
(d) any
inaccuracy in, or breach of, any representation or warranty in
Section 4.21
of this U.S. SPA,
Section 4.21 of the Swiss Merger Agreement or Section 4.19 of the German SPA to the extent that the aggregate amount of all such Losses exceeds $10,000,000 (the
"
Tax Deductible
") (other than Losses arising from criminal activity or fraudin each case as determined in a final,
non-appealable decision by a court of competent jurisdictionof Sellers or BioSpin U.S., which Losses shall not be subject to the Tax Deductible), it being understood that such
representations and warranties shall be interpreted without giving effect to any exceptions or disclosures made with respect thereto on the disclosure schedules to this U.S. SPA, the Swiss Merger
Agreement or the German SPA;
provided
,
however
, that any Taxes of a Subsidiary attributable to the
payment of a Subsidiary Dividend (as defined in the Swiss Merger Agreement) shall not be applied against the Tax Deductible.
A-1-36
Section 9.3
Indemnification Procedure.
(a) If
any BRKR Indemnified Party intends to seek indemnification pursuant to this
Article IX
, such BRKR Indemnified
Party shall promptly notify Sellers in writing. The BRKR Indemnified Party will provide Sellers with prompt notice of any third-party claim in respect of which indemnification is sought. The failure
to provide either such notice will not affect any rights hereunder except to the extent Sellers are materially prejudiced thereby.
(b) If
such claim involves a claim by a Third Party against the BRKR Indemnified Parties, Sellers may, upon notice to the BRKR Indemnified Parties, assume, through counsel
of Sellers' choosing and at Sellers' expense, the settlement or defense thereof, and the BRKR Indemnified Parties shall reasonably cooperate with Sellers in connection therewith;
provided
, that the BRKR
Indemnified Parties may participate in such settlement or defense through counsel chosen by them;
provided
,
further
, that if the BRKR Indemnified Parties
reasonably determine that representation by the
counsel of Sellers and the BRKR Indemnified Parties may present such counsel with a conflict of interest, then Sellers shall pay the reasonable fees and expenses of the BRKR Indemnified Parties'
counsel. Notwithstanding anything in this
Section 9.3
to the contrary, Sellers may not, without the prior written consent of the BRKR Indemnified
Parties, settle or compromise any action or consent to the entry of any judgment, such consent not to be unreasonably withheld. So long as Sellers are contesting any such claim in good faith, the BRKR
Indemnified Parties shall not pay or settle any such claim without Sellers' consent, such consent not to be unreasonably withheld. If Sellers are not contesting such claim in good faith, then the BRKR
Indemnified Parties may conduct and control, through counsel of their own choosing and at Sellers' expense, the settlement or defense thereof, and Sellers shall cooperate with it in connection
therewith. The failure of the BRKR Indemnified Parties to participate in, conduct or control such defense shall not relieve Sellers of any obligation they may have hereunder.
(c) Notwithstanding
anything to the contrary in this
Section 9.3
, to the extent a claim for which indemnification is
sought by BRKR Indemnified Parties relates to Taxes for a taxable period beginning on or before and ending after the Closing Date, Sellers and BRKR shall jointly control any proceeding in respect of
such claim and neither party shall settle or compromise any action or consent to the entry of any judgment with respect thereto without the prior written consent of the other party, such consent not
to be unreasonably withheld.
Section 9.4
Calculation of Indemnity Payments.
The amount of any Loss for which indemnification is
provided under this
Article IX
shall be (a) increased to the extent necessary such that after payment of any net Tax cost by the BRKR
Indemnified Parties with respect to the receipt or accrual of indemnity payments hereunder, as increased pursuant to this clause (a), the amount remaining shall be the amount of the indemnity
payment prior to any increase pursuant to this clause (a) and (b) reduced by the
amount of the net Tax benefit actually realized by the BRKR Indemnified Parties by reason of such Loss (as an illustrative example, clause (b) takes into account on a present value basis any
net Tax benefit actually realized by the BRKR Indemnified Party by reason of the indemnified Loss in a Tax jurisdiction or Tax year other than the jurisdiction or year in which such Loss arose).
Section 9.5
Indemnification Amounts.
(a) Notwithstanding
any provision to the contrary contained in this U.S. SPA, Sellers shall not be obligated to indemnify the BRKR Indemnified Parties for any Losses
pursuant to this
Article IX
to the extent they are a result of any claim made pursuant to
Section 9.2(a)
unless and until the dollar amount of
all Losses in the aggregate from claims made pursuant to
Section 9.2(a)
, Section 10.2(a) of the Swiss Merger Agreement and Section 9.2(a) of the German SPA exceed $3,250,000, in which
case
Sellers will be obligated to indemnify the BRKR Indemnified Parties for the total amount of Losses including any amounts which would otherwise not be required to be
A-1-37
paid
by reason of this
Section 9.5
;
provided
,
however
, that in no event shall the aggregate indemnification
obligations of Sellers pursuant to
Sections
9.2(a)
,
(b)
or
(c)
of this U.S. SPA, Sections 10.2(a), (b) or
(c) of the Swiss Merger Agreement, and Sections 9.2(a), (b) or (c) of the German SPA exceed Ninety Two Million Dollars ($92,000,000) (the "
Indemnity
Cap
");
provided
,
further
, that notwithstanding the foregoing, the BRKR
Indemnified Parties' right to seek indemnification hereunder for any Losses arising out of (i) criminal activity or fraud (in each case as determined in a final, non-appealable
decision by a court of competent jurisdiction) of Sellers or BioSpin U.S. or (ii)
Section 3.8
(Ownership of the Shares),
Section 3.9
(Withholding Tax),
Section 4.3
(Capitalization of BioSpin U.S.),
Section 4.4
(Capitalization of the Subsidiaries; Other Interests) or
Section 4.17
(Environmental) shall not be subject to, or limited by, the limits contained in this
Section 9.5
;
provided
,
further
, that with respect to any Losses arising out of
Section 3.8
(Ownership of Shares) and
Section 3.9
(Withholding Tax), the liability of any
Seller beyond the Indemnity Cap shall be several and not joint. Notwithstanding the foregoing, no Seller shall have any liability under this
Article IX
or otherwise under this U.S. SPA in excess of
the amount set forth opposite such Seller's name under the heading "Individual Selling
Shareholders' Indemnity Cap" as set forth on
Schedule 9.5
.
(b) For
the purpose of calculating the amount of any Loss for which a BRKR Indemnified Party is entitled to indemnification under this U.S. SPA, the amount of each Loss
shall be deemed to be an amount net of any insurance proceeds and any indemnity, contribution or other similar payment that has been paid by any insurer or other third party with respect thereto. The
reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of counsel) actually incurred by the BRKR Indemnified Parties in pursuing any insurance
proceeds or indemnity, contribution or other similar payment from any insurer or other third party under this
Article IX
shall constitute
additional Losses with respect to the matter for which indemnification may be sought hereunder, except to the extent such costs and expenses are paid or reimbursed by such insurer or other third
party. In the event that a BRKR Indemnified Party is paid by Sellers for a Loss for which one or more insurance claims or claims against Third Parties has been or could be made, but for which payment
from such insurer or Third Party has not been received, then such Purchaser Indemnified Party shall assign, to the extent legally permissible, all such claims to Sellers for purposes of recouping
payment of such Loss. To the extent such assignment should not be
legally permissible, the respective BRKR Indemnified Party shall remit any payment received, up to the amount of such Loss, from such insurance claim or Third Party claim to Sellers.
Section 9.6
Exclusive Remedy.
BRKR acknowledges and agrees that the indemnification provisions of this
Article IX
shall be the
sole and exclusive remedies of BRKR against Sellers and BioSpin U.S. for any breach by Sellers or BioSpin U.S. of the
representations and warranties in this U.S. SPA, for any failure by Sellers or BioSpin U.S. to perform and comply with any covenants and agreements in this U.S. SPA that are required to be complied
with or performed prior to the Closing and for any failure by Sellers or BioSpin U.S. to perform and comply with any covenants and agreements in this U.S. SPA, except that if any of the provisions of
this U.S. SPA are not performed in accordance with their terms or are otherwise breached, BRKR shall be entitled to specific performance of the terms thereof in addition to any other remedy at law or
equity. Notwithstanding anything contained in this U.S. SPA to the contrary, BRKR shall retain the right to receive damages or other relief (including equitable relief) against BioSpin U.S. or Sellers
as a result of any criminal activity or fraudulent action (in each case as determined in a final, non-appealable decision by a court of competent jurisdiction) by BioSpin U.S. or Sellers
without regard to any restriction or limitation contained herein. The indemnification obligations contained in this
Article IX
are obligations of
Sellers and not of BioSpin U.S.
A-1-38
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1
Notices.
All notices and other communications required or permitted hereunder will be in
writing and, unless otherwise provided in this U.S. SPA, will be deemed to have been duly given when delivered in person or when dispatched by electronic facsimile transfer (confirmed in writing by
mail simultaneously dispatched) or one (1) Business Day after having been dispatched by a nationally recognized overnight courier service to the appropriate party at the address specified
below:
or
to such other address or addresses as any such party may from time to time designate as to itself by like notice.
Section 10.2
Expenses.
Except as otherwise expressly provided herein, each Party will pay any expenses
incurred by it incident to this U.S. SPA and in preparing to consummate and consummating the transactions provided for herein;
provided
,
however
, that with
respect to any fees relating to the
A-1-39
HSR
Act or any requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates
and exemptions required for the consummation of the Transactions contemplated by this U.S. SPA under any corresponding requirements of the European Commission and/or the European Union member states
agencies or competition regulatory authorities in other jurisdictions, BRKR shall be responsible for 100% of the fees for its filing and BioSpin U.S. shall be responsible for 100% of the fees for any
filing made by BioSpin U.S. or any of the Sellers.
Section 10.3
Successors and Assigns.
No Party may assign any of its rights under this U.S. SPA without
the prior written consent of the other Parties. Subject to the preceding sentence, this U.S. SPA will apply to, be binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the Parties. Notwithstanding anything to the contrary in this
Section 10.3
, upon written notice to Sellers, BRKR shall be
permitted to assign this U.S. SPA and the rights and obligations under it to a wholly owned, direct or indirect Subsidiary of BRKR;
provided
, that, in
the event of any such assignment, BRKR shall remain liable in full for the performance of its obligations hereunder. Nothing expressed or referred to in this U.S. SPA will be construed to give any
Person other than the Parties any legal or equitable right, remedy or claim under or with respect to this U.S. SPA or any provision of this U.S. SPA. This U.S. SPA and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this U.S. SPA and their successors and assigns.
Section 10.4
Extension; Waiver.
Either Party may, by written notice to the other Party (a) extend
the time for performance of any of the obligations of the other Party under this U.S. SPA, (b) waive any inaccuracies in the representations or warranties of the other Party contained in this
U.S. SPA, (c) waive compliance with any of the conditions or covenants of the other Party contained in this U.S. SPA or (d) waive or modify performance of any of the obligations of the
other Party under this U.S. SPA;
provided
, that no Party may, without the prior written consent of the other Party, make or grant such extension of
time, waiver of inaccuracies or compliance or waiver or modification of performance with respect to its representations, warranties, conditions or covenants hereunder. Except as provided in the
immediately preceding sentence, no action taken pursuant to this U.S. SPA will be deemed to constitute a waiver of compliance with any representations, warranties, conditions or covenants contained in
this U.S. SPA and will not operate or be construed as a waiver of any subsequent breach, whether of a similar or dissimilar nature.
Section 10.5
Entire Agreement; Schedules.
This U.S. SPA, the Swiss Merger Agreement and the German SPA,
which includes the schedules and exhibits hereto and thereto, supersedes any other agreement, whether written or oral, that may have been made or entered into by any party relating to the matters
contemplated by this U.S. SPA and such other agreements and constitutes the entire agreement by and among the Parties relating to these matters.
Section 10.6
Amendments, Supplements, Etc.
This U.S. SPA may be amended or supplemented at any time by
additional written agreements as may mutually be determined by BioSpin U.S., BRKR and Sellers to be necessary, desirable or expedient to further the purposes of this U.S. SPA or to clarify the
intention of the Parties.
Section 10.7
Applicable Law.
This U.S. SPA shall be governed by and construed under the Laws of the
Commonwealth of Massachusetts (without regard to the conflict of law principles thereof). Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this U.S. SPA or
for recognition and enforcement of any judgment in respect hereof shall be brought and determined in the United States District Court for the Eastern District of Massachusetts or if such legal action
or proceeding may not be brought in such court for jurisdictional purposes, in the Superior Court of Massachusetts. Each of the Parties hereby (a) irrevocably submits with regard to any such
action or proceeding to the exclusive personal jurisdiction of the aforesaid courts in the event any dispute arises out of this U.S. SPA or any transaction contemplated hereby and waives the defense
of sovereign
A-1-40
immunity,
(b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court or that such action is brought in an
inconvenient forum and (c) agrees that it shall not bring any action relating to this U.S. SPA or any transaction contemplated hereby in any court other than any Massachusetts state or federal
court sitting in Boston, Massachusetts.
Section 10.8
Waiver of Jury Trial.
Each of the Parties hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this U.S. SPA or the transactions contemplated
by this U.S. SPA. Each of the Parties hereby (a) certifies that no representative, agent or attorney of the other Party has represented, expressly or otherwise, that such other Party would not,
in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this U.S. SPA and the transactions contemplated by this U.S. SPA, as
applicable, by, among other things, the mutual waivers and certifications in this
Section 10.8
.
Section 10.9
Actions by Sellers.
Where any provision of this U.S. SPA indicates that BioSpin U.S. will
take any specified action (or refrain from taking any specified action) or requires BioSpin U.S. to take any specified action (or to refrain from taking any specified action), then, regardless of
whether this U.S. SPA specifically provides that Sellers will do so, Sellers shall cause BioSpin U.S. to take such action (or to refrain from taking such action, as applicable). Sellers will be
responsible for the failure of BioSpin U.S. to take any such action (or to refrain from taking any such action, as applicable).
Section 10.10
Execution in Counterparts.
This U.S. SPA may be executed in two or more counterparts, each
of which will be deemed an original, but all of which together will constitute one and the same agreement.
Section 10.11
Titles and Headings.
Titles and headings to sections herein are inserted for convenience of
reference only, and are not intended to be a part of or to affect the meaning or interpretation of this U.S. SPA.
Section 10.12
Invalid Provisions.
If any provision of this U.S. SPA is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations under this U.S. SPA of Sellers on the one hand and BRKR on the other hand will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this U.S. SPA will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part
hereof, (c) the remaining provisions of this U.S. SPA will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from
this U.S. SPA and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this U.S. SPA a legal, valid and enforceable provision as
similar in terms to such illegal, invalid or unenforceable provision as may be possible.
Section 10.13
Publicity.
The Parties agree that except as otherwise required by applicable Law or the
rules and regulations of any national securities exchange, no Party shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this U.S. SPA
or the Ancillary Agreements without prior consultation with and consent of BRKR and Sellers, which consent shall not be unreasonably withheld, conditioned or delayed. A mutually agreed press release
is attached hereto as
Exhibit D
.
Section 10.14
Specific Performance.
The Parties agree that if any of the provisions of this U.S. SPA were
not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and
that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.
A-1-41
Section 10.15
Construction.
(a) Whenever
the words "include," "includes," or "including" are used in this U.S. SPA, they shall be deemed to be followed by the words "without limitation."
(b) All
terms defined in this U.S. SPA shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein. The definitions contained in this U.S. SPA are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms. References to a Person are also to its permitted successors and assigns.
(c) Any
agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and all attachments thereto and instruments incorporated therein.
(d) All
article, section, paragraph, schedule and exhibit references used in this U.S. SPA are to articles, sections, paragraphs, schedules and exhibits to this U.S. SPA
unless otherwise specified.
(e) The
Parties acknowledge that each Party and its attorney has reviewed this U.S. SPA and that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this U.S. SPA.
Section 10.16
Actions by BRKR.
Any decision by BRKR relating to a dispute or a potential dispute between
BRKR and Sellers shall be subject to the approval of the Audit Committee.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
A-1-42
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
|
|
BRUKER BIOSCIENCES CORPORATION
|
|
|
By:
|
/s/
FRANK H. LAUKIEN,
Ph.D.
Name: Frank H. Laukien, Ph.D.
Title:
Chief Executive Officer and President
|
|
|
BRUKER BIOSPIN INC.
|
|
|
By:
|
/s/
RICHARD M. STEIN
Name: Richard M. Stein
Title:
Secretary
|
|
DIRK D. LAUKIEN
|
|
/s/
DIRK D. LAUKIEN,
Ph.D.
|
|
FRANK H. LAUKIEN
|
|
/s/
FRANK H. LAUKIEN,
Ph.D.
|
|
ISOLDE LAUKIEN-KLEINER
|
|
/s/
ISOLDE LAUKIEN-KLEINER
|
|
JOERG C. LAUKIEN
|
|
/s/
JOERG C. LAUKIEN
|
|
MARC M. LAUKIEN
|
|
/s/
MARC M. LAUKIEN
|
|
ROBYN L. LAUKIEN
|
|
/s/
ROBYN L. LAUKIEN
|
Annex A-2
GERMAN SHARE PURCHASE AGREEMENT
regarding
the
acquisition of
BRUKER PHYSIK GMBH
and
TECHNEON AG
Dated as of December 2, 2007
TABLE OF CONTENTS
|
|
|
|
|
|
Page
|
ARTICLE I
|
|
DEFINITIONS AND DEFINED TERMS
|
|
A-2-3
|
|
Section 1.1
|
|
|
|
Definitions
|
|
A-2-3
|
ARTICLE II
|
|
PURCHASE AND SALE OF SHARES; CLOSING
|
|
A-2-6
|
|
Section 2.1
|
|
|
|
Current Status
|
|
A-2-6
|
|
Section 2.2
|
|
|
|
Purchase and Sale of BPhysik Shares
|
|
A-2-6
|
|
Section 2.3
|
|
|
|
Purchase and Sale of Techneon Shares
|
|
A-2-7
|
|
Section 2.4
|
|
|
|
Purchase and Sale of SciTec Real Property
|
|
A-2-7
|
|
Section 2.5
|
|
|
|
Purchase Prices
|
|
A-2-8
|
|
Section 2.6
|
|
|
|
The Closing
|
|
A-2-8
|
|
Section 2.7
|
|
|
|
Deliveries and Actions at Closing
|
|
A-2-8
|
|
Section 2.8
|
|
|
|
Withholding
|
|
A-2-9
|
ARTICLE III
|
|
REPRESENTATIONS AND WARRANTIES OF SELLERS
|
|
A-2-9
|
|
Section 3.1
|
|
|
|
Power and Authority
|
|
A-2-9
|
|
Section 3.2
|
|
|
|
Enforceability
|
|
A-2-9
|
|
Section 3.3
|
|
|
|
No Violation
|
|
A-2-10
|
|
Section 3.4
|
|
|
|
No Conflict
|
|
A-2-10
|
|
Section 3.5
|
|
|
|
Litigation
|
|
A-2-10
|
|
Section 3.6
|
|
|
|
No Other Agreement
|
|
A-2-10
|
|
Section 3.7
|
|
|
|
No Broker
|
|
A-2-10
|
|
Section 3.8
|
|
|
|
Ownership of the Shares
|
|
A-2-10
|
|
Section 3.9
|
|
|
|
Withholding Tax
|
|
A-2-10
|
|
Section 3.10
|
|
|
|
Seller 1's Assets
|
|
A-2-10
|
|
Section 3.11
|
|
|
|
SciTec Verwaltungs
|
|
A-2-11
|
|
Section 3.12
|
|
|
|
SciTec Real Property
|
|
A-2-11
|
ARTICLE IV
|
|
REPRESENTATIONS AND WARRANTIES REGARDING THE TARGET COMPANIES
|
|
A-2-12
|
|
Section 4.1
|
|
|
|
Organization and Good Standing
|
|
A-2-12
|
|
Section 4.2
|
|
|
|
Authorization and Effect of German SPA
|
|
A-2-12
|
|
Section 4.3
|
|
|
|
Capitalization of the Target Companies
|
|
A-2-12
|
|
Section 4.4
|
|
|
|
Capitalization of the Subsidiaries; Other Interests
|
|
A-2-13
|
|
Section 4.5
|
|
|
|
No Conflict
|
|
A-2-14
|
|
Section 4.6
|
|
|
|
Permits; Compliance with Law
|
|
A-2-14
|
|
Section 4.7
|
|
|
|
Books and Records
|
|
A-2-14
|
|
Section 4.8
|
|
|
|
Litigation
|
|
A-2-15
|
|
Section 4.9
|
|
|
|
Financial Statements; Undisclosed Liabilities
|
|
A-2-15
|
|
Section 4.10
|
|
|
|
Absence of Certain Changes
|
|
A-2-15
|
|
Section 4.11
|
|
|
|
Contracts
|
|
A-2-15
|
|
Section 4.12
|
|
|
|
Transactions with Affiliates
|
|
A-2-17
|
|
Section 4.13
|
|
|
|
Insurance
|
|
A-2-17
|
|
Section 4.14
|
|
|
|
Accounts Receivable
|
|
A-2-18
|
|
Section 4.15
|
|
|
|
Real Property; Leases
|
|
A-2-18
|
|
Section 4.16
|
|
|
|
Environmental
|
|
A-2-19
|
|
Section 4.17
|
|
|
|
No Broker
|
|
A-2-20
|
|
Section 4.18
|
|
|
|
Labor Relations and Employee Benefits
|
|
A-2-20
|
A-2-i
|
Section 4.19
|
|
|
|
Taxes and Tax Returns
|
|
A-2-21
|
|
Section 4.20
|
|
|
|
Proprietary Rights
|
|
A-2-23
|
|
Section 4.21
|
|
|
|
Information Technology
|
|
A-2-24
|
|
Section 4.22
|
|
|
|
Guarantees
|
|
A-2-24
|
|
Section 4.23
|
|
|
|
Bank Accounts
|
|
A-2-24
|
|
Section 4.24
|
|
|
|
Foreign Corrupt Practices and International Trade Sanctions
|
|
A-2-24
|
|
Section 4.25
|
|
|
|
Inventory
|
|
A-2-25
|
|
Section 4.26
|
|
|
|
Deposits
|
|
A-2-25
|
|
Section 4.27
|
|
|
|
No Misleading Statements
|
|
A-2-25
|
ARTICLE V
|
|
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
|
|
A-2-25
|
|
Section 5.1
|
|
|
|
Organization of Purchasers; Authority
|
|
A-2-25
|
|
Section 5.2
|
|
|
|
Authorization; Enforceability
|
|
A-2-25
|
|
Section 5.3
|
|
|
|
No Conflict
|
|
A-2-26
|
|
Section 5.4
|
|
|
|
No Broker
|
|
A-2-26
|
|
Section 5.5
|
|
|
|
Investment Representation
|
|
A-2-26
|
|
Section 5.6
|
|
|
|
Accredited Investor
|
|
A-2-26
|
ARTICLE VI
|
|
COVENANTS
|
|
A-2-27
|
|
Section 6.1
|
|
|
|
Operation of the Target Companies Pending the Closing
|
|
A-2-27
|
|
Section 6.2
|
|
|
|
Access
|
|
A-2-29
|
|
Section 6.3
|
|
|
|
Notification
|
|
A-2-29
|
|
Section 6.4
|
|
|
|
No Inconsistent Action
|
|
A-2-29
|
|
Section 6.5
|
|
|
|
Reasonable Best Efforts
|
|
A-2-29
|
|
Section 6.6
|
|
|
|
Further Assurances
|
|
A-2-30
|
|
Section 6.7
|
|
|
|
No Solicitation
|
|
A-2-30
|
|
Section 6.8
|
|
|
|
Tax Matters
|
|
A-2-30
|
|
Section 6.9
|
|
|
|
Release
|
|
A-2-31
|
|
Section 6.10
|
|
|
|
Voting Agreement
|
|
A-2-31
|
|
Section 6.11
|
|
|
|
Non-competition and Non-solicitation
|
|
A-2-32
|
|
Section 6.12
|
|
|
|
No Election
|
|
A-2-32
|
|
Section 6.13
|
|
|
|
Compulsory Share Transfer
|
|
A-2-32
|
|
Section 6.14
|
|
|
|
SciTec Real Property Confirmations
|
|
A-2-32
|
ARTICLE VII
|
|
CLOSING CONDITIONS
|
|
A-2-32
|
|
Section 7.1
|
|
|
|
Conditions to Each Party's Obligations
|
|
A-2-32
|
|
Section 7.2
|
|
|
|
Conditions Precedent to Obligations of Purchasers
|
|
A-2-33
|
|
Section 7.3
|
|
|
|
Conditions Precedent to Obligations of Sellers
|
|
A-2-34
|
ARTICLE VIII
|
|
TERMINATION
|
|
A-2-35
|
|
Section 8.1
|
|
|
|
Termination
|
|
A-2-35
|
|
Section 8.2
|
|
|
|
Procedure and Effect of Termination
|
|
A-2-35
|
ARTICLE IX
|
|
SURVIVAL; INDEMNIFICATION
|
|
A-2-36
|
|
Section 9.1
|
|
|
|
Survival of Indemnification Rights
|
|
A-2-36
|
|
Section 9.2
|
|
|
|
Indemnification Obligations
|
|
A-2-36
|
|
Section 9.3
|
|
|
|
Indemnification Procedure
|
|
A-2-37
|
|
Section 9.4
|
|
|
|
Calculation of Indemnity Payments
|
|
A-2-38
|
|
Section 9.5
|
|
|
|
Indemnification Amounts
|
|
A-2-38
|
|
Section 9.6
|
|
|
|
Exclusive Remedy
|
|
A-2-39
|
A-2-ii
ARTICLE X
|
|
MISCELLANEOUS PROVISIONS
|
|
A-2-39
|
|
Section 10.1
|
|
|
|
Notices
|
|
A-2-39
|
|
Section 10.2
|
|
|
|
Expenses
|
|
A-2-40
|
|
Section 10.3
|
|
|
|
Successors and Assigns
|
|
A-2-41
|
|
Section 10.4
|
|
|
|
Extension; Waiver
|
|
A-2-41
|
|
Section 10.5
|
|
|
|
Entire Agreement; Schedules
|
|
A-2-41
|
|
Section 10.6
|
|
|
|
Amendments, Supplements, Etc
|
|
A-2-41
|
|
Section 10.7
|
|
|
|
Applicable Law
|
|
A-2-41
|
|
Section 10.8
|
|
|
|
Waiver of Jury Trial
|
|
A-2-42
|
|
Section 10.9
|
|
|
|
Actions by Sellers
|
|
A-2-42
|
|
Section 10.10
|
|
|
|
Execution in Counterparts
|
|
A-2-42
|
|
Section 10.11
|
|
|
|
Titles and Headings
|
|
A-2-42
|
|
Section 10.12
|
|
|
|
Invalid Provisions
|
|
A-2-42
|
|
Section 10.13
|
|
|
|
Publicity
|
|
A-2-42
|
|
Section 10.14
|
|
|
|
Specific Performance
|
|
A-2-43
|
|
Section 10.15
|
|
|
|
Construction
|
|
A-2-43
|
|
Section 10.16
|
|
|
|
Actions by Purchasers
|
|
A-2-43
|
Exhibits
|
|
|
Exhibit AFinancing Documents
|
|
|
Exhibit BPress Release
|
|
|
These
exhibits are omitted in accordance with Item 601(b)(2) of Regulation S-K. The Registrant will furnish a copy of any omitted exhibit to the Securities and
Exchange Commission supplementally upon request.
A-2-iii
List of Schedules
Schedule 2.1(d)
|
|
Subsidiaries
|
Schedule 2.1(e)
|
|
Corporate Documents
|
Schedule 2.1(f)
|
|
SciTec Real Property
|
Schedule 2.2(d)
|
|
Form of Bruker Physik Share Transfer Deed
|
Schedule 2.3(c)
|
|
Form of Techneon Transfer Deed
|
Schedule 2.4
|
|
Form of SciTec Real Property Sale and Transfer Agreement
|
Schedule 2.5
|
|
Purchase Price Allocation
|
Schedule 3.3
|
|
No Violation
|
Schedule 3.12
|
|
SciTec Real Property
|
Schedule 4.3(c)
|
|
Options, Warrants, Calls, Rights Etc.
|
Schedule 4.4(c)
|
|
Other Interests
|
Schedule 4.5
|
|
No Conflict
|
Schedule 4.6(a)
|
|
Permits
|
Schedule 4.7
|
|
Books and Records
|
Schedule 4.9
|
|
Financial Statements; Undisclosed Liabilities
|
Schedule 4.10
|
|
Absence of Certain Changes
|
Schedule 4.11(a)
|
|
Contracts
|
Schedule 4.12
|
|
Transactions with Affiliates
|
Schedule 4.13
|
|
Insurance
|
Schedule 4.15(a)
|
|
Owned Real Property
|
Schedule 4.15(b)
|
|
Real Property Leases
|
Schedule 4.16
|
|
Environmental
|
Schedule 4.18(b)
|
|
Service Agreement
|
Schedule 4.18(c)
|
|
Employee Benefits
|
Schedule 4.18(d)
|
|
Pensions
|
Schedule 4.19
|
|
Taxes and Tax Returns
|
Schedule 4.20(a)
|
|
Target Companies' Proprietary Rights
|
Schedule 4.20(b)
|
|
Target Companies' Proprietary Rights
|
Schedule 4.21
|
|
Information Technology
|
Schedule 4.22
|
|
Guarantees
|
Schedule 4.23
|
|
Bank Accounts
|
Schedule 4.27
|
|
No Misleading Statements
|
Schedule 5.3
|
|
No Conflict
|
Schedule 6.7(a)
|
|
No Solicitation
|
A-2-iv
GERMAN SHARE PURCHASE AGREEMENT
This GERMAN SHARE PURCHASE AGREEMENT (this "
Agreement
" or "
German
SPA
") is made and entered into as of December 2, 2007 by and among:
1.
|
|
SciTec GmbH & Co. KG
, Silberstreifen 4, 76287 Rheinstetten, Germany, a limited partnership under German law, registered with the Local Court of Mannheim under HRA 104585,
|
|
|
-"
Seller 1
"-
|
2.
|
|
Dirk D. Laukien
, 42 Pleasant Bend Drive, The Woodlands, TX, 77382, USA,
|
|
|
-"
Seller 2
"-
|
3.
|
|
Frank H. Laukien
, 294 Commonwealth Avenue, Apt. 2, Boston, MA, 02115, USA,
|
|
|
-"
Seller 3
"-
|
4.
|
|
Isolde Laukien-Kleiner
, Lichtentaler Allee 68, 76530 Baden-Baden, Germany,
|
|
|
-"
Seller 4
"-
|
5.
|
|
Joerg C. Laukien
, Markgrafenstrasse 34, 76530 Baden-Baden, Germany,
|
|
|
-"
Seller 5
"-
|
6.
|
|
Marc M. Laukien
, 809 Harbour Isles Ct, N. Palm Beach, FL, 33410, USA,
|
|
|
-"
Seller 6
"-
|
7.
|
|
Robyn L. Laukien
, 12 Smith Hill Road, Lincoln, MA, 01773, USA,
|
|
|
-"
Seller 7
"-
|
|
|
-Sellers 1 through 7 collectively referred to as "
Sellers
"-
|
|
|
-Sellers 2 through 7 collectively referred to as "
Laukien Sellers
"-
|
and
|
8.
|
|
Bruker BioSciences Corporation
, 40 Manning Road, Billerica, MA, 01821, USA, a Delaware corporation,
|
|
|
-"
Purchaser 1
"-
|
9.
|
|
Bruker Daltonik GmbH
, Fahrenheitstr. 4, D-28359 Bremen, Germany, a German limited liability company, registered with the Local Court of Bremen under HRB 8150,
|
|
|
-"
Purchaser 2
"-
|
10.
|
|
Bruker Optik GmbH
, Rudolf-Plank-Str. 27, 76275 Ettlingen, Germany, a German limited liability company, registered with the Local Court of Mannheim under HRB 362608,
|
|
|
-"
Purchaser 3
"-
|
|
|
-Purchasers 1 through 3 collectively referred to as "
Purchasers
"-
|
and
|
11.
|
|
Bruker Physik GmbH
, Am Silberstreifen 4, 76287 Rheinstetten, Germany, a German limited liability company, registered with the Local Court of Mannheim under HRB 702671,
|
|
|
-"
Bruker Physik
"-
|
12.
|
|
Techneon AG
, c/o Bruker BioSpin AG, Industriestrasse 26, CH 8117 Fällanden, Switzerland, a Swiss stock corporation, registered with the commercial register of the Canton of Zurich
under CH-020.3.925.959-1,
|
|
|
-"
Techneon
"-
|
|
|
-Bruker Physik and Techneon each a "
Target Company
" or collectively the "
Target Companies
"-
|
|
|
-Sellers, Purchasers, Bruker Physik and Techneon collectively referred to as the "
Parties
"-
|
A-2-1
RECITALS
WHEREAS, Bruker Physik is a German limited liability company with a registered share capital (
Stammkapital
) of
nominal €8,500,000; Sellers hold 87% of the registered share capital of Bruker Physik, the remaining 13% of the registered share capital in Bruker Physik (each share in Bruker Physik a
"
BPhysik Share
" and together the "
BPhysik Shares
") being held by Techneon;
WHEREAS,
Techneon is a Swiss stock corporation with a stated share capital of nominal CHF 8,000,000, divided into 8,000 registered shares on nominal CHF 1,000 each (together the
"
Techneon Shares
" and together with the BPhysik Shares the "
Shares
"), being held entirely by Seller 1
(other than, prior to the Compulsory Share Transfer, the Compulsory Shares);
WHEREAS,
Seller 1 and Seller 4 co-own (
1
/
2
co-ownership each) one piece of real property in Ettlingen (registered as Nr. 4276 in the land register
of Ettlingen) ("
SciTec Real Property
");
WHEREAS,
the Board of Directors of BRKR has appointed a Special Committee of independent directors to consider the acquisition of the Bruker BioSpin group of companies (the transactions
effecting such acquisition, the "
Transactions
"), which is comprised of Bruker BioSpin Inc. ("
BioSpin
U.S.
"), Bruker BioSpin Invest AG ("
Invest
"), Bruker Physik and Techneon, and each of their respective Subsidiaries;
WHEREAS,
reference is made to that certain U.S. Stock Purchase Agreement, dated as of December 2, 2007, by and among BRKR, Laukien Sellers and BioSpin U.S. (the
"
U.S. SPA
"), wherein is contemplated the acquisition of BioSpin U.S. by BRKR;
WHEREAS,
pursuant to Section 2.5 of the U.S. SPA, an escrow fund of $92,000,000 (the "
Indemnity Escrow
"), to be funded by the
purchase price of the U.S. SPA, shall be created to serve as security for fulfillment by Sellers of their obligations pursuant to Article IX of this German SPA, Article IX of the U.S.
SPA and Article X of the Swiss Merger Agreement;
WHEREAS,
the closing of the transactions contemplated by the U.S. SPA shall occur prior to the Closing of the transactions contemplated by this German SPA;
WHEREAS,
reference is made to that certain Swiss Agreement and Plan of Merger, dated as of December 2, 2007, by and among BRKR, Bruker BioSpin Beteiligungs AG, a Swiss stock
corporation and a direct, wholly owned subsidiary of BRKR ("
Merger Sub
"), Laukien Sellers and Invest (the "
Swiss Merger
Agreement
"), wherein is contemplated the acquisition of Invest by BRKR by means of a share exchange, share cancellation and reverse subsidiary merger in which Merger Sub is
intended to be merged with and into Invest, with Invest surviving the merger and becoming a direct, wholly owned subsidiary of BRKR, solely in exchange for the delivery of shares of BRKR Stock to
Sellers;
WHEREAS,
before the Closing Date, Invest will pay a special cash dividend of CHF 75,000,000 in the aggregate to be distributed to holders, as of the relevant record date, of outstanding
Invest common shares;
WHEREAS,
pursuant to this German SPA, (i) in a first step, Sellers desire to sell 50.5% of the BPhysik Shares to Purchaser 1 and 18.25% of the BPhysik Shares to each of Purchasers
2 and 3, (ii) in a second step, Seller 1 desires to sell the Techneon Shares to Bruker Physik, and (iii) in a third step, Sellers 1 and 4 desire to sell the SciTec Real Property to
Purchaser 3 herein; and
WHEREAS,
after the consummation of the Transactions, BRKR intends to cause itself to be renamed "
Bruker Corporation
";
WHEREAS,
BRKR has received a commitment letter for an underwritten credit facility, which is required for the financing of the Transactions, from certain lenders as set forth in
Exhibit A;
Now,
therefore, the Parties agree as follows:
A-2-2
ARTICLE I
DEFINITIONS AND DEFINED TERMS
Section 1.1
Definitions.
(a) As
used in this German SPA, the following terms shall have the following meanings:
"
Ancillary Agreements
" shall mean the Bruker Physik Share Transfer Deed, the Techneon Transfer Deed and the SciTec Real Property Sale and
Transfer Agreement.
"
BRKR
" shall mean Bruker BioSciences Corporation, a Delaware corporation.
"
CHF
" shall mean the lawful currency of Switzerland.
"
Consent
" shall mean any consent, approval or authorization of, notice to, permit, or designation, registration, declaration or filing
with, any Person, including any consents and approvals from Purchasers' and the Target Companies' (and their respective Subsidiaries') existing lenders.
"
Corporate Documents
" shall mean (i) the current commercial register extract, (ii) pending register applications (or
equivalent documents), if any, (iii) the current version of the articles of association or partnership agreement (or equivalent document or agreement), (iv) any pending shareholders or
partners resolutions or other statements to change such articles or agreement and (v) all other Organizational Documents.
"
Directors and Officers
" shall mean any managing directors
(
Geschäftsführer
), members of the management board (
Mitglieder des
Vorstandes
), members of the supervisory board (
Mitglieder des Aufsichtsrats
), members of the board of directors or any other
statutory representatives or members of any other statutory bodies of representation of any legal entity in any jurisdiction.
"
Employee
" shall mean any employee of the Target Companies or their Subsidiaries or any person providing services through a third-party
employee leasing or similar organization.
"
GAAP
" shall mean accounting (including valuation and consolidation) principles generally accepted in the stated jurisdiction, and the
statutory provisions underlying such principles.
"
Knowledge
" (including the word "
Known
" and the phrase "
to the
Knowledge of
" and words or phrases of similar import) as to Sellers or the Target Companies shall mean the knowledge of (i) Sellers with respect to Sellers and
(ii) Bernd Gewiese, Wulf-Ingo Jung, Arne Kasten, Albrecht Kehr, Tony Keller, Burkhard Prause, Gerhard Roth, Klaus Schlenga and Dieter Schmalbein, and Laukien Sellers with respect to
the Target Companies and their Subsidiaries, in all such cases, assuming reasonable inquiry.
"
Material Adverse Effect
" shall mean any circumstance, change or effect that, individually or in the aggregate with other circumstances,
changes or effects, is or is reasonably likely to materially delay or impede consummation of the transactions contemplated by this German SPA or be materially adverse to the business, operations
(including results of operations), prospects, assets, liabilities, or financial condition of the Target Companies and their Subsidiaries taken as a whole;
provided,
however
, that none of the following, either alone or in combination, shall be considered in determining whether there has been a Material Adverse Effect: (a) events,
circumstances, changes or effects (including legal and regulatory changes) that generally affect the industries in which each of the Target Companies and their Subsidiaries operate, other than such
events, circumstances, changes or effects that disproportionately affect (relative to other industry participants) the Target Companies or their Subsidiaries and (b) changes caused by a
material worsening of current conditions caused by acts of terrorism or war occurring after the date hereof.
A-2-3
"
Ordinary Course of Business
" shall mean the ordinary course of business of the Target Companies and their respective Subsidiaries
consistent with past practice.
"
Permits
" shall mean all permits, licenses, approvals, certifications, registrations, franchises, notices and authorizations issued by any
Governmental Authority that are used or held for use in, necessary or otherwise relate to the ownership, operation or other use of any businesses of the Target Companies or their Subsidiaries.
"
Permitted Liens
" shall mean (i) mechanics', carriers', workmen's, repairmen's or other like Liens arising or incurred in the
Ordinary Course of Business for amounts which are not material and not yet due and payable and which secure an obligation of the Target Companies or their Subsidiaries, (ii) Liens arising under
Contracts with Third Parties entered into in the Ordinary Course of Business in respect
of amounts still owing, which Liens are reflected in the Financial Statements, (iii) Liens for Taxes that are not due and payable and (iv) any Lien arising by operation of law.
"
Schedule
" shall mean that schedule delivered to Purchasers by Sellers prior to the execution of this German SPA (each numbered Schedule
of which qualifies only the correspondingly numbered representation, warranty or covenant to the extent specified therein).
"
Swiss Closing
" has the meaning ascribed thereto in the Swiss Merger Agreement.
"
Target Company IT Systems
" shall mean any and all information technology and computer systems (including software, hardware and other
equipment, firmware and embedded software) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information whether or not in
electronic format, which technology and systems are used in or necessary to the conduct of the business of the Target Companies or the Subsidiaries.
(b) Terms
defined in the U.S. SPA shall, when used in this German SPA and unless otherwise defined in this German SPA, have the meaning ascribed to them in the U.S. SPA.
(c) Each
of the following terms is defined in the Section set forth opposite such term:
Accounts Receivable
|
|
4.14
|
Agreement
|
|
Preamble
|
Alternative Proposal
|
|
6.7(b)
|
BioSpin U.S.
|
|
Recitals
|
BPhysik Purchase Price
|
|
2.5(a)
|
BPhysik Shares
|
|
Recitals
|
Bruker Physik
|
|
Preamble
|
Bruker Physik Share Transfer Deed
|
|
2.2(d)
|
Closing
|
|
2.6
|
Closing Date
|
|
2.6
|
Compulsory Shareholders
|
|
2.1(c)
|
Compulsory Shares
|
|
2.1(c)
|
Compulsory Share Transfer
|
|
6.13
|
Deposit
|
|
4.26
|
Employee Benefits
|
|
4.18(c)
|
Environmental Law
|
|
4.16(e)(ii)
|
Environmental Permits
|
|
4.16(e)(iii)
|
Financial Statements
|
|
4.9(a)
|
German SPA
|
|
Preamble
|
Group Entities
|
|
2.1(d)
|
Hazardous Substances
|
|
4.16(e)(i)
|
Indemnity Cap
|
|
9.5(a)
|
A-2-4
Indemnity Escrow
|
|
Recitals
|
Invest
|
|
Recitals
|
Laukien Sellers
|
|
Preamble
|
Leased Real Property
|
|
4.15(b)
|
Merger Sub
|
|
Recitals
|
Owned Proprietary Rights
|
|
4.20(a)
|
Owned Real Property
|
|
4.15(a)
|
Parties
|
|
Preamble
|
Pension Commitments
|
|
4.18(d)
|
Proceeding
|
|
3.5
|
Proprietary Rights
|
|
4.20(a)
|
Purchaser 1
|
|
Preamble
|
Purchaser 2
|
|
Preamble
|
Purchaser 3
|
|
Preamble
|
Purchaser Indemnified Parties
|
|
9.2
|
Purchasers
|
|
Preamble
|
Real Property
|
|
4.15(b)
|
Real Property Leases
|
|
4.15(b)
|
Refund
|
|
4.26
|
Related Party
|
|
4.12
|
Release
|
|
4.16(e)(iv)
|
Representatives
|
|
6.2
|
SciTec Real Property
|
|
Recitals
|
SciTec Real Property Purchase Price
|
|
2.5(c)
|
SciTec Real Property Sale and Transfer Agreement
|
|
2.4
|
SciTec Verwaltungs
|
|
3.10
|
Seller 1
|
|
Preamble
|
Seller 2
|
|
Preamble
|
Seller 3
|
|
Preamble
|
Seller 4
|
|
Preamble
|
Seller 5
|
|
Preamble
|
Seller 6
|
|
Preamble
|
Seller 7
|
|
Preamble
|
Sellers
|
|
Preamble
|
Senior Employees' Agreements
|
|
4.18(b)
|
Shares
|
|
Recitals
|
Subsidiaries
|
|
2.1(d)
|
Subsidiary Interests
|
|
2.1(d)
|
Swiss Merger Agreement
|
|
Recitals
|
Target Companies
|
|
Preamble
|
Target Company Contracts
|
|
4.11(a)
|
Target Company Proprietary Rights
|
|
4.20(a)
|
Tax Deductible
|
|
9.2(d)
|
Techneon
|
|
Preamble
|
Techneon Purchase Price
|
|
2.5(b)
|
Techneon Shares
|
|
Recitals
|
Techneon Transfer Deed
|
|
2.3(c)
|
Trade Secrets
|
|
4.20(a)
|
Transactions
|
|
Recitals
|
U.S. SPA
|
|
Recitals
|
A-2-5
ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
Section 2.1
Current Status.
(a) Bruker
Physik GmbH is a German limited liability company with a registered share capital (
Stammkapital
) in the nominal
amount of €8,500,000 all of which is fully paid up and has not been directly or indirectly repaid.
(b) The
BPhysik Shares are held as follows:
Shareholder
|
|
Percentage
|
|
Number of Share
Certificates
|
|
Nominal Amount
|
SciTec GmbH & Co. KG
|
|
61.50
|
%
|
1
|
|
€5,227,500
|
Dirk D. Laukien
|
|
5.00
|
%
|
1
|
|
€425,000
|
Frank H. Laukien
|
|
3.6718
|
%
|
1
|
|
€312,100
|
Isolde Laukien-Kleiner
|
|
5.50
|
%
|
1
|
|
€467,500
|
Joerg C. Laukien
|
|
5.00
|
%
|
1
|
|
€425,000
|
Marc M. Laukien
|
|
5.00
|
%
|
1
|
|
€425,000
|
Robyn L. Laukien
|
|
1.3282
|
%
|
1
|
|
€112,900
|
Techneon AG
|
|
13.00
|
%
|
1
|
|
€1,105,000
|
(c)
Techneon and the Techneon Shares.
Techneon is a Swiss stock corporation with a registered share capital
(
Aktienkapital
) of CHF 8,000,000, divided into 8,000 registered shares of nominal CHF 1,000 each, all of which is fully paid up and has not been
directly or indirectly repaid. The Techneon Shares are being held, free and clear of any Liens other than restrictions on transfer which may arise solely under applicable securities Laws, as follows:
(i) 7,996 Techneon Shares held of record and beneficially by Seller 1 and (ii) one Techneon Share held of record by each of Roger Deutsch, René Jeker, Seller 5 and Werner
Schittenhelm (the "
Compulsory Shareholders
"), in each case for the benefit of Seller 1 (the "
Compulsory
Shares
"). Prior to the Closing, Seller 1 shall have good and valid title to, and shall own of record and beneficially, all Compulsory Shares free and clear of any Liens other
than restrictions on transfer which may arise solely under applicable securities Laws.
(d)
Subsidiaries; Group Entities.
The Target Companies hold, directly or indirectly, interests in other legal
entities as shown (in each case with the percentage and the number and par value or nominal amount, if any, of such interests) in
Schedule 2.1(d)
(the "
Subsidiaries
"). The Target Companies and the Subsidiaries shall be collectively referred to as the "
Group
Entities
" and the interests of the Target Companies or any Group Entity in any Group Entity as the "
Subsidiary Interests
".
(e)
Schedule 2.1(e)
includes copies of all Corporate Documents for each Group Entity.
(f)
SciTec Real Property.
Sellers 1 and 4 each hold a 50% co-ownership
(
1
/
2
Miteigentumsanteil
) in the SciTec Real Property. A true and correct extract from the land register
(
Grundbuchauszug
) for the SciTec Real Property is attached hereto as
Schedule 2.1(f)
. Except as
registered therein, or set out in that certain purchase agreement dated June 8, 1989 (deed 1 UR 512/89 Notariat Ettlingen), the SciTec Real Property is free of any encumbrances of whatever
nature.
Section 2.2
Purchase and Sale of BPhysik Shares.
(a)
Seller 1.
Seller 1 hereby sells:
(i) to
Purchaser 1, one BPhysik Share in the nominal amount of €2,125,000;
A-2-6
(ii) to
Purchaser 2, one BPhysik Share in the nominal amount of €1,551,250; and
(iii) to
Purchaser 3, one BPhysik Share in the nominal amount of €1,551,250;
such
BPhysik Shares to result from a split of Seller 1's BPhysik Share in the nominal amount of €5,227,500 into one share in the nominal amount of €2,125,000 and two
shares in the nominal amount of €1,551,250 each. The Purchasers hereby accept such sale of BPhysik Shares as specified above. Bruker Physik hereby grants its consent to such split of
BPhysik Shares in accordance with § 17 of the German Act on Limited Liability Companies (
Gesetz betreffend die Gesellschaften mit beschränkter
Haftung
).
(b)
Laukien Sellers.
Each of the Laukien Sellers hereby sells to Purchaser 1 the BPhysik Shares held by him or
her respectively, as specified in
Section 2.1
above, and Purchaser 1 hereby accepts such sale.
(c)
Ancillary Rights.
The sale of the BPhysik Shares pursuant to
Sections
2.2(a)
and
2.2(b)
above shall include all ancillary rights attaching thereto. The profit of the current fiscal year as well as
the profit of previous fiscal years which has not yet been distributed shall be exclusively for the account of Purchasers.
(d)
Transfer of BPhysik Shares.
The transfer of BPhysik Shares sold above shall not be effected by this German
SPA but by way of a separate transfer deed under German law, to be entered into before a German notary on the Closing Date, in substantially the form attached hereto as
Schedule 2.2(d)
(the
"
Bruker Physik Share Transfer Deed
").
(e)
Resulting Shareholding in Bruker Physik.
Upon the Bruker Physik Share Transfer Deed having become effective,
the BPhysik Shares will be held as follows:
(i) Purchaser
1 holding seven shares in the aggregate nominal amount of €4,292,500,
i.e.
, shares of nominal
amounts, respectively, of €2,125,000, €425,000, €425,000, €425,000, €312,100, €467,500, and
€112,900, constituting 50.5% of the entire registered share capital of Bruker Physik;
(ii) Purchasers
2 and 3 each holding one share in the nominal amount of €1,551,250, each such share constituting 18.25% of the entire stated share capital of
Bruker Physik; and
(iii) Techneon
holding one share in the nominal amount of €1,105,000, constituting 13.0% of the entire stated share capital of Bruker Physik.
Section 2.3
Purchase and Sale of Techneon Shares.
(a)
Sale of the Techneon Shares.
Seller 1 hereby sells 100% of the Techneon Shares to Bruker Physik who hereby
accepts such sale.
(b)
Ancillary Rights.
The sale of the Techneon Shares shall include all ancillary rights attaching thereto
(
Nebenrechte
). The profit of the current fiscal year as well as the profit of previous fiscal years which has not been distributed shall be exclusively
for the account of Bruker Physik.
(c)
Assignment of Techneon Shares.
The assignment of the Techneon Shares sold above shall not be effected by
this German SPA but by way of a separate assignment deed under Swiss law to be entered into immediately after the Bruker Physik Share Transfer Deed has been entered into, in substantially the form
attached hereto as
Schedule 2.3(c)
(the "
Techneon Transfer Deed
").
Section 2.4
Purchase and Sale of SciTec Real Property.
Sellers 1 and 4 as sellers and Purchaser 3 as
purchaser hereby undertake, without undue delay, to enter into a real property sale and transfer agreement regarding the SciTec Real Property before a German notary public, in
A-2-7
substantially
the form attached hereto as
Schedule 2.4
(the "
SciTec Real Property Sale and Transfer
Agreement
").
Section 2.5
Purchase Prices.
The aggregate purchase price for 87% of the BPhysik Shares, 100% of the
Techneon Shares and the SciTec Real Property sold hereunder shall be cash payments apportioned as follows:
(a) The
aggregate purchase price for 87% of the BPhysik Shares sold hereunder shall be a cash payment in the amount of $143,460,000 (the "
BPhysik
Purchase Price
"). The BPhysik Purchase Price will be payable by Purchasers to Sellers in accordance with
Schedule 2.5
in
an amount to each Seller as set forth opposite such Seller's name under the heading "Portion of BPhysik Purchase Price".
(b) The
aggregate purchase price for the Techneon Shares sold hereunder shall be a cash payment in the amount of $142,540,000 (the "
Techneon Purchase
Price
").
(c) The
aggregate purchase price for the SciTec Real Property to be sold pursuant to the SciTec Real Property Sale and Transfer Agreement shall be a cash payment in the
amount of €1,416,250 (the "
SciTec Real Property Purchase Price
"), to be paid to Seller 1 and Seller 4 in equal parts as specified in the
SciTec Real Property Sale and Transfer Agreement.
Section 2.6
The Closing.
The closing of the transactions contemplated by this German SPA (the
"
Closing
") shall take place together with the U.S. Closing and the Swiss Closing simultaneously at the offices of Dewey & LeBoeuf LLP, 1301
Avenue of the Americas, New York, New York 10019, and the offices of Dewey & LeBoeuf LLP, Taunusanlage 1, 60329 Frankfurt am Main, Germany, at 10:00 a.m., New York time, on the later of
(i) January 23, 2008 and (ii) the first (1st) Business Day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) or such other date as Purchasers,
the Target Companies and Sellers may mutually agree in writing (the "
Closing Date
"). The Closing shall be deemed to have been consummated at
12:03 a.m., New York time, on the Closing Date.
Section 2.7
Deliveries and Actions at Closing.
At the Closing:
(a) Sellers
shall deliver the following documents and deliverables to Purchasers:
(i) a
receipt to Purchasers executed by Sellers for the BPhysik Purchase Price;
(ii) a
receipt to Bruker Physik executed by Seller 1 for the Techneon Purchase Price;
(iii) a
receipt to Purchaser 3 executed by Sellers 1 and 4 for the SciTec Real Property Purchase Price; and
(iv) all
other documents and instruments required to be delivered by Sellers pursuant to this German SPA or any Ancillary Agreement to which the Sellers are or are required
to be a party, including those set forth in
Article VII
, and any other document or instrument reasonably requested by Purchasers or Bruker
Physik.
(b) The
Target Companies shall deliver to Purchasers all documents and instruments required to be delivered by the Target Companies pursuant to this German SPA or any
Ancillary Agreement to which a Target Company is or is required to be a party, including those set forth on
Article VII
, and any other document
or instrument reasonably requested by Purchasers.
A-2-8
(c) Purchasers
and Bruker Physik shall deliver the following documents and deliverables to each Seller:
(i) an
amount equal to such Seller's portion of the BPhysik Purchase Price set forth on
Schedule 2.5
, the Techneon
Purchase Price and the SciTec Real Property Purchase Price, as applicable, by wire transfer to an account specified by such Seller in writing to Purchasers and Bruker Physik no less than three
(3) Business Days prior to the Closing Date; and
(ii) all
other documents and instruments required to be delivered by Purchasers and Bruker Physik pursuant to
Article VII.
(d) Seller
1 shall deliver the following documents and deliverables to Purchasers:
(i) a
share register of Techneon duly issued by the board of directors of Techneon showing that SciTec is the registered shareholder of all Techneon Shares;
(ii) to
Bruker Physik, a circular resolution signed by all members of the board of directors of Techneon evidencing that the board of directors of Techneon resolved that
Bruker Physik, contingent upon the Closing, shall be registered in Techneon's share register as shareholder in respect of all Techneon Shares;
(e) Sellers
and Purchasers shall enter into the Bruker Physik Share Transfer Deed and Bruker Physik and Seller 1 shall enter into the Techneon Transfer Deed.
Section 2.8
Withholding.
Purchasers and Bruker Physik shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this German SPA such amounts as they reasonably determine they should deduct and withhold with respect to the making of such payment under the Code and the
rules and Treasury Regulations promulgated thereunder, or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld or paid over to or deposited with the relevant
Governmental Authority, including any Taxing Authority, such amounts shall be treated for all purposes of this German SPA as having been paid to the Person in respect of which such deduction and
withholding was made by Purchasers or Bruker Physik.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to Purchasers (except with respect to the representations in
Sections 3.8
and
3.9
, which are made by each Seller in its individual capacity,
Sections 3.10
and
3.11
which are
made by Seller 1 alone and
Section 3.12
which is made jointly by Sellers 1 and 4), as of the date hereof and as of the Closing Date or, if a representation or warranty is
made as of a specified date, as of such date, as follows:
Section 3.1
Power and Authority.
Sellers have all necessary power and authority to execute, deliver and
perform this German SPA and, as of the Closing Date, the Ancillary Agreements, if any, to which it will become a party. In particular, without limitation, Laukien Sellers do not require consent from
any third party, including their respective spouses, to enter into and consummate this German SPA.
Section 3.2
Enforceability.
This German SPA and, as of the Closing Date, each Ancillary Agreement to
which any Seller is a party have been duly executed and delivered by Sellers and (assuming due
authorization, execution and delivery by Purchasers and the Target Companies), constitutes a legal, valid and binding obligation of Sellers, enforceable against Sellers in accordance with its
respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity.
A-2-9
Section 3.3
No Violation.
Except as set forth in
Schedule 3.3
, Sellers' execution and delivery of this German SPA and, as of the
Closing Date, any Ancillary Agreement to which any Seller is a
party, the consummation of the transactions contemplated hereby or thereby or compliance by Sellers with any of the provisions hereof or thereof will not (a) result in the creation of any Lien
upon the Shares under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, agreement or any other instrument or obligation to which any Seller is
a party or by which Sellers or the Shares may be bound or affected, by Law or otherwise, (b) violate any Law applicable to Sellers or the Shares or (c) conflict with, result in any
breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, require any consent under any Contract to which any of the Sellers a party or by
which any of the Sellers may be bound.
Section 3.4
No Conflict.
The execution and delivery of this German SPA or, as of the Closing Date, any
Ancillary Agreement by Sellers and the consummation of the transactions contemplated hereby or thereby do not and shall not adversely affect the ability of Sellers or the Target Companies to enter
into, perform their obligations under, and to consummate or materially delay the consummation of, the transactions contemplated by this German SPA or any Ancillary Agreement.
Section 3.5
Litigation.
There is no action, proceeding, claim, suit, arbitration, opposition, challenge,
proceeding, charge or investigation (collectively, "
Proceedings
") pending or, to the Knowledge of Sellers, threatened that relates, directly or
indirectly, to this German SPA, the Shares or any action taken or to be taken in connection with this German SPA or any Ancillary Agreement.
Section 3.6
No Other Agreement.
No Seller has any obligation, absolute or contingent, to any other
individual, corporation, partnership, trust, limited liability company, association, joint venture or any similar entity to sell the BPhysik Shares or Techneon Shares.
Section 3.7
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for Sellers in connection with this German SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby or (b) is or will be
entitled to any broker's or finder's fee or any other commission or similar fee in connection with this German SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby.
Section 3.8
Ownership of the Shares.
Sellers hold unrestricted legal and beneficial title to the BPhysik
Shares and, other than the Compulsory Shares prior to the Compulsory Share Transfer, the Techneon Shares, and the Target Companies and each Group Entity hold unrestricted legal and beneficial title to
the Subsidiary Interests, all as set forth in
Section 2.1.
The information set forth in
Section 2.1
is true and correct. Other than with respect
to the Compulsory Shares, the Shares and the Subsidiary Interests are not pledged,
attached or otherwise encumbered with any third party rights and are not subject to any (i) trust arrangement, silent partnership, sub-participation or similar arrangement,
(ii) pending transfer or other disposition, (iii) sale, contribution or other contractual arrangement creating an obligation to transfer or encumber or (iv) shareholders
resolution on the redemption of shares.
Section 3.9
Withholding Tax.
Each Seller represents that no withholding of any U.S. federal Tax, German
Tax, Swiss Tax or any other Tax is required with respect to any payment to be made to such Seller in connection with the transactions contemplated by this German SPA and each Seller agrees that it
will provide to Purchasers and Bruker Physik (with respect to the purchase of Techneon Shares) in a timely manner such form or forms, accurately and completely filled out and executed, as may be
necessary in the opinion of Purchasers and Bruker Physik to establish such Seller's entitlement to exemption from any such withholding.
Section 3.10
Seller 1's Assets.
Seller 1 represents that its assets exclusively consist of
(i) 100% of the Techneon Shares (other than with respect to the Compulsory Shares), (ii) 61.5% of the BPhysik Shares, (iii) 100% of the shares of its own general partner, i.e.,
SciTec Verwaltungs GmbH ("
SciTec
A-2-10
Verwaltungs
"), and (iv) its 50% co-ownership of the SciTec Real Property. In particular, without limitation, there are no remaining claims of Seller 1
against any of the Group Entities.
Section 3.11
SciTec Verwaltungs.
Seller 1 represents that SciTec Verwaltungs does not hold any assets
except for its participation (with no capital share) in Seller 1 and that its only business is the management of Seller 1, and that therefore SciTec Verwaltungs is not material to the business of the
Target Companies or the Subsidiaries in any way.
Section 3.12
SciTec Real Property.
Sellers 1 and 4, jointly and severally, represent the following
regarding the SciTec Real Property:
(a) except
as set forth in
Schedule 3.12(a).
the statements contained in Section 2.1(f) are true and correct;
(b) the
land register extract as per
Schedule 2.1(f)
is true, complete and correct;
(c) except
as provided for in the SciTec Real Property Sale and Transfer Agreement there are no acts or transactions requiring registration in the land registry that have
not yet been registered;
(d) upon
completion of the SciTec Real Property Sale and Transfer Agreement, Purchaser 3 will become the sole and, except as set forth in the SciTec Real Property Sale and
Transfer Agreement, unencumbered owner of the SciTec Real Property;
(e) to
the Knowledge of Seller 1 and Seller 4, there are no environmental hazards and/or pollution of the soil or the ground water on the SciTec Real Property, no
redevelopment order has been issued, no decontamination measures have been conducted on the basis of an official order or for any other reason with respect to the SciTec Real Property; Sellers 1 and 4
have no knowledge of environmental hazards and/or pollution with respect to the neighboring properties;
(f) there
are no public levies and dues, including development costs (
Erschließungsbeiträge
), due
or becoming due as a result of any pre-Closing facts or actions;
(g) except
as set forth on
Schedule 3.12(g)
, there are no agreements with public authorities or private parties
restricting the use of the SciTec Real Property; and
(h) SciTec
Real Property is not located in an area:
(i) that
is formally declared as a redevelopment area (
Sanierungsgebiet
) or development area
(
Entwicklungsgebiet
),
(ii) for
which a preliminary analysis has been conducted with the purpose of declaring it as a redevelopment area or a development area (§ 141 subsections
3 and 4 of the German Construction Code),
(iii) for
which a preservation statute (
Erhaltungssatzung
) is in force or a resolution about a preservation statute has been
adopted or publicized in a manner customary in a place,
(iv) which
is a re-allotment area (
Umlegungsgebiet
) or a flooding area
(
Überflutungsgebiet
), or
(v) for
which a change ban (
Veränderungssperre
) has been decreed.
A-2-11
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING
THE TARGET COMPANIES
Each of Sellers and the Target Companies, jointly and severally, hereby represent and warrant to Purchasers, as of the date hereof and as of the Closing Date or,
if a representation or warranty is made as of a specified date, as of such date, as follows:
Section 4.1
Organization and Good Standing.
The Target Companies and the Subsidiaries are duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its organization and have the requisite corporate, partnership or limited liability company authority and power to own,
lease, operate and otherwise hold their property and assets and to conduct their business as currently being conducted. The Target Companies and the Subsidiaries are duly qualified to do business as a
foreign company and are in good standing in each jurisdiction where the property owned by the Target Companies and the Subsidiaries or the nature of their business require such qualification, except
where the failure to be so qualified could not reasonably be expected to have an adverse effect on the Target Companies or the Subsidiaries in any material respect.
Section 4.2
Authorization and Effect of German SPA.
(a) The
execution and delivery by the Target Companies of this German SPA and, as of the Closing Date, the Ancillary Agreements to which they are a party and to perform
their obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby on or prior to the Closing have been duly and validly authorized and approved by all
requisite action on the part of the Target Companies, and no other action by the Target Companies is necessary to authorize the transactions contemplated hereby or thereby or to consummate such
transactions.
(b) This
German SPA and, as of the Closing Date, the Ancillary Agreements to which the Target Companies are a party have been duly executed and delivered by the Target
Companies, and (assuming due authorization, execution and delivery by Purchasers and the Sellers) this German SPA and, as of the Closing Date, each such Ancillary Agreement constitutes a legal, valid
and binding obligation of the Target Companies, enforceable against the Target Companies in accordance with its respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar Laws affecting creditors' rights generally and subject, as to enforceability, to general
principles of equity.
Section 4.3
Capitalization of the Target Companies.
(a) The
BPhysik Shares are fully paid up. All contributions have been made in compliance with applicable law and have not been repaid or returned, in whole or in part,
whether open or disguised, directly or indirectly. There are no obligations to make further contributions.
(b) As
of the date hereof, the capital stock of Techneon consists of 8,000 registered shares of common stock, par value CHF 1,000 per share, of which all are issued and
outstanding on the date hereof and held beneficially and, other than the Compulsory Shares prior to the Compulsory Share Transfer, of record by Seller 1. No share certificates incorporating any of the
Techneon Shares have ever been issued. There are no shares of preferred stock authorized or outstanding. There exists no contingent or authorized share capital. The shares of Techneon held by Seller
1, together with the Compulsory Shares prior to the Compulsory Share Transfer, constitute all of the issued and outstanding shares of capital stock of Techneon as of the date hereof and have been duly
authorized and are validly issued. All Techneon Shares are fully paid up. All contributions have been made in compliance with applicable law and have not been repaid or returned, in whole or in part,
whether open or disguised, directly or indirectly. There are no obligations to make further contributions. Seller 1 has good and valid title to own, beneficially and, other than the Compulsory Shares
prior to the Compulsory Share Transfer, of record, the Techneon Shares, free and clear of
A-2-12
any
Liens other than restrictions on transfer which may arise solely under applicable securities Laws. Upon consummation of the transactions contemplated under this German SPA and registration of the
Techneon Shares in the name of Bruker Physik in the share register of Techneon, Bruker Physik will own all the Techneon Shares free and clear of all Liens other than restrictions on transfer which may
arise solely under applicable securities Laws. Upon consummation of the transactions contemplated under this German SPA, the Techneon Shares will be fully paid and nonassessable. The share register of
Techneon accurately records: (i) the name and address of each Person owning Techneon Shares and (ii) the number of Techneon Shares held by each of the Persons as per (i) above.
(c) The
Target Companies have not issued any securities in violation of any preemptive or similar rights and, except as set forth on
Schedule 4.3(c)
, there are no options, warrants, calls, rights or other
securities convertible into or exchangeable or exercisable for equity
securities of the Target Companies, any other commitments, arrangements, rights or agreements providing for the issuance or sale of additional equity interests or the repurchase, redemption or other
acquisition of equity interests of the Target Companies, and there are no agreements of any kind which may obligate the Target Companies to issue, purchase, redeem or otherwise acquire any of its
equity interests. No shares of the issued and outstanding shares of the stated share capital or partnership interests of the Target Companies are held in the treasury of the Target Companies or the
Subsidiaries. There are no voting agreements,
shareholder's agreements, proxies or other similar agreements or understandings with respect to the equity interests of the Target Companies.
Section 4.4
Capitalization of the Subsidiaries; Other Interests.
(a)
Schedule 2.1(d)
sets forth each of the Target Companies' directly and indirectly owned Subsidiaries.
Schedule 2.1(d) sets forth the designation, par value and the number of authorized, issued and outstanding shares of capital stock or membership interests for each Subsidiary and the number and
percentage ownership interest of the Target Companies (if direct) or of the Target Companies' Subsidiary (if indirect) in each such Subsidiary. All of the outstanding shares of capital stock or
membership interests of each Subsidiary (i) are duly authorized and are validly issued, fully paid and nonassessable and have not been issued and were not issued in violation of any preemptive
or other similar right and (ii) are owned of record and beneficially by the Target Companies or the Subsidiary set forth on
Schedule 2.1(d)
, in each case, free and clear of any Lien other than
Permitted Liens or restrictions on transfer which may arise solely under
applicable securities Laws.
(b) There
are no outstanding options, warrants, rights or other securities convertible into or exchangeable or exercisable for equity interests of the Subsidiaries, any
other commitments, arrangements, rights or agreements providing for the issuance or sale of additional equity interests or the repurchase or, redemption or other acquisition of equity interests of the
Subsidiaries, and there are no agreements of any kind which may obligate the Subsidiaries to issue, purchase, redeem or otherwise acquire any of their respective equity interests. There are no voting
agreements, shareholders' agreements, proxies or other similar agreements or understandings with respect to the equity interests of the Subsidiaries.
(c) Except
as set forth on
Schedule 2.1(d)
and
Schedule 4.4(c)
,
neither the Target Companies nor any Subsidiaries own, directly or indirectly, any interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, joint
venture, business, trust or other Person other than in a Subsidiary.
A-2-13
Section 4.5
No Conflict.
The execution and delivery by the Target Companies of this German SPA or any
Ancillary Agreement and the consummation by the Target Companies of the transactions contemplated hereby and thereby do not and shall not:
(a) violate,
conflict with or result in the breach of any Organizational Document of the Target Companies;
(b) violate
or conflict with any Law applicable to the Target Companies or the Subsidiaries or any of their respective assets, properties or businesses or require any filing
with, consent, approval or authorization of, or notice to, any Governmental Authority, except (i) as described on
Schedule 4.5(b)
, and
(ii) the applicable notification and waiting period requirements of the HSR Act and the requirements of the antitrust laws of any relevant jurisdiction; or
(c) except
as described on
Schedule 4.5(c)
, (i) conflict with, result in any breach of, constitute a default
(or event which after notice or lapse of time or both, would become a default) under, require any consent under any Contract to which the Target Companies or any Subsidiaries are a party or by which
the Target Companies or any Subsidiaries may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of any Lien under any such Contract or
(iv) constitute an event which, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien;
except,
in the case of clause (c) above, for any conflict, breach, default, termination or Lien that would not reasonably be expected to (A) adversely affect in any material respect the
ability of the Target Companies to enter into, perform its obligations under, and to consummate the transactions contemplated by, this German SPA or (B) adversely affect in any material respect
the business, operations (including results of operations), assets, liabilities or financial condition of the Target Companies and the Subsidiaries.
Section 4.6
Permits; Compliance with Law.
(a) The
Target Companies and the Subsidiaries hold all Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of their
respective businesses as currently conducted under and pursuant to all applicable Laws.
Schedule 4.6(a)
sets forth a true and complete list of
all such Permits. All Permits have been legally obtained and maintained and are valid and in full
force and effect. No outstanding violations are or have been recorded in respect of any such Permits. No Proceeding is pending or, to the Knowledge of the Target Companies, threatened, to suspend,
revoke, withdraw, modify or limit any Permit. The transactions contemplated by this German SPA or any Ancillary Agreement do not give rise to the requirement of any consent, approval or modification
in order for each Permit to continue to be valid and in full force and effect following the Closing.
(b) The
Target Companies and the Subsidiaries are and have been in compliance with and are not in default under any Law applicable to the Target Companies or any of the
Subsidiaries or any of their respective properties, assets or businesses.
Section 4.7
Books and Records.
Except as set forth on
Schedule 4.7
, (i) true and complete copies of the Corporate Documents
of the Target Companies and the Subsidiaries, as currently in
effect, have heretofore been delivered to Purchasers, (ii) the minute books of the Target Companies and the Subsidiaries accurately reflect in all material respects all actions taken at
meetings, or by written consent in lieu of meetings, of the stockholders, boards of directors (or other governing body) and all committees of the boards of directors (or other governing body) of the
Target Companies and the Subsidiaries, as the case may be and (iii) all corporate actions and other actions taken by the Target Companies and the Subsidiaries, as the case may be, have been
duly authorized, and no such actions taken by the Target Companies and the Subsidiaries, as the case may be, have been taken in breach or violation of the Corporate Documents of the Target Companies
and the Subsidiaries.
A-2-14
Section 4.8
Litigation.
There are no Proceedings pending or, to the Knowledge of the Target Companies,
threatened that relate, directly or indirectly, to this German SPA or any Ancillary Agreement to which any of the Target Companies is a party, or any action taken or to be taken in connection with
this German SPA or any Ancillary Agreement. There are no Proceedings pending or, to the Knowledge of the Target Companies, threatened that relate to (a) the Target Companies or any Subsidiary
or their respective assets, properties or businesses or (b) the officers, directors, employees, stockholders or Affiliates of the Target Companies (in their capacity as such). There are no
outstanding judgments, writs, injunctions, orders, decrees or settlements that apply, in whole or in part, to the Target Companies or any Subsidiary or their respective assets, properties or business.
Section 4.9
Financial Statements; Undisclosed Liabilities.
(a) Except
as set forth on
Schedule 4.9
, the Target Companies have furnished Purchasers true and complete copies of
the audited combined balance sheet and the related audited combined statements of income, shareholders' equity and cash flows of the Subject Companies for each of the fiscal years ended as of and for
December 31, 2005 and 2006, the related opinion of E&Y, the independent accountants of the Subject Companies and the unaudited combined balance sheet and the related
unaudited combined statements of income, shareholders' equity and cash flows of the Subject Companies as of and for the nine months ended September 30, 2007 and 2006 as well as the audited
statutory balance sheets of Techneon as per December 31, 2005 and 2006 and the related audited statutory statements of income together with the relevant audit reports (collectively, together
with the related notes thereto, the "
Financial Statements
").
(b) The
Financial Statements fairly present in all material respects the financial position and the results of operations of the Subject Companies as of the respective dates
thereof and for the respective periods then ended. The Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise noted
therein or in the notes thereto. The Financial Statements have been prepared in accordance with the books and records of the Subject Companies consistent with past practice.
(c) Except
as set forth in
Schedule 4.9
and (i) as reflected or adequately reserved against in the Financial
Statements and (ii) for liabilities which have been incurred since December 31, 2006 in the Ordinary Course of Business, there are no liabilities or obligations, secured or unsecured
(whether absolute, accrued, contingent or otherwise), matured or unmatured that are, or would reasonably be expected to be, material to the Subject Companies or that would materially delay the
consummation of the transactions contemplated by this German SPA.
Section 4.10
Absence of Certain Changes.
Except as set forth on
Schedule 4.10
, since December 31, 2006, (a) the Target
Companies and the Subsidiaries have been operated in the Ordinary Course of
Business, (b) neither the Target Companies nor any Subsidiary has taken or agreed to take any of the actions set forth in
Section 6.1
,
(c) there has not occurred any event or condition that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect, (d) there have been no actual
or threatened cancellations or terminations by any material producer, agent, supplier, customer or contractor of the Target Companies or any Subsidiary and (e) there has been no material damage
to or loss or theft of any of the material assets of the Target Companies or the Subsidiaries.
Section 4.11
Contracts.
(a)
Schedule 4.11(a)
sets forth a complete and accurate list of the following Contracts to which the Target Companies
or any Subsidiary is a party or by which the Target Companies or any
A-2-15
Subsidiary
or any of their respective properties or assets is or may be bound (the "
Target Company Contracts
"):
(i) employment
Contracts with (a) any current officer, manager, director or Employee and (b) any former officer, manager, director or Employee with respect to
which a Target Company or any Subsidiary
remains liable for any obligations thereunder (the name, position or capacity and rate of compensation of each such person and the expiration date of each such Contract being set forth in accordance
with this
Section 4.11(a)
), other than standard contracts required under local Law or custom;
(ii) all
Contracts (other than employment contracts) with any current or former officer, manager, director, stockholder, member, Employee, consultant, agent or other
representative or with an entity in which any of the foregoing is a controlling person (excluding any Contracts with respect to which a the Target Companies and the Subsidiaries have no liabilities
for any obligations thereunder);
(iii) all
lease, sublease, rental or other Contracts under which the Target Companies or any of the Subsidiaries is a lessor or lessee of any real property or the guarantee
of any such lease, sublease, rental or other Contracts;
(iv) all
shop agreements (
Betriebsvereinbarungen
), collective bargaining
(
Tarifverträge
) or other labor or union Contracts;
(v) all
instruments relating to indebtedness for borrowed money, any note, bond, deed of trust, mortgage, indenture or agreement to borrow money, and any agreement relating
to the extension of credit or the granting of a Lien other than Permitted Liens, or any Contract of guarantee in favor of any Person or entity other than the Target Companies or any Subsidiary;
(vi) all
confidentiality Contracts (other than standard materials transfer agreements or non-disclosure agreements for customer test sample measurements made in
the Ordinary Course of Business);
(vii) all
partnership or joint venture Contracts;
(viii) all
Contracts relating to licenses of trademarks, trade names, service marks or other Target Company Proprietary Rights;
(ix) all
other Contracts material to the business of the Target Companies or any Subsidiary, other than any Contracts having only Subject Companies as parties;
(x) all
lease, sublease, rental, licensing use or similar Contracts with respect to personal property providing for annual rental license or use payments in excess of
€135,000 or the guarantee of any such lease, sublease, rental or other Contracts;
(xi) all
Contracts containing any covenant or provision limiting the freedom or ability of the Target Companies or any Subsidiary to engage in any line of business, engage
in business in any geographical area or compete with any other Person;
(xii) all
Contracts (other than Contracts having only Subject Companies as parties) for the purchase or sale of materials, supplies or equipment (including computer hardware
and software), or the provision of services (including consulting services, data processing and management, project management services and clinical trial management), involving total payments in
excess of €1,000,000 or containing any escalation, renegotiation or redetermination provisions, which Contracts are not terminable at will without liability, premium or penalty by the
Target Companies or any Subsidiary;
A-2-16
(xiii) all
Contracts, purchase orders or service agreements relating to capital expenditures of the Target Companies or any Subsidiary involving total payments in excess of
€135,000;
(xiv) all
Contracts between or among (A) the Target Companies or any Subsidiary, on the one hand, and (B) any Seller, Affiliate of any Seller, (other than the
Subject Companies) or any Related Party, on the other hand;
(xv) all
Contracts (A) outside the Ordinary Course of Business for the purchase, acquisition, sale or disposition of any assets or properties or (B) for the
grant to any Person (excluding the Target Companies or any Subsidiary) of any option or preferential rights to purchase any assets or properties;
(xvi) all
Contracts (other than Contracts having only Subject Companies as parties) pursuant to which there is either a current or future obligation of the Target Companies
or any Subsidiary to make payments or provide services for a value in excess of €135,000 in any twelve (12) month period;
(xvii) all
Contracts under which the Target Companies or any Subsidiary agrees to indemnify any Person (other than standard materials transfer agreements or
non-disclosure agreements for customer test sample measurements made in the Ordinary Course of Business);
(xviii) all
non-competition, non-solicitation and any similar Contracts;
(xix) all
"earn-out" agreements or arrangements or any similar Contracts; and
(xx) each
amendment, supplement and modification in respect of any of the foregoing.
(b) (i) Each
Target Company Contract (including, for purposes of this
Section 4.11(b)
, all Contracts that would
be deemed a "Target Company Contract" but for the fact that a Subject Company is a party thereto) is legal, valid, binding and enforceable against the Target Companies or the Subsidiary that is party
thereto and against each other party thereto, is in full force and effect and (ii) no party is in material breach or default, and no event has occurred which would constitute (with or without
notice or lapse of time or both) a material breach or default (or give rise to any right of termination, modification, cancellation or acceleration) or material loss of any benefits under any Target
Company Contract.
Section 4.12
Transactions with Affiliates.
Except as set forth on
Schedule 4.12
, no Related Party, either currently or at any
time since December 31, 2003 (a) has or has had any interest in any
property (real or personal, tangible or intangible) that the Target Companies or any Subsidiary uses or has used in or pertaining to the business of the Target Companies or any Subsidiary or
(b) has or has had any business dealings, contracts, agreements, arrangements, understandings or any financial interest in any transaction with the Target Companies or any Subsidiary or
involving any assets or property of the Target Companies or any Subsidiary, other than business dealings or transactions conducted in the Ordinary Course of Business at prevailing market prices and on
prevailing market terms. For purposes of this German SPA, the term "
Related Party
" shall mean as of any time: Sellers, any executive officer, member,
manager or director, ten percent (10%) stockholder (including any executive officers, members, managers or directors thereof) or Affiliate of the Target Companies or any Subsidiary at such time, any
present or former known spouse, sibling, parent or child of any such Sellers, executive officer, member, manager, director or Affiliate of the Target Companies or any Subsidiary or any trust or other
similar entity for the benefit of any of the foregoing Persons;
provided
,
however
, that the term
"Related Party" shall not be deemed to include any Subject Company. Purchasers have been provided with true and complete copies of all documents listed on
Schedule 4.12
and any amendments thereto.
Section 4.13
Insurance.
Schedule 4.13
sets forth a
true and complete list of all insurance policies currently maintained relating to the Target Companies and each Subsidiary, including those which
A-2-17
pertain
to the Target Companies' and each Subsidiary's assets, directors, officers or employees or operations, and all such insurance policies are in full force and effect and all premiums due
thereunder have been paid. There is no material claim outstanding under any such insurance policies and there are no existing circumstances likely to give rise to a claim under any such insurance
policies. The Target Companies have not received notice of cancellation of any such insurance policies. The Target Companies have provided to Purchasers true and complete copies of all insurance
policies (including any amendments thereto) listed on
Schedule 4.13
.
Section 4.14
Accounts Receivable.
All accounts receivable, notes receivable and other indebtedness of the
Target Companies and each Subsidiary (the "
Accounts Receivable
") reflected in the Financial Statements or which arose subsequent to December 31,
2006, represent bona fide, arm's-length transactions for the sale of goods or performance of services actually delivered in the Ordinary Course of Business and, in the case of Accounts Receivable,
have been billed or invoiced in the Ordinary Course of Business consistent with past practice. Except to the extent expressly reserved against or reflected on the Financial Statements (which reserves
are consistent with past practice) or paid prior to the Closing, the Accounts Receivable are or will be as of the Closing Date, collectible in the Ordinary Course of Business.
Section 4.15
Real Property; Leases.
(a) Except
as set forth on
Schedule 4.15(a)
, neither the Target Companies nor any Subsidiary owns any real property
(such property, the "
Owned Real Property
") and, except as set forth on
Schedule 4.15(a)
, such
owned real property is owned free and clear of all Liens.
(b)
Schedule 4.15(b)
contains a complete and correct list of all leases of real property, occupancy agreements,
licenses, concessions or similar agreements (the "
Real Property Leases
") under which the Target Companies or any Subsidiary is a lessee,
sub-lessee, tenant, licensee or assignee of any real property owned by any other Person (the "
Leased Real Property
" and, together with the
Owned Real Property, the "
Real Property
"). The Target Companies have delivered to Purchasers true, correct and complete copies of each Real Property
Lease. With respect to each Real Property Lease, (i) there exists no default under such Real Property Lease by the Target Companies or any Subsidiary nor is there any event which, with notice
or the passage of time or both, could ripen into a default and neither the Target Companies nor any Subsidiary has received written notice of any such default and (ii) to the Knowledge of the
Target Companies, there exists no default by any other Person thereunder nor any event which, with notice or the passage of time or both, could ripen into a default. Each Real Property Lease is a
legal, valid and binding obligation of the Target Companies and/or each Subsidiary, and, to the Knowledge of the Target Companies, each other party thereto, enforceable against each such other party
thereto in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to
general principles of equity. The consummation of the transactions contemplated by this
German SPA or any Ancillary Agreement requires no Consents from any Person, except as set forth on
Schedule 4.15(b)
(which Consents have been
obtained prior to the date hereof), and will not result in any default, penalty, right to terminate, increase in the amounts payable under or modification to any Real Property Lease. The Target
Companies and the Subsidiaries hold good and valid leasehold estates in the Leased Real Property and the Real Property constitutes all of the real property necessary for the conduct of the Target
Companies' and the Subsidiaries' respective businesses.
(c) (i) There
is no pending or, to the Knowledge of the Target Companies, threatened condemnation (or similar proceedings) of all or any part of the Real Property,
and neither the Target Companies nor any Subsidiary has assigned or sublet or granted any rights to use and occupy or created any limitations to or on its interests under any Real Property Lease to
any
A-2-18
Person,
(ii) to the Knowledge of the Target Companies, there are no zoning, building code, occupancy restriction or other land-use regulation proceedings or any proposed change in
any applicable Laws that could, individually or in the aggregate, result in a Material Adverse Effect, nor have the Target Companies or any Subsidiary received any notice of any special assessment
proceedings affecting any Real Property, or applied for any change to the zoning or land use status of any Real Property, (iii) to the Knowledge of the Target Companies, there are no defects,
structural or otherwise, with respect to any of the Real Property (or any improvements located thereon), which could reasonably be anticipated to have a material adverse impact on the value or utility
of any such parcel of Real Property and (iv) there are no easements, Liens or other agreements (whether of record or not) affecting title to, or creating any Lien or charge upon, any of the
Real Property.
Section 4.16
Environmental.
(a) The
Target Companies and the Subsidiaries hold all Environmental Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of
their respective businesses as currently conducted under and pursuant to all applicable Laws;
Schedule 4.16(a)
sets forth a true and complete
list of all such Environmental Permits. All such Environmental Permits have been legally obtained and maintained and are valid and in full force and effect. No outstanding violations are or have been
recorded in respect of any such Environmental Permits. No Proceeding is pending or, to the Knowledge of the Target Companies, threatened, to suspend, revoke, withdraw, modify or limit any such
Environmental Permit. The transactions contemplated by this German SPA or any Ancillary Agreement do not give rise to the requirement of any filing, consent, approval or modification in order for each
Environmental Permit to continue to be valid and in full force and effect following the Closing.
(b) The
Target Companies and the Subsidiaries comply and have complied in all respects with and are not in default under any Environmental Law applicable to Target Companies
or any of its Subsidiaries or any of their respective properties or assets.
(c) There
are no Proceedings arising under any Environmental Law pending or, to the Knowledge of the Target Companies, threatened that relate to the (i) Target
Companies or any Subsidiary or their respective assets, properties or businesses or (ii) the officers, directors, employees, stockholders or Affiliates of the Target Companies (in their
capacity as such). There are no outstanding judgments, writs, injunctions, orders, decrees or settlements arising under any Environmental Law that apply, in whole or in part, to the Target Companies
or any Subsidiary or their respective assets, properties or business.
(d) Except
as set forth on
Schedule 4.16(d)
, there has been no Release or threatened Release of any Hazardous
Substance from, and no Hazardous Substances are present at, on or beneath, any property currently or formerly owned, leased or operated by the Target Companies or any Subsidiary or, except as would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, at any other location, including any location at which any Hazardous Substances manufactured, used or
generated by the Target Companies or any Subsidiary have been stored, treated or disposed.
(e) (i) "
Hazardous Substances
" shall mean any pollutant, contaminant, hazardous substance, hazardous waste,
medical waste, special waste, toxic substance, petroleum or petroleum-derived substance, waste or additive, radioactive material, or other compound, element, material or substances in any form
(including products) regulated, restricted or addressed by or under any applicable Environmental Law.
A-2-19
(ii) "
Environmental Law
" shall mean any Law relating to the environment, natural resources or the safety or health of human
beings or other living organisms, including the manufacture, distribution in commerce, use or presence of hazardous substances.
(iii) "
Environmental Permits
" shall mean all Permits required under Environmental Laws.
(iv) "
Release
" shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, migrating, dumping,
seepage, spill, leak, flow, discharge, disposal (except orderly offsite disposal via qualified hazardous waste disposal contractors) or emission.
Section 4.17
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for the Target Companies in connection with this German SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby or (b) is
or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with this German SPA or any Ancillary Agreement or the transactions contemplated hereby or
thereby.
Section 4.18
Labor Relations and Employee Benefits.
(a)
No Employees.
Techneon has no employees.
(b)
Service Agreement.
Except as disclosed in
Schedule 4.18(b)
,
(i) the contracts with Employees are in full force and effect and enforceable against the parties thereto in accordance with their terms, (ii) no party to a service agreement with
members of the executive board, managing directors or senior executives (
leitende Angestellte
) (together, the "
Senior Employees'
Agreements
") has given or is reasonably likely to give notice of termination, and no circumstances exist which give any party to a Senior Employees' Agreement the right to
terminate or modify such agreement, (iii) no party to a Senior Employees' Agreement is in breach of such agreement or is or is reasonably likely to become unable to meet its obligations, and
(iv) the execution or consummation of this German SPA or the transactions contemplated herein do not trigger any rights of any party to a Senior Employees' Agreement.
(c)
Employee Benefits.
Schedule 4.18(c)
includes for the Target
Companies and each Subsidiary a correct and complete list of all agreements and other commitments, whether of an individual or collective nature and including commitments based on works custom,
regarding employee benefits such as anniversary, holiday or jubilee payments, bonus, profit participation or other variable remuneration elements, and stock options, stock appreciation rights or
similar rights, other than Pensions (the "
Employee Benefits
"). Such list correctly states the legal basis for the Employee Benefits and the nature and
dates of the respective commitments. The employees of the Target Companies and the Subsidiaries are not entitled to any Employee Benefits granted by Sellers, Sellers' Affiliates or any other third
parties.
(d)
Pensions.
Schedule 4.18(d)
includes for the Target Companies and
each Subsidiary a correct and complete list of all agreements and other commitments, whether of an individual or collective nature and including commitments based on works custom, regarding pensions
under which such Target Company or Subsidiary has any obligations (the "
Pension Commitments
"). All present and future obligations under or in connection
with the Pension Commitments, including obligations arising by operation of law, appertaining to periods prior to the Closing Date have either been fulfilled or are fully funded, in each case as
required by U.S. GAAP. In the past, all pensions provided by the Group Entities have been adjusted regularly as required by Section 16 of the German Company Pension Act
(
BetrAVG
) or, where applicable, equivalent provisions of foreign law or contractual provisions.
(e)
Employment Regulations.
The Target Companies and the Subsidiaries are in full compliance with all laws and regulations
dealing with wages, hours, vacations and working conditions for their employees. All compensation and withholding obligations of the Target
A-2-20
Companies
and the Subsidiaries to or in respect of their current and former employees for periods prior to the Closing Date have been paid by the Target Companies or Subsidiaries or have been properly
provided for in the Financial Statements.
Section 4.19
Taxes and Tax Returns.
Except as set forth on
Schedule 4.19
:
(a) All
Tax Returns required to be filed by or with respect to the Target Companies or any Subsidiary or their respective assets and operations have been timely filed. All
such Tax Returns (i) were prepared in the manner required by applicable Law, (ii) are true, correct and complete in all material respects and (iii) accurately reflect the
liability for Taxes of the Target Companies and each Subsidiary. All Taxes due and owing by any of the Target Companies and any Subsidiary on or before the date hereof (whether or not shown on any Tax
Returns) have been fully paid, or have been adequately reserved for in accordance with applicable GAAP. The books and records of each Target Company or Subsidiary relating to taxes have been properly
maintained and are in all respects correct and complete. True, correct and complete copies of all federal, state, local and foreign Tax Returns of or including the Target Companies and the
Subsidiaries filed in the previous five (5) years have been provided to Purchasers prior to the date hereof.
(b) The
Target Companies and the Subsidiaries have timely paid, or caused to be paid, all Taxes required to be paid, whether or not shown (or required to be shown) on a Tax
Return, and the Target Companies and the Subsidiaries have accrued for the payment in full of all Taxes not yet due and payable on the balance sheets included in the Financial Statements for the
fiscal year ended December 31, 2006 of the Target Companies and the Subsidiaries. Since December 31, 2006, neither the Target Companies nor any Subsidiary has incurred any liability for
Taxes other than Taxes incurred in the Ordinary Course of Business. In particular, the reserves with respect to Taxes on the respective books of each of the Target Companies and the Subsidiaries are
sufficient to cover all Taxes of whatever nature that may be assessed or computed on the results, transactions, or capital of the Target Companies and each of the Subsidiaries for all periods prior to
the date of the Financial Statements irrespective of the financial period during which such Taxes may become due.
(c) The
Target Companies and the Subsidiaries have complied in all material respects with all provisions of state, local and foreign Law relating to the withholding and
payment of Taxes, and have, within the time and in the manner prescribed by Law, withheld the applicable amount of Taxes required to be withheld from amounts paid to any stockholder, Employee,
independent contractor or other third party and paid over to the proper Governmental Authorities all amounts required to be so paid over.
(d) There
are no tax audits, examinations or other administrative or court proceedings relating to Taxes in progress or pending, and there is no existing, pending or
threatened claim, proposal or assessment against the Target Companies or any Subsidiary or relating to their assets or operations asserting any deficiency for Taxes.
(e) No
claim has ever been made by any Taxing Authority with respect to the Target Companies or any Subsidiary in a jurisdiction where the Target Companies or any Subsidiary
does not file Tax Returns that the Target Companies or any Subsidiary is or may be subject to taxation by that jurisdiction. There are no security interests on any of the assets of the Target
Companies or any Subsidiary that arose in connection with any failure (or alleged failure) to pay any Taxes and, except for liens for real and personal property Taxes that are not yet due and payable,
there are no liens for any Taxes upon any assets of the Target Companies or any Subsidiary.
A-2-21
(f) No
extension of time with respect to any date by which a Tax Return was or is to be filed by or with respect to the Target Companies or any Subsidiary is in force, and
no waiver or agreement by the Target Companies or any Subsidiary is in force for the extension of time for the assessment or payment of any Taxes.
(g) Neither
the Target Companies nor any of the Subsidiaries has granted a power of attorney to any Person with respect to any Taxes.
(h) Neither
the Target Companies nor any Subsidiaries is a party to any contract, agreement, plan or arrangement relating to allocating or sharing the payment of, indemnity
for, or liability for, Taxes.
(i) The
Target Companies and the Subsidiaries have, in all material respects, properly and in a timely manner documented their transfer pricing methodology and their
intercompany transactions in compliance with all applicable Tax Laws or regulations. In particular, the reserves with respect to Taxes on the respective books of each of the Target Companies and the
Subsidiaries in relation to Taxes due or that might become due in connection with the transfer pricing methodology applied, are sufficient to cover all Taxes of whatever nature that may be assessed or
computed on the results, transactions, or capital of the Target Companies and each of the Subsidiaries for all periods prior to the date of the Financial Statements irrespective of the financial
period during which such Taxes may become due.
(j) Neither
the Target Companies nor any Subsidiaries will be required to include any item of income, or exclude any item of deduction, from taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of: (i) any change in method of accounting for a taxable period ending on or before the Closing Date, or (ii) any
intercompany transaction.
(k) Except
as set forth on
Schedule 4.19(k),
the shares in the Subsidiaries do not result from a contribution in kind
against the issuance of new shares.
(l) The
book value of each participation in each of the Subsidiaries corresponds to its historical acquisition costs in the books of the Target Companies,
i.e.
, no write-off has been made since the acquisition
of the shares.
(m) The
Target Companies and the Subsidiaries have not received or applied for any written tax ruling or entered into any written or legally binding agreement with any
Taxing Authority.
(n) No
undisclosed dividend distributions have been made by the Target Companies and the Subsidiaries on or before the Closing Date.
(o) None
of the Target Companies or any Subsidiaries is, or has been, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of
the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(p) Neither
the Target Companies nor any Subsidiaries has ever participated in an international boycott within the meaning of Section 999 of the Code.
(q) Neither
of the Target Companies nor any Subsidiaries was a foreign personal holding company (within the meaning of Section 552 of the Code) on or before
December 31, 2004, and neither of the Target Companies nor any Subsidiary is or has been a passive foreign investment company (within the meaning of Section 1297 of the Code).
(r) Except
as set forth on
Schedule 4.19(r),
neither the Target Companies nor any Subsidiary is engaged in a trade or
business within the United States.
A-2-22
(s) The
taxable year for U.S. federal income tax purposes of the Target Companies and each of their Subsidiaries ends on December 31 of each year.
(t) The
Target Companies are foreign corporations within the meaning of Section 7701(a)(5) of the Code.
(u) None
of the Target Companies or any Subsidiaries has been includible with any other entity in any consolidated, combined, unitary or similar return for any Tax period
for which the statute of limitations has not expired (other than any such return with respect to which a Target Company was the common parent).
Section 4.20
Proprietary Rights.
(a) (i) Except
as set forth on
Schedule 4.20(a),
a Target Company or a Subsidiary is the sole owner of, free
and clear of any Lien (other than Permitted Liens), or has a valid license to (without the payment of any royalty, except with respect to off-the-shelf software licensed on
commercially reasonable terms), all U.S. and non-U.S. trademarks, service marks, logos, designs, trade names, internet domain names and corporate names, and the goodwill of the business
connected with and symbolized by the foregoing, patents, registered designs, copyrights, computer software (including all information systems, data files and databases, source and object codes, user
interfaces, manuals and other specifications and documentation related thereto and all intellectual property and proprietary rights incorporated therein), web sites and web pages and related items
(and all intellectual property and proprietary rights incorporated therein) and all trade secrets, research and development, formulae and know-how ("
Trade
Secrets
") and all other proprietary and intellectual property rights and information, including all grants, registrations and applications relating to any of the foregoing (all
of the foregoing to be collectively referred to as the "
Proprietary Rights
") used or held for use in, or necessary for the conduct of the business of
the Target Companies or the businesses of the Subsidiaries (such Proprietary Rights owned by or licensed to the Target Companies or the Subsidiaries, collectively, the "
Target
Company Proprietary Rights
"), (ii) the rights of the Target Companies and the Subsidiaries in the Target Company Proprietary Rights are valid and enforceable,
(iii) neither the Target Companies nor any Subsidiary has received any demand, claim, notice or inquiry from any Person in respect of the Target Company Proprietary Rights which challenges,
threatens to challenge or inquires as to whether there is any basis to challenge, the validity or enforceability of, or the rights of the Target Companies or any Subsidiary in, any of the Target
Company Proprietary Rights, and neither the Target Companies nor any Subsidiary has Knowledge of any facts which could form a reasonable basis for any such demand, claim, notice or inquiry,
(iv) no act has been done or omitted to be done by the Target Companies or any Subsidiary, or any licensee thereof, which has had or could have the effect of impairing or dedicating to the
public, or entitling any U.S. or foreign governmental authority or any other Person to invalidate, render unenforceable or unpatentable, preclude issuance of, cancel, forfeit, modify or consider
abandoned, any material Target Company Proprietary Rights owned by the Target Companies or a Subsidiary (the "
Owned Proprietary Rights
"), or give any
Person any rights with respect thereto (except pursuant to an agreement listed on
Schedule 4.20(b)
), (v) all necessary registration,
maintenance and renewal fees in respect of the Owned Proprietary Rights have been paid and all necessary documents and certificates have been filed with the relevant Governmental Authority for the
purpose of maintaining such Owned Proprietary Rights, (vi) to the Knowledge of the Target Companies and their Subsidiaries, the respective businesses of the Target Companies and the
Subsidiaries as currently or in the past operated do not violate or infringe, and have not violated or infringed, any Proprietary Rights of any other Person, (vii) to the Knowledge of the
Target Companies and their Subsidiaries, no Person is violating or infringing any of the Target Company Proprietary Rights, (viii) the Target Companies and the Subsidiaries have obtained from
all individuals who participated (as Employees, consultants, employees of consultants or otherwise) in any respect in the invention,
A-2-23
development
or authorship of any of the Owned Proprietary Rights effective waivers of any and all ownership rights of such individuals in such Proprietary Rights, and/or assignments to the Target
Companies or the Subsidiaries, as the case may be, of all rights with respect thereto, and (ix) neither the Target Companies nor the Subsidiaries have divulged, furnished to or made accessible
to any Person, any Trade Secrets without prior thereto having obtained an enforceable agreement of confidentiality from such Person.
(b)
Schedule 4.20(b)
contains a complete and accurate list of the material Target Company Proprietary Rights (other
than Trade Secrets) and all licenses and other agreements relating thereto.
Section 4.21
Information Technology.
(a) Except
as set forth on
Schedule 4.21,
the material Target Company IT Systems have been properly maintained by
technically competent personnel in accordance with standards set by the manufacturers for proper operation, monitoring and use. The material Target Company IT Systems are in good working condition to
effectively perform all information technology operations necessary for the conduct of its business as now conducted or as contemplated to be conducted. Neither the Target Companies nor any of their
Subsidiaries have experienced within the past twelve (12) months any material disruption to, or material interruption in, their conduct of their respective businesses attributable to a defect,
bug, breakdown or other failure or deficiency on the part of Target Company IT Systems.
(b) Except
for scheduled or routine maintenance which would not reasonably be expected to cause any material disruption to, or material interruption in, the conduct of the
business, the Target Company IT Systems are available for use during normal working hours and other times when required to be available. The Target Companies and the Subsidiaries have taken
commercially reasonable steps to provide for the backup and recovery of the data and information critical to the conduct of the business (including such data and information that is stored on magnetic
or optical media in the ordinary course) without material disruption to, or material interruption in, the conduct of the business.
(c) The
Target Companies and Subsidiaries have taken commercially reasonable actions, consistent with standards in the business, with respect to the Target Company IT
Systems to detect and prevent the disclosure to unauthorized persons of, and keep secure, any and all confidential information, trade secrets, or other proprietary information stored on Target Company
IT Systems including the designs, policies, processes and procedures relating to the composition and structure of the Target Company IT Systems.
Section 4.22
Guarantees.
Except as set forth on
Schedule 4.22,
neither the Target Companies nor any Subsidiary is a guarantor or
otherwise responsible for any liability or obligation (including
indebtedness) of any Person.
Section 4.23
Bank Accounts.
Schedule 4.23
contains
a true and complete list of (a) the names and locations of all banks, trust companies, securities brokers and other financial institutions at which the Target Companies or any Subsidiary have
an account or safe deposit box or maintains a banking, custodial, trading or other similar relationship which is material to the Target Companies and the Subsidiaries taken as a whole, (b) a
true and complete list and description of each such account, box and relationship and (c) the name of every Person authorized to draw thereon or having access thereto.
Section 4.24
Foreign Corrupt Practices and International Trade Sanctions.
To the Knowledge of Sellers and
Target Companies, neither Target Companies, any Subsidiary nor any of their respective directors, officers, agents, employees or any other Persons acting on their behalf has, in connection with the
operation of the business of Target Companies or any Subsidiary, (a) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful
expenditures
A-2-24
relating
to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of
applicable Laws, (b) paid, accepted or received any unlawful contributions, payments, expenditures or gifts or (c) violated or operated in noncompliance with any applicable export
restrictions, anti-boycott regulations, embargo regulations or other applicable Laws.
Section 4.25
Inventory.
The inventories shown on the Financial Statements, net of inventory reserves
reflected thereon, for the period ended December 31, 2006 or acquired after December 31, 2006, were acquired and maintained in the Ordinary Course of Business, are of good and
merchantable quality, and consist of items of a quantity and quality usable or salable in the Ordinary Course of Business.
Section 4.26
Deposits.
No deposit received by a Subject Company prior to the Closing Date on a purchase
made by a customer from a Subject Company (a "
Deposit
") shall be required to be returned or refunded to such customer or otherwise be subject to any
adjustment in favor of such customer (each such return, refund or adjustment, a "
Refund
"), in each case other than (a) aggregate Refunds to the
extent the aggregate sum of which is less than $1,000,000 or (b) any Refund granted pursuant to a renegotiation between the parties to the Contract pursuant to which the Deposit subject to such
Refund was initially made that is (i) in an amount less than $500,000 and deemed by the Chief Financial Officer of BRKR to be neutral or beneficial to such Subject Company or (ii) in an
amount of $500,000 or more and deemed by the Special Committee or the Audit Committee of BRKR to be neutral or beneficial to such Subject Company or (iii) in an amount less than $50,000 (which
Refunds shall be deemed to be in the Ordinary Course of Business).
Section 4.27
No Misleading Statements.
Except as set forth on
Schedule 4.27,
the representations and warranties made by Sellers
and the Target Companies in this German SPA, including in the exhibits and
schedules hereto, do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
Purchasers represent and warrant to Sellers as of the date hereof and as of the Closing Date or, if a representation or warranty is made as of a specified date,
as of such date, as follows:
Section 5.1
Organization of Purchasers; Authority.
Purchasers are duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and have all necessary power and authority to own, lease, operate and otherwise hold their properties and assets and to carry on
their business as presently conducted. Purchasers are duly qualified or licensed to do business as a foreign entity and are in good standing in every jurisdiction in which the nature of the business
conducted by them or the assets or properties owned or leased by them requires qualification, except where the failure to be so qualified, licensed or in good standing could not, individually or in
the aggregate, be reasonably likely to have a material adverse effect on the ability of Purchasers to consummate the transactions contemplated by this German SPA or any Ancillary Agreement to which
they are a party.
Section 5.2
Authorization; Enforceability.
(a) The
execution and delivery by Purchasers of this German SPA and, as of the Closing Date, the Ancillary Agreements to which they are a party, the performance of their
obligations hereunder and thereunder and the consummation by Purchasers of the transactions contemplated hereby and thereby, have been duly and validly authorized and approved by all requisite action
on the part of Purchasers (subject to the approval of the holders of a majority of the outstanding
A-2-25
shares
of BRKR Stock and a majority of the outstanding shares of BRKR Stock not held by Sellers and their Affiliates and present and voting at the meeting) and no other action by Purchasers is
necessary to authorize the transactions contemplated hereby or thereby or to consummate such transactions.
(b) This
German SPA and, as of the Closing Date, the Ancillary Agreements to which Purchasers are a party have been duly executed and delivered by Purchasers, and (assuming
the due authorization, execution and delivery of this German SPA by Sellers and the Target Companies), this German SPA and, as of the Closing Date, each such Ancillary Agreement constitutes a valid
and binding obligation of Purchasers, enforceable against Purchasers in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar Laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 5.3
No Conflict.
The execution and delivery by Purchasers of this German SPA and, as of the
Closing Date, the Ancillary Agreements to which they are a party and the consummation by Purchasers
of the transactions contemplated hereby and thereby, assuming all required filings, consents, approvals, authorizations and notices set forth on
Schedule 5.3
have been made, given or obtained, does
not and shall not:
(a) violate
or conflict with any Organizational Document of Purchasers;
(b) violate
or conflict with, in any material respect, any Law applicable to Purchasers or any of its assets, properties or businesses or require any filing with, consent,
approval or authorization of, or notice to, any Governmental Authority; or
(c) (i) conflict
with, result in any breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, or require
any consent under any Contract, to which Purchasers are a party or by which Purchasers may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of
any Lien (other than Permitted Liens) upon any of the properties or assets of Purchasers or (iv) constitute an event which, after notice or lapse of time or both, would result in any such
breach, termination or creation of a Lien upon any of the properties or assets of Purchasers;
except
in the case of clause (c) above, as would not reasonably be expected to have a material adverse effect on Purchasers or the ability of Purchasers to enter into and perform its
obligations under, and to consummate the transactions contemplated by, this German SPA.
Section 5.4
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person,
other than Bear, Stearns & Co. Inc., the fees of which will be paid by BRKR, (a) has acted directly or indirectly for Purchasers in connection with this German SPA or any
Ancillary Agreement or the transactions contemplated hereby or thereby or (b) is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with
this German SPA or any Ancillary Agreement or the transactions contemplated hereby or thereby.
Section 5.5
Investment Representation.
Purchasers are acquiring the Shares for investment purposes only,
and not with a view to, or for offer or sale in connection with, any resale or distribution thereof or any transaction which would be in violation of all applicable Laws, including U.S. federal
securities laws.
Section 5.6
Accredited Investor.
Each Purchaser (a) is an "accredited investor" as such term is
defined in Rule 501(a) under the Securities Act of 1933, as amended, and (b) has such knowledge and experience in financial and business matters that it is capable of evaluating the
merits and risks of an investment in the Shares.
A-2-26
ARTICLE VI
COVENANTS
Section 6.1
Operation of the Target Companies Pending the Closing.
The Target Companies covenant and
agree that the Target Companies and the Subsidiaries will not (and the Target Companies shall cause the Subsidiaries not to), and Sellers covenant and agree to cause the Target Companies and the
Subsidiaries not to, take any action with the purpose of causing any of the conditions to Purchasers' obligations set forth in
Article VII
to not
be satisfied. Except with the prior written consent of Purchasers, during the period from the date of this German SPA to the Closing, the businesses of the Target Companies and the Subsidiaries shall
be conducted in the Ordinary Course of Business and the Target Companies covenant and agree, and Sellers agree to cause the Target Companies, to use all commercially reasonable efforts consistent
therewith to preserve intact the Target Companies material properties, assets and business organizations (including those of its Subsidiaries). Except to the extent necessary to consummate the
transactions contemplated by this German SPA, without limiting the generality of the foregoing, and except as otherwise provided in this German SPA, the Target Companies shall not and will not permit
the Subsidiaries to, and Sellers shall cause each of the Target Companies and the Subsidiaries not to, without the prior written consent of Purchasers:
(a) amend
any of its Corporate Documents;
(b) liquidate,
dissolve, recapitalize or otherwise wind up its business;
(c) make
any distribution or declare, pay or set aside any dividend in cash or property with respect to, or split, combine, redeem, reclassify, purchase or otherwise
acquire, directly or indirectly, any equity interests or shares of capital stock of, or other equity or voting interest in, the Target Companies or any Subsidiary, or make any other changes in the
capital structure of the Target Companies or any Subsidiary;
(d) authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (i) any equity interest or capital stock of the Target Companies or any
Subsidiary, (ii) any equity rights in respect of, security convertible into, exchangeable for or evidencing the right to subscribe for or acquire either (x) any equity interest or shares
of capital stock of the Target Companies or any Subsidiary or (y) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any
shares of the capital stock of, or other equity or voting interest in, the Target Companies or any Subsidiary, (iii) any instruments of indebtedness (other than in the Ordinary Course of
Business) or (iv) any derivative instruments (other than in the Ordinary Course of Business);
(e) other
than in the Ordinary Course of Business, acquire or dispose of, whether by purchase, merger, consolidation or sale, lease, pledge or other encumbrance of stock or
assets or otherwise, any interest in any (i) corporation, partnership or other Person or (ii) assets comprising a business or any other property or assets, in a single transaction or in
a series of transactions;
(f) other
than in the Ordinary Course of Business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge,
disposition, transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
(g) other
than with respect to the sale of the SciTec Real Property, sell, assign, lease, license, transfer or otherwise dispose of, mortgage, pledge or encumber, any real
property, or amend, terminate, modify or renew any real property lease;
(h) incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other Person in excess of €325,000 in the
aggregate;
(i) cancel
any third-party indebtedness owed to the Target Companies;
A-2-27
(j) (i) increase
in any manner the rate or terms of compensation or benefits of any of its directors, managers, officers, Employees, consultants, agents, independent
contractors or other individual service providers (including the grant of any stock options or any other award), except (A) as may be required under existing employment agreements or
(B) annual wage increases granted in the Ordinary Course of Business, (ii) hire any new Employees except in the Ordinary Course of Business with respect to Employees with an annual base
and incentive compensation opportunity not to exceed €100,000, (iii) pay or agree to pay any pension, retirement allowance or other employee benefit not required or permitted by
any existing Employee Benefits or Pension Commitments or other agreement or arrangement to any such director, manager, officer, Employee, consultant, agent, independent contractor or other individual
service provider, whether past or present, (iv) enter into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired Employees in the Ordinary
Course of Business with an annual base and incentive compensation opportunity not to exceed €100,000, or (v) except as required to ensure that any Employee Benefits or Pension
Commitments is not then out of compliance with
applicable Law, enter into or adopt any new, or increase benefits under or renew or amend any existing, Employee Benefits or Pension Commitments or benefit arrangement or any collective bargaining
agreement;
(k) make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and Employees), except in
the Ordinary Course of Business;
(l) commit
to make any capital expenditure or fail to make capital expenditures consistent with past practice;
(m) fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the Ordinary Course of Business or damage by fire or other
unavoidable casualty;
(n) except
as may be required as a result of a change in applicable law or GAAP, make, revoke or change any Tax election or change any Tax accounting method, settle or
compromise any Tax liability, or waive or consent to the extension of any statute of limitations for the assessment and collection of any Tax;
(o) except
as may be required as a result of a change in applicable Law or GAAP, change any accounting principles or practices used by the Target Companies or any
Subsidiary;
(p) institute,
settle or dismiss any action, claim, demand, lawsuit, proceeding, arbitration or grievance by or before any court, arbitrator or governmental or regulatory
body threatened against, relating to or involving the Target Companies or any Subsidiary in connection with any business, asset or property of the Target Companies or any Subsidiary;
(q) enter
into any Target Company Contracts or Contracts (in each case other than any Contracts having only Subject Companies as parties and other than Contracts covered by
Section 6.1(g)) (i) having a term in excess of twelve (12) months or (ii) involving the payment, or provision of goods or services, in excess of €325,000 on
an individual or aggregate basis, except for the acceptance of customer purchase orders in the Ordinary Course of Business with terms up to twenty-four (24) months and individual
amounts up to €3,250,000;
(r) either
fail to pay the accounts payable or other liabilities of the Target Companies or any Subsidiary, or fail to collect the accounts receivable or other indebtedness
owed to the Target Companies or any Subsidiary, in a manner consistent with the practices prior to the date hereof or take any action not consistent with past practices that is designed to accelerate
or has the effect of accelerating the receipt
by the Target Companies or any Subsidiary of any amounts of cash earlier than such cash would have been realized consistent with past practices;
A-2-28
(s) enter
into, or renew, amend or otherwise modify or extend, any Contracts relating to derivative or hedging transactions or similar transactions, including currency
derivative or hedging Contracts or transactions; or
(t) agree
in writing to take any of the foregoing actions.
Section 6.2
Access.
The Target Companies shall, and shall cause the Subsidiaries to, and Sellers shall
cause the Target Companies and the Subsidiaries to, afford to officers, employees, accountants, counsel and other representatives ("
Representatives
") of
Purchasers reasonable access to all of the assets, properties, personnel, books and records of the Target Companies and the Subsidiaries.
Section 6.3
Notification.
(a) The
Target Companies shall, and shall cause the Subsidiaries to, and Sellers shall cause the Target Companies and the Subsidiaries to, promptly notify Purchasers, and
Purchasers shall promptly notify Sellers, of any Proceeding pending or, to their Knowledge, threatened against the Target Companies, Purchasers or Sellers as the case may be, which challenges the
transactions contemplated by this German SPA or any Ancillary Agreement.
(b) Sellers
shall provide prompt written notice to Purchasers of any change in any of the information contained in the representations and warranties made by Sellers in
Article III
or
Article IV
or any Schedules or schedules referred to herein or attached
hereto and shall promptly furnish any information which Purchasers may reasonably request in relation to such change;
provided
, that such notice shall
not operate in any way to modify or cure any breach of the representations and warranties made by Sellers in
Article III
or
Article IV
or any
Schedules or schedules referred to herein or attached hereto.
(c) The
Target Companies shall and shall cause the Subsidiaries to, and Sellers shall cause the Target Companies and the Subsidiaries to, provide prompt written notice to
Purchasers of any change in any of the information contained in the representations and warranties made by the Target Companies in
Article IV
or
any Schedules or schedules referred to herein or attached hereto and shall promptly furnish any information which Purchasers may reasonably request in relation to such change;
provided
, that such notice
shall not operate in any way to modify or cure any breach of the representations and
warranties made by the Target Companies in
Article IV
or any Schedules or schedules referred to herein or attached hereto.
Section 6.4
No Inconsistent Action.
Neither the Target Companies, Purchasers nor Sellers will take any
action which is inconsistent with their respective obligations under this German SPA.
Section 6.5
Reasonable Best Efforts.
(a) Upon
the terms and subject to the conditions of this German SPA, each of the Parties shall use its 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 under applicable Laws to consummate and make effective the transactions contemplated by this German SPA and the Ancillary
Agreements as promptly as practicable, including (i) the prompt preparation and filing of all forms, registrations and notices required to be filed to consummate the transactions contemplated
by this German SPA and the Ancillary Agreements and the taking of such commercially reasonable actions as are necessary to obtain any requisite approvals, consents, orders, exemptions or waivers by
any Governmental Authority or any other Person and (ii) using reasonable best efforts to cause the satisfaction of all conditions to Closing;
provided,
however
, that nothing in this
Section 6.5
shall require or be construed to require Purchasers or any Affiliate of
Purchasers to offer or agree to (x) enter into any agreements, including agreements to sell, license or otherwise dispose of, or hold separate or otherwise divest itself of, all or any portion
of Purchasers' or any Affiliate of Purchasers' businesses or assets or any portion of the businesses or assets of its Subsidiaries or any
A-2-29
portion
of the businesses or assets of the Target Companies or its Subsidiaries, (y) to conduct its, its Subsidiaries' or any of their respective Affiliates' businesses in a specified manner or
(z) provide any compensation, benefits or other consideration to the Target Companies' Employees.
(b) Each
Party shall promptly consult with the other Parties with respect to, provide any necessary information with respect to and provide each other Party (or its counsel)
copies of, all filings made by such Party with any Governmental Authority or any other Person or any other information supplied by such Party to a Governmental Authority or any other Person in
connection with this German SPA and the transactions contemplated hereby.
(c) Each
Party shall promptly inform the other Party of any communication from any Governmental Authority regarding any of the transactions contemplated by this German SPA
and the Ancillary Agreements. If any Party or Affiliate thereof receives a request for additional information or documentary material from any such Governmental Authority with respect to the
transactions contemplated by this German SPA, then such Party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other Party,
an appropriate response in compliance with such request.
Section 6.6
Further Assurances.
From time to time after the Closing, without additional consideration,
each Party will (or, if appropriate, cause its Affiliates to) execute and deliver such further instruments and take such other action as may be necessary or reasonably requested by any other Party to
make effective the transactions contemplated by this German SPA and to provide each other Party with the intended benefits of this German SPA. Without limiting the foregoing, upon reasonable request
of Purchasers, each of Sellers and the Target Companies shall, or shall cause their respective Affiliates to, as applicable, execute, acknowledge and deliver all such further assurances, deeds,
assignments, consequences, powers of attorney and other instruments and paper as may be required to sell, transfer, assign, convey and deliver to Purchasers all right, title and interest in, to and
under the Shares.
Section 6.7
No Solicitation.
(a) The
Target Companies shall, and shall cause the Subsidiaries to, and Sellers shall, and shall cause the Target Companies and the Subsidiaries to, and each of the
foregoing shall cause each of its officers, managers, employees, subsidiaries, Affiliates, agents and other representatives to, immediately cease any existing discussions or negotiations with respect
to any Alternative Proposal, except as set forth in
Schedule 6.7(a)
, and will not, and shall not cause such Persons to, directly or indirectly,
encourage, solicit, participate in, initiate or facilitate discussions or negotiations with, or provide any information to, any corporation, partnership, Person or other entity or group (other than
Purchasers or its managers, officers, employees, subsidiaries, agents or other Affiliates) concerning any Alternative Proposal. Sellers and the Target Companies shall immediately communicate to
Purchasers any such inquiries or proposals regarding an Alternative Proposal, including the terms thereof.
(b) "
Alternative Proposal
" shall mean any of the following involving the Target Companies or any of their Subsidiaries (other
than the Transactions expressly contemplated by this German SPA, the U.S. SPA and the Swiss Merger Agreement): any inquiry or proposal relating to a sale of stock, any merger, consolidation, share
exchange, business combination, transfer of membership interests, partnership, joint venture, disposition of assets (or any interest therein) or other similar transaction.
Section 6.8
Tax Matters.
(a) All
transfer, documentary, sales, use, registration and other such Taxes (including all applicable German and other real estate transfer Taxes and stock transfer Taxes)
incurred in connection with this German SPA and the transactions contemplated hereby shall be paid by
A-2-30
Purchasers.
Each Party shall cooperate to the extent necessary in the timely making of all filings, returns, reports and forms as may be required in connection therewith.
(b) All
contracts, agreements or arrangements under which the Target Companies or any Subsidiary may at any time have an obligation to indemnify for or share the payment of
or liability for any portion of a Tax (or any amount calculated with reference to any portion of a Tax) shall be terminated with respect to the Target Companies or any such Subsidiary, as applicable,
as of the Closing Date, and the Target Companies or such Subsidiary, as applicable, shall thereafter be released from any liability thereunder.
(c) The
Target Companies, Purchasers and Sellers shall, and shall each cause their Affiliates to, provide to the other cooperation and information, as and to the extent
reasonably requested, in connection with the filing of any Tax Return or in conducting any audit, litigation or other proceeding with respect to Taxes.
(d) Immediately
prior to the Closing, Bruker Physik and Techneon shall deliver to Purchasers and Bruker Physik, respectively, a certification that stock in Bruker Physik or
Techneon, as applicable, is not a U.S. real property interest because Bruker Physik or Techneon, as applicable, is not, and has not been, a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Such certification shall be in accordance with Treasury
Regulation Section 1.1445-2(c)(3)(i). Bruker Physik and Techneon shall timely deliver to the IRS the notification required under Treasury Regulation
Section 1.897-2(h)(2).
Section 6.9
Release.
In consideration for payment of the BPhysik Purchase Price, the Techneon Purchase
Price and the SciTec Real Property Purchase Price, as of and following the Closing Date, each Seller (on its own behalf and on behalf of each of its Affiliates) knowingly, voluntarily and
unconditionally releases, forever discharges, and covenants not to sue Purchasers and its Subsidiaries and their respective predecessors, successors, parents, Subsidiaries and other Affiliates, and
all of their respective current and former officers, directors, managers, employees, agents, attorneys and representatives from and for any and all claims, causes of action, demands, suits, debts,
obligations, liabilities, damages, losses, costs, and expenses (including attorneys' fees) of every kind or nature whatsoever, known or unknown, actual or potential, suspected or unsuspected, fixed or
contingent, that any Seller or its respective Affiliates, as applicable, has or may have, now or in the future, arising out of, relating to, or resulting from any act of commission or omission,
errors, negligence, strict liability, breach of contract, tort, violations of law, matter or cause whatsoever from the beginning of time to the Closing Date, with respect to, arising out of, or in
connection with the Target Companies or the Subsidiaries;
provided, however
, that such release shall not cover: (a) any claims arising under this
German SPA, including the schedules and Schedules attached hereto, or the agreements or documents executed and/or delivered in connection herewith, but excluding claims of a breach of fiduciary duties
by any Sellers or the Target Companies in connection with the transactions contemplated by this German SPA or (b) any claims against the Target Companies or a Subsidiary in its capacity as a
current or former director, manager, officer or employee of the Target Companies or a Subsidiary for indemnification under the Corporate Documents of such Target Company or such Subsidiary, as such
documents are in effect immediately prior to the Closing Date.
Section 6.10
Voting Agreement.
To the extent applicable, each Seller covenants and agrees to vote in
his/her capacity as a holder of shares of capital stock of BRKR, all of the shares of capital stock of BRKR owned by such Seller in favor of the transactions contemplated by this German SPA.
A-2-31
Section 6.11
Non-competition and Non-solicitation.
From the Closing and for a
period of five (5) years thereafter, Sellers will not, and will cause their Affiliates not to, directly or indirectly, except on behalf of BRKR or its Affiliates:
(a) engage
in, hold an interest in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of less than one percent (1%) of a
publicly traded security), joint venturer, partner, consultant or employee, or otherwise engage or participate in, provide services to or be connected in any manner with or assist in any way any
entity, person or business that engages in a business involving the design, manufacture or distribution of the BioSpin Technologies;
provided
, that such
restriction shall not prohibit any Laukien Seller from accepting employment with another company that utilizes the BioSpin Technologies so long as such Laukien Seller does not directly manage the
BioSpin Technologies operations of such company or such BioSpin Technologies operations account for less than ten percent (10%) of the overall revenues of such company; or
(b) solicit
for employment or hire any employee of the Target Companies or any of their Subsidiaries without the prior written consent of Purchasers. This provision shall
not apply to any employee of the Target Companies who replies or responds to a general solicitation or advertisement for employment by a Seller or on a Seller's behalf or to solicitations of employees
of the Target Companies twelve months after such employee's employment has been terminated by a Target Company.
Section 6.12
No Election.
Purchasers shall at no time make an election under Section 338 of the
Code with respect to the Target Companies, either of them, or any stock held, directly or indirectly, by either of them.
Section 6.13
Compulsory Share Transfer.
As soon as possible after January 1, 2008, Sellers and
Techneon shall cause all Compulsory Shares to be transferred to Seller 1 (the "
Compulsory Share Transfer
"), free and clear of any Liens, and shall cause
the share register of Techneon to be duly revised to reflect the record and beneficial ownership of all Compulsory Shares by Seller 1.
Section 6.14
SciTec Real Property Confirmations.
Upon receipt of the SciTec Real Property Purchase Price
by Seller 1 and Seller 4, Seller 1 and Seller 4 shall issue (i) a joint written confirmation to the relevant notary pursuant to Section 10.3.1 of the SciTec Real Property Sale and
Transfer Agreement and (ii) a statement to BRKR and to Purchasers that such receipt of the SciTec Real Property Purchase Price constitutes fulfillment of all payment obligations of Purchasers
under the SciTec Real Property Sale and Transfer Agreement.
ARTICLE VII
CLOSING CONDITIONS
Section 7.1
Conditions to Each Party's Obligations.
The respective obligation of each Party to effect the
transactions contemplated by this German SPA is subject to the satisfaction on or prior to the Closing Date, at the following conditions, which may be waived by Purchasers or Sellers:
(a) The
waiting periods (i) under the HSR Act applicable to the consummation of the Transactions shall have expired or been terminated and all necessary Consents of
any Governmental Authority required for consummation of the Transactions shall have been obtained and (ii) applicable to the consummation of the Transactions and instituted by the European
Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers,
permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required for the consummation of the Transactions under any corresponding
A-2-32
requirements
of the European Union member states or competition regulatory authorities in other jurisdictions shall have been obtained; and
(b) There
shall not be in effect any Law of any Governmental Authority of competent jurisdiction restraining, enjoining or otherwise preventing the consummation of the
transactions contemplated by this German SPA or any of the Ancillary Agreements.
(c) The
U.S. Closing shall have occurred; and
(d) The
Swiss Closing shall have occurred.
Section 7.2
Conditions Precedent to Obligations of Purchasers.
The obligation of Purchasers to effect the
transactions contemplated by this German SPA is subject to the satisfaction or waiver by Purchasers of the following conditions:
(a) The
representations and warranties of Sellers in this German SPA that are qualified as to materiality shall be true and correct in all respects and the representations
and warranties of Sellers that are not qualified as to materiality shall be true and correct in all material respects, in each case, as of the date hereof and at and as of the Closing with the same
effect as though such representations and warranties had been made at and as of such time, other than representations and warranties that speak as of another specific date or time prior to the date
hereof (which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by Sellers on or prior to the Closing Date shall have been complied with or performed in all
material respects;
(c) Purchasers
shall have received certificates of Sellers, dated as of the Closing Date, certifying in such detail as Purchasers may reasonably request that the conditions
specified in
Sections 7.2(a)
and
7.2(b)
have been fulfilled;
(d) No
action, suit or proceeding shall be pending or threatened by or before any Governmental Authority or pending or threatened by any other Person to enjoin, restrain,
prohibit or obtain damages in respect of any of the transactions contemplated by this German SPA or any Ancillary Agreement, or which would be reasonably likely to prevent or make illegal the
consummation of any transactions contemplated by this German SPA or any Ancillary Agreement;
(e) There
shall not have occurred since the date hereof any events that have had, or are, individually or in the aggregate, reasonably likely to have a Material Adverse
Effect;
(f) Purchasers
shall have received evidence, reasonably satisfactory to Purchasers, of receipt of all requisite third-party and governmental Consents, including those set
forth on
Schedule 4.5(c)
;
(g) Purchasers
shall have obtained financing by reputable lenders at reasonable market interest rates and terms and conditions as determined by the Special Committee in
sufficient amounts to complete the Transactions, and all funds to be received by Purchasers pursuant to such financing arrangements shall be available pursuant to the terms thereof and all funds
contemplated to be received at the Closing Date to fund the Transactions shall have been received or will be made available during the Closing;
(h) The
approval of the transactions contemplated by this German SPA by the holders of shares of capital stock of BRKR who are unaffiliated with the Laukien Sellers
representing at least a majority of the total votes cast by such holders at a duly held meeting of the BRKR stockholders;
A-2-33
(i) The
approval of the transactions contemplated by this German SPA by the holders of shares of capital stock of Purchasers representing at least a majority of the total
votes cast at a duly held meeting of the BRKR stockholders;
(j) Sellers
1, Seller 4 and Purchaser 3 shall have entered into the SciTec Real Property Sale and Transfer Agreement and all conditions for the payment of the SciTec Real
Property Purchase Price thereunder shall have either been fulfilled or validly waived;
(k) The
Special Committee shall have obtained adequate proof that no consent of any spouse of any of the Laukien Sellers is required for the entering into and consummation
of this German SPA, or such consent shall have been granted;
(l) The
Special Committee shall have obtained adequate proof that there are no claims of any of the Sellers against any of the Group Entities (except for claims under the
current service agreements of those Sellers that are employed by a Group Entity and except for the current pension entitlements of Seller 4), in particular, that the claim of Seller 1 against Techneon
in the amount of €272,773.10 recorded in Seller 1's financial statements as of December 31, 2006 shall have been waived by Seller 1;
(m) Bruker
Physik and Techneon shall have furnished to Purchasers and Bruker Physik, respectively, a certification in accordance with Treasury Regulation
Section 1.1445-2(c) and in the form provided in Treasury Regulation Section 1.897-2(h)(2), in a customary and standard form; and
(n) All
Compulsory Shares shall have been transferred to Seller 1, free and clear of any Liens, and the share register of Techneon shall reflect the record and beneficial
ownership of such Compulsory Shares by Seller 1.
Section 7.3
Conditions Precedent to Obligations of Sellers.
The obligation of Sellers to effect the
transactions contemplated by this German SPA are subject to the satisfaction or waiver of the following conditions:
(a) The
representations and warranties of Purchasers in this German SPA that are qualified as to materiality shall be true and correct in all respects and the
representations and warranties of Purchasers that are not qualified as to materiality shall be true and correct in all material respects, in each case, as of the date hereof and at and as of the
Closing with the same effect as though such representations and warranties had been made at and as of such time, other than representations and warranties that speak as of another specific date or
time prior to the date hereof (which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by Purchasers on or prior to the Closing Date shall have been complied with or performed in
all material respects;
(c) Sellers
shall have received a certificate, dated as of the Closing Date, executed on behalf of Purchasers by an authorized executive officer thereof, certifying in such
detail as Sellers may reasonably request that the conditions specified in
Section 7.3(a)
and
Section 7.3(b)
have been fulfilled; and
(d) Purchasers
shall have delivered the BPhysik Purchase Price, the Techneon Purchase Price and the SciTec Real Property Purchase Price in accordance with the terms of
Section 2.5.
A-2-34
ARTICLE VIII TERMINATION
Section 8.1
Termination.
This German SPA may be terminated and the transactions contemplated by this
German SPA may be abandoned at any time prior to the Closing:
(a) by
mutual written consent of Purchasers and Sellers;
(b) by
Sellers or Purchasers, if:
(i) a
Governmental Authority shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the Parties shall use reasonable best
efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this German SPA and such order, decree, ruling or other action shall have
become final and nonappealable;
(ii) the
Closing shall not have occurred on or before June 30, 2008 (other than due principally to the failure of the Party seeking to terminate this German SPA to
perform any obligations under this German SPA required to be performed by it at or prior to the Closing);
(iii) the
shareholder approvals of BRKR shall not have been obtained at the respective shareholders meetings or at any adjournment or postponement thereof; or
(iv) the
Swiss Merger Agreement or the U.S. SPA shall have been terminated.
(c) by
Purchasers, if there is a default or breach by the Target Companies or any Seller with respect to the due and timely performance of any of their respective covenants
or agreements contained herein, or if the representations or warranties of the Target Companies or any Seller contained in this German SPA shall have become inaccurate, in either case such that the
conditions set forth in
Section 7.2
would not be satisfied and such breach or default or inaccuracy is not curable or, if curable, has not been
cured or waived within twenty (20) calendar days after written notice to the Target Companies or Sellers, as applicable, specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction; or
(d) by
Sellers, if there is a default or breach by Purchasers with respect to the due and timely performance of any of its covenants or agreements contained herein, or if
the representations or warranties of Purchasers contained in this German SPA shall have become inaccurate, in either case such that the conditions set forth in
Section 7.3
would not be satisfied
and such breach or default or inaccuracy is not curable or, if curable, has not been cured or waived within
twenty (20) calendar days after written notice to Purchasers specifying, in reasonable detail, such claimed default, breach or inaccuracy and demanding its cure or satisfaction.
Section 8.2
Procedure and Effect of Termination.
In the event of termination and abandonment of the
transactions contemplated by this German SPA pursuant to
Section 8.1
, written notice thereof shall forthwith be given to the other Parties and
this German SPA shall terminate (subject to the provisions of this
Section 8.2
) and the transactions contemplated by this German SPA shall be
abandoned, without further action by any of the Parties. If this German SPA is terminated as provided herein:
(a) Upon
the written request therefor, each Party will (i) redeliver or (ii) destroy with certification thereto in form and substance reasonably satisfactory
to the other party, all documents, work papers and other materials of any other party relating to the transactions contemplated by this German SPA, whether
obtained before or after the execution hereof, to the party furnishing the same;
provided, however
, that each Party shall be entitled to retain copies
of any such materials for record-keeping purposes or as required by Law; and
A-2-35
(b) Subject
to
Section 8.1
, in the event of the termination and abandonment of this German SPA pursuant to
Section 8.1, this German SPA shall forthwith become void and have no effect, without any liability on the part of any Party or its Affiliates, directors, managers, officers or stockholders,
other than the provisions of
Sections 8.1, 10.1, 10.2, 10.3, 10.7, 10.8, 10.9, 10.12
and
10.16.
Nothing
contained in this Section 8.2 shall relieve any party from liability for any breach of this German SPA.
ARTICLE IX
SURVIVAL; INDEMNIFICATION
Section 9.1
Survival of Indemnification Rights.
Subject to the limitations and other provisions of this
German SPA, the representations and warranties of Sellers in
Article III
and of the Target Companies and Sellers in Article IV shall
survive the Closing and remain in full force and effect until the later of the Cut-Off Date and the resolution of any claim for indemnification with respect to which any Purchaser
Indemnified Party has provided Sellers notice of a claim for indemnification pursuant to
Section 9.3(a)
prior to the Cut-Off Date;
provided, however
,
the following representations and warranties shall survive and remain in full force and effect for the period indicated:
(a)
Section 3.8
(Ownership of the Shares),
Section 4.3
(Capitalization of the Target Companies) and
Section 4.4
(Capitalization of the Subsidiaries; Other Interests), ten (10) years following
the Closing Date;
(b)
Section 4.16
(Environmental),
Section 4.18
(Labor Relations
and Employee Benefits),
Section 4.20
(Proprietary Rights) and
Section 4.27
(No Misleading
Statements), three (3) years following the Closing Date; and
(c)
Section 3.9
(Withholding Tax) and
Section 4.19
(Taxes and
Tax Returns), until sixty (60) calendar days after expiration of the applicable statute of limitations (including any extension thereof);
and
with respect to clauses (a), (b) and (c), if a claims notice has been provided by such date, shall remain in full force and effect until final resolution thereof.
The
covenants and agreements of Sellers and the Target Companies contained in this German SPA shall survive and remain in full force and effect for the applicable period specified
therein, or if no such period is specified, indefinitely. The provisions of this
Article IX
shall survive for so long as any other Section of
this German SPA shall survive.
Section 9.2
Indemnification Obligations.
Sellers agree to jointly and severally indemnify, defend and
hold harmless Purchasers, and, after the acquisition of the BPhysik Shares, Bruker Physik, and any parent, Subsidiary, associate, Affiliate, director, manager, officer, stockholder, employee or agent
thereof, and their respective representatives, successors and permitted assigns (all of the foregoing are collectively referred to as the "
Purchaser Indemnified
Parties
") from and against, and pay on behalf of or reimburse such party in respect of, as and when incurred, all Losses which any such party may actually incur, suffer,
sustain or become subject to or accrue, as a result of, in connection with, or relating to or by virtue of:
(a) any
inaccuracy in, or breach of, any representation or warranty made by a Target Company or Sellers under this German SPA or any Ancillary Agreement, other than any
representation or warranty in
Section 4.19
(Taxes and Tax Returns), it being understood that such representations and warranties shall be
interpreted without giving effect to any limitations or qualifications as to "materiality" (including the word "material" or "Material Adverse Effect") set forth therein;
A-2-36
(b) any
breach or nonfulfillment of any covenant or agreement on the part of Sellers or a Target Company in respect of pre-Closing covenants, under this German
SPA or any Ancillary Agreement;
(c) any
fees, expenses or other payments incurred or owed by Sellers or a Target Company to any agent, broker, investment banker or other firm or Person retained or employed
by Sellers or a Target Company in connection with the transactions contemplated by this German SPA; or
(d) any
inaccuracy in, or breach of, any representation or warranty in
Section 4.19
of this German SPA,
Section 4.21 of the Swiss Merger Agreement or Section 4.21 of the U.S. SPA to the extent that the aggregate amount of all such Losses exceeds $10,000,000 (the
"
Tax Deductible
") (other than Losses arising from criminal activity or fraudin each case as determined in a final,
non-appealable decision by a court of competent jurisdictionof Sellers or the Target Companies, which Losses shall not be subject to the Tax Deductible), it being understood
that such representations and warranties shall be interpreted without giving effect to any exceptions or disclosures made with respect thereto on the disclosure schedules to this German SPA, the Swiss
Merger Agreement or the U.S. SPA;
provided, however
, that any Taxes of a Subsidiary attributable to the payment of a Subsidiary Dividend (as defined in
the Swiss Merger Agreement) shall not be applied against the Tax Deductible.
Section 9.3
Indemnification Procedure.
(a) If
any Purchaser Indemnified Party intends to seek indemnification pursuant to this
Article IX
, such Purchaser
Indemnified Party shall promptly notify Sellers in writing. The Purchaser Indemnified Party will provide Sellers with prompt notice of any third-party claim in respect of which indemnification is
sought. The failure to provide either such notice will not affect any rights hereunder except to the extent Sellers are materially prejudiced thereby.
(b) If
such claim involves a claim by a Third Party against the Purchaser Indemnified Parties, Sellers may, upon notice to the Purchaser Indemnified Parties, assume, through
counsel of Sellers' choosing and at Sellers' expense, the settlement or defense thereof, and the Purchaser Indemnified Parties shall reasonably cooperate with Sellers in connection therewith;
provided
,
that the Purchaser Indemnified Parties may participate in such settlement or defense through counsel chosen by them;
provided, further
, that if the Purchaser Indemnified Parties reasonably determine
that representation by the counsel of Sellers and the Purchaser
Indemnified Parties may present such counsel with a conflict of interests, then Sellers shall pay the reasonable fees and expenses of the Purchaser Indemnified Parties' counsel. Notwithstanding
anything in this
Section 9.3
to the contrary, Sellers may not, without the prior written consent of the Purchaser Indemnified Parties, settle or
compromise any action or consent to the entry of any judgment, such consent not to be unreasonably withheld. So long as Sellers are contesting any such claim in good faith, the Purchaser Indemnified
Parties shall not pay or settle any such claim without Sellers' consent, such consent not to be unreasonably withheld. If Sellers are not contesting such claim in good faith, then the Purchaser
Indemnified Parties may conduct and control, through counsel of their own choosing and at Sellers' expense, the settlement or defense thereof, and Sellers shall cooperate with it in connection
therewith. The failure of the Purchaser Indemnified Parties to participate in, conduct or control such defense shall not relieve Sellers of any obligation they may have hereunder.
(c) Notwithstanding
anything to the contrary in this
Section 9.3
, to the extent a claim for which indemnification is
sought by Purchaser Indemnified Parties relates to Taxes for a taxable period beginning on or before and ending after the Closing Date, Sellers and Purchaser Indemnified Parties shall jointly control
any proceeding in respect of such claim and neither party shall settle or compromise any action or consent to the entry of any judgment with respect thereto without the prior written consent of the
other party, such consent not to be unreasonably withheld.
A-2-37
Section 9.4
Calculation of Indemnity Payments.
The amount of any Loss for which indemnification is
provided under this
Article IX
shall be (a) increased to the extent necessary such that after payment of any net Tax cost by the Purchaser
Indemnified Parties with respect to the receipt or accrual of indemnity payments hereunder, as increased pursuant to this clause (a), the amount remaining shall be the amount of the indemnity
payment prior to any increase pursuant to this clause (a) and (b) reduced by the amount of the net Tax benefit actually realized by the Purchaser Indemnified Parties by reason of such
Loss (as an illustrative example, clause (b) takes into account on a present value basis any net Tax benefit actually realized by the Purchaser Indemnified Party by reason of the indemnified
Loss in a Tax jurisdiction or Tax year other than the jurisdiction or year in which such Loss arose).
Section 9.5
Indemnification Amounts.
(a) Notwithstanding
any provision to the contrary contained in this German SPA, Sellers shall not be obligated to indemnify the Purchaser Indemnified Parties for any Losses
pursuant to this
Article IX
to the extent they are a result of any claim made pursuant to
Section 9.2(a)
unless and until the dollar amount of
all Losses in the aggregate from claims made pursuant to
Section 9.2(a)
of this German SPA, Section 10.2(a) of the Swiss Merger Agreement and Section 9.2(a) of the U.S. SPA exceed
$3,250,000, in which case Sellers will be obligated to indemnify the Purchaser Indemnified Parties for the total amount of Losses including any amounts which would otherwise not be required to be paid
by reason of this
Section 9.5; provided, however
, that in no event shall the aggregate indemnification obligations of Sellers pursuant to
Sections 9.2(a), (b)
or
(c)
of this German SPA, Sections 10.2(a), (b) or
(c) of the Swiss Merger Agreement and Sections 9.2(a), (b) or (c) of the U.S. SPA exceed Ninety Two Million Dollars ($92,000,000) (the "
Indemnity
Cap
");
provided, further
, that notwithstanding the foregoing, the Purchaser Indemnified Parties' right to seek indemnification
hereunder for any Losses arising out of (i) criminal activity or fraud (in each case as determined in a final, non-appealable decision by a court of competent jurisdiction) of
Sellers or the Target Companies or (ii)
Section 3.8
(Ownership of the Shares),
Section 3.9
(Withholding Tax),
Section 4.3
(Capitalization of Bruker Physik),
Section 4.4
(Capitalization of the Subsidiaries; Other Interests), or
Section 4.16
(Environmental) shall not be subject to, or limited by, the limits contained in this
Section 9.5; provided, further
, that with respect to any
Losses arising out of
Section 3.8
(Ownership of Shares) and
Section 3.9
(Withholding Tax),
the liability of any Seller beyond the Indemnity Cap shall be several and not joint. Notwithstanding the foregoing, no Seller shall have any liability under this
Article IX
or otherwise under this
German SPA in excess of the amount set forth opposite such Seller's name under the heading "Individual Selling
Shareholders' Indemnity Cap" as set forth on
Schedule 9.5
to the U.S. SPA.
(b) For
the purpose of calculating the amount of any Loss for which a Purchaser Indemnified Party is entitled to indemnification under this German SPA, the amount of each
Loss shall be deemed to be an amount net of any insurance proceeds and any indemnity, contribution or other similar payment that has been paid by any insurer or other third party with respect thereto.
The reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of counsel) actually incurred by the Purchaser Indemnified Parties in pursuing any
insurance proceeds or indemnity, contribution or other similar payment from any insurer or other third party under this
Article IX
shall
constitute additional Losses with respect to the matter for which indemnification may be sought hereunder, except to the extent such costs and expenses are paid or reimbursed by such insurer or other
third party. In the event that a Purchaser Indemnified Party is paid by Sellers for a Loss for which one or more insurance claims or claims against Third Parties has been or could be made, but for
which payment from such insurer or Third Party has not been received, then such Purchaser Indemnified Party shall assign, to the extent legally permissible, all such claims to Sellers for purposes of
recouping payment of such Loss. To the extent such assignment should not be legally permissible, the respective BRKR Indemnified Party shall remit
A-2-38
any
payment received, up to the amount of such Loss, from such insurance claim or Third Party claim to Sellers.
(c) Purchasers
shall be entitled to recover Losses from the Indemnity Escrow; provided, however, that the recovery is not limited to the amount in the Indemnity Escrow.
Section 9.6
Exclusive Remedy.
Purchasers acknowledge and agree that the indemnification provisions of
this Article IX shall be the sole and exclusive remedies of Purchasers against Sellers and the Target Companies for any breach by Sellers or the Target Companies of the representations and
warranties in this German SPA, for any failure by Sellers or the Target Companies to perform and comply with any covenants and agreements in this German SPA that are required to be complied with or
performed prior to the Closing and for any failure by Sellers or the Target Companies to perform and comply with any covenants and agreements in this German SPA, except that if any of the provisions
of this German SPA are not performed in accordance with their terms or are otherwise breached, Purchasers shall be entitled to specific performance of the terms thereof in addition to any other remedy
at law or equity. Notwithstanding anything contained in this German SPA to the contrary, Purchasers shall retain the right to receive damages or other relief (including equitable relief) against the
Target Companies or Sellers as a result of any criminal activity or fraudulent action (in each case as determined in a final, non-appealable decision by a court of competent jurisdiction)
by the Target Companies or Sellers without regard to any restriction or limitation contained herein. The indemnification obligations contained in this
Article IX
are obligations of Sellers and not
of the Target Companies.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1
Notices.
All notices and other communications required or permitted hereunder will be in
writing and, unless otherwise provided in this German SPA, will be deemed to have been duly given when delivered in person or when dispatched by electronic facsimile transfer (confirmed in writing by
mail simultaneously dispatched) or one (1) Business Day after having been dispatched by a nationally recognized overnight courier service to the appropriate party at the address specified
below:
-
(a)
-
If
to Purchasers, to:
Bruker
BioSciences Corporation
40 Manning Road
Billerica, MA 01821
Facsimile: 978-667-2917
Attention: Bill Knight
with
copies to:
Dewey &
LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019
Facsimile: 212-259-6333
Attention: Frederick W. Kanner, Esq.
Bryan J. Luchs, Esq.
A-2-39
-
(b)
-
If
to Sellers, to:
-
(c)
-
If
to Bruker Physik to:
or
to such other address or addresses as any such party may from time to time designate as to itself by like notice.
Section 10.2
Expenses.
Except as otherwise expressly provided herein, each Party will pay any expenses
incurred by it incident to this German SPA and in preparing to consummate and consummating the transactions contemplated by this German SPA;
provided,
however,
that with respect
A-2-40
to
any fees relating to the HSR Act or any requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions,
declarations, certificates and exemptions required for the consummation of the transactions contemplated by this German SPA under any corresponding requirements of the European Commission and/or the
European Union member states agencies or competition regulatory authorities in other jurisdictions, Purchasers shall be responsible for 100% of the fees for its filing and the Target Companies shall
be responsible for 100% of the fees for any filing made by the Target Companies or any of the Sellers.
Section 10.3
Successors and Assigns.
No Party may assign any of its rights under this German SPA without
the prior written consent of the other Parties. Subject to the preceding sentence, this German SPA will apply to, be binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the Parties. Notwithstanding anything to the contrary in this
Section 10.3
, (i) upon written notice to Sellers,
Purchasers shall be permitted to assign this German SPA and the rights and obligations under it to a wholly owned, direct or indirect subsidiary of Purchasers and (ii) BRKR shall be permitted
to assign this German SPA and the rights and obligations under it to Bruker BioSpin Corporation after the U.S. Closing such that, as a result of such assignment, Bruker BioSpin Corporation shall
become Purchaser 1 for all purposes hereunder;
provided
, that in the event of any such assignment, each Purchaser shall remain liable in full for the
performance of its obligations hereunder. Nothing expressed or referred to in this German SPA will be construed to give any Person other than the Parties any legal or equitable right, remedy or claim
under or with respect to this German SPA or any provision of this German SPA. This German SPA and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this
German SPA and their successors and assigns.
Section 10.4
Extension; Waiver.
Either Party may, by written notice to the other Party (a) extend
the time for performance of any of the obligations of the other Party under this German SPA, (b) waive any inaccuracies in the representations or warranties of the other Party contained in this
German SPA, (c) waive compliance with any of the conditions or covenants of the other Party contained in this German SPA or (d) waive or modify performance of any of the obligations of
the other Party under this German SPA;
provided
, that no Party may, without the prior written consent of the other Party, make or grant such extension
of time, waiver of inaccuracies or compliance or waiver or modification of performance with respect to its representations, warranties, conditions or covenants hereunder. Except as provided in the
immediately preceding sentence, no action taken pursuant to this German SPA will be deemed to constitute a waiver of compliance with any representations, warranties, conditions or covenants contained
in this German SPA and will not operate or be construed as a waiver of any subsequent breach, whether of a similar or dissimilar nature.
Section 10.5
Entire Agreement; Schedules.
This German SPA, the Swiss Merger Agreement and the U.S. SPA,
which includes the schedules and Schedules hereto and thereto, supersedes any other agreement, whether written or oral, that may have been made or entered into by any party relating to the matters
contemplated by this German SPA and such other agreements and constitutes the entire agreement by and among the Parties relating to these matters.
Section 10.6
Amendments, Supplements, Etc.
This German SPA may be amended or supplemented at any time by
additional written agreements as may mutually be determined by Bruker Physik, Techneon, Purchasers and Sellers to be necessary, desirable or expedient to further the purposes of this German SPA or to
clarify the intention of the Parties.
Section 10.7
Applicable Law.
This German SPA shall be governed by and construed under the Laws of the
Commonwealth of Massachusetts (without regard to the conflict of law principles thereof). Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this German SPA or
for recognition and enforcement of any judgment in respect hereof shall be brought and
A-2-41
determined
in the United States District Court for the Eastern District of Massachusetts or if such legal action or proceeding may not be brought in such court for jurisdictional purposes, in the
Superior Court of Massachusetts. Each of the Parties hereby (a) irrevocably submits with regard to any such action or proceeding to the exclusive personal jurisdiction of the aforesaid courts
in the event any dispute arises out of this German SPA or any transaction contemplated hereby and waives the defense of sovereign immunity, (b) agrees that it shall not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any such court or that such action is brought in an inconvenient forum and (c) agrees that it shall not bring any
action relating to this German SPA or any transaction contemplated hereby in any court other than any Massachusetts state or federal court sitting in Boston, Massachusetts.
Section 10.8
Waiver of Jury Trial.
Each of the Parties hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this German SPA or the transactions
contemplated by this
German SPA. Each of the Parties hereby (a) certifies that no representative, agent or attorney of the other Party has represented, expressly or otherwise, that such other Party would not, in
the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this German SPA and the transactions contemplated by this German SPA,
as applicable, by, among other things, the mutual waivers and certifications in this Section 10.8.
Section 10.9
Actions by Sellers.
Where any provision of this German SPA indicates that a Target Company
will take any specified action (or refrain from taking any specified action) or requires a Target Company to take any specified action (or to refrain from taking any specified action), then,
regardless of whether this German SPA specifically provides that Sellers will do so, Sellers shall cause the applicable Target Company to take such action (or to refrain from taking such action, as
applicable). Sellers will be responsible for the failure of Target Company to take any such action (or to refrain from taking any such action, as applicable).
Section 10.10
Execution in Counterparts.
This German SPA may be executed in two or more counterparts,
each of which will be deemed an original, but all of which together will constitute one and the same agreement.
Section 10.11
Titles and Headings.
Titles and headings to sections herein are inserted for convenience of
reference only, and are not intended to be a part of or to affect the meaning or interpretation of this German SPA.
Section 10.12
Invalid Provisions.
If any provision of this German SPA is held to be illegal, invalid or
unenforceable under any present or future Law, and if the rights or obligations under this German SPA of Sellers on the one hand and Purchasers on the other hand will not be materially and adversely
affected thereby, (a) such provision will be fully severable, (b) this German SPA will be construed and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this German SPA will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this German SPA and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this German SPA a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.
Section 10.13
Publicity.
The Parties agree that except as otherwise required by applicable Law or the
rules and regulations of any national securities exchange, no Party shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this German
SPA or the Ancillary Agreements without prior consultation with and consent of the Purchasers and Sellers, which consent shall not be unreasonably withheld, conditioned or delayed. A mutually agreed
press release is attached hereto as
Exhibit B.
A-2-42
Section 10.14
Specific Performance.
The Parties agree that if any of the provisions of this German SPA
were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.
Section 10.15
Construction.
(a) Whenever
the words "include," "includes," or "including" are used in this German SPA, they shall be deemed to be followed by the words "without limitation."
(b) All
terms defined in this German SPA shall have the defined meanings contained herein when used in any certificate or other document made or delivered pursuant hereto,
unless otherwise defined therein. The definitions contained in this German SPA are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such terms. References to a Person are also to its permitted successors and assigns.
(c) Any
agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and all attachments thereto and instruments incorporated therein.
(d) All
article, section, paragraph, schedule and Schedule references used in this German SPA are to articles, sections, paragraphs, schedules and Schedules to this German
SPA unless otherwise specified.
(e) The
Parties acknowledge that each Party and its attorney has reviewed this German SPA and that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this German SPA.
(f) Except
as explicitly set forth herein, all payments provided for in this German SPA shall be made in U.S. Dollars only, and not in Euros or in any other currency.
Section 10.16
Actions by Purchasers.
Any decision by Purchasers relating to a dispute or a potential
dispute between Purchasers and Sellers shall be subject to the approval of the Audit Committee.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
A-2-43
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
|
|
SCITEC GMBH & CO. KG (as seller)
|
|
|
By:
|
|
/s/
JOERG C. LAUKIEN
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Joerg C. Laukien
|
|
|
|
|
Title:
|
|
Managing Director
|
|
|
BRUKER BIOSCIENCES CORPORATION (as purchaser)
|
|
|
By:
|
|
/s/
FRANK H. LAUKIEN,
Ph.D
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Frank H. Laukien, Ph.D.
|
|
|
|
|
Title:
|
|
Chief Executive Officer and President
|
|
|
BRUKER DALTONIK GMBH (as purchaser)
|
|
|
By:
|
|
/s/
FRANK H. LAUKIEN,
Ph.D
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Frank H. Laukien, Ph.D
|
|
|
|
|
Title:
|
|
Managing Director
|
|
|
BRUKER OPTIK GMBH (as purchaser)
|
|
|
By:
|
|
/s/
DR. KLAUS-DIETER SCHMALBEIN
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Dr. Klaus-Dieter Schmalbein
|
|
|
|
|
Title:
|
|
Managing Director
|
|
|
BRUKER OPTIK GMBH (as purchaser)
|
|
|
By:
|
|
/s/
ROLF LANG
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Rolf Lang
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
|
|
BRUKER PHYSIK GMBH (as target as well as purchaser)
|
|
|
By:
|
|
/s/
ALBRECHT KEHR
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Albrecht Kehr
|
|
|
|
|
Title:
|
|
Managing Director
|
A-2-44
|
|
TECHNEON AG (as target)
|
|
|
By:
|
|
/s/
DR. RENE JEKER
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Dr. Rene Jeker
|
|
|
|
|
Title:
|
|
Director
|
|
|
TECHNEON AG (as target)
|
|
|
By:
|
|
/s/
ROGER DEUTSCH
|
|
|
|
|
|
|
|
|
|
Name:
|
|
Roger Deutsch
|
|
|
|
|
Title:
|
|
Director
|
|
|
DIRK D. LAUKIEN
|
|
|
/s/
DIRK D. LAUKIEN,
Ph.D
|
|
|
|
|
|
FRANK H. LAUKIEN
|
|
|
/s/
FRANK H. LAUKIEN,
Ph.D
|
|
|
|
|
|
ISOLDE LAUKIEN-KLEINER
|
|
|
/s/
ISOLDE LAUKIEN-KLEINER
|
|
|
|
|
|
JOERG C. LAUKIEN
|
|
|
/s/
JOERG C. LAUKIEN
|
|
|
|
|
|
MARC M. LAUKIEN
|
|
|
/s/
MARC M. LAUKIEN
|
|
|
|
|
|
ROBYN L. LAUKIEN
|
|
|
/s/
ROBYN L. LAUKIEN
|
|
|
|
A-2-45
Annex A-3
SWISS AGREEMENT AND PLAN OF MERGER
by and among
BRUKER BIOSCIENCES CORPORATION
("BRKR"),
BRUKER BIOSPIN BETEILIGUNGS AG
("Merger Sub"),
BRUKER BIOSPIN INVEST AG
("Invest")
and
DIRK D. LAUKIEN,
FRANK H. LAUKIEN,
ISOLDE LAUKIEN-KLEINER,
JOERG C. LAUKIEN,
MARC M. LAUKIEN,
and
ROBYN L. LAUKIEN
("Invest Shareholders")
Dated as of December 2, 2007
TABLE OF CONTENTS
|
|
|
|
Page
|
ARTICLE I
|
|
DEFINITIONS AND DEFINED TERMS
|
|
A-3-2
|
|
Section 1.1
|
|
Definitions
|
|
A-3-2
|
ARTICLE II
|
|
SHARE EXCHANGE AND CANCELLATION; MERGER; CLOSING
|
|
A-3-6
|
|
Section 2.1
|
|
Share Exchange
|
|
A-3-6
|
|
Section 2.2
|
|
Share Cancellation
|
|
A-3-6
|
|
Section 2.3
|
|
Merger
|
|
A-3-7
|
|
Section 2.4
|
|
The Closing
|
|
A-3-7
|
|
Section 2.5
|
|
Deliveries at Closing
|
|
A-3-7
|
|
Section 2.6
|
|
Withholding
|
|
A-3-8
|
ARTICLE III
|
|
REPRESENTATIONS AND WARRANTIES OF INVEST SHAREHOLDERS
|
|
A-3-8
|
|
Section 3.1
|
|
Power and Authority
|
|
A-3-8
|
|
Section 3.2
|
|
Enforceability
|
|
A-3-8
|
|
Section 3.3
|
|
No Violation
|
|
A-3-8
|
|
Section 3.4
|
|
No Conflict
|
|
A-3-9
|
|
Section 3.5
|
|
Litigation
|
|
A-3-9
|
|
Section 3.6
|
|
No Other Agreement
|
|
A-3-9
|
|
Section 3.7
|
|
No Broker
|
|
A-3-9
|
|
Section 3.8
|
|
Ownership of the Invest Shares
|
|
A-3-9
|
|
Section 3.9
|
|
Withholding Tax
|
|
A-3-9
|
|
Section 3.10
|
|
Investment Representation
|
|
A-3-9
|
|
Section 3.11
|
|
Legend
|
|
A-3-10
|
ARTICLE IV
|
|
REPRESENTATIONS AND WARRANTIES REGARDING INVEST
|
|
A-3-10
|
|
Section 4.1
|
|
Organization
|
|
A-3-10
|
|
Section 4.2
|
|
Authorization and Effect of Agreement
|
|
A-3-10
|
|
Section 4.3
|
|
Capitalization of Invest
|
|
A-3-10
|
|
Section 4.4
|
|
Capitalization of the Subsidiaries; Other Interests
|
|
A-3-11
|
|
Section 4.5
|
|
No Conflict
|
|
A-3-12
|
|
Section 4.6
|
|
Permits; Compliance with Law
|
|
A-3-12
|
|
Section 4.7
|
|
Books and Records
|
|
A-3-12
|
|
Section 4.8
|
|
Litigation
|
|
A-3-13
|
|
Section 4.9
|
|
Financial Statements; Undisclosed Liabilities
|
|
A-3-13
|
|
Section 4.10
|
|
Absence of Certain Changes
|
|
A-3-13
|
|
Section 4.11
|
|
Contracts
|
|
A-3-14
|
|
Section 4.12
|
|
Transactions with Affiliates
|
|
A-3-15
|
|
Section 4.13
|
|
Labor Relations
|
|
A-3-16
|
|
Section 4.14
|
|
Insurance
|
|
A-3-16
|
|
Section 4.15
|
|
Accounts Receivable
|
|
A-3-16
|
|
Section 4.16
|
|
Real Property; Leases
|
|
A-3-17
|
|
Section 4.17
|
|
Environmental
|
|
A-3-17
|
|
Section 4.18
|
|
No Broker
|
|
A-3-18
|
|
Section 4.19
|
|
Employee Benefits
|
|
A-3-18
|
|
Section 4.20
|
|
Employees
|
|
A-3-20
|
|
Section 4.21
|
|
Taxes and Tax Returns
|
|
A-3-20
|
A-3-i
|
Section 4.22
|
|
Proprietary Rights
|
|
A-3-22
|
|
Section 4.23
|
|
Information Technology
|
|
A-3-23
|
|
Section 4.24
|
|
Guarantees
|
|
A-3-23
|
|
Section 4.25
|
|
Bank Accounts
|
|
A-3-24
|
|
Section 4.26
|
|
Foreign Corrupt Practices and International Trade Sanctions
|
|
A-3-24
|
|
Section 4.27
|
|
Inventory
|
|
A-3-24
|
|
Section 4.28
|
|
Deposits
|
|
A-3-24
|
|
Section 4.29
|
|
No Misleading Statements
|
|
A-3-24
|
ARTICLE V
|
|
REPRESENTATIONS AND WARRANTIES OF BRKR
|
|
A-3-25
|
|
Section 5.1
|
|
Organization of BRKR; Authority
|
|
A-3-25
|
|
Section 5.2
|
|
Capitalization
|
|
A-3-25
|
|
Section 5.3
|
|
Authorization; Enforceability
|
|
A-3-25
|
|
Section 5.4
|
|
No Conflict
|
|
A-3-25
|
|
Section 5.5
|
|
No Broker
|
|
A-3-26
|
|
Section 5.6
|
|
SEC Filings
|
|
A-3-26
|
|
Section 5.7
|
|
Investment Representation
|
|
A-3-26
|
|
Section 5.8
|
|
Accredited Investor
|
|
A-3-26
|
ARTICLE VI
|
|
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
|
|
A-3-27
|
|
Section 6.1
|
|
Merger Sub
|
|
A-3-27
|
ARTICLE VII
|
|
COVENANTS
|
|
A-3-27
|
|
Section 7.1
|
|
Operation of Invest Pending the Closing
|
|
A-3-27
|
|
Section 7.2
|
|
Merger
|
|
A-3-29
|
|
Section 7.3
|
|
Access
|
|
A-3-29
|
|
Section 7.4
|
|
Notification
|
|
A-3-29
|
|
Section 7.5
|
|
No Inconsistent Action
|
|
A-3-30
|
|
Section 7.6
|
|
Reasonable Best Efforts
|
|
A-3-30
|
|
Section 7.7
|
|
Further Assurances
|
|
A-3-30
|
|
Section 7.8
|
|
No Solicitation
|
|
A-3-30
|
|
Section 7.9
|
|
Tax Matters
|
|
A-3-31
|
|
Section 7.10
|
|
Release
|
|
A-3-31
|
|
Section 7.11
|
|
Voting Agreement
|
|
A-3-32
|
|
Section 7.12
|
|
Non-competition and Non-solicitation
|
|
A-3-32
|
|
Section 7.13
|
|
Restrictions on Sales
|
|
A-3-32
|
|
Section 7.14
|
|
No Election
|
|
A-3-32
|
|
Section 7.15
|
|
Compulsory Share Transfer
|
|
A-3-32
|
|
Section 7.16
|
|
Compulsory Share Transfer relating to Bruker AG and Bruker International
|
|
A-3-33
|
|
Section 7.17
|
|
Transfer of Wheeler & Co. Shares
|
|
A-3-33
|
ARTICLE VIII
|
|
CLOSING CONDITIONS
|
|
A-3-33
|
|
Section 8.1
|
|
Conditions to Each Party's Obligations
|
|
A-3-33
|
|
Section 8.2
|
|
Conditions Precedent to Obligations of BRKR and Merger Sub
|
|
A-3-34
|
|
Section 8.3
|
|
Conditions Precedent to Obligations of Invest Shareholders and Invest
|
|
A-3-35
|
ARTICLE IX
|
|
TERMINATION
|
|
A-3-36
|
|
Section 9.1
|
|
Termination
|
|
A-3-36
|
|
Section 9.2
|
|
Procedure and Effect of Termination
|
|
A-3-36
|
A-3-ii
ARTICLE X
|
|
SURVIVAL; INDEMNIFICATION
|
|
A-3-37
|
|
Section 10.1
|
|
Survival of Indemnification Rights
|
|
A-3-37
|
|
Section 10.2
|
|
Indemnification Obligations
|
|
A-3-37
|
|
Section 10.3
|
|
Indemnification Procedure
|
|
A-3-38
|
|
Section 10.4
|
|
Calculation of Indemnity Payments
|
|
A-3-39
|
|
Section 10.5
|
|
Indemnification Amounts
|
|
A-3-39
|
|
Section 10.6
|
|
Exclusive Remedy
|
|
A-3-40
|
ARTICLE XI
|
|
MISCELLANEOUS PROVISIONS
|
|
A-3-41
|
|
Section 11.1
|
|
Notices
|
|
A-3-41
|
|
Section 11.2
|
|
Expenses
|
|
A-3-41
|
|
Section 11.3
|
|
Successors and Assigns
|
|
A-3-42
|
|
Section 11.4
|
|
Extension; Waiver
|
|
A-3-42
|
|
Section 11.5
|
|
Entire Agreement; Schedules
|
|
A-3-42
|
|
Section 11.6
|
|
Amendments, Supplements, Etc
|
|
A-3-42
|
|
Section 11.7
|
|
Applicable Law
|
|
A-3-42
|
|
Section 11.8
|
|
Waiver of Jury Trial
|
|
A-3-43
|
|
Section 11.9
|
|
Actions by Invest Shareholders
|
|
A-3-43
|
|
Section 11.10
|
|
Execution in Counterparts
|
|
A-3-43
|
|
Section 11.11
|
|
Titles and Headings
|
|
A-3-43
|
|
Section 11.12
|
|
Invalid Provisions
|
|
A-3-43
|
|
Section 11.13
|
|
Publicity
|
|
A-3-43
|
|
Section 11.14
|
|
Specific Performance
|
|
A-3-44
|
|
Section 11.15
|
|
Construction
|
|
A-3-44
|
|
Section 11.16
|
|
Actions by BRKR
|
|
A-3-44
|
EXHIBIT
Exhibit APress
Release
ANNEXES
Annex
AExcerpt of the Commercial Register Entry of Merger Sub
Annex
BForm of Merger Filing
The
exhibit and annexes are omitted in accordance with Item 601(b)(2) of Regulation S-K. The Registrant will furnish a copy of any omitted exhibit to the Securities and Exchange
Commission supplementally upon request.
A-3-iii
List of Schedules
Schedule 2.1
|
|
Exchange Shares
|
Schedule 2.1-1
|
|
Share Exchange Price
|
Schedule 2.1-2
|
|
Form of Exchange Shares Transfer Deed
|
Schedule 2.2
|
|
Cancellation Shares
|
Schedule 2.2-1
|
|
Share Cancellation Price
|
Schedule 2.2-2
|
|
Form of Cancellation Shares Transfer Deed
|
Schedule 4.3(b)
|
|
Options, Warrants, Calls, Rights, Etc.
|
Schedule 4.4(a)
|
|
Directly and Indirectly Owned Subsidiaries
|
Schedule 4.4(b)
|
|
Subsidiary Options
|
Schedule 4.4(c)
|
|
Directly/Indirectly Owned Interests or Investments
|
Schedule 4.5(c)
|
|
No Conflict
|
Schedule 4.6(a)
|
|
Permits; Compliance with Law
|
Schedule 4.7
|
|
Books and Records
|
Schedule 4.8
|
|
Litigation
|
Schedule 4.9
|
|
Financial Statements; Undisclosed Liabilities
|
Schedule 4.10
|
|
Absence of Certain Changes
|
Schedule 4.11(a)
|
|
Contracts
|
Schedule 4.11(b)
|
|
Other Contracts
|
Schedule 4.12
|
|
Transactions with Affiliates
|
Schedule 4.13(a)
|
|
Labor Relations
|
Schedule 4.14
|
|
Insurance Policies
|
Schedule 4.16(a)
|
|
Owned Real Property
|
Schedule 4.16(b)
|
|
Real Property Leases
|
Schedule 4.17
|
|
Environmental Permits
|
Schedule 4.19
|
|
Employee Benefit Plans
|
Schedule 4.20
|
|
Employees
|
Schedule 4.21
|
|
Taxes and Tax Returns
|
Schedule 4.22(a)
|
|
Invest Proprietary Rights
|
Schedule 4.22(b)
|
|
Invest Proprietary Rights
|
Schedule 4.23
|
|
Information Technology
|
Schedule 4.24
|
|
Guarantees
|
Schedule 4.25
|
|
Bank Accounts
|
Schedule 4.29
|
|
No Misleading Statements
|
Schedule 5.4
|
|
No Conflict
|
A-3-iv
SWISS AGREEMENT AND PLAN OF MERGER
This SWISS AGREEMENT AND PLAN OF MERGER (this "
Agreement
" or "
Swiss Merger
Agreement
") is made and entered into as of December 2, 2007 by and among Bruker BioSciences Corporation, a Delaware corporation
("
BRKR
"), Bruker BioSpin Beteiligungs AG, a Swiss corporation which, subsequent to the transfer of the founders' compulsory shares to BRKR will be
wholly owned by BRKR ("
Merger Sub
"), Bruker BioSpin Invest AG, a Swiss corporation ("
Invest
"), and Dirk
D. Laukien, Frank H. Laukien, Isolde Laukien-Kleiner, Joerg C. Laukien, Marc M. Laukien and Robyn L. Laukien (each an "
Invest Shareholder
" and
collectively, "
Invest Shareholders
").
RECITALS
WHEREAS, Invest Shareholders (and, prior to the Compulsory Share Transfer, Compulsory Shareholders) own 16,000 registered shares, par value CHF 1,000 per share,
of Invest (the "
Invest Shares
"), which constitute all of the issued and outstanding capital stock of Invest as of the date hereof;
WHEREAS,
BRKR desires to acquire the Invest Shares and to thereby cause Invest to become a wholly owned Subsidiary of BRKR;
WHEREAS,
the Parties intend that Merger Sub shall be merged with and into Invest pursuant to the Swiss Federal Act on Merger, Demerger, Transformation and Transfer of Assets (the
"
Merger Act
" and such merger, the "
Merger
"), with Invest surviving the Merger;
WHEREAS,
the Parties intend that, in connection with the Merger and Share Cancellation, BRKR shall issue that number of shares of BRKR Stock equal to the Share Exchange Price to Invest
Shareholders in exchange for 15,840 Invest Shares, upon the terms and subject to the conditions set forth herein (the "
Share Exchange
");
WHEREAS,
the Parties intend that, in connection with the Merger and Share Exchange, 160 Invest Shares shall be canceled, and in exchange for such cancellation Invest Shareholders
shall be entitled to receive that number of shares of BRKR Stock equal to the Share Cancellation Price, upon the terms
and subject to the conditions set forth herein (the "
Share Cancellation
", and together with the Merger, the Share Exchange and the Compulsory Share
Transfer, the "
Swiss Transactions
");
WHEREAS,
for U.S. federal income tax purposes, it is intended that the Swiss Transactions qualify as a reorganization under Section 368(a) of the Code and that this Swiss Merger
Agreement shall be, and is hereby adopted as, a plan of reorganization for purposes of Section 368(a) of the Code;
WHEREAS,
the Board of Directors of BRKR has appointed a Special Committee of independent directors to consider the acquisition of the Bruker BioSpin group of companies (the transactions
effecting such acquisition, the "
Transactions
"), which is comprised of Invest, Bruker BioSpin Inc. ("
BioSpin
U.S.
"), Bruker Physik GmbH ("
Bruker Physik
") and Techneon AG ("
Techneon
"), and
each of their respective Subsidiaries;
WHEREAS,
reference is made to that certain U.S. Stock Purchase Agreement, dated as of December 2, 2007, by and among BRKR, Invest Shareholders and BioSpin U.S. (the
"
U.S. SPA
"), wherein is contemplated the acquisition of 100% of BioSpin U.S. from Invest Shareholders for $99,962,514 in cash by BRKR;
WHEREAS,
pursuant to Section 2.5 of the U.S. SPA, an escrow fund of $92,000,000 (the "
Indemnity Escrow
"), to be funded by the
purchase price of the U.S. SPA, shall be created to serve as security for fulfillment by Invest Shareholders of their obligations pursuant to
Article X
of this Swiss Merger Agreement,
Article IX of the U.S. SPA and Article IX of the German SPA;
WHEREAS,
reference is made to that certain German Share Purchase Agreement, dated as of December 2, 2007, by and among BRKR (or after the U.S. Closing and assignment of BRKR
rights
A-3-1
and
obligations under the German SPA, Bruker BioSpin Corporation), SciTec GmbH & Co. KG ("
SciTec
"), Techneon, Bruker Optik GmbH, Bruker Daltonik
GmbH, Invest Shareholders and Bruker Physik (the "
German SPA
"), wherein is contemplated (i) the acquisition of common shares of Bruker Physik in
the aggregate nominal amount of €2,167,500 from Invest Shareholders and the acquisition of common shares of Bruker Physik in the aggregate nominal amount of €5,227,500
from SciTec for $143,460,000 in cash by, respectively, Bruker BioSpin Corporation (following the U.S. Closing) (shares in the aggregate of nominal €4,292,500), Bruker Daltonik GmbH
(one share of nominal €1,551,250) and Bruker Optik GmbH (one share of nominal €1,551,250), with one share of nominal €1,105,000 of Bruker Physik
remaining in the ownership of Techneon, a wholly owned subsidiary of SciTec, (ii) the subsequent acquisition of 100% of the common shares of Techneon from SciTec by Bruker Physik for
$142,540,000 in cash, and (iii) the purchase by Bruker Optik GmbH of one piece of real property in Ettlingen, Germany (registered as Nr. 4276 in the land register of Ettlingen) from SciTec and
Isolde Laukien-Kleiner for €1,416,250 in cash;
WHEREAS,
before the Closing Date, Invest will pay a special cash dividend of CHF 75,000,000 in the aggregate to be distributed to the holders, as per the resolution of the extraordinary
shareholders' meeting of Invest held on November 15, 2007, of outstanding Invest Shares (the "
Special Dividend
", to be funded by special cash
dividends (the "
Subsidiary Dividends
") distributed from, in each case to Invest as sole equity holder of, each of Bruker BioSpin K.K., Bruker BioSpin
Scandinavia AB, Bruker BioSpin Ltd., Bruker BioSpin AG, Bruker BioSpin International AG, Bruker BioSpin S.A., Bruker BioSpin Ltd., Bruker BioSpin B.V. and Bruker BioSpin MRI GmbH (the
"
Distributing Subsidiaries
");
WHEREAS,
after the consummation of the Transactions, BRKR intends to cause itself to be renamed "Bruker Corporation";
WHEREAS,
the incorporation of Merger Sub has been registered in the Commercial Register on November 26, 2007 and has been published in the Swiss Official Commercial Gazette on
November 30, 2007. To ensure that all Parties to this Swiss Merger Agreement have knowledge of the legal existence of Merger Sub,
Annex A
sets
forth a copy of the legalized excerpt of the commercial register entry of Merger Sub as available as of the date hereof;
WHEREAS,
the desired Merger of Merger Sub and Invest, which shall be made pursuant to the Merger Act, under which Merger Sub and Invest, and the board of directors of Merger Sub and
Invest, intend to enter into a merger agreement (the "
Merger Filing
") and do all such acts and sign all such documents to enable the Merger as
contemplated by this Swiss Merger Agreement;
NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements herein contained, the Parties agree as follows:
ARTICLE I
DEFINITIONS AND DEFINED TERMS
Section 1.1
Definitions.
(a) As
used in this Swiss Merger Agreement, the following terms shall have the following meanings:
"
Ancillary Agreements
" shall mean the Merger Filing, the Exchange Shares Assignment Deed and the Cancellation Shares Assignment Deed.
"
Commercial Register
" shall mean the commercial register of the Canton of Zug.
"
Consent
" shall mean any consent, approval or authorization of, notice to, permit, or designation, registration, declaration or filing
with, any Person, including any consents and approvals from BRKR's and Invest's (and their respective Subsidiaries') existing lenders.
A-3-2
"
Employee
" shall mean any employee of Invest, any of its Subsidiaries or any person providing services through a third-party employee
leasing or similar organization.
"
Exchange Act
" shall mean the U.S. Securities Exchange Act of 1934, as amended.
"
Fair Market Value
" shall mean, with respect to a publicly traded security on a particular date, the last closing price of such security
on the NASDAQ Global Select Market.
"
GAAP
" shall mean the accounting (including valuation and consolidation) principles generally accepted in the stated jurisdiction, and the
statutory provisions underlying such principles.
"
Invest IT Systems
" shall mean any and all information technology and computer systems (including software, hardware and other equipment,
firmware and embedded software) relating to the transmission, storage, maintenance, organization, presentation, generation, processing or analysis of data and information whether or not in electronic
format, which technology and systems are used in or necessary to the conduct of the business of Invest or the Subsidiaries.
"
Knowledge
" (including the word "
Known
" and the phrase "
to the
Knowledge of
" and words or phrases of similar import) as to Invest Shareholders or Invest shall mean the knowledge of (i) Invest Shareholders with respect to Invest
Shareholders, (ii) Roger Deutsch, Arne Kasten, Tony Keller, Daniel Sauter, Christoph Straub and Invest Shareholders with respect to Invest and its Subsidiaries and (iii) specifically as
to Bruker BioSpin AG, Remo Lüchinger; in all such cases, assuming reasonable inquiry.
"
Material Adverse Effect
" shall mean any circumstance, change or effect that, individually or in the aggregate with other circumstances,
changes or effects, is or is reasonably likely to materially delay or impede consummation of the transactions contemplated by this Swiss Merger Agreement or be materially adverse to the business,
operations (including results of operations), prospects, assets, liabilities, or financial condition of Invest and the Subsidiaries taken as a whole;
provided,
however,
that none of the following, either alone or in combination, shall be considered in determining whether there has been a Material Adverse Effect: (a) events,
circumstances, changes or effects (including legal and regulatory changes) that generally affect the industries in which each of Invest and the Subsidiaries operate, other than such events,
circumstances, changes or effects that disproportionately affect (relative to other industry participants) Invest or the Subsidiaries and (b) changes caused by a material worsening of current
conditions caused by acts of terrorism or war occurring after the date hereof.
"
Ordinary Course of Business
" shall mean the ordinary course of business of Invest and its Subsidiaries consistent with past practice.
"
Parties
" shall mean Invest, BRKR, Merger Sub and Invest Shareholders.
"
Permits
" shall mean all permits, licenses, approvals, certifications, registrations, franchises, notices and authorizations issued by any
Governmental Authority that are used or held for use in, necessary or otherwise relate to the ownership, operation or other use of any business of Invest or its Subsidiaries.
"
Permitted Liens
" shall mean (i) mechanics', carriers', workmen's, repairmen's or other like Liens arising or incurred in the
Ordinary Course of Business for amounts which are not material and not yet due and payable and which secure an obligation of Invest or its Subsidiaries, (ii) Liens arising under Contracts with
Third Parties entered into in the Ordinary Course of Business in respect of amounts still owing, which Liens are reflected in the Financial Statements, and (iii) Liens for Taxes that are not
due and payable.
A-3-3
"
Schedule
" shall mean that schedule delivered to BRKR by Invest Shareholders prior to the execution of this Swiss Merger Agreement (each
numbered Schedule of which qualifies only the correspondingly numbered representation, warranty or covenant to the extent specified therein).
"
SEC
" shall mean the U.S. Securities and Exchange Commission.
"
Securities Act
" shall mean the U.S. Securities Act of 1933, as amended.
"
Significant Subsidiary
" shall mean a Subsidiary that meets any of the following conditions:
(i) Invest's
and Invest's other Subsidiaries' investments in and advances to the Subsidiary exceed ten percent (10%) of the total assets of Invest and the Subsidiaries
consolidated as of the end of the most recently completed fiscal year;
(ii) Invest's
and Invest's other Subsidiaries' proportionate share of the total assets (after intercompany eliminations) of the Subsidiary exceeds ten percent (10%) of the
total assets of Invest and the Subsidiaries consolidated at the end of the most recently completed fiscal year; or
(iii) Invest
and Invest's other Subsidiaries' equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in
accounting principle of the Subsidiary exceeds ten percent (10%) of such income of Invest and the Subsidiaries consolidated for the most recently completed fiscal year.
"
Subsidiary
" shall mean, with respect to any Person, any other corporation, partnership, limited liability company, joint venture or other
entity in which such Person (i) owns, directly or indirectly, fifty percent (50%) or more of the outstanding voting securities, equity securities, profits interest or capital interest,
(ii) is entitled to elect at least a majority of the board of directors or similar governing body or (iii) in the case of a limited partnership or limited liability company, is a general
partner or managing member, respectively. When used without reference to a particular entity, Subsidiary means a Subsidiary of Invest.
"
Swiss Francs
" and "
CHF
" shall mean the lawful currency of Switzerland.
(b) Terms
defined in the U.S. SPA shall, when used in this Swiss Merger Agreement and unless otherwise defined in this Swiss Merger Agreement, have the meaning ascribed to
them in the U.S. SPA.
(c) Each
of the following terms is defined in the Section set forth opposite such term:
Term
|
|
Section
|
Accounts Receivable
|
|
4.15
|
Acquisition Price
|
|
2.2
|
Agreement
|
|
Preamble
|
Alternative Proposal
|
|
7.8(b)
|
Benefit Plan
|
|
4.19(a)
|
BioSpin U.S.
|
|
Recitals
|
BRKR
|
|
Preamble
|
BRKR Indemnified Parties
|
|
10.2
|
BRKR Preferred Shares
|
|
5.2(a)
|
BRKR SEC Documents
|
|
5.6(a)
|
Bruker AG
|
|
4.6(a)
|
Bruker International
|
|
4.9(a)
|
Bruker Physik
|
|
Recitals
|
Cancellation Shares
|
|
2.2
|
Cancellation Shares Transfer Deed
|
|
2.2
|
A-3-4
Closing
|
|
2.4
|
Closing Date
|
|
2.4
|
Compulsory Shares
|
|
3.8
|
Compulsory Shareholders
|
|
3.8
|
Compulsory Share Transfer
|
|
7.15
|
Deposit
|
|
4.28
|
Distributing Subsidiary
|
|
Recitals
|
Effective Time
|
|
2.3
|
Environmental Law
|
|
4.17(e)(ii)
|
Environmental Permits
|
|
4.17(e)(iii)
|
Exchange Shares
|
|
2.1
|
Exchange Shares Transfer Deed
|
|
2.1
|
Financial Statements
|
|
4.9(a)
|
German SPA
|
|
Recitals
|
Hazardous Substances
|
|
4.17(e)(i)
|
Indemnity Cap
|
|
10.5(a)
|
Indemnity Escrow
|
|
Recitals
|
Invest
|
|
Preamble
|
Invest Contracts
|
|
4.11(b)
|
Invest Proprietary Rights
|
|
4.22(a)
|
Invest Shareholders
|
|
Preamble
|
Invest Shares
|
|
Recitals
|
Leased Real Property
|
|
4.16(b)
|
Merger
|
|
Recitals
|
Merger Act
|
|
Recitals
|
Merger Balance Sheet
|
|
2.3
|
Merger Documents
|
|
7.2
|
Merger Filing
|
|
Recitals
|
Merger Sub
|
|
Preamble
|
Owned Proprietary Rights
|
|
4.22(a)
|
Owned Real Property
|
|
4.16(a)
|
Proceedings
|
|
3.5
|
Proprietary Rights
|
|
4.22(a)
|
Real Property
|
|
4.16(b)
|
Real Property Leases
|
|
4.16(b)
|
Refund
|
|
4.28
|
Related Party
|
|
4.12
|
Release
|
|
4.17(e)(iv)
|
Representatives
|
|
7.3
|
SciTec
|
|
Recitals
|
Share Cancellation
|
|
Recitals
|
Share Cancellation Price
|
|
2.2
|
Share Exchange
|
|
Recitals
|
Share Exchange Price
|
|
2.1
|
Special Dividend
|
|
Recitals
|
Subsidiary Dividends
|
|
Recitals
|
Surviving Company
|
|
2.3
|
Swiss Closing
|
|
2.4
|
Swiss Merger Agreement
|
|
Preamble
|
Swiss Transactions
|
|
Recitals
|
A-3-5
Tax Deductible
|
|
10.2(e)
|
Techneon
|
|
Recitals
|
Trade Secrets
|
|
4.22(a)
|
Transactions
|
|
Recitals
|
U.S. SPA
|
|
Recitals
|
ARTICLE II
SHARE EXCHANGE AND CANCELLATION; MERGER; CLOSING
Section 2.1
Share Exchange.
Each Invest Shareholder hereby undertakes to assign, transfer and convey to
BRKR (and BRKR undertakes to accept such assignment, transfer and conveyance from Invest Shareholders) at the Closing, upon the terms and subject to the conditions set forth herein, the number of
Invest Shares set forth opposite each Invest Shareholder's name on
Schedule 2.1
(the "
Exchange
Shares
"), free and clear of any Liens, and BRKR shall deliver to each such Invest Shareholder the number of shares of BRKR Stock (the aggregate of all such shares delivered by
BRKR to Invest Shareholders, the "
Share Exchange Price
") set forth opposite such Invest Shareholder's name on
Schedule 2.1-1
. The assignment of the
Exchange Shares shall not be effected by this Swiss Merger Agreement but by way of a separate
assignment deed under Swiss law, to be entered into on the Closing Date, in substantially the form attached hereto as
Schedule 2.1-2
(the "
Exchange Shares Transfer Deed
").
Section 2.2
Share Cancellation.
Invest Shareholders hereby undertake to assign, transfer and convey, at
the Closing and simultaneously with the consummation of the Share Exchange, upon the terms and subject to the conditions set forth herein, to Invest, and Invest shall accept such assignment, transfer
and conveyance from Invest Shareholders, the number of Invest Shares set forth opposite each Invest Shareholder's name on
Schedule 2.2
(the
"
Cancellation Shares
"), free and clear of any Liens, and, at the Effective Time and in the Merger, Invest shall deliver to each such Invest Shareholder
the number of shares of BRKR Stock (the aggregate of all such shares delivered by Invest to Invest Shareholders, the "
Share Cancellation Price
", and
together with the Share Exchange Price, the "
Acquisition Price
") set forth opposite such Invest Shareholder's name on
Schedule 2.2-1; provided, however,
that, in the event that the aggregate number of shares of BRKR Stock listed on
Schedule 2.2-1
have a total Fair Market Value greater than CHF 160,000, then the number of shares of BRKR
Stock constituting the
Share Cancellation Price shall be reduced, and each Invest Shareholder's share of the Share Cancellation Price shall be accordingly reduced on a pro rata basis, to that number of shares of BRKR Stock
that have a total Fair Market Value of CHF 160,000. The assignment of the Cancellation Shares shall not be effected by this Swiss Merger Agreement but by way of a separate assignment deed under Swiss
law, to be entered into on the Closing Date, in
substantially the form attached hereto as
Schedule 2.2-2
(the "
Cancellation Shares Transfer
Deed
"). Invest hereby agrees that, upon the receipt of the Cancellation Shares by Invest, the Cancellation Shares shall not confer any membership rights (including voting
rights) or any financial rights (including the right to receive dividends) on any Person, until such time as a transfer of such Cancellation Shares by Invest or annulment of such Cancellation Shares
by reduction of Invest's share capital shall have occurred.
A-3-6
Section 2.3
Merger.
BRKR shall cause Invest and Merger Sub to (i) receive from a specially
qualified auditor a confirmation that there are no known or expected claims of Merger Sub and Invest which could be jeopardized due to the Merger (Article 25(2) of the Merger Act),
(ii) consult with the employee representatives of the merging entities pursuant to Article 28 of the Merger Act, (iii) execute the Merger Filing, which complies with
Article 13 in connection with Articles 23(1)(b) and 24(1) of the Merger Act, attached hereto as
Annex B
, and (iv) file the executed Merger
Filing together with the merger balance sheet as of the Closing produced in accordance with Article 11 of the Merger Act ("
Merger Balance
Sheet
"), with the Commercial Register. Upon the effectiveness of the Merger (the "
Effective Time
"), Merger Sub will, by
operation of Swiss law, merge with and into Invest (referred to after the Merger as the "
Surviving Company
"). As a result of the Merger, the shares of
Merger Sub will automatically be canceled and will cease to exist, all assets, liabilities and obligations of Merger Sub prior to the Merger will automatically be assumed by the Surviving Company and
the separate legal existence of Merger Sub shall terminate. Because the Merger qualifies as a simplified merger pursuant to Article 23(1)(b) of the Merger Act, there is no requirement for an
increase of the share capital of the Surviving Company and/or an exchange of shares of Merger Sub against shares of Invest. As a result of the Swiss Transactions, Invest Shareholders shall acquire
57,544,872 shares of BRKR Stock and Invest shall become a direct, wholly owned Subsidiary of BRKR.
Section 2.4
The Closing.
The closing of the transactions contemplated by this Swiss Merger Agreement (the
"
Closing
" or "
Swiss Closing
") shall take place at the offices of Dewey & LeBoeuf LLP, 1301 Avenue
of the Americas, New York, New York, 10019, at 10:00 a.m., New York time, on the later of (i) January 23, 2008 and (ii) the first (1st) Business Day following the
satisfaction or waiver of all conditions to the obligations of the Parties to consummate the Swiss transactions contemplated hereby (other than conditions which by their nature are to be satisfied at
the Closing, but subject to the satisfaction or waiver of those conditions) or such other date as BRKR and Invest Shareholders may mutually agree in writing (the "
Closing
Date
"). The Closing shall be deemed to have been consummated at 12:02 a.m., New York time, on the Closing Date.
Section 2.5
Deliveries at Closing.
At the Closing:
(a) Invest
Shareholders shall deliver the following documents and deliverables:
(i) to
BRKR, a share register of Invest duly issued by the board of directors of Invest showing that Invest Shareholders are the only holders of Invest Shares;
(ii) to
BRKR, the Exchange Shares Transfer Deed, duly signed by each of Invest Shareholders;
(iii) to
Invest, the Cancellation Shares Transfer Deed, duly signed by each of the Invest Shareholders;
(iv) to
BRKR and Invest, a circular resolution signed by all members of the board of directors of Invest evidencing that the board of directors of Invest resolved that BRKR
and Invest, contingent upon the Closing, shall be registered in Invest's share register as shareholders in respect of the Exchange Shares and the Cancellation Shares, respectively;
(v) to
BRKR, a receipt executed by Invest Shareholders for the Share Exchange Price;
(vi) to
BRKR, an excerpt of the entry of Invest in the Commercial Register, which is not older than 5 calendar days, evidencing that Isolde Laukien-Kleiner has resigned from
the board of directors of Invest and that Tony Keller is registered as president of the board of directors of Invest and a statement of Isolde Laukien-Kleiner that she has been fully compensated for
her services rendered to Invest and that she has no, and validly waives all, claims of whatsoever nature against Invest except for claims under this Swiss Merger Agreement; and
A-3-7
(vii) to
BRKR, all other documents and instruments required to be delivered by Invest Shareholders pursuant to this Swiss Merger Agreement or any Ancillary Agreement to
which Invest Shareholder is or is required to be a party, including those set forth in
Article VIII
, and any other document or instrument
reasonably requested by BRKR.
(b) Invest
shall deliver to BRKR all documents and instruments required to be delivered by Invest pursuant to this Swiss Merger Agreement or any Ancillary Agreement to which
Invest is or is required to be a party, including those set forth in
Article VIII
, and any other document or instrument reasonably requested by
BRKR.
(c) BRKR
shall deliver the following documents and deliverables to each Invest Shareholder:
(i) stock
certificates evidencing shares of BRKR Stock representing all of such Invest Shareholder's portion of the Share Exchange Price, duly endorsed in blank, or
accompanied by stock powers duly executed in blank and with all required stock transfer tax stamps affixed; and
(ii) all
other documents and instruments required to be delivered by BRKR pursuant to
Article VIII
.
Section 2.6
Withholding.
BRKR shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Swiss Merger Agreement such amounts as it reasonably determines it should deduct and withhold with respect to the making of such payment under the Code and the rules and
Treasury Regulations promulgated thereunder, or any provision of state, local or foreign Tax Law. To the extent that amounts are so withheld or paid over to or deposited with the relevant Governmental
Authority, including any Taxing Authority, such amounts shall be treated for all purposes of this Swiss Merger Agreement as having been paid to the Person in respect of which such deduction and
withholding was made by BRKR.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVEST SHAREHOLDERS
Invest Shareholders hereby jointly and severally represent and warrant to BRKR (except with respect to the representations in
Sections
3.8, 3.9, 3.10
and
3.11
, which are made by each Invest Shareholder in its individual capacity), as of the date hereof and as of
the Closing Date or, if a representation or warranty is made as of a specified date, as of such date, as follows:
Section 3.1
Power and Authority.
Invest Shareholders have all necessary power and authority to execute,
deliver and perform this Swiss Merger Agreement and, as of the Closing Date, the Ancillary Agreements, if any, to which it will become a party.
Section 3.2
Enforceability.
This Swiss Merger Agreement and, as of the Closing Date, each Ancillary
Agreement to which any Invest Shareholder is a party have been duly executed and delivered by Invest Shareholders and (assuming due authorization, execution and delivery by BRKR), constitute a legal,
valid and binding obligation of Invest Shareholders, enforceable against Invest Shareholders in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar Laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 3.3
No Violation.
Invest Shareholders' execution and delivery of this Swiss Merger Agreement and,
as of the Closing Date, any Ancillary Agreement to which any Invest Shareholder is a party, the consummation of the Swiss Transactions contemplated hereby or thereby or compliance by Invest
Shareholders with any of the provisions hereof or thereof will not (a) result in the creation of any Lien upon the Invest Shares under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, agreement or any other instrument or obligation to which
A-3-8
any
Invest Shareholder is a party or by which Invest Shareholders or the Invest Shares may be bound or affected, by Law or otherwise, (b) violate any Law applicable to Invest Shareholders or
the Invest Shares or (c) conflict with, result in any breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, require any consent
under any Contract to which any of Invest Shareholders a party or by which any of Invest Shareholders may be bound.
Section 3.4
No Conflict.
The execution and delivery of this Swiss Merger Agreement or, as of the Closing
Date, any Ancillary Agreement by Invest Shareholders and the consummation of the Swiss Transactions contemplated hereby or thereby do not and shall not adversely affect the ability of Invest
Shareholders or Invest to enter into, perform their obligations under, and to consummate or materially delay the consummation of, the Swiss Transactions or any Ancillary Agreement.
Section 3.5
Litigation.
There is no action, proceeding, claim, suit, arbitration, opposition, challenge,
proceeding, charge or investigation (collectively, "
Proceedings
") pending or, to the Knowledge of Invest Shareholders, threatened that relates, directly
or indirectly, to this Swiss Merger Agreement, the Invest Shares or any action taken or to be taken in connection with this Swiss Merger Agreement or any Ancillary Agreement.
Section 3.6
No Other Agreement.
No Invest Shareholder has any obligation, absolute or contingent, to any
other individual, corporation, partnership, trust, limited liability company, association, joint venture or any similar entity to transfer the Invest Shares.
Section 3.7
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for Invest Shareholders in connection with this Swiss Merger Agreement or any Ancillary Agreement or the Swiss Transactions contemplated hereby or thereby
or (b) is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with this Swiss Merger Agreement or any Ancillary Agreement or the Swiss
Transactions contemplated hereby or thereby.
Section 3.8
Ownership of the Invest Shares.
Each Invest Shareholder has good and valid title to, and owns
beneficially and, other than the Compulsory Shares prior to the Compulsory Share Transfer, of record, the sum of the amounts of Invest Shares set forth opposite such Invest Shareholder's name under
the caption "Invest Shares Owned" on
Schedule 2.1
and
Schedule 2.2
, free and clear of any
Liens other than restrictions on transfer which may arise solely under applicable securities Laws and, prior to the
Closing, Isolde Laukien-Kleiner shall have good and valid title to, and shall own of record and beneficially, all Invest Shares previously owned by Christoph Straub and Daniel Sauter (such Invest
Shares, the "
Compulsory Shares
" and such holders, the "
Compulsory Shareholders
"), free and clear of any
Liens other than restrictions on transfer which may arise solely under applicable securities Laws.
Section 3.9
Withholding Tax.
Each Invest Shareholder represents that no withholding of any U.S. federal
Tax, German Tax, Swiss Tax or any other Tax is required with respect to any payment to be made to such Invest Shareholder in connection with the Swiss Transactions and each Invest Shareholder agrees
that it will provide to BRKR in a timely manner such form or forms, accurately and completely filled out and executed, as may be necessary in the opinion of BRKR to establish such Invest Shareholder's
entitlement to exemption from any such withholding.
Section 3.10
Investment Representation.
Each Invest Shareholder represents that the shares of BRKR Stock
to be issued hereunder to such Invest Shareholder by BRKR and Invest are being acquired by such Invest Shareholder for investment purposes only, and not with a view to, or for offer or sale in
connection with, any resale or distribution thereof or any transaction which would be in violation of all applicable Laws, including U.S. federal securities laws. Each Invest Shareholder represents
that such Invest Shareholder is an "accredited investor" as such term is defined in Rule 501(a) under the Securities Act.
A-3-9
Section 3.11
Legend.
Each Invest Shareholder acknowledges and is aware that the shares of BRKR Stock to
be issued by BRKR and Invest hereunder cannot be resold unless they are registered under the Securities Act and qualified under any applicable securities law of any state or other jurisdiction, or an
exemption from such registration or qualification is available, and further acknowledges that the certificates evidencing the shares of BRKR Stock issued hereunder will bear the following legend:
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING INVEST
Each of Invest Shareholders and Invest (to the extent legally permissible), jointly and severally, hereby represent and warrant to BRKR, as of the date hereof and
as of the Closing Date or, if a representation or warranty is made as of a specified date, as of such date, as follows:
Section 4.1
Organization.
Invest and each Subsidiary is duly organized and validly existing under the
Laws of the jurisdiction of its organization and has the requisite corporate, partnership or limited liability company authority and power to own, lease, operate and otherwise hold its property and
assets and to conduct its business as currently being conducted. Invest and each Subsidiary is duly qualified to do business as a foreign company and is in good standing in each jurisdiction where the
property owned by Invest and each Subsidiary or the nature of its business requires such qualification, except where the failure to be so qualified could not reasonably be expected to have an adverse
effect on Invest or any Subsidiary in any material respect.
Section 4.2
Authorization and Effect of Agreement.
(a) The
execution and delivery by Invest of this Swiss Merger Agreement and, as of the Closing Date, the Ancillary Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the Swiss Transactions contemplated hereby or thereby, have been duly and validly authorized and approved by all requisite action on the part of
Invest (including approval of the holders of all of the outstanding Invest Shares), and no other action by Invest is necessary to authorize the Swiss Transactions contemplated hereby or thereby or to
consummate such Swiss Transactions.
(b) This
Swiss Merger Agreement and, as of the Closing Date, the Ancillary Agreements to which Invest is a party have been duly executed and delivered by Invest, and
(assuming due authorization, execution and delivery by BRKR and Invest Shareholders) this Swiss Merger Agreement and, as of the Closing Date, each such Ancillary Agreement constitutes a legal, valid
and binding obligation of Invest, enforceable against Invest in accordance with its respective terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar Laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 4.3
Capitalization of Invest.
(a) As
of the date hereof, the capital stock of Invest consists of 16,000 registered Invest Shares, of which all are issued and outstanding on the date hereof and held
beneficially and, other
A-3-10
than
the Compulsory Shares prior to the Compulsory Share Transfer, of record by Invest Shareholders as set forth on
Schedule 2.1
and
Schedule 2.2
. No
share certificates incorporating any of the Invest Shares have ever been issued. There are no shares of preferred stock
authorized or outstanding. There exists no contingent or authorized Invest share capital. The Invest Shares held by Invest Shareholders (and, prior to the Compulsory Share Transfer, by the Compulsory
Shareholders) constitute all of the issued and outstanding shares of capital stock of Invest as of the date hereof and have been duly authorized and are validly issued, fully paid and nonassessable
and have not been issued and were not issued in violation of any preemptive or other similar right. Invest Shareholders own beneficially and, other than the Compulsory Shares prior to the Compulsory
Share Transfer, have good and valid title to and are record owners of, the Invest Shares, free and clear of any Liens other than restrictions on transfer which may arise solely under applicable
securities Laws. Upon consummation of the Swiss Transactions and registration of the Invest Shares in the name of BRKR and of Invest, as the case may be, in the share register of Invest, BRKR will
own, directly or indirectly, all of the Invest Shares free and clear of all Liens other than restrictions on transfer which may arise solely under applicable securities Laws. Upon consummation of the
Swiss Transactions, the Invest Shares will be fully paid and nonassessable.
(b) Invest
has not issued any securities in violation of any preemptive or similar rights and, except as set forth on
Schedule 4.3(b)
, there are no options, warrants, calls, rights or other securities
convertible into or exchangeable or exercisable for equity
securities of Invest, any other commitments, arrangements, rights or agreements providing for the issuance or sale of additional equity interests or the repurchase, redemption or other acquisition of
equity interests of Invest, and there are no agreements of any kind which may obligate Invest to issue, purchase, redeem or otherwise acquire any of its equity interests. No shares of the issued and
outstanding shares of common stock of Invest are held in the treasury of Invest prior to consummation of the Merger (other than the Cancellation Shares). There are no voting agreements, shareholder's
agreements, proxies or other similar agreements or understandings with respect to the equity interests of Invest.
(c) The
share register of Invest accurately records: (i) the name and address of each Person owning Invest Shares and (ii) the number of Invest Shares held by
each of the persons as per clause (i) above.
Section 4.4
Capitalization of the Subsidiaries; Other Interests.
(a)
Schedule 4.4(a)
sets forth each of Invest's directly and indirectly owned Subsidiaries.
Schedule 4.4(a)
sets forth the designation, par value and the number
of authorized, issued and outstanding shares of capital stock or membership
interests for each Subsidiary and the number and percentage ownership interest of Invest (if direct) or of Invest's Subsidiary (if indirect) in each such Subsidiary. All of the outstanding shares of
capital stock or membership interests of each Subsidiary (i) are duly authorized and are validly issued, fully paid and nonassessable and have not been issued and were not issued in violation
of any preemptive or other similar right and (ii) are owned of record and beneficially by Invest
or the Subsidiary set forth on
Schedule 4.4(a)
, in each case, free and clear of any Lien other than Permitted Liens or restrictions on transfer
which may arise solely under applicable securities Laws.
(b) Except
as set forth on
Schedule 4.4(b),
(i) there are no outstanding options, warrants, rights or other
securities convertible into or exchangeable or exercisable for equity interests of the Subsidiaries, any other commitments, arrangements, rights or agreements providing for the issuance or sale of
additional equity interests or the repurchase or, redemption or other acquisition of equity interests of the Subsidiaries, and there are no agreements of any kind which may obligate the Subsidiaries
to issue, purchase, redeem or otherwise acquire any of their respective equity interests and (ii) there are no voting agreements, shareholder's agreements, proxies or other similar agreements
or understandings with respect to the equity interests of the Subsidiaries.
A-3-11
(c) Except
as set forth in
Schedule 4.4(c),
neither Invest nor any Subsidiary owns, directly or indirectly, any
interest or investment (whether equity or debt) in any corporation, partnership, limited liability company, joint venture, business, trust or other Person other than in a Subsidiary.
Section 4.5
No Conflict.
The execution and delivery by Invest of this Swiss Merger Agreement or any
Ancillary Agreement and the consummation by Invest of the Swiss Transactions contemplated hereby and thereby do not and shall not:
(a) violate,
conflict with or result in the breach of any Organizational Document of Invest or the Subsidiaries;
(b) (i) violate
or conflict with any Law applicable to Invest or the Subsidiaries or any of their respective assets, properties or businesses or (ii) require
any filing with, consent, approval or authorization of, or notice to, any Governmental Authority other than with respect to the applicable notification and waiting period requirements of the antitrust
laws of any relevant jurisdiction; or
(c) except
as described on
Schedule 4.5(c)
, (i) conflict with, result in any breach of, constitute a default
(or event which after notice or lapse of time or both, would become a default) under, require any consent under any Contract to which Invest or any Subsidiaries is a party or by which Invest or any
Subsidiaries may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of any Lien under any such Contract or (iv) constitute an event which,
after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien;
except,
in the case of clause (c) above, for any conflict, breach, default, termination or Lien that would not reasonably be expected to (A) adversely affect in any material respect the
ability of Invest to enter into, perform its obligations under, and to consummate the Swiss Transactions contemplated by, this Swiss Merger Agreement or (B) adversely affect in any material
respect the business, operations (including results of operations), assets, liabilities or financial condition of Invest and the Subsidiaries.
Section 4.6
Permits; Compliance with Law.
(a) Invest
and the Subsidiaries hold all Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of their respective businesses
as currently conducted under and pursuant to all applicable Laws.
Schedule 4.6(a)
sets forth a true and complete list of all such Permits. All
Permits have been legally obtained and maintained and are valid and in full force and effect. No outstanding violations are or have been recorded in respect of any such Permits. No Proceeding is
pending or, to the Knowledge of Invest and Bruker BioSpin AG ("
Bruker AG
"), threatened, to suspend, revoke, withdraw, modify or limit any Permit. The
Swiss Transactions or any Ancillary Agreement do not give rise to the requirement of any consent, approval or modification in order for each Permit to continue to be valid and in full force and effect
following the Closing.
(b) Invest
and the Subsidiaries are and have been in compliance with and are not in default under any Law applicable to Invest or any of the Subsidiaries or any of their
respective properties, assets or businesses.
Section 4.7
Books and Records.
Except as described on
Schedule 4.7,
(i) true and complete copies of the Organizational
Documents of Invest and the Significant Subsidiaries, as currently in
effect, have heretofore been delivered to BRKR, (ii) the minute books of Invest and the Significant Subsidiaries accurately reflect in all material respects all actions taken at meetings, or,
to the extent legally permissible, by written consent in lieu of meetings, of the stockholders, boards of directors (or other governing body) and all committees of the boards of directors (or other
governing body) of Invest and the Significant Subsidiaries, as the case may be, (iii) all corporate actions and other actions
A-3-12
taken
by Invest and the Significant Subsidiaries, as the case may be, have been duly authorized, and no such actions taken by Invest and the Significant Subsidiaries, as the case may be, have been
taken in breach or violation of the Organizational Documents of Invest and the Significant Subsidiaries.
Section 4.8
Litigation.
There are no Proceedings pending or, to the Knowledge of Invest, threatened that
relate, directly or indirectly, to this Swiss Merger Agreement or any Ancillary Agreement to which Invest is a party, or any action taken or to be taken in connection with this Swiss Merger Agreement
or any Ancillary Agreement. Except as set forth on
Schedule 4.8
, there are no Proceedings pending or, to the Knowledge of Invest or Bruker AG,
threatened that relate to (a) Invest or any Subsidiary or their respective assets, properties or businesses or (b) the officers, directors, employees, stockholders or
Affiliates of Invest (in their capacity as such). There are no outstanding judgments, writs, injunctions, orders, decrees or settlements that apply, in whole or in part, to Invest or any Subsidiary or
their respective assets, properties or business.
Section 4.9
Financial Statements; Undisclosed Liabilities.
(a) Except
as set forth on
Schedule 4.9,
Invest has furnished BRKR true and complete copies of the audited combined
balance sheet and the related audited combined statements of income, shareholders' equity and cash flows of the Subject Companies as of and for each of the fiscal years ended as of December 31,
2005 and 2006 and the related opinion of E&Y, the independent accountants of the Subject Companies, and the unaudited combined balance sheet and the related unaudited combined statements of income,
shareholders' equity and cash flows of the Subject Companies as of and for the nine months ended September 30, 2007 and 2006 (collectively, together with the related notes thereto, the
"
Financial Statements
"), and the audit report including the audited statutory balance sheet and the audited statutory statement of income of
(i) Kurt Buergi, dipl Buecher- und Steuerexperte, the independent auditors of Invest and Bruker BioSpin International AG ("
Bruker International
")
as per December 31, 2005 and 2006 and of (ii) Ernst & Young AG, the independent auditors of Bruker AG as per December 31, 2005 and 2006.
(b) The
Financial Statements fairly present in all material respects the financial position and the results of operations of the Subject Companies as of the respective dates
thereof and for the respective periods then ended. The Financial Statements have been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise noted
therein or in the notes thereto. The Financial Statements have been prepared in accordance with the books and records of the Subject Companies consistent with past practice.
(c) Except
as set forth on
Schedule 4.9
and (i) as reflected or adequately reserved against in the Financial
Statements and (ii) liabilities which have been incurred since December 31, 2006 in the Ordinary Course of Business, there are no liabilities or obligations, secured or unsecured
(whether absolute, accrued, contingent or otherwise), matured or unmatured that are, or would reasonably be expected to be, material to the Subject Companies or that would materially delay the
consummation of the Swiss Transactions.
Section 4.10
Absence of Certain Changes.
Except as described on
Schedule 4.10
, since December 31, 2006, (a) Invest and
the Subsidiaries have been operated in the Ordinary Course of Business,
(b) neither Invest nor any Subsidiary has taken or agreed to take any of the actions set forth in
Section 7.1
, (c) there has not
occurred any event or condition that, individually or in the aggregate, has had or is reasonably likely to have a Material Adverse Effect, (d) there have been no actual or threatened
cancellations or terminations by any material producer, agent, supplier, customer or contractor of Invest or any Subsidiary and (e) there has been no material damage to or loss or theft of any
of the material assets of Invest or any Subsidiary.
A-3-13
Section 4.11
Contracts.
(a)
Schedule 4.11(a)
sets forth a complete and accurate list of the following Contracts to which (x) Invest or
any Significant Subsidiary is a party or by which Invest or any Significant Subsidiary or any of their respective properties or assets is or may be bound or (y) any other Subsidiary is a party
or by which any such Subsidiary or any of its properties or assets is or may be bound which is material to Invest and the Subsidiaries taken as a whole:
(i) employment
Contracts with (a) any current officer, manager, director or Employee and (b) any former officer, manager, director or Employee with respect to
which Invest or any Subsidiary remains liable for any obligations thereunder (the name, position or capacity and rate of compensation of each such person and the expiration date of each such Contract
being set forth in accordance with this
Section 4.11(a))
, other than standard contracts required under local Law or custom;
(ii) all
Contracts (other than employment contracts) with any current or former officer, manager, director, stockholder, member, Employee, consultant, agent or other
representative or with an entity in which any of the foregoing is a controlling person (excluding any Contracts with respect to which Invest and its Subsidiaries have no liabilities for any
obligations thereunder);
(iii) all
lease, sublease, rental or other Contracts under which Invest or any Subsidiary is a lessor or lessee of any real property or the guarantee of any such lease,
sublease, rental or other Contracts;
(iv) all
collective bargaining or other labor or union Contracts;
(v) all
instruments relating to indebtedness for borrowed money, any note, bond, deed of trust, mortgage, indenture or agreement to borrow money, and any agreement relating
to the extension of credit or the granting of a Lien other than Permitted Liens, or any Contract of guarantee in favor of any Person or entity other than Invest or any Subsidiary;
(vi) all
confidentiality Contracts (other than standard materials transfer agreements or non-disclosure agreements for customer test sample measurements made in
the Ordinary Course of Business);
(vii) all
partnership or joint venture Contracts;
(viii) all
Contracts relating to licenses of trademarks, trade names, service marks or other Invest Proprietary Rights;
(ix) all
other Contracts material to the business of Invest or any Subsidiary, other than any Contracts having only Subject Companies as parties; and
(x) each
amendment, supplement and modification in respect of any of the foregoing.
(b)
Schedule 4.11(b)
sets forth a complete and accurate list of the following Contracts (x) to which Invest or
any Subsidiary is a party or (y) by which Invest or any Subsidiary or any of their respective properties or assets is or may be bound (such Contracts collectively, along with the Contracts
listed on
Schedule 4.11(a)
, the "
Invest Contracts
"):
(i) all
lease, sublease, rental, licensing use or similar Contracts with respect to personal property providing for annual rental license or use payments in excess of U.S.
$200,000 or the guarantee of any such lease, sublease, rental or other Contracts;
A-3-14
(ii) all
Contracts containing any covenant or provision limiting the freedom or ability of Invest or any Subsidiary to engage in any line of business, engage in business in
any geographical area or compete with any other Person;
(iii) all
Contracts (other than Contracts having only Subject Companies as parties) for the purchase or sale of materials, supplies or equipment (including computer hardware
and software), or the provision of services (including consulting services, data processing and management, project management services and clinical trial management), involving total payments in
excess of U.S. $1,750,000 or containing any escalation, renegotiation or redetermination provisions, which Contracts are not terminable at will without liability, premium or penalty by Invest or any
Subsidiary;
(iv) all
Contracts, purchase orders or service agreements relating to capital expenditures of Invest or any Subsidiary involving total payments in excess of U.S. $200,000;
(v) all
Contracts between or among (A) Invest or any Subsidiary, on the one hand, and (B) any Invest Shareholder, Affiliate of any Invest Shareholder, (other
than the Subject Companies) or any Related Party, on the other hand;
(vi) all
Contracts (A) outside the Ordinary Course of Business for the purchase, acquisition, sale or disposition of any assets or properties or (B) for the
grant to any Person (excluding Invest or any Subsidiary) of any option or preferential rights to purchase any assets or properties;
(vii) all
Contracts (other than Contracts having only Subject Companies as parties) pursuant to which there is either a current or future obligation of Invest or any
Subsidiary to make payments or provide services for a value in excess of U.S. $200,000 in any twelve (12) month period;
(viii) all
Contracts under which Invest or any Subsidiary agrees to indemnify any Person (other than standard materials transfer agreements or non-disclosure
agreements for customer test sample measurements made in the Ordinary Course of Business);
(ix) all
non-competition, non-solicitation and any similar Contracts;
(x) all
"earn-out" agreements or arrangements or any similar Contracts; and
(xi) each
amendment, supplement and modification in respect of any of the foregoing.
(c) (i) Each
Invest Contract (including, for purposes of this
Section 4.11(c)
, all Contracts that would be
deemed an "Invest Contract" but for the fact that a Subject Company is a party thereto) is legal, valid, binding and enforceable against Invest or the Subsidiary that is party thereto and against each
other party thereto, is in full force and effect and (ii) no party is in material breach or default, and no event has occurred which would constitute (with or without notice or lapse of time or
both) a material breach or default (or give rise to any right of termination, modification, cancellation or acceleration) or material loss of any benefits under any Invest Contract.
Section 4.12
Transactions with Affiliates.
Except as set forth on
Schedule 4.12
, no Related Party, either currently or at any
time since December 31, 2003 (a) has or has had any interest in any
property (real or personal, tangible or intangible) that Invest or any Subsidiary uses or has used in or pertaining to the business of Invest or any Subsidiary or (b) has or has had any
business dealings, contracts, agreements, arrangements, understandings or any financial interest in any transaction with Invest or any Subsidiary or involving any assets or property of Invest or any
Subsidiary, other than business dealings or transactions conducted in the Ordinary Course of Business at prevailing market prices and on prevailing market terms. For purposes of this Swiss Merger
Agreement, the term "
Related Party
" shall mean as of any time: Invest Shareholders, any executive officer, member, manager or director, ten
A-3-15
percent
(10%) stockholder (including any executive officers, members, managers or directors thereof) or Affiliate of Invest or any Subsidiary or at such time, any present or former known spouse,
sibling, parent or child of any such Invest Shareholders, executive officer, member, manager, director or Affiliate of Invest or any Subsidiary or any trust or other similar entity for the benefit of
any of the foregoing Persons;
provided, however
, that the term "Related Party" shall not be deemed to include any Subject Company. BRKR has been
provided with true and complete copies of all documents listed on
Schedule 4.12
and any amendments thereto.
Section 4.13
Labor Relations.
(a) As
of the date of this Swiss Merger Agreement, there is no labor dispute, controversy, arbitration, grievance, strike, slowdown, lockout or work stoppage against Invest
or any Significant Subsidiary pending or threatened which may interfere with the business activities of Invest or any Significant Subsidiary. Except as set forth on
Schedule 4.13(a)
, neither Invest
nor any Significant Subsidiary is a party to, or bound by, any labor agreement, collective bargaining agreement,
work rules or practices or any other labor-related agreements or arrangements with any labor union, labor organization or works council. Except as set forth on
Schedule 4.13(a)
, there are no labor
agreements, collective bargaining agreements, work rules or practices or any other labor-related agreements
or arrangements that pertain
to any Employees. None of the Employees is represented by any labor organization with respect to such Employees' employment or other service with Invest or any Significant Subsidiary. Except as set
forth on
Schedule 4.13(a)
, no labor union, labor organization, works council or group of Employees of Invest or any Significant Subsidiary has
made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened in writing to be brought or filed with
any labor relations tribunal or authority. There are no organizational efforts presently being made involving any of the presently unorganized Employees. Neither Invest nor any Significant Subsidiary
is a party to, or otherwise bound by, any order relating to Employees or employment practices.
(b) Invest
and each Subsidiary has, in all material respects, properly classified the employment or other service status of all Employees, independent contractors and other
persons providing services to or on behalf of Invest or any Subsidiary for purposes of compliance with (i) all applicable Laws and (ii) the terms or tax qualification requirements of any
Benefit Plan or other benefit arrangement.
Section 4.14
Insurance.
Schedule 4.14
sets forth a
true and complete list of all insurance policies currently maintained relating to Invest and each Significant Subsidiary, including those which pertain to Invest's and each Significant Subsidiary's
assets, directors, officers or employees or operations, and all such insurance policies are in full force and effect and all premiums due thereunder have been paid. There is no material claim
outstanding under any such insurance policies and there are no existing circumstances likely to give rise to a claim under any such insurance policies. Invest has not received notice of cancellation
of any such insurance policies. Invest has provided to BRKR true and complete copies of all insurance policies (including any amendments thereto) listed on
Schedule 4.14
.
Section 4.15
Accounts Receivable.
All accounts receivable, notes receivable and other indebtedness of
Invest and each Subsidiary (the "
Accounts Receivable
") reflected in the Financial Statements or which arose subsequent to December 31, 2006,
represent bona fide, arm's-length transactions for the sale of goods or performance of services actually delivered in the Ordinary Course of Business and, in the case of Accounts Receivable, have been
billed or invoiced in the Ordinary Course of Business consistent with past practice. Except to the extent expressly reserved against or reflected on the Financial Statements (which reserves are
consistent with past practice) or paid prior to the Closing, the Accounts Receivable are or will be as of the Closing Date, collectible in the Ordinary Course of Business.
A-3-16
Section 4.16
Real Property; Leases.
(a) Except
as set forth on
Schedule 4.16(a)(i)
, neither Invest nor any Subsidiary owns any real property (such
property, the "
Owned Real Property
") and the Owned Real Property is owned free and clear of all Liens.
(b)
Schedule 4.16(b)(i)
contains a complete and correct list of all leases of real property, occupancy
agreements, licenses, concessions or similar agreements (the "
Real Property Leases
") under which Invest or any of its Subsidiaries is a lessee,
sublessee, tenant, licensee or assignee of any real property owned by any other Person (the "
Leased Real Property
" and, together with the Owned Real
Property, the "
Real Property
"). Invest has delivered to BRKR true, correct and complete copies of each Real Property Lease. With respect to each Real
Property Lease, (i) there exists no default under such Real Property Lease by Invest or any Subsidiary nor is there any event which, with notice or the passage of time or both, could ripen into
a default and neither Invest nor any Subsidiary has received written notice of any such default and (ii) to the Knowledge of Invest or Bruker AG, there exists no default by any other Person
thereunder nor any event which, with notice or the passage of time or both, could ripen into a default. Each Real Property Lease is a legal, valid and binding obligation of Invest and/or each
Subsidiary, and, to the Knowledge of Invest, and each other party thereto, enforceable against each such other party thereto in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general principles of equity. The consummation of the Swiss Transactions or any
Ancillary Agreement requires no Consents from any Person, except as set forth on
Schedule 4.16(b)(ii)
(which Consents have been obtained
prior to the date hereof), and will not result in any default, penalty, right to terminate, increase in the amounts payable under or modification to any Real Property Lease. Invest and the
Subsidiaries hold good and valid leasehold estates in the Leased Real Property and the Real Property constitutes all of the real property necessary for the conduct of Invest's and the Subsidiaries
respective businesses.
(c) (i) There
is no pending or, to the Knowledge of Invest or Bruker AG, threatened condemnation (or similar proceedings) of all or any part of the Real Property, and
neither Invest nor any Subsidiary has assigned or sublet or granted any rights to use and occupy or created any limitations to or on its interests under any Real Property Lease to any Person,
(ii) to the Knowledge of Invest or Bruker AG, there are no zoning, building code, occupancy restriction or other land-use regulation proceedings or any proposed change in any
applicable Laws that could, individually or in the aggregate, result in a Material Adverse Effect, nor has Invest or any Subsidiary received any notice of any special assessment proceedings affecting
any Real Property, or applied for any change to the zoning or land use status of any Real Property, (iii) to the Knowledge of Invest or Bruker AG, there are no defects, structural or otherwise,
with respect to any of the Real Property (or any improvements located thereon), which could reasonably be anticipated to have a material adverse impact on the value or utility of any such parcel of
Real Property and (iv) there are no easements, Liens or other agreements (whether of record or not) affecting title to, or creating any Lien or charge upon, any of the Real Property.
Section 4.17
Environmental.
(a) Invest
and the Subsidiaries hold all Environmental Permits necessary for the ownership and lease of their properties and assets and the lawful conduct of their
respective businesses as currently conducted under and pursuant to all applicable Laws;
Schedule 4.17
sets forth a true and complete list of all
such Environmental Permits. All such Environmental Permits have been legally obtained and maintained and are valid and in full force and effect. No outstanding violations are or have been recorded in
respect of any such Environmental Permits. No Proceeding is pending or, to the Knowledge of Invest or Bruker AG, threatened, to suspend, revoke, withdraw, modify or
A-3-17
limit
any such Environmental Permit. The Swiss Transactions or any Ancillary Agreement do not give rise to the requirement of any filing, consent, approval or modification in order for each
Environmental Permit to continue to be valid and in full force and effect following the Closing or the Effective Time.
(b) Invest
and the Subsidiaries comply and have complied in all respects with and are not in default under any Environmental Law applicable to Invest or any of its
Subsidiaries or any of their respective properties or assets.
(c) There
are no Proceedings arising under any Environmental Law pending or, to the Knowledge of Invest or Bruker AG, threatened that relate to the (i) Invest or any
Subsidiary or their respective assets, properties or businesses or (ii) the officers, directors, employees, stockholders or Affiliates of Invest (in their capacity as such). There are no
outstanding judgments, writs, injunctions, orders, decrees or settlements arising under any Environmental Law that apply, in whole or in part, to Invest or any Subsidiary or their respective assets,
properties or business.
(d) Except
as set forth on
Schedule 4.17(d)
, there has been no Release or threatened Release of any Hazardous
Substance from, and no Hazardous Substances are present at, on or beneath, any property currently or formerly owned, leased or operated by Invest or any Subsidiary or, except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect, at any other location, including any location at which any Hazardous Substances manufactured, used or generated by
Invest or any Subsidiary have been stored, treated or disposed.
(e) (i) "
Hazardous Substances
" shall mean any pollutant, contaminant, hazardous substance, hazardous waste,
medical waste, special waste, toxic substance, petroleum or petroleum-derived substance, waste or additive, radioactive material, or other compound, element, material or substances in any form
(including products) regulated, restricted or addressed by or under any applicable Environmental Law.
(ii) "
Environmental Law
" shall mean any Law relating to the environment, natural resources or the safety or health of human
beings or other living organisms, including the manufacture, distribution in commerce, use or presence of hazardous substances.
(iii) "
Environmental Permits
" shall mean all Permits required under Environmental Laws.
(iv) "
Release
" shall mean any release, pumping, pouring, emptying, injecting, escaping, leaching, migrating, dumping,
seepage, spill, leak, flow, discharge, disposal (except orderly offsite disposal via qualified hazardous waste disposal contractors) or emission.
Section 4.18
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person
(a) has acted directly or indirectly for Invest in connection with this Swiss Merger Agreement or any Ancillary Agreement or the Swiss Transactions contemplated hereby or thereby or
(b) is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection with this Swiss Merger Agreement or any Ancillary Agreement or the Swiss
Transactions contemplated hereby or thereby.
Section 4.19
Employee Benefits.
(a)
Schedule 4.19
identifies bonus, stock purchase, stock option, severance pay, termination pay and all pension
plans, all insurance to be paid by the employer (accident insurance, insurance for unwanted leave, etc.) or any other plan for the benefit of the Employees pursuant to which BRKR or Invest or any
Subsidiary could incur liability (all plans, programs and agreements of the type referred to in the prior sentence are referred to in this Swiss Merger Agreement as the
"
Benefit Plans
.")
A-3-18
(b) With
respect to each Benefit Plan, Invest has delivered to BRKR:
(i) an
accurate and complete copy of the Benefit Plan regulations (including all amendments thereto);
(ii) an
accurate and complete copy of the annual report, if required under applicable law, with respect to such Benefit Plan for each of the last two years; and
(iii) accurate
and complete copies of all Contracts relating to such Benefit Plan, including service provider agreements, insurance contracts, and investment management
agreements.
(c) Each
Benefit Plan has, in all material respects, been established, funded, maintained and administered in compliance with its terms and with the applicable Laws.
(d) Neither
Invest nor any of its Subsidiaries has any intention or commitment to create any Benefit Plan or to modify or change any existing Benefit Plan (other than to
comply with applicable law).
(e) Each
of the Benefit Plans has been operated and administered in all material respects in accordance with applicable Law and the terms of the Benefit Plan. Each of Invest
and the Subsidiaries has met and is meeting all of its obligations under the Benefit Plans and has paid (or provisioned) all contributions required prior to the date of this Swiss Merger Agreement
under the Benefit Plans.
(f) Neither
the execution and delivery of this Swiss Merger Agreement nor the consummation of the Swiss Transactions contemplated hereby will (either alone or in conjunction
with any other event) (i) cause or result in the accelerated vesting, funding or delivery of, or increase the amount or value of, any material payment or benefit to any manager, officer,
Employee, consultant or independent contractor of Invest or any Subsidiary, (ii) cause or result in the funding of any Benefit Plan or (iii) cause or result in a limitation on the right
of Invest or any Subsidiary to amend, merge, terminate or receive a reversion of assets from any Benefit Plan or related trust.
(g) All
contributions or premiums owed by Invest or any Subsidiary with respect to Benefit Plans under Law, contract or otherwise have been made in full and on a timely
basis. All material reports, returns and similar documents required to be filed with any Governmental Authority or distributed to any plan participant have been duly and timely filed or distributed.
All amounts that Invest or any Subsidiary is legally or contractually required to deduct from the salaries of their Employees have been duly paid into the appropriate fund or funds. In particular,
each of Invest and the Subsidiaries has paid, or made provision of payment for, any and all social security payments relating to any period prior to the date of the Financial Statements. Except as set
forth on
Schedule 4.19
, in the past five years no social security authority has conducted a social security audit at Invest or one of the
Subsidiaries and no social security authority has threatened to conduct or is presently conducting such an audit. There exist no circumstances which may result in a re-assessment by any
social security authority of the social security contributions paid or to be paid by any of Invest and the Subsidiaries.
(h) All
employees of Invest and the Subsidiaries are fully capable of performing work on behalf of their employers (no material absence due to disability or other unwanted
leave). Neither Invest nor any Subsidiary is obligated under any Benefit Plan to provide life, health, medical, death or other welfare benefits with respect to any current or former Employee (or their
beneficiaries or dependents) of Invest, any Subsidiary or their respective predecessors after termination of employment or other service, except as set forth on
Schedule 4.19
.
A-3-19
Section 4.20
Employees.
(a)
Schedule 4.20(a)
sets forth (i) the name, title and total compensation (payable by Invest or any
Subsidiary) of each officer, manager and director of Invest and the Subsidiaries and each other Employee and agent whose total compensation (so payable and including bonuses and commissions) for the
year ended December 31, 2006 equaled or exceeded U.S. $150,000 or who will receive compensation (including bonuses and commissions) for the year ending December 31, 2007 equal to or in
excess of U.S. $150,000, (ii) all bonuses and other incentive compensation received by such Persons since January 1, 2006 and any accrual for such bonuses and incentive compensation and
(iii) all Contracts or commitments by Invest or any Subsidiary to increase the compensation or to modify the conditions or terms of employment or other service of any of its officers, managers,
Employees, consultants and agents whose total compensation (including bonuses and commissions) exceeds U.S. $150,000 per annum.
(b) To
the Knowledge of Invest or Bruker AG, except with respect to BRKR, no officer, manager or director of Invest or any Subsidiary or any Employee, consultant or agent of
Invest or any Subsidiary is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, non-competition, or proprietary rights agreement, between
such Person and any other Person that will (i) materially affect the performance by such Person of such Person's duties to Invest or any Subsidiary or (ii) materially affect the ability
of Invest or any Subsidiary to conduct its business.
(c) No
executive, key Employee or significant group of Employees has given notice to Invest or any Significant Subsidiary to terminate employment or service with Invest or
any Significant Subsidiary during the next twelve (12) months.
Section 4.21
Taxes and Tax Returns.
Except as provided on
Schedule 4.21
:
(a) All
Tax Returns required to be filed by or with respect to Invest or any Subsidiary or their respective assets and operations have been timely filed. All such Tax
Returns (i) were prepared in the manner required by applicable Law, (ii) are true, correct and complete in all material respects and (iii) accurately reflect the liability for
Taxes of Invest and each Subsidiary. All Taxes due and owing by any of Invest and any Subsidiary on or before the date hereof (whether or not shown on any Tax Returns) have been fully paid, or have
been adequately reserved for in accordance with applicable GAAP on the Financial Statements. True, correct and complete copies of all federal, state, local and foreign Tax Returns of or including
Invest and the Subsidiaries filed in the previous five (5) years have been provided to BRKR prior to the date hereof.
(b) Invest
and the Subsidiaries have timely paid, or caused to be paid, all Taxes required to be paid, whether or not shown (or required to be shown) on a Tax Return, and
Invest and the Subsidiaries have accrued for the payment in full of all Taxes not yet due and payable on the balance sheet included in the Financial Statements for Invest's fiscal year ended
December 31, 2006. Since December 31, 2006, neither Invest nor any Subsidiary has incurred any liability for Taxes other than Taxes incurred in the Ordinary Course of Business. In
particular, the reserves with respect to Taxes on the respective books of each of Invest and the Subsidiaries are sufficient to cover all Taxes of whatever nature that may be assessed or computed on
the results, transactions, or capital of Invest and each of the Subsidiaries for all periods prior to the date of the Financial Statements irrespective of the financial period during which such Taxes
may become due.
(c) Invest
and the Subsidiaries have complied in all material respects with all provisions of state, local and foreign Law relating to the withholding and payment of Taxes,
and have, within the time and in the manner prescribed by Law, withheld the applicable amount of Taxes required to be
A-3-20
withheld
from amounts paid to any stockholder, Employee, independent contractor or other third party and paid over to the proper Governmental Authorities all amounts required to be so paid over.
Neither Invest nor any of the Subsidiaries has distributed any hidden dividend, or distributed or granted any other benefit to any of Invest Shareholders or any other person which could lead to the
imposition of any withholding tax on dividends or constructive dividends. Each cash distribution paid (or that will be paid) by Invest to Invest Shareholders, including the Special Dividend,
constituted (or, in the case of a cash distribution not yet paid, will constitute) a dividend (within the meaning of Section 316 of the Code) of Invest paid to and properly includible in the
income of Invest Shareholders for U.S. federal income tax purposes (and, as applicable, for purposes of state, local and foreign Law). In addition, each cash distribution paid (or that will be paid)
by a Subsidiary to any shareholder of the Subsidiary, including any Subsidiary Dividend, constituted (or, in the case of a cash distribution not yet paid, will constitute) a dividend (within the
meaning of Section 316 of the Code) of the Subsidiary paid to and properly includible in the income of such shareholder for U.S. federal income tax purposes (and, as applicable, for purposes of
state, local and foreign law).
(d) Neither
Invest nor any of the Subsidiaries is subject to proceedings or investigations related to Taxes by any authority and no such proceedings are threatened against
Invest or any Subsidiary. There are no examinations or other administrative or court proceedings relating to Taxes in progress or pending, and there is no existing, pending or threatened claim,
proposal or assessment against Invest or any Subsidiary or relating to their assets or operations asserting any deficiency for Taxes.
(e) No
claim has ever been made by any Taxing Authority with respect to Invest or any Subsidiary in a jurisdiction where Invest or any Subsidiary does not file Tax Returns
that Invest or any Subsidiary is or may be subject to taxation by that jurisdiction. There are no security interests on any of the assets of Invest or any Subsidiary that arose in connection with any
failure (or alleged failure) to pay any Taxes and, except for liens for real and personal property Taxes that are not yet due and payable, there are no liens for any Taxes upon any assets of Invest or
any Subsidiary.
(f) No
extension of time with respect to any date by which a Tax Return was or is to be filed by or with respect to Invest or any Subsidiary is in force, and no waiver or
agreement by Invest or any Subsidiary is in force for the extension of time for the assessment or payment of any Taxes.
(g) Neither
Invest nor any of the Subsidiaries has granted a power of attorney to any Person with respect to any Taxes.
(h) Neither
Invest nor any Subsidiary is a party to any contract, agreement, plan or arrangement relating to allocating or sharing the payment of, indemnity for, or
liability for, Taxes.
(i) Invest
is not, and has not been, a "United States real property holding corporation" within the meaning of Section 897(c)(2) of the Code during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code.
(j) Neither
Invest nor any Subsidiary has ever participated in an international boycott within the meaning of Section 999 of the Code.
(k) Invest
and the Subsidiaries have, in all material respects, properly and in a timely manner documented their transfer pricing methodology in compliance with the
applicable provisions of Swiss federal, Swiss cantonal, Swiss local or foreign Tax Law or regulation. In particular, the reserves with respect to Taxes on the respective books of each of Invest and
the Subsidiaries, in relation to Taxes due or that might become due in connection with the transfer pricing methodology applied, are sufficient to cover all Taxes of whatever nature that may be
assessed or computed on the results, transactions, or capital of Invest and each of the Subsidiaries for all
A-3-21
periods
prior to the date of the Financial Statements irrespective of the financial period during which such Taxes may become due.
(l) Neither
Invest nor any Subsidiary was a foreign personal holding company (within the meaning of Section 552 of the Code) on or before December 31, 2004,
and neither Invest nor any Subsidiary is or has been a passive foreign investment company (within the meaning of Section 1297 of the Code).
(m) Other
than as described on
Schedule 4.21(m)
, neither Invest nor any Subsidiary is engaged in a trade or business
within the United States.
(n) The
taxable year for U.S. federal income tax purposes of Invest and each of its Subsidiaries ends on December 31 of each year.
(o) Invest
is a foreign corporation within the meaning of Section 7701(a)(5) of the Code.
(p) Neither
Invest nor any of the Subsidiaries has been includible with any other entity in any consolidated, combined, unitary or similar return for any Tax period for
which the statute of limitations has not expired (other than any such return with respect to which Invest was the common parent).
(q) Invest
shall pay the Special Dividend entirely from its cash on hand or the cash on hand of the Distributing Subsidiaries, and neither the cash distributed by Invest to
Invest Shareholders in connection with the Special Dividend, nor any of the cash amounts distributed to Invest pursuant to any of the Subsidiary Dividends, have been funded by, are attributable to, or
are otherwise traceable to (i) a borrowing or other debt or credit arrangement of any kind whatsoever involving Invest or any Subsidiary, including any borrowing or other debt or credit
arrangement with an unrelated third party or an Affiliate, or (ii) a distribution, payment or other transfer by a Subsidiary to Invest other than pursuant to a Subsidiary Dividend.
Section 4.22
Proprietary Rights.
(a) (i) Except
as set forth on
Schedule 4.22(a)
, Invest or a Subsidiary is the sole owner of, free and clear of
any Lien (other than Permitted Liens), or has a valid license to (without the payment of any royalty, except with respect to off-the-shelf software licensed on commercially
reasonable terms), all U.S. and non-U.S. trademarks, service marks, logos, designs, trade names, internet domain names and corporate names, and the goodwill of the business connected with
and symbolized by the foregoing, patents, registered designs, copyrights, computer software (including all information systems, data files and databases, source and object codes, user interfaces,
manuals and other specifications and documentation related thereto and all intellectual property and proprietary rights incorporated therein), web sites and web pages and related items (and all
intellectual property and proprietary rights incorporated therein) and all trade secrets, research and development, formulae and know-how ("
Trade
Secrets
") and all other proprietary and intellectual property rights and information, including all grants, registrations and applications relating to any of the foregoing (all
of the foregoing to be collectively referred to as the "
Proprietary Rights
") used or held for use in, or necessary for the conduct of the business of
Invest or the businesses of the Subsidiaries (such Proprietary Rights owned by or licensed to Invest or the Subsidiaries, collectively, the "
Invest Proprietary
Rights
"), (ii) the rights of Invest and the Subsidiaries in Invest Proprietary Rights are valid and enforceable, (iii) neither Invest nor any Subsidiary has
received any demand, claim, notice or inquiry from any Person in respect of Invest Proprietary Rights which challenges, threatens to challenge or inquires as to whether there is any basis to
challenge, the validity or enforceability of, or the rights of Invest or any Subsidiary in, any of Invest Proprietary Rights, and neither Invest nor any Subsidiary has Knowledge of any facts which
could form a reasonable basis for any such demand, claim, notice or inquiry, (iv) no act has been done or omitted to be done by Invest or any Subsidiary, or any licensee thereof, which
has
A-3-22
had
or could have the effect of impairing or dedicating to the public, or entitling any U.S. or foreign governmental authority or any other Person to invalidate, render unenforceable or unpatentable,
preclude issuance of, cancel, forfeit, modify or consider abandoned, any material Invest Proprietary Rights owned by Invest or a Subsidiary (the "
Owned Proprietary
Rights
"), or give any Person any rights with respect thereto (except pursuant to an agreement listed on
Schedule 4.22(b)
), (v) all necessary registration, maintenance
and renewal fees in respect of the Owned Proprietary Rights have been paid
and all necessary documents and certificates have been filed with the relevant Governmental Authority for the purpose of maintaining such Owned Proprietary Rights, (vi) to the Knowledge of
Invest and its Subsidiaries, the respective businesses of Invest and the Subsidiaries as currently or in the past operated do not violate or infringe, and have not violated or infringed, any
Proprietary Rights of any other Person, (vii) to the Knowledge of Invest and its Subsidiaries, no Person is violating or infringing any of Invest Proprietary Rights, (viii) Invest and
the Subsidiaries have obtained from all individuals who participated (as Employees, consultants, employees of consultants or otherwise) in any respect in the invention, development or authorship of
any of the Owned Proprietary Rights effective waivers of any and all ownership rights of such individuals in such Proprietary Rights, and/or assignments to Invest or the Subsidiaries, as the case may
be, of all rights with respect thereto, and (ix) neither Invest nor the Subsidiaries have divulged, furnished to or made accessible to any Person, any Trade Secrets without prior thereto having
obtained an enforceable agreement of confidentiality from such Person.
(b)
Schedule 4.22(b)
contains a complete and accurate list of the material Invest Proprietary Rights (other than Trade
Secrets) and all licenses and other agreements relating thereto.
Section 4.23
Information Technology.
Except as described on
Schedule 4.23
:
(a) The
material Invest IT Systems have been properly maintained by technically competent personnel in accordance with standards set by the manufacturers for proper
operation, monitoring and use. The material Invest IT Systems are in good working condition to effectively perform all information technology operations necessary for the conduct of its business as
now conducted or as contemplated to be conducted. Neither Invest nor any Subsidiary has experienced within the past twelve (12) months any material disruption to, or material interruption in,
its conduct of its business attributable to a defect, bug, breakdown or other failure or deficiency on the part of Invest IT Systems.
(b) Except
for scheduled or routine maintenance which would not reasonably be expected to cause any material disruption to, or material interruption in, the conduct of the
business, Invest IT Systems are available for use during normal working hours and other times when required to be available. Invest and the Subsidiaries have taken commercially reasonable steps to
provide for the backup and recovery of the data and information critical to the conduct of the business (including such data and information that is stored on magnetic or optical media in the ordinary
course) without material disruption to, or material interruption in, the conduct of the business.
(c) Invest
and Subsidiaries have taken commercially reasonable actions, consistent with standards in the business, with respect to Invest IT Systems to detect and prevent
the disclosure to unauthorized persons of, and keep secure, any and all confidential information, trade secrets, or other proprietary information stored on Invest IT Systems including the designs,
policies, processes and procedures relating to the composition and structure of Invest IT Systems.
Section 4.24
Guarantees.
Except as described on
Schedule 4.24
, neither Invest nor any Subsidiary is a guarantor or otherwise
responsible for any liability or obligation (including indebtedness)
of any Person.
A-3-23
Section 4.25
Bank Accounts.
Schedule 4.25
contains
a true and complete list of (a) the names and locations of all banks, trust companies, securities brokers and other financial institutions at which (i) Invest or any Significant
Subsidiary has an account or safe deposit box or maintains a banking, custodial, trading or other similar relationship or (ii) any other Subsidiary has an account or safe deposit box or
maintains a banking, custodial, trading or other similar relationship which is material to Invest and the Subsidiaries taken as a whole, (b) a true and complete list and description of each
such account, box and relationship and (c) the name of every Person authorized to draw thereon or having access thereto.
Section 4.26
Foreign Corrupt Practices and International Trade Sanctions.
To the Knowledge of Invest
Shareholders and Invest, neither Invest, any Subsidiary nor any of their respective directors, officers, agents, employees or any other Persons acting on their behalf has, in connection with the
operation of the business of Invest or any Subsidiary, (a) used any corporate or other funds for unlawful contributions, payments, gifts or entertainment, or made any unlawful expenditures
relating to political activity to government officials, candidates or members of political parties or organizations, or established or maintained any unlawful or unrecorded funds in violation of
applicable Laws, (b) paid, accepted or received any unlawful contributions, payments, expenditures or gifts or (c) violated or operated in noncompliance with any applicable export
restrictions, anti-boycott regulations, embargo regulations or other applicable Laws.
Section 4.27
Inventory.
The inventories shown on the Financial Statements, net of inventory reserves
reflected thereon, for the period ended December 31, 2006 or acquired after December 31, 2006, were acquired and maintained in the Ordinary Course of Business, are of good and
merchantable quality, and consist of items of a quantity and quality usable or salable in the Ordinary Course of Business.
Section 4.28
Deposits.
No deposit received by a Subject Company prior to the Closing Date on a purchase
made by a customer from Invest or any of its Subsidiaries (a "
Deposit
") shall be required to be returned or refunded to such customer or otherwise be
subject to any adjustment in favor of such customer (each such return, refund or adjustment, a "
Refund
"), in each case other than (a) aggregate
Refunds to the extent the aggregate sum of which is less than $1,000,000 or (b) any Refund granted pursuant to a renegotiation between the parties to the Contract pursuant to which the Deposit
subject to such Refund was initially made that is (i) (A) deemed by the Chief Financial Officer of BRKR to be neutral or beneficial to Invest and (B) in an amount less than $500,000
(ii) deemed by the Special Committee or the Audit Committee of BRKR to be neutral or beneficial to Invest or (iii) in an amount less than $50,000 (which Refunds shall be deemed to be in
the Ordinary Course of Business).
Section 4.29
No Misleading Statements.
Except as set forth on
Schedule 4.29
, the representations and warranties made by Invest
Shareholders and Invest in this Swiss Merger Agreement, including in the
exhibits and schedules hereto, do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not
misleading.
A-3-24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BRKR
BRKR represents and warrants to Invest Shareholders as of the date hereof and as of the Closing Date or, if a representation or warranty is made as of a specified
date, as of such date, as follows:
Section 5.1
Organization of BRKR; Authority.
BRKR is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has all necessary corporate power and authority to own, lease, operate and otherwise hold its properties and assets and to
carry on its business as presently conducted. BRKR is duly qualified or licensed to do business as a foreign corporation and is in good standing in every jurisdiction in which the nature of the
business conducted by it or the assets or properties owned or leased by it requires qualification, except where the failure to be so qualified, licensed or in good standing could not, individually or
in the aggregate, be reasonably likely to have a material adverse effect on the ability of BRKR to consummate the Swiss Transactions or any Ancillary Agreement to which it is a party.
Section 5.2
Capitalization.
(a) The
authorized capital stock of BRKR consists of 200,000,000 shares of BRKR Stock and 5,000,000 shares of preferred stock, $0.01 par value ("
BRKR
Preferred Shares
"). At the close of business on September 30, 2007, 105,474,931 shares of BRKR Stock and no BRKR Preferred Shares were issued and outstanding. All of the
outstanding shares of capital stock of BRKR have been duly authorized and validly issued and are fully paid and nonassessable and free of preemptive and similar rights and were issued in compliance
with applicable federal and state securities laws.
(b) All
shares of BRKR Stock to be issued in connection with the Swiss Transactions, when issued pursuant to this Swiss Merger Agreement, will be duly authorized, validly
issued, fully paid and non-assessable and not subject to any preemptive or similar rights.
Section 5.3
Authorization; Enforceability.
(a) The
execution and delivery by BRKR of this Swiss Merger Agreement and, as of the Closing Date, the Ancillary Agreements to which it is a party, the performance of its
obligations hereunder and thereunder and the consummation by BRKR of the Swiss Transactions contemplated hereby and thereby, have been duly and validly authorized and approved by all requisite action
on the part of BRKR (subject to the approval of the holders of a majority of the outstanding shares of BRKR Stock and a majority of the outstanding shares of BRKR Stock not held by Invest Shareholders
and their Affiliates and present and voting at the meeting) and no other action by BRKR is necessary to authorize the Swiss Transactions contemplated hereby or thereby or to consummate such Swiss
Transactions.
(b) This
Swiss Merger Agreement and, as of the Closing Date, the Ancillary Agreements to which BRKR is a party have been duly executed and delivered by BRKR, and (assuming
the due authorization, execution and delivery of this Swiss Merger Agreement by Invest Shareholders) this Swiss Merger Agreement and, as of the Closing Date, each such Ancillary Agreement constitutes
a valid and binding obligation of BRKR, enforceable against BRKR in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar Laws affecting creditors' rights generally and subject, as to enforceability, to general principles of equity.
Section 5.4
No Conflict.
The execution and delivery by BRKR of this Swiss Merger Agreement and, as of the
Closing Date, the Ancillary Agreements to which it is a party and the consummation by BRKR of the Swiss Transactions contemplated hereby and thereby, assuming all required filings,
A-3-25
consents,
approvals authorizations and notices set forth on
Schedule 5.4
have been made, given or obtained, do not and shall not:
(a) violate
or conflict with any Organizational Document of BRKR;
(b) violate
or conflict with, in any material respect, any Law applicable to Buyer or any of its assets, properties or businesses or require any filing with, consent,
approval or authorization of, or notice to, any Governmental Authority; or
(c) (i) conflict
with, result in any breach of, constitute a default (or event which after notice or lapse of time or both, would become a default) under, or require
any consent under any Contract, to which BRKR is a party or by which BRKR may be bound, (ii) result in the termination of any such Contract, (iii) result in the creation of any Lien
(other than Permitted Liens) upon any of the properties or assets
of BRKR or (iv) constitute an event which, after notice or lapse of time or both, would result in any such breach, termination or creation of a Lien upon any of the properties or assets of
Buyer;
except
in the case of clause (c) above, as would not reasonably be expected to have a material adverse effect on BRKR or the ability of BRKR to enter into and perform its obligations under, and
to consummate the Swiss Transactions contemplated by, this Swiss Merger Agreement.
Section 5.5
No Broker.
No agent, broker, investment banker, financial advisor or other firm or Person,
other than Bear, Stearns & Co. Inc., the fees of which will be paid by BRKR, (a) has acted directly or indirectly for BRKR in connection with this Swiss Merger Agreement or any
Ancillary Agreement or the Swiss Transactions contemplated hereby or thereby or (b) is or will be entitled to any broker's or finder's fee or any other commission or similar fee in connection
with this Swiss Merger Agreement or any Ancillary Agreement or the Swiss Transactions contemplated hereby or thereby.
Section 5.6
SEC Filings.
(a) BRKR
has filed with the SEC all forms, reports, schedules, statements and other documents required to be filed by it since January 1, 2005 (collectively, the
"
BRKR SEC Documents
"). The BRKR SEC Documents as of their respective dates or, if amended, as of the date of the last such amendment, (i) did not
contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (ii) complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, and the
applicable rules and regulations of the SEC thereunder. No Subsidiary of BRKR is required to make any filings with the SEC.
(b) The
consolidated financial statements of BRKR included in the BRKR SEC Documents complied in all material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly presented (subject, in the case of the unaudited statements, to normal, recurring audit adjustments not material in amount) in all material respects, the consolidated
financial position of BRKR and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended.
Section 5.7
Investment Representation.
BRKR is acquiring the Invest Shares for investment purposes only,
and not with a view to, or for offer or sale in connection with, any resale or distribution thereof or any transaction which would be in violation of all applicable Laws, including U.S. federal
securities laws.
Section 5.8
Accredited Investor.
BRKR (a) is an "accredited investor" as such term is defined in
Rule 501(a) under the Securities Act and (b) has such knowledge and experience in financial and
A-3-26
business
matters that it is capable of evaluating the merits and risks of an investment in the Invest Shares.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF MERGER SUB
Section 6.1
Merger Sub.
Merger Sub represents and warrants to Invest Shareholders as of the date hereof
and as of the Closing Date or, if a representation or warranty is made as of a specified date, as of such date, as follows: Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Swiss Merger Agreement, has engaged in no other business activities and has conducted and will conduct (through and including the Effective Time) its operations only as
contemplated by this Swiss Merger Agreement.
ARTICLE VII
COVENANTS
Section 7.1
Operation of Invest Pending the Closing.
Invest covenants and agrees that Invest and the
Subsidiaries will not (and Invest shall cause the Subsidiaries not to), and Invest Shareholders covenant and agree to cause Invest and the Subsidiaries not to, take any action with the purpose of
causing any of the conditions to BRKR's obligations set forth in Article VIII to not be satisfied. Except with the
prior written consent of BRKR, during the period from the date of this Swiss Merger Agreement to the Closing, the businesses of Invest and the Subsidiaries shall be conducted in the Ordinary Course of
Business and Invest covenants and agrees, and Invest Shareholders agree to cause Invest, to use all commercially reasonable efforts consistent therewith to preserve intact Invest's material
properties, assets and business organizations (including those of its Subsidiaries). Except to the extent necessary to consummate the Swiss Transactions contemplated by this Swiss Merger Agreement,
without limiting the generality of the foregoing, and except as otherwise provided in this Swiss Merger Agreement, Invest shall not and will not permit the Subsidiaries to, and Invest Shareholders
shall cause Invest and the Subsidiaries not to, without the prior written consent of BRKR:
(a) amend
any of its Organizational Documents;
(b) liquidate,
dissolve, recapitalize or otherwise wind up its business;
(c) make
any distribution or declare, pay or set aside any dividend in cash or property (other than the Special Dividend or the Subsidiary Dividends) with respect to, or
split, combine, redeem, reclassify, purchase or otherwise acquire, directly or indirectly, any equity interests or shares of capital stock of, or other equity or voting interest in, Invest or any
Subsidiary, or make any other changes in the capital structure of Invest or any Subsidiary;
(d) authorize
for issuance, issue, sell, deliver or agree or commit to issue, sell or deliver (i) any equity interest or capital stock of Invest or any Subsidiary,
(ii) any equity rights in respect of, security convertible into, exchangeable for or evidencing the right to subscribe for or acquire either (x) any equity interest or shares of capital
stock of Invest or any Subsidiary or (y) any securities convertible into, exchangeable for, or evidencing the right to subscribe for or acquire any shares of the capital stock of, or other
equity or voting interest in, Invest or any Subsidiary, (iii) any instruments of indebtedness (other than in the Ordinary Course of Business) or (iv) any derivative instruments (other
than in the Ordinary Course of Business);
(e) other
than in the Ordinary Course of Business, acquire or dispose of, whether by purchase, merger, consolidation or sale, lease, pledge or other encumbrance of stock or
assets or
A-3-27
otherwise,
any interest in any (i) corporation, partnership or other Person or (ii) assets comprising a business or any other property or assets, in a single transaction or in a series
of transactions;
(f) other
than in the Ordinary Course of Business, sell, assign, pledge, dispose of, transfer, lease, license, guarantee or encumber, or authorize the sale, pledge,
disposition, transfer, lease, license, guarantee or encumbrance of, any amount of property or assets;
(g) sell,
assign, lease, license, transfer or otherwise dispose of, mortgage, pledge or encumber, any real property, or amend, terminate, modify or renew any real property
lease;
(h) incur
any indebtedness or issue any debt securities or assume, guarantee or endorse the obligations of any other Person in excess of U.S. $600,000 in the aggregate;
(i) cancel
any third-party indebtedness owed to Invest;
(j) (i) increase
in any manner the rate or terms of compensation or benefits of any of its directors, managers, officers, Employees, consultants, agents, independent
contractors or other individual service providers (including the grant of any stock options or any other award), except (A) as may be required under existing employment agreements or
(B) annual wage increases granted in the Ordinary Course of Business, (ii) hire any new Employees except in the Ordinary Course of Business with respect to Employees with an annual base
and incentive compensation opportunity not to exceed U.S. $150,000, (iii) pay or agree to pay any pension, retirement allowance or other employee benefit not required or permitted by any
existing Benefit Plan or other agreement or arrangement to any such director, manager, officer, Employee, consultant, agent, independent contractor or other individual service provider, whether past
or present, (iv) enter into or amend any employment, bonus, severance or retirement contract, except for agreements for newly hired Employees in the Ordinary Course of Business with an annual
base and incentive compensation opportunity not to exceed U.S. $150,000, or (v) except as required to ensure that any Benefit Plan is not then out of compliance with applicable Law, enter into
or adopt any new, or increase benefits under or renew or amend any existing, Benefit Plan or benefit arrangement or any collective bargaining agreement;
(k) make
any distributions, loans, advances or capital contributions (other than advances for travel and other normal business expenses to officers and Employees), except in
the Ordinary Course of Business;
(l) commit
to make any capital expenditure or fail to make capital expenditures consistent with past practice;
(m) fail
to maintain all its assets in good repair and condition, except to the extent of wear or use in the Ordinary Course of Business or damage by fire or other
unavoidable casualty;
(n) except
as may be required as a result of a change in applicable law or GAAP, make, revoke or change any Tax election or change any Tax accounting method, settle or
compromise any Tax liability, or waive or consent to the extension of any statute of limitations for the assessment and collection of any Tax;
(o) except
as may be required as a result of a change in applicable Law or GAAP, change any accounting principles or practices used by Invest or any Subsidiary;
(p) other
than any reasonable settlement with respect to matters described in Schedule 4.8, institute, settle or dismiss any action, claim, demand, lawsuit,
proceeding, arbitration or grievance by or before any court, arbitrator or governmental or regulatory body threatened against, relating to or involving Invest or any Subsidiary in connection with any
business, asset or property of Invest or any Subsidiary;
A-3-28
(q) enter
into any Invest Contracts or Contracts (in each case other than any Contracts having only Subject Companies as parties and other than Contracts covered by
Section 7.1(g)
) (i) having a term in
excess of twelve (12) months or (ii) involving the payment, or provision of goods or
services, in excess of U.S. $500,000 on an individual or aggregate basis, except for the acceptance of customer purchase orders in the Ordinary Course of Business with terms up to
twenty-four (24) months and individual amounts up to U.S. $5,000,000;
(r) either
fail to pay the accounts payable or other liabilities of Invest or any Subsidiary, or fail to collect the accounts receivable or other indebtedness owed to Invest
or any Subsidiary;
(s) enter
into, or renew, amend or otherwise modify or extend, any Contracts relating to derivative or hedging transactions or similar transactions, including currency
derivative or hedging Contracts or transactions; or
(t) agree
in writing to take any of the foregoing actions.
Section 7.2
Merger.
BRKR, Merger Sub and Invest shall use their reasonable best efforts and Invest
Shareholder and BRKR shall cause Invest and Merger Sub, respectively, to use its reasonable best efforts to (i) receive a positive ruling on the merger documents
(
i.e.
, the Merger Filing, the Merger Balance Sheet and the Merger application form to the Commercial Register, together the
"
Merger Documents
") from the Commercial Register as soon as possible, (ii) receive from a specially qualified auditor a confirmation that there
are no known or expected claims of Merger Sub and Invest which could be jeopardized due to the Merger pursuant to Article 25(2) of the Merger Act, (iii) consult with their employee
representatives pursuant to Article 28 of the Merger Act and (iv) enter into the Merger Filing with each other, substantially in the form attached hereto as
Annex
B
in its German version or as required by the Commercial Register.
Section 7.3
Access.
Invest shall, and shall cause the Subsidiaries to, and Invest Shareholders shall
cause Invest and the Subsidiaries to, afford to officers, employees, accountants, counsel and other representatives ("
Representatives
") of BRKR
reasonable access to all of the assets, properties, personnel, books and records of Invest and the Subsidiaries.
Section 7.4
Notification.
(a) Invest
shall, and shall cause the Subsidiaries to, and Invest Shareholders shall cause Invest and the Subsidiaries to, promptly notify BRKR, and BRKR shall promptly
notify Invest Shareholders, of any Proceeding pending or, to their Knowledge, threatened against Invest, BRKR, Merger Sub or Invest Shareholders as the case may be, which challenges the Swiss
Transactions or any Ancillary Agreement.
(b) Invest
Shareholders shall provide prompt written notice to BRKR of any change in any of the information contained in the representations and warranties made by Invest
Shareholders in
Article III
or
Article IV
or any exhibits or schedules referred to herein
or attached hereto and shall promptly furnish any information which BRKR may reasonably request in relation to such change; provided, that such notice shall not operate in any way to modify or cure
any breach of the representations and warranties made by Invest Shareholders in
Article III
or
Article IV
or any exhibits or schedules referred
to herein or attached hereto.
(c) Invest
shall and shall cause the Subsidiaries to, and Invest Shareholders shall cause Invest and the Subsidiaries to, provide prompt written notice to BRKR of any change
in any of the information contained in the representations and warranties made by Invest in
Article IV
or any exhibits or schedules referred to
herein or attached hereto and shall promptly furnish any information which BRKR may reasonably request in relation to such change;
provided
, that such
notice shall not operate in any way to modify or cure any breach of the representations and
A-3-29
warranties
made by Invest in
Article IV
or any exhibits or schedules referred to herein or attached hereto.
Section 7.5
No Inconsistent Action.
Neither Invest, BRKR, Merger Sub nor Invest Shareholders will take
any action which is inconsistent with their respective obligations under this Swiss Merger Agreement.
Section 7.6
Reasonable Best Efforts.
(a) Upon
the terms and subject to the conditions of this Swiss Merger Agreement, each of the Parties shall use its 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 under applicable Laws to consummate and make effective the Swiss Transactions and the Ancillary Agreements as
promptly as practicable, including (i) the prompt preparation and filing of all forms, registrations and notices required to be filed to consummate the Swiss Transactions and the Ancillary
Agreements and the taking of such commercially reasonable actions as are necessary to obtain any requisite approvals, consents, orders, exemptions or waivers by any Governmental Authority or any other
Person and (ii) using reasonable best efforts to cause the satisfaction of all conditions to Closing;
provided
,
however
, that nothing in this
Section 7.6
shall require or be construed to require BRKR or any
Affiliate of BRKR to offer or agree to (x) enter into any agreements, including agreements to sell, license or otherwise dispose of, or hold separate or otherwise divest itself of, all or any
portion of BRKR's or any Affiliate of BRKR's businesses or assets or any portion of the businesses or assets of its Subsidiaries or any portion of the businesses or assets of Invest or its
Subsidiaries, (y) to conduct its, its Subsidiaries' or any of their respective Affiliates' businesses in a specified manner or (z) provide any compensation, benefits or other
consideration to Invest's Employees.
(b) Each
Party shall promptly consult with the other Parties with respect to, provide any necessary information with respect to and provide each other Party (or its counsel)
copies of, all filings made by such Party with any Governmental Authority or any other Person or any other information supplied by such Party to a Governmental Authority or any other Person in
connection with this Swiss Merger Agreement and the Swiss Transactions contemplated hereby.
(c) Each
Party shall promptly inform the other Parties of any communication from any Governmental Authority regarding any of the Swiss Transactions and the Ancillary
Agreements. If any Party or Affiliate thereof receives a request for additional information or documentary material from any such Governmental Authority with respect to the Swiss Transactions, then
such Party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other Parties, an appropriate response in compliance with such
request.
Section 7.7
Further Assurances.
From time to time after the Closing, without additional consideration,
each Party will (or, if appropriate, cause its Affiliates to) execute and deliver such further instruments and take such other action as may be necessary or reasonably requested by each of the other
Parties to make effective the Swiss Transactions and to provide each other Party with the intended benefits of this Swiss Merger Agreement. Without limiting the foregoing, upon reasonable request of
BRKR, each of Invest Shareholders and Invest shall, or shall cause their respective Affiliates to, as applicable, execute, acknowledge and deliver all such further assurances, deeds, assignments,
consequences, powers of attorney and other instruments and paper as may be required to transfer, assign, convey and deliver to BRKR all right, title and interest in, to and under the Invest Shares.
Section 7.8
No Solicitation.
(a) Invest
shall, and shall cause the Subsidiaries to, and Invest Shareholders shall, and shall cause Invest and the Subsidiaries to, and each of the foregoing shall cause
each of its officers, managers, employees, subsidiaries, Affiliates, agents and other representatives to, immediately
A-3-30
cease
any existing discussions or negotiations with respect to any Alternative Proposal and will not, and shall cause such Persons not to, directly or indirectly, encourage, solicit, participate in,
initiate or facilitate discussions or negotiations with, or provide any information to, any corporation, partnership, Person or other entity or group (other than BRKR or its managers, officers,
employees, subsidiaries, agents or other Affiliates) concerning any Alternative Proposal. Invest Shareholders and Invest shall immediately communicate to BRKR any such inquiries or proposals regarding
an Alternative Proposal, including the terms thereof.
(b) "Alternative
Proposal" shall mean any of the following involving Invest or any of its Subsidiaries (other than the Transactions expressly contemplated by this Swiss
Merger Agreement, the U.S. SPA and the German SPA): any inquiry or proposal relating to a sale of stock, any merger, consolidation, share exchange, business combination, transfer of membership
interests, partnership, joint venture, disposition of assets (or any interest therein) or other similar transaction.
Section 7.9
Tax Matters.
(a) All
transfer, documentary, sales, use, registration and other such Taxes (including all applicable German and other real estate transfer Taxes and stock transfer Taxes)
incurred in connection with this Swiss Merger Agreement and the Swiss Transactions contemplated hereby shall be paid by BRKR. Each Party shall cooperate to the extent necessary in the timely making of
all filings, returns, reports and forms as may be required in connection therewith.
(b) All
contracts, agreements or arrangements under which Invest or any Subsidiary may at any time have an obligation to indemnify for or share the payment of or liability
for any portion of a Tax (or any amount calculated with reference to any portion of a Tax) shall be terminated with respect to Invest or any such Subsidiary, as applicable, as of the Closing Date, and
Invest or such Subsidiary, as applicable, shall thereafter be released from any liability thereunder.
(c) Invest,
BRKR, Merger Sub and Invest Shareholders shall, and shall each cause their Affiliates to, provide to the other cooperation and information, as and to the extent
reasonably requested, in connection with the filing of any Tax Return or in conducting any audit, litigation or other proceeding with respect to Taxes.
(d) Immediately
prior to the Closing, Invest shall deliver to BRKR a certification that stock in Invest is not a U.S. real property interest because Invest is not, and has
not been, a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Such certification shall
be in accordance with Treasury Regulation Section 1.1445-2(c)(3)(i). Invest shall timely deliver to the IRS the notification required under Treasury Regulation
Section 1.897-2(h)(2).
(e) The
Parties intend that the Swiss Transactions shall qualify for treatment as a reorganization under Section 368(a) of the Code and shall file any Tax Returns in
a manner consistent with such treatment.
Section 7.10
Release.
In consideration for payment of the Acquisition Price, as of and following the
Closing Date, each Invest Shareholder (on its own behalf and on behalf of each of its Affiliates) knowingly, voluntarily and unconditionally releases, forever discharges, and covenants not to sue BRKR
and its Subsidiaries and their respective predecessors, successors, parents, Subsidiaries and other Affiliates, and all of their respective current and former officers, directors, managers, employees,
agents, attorneys and representatives from and for any and all claims, causes of action, demands, suits, debts, obligations, liabilities, damages, losses, costs, and expenses (including attorneys'
fees) of every kind or nature whatsoever, known or unknown, actual or potential, suspected or unsuspected, fixed or contingent, that any Invest Shareholder or its respective Affiliates, as applicable,
has or may have, now or in the future, arising out of, relating to, or resulting from any act of commission or omission, errors,
A-3-31
negligence,
strict liability, breach of contract, tort, violations of law, matter or cause whatsoever from the beginning of time to the Closing Date, with respect to, arising out of, or in connection
with Invest or the Subsidiaries;
provided, however
, that such release shall not cover: (a) any claims arising under this Swiss Merger Agreement,
including the schedules and exhibits attached hereto, or the agreements or documents executed and/or delivered in connection herewith, but excluding claims of a breach of fiduciary duties by any
Invest Shareholders or Invest in connection with the Swiss Transactions or (b) any claims against Invest or a Subsidiary in its capacity as a current or former director, manager, officer or
employee of Invest or a Subsidiary for indemnification under the Organizational Documents of Invest or such Subsidiary, as such documents are in effect immediately prior to the Closing Date.
Section 7.11
Voting Agreement.
To the extent applicable, each Invest Shareholder covenants and agrees to
vote in her/his capacity as a holder of shares of BRKR Stock, all of the shares of BRKR Stock owned by such Invest Shareholder in favor of the Swiss Transactions.
Section 7.12
Non-competition and Non-solicitation.
From the Closing and for a
period of five (5) years thereafter, Invest Shareholders will not, and will cause their Affiliates not to, directly or indirectly, except on behalf of BRKR or its Affiliates:
(a) engage
in, hold an interest in, own, manage, operate, control, direct, be connected with as a stockholder (other than as a holder of less than one percent (1%) of a
publicly traded security), joint venturer, partner, consultant or employee, or otherwise engage or participate in, provide services to or
be connected in any manner with or assist in any way any entity, person or business that engages in a business involving the design, manufacture or distribution of the BioSpin Technologies;
provided
,
that such restriction shall not prohibit any Invest Shareholder from accepting employment with another company that utilizes the BioSpin
Technologies so long as such Invest Shareholder does not directly manage the BioSpin Technologies operations of such company or such BioSpin Technologies operations account for less than ten percent
(10%) of the overall revenues of such company; or
(b) solicit
for employment or hire any employee of Invest or any of its Subsidiaries without the prior written consent of BRKR. This provision shall not apply to any
employee of Invest who replies or responds to a general solicitation or advertisement for employment by an Invest Shareholder or on an Invest Shareholder's behalf or to solicitations of employees of
Invest twelve months after such employee's employment has been terminated by Invest.
Section 7.13
Restrictions on Sales.
Each Invest Shareholder agrees that, other than certain transfers
solely among Invest Shareholders, such Invest Shareholder will not sell, contract to sell, pledge, or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by such Invest Shareholder or any person in privity with
such Invest Shareholder), directly or indirectly, including the participation in the filing of a registration statement with the SEC in respect of, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any shares of BRKR Stock acquired pursuant to this Swiss Merger Agreement, or publicly
announce an intention to effect any such transaction, for a period of 365 days after the Closing Date.
Section 7.14
No Election.
BRKR shall at no time make an election under Section 338 of the Code
with respect to Invest or any stock held, directly or indirectly, by Invest.
Section 7.15
Compulsory Share Transfer.
As soon as possible after January 1, 2008, Invest
Shareholders and Invest shall cause all Compulsory Shares to be transferred to Isolde Laukien-Kleiner (the "
Compulsory Share Transfer
"), free and clear
of any Liens, and shall cause the share register of Invest to be duly revised to accurately reflect the record and beneficial ownership of all Compulsory Shares by Isolde Laukien-Kleiner.
A-3-32
Section 7.16
Compulsory Share Transfer relating to Bruker AG and Bruker International.
As soon as
possible after January 1, 2008, Invest Shareholders and Invest shall cause all compulsory shares held by the members of the board of directors of Bruker AG and Bruker International to be
transferred to Invest, free and clear of any Liens, and shall cause the share registers of Bruker AG and Bruker International
to be duly revised to accurately reflect the record and beneficial ownership of all shares in these companies by Invest.
Section 7.17
Transfer of Wheeler & Co. Shares.
Invest Shareholders and Invest shall cause all
Invest Shares held by Wheeler & Co. or any of its Affiliates for the benefit of Marc M. Laukien to be transferred to Marc M. Laukien, free and clear of any Liens, and shall cause the share
register of Invest to be duly revised to accurately reflect the record and beneficial ownership of such Invest Shares by Marc M. Laukien.
ARTICLE VIII
CLOSING CONDITIONS
Section 8.1
Conditions to Each Party's Obligations.
The respective obligation of each Party to effect the
Swiss Transactions is subject to the satisfaction, on or prior to the Closing Date, of the following conditions, which may be waived by BRKR or Invest Shareholders:
(a) The
U.S. Closing shall have occurred;
(b) The
waiting periods (i) under the HSR Act applicable to the consummation of the Transactions shall have expired or been terminated and all necessary Consents of
any Governmental Authority required for consummation of the Transactions shall have been obtained and (ii) applicable to the consummation of the Transactions and instituted by the European
Commission and/or the European Union member states' agencies shall have expired or been terminated and all requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers,
permits, consents, reviews, sanctions, orders, rulings, decisions, declarations, certificates and exemptions required for the consummation of the Transactions under any corresponding requirements of
the European Union member states or competition regulatory authorities in other jurisdictions shall have been obtained; and
(c) There
shall not be in effect any Law of any Governmental Authority of competent jurisdiction restraining, enjoining or otherwise preventing the consummation of the
transactions contemplated by this Swiss Merger Agreement or any of the Ancillary Agreements.
(d) A
ruling of the Merger Documents from the Commercial Register shall have been received, confirming that the Merger Documents are in line with Swiss law and that the
Merger Filing will be registered in the Commercial Register upon the filing of the Merger Documents;
(e) A
confirmation of a specially qualified auditor pursuant to Article 25(2) of the Merger Act shall have been received from Invest and the Merger Sub confirming
that there are no known or expected claims of Invest which could be jeopardized due to the Merger;
(f) A
confirmation of Invest and the Merger Sub shall have been issued confirming that consultation proceedings with the employee representatives, pursuant to
Article 28 of the Merger Act, have taken place; and
A-3-33
Section 8.2
Conditions Precedent to Obligations of BRKR and Merger Sub.
The obligation of BRKR and
Merger
Sub to effect the Swiss Transactions is subject to the satisfaction or waiver of the following conditions:
(a) The
representations and warranties of Invest Shareholders in this Swiss Merger Agreement that are qualified as to materiality shall be true and correct in all respects
and the representations and warranties of Invest Shareholders that are not qualified as to materiality shall be true and correct in all material respects, in each case, as of the date hereof and at
and as of the Closing with the same effect as though such representations and warranties had been made at and as of such time, other than representations and warranties that speak as of another
specific date or time prior to the date hereof (which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by Invest Shareholders on or prior to the Closing Date shall have been complied with or
performed in all material respects;
(c) BRKR
shall have received certificates of Invest Shareholders, dated as of the Closing Date, certifying in such detail as BRKR may reasonably request that the conditions
specified in
Sections 8.2(a)
and
8.2(b)
have been fulfilled;
(d) No
action, suit or proceeding shall be pending or threatened by or before any Governmental Authority or pending or threatened by any other Person to enjoin, restrain,
prohibit or obtain damages in respect of any of the Swiss Transactions or any Ancillary Agreement, or which would be reasonably likely to prevent or make illegal the consummation of any Swiss
Transactions or any Ancillary Agreement;
(e) Invest
shall have furnished to BRKR a certification in accordance with Treasury Regulation Section 1.1445-2(c) and in the form provided in Treasury
Regulation Section 1.897-2(h)(2), in a customary and standard form;
(f) Invest
Shareholders shall have delivered to BRKR the Exchange Shares Transfer Deed, duly signed by each of Invest Shareholders in accordance with the terms of
Section 2.1
;
(g) Invest
Shareholders shall have delivered to Invest the Cancellation Shares Transfer Deed, duly signed by each of Invest Shareholders in accordance with the terms of
Section 2.2
;
(h) There
shall not have occurred since the date hereof any events that have had, or are, individually or in the aggregate, reasonably likely to have a Material Adverse
Effect;
(i) BRKR
shall have received evidence, reasonably satisfactory to BRKR, of receipt of all requisite third-party and governmental Consents, including those set forth on
Schedule 4.5(c)
;
(j) The
insurance policy between Bruker AG and Winterthur Versicherungen, dated October 8, 2007 (Policy # 8.246.554) shall have been amended so that full insurance
coverage is provided under the policy before and after the consummation of this Swiss Merger Agreement;
(k) BRKR
shall have received evidence that condominium ownership under standard terms and conditions shall have been established in the Bruker AG building at
Industriestrasse 26, CH-8117 Fällanden, Switzerland and the top floor shall have been sold, at fair market value, to Isolde Laukien-Kleiner or one of her Affiliates, and
that the foregoing has been duly entered into the land register (
Grundbuch
);
(l) All
members of the board of directors of Bruker AG and Bruker International shall have terminated their trust agreements relating to the compulsory share and such shares
shall have been transferred to Invest and the respective share registers of Bruker AG and Bruker International shall have been duly amended accordingly so that the sole shareholder of both Bruker AG
and Bruker International is Invest;
A-3-34
(m) The
two full-time employment agreements between Werner Schittenhelm and Bruker AG on one hand and Bruker International on the other hand, shall have been
amended and/or terminated to provide for the factual employment terms of Werner Schittenhelm with Bruker AG and Bruker International;
(n) Any
fees due to Joerg Laukien under the consulting agreement between Joerg Laukien and Invest shall as of the Closing either have been paid by Invest, or if paid by
Bruker International, Invest shall have undertaken to reimburse Bruker International for such costs in the future;
(o) Bruker
Biospin K.K. shall have issued, and Invest shall have received, a stock certificate representing Invest's ownership of 960,000 shares of Bruker Biospin K.K.
common stock;
(p) The
approval of the Swiss Transactions by the holders of shares of BRKR Stock who are unaffiliated with Invest Shareholders representing at least a majority of the total
votes cast by such holders at a duly held meeting of the BRKR stockholders;
(q) The
approval of the Swiss Transactions by the holders of shares of BRKR Stock representing at least a majority of the total votes cast at a duly held meeting of the BRKR
stockholders;
(r) All
conditions precedent contained in the German SPA and the Ancillary Agreements (other than any conditions stating that the Swiss Closing shall have occurred) shall
have been satisfied or waived by the parties thereto;
(s) BRKR
and the Special Committee each shall have received an opinion from its special Swiss counsel to the effect that, as a result of the operation of the Merger Act, the
following events shall occur simultaneously at the Effective Time of the Merger: (i) All of the assets and liabilities of Merger Sub shall become the assets and liabilities of Invest and
(ii) Merger Sub shall cease its separate legal existence for all purposes;
(t) All
Compulsory Shares shall have been transferred to Isolde Laukien-Kleiner, free and clear of any Liens, and the share register of Invest shall have been duly revised
to accurately reflect the record and beneficial ownership of such Compulsory Shares by Isolde Laukien-Kleiner; and
(u) All
Invest Shares held by Wheeler & Co. or any of its Affiliates for the benefit of Marc M. Laukien shall have been transferred to Marc M. Laukien, free and clear
of any Liens, and the share register of Invest shall have been duly revised to accurately reflect the record and beneficial ownership of such Invest Shares by Marc M. Laukien.
Section 8.3
Conditions Precedent to Obligations of Invest Shareholders and Invest.
The obligation of
Invest Shareholders and Invest to effect the Swiss Transactions are subject to the satisfaction or waiver of the following conditions:
(a) The
representations and warranties of BRKR and Merger Sub in this Swiss Merger Agreement that are qualified as to materiality shall be true and correct in all respects
and the representations and warranties of BRKR that are not qualified as to materiality shall be true and correct in all material
respects, in each case, as of the date hereof and at and as of the Closing with the same effect as though such representations and warranties had been made at and as of such time, other than
representations and warranties that speak as of another specific date or time prior to the date hereof (which need only be true and correct as of such date or time);
(b) All
of the terms, covenants and conditions to be complied with and performed by BRKR and Merger Sub on or prior to the Closing Date shall have been complied with or
performed in all material respects;
A-3-35
(c) Invest
Shareholders shall have received a certificate, dated as of the Closing Date, executed on behalf of BRKR by an authorized executive officer thereof, certifying in
such detail as Invest Shareholders may reasonably request that the conditions specified in
Section 8.3(a)
and
Section 8.3(b)
have been fulfilled;
and
(d) BRKR
shall have delivered to Invest Shareholders the Share Exchange Price in accordance with the terms of
Section 2.1
.
ARTICLE IX
TERMINATION
Section 9.1
Termination.
This Swiss Merger Agreement may be terminated and the Swiss Transactions may be
abandoned at any time prior to the Closing:
(a) by
mutual written consent of BRKR and Invest Shareholders;
(b) by
Invest Shareholders or BRKR, if:
(i) a
Governmental Authority shall have issued an order, decree or ruling or taken any other action (which order, decree or ruling the Parties shall use reasonable best
efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the Swiss Transactions and such order, decree, ruling or other action shall have become final and
nonappealable; or
(ii) the
Closing shall not have occurred on or before June 30, 2008 (other than due principally to the failure of the Party seeking to terminate this Swiss Merger
Agreement to perform any obligations under this Swiss Merger Agreement required to be performed by it at or prior to the Closing);
(iii) the
shareholder approvals of BRKR shall not have been obtained at the shareholders meeting or at any adjournment or postponement thereof; or
(iv) the
U.S. SPA or the German SPA shall have been terminated;
(c) by
BRKR, if there is a default or breach by Invest or any Invest Shareholder with respect to the due and timely performance of any of their respective covenants or
agreements contained herein, or if the representations or warranties of Invest or any Invest Shareholder contained in this Swiss Merger Agreement shall have become inaccurate, in either case such that
the conditions set forth in
Section 8.2
would not be satisfied and such breach or default or inaccuracy is not curable or, if curable, has not
been cured or waived within twenty (20) calendar days after written notice to Invest or Invest Shareholders, as applicable, specifying, in reasonable detail, such claimed default, breach or
inaccuracy and demanding its cure or satisfaction; or
(d) by
Invest Shareholders, if there is a default or breach by BRKR with respect to the due and timely performance of any of its covenants or agreements contained herein, or
if the representations or warranties of BRKR contained in this Swiss Merger Agreement shall have become inaccurate, in either case such that the conditions set forth in
Section 8.3
would not be
satisfied and such breach or default or inaccuracy is not curable or, if curable, has not been cured or waived within
twenty (20) calendar days after written notice to BRKR specifying, in reasonable detail, such claimed default, breach or inaccuracy and demanding its cure or satisfaction.
Section 9.2
Procedure and Effect of Termination.
In the event of termination and abandonment of the Swiss
Transactions pursuant to
Section 9.1
, written notice thereof shall forthwith be given to the other Parties and this Swiss Merger Agreement shall
terminate (subject to the provisions of this
A-3-36
Section 9.2
) and the Swiss Transactions shall be abandoned, without further action by any of the Parties. If this Swiss Merger Agreement is terminated as provided
herein:
(a) Upon
the written request therefor, each Party will (i) redeliver or (ii) destroy with certification thereto in form and substance reasonably satisfactory
to the other party, all documents, work papers and other materials of any other party relating to the Swiss Transactions, whether obtained before or after the execution hereof, to the party furnishing
the same;
provided
,
however
, that each Party shall be entitled to retain copies of any such materials
for record-keeping purposes or as required by Law; and
(b) Subject
to
Section 9.1
, in the event of the termination and abandonment of this Swiss Merger Agreement pursuant to
Section 9.1
, this Swiss Merger
Agreement shall forthwith become void and have no effect, without any liability on the part of any Party or its
Affiliates, directors, managers, officers or stockholders, other than the provisions of
Sections 9.1, 11.1, 11.2, 11.3, 11.7, 11.8, 11.9, 11.12
and
11.16
.
Nothing contained in this
Section 9.2
shall relieve any party from liability for any
breach of this Swiss Merger Agreement.
ARTICLE X
SURVIVAL; INDEMNIFICATION
Section 10.1
Survival of Indemnification Rights.
Subject to the limitations and other provisions of this
Swiss Merger Agreement, the representations and warranties of Invest Shareholders in
Article III
and of Invest and Invest Shareholders in
Article IV
shall survive the Closing and remain in full force and effect until the later of the Cut-Off Date and the resolution of
any claim for indemnification with respect to which any BRKR Indemnified Party has provided Invest Shareholders notice of a claim for indemnification pursuant to
Section 10.3(a)
prior to the
Cut-Off Date;
provided
,
however
, the following representations and warranties shall survive and remain in full force and effect for the period indicated:
(a)
Section 3.8
(Ownership of the Invest Shares),
Section 4.3
(Capitalization of Invest) and
Section 4.4
(Capitalization of the Subsidiaries; Other Interests), ten (10) years following the Closing
Date;
(b)
Section 4.17
(Environmental),
Section 4.19
(Employee
Benefits),
Section 4.22
(Proprietary Rights) and
Section 4.29
(No Misleading Statements),
three (3) years following the Closing Date; and
(c)
Section 3.9
(Withholding Tax) and
Section 4.21
(Taxes and
Tax Returns), until sixty (60) calendar days after expiration of the applicable statute of limitations (including any extension thereof);
and,
with respect to clauses (a), (b) and (c), if a claims notice has been provided by such date, shall remain in full force and effect until final resolution thereof.
The
covenants and agreements of Invest Shareholders and Invest contained in this Swiss Merger Agreement shall survive and remain in full force and effect for the applicable period
specified therein, or if no such period is specified, indefinitely. The provisions of this
Article X
shall survive for so long as any other
Section of this Swiss Merger Agreement shall survive.
Section 10.2
Indemnification Obligations.
Invest Shareholders agree to jointly and severally indemnify,
defend and hold harmless BRKR and any parent, Subsidiary, associate, Affiliate, director, manager, officer, stockholder, employee or agent thereof, and their respective representatives, successors and
permitted assigns (all of the foregoing are collectively referred to as the "
BRKR Indemnified Parties
") from and against, and pay on behalf of or
reimburse such party in respect of, as
A-3-37
and
when incurred, all Losses which any such party may actually incur, suffer, sustain or become subject to or accrue, as a result of, in connection with, or relating to or by virtue of:
(a) any
inaccuracy in, or breach of, any representation or warranty made by Invest or Invest Shareholders under this Swiss Merger Agreement or any Ancillary Agreement, other
than any representation or warranty in
Section 4.21
(Taxes and Tax Returns), it being understood that such representations and warranties shall
be interpreted without giving effect to any limitations or qualifications as to "materiality" (including the word "material" or "Material Adverse Effect") set forth therein;
(b) any
breach or nonfulfillment of any covenant or agreement on the part of Invest Shareholders or Invest in respect of pre-Closing covenants, under this Swiss
Merger Agreement or any Ancillary Agreement;
(c) any
fees, expenses or other payments incurred or owed by Invest Shareholders or Invest to any agent, broker, investment banker or other firm or Person retained or
employed by Invest Shareholders or Invest in connection with the Swiss Transactions;
(d) any
liability for Taxes, including withholding Taxes, arising out of or related to the payment of the Special Dividend by Invest to Invest Shareholders, but specifically
excluding any liability for Taxes, including withholding Taxes, of a Subsidiary incurred by reason of its payment of any Subsidiary Dividend to Invest; or
(e) any
inaccuracy in, or breach of, any representation or warranty in
Section 4.21
of this Swiss Merger Agreement,
Section 4.21 of the U.S. SPA or Section 4.19 of the German SPA to the extent that the aggregate amount of all such Losses exceeds $10,000,000 (the "
Tax
Deductible
") (other than Losses arising from criminal activity or fraudin each case as determined in a final, non-appealable decision by a court of
competent jurisdictionof Invest Shareholders or Invest, which Losses shall not be subject to the Tax Deductible), it being understood that such representations and warranties shall be
interpreted without giving effect to any exceptions or disclosures made with respect thereto on the disclosure schedules to this Swiss Merger Agreement, the U.S. SPA or the German SPA;
provided
,
however
, that any Taxes of a Subsidiary attributable to the payment of a Subsidiary Dividend
shall not be applied against the Tax Deductible.
Section 10.3
Indemnification Procedure.
(a) If
any BRKR Indemnified Party intends to seek indemnification pursuant to this
Article X
, such BRKR Indemnified
Party shall promptly notify Invest Shareholders in writing. The BRKR Indemnified Party will provide Invest Shareholders with prompt notice of any third-party claim in respect of which indemnification
is sought. The failure to provide either such notice will not affect any rights hereunder except to the extent Invest Shareholders are materially prejudiced thereby.
(b) If
such claim involves a claim by a Third Party against the BRKR Indemnified Parties, Invest Shareholders may, upon notice to the BRKR Indemnified Parties, assume,
through counsel of Invest Shareholders' choosing and at Invest Shareholders' expense, the settlement or defense thereof, and the BRKR Indemnified Parties shall reasonably cooperate with Invest
Shareholders in connection therewith;
provided
, that the BRKR Indemnified Parties may participate in such settlement or defense through counsel chosen
by them;
provided
,
further
, that if the BRKR Indemnified Parties reasonably determine that
representation by the counsel of Invest Shareholders and the BRKR Indemnified Parties may present such counsel with a conflict of interests, then Invest Shareholders shall pay the reasonable fees and
expenses of the BRKR Indemnified Parties' counsel. Notwithstanding anything in this
Section 10.3
to the contrary, Invest Shareholders may not,
without the prior written consent of the BRKR Indemnified Parties, settle or compromise any action or consent to the entry of any judgment, such consent not to be unreasonably withheld. So long as
Invest Shareholders are contesting any such claim in good faith, the BRKR Indemnified
A-3-38
Parties
shall not pay or settle any such claim without Invest Shareholders' consent, such consent not to be unreasonably withheld. If Invest Shareholders are not contesting such claim in good faith,
then the BRKR Indemnified Parties may conduct and control, through counsel of their own choosing and at Invest Shareholders' expense, the settlement or defense thereof, and Invest Shareholders shall
cooperate with it in connection therewith. The failure of the BRKR Indemnified Parties to participate in, conduct or control such defense shall not relieve Invest Shareholders of any obligation they
may have hereunder.
(c) Notwithstanding
anything to the contrary in this
Section 10.3
, to the extent a claim for which indemnification is
sought by BRKR Indemnified Parties relates to Taxes for a taxable period beginning on or before and ending after the Closing Date, Invest Shareholders and BRKR shall jointly control any proceeding in
respect of such claim and neither party shall settle or compromise any action or consent to the entry of any judgment with respect thereto without the prior written consent of the other party, such
consent not to be unreasonably withheld.
Section 10.4
Calculation of Indemnity Payments.
The amount of any Loss for which indemnification is
provided under this
Article X
shall be (a) increased to the extent necessary such that after payment of any net Tax cost by the BRKR
Indemnified Parties with respect to the receipt or accrual of indemnity payments hereunder, as increased pursuant to this clause (a), the amount remaining shall be the amount of the indemnity
payment prior to any increase pursuant to this clause (a) and (b) reduced by the amount of the net Tax benefit actually realized by the BRKR Indemnified Parties by reason of such Loss
(as an illustrative example, clause (b) takes into account on a present value basis any net Tax benefit actually realized by the BRKR Indemnified Party by reason of the indemnified Loss in a
Tax jurisdiction or Tax year other than the jurisdiction or year in which such Loss arose).
Section 10.5
Indemnification Amounts.
(a) Notwithstanding
any provision to the contrary contained in this Swiss Merger Agreement, Invest Shareholders shall not be obligated to indemnify the BRKR Indemnified
Parties for any Losses
pursuant to this
Article X
to the extent they are a result of any claim made pursuant to
Section 10.2(a)
unless and until the dollar amount of
all Losses in the aggregate from claims made pursuant to
Section 10.2(a)
, Section 9.2(a) of the U.S. SPA and Section 9.2(a) of the German SPA exceed $3,250,000, in which case Invest
Shareholders will be obligated to indemnify the BRKR Indemnified Parties for the total amount of Losses including any amounts which would otherwise not be required to be paid by reason of this
Section 10.5
;
provided
,
however
, that in no event
shall the aggregate indemnification obligations of Invest Shareholders pursuant to
Sections 10.2(a)
,
(b)
or
(c)
of this Swiss Merger Agreement, Sections 9.2(a), (b) or (c) of
the U.S. SPA, and Sections 9.2(a), (b) or (c) of the German SPA exceed Ninety Two Million Dollars ($92,000,000) (the "
Indemnity Cap
");
provided
,
further
, that notwithstanding the foregoing, the BRKR Indemnified Parties' right to seek
indemnification hereunder for any Losses arising out of (i) criminal activity or fraud (in each case as determined in a final, non-appealable decision by a court of competent
jurisdiction) of Invest Shareholders or Invest or (ii)
Section 3.8
(Ownership of the Invest Shares),
Section 3.9
(Withholding Tax),
Section 4.3
(Capitalization of Invest),
Section 4.4
(Capitalization of the Subsidiaries; Other Interests) or
Section 4.17
(Environmental) shall not be subject to, or limited by, the limits contained in this
Section 10.5
;
provided
,
further
, that with respect to any Losses arising out of
Section 3.8
(Ownership of Invest Shares) and
Section 3.9
(Withholding Tax), the liability
of any Invest Shareholder beyond the Indemnity Cap shall be several and not joint. Notwithstanding the foregoing, no Invest Shareholder shall have any liability under this Article X or
otherwise under this Swiss Merger Agreement in excess of the amount set forth opposite such Invest Shareholder's name under the heading "Individual Selling Shareholders' Indemnity Cap" as set forth on
Schedule 9.5
to the U.S. SPA.
A-3-39
(b) For
the purpose of calculating the amount of any Loss for which a BRKR Indemnified Party is entitled to indemnification under this Swiss Merger Agreement, the amount of
each Loss shall be deemed to be an amount net of any insurance proceeds and any indemnity, contribution or other similar payment that has been paid by any insurer or other third party with respect
thereto. The reasonable out-of-pocket costs and expenses (including reasonable fees and disbursements of counsel) actually incurred by the BRKR Indemnified Parties in pursuing
any insurance proceeds or indemnity, contribution or other similar payment from any insurer or other third party under this Article X shall constitute additional Losses with respect to the
matter for which indemnification may be sought hereunder, except to the extent such costs and expenses are paid or reimbursed by such insurer or other third party. In the event that a BRKR Indemnified
Party is paid by Invest Shareholders for a Loss for which one or more insurance claims or claims against Third Parties has been or could be made, but for which payment from such insurer or Third Party
has not been received, then such BRKR Indemnified Party shall assign, to the extent legally permissible, all such claims to Invest Shareholders for purposes of recouping payment of such Loss. To the
extent such assignment should not be legally permissible, the respective BRKR Indemnified Party shall remit any payment received, up to the amount of such Loss, from such insurance claim or Third
Party claim to Invest Shareholders.
(c) BRKR
shall be entitled to recover Losses from the Indemnity Escrow;
provided
,
however
, that the recovery is not limited to the amount in the Indemnity Escrow.
Section 10.6
Exclusive Remedy.
BRKR acknowledges and agrees that the indemnification provisions of this
Article X shall be the sole and exclusive remedies of BRKR against Invest Shareholders and Invest for any breach by Invest Shareholders or Invest of the representations and warranties in this
Swiss Merger Agreement, for any failure by Invest Shareholders or Invest to perform and comply with any covenants and agreements in this Swiss Merger Agreement that are required to be complied with or
performed prior to the Closing and for any failure by Invest Shareholders or Invest to perform and comply with any covenants and agreements in this Swiss Merger Agreement, except that if any of the
provisions of this Swiss Merger Agreement are not performed in accordance with their terms or are otherwise breached, BRKR shall be entitled to specific performance of the terms thereof in addition to
any other remedy at law or equity. Notwithstanding anything contained in this Swiss Merger Agreement to the contrary, BRKR shall retain the right to receive damages or other relief (including
equitable relief) against Invest or Invest Shareholders as a result of any criminal activity or fraudulent action (in each case as determined in a final, non-appealable decision by a court
of competent jurisdiction) by Invest or Invest Shareholders without regard to any restriction or limitation contained herein. The indemnification obligations contained in this
Article X
are
obligations of Invest Shareholders and not of Invest.
A-3-40
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1
Notices.
All notices and other communications required or permitted hereunder will be in
writing and, unless otherwise provided in this Swiss Merger Agreement, will be deemed to have been duly given when delivered in person or when dispatched by electronic facsimile transfer (confirmed in
writing by mail simultaneously dispatched) or one (1) Business Day after having been dispatched by a nationally recognized overnight courier service to the appropriate party at the address
specified below:
(a)
If to BRKR or Merger Sub, to:
Bruker
BioSciences Corporation
40 Manning Road
Billerica, MA 01821
Facsimile: 978-667-2917
Attention: Bill Knight
with
a copy to:
Dewey &
LeBoeuf LLP
1301 Avenue of the Americas
New York, NY 10019
Facsimile: 212-259-6333
Attention: Frederick W. Kanner, Esq.
Bryan J. Luchs, Esq.
(b)
If to Invest Shareholders, to:
(c)
If to Invest to:
or
to such other address or addresses as any such party may from time to time designate as to itself by like notice.
Section 11.2
Expenses.
Except as otherwise expressly provided herein, each Party will pay any expenses
incurred by it incident to this Swiss Merger Agreement and in preparing to consummate and
A-3-41
consummating
the Swiss Transactions provided for herein;
provided
,
however
, that with respect to any
fees relating to the HSR Act or any requisite approvals, waiting or suspensory periods (and any extensions thereof), waivers, permits, consents, reviews, sanctions, orders, rulings, decisions,
declarations, certificates and exemptions required for the consummation of the Swiss Transactions under any corresponding requirements of the European Commission and/or the European Union member
states agencies or competition regulatory authorities in other jurisdictions, BRKR shall be responsible for 100% of the fees for its filing and Invest shall be responsible for 100% of the fees for any
filing made by Invest or any of Invest Shareholders.
Section 11.3
Successors and Assigns.
No Party may assign any of its rights under this Swiss Merger
Agreement without the prior written consent of the other Parties. Subject to the preceding sentence, this Swiss Merger Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the Parties. Notwithstanding anything to the contrary in this
Section 11.3
, upon written
notice to Invest Shareholders, BRKR shall be permitted to assign this Swiss Merger Agreement and the rights and obligations under it to a wholly owned, direct or indirect Subsidiary of BRKR;
provided
that, in the event of any such assignment, BRKR shall remain liable in full for the performance of its obligations hereunder. Nothing expressed
or referred to in this Swiss Merger Agreement will be construed to give any Person other than the Parties any legal or equitable right, remedy or claim under or with respect to this Swiss Merger
Agreement or any provision of this Swiss Merger Agreement. This Swiss Merger Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the parties to this Swiss
Merger Agreement and their successors and assigns.
Section 11.4
Extension; Waiver.
Either Party may, by written notice to the other Party (a) extend
the time for performance of any of the obligations of the other Party under this Swiss Merger Agreement, (b) waive any inaccuracies in the representations or warranties of the other Party
contained in this Swiss Merger Agreement, (c) waive compliance with any of the conditions or covenants of the other Party contained in this Swiss Merger Agreement or (d) waive or modify
performance of any of the obligations of the other Party under this Swiss Merger Agreement;
provided
, that no Party may, without the prior written
consent of the other Party, make or grant such extension of time, waiver of inaccuracies or compliance or waiver or modification of performance with respect to its representations, warranties,
conditions or covenants hereunder. Except as provided in the immediately preceding sentence, no action taken pursuant to this Swiss Merger Agreement will be deemed to constitute a waiver of compliance
with any representations, warranties, conditions or covenants contained in this Swiss Merger Agreement and will not operate or be construed as a waiver of any subsequent breach, whether of a similar
or dissimilar nature.
Section 11.5
Entire Agreement; Schedules.
This Swiss Merger Agreement, the U.S. SPA and the German SPA,
which includes the schedules and exhibits hereto and thereto, supersedes any other agreement, whether written or oral, that may have been made or entered into by any party relating to the matters
contemplated by this Swiss Merger Agreement and such other agreements and constitutes the entire agreement by and among the Parties relating to these matters.
Section 11.6
Amendments, Supplements, Etc.
This Swiss Merger Agreement may be amended or supplemented at
any time by additional written agreements as may mutually be determined by Invest, BRKR, Merger Sub and Invest Shareholders to be necessary, desirable or expedient to further the purposes of this
Swiss Merger Agreement or to clarify the intention of the Parties.
Section 11.7
Applicable Law.
This Swiss Merger Agreement shall be governed by and construed under the
Laws of the Commonwealth of Massachusetts (without regard to the conflict of law principles thereof). Each of the Parties irrevocably agrees that any legal action or proceeding with respect to this
Swiss Merger Agreement or for recognition and enforcement of any judgment in respect hereof shall be brought and determined in the United States District Court for the Eastern District of
A-3-42
Massachusetts
or if such legal action or proceeding may not be brought in such court for jurisdictional purposes, in the Superior Court of Massachusetts. Each of the Parties hereby
(a) irrevocably submits with regard to any such action or proceeding to the exclusive personal jurisdiction of the aforesaid courts in the event any dispute arises out of this Swiss Merger
Agreement or any Swiss Transaction contemplated hereby and waives the defense of sovereign immunity, (b) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court or that such action is brought in an inconvenient forum and (c) agrees that it shall not bring any action relating to this Swiss Merger Agreement
or any Swiss Transaction contemplated hereby in any court other than any Massachusetts state or federal court sitting in Boston, Massachusetts.
Section 11.8
Waiver of Jury Trial.
Each of the Parties hereby waives to the fullest extent permitted by
applicable law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Swiss Merger Agreement or the Swiss
Transactions. Each of the Parties hereby (a) certifies that no representative, agent or attorney of the other Party has represented, expressly or otherwise, that such other Party would not, in
the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this Swiss Merger Agreement and the Swiss Transactions, as applicable,
by, among other things, the mutual waivers and certifications in this Section 11.8.
Section 11.9
Actions by Invest Shareholders.
Where any provision of this Swiss Merger Agreement indicates
that Invest will take any specified action (or refrain from taking any specified action) or requires Invest to take any specified action (or to refrain from taking any specified action), then,
regardless of whether this Swiss Merger Agreement specifically provides that Invest Shareholders will do so, Invest Shareholders shall cause Invest to take such action (or to refrain from taking such
action, as applicable). Invest Shareholders will be responsible for the failure of Invest to take any such action (or to refrain from taking any such action, as applicable).
Section 11.10
Execution in Counterparts.
This Swiss Merger Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which together will constitute one and the same agreement.
Section 11.11
Titles and Headings.
Titles and headings to sections herein are inserted for convenience of
reference only, and are not intended to be a part of or to affect the meaning or interpretation of this Swiss Merger Agreement.
Section 11.12
Invalid Provisions.
If any provision of this Swiss Merger Agreement is held to be illegal,
invalid or unenforceable under any present or future Law, and if the rights or obligations under this Swiss Merger Agreement of Invest Shareholders on the one hand and BRKR on the other hand will not
be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Swiss Merger Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Swiss Merger Agreement will remain in full force and effect and will not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this Swiss Merger Agreement and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Swiss Merger Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.
Section 11.13
Publicity.
The Parties agree that except as otherwise required by applicable Law or the
rules and regulations of any national securities exchange, no Party shall issue any press release or otherwise make any public statement with respect to the Swiss Transactions or the Ancillary
Agreements without prior consultation with and consent of BRKR and Invest Shareholders, which consent shall not be unreasonably withheld, conditioned or delayed. A mutually agreed press release is
attached hereto as
Exhibit A
.
A-3-43
Section 11.14
Specific Performance.
The Parties agree that if any of the provisions of this Swiss Merger
Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to
determine, and that the Parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.
Section 11.15
Construction.
(a) Whenever
the words "include," "includes," or "including" are used in this Swiss Merger Agreement, they shall be deemed to be followed by the words "without limitation."
(b) All
terms defined in this Swiss Merger Agreement shall have the defined meanings contained herein when used in any certificate or other document made or delivered
pursuant hereto, unless otherwise defined therein. The definitions contained in this Swiss Merger Agreement are applicable to the singular as well as the plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms. References to a Person are also to its permitted successors and assigns.
(c) Any
agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, qualified or supplemented, including (in the case of agreements and instruments) by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and all attachments thereto and instruments incorporated therein.
(d) All
article, section, paragraph, schedule and exhibit references used in this Swiss Merger Agreement are to articles, sections, paragraphs, schedules and exhibits to
this Swiss Merger Agreement unless otherwise specified.
(e) The
Parties acknowledge that each Party and its attorney has reviewed this Swiss Merger Agreement and that any rule of construction to the effect that any ambiguities
are to be resolved against the drafting party, or any similar rule operating against the drafter of an agreement, shall not be applicable to the construction or interpretation of this Swiss Merger
Agreement.
Section 11.16
Actions by BRKR.
Any decision by BRKR relating to a dispute or a potential dispute between
BRKR and Invest Shareholders shall be subject to the approval of the Audit Committee.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
A-3-44
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.
|
|
BRUKER BIOSCIENCES CORPORATION
(as acquiror)
|
|
|
By:
|
|
/s/
FRANK H. LAUKIEN,
Ph.D.
|
|
|
|
|
Name:
|
|
Frank H. Laukien, Ph.D.
|
|
|
|
|
Title:
|
|
Chief Executive Officer and President
|
|
|
BRUKER BIOSPIN INVEST AG
|
|
|
By:
|
|
/s/
DR. DANIEL SAUTER
|
|
|
|
|
Name:
|
|
Dr. Daniel Sauter
|
|
|
|
|
Title:
|
|
Director
|
|
|
DIRK D. LAUKIEN
|
|
|
/s/
DIRK D. LAUKIEN,
Ph.D
|
|
|
FRANK H. LAUKIEN
|
|
|
/s/
FRANK H. LAUKIEN,
Ph.D.
|
|
|
ISOLDE LAUKIEN-KLEINER
|
|
|
/s/
ISOLDE LAUKIEN-KLEINER
|
|
|
JOERG C. LAUKIEN
|
|
|
/s/
JOERG C. LAUKIEN
|
|
|
MARC M. LAUKIEN
|
|
|
/s/
MARC M. LAUKIEN
|
|
|
ROBYN L. LAUKIEN
|
|
|
/s/
ROBYN L. LAUKEIN
|
|
|
BRUKER BIOSPIN BETEILIGUNGS AG
|
|
|
By:
|
|
/s/
DR. CHRISTOPH STRAUB
|
|
|
|
|
Name:
|
|
Dr. Christoph Straub
|
|
|
|
|
Title:
|
|
Member of Board of Directors
|
A-3-45
Annex B
December 2,
2007
Special
Committee of the Board of Directors
Bruker BioSciences Corporation
40 Manning Road
Billerica, MA 01821
Gentlemen:
We
understand that Bruker BioSciences Corporation ("BioSciences") intends to enter into a series of agreements pursuant to which BioSciences will acquire the Bruker BioSpin group of
companies (the transactions effecting such acquisition, collectively, the "Transaction"), which is comprised of Bruker BioSpin Invest AG ("Invest"), Bruker BioSpin Inc. ("BioSpin U.S."), Bruker
Physik GmbH ("Bruker Physik") and Techneon AG ("Techneon" and, together with Invest, BioSpin U.S. and Bruker Physik, "BioSpin").
In
order to effect the Transaction, we understand that BioSciences, BioSpin and various other related individuals and entities intend to undertake the following:
-
-
Dirk
D. Laukien, Frank H. Laukien, Isolde Laukien-Kleiner, Joerg C. Laukien, Marc M Laukien and Robyn L. Laukien (collectively, the "Sellers"), BioSciences and BioSpin U.S.
intend to enter into a U.S. Stock Purchase Agreement, to be dated as of December 2, 2007 (the "U.S. Stock Purchase Agreement"), pursuant to which the Sellers will sell to BioSciences all of the
issued and outstanding capital stock of BioSpin U.S. for an aggregate purchase price of $99,962,514 in cash (the "U.S. Consideration");
-
-
BioSciences,
SciTec GmbH & Co. KG ("SciTec"), Techneon, Bruker Optik GmbH, Bruker Daltonik GmbH, the Sellers and Bruker Physik intend to enter into a German Share
Purchase Agreement, to be dated as of December 2, 2007 (the "German Share Purchase Agreement"), pursuant to which the following transactions shall be effected: (i) the acquisition of
25.5% of Bruker Physik's share capital from the Sellers and the acquisition of 61.5% of Bruker Physik's share capital from SciTec for an aggregate of $143,460,000 in cash (the "German Phase I
Consideration") by, respectively, BioSciences (or its assignee) (shares in the aggregate representing 50.5% of Bruker Physik's share capital), Bruker Daltonik GmbH (one share representing 18.25% of
Bruker Physik's share capital) and Bruker Optik GmbH (one share representing 18.25% of Bruker Physik's share capital), with one share representing 13.0% of Bruker Physik's share capital remaining in
the ownership of Techneon, a wholly owned subsidiary of SciTec, and (ii) the subsequent acquisition of 100% of the common shares of Techneon from SciTec by Bruker Physik for $142,540,000 in
cash (together with the German Phase I Consideration, the "German Consideration");
-
-
Bruker
Optik GmbH, SciTec and Isolde Laukien-Kleiner intend to enter into the SciTec Real Property Sale and Transfer Agreement, to be dated as of the closing of the
Transaction, pursuant to which SciTec and Isolde Laukien-Kleiner will sell to Bruker Optik GmbH certain SciTec real property for an aggregate purchase price of 1,416,250 Euros in cash (the "SciTec
Real Property Consideration");
-
-
BioSciences,
Bruker BioSpin Beteiligungs AG, a Swiss stock corporation and a direct, wholly owned subsidiary of BioSciences ("Merger Sub"), the Sellers and Invest intend to
enter into a Swiss Agreement and Plan of Merger, to be dated as of December 2, 2007 (the "Swiss Merger Agreement" and collectively with the U.S. Stock Purchase Agreement and the German Share
B-1
Purchase
Agreement, the "Purchase Agreements"), pursuant to which BioSciences will acquire Invest by means of a share exchange, share cancellation and reverse subsidiary merger in which Merger Sub
will be merged with and into Invest (the "Swiss Merger"), with Invest surviving the Swiss Merger as a direct, wholly owned subsidiary of BioSciences. In connection with the Swiss Merger, BioSciences
shall issue to the Sellers 57,544,872 shares (together with the U.S. Consideration, the German Consideration and the SciTec Real Property Consideration, the "Transaction Consideration") of the common
stock, par value $0.01 per share, of BioSciences ("BioSciences Common Stock") in consideration for 15,840 shares of Invest and the cancellation of 160 Invest shares;
-
-
Pursuant
to the terms of an agreement by and among BioSciences, the Sellers and Nixon Peabody LLP, a New York limited liability partnership ("Escrow Agent"), to be dated as
of the closing of the Transaction (the "Working Capital Escrow Agreement"), BioSciences shall deposit with Escrow Agent on behalf of the Sellers a portion of the U.S. Consideration, to be held by
Escrow Agent in an escrow account and released to the Sellers or Purchaser under the terms of the Working Capital Escrow Agreement, as security for any potential post-closing adjustments
to the U.S. Consideration pursuant to the U.S. Stock Purchase Agreement; and
-
-
Pursuant
to the terms of an agreement by and among BioSciences, the Sellers and Escrow Agent, to be dated as of the closing of the Transaction (together with the Purchase
Agreements and the Working Capital Escrow Agreement, the "Transaction Agreements"), an escrow fund of $92,000,000, to be funded by a portion of the U.S. Consideration, shall be created to serve as
security for fulfillment by the Sellers of their indemnity obligations under each of the Purchase Agreements.
As
contemplated by the Transaction Agreements, we further understand that Invest will pay a special cash dividend, prior to the closing of the Transaction, of 75,000,000 Swiss Francs in
the aggregate to be distributed to holders, as of the relevant record date, of outstanding shares of common stock of Invest (the "Swiss Special Dividend"). We also understand that the Sellers have
entered into cash-stock exchange agreements (the "Exchange Agreements") amongst themselves related to the allocation of the Swiss Special Dividend and the Transaction Consideration, which
at the time of the closing of the Transaction or within one year thereafter will result in each Sellers' receiving differing proportions of cash and stock Transaction Consideration.
You
have provided us with a copy of the Transaction Agreements in substantially final form. We further understand that Dirk D. Laukien, Frank H. Laukien, Isolde Laukien-Kleiner, Joerg C.
Laukien, Marc M. Laukien and Robyn L. Laukien collectively own approximately 52% of BioSciences (such parties, collectively with their respective affiliates and associates, the "Affiliated Parties").
You
have asked us to render our opinion as to whether the Transaction Consideration is fair, from a financial point of view, to the holders of BioSciences Common Stock, excluding the
Affiliated Parties.
In
the course of performing our reviews and analyses for rendering this opinion, we have:
-
-
reviewed
drafts of the Transaction Agreements dated as of December 1, 2007;
-
-
reviewed
BioSpin's restated Combined Financial Statements for the years ended December 31, 2004, 2005 and 2006, as audited by Ernst & Young LLP, and its
Combined Financial Statements for the nine months ended September 30, 2006 and 2007, as reviewed by Ernst & Young LLP;
-
-
reviewed
BioSciences' Annual Reports to Shareholders and Annual Reports on Form 10-K for the years ended December 31, 2004, 2005 and 2006, its
Quarterly Reports on Form 10-Q for the periods ended March 31, 2007, June 30, 2007 and September 30, 2007 and its Current Reports on Form 8-K
filed since December 31, 2006;
B-2
-
-
reviewed
certain operating and financial information relating to BioSpin's business and prospects, including projections for the five years ended December 31, 2012,
all as prepared and provided to us by BioSpin's management (the "BioSpin Projections");
-
-
met
with certain members of BioSpin's senior management to discuss BioSpin's business, operations, historical financial results and future prospects and the BioSpin
Projections;
-
-
reviewed
certain operating and financial information relating to BioSciences' and BioSpin's businesses and prospects, including projections for each of BioSciences and
BioSpin for the five years ended December 31, 2012, all as prepared and provided to us by BioSciences' management (the "BioSciences Projections" and "Adjusted BioSpin Projections,"
respectively, and taken together with the BioSpin Projections, the "Projections");
-
-
reviewed
certain estimates of revenue enhancements, cost savings and other combination benefits expected to result from the Transaction, all as prepared and provided to us
by BioSciences' management (collectively, the "Potential Synergies");
-
-
met
with certain members of BioSciences' senior management to discuss BioSciences' and BioSpin's businesses, operations, historical financial results and future prospects,
the Projections and the Potential Synergies;
-
-
reviewed
the historical prices, trading multiples and trading volume of the BioSciences Common Stock;
-
-
reviewed
certain publicly available financial data, stock market performance data and trading multiples of companies which we deemed generally comparable to BioSciences and
BioSpin;
-
-
reviewed
the terms of certain relevant mergers and acquisitions involving companies which we deemed generally comparable to BioSpin;
-
-
performed
discounted cash flow analyses based on the BioSciences Projections, the Adjusted BioSpin Projections and the pro forma combined projections of BioSciences and
BioSpin including the Potential Synergies;
-
-
reviewed
the pro forma financial results, financial condition and capitalization of BioSciences, giving effect to the Transaction; and
-
-
conducted
such other studies, analyses, inquiries and investigations as we deemed appropriate.
We
have relied upon and assumed, without independent verification, the accuracy and completeness of the financial and other information provided to or discussed with us by BioSciences
and BioSpin or obtained by us from public sources, including, without limitation, the Projections and the Potential Synergies. With respect to the Projections and the Potential Synergies, we have
relied on representations that they have been reasonably prepared on bases reflecting the best currently available estimates and judgments of the senior management of BioSciences and BioSpin, as the
case may be, as to the expected future performance of BioSciences and BioSpin. We have not assumed any responsibility for the independent verification of any such information or of the Projections and
the Potential Synergies. We express no view or opinion as to the Projections and the Potential Synergies and the assumptions upon which they are based and we have further relied upon the assurances of
the senior management of BioSciences and BioSpin, as the case may be, that they are unaware of any facts that would make the information, the Projections and the Potential Synergies incomplete or
misleading.
In
arriving at our opinion, we have not performed or obtained any independent appraisal of the assets or liabilities (contingent or otherwise) of BioSciences and BioSpin, nor have we
been furnished with any such appraisals. We have assumed that the Transaction will be consummated in a timely manner and in accordance with the terms of the Transaction Agreements without any
limitations, restrictions, conditions, amendments or modifications, regulatory or otherwise, that collectively would
B-3
have
a material effect on BioSciences or BioSpin. We are not legal, regulatory, tax or accounting experts and have relied on the assessments made by BioSciences and BioSpin and their respective
advisors with respect to such issues. We have also assumed that the form of the Transaction Agreements will be substantially similar to the draft reviewed by us.
We
do not express any opinion as to the price or range of prices at which the BioSciences Common Stock may trade subsequent to the announcement or consummation of the Transaction.
We
have acted as a financial advisor to the Special Committee of the Board of Directors of BioSciences in connection with the Transaction and will receive a customary fee for such
services, a substantial portion of which is contingent on successful consummation of the Transaction. A portion of our compensation is payable upon delivery of this letter and may be credited against
the fee payable upon consummation of the Transaction. In addition, BioSciences has agreed to reimburse us for certain expenses and to indemnify us against certain liabilities arising out of our
engagement.
Bear,
Stearns & Co. Inc. ("Bear Stearns") has previously been engaged by BioSciences to provide certain investment banking and other services on matters unrelated to the
Transaction for which we have received customary fees. Bear Stearns may seek to provide BioSciences and its respective affiliates with certain investment banking and other services unrelated to the
Transaction in the future.
Consistent
with applicable legal and regulatory requirements, Bear Stearns has adopted certain policies and procedures to establish and maintain the independence of Bear Stearns'
research departments and personnel. As a result, Bear Stearns' research analysts may hold views, make statements or investment recommendations and/or publish research reports with respect to
BioSciences, the Transaction and other participants in the Transaction that differ from the views of Bear Stearns' investment banking personnel.
In
the ordinary course of business, Bear Stearns and its affiliates may actively trade (for its own account and for the accounts of its customers) certain equity and debt securities,
bank debt and/or other financial instruments issued by BioSciences and its affiliates, as well as derivatives thereof, and, accordingly, may at any time hold long or short positions in such
securities, bank debt, financial instruments and derivatives.
It
is understood that this letter is intended for the benefit and use of the Special Committee of the Board of Directors of BioSciences in connection with its consideration of the
Transaction. This letter is not to be used for any other purpose, or be reproduced, disseminated, quoted from or referred to at any time, in whole or in part, without our prior written consent;
provided, however, that this letter may be included in its entirety in any proxy statement to be distributed to the holders of BioSciences Common Stock in connection with the Transaction. This letter
does not constitute a recommendation to the Board of Directors or the Special Committee of the Board of Directors of BioSciences in connection with the Transaction, nor does this letter constitute a
recommendation to any holders of BioSciences Common Stock as to how to vote in connection with the Transaction. Our opinion does not address BioSciences' underlying business decision to pursue the
Transaction, the relative merits of the Transaction as compared to any alternative business or financial strategies that might exist for BioSciences, the financing of the Transaction or the effects of
any other transaction in which BioSciences might engage. Our opinion does not address the allocation of the Swiss Special Dividend and the Transaction Consideration amongst the Sellers pursuant to the
Exchange Agreements.
Our
opinion has been authorized for issuance by the Fairness Opinion and Valuation Committee of Bear Stearns. Our opinion is subject to the assumptions limitations, qualifications and
other conditions contained herein and is necessarily based on economic, market and other conditions, and the information made available to us, as of the date hereof. We assume no responsibility for
updating or revising our opinion based on circumstances or events occurring after the date hereof.
B-4
Based
on and subject to the foregoing, it is our opinion that, as of the date hereof, the Transaction Consideration is fair, from a financial point of view, to the holders of BioSciences
Common Stock, excluding the Affiliated Parties.
|
|
Very truly yours,
|
|
|
|
|
BEAR, STEARNS & CO. INC.
|
|
|
By:
|
|
/s/
STEVEN R. FRANK
Senior Managing Director
|
|
|
B-5
ANNEX C
Proposed Amendments to the Certificate of Incorporation of Bruker BioSciences Corporation
Note:
The text of the proposed amendment is marked to reflect the proposed changes.
That the Certificate of Incorporation of the Corporation be amended and restated in its entirety by striking Article FIRST in its entirety and substituting
therefor:
|
|
FIRST:
|
|
The name of this corporation shall be "Bruker Corporation."
|
|
That the Certificate of Incorporation of the Corporation be amended by striking Article FOURTH in its entirety and substituting therefor:
|
|
FOURTH:
|
|
The total number of shares of stock which the Corporation shall have authority to issue is 265,000,000 shares, which shares shall be divided into two classes consisting of: (i) 260,000,000 shares of Common Stock (with $.01 par value per share)
("Common Stock") and (ii) 5,000,000 shares of Preferred Stock (with $.01 par value per share) ("Blank Check Preferred Stock").
|
|
C-1
ANNEX D
BRUKER BIOSCIENCES CORPORATION
AMENDED AND RESTATED
2000 STOCK OPTION PLAN
1.
Purpose of the Plan.
This
stock option plan (the "2000 Stock Option Plan") is intended to encourage ownership of the stock of Bruker BioSciences Corporation (f/k/a Bruker Daltonics Inc.) (the
"Company") by management, employees, directors, consultants and advisors ("Optionees") of the Company and its subsidiaries, to induce qualified personnel to enter and remain in the employ of the
Company or its subsidiaries and otherwise to provide additional incentive for Optionees to promote the success of its business.
2.
Stock Subject to the 2000 Stock Option Plan.
(a) The
total number of shares of the authorized but unissued or Treasury shares of the common stock, $.01 par value, of the Company ("Common Stock") for which options may
be granted under the 2000 Stock Option Plan shall not exceed ten million (10,000,000) shares, subject to adjustment as provided in Section 12 hereof.
(b) If
an option granted hereunder shall expire or terminate for any reason without having vested fully or having been exercised in full, the unvested and/or unpurchased
shares subject thereto shall again be available for subsequent option grants under the 2000 Stock Option Plan.
(c) Stock
issuable upon exercise of an option granted under the 2000 Stock Option Plan may be subject to such restrictions on transfer, repurchase rights (but not to exceed
20% of the stock issuable upon exercise of options granted under the 2000 Stock Option Plan) or other restrictions as shall be determined by the Board of Directors of the Company (the "Board").
(d) Notwithstanding
any other provision of this Plan to the contrary, the Compensation Committee of the Board shall have the right, in its sole discretion, to allocate and
grant up to twenty percent (20%) of the Common Stock authorized to be granted as options hereunder as restricted stock to employees of the Company on such terms and conditions and pursuant to such
restricted stock agreements as the Compensation Committee, in its discretion, shall deem appropriate.
3.
Administration of the 2000 Stock Option Plan.
The
2000 Stock Option Plan shall be administered by the Board or a Stock Option Committee (the "Compensation Committee") consisting of two or more persons appointed to such Compensation
Committee from time to time by the Board; provided, however, that (i) to the extent necessary in order to permit officers and directors of the Company to be exempt from the provisions of
Section 16(b) of the 1934 Act with respect to transactions pursuant to the 2000 Stock Option Plan, each of such persons shall be a "Non-Employee Director" within the meaning of
Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "1934 Act") and
(ii) if such qualification is deemed necessary in order for the grant or exercise of awards made under the 2000 Stock Option Plan to qualify for any tax or other material benefit to
participants of the Company under applicable regulations under Section 162(m) of the Code, each of such persons shall be an "outside director" (as defined in applicable regulations thereunder).
The term "Compensation Committee" shall, for all purposes of the 2000 Stock Option Plan be deemed to refer to the Board if the Board is administering the 2000 Stock Option Plan. If the 2000 Stock
Option Plan is administered by a Compensation Committee, the Compensation Committee shall from time to time select a Chairman from among its members and shall adopt such rules and regulations as it
shall deem appropriate concerning the holding of meetings and the administration of the 2000 Stock Option Plan.
D-1
A
majority of the entire Compensation Committee shall constitute a quorum and the actions of a majority of the members of the Compensation Committee present at a meeting at which a quorum is present,
or actions approved in writing by all of the members of the Compensation Committee, shall be the actions of the Compensation Committee; provided, however, that if the Compensation Committee consists
of only two members, both shall be required to constitute a quorum and to act at a meeting or to approve actions in writing. Except as otherwise expressly provided in the 2000 Stock Option Plan, the
Compensation Committee shall have all powers with respect to the administration of the 2000 Stock Option Plan, including, without limitation, full power and authority to interpret the provisions of
the 2000 Stock Option Plan and any option agreement grated hereunder, and to resolve all questions arising under the 2000 Stock Option Plan. All decisions of the Compensation Committee shall be
conclusive and binding on all participants in the 2000 Stock Option Plan.
4.
Type of Options.
Options
granted pursuant to the 2000 Stock Option Plan shall be authorized by action of the Compensation Committee and may be designated as either incentive stock options meeting the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified options which are not intended to meet the requirements of such
Section 422 of the Code, the designation to be in the sole discretion of the Compensation Committee. The 2000 Stock Option Plan shall be administered by the Compensation Committee in such
manner as to permit options granted as incentive stock options to qualify as incentive stock options under the Code.
5.
Eligibility.
(a) As
required by U.S. law, incentive stock options shall only be granted to Optionees who are employees. As a result, options designated as incentive stock options shall,
subject to the limitation on amounts of more than 10% of the combined voting power of the Company as designated in Section 5(e), be granted only to key employees (including officers and
directors who are also employees) of the Company or any of its subsidiaries, including subsidiaries which become such after adoption of the 2000 Stock Option Plan.
(b) The
law permits more flexibility for the grant of non-qualified stock options. Accordingly, options designated as non-qualified options may be
granted to officers, employees, consultants, advisors and directors of the Company or of any of its subsidiaries, including subsidiaries which become such after adoption of the 2000 Stock Option Plan.
(c) As
used herein, "subsidiary" or "subsidiaries" shall be as defined in Section 424 of the Code and the Treasury Regulations promulgated thereunder (the
"Regulations").
(d) The
Compensation Committee shall, from time to time, at its sole discretion, select from such eligible persons those to whom options shall be granted and shall determine
the number of shares to be subject to each option. In determining the eligibility of a person to be granted an option, as well as in determining the number of shares to be granted to any person, the
Compensation Committee in its sole discretion shall take into account the position and responsibilities of the person being considered, the nature and value to the Company or its subsidiaries of his
or her service and accomplishments, his or her present and potential contribution to the success of the Company or its subsidiaries, and such other factors as the Compensation Committee may deem
relevant.
(e) As
required by law, no option designated as an incentive stock option shall be granted to any employee of the Company or any subsidiary if such employee owns,
immediately prior to the grant of an option, stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of a parent or a subsidiary, unless the
purchase price for the stock under such option shall be at least 110% of its fair market value at the time such option is granted and the option, by its terms, shall not be exercisable more than five
years from the date it is granted. In determining the stock ownership under this paragraph, the provisions of Section 424(d) of the Code shall be controlling.
D-2
(f) In
determining the fair market value under this paragraph, the provisions of Section 7 hereof shall apply.
(g) Subject
to the provisions of Section 12 relating to adjustments upon changes in the shares of Common Stock, no employee shall be eligible to be granted Options
covering more than 100,000 shares of Common Stock during any calendar year.
6.
Option Agreement.
Each
option shall be evidenced by an option agreement (the "Agreement") duly executed on behalf of the Company and by the Optionee to whom such option is granted, which Agreement shall
comply with and be subject to the terms and conditions of the 2000 Stock Option Plan. The Agreement may contain such other terms, provisions and conditions which are not inconsistent with the 2000
Stock Option Plan as may be determined by the Compensation Committee; provided that (a) options designated as incentive stock options shall meet all of the conditions for incentive stock
options as defined in Section 422 of the Code; (b) the vesting schedule contained in the form of incentive stock option agreement approved by the Board shall not be altered by the
Compensation Committee for any grant of an incentive stock option; and (c) the vesting schedule contained in the form of non-qualified stock option agreement approved by the Board
shall be the recommended vesting schedule for the grant of non-qualified stock options by the Compensation Committee but may be altered by the Compensation Committee. The date of grant of
an option shall be as determined by the Compensation Committee. More than one option may be granted to an individual.
7.
Option Price.
The
option price or prices of shares of the Company's Common Stock for options designated as non-qualified stock options shall be as determined by the Compensation Committee,
but
in no event shall the option price of a non-qualified stock option be less than 50% of the fair market value of such Common Stock at the time the option is granted, as determined by the
Compensation Committee. The option price or prices of shares of the Company's Common Stock for incentive stock options shall be not less than the fair market value of such Common Stock at the time the
option is granted as determined by the Compensation Committee in accordance with the Regulations promulgated under Section 422 of the Code. If such shares are then listed on any national
securities exchange, the fair market value shall be the mean between the high and low sales prices, if any, on the largest such exchange on the date of the grant of the option or, if none, shall be
determined by taking a weighted average of the means between the highest and lowest sales prices on the nearest date before and the nearest date after the date of grant in accordance with Treasury
Regulations Section 25.2512-2. If the shares are not then listed on any such exchange, the fair market value of such shares shall be the mean between the high and low sales prices,
if any, as reported in the National Association of Securities Dealers Automated Quotation National Market ("NASDAQ/NM") for the date of the grant of the option, or, if none, shall be determined by
taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the date of grant in accordance with Treasury Regulations
Section 25.2512-2. If the shares are not then either listed on any such exchange or quoted in NASDAQ/NM, the fair market value shall be the mean between the average of the "Bid" and
the average of the "Ask" prices, if any, as reported in the National Daily Quotation Service for the date of the grant of the option, or, if none, shall be determined by taking a weighted average of
the means between the highest and lowest sales prices on the nearest date before and the nearest date after the date of grant in accordance with Treasury Regulations
Section 25.2512-2. If the fair market value cannot be determined under the preceding three sentences, it shall be determined in good faith by the Compensation Committee.
D-3
8.
Manner of Payment; Manner of Exercise.
(a) Options
granted under the 2000 Stock Option Plan may provide for the payment of the exercise price, as determined by the Compensation Committee and as set forth in the
Option Agreement, by delivery of (i) cash or a check payable to the order of the Company in an amount equal to the exercise price of such options, (ii) shares of Common Stock of the
Company owned by the optionee having a fair market value equal in amount to the exercise price of the options being exercised, (iii) any combination of (i) and (ii), provided, however,
that payment of the exercise price by delivery of shares of Common Stock of the Company owned by such optionee may be made only if such payment does not result in a charge to earnings for financial
accounting purposes as determined by the Compensation Committee or (iv) payment may also be made by delivery of a properly executed exercise notice to the Company, together with a copy of
irrevocable instruments to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the exercise price. To facilitate clause (iv) above, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.
(b) To
the extent that the right to purchase shares under an option has accrued and is in effect, options may be exercised in full at one time or in part from time to time,
by giving written notice, signed by the Optionee exercising the option, to the Company, stating the number of shares with respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise, delivery of a certificate for paid-up non-assessable shares shall be made at the principal
office of the Company to the Optionee exercising the option at such time, during ordinary business hours, not more than thirty (30) days from the date of receipt of the notice by the Company,
as shall be designated in such notice, or at such time, place and manner as may be agreed upon by the Company and the person or persons exercising the option. Upon exercise of the option and payment
as provided above, the Optionee shall become a shareholder of the Company as to the Shares acquired upon such exercise.
9.
Exercise of Options.
Each
option granted under the 2000 Stock Option Plan shall, subject to Section 6, Section 10(b) and Section 12 hereof, be exercisable at such time or times and
during such period as determined by the Compensation Committee which shall be set forth in the Agreement; provided, however, that no option granted under the 2000 Stock Option Plan shall have a term
in excess of ten (10) years from the date of grant.
To
the extent that an option to purchase shares is not exercised by an Optionee when it becomes initially exercisable, it shall not expire but shall be carried forward and shall be
exercisable, on a cumulative basis, until the expiration of the exercise period. No partial exercise may be made for less than fifty (50) full shares of Common Stock.
Notwithstanding
the foregoing, the Compensation Committee may in its discretion accelerate the exerciseability of any option subject to such terms and conditions as the Compensation
Committee deems necessary and appropriate.
10.
Term of Options; Exerciseability.
(a)
Term.
(1) Each
option shall expire not more than ten (10) years from the date of the granting thereof, but shall be subject to earlier termination as herein provided.
(2) Except
as otherwise provided in this Section 10, an option granted to any employee who ceases to be an employee of the Company, or an option granted to any other
Optionee who ceases to have the same relationship with the Company or one of its subsidiaries which was in effect on the date the option was granted, shall terminate immediately on the date such
Optionee ceases to be an
D-4
employee,
or ceases to have such relationship with the Company or one of its subsidiaries, or on the date on which the option expires by its terms, whichever occurs first.
(3) If
such termination of employment or relationship is because the Optionee has become permanently disabled (within the meaning of Section 22(e)(3) of the Code),
such option shall terminate thirty (30) days after the date such Optionee ceases to be an employee or to have such relationship, or on the date on which the option expires by its terms,
whichever occurs first.
(4) In
the event of the death of any Optionee, any option granted to such Optionee shall terminate ninety (90) days after the date of death, or on the date on which
the option expires by its terms, whichever occurs first.
(5) Notwithstanding
subparagraphs (2), (3) and (4) above, the Compensation Committee shall have the authority to extend the expiration date of any outstanding
option in circumstances in which it deems such action to be appropriate, provided that no such extension shall extend the term of an option beyond the date on which the option would have expired if no
termination of the Optionee's employment or relationship with the Company or its subsidiary had occurred.
(b)
Exerciseability.
An
option granted to an Optionee who ceases to be an employee, or ceases to have the same relationship with the Company or one of its subsidiaries which was in existence on the date the
option was granted shall be exercisable only to the extent that the right to purchase shares under such option has accrued and is in effect on the date such Optionee ceases to be an employee, or
ceases to have such relationship with the Company or one of its subsidiaries.
11.
Options Not Transferable.
The
right of any Optionee to exercise any option granted to him or her shall not be assignable or transferable by such Optionee otherwise than by will or the laws of descent and
distribution, and any such option shall be exercisable during the lifetime of such Optionee only by him or her. Any option granted under the 2000 Stock Option Plan shall be null and void and without
effect upon the
bankruptcy of the Optionee to whom the option is granted, or upon any attempted assignment or transfer, except as herein provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition, attachment, divorce, trustee process or similar process, whether legal or equitable, upon such option.
12.
Recapitalizations, Reorganizations and the Like.
(a) In
the event that the outstanding shares of the Common Stock of the Company are changed into or exchanged for a different number or kind of shares or other securities of
the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, combination of shares, or dividends
payable in capital stock, appropriate adjustment shall be made in the number and kind of shares as to which options may be granted under the 2000 Stock Option Plan and as to which outstanding options
or portions thereof then unexercised shall be exercisable, to the end that the proportionate interest of the Optionee shall be maintained as before the occurrence of such event; such adjustment in
outstanding options shall be made without change in the total price applicable to the unexercised portion of such options and with a corresponding adjustment in the option price per share.
(b) In
addition, unless otherwise determined by the Board in its sole discretion, in the case of any (i) sale or conveyance to another entity of all or substantially
all of the property and assets of the Company, including, without limitation, by way of merger or consolidation, or (ii) Change in Control (as hereinafter defined) of the Company, the
purchaser(s) of the Company's assets or stock may, in his, her or its discretion, deliver to the Optionee the same kind of consideration that is delivered to the shareholders of the Company as a
result of such sale, conveyance or Change in Control, or the Board
D-5
may
cancel all outstanding options in exchange for consideration in cash or in kind which consideration in both cases shall be equal in value to the value of those shares of stock or other securities
the Optionee would have received had the option been exercised (to the extent then exercisable) and no disposition of the shares acquired upon such exercise been made prior to such sale, conveyance or
Change in Control, less the option price therefor. Upon receipt of such consideration by the Optionee, his or her option shall immediately terminate and be of no further force and effect. The value of
the stock or other securities the Optionee would have received if the option had been exercised shall be determined in good faith by the Board, and in the case of shares of the Common Stock of the
Company, in accordance with the provisions of Section 7 hereof. The Board shall also have the power and right to accelerate the exerciseability of any options, notwithstanding any limitations
in this 2000 Stock Option Plan or in the Agreement upon such a sale, conveyance or Change in Control. Upon such acceleration, any options or portion thereof originally designated as incentive stock
options that no longer qualify as incentive stock options under Section 422 of the Code as a result of such acceleration shall be redesignated as non-qualified stock options. A
"Change in Control" shall be deemed to have occurred if any person, or any two or more persons acting as a group, and all affiliates of such person or persons, who prior to such time owned less than
twenty percent (20%) of the then outstanding Common Stock of the Company, shall acquire, whether by purchase, exchange, tender offer, merger, consolidation or otherwise, such additional shares of the
Company's Common Stock in one or more transactions, or series of transactions, such that following such transaction or transactions, such person or group and affiliates beneficially own at least fifty
percent (50%) of the Company's Common Stock outstanding.
(c) Upon
dissolution or liquidation of the Company, all options granted under this 2000 Stock Option Plan shall terminate, but each Optionee (if at such time in the employ
of or otherwise associated with the Company or any of its subsidiaries) shall have the right, immediately prior to such dissolution or liquidation, to exercise his or her option to the extent then
exercisable.
(d) No
fraction of a share shall be purchasable or deliverable upon the exercise of any option, but in the event any adjustment hereunder of the number of shares covered by
the option shall cause such number to include a fraction of a share, such fraction shall be adjusted to the nearest smaller whole number of shares.
13.
No Special Employment or Other Rights.
Nothing
contained in the 2000 Stock Option Plan or in any option granted under the Plan shall confer upon any Optionee right with respect to the continuation of his or her employment or
other relationship by the Company (or any subsidiary) or interfere in any way with the right of the Company (or any subsidiary), subject to the terms of any separate employment or other agreement, at
any time to terminate such employment or other relationship or to increase or decrease the compensation of the option holder from the rate in existence at the time of the grant of an option. Whether
an authorized leave of absence, or absence in military or government service, shall constitute termination of employment or another relationship shall be determined by the Compensation Committee at
the time.
14.
Withholding.
The
Company's obligation to deliver shares upon the exercise of any option granted under the 2000 Stock Option Plan and any payments or transfers under Section 12 hereof shall be
subject to the Optionee's satisfaction of all applicable Federal, state and local income, excise, employment and any other tax withholding requirements. All non-U.S. Optionees must pay all
applicable employee and employers wage and other withholding taxes in advance of receiving shares upon exercise of any vested option.
D-6
15.
Restrictions on Issue of Shares.
(a) Notwithstanding
the provisions of Section 8, the Company may delay the issuance of shares covered by the exercise of an option and the delivery of a certificate
for such shares until one of the following conditions shall be satisfied:
(i) The
shares with respect to which such option has been exercised are at the time of the issue of such shares effectively registered or qualified under applicable Federal
and state securities acts now in force or as hereafter amended; or
(ii) Counsel
for the Company shall have given an opinion, which opinion shall not be unreasonably conditioned or withheld, that such shares are exempt from registration and
qualification under applicable Federal and state securities acts now in force or as hereafter amended.
(b) It
is intended that all exercises of options shall be effective, and the Company shall use its best efforts to bring about compliance with the above conditions within a
reasonable time, except that the Company shall be under no obligation to qualify shares or to cause a registration statement or a post-effective amendment to any registration statement to
be prepared for the purpose of covering the issue of shares in respect of which any option may be exercised, except as otherwise agreed to by the Company in writing.
16.
Purchase for Investment; Rights of Holder on Subsequent Registration.
Unless
the shares to be issued upon exercise of an option granted under the 2000 Stock Option Plan have been effectively registered under the Securities Act of 1933, as now in force or
hereafter amended, the Company shall be under no obligation to issue any shares covered by any option unless the Optionee, in whole or in part, shall give a written representation and undertaking to
the Company which is satisfactory in form and scope to counsel for the Company and upon which, in the opinion of such counsel, the Company may reasonably rely, that he or she is acquiring the shares
issued pursuant to such exercise of the option for his or her own account as an investment and not with a view to, or for sale in connection with, the distribution of any such shares, and that he or
she will make no transfer of the same except in compliance with any rules and regulations in force at the time of such transfer under the Securities Act of 1933, or any other applicable law, and that
if shares are issued without such registration, a legend to this effect may be endorsed upon the securities so issued. In the event that the Company shall, nevertheless, deem it necessary or desirable
to register under the Securities Act of 1933 or other applicable statutes any shares with respect to which an option shall have been exercised, or to qualify any such shares for exemption from the
Securities Act of 1933 or other applicable statutes, then the Company may take such action and may require from each Optionee such information in writing for use in any registration statement,
supplementary registration statement, prospectus, preliminary prospectus or offering circular as is reasonably necessary for such purpose and may require reasonable indemnity to the Company and its
officers and directors and controlling persons from such holder against all losses, claims, damages and liabilities arising from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
17.
Modification of Outstanding Options.
The
Board may authorize the amendment of any outstanding option with the consent of the Optionee when and subject to such conditions as are deemed to be in the best interests of the
Company and in accordance with the purposes of this 2000 Stock Option Plan.
D-7
18.
Approval of Stockholders.
The
2000 Stock Option Plan shall be subject to approval by the vote of stockholders holding at least a majority of the voting stock of the Company present, or represented, and entitled
to vote at a duly held stockholders' meeting, or by written consent of the stockholders as provided for under applicable state law, within twelve (12) months after the adoption of the 2000
Stock Option Plan by the Board of Directors and shall take effect as of the date of adoption by the Board of Directors upon such approval. The Compensation Committee may grant options under the 2000
Stock Option Plan prior to such approval, but any such option shall become effective as of the date of grant only upon such approval and, accordingly, no such option may be exercisable prior to such
approval.
19.
Termination and Amendment.
Unless
sooner terminated as herein provided, the 2000 Stock Option Plan shall terminate ten (10) years from the date upon which the 2000 Stock Option Plan was duly adopted by the
Board. The Board may at any time terminate the 2000 Stock Option Plan or make such modification or amendment thereof as it deems advisable; provided, however, that except as provided in this
Section 19, the Board may not, without the approval of the stockholders of the Company obtained in the manner stated in Section 18, increase the maximum number of shares for which
options may be granted or change the designation of the class of persons eligible to receive options under the 2000 Stock Option Plan, or make any other change in the 2000 Stock Option Plan which
requires stockholder approval under applicable law or regulations.
20.
Reservation of Stock.
The
Company shall at all times during the term of the 2000 Stock Option Plan reserve and keep available such number of shares of stock as will be sufficient to satisfy the requirements
of the 2000 Stock Option Plan and shall pay all fees and expenses necessarily incurred by the Company in connection therewith.
21.
Limitation of Rights in the Option Shares.
An
Optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to any of the options except to the extent that the option shall have been exercised with
respect thereto and, in addition, a certificate shall have been issued theretofore and delivered to the Optionee.
22.
Notices.
Any
communication or notice required or permitted to be given under the 2000 Stock Option Plan shall be in writing, and mailed by registered or certified mail or delivered by hand, if to
the Company, to its principal place of business, attention: Treasurer, and, if to an Optionee, to the address as appearing on the records of the Company.
D-8
ANNEX E
CHARTER OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS OF BRUKER BIOSCIENCES CORPORATION
December 2006
Purpose and Philosophy
The primary purpose of the Compensation Committee (the "Committee") is to discharge the responsibilities of the Board of Directors relating to the compensation of
the Company's Chief Executive Officer, the compensation program for the Company's other executive officers and approving the compensation structure for senior management and other highly paid
professionals, in accordance with guidelines established by the Committee from time to time, and produce an annual report on executive compensation for inclusion in the Company's proxy statement in
accordance with applicable rules and regulations. The Committee also administers the Company's stock option plan, reviews general policy matters relating to compensation and employee benefits,
approves broad-based and special compensation plans across the Company as needed and makes recommendations to the Board of Directors concerning these matters.
The
objectives of the Committee in determining executive compensation are to: (1) attract and retain qualified executive officers, (2) motivate existing officers to
perform, (3) reward corporate performance,
(4) align compensation with the Company's annual and long-term performance goals, (5) enhance profitability of the Company, and (6) maximize stockholder value. The
Committee focuses on the Company's goal of long-term enhancement of stockholder value by stressing long-term goals and by using stock-based incentive programs with extended
vesting schedules.
Membership and Structure
The Committee shall consist of three or more members of the Board of Directors, with the actual number of members to be determined from time to time by resolution
of the Board. Each Committee member must: (1) meet the independence requirement of current NASDAQ National Market listing standards and all other applicable laws, rules and regulations
governing director independence, as determined by the Board, (2) qualify as a "non-employee director" as defined under Section 16 of the Securities Exchange Act of 1933, and
(3) qualify as an "outside director" under Section 162(m) of the Internal Revenue Code.
Appointment
to the Committee, including the designation of the Chair of the Committee, shall be made on an annual basis by the Board. Members of the Committee may be removed by the Board
on the recommendation of a majority of the Board.
The
Committee has the sole right to establish subcommittees as it may deem appropriate. Such subcommittees shall consist of one or more members to carry out such duties as the Committee
may assign and shall report to the full Committee.
Meetings
The Committee shall fix its own rules of procedure and meetings of the Compensation Committee shall be held at such times and places as the Compensation Committee
shall determine. The Committee shall meet as often as it deems necessary to carry out its responsibilities. In addition to the regular meeting schedule established by the Committee, the Committee
Chair may call a special meeting at any time. The Committee may invite members of management, compensation consultants or other advisors to attend meetings and provide pertinent information; provided,
however, the Committee may meet in executive session at its discretion.
E-1
Operating Principles
The Committee Chair will preside, when present, at all meetings of the Committee. The Committee acts only on the affirmative vote of a majority of the members at
a meeting (in person or by telephone or videoconference) or by unanimous written consent.
To
carry out their duties and responsibilities:
-
1.
-
The
Committee may undertake studies and make recommendations to the Board, as the Board or the Committee may deem appropriate, with respect to the Company's compensation structure and
policies.
-
2.
-
The
Committee may request that members of management be present at its meetings to assist the Committee in performing its duties.
-
3.
-
The
Committee will consult with the Company's Chief Financial Officer on accounting issues, including variable plan accounting issues related to equity incentive compensation, to
ensure appropriate financial reporting by the Company.
Following
each Committee meeting, the Committee reports its actions and recommendations to the Board at the next meeting of the full Board.
Duties and Responsibilities
To ensure that the structure of employee compensation throughout the Company is fair, non-discriminatory and forward-looking, and that the
compensation structure promotes the Company's compensation philosophy, the Committee has the duty and responsibility to:
-
1.
-
Review
and approve annually the Company's compensation strategy to ensure that management is afforded the appropriate incentives and is rewarded appropriately for its contributions to
the Company's growth and profitability and that the executive compensation strategy supports the Company's objectives and stockholder interests.
-
2.
-
Review
and approve annually the corporate goals and objectives relevant to the compensation of the Chief Executive Officer and all other officers of the Company (as such term is
defined under Rule 16a-1 promulgated under the Securities Exchange Act of 1934) (collectively, the "Executive Officers").
-
3.
-
Review
and evaluate annually the performance of the Company's Executive Officers in light of the goals and objectives established in accordance with Paragraph 1 above, and
determine, set and approve, pursuant to the Committee's sole authority, the individual elements of the Executive Officers' total compensation based on such reviews and evaluations. Specifically:
Annual Salaries.
In determining the annual base salaries for Executive Officers, the Committee considers, in particular, the Executive
Officers' level of responsibility, experience and potential as well as the needs of the Company. Base salaries paid by other companies in the Company's industry for comparable positions may also be
considered. If benchmark comparisons are made in determining the annual base salaries for Executive Officers, the Committee will disclose in its annual report on executive compensation the names of
the peer group companies used in such comparison.
Annual Cash Incentive Awards.
In determining the annual incentive awards in the form of performance-based cash bonuses for the Chief
Executive Officer and the Company's other Executive Officers, management's success in meeting the Company's financial and strategic goals is a factor the Committee deems relevant. These
performance-based incentives are capped and are tied to the achievement of certain performance-based operational measures that reflect both business and individual accomplishments. In setting
performance measures,
E-2
the
Committee considers a variety of qualitative and quantitative performance metrics. Quantitative considerations include such items as revenue and profit growth, net income, cash flow and cash
management, return on equity, economic value added, cost of capital, return on invested operating capital, margins, debt reduction, cost containment and market share. Qualitative considerations
include such items as leadership, succession planning, customer satisfaction, product quality, legal compliance, ethics and the promotion of a culture of integrity at all levels of the Company and
employee development.
Stock Incentives.
In determining the long-term incentive component of the Company's compensation, which is designed to provide
long-term incentives to Executive Officers and other employees, to encourage the Executive Officers and other employees to remain with the Company and to enable optionees generally to
develop and maintain a long-term stock ownership position in the Company's common stock and in turn motivate the recipient to focus on long-term enhancement in stockholder
value, the Committee considers the Company's performance and relative stockholder return, the value of similar incentive awards to comparable executives at comparable companies, the awards given to
the Company's Executive Officers in the past, an employee's individual initiative, achievement of objectives, qualitative assessment of performance years and such other factors as the Committee deems
relevant.
Review of Performance Incentive Compensation.
The Committee is especially critical in its review and award of incentive compensation based
on achieving financial targets because such compensation could act as an improper motivation with respect to financial reporting and related matters. In an effort to reduce potential abuses associated
with such awards, the Committee will be particularly cautious in awarding compensation which is tied to the achievement of financial targets. The Committee will have an appropriate dialog within the
Committee with respect to any such possible awards with a particular emphasis on the appropriateness of the award in the specific circumstances, giving due consideration to the position of the
potential recipient. For example, for a chief executive officer who is typically not involved in the financial reporting process, such an award may be more appropriate than for a person, such as the
chief financial officer, who is directly involved in the financial reporting process. In any event, to the extent the Committee does choose to make any such awards, the Committee will be careful to
select appropriate performance metrics in advance and document them sufficiently.
-
4.
-
Review
and discuss with management the Company's annual Compensation Discussion and Analysis and, based on the review and discussions, determine whether to recommend to the Board of
Directors that the Compensation Committee Discussion and Analysis be included in the Company's annual report on Form 10-K and, as applicable, the Company's proxy or information
statement.
-
5.
-
Review
and approve any special or supplemental benefits for the Company's Executive Officers.
-
6.
-
Review
the overall compensation strategy and the individual elements of total compensation for the senior management of the Company.
-
7.
-
Review
the overall compensation and benefits strategy for all non-executive employees of the Company to ensure consistency with the Company's stated compensation strategy.
-
8.
-
Interpret
and administer the Company's 2000 Stock Plan and such other equity-based plans as may be in effect from time to time (the "Plans") and approve changes to such Plans or, where
necessary, recommend changes to such plans for approval by the Board or the Company's
E-3
In
making specific grants to Executive Officers, the Committee evaluates each Executive Officer's total equity compensation package. The Committee generally reviews the option holdings of each of the
Executive Officers including vesting and exercise price and the then current value of such unvested options.
-
9.
-
Review
and make recommendations to the Board concerning policies or guidelines with respect to employment agreements, severance arrangements, change-in-control
agreements, or arrangements involving Executive Officers and directors of the Company.
-
10.
-
Review
annually, in conjunction with the Chairman of the Board of Directors of the Company, the compensation of the Board of Directors of the Company and recommend any changes thereto
to the Board of Directors of the Company. The report to the Board of Directors of the Company on this issue will occur each year at the March meeting of the Board of Directors.
-
11.
-
At
least bi-annually, or more frequently if necessary to comply with the regulations of the NASDAQ or any other statute or regulation applicable to this Committee, review
its own performance, and review and reassess the adequacy of this Charter and recommend any proposed changes to the Board of Directors for its approval.
E-4
Appendix A