Exhibit 10.1

 

Execution Copy

 

AMENDED AND RESTATED STOCK AND ASSET PURCHASE AGREEMENT

 

Dated as of March 17, 2005

 

Among

 

BIOTAGE AB

 

and

 

ARGONAUT TECHNOLOGIES, INC.

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TABLE OF CONTENTS

 

                Page

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ARTICLE I DEFINITIONS

   2        1.1   Defined Terms.    2        1.2   Other Defined Terms    8  
     1.3   Rules of Construction    9

ARTICLE II PURCHASE AND SALE OF THE TRANSFERRED SUBSIDIARIES AND THE TRANSFERRED
ASSETS

   10        2.1   Sale of the Transferred Subsidiaries    10        2.2  
Purchase and Sale of Transferred Assets    10        2.3   Assumption of
Liabilities    14        2.4   Transfer of Purchased Assets and Assumed
Liabilities    16        2.5   Procedures for Assets Not Transferable    16  
     2.6   Payments Post-Closing    17

ARTICLE III PURCHASE PRICE AND ADJUSTMENTS

   18        3.1   Purchase Price    18        3.2   Payment of Purchase Price
and Estimated Purchase Price Adjustment    18        3.3   Closing Date Net
Working Capital Statement; Schedule of Cash and Cash Equivalents; and Actual
Adjustment Amount.    19        3.4   Allocation of Purchase Price    21

ARTICLE IV REPRESENTATIONS AND WARRANTIES

   22        4.1   Representations and Warranties of the Company    22       
4.2   Representations and Warranties of the Buyer    39

ARTICLE V COVENANTS

   41        5.1   Access; Information and Records; Confidentiality    41       
5.2   Conduct of the Business Prior to the Closing Date    42        5.3  
Acquisition Proposals.    46        5.4   Non-Solicitation    48        5.5  
Non-Competition    48        5.6   Further Actions; Best Efforts.    49       
5.7   Stockholder Approval; Preparation of Proxy Statement.    49        5.8  
Public Announcements    50        5.9   Company Employee Benefits.    50       
5.10   Insurance    52        5.11   Reorganization    53        5.12   Certain
Notices    53

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       5.13   Certain Intellectual Property Covenants.    53        5.14   WARN
   54        5.15   Intercompany Accounts    54        5.16   Confidentiality   
54        5.17   Successors    54

ARTICLE VI TAX MATTERS

   55        6.1   Control of Tax Audits    55        6.2   Tax Returns    55  
     6.3   Cooperation; Other Tax Matters    56        6.4   Transfer Taxes   
56        6.5   Straddle Periods    56        6.6   Proration of Taxes    56  
     6.7   Section 338 Elections    57        6.8   Tax Refunds    57

ARTICLE VII Closing

   57        7.1   Closing Date    57        7.2   Deliveries by the Buyer    57
       7.3   Deliveries by the Company    58        7.4   Actions at Closing
Meeting    59

ARTICLE VIII CONDITIONS PRECEDENT

   59        8.1   Conditions Precedent to Obligations of Parties    59       
8.2   Conditions to Obligations of the Buyer    60        8.3   Conditions to
the Obligations of the Company    61

ARTICLE IX TERMINATION

   61        9.1   Termination    61        9.2   Effect of Termination    63

ARTICLE X Indemnification

   64        10.1   Indemnification    64        10.2   Limitations on Indemnity
Payments    66        10.3   Notice of Indemnity Claims    67        10.4  
Indemnification Procedures    67        10.5   Settlement of Indemnity Claims   
68        10.6   Survival    69        10.7   Treatment of Indemnification
Payments    69        10.8   Remedies Exclusive    69

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ARTICLE XI MISCELLANEOUS

   69        11.1   Notices    69        11.2   Counterparts; Facsimile
Signature    70        11.3   Bulk Sales    71        11.4   Further Assurances
   71        11.5   Entire Agreement    71        11.6   No Third-Party
Beneficiaries    71        11.7   Assignment    71        11.8   Amendment and
Modification; Waiver    71        11.9   Enforcement; Jurisdiction    72       
11.10   Waiver of Jury Trial    72        11.11   Costs and Expenses    72  
     11.12   Setoff    72        11.13   Casualty Losses    73        11.14  
Mutual Drafting.    73        11.15   Governing Law    73        11.16  
Disclosure Schedules.    73        11.17   Severability    73

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AMENDED AND RESTATED STOCK AND ASSET PURCHASE AGREEMENT

 

AMENDED AND RESTATED STOCK AND ASSET PURCHASE AGREEMENT, dated as of February
21, 2005, as amended and restated as of March 17, 2005 (such date, the
“Amendment Date” and as amended this “Agreement”), among Biotage AB, a
corporation organized under the laws of Sweden (the “Buyer”) and Argonaut
Technologies, Inc., a Delaware corporation (the “Company”).

 

RECITALS

 

WHEREAS, the Company, including through its Subsidiaries, is engaged in the
chemistry consumables business, which includes the following segments: (i)
Argoresins, (ii) Solid Phase Extraction Systems, Consumables and Services, (iii)
Flash Chromatography Systems, Consumables and Services and (iv) Quest, Trident
and Nautalis Discontinued Systems, Consumables and Services (collectively, the
“Consumables Business”);

 

WHEREAS, the Company, including through its Subsidiaries, also is engaged in the
business of developing and manufacturing instruments and related services to
address the chemical development workflow of compound synthesis for the
pharmaceutical and specialty chemical industries which is conducted through the
Company’s Advantage Series 2410/3400/4100, Endeavor and, Atlantis, Surveyor and
Firstmate product lines (the “Process Business”);

 

WHEREAS, upon the terms and conditions set forth herein, the Buyer, through one
or more of its direct or indirect Subsidiaries, desires to purchase, and the
Company desires to sell or cause to be sold (the “Acquisition”) to the Buyer
and/or one or more of Buyer’s direct or indirect Subsidiaries set forth on
Exhibit A (the “Designated Purchasers”): (i) all of the outstanding shares of
capital stock of Argonaut Technologies Limited, a corporation organized under
the laws of the United Kingdom (the “Transferred Subsidiary”), (ii) certain of
the assets and liabilities of the Company related to the Consumables Business as
described herein and (iii) certain of the assets and liabilities of the Company
related to the Process Business as described herein (the “Transferred Process
Operations”);

 

WHEREAS, the Board of Directors of the Company has, by the unanimous vote of all
directors (i) determined that the Acquisition and the transactions contemplated
by this Agreement are expedient and in the best interests of the Company and its
stockholders and (ii) declared the advisability of this Agreement and resolved
to recommend that the Company’s stockholders approve the Acquisition and the
consummation of the transactions contemplated by this Agreement; and

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NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1 Defined Terms. Defined terms used in this Agreement have the meanings
ascribed to them as follows:

 

“Accounts” shall mean the audited balance sheets and the audited profit and loss
accounts of each of the Transferred Subsidiaries in respect of the accounting
reference period of the Transferred Subsidiaries ended on the Accounts Date.

 

“Accounts Date” shall mean December 31, 2003.

 

“ Acquired Businesses” shall mean, collectively, the Consumables Business and
the Transferred Process Operations.

 

“Acquisition Proposal” shall mean, other than the transactions contemplated
hereby or any offer or proposal made by the Buyer or a Subsidiary of the Buyer,
any inquiry with respect to, or a proposal or offer for a tender offer or
exchange offer, merger, reorganization, share exchange, consolidation or other
business combination involving, the Company and its Subsidiaries or any proposal
or offer to acquire in any manner an equity interest representing a 10% or
greater economic or voting interest in the Company, or the assets, securities or
ownership interests of or in the Company or any of its Subsidiaries representing
10% or more of the consolidated assets of the Company and its Subsidiaries,
other than (i) a proposal with respect to a purchase of the Company’s property
located at Tir-Y-Berth Industrial Estate, New Road, Hengoed, Wales and (ii)
after any termination hereof, any proposal for a bona fide equity financing
transaction made after such termination by a Person who has not made an
Acquisition Proposal prior to such termination and which represents a 30% or
less economic and voting interest in the Company.

 

“Affiliate” shall mean, with respect to any Person, any other Person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. When used in this
Agreement, “control” (including, with its correlative meanings, the terms
“controlling”, “controlled by” and “under common control with”) shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by Contract or otherwise.

 

“Books and Records” shall mean originals or true copies of all agreements,
documents, books, records and files, of the Company and its Subsidiaries,
including records and files stored on computer disks or tapes or any other
storage medium prepared, used or held for use principally in connection with the
conduct or operation of the Consumables Business or the Transferred Process
Operations, including the certificates of incorporation, check books, common
seals and all statutory and minute books (which for the purposes of Article VII
shall be written up to the date of Closing), and all unused share certificate
forms, in each case of the Transferred Subsidiaries.

 

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“Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a
day on which banks in San Francisco, California, New York, New York or
Stockholm, Sweden are required or authorized by law, executive order or
governmental decree to be closed.

 

“Buyer Disclosure Schedule” shall mean the Buyer’s disclosure schedule delivered
by the Buyer to the Company prior to the execution of this Agreement.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Company Disclosure Schedule” shall mean the Company’s disclosure schedule
delivered by the Company to the Buyer within five (5) Business Days after the
Amendment Date, which may not, without the Buyer’s prior written consent,
include any exception item that was not disclosed in writing to the Buyer prior
to entry into this Agreement as part of the due diligence process conducted.

 

“Company Employees” shall mean the Transferred Subsidiary Employees, Process
Business Employees and US Consumables Employees, collectively, who are,
immediately prior to the Closing, employed with the Company or any of its
Affiliates.

 

“Confidentiality Agreement” shall mean the Confidentiality Agreement dated
January 7, 2004, as amended between the Company and the Buyer.

 

“Consumables Business Employee” shall mean any current or former employee,
director, officer, independent contractor or consultant of the Consumables
Business, and for purposes of completeness, shall include the Transferred
Subsidiary Employees.

 

“Contracts” shall mean all written and oral contracts, agreements, leases,
subleases, licenses, purchase orders, instruments of indebtedness, mortgages,
deeds of trust, guarantees and any other binding contractual arrangements
related principally to the operation of the Consumables Business or the Process
Business or to which the Transferred Assets are subject. “DGCL” shall mean the
Delaware General Corporation Law, as the same may be amended from time to time.

 

“dollars” or “$” shall mean United States dollars.

 

“Environmental Laws” shall mean all applicable Laws or Orders relating to (i)
pollution, contamination, restoration or protection of the environment, health
or safety or natural resources, (ii) the handling, use, presence, disposal,
release or threatened release of any Hazardous Substance or (iii) noise, odor,
wetlands, pollution, contamination, waste or injury or threat of injury to
Persons or property.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.

 

“Exchange Act” or “1934 Act” shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

 

“GAAP” shall mean United States generally accepted accounting principles.

 

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“Governmental Authority” shall mean any federal, state, municipal, foreign or
other governmental body, department, commission, board, bureau, agency, court or
instrumentality, domestic or foreign, or other entity exercising any executive,
legislative, judicial, quasi-judicial, regulatory or administrative function of
government.

 

“Hazardous Substance” shall mean any substance that is (i) listed, classified or
regulated pursuant to any Environmental Law, (ii) any petroleum or petroleum
product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, radioactive materials or radon or (iii) any
other substance which may be the subject of regulatory action by any
Governmental Authority pursuant to any Environmental Law.

 

“Intellectual Property” shall mean collectively, on a worldwide basis, all of
the following types of intangible assets: (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and re-examinations thereof, (ii) all trademarks, service marks,
trade dress, logos, domain names, URLs, trade names, brand names, model names,
corporate names and other source indicators, including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrights (whether registered or unregistered), and all
applications, registrations and renewals in connection therewith, (iv) all mask
works and all applications, registrations, and renewals in connection therewith,
(v) all trade secrets and confidential information (including confidential
ideas, research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
marketing plans and proposals), (vi) all computer software (including data and
related documentation and including software installed on hard disk drives and
any related source codes), (vii) all joint or partial interests in any of the
foregoing and (viii) all rights to pursue, recover and retain damages, costs and
attorneys’ fees for past, present and future infringement or misappropriations
of the foregoing.

 

“Inventory” means all inventory and all raw materials, work-in-process, finished
products, supplies, accessories, packaging materials, goods or parts, in each
case whether or not in transit on the Closing Date, that are used or held for
use principally in the conduct or operation of the Consumables Business or the
Process Business. For the avoidance of doubt, “Inventory” shall include all
discontinued products, service and spare parts inventory, including finished
goods inventory and any and all stock that may be represented in the gross
inventory values prior to reserves, including with respect to the Quest, Trident
and Nautalis Discontinued Systems, Consumables and Services line of the
Consumables Business.

 

“Knowledge of the Buyer” shall mean, with respect to any matter in question, the
knowledge, after reasonable inquiry, of those individuals listed in Section
1.1(i) of the Buyer Disclosure Schedule.

 

“Knowledge of the Company” shall mean, with respect to any matter in question,
the knowledge, after reasonable inquiry, of individuals listed in Section 1.1(i)
of the Company Disclosure Schedule.

 

4

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“Law” shall mean any federal, state, local or foreign law, statute, common law,
rule, regulation, code, directive, ordinance or other requirement of general
application of any Governmental Authority, including Environmental Laws.

 

“Liabilities” means any direct or indirect liability, indebtedness, claim, loss,
damage, deficiency, obligation or responsibility, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
known or unknown, contingent or otherwise.

 

“Licenses and Permits” shall mean all licenses, permits, concessions,
exemptions, consents, franchises, certificates, variances, approvals and other
authorizations that are required by Governmental Authorities or otherwise under
any applicable Law to conduct each of the Consumables Business and the
Transferred Process Operations as they are presently conducted or to own or use
the Transferred Assets. “Lien” shall mean any lien, claim, charge, option,
mortgage, pledge or security interest, rights of first refusal or rights of
first offer, encumbrance (including leases, easements, licenses, zoning
ordinances, covenants, conditions, restrictions and rights-of-way) or other
similar right affecting real or personal property, in each case, whether arising
by contract, operation of law or otherwise.

 

“Material Adverse Effect” or “Material Adverse Change” shall mean any event,
change, circumstance or effect that is or would reasonably be expected to be
materially adverse to the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, businesses or results of operations
of the Acquired Businesses or to have a material adverse effect on the ability
of the Company to consummate the transactions contemplated hereunder on a timely
basis; provided, however, that a “Material Adverse Effect” shall not include (i)
changes, effects and circumstances resulting from (a) factors generally
affecting the life sciences industry or (b) changes in general economic,
regulatory or political conditions, including changes in the United States or
worldwide capital markets; (ii) the loss of Company Employees or customers
having a relationship with the Consumables Business or the Transferred Process
Operations as a result of the announcement or pendency of the Acquisition, this
Agreement or the transactions contemplated hereby, (iii) compliance by the
Company with its express obligations pursuant to the terms and conditions of
this Agreement; or (iv) any change in GAAP or applicable laws, rules or
regulations that occurs or becomes effective after the date of this Agreement;
provided, that in the case of any event, change, circumstance or effect referred
to in clause (i) above, such event, change, circumstance or effect does not have
a materially disproportionate effect on the Acquired Businesses relative to
other participants in the life sciences industry.

 

“Order” shall mean any order, writ, injunction, judgment, decree or ruling
entered, issued, made or rendered by any court, administrative agency,
arbitration tribunal or other Governmental Authority of competent jurisdiction.

 

“Permitted Liens” shall mean (i) mechanics’, carriers’, workers’ or repairmen’s
Liens arising in the ordinary course of business and securing payments or
obligations that are not delinquent, (ii) Liens for Taxes, assessments and other
similar governmental charges which are not due and payable and (iii) Liens that
arise under zoning, land use and other similar Laws and other imperfections of
title or encumbrances, if any, which do not materially affect the marketability
of the property subject thereto and do not materially impair the use of the
property subject thereto as used as of the date hereof.

 

5

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“Person” shall mean any individual, corporation, partnership, firm, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, Governmental Authority or other entity.

 

“Post-Closing Tax Period” shall mean any taxable period beginning after the
Closing Date and, with respect to any Straddle Period, the portion of such
Straddle Period beginning after the Closing Date.

 

“Pre-Closing Tax Period” shall mean any taxable period ending on or before the
Closing Date and, with respect to any Straddle Period, the portion of such
Straddle Period ending on the Closing Date.

 

“Previous Accounts” shall mean the audited balance sheets of the Transferred
Subsidiaries as of the end of each of the two accounting reference periods
immediately preceding the period ended on the Accounts Date and the audited
profit and loss accounts of the Transferred Subsidiaries for such periods.

 

“Proceeding” shall mean any action, suit, dispute, litigation, hearing, claim,
grievance, arbitral action or other proceeding before any Governmental
Authority, at law or in equity.

 

“Process Business Employees” shall mean the employees of the Process Business
set forth in Section 1.1(ii) of the Company Disclosure Schedule.

 

“Representative” shall mean any attorney, accountant, financial advisor or other
authorized representative of any Person.

 

“SEC” shall mean the United States Securities and Exchange Commission.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

“Straddle Period” shall mean any taxable period that begins on or before and
ends after the Closing Date.

 

“Subsidiary” and “Subsidiaries” when used with respect to any Person shall mean
any Person in which such Person directly or indirectly owns 50% or more of the
aggregate voting stock. For purposes of this definition, “voting stock” means
stock or other interests that ordinarily has voting power for the election of
directors or managers.

 

“Superior Proposal” means an Acquisition Proposal that is reasonably capable of
being consummated, taking into account all legal, financial, regulatory, timing,
and similar aspects of, and conditions to, the proposal, the likelihood of
obtaining necessary financing and the Person making the proposal, and, which, if
consummated, would result in a transaction more favorable to the Company’s
stockholders from a financial point of view than the transactions contemplated
hereby (after giving effect to any adjustments to the terms and provisions of
this

 

6

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Agreement proposed by Parent in response to such Acquisition Proposal after
receipt of notice of such Acquisition Proposal as required by Section 5.3);
provided, that for the purposes of this definition of “Superior Proposal,” the
term Acquisition Proposal shall have the meaning assigned to such term, except
that the references to “10% or more” in the definition of “Acquisition Proposal”
shall be deemed to be references to “a majority”.

 

“Tax” or “Taxes” shall mean any taxes of any kind, including those measured on,
measured by or referred to as, income, alternative or add-on minimum, gross
receipts, escheat, capital, capital gains, sales, use, ad valorem, franchise,
profits, license, privilege, transfer, withholding, payroll, employment, social,
excise, severance, stamp, occupation, premium, value added, property,
environmental or windfall profits taxes, customs, duties or similar fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts (including any interest
thereon) imposed by any Governmental Authority.

 

“Tax Returns” shall mean all reports, estimates, declarations of estimated Tax,
claims for refund, information statements and returns relating to, or required
to be filed in connection with, any Taxes, including any schedule or attachment
thereto, and including any amendment thereof.

 

“Target Net Working Capital” means $7,080,000.

 

“Transferred Subsidiary Employees” shall mean those Consumables Business
Employees whose service relationship is or was with the Transferred Subsidiaries
and that certain employee of the Process Business employed by a Transferred
Subsidiary (identified as such in Section 1.1(ii) of the Company Disclosure
Schedule).

 

“Transferred Subsidiaries” shall mean the Transferred Subsidiary and each Person
in which the Transferred Subsidiary owns any capital stock or other security
interest, including International Sorbent Technology Limited, a corporation
organized under the laws of England and Wales, and Jones Chromatography U.S.A.,
Inc., a Colorado corporation.

 

“UK Tax Proceeding” shall mean any current audit or investigation by the Inland
Revenue, including any Proceedings arising therefrom, related to intercompany
transactions between the Transferred Subsidiaries and the Company, including
management fees, intercompany charges and sales or transfers of goods.

 

“UK Tax Liability” shall mean any Pre-Closing Tax Period Taxes for which the
Transferred Subsidiaries may be liable in connection with or as a result of the
UK Tax Proceeding.

 

“US Consumables Employees” shall mean the employees of the Consumables Business
set forth on Section 1.1(ii) of the Company Disclosure Schedule.

 

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1.2 Other Defined Terms. The following capitalized terms are defined in this
Agreement in the Section indicated below:

 

Defined Term

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  Section

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1060 Forms

  3.4

Accounts Payable Statement

  3.3(a)

Acquired Businesses

  1.1

Acquisition

  Recitals

Agreement

  Preamble

Amendment Date

  Preamble

Assumed Liabilities

  2.3(a)

Buyer

  Preamble

Buyer Expenses

  9.2(c)

Buyer Indemnified Party

  10.1(a)

Buyer Losses

  10.1(a)

Change in Company Recommendation

  5.3(b)

Claim Notice

  10.3

Closing

  7.1

Closing Date

  7.1

Closing Date Cash Statement

  3.3(a)

Closing Date Net Working Capital

  3.2(b)

Closing Date Net Working Capital Statement

  3.3(a)

Closing Statement

  3.3(a)

Company

  Preamble

Company Indemnified Party

  10.1(b)

Company Losses

  10.1(b)

Company Plans

  4.1(o)

Company SEC Documents

  4.1(g)

Company Special Meeting

  5.7(b)

Consents

  2.5

Consumables Business

  Recitals

Consumables Business Balance Sheet

  2.3(a)

Deficiency

  3.3(d)

Designated Purchasers

  Recitals

Escrow Funds

  3.2(a)

Excluded Assets

  2.2(b)

Excluded Liabilities

  2.3(b)

Financial Statements

  4.1(g)

Foreign Benefit Plan

  4.1(o)

Grace Acquisition

  10.1(a)

Indemnified Party

  10.3

Indemnifying Party

  10.3

Indemnity Claim

  10.3

Independent Accounting Firm

  3.3(c)

Initial Closing Escrow Period

  3.2(a)

Inventory Count

  3.3(a)

Leader

  5.1(b)

Leased Real Property

  2.2(a)

Leases

  4.1(i)

LIBOR

  3.3(e)

 

8

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Defined Term

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  Section

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Noncompetition Period

  5.5(a)

Owned Real Property

  2.2(a)

Periodic Taxes

  6.6

Preliminary Closing Date Net Working Capital

  3.2(b)

Preliminary Closing Date Net Working Capital Statement

  3.2(b)

Process Business

  Recitals

Process Business Balance Sheet

  4.1(g)

Proxy Statement

  5.7(a)

Public Proposal

  9.2(b)

Purchase Price

  3.1

Recall

  4.1(x)

Real Property Permits

  4.1(i)

Related Person

  4.1(t)

Reorganization

  5.11

Seller Plans

  5.9(d)

Severance Costs

  5.9(a)

Stockholder Approval

  4.1(c)

Surplus

  3.3(d)

Tax Proceeding

  6.1

Termination Date

  9.1(b)

Termination Fee

  9.2(b)

Third Party Claim

  10.4

Transfer Costs

  6.4

Transferred Assets

  2.2(b)

Transferred Process Operations

  Recitals

Transferred Real Property

  2.2(a)

Transferred Shares

  2.1

Transferred Subsidiary

  Recitals

Transferred Employees

  5.9(a)

Transition Team

  5.1(b)

Violation

  4.1(d)

Voting Debt

  4.1(b)

Wales Lease

  8.2(h)

WARN

  4.1(p)

 

1.3 Rules of Construction. References in this Agreement to gender include
references to all genders, and references to the singular include references to
the plural and vice versa. The words “include”, “includes” and “including” when
used in this Agreement shall be deemed to be followed by the phrase “without
limitation”. Unless the context otherwise requires, references in this Agreement
to Articles, Sections and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement. Unless the context
otherwise requires, the words “hereof”, “hereby” and “herein” and words of
similar meaning when used in this Agreement refer to this Agreement in its
entirety and not to any particular Article, Section or provision of this
Agreement. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References herein to “date hereof”, “date of
this Agreement” or similar references shall mean as of February 21, 2005.

 

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ARTICLE II

 

PURCHASE AND SALE OF THE TRANSFERRED SUBSIDIARIES AND THE

 

TRANSFERRED ASSETS

 

2.1 Sale of the Transferred Subsidiaries. Subject to the satisfaction or waiver
of the conditions set forth in this Agreement, at the Closing and as of the
Closing Date, the Company shall sell, assign, transfer, convey and deliver to
the Buyer and/or the respective Designated Purchaser, and the Buyer shall or
shall cause the applicable Designated Purchaser to purchase and acquire, all of
the shares (the “Transferred Shares”) of the Transferred Subsidiary. In
connection therewith, the Company shall deliver to the Buyer and/or the
applicable Designated Purchaser share certificates representing the Transferred
Shares showing the name of the Buyer or the applicable Designated Purchaser as
the registered holder, a transfer of all the Transferred Shares duly executed by
the Company in favor of the Buyer or the applicable Designated Purchaser and all
other documents related to the Transferred Shares as the Buyer may reasonably
request to effectuate such sale, assignment, transfer, conveyance and delivery.

 

2.2 Purchase and Sale of Transferred Assets.

 

(a) Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, at the Closing and as of the Closing Date, the Company shall sell,
transfer, convey, assign and deliver to the Buyer, and/or the applicable
Designated Purchaser, and the Buyer shall or shall cause the applicable
Designated Purchaser to purchase and acquire, all of the Company’s and any of
its Subsidiaries’ right, title and interest in, to and under all of the
properties, assets, rights and claims used or held for use principally in the
conduct or operation of the Consumables Business as the same may exist on the
Closing Date, whether tangible or intangible, and such other properties, assets,
rights and claims used or held for use principally in the conduct or operation
of the Process Business as may be specifically enumerated below (it being
understood that to the extent any of such properties, assets, rights and claims
are owned or held by the Transferred Subsidiaries and are not Excluded Assets,
such properties, assets, rights and claims shall not be transferred pursuant to
this Section 2.2(a)), but rather by operation of law pursuant to the sale of the
Transferred Shares in accordance with Section 2.1), including all right, title
and interest of the Company and its Subsidiaries in, to and under:

 

(i) (A) all billed and unbilled accounts and notes receivable principally
related to the Consumables Business, all prepayments and prepaid expenses and
deposits related to each of the Consumables Business and all other current
assets principally related to the Consumables Business, and the full benefit of
any and all security for such accounts receivable, notes receivable,
prepayments, prepaid expenses and other current assets and all Proceedings
related to any such items, and, as applicable,

 

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with respect to all such other items not principally related to the Consumables
Business, such items to the extent related to the Consumables Business; and (B)
all prepayments and prepaid expenses and deposits related to the Process
Business (other than (1) payments with respect to insurance or Taxes and (2)
deposits related to any facilities owned or used principally in connection with
the conduct or operation of the Process Business that do not constitute
Transferred Assets);

 

(ii) all of the real property set forth in Section 2.2(a)(ii) of the Company
Disclosure Schedule (the “Owned Real Property”), including all of the land
structures, buildings, improvements and fixtures now or subsequently leased,
located thereon or related thereto;

 

(iii) all right, title and interest in, to and under the Leases related to the
Consumables Business and identified in Section 4.1(i)(ii) of the Company
Disclosure Schedule (the “Leased Real Property” and together with the Owned Real
Property, the “Transferred Real Property”), and all buildings, structures and
other improvements situated thereon;

 

(iv) all Inventory existing on the Closing Date;

 

(v) all of the Company’s and its Subsidiaries’ owned or leased tangible personal
property used or held for use principally in the conduct or operation of the
Consumables Business, including machinery, mobile and immobile equipment,
furniture, office equipment, furnishings, transportation equipment, tools,
tooling, dies, parts, supplies and other tangible personal property and all
warranties or guarantees, if any, express or implied, existing for the benefit
of the Company, any of its Subsidiaries or the Consumables Business with respect
thereto;

 

(vi) all of the Company’s and its Subsidiaries’ (A) manufacturing, engineering
and laboratory machinery, equipment (whether mobile or immobile) and supplies,
in whatever form, used or held for use principally in the conduct or operation
of the Process Business; (B) demonstration equipment used or held for use
principally in the conduct or operation of the Process Business; and (C) all
computer equipment and information systems related to, or used or held for use
principally in, the conduct or operation of the Process Business, and in each
such case, all warranties or guarantees, if any, express or implied, existing
for the benefit of the Company, any of its Subsidiaries or the Process Business
with respect thereto;

 

(vii) all right, title and interest in, to and under all the Contracts to which
the Company or any of its Subsidiaries is a party, including all rights to
receive goods and services purchased pursuant to such Contracts and all claims
and rights to take any other actions arising out of or related to such Contracts
or the Transferred Assets, or in respect thereof;

 

(viii) all of the Company’s and any of its Subsidiaries’ right, title and
interest in and to any Intellectual Property;

 

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(ix) all of the Company’s and any of its Subsidiaries’ rights under any Licenses
and Permits to the extent transferable under applicable Law and all rights under
any licenses or permits from third parties other than Governmental Authorities
required to conduct each of the Consumables Business and the Transferred Process
Operations as it is presently conducted or to own or use the Transferred Assets;

 

(x) all Books and Records, including any and all (A) subject to applicable Law,
data and records pertaining to the Transferred Subsidiary Employees, the US
Consumables Employees and the Process Business Employees and (B) sales
literature, promotional literature and other selling and advertising material
and lists of customers and suppliers;

 

(xi) all rights under express or implied warranties, representations or
guarantees made by suppliers furnishing goods or services;

 

(xii) all credits and deferred charges related to, or arising in connection
with, the Consumables Business or the Transferred Process Operations, including
in connection with any Leases set forth in Section 4.1(i)(ii) of the Company
Disclosure Schedule that constitute Transferred Assets and rentals;

 

(xiii) all information systems, hardware, telephone systems, software systems,
database and database systems used in the Consumables Business and any and all
rights thereunder, in each case, to the extent reflected as an asset on the
Consumables Business Balance Sheet or acquired after the date thereof and which
would reasonably be expected to be reflected as an asset thereon if the
Consumables Business Balance Sheet were prepared as of the Closing Date;

 

(xiv) all insurance proceeds received by the Company or any of its Subsidiaries
in respect of any Transferred Assets as a result of any damage or claim
occurring prior to Closing Date and any rights, claims or causes of action
existing or arising in respect of the Transferred Assets under the Company’s
insurance policies;

 

(xv) any assets relating to the Liabilities assumed pursuant to Section 5.9(a);

 

(xvi) the goodwill and going concern value of each of the Consumables Business
and the Process Business;

 

(xvii) all inventory backlog relating to the Process Business existing and
unfulfilled on the Closing Date, including all unshipped and unfulfilled
customer product and service orders, all orders in progress and all other
obligations to deliver products which have not yet been performed as of the
Closing Date and for which, as of the Closing Date, a bona fide receivable does
not exist on the books of the Company or otherwise for its benefit; and

 

(xviii) all other properties, assets, rights and claims reflected on the
Consumables Business Balance Sheet or accrued after the date thereof and which
would reasonably be expected to be reflected thereon if the Consumables Business
Balance Sheet was prepared as of the Closing Date but not otherwise described in
this Section 2.2(a).

 

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(b) The properties, assets, rights and claims to be purchased by Buyer and/or
the Designated Purchaser pursuant to this Section 2.2(b), along with the
properties, assets, rights and claims enumerated in Section 2.2(b) and the
properties, assets, rights and claims of the Transferred Subsidiaries which
shall be transferred to the Buyer and/or the Designated Purchaser through the
sale of the Transferred Shares pursuant to Section 2.1, shall collectively be
referred to herein as the “Transferred Assets”. As of the Closing, risk of loss
as to the Transferred Assets shall pass from the Company to the Buyer, except as
may otherwise be expressly provided herein. Notwithstanding Section 2.2(a), the
Company shall retain all of its existing right, title and interest in, to and
under, and the Transferred Assets shall exclude the following assets (the
“Excluded Assets”):

 

(i) all cash and cash equivalents;

 

(ii) all billed and unbilled accounts and notes receivable principally related
to the Process Business and all other current assets principally related to the
Process Business, and the full benefit of any and all security for such accounts
receivable, notes receivable and other current assets and all Proceedings
related to any such items, and, as applicable, with respect to all such other
items not principally related to the Process Business, such items to the extent
related to the Process Business;

 

(iii) all assets sold or otherwise disposed of not in violation of any
provisions of this Agreement during the period from the date of this Agreement
until the Closing Date;

 

(iv) all income Tax Returns of the Company and, subject to Section 6.6, all Tax
refunds, Tax losses, Tax carryforwards, Tax credits and Tax benefits of the
Company;

 

(v) the minute books for the board of directors, committees or shareholders’
meetings, incorporation documents, stock transfers and Tax or similar or related
corporate records of the Company and its Subsidiaries, other than the
Transferred Subsidiaries;

 

(vi) all of the assets to be transferred to the Company or one of its
Subsidiaries, other than the Transferred Subsidiaries, pursuant to the
Reorganization;

 

(vii) the real property located at Tir-Y-Berth Industrial Estate, New Road,
Hengoed, Wales;

 

(viii) all of the Company’s right, title and interest under this Agreement and
the Confidentiality Agreement; and

 

(ix) all assets of the Company and its Subsidiaries, other than the Transferred
Subsidiaries, not used in connection with the operation of the Consumables
Business or the Transferred Process Operations.

 

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2.3 Assumption of Liabilities.

 

(a) Subject to the satisfaction or waiver of the conditions set forth in this
Agreement, at the Closing and as of the Closing Date, the Buyer shall or shall
cause the applicable Designated Purchaser to assume and agree to pay, discharge
or perform when due only the following Liabilities (except to the extent that
such Liabilities constitute Liabilities of the Transferred Subsidiaries which
shall be assumed by the Buyer and/or the Designated Purchaser by operation of
law through its purchase of the Transferred Shares pursuant to Section 2.1):

 

(i) all Liabilities related to the Consumables Business and reflected on the
balance sheet of the Consumables Business dated as of December 31, 2004, which
is contained in Section 4.1(g)(i) of the Company Disclosure Schedule (the
“Consumables Business Balance Sheet”), other than any Excluded Liabilities;

 

(ii) all other Liabilities related to the Consumables Business incurred after
the date of the Consumables Business Balance Sheet not in violation of the terms
of this Agreement which would have been required to be reflected on the
Consumables Business Balance Sheet under GAAP if such Liabilities were incurred
on or prior to the date of the Consumables Business Balance Sheet, other than
any Excluded Liabilities;

 

(iii) all Liabilities arising under the Contracts (other than with respect to
any Seller Plans) to the extent such Liabilities (A) arise in the ordinary
course of business consistent with past practice pursuant to the terms of such
Contracts, (B) were not due to have been satisfied or discharged prior to the
Closing Date, and (C) have not arisen as a result of a default or breach of such
Contract by the Company or its Subsidiaries;

 

(iv) all warranty Liabilities to the extent such Liabilities (A) arise in the
ordinary course of business consistent with past practice under the terms of the
Contracts or under the Uniform Commercial Code and (B) were not due to have been
satisfied or discharged prior to the Closing Date;

 

(v) all customer service and support obligations following the Closing relating
to the products manufactured by the Process Business to the extent such
obligations (A) arise in the ordinary course of business consistent with past
practice under the terms of the Contracts related to the Process Business or
under the Uniform Commercial Code and (B) were not due to have been satisfied or
discharged prior to the Closing Date;

 

(vi) all accounts payable arising out of the operation of the Process Business
prior to the Closing Date and accrued in the ordinary course of business on the
balance sheet of the Process Business under GAAP as of the Closing Date;
provided, however, that the aggregate amount of such accounts payable shall not
exceed $350,000;

 

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(vii) all Liabilities arising as a result of the post-Closing operation of the
Consumables Business or the Transferred Process Operations or the post-Closing
ownership or use by the Buyer and its Subsidiaries of the Transferred Assets;
and

 

(viii) all Liabilities for all earned but unpaid base salary, bonuses, vacation,
sick leave and unreimbursed business expenses that are accrued in the ordinary
course of business consistent with past practice and reflected on the balance
sheet of the Consumables Business or the Process Business, as the case may be,
under GAAP as of the Closing Date, and which are not incurred in violation of
Section 5.2 and are payable to Closing Date Employees.

 

The Liabilities assumed by Buyer and/or the Designated Purchaser pursuant to
this Section 2.3(a), along with the Liabilities which shall be assumed by Buyer
and/or the Designated Purchaser through the purchase of the Transferred Shares
pursuant to Section 2.1, shall collectively be referred to herein as the
“Assumed Liabilities.”

 

(b) Neither the Buyer nor any Designated Purchaser shall assume pursuant to this
Agreement or the transactions contemplated hereby any Liabilities of the Company
or any of its Subsidiaries other than the Assumed Liabilities, and the Company
and its Subsidiaries shall retain all such other Liabilities, including:

 

(i) any claim or Liabilities related to or arising out of the use or ownership
of any Excluded Assets;

 

(ii) Liabilities, whether of the Transferred Subsidiaries or otherwise, to the
Company or any other Subsidiary or Affiliate of the Company;

 

(iii) any Liabilities of the Company and the Transferred Subsidiaries, whether
arising prior to, on or after the Closing Date, to the extent arising from or as
a result of the conduct of any business of the Company or such Transferred
Subsidiaries other than the Consumables Business, other than those expressly
contemplated in Section 2.3(a) (iii) through (viii);

 

(iv) claims or Liabilities arising out of or otherwise with respect to or in
connection with the Reorganization;

 

(v) Liabilities relating to any Consumables Business Employee or Process
Business Employee, whether or not arising under or in respect of any Company
Plan, other than those expressly assumed by the Buyer and/or the applicable
Designated Purchaser as set forth in Section 2.3(a) (viii) and Section 5.9(a);

 

(vi) any Liability of the Company or any Affiliate (other than the Transferred
Subsidiaries) of the Company for Taxes relating to any Pre-Closing Tax Period;

 

(vii) Liabilities under or relating to Environmental Laws to the extent relating
to events or conditions existing as of, or prior to, the Closing Date, other
than routine maintenance or similar obligations in the ordinary course of
business;

 

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(viii) any Liability of the Company or its Subsidiaries to any broker, finder or
agent, including SG Cowen & Co., LLC, for any investment banking or brokerage
fees, finder’s fees or commission with respect to the transactions contemplated
by this Agreement;

 

(ix) any Liability with respect to a claim for personal injury (including
wrongful death) and/or property damage arising out of pre-Closing occurrences
and based on product liability, strict liability or other similar theories of
recovery, whether arising in contract or tort or otherwise;

 

(x) any Liability with respect to the wrongful discharge claim in France by the
Company’s former employee, which employee was an employee of Argonaut
Technologies, A.G.;

 

(xi) any Liability with respect to the mass spectrometer referred to in Section
4.1(f)(1) of the Company Disclosure Schedule;

 

(xii) any other Liability which the Company has expressly agreed to retain
pursuant to the provisions of this Agreement other than this Article II; and

 

(xiii) except to the extent expressly set forth in Section 2.3(a) or elsewhere
in this Agreement, Liabilities relating to the Acquired Businesses, the
Transferred Assets, the Transferred Subsidiaries, the Transferred Shares, the
Process Business, the Process Business Employees or the Consumables Business
Employees or arising out of the operation or ownership of the Acquired
Businesses, the Transferred Subsidiaries or the Transferred Shares or the
employment of the Consumables Business Employees or the Process Business
Employees, in each case, prior to the Closing Date.

 

The Liabilities retained by the Company and its Subsidiaries pursuant to this
Section 2.3(b) are referred to herein as the “Excluded Liabilities”).

 

2.4 Transfer of Purchased Assets and Assumed Liabilities. The Transferred Assets
(other than the properties, assets, rights and claims of the Transferred
Subsidiaries which shall be transferred through the purchase of the Transferred
Shares pursuant to Section 2.1) shall be sold, conveyed, transferred, assigned
and delivered, and the Assumed Liabilities shall be assumed, pursuant to
transfer and assumption agreements or other instruments in such form as is
necessary to effect a conveyance of the Transferred Assets and an assumption of
the Assumed Liabilities in the jurisdictions in which such transfers are to be
made, and which shall be satisfactory to the Buyer and the Company, to be
executed (upon the terms and subject to the conditions hereof) on the Closing
Date by the Company and the Buyer or the respective Designated Purchaser, and
such other conveyance and assumption documents as may be required in such
jurisdictions.

 

2.5 Procedures for Assets Not Transferable. Notwithstanding anything to the
contrary contained in this Agreement, to the extent that the sale, conveyance,
transfer, assignment or delivery or attempted sale, conveyance, transfer,
assignment or delivery to the Buyer or any Designated Purchaser of any
Transferred Asset (but not any Transferred Shares) is

 

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prohibited by applicable Law or would require any governmental or third-party
authorizations, approvals, consents or waivers (collectively, “Consents”) the
Company shall use its, and shall cause its Subsidiaries to use their respective
reasonable best efforts to obtain such Consents prior to the Closing and if any
such Consents shall not have been obtained prior to the Closing, this Agreement
shall not constitute a sale, conveyance, transfer, assignment or delivery
thereof if any of the foregoing would constitute a breach of applicable Law or
the rights of any third party; provided, however, that the Closing shall occur
notwithstanding the foregoing on the terms set forth herein; provided further,
however, that the Company shall not be relieved of its obligation to sell, and
the Buyer of its obligation to purchase, such Transferred Assets. Following the
Closing, the parties shall use their reasonable best efforts and shall cooperate
with each other to obtain promptly such Consents. Pending or in the absence of
such Consent, the parties shall use their respective reasonable best efforts to
implement an alternative arrangement to permit the Buyer or the respective
Designated Purchaser, as the case may be, to realize, receive and enjoy
substantially similar rights and the full benefits of such Transferred Asset as
if such impediment to assignment or transfer did not exist, and to enable Buyer
or the respective Designated Purchaser to conduct the Consumables Business or
the Transferred Process Operations, as the case may be, until such Consent is
obtained; provided, however, that after Closing, the Company shall, and shall
cause its Subsidiaries to, enforce, upon and at the request of the Buyer and for
the benefit of the Buyer, any rights of the Company or its Subsidiaries arising
with respect to third parties party thereto. If such Consent is obtained, the
Company shall, and shall cause its Subsidiaries to, promptly convey, transfer,
assign and deliver, or cause to be conveyed, transferred, assigned and
delivered, such Transferred Asset to the Buyer or such Designated Purchaser. The
provisions of this Section 2.5 shall not in any way limit the Buyer’s rights
under this Agreement in the event that the conditions to Closing are not
satisfied.

 

2.6 Payments Post-Closing.

 

(a) If, following the Closing Date, the Company or any of its Subsidiaries
receives any payment or other proceeds any portion of which relates to any
Transferred Assets, the Transferred Subsidiaries or otherwise relates to the
conduct or operation of the Consumables Business or the Transferred Process
Operations, including with respect to any receivables or inventory backlog
purchased by the Buyer in the Acquisition, the Company shall, and shall cause
its Subsidiaries to, promptly remit to the Buyer the amount of any such payments
to the extent relating to the Transferred Assets, the Transferred Subsidiaries
or the Consumables Business or the Transferred Process Operations.

 

(b) If, following the Closing Date, the Buyer or any of its Subsidiaries
receives any payment or other proceeds any portion of which relates to any
Excluded Assets or otherwise relates to the conduct or operation of the Company
and its Subsidiaries other than the Consumables Business or the Transferred
Process Operations, the Buyer shall, and shall cause its Subsidiaries to,
promptly remit to the Company the amount of any such payments to the extent
relating to the Excluded Assets or such other business.

 

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ARTICLE III

 

PURCHASE PRICE AND ADJUSTMENTS

 

3.1 Purchase Price. Subject to any adjustments required pursuant to Sections 3.2
and 3.3, the aggregate purchase price for the Transferred Shares and the
Transferred Assets shall be an amount equal to $21,200,000 (Twenty-One Million,
Two Hundred Thousand Dollars) (the “Purchase Price”), payable in cash by wire
transfer of immediately available funds to an account designated by the Company
at least two (2) Business Days prior to Closing.

 

3.2 Payment of Purchase Price and Estimated Purchase Price Adjustment

 

(a) Escrow. At the Closing, the Buyer shall pay out of the Purchase Price
$2,000,000 (Two Million Dollars) (the “Escrow Funds”) to be held in an escrow
account in accordance with the terms of the Escrow Agreement to be executed
prior to Closing in the form of Exhibit B, $1,000,000 (One Million Dollars) of
which Escrow Funds shall be available for the Buyer to satisfy claims under
Section 10.1(a) (other than Section 10.1(a)(iv)) and $1,000,000 (One Million
Dollars) of which shall be available to satisfy claims under Section
10.1(a)(iv), including to make any payment with respect to the UK Tax Liability,
if any. In the event that the UK Tax Proceeding is finally resolved, which
resolution shall be in accordance with the procedures prescribed by Section 6.1,
within one (1) year of the Closing Date, and the amount paid, if any, with
respect thereto is less than $1,000,000 (One Million Dollars), the Buyer shall
instruct the escrow agent to (i) pay any amounts owed in respect of the UK Tax
Liability to the party to which it is due, (ii) deliver to the Company an amount
equal to the excess of $1,000,000 (One Million Dollars) over the amount paid to
finally settle and resolve the UK Tax Liability, if any, and (iii) deliver the
remaining Escrow Funds, if any, within three (3) Business Days after the date
that is one (1) year after the Closing Date (such one (1) year and three (3)
Business Day period, as extended by this sentence, the “Initial Closing Escrow
Period”), except that such period shall be increased, if at all, to the extent
that the Buyer has become aware of the assertion of any claim or of the
commencement of any Proceeding at law or in equity as to which it is entitled to
indemnification hereunder and has notified the Company thereof in accordance
with Article X prior to the end of the Closing Escrow Period until such time as
all such claims have been finally resolved in accordance with the procedures set
forth in the Escrow Agreement. In addition, in the event that the UK Tax
Proceeding is not finally resolved within the Initial Closing Escrow Period, in
addition to any other Escrow Funds being held by the Escrow Agent with respect
to any unresolved claims (other than the UK Tax Proceeding), $1,000,000 of the
Escrow Funds shall continue to be held by the escrow agent and be available for
the Buyer in respect of the UK Tax Liability until such time as the UK Tax
Proceeding is finally resolved in accordance with the procedures prescribed in
Section 6.1. Upon such resolution in accordance with the procedures prescribed
in Section 6.1, and after payment of the Escrow Funds in satisfaction of the UK
Tax Liability, if any, and resolution and payment of all other remaining claims,
any remaining Escrow Funds shall be distributed to the Company, subject to the
terms of the Escrow Agreement.

 

(b) Estimated Purchase Price Adjustment. No later than three (3) Business Days
prior to the Closing Date, the Company shall deliver to the Buyer a statement
(the “Preliminary Closing Date Net Working Capital Statement”) setting forth the
Company’s good faith

 

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estimate (the “Preliminary Closing Date Net Working Capital”) of (i) the total
Inventory of the Consumables Business plus (ii) the total accounts receivable of
the Consumables Business minus (ii) the total accounts payable of the
Consumables Business, in each case, calculated as of the Closing Date (the
“Closing Date Net Working Capital”), calculated in accordance with GAAP, the
methodology used in preparing the Consumables Business Balance Sheet and Section
3.2(b) of the Company Disclosure Schedule, which shall be certified by the
Company’s chief financial officer (for the avoidance of doubt, the accounts
receivable and accounts payable of the Consumables Business shall include all
such accounts with respect to the Quest, Trident and Nautalis Discontinued
Systems, Consumables and Services line of the Consumables Business). In the
event that the Buyer does not agree with the Company’s estimate, the Company and
the Buyer shall negotiate in good faith to mutually agree as promptly as
practicable on an acceptable estimate of the Preliminary Closing Date Net
Working Capital Statement. At the Closing, the amount of the Purchase Price that
the Buyer shall be required to pay to the Company pursuant to this Agreement
shall be adjusted by the difference between the Preliminary Closing Date Net
Working Capital and the Target Net Working Capital. If the Preliminary Closing
Date Net Working Capital exceeds the Target Net Working Capital, the amount of
the Purchase Price paid by the Buyer to the Company at Closing shall be
increased dollar-for-dollar by the amount of such excess, and if the Preliminary
Closing Date Net Working Capital is less than the Target Net Working Capital,
the amount of the Purchase Price paid at the Closing shall be decreased
dollar-for-dollar by such shortfall, a portion of which shall be paid to the
escrow agent pursuant to paragraph (a) above. The Purchase Price shall
thereafter be subject to further adjustment as provided in Section 3.3.

 

3.3 Closing Date Net Working Capital Statement; Schedule of Cash and Cash
Equivalents; and Actual Adjustment Amount.

 

(a) No later than sixty (60) days after the Closing Date, the Company shall
prepare (i) a balance sheet of the Consumables Business, which balance sheet
shall be prepared in accordance with GAAP, the methodology used in preparing the
Consumables Business Balance Sheet and Section 3.2(b) of the Company Disclosure
Schedule (the “Closing Statement”), (ii) a statement of the actual Closing Date
Net Working Capital (such statement, as finally determined pursuant to the
provisions of this Section 3.3, the “Closing Date Net Working Capital
Statement”), which statement shall be prepared in accordance with GAAP, the
methodology used in preparing the Consumables Business Balance Sheet and Section
3.2(b) of the Company Disclosure Schedule, (iii) a statement of the actual cash
and cash equivalents held by the Transferred Subsidiaries as of the Closing Date
(such statement, as finally determined pursuant to the provisions of this
Section 3.3, the “Closing Date Cash Statement”), which Closing Date Net Working
Capital Statement and Closing Date Cash Statement shall be prepared in
accordance with GAAP, the methodology used in preparing the Consumables Business
Balance Sheet and Section 3.2(b) of the Company Disclosure Schedule, and derived
from the Closing Statement, and (iv) a statement setting forth the aggregate
dollar amount of the accounts payable of the Process Business transferred to the
Buyer at Closing (the “Accounts Payable Statement”). The Buyer shall cooperate
with the Company and its accountants to the extent required to enable the
Company to prepare the Closing Statement, the Closing Date Net Working Capital
Statement, the Closing Date Cash Statement and the Accounts Payable Statement in
accordance with this Agreement. In connection with the preparation of the
Closing Date Net Working Capital Statement, the Buyer and the Company shall
jointly conduct a

 

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physical inventory count of the Inventory of the Consumables Business (the
“Inventory Count”), including all raw materials, work-in-process, finished
products, supplies, accessories, packaging materials, goods or parts, in each
case that are (i) used or held for use principally in the conduct or operation
of the Consumables Business by the Company or its Subsidiaries (including the
Transferred Subsidiaries) or (ii) in the possession of third parties, commencing
at a mutually agreed upon date within ten (10) days prior to the Closing Date
and be reconciled to, and completed by, the Closing Date. Any disputes with
respect to the Inventory Count shall be submitted to the Independent Accounting
Firm in accordance with the provisions of Section 3.3(c).

 

(b) The Buyer may dispute the Closing Date Net Working Capital Statement, the
Closing Date Cash Statement, the Closing Statement and the Accounts Payable
Statement by notifying the Company within thirty (30) days after its receipt
thereof. During such 30-day period, and until the Closing Date Net Working
Capital Statement, the Closing Date Cash Statement, the Closing Statement and
the Accounts Payable Statement are finally determined, employees of the Buyer
and its accountants shall be entitled to access to the Company’s and its
accountants’ work papers prepared in connection with the Closing Date Net
Working Capital Statement, the Closing Date Cash Statement, the Closing
Statement and the Accounts Payable Statement and shall be entitled to review and
discuss such work papers with the Company and its accountants. Any notice
delivered in accordance with this Section 3.3(b) shall specify in reasonable
detail the nature of any disagreement so asserted. If the Buyer does not so
notify the Company within such period, the Closing Date Net Working Capital
Statement, the Closing Date Cash Statement, the Closing Statement and the
Accounts Payable Statement shall be final, binding and conclusive on the
parties. If the Buyer does so notify the Company, the Buyer and the Company and
their respective accountants shall attempt to reconcile their differences, and
any resolution by them as to any disputed amounts shall be final, binding and
conclusive on the parties thereto.

 

(c) If the Buyer and the Company are unable to reach a resolution with respect
to all of the items specified in a notice provided pursuant to Section 3.3(b)
within twenty (20) days after receipt by the Company of such notice, then either
party may submit the items remaining in dispute for resolution to KPMG LLP,
provided that if at such time either party has a conflict with respect to KPMG
LLP, the parties shall select another mutually acceptable firm (such firm, the
“Independent Accounting Firm”), which shall, within twenty (20) days after such
submission or such longer period as the Independent Accounting Firm may
reasonably require, determine and report to the Buyer and the Company upon such
remaining disputed items, and such determination shall be final, binding and
conclusive on the parties hereto. The fees and disbursements of the Independent
Accounting Firm shall be allocated between the Buyer and the Company in such
manner that the Buyer shall be responsible for that portion of the fees and
expenses equal to such fees and expenses multiplied by a fraction the numerator
of which is the aggregate dollar value of disputed items submitted to the
Independent Accounting Firm that are resolved against the Buyer (as finally
determined by the Independent Accounting Firm) and the denominator of which is
the total dollar value of the disputed items so submitted, and the Company shall
be responsible for the remainder of such fees and expenses.

 

(d) Following the determination of the Closing Date Net Working Capital pursuant
to this Section 3.3, (i) if the Closing Date Net Working Capital exceeds the
Preliminary

 

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Closing Date Net Working Capital, (A) the Purchase Price shall be increased
dollar-for-dollar by the amount of such surplus (the “Surplus”) and (B) the
Buyer shall pay to the Company the Surplus, with interest thereon as calculated
pursuant to Section 3.3(e) plus the total amount reflected on the Closing Date
Cash Statement, (ii) if the Closing Date Net Working Capital is less than the
Preliminary Closing Date Net Working Capital, (A) the Purchase Price shall be
decreased dollar-for-dollar by such deficiency (the “Deficiency”) and (B) (x) if
the total amount reflected on the Closing Date Cash Statement is greater than
the amount of the Deficiency, the Buyer shall pay to the Company the excess of
the total amount reflected on the Closing Date Cash Statement over the
Deficiency, or, (y) if the total amount reflected on the Closing Date Cash
Statement is less than the amount of the Deficiency, the Company shall pay to
the Buyer the excess of the Deficiency over the total amount reflected on the
Closing Date Cash Statement, and (iii) if the Closing Date Net Working Capital
is the same as the Preliminary Closing Date Net Working Capital, the Buyer shall
pay to the Company the total amount reflected on the Closing Date Cash
Statement, in each case with interest thereon as calculated pursuant to Section
3.3(e), in each case, within five (5) Business Days after the Buyer and the
Company agree to the Closing Date Net Working Capital and the Closing Date Cash
Statement or within five (5) Business Days after the Independent Accounting Firm
finally determines the Closing Date Net Working Capital and the Closing Date
Cash Statement. In the event the amount of the accounts payable of the Process
Business on the Closing Date calculated in accordance with GAAP and as finally
determined pursuant to this Section 3.3 is greater than $350,000, the excess
over $350,000 shall be subtracted from any amounts owed by the Buyer to the
Company pursuant to this Section 3.3(d) or added to any amounts owed by the
Company to the Buyer pursuant to this Section 3.3(d), as the case may be. Any
Surplus or Deficiency, as applicable, together with interest thereon, and any
payment with respect to the Closing Date Cash Statement payable pursuant to this
Agreement shall be treated for tax purposes as an adjustment to the Purchase
Price.

 

(e) The party making such payment pursuant to Section 3.3(d), shall pay interest
thereon to the other party for the period from the Closing Date to the date of
payment at the London Inter-Bank Offer Rate (“LIBOR”) for six (6) month deposits
in U.S. dollars as quoted on Telerate Page 3750 on the Closing Date. Such
payment and interest thereon shall be made by wire transfer in immediately
available funds to such account or accounts as are designated in writing by the
party entitled to receive such payment no later than the second Business Day
prior to the date on which such payment is due.

 

3.4 Allocation of Purchase Price. The Buyer and the Company agree to allocate
the Purchase Price (and any Liabilities assumed hereunder that are properly
treated as purchase price) in accordance with the rules under Section 1060 of
the Code and the Treasury Regulations promulgated thereunder. Such allocation
shall be mutually agreed upon between the parties. The Buyer and the Company
agree to act in accordance with the computations and allocations as determined
pursuant to this Section 3.4 in any relevant Tax Returns or filings, including
any forms or reports required to be filed pursuant to Section 1060 of the Code,
the Treasury Regulations promulgated thereunder or any provisions of local,
state and foreign law (“1060 Forms”), and to cooperate in the preparation of any
1060 Forms and to file such 1060 Forms in the manner required by applicable law.
Any issues with respect to the allocation which have not been finally resolved
within 60 days following Closing shall be referred to the Independent Accounting
Firm in accordance with the provisions of Section 3.3(c). Notwithstanding

 

21

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the foregoing, the Buyer and the Company shall agree to a tentative allocation
of the Purchase Price (and any Assumed Liabilities) between the Transferred
Shares, on the one hand, and the Transferred Assets, on the other hand, within
20 days after the Amendment Date, and if the parties cannot mutually agree upon
such a tentative allocation, such tentative allocation shall be prepared by the
Buyer in good faith.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

4.1 Representations and Warranties of the Company. Except as set forth in
applicable section of the Company Disclosure Schedule and subject to Section
11.15, the Company hereby represents and warrants to Buyer as follows:

 

(a) Due Organization. Each of the Company and each of its Subsidiaries is a
corporation duly organized, validly existing and, where applicable, in good
standing under the laws of the jurisdiction of its organization. Each of the
Company and each of its Subsidiaries (i) has all requisite corporate power and
authority to own, lease and operate all of its properties and assets and to
carry on its business as it is now being conducted and (ii) is in good standing
and is duly qualified to do business in each jurisdiction in which the nature of
its business or the ownership, leasing or operation of its properties makes such
qualification necessary, except where the failure to so qualify or be in good
standing, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect. The copies of the
certificate of incorporation and by-laws or similar organizational documents of
the Company and the Transferred Subsidiaries which were previously made
available to the Buyer, are true, complete and correct copies of such documents
as in effect on the date of this Agreement. The register of members of the
Transferred Subsidiaries contain accurate records of the members of the
Transferred Subsidiaries and the Transferred Subsidiaries have not received any
notice of any application or intended application for rectification. The
statutory books of the Transferred Subsidiaries and their registers are up to
date in all material respects and contain records which are complete and
accurate in all material respects of all matters required to be dealt with in
such books.

 

(b) Subsidiaries.

 

(i) Except for the Transferred Shares, the Company does not own or hold,
directly or indirectly, any equity interest of any kind in any Person that owns
assets or properties or conducts operations used or held for use in the
Consumables Business or the Transferred Process Operations. All of the
Transferred Shares and all of the shares of capital stock of the other
Transferred Subsidiaries have been duly authorized and validly issued and are
fully paid-up and non-assessable, to the extent such terms are applicable, with
no personal liability attaching to ownership thereof, and such shares or other
securities are owned by the Company or, in the case of the other Transferred
Subsidiaries, the Transferred Subsidiary, in each case free and clear of any
Lien. Upon consummation of the transactions contemplated hereby, the Buyer
and/or the Designated Purchaser will

 

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acquire good and valid title to the Transferred Shares free and clear of all
Liens. Except for this Agreement there are no outstanding options, warrants,
stock appreciation rights, rights to subscribe to, calls, rights of first offer,
rights of first refusal or commitments of any character whatsoever relating to,
or securities or rights convertible into or exercisable or exchangeable for,
shares of any capital stock or other equity securities of the Transferred
Subsidiaries, and there are no Contracts or other arrangements by which the
Transferred Subsidiaries may be or become bound to issue additional shares of
its capital stock or other equity securities, or options, warrants or rights to
purchase, acquire, subscribe to, calls on, or rights of first offer, rights of
first refusal or commitments for, any shares of its capital stock or other
equity securities.

 

(ii) Neither the Company nor any of its Subsidiaries has, owns or controls (of
record or beneficially), directly or indirectly, any interest in any other
Person, or is a party to or participant in any partnership, joint venture or
other similar investment related to the Consumables Business or the Transferred
Process Operations. Neither the Company nor any of its Subsidiaries is subject
to any obligation or requirement to provide funds to or make any investment
(whether in the form of a loan, capital contribution or otherwise) in any Person
related to the Consumables Business or the Transferred Process Operations.

 

(iii) The authorized capital stock of the Transferred Subsidiary consists of
500,000 ordinary shares of 100 pence each. At the close of business on February
15, 2005, 179,018 shares were outstanding and no shares were held in treasury.
Section 4.1(b)(iii) of the Company Disclosure Schedule sets forth (i) the
authorized capital stock of each of the Transferred Subsidiaries (other than the
Transferred Subsidiary) and the par value of such shares, to the extent
applicable, and (ii) the number of shares of such capital stock outstanding and
number of shares held in treasury, in each case, for each of the Transferred
Subsidiaries (other than the Transferred Subsidiary) as of February 15, 2005.
The Transferred Subsidiary owns all of the shares of capital stock of each of
the other Transferred Subsidiaries. There are no outstanding obligations of the
Transferred Subsidiaries to repurchase, redeem or otherwise acquire any shares
of capital stock of the Transferred Subsidiaries or pursuant to which the
Transferred Subsidiaries is or could be required to register any shares of its
capital stock or any other securities under the Securities Act or under any
other Laws. No bonds, debentures, notes or other indebtedness having the right
to vote, or being convertible into or exercisable or exchangeable for any
securities having the right to vote, on any matters on which stockholders may
vote (“Voting Debt”) of the Transferred Subsidiaries are issued or outstanding.

 

(c) Authorization and Validity of Agreement. The Company has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate action or proceeding on the
part of the Company is or will be necessary for the execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby (other than the approval of the
Acquisition and the

 

23

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consummation of the transactions contemplated by this Agreement by the
affirmative vote of the holders of a majority of the outstanding stock of the
Company entitled to vote thereon (the “Stockholder Approval”). This Agreement
has been duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery hereof by the Buyer, constitutes a
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors’ rights generally and by general equity
principles (whether considered in a proceeding in equity or at law). The
Company’s Board of Directors, by resolutions duly adopted at a meeting duly
called and held, has (i) determined that the Acquisition and the transactions
contemplated by this Agreement are expedient and in the best interests of the
Company and its stockholders and declared the Acquisition and the transactions
contemplated by this Agreement advisable, (ii) approved this Agreement and the
transactions contemplated by this Agreement, including the Acquisition, and
(iii) recommended that the stockholders of the Company approve this Agreement
and the consummation of the transactions contemplated hereby and directed that
such matter be submitted for consideration by the stockholders of the Company at
the meeting of the stockholders to obtain the Stockholder Approval. The only
vote of the stockholders of the Company required to approve the Acquisition and
the consummation of the transactions contemplated by this Agreement is the
Stockholder Approval.

 

(d) No Conflict. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, (i) conflict with, or result in any violation of, or
constitute a default (with or without notice or lapse of time or both) under, or
give rise to a right of termination, cancellation, acceleration or increase of
any obligation, liability or fee or the loss of a material benefit under, or the
creation of a Lien on the Transferred Assets (any such conflict, violation,
default, right of termination, cancellation or acceleration, loss or creation, a
“Violation”) pursuant to, any provision of the certificate of incorporation or
by-laws of the Company or any of its Subsidiaries, (ii) result in any Violation
of any of the Contracts or any other material contract to which the Company or
any of its Subsidiaries is a party, or (iii) result in any Violation of any
Licenses and Permits, Order or Law applicable to the Consumables Business, the
Transferred Process Operations, the Transferred Assets or the Transferred
Subsidiaries or their respective properties, rights or assets or otherwise
applicable to the Company, except in the case of clauses (ii) and (iii) for any
Violation which, individually or in the aggregate, has not had, and would not
reasonably be expected to have, a Material Adverse Effect.

 

(e) Consents. No consent, approval, Order, Licenses and Permits, or
registration, declaration or filing with, or notice to, any Governmental
Authority or of, with or from any other Person, is required in connection with
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the transactions contemplated hereby, except for (i) the
filing with the SEC of the Proxy Statement (as defined herein) and the filing
with the SEC of such reports and other materials under the Exchange Act as may
be required in connection with this Agreement and the transactions contemplated
hereby, and (ii) such other consents, approvals, Orders, Licenses and Permits,
registrations and filings which, if not obtained or made, individually or in the
aggregate, would not reasonably be expected to interfere in any material respect
with the conduct of the Consumables Business or the Transferred Process
Operations as currently conducted.

 

24

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(f) Conduct of the Consumables Business and the Transferred Process Operations.
Except as expressly contemplated hereby, since September 30, 2004 (or as
otherwise indicated in subclause (ii) below) to the date of this Agreement, (i)
the Company and its Subsidiaries have conducted the operations of the
Consumables Business and the Transferred Process Operations only in the ordinary
course of business consistent with past practice, (ii) have not taken any action
that would have been prohibited by Section 5.2 if this Agreement had been in
effect at the time such action was taken (other than with respect to subclauses
(ix) and (xi) (excluding the proviso) in which case the reference date shall be
December 31, 2004, and subclause (xxii) which shall not be deemed covered by
this representation) and (iii) there has not been any Material Adverse Effect.

 

(g) Financial Statements; Undisclosed Liabilities.

 

(i) As of their respective dates of filing with the SEC (or, if amended or
superseded by a filing prior to the date hereof, as of such filing), all of the
reports, prospectuses, registrations statements, proxy and information
statements and all other documents required to be filed by the Company with the
SEC since January 1, 2002 (including all exhibits and schedules thereto and
documents incorporated by reference therein, the “Company SEC Documents”)
complied as to form in all material respects with the applicable requirements of
the Securities Act, the 1934 Act and the Sarbanes-Oxley Act of 2002 and the
related rules and regulations promulgated thereunder, as the case may be, and
none of the Company SEC Documents when filed contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.

 

(ii) Section 4.1(g)(i) of the Company Disclosure Schedule contains a true and
complete copy of the (A) unaudited Consumables Business Balance Sheet and (B)
the Argonaut Technologies, Inc. Worldwide 2004 Unaudited Revenue Split Statement
(collectively, the “Financial Statements”). The Financial Statements present
fairly, in all material respects, on a pro forma basis, the financial condition
and results of operations of the Consumables Business as of the respective dates
and for the respective periods indicated therein. The Financial Statements were
prepared from, and are in accordance with, the Books and Records of the
Consumables Business and using the same methodologies and principles as used to
prepare the financial statement filed by the Company with the SEC, except as
expressly stated therein. The Financial Statements have been prepared based on
management’s good faith belief of the results, and/or financial position, of the
Consumables Business.

 

(iii) All of the Liabilities reflected on the Consumables Business Balance Sheet
are related to the Consumables Business and arose out of or were incurred in the
ordinary course of business. Except (i) to the extent reflected or reserved
against in the Consumables Business Balance Sheet, or (ii) for Liabilities that
are incurred after the date of the Consumables Business Balance Sheet in the
ordinary course of business, there are no material Liabilities or other
obligations of any nature whatsoever relating to the Consumables Business.

 

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(iv) The Accounts of the Transferred Subsidiaries incorporated in England and
Wales:

 

(A) have been prepared in accordance with the generally accepted accounting
practice commonly adopted by companies carrying on businesses similar to those
carried on by such Transferred Subsidiaries in the United Kingdom as of the
Accounts Date;

 

(B) show a true and fair view of the state of affairs of such Transferred
Subsidiaries as of the Accounts Date and of their respective profits or losses
for the accounting reference period ended on that date;

 

(C) comply with the requirements of the United Kingdom Companies Act 1985, as
amended; and

 

(D) (except as the Accounts expressly disclose) are prepared using estimation
techniques and accounting policies which are the same in all material respects
as those adopted in preparing the Previous Accounts.

 

(v) Since the Accounts Date apart from the dividends provided for in the
Accounts, no dividend or other distribution has been declared, paid or made by
the Transferred Subsidiaries incorporated in England and Wales.

 

(vi) Section 4.1(g)(vi) of the Company Disclosure Schedule contains a true and
complete copy of the unaudited balance sheet of the Process Business dated as of
December 31, 2004 (the “Process Business Balance Sheet”). The Process Business
Balance Sheet presents fairly, in all material respects, on a pro forma basis,
the financial condition of the Process Business as of the respective dates and
for the respective periods indicated therein. The Process Business Balance Sheet
was prepared from, and is in accordance with, the Books and Records of the
Process Business using the same methodologies and principles as used to prepare
the financial statement filed by the Company with the SEC, except as expressly
stated therein. The Process Business Balance Sheet has been prepared based on
management’s good faith belief of the results, and/or financial position, of the
Process Business.

 

(h) Takeover Statutes. The Company has taken all corporate action necessary to
render inapplicable to this Agreement and the transactions contemplated hereby
the restrictions on business combinations set forth in Section 203 of the DGCL
and any similar Laws.

 

(i) Properties.

 

(i) The Owned Real Property is all of the real property legally and beneficially
owned by the Company or any of its Subsidiaries and used in connection with the
Consumables Business (other than the real property located at Tir-Y-Berth
Industrial Estate, New Road, Hengoed, Wales) and neither the Company nor any
Transferred Subsidiary has any estate, right, interest or Liability in any other
land. The Company or one of the Transferred Subsidiaries has good, marketable
and insurable fee simple title to the Owned Real Property, free and clear of all
Liens other than Permitted Liens. The existing use of each parcel of Owned Real
Property is the lawful use. Neither the

 

26

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Company nor the Transferred Subsidiaries has disposed of, or taken any steps to
dispose of, the Owned Real Property and are not under any commitment to dispose
of it in whole or in part. All certificates of occupancy, permits, licenses,
approval and authorizations (collectively, the “Real Property Permits”) of all
Governmental Authorities having jurisdiction over the Owned Real Property or any
portion thereof have been obtained and are in full force and effect to operate
and occupy such Owned Real Property, except to the extent the absence or
invalidity of any Real Property Permit does not materially and adversely affect
the value or operation and occupancy of such Owned Real Property. As of the date
hereof, neither the Company nor the Transferred Subsidiaries has received any
written notice from any Governmental Authority having jurisdiction over any of
the Owned Real Property suspending, revoking or canceling any Real Property
Permit, or modifying any Real Property Permit in a manner which materially and
adversely affects the operation of the Consumables Business or the occupancy of
the Owned Real Property. As of the date hereof, there are no disputes, actions
or orders pending, or to the Knowledge of the Company, threatened against or
relating to the condemnation, use, occupation or condition of the Owned Real
Property (whether contingent or otherwise), or any portion thereof.

 

(ii) Section 4.1(i)(ii) of the Company Disclosure Schedule contains a complete
and accurate list of (A) all real property leased by the Company and its
Subsidiaries in connection with the operation of the Consumables Business, (B)
all real property leased by the Company and its Subsidiaries in connection with
the operation of the Process Business and (C) the agreements under which such
real property is leased (the “Leases”). Except as, individually or in the
aggregate, has not had, and would not reasonably be expected to interfere in any
material respect with the conduct of the Consumables Business, (A) each Lease
has been executed and is in full force and effect, (B) none of the Company or
any of its Subsidiaries is in breach or default in any respect under any such
Lease, and, to the Knowledge of the Company, no event has occurred which, with
notice or lapse of time or both, would constitute such a material breach or
default of such Lease, (C) each Lease will continue to be binding in accordance
with its terms immediately following the Closing, except those Leases which
would no longer be binding as a result of actions that are taken by the Buyer or
its Affiliates, and (D) to the Knowledge of the Company, no party to such Lease
is in breach or default under such Lease or has repudiated any material
provision thereof.

 

(iii) Where necessary, (A) all titled deeds are either (1) fully stamped with ad
valorem stamp duty and a particulars delivered stamp or (2) accompanied by a
valid certificate from the Inland Revenue evidencing submission of a land
transaction return and (B) all documents of title include the consents for the
grant of the Leases.

 

(j) Title to Transferred Assets; Sufficiency of Assets. The Company or one of
the Transferred Subsidiaries has good, valid and marketable title, of record and
beneficially, to all of the Transferred Assets and at the Closing will transfer
and deliver to the Buyer and/or the respective Designated Purchaser legal and
valid title to the Transferred Assets, free and clear of all Liens, other than
Permitted Liens. The Transferred Assets constitute all of the assets necessary
for the Buyer (i) to conduct the Consumables Business in the manner in which it
is currently being conducted and (ii) to satisfy the Liabilities it is assuming
relating to the Process

 

27

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Business in due course. All of the machinery, equipment and other tangible
assets included in the Transferred Assets are in good and usable condition,
ordinary wear and tear excepted, have been maintained in accordance with normal
industry practice and are otherwise suitable for the purposes for which they are
currently used.

 

(k) Taxes.

 

(i) All material Tax Returns required to be filed by each of the Transferred
Subsidiaries or in connection with the Acquired Businesses have been timely
filed. All material Taxes required to be paid (whether or not shown to be due on
such Tax Returns) by each of the Transferred Subsidiaries or in connection with
the Acquired Businesses have been timely paid. All such Tax Returns are true,
correct and complete in all material respects.

 

(ii) There is no material Proceeding, investigation, audit or examination
proposed in writing or currently ongoing against or with respect to any of the
Transferred Subsidiaries or in connection with the Acquired Businesses in
respect of any Tax. No deficiencies for any Taxes have been proposed, asserted
or assessed against any of the Transferred Subsidiaries or in connection with
the Acquired Businesses.

 

(iii) All Taxes required to have been withheld by each of the Transferred
Subsidiaries or in connection with the Acquired Businesses have been withheld
and paid over to the proper Governmental Authority.

 

(iv) There are no material Liens for Taxes upon any property or assets of any of
the Transferred Subsidiaries or the Acquired Businesses (other than for Taxes
not yet due and payable).

 

(v) None of the Transferred Subsidiaries has any material liability for the
Taxes of any Person (other than the Transferred Subsidiaries) including (A)
under section 1.1502-6 of the Treasury Regulations (or any similar provision of
state, local or foreign law), (B) as a transferee or successor or (C) by
Contract.

 

(vi) None of the Transferred Subsidiaries is a party to, is bound by or has any
obligation under, any tax sharing agreement or similar Contract or any agreement
that obligates it to make any payment computed by reference to the taxes,
taxable income or taxable losses of any other Person.

 

(vii) None of the Transferred Subsidiaries have within the last six (6) years
acquired any asset from any other company (other than another of the Transferred
Subsidiaries) which was, at the time of such acquisition, a member of the same
group of companies as the relevant Transferred Subsidiary for the purposes of
any Tax.

 

(viii) No liability for Taxes or deficit for any Tax purposes would arise for
any of the Transferred Subsidiaries from the loan relationships to which the
relevant Transferred Subsidiary is party being repaid to the extent of the
amounts shown in respect of such loan relationships in the books of the relevant
Transferred Subsidiary as of the date hereof.

 

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(ix) Each of the Transferred Subsidiary and International Sorbent Technology
Limited is a registered and taxable person for the purposes of the United
Kingdom Value Added Tax Act 1994 and neither is nor has ever been treated for
such purposes as a member of a group for the purposes of United Kingdom value
added tax.

 

(x) All documents in the possession or under the control of the Transferred
Subsidiaries or to the production of which any of the Transferred Subsidiaries
are entitled which are necessary to establish title to any asset or to effect
registration in respect of the holding of an asset or to produce the relevant
instrument as evidence in civil proceedings or in a hearing before an arbitrator
or referee and which, in the United Kingdom or elsewhere, attract either stamp
duty or transfer Tax or require to be stamped with a particular stamp denoting
that no duty is chargeable or that the document has been produced to the
appropriate authority, have been properly stamped or the transfer Tax duly paid
and there are no circumstances in which any of the Transferred Subsidiaries will
or may after Closing be liable to pay an amount of United Kingdom stamp duty
land tax, submit a United Kingdom stamp duty land transaction return or a United
Kingdom stamp duty land tax self certificate in respect of any transaction
entered into or action taken prior to Closing.

 

(xi) None of the Transferred Subsidiaries is liable to Tax in any jurisdiction
other than the jurisdiction in which it is incorporated, and none of the
Transferred Subsidiaries or the Company has or has ever had a permanent
establishment in a jurisdiction other than the jurisdiction of its
incorporation.

 

(l) Legal Proceedings. There are no Proceedings which are pending or, to the
Knowledge of the Company, threatened against, affecting or involving the
Company, the Consumables Business, the Process Business, any of the Transferred
Assets or any of the Transferred Subsidiaries or challenging the validity of
this Agreement or any of the transactions contemplated hereby which,
individually or in the aggregate, has had, or would reasonably be expected to
have, a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
nor any of their respective properties is or are subject to any Order affecting
or involving the Consumables Business, the Process Business or the Transferred
Assets, except for those that, individually or in the aggregate, would not
reasonably be expected to interfere in any material respect with the conduct of
the Consumables Business or the Transferred Process Operations as currently
conducted or the use of the Transferred Assets. There are no formal or informal
SEC inquiries or investigations, other governmental inquiries or investigations
or internal investigations or material whistle-blower complaints pending, or to
the Knowledge of the Company with respect to SEC or other governmental inquiries
or investigations, threatened, relating to, affecting or involving the
Consumables Business, the Process Business or the Transferred Assets, including
the Transferred Subsidiaries.

 

(m) Licenses and Permits; Compliance with Laws. Except (other than in the case
of clauses (i) and (ii) below) as, individually or in the aggregate, has not
had, and would not reasonably be expected to have, a Material Adverse Effect:

 

(i) the Company or the Transferred Subsidiaries owns or possess all material
Licenses and Permits, and have made all filings, applications and registrations
with all Governmental Authorities (including all authorizations required by the
Drug

 

29

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Enforcement Administration and under the Federal Food, Drug and Cosmetic Act,
the regulations of the United States Food and Drug Administration and
Environmental Laws and all other similar Laws in other applicable jurisdictions)
and all such Licenses and Permits are in full force and effect;

 

(ii) no loss of any such material Licenses and Permits is pending in any
Proceeding or, to the Knowledge of the Company, has been threatened by a
Governmental Authority, except for normal expirations in accordance with the
terms thereof or applicable Law and all such Licenses and Permits may be
transferred to the Buyer or its Subsidiaries;

 

(iii) the Company and each of the Transferred Subsidiaries have complied with
(A) all terms and conditions of all Licenses and Permits and (B) all Laws
applicable to the operation of each of the Consumables Business and the Process
Business and ownership or use of the Transferred Assets, and it has not received
any written notice of any pending Proceeding alleging facts which, if true,
would constitute a failure to comply with either (A) or (B) of this Section
4.1(m)(iii);

 

(iv) there are no (A) unresolved violations, criticisms or exceptions noted by
any Governmental Authority in any report, comment letter or other written
statement relating to or based on any examinations of the Consumables Business,
the Process Business, the Transferred Subsidiaries or, with respect to the
Consumables Business, the Process Business and the Transferred Assets, the
Company or its Subsidiaries or (B) written agreements, memoranda of
understanding, commitment letters or similar undertakings to which the
Consumables Business, the Process Business, the Transferred Subsidiaries or,
with respect to the Consumables Business, the Process Business and the
Transferred Assets, the Company or its Subsidiaries is a party, or Orders from,
or any resolution adopted at the request of, any Governmental Authority; and

 

(v) to the Knowledge of the Company, each third party at any time engaged in the
testing, manufacturing, storage, packaging, labeling, sale or distribution of a
product on behalf of the Consumables Business, the Process Business, the
Transferred Subsidiaries or, with respect to the Consumables Business, the
Process Business and the Transferred Assets, the Company or its Subsidiaries has
been, in compliance with all applicable Laws and Licenses and Permits which have
jurisdiction over the products being tested, manufactured, stored, packaged,
labeled, sold or distributed on behalf of the Consumables Business, the Process
Business, the Transferred Subsidiaries or, with respect to the Consumables
Business, the Process Business and the Transferred Assets, the Company or its
Subsidiaries; provided, that with respect to this Section 4.1(m)(v), the term
“Knowledge of the Company” shall mean, with respect to any such matter, the
actual knowledge, without due inquiry, of the individuals listed in Section
1.1(i) of the Company Disclosure Schedule.

 

(n) Environmental Matters. Except as, individually or in the aggregate, has not
had, and would not reasonably be expected to have, a Material Adverse Effect:

 

(i) The Company, its Subsidiaries, the Consumables Business and the Process
Business have complied with all Environmental Laws and, to the Knowledge of

 

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the Company, there is no condition that would, individually or in the aggregate,
reasonably be expected to prevent or interfere with compliance with all
Environmental Laws (in effect on the date hereof) in the future;

 

(ii) the Transferred Real Property and all property operated by the Company or
any of its Subsidiaries or otherwise owned, used, occupied or operated in
connection with the Consumables Business or the Process Business (including
soils, groundwater, surface water, buildings, equipment or other structures or
facilities) do not contain and are not contaminated with any Hazardous Substance
and no foreseen or proposed alterations or improvements are required within
three (3) years from the date hereof in relation to such properties in order to
maintain compliance with Environmental Laws;

 

(iii) the properties formerly owned or operated by the Company or any of its
Subsidiaries or otherwise owned or operated in connection with the Consumables
Business or the Process Business were not contaminated with any Hazardous
Substance during the period of ownership or operation by the Company or any of
its Subsidiaries;

 

(iv) neither the Company nor any of its Subsidiaries is subject to liability for
any Hazardous Substance disposal or contamination on any third party property
under Environmental Laws;

 

(v) neither the Company nor any of its Subsidiaries has received any notice,
demand, letter, claim or request for information indicating that the Company,
any of its Subsidiaries, the Consumables Business or the Process Business may be
in violation of or subject to liability under any Environmental law;

 

(vi) neither the Company nor any of its Subsidiaries is subject or a party to
any indemnity or other agreement with any third party relating to any
Environmental Law or Hazardous Substances; and

 

(vii) there are no other circumstances or conditions involving the Company, any
of its Subsidiaries, the Consumables Business or the Process Business that could
be reasonably likely to result in any claims, liability, investigations, costs
or restrictions on the ownership, use or transfer of any property of the Company
or any of its Subsidiaries used or held for use in the conduct or operation of
the Acquired Businesses pursuant to any Environmental Law.

 

(o) Employee Benefit Plans.

 

(i) Section 4.1(o)(i) of the Company Disclosure Schedule contains a true and
complete list of each “employee benefit plan” (within the meaning of Section
3(3) of ERISA), including “multiemployer plans” within the meaning of Section
3(37) of ERISA), and all stock purchase, stock option, severance, employment,
consulting, independent contractor, change-in-control, fringe benefit,
collective bargaining, bonus, incentive, deferred compensation, pensions,
employee loan and all other employee benefit plans, agreements, programs,
policies or other arrangements, whether or not subject to ERISA (including any
funding mechanism therefor now in

 

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effect or required in the future as a result of the transaction contemplated by
this Agreement or otherwise), under which (A) any Consumables Business Employee
or Process Business Employee has any present or future right to benefits and
which are contributed to, sponsored by or maintained by the Company or its
Affiliates or (B) any of the Transferred Subsidiaries has had or has any present
or future liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the “Company Plans”.

 

(ii) With respect to each Company Plan, the Company has provided or made
available to the Buyer with a current, accurate and complete copy (or, to the
extent no such copy exists, an accurate description) thereof and, to the extent
applicable: (A) any related trust agreement or other funding instrument, (B) the
most recent determination letter, if applicable, (C) any summary plan
description and other written communications (or a description of any oral
communications) by the Company or its Affiliates to the Consumables Business
Employees or Process Business Employee concerning the extent of the benefits
provided under a Company Plan, and (D) to the extent applicable, for the most
recent year, audited financial statements and actuarial valuation reports.

 

(iii) (A) no event has occurred and no condition exists that would subject the
Company or its Subsidiaries, either directly or by reason of their affiliation
with any member of their “Controlled Group” (defined as any organization which
is a member of a controlled group of organizations within the meaning of
Sections 414(b), (c), (m) or (o) of the Code), to any tax, fine, lien, penalty
or other liability imposed by ERISA, the Code or other applicable Laws for which
any of the Transferred Subsidiaries, Buyer or any Designated Purchaser would
reasonably be expected to be liable, and (B) no Company Plan is subject to Title
IV of ERISA.

 

(iv) With respect to any Company Plan, no administrative investigation, audit or
other administrative proceeding by the Department of Labor, the Internal Revenue
Service, Inland Revenue or other Governmental Authority are pending, threatened
or in progress which, in any such case, individually or in the aggregate, could
reasonably be expected to result in a material liability to any of the
Transferred Subsidiaries, Buyer or any Designated Purchaser.

 

(v) No Company Plan exists that, as a result of the execution of this Agreement,
the Stockholder Approval, or the transactions contemplated by this Agreement
(whether alone or in connection with any subsequent event(s)), could: (A) result
in any bonus payment, any severance pay or any increase in severance pay upon
any termination of employment after the date of this Agreement, (B) accelerate
the time of payment or vesting or result in any payment or funding (through a
grantor trust or otherwise) of compensation or benefits under, increase the
amount payable or result in any other material obligation pursuant to, any of
the Company Plans, or (C) limit or restrict the right of any of the Transferred
Subsidiaries or Buyer to merge, amend or terminate any of the Company Plans.

 

(vi) No Company Plan is maintained outside the jurisdiction of the United
States, or covers any employee residing or working outside the United States
(any

 

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such Company Plan, a “Foreign Benefit Plan”). With respect to any Foreign
Benefit Plans, (A) all Foreign Benefit Plans have been established, maintained
and administered in compliance in all material respects with their terms and all
applicable statutes, laws, ordinances, rules, orders, decrees, judgments, writs,
and regulations of any controlling Governmental Authority, (B) all Foreign
Benefit Plans that are required to be funded are fully funded, and with respect
to all other Foreign Benefit Plans, adequate reserves therefore have been
established on the Closing Statement, and (C) no material liability or
obligation of the Company or its Subsidiaries exists with respect to such
Foreign Benefit Plans that has not been disclosed on Section 4.1(o)(vi) of the
Company Disclosure Schedule.

 

(vii) Other than the Group Personal Pension Plan administered by Standard Life,
no agreement or arrangement exists for the provision by the Transferred
Subsidiaries of any relevant benefits (as defined in section 612(1) of the
Income and Corporation Taxes Act 1988 of the United Kingdom Parliament, with the
omission of the exception in that definition) for any officer or employee or
former officer or employee of the Consumables Business or for Process Business
Employee or any dependant of any of such persons and the Transferred
Subsidiaries have never participated in any agreement or arrangements providing
such relevant benefits (as defined above).

 

(p) Labor Matters.

 

(i) Neither the Company nor any of its Subsidiaries is a party to any U.S. or
non-U.S. collective bargaining agreement or other labor union contract (or is
subject to any statutory scheme of similar import) applicable to all or any of
the Consumables Business Employees or Process Business Employees, nor, to the
Knowledge of the Company, are there any activities or proceedings of any labor
union to organize any Consumables Business Employees or Process Business
Employees.

 

(ii) The Company and its Subsidiaries are, with respect to the Consumables
Business and the Process Business, in compliance with all applicable Laws
respecting employment practices, terms and conditions of employment,
management-labor relations and wages and hours which are in effect as of the
date of this Agreement, except where the failure to comply, individually or in
the aggregate, has not had, and would not reasonably be expected to have, a
Material Adverse Effect. Except for any such event which, individually or in the
aggregate, has not had, and would not reasonably be expected to have, a Material
Adverse Effect, there is no unfair labor practice charge or other employment
related complaint pending or, to the Knowledge of the Company, threatened
against the Company or any of its Subsidiaries before any Governmental
Authority, nor is there any Proceeding brought by or on behalf of any employee,
prospective employee, former employee, retiree, labor organization or other
representative of the Company’s or any of its Subsidiaries’ employees pending
or, to the Knowledge of the Company, threatened against the Company, in each
case, with respect to the operation of the Consumables Business or the Process
Business. Neither the Company nor any of its Subsidiaries is a party to or bound
by any consent decree with, or citation by, any Governmental Authority relating
to employees or employment practices of, or in connection with, the Consumables
Business or the Process Business. Except for any such event which, individually
or in the aggregate, has not had, and would not

 

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reasonably be expected to have, a Material Adverse Effect, there is no labor
strike, slowdown or work stoppage, lockout or labor disturbance pending or, to
the Knowledge of the Company, threatened against the Company or any of its
Subsidiaries, nor is there any grievance currently being asserted. Neither the
Company nor any of its Subsidiaries has experienced any material work stoppage
or work slowdown at any time during the five (5) years immediately preceding the
date of this Agreement with respect to the operation of the Acquired Businesses.
The Company and its Subsidiaries have paid in full to all Consumables Business
Employees and all Process Business Employees all wages, salaries, commissions,
bonuses, benefits and other compensation due to such employees and neither the
Company nor any of its Subsidiaries is liable for any severance pay or other
payments to any current or former Process Business Employee or Consumables
Business Employee arising from the termination of employment. Neither the
Company nor any of its Subsidiaries has closed any plant or facility,
effectuated any layoffs of employees or implemented any early retirement,
separation or window program within the past five years, nor has any such party
planned or announced any such action or program for the future affecting, in
whole or in part, Consumables Business Employees or the Process Business
Employees. The Company and its Subsidiaries are, and have operated the
Consumables Business and the Process Business, in compliance with their
respective obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988 (“WARN”) and similar applicable Laws, and all other
notification and bargaining obligations arising under any collective bargaining
agreement, statute or otherwise.

 

(iii) The Transferred Subsidiary Employees who are currently employed by the
Transferred Subsidiaries, the US Consumables Employees and the Process Business
Employees constitute all employees who are wholly or predominantly engaged for
purposes of conducting, and required in connection with the operation of, the
Acquired Businesses.

 

(q) Intellectual Property.

 

(i) Section 4.1(q)(i)(A) of the Company Disclosure Schedule sets forth a
complete and accurate list of all registered Intellectual Property used or held
for use in the conduct or operation of the Consumables Business and the Process
Business, including (A) each patent, trademark or copyright registration and (B)
each pending patent application or application for trademark or copyright
registration. Except as, individually or in the aggregate, has not had, and
would not reasonably be expected to have, a Material Adverse Effect: (A) the
Company or one of the Transferred Subsidiaries owns or, pursuant to an agreement
set forth in Section 4.1(q)(iii) of the Company Disclosure Schedule, has the
right to use all the Intellectual Property used or held for use in the conduct
or operation of the Consumables Business and the Process Business free and clear
of all Liens (except Permitted Liens), and the Company has taken commercially
reasonable actions to maintain and protect each item of owned Intellectual
Property that is used or held for use in the conduct or the operation of the
Consumables Business and the Process Business; (B) the owned Intellectual
Property and, to the Knowledge of the Company, the licensed Intellectual
Property, in each case used or held for use in the conduct or operation of the
Consumables Business and the Process Business is valid,

 

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unexpired, subsisting and enforceable, and, except as set forth in Section
4.1(q)(i)(B), no actions are necessary (including filing of documents or
payments of fees) within ninety (90) days after the Closing Date to maintain or
preserve the validity or status of any material registered Intellectual
Property; and (C) as of the date hereof, no Proceeding is pending or, to the
Knowledge of the Company, threatened which challenges the legality, validity,
enforceability, use or ownership of any Intellectual Property used or held for
use in the conduct or operation of the Consumables Business and the Process
Business. The Company or one of the Transferred Subsidiaries, as applicable, has
taken all necessary actions (including requiring that current and past
employees, contractors and agents execute confidentiality and non-disclosure
agreements and assign to the Company or the Transferred Subsidiaries all of
their right, title and interest in any owned Intellectual Property used or held
for use in the conduct or operation of the Consumables Business and the Process
Business) to protect, preserve and maintain the owned Intellectual Property used
or held for use in the conduct or operation of the Consumables Business and the
Process Business.

 

(ii) (A) To the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has infringed or misappropriated any Intellectual Property rights
of third parties, (B) neither the Company nor any of its Subsidiaries has
received any complaint, claim, demand or notice alleging any such infringement
or misappropriation (including any claim that the Company must license or
refrain from using any Intellectual Property rights of any third party) nor, to
the Knowledge of the Company, is there any valid basis for any such complaint,
claim, demand or notice and (C) to the Knowledge of the Company, no third party
has materially infringed or materially misappropriated, or is currently
infringing or misappropriating, any of the Intellectual Property used or held
for use in the conduct or operation of the Consumables Business and the Process
Business.

 

(iii) Section 4.1(q)(iii) of the Company Disclosure Schedule identifies each
material agreement (including all amendments and revisions thereto) pursuant to
which (A) the Company or its Subsidiaries has granted a license or similar
rights to any third party with respect to any of the registered Intellectual
Property identified or required to be identified in Section 4.1(q)(i) of the
Company Disclosure Schedule, excluding consumer end-user licenses or (B) the
Company or its Subsidiaries has received a license or similar rights to any
Intellectual Property owned by a third party, excluding shrink-wrap or other
Intellectual Property generally commercially available, that is used or held for
use in the conduct or operation of the Consumables Business and the Process
Business. Except as, individually or in the aggregate, has not had, and would
not reasonably be expected to have, a Material Adverse Effect, each such
material agreement (A) is valid and enforceable and in full force and effect,
except to the extent it has previously expired in accordance with its terms and
(B) neither the Company nor any of its Subsidiaries, nor, to the Knowledge of
the Company, any third party, has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time or both,
would constitute a default under such agreement.

 

(iv) The Transferred Assets include all of the Intellectual Property necessary
to enable Buyer to operate the Consumables Business and the Transferred Process
Operations in substantially the same manner as it is currently operated, without
infringing or misappropriating any rights of any third party.

 

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(r) Brokers, Finders, etc. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker’s or
finder’s fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, except SG Cowen & Co., LLC,
whose fees and expenses will be paid by the Company in accordance with the
Company’s agreement with such advisor.

 

(s) Insurance. Section 4.1(s) of the Company Disclosure Schedule contains a
complete and accurate list of all material policies or binders of insurance
currently maintained by the Company or any of its Subsidiaries that provide
coverage with respect to the Transferred Subsidiaries, the Consumables Business,
the Transferred Process Operations or the Transferred Assets showing as to each
policy or binder the carrier, policy number, expiration dates and a general
description of the type of coverage provided (including whether it is a “claims
made” or “occurrence” based policy). Except as, individually or in the
aggregate, has not had, and would not reasonably be expected to have a Material
Adverse Effect, all such policies are in full force and effect.

 

(t) Transactions with Related Persons. The Consumables Business, the Transferred
Process Operations and the Transferred Assets do not include any Contracts with
any of the stockholders, directors, officers or employees (or any relative or
spouse of any of the foregoing Persons or any other Affiliate of the foregoing
Persons) (collectively, “Related Persons”) of the Company. Neither the Company
nor any Related Person has any interest, directly or indirectly, in any
Contract, Lien or other agreement relating to the Consumables Business, the
Transferred Process Operations or the Transferred Assets or to which the
Consumables Business, the Transferred Process Operations or the Transferred
Assets are subject.

 

(u) Books and Records. The Books and Records are complete and correct in all
material respects, have been maintained in accordance with good practice, and
reflect the basis for (i) the financial position and results of operations of
the Consumables Business as set forth in the Financial Statements and (ii) the
financial position of the Process Business as set forth in the Process Business
Balance Sheet.

 

(v) Certain Contracts. Section 4.1(v) of the Company Disclosure Schedule sets
forth all of the Contracts to which the Company or any of its Subsidiaries
(including the Transferred Subsidiaries) is a party or by which it is bound, in
each case, relating to or in connection with the Consumables Business, the
Process Business, the Transferred Assets or the Assumed Liabilities, (i) with
respect to the employment or termination of, or severance or retirement
arrangements relating to, any Consumables Business Employees or Process Business
Employees involving the payment of $100,000 or more per annum, or with any
consultants involving the payment of $100,000 or more per annum, (ii) which is a
“material contract” (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC), (iii) which provides for any payment by or to the Company or
any of its Subsidiaries in excess of $100,000 in any year or which is not
terminable within one year without penalty, (iv) which limits (or purports to
limit) in any way the ability of the Company, any of the Transferred
Subsidiaries or any of its Affiliates or of the Consumables Business or the
Process Business to compete or engage in any line of business, in any geographic
area or with any person, or which requires referrals of any

 

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business or requires any of the Transferred Subsidiaries or Affiliates or the
Consumables Business or the Process Business to make available investment
opportunities to any Person on a priority, equal or exclusive basis, (v) which
provides for or requires any aggregate future payments in excess of $100,000
with respect to, or in connection with, any capital expenditures or the
acquisition or construction of fixed assets, (vi) pursuant to which the Company
or any of its Subsidiaries has entered into a partnership or joint venture with
any other Person, (vii) which contains any ongoing indemnification obligation by
the Company or any of its Subsidiaries which could reasonably require the
payment by such entity in excess of $100,000 in the aggregate (excluding product
warranties and indemnities to the extent consistent with the Company’s Standard
Terms and Conditions), (viii) relating to, or evidencing, indebtedness for
borrowed money or any guarantee of indebtedness for borrowed money, in each case
involving an amount in excess of $100,000, (ix) since January 1, 2002, relating
to the acquisition or disposition of any business (whether by merger, sale of
stock, sale of assets or otherwise) which involves an asset value or purchase
price in excess of $100,000, (x) between the Company or any wholly-owned
Subsidiary of the Company (other than the Transferred Subsidiaries) and any of
the Transferred Subsidiaries, (xi) relating to, or evidencing, any indemnity or
any guarantee of obligations of any Person, (xii) which imposes any
confidentiality, non-disclosure or standstill obligation on the Company or its
Affiliates (except confidentiality provisions entered into in the ordinary
course of business consistent with past practice) or the Consumables Business or
the Process Business, or (xiii) any of the benefits or liabilities of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of the transactions contemplated by this Agreement, or the value
of any of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement. The Company has previously made
available to the Buyer complete and accurate copies of each Contract of the type
described in this Section 4.1(v). All of the Contracts are valid and in full
force and effect, except where the failure to be in full force and effect,
individually or in the aggregate, has not had, and would not reasonably be
expected to have, a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries nor the Consumables Business nor the Process Business, and to the
Knowledge of the Company, none of the other parties thereto, has violated any
provision of, or committed or failed to perform any act which (with or without
notice, lapse of time or both) would constitute a default under the provisions
of any Contract, except in each case for those violations and defaults which,
individually or in the aggregate, have not had, and would not reasonably be
expected to have, a Material Adverse Effect. Each Contract will be a valid and
binding obligation of the Consumables Business or the Process Business, as
applicable, and upon consummation of the transactions contemplated hereby will
be in full force and effect.

 

(w) Customers and Suppliers. Section 4.1(w) of the Company Disclosure Schedule
contains a list of the top ten customers and the top ten suppliers for each of
the Consumables Business and the Process Business for each of the last two
fiscal years. None of such customers or suppliers has ceased to do business with
the Company (with respect to the Consumables Business or the Process Business)
or any of the Transferred Subsidiaries and, to the Knowledge of the Company, as
of the date hereof, no such customer or supplier is currently threatening any
material modification or change in, or termination of, the business relationship
(i) with respect to the Consumables Business, with the Company or any of its
Subsidiaries (other than the Transferred Subsidiaries) or (ii) with any of the
Transferred Subsidiaries.

 

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(x) Products Liability.

 

(i) Neither the Company nor any of its Subsidiaries has received any written
notice relating to, nor, to the Knowledge of the Company, are there any facts or
circumstances which could reasonably be expected to give rise to, any material
claim involving any service provided or any product designed, manufactured,
serviced, produced, modified, distributed or sold by or on behalf of the Company
or any of its Subsidiaries relating to or in connection with the conduct or
operation of the Consumables Business or the Process Business, resulting from an
alleged defect in design, manufacture, materials or workmanship, performance, or
any alleged failure to warn, or from any alleged breach of implied warranties or
representations, or any alleged noncompliance with any applicable Laws, other
than routine service obligations in the ordinary course of business.

 

(ii) There has been no product recall, rework or post-sale warning or similar
action (collectively, a “Recall”) conducted by the Company or any of its
Subsidiaries with respect to any product manufactured (or to be manufactured),
shipped, sold or delivered by or on behalf of the Consumables Business or the
Process Business, or any investigation or consideration of or decision made by
any director, officer or key employee thereof concerning whether to undertake or
not undertake any Recall.

 

(y) Inventory. The Inventory as reflected in each of the Consumables Business
Balance Sheet and the Process Business Balance Sheet is stated at the lower of
cost or market, with adequate allowances for excess and obsolete materials and
materials below standard quality in accordance with GAAP. The quantity and
quality of the Inventory is such that the Inventory is readily usable and
saleable in the normal course of the operation of the Consumables Business or
the Process Business, as the case may be, except for such amounts as are
reserved in accordance with GAAP and except for the discontinued products,
service and spare parts inventory with respect to the Quest, Trident and
Nautalis Discontinued Systems, Consumables and Services line of the Consumables
Business; provided, that the Quest finished good units are saleable in
connection with the operation of the Consumables Business.

 

(z) Consumables Business Receivables. All of the accounts receivable and notes
receivable relating to or in connection with the Consumables Business as
reflected in the Consumables Business Balance Sheet constitute valid and
enforceable claims arising from bona fide transactions in the ordinary course of
the operations of the Consumables Business, and there are no contingent or
asserted claims, rights of return or other rights of set-off against any
thereof, except to the extent appropriately reserved for in the Consumables
Business Balance Sheet in accordance with GAAP.

 

(aa) Opinion of Financial Advisor. SG Cowen & Co., LLC has delivered to the
Company’s Board of Directors its written opinion (or oral opinion to be
confirmed in writing), dated as of the Amendment Date, that, as of such date,
the Purchase Price is fair, from a financial point of view, to the Company.

 

(bb) Grace Acquisition. No claims for indemnification, reimbursement, breach or
other disputes, or any inquiries or correspondence relating or reasonably
expected to lead thereto, have been received or made with respect to the Grace
Acquisition, and to the Company’s Knowledge, there are no facts, events or
circumstances which exist, as of the date hereof, that could give rise to any
such claim or right of indemnification.

 

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(cc) Acquisition Proposals. The Company has complied with all the provisions of
Section 5.3(a) and (b) of this Agreement, and has terminated all discussions
with any Person who has made an Acquisition Proposal with respect to the
Consumables Business, the Process Business or the Company.

 

(dd) Solvency. (a) Immediately after giving effect to the transactions
contemplated by this Agreement, (i) the fair value of the assets of the Company
on a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, direct, subordinated, contingent or otherwise, of the Company on a
consolidated basis; (ii) the present fair saleable value of the property of the
Company on a consolidated basis will be greater than the amount that will be
required to pay the probable liability of the Company on a consolidated basis on
its debts and other liabilities, direct, subordinated, contingent or otherwise,
as such debts and other liabilities become absolute and matured; (iii) the
Company on a consolidated basis will be able to pay its debts and liabilities,
direct, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured; and (iv) the Company on a consolidated basis will
not have unreasonably small capital with which to conduct the businesses in
which it is engaged as such business is now conducted and is proposed to be
conducted following the Acquisition.

 

4.2 Representations and Warranties of the Buyer. Except as set forth in
applicable section of the Buyer Disclosure Schedule and subject to Section
11.15, the Buyer hereby represents and warrants to the Company as follows:

 

(a) Due Organization and Power. The Buyer is a corporation duly incorporated or
otherwise organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization.

 

(b) Authorization and Validity of Agreement. The Buyer has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance by the
Buyer of this Agreement and the consummation by the Buyer of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action by the board of directors and, prior to the Closing, will be
duly and validly authorized by all necessary action by the Buyer, and no other
corporate action or proceeding on the part of the Buyer is or will be necessary
for the execution, delivery and performance by the Buyer of this Agreement and
the consummation by the Buyer of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Buyer and,
assuming the due authorization, execution and delivery hereof and thereof by the
Company, constitutes a legal, valid and binding obligation of the Buyer,
enforceable against the Buyer in accordance with its terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other Laws relating to or affecting creditors’ rights generally
and by general equity principles (whether considered in a proceeding in equity
or at law).

 

(c) No Conflict. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and compliance with the
terms hereof will not, (i) result in any Violation of any provision of the
articles or certificate of incorporation, by-laws or similar organizational
documents of the Buyer or any of its Subsidiaries, (ii) result in any Violation
of any material loan or credit agreement, note, bond, mortgage, guarantee, deed
of trust, indenture, lease, to which the Buyer or any of its Subsidiaries is a
party, or (iii) result in

 

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any Violation of any license, permit, concession, exemption, consent, franchise,
certificate, variance, approval, Order or Law applicable to the Buyer or any of
its Subsidiaries or their respective properties, rights or assets, except in the
case of clauses (ii) or (iii) for any Violation which, individually or in the
aggregate, would not reasonably be expected to materially adversely effect the
ability of the Buyer to perform its obligations under this Agreement.

 

(d) Brokers, Finders, etc. Neither the Buyer nor any of its Affiliates has
employed any agent, broker, investment banker, financial advisor or other firm
or Person in connection with the transactions contemplated by this Agreement who
is entitled to a fee or commission in connection with such transactions.

 

(e) Financing. The Buyer will have available to it, at the Closing, immediately
available funds necessary to pay the Purchase Price.

 

(f) Legal Proceedings. There are no Proceedings pending, or to the Knowledge of
the Buyer, threatened against or affecting the Buyer or any of its Subsidiaries,
or any of their respective properties, assets or rights, and neither the Buyer
nor any of its Subsidiaries is subject to any Order rendered specifically
against the Buyer or any of its Subsidiaries which, in either case, would or
seeks to enjoin, rescind or materially delay the transactions contemplated by
this Agreement or otherwise hinder the Buyer from timely complying with the
terms and provisions of this Agreement.

 

(g) Board Approvals. The Board of Directors of the Buyer, by resolutions duly
adopted at a meeting duly called and held, has (A) determined that this
Agreement and the Acquisition are advisable and in the best interests of the
Buyer and its stockholders and (B) approved the transactions contemplated by
this Agreement, including the Acquisition. No other corporate proceedings on the
part of the Buyer are necessary to authorize the transaction contemplated by
this Agreement.

 

(h) Investment Intent. The Buyer is acquiring the Transferred Shares for
investment and not with a view toward, or for sale in connection with, any
distribution thereof in violation of any applicable federal or state securities
Laws. The Buyer acknowledges that the Transferred Shares have not been
registered under the Securities Act or the securities or “blue sky” laws of any
state or province and that the Transferred Shares may not be sold, transferred,
offered for sale, pledged, hypothecated or otherwise disposed of without
registration under the Securities Act, except pursuant to an exemption from such
registration available under the Securities Act, and without compliance with
state, provincial and foreign securities Laws, in each case to the extent
applicable.

 

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ARTICLE V

 

COVENANTS

 

5.1 Access; Information and Records; Confidentiality.

 

(a) From the date hereof to the Closing Date or the earlier termination of this
Agreement, upon reasonable prior written notice, the Company shall, and shall
cause its Subsidiaries to, and use its reasonable best efforts to cause its and
its Subsidiaries’ officers, directors and employees to, afford the officers,
employees, auditors and other Representatives of the Buyer reasonable access,
consistent with applicable Law, at all reasonable times to its officers,
employees, properties, offices, plants and other facilities and Books and
Records relating to the Transferred Assets, the Assumed Liabilities, the
Consumables Business, the Process Business and the Transferred Subsidiaries, and
shall furnish the Buyer with all financial, operating and other data and
information as the Buyer, through its officers, employees or other
Representatives, may from time to time reasonably request in writing and any
reports and other documents filed by the Company during such period with any
Governmental Authority pursuant to the requirements of applicable Law relating
to the Acquired Businesses. At the request of the Buyer, the Company shall, and
shall cause its Subsidiaries, to take all reasonable actions to facilitate
contact, including arranging meetings, between the Buyer or its Representatives
and the customers and suppliers of the Consumables Business and the Process
Business.

 

(b) Promptly following execution of this Agreement, the parties shall establish
a transition planning team (the “Transition Team”) to be led by Dave Patteson
(the “Leader”), of the Buyer, and comprised of 3 representatives of the Buyer
and 1 representative of the Company, who shall be Steve Nelson. The Transition
Team shall be responsible for, subject to the oversight of the Leader,
facilitating a transition and integration planning process designed to ensure
the efficient transfer of the Acquired Businesses to the Buyer, which shall
include taking, or causing to be taken, those actions specified in Section
5.1(b) of the Company Disclosure Schedule. To the extent the actions set forth
in Section 5.1(b) of the Company Disclosure Schedule, or any other actions
identified by the Transition Team, are not accomplished prior to the Closing
Date, the Company and the Buyer shall agree upon a commercially reasonable
arrangement in order to ensure that such actions are completed promptly
following the Closing, giving credit to the Buyer for payments in respect of
such services and those referred to in the last sentence of this paragraph in
the amounts set forth below. The Buyer and the Company shall enter into an
agreement under which the Buyer shall pay the Company $40,000 per month for four
months after the Closing Date for occupancy arrangements and interim transition
services to be agreed upon, which amounts shall be payable whether or not the
Buyer occupies the facilities or requests the services. The interim transition
services to be provided may include, but shall not be limited to, transition and
support services necessary to conduct operations relating to the Transferred
Assets and Assumed Liabilities, including production, packing, dispatch,
shipping, receiving, accounting, service administration, ordering and other
services incidental to the operation of the Transferred Assets and Assumed
Liabilities.

 

(c) The Buyer agrees that all communications by the Buyer to any Consumables
Business Employees or Process Business Employees currently employed by the
Company or the Transferred Subsidiaries shall be coordinated through the
Company’s representative on the Transition Team, unless the Company shall
otherwise consent (such consent not to be unreasonably withheld).

 

(d) The Buyer will hold, and will use its reasonable best efforts to cause its
officers, employees and other Representatives to hold, any nonpublic information
in confidence in accordance with the provisions of the Confidentiality
Agreement, the terms of which are incorporated herein by reference.

 

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(e) No such investigation under this Section 5.1 by the Buyer shall affect the
representations and warranties of the Company and its Subsidiaries herein.

 

5.2 Conduct of the Business Prior to the Closing Date.

 

(a) During the period commencing on the date hereof and continuing until the
Closing, the Company agrees as to itself and its Subsidiaries that, except as
expressly permitted or required by this Agreement, including pursuant to the
Reorganization, or as set forth in Section 5.2(a) of the Company Disclosure
Schedule, or to the extent that the Buyer shall otherwise consent in writing,
the Company and its Subsidiaries shall carry on the Consumables Business and the
Transferred Process Operations only in the ordinary course of business and
consistent with past practice, including using reasonable best efforts to:

 

(i) preserve intact, protect and maintain the Consumables Business and the
Transferred Process Operations;

 

(ii) keep available and continue to provide all services currently provided to
the Consumables Business and the Transferred Process Operations;

 

(iii) (A) maintain all rights, privileges, licenses and other authorizations
(including all Intellectual Property) necessary or desirable for the operation
of the Consumables Business and the Transferred Process Operations, (B) keep
available the services of the Consumables Business Employees and the Process
Business Employees, (C) maintain the relationship with, and goodwill of,
customers, suppliers, vendors, distributors and other Persons with whom the
Company or any of its Subsidiaries otherwise has business relationships relating
to the Consumables Business or the Transferred Process Operations, (D) continue
in all material respects the current sales, marketing and promotional activities
relating to the Consumables Business and the Transferred Process Operations, (E)
keep and maintain the Transferred Assets, including the properties and assets of
the Transferred Subsidiaries, in good operating condition and repair to permit
their use in the continuing operation of the Consumables Business and the
Transferred Process Operations, ordinary wear and tear excepted, (F) perform all
of its obligations under the Contracts and the Leases included within the
Transferred Assets in accordance with the terms thereof, and (G) maintain in
place its insurance policies (or replacement policies in similar amounts and
protecting against similar risks) as in effect as of the date hereof;

 

(iv) pay and discharge all Liabilities as they become due and all payables in
the ordinary course of business and in the same manner as previously paid
(subject to the Company’s ability to pursue in good faith any bona fide
disputes);

 

(v) cause the Books and Records to be maintained in the usual, regular and
ordinary manner; and

 

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(vi) comply in all material respects with all Laws applicable to the Consumables
Business and the Process Business and, promptly following receipt thereof, give
to the Buyer copies of any notice received from any Governmental Authority or
other Person alleging any violation of any such Laws.

 

(b) Without limiting the generality of clause (a) above and subject to (x) the
exceptions therein and in Section 5.2(b) of the Company Disclosure Schedule and
(y) the Reorganization, from the date of this Agreement to the Closing, the
Company shall not and shall not permit any of its Subsidiaries to do any of the
following, unless approved or consented to in writing by the Buyer (which
consent shall not be unreasonably withheld or delayed):

 

(i) (A) acquire or agree to acquire by merging or consolidating with, by
purchasing a substantial equity interest in or a substantial portion of the
assets of, by forming a partnership or joint venture with, or by any other
manner, any business or any corporation, partnership, association or other
Person or business organization or division thereof, (B) otherwise acquire any
property or assets (except as set forth in Section 5.2(b)(xviii) or (xxii)), or
(C) make any investment, either by purchase of stock or securities, contribution
to capital, property transfer or otherwise;

 

(ii) sell, lease, assign, transfer, license, sublicense, encumber or otherwise
dispose of, in whole or in part, any of the Transferred Assets, other (A) than
the property located at Tir-Y-Berth Industrial Estate, New Road, Hengoed, Wales,
which sale shall take place only on a “VAT exclusive” basis to the extent lawful
and (B) sales of Inventory in the ordinary course of business consistent with
past practice;

 

(iii) enter into any new line of business or modify, change or otherwise alter
in any material respect the fundamental nature of the Consumables Business or
the Transferred Process Operations;

 

(iv) enter into, cancel, rescind, terminate, renew, assign or make any material
change to any Contract, other than the expiration of a Contract in accordance
with its terms as of the date hereof;

 

(v) enter into any Contract that limits or otherwise restricts the Company or
any of its Subsidiaries or Affiliates (or any successors thereto) or that by its
terms could, after the Closing, limit or restrict the Buyer or any of their
respective Subsidiaries or Affiliates (or any successors thereto), from engaging
or competing in any line of business or in any geographic area, or require
referrals of any business or require the Company or any of its Subsidiaries or
Affiliates to make available any investment opportunities to any Person on a
priority, equal or exclusive basis;

 

(vi) make any prepayment or other payment on or in respect of any Liabilities of
the Acquired Businesses unless required by the terms thereof on the date of this
Agreement, or incur, create or assume any indebtedness or Liabilities for
borrowed money or guarantee any such obligation or issue or sell any debt
securities or warrants or enter into any “keepwell” or other similar
arrangements which would constitute an Assumed Liability;

 

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(vii) incur, create, assume or suffer to exist any Lien on any Transferred Asset
(except for Permitted Liens) unless such Lien is released upon or prior to
Closing;

 

(viii) except as required by any applicable Law, Governmental Authority or any
Company Plan: (A) increase the compensation or benefits of any Consumables
Business Employee or any Process Business Employee, (B) loan or advance any
money or other property, or make any payment or distribution of any
compensation, to any Consumables Business Employee or to any Process Business
Employee, (C) establish, adopt, enter into, amend or terminate any Company Plan
or any plan, agreement, program, policy, trust, fund or other arrangement that
would be a Company Plan if it were in existence as of the date of this
Agreement, (D) grant any severance or termination pay, other than in accordance
with the terms of any agreement in effect as of the date hereof, or (E) grant
any equity or equity-based awards in any of the Transferred Subsidiaries;

 

(ix) terminate any Consumables Business Employees (except as provided for in the
Reorganization or for cause) or any Process Business Employee or hire any new
Consumables Business Employees, or terminate any other employees of the Process
Business to the extent the Company would become incapable of adequately
delivering the transition services contemplated by Section 5.1(b);

 

(x) issue, deliver, sell, pledge or transfer or authorize or propose the
issuance, delivery, sale, pledge or transfer of, any shares of capital stock or
rights to purchase the capital stock of any of the Transferred Subsidiaries, any
Voting Debt or any securities convertible into or exercisable or exchangeable
for, or any rights, warrants or options to acquire, any such shares or Voting
Debt, or enter into any agreement with respect to any of the foregoing;

 

(xi) other than cash dividends, (A) declare or pay any dividends on or make
other distributions (whether in cash, stock or property or any combination
thereof) in respect of any of the capital stock of the Transferred Subsidiaries,
(B) split, combine or reclassify any of the capital stock of the Transferred
Subsidiaries, or (C) repurchase, redeem or otherwise acquire, or permit the
Subsidiaries to purchase, redeem or otherwise acquire, any shares of the capital
stock of the Transferred Subsidiaries or any securities convertible into or
exercisable or exchangeable for any shares of the capital stock of the
Transferred Subsidiaries; provided, however, that no cash dividends may be paid
which would result in the Transferred Subsidiary having less than $300,000 in
cash or cash equivalents as of the Closing Date;

 

(xii) transfer, abandon or grant any material right under, or enter into any
settlement regarding the breach or infringement of, any Intellectual Property,
or modify any existing right with respect thereto, except to the extent that the
Company’s sale or disposition of Inventory in the ordinary course of business
consistent with past practice constitutes the grant of an implied license or an
exhaustion of remedies under the Intellectual Property;

 

(xiii) enter into or amend any collective bargaining agreement or union contract
or other agreement covering the Consumables Business Employees or the

 

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Process Business Employees or enter into any negotiations for the purposes of
entering into any such agreement, except as required by applicable Law,
Governmental Authority or any Company Plan;

 

(xiv) effectuate a “plant closing,” “mass layoff” or other similar triggering
event as those terms are defined in WARN or any other applicable Law, affecting
in whole or in part any site of employment, facility, operating unit or employee
of the Consumables Business or any of the Transferred Subsidiaries or any
Process Business Employee;

 

(xv) (A) institute, settle or agree to settle any Proceeding by or before any
Governmental Authority that creates or imposes any continuing obligation or
restriction on the Consumables Business or the Transferred Process Operations or
would otherwise constitute an Assumed Liability or (B) waive, release or
relinquish any material claims or rights relating to the Consumables Business or
the Transferred Process Operations or the Transferred Assets;

 

(xvi) amend or propose to amend the certificate of incorporation, by-laws,
articles of association, memorandum of association or other organizational
documents of the Transferred Subsidiaries or enter into, or permit any of the
Transferred Subsidiaries to enter into a reduction of capital, a plan of
consolidation, a scheme of arrangement, merger or reorganization with any
Person;

 

(xvii) adopt a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization or reorganization or resolutions providing for
or authorizing the foregoing, other than the Reorganization or a plan of
liquidation pursuant to which no formal actions are taken in furtherance of the
implementation or completion of such liquidation, other than the approval of
such plan, prior to the Closing Date;

 

(xviii) incur any capital expenditures in excess of $5,000 individually or
$50,000 in the aggregate relating to the Consumables Business or the Transferred
Process Operations;

 

(xix) make or permit any change to its accounting methods or principles, except
as required by changes in GAAP as concurred in by the Company’s independent
auditors;

 

(xx) enter into any agreement with a Related Person relating to the Consumables
Business or the Transferred Process Operations;

 

(xxi) (A) accelerate the delivery or sale of products or (B) offer discounts or
price protection on the sale of products or premiums on the purchase of raw
materials that are, in the case of this clause (B), greater on an absolute or
proportionate basis than the Company’s past practice;

 

(xxii) (A) purchase, order or otherwise acquire Inventory unless such inventory
is (1) necessary to meet a delivery obligation to a customer prior to the
Closing Date or (2) necessary to meet a required customer support or service or
(B) write down the value of any Inventory or Transferred Asset, except as may be
required by GAAP;

 

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(xxiii) (A) make, rescind or change any Tax election, annual Tax accounting
period or method of Tax accounting, (B) settle or compromise any Tax claim or
assessment, (C) file any amended Tax Return or (D) surrender any right to claim
a Tax refund, in each case, with respect to any of the Transferred Subsidiaries;

 

(xxiv) amend, modify or alter the Rights Agreement, dated as of May 24, 2004,
between the Company and U.S. Stock Transfer Corporation, as Rights Agent, or
take any action to exempt any third Person from all or any provisions thereof;

 

(xxv) with respect to the Process Business, accelerate the shipment of backlog
or the delivery of products fabricated or manufactured for delivery to
customers, or delay the payment of accounts payable or the performance of
customer service, warranty and support obligations other than in the ordinary
course of business; or

 

(xxvi) otherwise commit to do, or take any action or omit to take any action
that would result in, any of the foregoing.

 

5.3 Acquisition Proposals.

 

(a) From the date hereof until the Closing Date or, if earlier, the termination
of this Agreement, the Company agrees that (i) it and its officers and directors
shall not, (ii) its Subsidiaries and their officers and directors shall not, and
(iii) its Representatives and controlled Affiliates shall not, take any action
to, directly or indirectly (x) solicit, initiate or knowingly facilitate or
encourage, or respond to, any inquiries with respect to, or the making,
submission or reaffirmation of any Acquisition Proposal, or (y) engage in any
discussions, negotiations or other communications relating to an Acquisition
Proposal, or (z) furnish to any Person (other than the Buyer, its officers,
directors, employees or Representatives), or provide any Person (other than the
Buyer, its officers, directors, employees or Representatives) access to, its
properties, Books and Records or any non-public information or data with respect
to the Company or its Subsidiaries, this Agreement or any agreement entered into
by the Buyer or the Company in connection therewith or the transactions
contemplated hereby or thereby. Notwithstanding the foregoing, prior to the
approval of the Acquisition and the transactions contemplated by this Agreement
by the Company’s stockholders in accordance with this Agreement, the Company may
(A) provide access to its properties and Books and Records in response to a
request therefor by a Person who has made an unsolicited bona fide written
Acquisition Proposal if the Company’s Board of Directors receives from the party
so requesting such information an executed confidentiality agreement on terms
substantially similar to those contained in the Confidentiality Agreement
(except for such changes specifically necessary in order for the Company to be
able to comply with its obligations under this Agreement) or (B) engage in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written Acquisition Proposal, if and only to the extent that prior to
taking any of the actions set forth in clauses (A) or (B) with respect to an
Acquisition Proposal, (x) the Company’s Board of Directors shall have determined
in good faith, after consultation with its outside legal counsel and financial
advisors, that the failure to take such action would violate the fiduciary
duties of the Company’s Board of Directors under applicable Law and that such
Acquisition Proposal constitutes or is

 

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reasonably likely to result in a Superior Proposal from the party that made the
applicable Acquisition Proposal and (y) the Company shall have informed the
Buyer promptly following (and in no event later than 24 hours after) the taking
by it of any such action.

 

(b) Except as set forth in this Section 5.3(b), the Company may not (i)
withhold, withdraw, amend, qualify, modify or change in a manner adverse to the
Buyer (or propose to do any of the foregoing), or fail to make, all or any
portion of its recommendation that the Company’s stockholders approve the
Acquisition and the consummation of the transactions contemplated by this
Agreement, (ii) approve or recommend any Acquisition Proposal or (iii) take any
other action or make any other public statements in connection with the Company
Special Meeting inconsistent with its recommendation (collectively, a “Change in
Company Recommendation”). Notwithstanding the foregoing, if, prior to the
receipt of the Stockholder Approval, if and to the extent the Company’s Board of
Directors concludes in good faith, after consultation with its financial
advisors and the Company’s outside legal counsel, in response to a bona fide
written Acquisition Proposal which was unsolicited and did not otherwise result
from a breach of Section 5.3(a), that such proposal is a Superior Proposal and
that not terminating this Agreement to accept such Superior Proposal and/or
failure to recommend such Superior Proposal to the stockholders of the Company
would violate the fiduciary duties of the Company’s Board of Directors under
applicable Law, the Company may terminate this Agreement and/or the Company’s
Board of Directors may effect a Change in Company Recommendation, as applicable;
provided, however, that the Company shall not terminate this Agreement pursuant
to this sentence, and any purported termination pursuant to this sentence shall
be void and of no force or effect, unless concurrently with such termination
pursuant to this Section 5.3(b) the Company pays to the Buyer the Termination
Fee payable pursuant to Section 9.2(b); provided, further, however, that the
Company shall not exercise its rights to terminate this Agreement and the
Company’s Board of Directors shall not effect a Change in Company Recommendation
pursuant to this Section 5.3(b) unless the Company shall have delivered to the
Buyer a prior written notice advising the Buyer that the Company or the
Company’s Board of Directors intends to take such action with respect to a
Superior Proposal, specifying in reasonable detail the material terms and
conditions of the Superior Proposal, this notice to be delivered not less than
five (5) Business Days prior to the time the action is taken, and during this
five (5) Business Day period, the Company and its directors, officers, employees
and other Representatives shall negotiate in good faith with the Buyer to make
such adjustments in the terms and conditions of this Agreement such that such
Acquisition Proposal would no longer constitute a Superior Proposal.

 

(c) The Company shall immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted heretofore
with respect to any Acquisition Proposal. The Company also shall, if it has not
already done so, promptly request that each Person that has received any
confidential information or data concerning the Company and its Subsidiaries in
connection with its consideration of any Acquisition Proposal return or destroy
all such information or data heretofore furnished.

 

(d) Nothing contained in this Agreement shall prohibit the Company or the
Company’s Board of Directors from taking and disclosing to the Company’s
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making any disclosure required by applicable Law with regard to an
Acquisition Proposal.

 

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(e) Promptly after receipt by the Company, its Subsidiaries, or any of their
respective directors, officers, employees or other Representatives of an
Acquisition Proposal, or if any non-public information is requested from, or any
discussions or negotiations are sought to be initiated or continued with, the
Company, its Subsidiaries or any of their respective directors, officers,
employees or other Representatives, the Company shall provide the Buyer with
written notice of the material terms and conditions of any Acquisition Proposal
or the identity of any party requesting non-public information or seeking
discussions or negotiations, and thereafter shall keep the Buyer informed, on a
current basis, of the status and material terms and conditions of any proposals
or offers. The Company shall make available to the Buyer (to the extent it has
not previously done so) all non-public information made available to any Person
making an Acquisition Proposal.

 

5.4 Non-Solicitation. The Company agrees that for a period of two (2) years from
and after the Closing Date it shall not, and its shall cause its Subsidiaries
not to, without the prior written consent of the Buyer, directly or indirectly,
solicit to hire or hire (or cause to seek to cause to leave the employ of the
Buyer or its Subsidiaries) (i) any US Consumables Employee, any Process Business
Employee or any Transferred Subsidiary Employee or (ii) any Person employed by
the Buyer or any of its Subsidiaries who became known to or was identified to
the Company or its Subsidiaries in connection with the transactions contemplated
by this Agreement, unless, in the case of clause (i) or (ii) above, such Person
ceased to be an employee of the Buyer or its Subsidiaries prior to such action
by the Company or any of its Subsidiaries, or, in the case of such Person’s
voluntary termination of employment with the Buyer or its Subsidiaries, at least
three months prior to such action by the Company or any of its Subsidiaries.
Notwithstanding the foregoing, the restrictions set forth in this Section 5.4
shall not apply to bona fide public advertisements for employment placed by the
Company or its Subsidiaries and not specifically targeted at the employees of
the Buyer or its Subsidiaries.

 

5.5 Non-Competition.

 

(a) In consideration of the Buyer entering into this Agreement and in order that
the Buyer may enjoy the full benefit of the Transferred Assets and the Acquired
Businesses, for a period of three (3) years from and after the Closing Date (the
“Noncompetition Period”), neither the Company nor any of its controlled
Affiliates shall, directly or indirectly, whether as principal, agent, partner,
officer, director, stockholder, employee, consultant or otherwise, alone or in
association with any other Person, own, manage, operate, control, participate
in, invest in, perform services for, or otherwise carry on, a business which,
directly or indirectly, is in competition with the Consumables Business or the
Transferred Process Operations in North America, Europe, Japan and any other
jurisdiction where the Consumables Business or the Transferred Process
Operations are currently conducted.

 

(b) The Company acknowledges and agrees that the remedy at law for any breach,
or threatened breach, of any of the provisions of this Section 5.5 will be
inadequate and, accordingly, the Company covenants and agrees that the Buyer
shall, in addition to any other rights and remedies which the Buyer may have at
Law, be entitled to equitable relief, including injunctive relief, and to the
remedy of specific performance with respect to any breach or

 

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threatened breach of such covenant, as may be available from any court of
competent jurisdiction. In addition, the Company and the Buyer agree that the
terms of the covenant in this Section 5.5 are fair and reasonable in light of
the Buyer’s plans for the Transferred Assets, the Consumables Business and the
Transferred Process Operation and are necessary to accomplish the full transfer
of the goodwill and other intangible assets contemplated hereby. In the event
that any of the covenants contained in this Section 5.5 shall be determined by
any court of competent jurisdiction to be unenforceable for any reason
whatsoever, then any such provision or provisions shall not be deemed void, and
the parties hereto agree that said limits may be modified by the court and that
said covenant contained in this Section 5.5 shall be amended in accordance with
said modification, it being specifically agreed by the parties that it is their
continuing desire that this covenant be enforced to the full extent of its terms
and conditions or if a court finds the scope of the covenant unenforceable, the
court should redefine the covenant so as to comply with applicable Law.

 

5.6 Further Actions; Best Efforts.

 

(a) Subject to the terms and conditions of this Agreement, each party 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 the Acquisition and the other transactions
contemplated by this Agreement, including preparing and filing as promptly as
practicable, all documentation, if any, to effect all necessary filings,
notices, petitions, statements, registrations, submissions of information,
applications and other documents necessary to consummate the Acquisition and the
other transactions contemplated by this Agreement.

 

(b) In the event that any Proceeding or Order is instituted (or threatened to be
instituted) by a Governmental Authority or private party challenging the
Acquisition or any other transaction contemplated by this Agreement, or any
other agreement contemplated hereby, (i) each of the Buyer, the Company and its
Subsidiaries shall cooperate in all respects with each other and use its
respective reasonable best efforts to contest and resist any such Proceeding or
Order and to have vacated, lifted, reversed or overturned any decree, judgment,
injunction or other order, whether temporary, preliminary or permanent, that is
in effect and that prohibits, prevents or restricts consummation of the
transactions contemplated by this Agreement, and (ii) each of the Buyer, the
Company and its Subsidiaries shall use their respective reasonable best efforts
to defend, at its own cost and expense, any action or actions, whether judicial
or administrative, in connection with the transactions contemplated by this
Agreement.

 

5.7 Stockholder Approval; Preparation of Proxy Statement.

 

(a) As promptly as reasonably practicable following the date hereof, the Buyer
and the Company shall cooperate in preparing and shall cause to be filed with
the SEC mutually acceptable definitive proxy materials (the “Proxy Statement”)
relating to the matters to be considered by the stockholders in connection with
the Company Special Meeting (as defined below). The Company shall use reasonable
best efforts to have the Proxy Statement cleared by the SEC. No filing of, or
amendment or supplement to, or correspondence with the SEC or its staff with
respect to the Proxy Statement will be made by the Company without providing the
Buyer a reasonable opportunity to review and comment thereon. The Company will
advise the Buyer, promptly after it receives notice thereof, of any request by
the SEC for the amendment of

 

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the Proxy Statement or comments thereon and responses thereto or requests by the
SEC for additional information. The Company will cause the final Proxy Statement
to be mailed to the Company’s stockholders as promptly as practicable subsequent
to its filing with the SEC. If at any time prior to the Company Special Meeting
any information relating to the Company or the Buyer, or any of their respective
Affiliates, officers or directors, should be discovered by the Company or the
Buyer and that should be set forth in an amendment or supplement to the Proxy
Statement so that any of such documents would not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party which discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent
required by Law, disseminated to the stockholders of the Company.

 

(b) As soon as practicable following the execution and delivery of this
Agreement, the Company shall duly take all lawful action to set a record date
for, duly call, give notice of, convene and hold a special meeting of its
stockholders (the “Company Special Meeting”) for the purpose of considering the
approval of the Acquisition and the transactions contemplated by this Agreement
and such other matters as may in the reasonable judgment of the Company be
appropriate for consideration at the Company Special Meeting. The Company’s
Board of Directors shall recommend that the stockholders of the Company approve
the Acquisition and the consummation of the transactions contemplated by this
Agreement and the Company shall include such recommendation in the Proxy
Statement and shall not make or effect any Change in Company Recommendation.
Unless this Agreement is terminated in accordance with the provisions hereof,
this Agreement shall be submitted to the stockholders of the Company at the
Company Special Meeting for the purpose of approving the Acquisition and the
consummation of the transactions contemplated by this Agreement, and the Company
shall use its reasonable best efforts to secure the vote or consent of
stockholders required by the DGCL to effect the transactions contemplated by
this Agreement.

 

5.8 Public Announcements. Each of the Company and the Buyer shall use its
respective reasonable best efforts to develop a joint communications plan and
each party shall use its respective reasonable best efforts (a) to ensure that
all press releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan, and
(b) unless otherwise required by applicable Law or by obligations pursuant to
any listing agreement with, or the rules of, any securities exchange, to consult
with each other before issuing any press release or otherwise making any public
statement with respect to this Agreement or the transactions contemplated
hereby.

 

5.9 Company Employee Benefits.

 

(a) Buyer shall, or shall cause the Designated Purchaser to, offer employment,
commencing on the Closing Date, to only those US Consumables Employees and
Process Business Employees who are actively employed by the Company or an
Affiliate in the Consumables Business or the Process Business, respectively on
the day immediately preceding the Closing Date (the “Closing Date Employees”),
at a wage and salary level that is the same as that provided to such employees
of the Company on the day preceding the Closing Date. With respect to the
Liabilities relating to the Closing Date Employees who accept the offer of
employment described above (the “Transferred Employees”) and arising out of the
Company

 

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Plans, Buyer shall, as of the Closing Date, assume only those Liabilities that
are both (i) described in Section 2.3(a)(viii) of this Agreement and (ii)
directly related to such Transferred Employees’ employment with the Consumables
Business or the Process Business, as applicable. In addition to the foregoing,
Buyer shall reimburse the Company for all Severance Costs (as such term is
hereinafter defined) incurred by the Company in a lump sum within thirty (30)
days after Buyer receives from the Company an invoice stating the name of each
applicable Closing Date Employee whose employment with the Company was
terminated as a result of such employee not accepting the Buyer’s offer of
employment, his or her years of service with the Company through such date of
termination, his or her annual rate of base salary as in effect immediately
prior to the Closing Date, and the total amount of severance paid or payable to
such employee by the Company. For purposes of this Agreement, the term
“Severance Costs” shall mean, for each Closing Date Employee who does not accept
the offer of employment described above and whose employment with the Company or
any Affiliate thereof is involuntarily terminated thereby within thirty (30)
days after the Closing Date, the amount of severance payments to which such
employee would be entitled under the Seller Plan (as such term is defined in
Section 5.9(d)) that is a severance plan (as in effect on the date hereof)
applicable to such employee, if his employment were involuntarily terminated on
the Closing Date; provided, however, that such amount shall only be included in
the definition of Severance Costs to the extent that the Company or one of its
Affiliates, as applicable, provides such employee with severance payments that
are at least equal to such amount. For the avoidance of doubt, Buyer shall not
assume any Liabilities relating to change in control agreements or arrangements
between the Company or its Affiliates and any Company Employee, or any
Liabilities relating to severance and other similar agreements or arrangements
between the Company or its Affiliates and any Company Employee who is not a
Transferred Employee.

 

(b) From and after the Closing Date until the first anniversary of the Closing
Date, the Buyer shall, or shall cause the Transferred Subsidiaries or Designated
Purchaser(s), as applicable, to, provide the Transferred Employees and
Transferred Subsidiary Employees who are employed by the Transferred Subsidiary
immediately prior to the Closing, for so long as such employees remain so
employed by the Buyer or any Subsidiary of the Buyer during such time, health
benefits which are no less favorable, in the aggregate, than those provided to
employees of a division of the Buyer or any Subsidiary of the Buyer, that is of
a size, nature and in a geographic location that is substantially similar to the
Company, who are in positions comparable to positions held by such employees
with the Buyer or its Subsidiaries from time to time after the Closing Date.

 

(c) From and after the Closing Date, the Buyer shall, or shall cause the
Transferred Subsidiaries or Designated Purchaser, as applicable, to, recognize
the prior service with the Company or its Affiliates of each Transferred
Employee and Transferred Subsidiary Employee employed as of immediately prior to
the Closing Date in connection with all employee benefit plans, programs or
policies (including vacation) of the Buyer or any of its Affiliates in which any
such employees are eligible to participate following the Closing Date for
purposes of eligibility, vesting and levels of vacation and severance benefits
(but not for purposes of benefit accruals under any defined benefit pension plan
or to the extent that such recognition would result in duplication of benefits).
From and after the Closing Date, and to the extent permitted by applicable Law
and/or applicable insurance providers, the Buyer will, or will cause the
Transferred Subsidiaries or Designated Purchaser, as applicable, to, cause any
pre-existing

 

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conditions or limitations and eligibility waiting periods (to the extent that
such waiting periods would be inapplicable, taking into account service with the
Company and any of its Affiliates), under any group health plans of the Buyer or
its Affiliates in which Transferred Employees and Transferred Subsidiary
Employees who are employed by the Transferred Subsidiary immediately prior to
the Closing, are otherwise to become eligible to participate in after the
Closing Date, to be waived with respect to such employees and their eligible
dependents. The Buyer shall, or shall cause the Transferred Subsidiaries or
Designated Purchaser, as applicable, to, give each Transferred Employee and
Transferred Subsidiary Employee credit for any deductibles and annual
out-of-pocket limits for medical expenses paid during the applicable plan year
in which the Closing occurs under any welfare plans maintained or contributed to
by the Company or the Transferred Subsidiaries prior to the Closing in
satisfying any deductibles and annual out-of-pocket limits for medical expenses
for the same plan year under any welfare plans maintained or contributed to by
the Buyer or its Affiliates in which such employees participate during such
year.

 

(d) Except as required by applicable Law, as of the Closing Date the Transferred
Employees and Transferred Subsidiary Employees shall cease to accrue further
benefits under the employee benefit plans and arrangements maintained by the
Company or any of its Affiliates (excluding any such plans maintained solely by
any of the Transferred Subsidiaries) (the “Seller Plans”); provided, however,
that the Company shall, or shall cause its Affiliates to, take such actions as
may be necessary to, effective immediately prior to the Closing Date, cause (i)
the US Consumables Employees and the Process Business Employees who become
Transferred Employees to be fully vested in any unvested portion of their
account balances under any Seller Plans that are defined contribution plans and
(ii) all Transferred Subsidiary Employees who are employed by the Transferred
Subsidiary immediately prior to the Closing to become fully vested in any
unvested benefits under any Seller Plans that are pension plans. From and after
the Closing Date, the Company and its Affiliates shall remain solely responsible
for any and all Liabilities in respect of the Seller Plans, except as otherwise
provided herein. In addition to the foregoing, the Company shall indemnify and
hold harmless each Buyer Indemnified Party from and against, and shall reimburse
each Buyer Indemnified Party for any and all Losses incurred by the Buyer
Indemnified Party in respect of any claim or Liabilities arising from or related
to any suit or claim of violation brought against Buyer under WARN and other
similar applicable Laws for any actions taken by the Company in connection with,
on or prior to the Closing Date with regard to any site of employment, facility,
operating unit or employee affected by this Agreement.

 

(e) Nothing herein is intended to, and shall not be construed to, create any
third party beneficiary rights of any kind or nature, including the right of any
Company Employee or other individual to seek to enforce any right to
compensation, benefits, or any other right or privilege of employment with the
Buyer or any of its Affiliates.

 

5.10 Insurance. To the extent that any insurance policies or binders cover any
loss, liability, claim, damage or expense relating to the Consumables Business,
the Transferred Process Operations, the Transferred, the Transferred Assets, the
Assumed Liabilities or the Transferred Subsidiaries and relating to or arising
out of occurrences or wrongful acts prior to the Closing Date and such policies
continue after the Closing Date to permit claims to be made thereunder with
respect to such occurrences or acts prior to the Closing Date, the Company and

 

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its Affiliates shall cooperate with the Buyer and its Affiliates (including the
Transferred Subsidiaries post-Closing) to submit any such claims, including
filing and furnishing required notices for the benefit of or on behalf of the
Buyer or its Affiliates under such policies or pursuing claims previously made.
The Company shall use its reasonable best efforts so that, on and after the
Closing Date, the Buyer and its Affiliates (including the Transferred
Subsidiaries post-Closing) will be able to have the right to make claims for
indemnification to the extent possible under the terms of such policies and, to
the extent assignable, shall assign the right to make such claims to the Buyer.

 

5.11 Reorganization. Notwithstanding anything to the contrary contained in this
Article V or any other provision of this Agreement, it is the explicit intent of
the Buyer and the Company that the Company and its Subsidiaries shall consummate
at or prior to the Closing certain transactions, including asset transfers, to
ensure that the Transferred Subsidiaries only own assets used or held for use
principally in the conduct or operation of the Consumables Business or the
Transferred Process Operations or that otherwise constitute Transferred Assets,
and are subject only to Liabilities that fall within the definition of Assumed
Liabilities, in furtherance of the transactions contemplated hereby and as set
forth in Section 5.11 of the Company Disclosure Schedule (the “Reorganization”),
and the Company agrees to cause the Reorganization to occur prior to the
Closing. The Company shall provide the Buyer copies of, and the opportunity to
review and comment on, the documents relating to the Reorganization prior to
their execution and shall not make any such transfers or take other similar
actions without the prior written consent of the Buyer.

 

5.12 Certain Notices. From and after the date of this Agreement until the
Closing, the Company and the Buyer shall promptly notify each other orally and
in writing of (a) any notice or other communication from any Person alleging
that the Consent of such Person is or may be required in connection with the
Acquisition and the other transactions contemplated by this Agreement, (b) any
Proceedings commenced or, to the Knowledge of the Company or the Knowledge of
the Buyer, as the case may be, threatened against, relating to or involving or
otherwise affecting such party or any of its Subsidiaries that, if pending on
the date of this Agreement, would have been required to be disclosed pursuant to
Article IV, or that relate to the transactions contemplated by this Agreement,
(c) in the case of the Company, any customer, supplier, vendor or distributor
threatening any material modification or change in, or termination of, its
business relationship with the Consumables Business or the Process Business and
(d) in the case of the Company, any fact, event, change or circumstance known to
it that (i) individually or taken together with all other facts, events, changes
and circumstances known to it, has had, or would reasonably be expected to have,
a Material Adverse Effect or (ii) would result in, or would reasonably be
expected to result in, any of the conditions to the Acquisition set forth in
Article VIII not being satisfied or which would adversely affect, in any
material respect, the ability of the parties to consummate the Acquisition and
the other transactions contemplated by this Agreement on a timely basis.

 

5.13 Certain Intellectual Property Covenants.

 

(a) The Company shall and shall cause its Subsidiaries to, at their expense,
take such actions prior to and after the Closing as reasonably required, or as
requested by Buyer, to duly execute, deliver and file as of the Closing Date or
as soon thereafter as practicable all instruments and documents necessary to
ensure that the records and registrations of all

 

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Intellectual Property used or held for use in the conduct or operation of the
Acquired Businesses, in the United States Patent and Trademark Office or the
United States Copyright Office and all counterpart or similar agencies wherever
such Intellectual Property is registered, correctly reflect all transactions
affecting the ownership by Buyer of such Intellectual Property.

 

(b) Buyer hereby grants the Company for a period of up to three years following
the Closing a non-exclusive, worldwide, royalty free and fully paid-up,
non-assignable and sublicensable only to Affiliates of the Company, license to
use the name “ARGONAUT TECHNOLOGIES, INC.” in connection with the sale and
offering for sale of products and the provision of services by the Company or
its Affiliates solely to the extent that such name was used prior to the
Closing.

 

5.14 WARN. The Company shall not, at any time within the 60-day period prior to
the Closing Date, effectuate a “plant closing” or “mass layoff,” as those terms
are defined in the WARN or any other similar triggering event under similar
applicable Laws, affecting in whole or in part any site of employment, facility
or operating unit of the Consumables Business or the Process Business.

 

5.15 Intercompany Accounts. The Company shall take any and all actions necessary
so that, as of the Closing, there will not be outstanding any Liabilities, and
there shall have been settled all intercompany accounts, between the Company and
its Affiliates (other than the Transferred Subsidiaries), on the one hand, and
the Acquired Businesses or the Transferred Subsidiaries, on the other hand.

 

5.16 Confidentiality. The Company recognizes that by reason of its ownership of
the Consumables Business, the Process Business, the Transferred Assets and the
Transferred Shares, it and its Affiliates have acquired confidential information
and trade secrets concerning the Consumables Business and the Process Business,
the use or disclosure of which could cause the Buyer or its Affiliates
substantial loss and damages that could not be readily calculated and for which
no remedy at law would be adequate. Accordingly, the Company covenants and
agrees with the Buyer that the Company and its Affiliates will not at any time,
except in performance of the Company’s obligations to the Buyer or with the
prior written consent of the Buyer, directly or indirectly, disclose any
proprietary, secret or confidential information relating to the Consumables
Business or the Process Business that any such Person may learn or has learned
by reason of its ownership of the Consumables Business, the Process Business,
the Transferred Assets and the Transferred Shares, unless (i) such information
becomes known to the public generally through no fault of the Company or of its
Affiliates or (ii) disclosure is required in the opinion of its independent
counsel, by applicable Law. The parties hereto agree that the covenant contained
in this Section 5.16 imposes a reasonable restraint on the Company, its
Affiliates and its employees.

 

5.17 Successors.

 

(a) In the event that the Company (or any of its respective successors or
assigns) shall (i) consolidate or merge with any other Person and shall not be
the continuing or surviving corporation or entity in such consolidation or
merger, (ii) transfer all or substantially all of its properties and assets to
any other person, or (iii) decide to dissolve or liquidate, or adopt a plan of
dissolution or liquidation, then in each case proper provision shall be made so
that the

 

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continuing or surviving corporation or entity (or its successors or assigns, if
applicable), or transferee of such assets, or such liquidating trust or other
agent, as the case may be, shall expressly assume all of the Company’s
obligations under this Agreement, including pursuant to Articles II and X. Prior
to any such transaction, the Company shall notify the Buyer of any transaction
that would trigger the terms of this Section 5.17 and the terms thereof,
including the identity of the purchaser.

 

(b) In the event that the Buyer (or any of its respective successors or assigns)
shall consolidate or merge with any other Person and shall not be the continuing
or surviving corporation or entity in such consolidation or merger, or transfers
all or substantially all of its properties and assets to any other person, then
in each case proper provision shall be made so that the continuing or surviving
corporation or entity (or its successors or assigns, if applicable), or
transferee of such assets, as the case may be, shall expressly assume all of the
Buyer’s obligations under this Agreement, including pursuant to Articles II and
X.

 

ARTICLE VI

 

TAX MATTERS

 

6.1 Control of Tax Audits. The Company shall have the right to represent the
interests of the Transferred Subsidiaries in any Tax audit or administrative or
court proceeding (a “Tax Proceeding”) relating to any Tax covered by Sections
10.1(a)(iv) and (vi) and to employ counsel of its choice; provided that if the
results of such Tax audit or proceeding could reasonably be expected to have a
material adverse effect on the Buyer, any of the Buyer’s Affiliates or any of
the Transferred Subsidiaries for any Post-Closing Tax Period, then the Company
and the Buyer shall jointly control the defense and settlement of any such Tax
audit or proceeding and each party shall cooperate with the other party at its
own expense and there shall be no settlement or closing or other agreement with
respect thereto without the consent of the other party, which consent will not
be unreasonably withheld or delayed. The Company shall promptly notify the Buyer
if it decides not to control the defense or settlement of any such Tax audit or
administrative or court proceeding and the Buyer thereupon shall be permitted to
defend and settle such Tax audit or proceeding. With respect to any Tax
Proceeding of any of the Transferred Subsidiaries relating to a Straddle Period,
the Company and the Buyer shall jointly control the defense and settlement of
any such Tax audit or proceeding and each party shall cooperate with the other
party at its own expense and there shall be no settlement or closing or other
agreement with respect thereto without the consent of the other party, which
consent will not be unreasonably withheld or delayed. Notwithstanding the
foregoing, the Company shall not be entitled to settle the UK Tax Proceeding
without the prior written consent of the Buyer if the amount of such settlement
would exceed (a) the amount of Escrow Funds available at such time to satisfy
such claim, plus (b) the amount tendered by the Company to the Buyer to satisfy
its indemnification obligation under this Agreement with respect to such
proposed settlement.

 

6.2 Tax Returns. The Buyer shall, or cause the Transferred Subsidiaries to,
properly prepare or cause to be properly prepared, and shall timely file or
cause to be timely filed, all Tax Returns of the Transferred Subsidiaries that
are required to be filed after the

 

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Closing Date. Such Tax Returns shall be prepared in a manner consistent with
past practices, unless such past practices are not in accordance with applicable
law. The Company shall pay all Taxes shown as due and owing on such Tax Returns
or otherwise levied or assessed upon any of the Transferred Subsidiaries to the
extent such Taxes relate to a Pre-Closing Tax Period.

 

6.3 Cooperation; Other Tax Matters. The Company and the Buyer shall cooperate
fully with each other in connection with the preparation and timely filing of
any Tax Returns required to be prepared and filed by the Buyer or the Company,
or in connection with the preparation or filing of any election, claim for
refund, consent or certification. For the avoidance of doubt, with respect to
the Transferred Subsidiaries, all Tax Returns and other records and information
relating to Taxes shall be retained by the Transferred Subsidiaries and
constitute part of the Transferred Assets and shall be transferred to the Buyer
through the sale of the Transferred Shares pursuant to Section 2.1; provided,
however, the Buyer shall provide the Company with copies of such Tax Returns
upon reasonable request. The Company will provide copies of all Tax Returns of
the Company that are reasonably requested by the Buyer or its Subsidiaries in
connection with a Tax Proceeding.

 

6.4 Transfer Taxes. The Company and the Buyer shall share equally and be
responsible for the timely payment of (on an after-tax basis) all sales
(including bulk sales), use, value added, documentary, stamp, gross receipts,
registration, transfer, conveyance, excise, recording, license, stock transfer
stamps, UK Stamp Duty Land Tax and other similar Taxes and fees (“Transfer
Costs”) arising out of or in connection with or attributable to the transactions
effected pursuant to this Agreement. The Company and the Buyer shall use their
respective commercially reasonable efforts to deliver certain of the Transferred
Assets, as appropriate, through an electronic delivery or in such other manner
reasonable calculated and legally permitted, and take all other commercially
reasonable actions necessary, to minimize or avoid the incurrence of Transfer
Costs.

 

6.5 Straddle Periods. Taxes attributable to Straddle Periods (including any
Taxes resulting from a Tax audit or administrative or court proceeding) shall be
apportioned to the period ending on the Closing Date and to the period beginning
on the day after the Closing Date by means of a closing of the books and records
of the Company as of the close of business on the Closing Date and, to the
extent not susceptible to such allocation, by apportionment on the basis of
elapsed days unless such Tax is transaction based (such as sales, transfer and
other similar Taxes) in which case such Tax shall be apportioned to the period
in which the related transaction occurred/occurs.

 

6.6 Proration of Taxes. Real and personal property Taxes and ad valorem Taxes
(and related Tax refunds or credits) (collectively, “Periodic Taxes”) relating
to the Transferred Assets shall be prorated between the Company and the Buyer
for any Straddle Period. Periodic Taxes relating to the Transferred Assets and
attributable to Straddle Periods shall be prorated between the Buyer and the
Company based on the relative periods such assets of the Company were owned by
each respective party during the fiscal period of the taxing jurisdiction for
which such Taxes were imposed by such jurisdiction (as such fiscal period is or
may be reflected on the bill rendered by such taxing jurisdiction). On the
Closing Date, the Buyer and the Company shall pay or be reimbursed, on this
prorated basis, for Periodic Taxes relating to the Transferred Assets that have
been paid prior to the Closing Date. The Buyer or the Company shall promptly
forward an invoice to the other party for its reimbursable pro rata share, if
any, of any Periodic Taxes relating to the Transferred Assets paid after the
Closing Date.

 

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6.7 Section 338 Elections. Neither the Buyer nor any of its Affiliates shall
make an election under Section 338 of the Code with respect to the Transferred
Subsidiaries without the prior written consent of the Company, such consent not
to be unreasonably withheld or delayed; provided that, if requested by the
Company, and at the Company’s expense, the Buyer shall cause the purchaser of
the Transferred Shares to make an election under Section 338 of the Code with
respect to any or all of the Transferred Subsidiaries (other than any of the
Transferred Subsidiaries that is a United States corporation for United States
tax purposes) so long as making such election would not be reasonably expected
to have an adverse impact on the Buyer or its Affiliates.

 

6.8 Tax Refunds. Any Tax refunds that are received by the Transferred
Subsidiaries relating to a Pre-Closing Tax Period (excluding Tax refunds
attributable to a loss originating in a Post-Closing Tax Period) shall be for
the account of the Company, and the Buyer shall pay or shall cause the relevant
Transferred Subsidiary to pay over to the Company any such refund within fifteen
(15) days after receipt; provided, however, that the Company shall be
responsible for all Taxes resulting from the disallowance of such Tax refunds;
provided, further, that any amounts payable under this Section 6.8 shall be
subject to any right of offset and/or setoff pursuant hereto.

 

ARTICLE VII

 

CLOSING

 

7.1 Closing Date. Unless this Agreement shall have been terminated and the
transactions herein shall have been abandoned pursuant to Article IX hereof, the
closing of the transactions contemplated by this Agreement (the “Closing”) shall
take place at the offices of Simpson Thacher & Bartlett LLP at 10:00 a.m. New
York City time on the date (the “Closing Date”) that is two (2) Business Days
after satisfaction or waiver (subject to applicable Law) of the conditions
(excluding conditions that, by their terms, are to be satisfied on the Closing
Date) set forth in Article VIII, or at such other time or date as agreed to in
writing by the parties hereto. Notwithstanding the foregoing, the Closing shall
for all purposes be deemed to occur at the close of business in New York, New
York on the Closing Date.

 

7.2 Deliveries by the Buyer. At the Closing, the Buyer shall execute, deliver to
the Company and/or file, or shall cause the respective Designated Purchaser to
execute, deliver to the Company and/or file the following in such form and
substance (except for clause (a)) as are reasonably acceptable to the Company:

 

(a) the Purchase Price as provided in Section 3.1 hereof (as adjusted pursuant
to Section 3.2(b)) less the Escrow Funds to be deposited by Buyer with the
escrow agent at Closing;

 

(b) the assignment and conveyance instruments described in Article II hereof;

 

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(c) the documents described in Article VIII hereof;

 

(d) the Escrow Agreement; and

 

(e) such other documents and instruments as counsel for the Buyer and the
Company mutually agree to be reasonably necessary to consummate the transactions
described herein.

 

7.3 Deliveries by the Company. At the Closing, the Company shall execute,
deliver to the Company and/or file the following in such form and substance as
are reasonably acceptable to the Buyer:

 

(a) deeds transferring the Owned Real Property to Buyer and/or the Designated
Purchaser subject to any and all Permitted Liens;

 

(b) the Books and Records (which Books and Records pertaining to any of the
Transferred Subsidiaries organized under the laws of the United Kingdom shall be
transferred to the Buyer in the United Kingdom);

 

(c) transfers of all of the Transferred Shares duly executed by the Company and
endorsed or accompanied by stock powers and such other instruments or assignment
and conveyance as may be appropriate pursuant to Section 2.1 hereof together
with definitive share certificates for the Transferred Shares each showing the
name of the Company as registered holder;

 

(d) share certificates showing the name of the Transferred Subsidiary as
registered holder of all of the shares in each of the other Transferred
Subsidiaries;

 

(e) the Escrow Agreement;

 

(f) all of the Tax Returns of the Transferred Subsidiaries;

 

(g) the documents described in Article VIII hereof;

 

(h) all such deeds, endorsements, Consents and other instruments as shall be
necessary to vest in Buyer or the Designated Purchaser good title, rights and
interest to the Transferred Assets (other than the properties, assets, rights
and claims of the Transferred Subsidiaries which shall be transferred through
the Purchase of the Transferred Shares pursuant to Sections 2.1 and 7.3(c)),
including the assignment and conveyance instruments described in Article II
hereof;

 

(i) such deeds, leases, licenses and other documents as may be in the possession
of the Company or its Subsidiaries in relation to the Owned Real Property;

 

(j) resignations and releases, effective as of the Closing Date, of all members
of the board of directors of each of the Transferred Subsidiaries;

 

(k) a notice of resignation of the existing auditors of the Transferred
Subsidiaries;

 

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(l) duly executed powers of attorney reasonably acceptable to the Buyer in favor
of the Buyer or the applicable Designated Purchaser with respect to the
Transferred Shares; and

 

(m) such other documents and instruments as counsel for the Buyer and the
Company mutually agree to be reasonably necessary to consummate the transactions
described herein.

 

7.4 Actions at Closing Meeting. The Company shall procure that the following
business is transacted at the meetings of the board of directors of each of the
Transferred Subsidiaries prior to the Closing:

 

(a) the directors of the Transferred Subsidiary shall approve registration of
the transfers of the Transferred Shares to the Buyer or the applicable
Designated Purchase and the entry of such Person in the register of the members
of the Transferred Subsidiary, in each case subject to the transfers being
presented duly stamped;

 

(b) the situation of the registered office of each of the Transferred
Subsidiaries shall be changed to that nominated by the Buyer;

 

(c) all existing mandates for the operation of the bank accounts of each of the
Transferred Subsidiaries shall be revoked and new mandates issued giving
authority to persons nominated by the Buyer;

 

(d) the accounting reference date of each of the Transferred Subsidiaries shall
be changed to December 31;

 

(e) Messrs. Jeff Bork, Mats-Olof Wallin and David Patteson are appointed
directors of each of the Transferred Subsidiaries, and Mr. Edward P. Connell is
appointed as secretary of each of the Transferred Subsidiaries in each case,
subject to such persons having consented to act; and

 

(f) Deloitte Touche Tohmatsu shall be appointed to replace the existing auditors
of the Transferred Subsidiaries.

 

ARTICLE VIII

 

CONDITIONS PRECEDENT

 

8.1 Conditions Precedent to Obligations of Parties. The respective obligations
of each of the parties hereto to effect the Acquisition are subject to the
satisfaction, at or prior to the Closing Date, of each of the following
conditions:

 

(a) No Injunctions; Illegality. At the Closing Date, there shall be no Order or
other legal restraint or prohibition of any nature of any court or Governmental
Authority of competent jurisdiction that is in effect that restrains or
prohibits the consummation of the Acquisition. There shall not be any action
taken, or any statute, rule or regulation enacted, entered, enforced or deemed
applicable to the Acquisition, by any Governmental Authority which makes the
consummation of the Acquisition illegal.

 

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(b) Stockholder Approval. The Company shall have obtained the Stockholder
Approval at the Company Special Meeting.

 

8.2 Conditions to Obligations of the Buyer. The obligation of the Buyer to
effect the Acquisition is subject to the satisfaction or waiver, at or prior to
the Closing Date, of each of the following conditions:

 

(a) Representations and Warranties. Each of the representations and warranties
of the Company set forth in this Agreement (read without regard to any
qualifications regarding materiality or Material Adverse Effect or any similar
standard or qualification) shall be true and correct as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of any earlier date) as of the Closing Date as though made on and as of the
Closing Date, other than such failures to be true and correct that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect, and the Buyer shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer and the Chief Financial Officer of the
Company to such effect.

 

(b) Performance of Obligations of the Company. The Company shall have performed
or complied with in all material respects all of its obligations required to be
performed or complied with by it under this Agreement at or prior to the Closing
Date, and the Buyer shall have received a certificate signed on behalf of the
Company by the Chief Executive Officer and Chief Financial Officer of the
Company to such effect.

 

(c) Governmental Consents. All consents, approvals and authorizations of any
Governmental Authority required to be made or obtained by the Company or the
Buyer or any of their respective Subsidiaries to consummate the Acquisition the
failure of which to be made or obtained would, individually or in the aggregate,
have a Material Adverse Effect shall be in full force and effect at the Closing.

 

(d) FIRPTA Certificate. The Company shall have delivered to Buyer a
certificate(s) in form and substance reasonably satisfactory to Buyer, duly
executed and acknowledged, certifying any facts that would exempt the
transactions contemplated hereby from withholding under section 1445 of the Code
and the Treasury Regulations promulgated thereunder.

 

(e) Licenses and Permits. The Buyer shall have received, or shall receive as of
the Closing, all material Licenses and Permits necessary to conduct the Acquired
Businesses in all material respects with past practices and in all material
respects in compliance with all applicable Laws.

 

(f) No Proceedings. There shall not be pending or threatened any investigation
or Proceeding to which a Governmental Authority is a party or, in the case of
clause (i), otherwise pending in a court of competent jurisdiction (i) seeking
to restrain or prohibit the consummation of the transactions contemplated hereby
or (ii) seeking to prohibit or limit the ownership or operation by the Buyer or
the Company of any material portion of the Consumables Business, the Transferred
Process Operations or the Transferred Assets (including the Transferred
Subsidiaries).

 

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(g) Material Adverse Change. There shall not have occurred or arisen after the
date hereof, and prior to Closing, any Material Adverse Change.

 

(h) Lease. The Company shall have obtained the lawful assignment of the lease
held by International Sorbent Technology Limited in relation to Unit 40, Duffryn
Industrial Estate, Ystrad Mynach, Caerphilly, Wales (the “Wales Lease”) to
Argonaut Technologies Limited on or prior to Closing.

 

8.3 Conditions to the Obligations of the Company. The obligation of the Company
to effect the Acquisition is subject to the satisfaction or waiver, at or prior
to the Closing Date, of each of the following conditions:

 

(a) Representations and Warranties. Each of the representations and warranties
of the Buyer set forth in this Agreement (read without regard to any
qualifications regarding materiality or Material Adverse Effect or any similar
standard or qualification) shall be true and correct as of the date of this
Agreement and (except to the extent such representations and warranties speak as
of any earlier date) as of the Closing Date as though made on and as of the
Closing Date, other than such failures to be true and correct that individually
or in the aggregate would not reasonably be expected to materially adversely
affect the ability of the Buyer to perform its obligations under this Agreement,
and the Company shall have received a certificate signed on behalf of the Buyer
by the Chief Executive Officer and the Chief Financial Officer of the Buyer to
such effect.

 

(b) Performance of Obligations of the Buyer. The Buyer shall have performed or
complied with in all material respects all of its obligations required to be
performed or complied with by it under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on behalf of the
Buyer by the Chief Executive Officer and Chief Financial Officer of the Buyer to
such effect.

 

ARTICLE IX

 

TERMINATION

 

9.1 Termination. This Agreement may be terminated and the Acquisition
contemplated hereby may be abandoned at any time prior to the Closing, whether
before or after approval of the Acquisition and the consummation of the
transactions contemplated by this Agreement by the stockholders of the Company:

 

(a) By mutual written consent of the Buyer and the Company;

 

(b) By either the Company or the Buyer, upon written notice to the other party,
if the Acquisition shall not have been consummated on or before July 1, 2005
(the “Termination Date”); provided, however, that the right to terminate this
Agreement under this Section 9.1(b)

 

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shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the primary cause of, or resulted in, the failure
of such consummation to occur on or before such date;

 

(c) By either the Company or the Buyer, upon written notice to the other party,
if any Governmental Authority shall have issued an Order or taken any other
action (which the parties shall have used their respective reasonable best
efforts to resist, resolve or lift, as applicable, in accordance with Section
5.6) permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such Order shall have become
final and nonappealable;

 

(d) By the Buyer, upon written notice to the Company, if the Company shall have
(i) effected a Change in Company Recommendation (or resolved to take any such
action) whether or not permitted by the terms hereof, (ii) materially breached
its obligations under this Agreement by reason of a failure to call the Company
Special Meeting in accordance with Section 5.7 or a failure to prepare and mail
to its stockholders the Proxy Statement in accordance with Section 5.7 (provided
that, in the event the Company fails to file its Proxy Statement by March 8,
2005, so long as the Company has diligently worked to do so and continues to
diligently work to file the Proxy Statement promptly, the Buyer agrees that the
Company shall not be in material breach of its obligations under Section 5.7 for
purposes of this Section 9.1(d)), or (iii) otherwise failed to comply with or
perform in any material respect its obligations under Section 5.3;

 

(e) By either the Buyer or the Company if the stockholders do not vote to
approve the Acquisition and the other transactions contemplated by this
Agreement at the duly convened Company Special Meeting (or any adjournment or
postponement thereof);

 

(f) By the Company, if prior to the vote of the stockholders at the Company
Special Meeting and after compliance in all material respects with the
applicable provisions of Section 5.3, the Company elects to enter into a binding
agreement with respect to a Superior Proposal and prior to such termination, the
Company pays the Termination Fee required pursuant to Section 9.2(b)(iii);

 

(g) By the Buyer, upon written notice provided to the Company, if there shall
have been a breach of any representation, warranty, covenant or agreement on the
part of the Company contained in this Agreement which breach would, individually
or in the aggregate together with all such other then uncured breaches by the
Company, constitute grounds for the conditions set forth in Section 8.2(a) or
(b) not to be satisfied at the Closing Date and such breach is not reasonably
capable of being cured (i) prior to the Termination Date or (ii) if such breach
is reasonably capable of being cured prior to the Termination Date, such breach
shall not have been cured prior to the earlier of (A) thirty (30) days after the
Buyer has provided to the Company written notice of such breach and (B) three
(3) Business Days prior to the Termination Date; or

 

(h) By the Company, upon written notice provided to the Buyer, if there shall
have been a breach of any representation, warranty, covenant or agreement on the
part of the Buyer contained in this Agreement which breach would, individually
or in the aggregate together with all such other then uncured breaches,
constitute grounds for the conditions set forth in

 

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Section 8.3(a) or (b) not to be satisfied at the Closing Date and, such breach
is not reasonably capable of being cured (i) prior to the Termination Date or
(ii) if such breach is reasonably capable of being cured prior to the
Termination Date, such breach shall not have been cured prior to the earlier of
(A) thirty (30) days after the Company has provided to the Buyer written notice
of such breach and (B) three (3) Business Days prior to the Termination Date.

 

9.2 Effect of Termination.

 

(a) In the event of termination of this Agreement by either the Company or the
Buyer as provided in Section 9.1, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of the Buyer or the
Company or their respective officers or directors except for Sections 4.1(r),
4.2(d), 5.8, this Section 9.2 and Article XI each of which shall survive
termination; provided, however, that nothing herein shall relieve any party from
liability for any intentional and material breach of any of the representations,
warranties, covenants or agreements set forth in this Agreement.

 

(b) The Company shall pay the Buyer, by wire transfer of immediately available
funds, $950,000 (Nine Hundred Fifty Thousand Dollars) (the “Termination Fee”) in
the event that this Agreement is terminated as follows:

 

(i) if the Buyer shall terminate this Agreement pursuant to Section 9.1(d)(i),
then the Company shall pay the Termination Fee on the Business Day immediately
following such termination;

 

(ii) if (A) either party shall terminate this Agreement pursuant to Section
9.1(e), and (B) at any time after the date of this Agreement and at or before
the date of the Company Special Meeting (or any adjournment or postponement
thereof), an Acquisition Proposal shall have been publicly announced or
otherwise disclosed or communicated to the Company’s Board of Directors (a
“Public Proposal”) and shall not have been withdrawn prior to the time of the
Company Special Meeting, and (C) within twelve (12) months following such
termination, the Company either (1) enters into an agreement or letter of intent
providing for an Acquisition Proposal (other than the Public Proposal) or an
Acquisition Proposal (other than the Public Proposal) is consummated or (2)
consummates the transaction contemplated by the Public Proposal, then the
Company shall pay the Termination Fee concurrently with the consummation of such
transaction, less any amounts paid to the Buyer pursuant to Section 9.2(c);

 

(iii) if the Company shall terminate this Agreement pursuant to Section 9.1(f),
then the Company shall pay the Termination Fee prior to such termination; and

 

(iv) if (A) the Buyer shall terminate this Agreement pursuant to Sections 9.1(b)
(but only if the Public Proposal referred to in clause (B) shall have been made
or solicited by a stockholder or group of stockholders holding 5% or more of the
Company’s common stock), 9.1 (d)(ii), (d)(iii) or 9.1(g) (but only if such
termination under Section 9.1(g) is due to an intentional breach of any
representation, warranty or covenant by the Company), and (B) at any time after
the date of this Agreement and before such termination there shall have been a
Public Proposal with respect to the Company, and (C) within twelve (12) months
following such termination, the Company

 

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either (1) enters into an agreement or letter of intent providing for an
Acquisition Proposal (other than the Public Proposal) or an Acquisition Proposal
(other than the Public Proposal) is consummated or (2) consummates the
transaction contemplated by the Public Proposal, then the Company shall pay the
Termination Fee concurrently with the consummation of such transaction, less in
any of the foregoing cases amounts paid to the Buyer pursuant to Section 9.2(c);

 

provided, however, that for the purposes of this Section 9.2(b), the term
Acquisition Proposal shall have the meaning assigned to such term, except that
the reference to “10% or more” in the definition of “Acquisition Proposal” shall
be deemed to be a reference to “40% or more.”

 

(c) In the event this Agreement is terminated by (i) the Buyer pursuant to
Section 9.1(d)(ii) or (iii), (ii) the Company or the Buyer pursuant to Section
9.1(e) or (iii) the Buyer pursuant to Section 9.1(g) (but only if such
termination under Section 9.1(g) is due to an intentional breach of any
representation, warranty or covenant by the Company), the Company shall
reimburse the Buyer for all its reasonable costs and expenses (including
reasonable legal, consulting and account fees and expenses) incurred by the
Buyer or its Affiliates in connection with this Agreement (the “Buyer
Expenses”); provided, the Company shall not be required to reimburse the Buyer
for any such Buyer Expenses exceeding $550,000 (Five Hundred Fifty Thousand
Dollars); provided, further, the Company shall not be required to pay any Buyer
Expenses in the event that the Company has previously paid the Termination Fee
with respect to any such termination. The Company shall promptly, but in no
event later than three (3) Business Days after it receives notice from the Buyer
setting forth the amount of such costs and expenses, pay such amount by wire
transfer of same day funds to an account designated by the Buyer.

 

(d) The Company hereby acknowledges that the agreements contained in this
Section 9.2 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Buyer would not enter into
this Agreement; accordingly, if the Company fails to pay all amounts due to the
Buyer on the dates specified, then the Company shall pay all costs and expenses
(including reasonable legal fees and expenses) incurred by the Buyer in
connection with any Proceeding taken by it to collect such unpaid amounts,
together with interest on such unpaid amounts at the prime lending rate
prevailing at such time, as published in the Wall Street Journal, from the date
such amount were required to be paid until the date actually received by the
Buyer. Payment of the fees described in this Section 9.2(d) shall not be in lieu
of damages incurred in the event of breach of this Agreement, to the extent
permitted by Article X.

 

ARTICLE X

 

INDEMNIFICATION

 

10.1 Indemnification.

 

(a) Following the Closing and subject to the terms and conditions of this
Article X, the Company shall indemnify, defend and hold harmless the Buyer and
its Affiliates and their

 

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respective officers, directors, employees, stockholders, assigns and successors
(each, a “Buyer Indemnified Party”) from and against, and shall reimburse each
Buyer Indemnified Party for, any and all losses (but not lost profits and
consequential or punitive damages, except to the extent awarded by a court of
competent jurisdiction in respect of a third party claim), Taxes, damages,
liabilities, costs and expenses, including interest, penalties, court costs and
reasonable attorneys’ fees and expenses, imposed upon or incurred by such Buyer
Indemnified Party (“Buyer Losses”), with respect to:

 

(i) any inaccuracy or breach of any representation or warranty made by the
Company (other than the representations and warranties set forth in Sections
4.1(k)(i) – (vi));

 

(ii) any breach of any covenant or agreement made by the Company herein;

 

(iii) any Liabilities, other than the Assumed Liabilities, of the Company or any
of its Affiliates, including any Excluded Liabilities;

 

(iv) the UK Tax Liability;

 

(v) any Liability arising out of or related to the Asset Purchase Agreement,
dated July 29, 2003 between Grace Construction Products Limited, The Separations
Group, Jones Chromatography U.S.A., Inc., Argonaut Technologies Limited and the
Company and the transactions contemplated thereby (the “Grace Acquisition”);

 

(vi) except for Transfer Costs, which are covered in Section 6.4: (A) all Taxes
imposed (whether payable in cash or by use of a loss carryback or tax credit
that is generated in a Post-Closing Tax Period) on any of the Transferred
Subsidiaries for any Pre-Closing Tax Period and (B) all Taxes (whether payable
in cash or by use of a loss carryback or tax credit that is generated in a
Post-Closing Tax Period) of any Person (other than the Transferred Subsidiaries)
imposed on any of the Transferred Subsidiaries (1) as a result of being a member
on or prior to the Closing Date of any consolidated, combined, affiliated or
unitary Tax Group or (2) as a transferee or successor, by contract, or
otherwise, which Taxes, with respect to this clause (2), relate to an event or
transaction occurring before the Closing;

 

(vii) any Liability arising from or related to the Wales Lease including any
Liability, fines or penalties arising in connection with any assignment or
purported assignment of the Wales Lease to Argonaut Technologies Limited.

 

(b) Following the Closing and subject to the terms and conditions provided in
this Article X, the Buyer shall indemnify, defend and hold harmless, the Company
and its Affiliates and their respective officers, directors, employees,
stockholders, assigns and successors (each, a “Company Indemnified Party”) from
and against, and shall reimburse each Company Indemnified Party for, any and all
losses (but not lost profits and consequential or punitive damages, except to
the extent awarded by a court of competent jurisdiction in respect of a third
party claim), damages, liabilities, costs and expenses, including interest,
penalties, court costs and reasonable attorneys’ fees and expenses, imposed upon
or incurred by such Company Indemnified Party (“Company Losses”), with respect
to:

 

(i) any inaccuracy or breach of any representation or warranty made by the
Buyer;

 

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(ii) any breach of any covenant or agreement made by the Buyer herein;

 

(iii) any of the Assumed Liabilities;

 

(iv) except for Transfer Costs, which are covered in Section 6.4 and Taxes for
which the Company is responsible pursuant to Section 10.1(a): (A) all Taxes
imposed on any of the Transferred Subsidiaries for any Post-Closing Tax Period
and (B) all Taxes of any Person (other than the Transferred Subsidiaries)
imposed on any of the Transferred Subsidiaries (1) as a result of being a member
after the Closing Date of any consolidated, combined, affiliated or unitary Tax
Group or (2) as a transferee or successor, by contract, or otherwise, which
Taxes, with respect to this clause (2), relate to an event or transaction
occurring after the Closing or

 

(v) except for those matters with the Company has indemnified the Buyer
Indemnified Parties pursuant to Section 10.1(a), the conduct of the Acquired
Businesses by the Buyer or the use or operation of the Transferred Assets, in
each case after the close of business on the Closing Date.

 

10.2 Limitations on Indemnity Payments. Notwithstanding anything contained
herein to the contrary, the maximum aggregate liability of (a) the Company to
all Buyer Indemnified Parties taken together for all Buyer Losses under Section
10.1(a)(i) and (b) the Buyer to all Company Indemnified Parties taken together
for all Company Losses under Section 10.1(b)(i) shall, in each such case, be
limited to a maximum of $1,000,000 (One Million Dollars), and (c) the Company’s
obligations with respect to the UK Tax Liability, shall be limited to a maximum
of $1,000,000 (One Million Dollars). Notwithstanding anything contained herein
to the contrary, (x) the Company shall not be obligated to make any
indemnification payment under Section 10.1(a)(i) unless and until the aggregate
Buyer Losses sustained by Buyer Indemnified Parties and (y) the Buyer shall not
be obligated to make any indemnification payment under Section 10.1(b)(i) unless
and until the aggregate Company Losses sustained by Company Indemnified Parties,
in each such case, collectively exceeds $200,000 (Two Hundred Thousand Dollars),
and then any indemnification with respect to such Buyer Losses or Company Losses
shall be made only to the extent of such excess. Notwithstanding the foregoing,
the limitations and qualifications set forth in this Section 10.2 shall not
apply to indemnification for breaches of the representations and warranties
contained in Sections 4.1(a), (b), (c) and (r) and 4.2(a), (b) and (d). The
Buyer Indemnified Parties’ remedies with respect to Buyer Losses specified in
(i) Sections 10.1(a)(i) and (vii) shall be satisfied by application of the
Escrow Funds held pursuant to the Escrow Agreement in accordance with the terms
herein and therein, (ii) in Section 10.1(a)(iv) shall be satisfied first by
application of the Escrow Funds held pursuant to the Escrow Agreement in
accordance with its terms herein and therein, and if any such Buyer Losses shall
be in excess of the amount of the Escrow Funds, then the Company shall be
obligated to satisfy any such excess amounts, and (iii) Sections 10.1(a)(ii),

 

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(iii), (v) and (vi) shall be satisfied by the Company; provided that, if the
Company fails to pay amounts due pursuant to this Section 10.2(iii), such
amounts may be satisfied by application of the Escrow Funds held pursuant to the
Escrow Agreement in accordance with the terms herein and therein. The amount of
any Buyer Losses or Company Losses for which indemnification is provided under
this Article X shall be reduced to take into account any net Tax benefit
actually realized by the indemnified party as a result of the payment of such
losses. In computing the amount of any such Tax benefit actually realized, an
indemnified party shall be deemed to actually realize the benefit arising from
the payment of such losses after the use of all other losses, deductions,
credits or items of such indemnified party. In no event shall any Buyer
Indemnified Party or Company Indemnified Party, as applicable, be entitled to
indemnification in respect of Liabilities, Buyer Losses or Company Losses, as
the case may be, for which such Buyer Indemnified Party or Company Indemnified
Party, as the case may be, has already been compensated pursuant to Section 3.3
or this Article X; provided that such restriction on indemnification shall only
apply to the extent that such Buyer Indemnified Party or Company Indemnified
Party, as the case may be, has actually received payment in respect of such
Liabilities, Buyer Losses or Company Losses, as applicable.

 

10.3 Notice of Indemnity Claims. If any Buyer Indemnified Party or Company
Indemnified Party entitled to or seeking indemnification hereunder (an
“Indemnified Party”) (i) determines that any event, occurrence, fact, condition
or claim has given or could give rise to any Buyer Losses or Company Losses, as
applicable, for which such Indemnified Party is or may be entitled to, or may
seek, indemnification under this Agreement, (ii) otherwise identifies an event,
occurrence, fact, condition or claim giving rise (or which may give rise) to a
right of indemnification hereunder in favor of such Indemnified Party, or (iii)
with respect to any Third Party Claim (as defined herein), becomes aware of the
assertion of any claim or of the commencement of any Proceeding at law or in
equity (any of the foregoing, an “Indemnity Claim”), such Indemnified Party
shall promptly notify the party obligated to provide indemnification or from
whom indemnification is being or will be sought (the “Indemnifying Party”) in
writing of such Indemnity Claim (a “Claim Notice”) describing the facts giving
rise to the claim for indemnification under this Agreement and shall include in
such Claim Notice (if then known) the amount or the method of computation of the
amount of such claim and a reference to the provision of this Agreement or any
other agreement, document or instrument executed hereunder or in connection with
this Agreement upon which such claim is based; provided, however, that the
failure of any Indemnified Party to give timely notice thereof shall not affect
any of its rights to indemnification hereunder nor relieve the Indemnifying
Party from any of its indemnification obligations hereunder, except to the
extent the Indemnifying Party is materially prejudiced by such failure.

 

10.4 Indemnification Procedures. Any obligation to provide indemnification
hereunder with respect to any Proceeding at law or in equity by or against any
third party, including any Governmental Authority (a “Third Party Claim”),
except with respect to Tax Proceedings, which shall be governed by Article VI,
shall be subject to the following terms and conditions:

 

(a) Within ten (10) days after receipt of a Claim Notice, the Indemnifying Party
shall give written notice to the Indemnified Party stating whether it disputes
the Indemnity Claim and whether it will defend against such Indemnity Claim. The
Indemnifying Party shall be

 

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entitled, at its sole cost and expense, subject to Section 10.5, to assume and
control the defense, compromise, settlement and investigation of such Indemnity
Claim, including the management of any Proceeding relating thereto, and to
employ and engage counsel reasonably acceptable to the Indemnified Party. The
Indemnified Party shall at all times have the right to fully participate in the
defense of an Indemnity Claim at its own cost and expense directly or through
counsel; provided, however, that if the named parties to a Proceeding include
both the Indemnifying Party and the Indemnified Party and the Indemnified Party
has been advised by counsel that (i) representation of both parties by the same
counsel would be inappropriate under applicable standards of professional
conduct or (ii) there may be one or more legal or equitable defenses available
to it that are different from or additional to those available to the
Indemnifying Party, then, in either case, the Indemnified Party shall be
entitled to retain its own counsel at the cost and expense of the Indemnifying
Party (except that the Indemnifying Party shall not be obligated to pay the fees
and expenses of more than one separate counsel for all Indemnified Parties,
taken together). Notwithstanding the foregoing, the Indemnified Party, during
the period the Indemnifying Party is determining whether to elect to assume the
defense of a matter covered by this Section 10.4, may take such reasonable
actions as it deems necessary to preserve any and all rights with respect to the
matter, without such actions being construed as a waiver of the Indemnified
Party’s rights to defense and indemnification under this Agreement.

 

(b) If the Indemnifying Party exercises the right to undertake the defense and
investigation of any such Indemnity Claim as provided in Section 10.4(a), then
(i) the Indemnified Party agrees to cooperate with the Indemnifying Party in
such efforts and make available to the Indemnifying Party all witnesses,
records, materials and information in the Indemnified Party’s possession, under
its control or to which it may have access as may be reasonably requested by the
Indemnifying Party, and (ii) the Indemnifying Party will keep the Indemnified
Party reasonably informed of the progress of the defense of any such Indemnity
Claim. If the Indemnifying Party fails to undertake the defense and
investigation of any such Indemnity Claim as provided in Section 10.4(a),
including conducting a good faith and diligent defense, then (i) the Indemnified
Party against which such Indemnity Claim has been asserted shall have the right
to undertake the defense, compromise, settlement and investigation of such
Indemnity Claim on behalf of, and at the cost and expense of and for the account
and risk of, the Indemnifying Party, (ii) the Indemnifying Party agrees to
cooperate with the Indemnified Party in such efforts and make available to the
Indemnified Party all witnesses, records, materials and information in the
Indemnifying Party’s possession, under its control or to which it may have
access as may be reasonably requested by the Indemnified Party, and (iii) the
Indemnified Party will keep the Indemnifying Party reasonably informed of the
progress of the defense of any such Indemnity Claim.

 

10.5 Settlement of Indemnity Claims. The Indemnifying Party shall not, without
the prior written consent of the Indemnified Party, (a) settle or compromise any
Indemnity Claim or consent to the entry of any final judgment that does not
include as an unconditional term thereof the delivery by the claimant or
plaintiff of a written release or releases from all liability in respect of such
Indemnity Claim of all Indemnified Parties affected by such Indemnity Claim, or
(b) settle or compromise any Indemnity Claim if the settlement imposes equitable
remedies or material obligations on the Indemnified Party other than financial
obligations for which such Indemnified Party shall be indemnified hereunder.
Except in the event the Indemnified Party has assumed the defense of the
Indemnified Claim pursuant to Section 10.4(b),

 

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the Indemnified Party shall not, without the prior written consent of the
Indemnifying Party, settle or compromise any Indemnity Claim or consent to the
entry of any final judgment with respect to an Indemnity Claim.

 

10.6 Survival. All covenants and agreement of the parties made in this Agreement
shall survive the Closing Date unless otherwise expressly provided herein. The
representations and warranties of the Company and the Buyer contained in this
Agreement shall survive the Closing Date for a period of twelve (12) months
following the Closing Date, notwithstanding any investigation at any time made
by or on behalf of the party, except (a) the representations and warranties of
the Company contained in Sections 4.1(a), (b), (c), (j), and (r) and the
representations and warranties of the Buyer contained in Sections 4.2(a), (b)
and (d) shall survive indefinitely and (b) the representations and warranties of
the Company contained in Sections 4.1(k) shall survive until ninety (90) days
following the expiration of the applicable statue of limitations or statutory
tax assessment period (including all periods of extension, whether automatic or
permissive). If any Claim Notice for indemnification under Section 10.1(a) or
10.1(b) shall have been given within the applicable survival period, the
representations and warranties that are the subject of such indemnification
claim shall survive until such time as such claim is finally resolved.

 

10.7 Treatment of Indemnification Payments. Each of the Buyer and the Company
agrees to treat any payment made under this Article X as an adjustment to the
Purchase Price. If, notwithstanding such treatment by the parties, any indemnity
payment is determined to be taxable income rather than an adjustment to the
Purchase Price by any taxing authority, then the indemnifying party shall
indemnify the indemnified party for any Taxes imposed on the indemnified party
or by reason of the receipt of such indemnity payment (including any payments
under this Section 10.7).

 

10.8 Remedies Exclusive. Except for any equitable relief, including injunctive
relief or specific performance, to which any party to this Agreement may be
entitled, the indemnification contemplated by this Article X shall be the sole
and exclusive remedy of any Buyer Indemnified Party or Company Indemnified Party
with respect to this Agreement or the transactions contemplated hereby or
thereby, except with respect to any damages incurred by any party as a result
of, or in connection with any, fraud or willful breach on the part of the other
party; provided, however, that nothing in this Section 10.8 shall limit the
rights or remedies expressly provided for in this Agreement or any other
instrument delivered hereunder or the rights or remedies which, as a matter of
applicable Law or public policy, cannot be limited or waived.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed duly given (a) on the date of delivery if delivered
personally, or by telecopy or facsimile, upon confirmation of receipt, (b) on
the first Business Day following the

 

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date of dispatch if delivered by a recognized next-day courier service, or (c)
on the fifth Business Day following the date of mailing if delivered by
registered or certified mail return receipt requested, postage prepaid. All
notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such
notice:

 

  (i) if to the Company, to it at:

 

Argonaut Technologies, Inc.

220 Saginaw Drive

Redwood City, CA 94063

Attention:  Lissa Goldenstein

Facsimile:  (650) 716-1557

 

with copies to:

 

O’Melveny & Myers LLP

Embarcadero Center West

275 Battery Street

Suite 2600

San Francisco, CA 94111

Attention:  Michael J. Kennedy

Facsimile:  415-984-8701

 

  (ii) if to the Buyer, to it at:

 

Biotage AB

Kungsgatan 76

SE-753 18 Uppsala

Sweden

Attention:  Jeff Bork

Facsimile:  +46 70 202 98 63

 

with copies to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention:  Richard A. Miller

                  Caroline B. Gottschalk

Facsimile:  212-455-2502

 

11.2 Counterparts; Facsimile Signature. This Agreement may be executed in any
number of counterparts, each of which shall be considered one and the same
agreement and shall become effective when all counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
the parties need not sign the same counterpart. Any party may execute this
Agreement by facsimile signature, and the other parties will be entitled to rely
on such facsimile signature as conclusive evidence that this Agreement has been
duly executed by such party.

 

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11.3 Bulk Sales. The parties hereto agree to waive compliance with the
provisions of the Laws of any jurisdiction relating to a bulk sale or transfer
of assets that may be applicable to the transactions contemplated by this
Agreement.

 

11.4 Further Assurances. From time to time after the Closing and without further
consideration, the Company shall, and shall cause its Subsidiaries to, execute,
acknowledge and deliver such documents and instruments of conveyance,
assignment, transfer and delivery and take or cause to be taken such other
actions as the Buyer may reasonably request in order to carry out the purpose
and intention of this Agreement, including to consummate more effectively the
purchase, sale, conveyance, assignment, transfer and delivery of the Transferred
Shares and the Transferred Assets as contemplated by this Agreement, to vest in
the Buyer and/or the Designated Purchaser title to the Transferred Shares and
the Transferred Assets or to enable the Buyer and/or the Designated Purchaser to
protect, exercise and enjoy all rights and benefits of the Company or its
Subsidiaries with respect thereto and as otherwise appropriate to consummate the
transactions contemplated by this Agreement.

 

11.5 Entire Agreement. This Agreement (including the documents and the
instruments referred to herein) and the Escrow Agreement constitutes the entire
agreement among all the parties hereto and terminates and supersedes all prior
agreements and understandings, oral and written, among all the parties hereto
with respect to the subject matter hereof and thereof, other than the
Confidentiality Agreement which shall survive the execution and delivery of this
Agreement as provided for herein.

 

11.6 No Third-Party Beneficiaries. This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns. Nothing in this Agreement, expressed or implied, is intended to or
shall confer on any Person other than the parties hereto or their respective
successors and assigns, any rights, remedies or Liabilities under or by reason
of this Agreement.

 

11.7 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, in whole
or in part (whether by operation of law or otherwise), without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void; provided, however, that the Buyer
may assign in writing its rights and obligations, in whole or in part, to one or
more of its wholly-owned Subsidiaries, but the Buyer shall remain jointly and
severally liable with any such assignee(s) with respect to all obligations of
the Buyer hereunder.

 

11.8 Amendment and Modification; Waiver. This Agreement may be amended, modified
and supplemented by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after the Stockholder
Approval, but, after any such approval, no amendment shall be made which by Law
requires further approval by such stockholders without such further approval.
This Agreement may not be amended, except by an instrument in writing signed on
behalf of each of the parties hereto. At any time prior to the Closing, the
parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally permitted, (a) extend the time for the
performance of any of

 

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the obligations or other acts of any other party hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of a party to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.

 

11.9 Enforcement; Jurisdiction. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court or state court
sitting in the State of Delaware, this being in addition to any other remedy to
which they are entitled at law or in equity subject to the terms hereof. In
addition, each of the parties hereto (a) hereby irrevocably agrees that any
legal action or proceeding with respect to this Agreement or for recognition and
enforcement of any judgment in respect hereof brought by another party hereto or
its successors or assigns may be brought and determined in the Court of Chancery
of the State of Delaware or the federal courts located in the State of Delaware,
and each party hereto hereby irrevocably submits with regard to any such action
or proceeding for itself and in respect of its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts, and (b)
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (i) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to lawfully
serve process, (ii) that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (iii) to the fullest extent permitted by applicable Law, that (A) the suit,
action or proceeding in any such court is brought in an inconvenient forum, (B)
the venue of such suit, action or proceeding is improper and (C) this Agreement,
or the subject matter hereof, may not be enforced in or by such courts.

 

11.10 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.

 

11.11 Costs and Expenses. Regardless of whether the transactions contemplated by
this Agreement are consummated and except as otherwise provided in this
Agreement, the Company, on the one hand, and the Buyer, on the other hand, will
each bear their own costs and expenses (including attorneys’ fees and costs)
incurred in connection with this Agreement and the transactions contemplated by
this Agreement.

 

11.12 Setoff. The Company agrees that the Buyer and its Subsidiaries may setoff
against any amounts due and owing to the Company or any of its Subsidiaries
hereunder any amounts due to the Buyer or its Subsidiaries under this Agreement.
Each of the Company and its Subsidiaries hereby waives any right of setoff it
may have or to which it may be entitled

 

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under this Agreement from time to time against Buyer and its Subsidiaries and
expressly waives the right to cause or instruct the escrow agent to do the same
with respect to any payment from the Escrow Funds.

 

11.13 Casualty Losses. If there shall have been suffered between the date of
this Agreement and the Closing Date any casualty or loss relating to the
Transferred Assets or any asset of the Transferred Subsidiaries, then at the
Closing all claims to insurance proceeds or other rights of the Company or any
of its Subsidiaries against third parties relating from such casualty or loss
shall (to the extent assignable) be separately assigned by the Company or its
Subsidiaries to the Buyer and/or the Designated Purchaser. To the extent not so
assignable, the Company shall, and shall cause its Subsidiaries to, remit all
proceeds received from insurers or third parties in respect of such claims to
the Buyer.

 

11.14 Mutual Drafting. The parties hereto have been represented by counsel who
have carefully negotiated the provisions hereof. As a consequence, the parties
do not intend that the presumptions of any laws or rules relating to the
interpretation of contracts against the drafter of any particular clause should
be applied to this Agreement and therefore waive their effects. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intent of the parties.

 

11.15 Governing Law. This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware, without
giving effect to the principles of conflict of laws thereof.

 

11.16 Disclosure Schedules. Each disclosure set forth in the Company Disclosure
Schedule or Buyer Disclosure Schedule shall be deemed disclosed for purposes of,
and shall qualify and be treated as an exception to, only the specific section
of this Agreement specified therefor, except to the extent that disclosure in
one specific section of the Company Disclosure Schedule or Buyer Disclosure
Schedule, as the case may be, is specifically referred to in another specific
section of the Company Disclosure Schedule or Buyer Disclosure Schedule, as
applicable, or by appropriate cross-reference and except to that it would be
reasonably apparent that a reference in one specific section in the Company
Disclosure Schedule or Buyer Disclosure Schedule, as the case may be, also
relates to another specific section of the Company Disclosure Schedule or Buyer
Disclosure Schedule.

 

11.17 Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability and shall not render
invalid or unenforceable the remaining terms and provisions of this Agreement or
affect the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered by their respective duly authorized Representative as of the date
first above written.

 

BIOTAGE AB By:  

/s/ Jeff Bork

--------------------------------------------------------------------------------

Name:   Jeff Bork Title:   President and CEO ARGONAUT TECHNOLOGIES, INC. By:  

/s/ Lissa Goldenstein

--------------------------------------------------------------------------------

Name:   Lissa A. Goldenstein Title:   President and Chief Executive Officer

--------------------------------------------------------------------------------

Exhibit A

 

Designated Purchasers

 

Transferred Shares pursuant to Section 2.1

  Biotage UK Ltd

 

Transferred Assets pursuant to Section 2.2

  Biotage, LLC

--------------------------------------------------------------------------------

Exhibit B

 

ESCROW AGREEMENT

 

ESCROW AGREEMENT (the “Agreement”) entered into as of the     th day of March,
2005, by and among Biotage AB, a corporation organized under the laws of Sweden
(“Buyer”), Argonaut Technologies, Inc., a Delaware corporation (the “Company”),
and [            ], as escrow agent (the “Escrow Agent”).

 

WHEREAS, pursuant to a Sale and Asset Purchase Agreement dated as of February
    , 2005 (the “Purchase Agreement”), between Buyer and the Company, Buyer will
acquire from the Company certain assets and shares and assume certain
liabilities of the Company;

 

WHEREAS, the Purchase Agreement contemplates the due execution and delivery of
this Agreement at, and as a condition to, the Closing;

 

WHEREAS, the Company has agreed to indemnify Buyer against breaches of the
representations, warranties and covenants made by the Company in the Purchase
Agreement and against certain other matters as specified in Articles III, VI and
X of the Purchase Agreement;

 

WHEREAS, to secure partially the payment of the Company’s indemnification
obligations and other obligations pursuant to Articles III, VI and X of the
Purchase Agreement, if any, Two Million Dollars ($2,000,000) of the
consideration to be received by the Company pursuant to the Purchase Agreement
is being deposited, pursuant to Section 3.2(a) of the Purchase Agreement, in
escrow to be held by the Escrow Agent as hereinafter provided; and

 

WHEREAS, the Escrow Agent is willing to act as escrow agent on the terms and
conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties hereby agree as follows:

 

1. Defined Terms. Unless otherwise indicated, all capitalized terms used herein
shall have the respective meanings attributed to them in the Purchase Agreement.

 

2. Establishment of Escrow. Pursuant to Section 3.2(a) of the Purchase
Agreement, on the Closing Date, the Buyer shall deliver to the Escrow Agent Two
Million Dollars ($2,000,000) (the “Closing Escrow”), and the Escrow Agent shall
deposit the Closing Escrow into an escrow account (the “Escrow Account”). All
amounts held in the Escrow Account shall be held, invested and distributed
pursuant to the terms and conditions of this Agreement. No part of the Escrow
Account or any interest accrued thereon may be withdrawn from the escrow
established hereunder (the “Escrow”) without the prior written consent of the
Company and the Buyer, except as expressly provided otherwise in Section 4 of
this Agreement. The Escrow Agent shall hold all amounts in the Escrow Account in
a separate account, apart from any other funds or accounts of the Escrow Agent
or any other person. The Escrow Agent shall keep an accurate record of all
transactions with respect to such amount.

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3. Administration of Escrow.

 

3.1 Any monies held in the Escrow Account shall be invested and reinvested by
the Escrow Agent as specifically directed in writing by the Company, to the
extent permitted by law, in (a) direct obligations issued or guaranteed by the
United States of America or any agency or instrumentality thereof; (b)
obligations (including certificates of deposit and bankers’ acceptances) of
banks and savings and loan associations which at the date of their last public
reporting had total assets in excess of $500 million; and (c) mutual funds
sponsored by the Escrow Agent investing exclusively in the securities described
in the foregoing clauses (a) and (b) (the “Mutual Funds”). If the Company does
not provide directions to the Escrow Agent for any investment or reinvestment of
monies held in the Escrow Account, such monies shall be invested in the Mutual
Funds. Neither the Escrow Agent, the Buyer nor the Company shall be liable or
responsible for any loss resulting from any investment or reinvestment made
pursuant to this Section 3. The Escrow Account shall be increased from time to
time by any and all interest accrued and paid or dividends or similar return
received by the Escrow Agent thereon (“Interest”) after payment of expenses
incurred in connection with the investment, reinvestment or sale thereof,
pursuant to this Section 3.1 and shall be distributed in accordance with this
Agreement.

 

4. Claims by the Buyer.

 

4.1 Direct Claim Notices. If the Buyer wishes to make a claim for losses under
this Agreement for any amount that it is entitled to receive under Article X of
the Purchase Agreement (the “Direct Claim Payment”), the Buyer shall deliver to
the Escrow Agent (with a copy to the Company) a written notice signed by the
Buyer (i) specifying (x) in reasonable detail the amount of the Direct Claim
Payment sought and nature of the Direct Claim or (y) a reasonable estimate of
the amount of losses which the Buyer expect to incur with respect to any matter
for which the Buyer may be entitled to submit a claim notice under Section 10.3
of the Purchase Agreement (in either case, a “Direct Claim Notice”) and (ii)
that the Direct Claim Payment specified in clause (i) is the Buyer’s good faith
estimate of the amount that the Buyer is entitled to receive under Article X of
the Purchase Agreement. The Direct Claim Notice shall clearly state that it is a
“Direct Claim Notice.” Any Direct Claim Notice to be delivered for a claim
against the Closing Escrow must be given by the Buyer on or prior to the date
that is three business days after the one-year anniversary of the Closing Date
(the “Initial Closing Escrow Termination Date”) and must relate to a claim which
arose prior to such anniversary; provided, however, that if the UK Tax
Proceeding is not resolved by the Initial Closing Escrow Termination Date, such
period shall be extended for claims in respect of the UK Tax Liability as
provided in Section 3.2(a) of the Purchase Agreement (the date, as so extended
pursuant to such Section 3.2(a), shall be the “Initial Closing Escrow
Termination Date”).

 

4.2 If the time period required to resolve the claim underlying any Direct Claim
Notice (including the time required for the Independent Accounting Firm to
determine the

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amount to be paid or reserved from the Closing Escrow in respect of any Direct
Claim Notice) extends beyond the Initial Closing Escrow Termination Date, the
Escrow Agent shall retain the aggregate amount shown in such Direct Claims
Notice(s), including Interest thereon, and extend the Initial Closing Escrow
Termination Date by the period of time remaining until all such remaining claims
are finally resolved (the “Extended Escrow Termination Date”). Funds in the
Escrow Account in excess of the amounts shown in all such remaining Direct Claim
Notices on the Initial Closing Escrow Termination Date (an “Overage”) including
Interest thereon shall be paid to the Company within three business days after
the Initial Closing Escrow Termination Date.

 

4.3 The Company shall have 10 business days to provide written notice of
objection to the Purchaser and the Escrow Agent of any Direct Claim Notice,
specifying in reasonable detail any items disputed. After receipt of any such
dispute notice, the parties agree to negotiate in good faith to resolve such
dispute. If any such dispute cannot be resolved by the parties within thirty
days, the parties agree to appoint the Independent Accounting Firm (or if the
Independent Accounting Firm is unable to resolve such dispute, another mutually
acceptable third party) to settle such dispute in accordance with Section 7(d).
If the Company does not provide any such written notice of objection pursuant to
this Section 4.3, the Escrow Agent shall promptly pay such amount including any
Interest thereon to the Buyer from the Escrow Account and deliver a copy of the
Direct Claim Notice to the Company; provided that in the case of a Direct Claim
Notice provided pursuant to Section 4.1(i)(y), the Escrow Agent shall pay such
amount as is finally resolved to be the amount of losses actually incurred by
the Buyer.

 

4.4 Each of the Buyer and the Company hereby agrees that it will deliver notices
to the Escrow Agent only in accordance with Section 16 hereof.

 

5. Release and Termination of Escrow Account. On a date not later than three
business days after the Initial Closing Escrow Termination Date or the Extended
Escrow Termination Date, if any, the Escrow Agent shall make a cash payment to
the Company from the Escrow Account of an amount equal to all funds remaining in
the Escrow Account including Interest thereon, less any amounts that are paid to
the Buyer as a result of each such Direct Claim Notice.

 

6. Fees of Escrow Agent. All fees and costs of the Escrow Agent (including
reasonable attorneys’ fees) shall be paid out of the Escrow Account; provided,
however, any such fees in excess of $15,000 annually (the “Fee Cap”) shall be
paid by the Company. The Escrow Agent shall send copies of periodic invoices for
fees and costs to the Company and the Buyer, and the Company shall pay the
amount of any invoice reflecting fees in excess of the Fee Cap within 30 days of
receipt of such invoice. In the event any amounts owed to the Escrow Agent
remain unpaid upon the expiration of such 30-day period, the Company and the
Buyer hereby authorize the Escrow Agent to disburse such unpaid fees and costs
to itself from the Escrow Account. If such amounts are deducted from the Escrow
Account, the Company shall promptly make such adjusting payments to the Escrow
Account as shall be necessary so that it pays all such fees and costs. The
Escrow Agent shall have no liability for any such fees and costs unless arising
from its own bad faith, gross negligence or willful misconduct.

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7. Responsibilities and Liabilities of the Escrow Agent.

 

(a) The Escrow Agent shall deal with the Escrow Account and any interest accrued
thereon only in accordance with (a) this Agreement and, to the extent referred
to herein, the Purchase Agreement or (b) written instructions given in
conformity with this agreement. The Escrow Agent assumes no liabilities except
those expressed in this Agreement and shall have no responsibility or liability
to any person with respect to any action taken, suffered or omitted to be taken
by it in good faith under this Agreement, or for any mistake of fact or law, or
for anything that it may do or refrain from doing in connection herewith, except
to the extent that such actions constitute bad faith, gross negligence or
willful misconduct.

 

(b) The Escrow Agent shall be protected in acting upon any notice, request,
certificate, approval, consent, or other document delivery of which complies
with Section 16 and that the Escrow Agent reasonably believes to be genuine and
to be signed by the proper party or parties. The Escrow Agent may assume that
any person purporting to give notice, receipt or advice or make any statement or
execute any document with the provisions hereof has been duly authorized to do
so. The Escrow Agent may act in reliance upon the advice of counsel satisfactory
to it in reference to any matter in connection with this Agreement and shall not
incur any liability for any action taken in good faith in accordance with such
advice.

 

(c) The Escrow Agent shall be deemed conclusively to have given and delivered
any notice required to be given or delivered hereunder if the same is in
writing, signed by any of the Escrow Agent’s authorized officers and mailed by
registered or certified mail, addressed to each of the parties at its address
set forth herein, or otherwise is in accordance with Section 16.

 

(d) In the event of any disagreement between the other parties hereto resulting
in adverse claims or demands being made in connection with the Escrow Account
(which disagreement is not resolved within 30 days), or in the event that the
Escrow Agent in good faith is in doubt as to what action it should take
hereunder, (i) the Escrow Agent shall be entitled, without liability on its
part, to refrain from making any disbursement or taking any further action, and
(ii) the parties shall appoint the Independent Accounting Firm (as such term is
defined in the Purchase Agreement) to resolve such disagreement, which
Independent Accounting Firm shall settle such disagreement in its sole
discretion. The fees and expenses of such Independent Accounting Firm shall be
allocated between the Buyer and the Company in such manner that the Buyer shall
be responsible for that portion of the fees and expenses equal to such fees and
expenses multiplied by a faction the numerator of which is the aggregate dollar
value of disputed items submitted to the Independent Accounting Firm that are
resolved against the Buyer (as finally determined by the Independent Accounting
Firm) and the denominator of which is the total dollar value of the disputed
items so submitted, and the Company shall be responsible for the remainder of
such fees and expenses. The determination of the Independent Accounting Firm
shall be set forth in writing (such determination to include a work sheet
setting forth all material calculations used in arriving at such determination
and to be based solely on information provided to the Independent Accounting
Firm by the Buyer and the Company) delivered to each of the Buyer and the
Company and shall be final, binding and non-appealable on the parties hereto.
The Escrow Agent shall retain any disputed amounts in the Escrow Fund

--------------------------------------------------------------------------------

until the Escrow Agent shall have received either the final decision of the
Independent Accounting Firm as described above or written instructions jointly
executed by the Buyer and the Company directing delivery of the amounts of the
Escrow Account in dispute, in which event the Escrow Agent shall deliver the
amounts of the Escrow Account in dispute in accordance with such order and
instructions. The Escrow Agent shall act on such order without further
questions. In any event, the Escrow Agent shall not be liable by reason of such
action or omission to act to any of the parties hereto or to any other person,
firm, association, or corporation, even if thereafter any such order, judgment,
decree or levy be reversed, modified, annulled, set aside, or vacated.

 

(e) The Escrow Agent shall have no responsibility for and makes no
representation as to the validity, genuineness or sufficiency of this Agreement
or the value, validity or genuineness of any check for payment of money
deposited with the Escrow Agent under this Agreement.

 

(f) The Buyer and the Company hereby appoint the Escrow Agent as their
attorney-in-fact for the purposes of causing effective transfers of property
from the Escrow Account in accordance with the terms of this Agreement.

 

(g) The Escrow Agent or any successor Escrow Agent hereunder may resign
hereunder (i) at any time, with the consent of the Buyer and the Company and the
appointment of a substitute Escrow Agent by the Buyer and the Company; (ii) upon
the petitioning of a court of competent jurisdiction seeking the appointment of
a substitute Escrow Agent and the appointment by such court of a substitute
Escrow Agent; or (iii) upon 60 days’ written notice to the Buyer and the Company
and the appointment of a substitute Escrow Agent by the Buyer and the Company,
and such resignation shall be effective from the date specified in such notice.
After receipt of notice of the Escrow Agent’s intent to resign, the Buyer and
the Company will work in good faith to select a substitute Escrow Agent. In case
the office of the Escrow Agent shall become vacant for any reason, the Buyer and
the Company shall appoint a bank or trust company with an office in New York
City having a net worth (as reflected in its latest publicly available certified
financial statements) in excess of $500,000,000 as successor Escrow Agent
hereunder by an instrument or instruments in writing delivered by the Buyer and
the Company to such successor Escrow Agent, whereupon such successor Escrow
Agent shall succeed to all rights and obligations of the retiring Escrow Agents
as if this Agreement were originally executed by such successor Escrow Agent,
and the retiring Escrow Agent shall deliver to such successor Escrow Agent the
Escrow Account and any interest accrued thereon.

 

(h) Subject to Sections 4, 8 and 14 hereof, the Escrow Agent shall not have any
interest in the Escrow Account, but shall serve as escrow holder only and have
possession thereof. Any payments of income from the Escrow Account shall be
subject to withholding regulations then in force with respect to United States
taxes. The parties hereto will provide the Escrow Agent with appropriate W-9
forms for tax identification number certification or non-resident alien
certifications.

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8. Indemnification. The Escrow Agent shall be indemnified by the Buyer and the
Company against any claim or charge made against the Escrow Agent by reason of
any action or failure to act in connection with any of the transactions
contemplated by this Agreement, and against any loss the Escrow Agent may
sustain in carrying out the terms of this Agreement, except as a result of the
Escrow Agent’s bad faith, gross negligence or willful misconduct. The Buyer and
the Company shall each be liable for one-half of any such claims, charges or
losses.

 

9. Termination Date. This Agreement shall terminate on the date when all claims
pursuant to Section 4 hereof are resolved and all funds have been disbursed from
the Escrow Account in accordance with the provisions of this Agreement.

 

10. Interpleader. In the event that the Escrow Agent shall at any time be
confronted with inconsistent claims or demands by the parties hereto, the Escrow
Agent shall have the right to interplead said parties in any court of competent
jurisdiction and request that such court determine such respective rights of the
parties with respect to this Agreement, and upon doing so, the Escrow Agent
automatically shall be released from any obligations or liability as a
consequence of any such claims or demands, except that the Escrow Agent shall
not be released from any liability for its bad faith, gross negligence or
willful misconduct occurring during the time that it served as Escrow Agent.

 

11. Removal of the Escrow Agent. The Buyer and the Company, together, shall have
the right to remove the Escrow Agent hereunder by giving notice in writing to
the Escrow Agent, specifying the date upon which such removal shall take effect.
In the event of such removal, the Buyer and the Company agree that, prior to the
effective date of removal of the Escrow Agent, they will jointly appoint a
successor to the Escrow Agent (the “Successor Escrow Agent”), and the Escrow
Agent hereby agrees that, upon receiving joint written instructions from the
Buyer and the Company, it shall turn over and deliver to such Successor Escrow
Agent all of the funds in the Escrow Account and other amounts held by it
pursuant to this Agreement in accordance with the terms of such written
instructions and render the accounting required by Section 13 hereof.

 

12. Successor Escrow Agent. Upon receipt of the Escrow Fund and any other
amounts held by the Escrow Agent pursuant to this Agreement, the Successor
Escrow Agent shall thereupon be bound by all of the provisions hereof, and the
term “Escrow Agent” as used herein shall mean the Successor Escrow Agent.

 

13. Accounting. In the event of the resignation or removal of the Escrow Agent,
upon the termination of this Agreement or upon demand under reasonable
circumstances, the Escrow Agent shall render to the Buyer and the Company and
the Successor Escrow Agent(s), if any, an account in writing of the property
constituting the Escrow Fund and all distributions therefrom unless waived in
writing by both the Buyer and the Company. The Buyer and the Company together
shall each pay one-half of all reasonable fees and expenses of the Escrow Agent
for the preparation of such accounting, including the reasonable fees and
disbursements of counsel.

 

14. Tax Matters. The parties agree that to the extent permitted by applicable
law, the Buyer and the Company and their respective assigns will include the
Interest in their respective

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gross incomes for federal, state and local income tax (collectively, “Income
Tax”) purposes in accordance with their respective percentage interest in the
Escrow Fund, and pay any Income Tax resulting therefrom. The parties also agree
for Income Tax purposes to treat all payments from the Buyer to the Escrow Fund
as payments of purchase price to the Company. Notwithstanding the foregoing, the
Escrow Agent shall report and, as required, withhold any taxes as it determines
may be required by any law or regulation in effect. The Escrow Agent shall remit
such taxes to the appropriate authorities.

 

15. Amendments. This Agreement may only be amended by the mutual written
agreement of the Buyer, the Company and the Escrow Agent.

 

16. Notices. Any notices or other communications given hereunder shall be
delivered personally or sent by telecopy or telefax, a reputable overnight
courier service, or registered or certified mail, addressed as follows or to
such other address of which the parties may have given notice:

 

If to the Company

   Argonaut Technologies, Inc.      220 Saginaw Drive      Redwood City, CA
94063      Attention:      Fax No.:

Copy to:

   O’Melveny & Myers LLP      Embarcadero Center West      275 Battery Street  
   Suite 2600      San Francisco, CA 94111      Attention: Michael J. Kennedy  
   Facsimile: 415-984-8701

If to the Buyer:

   Biotage AB      Kungsgatan 76      SE-753 18 Uppsala      Sweden     
Attention: Jeff Bork      Fax No.: +46 70 202 98 63

Copy to:

   Simpson Thacher & Bartlett LLP      425 Lexington Avenue      New York, New
York 10017      Attention: Richard A. Miller                       Caroline B.
Gottschalk     

Facsimile: 212-455-2502

 

If to Escrow Agent:           Attn:      Fax No.:

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Such notices or other communications shall be deemed received (a) on the date
delivered or sent, if delivered personally or sent by telecopy or telefax
transmission confirmed, (b) the day after being sent, if sent by a reputable
overnight receipted courier service, or (c) three business days after being
sent, if sent by registered or certified mail.

 

17. Governing Law. This Agreement shall be governed by, and construed in
accordance with and subject to, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state. No suit, action
or proceeding with respect to this Agreement may be brought in any court or
before any similar authority other than (i) a federal court located in the State
of New York or (ii) if no such court has jurisdiction over any such suit, action
or proceeding, any other court of competent jurisdiction in the State of New
York. Each of the parties submits to the exclusive jurisdiction of such courts
in any such suit, action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the suit, action or
proceeding may be heard and determined in any such court. Each party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the parties waives any defense of
inconvenient forum to the maintenance of any suit, action or proceeding so
brought and waives any bond, surety, or other security that might be required of
any other party with respect thereto.

 

18. Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

19. Entire Agreement, Modification. This Agreement embodies the entire agreement
between the parties with respect to the subject matter hereof, and except as
specifically provided herein there are no prior representations, warranties, or
agreements relating thereto. No change in, addition to, or waiver of the terms
and conditions hereof shall be binding upon the parties hereto unless approved
in writing by the parties.

 

20. Captions. The captions contained in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement and shall not
affect the meaning or interpretation hereof.

 

21. Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. The Buyer may assign their rights hereunder to any person to whom they
may assign their rights under the Purchase Agreement.

 

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

COMPANY:

  ARGONAUT TECHNOLOGIES, INC.    

By:

 

 

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BUYER:

  BIOTAGE AB    

By:

 

 

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Name:

       

Title:

   

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

ESCROW AGENT:

 

By:

 

 

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Name:

   

Title: