1
EXHIBIT NUMBER 2.1
MERGER AGREEMENT
DATED AS OF JUNE 10, 1999
AMONG
ION BEAM APPLICATIONS S.A.
ION BEAM APPLICATIONS G.P.
IBA ACQUISITION CORP.
AND
STERIGENICS INTERNATIONAL, INC.
2
TABLE OF CONTENTS
Page
----
ARTICLE 1 THE OFFER..............................................................................1
SECTION 1.1. THE OFFER..............................................................................1
SECTION 1.2. COMPANY ACTION.........................................................................3
SECTION 1.3. BOARDS OF DIRECTORS AND COMMITTEES; SECTION 14(F)......................................4
ARTICLE 2 THE MERGER.............................................................................5
SECTION 2.1. THE MERGER.............................................................................5
SECTION 2.2. CLOSING OF THE MERGER..................................................................5
SECTION 2.3. EFFECTIVE TIME.........................................................................5
SECTION 2.4. EFFECTS OF THE MERGER..................................................................5
SECTION 2.5. CHARTER AND BYLAWS.....................................................................6
SECTION 2.6. DIRECTORS..............................................................................6
SECTION 2.7. OFFICERS...............................................................................6
SECTION 2.8. CONVERSION OF SHARES...................................................................6
SECTION 2.9. PAYMENT OF CASH MERGER CONSIDERATION...................................................6
SECTION 2.10. STOCK OPTIONS; PURCHASE PLAN...........................................................8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................8
SECTION 3.1. ORGANIZATION AND QUALIFICATION; SUBSIDIARIES...........................................8
SECTION 3.2. CAPITALIZATION OF THE COMPANY AND ITS SUBSIDIARIES.....................................9
SECTION 3.3. AUTHORITY RELATIVE TO THIS AGREEMENT; RECOMMENDATION..................................10
SECTION 3.4. SEC REPORTS; FINANCIAL STATEMENTS.....................................................10
SECTION 3.5. INFORMATION SUPPLIED..................................................................11
SECTION 3.6. CONSENTS AND APPROVALS; NO VIOLATIONS.................................................11
SECTION 3.7. COMPLIANCE WITH APPLICABLE LAW........................................................12
SECTION 3.8. NO UNDISCLOSED LIABILITIES; ABSENCE OF CHANGES........................................12
SECTION 3.9. LITIGATION............................................................................13
SECTION 3.10. YEAR 2000 COMPLIANCE..................................................................13
SECTION 3.11. EMPLOYEE BENEFIT PLANS, LABOR MATTERS.................................................13
SECTION 3.12. ENVIRONMENTAL LAWS AND REGULATIONS....................................................14
SECTION 3.13. TAXES.................................................................................15
SECTION 3.14. PROPERTIES............................................................................16
SECTION 3.15. MATERIAL CONTRACTS AND COMMITMENTS....................................................17
SECTION 3.16. INTANGIBLE PROPERTY...................................................................18
SECTION 3.17. BROKERS...............................................................................19
SECTION 3.18 CERTAIN BUSINESS PRACTICES............................................................19
SECTION 3.19. APPLICABILITY OF STATE TAKEOVER STATUTES..............................................19
SECTION 3.20 AMENDMENT TO THE RIGHTS AGREEMENT.....................................................19
SECTION 3.21 OPINION OF FINANCIAL ADVISOR..........................................................19
SECTION 3.22 EMPLOYEES.............................................................................20
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION..............................20
SECTION 4.1. ORGANIZATION..........................................................................20
SECTION 4.2. AUTHORITY RELATIVE TO THIS AGREEMENT..................................................20
SECTION 4.3. INFORMATION SUPPLIED..................................................................21
SECTION 4.4. FINANCING.............................................................................21
SECTION 4.5. CONSENTS AND APPROVALS; NO VIOLATIONS.................................................21
ARTICLE 5 COVENANT..............................................................................22
i
3
SECTION 5.1. INTERIM OPERATIONS....................................................................22
SECTION 5.2. STOCKHOLDERS' MEETING.................................................................24
SECTION 5.3. OTHER POTENTIAL ACQUIRERS.............................................................24
SECTION 5.4. INTENTIONALLY OMITTED.................................................................26
SECTION 5.5. ACCESS TO INFORMATION.................................................................26
SECTION 5.6. FURTHER ACTIONS.......................................................................26
SECTION 5.7. HSR MATTERS...........................................................................27
SECTION 5.8. PUBLIC ANNOUNCEMENTS..................................................................27
SECTION 5.9. EMPLOYEE BENEFIT MATTERS; COMPANY STOCK OPTION........................................27
SECTION 5.10. NOTIFICATION OF CERTAIN MATTERS.......................................................28
SECTION 5.11. GUARANTEE OF PERFORMANCE..............................................................28
SECTION 5.12. INDEMNIFICATION, DIRECTORS' AND OFFICERS' INSURANCE...................................28
SECTION 5.13. STATE TAKEOVER LAWS...................................................................28
SECTION 5.14. EMPLOYEE BENEFITS.....................................................................28
ARTICLE 6 DISSENTING SHARES; EXCHANGE OF SHARES.................................................29
SECTION 6.1. DISSENTING SHARES.....................................................................29
ARTICLE 7 CONDITIONS TO THE OFFER...............................................................29
SECTION 7.1. CONDITIONS TO THE OFFER...............................................................29
ARTICLE 8 CONDITIONS TO CONSUMMATION OF THE MERGER..............................................32
SECTION 8.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER...........................32
ARTICLE 9 TERMINATION; AMENDMENT; WAIVER........................................................33
SECTION 9.1. TERMINATION...........................................................................33
SECTION 9.2. PROCEDURE AND EFFECT OF TERMINATION...................................................34
SECTION 9.3. FEES AND EXPENSES.....................................................................34
SECTION 9.4. AMENDMENT.............................................................................35
SECTION 9.5. WAIVER................................................................................35
ARTICLE 10 MISCELLANEOUS.........................................................................36
SECTION 10.1. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.........................................36
SECTION 10.2. ENTIRE AGREEMENT; ASSIGNMENT..........................................................36
SECTION 10.3. VALIDITY..............................................................................36
SECTION 10.4. NOTICES...............................................................................36
SECTION 10.5. GOVERNING LAW.........................................................................37
SECTION 10.6. DESCRIPTIVE HEADINGS..................................................................37
SECTION 10.7. PARTIES IN INTEREST...................................................................37
SECTION 10.8. CERTAIN DEFINITIONS...................................................................37
SECTION 10.9. PERSONAL LIABILITY....................................................................38
SECTION 10.10. SPECIFIC PERFORMANCE..................................................................38
SECTION 10.11. COUNTERPARTS..........................................................................38
ii
4
TABLE OF DEFINED TERMS
----------------------
Term Page
---- ----
Acquiring Person....................................................................................19
Acquisition..........................................................................................1
Acquisition Proposal................................................................................24
Affiliate...........................................................................................37
Agreement............................................................................................1
Blue Sky Laws.......................................................................................11
Board................................................................................................1
Break-Up Fee........................................................................................34
Business Day........................................................................................37
Cash Merger Consideration............................................................................6
Certificates.........................................................................................7
Closing Time.........................................................................................5
Company..............................................................................................1
Company Disclosure Schedule..........................................................................8
Company Employee Plan...............................................................................13
Company Employee Plans..............................................................................13
Company Option Plan..................................................................................8
Company Option Plans.................................................................................8
Company Personnel...................................................................................13
Company Real Assets.................................................................................16
Company SEC Reports.................................................................................10
Company Securities...................................................................................9
Company Stock Option.................................................................................8
Company Stock Options................................................................................8
Confidentiality Agreement...........................................................................26
Continuing Directors.................................................................................5
Contracts...........................................................................................17
Cure Time...........................................................................................32
DGCL.................................................................................................3
Disclosure Statement................................................................................11
Dissenting Shares...................................................................................29
Distribution Date....................................................................................3
Effective Time.......................................................................................5
Environmental Claim.................................................................................15
Environmental Laws..................................................................................14
ERISA...............................................................................................13
Exchange Act.........................................................................................1
Expiration Date.....................................................................................19
Governmental Entity.................................................................................11
GP ..................................................................................................1
HSR Act.............................................................................................11
Indemnified Parties.................................................................................28
Intangible Property.................................................................................19
Knowledge...........................................................................................12
Lien.................................................................................................9
Material Adverse Effect..............................................................................9
Material Change.....................................................................................29
Merger...............................................................................................5
Merger Certificate...................................................................................5
Merger Fund..........................................................................................7
iii
5
Minimum Stock Condition..............................................................................2
Offer................................................................................................1
Offer Documents......................................................................................2
Parent...............................................................................................1
Parent Material Adverse Effect......................................................................20
Payment Agent........................................................................................6
Per Share Amount.....................................................................................1
Permitted Liens.....................................................................................16
Person..............................................................................................37
Right................................................................................................6
Rights...............................................................................................6
Rights Agreement.....................................................................................6
Schedule 14D-9.......................................................................................3
SEC..................................................................................................2
Section 203 Approval.................................................................................3
Securities Act......................................................................................10
Share................................................................................................1
Shares...............................................................................................1
Stock...............................................................................................37
Stockholders Agreement...............................................................................5
Stockholders' Meeting...............................................................................24
Subsidiaries........................................................................................37
Subsidiary..........................................................................................37
Superior Proposal...................................................................................25
Surviving Corporation................................................................................5
Tax.................................................................................................15
Tax Return..........................................................................................15
Taxes...............................................................................................15
Tender Offer Purchase Time...........................................................................4
iv
6
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Agreement") dated as of June 10, 1999, is among
STERIGENICS INTERNATIONAL, INC., a Delaware corporation ("Company"), ION BEAM
APPLICATIONS S.A., a Belgian corporation ("Parent"), ION BEAM APPLICATIONS G.P.
a general partnership organized under the laws of Delaware which is controlled
by Parent ("GP") and IBA ACQUISITION CORP., a Delaware corporation which is
wholly-owned by GP ("Acquisition"). WHEREAS, the Board of Directors of the
Company (the "Board") has, in light of and subject to the terms and conditions
set forth herein, (i) determined that each of the Offer and the Merger (each as
defined below) is advisable on substantially the terms and conditions set forth
herein and is fair to the stockholders of the Company and in the best interests
of such stockholders and (ii) approved and adopted this Agreement and the
transactions contemplated hereby and resolved, subject to the terms hereof, to
recommend acceptance of the Offer and approval and adoption by the stockholders
of the Company, if necessary, of this Agreement; and
WHEREAS, in furtherance thereof, it is proposed that Acquisition shall,
within five (5) business days after the public announcement hereof, commence a
tender offer (the "Offer") to acquire all of the issued and outstanding Shares
(defined herein) together with the associated Rights (defined herein) which are
not owned by Parent, GP, or Acquisition or any affiliate thereof, at a price of
$27.00 per Share (subject to adjustment for stock splits, stock dividends,
combinations, recapitalizations or the like) (such amount, being hereinafter
referred to as the "Per Share Amount"), net to the seller in cash, less any
required withholding of taxes, in accordance with the terms and subject to the
conditions provided herein;
NOW THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained and intending to be
legally bound hereby, the Company, Parent, GP, and Acquisition hereby agree as
follows:
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer. (a) Provided that this Agreement shall not have been
terminated in accordance with Section 9.1, as promptly as possible but in no
event later than five (5) business days after the public announcement of the
execution hereof by the parties, Parent and GP shall cause Acquisition to
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Offer; and to cause Acquisition to
use its best efforts to consummate the Offer, including, without limitation,
engaging an information agent in connection therewith. Acquisition shall accept
for payment issued and outstanding shares of common stock, $0.001 par value of
the Company (individually a "Share" and collectively, the "Shares") together
with the associated Rights which have been validly tendered and not withdrawn
pursuant to the Offer at the earliest time following expiration of the Offer
that all conditions to the Offer shall have been satisfied or waived by
Acquisition. The obligation of Acquisition to accept for payment, purchase and
pay for Shares tendered pursuant to the Offer shall be subject to the condition
that the number of Shares validly tendered and not withdrawn prior to the
expiration of the Offer, combined with the Shares already owned by Parent, GP,
Acquisition or any of their affiliates, constitutes at least a majority of the
then
7
outstanding Shares on a fully-diluted basis (including for purposes of such
calculation all Shares issuable upon exercise of all vested and unvested stock
options, and conversion of convertible securities or other rights to purchase or
acquire Shares) at the expiration of the Offer (the "Minimum Stock Condition")
and the other conditions set forth in Article 7. Acquisition expressly reserves
the right to waive any such condition, to increase the Per Share Amount, and to
make any other changes in the terms and conditions of the Offer; provided,
however, that Parent, GP and Acquisition agree that no change may be made
without the written consent of the Company which decreases the Per Share Amount,
which changes the form of consideration to be paid in the Offer, which reduces
the maximum number of shares to be purchased in the Offer, which reduces the
Minimum Stock Condition to below a majority of the then outstanding shares (on a
fully-diluted basis), which otherwise modifies or amends the conditions to the
Offer or any other term of the Offer in a manner that is materially adverse to
the holders of the Shares, which imposes conditions to the Offer in addition to
those set forth in Article 7 or which extends the expiration date of the Offer
beyond September 30, 1999 (except that Acquisition may extend the expiration
date of the Offer beyond September 30, 1999 as required to comply with any rule,
regulation or interpretation of the Securities and Exchange Commission or to
provide the time necessary to satisfy the conditions set forth in Article 7). It
is agreed that the conditions set forth in Article 7 are for the sole benefit of
Acquisition and may be asserted by Acquisition regardless of the circumstances
giving rise to any such condition (including any action or inaction by
Acquisition) or may be waived by Acquisition, in whole or in part at any time
and from time to time, in its sole discretion. The failure by Acquisition at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. The Per Share Amount shall be paid
net to the seller in cash, less any required withholding of taxes, upon the
terms and subject to such conditions of the Offer. The Company agrees that no
Shares held by the Company or any of its subsidiaries will be tendered in the
Offer.
(b) As soon as practicable after the date hereof, Parent, GP and
Acquisition agree that Parent, GP and Acquisition shall file with the Securities
and Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
with respect to the Offer, which shall include an offer to purchase and form of
transmittal letter (together with any amendments thereof or supplements thereto,
collectively the "Offer Documents"). The Company and its counsel shall be given
a reasonable opportunity to review and comment on the Offer Documents prior to
their filing with the SEC or dissemination to the stockholders of the Company.
Parent and Acquisition agree to provide the Company and its counsel with any
comments which Parent, Acquisition or their counsel may receive from the SEC or
the staff of the SEC with respect to such documents promptly after receipt
thereof. The Offer Documents will comply in all material respects with the
provisions of applicable federal securities laws. The information provided and
to be provided by Parent, GP and Acquisition for use in the Offer Documents
shall not, on the date filed with the SEC and on the date first published or
sent or given to the Company's stockholders, as the case may be, contain any
untrue statement of a material fact nor omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, provided,
however, that no representation or warranty is made by Parent, GP or Acquisition
with respect to
6
8
information supplied by the Company or any of its stockholders for inclusion in
the Offer Documents. The Company agrees that information provided by the Company
or any of its subsidiaries for inclusion or incorporation in the Offer Documents
shall not, on the date filed with the SEC and on the date first published or
sent or given to the Company's stockholders, as the case may be, contain any
untrue statement of a material fact nor omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. Parent,
GP, Acquisition and the Company each agree promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect and
Parent, GP and Acquisition further agree to take all steps necessary to cause
the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. SECTION 1.2. Company Action. (a) The Company
hereby approves of and consents to the Offer and the Merger and represents and
warrants that (i) the Board has, subject to the terms and conditions set forth
herein, adopted final and binding resolutions, which have not been amended or
repealed, pursuant to which the Board (A) determined that this Agreement, and
the transactions contemplated hereby and thereby, including the Offer and the
Merger, are fair to, and in the best interests of, the stockholders of the
Company, (B) approved and adopted this Agreement, and the Stockholders Agreement
(defined herein) and the transactions contemplated hereby and thereby, including
without limitation, the Merger and the acquisition of Shares by Parent or
Acquisition pursuant to the options granted by the Stockholders under the
Stockholders Agreement, and such approval (the "Section 203 Approval")
constitutes the approval of the foregoing for the purposes of Section 203 of the
Delaware General Corporation Law ("DGCL"), (C) taken all necessary action to
avoid the occurrence of a "Distribution Date" (as defined in the Rights
Agreement referred to in Section 2.8) with respect to the Rights, and (D)
recommended that the stockholders of the Company accept the Offer, tender their
Shares thereunder to Acquisition and, if required by law, approve and adopt this
Agreement and the Merger (provided, however, that subject to the provisions of
Section 5.3 such recommendation may be withdrawn, modified or amended in
connection with a Superior Proposal (as defined in Section 5.3)) and (ii)
PaineWebber Incorporated and TM Capital Corp. have each delivered to the Board a
written opinion to the effect that, as of the date of such opinion, the
consideration to be received by the holders of the Shares (other than the
Parent, GP, Acquisition and their affiliates) pursuant to the Offer and Merger
is fair to such holders from a financial point of view. Subject only to the
provisions of Section 5.3, the Company hereby consents to the inclusion in the
Offer Documents of the recommendation of the Board described in the immediately
preceding sentence.
(b) The Company hereby agrees to file with the SEC as soon as practicable
after the date hereof a Solicitation/Recommendation Statement on Schedule 14D-9
pertaining to the Offer (together with any amendments thereof or supplements
thereto, the "Schedule 14D-9") containing the recommendation described in
Section 1.2(a) and to promptly mail the Schedule 14D-9 to the stockholders of
the Company. The Company represents and warrants that the Schedule 14D-9 will
comply in all material respects with the provisions of applicable federal
securities laws and, on the date filed with the SEC and on the date first
published or sent or given to the Company's stockholders, as the case may be,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order
7
9
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Company
with respect to information supplied by Parent, GP or Acquisition in writing for
inclusion in the Schedule 14D-9. The Company, Parent, GP and Acquisition each
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to the holders of Shares, in each case as and to
the extent required by applicable federal securities laws.
(c) In connection with the Offer, the Company will promptly furnish Parent
and Acquisition with mailing labels, security position listings and any
available listing or computer files containing the names and addresses of the
record holders of the Shares as of a recent date and shall furnish Acquisition
with such additional information and assistance (including, without limitation,
updated lists of stockholders, mailing labels and lists of securities positions)
as Acquisition or its agents may reasonably request in communicating the Offer
to the record and beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Parent, GP, Acquisition and their affiliates, associates, agents and advisors
shall hold in confidence the information contained in any of such labels and
lists, and use the information contained in any such labels, listings and files
only in connection with the Offer and the Merger, and, if this Agreement shall
be terminated, will deliver to the Company all copies of such information then
in their possession.
SECTION 1.3. Boards of Directors and Committees; Section 14(f). (a) Promptly
upon the purchase by Acquisition of Shares following the expiration date (as
such date may be extended) of, and pursuant to, the Offer (the "Tender Offer
Purchase Time") and from time to time thereafter, and subject to the last
sentence of this Section 1.3(a), Acquisition shall be entitled to designate
directors of the Company constituting a majority of the Board, and the Company
shall use its best efforts to, upon request by Acquisition, promptly, at the
Company's election, either increase the size of the Board to the extent
permitted by its Certificate of Incorporation or secure the resignation of such
number of directors as is necessary to enable Acquisition's designees to be
elected to the Board and to cause Acquisition's designees to be so elected and
to constitute at all times after the Tender Offer Purchase Time a majority of
the Board. At such times, and subject to the last sentence of this Section
1.3(a), the Company will use its best efforts to cause persons designated by
Acquisition to constitute the same percentage as is on the Board of (i) each
committee of the Board (other than any committee of the Board established to
take action under this Agreement), (ii) each board of directors of each
subsidiary of the Company and (iii) each committee of each such board.
Notwithstanding the foregoing, the Company shall use reasonable efforts to
encourage Xxxxx X. Xxxxxxx and Xxxx Xxxxxxxxxx to remain members of the Board
until the Effective Time (as determined herein).
(b) The Company's obligation to appoint designees to the Board shall be
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Company shall promptly take all action required pursuant to such
Section and Rule in order to fulfill its obligations under this Section 1.3 and
shall include in the Schedule 14D-9 such information with respect to the Company
and its officers and directors as is required under such Section and Rule in
order to fulfill its obligations under this Section 1.3. Acquisition will supply
to the Company in writing
8
10
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by such Section and Rule.
(c) Following the election or appointment of Acquisition's designees
pursuant to this Section 1.3 and prior to the Effective Time, any amendment or
termination of this Agreement, extension of the performance or waiver of the
obligations or other acts of Parent, GP or Acquisition or waiver of the
Company's rights hereunder, shall require the concurrence of a majority of the
Company's directors (or the concurrence of the director, if there is only one
remaining) then in office who are directors on the date hereof, or are directors
(other than directors designated by Acquisition in accordance with this Section
1.3) designated by such persons to fill any vacancy (the "Continuing
Directors"). SECTION 1.4. Stockholders Agreement. In order to induce Parent, GP
and Acquisition to enter into this Agreement and to perform their obligations
hereunder and as a condition thereof, Parent, GP and Acquisition shall enter
into the stockholders agreement (the "Stockholders Agreement") on even date
hereof in the form attached hereto as Exhibit A stockholders of the Company
listed in Schedule A to the Stockholders Agreement.
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger. At the Effective Time (as defined below) and upon the
terms and subject to the conditions of this Agreement and in accordance with the
DGCL, Acquisition shall be merged with and into the Company (the "Merger").
Following the Merger, the Company shall continue as the surviving corporation
(the "Surviving Corporation") and the separate corporate existence of
Acquisition shall cease. GP, as the sole stockholder of Acquisition, hereby
approves this Agreement, the Merger and the other transactions contemplated
hereby.
SECTION 2.2. Closing of the Merger. The closing of the Merger will take
place at a time (the "Closing Time") and on a date to be specified by the
parties, which shall be no later than the second business day after satisfaction
of the latest to occur of the conditions set forth in Article 8 at the offices
of Xxxxxx & Whitney LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
another time, date or place is agreed to in writing by the parties hereto.
SECTION 2.3. Effective Time. Subject to the terms and conditions set forth in
this Agreement, a certificate of merger (the "Merger Certificate") shall be duly
executed and acknowledged by Acquisition and the Company and thereafter
delivered at the Closing Time to the Secretary of State of the State of Delaware
for filing pursuant to the DGCL. The Merger shall become effective at such time
as a properly executed and certified copy of the Merger Certificate is duly
accepted for record by the Secretary of State of the State of Delaware for
filing pursuant to the DGCL, or such later time as Acquisition and the Company
may agree upon and set forth in the Merger Certificate (not exceeding 30 days
after the Merger Certificate is accepted for record; the time the Merger becomes
effective being referred to herein as the "Effective Time").
SECTION 2.4.Effects of the Merger. The Merger shall have the effects set forth
in the DGCL. Without limiting the generality of the foregoing and subject
thereto at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Acquisition shall vest in
9
11
the Surviving Corporation and all debts, liabilities and duties of the Company
and Acquisition shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.5. Charter and Bylaws. The Certificate of Incorporation of the Company
in effect at the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation until amended in accordance with applicable law. The
Bylaws of the Company in effect at the Effective Time shall be the Bylaws of the
Surviving Corporation until amended in accordance with applicable law.
SECTION 2.6. Directors. The directors of Acquisition at the Effective Time shall
be the initial directors of the Surviving Corporation, each to hold office in
accordance with the charter and Bylaws of the Surviving Corporation until the
next annual meeting of stockholders and until each such director's successor is
duly elected or appointed and qualified.
SECTION 2.7. Officers. The officers of Acquisition at the Effective Time shall
be the initial officers of the Surviving Corporation, each to hold office in
accordance with the charter and Bylaws of the Surviving Corporation until such
officer's successor is duly elected or appointed and qualified.
SECTION 2.8. Conversion of Shares.
(a) At the Effective Time, each Share issued and outstanding immediately
prior to the Effective Time, together with the associated right to purchase
shares of Series A Junior Participating Preferred Stock, par value $0.001 per
share (individually, the "Right" and collectively, the "Rights"), issued
pursuant to the Rights Agreement dated as of March 31, 1999 between the Company
and US Stock Transfer Corporation, as Rights Agent (the "Rights Agreement"
(other than (i) Shares together with any associated Rights held by any of the
Company's subsidiaries, (ii) Shares together with any associated Rights held by
Parent, GP, Acquisition or any other subsidiary of Parent and (iii) Dissenting
Shares (defined herein)) shall, by virtue of the Merger and without any action
on the part of Acquisition, the Company or the holder thereof, be converted into
and shall become the right to receive the Per Share Amount in cash, without
interest (the "Cash Merger Consideration"). Notwithstanding the foregoing, if
between the date of this Agreement and the Effective Time, the Shares shall have
been changed into a different number of shares or a different class by reason of
any stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, then the Cash Merger Consideration
contemplated by the Merger shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares.
(b) At the Effective Time, each Share, together with any associated Right,
then owned by Parent, GP, Acquisition, the Company or any direct or indirect
wholly-owned subsidiary of Parent, GP or Acquisition or of the Company shall, by
virtue of the Merger and without any action on the part of Parent, GP,
Acquisition, the Company or the holder thereof, be canceled and retired and will
cease to exist and no payment shall be made with respect thereto.
(c) At the Effective Time, each share of common stock of Acquisition issued
and outstanding immediately prior to the Effective Time shall be converted into
and exchanged for one fully-paid and non-assessable share of common stock, par
value $0.001 per share of the Surviving Corporation.
10
12
SECTION 2.9. Payment of Cash Merger Consideration.
(a) As of the Effective Time, Acquisition shall deposit with such agent or
agents as may be appointed by Parent and Acquisition (the "Payment Agent") for
the benefit of the holders of Shares in cash the aggregate amount necessary to
pay the Cash Merger Consideration (such cash is hereinafter referred to as the
"Merger Fund") payable pursuant to Section 2.8 in exchange for outstanding
Shares.
(b) As soon as reasonably practicable after the Effective Time, the Payment
Agent shall mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding Shares (the
"Certificates") whose shares were converted into the right to receive the Cash
Merger Consideration pursuant to Section 2.8: (i) a letter of transmittal (which
shall specify that delivery shall be effected and risk of loss and title to the
Certificates shall pass only upon delivery of the Certificates to the Payment
Agent and shall be in such form and have such other provisions as Parent and the
Company may reasonably specify) and (ii) instructions on how to surrender the
Certificates in exchange for the Cash Merger Consideration. Upon surrender to
the Payment Agent of a Certificate for cancellation, together with such letter
of transmittal duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor a check representing the Cash Merger
Consideration which such holder has the right to receive pursuant to the
provisions of this Article 2 and the Certificate so surrendered shall forthwith
be canceled. In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, payment of the Cash Merger
Consideration may be made to a transferee if the Certificate representing such
Shares is presented to the Payment Agent accompanied by all documents required
to evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.9, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Cash Merger
Consideration as contemplated by this Section 2.9.
(c) In the event that any Certificate shall have been lost, stolen or
destroyed, the Payment Agent shall issue in exchange therefor, upon the making
of an affidavit of that fact by the holder thereof, such Cash Merger
Consideration as may be required pursuant to this Agreement; provided, however,
that Acquisition or its Payment Agent may, in its discretion, require the
delivery of a suitable bond or indemnity.
(d) All Cash Merger Consideration paid upon the surrender for exchange of
Shares in accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such Shares; subject, however, to
the Surviving Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared or made by the Company on such Shares in accordance with the terms of
this Agreement, or prior to the date hereof and which remain unpaid at the
Effective Time, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the Shares which were
outstanding immediately prior to the Effective Time. If after the Effective Time
Certificates are presented to the Surviving Corporation for any reason they
shall be canceled and exchanged as provided in this Article 2.
(e) Any portion of the Merger Fund which remains undistributed to the
stockholders of the Company for six months after the Effective Time shall be
delivered to Parent upon demand and
11
13
any stockholders of the Company who have not theretofore complied with this
Article 2 shall thereafter look only to Parent for payment of their claim for
the Cash Merger Consideration.
(f) Neither Acquisition nor the Company shall be liable to any holder of Shares
for cash from the Merger Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
SECTION 2.10. Stock Options; Purchase Plan.
(a) At the Effective Time, each outstanding option to purchase Shares (a
"Company Stock Option" or collectively "Company Stock Options") issued pursuant
to the Company's 1997 Equity Incentive Plan and its Second Amended and Restated
1986 Stock Option Plan (a "Company Option Plan" or collectively "Company Option
Plans") shall vest in full and the Surviving Corporation shall pay to the holder
of each outstanding Company Stock Option an amount equal to the excess, if any,
of the Per Share Amount over the exercise price per Share of such Company Stock
Option, less the amount of Taxes (defined below) required to be withheld under
Federal, state or local laws and regulations multiplied by the number of Shares
subject to such Company Stock Option. To the extent required the Company will
take all reasonable steps to effectuate the foregoing provisions of this Section
2.10.
(b) Except as provided herein or as otherwise agreed to by the
parties and to the extent permitted by the Company Option Plan, the Company
Option Plans shall terminate as of the Effective Time and any rights under any
provisions under the Company Option Plans and any awards issued thereunder shall
be canceled as of the Effective Time.
(c) The Company shall amend the 1997 Employee Stock Purchase
Plan to provide for (A) the suspension of participation during the offering
periods commencing subsequent to the date of the Agreement for the pendency of
the Merger and subject to the successful consummation of the Merger and (B) the
termination of such Plan as of the Effective Time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule previously delivered by the
Company to Parent (the "Company Disclosure Schedule"), the Company hereby
represents and warrants to each of Parent, GP and Acquisition as follows:
SECTION 3.1. Organization and Qualification; Subsidiaries.
(a) Section 3.1 of the Company Disclosure Schedule identifies
each subsidiary of the Company as of the date hereof and its respective
jurisdiction of incorporation or organization, as the case may be. The Company
and each of its subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
as set forth in Section 3.1 of the Company Disclosure Schedule and has all
requisite power and authority to own lease and operate its properties and to
carry on its businesses as now being conducted, except where such failure to so
qualify would not have a Material Adverse Effect (defined herein) on the
Company. The Company has heretofore provided Parent with access to accurate and
complete copies of the charter and Bylaws (or similar governing documents), as
currently in effect, of the Company and its subsidiaries.
12
14
(b) Except as disclosed in Section 3.1(b) of the Company Disclosure Schedule,
each of the Company and its subsidiaries is duly qualified or licensed and in
good standing to do business in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted by it makes
such qualification or licensing necessary, except in such jurisdictions where
the failure to be so duly qualified or licensed and in good standing would not
have a Material Adverse Effect on the Company. When used in connection with the
Company or its subsidiaries, the term "Material Adverse Effect" means any change
or effect (i) that is materially adverse to the business, properties, financial
condition or results of operations of the Company and its subsidiaries, taken as
whole, or (ii) that would materially impair the ability of the Company to
consummate the transactions contemplated hereby.
SECTION 3.2. Capitalization of the Company and its Subsidiaries.
(a) As of the date hereof, the authorized stock of the Company consists of
15,000,000 Shares, of which, as of May 31, 1999, 8,005,802 Shares were issued
and outstanding, and 1,000,000 shares of preferred stock, par value $0.001 per
share, no shares of which are outstanding. All of the outstanding Shares have
been validly issued and are fully paid, nonassessable and free of preemptive
rights. As of May 31, 1999, approximately 1,182,210 Shares were reserved for
issuance and issuable upon or otherwise deliverable in connection with the
exercise of outstanding Company Stock Options issued pursuant to the Company
Option Plans referred to in Section 2.10. Between May 31, 1999 and the date
hereof, no shares of the Company's stock have been issued other than pursuant to
Company Stock Options, and between May 31, 1999 and the date hereof no stock
options have been granted. Except as set forth above and in Section 3.2(a) of
the Company Disclosure Schedule, as of the date hereof, there are issued,
reserved for issuance, or outstanding (i) no shares of stock or other voting
securities of the Company, (ii) no securities of the Company or its subsidiaries
convertible into or exchangeable for shares of stock or voting securities of the
Company, (iii) no options or other rights to acquire from the Company or its
subsidiaries and, except as described in the Company SEC Reports (defined
herein), no obligations of the Company or its subsidiaries to issue any stock,
voting securities or securities convertible into or exchangeable for stock or
voting securities of the Company, (iv) no bonds, debentures, notes or other
indebtedness or obligations of the Company or any of its subsidiaries entitling
the holders thereof to have the right to vote (or which are convertible into, or
exercisable or exchangeable for, securities entitling the holders thereof to
have the right to vote) with the stockholders of the Company or any of its
subsidiaries on any matter, (v) no equity equivalent interests in the ownership
or earnings of the Company or its subsidiaries or other similar rights, and (vi)
the Rights (collectively "Company Securities"). As of the date hereof, there are
no outstanding obligations of the Company or its subsidiaries (absolute,
contingent or otherwise) to repurchase, redeem or otherwise acquire any Company
Securities. There are no Shares outstanding subject to rights of first refusal
of the Company, nor are there any pre-emptive rights with respect to any Shares.
Other than this Agreement, there are no stockholder agreements, voting trusts or
other agreements or understandings to which the Company is a party or by which
it is bound relating to the voting or registration of any shares of stock of the
Company.
(b) Except as disclosed in Section 3.2(b) of the Company Disclosure Schedule,
all of the outstanding stock of the Company's subsidiaries is owned by the
Company, directly or indirectly,
13
15
free and clear of any Lien (defined herein) or any other limitation or
restriction (including any restriction on the right to vote or sell the same
except as may be provided as a matter of law). There are no securities of the
Company or its subsidiaries convertible into or exchangeable for, no options or
other rights to acquire from the Company or its subsidiaries and no other
contract, understanding, arrangement or obligation (whether or not contingent)
providing for, the issuance or sale, directly or indirectly, of any stock or
other ownership interests in, or any other securities of any subsidiary of, the
Company. There are no outstanding contractual obligations of the Company or its
subsidiaries to repurchase, redeem or otherwise acquire any outstanding shares
of capital stock or other ownership interests in any subsidiary of the Company.
For purposes of this Agreement, "Lien" means, with respect to any asset
(including without limitation any security), any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.
(c) The Shares and the Rights constitute the only classes of equity securities
of the Company or its subsidiaries registered or required to be registered under
the Exchange Act.
SECTION 3.3. Authority Relative to this Agreement; Recommendation.
The Company has all necessary corporate power and authority to execute and
deliver this Agreement and, if required by law, subject to stockholder approval
of the Merger, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
except, if required by law, the approval and adoption of this Agreement and the
Merger by the holders of the outstanding Shares. This Agreement has been duly
and validly executed and delivered by the Company and assuming the due
authorization, execution and delivery by Parent, GP and Acquisition, constitutes
a valid, legal and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally, and
except as the availability of equitable remedies may be limited by the
application of general principles of equity (regardless of whether such
equitable principle is applied in a proceeding at law or in equity).
The Board has duly and validly approved, and taken all corporate actions
required to be taken by the Board for the consummation of, the transactions
contemplated hereby, including the Offer and the acquisition of the Shares
pursuant thereto and the Merger. The Board has taken all appropriate action so
that none of Parent, GP or Acquisition will be an "interested stockholder"
within the meaning of Section 203 of the DGCL by virtue of Parent, GP,
Acquisition and the Company entering into this Agreement, or the Stockholders
Agreement or any other agreement contemplated hereby or thereby and consummating
the transactions contemplated hereby and thereby.
SECTION 3.4. SEC Reports; Financial Statements.
(a) The Company has filed all required forms, reports and documents ("Company
SEC Reports") with the SEC since its initial public offering on August 13, 1997,
each of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the Exchange Act, each as in effect on the dates such
14
16
forms, reports and documents were filed. None of such Company SEC Reports,
including, without limitation, any financial statements or schedules included or
incorporated by reference therein, contained when filed any untrue statement of
a material fact or omitted to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The audited consolidated financial statements of the Company
included in the Company SEC Reports fairly present in conformity with GAAP
(except as may be indicated in the notes thereto or, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC) the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and their consolidated results of operations and changes
in financial position for the periods then ended.
(b) The Company has heretofore made available or promptly will make available to
Acquisition or Parent a complete and correct copy of any amendments or
modifications which are required to be filed with the SEC but have not yet been
filed with the SEC to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Exchange
Act.
SECTION 3.5. Information Supplied. Neither the Schedule 14D-9 nor any of the
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents, Schedule 14D-9, any other
tender offer materials, Schedule 14A or 14C, or the proxy statement or
information statement ("Proxy Statement") relating to any meeting of the
Company's stockholders to be held in connection with the Merger (all of the
foregoing documents, collectively, the "Disclosure Statements") will, at the
date each and any of the Disclosure Statements is filed with the SEC or are
first published, mailed to stockholders of the Company, and at the time of the
meeting of stockholders of the Company to be held, if necessary, in connection
with the Merger (the "Stockholders' Meeting" (defined herein)) contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading; provided,
however, that no representation or warranty is made by the Company with respect
to information supplied by Parent, Acquisition or GP, for inclusion in the
Disclosure Statements. The Disclosure Statements will comply as to form in all
material respects with all provisions of applicable law.
SECTION 3.6. Consents and Approvals; No Violations. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, state securities laws ("Blue Sky
Laws"), the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and the securities or antitrust laws of any foreign country,
and the filing and recordation and acceptance for record of the Merger
Certificate as required by the DGCL, respectively, no filing with or notice to
and no permit, authorization, consent or approval of any court or tribunal, or
administrative governmental or regulatory body, agency or authority (a
"Governmental Entity") is necessary for the execution and delivery by the
Company of this Agreement or the consummation by the Company of the transactions
contemplated hereby, except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings or give such
notice would not have a Material Adverse Effect. Neither the execution, delivery
and performance of this
15
17
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) conflict with or result in any breach of any
provision of the respective charter or Bylaws (or similar governing documents)
of the Company or any of its subsidiaries, (ii) result in a violation or breach
of or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their respective properties or assets
may be bound or (iii) conflict with or violate any order, writ, injunction,
decree, law, statute, rule or regulation applicable to the Company or any of its
subsidiaries or any of their respective properties or assets except, in the case
of (ii) or (iii), for violations, breaches or defaults which would not have a
Material Adverse Effect.
SECTION 3.7. Compliance with Applicable Law. Neither the Company nor any of its
subsidiaries is in conflict with, or in default or violation of (a) its
respective charter or certificate of incorporation, bylaws, or other charter or
organization documents, (b) to the Company's Knowledge (defined herein), any
law, statute, rule, regulation, order, judgment, writ, injunction or decree
applicable to the Company or any of its subsidiaries or any of their respective
properties or assets, or (c) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any property or asset of the Company or
any of its subsidiaries may be bound or affected, in the case of (b) or (c), the
effect of which conflict, default or violation, either individually or in the
aggregate, would be reasonably likely to be a Material Adverse Effect. To the
Company's Knowledge, the Company and its subsidiaries hold all material
licenses, permits, approvals and other authorizations of Governmental Entities,
and are in substantial compliance with all applicable laws and governmental
regulations in connection with their businesses as now being conducted (except
where such non-compliance would not have a Material Adverse Effect on the
Company). For the purposes hereof, the term "Knowledge" with respect to the
Company means the actual knowledge of the officers and directors of the Company
including knowledge obtained in the ordinary course of the operation of the
business of the Company from the managers of the facilities of the Company.
SECTION 3.8. No Undisclosed Liabilities; Absence of Changes. Except to the
extent publicly disclosed in the Company's SEC Reports or in the Company
Disclosure Schedule, as of December 31, 1998, none of the Company or any of its
subsidiaries had any material liabilities or obligations of any nature, whether
or not accrued, contingent or otherwise, that would be required by GAAP to be
reflected on a consolidated balance sheet of the Company and its subsidiaries
(including the notes thereto) or which would have a Material Adverse Effect on
the Company and since such date, the Company has incurred no such liability or
obligation. Since December 31, 1998, except as disclosed in the Company SEC
Reports, (a) the Company and its subsidiaries have conducted their respective
businesses only in the ordinary course and in a manner consistent with past
practice and (b) there has not been (i) any change, event, occurrence or
circumstance in the business, operations, properties, financial condition or
results of operations of the Company or any of its subsidiaries which,
individually or in the aggregate, has
16
18
a Material Adverse Effect on the Company (except for changes, events,
occurrences or circumstances (A) with respect to general economic conditions or
(B) arising as a result of the transactions contemplated hereby), (ii) any
material change by the Company in its accounting methods, principles or
practices, (iii) any authorization, declaration, setting aside or payment of any
dividend or distribution or capital return in respect of any stock of, or other
equity interest in, the Company or any of its subsidiaries, (iv) any material
revaluation for financial statement purposes by the Company or any of its
subsidiaries of any asset (including, without limitation, any writing down of
the value of any property, investment or asset or writing off of notes or
accounts receivable), (v) other than payment of compensation for services
rendered to the Company or any of its subsidiaries in the ordinary course of
business consistent with past practice or the grant of Company Stock Options as
described in (and in amounts consistent with) Section 3.2, any material
transactions between the Company or any of its subsidiaries, on the one hand,
and any (A) officer or director of the Company or any of its subsidiaries, (B)
record or beneficial owner of five percent (5%) or more of the voting securities
of the Company, or (C) affiliate of any such officer, director or beneficial
owner, on the other hand, or (vi) other than pursuant to the terms of the plans,
programs or arrangements specifically referred to in Section 3.11 or Section
3.11 of the Company Disclosure Schedule or in the ordinary course of business
consistent with past practice, any increase in or establishment of any bonus,
insurance, welfare, severance, deferred compensation, pension, retirement,
profit sharing, stock option (including, without limitation, the granting of
stock options, stock appreciation rights, performance awards or restricted stock
awards), stock purchase or other employee benefit plan, or any other increase in
the compensation payable or to become payable to any employees, officers,
directors or consultants of the Company or any of its subsidiaries, which
increase or establishment, individually or in the aggregate, will result in a
material liability.
SECTION 3.9. Litigation. Except as publicly disclosed in the Company SEC
Reports, there is no suit, claim, action, proceeding or investigation pending
or, to the Company's Knowledge, threatened against the Company or any of its
subsidiaries or any of their respective properties or assets before any
Governmental Entity which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect on the Company or could reasonably be
expected to prevent or delay the consummation of the transactions contemplated
by this Agreement. Except as publicly disclosed by the Company in the Company
SEC Reports, none of the Company or its subsidiaries nor any property or asset
of the Company or any of its subsidiaries is subject to any outstanding order,
writ, injunction or decree which insofar as can be reasonably foreseen in the
future could reasonably be expected to have a Material Adverse Effect on the
Company or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
SECTION 3.10. Year 2000 Compliance. To the Company's Knowledge, the disclosure
contained in the Company's quarterly report on Form 10-Q for the quarter ended
December 31, 1998 does not contain any material misstatement or omission
regarding the status of the Company's Year 2000 readiness.
SECTION 3.11. Employee Benefit Plans; Labor Matters
(a) Section 3.11(a) of the Company Disclosure Schedule sets forth each plan
which is subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and each
17
19
other material agreement, arrangement or commitment which is an employment or
consulting agreement, executive or incentive compensation plan, bonus plan,
deferred compensation agreement, employee pension, profit sharing, savings or
retirement plan, employee stock option or stock purchase plan, group life,
health, or accident insurance or other employee benefit plan, agreement,
arrangement or commitment, including, without limitation, severance, vacation,
holiday or other bonus plans, currently maintained by the Company or any of its
subsidiaries for the benefit of any present or former employees, officers or
directors of the Company or any of its subsidiaries ("Company Personnel") or
with respect to which the Company or any of its subsidiaries has liability or
makes or has an obligation to make contributions (each such plan, agreement,
arrangement or commitment set forth in Section 3.11(a) of the Company Disclosure
Schedule being hereinafter referred to as a "Company Employee Plan").
(b) With respect to each Company Employee Plan maintained or contributed to by
the Company or any trade or business which is under common control with the
Company within the meaning of Section 414 of the Code (the "Company Employee
Plans"), the Company has made available to Parent a true and complete copy of,
to the extent applicable, (i) such Company Employee Plan, (ii) the most recent
annual report (Form 5500), (iii) each trust agreement related to such Company
Employee Plan, (iv) the most recent summary plan description for each Company
Employee Plan for which such a description is required, (v) the most recent
actuarial report relating to any Company Employee Plan subject to Title IV of
ERISA and (vi) the most recent IRS determination letter issued with respect to
any Company Employee Plan that is intended to qualify under Section 401(a) of
the Code.
(c) Each Company Employee Plan which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination from the IRS covering the provisions of the Tax Reform Act of 1986
stating that such Company Employee Plan is so qualified and nothing has occurred
since the date of such letter that could reasonably be expected to affect the
qualified status of such plan. Each Company Employee Plan has been operated in
all material respects in accordance with its terms and the requirements of
applicable law (except as would not have a Material Adverse Effect on the
Company). Neither the Company nor any ERISA Affiliate of the Company has
incurred or is reasonably expected to incur any liability under Title IV of
ERISA in connection with any Company Employee Plan (except as would not have a
material effect on the Company).
(d) To the Company's Knowledge, no employee of the Company or
any of its subsidiaries (i) is in violation of any term of any employment
contract, patent disclosure agreement, noncompetition agreement, or any
restrictive covenant with a former employer relating to the right of any such
employee to be employed by the Company or any of its subsidiaries because of the
nature of the business conducted or presently proposed to be conducted by the
Company or any of its subsidiaries or to the use of trade secrets or proprietary
information of others and (ii) has given notice to the Company or any of its
subsidiaries, that any employee intends to terminate his or her employment with
the Company except for terminations of a nature and number that are consistent
with the Company's prior experience. Neither the Company nor any of its
subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to Company Personnel. To the Company's Knowledge,
there are no activities or proceedings of any labor union to organize any
employees of the Company or any of its subsidiaries and there are no strikes, or
material slowdowns, work stoppages or lockouts, or threats thereof by or with
respect to any employees of the Company or any of its subsidiaries. The Company
and its subsidiaries are and have been in compliance with all applicable laws
18
20
regarding employment practices, terms and conditions of employment, and wages
and hours (including, without limitation, OSHA, ERISA, WARN or any similar state
or local law) (except as would not have a Material Adverse Effect on the
Company).
(e) Except as disclosed in Section 3.11(e) of the Company Disclosure Schedule,
the transactions contemplated by this Agreement (either alone or together with
any other transaction(s) or event(s)) will not (i) entitle any Company Personnel
to severance pay or other similar payments under any Company Employee Plan, (ii)
accelerate the time of payment or vesting or increase the amount of benefits due
under any Company Employee Plan or compensation to any Company Personnel, (iii)
result in any payments (including parachute payments) under any Company Employee
Plan becoming due to any Company Personnel, or (iv) terminate or modify or give
a third party a right to terminate or modify the provisions or terms of any
Company Employee Plan.
SECTION 3.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed in the Company SEC Reports, to the Company's
Knowledge, (i) the properties, assets and operations of the Company and its
subsidiaries are in material compliance with all applicable federal, state,
local and foreign laws and regulations, orders, decrees, judgments, permits and
licenses relating to public and worker health and safety and to the protection
and clean-up of the natural environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata) and
activities or conditions relating thereto, including, without limitation, those
relating to the generation, handling, disposal, transportation or release of
hazardous materials (collectively "Environmental Laws"), except for
non-compliance that would not have a Material Adverse Effect, which compliance
includes but is not limited to, the possession by the Company and its
subsidiaries of all material permits and other governmental authorizations
required under applicable Environmental Laws and compliance with the terms and
conditions thereof; (ii) none of the Company or its subsidiaries has received
written notice of or, to the Company's Knowledge, is the subject of any
Environmental Claim (defined below) that could reasonably be expected to have a
Material Adverse Effect on the Company; and (iii) to the Company's Knowledge,
there are no circumstances that are reasonably likely to prevent or interfere
with such material compliance in the future.
(b) Except as disclosed in the Company SEC Reports, there is no action, cause of
action, claim, investigation, demand or notice by any person or entity alleging
liability under or non-compliance with any Environmental Law (an "Environmental
Claim") which could reasonably be expected to have a Material Adverse Effect
that is pending or, to the Company's Knowledge, threatened against the Company
or its subsidiaries or, to the Company's Knowledge, against any person or entity
whose liability for any Environmental Claim the Company or any of its
subsidiaries has or may have retained or assumed either contractually or by
operation of law.
SECTION 3.13. Taxes
(a) For purposes of this Agreement: (i) "Tax" or "Taxes" means any taxes,
charges, fees, levies, or other assessments imposed by any U.S. or foreign
governmental entity, whether national, state, county, local or other political
subdivision, including, without limitation, all net income, gross income, sales
and use, rent and occupancy, value added, ad valorem, transfer, gains, profits,
excise, franchise, real and personal property, gross receipt, capital stock,
business and occupation, disability, employment, payroll, license, estimated, or
withholding
19
21
taxes or charges imposed by any governmental entity, and includes any interest
and penalties on or additions to any such taxes (and includes taxes for which
the Company and/or any of its subsidiaries, as the case may be, may be liable in
its own right, or as the transferee of the assets of, or as successor to, any
other corporation, association, partnership, joint venture, or other entity, or
under Treasury Regulation Section 1.1502-6 or any similar provision of foreign,
state or local law); and (ii) "Tax Return" means a report, return or other
information required to be supplied to a governmental entity with respect to
Taxes including, where permitted or required, group, combined or consolidated
returns for any group of entities that includes the Company or any of its
subsidiaries.
(b) Except as set forth in Section 3.13(b) of the Company
Disclosure Schedule, the Company and each of its subsidiaries, and any
affiliated or combined group of which the Company or any of its subsidiaries is
or was a member for applicable Tax purposes, have (i) filed all federal income
and all other Tax Returns required to be filed by applicable law and all such
federal income and other Tax Returns (A) reflect the liability for Taxes of the
Company and each of its subsidiaries except to the extent that a reserve for
Taxes is reflected on the balance sheet or the notes thereto including in the
most recent consolidated financial statements of the Company and its
subsidiaries contained in the Company SEC Reports, and (B) were filed on a
timely basis and (ii) within the time and in the manner prescribed by law, paid
(and until the Closing Time will pay within the time and in the manner
prescribed by law) all Taxes that were or are due and payable as set forth in
such Tax Returns.
(c) Each of the Company and, where applicable, the Company's
subsidiaries has established (and until the Closing Time will maintain on at
least a quarterly basis) on its books and records reserves adequate to pay all
Taxes of the Company or such respective subsidiary, as the case may be, in
accordance with GAAP, which are reflected in the most recent consolidated
financial statements of the Company and its subsidiaries contained in the
Company SEC Reports, as applicable, to the extent required by GAAP.
(d) Except as disclosed in Section 3.13(d) of the Company
Disclosure Schedule, neither the Company nor any subsidiary thereof has
requested any extension of time within which to file any income, franchise or
other Tax Return, which Tax Return has not been filed as of the date hereof.
(e) Except as disclosed in Section 3.13(e) of the Company Disclosure Schedule,
neither the Company nor any subsidiary thereof has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations with respect to any income, franchise or other Taxes or Tax Returns.
(f) Except as disclosed in Section 3.13(f) of the Company
Disclosure Schedule, no deficiency for any Tax which, alone or in the aggregate
with any other deficiency or deficiencies, would exceed $250,000, has been
proposed in writing, asserted in writing, or assessed against the Company and/or
any subsidiary thereof that has not been resolved and paid in full or otherwise
settled, no audits or other administrative proceedings are presently in progress
or, to the Company's Knowledge, pending, or threatened in writing with regard to
any Taxes or Tax Returns of the Company and/or any subsidiary thereof, and no
written claim is currently being made by any authority in a jurisdiction where
any of the Company or any subsidiary thereof, as the case may be, does not file
Tax Returns that it is or may be subject to Tax in that jurisdiction.
20
22
(g) Except as disclosed on Section 3.13(g) of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries is a party to any agreement
relating to allocating or sharing of the payment of, or liability for, Taxes
except an agreement between or among solely the Company and one or more of such
subsidiaries or between such subsidiaries.
(h) The Company does not constitute and for the past five years has not
constituted a "United States real property holding corporation" within the
meaning of Section 897(c)(2) of the Code.
SECTION 3.14. Properties. Section 3.14 of the Company Disclosure Schedule
contains a true and complete list (identifying the relevant owners, lessors and
lessees) of all real properties owned by the Company or any of its subsidiaries.
Each of the Company and its subsidiaries has good and marketable title to all
properties, assets and rights of any kind whatsoever (whether real, personal or
mixed, and whether tangible or intangible) owned by it (collectively, the
"Company Real Assets"), in each case free and clear of any material mortgage,
security interest, deed of trust, claim, charge, title defect or other lien or
encumbrance, except (a) as shown on the consolidated balance sheet of the
Company and its subsidiaries dated December 31, 1998 and the notes thereto, (b)
for any mortgage, security interest, deed of trust, claim, charge, title defect
or other lien or encumbrance arising by reason of (i) taxes, assessments or
governmental charges not yet delinquent or which are being contested in good
faith, (ii) deposits to secure public or statutory obligations in lieu of surety
or appeal bonds entered into in the ordinary course of business, (iii) operation
of law in favor of carriers, warehousemen, landlords, mechanics, materialmen,
laborers, employees or suppliers, incurred in the ordinary course of business
for sums which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection thereof
and (iv) matters of public record not having a material adverse effect in the
use or marketability of the Company Real Assets ("Permitted Liens"), or (c) as
set forth on Section 3.14 of the Company Disclosure Schedule. There are no
pending or, to the Company's Knowledge, threatened condemnation proceedings
against or affecting any material Company Real Assets, and none of the material
Company Real Assets is subject to any commitment or other arrangement for its
sale to a third party outside the ordinary course of business.
SECTION 3.15. Material Contracts and Commitments.
(a) Section 3.15 of the Company Disclosure Schedule contains a true and complete
list of all of the following contracts, agreements and commitments, whether oral
or written ("Contracts"), to which the Company or any of its subsidiaries is a
party or by which any of them or any of their material Company Real Assets is
bound, as each such contract or commitment may have been amended, modified or
supplemented:
(i) all Contracts pursuant to which the Company or its
subsidiaries holds a leasehold interest in or otherwise has an
economic interest in any real property, other than property
described in Section 3.14 of the Company Disclosure Schedule;
(ii) all Contracts granting or obtaining a franchise or
license to utilize a brand name or other rights of a system
providing sterilization services, or granting or obtaining a
license or sublicense of any material trademark, trade name,
copyright, patent, service xxxx, or trade secret, or any
rights therein or application
21
23
therefor other than for contracts related to packaged software
for the Company's internal use;
(iii) all partnership or joint venture Contracts;
(iv) all loan agreements, notes, bonds, debentures, debt
instruments, evidences of indebtedness, debt securities, or
other Contracts relating to any indebtedness of the Company or
any of its subsidiaries in an amount in excess of $250,000, or
involving the direct or indirect guaranty or suretyship by the
Company or any of its subsidiaries of any indebtedness in an
amount in excess of $250,000;
(v) all Contracts that, after the date hereof, obligate the
Company or any of its subsidiaries to pay, pledge, or encumber
or restrict assets in an aggregate amount in excess of
$250,000, except with respect to such Contracts entered into
in connection with facilities currently under construction in
which case such excess amount shall be $1,000,000;
(vi) all Contracts by which the Company has committed to
extend credit to third parties other than Contracts entered
into with customers in the ordinary course of business;
(vii) all Contracts with the 25 largest (based on revenue paid
to the Company) customers of the Company during the fiscal
year ended March 31, 1999; and
(viii) all Contracts that limit or restrict the ability of the
Company or any of its subsidiaries to compete or otherwise to
conduct business in any material manner or place.
(b) The Company has heretofore made available to the Parent true and complete
copies of all of the Contracts required to be set forth in Section 3.15 of the
Company Disclosure Schedule except those required by Section 3.15(vii) which
will be provided to Parent as soon as is practicable after the date hereof. Each
such Contract is valid and binding in accordance with its terms, and is in full
force and effect (except as set forth in Section 3.15 of the Company Disclosure
Schedule), provided that foregoing representation is to the Company's Knowledge
with respect to the other parties to such Contracts. Neither the Company nor any
of its subsidiaries is in default in any material respect with respect to any
such Contract, nor does any condition exist that with notice or lapse of time or
both would constitute such a material default thereunder or permit any other
party thereto to terminate such Contract. To the Company's Knowledge, no other
party to any such Contract is in default in any material respect with respect to
any such Contract. No party has given any written notice (i) of termination or
cancellation of any such Contract or (ii) that it intends to assert a breach of
any such Contract, whether as a result of the transactions contemplated hereby
or otherwise. Each Contract identified in Section 3.15 of the Company Disclosure
Schedule in response to any item under this Section 3.15 shall be deemed
incorporated by reference to all other items in this Section 3.15.
SECTION 3.16. Intangible Property.
(a) The Company has made available to the Parent a list of the Intangible
Property (as defined below) which is material to the Company and its
subsidiaries in which the Company or any of its subsidiaries has an interest.
(b) Except as set forth on Section 3.16 of the Company Disclosure Schedule:
22
24
(i) the Company and its subsidiaries own or have the right to
use, all material Intangible Property used in the conduct of
their business as presently conducted;
(ii) the Company and its subsidiaries have performed all
material obligations required to be performed by them, and are
not in default under any material contract or arrangement
relating to any material Intangible Property;
(iii) the execution, delivery and performance of this
Agreement and the consummation of the transactions
contemplated hereby will not breach, violate or conflict with
any agreement related to any material Intangible Property,
will not cause the forfeiture or termination or give rise to a
right of forfeiture or termination of, or in any material way
impair the right of the Company or any of its subsidiaries to
use, sell, license or dispose of or to bring any action for
the infringement of, any material Intangible Property or
material portion thereof;
(iv) there are no royalties, honoraria, fees or other payments
payable by the Company or any of its subsidiaries to any
person by reason of the ownership, use, license, sale or
disposition of any material Intangible Property;
(v) the conduct of the business by the Company and its
subsidiaries does not violate any material license or
agreement with any third party; and
(vi) neither the Company nor any of its subsidiaries has
received any notice to the effect (or is otherwise aware) that
any material Intangible Property or the use thereof by the
Company or any of its subsidiaries conflicts with any rights
of any person.
(c) As used herein "Intangible Property" means all patents, patent applications
(pending or otherwise), material internally developed (including by third
parties) computer software, registered copyrights, and currently used brand
names, service marks, trademarks, tradenames, and all registrations or
applications for registration of any of the foregoing.
SECTION 3.17. Brokers. No broker, finder or investment banker (other than
PaineWebber Incorporated, TM Capital Corp. and XX Xxxxx Securities Corporation,
the Company's financial advisers, a true and correct copy of whose entire
engagement agreements have been provided to Parent) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
SECTION 3.18. Certain Business Practices. None of the Company, any of its
subsidiaries or any directors or officers of the Company or any of its
subsidiaries (provided that as to the directors and officers of the Company's
Thailand subsidiary such representation is made to the Company's Knowledge), nor
to the Company's Knowledge, agents or employees of the Company or any of its
subsidiaries, has (a) used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to political activity, (b) made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns or violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended, or (c) made any other
unlawful payment.
SECTION 3.19 Applicability of State Takeover Statutes. The Section 203 Approval
is valid and in full force and effect. Section 203 of the DGCL will not apply to
this Agreement, the Stockholders Agreement, the Offer or the acquisition of
shares pursuant to the Offer or the
23
25
Stockholders Agreement or the Merger. No other state takeover statute or similar
statute or regulation applies or purports to apply to this Agreement, the
Stockholders Agreement, the Offer, Merger or the other transactions contemplated
hereby or thereby.
SECTION 3.20 Amendment to the Rights Agreement. The Company's Board of Directors
has taken all necessary action (including any amendment thereof) under the
Rights Agreement so that (x) none of the execution or delivery of this
Agreement, or the Stockholders Agreement, consummation of the Offer, or any of
the other transactions contemplated hereby or thereby will cause (i) the Rights
to become exercisable under the Rights Agreement, (ii) Parent, GP or Acquisition
to be deemed an "Acquiring Person" (as defined in the Rights Agreement), or
(iii) the "Distribution Date" (as defined in the Rights Agreement) to occur upon
any such event and (y) the "Expiration Date" (as defined in the Rights
Agreement) of the Rights shall occur immediately prior to the Effective Time.
SECTION 3.21 Opinion of Financial Advisor. The Company has received the opinion
of PaineWebber Incorporated and TM Capital Corp. to the effect that, as of the
date of this Agreement, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair to the Company's stockholders from
a financial point of view, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to Parent.
The Company has been authorized by PaineWebber Incorporated and TM Capital Corp.
to permit the inclusion of such opinion in its entirety in the Offer Documents
and the Schedule 14D-9 and the Proxy Statement, so long as such inclusion is in
form and substance reasonably satisfactory to PaineWebber Incorporated and TM
Capital Corp. and its counsel.
SECTION 3.22 Employees. Section 3.22 of the Company Disclosure Schedule sets
forth the following information concerning each employee of the Company whose
base annual salary is in excess of $50,000: (a) name; (b) position; (c) current
base salary; and (d) whether such employee has an employment agreement and, if
so, its expiration date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION
Parent and Acquisition hereby represent and warrant to the Company as follows:
SECTION 4.1. Organization.
(a) Parent is a corporation duly organized, validly existing
and in good standing under the laws of the Kingdom of Belgium, GP is a general
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware and Acquisition is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and each has all requisite power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted. Each of Parent
and Acquisition has heretofore delivered to the Company accurate and complete
copies of its Certificates of Incorporation and Bylaws as currently in effect.
(b) Each of Parent, GP and Acquisition is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing
24
26
would not have a Parent Material Adverse Effect. The term "Parent Material
Adverse Effect" means any change or effect that is (i) materially adverse to the
business, results of operations, condition (financial or otherwise) or prospects
of Parent and its subsidiaries, taken as a whole, other than any change or
effect arising out of general economic conditions or (ii) that may impair the
ability of Parent, GP and/or Acquisition to consummate the transactions
contemplated hereby.
SECTION 4.2. Authority Relative to this Agreement. Each of Parent, GP and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
boards of directors of Parent and Acquisition and the partners of GP and by GP
as the sole stockholder of Acquisition and no other corporate proceedings on the
part of Parent, GP or Acquisition are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Parent, GP and Acquisition and
constitutes a valid, legal and binding agreement of each of Parent, GP and
Acquisition enforceable against each of Parent, GP and Acquisition in accordance
with its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, and except as the
availability of equitable remedies may be limited by the application of general
principles of equity (regardless of whether such equitable principles are
applied in a proceeding at law or in equity).
SECTION 4.3. Information Supplied. Neither the Schedule 14D-1, nor any of the
information supplied or to be supplied by Parent, GP or Acquisition for
inclusion or incorporation by reference in any of the other Disclosure
Statements will, at the respective times that the Proxy Statement (if necessary)
and the Schedule 14D-9 and any amendments thereof or supplements thereto are
filed with the SEC and are first published or sent or given to holders of
Shares, and in the case of any required Proxy Statement, at the time that it or
any amendment thereof or supplement thereto is mailed to the Company's
stockholders or, at the time of the Stockholders' Meeting, if such is required,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
SECTION 4.4. Financing. Parent has or has available to it, and will make
available to Acquisition, all funds necessary to satisfy all of Parent's and
Acquisition's obligations under this Agreement and in connection with the
transactions contemplated hereby including without limitation, sufficient funds
available to purchase all of the Shares that Parent agrees, subject to the terms
and conditions hereof, to purchase hereunder and to pay all related fees and
expenses.
SECTION 4.5. Consents and Approvals; No Violations. Except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Act, the Exchange Act, Blue Sky Laws,
the HSR Act and the securities or antitrust laws of any country other than the
United States, and the filing and acceptance for record of the Merger
Certificate as required by the DGCL, respectively, no filing with or notice to,
and no permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution and delivery by Parent, GP or Acquisition of this
Agreement or the
25
27
consummation by Parent, GP or Acquisition of the transactions contemplated
hereby, except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings or give such notice would not have
a Parent Material Adverse Effect. Neither the execution, delivery and
performance of this Agreement by Parent, GP or Acquisition nor the consummation
by Parent, GP or Acquisition of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Certificates of Incorporation or Bylaws (or similar governing documents) of
Parent or Acquisition or the partnership agreement of GP, (ii) result in a
violation or breach of or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, amendment,
cancellation or acceleration or Lien) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent, GP or Acquisition
or any of Parent's other subsidiaries is a party or by which any of them or any
of their respective properties or assets may be bound or (iii) violate any
order, writ, injunction, decree, law, statute, rule or regulation applicable to
Parent, GP or Acquisition or any of Parent's other subsidiaries or any of their
respective properties or assets except, in the case of (ii) or (iii), for
violations, breaches or defaults which would not have a Parent Material Adverse
Effect.
ARTICLE 5
COVENANTS
SECTION 5.1. Interim Operations. From the date of this Agreement until the
Closing Time, except as set forth in Section 5.1 of the Company Disclosure
Schedule or as expressly contemplated by any other provision of this Agreement,
unless the Parent has consented in writing thereto, the Company shall, and shall
cause each of its subsidiaries to:
(a) conduct its business and operations only in the ordinary
course of business consistent with past practice;
(b) use reasonable efforts to preserve intact the business,
organization, goodwill, rights, licenses, permits and
franchises of the Company and its subsidiaries and maintain
their existing relationships with customers, suppliers and
other persons having business dealings with them, the loss of
any of which would be reasonably likely to result in a
Material Adverse Effect on the Company;
(c) use reasonable efforts to keep in full force and effect
adequate insurance coverage and maintain and keep its
properties and assets in good repair, working order and
condition, normal wear and tear excepted;
(d) not amend or modify its respective charter or certificate
of incorporation, by-laws, or other charter or organization
documents;
(e) not authorize for issuance, issue, sell, grant, deliver,
pledge or encumber or agree or commit to issue, sell, grant,
deliver, pledge or encumber any shares of any class or series
of capital stock of the Company or
26
28
any of its subsidiaries or any other equity or voting security
or equity or voting interest in the Company or any of its
subsidiaries, any securities convertible into or exercisable
or exchangeable for any such shares, securities or interests,
or any options, warrants, calls, commitments, subscriptions or
rights to purchase or acquire any such shares, securities or
interests (other than issuances of Shares upon exercise of
Company Stock Options granted prior to the date of this
Agreement and disclosed pursuant to Section 3.2 to directors,
officers, employees and consultants of the Company in
accordance with the Company Option Plans as currently in
effect);
(f) not (i) split, combine or reclassify any shares of its
stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of, or in substitution
for, shares of its stock, (ii) in solely the case of the
Company, declare, set aside or pay any dividends on, or make
other distributions in respect of, any of the Company's stock,
or (iii) repurchase, redeem or otherwise acquire, or agree or
commit to repurchase, redeem or otherwise acquire, any shares
of stock or other equity or debt securities or equity
interests of the Company or any of its subsidiaries;
(g) not amend or otherwise modify the terms of any Company
Stock Options or the Company Option Plans, the effect of which
shall be to make such terms more favorable to the holders
thereof or persons eligible for participation therein;
(h) other than regularly scheduled seniority increases in the
ordinary course of business consistent with past practice, not
increase the compensation payable or to become payable to any
directors, officers or employees of the Company or any of its
subsidiaries, or grant any severance or termination pay to, or
enter into any employment or severance agreement with any
director or officer of the Company or any of its subsidiaries,
or establish, adopt, enter into or amend in any material
respect or take action to accelerate any material rights or
benefits under any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer
or employee of the Company of any of its subsidiaries;
(i) not acquire or agree to acquire (including, without
limitation, by merger, consolidation, or acquisition of stock,
equity securities or interests, or assets) any corporation,
partnership, joint venture, association or other business
organization or division thereof or otherwise acquire or agree
to acquire any assets of any other person outside the ordinary
course of business consistent with past practice or any
interest in any real properties (whether or not in the
ordinary course of business);
(j) not incur, assume or guarantee any indebtedness for
borrowed money (including draw-downs on letters or lines of
credit) or issue or sell any notes, bonds, debentures, debt
instruments, evidences of indebtedness or other debt
securities of the Company or any of its subsidiaries or any
options, warrants or rights to purchase or acquire any of the
same, except for (i) renewals of existing bonds and letters of
credit in the ordinary course of business not to exceed
$1,000,000 in the aggregate; and (ii) advances, loans or other
indebtedness in the ordinary course of business consistent
with past practice in an aggregate amount not to exceed
$1,000,000;
27
29
(k) not sell, lease, license, encumber or otherwise dispose
of, or agree to sell, lease, license, encumber or otherwise
dispose of, any material properties or assets of the Company
and its subsidiaries taken as a whole;
(l) not authorize or make any capital expenditures (including
by lease) in excess of $1,000,000 in the aggregate for the
Company and all of its subsidiaries;
(m) not make any material change in any of its accounting or
financial reporting (including tax accounting and reporting)
methods, principles or practices, except as may be required by
GAAP or applicable tax laws;
(n) not make any material tax election or settle or compromise
any material United States or foreign tax liability;
(o) except in the ordinary course of business consistent with
past practice, not amend, modify or terminate any Contract
required to be listed in Section 3.15 of the Company
Disclosure Schedule or waive, release or assign any material
rights or claims thereunder;
(p) not adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any
of its subsidiaries; and
(q) except as to subsections (a), (b) and (c) of this Section
5.1, not agree or commit in writing or otherwise to do any of
the foregoing.
SECTION 5.2. Stockholders' Meeting.
(a) The Company, acting through the Board, shall, if required for the Merger
under the DGCL:
(i) duly call, give notice of, convene and hold a
meeting of its stockholders (the "Stockholders' Meeting"), to
be held as soon as practicable after the Tender Offer Purchase
Time for the purpose of considering and taking action upon
this Agreement;
(ii) except as otherwise permitted under Section 5.3,
include in the Proxy Statement (A) the recommendation of the
Board that stockholders of the Company vote in favor of the
approval and adoption of this Agreement, the Merger and the
other transactions contemplated hereby, and (B) a statement
that the Board believes that the consideration to be received
by the stockholders of the Company pursuant to the Merger is
fair to such stockholders;
(iii) except as otherwise permitted under Section
5.3, use reasonable efforts (A) to obtain and furnish the
information required to be included by it in the Disclosure
Statements and, after consultation with Parent and providing
Parent with a reasonable opportunity to review and comment
upon the Proxy Statement, cause the Proxy Statement to be
mailed to its stockholders at the earliest practicable time
following the Tender Offer Purchase Time, and (B) to obtain
the necessary approvals by its stockholders of this Agreement
and the transactions contemplated hereby. At such meeting,
Parent, GP and Acquisition will, and will cause their
affiliates to, vote all Shares owned by them in favor of
approval and adoption of this Agreement, the Merger and the
transactions contemplated hereby.
28
30
SECTION 5.3. Other Potential Acquirers.
(a) From and after the date of this Agreement until the
earlier of the Effective Time or termination of this Agreement pursuant to its
terms, the Company and its subsidiaries shall not, and will instruct their
respective directors, officers, employees, representatives, investment bankers,
agents and affiliates not to, directly or indirectly, (i) solicit or encourage
submission of, any inquiries, proposals or offers by any person, entity or group
(other than Parent and its affiliates, agents and representatives), or (ii)
participate in any discussions or negotiations with, or disclose any non-public
information concerning the Company or any of its subsidiaries to, or afford any
access to the properties, books or records of the Company or any of its
subsidiaries to, or otherwise assist or facilitate, or enter into or resolve to
enter into any agreement or understanding with, any person, entity or group
(other than Parent and its affiliates, agents and representatives), in
connection with any Acquisition Proposal with respect to the Company. For the
purposes of this Agreement, an "Acquisition Proposal" with respect to an entity
means any proposal or offer relating to (i) any merger, consolidation, sale of
substantial assets or similar transactions involving the entity or any
subsidiaries of the entity (other than sales of assets or inventory in the
ordinary course of business or as permitted under the terms of this Agreement),
(ii) the acquisition by any person of beneficial ownership or a right to acquire
beneficial ownership of, or the formation of any "group" (as defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder)
which beneficially owns, or has the right to acquire beneficial ownership of,
10% or more of the then outstanding shares of capital stock of the entity
(except for acquisitions for passive investment purposes only in circumstances
where the person or group qualifies for and files a Schedule 13G with respect
thereto); (iii) the adoption by the entity of a plan of liquidation or the
declaration or payment of an extraordinary dividend; (iv) the repurchase by the
entity of more than 20% of its outstanding shares of voting stock; (v) the
acquisition by the entity of direct or indirect ownership of a business where
annual revenue, net income or assets is greater than 20% of the entity; or (vi)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing. The Company will,
and will cause its subsidiaries and their respective directors, officers,
employees, representatives and agents, to immediately cease any and all existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. The Company will (i) notify Parent as
promptly as practicable if any inquiry or proposal is made or any information or
access is requested in connection with an Acquisition Proposal or potential
Acquisition Proposal and (ii) as promptly as practicable notify Parent of the
terms and conditions of any such Acquisition Proposal. In addition, subject to
the other provisions of this Section 5.3(a), from and after the date of this
Agreement until the earlier of the Effective Time and termination of this
Agreement pursuant to its terms, the Company and its subsidiaries will not, and
will instruct their respective directors, officers, employees, representatives,
investment bankers, agents and affiliates not to, directly or indirectly, make
or authorize any public statement, recommendation or solicitation in support of
any Acquisition Proposal made by any person, entity or group (other than Parent
or Acquisition); provided, however, that nothing herein shall prohibit the
Company's Board of Directors from taking and disclosing to the Company's
stockholders a position with respect to a tender offer pursuant to Rules 14d-9
and 14e-2 promulgated under the Exchange Act.
(b) Except as allowed under Section 5.3(b), the Board will not withdraw or
modify in a manner adverse to Parent or Acquisition its recommendation of the
transactions contemplated hereby or approve or recommend any Acquisition
Proposal. Notwithstanding the provisions of paragraph (a) above, prior to
consummation of the Offer, the Company may, to the extent the Board of Directors
of the Company determines, in good faith, after consultation with outside legal
counsel, that the Board's fiduciary duties under applicable law require it to do
so,
29
31
participate in discussions or negotiations with, and, subject to the
requirements of paragraph (c), below, furnish information to any person, entity
or group after such person, entity or group has delivered to the Company in
writing, an unsolicited bona fide Acquisition Proposal which the Board of
Directors of the Company in its good faith reasonable judgment determines, after
consultation with its independent financial advisors, would result in a
transaction more favorable than the Offer and the Merger to the stockholders of
the Company from a financial point of view and for which financing, to the
extent required, is then committed or which, in the good faith reasonable
judgement of the Board of Directors of the Company (based upon the advice of
independent financial advisors) is reasonably capable of being financed by such
person, entity or group and which is likely to be consummated (a "Superior
Proposal"). In the event the Company receives a Superior Proposal nothing
contained in this Agreement (but subject to the terms hereof) will prevent the
Board of Directors of the Company from recommending such Superior Proposal to
the Company's stockholders, if the Board determines, in good faith, after
consultation with outside legal counsel, that such action is required by its
fiduciary duties under applicable law, provided, however, that the Company shall
not recommend to its stockholders a Superior Proposal for a period of not less
than 72 hours after Parent's receipt of a copy of such Superior Proposal (or a
description of the terms and conditions thereof, if not in writing).
(c) Notwithstanding anything to the contrary herein, the Company will not
provide any nonpublic information to a third party unless: (x) the Company
provides such nonpublic information pursuant to a nondisclosure agreement with
terms regarding the protection of confidential information at least as
restrictive as such terms in the Confidentiality Agreement (as defined below);
and (y) such nonpublic information has been previously delivered to Parent.
SECTION 5.4 [INTENTIONALLY OMITTED]. .
SECTION 5.5 Access to Information. From the date of this Agreement until the
Closing Time, upon reasonable prior notice, the Company shall (and shall cause
each of its subsidiaries to) give the Parent and its representatives (including
lenders to and financing sources for such party) full access to the officers,
employees, agents, books, records, contracts, commitments, properties, offices
and other facilities of it and its subsidiaries, and shall furnish promptly to
the Parent and its representatives such financial and operating data and other
information concerning the business, operations, properties, contracts, records
and personnel of the Company and its subsidiaries as the Parent may from time to
time reasonably request. Parent and Acquisition will make all reasonable efforts
to minimize any disruption to the businesses of the Company and its subsidiaries
which may result from the access to properties and employees and for data and
information hereunder. All information obtained by the Parent pursuant to this
Section 5.5 shall be kept confidential in accordance with the confidentiality
provisions of the Non-Disclosure Agreement between Parent and the Company dated
May 17, 1999 (the "Confidentiality Agreement"). No representations and
warranties or conditions to the consummation of the Merger contained herein or
in any certificate or instrument delivered in connection herewith shall be
deemed waived or otherwise affected by any investigation made by the parties or
their respective representatives.
SECTION 5.6. Further Actions.
(a) Each of the parties hereto shall use its 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
30
32
applicable laws and regulations, and consult and fully cooperate with and
provide reasonable assistance to each other party hereto and their respective
representatives in order, to consummate and make effective the transactions
contemplated by this Agreement as promptly as practicable hereafter, including,
without limitation, (i) using reasonable efforts to make all filings,
applications, notifications, reports, submissions and registrations with, and to
obtain all consents, approvals, authorizations or permits of, Governmental
Entities or other persons or entities as are necessary for the consummation of
the Merger and the other transactions contemplated hereby (including, without
limitation, pursuant to the HSR Act, the Securities Act, the Exchange Act, Blue
Sky Laws, Delaware law and other applicable laws and regulations in effect in
the United States, Belgium or any other jurisdiction), and (ii) taking such
actions and doing such things as any other party hereto may reasonably request
in order to cause any of the conditions to such other party's obligation to
consummate the Merger as specified in Article 8 of this Agreement to be fully
satisfied. Prior to making any application to or filing with any Governmental
Entity or other person or entity in connection with this Agreement, the Company,
on the one hand, and the Parent, on the other hand, shall provide the other with
drafts thereof and afford the other a reasonable opportunity to comment on such
drafts.
(b) Without limiting the generality of the foregoing, each of
the Parent and the Company agree to cooperate and use reasonable efforts to
vigorously contest and resist any action, suit, proceeding or claim, and to have
vacated, lifted, reversed or overturned any injunction, order, judgment or
decree (whether temporary, preliminary or permanent), that delays, prevents or
otherwise restricts the consummation of the Merger or any other transaction
contemplated by this Agreement, and to take any and all actions (including,
without limitation, the disposition of assets, divestiture of businesses, or the
withdrawal from doing business in particular jurisdictions) as may be required
by Governmental Entities as a condition to the granting of any such necessary
approvals or as may be required to avoid, vacate, lift, reverse or overturn any
injunction, order, judgment, decree or regulatory action; provided, however,
that in no event shall any party hereto take, or be required to take, any action
that could reasonably be expected to have a Material Adverse Effect on the
Company or that individually or in the aggregate could reasonably be expected to
have a Parent Material Effect.
SECTION 5.7. HSR Matters. Each party hereto shall make an
appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the transactions contemplated hereby as promptly as practicable
after the date hereof. Each such filing shall request early termination of the
waiting periods imposed by the HSR Act. Each party hereby agrees to use its
reasonable best efforts to cause a termination of the waiting period under the
HSR Act without the entry by a court of competent jurisdiction of an order
enjoining the consummation of the transactions contemplated hereby at as early a
date as possible. Each party also agrees to respond promptly to all
investigatory requests as may be made by the government. In the event that a
Request for Additional Information is issued under the HSR Act, each party
agrees to furnish all information required and to comply substantially with such
request as soon as is practicable after its receipt thereof so that any
additional applicable waiting period under the HSR Act may commence. Each party
will keep the other party apprised of the status of any inquiries made of such
party by the Department of Justice, Federal Trade Commission or any other
governmental agency or authority or members of their respective staffs with
respect to this Agreement or the transactions contemplated hereby.
SECTION 5.8. Public Announcements. Parent, Acquisition and the Company, as the
case may be, will consult with one another before issuing any press release or
otherwise making any public statements with respect to the transactions
contemplated by this Agreement, including, without limitation, the Merger, and
shall not issue any such press release or make any such public statement prior
to such consultation except to the extent that such consultation may be
prohibited
31
33
by applicable law or such a disclosure or release is required by obligations
pursuant to any listing agreement with the Brussels Stock Exchange or Nasdaq as
determined by Parent or the Company, as the case may be.
SECTION 5.9. Employee Benefit Matters; Company Stock Options. The Company shall,
or shall cause one of its subsidiaries to, take such action effective as of the
Effective Time with respect to any Company Employee Plan as Parent shall
reasonably request, including termination of any such plan. The Company shall
(a) cooperate with Parent and Acquisition in obtaining waivers, in form and
substance reasonably satisfactory to Parent and Acquisition, of all terms of the
Company Option Plans and all terms of outstanding Company Stock Options, which
terms could prevent, restrict or impair the ability of Parent, Acquisition and
the Company to effectuate fully the provisions of Section 2.10, and (b) use
reasonable efforts to cause its Compensation Committee to interpret the Company
Option Plan, to the extent possible, so as to enable the Company, Parent and
Acquisition to effectuate fully the provisions of Section 2.10.
SECTION 5.10. Notification of Certain Matters. The Company shall give prompt
notice to Parent and Parent shall give prompt notice to the Company, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause (A) any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective Time or (B) any covenant, condition or agreement contained in this
Agreement not to be complied with or satisfied in all material respects and (ii)
any material failure of the Company, Parent, GP or Acquisition, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.10 shall not cure such breach or
non-compliance or limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 5.11. Guarantee of Performance. Parent hereby guarantees the performance
by Acquisition and GP of their obligations under this Agreement.
SECTION 5.12 Indemnification; Directors' and Officers' Insurance.
(a) Parent and Acquisition agree that all rights to indemnification for acts or
omissions occurring prior to the Effective Time now existing in favor of the
current or former directors or officers (the "Indemnified Parties") of the
Company and its subsidiaries as provided in their respective certificates of
incorporation or bylaws (or similar organizational documents) or existing
indemnification contracts shall survive the Merger and shall continue in full
force and effect in accordance with their terms.
(b) For six years from the Effective Time, Parent shall maintain in effect the
Company's current directors' and officers' liability insurance or insurance
policies with substantially equivalent coverage covering those persons who are
currently covered by the Company's directors' and officers' liability insurance
policy (a copy of which has been heretofore delivered to Parent).
(c) This Section 5.12 shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, Parent, the Acquisition and
the Indemnified Parties, and shall be binding on all successors and assigns of
Parent and the Acquisition.
SECTION 5.13 State Takeover Laws. Notwithstanding any other provision of this
Agreement, in no event shall the Section 203 Approval be withdrawn, revoked or
modified by the Board. If
32
34
any state takeover statute other than Section 203 of the DGCL becomes or is
deemed to become applicable to the Offer, the acquisition of the Shares pursuant
to the Offer or the Stockholders Agreement or the Merger, the Company shall take
all action necessary to render such statute inapplicable to all of the
foregoing.
SECTION 5.14 Employee Benefits. Following the Effective Time, the Surviving
Corporation will provide the persons employed by the Company immediately prior
to the Effective Time, for so long as such persons remain employed by the
Surviving Corporation with benefits (other than stock options) in the aggregate
which are substantially comparable to those provided to such persons by the
Company immediately prior to the Effective Time.
ARTICLE 6
DISSENTING SHARES; EXCHANGE OF SHARES
SECTION 6.1 Dissenting Shares. Notwithstanding anything in this Agreement to the
contrary, in the event that dissenters' rights are available in connection with
the Merger pursuant to Section 262 of the DGCL, Shares that are issued and
outstanding immediately prior to the Effective Time and that are held by
stockholders who did not vote in favor of the Merger and who comply with all of
the relevant provisions of Section 262 of the DGCL (the "Dissenting Shares")
shall not be converted into or be exchangeable for the right to receive the Cash
Merger Consideration, but instead shall be converted into the right to receive
such consideration as may be determined to be due to such stockholders pursuant
to Section 262 of the DGCL, unless and until such holders shall have failed to
perfect or shall have effectively withdrawn or lost their rights to appraisal
under the DGCL. If any such holder shall have failed to perfect or shall have
effectively withdrawn or lost such right, such holder's Shares shall thereupon
be deemed to have been converted into and to have become exchangeable for the
right to receive, as of the Effective Time, the Cash Merger Consideration
without any interest thereon. The Company shall give Parent (i) prompt notice of
any written demands for appraisal of Shares received by the Company and (ii) the
opportunity to participate in all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent of
Parent, voluntarily make any payment with respect to, or settle or offer to
settle, any such demands.
ARTICLE 7
CONDITIONS TO THE OFFER
SECTION 7.1. Conditions to the Offer. (a) Notwithstanding any other provisions
of the Offer, Acquisition shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-l(c) under the Exchange Act (relating to Acquisition's obligation to pay for
or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restrictions referred to above, the payment for, any tendered Shares, and may
amend the Offer consistent with the terms of this Agreement, including extending
the deadline for tendering Shares, or terminate the Offer, if any of the
following events shall occur:
33
35
(i) from the date of this Agreement until the Tender Offer
Purchase Time, there shall have occurred any change, event,
occurrence or circumstance which, individually or in the
aggregate, has a Material Change (as defined below) on the
Company (except for changes, events, occurrences or
circumstances with respect to general economic conditions).
"Material Change" means any change or effect that is
materially adverse to the business, properties or financial
condition of the Company; provided, however, that (x) the
commencement of any litigation against the Company or its
subsidiaries after the date of this Agreement which is related
to this Agreement or the transactions contemplated hereby or
any adverse change, event or effect that is proximately caused
by such litigation that is initiated or threatened after the
date of this Agreement against the Company or any of its
subsidiaries and (y) any adverse change resulting from any
action taken by the Company that was approved by Parent under
Section 5.1 of this Agreement shall not be a Material Change;
and provided further, however, that if the Offer is
consummated after July 31, 1999 the following shall not be
taken into account in determining whether there has been or
would be a Material Change with respect to the Company to the
extent such events occur subsequent to July 31, 1999:
(a) a reduction of up to 25% of the (i) average
monthly consolidated revenue and net profit of the
Company compared to the average monthly consolidated
revenue and net profit of the Company during the 12
months immediately preceding the date of this
Agreement or (ii) the net worth of the Company
compared to the December 31, 1998 balance sheet;
(b) any change in the assets of the Company in
connection with obtaining required regulatory
approvals; or
(c) any voluntary termination after the date of this
Agreement of officers or other key employees of the
Company;
(ii) from the date of this Agreement until the Tender Offer
Purchase Time, any Governmental Entity or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced
or entered any statute, rule, regulation, executive order,
decree, injunction or other order (and if temporary or
preliminary, not vacated within five (5) business days of its
entry), except with regard to HSR Act approval which shall be
governed by Section 7.1(a)(vii), which is in effect at the
Tender Offer Purchase Time and which (1) makes the acceptance
for payment of, or the payment for, some or all of the Shares
illegal or otherwise prohibits or restricts consummation of
the Offer, the Merger or any of the other transactions
contemplated hereby, (2) imposes material limitations on the
ability of Parent, GP or Acquisition to acquire or hold or to
exercise any rights of ownership of the Shares, or effectively
to manage or control the Company and its business, assets and
properties or (3) would result in a Material Change to the
Company; provided, however, that the parties shall use
reasonable efforts (subject to the proviso in Section 5.6(b))
to cause any such decree, judgment or other order to be
vacated or lifted as soon as is practicable;
(iii) the representations and warranties of the Company set
forth in this Agreement shall not (A) have been true and
correct in one or more material respects on the date hereof or
(B) (except with respect to the representations and
34
36
warranties set forth in Sections 3.8, 3.9, 3.14, 3.15, 3.22,
3.13(c), (d), (e), (f), (g) and (h) and 3.16(a), (b)(i), (ii),
(iv), (v) and (vi)) be true and correct in one or more
material respects as of the scheduled expiration date (as such
date may be extended) of the Offer as though made on and as of
such date or the Company shall have breached or failed in any
respect to perform or comply with any material obligation,
agreement or covenant required by this Agreement to be
performed or complied with by it (including without limitation
the provisions of Section 5.3) except, in each case with
respect to clause B, (1) for changes specifically permitted by
the Agreement and (2)(x) for those representations and
warranties that address matters only as of a particular date
which are true and correct as of such date or (y) where the
failure of representations and warranties (without regard to
materiality qualifications therein contained) to be true and
correct, or the performance or compliance with such
obligations, agreements, or covenants, would not, individually
or in the aggregate, result in a Material Change to the
Company;
(iv) from the date of this Agreement until the Tender Offer
Purchase Time, this Agreement shall have been terminated in
accordance with its terms;
(v) from the date of this Agreement until the Tender Offer
Purchase Time the Board of Directors of the Company or any
committee thereof shall have (1) withdrawn or modified
(including without limitation, by amendment of the Company's
Schedule 14D-9) in a manner adverse to Parent or Acquisition
its approval or recommendation of the Offer, the Merger or the
Agreement, (2) approved or recommended any Acquisition
Proposal by a third party other than the Offer and the Merger,
(3) resolved to do any of the foregoing, or (4) upon a request
to reaffirm the Company's approval or recommendation of the
Offer, the Agreement or the Merger, the Board of Directors of
the Company shall fail to do so within two business days after
such request is made;
(vi) from the date of this Agreement until the Tender Offer
Purchase Time, any of the consents, approvals, authorizations,
orders or permits required to be obtained by the Company,
Parent, GP or Acquisition, or their respective subsidiaries in
connection with the Offer or the Merger from, or filings or
registrations required to be made by any of the same prior to
the Tender Offer Purchase Time with, any Governmental Entity
in connection with the execution, delivery and performance of
this Agreement (including without limitation the termination
or expiration of any applicable waiting period or the receipt
of any required clearance under the HSR Act) shall not have
been obtained or made or shall have been obtained or made
subject to conditions or requirements, which (A) make the
acceptance for payment of, or the payment for the Shares
illegal or otherwise prohibits or restricts the consummation
of the Offer or the Merger or (B) have a Parent Material
Adverse Effect or result in a Material Change to the Company
or (C) impose material limitations on the ability of Parent,
GP or Acquisition effectively to manage or control the
Company;
35
37
(vii) from the date of this Agreement until the Tender Offer
Purchase Time, in the case of HSR Act approval, any
Governmental Entity or court of competent jurisdiction shall
have entered a final, non-appealable order enjoining the
consummation of the Merger;
(viii) from the date of this Agreement until the Tender Offer
Purchase Time, there shall have occurred (A) the declaration
of a banking moratorium or any suspension of payments in
respect of banks in the United States or in Belgium or (B) the
commencement of a war or armed hostilities involving the
United States or Belgium and resulting in a Material Change to
the Company or having a Parent Material Adverse Effect or
materially adversely affecting (or materially delaying) the
consummation of the Offer.
(b) The conditions set forth in Section 7.1(a) are for the
sole benefit of Parent, GP and Acquisition and may be asserted by Parent
regardless of any circumstances giving rise to any condition and may be waived
by Parent, in whole or in part, at any time and from time to time, in the sole
discretion of Parent. The failure by Parent (or any affiliate of Parent) at any
time to exercise any of the foregoing rights will not be deemed a waiver of any
right and each right will be deemed an ongoing right which may be asserted at
any time and from time to time.
(c) Notwithstanding the foregoing, if within the "Cure Time" (defined below) the
Company has cured one or more conditions set forth in subsections (a)(i), (ii),
or (iii) of Section 7.1, and following such cure, no condition enumerated in
Section 7.1(a) continues to exist, then this Article shall not relieve Parent,
GP and Acquisition of their obligations hereunder with respect to the Offer. For
purposes hereof, "Cure Time" means the earlier of (A) two (2) full business days
before the scheduled expiration date of the Offer (as such period may be
extended) or (B) ten (10) full business days following notice to the Company of
the existence of such condition.
ARTICLE 8
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 8.1. Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party hereto to effect the Merger are subject to
the satisfaction at or prior to the Closing Time of the following conditions:
(a) this Agreement, the Merger and the other transactions contemplated hereby
shall have been approved by all necessary corporate action of the Company,
including, if necessary, adoption by vote of the stockholders of the Company;
(a) no Governmental Entity or court of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (and if temporary
or preliminary, not vacated within five business days of its entry) which is in
effect and which (1) makes the payment of the Cash Merger Consideration illegal
or otherwise prohibits or restricts consummation of the Merger or any of the
other applicable transactions contemplated hereby, or (2) imposes material
limitations on the ability of Parent, GP or Acquisition to acquire or hold or to
exercise any rights of ownership of the Surviving Corporation, or effectively to
manage or control the Surviving Corporation and its business, assets and
properties;
36
38
(b) any waiting period applicable to the Merger under the HSR
Act shall have terminated or expired and any other governmental or regulatory
notices or approvals required with respect to the transactions contemplated
hereby shall have been either filed or received; and
(c) Acquisition shall have purchased Shares pursuant to the
Offer.
ARTICLE 9
TERMINATION; AMENDMENT; WAIVER
SECTION 9.1. Termination. This Agreement may be terminated, at any time prior to
the Effective Time, whether before or after approval by the stockholders of the
Company:
(a) by mutual written agreement of the Boards of Directors of Parent and
the Company;
(b) by either Parent or the Company;
(i) if the Offer (as may be extended in accordance
with the terms hereof) shall be terminated or expire without
any Shares having been purchased pursuant to the Offer;
provided, however, that a party shall not be entitled to
terminate this Agreement pursuant to this Section 9.l(b)(i) if
it is in material breach of its representations and
warranties, covenants or other obligations under this
Agreement; and provided, further, however, that if the Offer
is not consummated due to a failure to obtain clearance under
the HSR Act, Parent may not terminate this Agreement until
December 31, 1999 and the Company may not terminate this
Agreement until April 1, 2000; or
(ii) if any court of competent jurisdiction in the
United States or other United States governmental body shall
have issued an order, decree or ruling or taken any other
action restraining, enjoining or otherwise prohibiting the
Offer or the Merger and such order, decree, ruling or other
action shall have become final and nonappealable;
(c) by Parent:
(i) if the Board of Directors of the Company or any
committee thereof shall have approved, or recommended that
stockholders of the Company accept or approve, an Acquisition
Proposal by a third party, or shall have resolved to do any of
the foregoing;
(ii) if the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified its
approval of, or recommendation that the stockholders of the
Company accept or approve (as the case may be), the Offer,
this Agreement and the Merger, or shall have resolved to do
any of the foregoing;
37
39
(iii) if the Company shall have failed to include in
the Schedule 14D-9 the recommendation of the Board of
Directors of the Company that the stockholders of the Company
accept the Offer;
(iv) prior to the purchase of the Shares pursuant to
the Offer, if the Company is in material breach of any of its
covenants or obligations under this Agreement, or any
representation or warranty of the Company contained in this
Agreement shall have been incorrect, in any material respect,
when made;
(v) prior to the purchase of Shares pursuant to the
Offer, in the event that the conditions to the Offer set forth
in Section 7.1 shall not be satisfied, provided, that Parent
may not terminate this Agreement due to a failure to obtain
clearance under the HSR Act until December 31, 1999; or
(vi) after purchase of the Shares pursuant to the
Offer, if the Company is in violation or breach of Section
1.3.
(d) by the Company:
(i) if the Offer shall not have been commenced in
accordance with Section 1.1, or Parent or Acquisition shall
have failed to purchase validly tendered Shares in violation
of the terms of the Offer within ten business days after the
expiration of the Offer; provided, however, that the Company
shall not be entitled to terminate this Agreement pursuant to
this Section 9.1(d)(i) if it is in material breach of its
representations and warranties, covenants or other obligations
under this Agreement;
(ii) if the Board of Directors of the Company has
resolved to, and in fact does, recommend to the Company's
Stockholders that they accept a Superior Proposal, provided
that all the provisions of Section 5.3 have been fully
complied with and the Break-up Fee has been paid to Parent in
accordance with Section 9.3(b);
(iii) prior to the purchase of Shares pursuant to the
Offer, if Parent or Acquisition is in material breach of any
of its covenants or obligations under this Agreement, or any
representation or warranty of Parent or Purchaser contained in
this Agreement shall have been incorrect, in any material
respect, when made; or
(iv) at any time after March 31, 2000 if the Offer
has not been consummated due to a failure to obtain clearance
under the HSR Act; provided, however, that the Company shall
not be entitled to terminate this Agreement pursuant to this
Section 9.1(d)(iv) if it is in material breach of its
representations and warranties, covenants or other obligations
under this Agreement.
SECTION 9.2. Procedure and Effect of Termination. In the event of the
termination of this Agreement by the Company or Parent or both of them pursuant
to Section 9.1, the terminating party shall provide written notice of such
termination to the other party and this Agreement shall forthwith become void
and there shall be no liability on the part of Parent, Purchaser or the Company,
except that the confidentiality provisions of Section 5.5, the first sentence of
Section 5.13, and Sections 9.2 and 9.3 shall survive the termination of this
Agreement. The foregoing
38
40
shall not relieve any party for liability for damages actually incurred as a
result of any breach of this Agreement.
SECTION 9.3. Fees and Expenses.
(a) Except as otherwise provided in this Agreement and whether or not the
transactions contemplated by the Offer and this Agreement are consummated, all
costs and expenses incurred in connection with the transactions contemplated by
the Offer and this Agreement shall be paid by the party incurring such expenses.
(b) The Company shall pay to Parent, an amount equal to
$7,500,000 (the "Break-Up Fee"), if any of the following shall occur:
(i) if the Board of Directors of the Company or any
committee thereof shall have approved, or recommended
that stockholders of the Company accept or approve,
an Acquisition Proposal by a third party, or shall
have resolved to do any of the foregoing;
(ii) if the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified
its approval of, or recommendation that the
stockholders of the Company accept or approve (as the
case may be), the Offer, this Agreement and the
Merger, or shall have resolved to do any of the
foregoing; or
(iii) if the Company shall have failed to include in the
Schedule 14D-9 the recommendation of the Board of
Directors of the Company that the stockholders of the
Company accept the Offer.
Such Break-up Fee shall be payable within 30 days of such
event.
(b) Parent shall pay to the Company the sum of $8,000,000 if
the Offer has not been consummated, and (i) Parent terminates this Agreement
during the period from December 31, 1999 through February 15, 2000 due to a
failure to obtain clearance under the HSR Act and (ii) Parent shall have refused
to consent to any divestiture by the Company required for clearance under the
HSR Act.
(c) Parent shall pay to the Company the sum of $15,000,000 if
the Offer has not been consummated, and (i) Parent terminates the Agreement at
any time after February 15, 2000 due to a failure to obtain clearance under the
HSR Act and (ii) Parent shall have refused to consent to any divestiture by the
Company required for clearance under the HSR Act.
(d) Parent shall pay to the Company the sum of $15,000,000 if
the Company terminates the Agreement pursuant to Section 9.1(d)(iv) and Parent
shall have refused to consent to any divestiture by the Company required for
clearance under the HSR Act.
SECTION 9.4. Amendment. This Agreement may be amended by each
of the parties by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that (i)
such amendment shall be in writing signed by all of the parties, (ii) any such
waiver, amendment or supplement by the Company shall be effective as against the
Company only if approved by a majority of the Continuing Directors and (iii)
after adoption of this Agreement and the Merger by the stockholders of the
Company, no amendment
39
41
may be made without the further approval of the stockholders of the Company
which reduces the Merger Consideration or changes the form thereof or changes
any other terms and conditions of this Agreement if the changes, alone or in the
aggregate, would materially adversely affect the stockholders of the Company.
SECTION 9.5. Waiver. At any time prior to the Effective Time,
whether before or after the Company's Stockholders Meeting, any party hereto, by
action taken by its Board of Directors, may (i) extend the time for the
performance of any of the obligations or other acts of any other party hereto or
(ii) subject to the provisions of Section 9.4, waive compliance with any of the
agreements of any other party or with any conditions to its own obligations. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party by a duly authorized officer of such party. Notwithstanding the above, any
waiver given shall not apply to any subsequent failure of compliance with
agreements of the other party or conditions to its own obligations.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Nonsurvival of Representations and Warranties. The representations
and warranties made herein shall not survive beyond the Tender Offer Purchase
Time or a termination of this Agreement; provided, however, that this Section
10.1 shall not limit any covenant or agreement of the parties hereto which by
its terms requires performance after the Tender Offer Purchase Time including,
without limitation, the covenants and agreements set forth in Article 5.
SECTION 10.2. Entire Agreement; Assignment. This Agreement (a) constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings both written
and oral between the parties with respect to the subject matter hereof and (b)
shall not be assigned by operation of law or otherwise.
SECTION 10.3. Validity. If any provision of this Agreement or the application
thereof to any person or circumstance is held invalid or unenforceable the
remainder of this Agreement and the application of such provision to other
persons or circumstances shall not be affected thereby and to such end the
provisions of this Agreement are agreed to be severable.
SECTION 10.4. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested)
to each other party as follows:
if to Parent, GP or Acquisition: ION BEAM APPLICATIONS S.A. Xxxxxx xx
Xxxxxxxxx, 0
X-0000 Xxxxxxx-xx-Xxxxx
Xxxxxxx
Telecopier: 011-32-10-47-5810
Attention: Xxxxxx Xxxxxx
40
42
with a copy to: Xxxxxx & Whitney LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (212)
Attention: Xxxxx X. Xxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
if to the Company to: STERIGENICS INTERNATIONAL,
INC.
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier:
Attention: Xxxxx X. Xxxxxxx, President
and Chief Executive Officer
with a copy to: Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxx X. Xxxxxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
SECTION 10.5. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to the
principles of conflicts of law thereof. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction of any state or federal court within
Delaware, in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, other than issues involving the
corporate governance of any of the parties hereto, agrees that process may be
served upon them in any manner authorized by the laws of the State of Delaware
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such process.
SECTION 10.6. Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
SECTION 10.7. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors and
permitted assigns and nothing in this Agreement express or implied is intended
to or shall confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
SECTION 10.8. Certain Definitions. For the purposes of this Agreement the term:
(a) "affiliate" means a person that, directly or indirectly, through one or more
intermediaries controls, is controlled by or is under common control with the
first-mentioned person;
(b) "business day" means any day other than a day on which there is no trading
on Nasdaq;
41
43
(c) "stock" means common stock, preferred stock, partnership interests, limited
liability company interests or other ownership interests entitling the holder
thereof to vote with respect to matters involving the issuer thereof;
(d) "person" means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization or other legal entity;
and
(e) "subsidiary" or "subsidiaries" of the Company, Parent, the Surviving
Corporation or any other person means any corporation, partnership, limited
liability company, association, trust, unincorporated association or other legal
entity of which the Company, Parent, the Surviving Corporation or any such other
person, as the case may be, (either alone or through or together with any other
subsidiary) owns, directly or indirectly, 50% or more of the capital stock the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
SECTION 10.9. Personal Liability. This Agreement shall not create or be deemed
to create or permit any personal liability or obligation on the part of any
direct or indirect stockholder of the Company or Parent or any officer,
director, employee, agent, representative or investor of any party hereto.
SECTION 10.10. Specific Performance. The parties hereby acknowledge and agree
that the failure of any party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to the
consummation of the Merger, will cause irreparable injury to the other parties,
for which damages, even if available, will not be an adequate remedy.
Accordingly, each party hereby consents to the issuance of injunctive relief by
any court of competent jurisdiction to compel performance of such party's
obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder; provided, however, that if a party
hereto is entitled to receive the Termination Fee pursuant to Section 9.3 it
shall not also be entitled to specific performance to compel the consummation of
the Merger.
SECTION 10.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
42
44
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be duly
executed on its behalf as of the day and year first above written.
ION BEAM APPLICATIONS S.A.
By: /s/ XXXXXX XXXXXX
----------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
ION BEAM APPLICATIONS G.P.
ION BEAM APPLICATIONS S.A.
Its General Partner
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title:
--------------------------
IBA ACQUISITION CORP.
By: /s/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title:
--------------------------
STERIGENICS INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
43
