AGREEMENT
Dated as of May 3, 2005,
Among
FRESENIUS MEDICAL CARE AG,
FRESENIUS MEDICAL CARE HOLDINGS, INC.
XXXXXXXX ACQUISITION, INC.
And
RENAL CARE GROUP, INC.
TABLE OF CONTENTS
Page
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ARTICLE I
The Merger
SECTION 1.01. The Merger........................................................... 1
SECTION 1.02. Closing.............................................................. 1
SECTION 1.03. Effective Time....................................................... 2
SECTION 1.04. Effects.............................................................. 2
SECTION 1.05. Certificate of Incorporation and By-laws............................. 2
SECTION 1.06. Directors............................................................ 2
SECTION 1.07. Officers............................................................. 2
ARTICLE II
Effect on the Capital Stock of the Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock.............................................. 2
SECTION 2.02. Exchange of Certificates............................................. 3
ARTICLE III
Representations and Warranties of Rome
SECTION 3.01. Organization, Standing and Power..................................... 6
SECTION 3.02. Rome Subsidiaries; Equity Interests.................................. 7
SECTION 3.03. Capital Structure.................................................... 7
SECTION 3.04. Authority; Execution and Delivery; Enforceability.................... 9
SECTION 3.05. No Conflicts; Consents............................................... 9
SECTION 3.06. SEC Documents; Undisclosed Liabilities............................... 10
SECTION 3.07. Information Supplied................................................. 12
SECTION 3.08. Absence of Certain Changes or Events................................. 12
SECTION 3.09. Taxes................................................................ 13
SECTION 3.10. Absence of Changes in Benefit Plans.................................. 15
SECTION 3.11. ERISA Compliance; Excess Parachute Payments.......................... 15
SECTION 3.12. Litigation........................................................... 17
SECTION 3.13. Compliance with Applicable Laws...................................... 18
SECTION 3.14. Environmental Matters................................................ 18
SECTION 3.15. Contracts............................................................ 20
SECTION 3.16. Intellectual Property................................................ 20
SECTION 3.17. Assets............................................................... 21
SECTION 3.18. Brokers.............................................................. 21
SECTION 3.19. Opinion of Financial Advisor......................................... 21
SECTION 3.20. Fraud and Abuse Xxxxx; False Claims; HIPAA; Medicare Program......... 21
ARTICLE IV
Representations and Warranties of the Xxxxxxxx Parties
SECTION 4.01. Organization, Standing and Power..................................... 22
SECTION 4.02. Sub.................................................................. 23
SECTION 4.03. Authority; Execution and Delivery; Enforceability.................... 23
SECTION 4.04. No Conflicts; Consents............................................... 24
SECTION 4.05. Information Supplied................................................. 24
SECTION 4.06. Brokers.............................................................. 25
SECTION 4.07. Financing............................................................ 25
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business.................................................. 25
SECTION 5.02. No Solicitation...................................................... 29
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting................. 32
SECTION 6.02. Access to Information; Confidentiality............................... 33
SECTION 6.03. Standard of Efforts; Notification.................................... 34
SECTION 6.04. Stock Options........................................................ 36
SECTION 6.05. Benefit Plans........................................................ 38
SECTION 6.06. Indemnification...................................................... 39
SECTION 6.07. Fees and Expenses.................................................... 40
SECTION 6.08. Public Announcements................................................. 41
SECTION 6.09. Transfer Taxes....................................................... 41
SECTION 6.10. Rights Agreements.................................................... 42
SECTION 6.11. Xxxxxxxx Parties' Acknowledgement.................................... 42
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To Effect The Merger........... 42
ii
SECTION 7.02. Conditions to Obligations of the Xxxxxxxx Parties.................... 42
SECTION 7.03. Conditions to Obligations of Rome.................................... 43
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination.......................................................... 44
SECTION 8.02. Effect of Termination................................................ 45
SECTION 8.03. Amendment............................................................ 46
SECTION 8.04. Extension; Waiver.................................................... 46
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties........................ 46
SECTION 9.02. Notices.............................................................. 46
SECTION 9.03. Definitions.......................................................... 47
SECTION 9.04. Interpretation....................................................... 48
SECTION 9.05. Severability......................................................... 48
SECTION 9.06. Counterparts......................................................... 48
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries....................... 48
SECTION 9.08. Governing Law........................................................ 49
SECTION 9.09. Assignment........................................................... 49
SECTION 9.10. Enforcement.......................................................... 49
SECTION 9.11. Construction......................................................... 49
iii
AGREEMENT dated as of May 3, 2005, among FRESENIUS
MEDICAL CARE AG, a corporation organized under the laws of the
Federal Republic of Germany ("FME AG"), FRESENIUS MEDICAL CARE
HOLDINGS, INC., a New York corporation, and a wholly owned
subsidiary of FME AG ("FME"), XXXXXXXX ACQUISITION, INC., a
Delaware corporation, and a wholly owned subsidiary of FME
("Sub"), and RENAL CARE GROUP, INC., a Delaware corporation
("Rome").
WHEREAS the respective boards of directors of FME, Sub and Rome have
approved the merger (the "Merger") of Sub into Rome on the terms and subject to
the conditions set forth in this Agreement, whereby each issued and outstanding
share of common stock, par value $0.01 per share, of Rome (the "Rome Common
Stock") not owned by FME, Sub or Rome shall be converted into the right to
receive the Merger Consideration (as defined in Section 2.01);
WHEREAS the Supervisory Board of Directors and Managing Board of
Directors of FME AG have approved the Merger and the other transactions
contemplated by this Agreement (collectively, the "Transactions") on the terms
and subject to the conditions of this Agreement; and
WHEREAS FME AG, FME, and Sub (collectively, the "Xxxxxxxx Parties")
and Rome desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and the other Transactions and also to
prescribe various conditions to the Merger and the other Transactions.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
The Merger
SECTION 1.01. The Merger. On the terms and subject to the conditions
set forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Sub shall be merged with and into Rome at the
Effective time (as defined in Section 1.03). At the Effective Time, the separate
corporate existence of Sub shall cease, and Rome shall continue as the surviving
corporation (the "Surviving Corporation").
SECTION 1.02. Closing. The closing (the "Closing") of the Merger
shall take place at the offices of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m., on the second
business day following the date on which all the conditions set forth in Article
VII have been satisfied (or, to the extent permitted by Law (as defined in
Section 3.05(a)), waived by the party or parties entitled to the benefits
thereof), or at such other place, time and date as shall be
2
agreed in writing between FME and Rome. The date on which the Closing occurs is
referred to in this Agreement as the "Closing Date".
SECTION 1.03. Effective Time. Prior to the Closing, the parties
shall prepare, and on the Closing Date or as soon as practicable thereafter
shall file with the Secretary of State of the State of Delaware, a certificate
of merger or other appropriate documents (in any such case, the "Certificate of
Merger") executed in accordance with the relevant provisions of the DGCL and
shall make all other filings or recordings required under the DGCL. The Merger
shall become effective at such time as the Certificate of Merger is duly filed
with such Secretary of State, or at such later time as is permitted by the DGCL
and as FME and Rome shall agree and specify in the Certificate of Merger (the
time the Merger becomes effective being the "Effective Time").
SECTION 1.04. Effects. The Merger shall have the effects set forth
in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of Rome shall be amended at the Effective Time to
read in the form of Exhibit A, and, as so amended, such Certificate of
Incorporation shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable Law.
(b) The By-laws of Sub as in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable Law.
SECTION 1.06. Directors. The directors of Sub immediately prior to
the Effective Time shall be the directors of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
SECTION 1.07. Officers. The officers of Sub immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected or appointed and qualified, as the case may be.
ARTICLE II
Effect on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
shares of Rome Common Stock or any shares of capital stock of Sub:
3
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation.
(b) Cancelation of Treasury Stock and Xxxxxxxx-Owned Stock.
Each share of Rome Common Stock that is held by Rome as treasury stock or
owned by FME or Sub shall no longer be outstanding and shall automatically
be canceled and retired and shall cease to exist, and no Merger
Consideration, cash or other consideration shall be delivered or
deliverable in exchange therefor.
(c) Conversion of Rome Common Stock. (i) Subject to Sections
2.01(b) and 2.01(d), each issued and outstanding share of Rome Common
Stock shall be converted into the right to receive $48.00 in cash (the
"Merger Consideration"), without interest.
(ii) As of the Effective Time, all such shares of Rome Common Stock shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each holder of a certificate representing any such
shares of Rome Common Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration upon surrender of such
certificate in accordance with Section 2.02, without interest.
(d) Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, shares ("Appraisal Shares") of Rome Common
Stock that are outstanding immediately prior to the Effective Time and
that are held by any person who is entitled to demand and properly demands
appraisal of such Appraisal Shares pursuant to, and who complies in all
respects with, Section 262 of the DGCL ("Section 262") shall not be
converted into the right to receive the Merger Consideration as provided
in Section 2.01(c), but rather the holders of Appraisal Shares shall be
entitled to payment of the fair value of such Appraisal Shares in
accordance with Section 262; provided, however, that if any such holder
shall fail to perfect or otherwise shall waive, withdraw or lose the right
to appraisal under Section 262 or a court of competent jurisdiction shall
determine that such holder is not entitled to the relief provided by
Section 262, then the right of such holder to be paid the fair value of
such holder's Appraisal Shares shall cease, and such Appraisal Shares
shall be deemed to have been converted as of the Effective Time into, and
to have become exchangeable solely for the right to receive, Merger
Consideration as provided in Section 2.01(c). Rome shall provide notice to
FME, as promptly as reasonably practicable, of any demands for appraisal
of any shares of Rome Common Stock, and FME shall have the right to
participate in and direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, Rome shall not, without the
prior written consent of FME, not to be unreasonably withheld or delayed,
make any payment with respect to, or settle or offer to settle, any such
demands, or agree to do any of the foregoing.
SECTION 2.02. Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, FME shall
select a bank or trust company that is reasonably approved by Rome to act
as paying agent (the "Paying
4
Agent") for the payment of the Merger Consideration upon surrender of
certificates representing Rome Common Stock. FME shall provide to the
Paying Agent immediately following the Effective Time all the cash
necessary to pay for the shares of Rome Common Stock converted into the
right to receive cash pursuant to Section 2.01(c) (such cash being
hereinafter referred to as the "Exchange Fund").
(b) As soon as reasonably practicable after the Effective
Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates (the "Certificates") that immediately prior to
the Effective Time represented outstanding shares of Rome Common Stock
whose shares were converted into the right to receive Merger Consideration
pursuant to Section 2.01(c), (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
Paying Agent and shall be in such form as FME may specify and Rome may
reasonably approve) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent, together
with such letter of transmittal, duly executed, and such other documents
as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange for such Certificate
the Merger Consideration into which the shares of Rome Common Stock
formerly represented by such Certificate have been converted pursuant to
the provisions of this Article II, and the Certificate so surrendered
shall be canceled. In the event of a transfer of ownership of Rome Common
Stock that is not registered in the transfer records of Rome, the Merger
Consideration may be paid to a person other than the person in whose name
the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and the
person requesting such payment shall pay any transfer or other taxes
required by reason of the payment of the Merger Consideration to a person
other than the registered holder of such Certificate or establish to the
reasonable satisfaction of FME that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.02, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration as contemplated by this Section 2.02. No interest shall be
paid or accrue on any cash payable upon surrender of any Certificate.
(c) No Further Ownership Rights in Rome Common Stock. The
Merger Consideration paid in accordance with the terms of this Article II
upon conversion of any shares of Rome Common Stock shall be deemed to have
been paid in full satisfaction of all rights pertaining to such shares of
Rome Common Stock, and after the Effective Time there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Rome Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, any
Certificates formerly representing shares of Rome Common Stock are
presented to the Surviving Corporation or the Paying Agent for any reason,
they shall be canceled and exchanged as provided in this Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange
Fund that remains undistributed to the holders of Rome Common Stock for
one year after the
5
Effective Time shall be delivered, subject to applicable Law, to FME, upon
demand, and any holder of Rome Common Stock who has not complied with this
Article II before such demand shall thereafter look only to FME for
payment of its claim for the Merger Consideration.
(e) No Liability. None of FME, the Surviving Corporation or
the Paying Agent shall be liable to any person in respect of any cash from
the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. If any Certificate
has not been surrendered prior to three years after the Effective Time (or
immediately prior to such earlier date on which the Merger Consideration
in respect of such Certificate would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 3.05(b))) any
such shares, cash, dividends or distributions in respect of such
Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto.
(f) Investment of Exchange Fund. The Paying Agent shall invest
any cash included in the Exchange Fund as directed by FME, on a daily
basis, in obligations of the United States of America. Any interest and
other income resulting from such investments shall be the property of and
shall be paid to FME.
(g) Lost Certificates. If any Certificate shall have been
lost, stolen, defaced or destroyed, upon the making of an affidavit of
that fact by the person claiming such Certificate to be lost, stolen,
defaced or destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond, in such reasonable amount as the
Surviving Corporation may direct, as indemnity against any claim that may
be made against it with respect to such Certificate, the Paying Agent will
issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration.
(h) Withholding Rights. FME, the Surviving Corporation or the
Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder
of shares of Rome Common Stock any applicable taxes that FME, the
Surviving Corporation or the Paying Agent is legally required to deduct
and withhold under the Code (as defined in Section 3.10). To the extent
that amounts are so withheld and paid over to the appropriate taxing
authority by FME, the Surviving Corporation or the Paying Agent, such
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of shares of Rome Common Stock in respect
of which such deduction and withholding was made.
ARTICLE III
Representations and Warranties of Rome
Except as set forth in the letter, dated as of the date of
this Agreement (which letter shall be arranged in sections corresponding
to the numbered sections contained in this Agreement), from Rome to the
Xxxxxxxx Parties (the "Rome Disclosure
6
Letter") (it being understood that any matter disclosed in any section of
the Rome Disclosure Letter shall be deemed disclosed for all purposes and
all sections of this Agreement to which it is readily apparent from a
reading of the Rome Disclosure Letter and this Agreement that such
disclosure is applicable), Rome represents and warrants to the Xxxxxxxx
Parties that:
SECTION 3.01. Organization, Standing and Power. Each of Rome
and each subsidiary of Rome (a "Rome Subsidiary") is duly organized,
validly existing and in good standing under the laws of the jurisdiction
in which it is organized, except with respect to any Rome Subsidiary,
where the failure to be so organized, existing or in good standing,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Rome Material Adverse Effect (as defined below). Each
of Rome and each Rome Subsidiary has full corporate power and authority
and possesses all governmental franchises, licenses, permits,
authorizations and approvals ("Permits") necessary to enable it to own,
lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or
in the aggregate, has not had and would not reasonably be expected to have
a Rome Material Adverse Effect. Each of Rome and each Rome Subsidiary is
duly qualified to do business in each jurisdiction where the nature of its
business or the ownership or leasing of its properties make such
qualification necessary, except where the failure to so qualify,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Rome Material Adverse Effect. Rome has made available
to the Xxxxxxxx Parties true and complete copies of the certificate of
incorporation of Rome, as amended to the date of this Agreement (as so
amended, the "Rome Charter"), and the By-laws of Rome, as amended to the
date of this Agreement (as so amended, the "Rome By-laws"), and the
comparable charter and organizational documents of each Rome Subsidiary,
in each case as amended through the date of this Agreement. For purposes
of this Agreement: a "Rome Material Adverse Effect" means (A) a material
adverse effect on the business, assets, liabilities, results of operations
or financial condition of Rome and the Rome Subsidiaries taken as a whole,
(B) a material adverse effect on the ability of Rome to perform its
obligations under this Agreement or (C) a material adverse effect on the
ability of Rome to consummate the Merger and the other Transactions;
provided, that none of the following, either alone or in combination,
shall be considered in determining whether there has been a Rome Material
Adverse Effect: (1) events, circumstances, changes or effects that
generally affect providers of dialysis services in the United States,
except to the extent that Rome and the Rome Subsidiaries, taken as a
whole, are disproportionately affected in a material and adverse manner
relative to FME and its Subsidiaries, taken as a whole; (2) any
circumstance, change or effect that results principally from the existence
of any suit, action, proceeding or investigation undertaken by or on
behalf of any Governmental Entity (as defined in Section 3.05(b)) in
connection with any subpoenas served upon or claims made against Rome or a
Rome Subsidiary or any investigation conducted by the Office of Inspector
General of the United States Department of Health and Human Services, the
United States Department of Justice or any State Governmental Entity that
(A) has been publicly disclosed by Rome in the Available Rome SEC
Documents (as defined in Section 3.06(d) below) or (B) relates to any
violation or alleged violation of any statute or rule or regulation
promulgated by a
7
Governmental Entity that is generally applicable only to participants in
the health care industry by reason of their participation in federal or
state health care programs, including Medicare and Medicaid, or their
provision of health care services to people in the United States,
including 42 U.S.C. Section 1320a-7b, 42 U.S.C. Section 1395nn or 31
U.S.C. Section 3729-3733 or any other federal or state statute related to
false or fraudulent claims, kickbacks to health care providers,
inducements to beneficiaries of health care programs or self-referrals;
provided, that, for the avoidance of doubt, this clause (2)(B) shall
prohibit consideration of the existence of any such suit, action,
proceeding or investigation when determining whether a Rome Material
Adverse Effect exists but shall not prohibit consideration of actual
events or circumstances constituting a violation of any such statute or
rule or regulation or other Law; (3) general economic or political
conditions, except to the extent that Rome and the Rome Subsidiaries,
taken as a whole, are disproportionately affected in a material and
adverse manner relative to FME and its Subsidiaries, taken as a whole; (4)
changes arising from the consummation of the transactions contemplated by,
or the announcement of the execution of, this Agreement; (5) any
circumstance, change or effect that results from any action required to be
taken pursuant to this Agreement or taken upon the written request of FME;
and (6) changes caused by acts of terrorism or war (whether or not
declared) occurring after the date hereof, except to the extent that Rome
and the Rome Subsidiaries, taken as a whole, are disproportionately
affected in a material and adverse manner relative to FME and its
subsidiaries, taken as a whole.
SECTION 3.02. Rome Subsidiaries; Equity Interests. (a) The
Rome Disclosure Letter lists each Rome Subsidiary, its jurisdiction of
organization and Rome's interest therein. All the outstanding shares of
capital stock or other equity interests, as applicable, of each Rome
Subsidiary have been validly issued and are fully paid and nonassessable
and except as set forth in the Rome Disclosure Letter, are as of the date
of this Agreement owned by Rome, by another Rome Subsidiary or by Rome and
another Rome Subsidiary, free and clear of all pledges, liens, charges,
mortgages, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"). There are no bonds, debentures, notes
or other indebtedness of any Rome Subsidiary having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on matters on which the equity holders of any Rome Subsidiary may
vote.
(b) Except for its interests in Rome Subsidiaries and except
for the ownership interests set forth in the Rome Disclosure Letter, as of
the date of this Agreement, Rome does not own, directly or indirectly, any
capital stock, membership interest, partnership interest, joint venture
interest or other equity interest in any person.
SECTION 3.03. Capital Structure. The authorized capital stock
of Rome consists of (i) 150,000,000 shares of Rome Common Stock and (ii)
10,000,000 shares of preferred stock, par value $0.01 per share (the "Rome
Preferred Stock" and, together with the Rome Common Stock, the "Rome
Capital Stock"), of which 400,000 shares have been designated as Series A
Junior Participating Preferred Stock. At the close of business on April
29, 2005, (i) 67,997,913 shares of Rome Common Stock (excluding shares of
Rome Common Stock held by Rome in its treasury) and no shares of Rome
Preferred Stock were issued and outstanding, (ii) 14,766,300 shares of
Rome Common Stock were held by Rome in its treasury, (iii) 8,731,694
shares of Rome Common Stock
8
were subject to outstanding Rome Stock Options (as defined in Section
6.04(e)) and 6,912,909 additional shares of Rome Common Stock were
reserved for issuance pursuant to Rome Stock Plans (as defined in Section
6.04(e)) and (iv) 400,000 shares of Rome Preferred Stock were reserved for
issuance in connection with the rights (the "Rome Rights") issued pursuant
to the Shareholder Protection Rights Agreement dated as of May 2, 1997 (as
amended from time to time, the "Rome Rights Agreement"), between Rome and
First Union National Bank of North Carolina, as Rights Agent. As of April
29, 2005, no shares of Rome Common Stock are owned by any Rome Subsidiary.
As of the close of business on April 29, 2005, (i) there were outstanding
Rome Plan Stock Options (as defined in Section 6.04) to purchase 8,544,842
shares of Rome Common Stock with exercise prices on a per share basis
lower than the Merger Consideration, (ii) there were outstanding Rome
Non-Plan Stock Options (as defined in Section 6.04(e)) to purchase 186,852
shares of Rome Common Stock with exercise prices on a per share basis
lower than the Merger Consideration, and (iii) and the weighted average
exercise price of the Rome Stock Options referred to in the preceding
clauses (i) and (ii) was equal to $21.034. Except as set forth above, at
the close of business on April 29, 2005, no shares of capital stock or
other voting securities of Rome were issued, reserved for issuance or
outstanding. During the period from April 29, 2005, to the date of this
Agreement, (x) there have been no issuances by Rome of shares of capital
stock of, or other equity or voting interests in, Rome other than
issuances of shares of Rome Common Stock pursuant to the exercise of Rome
Stock Options outstanding on such date in accordance with their terms as
in effect on the date of this Agreement and (y) there have been no
issuances by Rome of options, warrants or other rights to acquire shares
of capital stock or other equity or voting interests from Rome. All
outstanding shares of Rome Capital Stock are, and all such shares that may
be issued pursuant to the Rome Stock Plans will be when issued in
accordance with the terms thereof, duly authorized, validly issued, fully
paid and nonassessable and not subject to or issued in violation of any
purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL,
Rome Charter, Rome By-laws or any Contract (as defined in Section 3.05) to
which Rome is a party or otherwise bound. There are no bonds, debentures,
notes or other indebtedness of Rome having the right to vote (or
convertible into, or exchangeable for, securities having the right to
vote) on any matters on which holders of Rome Capital Stock may vote
("Rome Voting Debt"). As of the date of this Agreement, there are no
options, warrants, rights, convertible or exchangeable securities,
"phantom" stock rights, stock appreciation rights, stock-based performance
units, commitments, Contracts, arrangements or undertakings of any kind to
which Rome or any Rome Subsidiary is a party or by which Rome or any Rome
Subsidiary is bound (i) obligating Rome or any Rome Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock of or other equity or voting interests in, or any
security convertible or exercisable for or exchangeable into any capital
stock of or other equity or voting interest in, Rome or any Rome
Subsidiary or any Rome Voting Debt, (ii) obligating Rome or any Rome
Subsidiary to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking,
or (iii) that give any person the right to receive any economic benefit or
right similar to or derived from the economic benefits and rights accruing
to holders of Rome Capital Stock. As of the date of this Agreement, there
are no outstanding contractual obligations of Rome or any Rome
9
Subsidiary to (i) repurchase, redeem or otherwise acquire any shares of
capital stock of or other equity or voting interest in Rome or any Rome
Subsidiary or (ii) vote or dispose of any shares of the capital stock of,
or other equity or voting interests in, any of the Rome Subsidiaries. Rome
has made available to the Xxxxxxxx Parties a complete and correct copy of
the Rome Rights Agreement, as amended to the date of this Agreement.
SECTION 3.04. Authority; Execution and Delivery;
Enforceability. (a) Rome has all requisite corporate power and authority
to execute and deliver this Agreement and to consummate the Transactions.
The execution and delivery by Rome of this Agreement and the consummation
by Rome of the Transactions have been duly authorized by all necessary
corporate action on the part of Rome, subject, in the case of the Merger,
to receipt of the Rome Stockholder Approval (as defined in Section
3.04(c)). Rome has duly executed and delivered this Agreement, and this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.
(b) The Board of Directors of Rome (the "Rome Board"), at a
meeting duly called and held, duly adopted resolutions (i) approving this
Agreement, the Merger and the other Transactions, (ii) determining and
declaring that the terms of the Merger and the other Transactions are
advisable and fair to and in the best interests of Rome and its
stockholders, (iii) recommending that Rome's stockholders adopt this
Agreement, and (iv) declaring that this Agreement is advisable. The Rome
Board has taken all action necessary in order that the limits on business
combinations provided for in Section 203 of the DGCL will not apply to
this Agreement, the Merger or any other Transaction. To the knowledge of
Rome, no other state takeover statute or similar statute or regulation
applies or purports to apply to Rome with respect to this Agreement, the
Merger or any other Transaction.
(c) The only vote of holders of any class or series of Rome
Capital Stock necessary to approve and adopt this Agreement and the Merger
is the adoption of this Agreement by the holders of a majority of the
outstanding Rome Common Stock (the "Rome Stockholder Approval"). The
affirmative vote of the holders of Rome Capital Stock, or any of them, is
not necessary to consummate any Transaction other than the Merger.
SECTION 3.05. No Conflicts; Consents. (a) Except as set forth
in the Available Rome SEC Documents, the execution and delivery by Rome of
this Agreement do not, and the consummation of the Merger and the other
Transactions and compliance with the terms hereof will not, conflict with,
or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any Lien upon any of the
properties or assets of Rome or any Rome Subsidiary under, any provision
of (i) the Rome Charter or the Rome By-laws; (ii) the comparable charter
or organizational documents of any Rome Subsidiary, (iii) any material
contract, lease, license, indenture, note, bond, agreement, permit,
concession, franchise or other instrument (a "Contract") to which Rome or
any Rome Subsidiary is a party or by which any of their respective
properties or assets is bound or (iv) subject to the filings and other
matters referred to in Section 3.05(b), any judgment, order or decree
("Judgment") applicable to Rome or any Rome Subsidiary or their respective
properties
10
or assets, any Permit held by Rome or any Rome Subsidiary, or Federal,
state, local, regional or foreign statute, law, ordinance, rule, reporting
or licensing requirement or regulation ("Law") applicable to Rome or any
Rome Subsidiary or their respective properties or assets, other than, in
the case of clauses (ii) through (iv) above, any such items that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Rome Material Adverse Effect.
(b) No consent, approval, license, permit, order or
authorization ("Consent") of, or registration, declaration or filing with,
or permit from, any national, federal, state, provincial, local or foreign
government or any court of competent jurisdiction, administrative agency
or commission or other governmental or regulatory authority or
instrumentality, domestic or foreign (a "Governmental Entity") is required
to be obtained or made by or with respect to Rome or any Rome Subsidiary
in connection with the execution, delivery and performance of this
Agreement or the consummation of the Transactions, other than (i)
compliance with and filings under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) the filing with
the Securities and Exchange Commission (the "SEC") of (A) a proxy
statement relating to the adoption of this Agreement by Rome's
stockholders (including any amendment or supplement thereto, the "Proxy
Statement") and (B) such reports under Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as may be required
in connection with this Agreement, the Merger and the other Transactions,
(iii) the filing of the Certificate of Merger with the Secretary of State
of the State of Delaware and appropriate documents with the relevant
authorities of the other jurisdictions in which Rome or any Rome
Subsidiary is qualified to do business, (iv) such filings as may be
required under applicable Environmental Laws (as defined in Section
3.14(b)), (v) such filings as may be required in connection with the taxes
described in Section 6.09, and (vi) such other items (A) required solely
by reason of the participation of any Xxxxxxxx Parties (as opposed to any
third party) in the Transactions or (B) that the failure of which to be
obtained or made, individually or in the aggregate, have not had and would
not reasonably be expected to have a Rome Material Adverse Effect.
(c) Rome and the Rome Board have taken all action necessary to
(i) render the Rome Rights inapplicable to this Agreement, the Merger and
the other Transactions and (ii) ensure that (A) neither any Xxxxxxxx Party
nor any of their affiliates or associates is or will become an "Acquiring
Person" (as defined in the Rome Rights Agreement) by reason of this
Agreement, the Merger or any other Transaction, (B) the "Separation Time"
(as defined in the Rome Rights Agreement) shall not occur by reason of
this Agreement, the Merger or any other Transaction, and (C) the Rome
Rights shall expire immediately prior to the Effective Time.
SECTION 3.06. SEC Documents; Undisclosed Liabilities. (a) Rome
has filed with the SEC (or, in the case of information provided under Item
7.01 of a report on Form 8-K, furnished to the SEC) all reports,
schedules, forms, statements and other documents required to be filed (or,
in the case of information provided under Item 7.01 of a report on Form
8-K, furnished) by Rome since January 1, 2002, pursuant to Sections 13(a)
and 15(d) of the Exchange Act (the "Rome SEC Documents"). Each Rome
Subsidiary has filed with the SEC all reports, schedules, forms,
statements and
11
other documents required to be filed by such Rome Subsidiary since January
1, 2002, pursuant to Sections 13(a) and 15(d) of the Exchange Act.
(b) Except to the extent set forth in a later filed or
furnished Rome SEC Document, as of its date, each Rome SEC Document
complied in all material respects with the requirements of the Exchange
Act or the Securities Act of 1933, as amended (the "Securities Act"), as
the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Rome SEC Document, and did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any Rome
SEC Document has been revised or superseded by a later filed or furnished
Rome SEC Document, none of the Rome SEC Documents contains any untrue
statement of a material fact or omits 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 is made as to any information
furnished by Rome to the SEC solely for purposes of complying with
Regulation FD promulgated by the SEC under the Exchange Act. The
consolidated financial statements of Rome and the Rome Subsidiaries
included in the Rome SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of Rome and the consolidated
Rome Subsidiaries as of the dates thereof and the consolidated results of
their operations and cash flows for the periods shown (subject, in the
case of unaudited statements, to normal year-end audit adjustments).
(c) Since the enactment of the Xxxxxxxx-Xxxxx Act of 2002 (the
"Xxxxxxxx-Xxxxx Act"), Rome has been in compliance, in all material
respects, with all provisions of the Xxxxxxxx-Xxxxx Act, including the
rules and regulations of the SEC promulgated thereunder, applicable to
Rome and the Rome Subsidiaries.
(d) Except as set forth in the reports, schedules, forms,
statements and other documents filed by Rome with the SEC or furnished by
Rome to the SEC, and in either case, publicly available prior to the date
of this Agreement (but excluding the portions of Rome's Annual Report on
Form 10-K for the fiscal year ended December 31, 2004 identified in
Section 3.06(d) of the Rome Disclosure Letter, and the substantially
identical portions of any other such reports, schedules, forms, statements
or other documents, the "Available Rome SEC Documents"), as of the date of
this Agreement, neither Rome nor any Rome Subsidiary has any liabilities
or obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by GAAP to be set forth on a consolidated balance
sheet of Rome and its consolidated subsidiaries or in the notes thereto,
other than any liabilities or obligations (A) reserved against, reflected
or disclosed on the most recent consolidated balance sheet of Rome and the
Rome
12
Subsidiaries (including the notes thereto) contained in the Available Rome
SEC Documents, (B) incurred in the ordinary course of business since the
date of the most recent financial statements included in the Available
Rome SEC Documents, or (C) that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Rome Material
Adverse Effect.
SECTION 3.07. Information Supplied. None of the information
supplied or to be supplied by Rome for inclusion or incorporation by
reference in the Proxy Statement will, at the date it is first mailed to
Rome's stockholders or at the time of the Rome Stockholders Meeting (as
defined in Section 6.01(a)), 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, that no
representation is made by Rome with respect to statements made or
incorporated by reference in the Proxy Statement based on information
supplied in writing by any Xxxxxxxx Party for inclusion or incorporation
by reference therein. The Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules
and regulations thereunder, except that no representation is made by Rome
with respect to statements made or incorporated by reference therein based
on information supplied by any Xxxxxxxx Party for inclusion or
incorporation by reference therein.
SECTION 3.08. Absence of Certain Changes or Events. Except as
set forth in the Available Rome SEC Documents, (a) from the date of the
most recent financial statements included in the Available Rome SEC
Documents to the date of this Agreement, Rome and the Rome Subsidiaries
(on a consolidated basis, taken as a whole) have conducted their business
only in the ordinary course consistent with past practice, and (b) during
such period there has not been:
(i) any event, change, effect or development that, individually or
in the aggregate, has had or would reasonably be expected to have a Rome
Material Adverse Effect;
(ii) (A) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to any
Rome Capital Stock or any other capital stock or other equity or voting
interests of Rome or any Rome Subsidiary (other than pro rata dividends and
distributions by a direct or indirect Rome Subsidiary to the holders of its
capital stock or other equity interests) or (B) any repurchase, redemption or
other acquisition by Rome of any Rome Capital Stock or any other capital stock
or other equity or voting interests of Rome or any Rome Subsidiary;
(iii) any split, combination or reclassification of any Rome Capital
Stock or other equity or voting interests in Rome or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of Rome Capital Stock or other equity or voting
interests in Rome;
(iv) (A) any granting by Rome or any Rome Subsidiary to any director
or executive officer of Rome or any Rome Subsidiary of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent financial statements
13
included in the Available Rome SEC Documents, (B) any granting by Rome or any
Rome Subsidiary to any such director or executive officer of any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements in effect as of the date of the most recent
financial statements included in the Available Rome SEC Documents, or (C) any
entry by Rome or any Rome Subsidiary into any employment, severance or
termination agreement with any such director or executive officer;
(v) any change in accounting methods, principles or practices by
Rome or any Rome Subsidiary materially affecting the consolidated assets,
liabilities or results of operations of Rome, except insofar as may have been
required by a change in GAAP;
(vi) any material elections with respect to Taxes (as defined in
Section 3.09(g)) by Rome or any Rome Subsidiary or settlement or compromise by
Rome or any Rome Subsidiary of any material Tax liability or refund; or
(vii) any material "impairment" (within the meaning of Statement of
Financial Accounting Standards Number 142 entitled "Goodwill and other
Intangible Assets" or Statement of Financial Accounting Standards Number 144
entitled "Accounting for Impairment or Disposal of Long-Lived Assets") with
respect to any of the assets of Rome or any Rome Subsidiary.
SECTION 3.09. Taxes. (a) Each of Rome and each Rome Subsidiary
has timely filed, or has caused to be timely filed on its behalf, all Tax
Returns (as defined in Section 3.09(g)) required to be filed by it, and
all such Tax Returns are true, complete and accurate, except to the extent
any failure to file or any inaccuracies in any filed Tax Returns,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Rome Material Adverse Effect. All Taxes shown to be due
on such Tax Returns, or otherwise owed by Rome and each Rome Subsidiary,
have been timely paid, except to the extent that any failure to pay,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Rome Material Adverse Effect.
(b) The most recent financial statements contained in the
Available Rome SEC Documents reflect an adequate reserve for all Taxes
payable by Rome and the Rome Subsidiaries (in addition to any reserve for
deferred Taxes to reflect timing differences between book and tax items)
for all Taxable periods and portions thereof accrued through the date of
such financial statements.
(c) No deficiency, refund litigation, adjustment, audit
examination or matter in controversy with respect to any Taxes has been
proposed, asserted or assessed against Rome or any Rome Subsidiary, and no
requests for waivers of the applicable statute of limitations to assess
any such Taxes are pending, except to the extent any such deficiency or
request for waiver, individually or in the aggregate, has not had and
would not reasonably be expected to have a Rome Material Adverse Effect.
The Federal income Tax Returns of Rome and each Rome Subsidiary
consolidated in such Tax Returns have been examined by and settled with
the United States Internal Revenue Service, or have closed by virtue of
the expiration of the relevant statute of limitations, for all years
through 2003. All assessments for Taxes due and owing by Rome or any Rome
Subsidiary with respect to completed and settled examinations or any
concluded
14
litigation have been fully paid, except for any assessments that have not
had and would not reasonably be expected to have a Rome Material Adverse
Effect.
(d) There are no Liens for Taxes (other than for current Taxes
not yet due and payable) on the assets of Rome or any Rome Subsidiary,
except for any Liens that have not had and would not reasonably be
expected to have a Rome Material Adverse Effect. Neither Rome nor any Rome
Subsidiary is bound by any agreement with respect to Taxes (including with
respect to a tax allocation agreement, a tax indemnification agreement, or
a tax sharing agreement or any advance pricing agreement, closing
agreement or other agreement relating to Taxes with any taxing authority).
Neither Rome nor any Rome Subsidiary has any liability for the Taxes of
any person (other than Rome or any Rome Subsidiary) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law) as a transferee or successor, by contract, or otherwise, as a
result of any consolidated, combined, unitary or aggregate group for Tax
purposes of which such person was a member, except for any liability that
has not had and would not reasonably be expected to have a Rome Material
Adverse Effect.
(e) Neither Rome nor any Rome Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" or a
successor thereto in a distribution of stock qualifying for Tax-free
treatment under Section 355 of the Code.
(f) Neither Rome nor any Rome Subsidiary has entered into any
"listed transaction" as defined in Treasury Regulation Section
1.6011-4(b)(1).
(g) For purposes of this Agreement:
"Taxes" includes (i) all forms of taxation, whenever created
or imposed, and whether of the United States or elsewhere, and whether
imposed by a local, provincial, municipal, governmental, state, foreign,
federal, national or other Governmental Entity, or in connection with any
agreement with respect to Taxes, including but not limited to, any net
income, alternative or add-on minimum tax, gross income, gross receipts,
sales, use, value added, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, environmental or windfall profit tax,
custom duty or other tax, governmental fee or other like assessment or
charge of any kind whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts (ii) liability for the
payment of any amount of the type described in clause (i) as a result of
being a member of an affiliated, consolidated, combined or unitary group
and (iii) liability for the payment of any amounts as a result of being a
transferee of or a successor to any person or a party to any tax sharing
agreement or as a result of an express or implied obligation to indemnify
any other person with respect to the payment of any amounts of the type
described in clause (i) or (ii).
"Tax Return" means all national, federal, state, local,
provincial and foreign Tax returns, declarations, statements, reports,
schedules, forms and information returns and any amended Tax return
relating to Taxes.
15
SECTION 3.10. Absence of Changes in Benefit Plans. Except as
set forth in the Available Rome SEC Documents, from the date of the most
recent audited financial statements included in the Available Rome SEC
Documents to the date of this Agreement, (i) there has not been any
adoption or amendment in any material respect by Rome or any Rome
Subsidiary of any collective bargaining agreement or any bonus, pension,
profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit, hospitalization, medical
or other material compensation or benefit plan, program, policy,
agreement, or arrangement established, maintained, or contributed to, by
Rome, any Rome Subsidiary, or any other Rome affiliate (which together
with Rome would be treated as a single employer under Section 414(b), (c),
(m), or (o) of the Internal Revenue Code of 1986, as amended (the "Code"))
(such Rome Subsidiaries and other Rome affiliates shall hereinafter
collectively be referred to as "ERISA Affiliates" and individually as an
"ERISA Affiliate") providing benefits to any current or former employee,
officer or director of Rome or any ERISA Affiliate, or with respect to
which Rome or any ERISA Affiliate has or would reasonably be expected to
have any liability (collectively, "Rome Benefit Plans") and (ii) none of
Rome or the Rome Subsidiaries have incurred any material unfunded
liability as a result of any adoption by Rome or any ERISA Affiliate of
any Rome Benefit Plan or any amendment to any Rome Benefit Plan. Except as
set forth in the Available Rome SEC Documents, as of the date of this
Agreement there are no employment, consulting, indemnification, severance
or termination agreements or arrangements between Rome or any Rome
Subsidiary and any current or former executive officer or director of Rome
or any Rome Subsidiary.
SECTION 3.11. ERISA Compliance; Excess Parachute Payments. (a)
The Rome Disclosure Letter contains a list of all Rome Benefit Plans that
are "employee pension benefit plans" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
("Rome Pension Plans") or "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA) ("Rome Welfare Plans") and all other material Rome
Benefit Plans. Each Rome Benefit Plan has been administered in compliance
with its terms, other than instances of noncompliance that, individually
and in the aggregate, have not had and would not reasonably be expected to
have a Rome Material Adverse Effect. Rome has made available to the
Xxxxxxxx Parties true, complete and correct copies of (i) each Rome
Benefit Plan (or, in the case of any unwritten Rome Benefit Plan, a
description thereof), (ii) the most recent annual report on Form 5500
filed with the Internal Revenue Service with respect to each Rome Benefit
Plan (if any such report was required), (iii) the most recent summary plan
description for each Rome Benefit Plan for which such summary plan
description is required or was otherwise prepared and (iv) each trust
agreement, funding arrangement, and group annuity contract, third party
administration agreement and investment management agreement relating to
any Rome Benefit Plan.
(b) All Rome Pension Plans that are intended to be tax
qualified have been the subject of determination letters from the Internal
Revenue Service to the effect that such Rome Pension Plans are qualified
and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, and no such determination letters have been
revoked, and, to the knowledge of Rome, no such revocation has been
16
threatened. Each such determination letter is current in that it covers
all of the provisions of each Rome Pension Plan to which it relates
(including changes required by applicable law) with respect to which the
Code Section 401(b) remedial amendment period has expired as of the date
of this Agreement, and with respect to any such provisions with respect to
which the Code Section 401(b) remedial amendment period has not expired as
of the date of this Agreement, a timely application for a determination
has been filed for such Rome Pension Plan, and is pending before the
Internal Revenue Service. To the knowledge of Rome, nothing has occurred
since the date of the determination letters that would reasonably be
expected to materially adversely affect the qualification of the Rome
Pension Plans. Each trust intended to qualify under Section 501(c)(9) of
the Code so qualifies in form and in operation in all material respects,
meets the requirements of Section 505(c) of the Code and the regulations
thereunder in all material respects, and has received an opinion letter
from the Internal Revenue Service that such trust so qualifies, and no
fact or event has occurred since the date of any opinion letter which
could affect adversely the exempt status of any such trust, except as has
not had and would not reasonably be expected to have a Rome Material
Adverse Effect.
(c) Rome and its ERISA Affiliates and all the Rome Benefit
Plans are in compliance with all applicable provisions of ERISA, the Code,
and other applicable laws, except for instances of noncompliance that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Rome Material Adverse Effect. All required reports and
descriptions of the Rome Benefit Plans have been timely filed with
applicable government agencies and/or distributed to participants, except
where the failure to be so filed or distributed, individually or in the
aggregate, has not had and would not reasonably be expected to have a Rome
Material Adverse Effect. There is not pending or, to the knowledge of
Rome, threatened any litigation, investigation or audit relating to the
Rome Benefit Plans that, individually or in the aggregate, has had or
would reasonably be expected to have a Rome Material Adverse Effect.
(d) Except as individually and in the aggregate, has not had
and would not reasonably be expected to have a Rome Material Adverse
Effect, none of Rome, any ERISA Affiliate, any officer of Rome or any
ERISA Affiliate or any of the Rome Benefit Plans which are subject to
ERISA, including the Rome Pension Plans, or, to the knowledge of Rome, any
trusts created thereunder or any trustee or administrator thereof, has
engaged in a "prohibited transaction" (as such term is defined in Section
406 of ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that would reasonably be expected to subject Rome, any
ERISA Affiliate or any officer of Rome or any ERISA Affiliate to the tax
or penalty on prohibited transactions imposed by such Section 4975 or to
any liability under Section 502(i) or 502(1) of ERISA.
(e) Each Rome Benefit Plan that is a "group health plan" (as
such term is defined in Section 5000(b)(1) of the Code), complies with the
applicable requirements of Section 4980B(f) of the Code, other than
instances of noncompliance that, individually and in the aggregate, have
not had and would not reasonably be expected to have a Rome Material
Adverse Effect.
(f) Except as has not had and would not reasonably be expected
to have a Rome Material Adverse Effect, (A) neither Rome nor any of its
ERISA Affiliates has
17
within the six year period ending on the date hereof, established,
maintained, contributed to or has any liability with respect to, any
material employee benefit plan (i) subject to Title IV of ERISA, (ii) that
has ever been a multiemployer plan within the meaning of ERISA Section
3(37), ERISA Section 4001(a)(3) or Code Section 414(f), (iii) that has
ever been subject to Code Section 412 or ERISA Section 302, or (iv) that
has ever been a "multiple employer welfare plan" or a "multiple employer
welfare arrangement" within the meaning of ERISA Section 514(b)(6) or a
welfare benefit fund within the meaning of Code Section 419(e), and (B)
none of Rome, any ERISA Affiliate nor any Rome Welfare Plan has ever
provided or has any obligation to provide in the future to current or
former employees any material medical, life insurance or other welfare
benefits after retirement or other termination of service, other than
coverage mandated by applicable Law.
(g) Except as would not reasonably be expected to have a Rome
Material Adverse Effect, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated herein
will (a) result in any payment (including severance, unemployment
compensation, golden parachute, or otherwise) becoming due to any
director, employee or independent contractor of Rome or any ERISA
Affiliate, (b) increase any benefits otherwise payable under any Rome
Benefit Plan, or (c) result in any acceleration of the time of payment or
vesting of any benefit under any Rome Benefit Plan. Neither Rome nor any
ERISA Affiliate, nor any of their officers or directors, has taken any
direct or indirect action which obligates Rome or any ERISA Affiliate to
institute, modify or change, any Rome Benefit Plan, or the manner in which
contributions to any Rome Benefit Plan are made or the basis on which such
contributions are determined, except for such institutions, modifications
or changes that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Rome Material Adverse Effect. The
deduction of any amount payable pursuant to the terms of the Rome Benefit
Plans would not be subject to disallowance under Code Section 162(m)
(before giving effect to Code Section 162(m)(4)(F)) for any taxable years
of Rome ending prior to the date hereof.
(h) Other than payments that may be made to the persons listed
in the Rome Disclosure Letter (the "Primary Rome Executives"), any amount
that could be received (whether in cash or property or the vesting of
property) as a result of the Merger or any other Transaction by any
employee, officer or director of Rome or any of its affiliates who is a
"disqualified individual" (as such term is defined in Treasury Regulation
Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Rome Benefit Plan currently
in effect would not be characterized as an "excess parachute payment" (as
defined in Section 280G(b)(1) of the Code) and except as set forth in the
Available Rome SEC Documents and except for obligations with respect to
Primary Rome Executives, neither Rome nor any of its ERISA Affiliates will
be required to "gross up" or otherwise compensate any such Primary Rome
Executive in respect thereof.
SECTION 3.12. Litigation. Except as set forth in the Available
Rome SEC Documents, as of the date of this Agreement, (i) there is no
suit, claim, demand, action or proceeding pending or, to the knowledge of
Rome, threatened against Rome or any Rome Subsidiary or any of their
respective assets that, individually or in the
18
aggregate, has had or would reasonably be expected to have a Rome Material
Adverse Effect, and (ii) there is no Judgment outstanding against, or
consent decree binding upon, Rome or any Rome Subsidiary that individually
or in the aggregate, has had or would reasonably be expected to have a
Rome Material Adverse Effect. Except as set forth in the Available Rome
SEC Documents, to the knowledge of Rome, there is not any active or
impending investigation, compliance review, inspection, hearing,
administrative or other proceeding, notice of violation, order of
forfeiture or complaint by any Governmental Entity against Rome or any
Rome Subsidiary that individually or in the aggregate, has had or would
reasonably be expected to have a Rome Material Adverse Effect.
SECTION 3.13.Compliance with Applicable Laws. Except as set
forth in the Available Rome SEC Documents, to the knowledge of Rome, Rome
and the Rome Subsidiaries are in compliance with all applicable Laws and
Judgments of any Governmental Entity applicable to their businesses and
operations, except for instances of noncompliance that, individually and
in the aggregate, have not had and would not reasonably be expected to
have a Rome Material Adverse Effect. Except as set forth in the Available
Rome SEC Documents, neither Rome nor any Rome Subsidiary has received any
written communication or, to the knowledge of Rome, any other
communication since January 1, 2002, from a Governmental Entity that
alleges that Rome or a Rome Subsidiary is not in compliance in any
material respect with any applicable Law or Judgment of any Governmental
Entity applicable to its businesses and operations. Except as set forth in
the Available Rome SEC Documents, neither Rome nor any Rome Subsidiary is
in violation of, default under, nor has any event occurred giving to any
other person any right of termination, amendment or cancellation of, with
or without notice or lapse of time or both, any Permit of Rome or any Rome
Subsidiary, except for any such violations, defaults, events,
terminations, amendments or cancellations that, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Rome Material Adverse Effect. This Section 3.13 does not relate to matters
with respect to Taxes, which are the subject of Section 3.09, to matters
with respect to Environmental Law, which are the subject of Section 3.14
or to matters with respect to HIPAA (as defined in Section 3.20), or
federal or state statutes related to health care matters, including false
or fraudulent claims and healthcare fraud and abuse matters, which are the
subject to Section 3.20.
SECTION 3.14. Environmental Matters. (a) Except as disclosed
in the Available Rome SEC Documents and except for such matters that
individually or in the aggregate would not reasonably be expected to have
a Rome Material Adverse Effect: (i) Rome and each Rome Subsidiary
possesses all Environmental Permits (as defined below) necessary to
conduct its businesses and operations in compliance with all Environmental
Laws (as defined below); (ii) to the knowledge of Rome, Rome and each Rome
Subsidiary has been and is in compliance with all applicable Environmental
Laws and all applicable Environmental Permits, and none of Rome or the
Rome Subsidiaries has received any written communication from any
Governmental Entity that alleges that Rome or any Rome Subsidiary has
violated or is liable under any Environmental Law or Environmental Permit;
(iii) there are no Environmental Claims (as defined below) pending or, to
the knowledge of Rome, threatened (A) against Rome or any Rome
19
Subsidiary or (B) against any person whose liability for any such
Environmental Claim has been retained or assumed by Rome or any Rome
Subsidiary, either contractually or by operation of law; and (iv) to the
knowledge of Rome, there have been no Releases (as defined below) of any
Hazardous Materials (as defined below) at or from any property or facility
owned or operated by Rome or any Rome Subsidiary that would reasonably be
expected to form the basis of any Environmental Claim against Rome or any
Rome Subsidiary or any liability on the part of Rome or any Rome
Subsidiary under any Environmental Law or Environmental Permit.
(b) For the purposes of this Agreement: (A) "Environmental
Claims" means any and all administrative, regulatory or judicial actions,
orders, decrees, suits, demands, demand letters, directives, claims,
liens, investigations, proceedings or notices of noncompliance or
violation by any Governmental Entity or other person alleging liability
arising out of, based on or related to (x) the presence, Release or
threatened Release of, or exposure to, any Hazardous Materials at any
location, whether or not owned, operated, leased or managed by Rome or any
Rome Subsidiary, or (y) any other circumstances forming the basis of any
violation or alleged violation of any Environmental Law or Environmental
Permit; (B) "Environmental Laws" means all applicable laws, rules,
regulations, orders, decrees, common law, judgments or any binding
agreements issued, promulgated or entered into by Rome or any Rome
Subsidiary with any Governmental Entity relating to pollution or
protection of the environment (including ambient air, surface water,
groundwater, soils, subsurface strata and natural resources) or to human
health and safety, including laws and regulations relating to the presence
of, exposure to, Release of or threatened Release of Hazardous Materials
or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, recycling, transport, handling of,
or the arrangement for such activities with respect to, Hazardous
Materials; (C) "Environmental Permits" means all permits, licenses,
certificates, registrations, waivers, exemptions and other authorizations
required under applicable Environmental Laws; (D) "Hazardous Materials"
means any substance which is regulated by (or is present at levels or in
concentrations that require remediation under) environmental laws, and
includes, without limitation, (x) any and all materials or substances
which are defined as hazardous waste, extremely hazardous waste or a
hazardous substance pursuant to state, federal or local governmental law;
(y) asbestos and asbestos containing materials; (z) polychlorinated
biphenyls; (aa) petroleum products, including without limitation, crude
oil, constituents of petroleum products, and substances derived from
petroleum; (bb) urea formaldehyde and related substances; (cc) radon and
other radioactive substances; (dd) substances which are toxic, ignitable,
reactive; (ee) medical, biological, and biohazardous materials, including
without limitation infectious substances, biological products, cultures
and stocks, diagnostic specimen or regulated medical waste as defined in
49 CFR sec. 173.134(a) and any other infectious materials, bodily fluids
or excrement or similar such wastes and (ff) mold, fungi, and other
allergens and (E) "Release" means any release, spill, emission, leaking,
dumping, injection, pouring, deposit, disposal, discharge, dispersal,
leaching or migration into or through the environment (including ambient
air, surface water, groundwater, land surface or subsurface strata) or
within any building, structure, facility or fixture.
20
SECTION 3.15. Contracts. (a) All Contracts to which Rome or
any Rome Subsidiary is a party as of the date hereof or to which any of
their respective properties or assets is subject as of the date hereof
that are required pursuant to Item 601 of Regulation S-K under the
Exchange Act to be filed as an exhibit to any Available Rome SEC Document
have been filed as an exhibit to such Available Rome SEC Document (such
filed Contracts, the "Filed Contracts"). To the knowledge of Rome, all the
Filed Contracts are valid and in effect, except as set forth in the
Available Rome SEC Documents, except to the extent they have previously
expired or terminated in accordance with their terms and except for any
invalidity or failure to be in effect that, individually or in the
aggregate, has not had and would not reasonably be expected to have a Rome
Material Adverse Effect. As of the date hereof, none of Rome or any Rome
Subsidiary is in violation of or default under any Filed Contract, except
as set forth in the Available Rome SEC Documents and except for such
violations or defaults that individually or in the aggregate have not had
and would not reasonably be expected to have a Rome Material Adverse
Effect.
(b) Rome has made available to the Xxxxxxxx Parties in the
data room prepared for the Transactions true and complete copies of (i)
substantially all medical director agreements and (ii) substantially all
joint venture contracts, partnership agreements and other agreements
involving a sharing of profits, losses, costs or liabilities of Rome or
any Rome Subsidiary, in each case to which Rome or any Rome Subsidiary is
a party as of the date of this Agreement. Rome has made available to the
Xxxxxxxx Parties in such data room a schedule identifying each material
agreement with a third party payor to which Rome or any Rome Subsidiary is
a party as of the date of this Agreement.
SECTION 3.16. Intellectual Property. Rome and the Rome
Subsidiaries own, or are validly licensed or otherwise have the right to
use, all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, service marks, service xxxx rights, copyrights
and other proprietary intellectual property rights and computer programs
(collectively, "Intellectual Property Rights") that are used or held for
use in the conduct of the business of Rome and the Rome Subsidiaries as of
the date hereof, except to the extent that the failure to own or have the
right to use any such Intellectual Property Right, individually or in the
aggregate, has not had or would not reasonably be expected to have a Rome
Material Adverse Effect. To the knowledge of Rome, none of Rome or any
Rome Subsidiary is infringing the rights of any person with regard to any
Intellectual Property Right, except for any infringement that,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Rome Material Adverse Effect. No claims are pending or,
to the knowledge of Rome, threatened alleging that Rome or any Rome
Subsidiary is infringing or otherwise adversely affecting the rights of
any person with regard to any Intellectual Property Right, except for any
pending or threatened claims that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Rome Material
Adverse Effect. To the knowledge of Rome, no person is infringing the
rights of Rome or any Rome Subsidiary with respect to any Intellectual
Property Right, except for any infringement that, individually or in the
aggregate, has not had and would not reasonably be expected to have a Rome
Material Adverse Effect.
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SECTION 3.17. Assets. Except as set forth in the Available
Rome SEC Documents, Rome or a Rome Subsidiary has good title to, or valid
leasehold interests in, all of the properties and assets (other than
Intellectual Property Rights which are addressed in Section 3.16) that are
used in the conduct of the business of Rome and the Rome Subsidiaries as
of the date hereof and reflected as assets on the most recent consolidated
balance sheet of Rome and the Rome Subsidiaries included in the Available
Rome SEC Documents, except (i) for inventories and other assets as have
been exhausted or disposed of in the ordinary course of business and (ii)
for any defects in title, easements, restrictive covenants and similar
encumbrances or impediments that, individually or in the aggregate, have
not had and would not reasonably be expected to have a Rome Material
Adverse Effect. Except as set forth in the Available Rome SEC Documents,
all such assets and properties, other than assets and properties in which
Rome or any of the Rome Subsidiaries has leasehold interests, are owned by
Rome or a Rome Subsidiary free and clear of all Liens, except for Liens
that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Rome Material Adverse Effect.
SECTION 3.18. Brokers. No broker, investment banker, financial
advisor or other person, other than Banc of America Securities LLC and
Xxxxxx Xxxxxxx & Co., the fees and expenses of which will be paid by Rome,
is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the Merger and the other
Transactions based upon arrangements made by or on behalf of Rome.
SECTION 3.19. Opinion of Financial Advisor. Rome has received
the opinion of Xxxxxx Xxxxxxx & Co. Incorporated, dated May 3, 2005, to
the effect that, as of such date, the consideration to be received in the
Merger by the holders of Rome Common Stock is fair from a financial point
of view.
SECTION 3.20. Fraud and Abuse Xxxxx; False Claims; HIPAA;
Medicare Program. To the knowledge of Rome and except for matters that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Rome Material Adverse Effect: (A) none of Rome and the
Rome Subsidiaries, (B) none of the predecessors of Rome and the Rome
Subsidiaries in respect of any dialysis or other business to which Rome or
any Rome Subsidiary succeeded and (C) no person or entity providing
professional, billing, management and/or marketing services to or on
behalf of Rome or any Rome Subsidiary has engaged in any activities that
are prohibited under 42 U.S.C. Section 1320a-7b, 42 U.S.C. Section
1320a-7, 42 U.S.C. Section 1395nn or 31 U.S.C. Section 3729-3733 (or any
other federal or state statute related to false or fraudulent claims) or
the regulations promulgated under such statutes including but not limited
to the following: (a) knowingly and willfully making or causing to be made
a false statement or representation of a fact in any application for any
benefit or payment from any federal or state health care program,
including Medicare and Medicaid, (b) knowingly and willfully making or
causing to be made any false statement or representation of a fact for use
in determining rights to any benefit or payment from any federal or state
health care program, including Medicare and Medicaid, (c) failing to
disclose knowledge by a claimant of the occurrence of any event affecting
the initial or
22
continued right to any benefit or payment on its own behalf or on behalf
of another, with intent fraudulently to secure any benefit or payment from
any federal or state health care program, including Medicare and Medicaid
and (d) knowingly and willfully soliciting, offering, paying or receiving
any remuneration (including any kickback, bribe or rebate), directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay or
receive such remuneration (i) in return for referring an individual to a
person for the furnishing or arranging for the furnishing of any item or
service for which payment may be made in whole or in part by any federal
or state health care program, including Medicare and Medicaid, or (ii) in
return for purchasing, leasing or ordering or arranging for or
recommending purchasing, leasing, or ordering any good, facility, service
or item for which payment may be made in whole or in part by any federal
or state health care program, including Medicare and Medicaid. To the
knowledge of Rome and except for matters that, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Rome Material Adverse Effect: (1) none of Rome, the Rome Subsidiaries and
their respective predecessors in respect of any dialysis or other business
to which any of Rome and the Rome Subsidiaries have succeeded has engaged
in activities that are prohibited under the applicable administrative
simplification provisions of the Health Insurance Portability and
Accountability Act of 1996, including the criminal provisions thereunder
related to federal health care offenses, or any regulations promulgated
thereunder (collectively, "HIPAA"), and (2) Rome and the Rome Subsidiaries
are in compliance with HIPAA, including applicable HIPAA administrative
simplification provisions and the standards and regulations regarding
privacy, security and transaction and code set standards, as well as
applicable state laws and regulations respecting privacy and data
security. Except as set forth in the Available Rome SEC Documents, the
dialysis centers of Rome and the Rome Subsidiaries that are currently
operating and accepting patients under the Medicare Program are providers
in good standing with the Medicare Program, except for such failures to be
in good standing that individually or in the aggregate have not had and
would not reasonably be expected to have a Rome Material Adverse Effect.
ARTICLE IV
Representations and Warranties of the Xxxxxxxx Parties
The Xxxxxxxx Parties, jointly and severally, represent and
warrant to Rome that, except as set forth in the letter, dated as of the
date of this Agreement, from the Xxxxxxxx Parties to Rome (the "Xxxxxxxx
Parties' Disclosure Letter"):
SECTION 4.01. Organization, Standing and Power. (a) Each of
Fresenius AG, a corporation organized under the laws of the Federal
Republic of Germany and the controlling shareholder of FME AG ("Xxxxxxxx
Parent"), and FME AG is a stock corporation duly organized and validly
existing under the laws of the Federal Republic of Germany. FME is a
corporation duly organized and validly existing under the laws of the
State of New York. Sub is a corporation duly organized and validly
existing under the laws of the State of Delaware. Each of Xxxxxxxx Parent,
FME AG, FME and Sub has full corporate power and authority and possesses
all governmental
23
franchises, licenses, permits, authorizations and approvals necessary to
enable it to own, lease or otherwise hold its properties and assets and to
conduct its businesses as presently conducted, other than such franchises,
licenses, permits, authorizations and approvals the lack of which,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Xxxxxxxx Material Adverse Effect (as defined below).
For purposes of this Agreement: a "Xxxxxxxx Material Adverse Effect" means
(A) a material adverse effect on the ability of any of the Xxxxxxxx
Parties to perform their respective obligations under this Agreement or
(B) a material adverse effect on the ability of FME or Sub to consummate
the Merger or any Xxxxxxxx Party to consummate the other Transactions.
(b) The Xxxxxxxx Parties have made available to Rome true and
complete copies of (i) Articles of Association of Xxxxxxxx Parent, as
amended to the date of this Agreement (as so amended, the "Xxxxxxxx Parent
Charter"), together with an English-language translation thereof, (ii) the
Articles of Association of FME AG, as amended to the date of this
Agreement (as so amended, the "FME AG Charter"), together with an
English-language translation thereof, (iii) the Certificate of
Incorporation and bylaws of FME, in each case as amended to the date of
this Agreement (as so amended, the "FME Charter") and (iv) the certificate
of incorporation and by-laws of Sub, in each case as amended through the
date of this Agreement.
SECTION 4.02. Sub. (a) Since the date of its incorporation,
Sub has not carried on any business or conducted any operations other than
the execution of this Agreement, the performance of its obligations
hereunder and matters ancillary thereto.
(b) The authorized capital stock of Sub consists of 3,000
shares of common stock, par value $0.01 per share. At the close of
business on May 2, 2005, 100 shares of Sub common stock were outstanding,
all of which have been validly issued, are fully paid and nonassessable,
and are owned by FME free and clear of any Liens.
SECTION 4.03. Authority; Execution and Delivery;
Enforceability. (a) Each Xxxxxxxx Party has all requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
Transactions. The execution and delivery by each Xxxxxxxx Party of this
Agreement and the consummation by it of the Transactions have been duly
authorized by all necessary corporate action on the part of such Xxxxxxxx
Party. Each Xxxxxxxx Party has duly executed and delivered this Agreement,
and this Agreement constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms.
(b) Each of the Supervisory Board of Xxxxxxxx Parent, the
Managing Board of Xxxxxxxx Parent, the Supervisory Board of FME AG, the
Managing Board of FME AG, and the Board of Directors of FME at a meeting
of such body duly called and held, or pursuant to a written consent in
lieu of such meeting, as the case may be, duly adopted resolutions
approving this Agreement, the Merger and the other Transactions.
(c) FME, as sole stockholder of Sub, has adopted this
Agreement.
(d) No consent of, or approval or adoption by, the holders of
any class of capital stock of Xxxxxxxx Parent, FME AG or of FME is
required for the execution and
24
delivery of this Agreement and the consummation of the Merger and the
other Transactions.
SECTION 0.00.Xx Conflicts; Consents. (a) The execution and
delivery by each Xxxxxxxx Party of this Agreement, do not, and the
consummation of the Merger and the other Transactions and compliance with
the terms hereof will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancelation or acceleration of any
obligation or to loss of a material benefit under, or result in the
creation of any Lien upon any of the properties or assets of any Xxxxxxxx
Party or any of their respective subsidiaries under, any provision of (i)
the Xxxxxxxx Parent Charter, the FME AG Charter, the FME Charter,
certificate of incorporation or by-laws of Sub or the charter or
organizational documents of any subsidiary of FME other than Sub, (ii) any
Contract to which any Xxxxxxxx Party or any of their respective
subsidiaries is a party or by which any of their respective properties or
assets is bound, or (iii) subject to the filings and other matters
referred to in Section 4.04(b), any Judgment or Law applicable to any
Xxxxxxxx Party or any of their respective subsidiaries or their respective
properties or assets, other than, in the case of clauses (ii) and (iii)
above, any such items that, individually or in the aggregate, have not had
and would not reasonably be expected to have a Xxxxxxxx Material Adverse
Effect.
(b) No Consent of, or registration, declaration or filing
with, any Governmental Entity is required to be obtained or made by or
with respect to any Xxxxxxxx Party or any of their respective subsidiaries
in connection with the execution, delivery and performance of this
Agreement or the consummation of the Transactions, other than (i)
compliance with and filings under the HSR Act, (ii) the filing with the
SEC of (A) the Proxy Statement and (B) such reports under Sections 13 and
16 of the Exchange Act, as may be required in connection with this
Agreement, the Merger and the other Transactions, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware, (iv) such filings as may be required under applicable
Environmental Laws, (v) such filings as may be required in connection with
the taxes described in Section 6.09, (vi) such of the foregoing as may be
required in connection with the Financing (as defined in Section 4.07(a))
and (vii) such other items (A) required solely by reason of the
participation of Rome (as opposed to any third party) in the Transactions
or (B) the failure of which to be obtained or made, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Xxxxxxxx Material Adverse Effect.
SECTION 4.05. Information Supplied. None of the information
supplied in writing or to be supplied in writing by any Xxxxxxxx Party for
inclusion or incorporation by reference in the Proxy Statement will, at
the date it is first mailed to Rome's stockholders or at the time of the
Rome Stockholders Meeting, 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, that no
representation is made by the Xxxxxxxx Parties with respect to statements
made or incorporated by reference in any of the foregoing documents based
on information supplied by Rome for inclusion or incorporation by
reference therein.
25
SECTION 4.06. Brokers. No broker, investment banker, financial
advisor or other person, other than Deutsche Bank, the fees and expenses
of which will be paid by a Xxxxxxxx Party, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the Merger and the other Transactions based upon
arrangements made by or on behalf of the Xxxxxxxx Parties.
SECTION 4.07. Financing. (a) FME AG and FME have received a
commitment letter dated April 29, 2005, from Bank of America, N.A. and
Deutsche Bank AG New York Branch (the "Lenders") relating to the
commitment of the Lenders to provide the financing required to consummate
the Merger and pay the Merger Consideration, to refinance all existing
indebtedness of Rome, and to pay related fees and expenses. The financing
required to consummate the Merger and pay the Merger Consideration, to
refinance all existing indebtedness of Rome, and to pay related fees and
expenses is collectively referred to in this Agreement as the "Financing".
FME AG has provided Rome with a complete and correct copy of such letter
(including all attachments thereto, the Fee Letter referred to therein and
all side letters in respect thereof) (collectively, the "Commitment
Letter"). As of the date of this Agreement, FME AG has no reason to
believe that any of the conditions to the Financing will not be satisfied
or that the funds for the Financing will not be available on a timely
basis for the transactions contemplated by this Agreement.
(b) Assuming Rome is not Insolvent (as defined below) prior to
the Effective Time, immediately after the Effective Time and after giving
effect to any change in the Surviving Corporation's assets and liabilities
as a result of the Merger, the Surviving Corporation will not (i) be
insolvent (insolvency being determined either because the financial
condition of the Surviving Corporation is such that the sum of its debts
is greater than the fair value of its assets or because the fair saleable
value of the Surviving Corporation's assets is less than the amount
required to pay its probable liability on existing debts as they mature),
(ii) have unreasonably small capital with which to engage in its business,
or (iii) have incurred liabilities beyond its ability to pay as they
become due. For purposes hereof, Rome will be deemed to be "Insolvent" if
any of the conditions described in clause (i), (ii) or (iii) above is
applicable to Rome prior to the Effective Time.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct of Business by
Rome. Except for matters set forth in the Rome Disclosure Letter or
otherwise contemplated by this Agreement, from the date of this Agreement
to the Effective Time Rome shall, and shall cause each Rome Subsidiary to,
conduct its business in the usual, regular and ordinary course
substantially consistent with past practice. In addition, and without
limiting the generality of the foregoing, except for matters set forth in
the Rome Disclosure Letter or otherwise contemplated by this Agreement,
from the date of this
26
Agreement to the Effective Time, Rome shall not, and shall not permit any
Rome Subsidiary to, do any of the following without the prior written
consent of FME:
(i) (A) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, other than pro rata
dividends and distributions by a direct or indirect Rome Subsidiary to the
holders of its capital stock or other equity interests, (B) split, combine or
reclassify any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, (C) purchase, redeem or otherwise acquire any shares of capital
stock of Rome or any Rome Subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities, (D)
enter into a contractual obligation to vote any shares of the capital stock of,
or other equity or voting interests in, any Rome Subsidiary or (E) amend its
certificate of incorporation, by-laws or other comparable charter or
organizational documents;
(ii) issue, deliver, sell, authorize or grant (A) any shares of its
capital stock, (B) any Rome Voting Debt or other voting securities, (C) any
securities convertible into or exchangeable for, or any options, warrants or
rights to acquire, any such shares, Rome Voting Debt, voting securities or
convertible or exchangeable securities or (D) any "phantom" stock, "phantom"
stock rights, stock appreciation rights or stock-based performance units, other
than the (1) issuance of Rome Common Stock (and associated Rome Rights) upon the
exercise of Rome Stock Options and rights under the Rome ESPP (as defined in
Section 6.04(e)) outstanding on the date of this Agreement and in accordance
with their present terms, and (2) if applicable, the issuance of Rome Capital
Stock upon the exercise of Rome Rights;
(iii) enter into or complete any acquisitions (whether by means of
merger, share exchange, consolidation, tender offer, asset purchase or
otherwise) and other business combinations (collectively, "Acquisitions") of any
business or any corporation, partnership, association or other business
organization or division thereof or of any additional assets outside the
ordinary course of business in connection with the day to day operations of Rome
and the Rome Subsidiaries, other than (A) the Acquisitions set forth in the Rome
Disclosure Letters and (B) Acquisitions of any business, corporation,
partnership, association or other business organization or division thereof or
interest therein having a value of less than $20,000,000, individually, and less
than $100,000,000, in the aggregate (provided that such aggregate limit shall be
increased to $150,000,000 in the event that the Closing has not occurred on or
prior to December 31, 2005); provided, that such Acquisition would not
reasonably be expected to increase in any material respect the divestitures that
may be required pursuant to Section 6.03 hereof;
(iv) (A) other than in the ordinary course of business consistent
with past practice with respect to employees (but not directors or officers of
Rome or any Rome subsidiary), enter into, adopt, amend (except for such
amendments as may be required by law) or terminate, in any material respect, any
Rome Benefit Plan, or any other employee benefit plan or any agreement,
arrangement, plan or policy between Rome or a Rome Subsidiary and one or more of
its directors, officers or employees, (B) except as required by any plan or
arrangement as in effect as of the date hereof, and except for normal payments,
awards and increases in the ordinary course of business consistent with past
practice with respect to employees (but not directors and officers of Rome or
any Rome Subsidiary), increase in any manner the compensation or fringe benefits
of any director, officer or employee or pay any
27
benefit not required by any contract, plan or arrangement as in effect as of the
date hereof or enter into any contract, agreement, commitment or arrangement to
do any of the foregoing; provided, however, that notwithstanding the foregoing,
Rome may, with the approval of the Xxxxxxxx Parties (such approval not to be
unreasonably withheld or delayed), increase the compensation (excluding
severance benefits) of directors and officers of Rome or any Rome Subsidiary
after December 31, 2005, consistent with past practice, (C) except pursuant to
Section 6.04, enter into or renew any contract, agreement, commitment or
arrangement (other than a renewal occurring in accordance with the terms
thereof) providing for the payment to any director, officer or employee of such
party of compensation or benefits contingent, or the terms of which are
materially altered, upon the occurrence of any of the transactions contemplated
by this Agreement, (D) take any action to provide that the consummation of the
Merger shall result in the acceleration or other modification of (x) the vesting
or other material terms of any Rome Stock Option, restricted stock award or unit
or other equity related award or (y) other benefits under any Rome Benefit Plan
except to the extent that such acceleration or other modification is consistent
with the terms as of the date of this Agreement of such Rome Stock Option, other
award or unit or Rome Benefit Plan, or (E) establish, adopt, enter into or amend
in any material respect any collective bargaining agreement, except as required
by Law or in the ordinary course of business consistent with past practice;
(v) make any change in financial or tax accounting methods, principles or
practices materially affecting the reported consolidated assets, liabilities or
results of operations of Rome and the Rome Subsidiaries, except insofar as may
have been required by a change in GAAP or concurred with by Rome's independent
auditors;
(vi) sell, lease (as lessor), license, assign or otherwise dispose of or
subject to any Lien any properties or assets (including capital stock of
subsidiaries and indebtedness of others) that are material, individually or in
the aggregate, to Rome and the Rome Subsidiaries, taken as a whole, except sales
of inventory and excess or obsolete assets in the ordinary course of business
consistent with past practice;
(vii) (A) incur, create or assume any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities of Rome or
any Rome Subsidiary, guarantee any debt securities of another person, enter into
any "keep well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic effect of
any of the foregoing, except for short-term borrowings (x) incurred to refinance
indebtedness of Rome or the Rome Subsidiaries outstanding on the date of this
Agreement (or to refinance indebtedness incurred pursuant to this clause (x) or
clause (y)) or (y) additional short-term borrowings (1) incurred for general
corporate purposes in an aggregate amount outstanding at any time not to exceed
$30,000,000 or (2) incurred in connection with Acquisitions permitted pursuant
to Section 5.01(a)(iii), or (B) make any loans, advances or capital
contributions to, or investments in, any other person, other than to or in Rome
or any direct or indirect wholly owned Rome Subsidiary;
(viii) make or agree to make any new capital expenditure or expenditures
that, individually, is in excess of $2,500,000 or, in the aggregate during any
calendar month, are in excess of $7,000,000;
28
(ix) change its annual Tax accounting period or make or change any
material Tax election or settle or compromise any material Tax liability or
refund;
(x) (A) pay, discharge, settle or satisfy any material claims, material
liabilities or material obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities reflected or reserved against in, or
contemplated by, the most recent consolidated financial statements (or the notes
thereto) of Rome included in the Available Rome SEC Documents or incurred since
the date of such financial statements in the ordinary course of business
consistent with past practice, (B) cancel any material indebtedness owed to Rome
(individually or in the aggregate) or waive any claims or rights of substantial
value, or (C) other than as contemplated by the last sentence of Section
5.02(a), waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which Rome or any Rome
Subsidiary is a party; or
(xi) adopt a plan of complete or partial liquidation of Rome or any
material Rome Subsidiary or resolutions providing for or authorizing such a
liquidation or a dissolution, restructuring, recapitalization or reorganization
of Rome or any material Rome Subsidiary;
(xii) enter into or otherwise become party to any Contract that contains a
material non-competition covenant or similar restriction on the ability of Rome
or FME or any of their respective subsidiaries to conduct, from and after the
Closing, any of their businesses in any geographical area, except for customary
non-competition covenants or similar restrictions included in joint venture
agreements entered into by Rome or a Rome Subsidiary consistent with past
practice; provided, that Rome shall offer FME a reasonable opportunity to review
and approve (such approval not to be unreasonably withheld or delayed) any such
covenant or similar restriction prior to Rome's entry into or agreeing to become
party to such Contract, and provided further that if FME does not approve any
such Contract, Rome may enter into such Contract only if it has a reasonable
basis for doing so.
(xiii) settle any litigation commenced after the date hereof against Rome
or any of its directors by any stockholder of Rome relating to this Agreement,
the Merger, any other transaction contemplated hereby or thereby, without the
prior written consent of FME, which consent shall not be unreasonably withheld
or delayed; or
(xiv) authorize any of, or commit or agree to take any of, the foregoing
actions.
(b) Conduct of Business of FME AG. Except for matters set forth in
the Xxxxxxxx Parties' Disclosure Letter or otherwise contemplated by this
Agreement, from the date of this Agreement to the Effective Time, FME AG
shall not, and shall not permit Xxxxxxxx Parent or any subsidiary of Xxxxxxxx
Parent to, do any of the following without the prior written consent of Rome:
(i) acquire or agree to acquire any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof or any assets if any such acquisition or agreement would have
or reasonably be expected to have a Xxxxxxxx Material Adverse Effect; provided
that this Section 5.01(b)(i) shall not limit or diminish in any respect the
Xxxxxxxx Parties' obligations under Section 6.03; or
29
(ii) authorize any of, or commit or agree to take any of, the foregoing
actions.
(c) Other Actions. Except as otherwise permitted by Section 5.02,
Rome shall not, and shall not permit any Rome Subsidiary to, take any action
that would, or that would reasonably be expected to, result in any condition
to the Merger set forth in Article VII, not being satisfied. Except as
otherwise permitted by Section 5.02, the Xxxxxxxx Parties shall not, and
shall not permit Xxxxxxxx Parent or any of its subsidiaries to, take any
action that would, or that would reasonably be expected to, result in any
condition to the Merger set forth in Article VII, not being satisfied.
(d) Advice of Changes. Rome shall promptly advise the Xxxxxxxx
Parties orally and in writing of any change or event that has or would
reasonably be expected to have a Rome Material Adverse Effect. The Xxxxxxxx
Parties shall promptly advise Rome orally and in writing of any change or
event that has or would reasonably be expected to have a Xxxxxxxx Material
Adverse Effect.
(e) Administration of Consents. Any request for a consent of FME
under Section 5.01(a), and any correspondence between the parties with
respect to such consents (including the granting or refusal to grant any such
consent) shall be made solely by and between the person identified in Section
5.01(e) of the Rome Disclosure Letter, on behalf of Rome and the Rome
Subsidiaries, and the person identified in writing by FME on or prior to the
date hereof, on behalf of the Xxxxxxxx Parties and their respective
subsidiaries.
(f) Control of Rome's Business. It is understood and agreed that the
Xxxxxxxx Parties and their affiliates do not have the right to control or
direct Rome's operations prior to the Effective Time. Prior to the Effective
Time, Rome shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision over its operations.
SECTION 0.00.Xx Solicitation. (a) Rome hereby represents and
warrants to the Xxxxxxxx Parties that as of the date hereof there are no
existing discussions or negotiations between Rome and any third party or
parties, other than the Xxxxxxxx Parties, relating to any Takeover Proposal
(as defined in Section 5.02(e)). Rome shall not, and it shall not authorize
or permit any Rome Subsidiary to, and it shall not authorize or permit any
officer, director or employee of, or any investment banker, attorney or other
advisor or representative (collectively, "Representatives") of, Rome or any
Rome Subsidiary to (i) solicit, initiate or encourage the submission of any
Takeover Proposal, (ii) enter into any agreement with respect to any Takeover
Proposal or (iii) participate in any discussions or negotiations regarding,
or furnish to any person any information with respect to, or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Takeover Proposal;
provided, however, that Rome and its Representatives may, in response to a
Takeover Proposal that the Rome Board determines, in good faith, could
reasonably be expected to lead to a Superior Proposal (as defined in Section
5.02(e)) that was not solicited by Rome and that did not otherwise result
from a breach of this Section 5.02(a), and subject to compliance with Section
5.02(c), (x) furnish information with respect to Rome to the person making
such Takeover Proposal and its Representatives pursuant to a
30
customary confidentiality agreement (which, for the avoidance of doubt, need
not contain any "standstill" or similar covenant) and (y) participate in
discussions or negotiations (including solicitation of a revised Takeover
Proposal) with such person and its Representatives regarding any Takeover
Proposal. In the event that Rome enters into a confidentiality agreement with
a person making a Takeover Proposal that does not include a "standstill"
provision or contains a "standstill" provision substantially less favorable
to Rome than the corresponding provision of the Confidentiality Agreement (as
defined in Section 6.02), the applicable Xxxxxxxx Parties and their
affiliates shall, without further action by Rome, be released from the
"standstill" provision under Section 6 of the Confidentiality Agreement to
the extent necessary to render such "standstill" provision of the
Confidentiality Agreement no more favorable to Rome than the "standstill", if
any, applicable to the person making such Takeover Proposal.
(b) Neither the Rome Board nor any committee thereof shall (i) (A)
withdraw (or modify in a manner adverse to the Xxxxxxxx Parties), or publicly
propose to withdraw (or modify in a manner adverse to the Xxxxxxxx Parties),
the adoption, approval, recommendation or declaration of advisability by the
Rome Board or any such committee thereof of this Agreement, the Merger or the
other Transactions or (B) recommend, adopt, approve or declare advisable, or
propose publicly to recommend, adopt, approve or declare advisable, any
Takeover Proposal (any action described in this clause (i) being referred to
as an "Adverse Recommendation Change") or (ii) adopt, approve, recommend or
declare advisable, or propose to adopt, approve, recommend or declare
advisable, or allow Rome or any of the Rome Subsidiaries to execute or enter
into, any letter of intent, memorandum of understanding, agreement in
principle, merger agreement, acquisition agreement, option agreement, joint
venture agreement, partnership agreement or other similar agreement
constituting or related to, or that is intended to or would reasonably be
expected to lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in Section 5.02(a)). Notwithstanding the foregoing, at
any time prior to obtaining the Rome Stockholder Approval, the Rome Board (or
the applicable committee thereof) may make an Adverse Recommendation Change
described in clause (i)(A) above, if the Rome Board (or such committee
thereof) determines in good faith (after consultation with outside counsel)
that it is required to do so in order to comply with applicable law,
including its fiduciary duties to the stockholders of Rome (including, but
not limited to, the Rome Board's duties of good faith and candor to the
stockholders of Rome); provided, however, that no Adverse Recommendation
Change may be made until the expiration of a three business day period
commencing upon the Xxxxxxxx Parties' receipt of written notice (a "Notice of
Adverse Recommendation") from Rome advising the Xxxxxxxx Parties that the
Rome Board intends to take such action and specifying the reasons therefor,
including the terms and conditions of any Superior Proposal that may be the
basis of the proposed action by the Rome Board (it being understood and
agreed that (x) any amendment to the financial terms or any other material
term of any such Superior Proposal or (y) with respect to any previous
Adverse Recommendation Change, any material change in the principal rationale
stated by the Rome Board for such previous Adverse Recommendation Change,
shall, in the case of either (x) or (y), require a new Notice of Adverse
Recommendation and a new three business day period). In determining whether
to make an Adverse Recommendation Change, the Rome Board shall take into
account any changes to the financial terms of this
31
Agreement proposed by the Xxxxxxxx Parties in response to a Rome Notice of
Adverse Recommendation or otherwise.
(c) In addition to the obligations of Rome set forth in paragraphs
(a) and (b) of this Section 5.02, Rome promptly shall advise the Xxxxxxxx
Parties orally and in writing of any Takeover Proposal or any inquiry with
respect to or that could reasonably be expected to lead to any Takeover
Proposal and the identity of the person making any such Takeover Proposal or
inquiry and shall provide the Xxxxxxxx Parties with the material terms and
conditions of any proposal that is the basis for a proposed Adverse
Recommendation Change or termination of this Agreement by Rome pursuant to
Section 8.01(f). Rome shall keep the Xxxxxxxx Parties fully informed of the
status of any such Takeover Proposal or inquiry. Rome shall not be required
to comply with this Section 5.02(c) in any instance to the extent that the
Rome Board determines in good faith, that such compliance would in such
instance be a breach of their fiduciary duties.
(d) Nothing contained in this Section 5.02 shall prohibit Rome from
(i) taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or (ii) making any disclosure to
Rome's stockholders if, in the good faith judgment of the Rome Board (after
consultation with outside counsel), failure so to disclose would be
inconsistent with its obligations under applicable Law, including but not
limited to the Rome Board's duty of candor to the stockholders of Rome;
provided, however, that in no event shall Rome or the Rome Board or any
committee thereof take, or agree or resolve to take, any action prohibited by
Section 5.02(b). Any action taken by Rome or the Rome Board in accordance
with Section 5.02(d)(i) shall be deemed not to be a withdrawal or
modification of the Rome Board's approval or recommendation of the Merger and
this Agreement.
(e) For purposes of this Agreement:
"Takeover Proposal" means any proposal or offer from any person
relating to any direct or indirect acquisition, in one transaction or a
series of transactions, including by way of any merger, consolidation,
tender offer, exchange offer, binding share exchange, business
combination, recapitalization, liquidation, dissolution, joint venture
or similar transaction, of (A) assets or businesses of Rome and the
Rome Subsidiaries that constitute or represent 15% or more of the total
revenue, operating income, earnings before interest, taxes,
depreciation and amortization or assets of Rome and the Rome
Subsidiaries, taken as a whole, or (B) 15% or more of the outstanding
shares of capital stock of Rome.
"Superior Proposal" means any bona fide written offer made by a
third party in respect of (i) a transaction that if consummated would
result in such third party acquiring, directly or indirectly, 50% or
more of the voting power of the outstanding Rome Common Stock or 50% or
more of the assets of Rome and the Rome Subsidiaries, taken as a whole,
or (ii) a merger between such third party and Rome, in either case
providing for consideration to Rome's stockholders consisting of cash
and/or securities (it being understood that securities retained by
Rome's stockholders be included for purposes of this determination),
which transaction the Rome Board determines in its good faith judgment
(after
32
consultation with outside counsel and a financial advisor of nationally
recognized reputation) to be (i) more favorable to the holders of Rome
Common Stock from a financial point of view than the Transactions
(taking into account all the terms and conditions of such Takeover
Proposal and this Agreement (including any changes to the financial
terms of this Agreement proposed by the Xxxxxxxx Parties in response to
such offer or otherwise), the form of consideration offered, the person
making the offer, breakup fees and expense reimbursement provisions as
well as other financial factors deemed relevant by the Rome Board) and
(ii) reasonably capable of being completed on the terms proposed,
taking into account all financial, legal, regulatory and other aspects
of such Takeover Proposal.
ARTICLE VI
Additional Agreements
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting.
(a) As soon as practicable following the date of this Agreement, Rome shall,
with FME's cooperation, prepare and file with the SEC the Proxy Statement in
preliminary form. Rome shall, with FME's cooperation, use its best efforts to
respond as promptly as practicable to any comments of the SEC with respect to
the Proxy Statement. Rome shall, as soon as practicable following the filing
of the Proxy Statement with the SEC, duly call, give notice of, convene and
hold a meeting of its stockholders (the "Rome Stockholders Meeting") for the
purpose of seeking the Rome Stockholders Approval, regardless of whether an
Adverse Recommendation Change has occurred at any time after the date of this
Agreement, and use its best efforts to cause the Proxy Statement to be mailed
to Rome's stockholders as promptly as practicable after filing with the SEC.
Rome shall notify FME promptly of the receipt of any comments from the SEC or
its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply FME with copies of all correspondence between Rome or any of its
Representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement, the Merger, or any of the other
Transactions. Prior to filing or mailing the Proxy Statement or responding to
any comments of the SEC with respect thereto, Rome shall (i) provide FME an
opportunity to review and comment in writing on such document or response and
(ii) give reasonable consideration to all written comments proposed by FME.
(b) If prior to the receipt of the Rome Stockholder Approval, any
event occurs with respect to Rome or any Rome Subsidiary, or any change
occurs with respect to other information supplied by Rome for inclusion in
the Proxy Statement which is required to be described in an amendment of, or
a supplement to, the Proxy Statement, Rome shall promptly notify the Xxxxxxxx
Parties of such event, and Rome and FME shall cooperate in the prompt filing
with the SEC of any necessary amendment or supplement to the Proxy Statement
and, as required by Law, in disseminating the information contained in such
amendment or supplement to Rome's stockholders.
33
(c) If prior to the receipt of the Rome Stockholder Approval, any
event occurs with respect to any Xxxxxxxx Party or any of their respective
subsidiaries, or any change occurs with respect to other information supplied
by the Xxxxxxxx Parties for inclusion in the Proxy Statement which is
required to be described in an amendment of, or a supplement to, the Proxy
Statement, the Xxxxxxxx Parties shall promptly notify Rome of such event, and
Rome and FME shall cooperate in the prompt filing with the SEC, of any
necessary amendment or supplement to the Proxy Statement and, as required by
Law, in disseminating the information contained in such amendment or
supplement to Rome's stockholders.
(d) Rome shall, through the Rome Board, recommend to its
stockholders that they give the Rome Stockholder Approval, except to the
extent that the Rome Board shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger as permitted by Section 5.02.
Without limiting the generality of the foregoing, Rome agrees that its
obligations pursuant to the first sentence of this Section 6.01(d) shall not
be affected by the commencement, public proposal, public disclosure or
communication to Rome of any Takeover Proposal.
(e) The Xxxxxxxx Parties shall cause all shares of Rome Common Stock
owned by Xxxxxxxx Parent, FME AG, FME or any other subsidiary of Xxxxxxxx
Parent to be voted in favor of the adoption of this Agreement.
SECTION 6.02. Access to Information; Confidentiality. Rome shall,
and shall cause the Rome Subsidiaries to, afford to the Xxxxxxxx Parties and
the Representatives of the Xxxxxxxx Parties, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, assets, books, contracts, commitments, personnel and
records. During such period, Rome shall, and shall cause the Rome
Subsidiaries to, furnish promptly to the Xxxxxxxx Parties, (a) a copy of each
report, schedule, form, registration statement and other document filed by it
during such period pursuant to the requirements of federal, state or foreign
securities laws and (b) all other information concerning its business,
properties and personnel as such other party may reasonably request. For the
purposes of this Section 6.02, all communications, including requests for
information or access, pursuant to this Section 6.02, shall only be made by
and between a representative of each of FME, on the one hand, and of Rome, on
the other hand, which representative (a) shall initially be the person
identified on Section 6.02 of the Xxxxxxxx Parties' Disclosure Letter for FME
and the person identified on Section 6.02 of the Rome Disclosure Letter for
Rome and (b) may be replaced with a substitute representative by either party
from time to time upon reasonable written notice to the other party.
Notwithstanding the foregoing, Rome may withhold (i) any document or
information that is subject to the terms of a confidentiality agreement with
a third party or (ii) such portions of documents or information relating to
pricing or other matters that are highly sensitive if the exchange of such
documents (or portions thereof) or information, as determined by Rome's
counsel, might reasonably result in antitrust difficulties for such party (or
any of its affiliates). If any material is withheld by Rome pursuant to the
proviso to the preceding sentence, Rome shall inform the Xxxxxxxx Parties as
to the general nature of what is being withheld. All information
34
exchanged pursuant to this Section 6.02 shall be subject to the
confidentiality agreement dated March 14, 2005, between Rome and FME (the
"Confidentiality Agreement").
SECTION 6.03. Standard of Efforts; Notification. (a) Upon the terms
and subject to the conditions set forth in this Agreement, each of the
parties shall, subject to Section 6.01(a) above, and Sections 6.03(b) and
6.03(c) below, use its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable,
the Merger and the other Transactions, including (i) the taking of all acts
necessary to cause the conditions precedent set forth in Article VII to be
satisfied, (ii) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity, (iii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iv) the defending of any lawsuits
or other legal proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the Transactions, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (v) the execution and delivery
of any additional instruments necessary to consummate the Merger and the
Transactions and to fully carry out the purposes of this Agreement. In
connection with and without limiting the foregoing, (i) Rome and the Rome
Board shall (A) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger or any Transaction or this Agreement, and (B) if any state takeover
statute or similar statute or regulation becomes applicable to this
Agreement, take all action necessary to ensure that the Merger and the other
Transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger and the other Transactions, and (ii) Rome
and the Rome Board shall cooperate with the Xxxxxxxx Parties in the
arrangements for obtaining the Financing and the Xxxxxxxx Parties shall keep
Rome and the Rome Board informed about the status of the Financing, including
providing prompt notice to Rome of any material developments with respect
thereto. Notwithstanding the foregoing, Rome and its Representatives shall
not be prohibited under this Section 6.03(a) from taking any action permitted
by Section 5.02.
(b) In furtherance and not in limitation of the other provisions of
this Section 6.03, each of the Xxxxxxxx Parties and Rome agrees to make, and
the Xxxxxxxx Parties agree to cause Xxxxxxxx Parent to make, an appropriate
filing of a notification and report form pursuant to the HSR Act (and to make
such other filings as are required under laws in foreign jurisdictions
governing antitrust or merger control matters (together with the HSR Act,
"Antitrust Laws")) with respect to the Merger and the Transactions as
promptly as practicable after the date of this Agreement but in any event not
later than fifteen (15) business days after the date of this Agreement, and
to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to Antitrust Laws. Each
of the Xxxxxxxx Parties and Rome will use its best
35
efforts to cause, and the Xxxxxxxx Parties shall cause Xxxxxxxx Parent to use
its best efforts to cause, the expiration or termination of the applicable
waiting periods under the HSR Act and the receipt of required approvals under
Antitrust Laws as soon as practicable. The parties hereto agree not to
extend, and the Xxxxxxxx Parties shall cause Xxxxxxxx Parent not to extend,
directly or indirectly any waiting period under the HSR Act or enter into any
agreement with a Governmental Entity to delay or not to consummate the Merger
and the Transactions, except with the prior written consent of the other
parties hereto. Each of the Xxxxxxxx Parties and Rome will, and the Xxxxxxxx
Parties will cause Xxxxxxxx Parent to, (x) promptly notify the other party of
any written communication to that party from any Governmental Entity located
in the United States and, to the extent practicable, outside of the United
States and, subject to applicable Law, if practicable, permit the other party
to review in advance any proposed written communication to any such
Governmental Entity and incorporate the other party's reasonable comments,
(y) not agree to participate in any substantive meeting or discussion with
any such Governmental Entity in respect of any filing, investigation or
inquiry concerning this Agreement, the Merger or the other Transactions
unless it consults with the other party in advance and, to the extent
permitted by such Governmental Entity, gives the other party the opportunity
to attend, and (z) furnish the other party with copies of all correspondence,
filings and written communications between them and their affiliates and
their respective Representatives on one hand, and any such Governmental
Entity or its staff on the other hand, with respect to this Agreement, the
Merger and the other Transactions. If any administrative or judicial action
or proceeding is instituted (or threatened to be instituted) challenging the
Merger or the Transactions contemplated by this Agreement as violative of any
Antitrust Law, or if any statute, rule, regulation, executive order, decree,
injunction or administrative order is enacted, entered, promulgated or
enforced by a Governmental Entity that would make the Merger or the other
Transactions illegal or would otherwise prohibit or materially impair or
delay the consummation of the Merger or the other Transactions, each of the
Xxxxxxxx Parties shall, and shall cause Xxxxxxxx Parent to, use its best
efforts, including selling, holding separate or otherwise disposing of or
conducting its business in a specified manner, or agreeing to sell, hold
separate or otherwise dispose of or conduct its business in a specified
manner or permitting the sale, holding separate or other disposition of, any
assets of the Xxxxxxxx Parties, Xxxxxxxx Parent, or their respective
subsidiaries, or after the Closing, Rome or the Rome Subsidiaries, or the
conducting of its business in a specified manner, to contest and resist any
such action or proceeding and shall, and shall cause Xxxxxxxx Parent to, use
its best efforts to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the Merger or the other Transactions and to have such
statute, rule, regulation, executive order, decree, injunction or
administrative order repealed, rescinded or made inapplicable so as to permit
consummation of the Transactions. Rome will cooperate with the Xxxxxxxx
Parties in all respects in the Xxxxxxxx Parties' or Xxxxxxxx Parent's
implementation of any of the measures described in the preceding sentence
that is undertaken in order to permit consummation of the Merger or the
Transactions (including entering into agreements or taking such other actions
prior to the Closing as the Xxxxxxxx Parties reasonably request to dispose of
assets of Rome and the Rome Subsidiaries; provided, that neither Rome nor any
Rome Subsidiary shall be required pursuant to this Section 6.03 to complete
any disposition of
36
the assets of Rome or a Rome Subsidiary prior to the Closing or enter into
any agreement or other arrangement for a disposition of any assets of Rome or
a Rome Subsidiary that does not expressly provide that Rome's obligation to
complete such disposition is subject to the prior or simultaneous occurrence
of the Closing).
(c) In furtherance and not in limitation of the other provisions of
this Section 6.03, the Xxxxxxxx Parties shall use their best efforts to (i)
enter into definitive agreements with respect to, and to obtain funding
under, the Financing provided for in the Commitment Letter and (ii) subject
to Rome's obligations under the last sentence of this Section 6.03(c), take
any and all actions necessary to satisfy the conditions precedent set forth
in such definitive agreements. In the event that any portion of such
Financing becomes unavailable, in the manner or from the sources originally
contemplated, the Xxxxxxxx Parties shall use their best efforts to obtain any
such portion on substantially comparable terms to the Financing provided for
in the Commitment Letter from alternative sources. In the event that any
portion of the Financing becomes unavailable on terms substantially
comparable to the Financing provided for in the Commitment Letter, despite
the Xxxxxxxx Parties use of their best efforts pursuant to the preceding
sentence, then the Xxxxxxxx Parties shall use their reasonable best efforts
to obtain any such portion on such other terms as are available from
alternative sources. Rome shall use its best efforts (provided that the
effectiveness of any actions taken pursuant to this sentence shall be
expressly conditioned on consummation of the Merger) to (i) take actions
reasonably requested in writing by the Xxxxxxxx Parties that are necessary to
facilitate the Financing, including actions with respect to Rome's Credit
Agreement, dated as of February 10, 2004, among the parties named therein and
(ii) to satisfy the conditions precedent in the Commitment Letter to the
extent such conditions relate to Rome or are within the control of Rome;
provided that in connection with any effort by the Xxxxxxxx Parties to obtain
financing from alternative sources as contemplated by the immediately
preceding sentence, Rome shall be required, consistent with the Xxxxxxxx
Parties obligations, to use its reasonable best efforts.
(d) Rome shall give prompt notice to the Xxxxxxxx Parties, and the
Xxxxxxxx Parties shall give prompt notice to Rome, of (i) any representation
or warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with
or satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however,
that no such notification shall affect the representations, warranties,
covenants or agreements of the parties or the conditions to the obligations
of the parties under this Agreement.
SECTION 6.04. Stock Options. (a) Prior to the Effective Time, the
Rome Board (or, if appropriate, any committee administering the Rome Stock
Plans) shall adopt such resolutions or take such other actions as are
required to adjust the terms of all outstanding Rome Stock Options to provide
that (i) each Rome Stock Option shall be vested and exercisable effective
immediately prior to the Effective Time, and (ii) each Rome Stock Option that
is not exercised prior to the Effective Time will be canceled as of the
Effective Time and the holder thereof shall then become entitled to receive,
as soon
37
as practicable following the Effective Time, a single lump sum cash payment
equal to the product of (x) the number of shares of Rome Stock for which such
Rome Stock Option shall not theretofore have been exercised and (y) the
excess, if any, of the Merger Consideration over the exercise price per share
of such Rome Stock Option.
(b) All amounts payable pursuant to this Section 6.04 shall be
subject to any required withholding of Taxes and shall be paid without
interest.
(c) Within seven (7) calendar days after the date of this Agreement,
the Rome Board of Directors (or, if appropriate, any committee administering
the Rome ESPP), shall adopt such resolutions or take such other actions as
may be required to provide that (i) no offering period shall be commenced
after the date of this Agreement, (ii) each participant's outstanding right
to purchase shares of Rome Common Stock under the Rome ESPP shall terminate
as soon as practicable following the date of this Agreement (but in no event
later than the last day of each applicable payroll period that includes the
date of this Agreement), provided that all amounts allocated to each
participant's account under the Rome ESPP as of such date shall thereupon be
used to purchase from Rome whole shares of Rome Common Stock at the
applicable price determined under the terms of the Rome ESPP for then
outstanding offering period and (iii) the Rome ESPP shall terminate
immediately following such purchases of Rome Common Stock.
(d) The Rome Stock Plans shall terminate as of the Effective Time,
and the provisions in any other Benefit Plan providing for the issuance,
transfer or grant of any capital stock of Rome or any interest in respect of
any capital stock of Rome shall be deleted as of the Effective Time, and Rome
shall ensure that following the Effective Time no holder of a Rome Stock
Option or any participant in any Rome Stock Plan or other Rome Benefit Plan
shall have any right thereunder to acquire any capital stock of Rome or the
Surviving Corporation.
(e) In this Agreement:
"Rome Non-Plan Stock Option" means any option to purchase Rome
Common Stock granted by Rome (other than any Rome Plan Stock Option).
"Rome Plan Stock Option" means any option to purchase Rome Common
Stock granted under any Rome Stock Plan (excluding rights under the
ESPP).
"Rome Stock Option" means any Rome Non-Plan Stock Option or Rome
Plan Stock Option.
"Rome Stock Plans" means Rome's Amended and Restated 1999 Long-Term
Incentive Plan, 2004 Stock and Incentive Compensation Plan, Fourth
Amended and Restated 1996 Stock Incentive Plan, the 1996 Stock Option
Plan for Outside Directors, the Employee Stock Purchase Plan, as
amended and restated effective July 1, 1997 (the "Rome ESPP"), the 1995
Equity Compensation Plan and the RDM Plan.
38
SECTION 6.05. Benefit Plans. (a) For purposes hereof, "Rome
Employees" shall mean those individuals who are common law employees of
Rome and the Rome Subsidiaries (including those employees who are on
vacation, disability or maternity leave, or other leave of absence) as of
the Effective Time.
(b) Subject to applicable Law, the Xxxxxxxx Parties shall, and
shall cause the Surviving Corporation to, give the Rome Employees full
credit, for all purposes, under any employee benefit plans or arrangements
maintained by the Xxxxxxxx Parties' business in the United States, the
Surviving Corporation and their respective subsidiaries for the Rome
Employees' service with Rome and the Rome Subsidiaries to the same extent
recognized by Rome and the Rome Subsidiaries immediately prior to the
Effective Time, except for purposes of (i) benefit accrual under defined
benefit pension plans both (A) in which the Rome Employees do not
participate immediately prior to the Effective Time and (B) to which no
liabilities with respect to the Rome Employees are transferred from any
defined benefit pension plans in which Rome Employees do participate
immediately prior to the Effective Time and (ii) eligibility for benefits
under post-retirement health and life insurance plans in which Rome
Employees do not participate immediately prior to the Effective Time. The
Xxxxxxxx Parties, jointly and severally, represent and warrant to Rome
that the Xxxxxxxx Parties' do not currently maintain any post-retirement
health or life insurance plans for the benefit of the Xxxxxxxx Parties'
employees in the United States.
(c) Subject to applicable Law, the Xxxxxxxx Parties shall, and
shall cause the Surviving Corporation to, (i) waive all limitations as to
preexisting conditions, exclusions, actively-at-work requirements and
waiting periods applicable to the Rome Employees and, to the extent
applicable, any retired employees of Rome or the Rome Subsidiaries (each a
"Retired Employee") under any welfare benefit plans in which such
employees may be eligible to participate from and after the Effective
Time, except to the extent that such waiting periods, pre-existing
condition limitations, exclusions and actively-at-work requirements would
have been applicable under the comparable Rome welfare benefit plan
immediately prior to the Effective Time and (ii) provide each Rome
Employee (and each Retired Employee) with credit for any co-payments and
deductibles paid prior to the Effective Time in the calendar year in which
the Effective Time occurs in satisfying any applicable deductible or
out-of-pocket requirements in the calendar year in which the Effective
Time occurs, under any welfare plans in which such Rome Employee (and each
Retired Employee) is eligible to participate after the Effective Time.
(d) Subject to applicable Law, for a period of two years
immediately following the Effective Time, the Xxxxxxxx Parties shall, or
shall cause the Surviving Corporation to, provide to each of the Rome
Employees (who are not members of Rome's senior management listed in
Section 6.05(d) of the Rome Disclosure Letter ("Rome Senior Management"))
employee benefits (including health, welfare, pension, vacation, savings
and severance) that are no less favorable in the aggregate than those
provided to the Rome Employees (who are not Rome Senior Management)
immediately prior to the Effective Time. Notwithstanding any provision to
the contrary, following the Effective Time, there shall be no obligation
to provide Rome Employees with awards of capital stock of any entity or
awards of options or other rights of any kind to acquire
39
capital stock of any entity; provided, however, the Xxxxxxxx Parties may,
in their discretion, offer such awards on a basis that is consistent with
such awards available to employees of the Xxxxxxxx Parties principally
employed in the United States who are not members of the Xxxxxxxx Parties'
senior management listed in Section 6.05(d) of the Xxxxxxxx Parties'
Disclosure Letter; provided, that Rome Senior Management shall be entitled
to participate in any plans or arrangements made available the Rome
Employees generally. Notwithstanding any provision herein to the contrary,
none of the Xxxxxxxx Parties, the Surviving Corporation or any of their
affiliates shall have any obligation to continue to employ any Rome
Employees other than on an "at will" basis except as otherwise may be
required under any employment agreements. Additionally, notwithstanding
any provision herein to the contrary, none of the Xxxxxxxx Parties, the
Surviving Corporation, any affiliates, or any successors shall have any
obligation to make provision for any benefits for any period of time with
respect to any Rome Employees of any entities that have been divested in
any manner from the Xxxxxxxx Parties, the Surviving Corporation, any
affiliates, or any successors following the date of such divestiture.
(e) Notwithstanding anything herein to the contrary, prior to
the Effective Time, the Rome Board or, if appropriate, any committee
thereof administering the applicable plan, policy or program shall adopt
such resolutions or take such other actions as may be required to (i)
terminate accruals under the Rome Supplemental Executive Retirement Plan
(the "SERP") immediately prior to the day on which the Effective Time
occurs so that the benefits for any participant in the SERP are determined
without regard to any period of employment after the earlier of the
Effective Time or the date of the participant's actual termination of
employment; and (ii) terminate any and all unwritten severance, deferred
compensation or termination plans, policies or programs immediately prior
to the day on which the Effective Time occurs, and to notify the employees
prior to the Effective Time who are covered by such plans, policies and
programs that they will terminate as of the Effective Time. FME shall
honor and continue or cause to be honored and continued the Renal Care
Group, Inc. 401(k) Employer Retirement Plan that is intended to be tax
qualified through the end of the "transition period" described in Code
Section 410(b)(6)(C)(ii) and FME shall honor any and all employment
agreements listed in the Rome Disclosure Letter after the Effective Time
in accordance with their terms.
SECTION 6.06. Indemnification. (a) FME shall, to the fullest
extent permitted by Law, cause the Surviving Corporation to honor all
Rome's obligations to indemnify (including any obligations to advance
funds for expenses) the current or former directors or officers of Rome
for acts or omissions by such directors and officers occurring prior to
the Effective Time to the extent that such obligations of Rome exist on
the date of this Agreement, whether pursuant to the Rome Charter, the Rome
By-laws, individual indemnity agreements or otherwise, and such
obligations shall survive the Merger and shall continue in full force and
effect in accordance with the terms of the Rome Charter, the Rome By-laws
and such individual indemnity agreements from the Effective Time until the
expiration of the applicable statute of limitations with respect to any
claims against such directors or officers arising out of such acts or
omissions.
40
(b) For a period of six years after the Effective Time, FME
shall cause to be maintained in effect the current policies of directors'
and officers' liability insurance maintained by Rome (provided that FME
may substitute therefor policies with reputable and financially sound
carriers of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising
from or related to facts or events which occurred at or before the
Effective Time; provided, however, that in no event shall FME be required
to maintain such current policies if it is required to pay aggregate
annual premiums for insurance under this Section 6.06(b) in excess of 225%
of the amount of the aggregate premiums paid by Rome for the year from
March 1, 2004 through February 28, 2005 for such purpose. Rome hereby
represents and warrants that the premiums for such insurance for the year
from March 1, 2004 through February 28, 2005 were $1,322,181. In the event
that FME is required to pay in excess of such amount, it shall only be
obligated to provide a policy with the best coverage FME is reasonably
able to obtain for such 225% amount.
(c) From and after the Effective Time, to the fullest extent
permitted by Law, the Xxxxxxxx Parties shall, jointly and severally, and
shall cause the Surviving Corporation to, indemnify, defend and hold
harmless the present and former officers and directors of Rome and the
Rome Subsidiaries and any employee of Rome or any Rome Subsidiary who, as
of the date of this Agreement, acts as a fiduciary under any Rome Benefit
Plan (each an "Indemnified Party") against all losses, claims, damages,
liabilities, fees and expenses (including attorneys' fees and
disbursements), judgments, fines and amounts paid in settlement (in the
case of settlements, with the approval of the indemnifying party (which
approval shall not be unreasonably withheld)) (collectively, "Losses"), as
incurred (payable monthly upon written request, which request shall
include reasonable evidence of the Losses set forth therein) to the extent
arising from, relating to, or otherwise in respect of, any actual or
threatened action, suit, proceeding or investigation, in respect of
actions or omissions occurring at or prior to the Effective Time in
connection with such Indemnified Party's duties as an officer or director
of Rome or any of its subsidiaries, including in respect to this
Agreement, the Merger and the other Transactions; provided, however, that
an Indemnified Party shall not be entitled to indemnification under this
Section 6.06(c) for Losses arising out of actions or omissions by the
Indemnified Party constituting (i) a breach of this Agreement, (ii)
criminal conduct or (iii) any violation of federal, state or foreign
securities laws and provided, further, that no Xxxxxxxx Party shall have
any liability pursuant to this Section 6.06(c) with respect to any claims
that are solely for money damages and as to which the Xxxxxxxx Parties
have acknowledged in writing their indemnification obligations hereunder
that are settled by the applicable Indemnified Party without the consent
of FME, not to be unreasonably withheld or delayed.
SECTION 6.07. Fees and Expenses. (a) Except as provided below,
all fees and expenses incurred in connection with the Merger and the other
Transactions shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated.
(b) Rome shall pay to FME a fee of $96,250,000 if: (i) the
Xxxxxxxx Parties terminate this Agreement pursuant to Section 8.01(e);
(ii) Rome terminates this
41
Agreement pursuant to Section 8.01(f); or (iii) (A) after the date of this
Agreement and prior to a duly held meeting to obtain the Rome Stockholder
Approval, any person makes a Takeover Proposal (which has not been
withdrawn), (B) this Agreement is terminated (x) pursuant to Section
8.01(b)(iii) as a result of the failure to obtain the Rome Stockholder
Approval at such meeting, or (y) pursuant to Section 8.01(c) as a result
of (I) a material breach by Rome of a covenant contained in this
Agreement, (II) a material breach by Rome as of the date of this Agreement
of a representation or warranty contained in this Agreement or (III) a
wilful material breach by Rome after the date of this Agreement of a
representation or warranty contained in this Agreement and required by
Section 7.02(a) to be true and correct as of the Closing Date and (C)
within one year of such termination Rome enters into a definitive
agreement to consummate, or consummates, the transactions contemplated by
such Takeover Proposal.
(c) Any fee due under Section 6.07(b) shall be paid by wire
transfer of same-day funds: (i) on the date of termination of this
Agreement, in the case of Section 6.07(b)(i) or 6.07(b)(ii) and (ii) on
the date of execution of such definitive agreement or, if earlier,
consummation of such transactions, in the case of Section 6.07(b)(iii).
Rome hereby acknowledges that the agreements contained in this Section
6.07 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, FME would not have entered
into this Agreement; accordingly, if Rome fails to pay to FME the full
amount provided for in Section 6.07(b) promptly following such payment
becoming due pursuant to this Section 6.07(c), Rome shall (i) pay to FME
interest on such unpaid amount at the prime rate published in the Wall
Street Journal Table of Money Rates on the date such payment was required
to be made during the period from and including the date payment of such
amount was due up to, but excluding, the actual date of payment and (ii)
reimburse FME for any out of pocket expenses (including the reasonable
fees of counsel) incurred by FME in connection with FME's enforcement of
its rights under this Section 6.07.
SECTION 6.08. Public Announcements. The Xxxxxxxx Parties, on
the one hand, and Rome, on the other hand, shall consult with each other
(and the Xxxxxxxx Parties shall cause Xxxxxxxx Parent to consult with
Rome) before issuing, and provide each other the opportunity to review and
comment upon, any press release or other public statements with respect to
the Merger and the other Transactions and shall not issue any such press
release or make any such public statement prior to such consultation,
except as may be required by applicable Law, court process or by
obligations pursuant to any listing requirement of any national securities
exchange on which such party's securities are listed.
SECTION 6.09. Transfer Taxes. All stock transfer, real estate
transfer, documentary, stamp, recording and other similar Taxes (including
interest, penalties and additions to any such Taxes) ("Transfer Taxes")
incurred in connection with the Transactions shall be paid by either FME
or the Surviving Corporation, and Rome shall cooperate with the Xxxxxxxx
Parties in preparing, executing and filing any Tax Returns with respect to
such Transfer Taxes.
42
SECTION 6.10. Rights Agreements. The Rome Board shall take all
action necessary in order to render the Rome Rights inapplicable to the
Merger and the other Transactions.
SECTION 6.11. Xxxxxxxx Parties' Acknowledgement. For the
avoidance of doubt, the Xxxxxxxx Parties acknowledge and agree that each
of them is jointly and severally liable to Rome for any failure of
Xxxxxxxx Parent to take any action or omit to take any action which the
Xxxxxxxx Parties are required to cause Xxxxxxxx Parent to take or omit to
take pursuant to this Agreement, including without limitation under
Section 6.03 of this Agreement, to the same extent Xxxxxxxx Parent would
be liable to Rome if Xxxxxxxx Parent, itself, were a party to this
Agreement and had so breached this Agreement.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation To Effect
The Merger. The respective obligation of each party to effect the Merger
is subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Stockholder Approval. Rome shall have obtained the Rome
Stockholder Approval.
(b) Antitrust. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) No Injunctions or Restraints. No temporary retraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger shall be in effect; provided,
however, that prior to asserting this condition, each of the parties shall
have used its best efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any such judgment that
may be entered.
SECTION 7.02. Conditions to Obligations of the Xxxxxxxx
Parties. The obligations of the Xxxxxxxx Parties to effect the Merger are
further subject to the satisfaction or waiver on or prior to the Closing
Date of the following conditions:
(a) Representations and Warranties. (i) The representations
and warranties of Rome contained in Sections 3.06(d), 3.12 and 3.20 of
this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on
the Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations
and warranties shall be true and correct on and as of such earlier date)
and (ii) the representations and warranties of Rome in this Agreement
(other than the representations and warranties identified in clause (i))
shall be true and correct as of the
43
date of this Agreement and as of the Closing Date as though made on the
Closing Date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations
and warranties shall be true and correct on and as of such earlier date),
other than in the case of this clause (ii) such failures to be true and
correct that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Rome Material Adverse Effect. FME shall
have received a certificate signed on behalf of Rome by the chief
executive officer and the chief financial officer of Rome to such effect.
For purposes of determining the satisfaction of clause (i) or clause (ii)
of this condition, "knowledge" as used in such representations and
warranties shall mean knowledge as of the Closing and for purposes of
determining the satisfaction of clause (ii) of this condition, the
applicable representations and warranties of Rome shall be deemed not
qualified by any references therein to a Rome Material Adverse Effect or
to materiality generally.
(b) Performance of Obligations of Rome. Rome shall have
performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
the Xxxxxxxx Parties shall have received a certificate signed on behalf of
Rome by the chief executive officer and the chief financial officer of
Rome to such effect.
(c) Absence of Rome Material Adverse Effect. Except as
disclosed in the Available Rome SEC Documents or in the Rome Disclosure
Letter, since the date of this Agreement there shall not have been any
event, change, effect or development that, individually or in the
aggregate, has had or would reasonably be expected to have a Rome Material
Adverse Effect.
(d) Conditions to Financing. As of the Closing Date, the
conditions precedent to the initial funding of the financing commitments
contained in clauses (i) (to the extent requiring the delivery of releases
of Liens encumbering the assets of Rome and the Rome Subsidiaries) and
(vi) (to the extent requiring the delivery of financial statements of Rome
and the Rome Subsidiaries) under the heading "Conditions Precedent to All
Borrowings" in the Summary of Terms and Conditions attached to the
Commitment Letter shall have been satisfied or waived in writing by the
lenders providing such commitments.
SECTION 7.03. Conditions to Obligations of Rome. The
obligations of Rome to effect the Merger are further subject to
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. (i) The representations
and warranties of the Xxxxxxxx Parties contained in Section 4.04 of this
Agreement shall be true and correct as of the date of this Agreement and
as of the Closing Date as though made on the Closing Date, except to the
extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct on and as of such earlier date) and (ii) the representations and
warranties of the Xxxxxxxx Parties in this Agreement (other than the
representations and warranties identified in clause (i)) shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made on the Closing Date, except to the
44
extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct on and as of such earlier date), other than in the case of this
clause (ii) such failures to be true and correct that, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Xxxxxxxx Material Adverse Effect. Rome shall have received a certificate
signed on behalf of each Xxxxxxxx Party other than Sub by the chief
executive officer and the chief financial officer of such Xxxxxxxx Party
to such effect. For purposes of determining the satisfaction of clause (i)
or clause (ii) of this condition, "knowledge" as used in such
representations and warranties shall mean knowledge as of the Closing and
for purposes of determining the satisfaction of clause (ii) of this
condition, the applicable representations and warranties of the Xxxxxxxx
Parties shall be deemed not qualified by any references therein to
Xxxxxxxx Material Adverse Effect or to materiality generally.
(b) Performance of Obligations of the Xxxxxxxx Parties. The
Xxxxxxxx Parties shall have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Closing Date, and Rome shall have received a certificate
signed on behalf of each Xxxxxxxx Party by the chief executive officer and
the chief financial officer of FME to such effect.
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after receipt of
the Rome Stockholder Approval:
(a) by mutual written consent of the Xxxxxxxx Parties and
Rome;
(b) by either the Xxxxxxxx Parties or Rome:
(i) if the Merger is not consummated on or before March 31, 2006 (the
"Outside Date"); provided, however (A) that the right to terminate this
Agreement pursuant to this Section 8.01(b)(i) shall not be available to any
party whose breach of this Agreement has been the primary reason the Merger has
not been consummated by such date and (B) that neither the Xxxxxxxx Parties nor
Rome may terminate pursuant to this Clause (b)(i) if on such date all conditions
in Article VII shall have been satisfied;
(ii) if any Governmental Entity issues an order, decree or ruling or takes
any other action permanently enjoining, restraining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall have become final
and nonappealable; provided, that the party seeking to terminate this Agreement
shall have used those efforts required hereunder to resist, lift or resolve, as
applicable, such action; or
(iii) if, upon a vote at a duly held meeting to obtain the Rome
Stockholder Approval, the Rome Stockholder Approval is not obtained; provided,
however, that this Agreement may
45
not be terminated by the Xxxxxxxx Parties pursuant to this clause (iii) if the
Xxxxxxxx Parties are in breach of Section 6.01(e);
(c) by the Xxxxxxxx Parties, if Rome breaches or fails to
perform in any material respect any of its representations, warranties or
covenants contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
7.02(a) or 7.02(b), and (ii) cannot be or has not been cured within 30
days after the giving of written notice to Rome of such breach (provided
that the Xxxxxxxx Parties are not then in material breach of any
representation, warranty or covenant contained in this Agreement);
(d) by Rome, if the Xxxxxxxx Parties breach or fail to perform
in any material respect any of their representations, warranties or
covenants contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
7.03(a) or 7.03(b), and (ii) cannot be or has not been cured within 30
days after the giving of written notice to the Xxxxxxxx Parties of such
breach (provided that Rome is not then in material breach of any
representation, warranty or covenant contained in this Agreement);
(e) by the Xxxxxxxx Parties in the event of an Adverse
Recommendation Change; provided, that the Xxxxxxxx Parties may not
exercise their termination right pursuant to this Section 8.01(e) at any
time after the Rome Stockholder Approval is obtained;
(f) by Rome if (i) the Rome Board has received a Superior
Proposal, (ii) Rome has notified the Xxxxxxxx Parties in writing that it
is prepared to accept such Superior Proposal, (iii) at least three
business days after receipt by the Xxxxxxxx Parties of the notice referred
to in clause (ii) above, and taking into account any revised proposal made
by the Xxxxxxxx Parties since receipt of the notice referred to in clause
(ii) above, such Superior Proposal remains a Superior Proposal, (iv) Rome
is in compliance with Sections 5.02 and 6.07, and (vi) the Rome Board
concurrently approves, and Rome concurrently enters into, a definitive
agreement providing for the implementation of such Superior Proposal; or
(g) by the Xxxxxxxx Parties if, except as disclosed in the
Available Rome SEC Documents or in the Rome Disclosure Letter, since the
date of this Agreement, there shall have been any event, change or
development that individually or in the aggregate has had or would be
reasonably be expected to have a Rome Material Adverse Effect.
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement by either Rome or the Xxxxxxxx Parties as
provided in Section 8.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of the
Xxxxxxxx Parties, or Rome, other than Section 3.18, Section 4.06, the last
sentence of Section 6.02, Section 6.07, this Section 8.02 and Article IX,
which provisions shall survive such termination, and except to the extent
that such termination results from the willful breach by a party of any
representation, warranty or covenant set forth in this Agreement.
46
SECTION 8.03. Amendment. This Agreement may be amended by the
parties at any time before or after receipt of the Rome Stockholder Approval;
provided, however, that (i) after receipt of the Rome Stockholder Approval,
there shall be made no amendment that by Law requires further approval by the
stockholders of Rome without the further approval of such stockholders, (ii) no
amendment shall be made to this Agreement after the Effective Time, and (iii)
except as provided above, no amendment of this Agreement by Rome shall require
the approval of the stockholders of Rome. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement, or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Subject to the proviso in Section 8.03, no
extension or waiver by Rome shall require the approval of the stockholders of
Rome Any agreement on the part of a party to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed given (a)
on the date of delivery, if delivered personally, (b) one business day after
being sent by overnight courier (providing proof of delivery) to the parties or
(c) on the third business day following the date of dispatch if delivered by
registered or certified mail, return receipt requested, postage prepaid at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to the Xxxxxxxx Parties, to
Fresenius Medical Care AG
Xxxx-Xxxxxx-Xxxxxxx 0
00000 Xxx Xxxxxxx v.d.H.
Telecopy: x00 (0000) 000-0000
47
Attention: Xx. Xxxxxx Xxxxx
Fresenius Medical Care Holdings, Inc.
Corporate Headquarters
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Telecopy: x0 (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
8000 Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
(b) if to Rome, to
Renal Care Group, Inc.
0000 Xxxx Xxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
SECTION 9.03. Definitions. For purposes of this Agreement:
An "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "business day" means any day other than a Saturday, Sunday or any
other day on which commercial banks in the City of New York, New York are
authorized or required by Law or executive order to close.
48
"knowledge of Rome" or similar terms used in this Agreement mean, as
of a particular date of determination, the actual knowledge as of such date of
the persons listed Section 9.03 of the Rome Disclosure Letter.
A "person" means any individual, firm, corporation, partnership,
company, limited liability company, trust, joint venture, association,
Governmental Entity, unincorporated organization or other entity.
A "subsidiary" of any person means another person of which such
first person, (i) directly or indirectly owns an amount of the voting
securities, other voting ownership or voting partnership interests having voting
power under ordinary circumstances sufficient to elect at least 50% of its board
of directors or other governing body or (ii) owns directly or indirectly 50% or
more of its equity interests or (ii) of which such first person is a general
partner.
SECTION 9.04. Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term "or" is not exclusive. The definitions contained in this
Agreement are applicable to the singular as well as the plural forms of such
terms. Except where the context otherwise requires, any agreement or instrument
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement or instrument as from time to time amended,
modified or supplemented. References to a person are also to its permitted
successors and assigns.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or Law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 9.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the Rome Disclosure Letter and the Xxxxxxxx Parties
Disclosure
49
Letter), taken together with the Confidentiality Agreement and the letter
agreement dated the date hereof among Xxxxxxxx Parent, FME AG, FME and Rome, (a)
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
Transactions and (b) except for Sections 6.04 and 6.06, are not intended to
confer upon any person other than the parties any rights or remedies.
Notwithstanding clause (b) of the immediately preceding sentence, following the
Effective Time the provisions of Article II shall be enforceable by holders of
Certificates.
SECTION 9.08. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.09. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties. Any purported assignment without
such consent shall be void. Subject to the preceding sentences, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
SECTION 9.10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any federal court located in the
State of Delaware or in the Court of Chancery of the State of Delaware, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware
or the Court of Chancery of the State of Delaware in the event any dispute
arises out of this Agreement, the Merger or any other Transaction, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court, (c) agrees that it will not
bring any action relating to this Agreement, the Merger or any other Transaction
in any court other than any federal court sitting in the State of Delaware or
the Court of Chancery of the State of Delaware and (d) waives any right to trial
by jury with respect to any action related to or arising out of this Agreement,
the Merger or any other Transaction.
SECTION 9.11. Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
50
IN WITNESS WHEREOF, FME AG, FME, Sub and Rome have duly executed
this Agreement, all as of the date first written above.
FRESENIUS MEDICAL CARE AG,
by
/s/ Xxxxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Financial Officer and Member of
Management Board
by
/s/ Xx. Xxxxxx Xxxxx
------------------------------------------------
Name: Xx. Xxxxxx Xxxxx
Title: Member of Management Board
FRESENIUS MEDICAL CARE HOLDINGS, INC.,
by
/s/ Rice Xxxxxx
------------------------------------------------
Name: Rice Xxxxxx
Title: Co-Chief Executive Officer
XXXXXXXX ACQUISITION, INC.,
by
/s/ Mats Xxxxxxxxx
------------------------------------------------
Name: Mats Xxxxxxxxx
Title: Co-Chief Executive Officer
51
RENAL CARE GROUP, INC.
by
/s/ Xxxx X. Xxxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President & Chief Executive Officer
