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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into as of this 3rd day of June, 1999, by and among CHEMFAB CORPORATION, a
Delaware corporation ("Parent"), UROK ACQUISITION CORP., a Delaware corporation
and a direct or indirect wholly-owned subsidiary of Parent ("Purchaser"), and
UROQUEST MEDICAL CORPORATION, a Delaware corporation (the "Company").
RECITALS
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company each
deem it advisable and in the best interests of Parent, Purchaser and the Company
and their respective stockholders, that Purchaser be merged with and into
Company (the "Merger") upon the terms and subject to the conditions set forth
herein and in accordance with the Delaware General Corporation Law (the "DGCL").
The Board of Directors of Parent and Purchaser and the stockholder of Purchaser
have adopted this Agreement. The Board of Directors of Company has approved this
Agreement and has resolved to recommend to the stockholders of the Company to
vote in favor of this Agreement; and
WHEREAS, substantially concurrently herewith and as a condition and
inducement to Parent's willingness to enter into this Agreement, Parent and
certain stockholders of the Company, who include certain of the directors and
officers of the Company and its Subsidiaries (as defined below) and certain
entities related to such directors and officers and who hold, in the aggregate,
more than 48% of the outstanding shares of Common Stock, par value $.001, of the
Company, are entering into Stockholder Agreements in the form of Exhibit A
hereto (the "Stockholder Agreements").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Parent, Purchaser and Company
hereby agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.3 hereof),
in accordance with this Agreement and the DGCL, Purchaser shall be merged with
and into Company, the separate existence of Purchaser (except as may be
continued by operation of law) shall cease, and Company shall continue as the
surviving corporation under the corporate name it possesses immediately prior to
the Effective Time. Company after the Merger hereinafter sometimes is referred
to as the "Surviving Corporation."
1.2 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of this Agreement and the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the rights and property of Company and Purchaser (the
"Constituent Corporations") shall vest in the Surviving Corporation, and all
debts and liabilities of Company and Purchaser shall become the debts and
liabilities of the Surviving Corporation.
1.3 Consummation of the Merger. In the event of, and as soon as is
practicable after, the satisfaction or waiver of the conditions set forth in
Article V hereof, the parties hereto will cause the Merger to be consummated by
filing with the Secretary of State of Delaware a Certificate of Merger in the
form of Exhibit B (the time of confirmation of such filing or such later time as
is specified in such Certificate of Merger being the "Effective Time").
Contemporaneous with the filing referred to in this Section 1.3, a closing (the
"Closing") will be held at the offices of Xxxxxxx Xxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 or at such other location as the parties may
establish for the purpose of confirming all the foregoing. The date and the time
of such Closing are referred to as the "Closing Date."
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1.4 Charter; Bylaws; Directors and Officers. Unless otherwise determined
by Parent prior to the Effective Time, the Certificate of Incorporation and
Bylaws of the Surviving Corporation shall be the Certificate of Incorporation
and Bylaws of Company, as in effect immediately prior to the Effective Time,
until thereafter amended as provided therein and under the DGCL. The directors
of Purchaser immediately prior to the Effective Time will be the initial
directors of the Surviving Corporation, and the officers of Purchaser
immediately prior to the Effective Time will be the initial officers of the
Surviving Corporation, in each case until their successors are elected and
qualified.
1.5 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, Company, the Surviving
Corporation or the holder of any of the following securities:
(a) Each share of Common Stock, $.001 par value per share, of Company
(the "Shares"), issued and outstanding immediately prior to the Effective Time
(other than Shares to be cancelled pursuant to Section 1.5(b) hereof and any
Dissenting Shares (as hereinafter defined)), shall be cancelled and extinguished
and be automatically converted into and become a right to receive the Per Share
Merger Consideration (as defined in Section 1.6) upon surrender in the manner
provided in Section 1.9, of the certificate that evidenced the Shares (the
"Certificate").
(b) Each Share which is issued and held in the treasury of Company
immediately prior to the Effective Time or issued and outstanding and owned by
Parent or any direct or indirect Subsidiary (as defined in Section 2.1) of
Parent or Company, shall be cancelled and retired, and no payment shall be made
with respect thereto.
(c) Each share of Common Stock, par value $.001 per share, of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of Common Stock, par value of $.001 per share, of the Surviving Corporation.
(d) The holders of Dissenting Shares, if any, shall be entitled to
payment for such Shares only to the extent permitted by and in accordance with
the provisions of Section 262 of the DGCL; provided, however, that if, in
accordance with such Section of the DGCL, any holder of Dissenting Shares shall
forfeit such right to payment of the fair cash value of such Shares, such Shares
shall thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the Per Share
Merger Consideration provided in Section 1.5(a).
1.6 Calculation of Merger Consideration.
For the purposes of this Agreement:
(a) The term "Per Share Merger Consideration" means an amount equal to
the quotient obtained by dividing (i) $29,000,000 less the sum of (x) the Total
Option Consideration, (y) the NOL Adjustment, if any, and (z) the Downward Net
Current Asset Adjustment, if any, and plus the Upward Net Current Asset
Adjustment, if any, by (ii) the total number of Shares outstanding at the
Effective Time, including Shares issued immediately prior to the Effective Time
pursuant to Section 1.7(a) or 1.7(c) but excluding Shares held in the treasury
of the Company or held by any Subsidiary of the Company to be cancelled pursuant
to Section 1.5(b) hereof, rounded upward to the nearest one one-hundredth of a
cent.
(b) The term "Total Option Consideration" means the total amount to be
paid by the Company in cancellation and settlement of outstanding options,
pursuant to Section 1.7.
(c) The term "NOL Adjustment" means, in the event that the Company's
cumulative net operating losses for federal income tax purposes ("NOLs")
immediately prior to the Effective Time are less than $8,500,000, an amount
equal to (x) $8,500,000 less the total amount of NOLs immediately prior to the
Effective Time (with the difference referred to as the "Specified NOLs") times
(y) .34, and then discounted to the net present value as of the Effective Time,
based on the Parent's reasonable estimate of when the Parent would have been
able to use the Specified NOLs (after taking into account the limitations of
Section 382 of the Internal Revenue Code of 1986, as amended, and any other
applicable limitation and assuming the NOLs actually existing at the Effective
Time are used first) and discounted from such time to the Effective Time at an
annual rate of 5%. Any dispute regarding the amount of the NOLs existing
immediately prior to the
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Effective Time or the calculation of the NOL Adjustment shall be resolved by a
mutually acceptable independent accounting firm, which shall be instructed to
complete its determination within ten (10) days and to make its determination
consistent with the definition of NOL Adjustment set forth in this paragraph
(c).
(d) The term "Downward Net Current Asset Adjustment" means the amount,
if any, by which the Net Current Assets (as defined below) as of the Effective
Time are less than $5,603,000, determined as provided in (f) below.
(e) The term "Upward Net Current Asset Adjustment" means the amount, if
any, by which the Net Current Assets as of the Effective Time are greater than
$6,403,000, determined as provided in (f) below.
(f) The term "Net Current Assets" means (i) the Company's total current
assets on a consolidated basis, determined in accordance with GAAP (as defined
in Section 2.6), but excluding both any cash amounts held pursuant to the 1996
Employee Stock Purchase Plan (the "ESPP") and any cash to be provided by the
Parent on or after the Closing Date to fund the termination of Options provided
for in Sections 1.7 and 4.15, less (ii) the sum of, without duplication, (v) the
Company's total current liabilities on a consolidated basis, determined in
accordance with GAAP, (w) accruals through the Closing Date for all vacation and
bonus liabilities (including the bonus liability referred to in Section 4.10(d))
of the Company and its Subsidiaries and the total short and long-term portions
of the total amount of all Indebtedness (including the Indebtedness secured by
mortgages on the Xxxxxx real property in Gary, Indiana) of the Company and its
Subsidiaries, in each case whether or not in accordance with GAAP, (x) the
amount of the Environmental Accrual (as defined in Section 4.19), to the extent
such Environmental Accrual exceeds $50,000, (y) the current unbilled but accrued
expenses of the Company and its Subsidiaries, on a consolidated basis, and (z)
the total out-of-pocket costs incurred and to be incurred by the Company and its
Subsidiaries in connection with the negotiation and preparation of this
Agreement and the transactions contemplated hereby including (i) investment
banking fees and expenses, (ii) legal and accounting fees and expenses, (iii)
financial printer expenses, (iv) SEC filing fees, (v) the cost of the insurance
referred to in Section 4.9, (vi) the severance and other costs to be paid by the
Company pursuant to Section 4.10(c) and any "gross up" or other amounts to be
paid by the Company or any of its Subsidiaries in connection with any "excess
parachute payments" referred to in Section 2.12(g), and (vii) any costs and
expenses (including any legal fees and expenses and payments to be made pursuant
to Section 1.8) to be paid or incurred by the Company or the Parent in
connection with Dissenting Shares. If any such transaction costs are to be
incurred after the Effective Time, then for purposes of this adjustment these
costs will be based on an estimate to be prepared in a reasonable manner by the
Company and agreed to by the Parent, with Parent's agreement to such estimate
not to be unreasonably withheld. The Environmental Accrual will be determined as
provided in Section 4.19 and Section 5.1(d). The other amounts referred to in
the definition of "Net Current Assets" will be based on a schedule prepared by
the Company in a reasonable manner at least ten (10) days prior to the Effective
Time. Thereafter the Parent and the Company and their representatives will meet
to discuss, verify and agree on this estimate and update it to the Effective
Time on a mutually agreeable basis. In verifying and agreeing on these
estimates, both Parent and the Company will act in a reasonable manner.
1.7 Company Stock Options and Related Matters.
(a) Immediately prior to the Effective Time, each outstanding option (an
"Option") to purchase Shares heretofore granted under the 1994 Stock Plan or any
other employee or director stock option or compensation plan or arrangement of
the Company, excluding the ESPP (collectively, the "Plans"), whether or not
exercisable, shall be cancelled by the Company and each holder of a cancelled
Option shall receive from the Surviving Corporation promptly after the Effective
Time, in cancellation and settlement of such Option, a cash payment in an amount
equal to the excess of the Per Share Merger Consideration over the per Share
exercise price of such Option, if any, multiplied by the number of Shares
covered by such Option (the "Option Settlement Amount"), subject to income tax
withholding as required by applicable law. Prior to the Closing, Company will
provide Parent with a listing of Options held by each optionee (including the
date of grant, the number of shares issuable upon exercise of the Option, and
the Option Settlement Amount to which the Optionee is entitled) certified by an
executive officer of Company. In the event that any holder of an Option does not
agree to a cash settlement of such holder's Options as provided above, the
Company will permit such
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holder to exercise all of such Options during a 15-day period ending immediately
prior to the Effective Time. Company shall not grant or amend any Option after
the date hereof or commence any new offering periods under the ESPP after the
date hereof.
(b) Notwithstanding the foregoing, in the event that due to Section
16(b) of the Securities and Exchange Act of 1934, as amended, it is inadvisable
to cancel any Option held by an officer or director of the Company, any such
Option shall not be cancelled as described above; provided, however, that the
Company or any such committee shall adopt such resolutions or take such other
actions as are required to adjust the terms of each Option not adjusted and
cancelled as contemplated by the immediately preceding section in order to
provide that each such Option shall be cancelled, and the holder thereof shall
be entitled to receive the Option Settlement Amount, not later than the
Effective Time or, in the case of options designated by the Company in writing
within one week after the date of this Agreement, six months and one day
following the grant date of such Options.
(c) The Board of Directors of Company (the "Board") shall take all
actions necessary pursuant to the terms of the ESPP in order to shorten the
Offering Periods (as defined in the ESPP) then in progress such that the
Purchase Date (as defined in the ESPP) shall occur immediately prior to the
Effective Time.
1.8 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary,
holders of Shares which are entitled to dissenter's rights in connection with
the Merger under the DGCL (collectively, the "Dissenting Shares") shall not be
converted into or represent the right to receive the Per Share Merger
Consideration. Such stockholders shall be entitled to receive payment of the
fair market value of such Shares held by them in accordance with the provisions
of the DGCL, except that all Dissenting Shares held by stockholders who shall
have failed to perfect or who effectively shall have withdrawn or lost their
rights to the payment of fair market value for such shares under the DGCL shall
thereupon be deemed to have been converted into and to have become exchangeable
for, as of the Effective Time, the right to receive the Per Share Merger
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 1.9, of the certificate or certificates that formerly
evidenced such Shares.
(b) Company shall give Parent (i) prompt notice of any demand for
payment of fair market value received by Company, the withdrawals of any such
demand, and any other instrument served pursuant to the DGCL and received by
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for payment of fair market value under the DGCL. Company
shall not, except with the prior written consent of Parent, make any payment
with respect to any demands for payment of fair market value or offer to settle
or settle any such demands.
1.9 Exchange of Certificates.
(a) From and after the Effective Time, a bank or trust company to be
designated by Parent (the "Exchange Agent") shall act as exchange agent in
effecting the exchange of the Per Share Merger Consideration for Certificates
which, prior to the Effective Time, represented Shares entitled to payment
pursuant to Section 1.5 hereof. On or before the Effective Time, Parent or
Purchaser shall deposit with the Exchange Agent the aggregate Per Share Merger
Consideration (the "Deposit Amount") in trust for the benefit of the holders of
Certificates. Pending distribution pursuant to this Section 1.9(a) of the
Deposit Amount deposited with the Exchange Agent, Parent may direct the Exchange
Agent to invest such Deposit Amount, provided that such investments (i) shall be
obligations of or guaranteed by the United States of America, in commercial
paper obligations receiving the highest rating from either Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation, or in certificates of deposit,
bank repurchase agreements or bankers acceptances of commercial banks with
capital exceeding $500,000,000 (collectively "Permitted Investments") or in
money market funds which are invested solely in Permitted Investments and (ii)
shall have maturities that will not prevent or delay payments to be made
pursuant to this Section 1.9(a). Upon the surrender of each such Certificate and
the issuance and delivery by the Exchange Agent of the Per Share Merger
Consideration in exchange therefor, such Certificate shall forthwith be
cancelled. Until so surrendered and exchanged, each such Certificate (other than
Certificates representing Shares held by Parent or Company
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or any direct or indirect Subsidiary of Parent or Company and Dissenting Shares)
shall represent solely the right to receive the Per Share Merger Consideration,
without interest, multiplied by the number of Shares represented by such
Certificate. Promptly after the Effective Time, the Exchange Agent shall mail to
each record holder of Certificates which immediately prior to the Effective Time
represented Shares a form of letter of transmittal and instructions for use in
surrendering such Certificates and receiving the Per Share Merger Consideration
therefor. Upon the surrender to the Exchange Agent of such an outstanding
Certificate together with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such other documents
as may be required pursuant to such instructions, the holder shall receive the
Per Share Merger Consideration, without any interest thereon and such
Certificate shall be cancelled. If any Per Share Merger Consideration is to be
paid to a name other than the name in which the Certificate representing Shares
surrendered in exchange therefor is registered, it shall be a condition to such
payment or exchange that the natural person, partnership, corporation, limited
liability company, joint venture, business association or other entity (a
"Person") requesting such payment or exchange shall pay to the Exchange Agent
any transfer or other taxes required by reason of the payment of such Per Share
Merger Consideration to a name other than that of the registered holder of the
Certificate surrendered, or such Person shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not applicable.
Notwithstanding the foregoing, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Shares for any Per Share Merger Consideration
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
(b) The Surviving Corporation shall not be entitled to the return of any
of the Deposit Amount in the possession of the Exchange Agent relating to the
transactions described in this Agreement until the date which is 180 days after
the Effective Time. Thereafter, each holder of a Certificate representing a
Share may surrender such Certificate to the Surviving Corporation and (subject
to applicable abandoned property, escheat and similar laws) receive in exchange
therefor the Per Share Merger Consideration, without any interest thereon, but
shall have no greater rights against the Surviving Corporation than may be
accorded to general creditors of the Surviving Corporation.
(c) At and after the Effective Time, the holders of Certificates to be
exchanged for the Per Share Merger Consideration pursuant to this Agreement
shall cease to have any rights as to stockholders of the Company except for the
right to surrender such holder's Certificates in exchange for payment of the Per
Share Merger Consideration, and after the Effective Time there shall be no
transfers on the stock transfer books of the Surviving Corporation of the Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or the
Exchange Agent, they shall be cancelled and exchanged for the Per Share Merger
Consideration, as provided in this Article I, subject to applicable law in the
case of Dissenting Shares.
(d) The provisions of this Section 1.9 shall also apply to Dissenting
Shares that lose their status as such, except that the obligations of Exchange
Agent under this Section 1.9 shall commence on the date of loss of such status.
1.10 Supplementary Action. If at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of either the Company or
Purchaser, or otherwise to carry out the provisions of this Agreement, the
officers and directors of the Surviving Corporation are hereby authorized and
empowered, in the name of and on behalf of the Company and Purchaser, to execute
and deliver any and all things necessary or proper to vest or to perfect or
confirm title to such property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser that, except as
described in the Company Disclosure Letter furnished by the Company to the
Parent prior to the execution of this Agreement (the
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"Company Disclosure Letter") or in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 (as amended on April 30, 1999, the "1998
10-K"), the Quarterly Report on Form 10-Q for the three months ended March 31,
1999 (the "March 1999 10-Q") or the Company's Proxy Statement for its 1998
Annual Meeting (the "1998 Proxy" and collectively the "Specified SEC Reports"):
2.1 Organization and Qualification. Each of the Company and its
Subsidiaries (as defined below) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as it is now being
conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, other than in jurisdictions where
the failure to be so qualified, individually or in the aggregate, would not have
a Material Adverse Effect (as defined below). Other than the Company's ownership
interest in its Subsidiaries, the Company has no direct or indirect equity or
related interest in any partnership, corporation, limited liability company,
joint venture, business association or other entity.
In this Agreement, (i) a "Subsidiary" means, with respect to any Person,
any corporation more than fifty percent (50%) of whose outstanding voting
securities are, or any partnership, limited liability company, joint venture or
other entity more than fifty percent (50%) of whose total equity interest, is
directly or indirectly owned by such Person, and specifically includes, in the
case of the Company, Xxxxxx, Inc. and BMT Acquisition Co., (ii) any reference to
any event, change or effect being "material" with respect to any entity or group
of entities means any event, change or effect which is material to the business,
properties, assets, results of operations or condition (business, financial or
otherwise) of such entity or group of entities, (iii) "Material Adverse Effect"
means, with respect to the Company and its Subsidiaries, any change in or effect
on the business, properties or assets of the Company and its Subsidiaries that
is materially adverse to the business, properties, assets, results of operations
or condition (business, financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, and (iv) "Affiliate" means, with respect to any
Person, any other Person controlling, controlled by or under common control with
such Person.
2.2 Certificate of Incorporation; Bylaws; and Stock Transfer Records. The
Company has made available to Parent prior to the date of this Agreement or will
furnish prior to the Closing complete and correct copies of (i) the Certificate
of Incorporation (or other charter document) and By-laws of the Company and each
of its Subsidiaries, (ii) shareholder list of each of the Company's Subsidiaries
and (iii) all stock certificates representing any of the issued and outstanding
capital stock of each of the Company's Subsidiaries, including without
limitation, Xxxxxx, Inc., and in each case such copies are or will be accurate
and complete as of the date of this Agreement or when furnished.
2.3 Capitalization of the Company.
(a) The authorized capital stock of the Company consists of (i)
16,000,000 shares of Preferred Stock, par value $.001 per share, of which none
are issued and outstanding, and (ii) 31,000,000 shares of Common Stock, par
value $.001 per share, of which 12,452,522 Shares are issued and outstanding as
of March 31, 1999. Except for (i) rights created pursuant to the 1994 Stock Plan
and the ESPP (the "Identified Equity Plans"), (ii) the rights created pursuant
to this Agreement, (iii) the Company's right to repurchase any unvested shares
under the Identified Equity Plans, and (iv) as set forth in the SEC Reports (as
defined in Section 2.6) there are no other options, warrants, calls, rights,
commitments or agreements of any character to which the Company is a party or by
which it is bound obligating the Company to issue, sell, deliver, repurchase or
redeem or cause to be issued, sold, delivered, repurchased or redeemed any
shares of capital stock of, or equity interests in, the Company. All outstanding
Shares are, and all Shares subject to issuance as aforesaid, upon issuance on
the terms and conditions specified in the instruments pursuant to which they are
issuable, will be, duly authorized, validly issued, fully paid and nonassessable
and free of preemptive rights or rights of first refusal. None of the Company or
any of its Subsidiaries is required to redeem, repurchase or otherwise acquire
shares of capital stock of the Company or any of its Subsidiaries, respectively,
as a result of the transactions contemplated by this Agreement. The Company has
no stockholder rights plan or agreement in force providing for the issuance to
holders of Shares of rights to purchase or receive stock, cash or other
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assets upon the acquisition or proposed acquisition of Shares by a Person (a
"Rights Plan"), nor has the Company's Board of Directors or stockholders ever
adopted a Rights Plan.
(b) All of the Company's Subsidiaries are listed in Exhibit 21.1 to the
1998 10-K. Except as set forth in the 1998 10-K, the Company owns all of the
outstanding capital stock of its Subsidiaries free and clear of any liens,
security interests, pledges, agreements, claims, charges or encumbrances of any
nature whatsoever. Except as set forth in the SEC Reports, there are no voting
trusts or other agreements or understandings to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries may
be bound with respect to the voting of the capital stock of the Company or any
of the Company's Subsidiaries. Except as set forth in the SEC Reports, there are
no options, warrants, calls, rights, commitments, or agreements of any character
to which any of the Company's Subsidiaries is a party or by which any of the
Company's Subsidiaries is bound obligating such Subsidiary to issue, sell,
deliver, repurchase or redeem, or caused to be issued, sold, delivered,
repurchased or redeemed, any shares of capital stock of, or equity interests in,
such Subsidiary. All of the outstanding capital stock of each of the Company's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and issued free of preemptive rights or rights of first refusal.
2.4 Corporate Power, Authorization and Enforceability. The Company has
full corporate power and authority to enter into this Agreement and to perform
its obligations hereunder and to consummate all the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations hereunder and the consummation by
the Company of the transactions contemplated hereby have been duly and validly
authorized by the Company's Board of Directors and no other corporate action on
the part of the Company is necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of this Agreement by stockholders holding a
majority of the outstanding Shares entitled to vote thereon). This Agreement has
been duly executed and delivered by the Company and is a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
2.5 No Conflict; Required Filings and Consents.
(a) Assuming satisfaction of any applicable requirements referred to in
Section 2.5(b) below, the execution and delivery by the Company of this
Agreement, the compliance by the Company with the provisions hereof and the
consummation by the Company of the transactions contemplated hereby:
(A) will not conflict with or violate any statute, law, ordinance,
rule, regulation, order, writ, judgment, award, injunction, decree or ruling
applicable to the Company or any of its Subsidiaries or any of their properties,
or conflict with, violate or result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, cancellation or
acceleration of, or the loss of a benefit under, or result in the creation of a
lien, security interest, charge or encumbrance on any of the properties or
assets of the Company or any of its Subsidiaries pursuant to (i) the Certificate
of Incorporation (or other charter document) or Bylaws of the Company or any of
its Subsidiaries or (ii) any contract, lease, agreement, note, bond, mortgage,
indenture, deed of trust, or other instrument or obligation, or any license,
authorization, permit, certificate or other franchise, other than such
conflicts, violations, breaches, defaults, losses, rights of termination,
amendment, cancellation or acceleration, liens, security interests, charges or
encumbrances as to which requisite waivers have been obtained or which
individually or in the aggregate would not have a Material Adverse Effect; and
(B) do not and will not result in any grant of rights to any other
party under the Certificate of Incorporation (or other charter document) or
Bylaws of the Company or any of its Subsidiaries or restrict or impair the
ability of the Parent or any of its Subsidiaries to vote, or otherwise exercise
the rights of a stockholder with respect to shares of the Company or any of its
Subsidiaries that may be directly or indirectly acquired or controlled by them.
(b) Other than in connection with or in compliance with the provisions
of the DGCL, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), the "blue sky" laws of various states, and the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (i) the Company
is
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not required to submit any notice, report, registration, declaration or other
filing with any federal, state or local government, court, administrative agency
or commission or other governmental authority or instrumentality, domestic or
foreign (collectively, "Governmental Entities"), in connection with the
execution or delivery of this Agreement by the Company or the performance by the
Company of its obligations hereunder or the consummation by the Company of the
transactions contemplated by this Agreement and (ii) no waiver, consent,
approval, order or authorization of any Governmental Entity is required to be
obtained in connection with the execution or delivery of this Agreement by the
Company or the performance by the Company of its obligations hereunder or the
consummation by the Company of the transactions contemplated by this Agreement,
other than such notices, reports, registrations, declarations, filings, waivers,
consents, approvals, orders, or authorizations, the absence of which would not,
individually or in the aggregate, subject the Company or its Subsidiaries to any
criminal penalties or otherwise have a Material Adverse Effect.
2.6 SEC Reports; Financial Statements. The Company has filed all required
reports, schedules, forms, statements and other documents with the Securities
and Exchange Commission (the "SEC") from June 28, 1996 through the date hereof
(collectively, the "SEC Reports"). The financial statements and schedules
contained in the SEC Reports (or incorporated therein by reference) and the
consolidated financial statements of the Company and its Subsidiaries for the
fiscal year ended December 31, 1998 and the quarter ended March 31, 1999
included in the 1998 10-K and March 1999 10-Q (collectively, the "Financial
Statements"), complied as to form in all material respects with the then
applicable accounting requirements and published rules and regulations of the
SEC with respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved ("GAAP") (except as may be indicated in the notes or schedules thereto
and except, in the case of the unaudited interim statements, as may be permitted
under Form 10-Q of the Exchange Act) and present fairly the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows as
of the dates and for the fiscal periods indicated therein (subject, in the case
of unaudited interim financial statements, to normal year-end adjustments). Each
SEC Report was filed with the SEC on a timely basis and, on the date of filing
thereof, complied in all material respects with the then applicable requirements
of the Exchange Act and the Securities Act of 1933, as amended (the "Securities
Act"), and the rules and regulations of the SEC promulgated thereunder 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 to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
Company has filed all documents and agreements which were required to be filed
as exhibits to the SEC Reports. None of the Company's Subsidiaries is required
to file any statements or reports with the SEC.
2.7 No Default. Neither the Company nor any of its Subsidiaries is in
default or violation (and no event has occurred which with or without notice,
the lapse of time or the happening or occurrence of any other event would
constitute a default or violation) of any term, condition or provision of (i)
its Certificate of Incorporation or Bylaws, or (ii) any contract, lease,
agreement, license, note, bond, mortgage, indenture, deed of trust or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or its Subsidiaries or any of their properties or
assets may be bound (nor to the knowledge of the Company is any other party
thereto in breach thereof or default thereunder), except in the case of this
clause (ii) for any defaults or violations that individually or in the aggregate
would not have a Material Adverse Effect.
2.8 Compliance with Law. Except as disclosed in the SEC Reports, each of
the Company and its Subsidiaries is in compliance, and has conducted its
respective businesses so as to comply with, all statutes, laws, ordinances,
rules, regulations, permits and approvals applicable to its operations, except
for violations which, individually or in the aggregate do not and insofar as
reasonably can be foreseen in the future would not have a Material Adverse
Effect. Except as disclosed in the SEC Reports, no investigation or review by
any Governmental Entity with respect to the Company, any of its Subsidiaries or
any property owned or leased by the Company or any of its Subsidiaries is
pending or, to the knowledge of the Company, threatened, except for any
investigation or review that would not individually or in the aggregate have a
Material Adverse Effect. The Company and its Subsidiaries have all permits,
authorizations, licenses and franchises from Governmental
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Entities required to conduct their business as now being conducted, except for
such permits, authorizations, licenses and franchises the absence of which would
not, individually or in the aggregate, have a Material Adverse Effect. Since
January 1, 1997 the Company and its Subsidiaries have not received notice of any
OSHA violation, other than any violations that individually or in the aggregate
would not have a Material Adverse Effect.
2.9 Absence of Certain Changes. As of the date of this Agreement, except
as contemplated by this Agreement or as disclosed in the SEC Reports or the
Company's financial statements for the fiscal year ended December 31, 1998 or
the three months ended March 31, 1999, since December 31, 1998 (the "Balance
Sheet Date"), since the Balance Sheet Date, the Company and its Subsidiaries
have conducted their business in the ordinary course consistent with past
practice and have not taken any of the actions set forth in paragraphs (a)
through (r) of Section 4.1, and there has not been any occurrence that has had
or may reasonably be expected to have a Material Adverse Effect, other than (i)
changes relating to the economy in general or the industries of the Company and
its Subsidiaries in general and not specifically relating to the Company or any
of its Subsidiaries or (ii) changes due to the disruption of the Company's or
its Subsidiary's businesses as a result of any rumors, speculation, or
announcement of a potential merger involving the Company or the execution of
this Agreement or the Merger.
2.10 No Undisclosed Liabilities. Except for liabilities and obligations
incurred since the Balance Sheet Date in the ordinary course of business,
neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature whatsoever (whether absolute, accrued, fixed,
contingent, liquidated, unliquidated or otherwise), required by generally
accepted accounting principles to be recognized or disclosed on a consolidated
balance sheet of the Company and its Subsidiaries or in the notes thereto, other
than (i) recognized or disclosed in the Financial Statements or disclosed in the
SEC Reports, or (ii) liabilities which would not individually or in the
aggregate have a Material Adverse Effect.
2.11 Litigation. Except as set forth in the SEC Reports, there is no
action, suit, investigation or proceeding pending against, or to the knowledge
of the Company, threatened against or affecting, the Company or any of its
Subsidiaries or any of their respective properties as to which there is a
reasonable possibility of an adverse determination and which if determined
adversely to the Company could reasonably be expected to have a Material Adverse
Effect and there is no judgment, decree, writ, injunction, award, ruling or
order of any Governmental Entity or arbitrator outstanding against the Company
or any of its Subsidiaries having, or which, insofar as can reasonably be
foreseen, in the future would have, a Material Adverse Effect. The Company has
made available to Parent correct and complete copies of all correspondence
prepared by its counsel for the Company's auditors in connection with the last
completed audit of the Company's financial statements and any such
correspondence since the date of the last such audit. As of the date of this
Agreement, there are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against the Company arising out of or in
any way related to this Agreement, the Merger or any of the transactions
contemplated hereby or thereby.
2.12. ERISA.
(a) Each "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
other written or oral plans or agreements involving direct or indirect
compensation (including any employment agreements entered into between the
Company or any of its Subsidiaries and any employee or former employee of the
Company or any of its Subsidiaries, but excluding worker's compensation,
unemployment compensation and other government-mandated programs) currently or
previously maintained, contributed to or entered into by the Company or any of
its Subsidiaries or any ERISA Affiliate thereof for the benefit of any employee
or former employee of or current or former service provider to the Company or
any of its Subsidiaries under which the Company or any of its Subsidiaries or
any ERISA Affiliate thereof has or may have any present or future obligation or
liability (collectively, the "Company Employee Plans") is either (i) included as
an exhibit to one or more of the SEC Reports or (ii) is not required to be filed
as an exhibit to the SEC Reports pursuant to Regulation SK Item
601(b)(10)(iii)(B)(4). For purposes of this Section 2.12, "ERISA Affiliate"
shall mean any entity which is a member of (i) a "controlled group of
corporations," as defined in Section 414(b) of the Internal
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Revenue Code of 1986, as amended (the "Code"), (ii) a group of entities under
"common control," as defined in Section 414(c) of the Code or (iii) an
"affiliated service group," as defined in Section 414(m) of the Code or treasury
regulations promulgated under Section 414(o) of the Code, any of which includes
the Company or any of its Subsidiaries. The only Company Employee Plans which
individually or collectively would constitute an "employee pension benefit
plan," as defined in Section 3(2) of ERISA (collectively, the "Company Pension
Plans"), is the Xxxxxx, Inc. 401(k) Profit Sharing Plan.
(b) No Company Pension Plan is subject to Title IV of ERISA, Part 3 of
Title I of ERISA or Section 412 of the Code. No Company Pension Plan constitutes
or has since the enactment of ERISA constituted a "multiemployer plan," as
defined in Section 3(37) of ERISA. No "prohibited transaction," as defined in
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Company Employee Plan which is covered by Title I of ERISA, excluding
transactions effected pursuant to a statutory or administrative exemption.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any Company Employee Plan has or is likely to make
the Company or any of its Subsidiaries or any officer or director thereof
subject to any material liability under Title I of ERISA or liable for any
material tax pursuant to Section 4975 of the Code.
(c) Each Company Pension Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, except to the extent that the requirements for
qualification may be satisfied by adopting retroactive amendments under Section
401(b) of the Code and the regulations thereunder or under Section 1140 of the
Tax Reform Act of 1986. Each trust forming a part of a Company Pension Plan is
exempt from tax pursuant to Section 501(a) of the Code. Each Company Employee
Plan has been maintained substantially in compliance with its terms and with the
applicable requirements of ERISA and the Code.
(d) Each employment, severance or other similar contract, arrangement or
policy and each plan or arrangement (written or oral) providing for insurance
coverage (including any self-insured arrangements), vacation benefits, severance
or severance-type benefits, disability benefits, death benefits, hospitalization
benefits, retirement benefits, deferred compensation, profit-sharing, bonuses,
stock options, stock purchase, phantom stock, stock appreciation or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
which (i) is not a Company Employee Plan, (ii) is entered into, maintained or
contributed to, as the case may be, by the Company or any of its Subsidiaries,
and (iii) covers any employee or former employee of or other current or former
service provider to the Company or any of its Subsidiaries, is herein referred
to as a "Company Benefit Arrangement" and collectively as the "Company Benefit
Arrangements." All material Company Benefit Arrangements that are required to be
so listed are listed as exhibits to or described in the SEC Reports. Each
Company Benefit Arrangement has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all statutes
(including but not limited to the Code), orders, rules and regulations which are
applicable to such Company Benefit Arrangements.
(e) Except as set forth in the SEC Reports, there has been no amendment
to, written interpretation or announcement (whether or not written) by the
Company or any of its Subsidiaries relating to, or change in employee
participation or coverage under, any Company Employee Plan or Company Benefit
Arrangement which would increase materially the expense of maintaining such
Company Employee Plan or Company Benefit Arrangement above the level of the
expense incurred in respect thereof for the fiscal year ended December 31, 1998.
(f) The Company has materially complied with the requirements of Section
4980B of the Code with respect to any "qualifying event" (as defined in Section
4980B(f)(3) of the Code) occurring prior to and including the Closing Date, and,
to the best of the Company's knowledge, no tax payable on account of Section
4980B of the Code has been incurred with respect to any current or former
employees of the Company or any of its Subsidiaries.
(g) Except as may be contained in any of the agreements listed as
exhibits to the 1998 10-K, there is no term of any Company Employee Plan or
Company Benefit Arrangement covering a "disqualified individual" (as defined in
Section 280G(c) of the Code), or of any contract, instrument, agreement or
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arrangement with any such disqualified individual, that individually or
collectively could result in a disallowance of the deduction for any "excess
parachute payment" (as defined in Section 280G(b)(i) of the Code) or the
imposition of the excise tax provided in Section 4999 of the Code. The
consummation of the transactions contemplated by this Agreement will not result
in any "excess parachute payment" or the imposition of any such excise tax in an
amount greater than $50,000 in the aggregate for all "disqualified individuals".
(h) The Company has heretofore made available to Parent certain Xxxxxx
handbooks, a Corporate/ Urology Benefits Summary, a Corporate/Urology Medical
Plan Book, a Corporate/Urology Dental Plan Book, a 401(k) Plan Booklet, an
Employee Stock Purchase Plan Document and a summary of the Company's incentive
compensation plan.
(i) There is no pending or threatened legal action, proceeding or
investigation, other than routine claims for benefits, concerning any Company
Employee Plan or Company Benefit Arrangement or, to the best knowledge of the
Company any fiduciary or service provider thereof and, to the best knowledge of
the Company, there is no basis for any such legal action or proceeding.
(j) No Company Employee Plan or Company Benefit Arrangement provides
health, life or other similar welfare coverages after termination of employment
except to the extent required by applicable state insurance laws and Title I,
Part 6 of ERISA.
(k) With respect to each Company Employee Plan or Company Benefit
Arrangement for which a separate fund of assets is or is required to be
maintained, full payment has been made of all amounts required of the Company
and its Subsidiaries and ERISA Affiliates under the terms of each such Plan or
Arrangement or applicable law, through the Closing Date.
(l) Except for the agreements listed in Section 4.10 of the Company
Disclosure Letter (including Schedule 4.1 thereto), neither the Company nor any
of its Subsidiaries has any plan or policy obligating the Company or any
Subsidiary to pay severance to any employee.
2.13 Tax Returns and Reports.
(a) The Company and its Subsidiaries have timely filed with the
appropriate taxing authorities all federal, state, county, local and foreign
returns, estimates, information statements, reports and other documents in
respect of Taxes (as defined below) required to be filed by the Company and its
Subsidiaries, except where the failure to file such Tax return would not
individually or in the aggregate have a Material Adverse Effect. All amounts
shown due on such returns have been timely paid as required by law. For purposes
of this Agreement, "Taxes" and "Tax" shall mean any and all federal, state,
local or foreign taxes and other governmental liabilities or assessments,
including, without limitation, all income, franchise, property, excise,
withholding, sales and use, payroll, profit, trade, capital, occupation,
value-added, unitary, stamp, transfer, registration, license, net worth and
other similar taxes, levies, imposts, duties, deficiencies and assessments,
together with all interest, penalties and additions imposed with respect
thereto.
(b) The audited consolidated financial statements of the Company for the
year ended December 31, 1998 included in the SEC Reports reflect an adequate
reserve for all material Taxes payable by the Company and its Subsidiaries for
all taxable periods and portions thereof through December 31, 1998.
(c) None of the federal, state, local or foreign Tax returns of the
Company or its Subsidiaries is presently being examined, audited or contested by
the relevant taxing authorities, except for any of the foregoing that would not
individually or in the aggregate have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has executed, or been asked in writing to
execute, an agreement or waiver extending the statutory period of limitation
applicable to any Tax return for any period with respect to which the applicable
statute of limitations has not expired, except for any of the foregoing that
would not individually or in the aggregate have a Material Adverse Effect.
(d) The Company has no ruling requests currently pending with the
Internal Revenue Service, except for any of the foregoing that would not
individually or in the aggregate have a Material Adverse Effect.
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(e) Except as set forth in the SEC Reports, neither the Company nor any
of its Subsidiaries is a party to (or obligated under) any Tax allocation, tax
sharing or tax indemnity agreement which has as a party any Person other than
the Company or its Subsidiaries.
(f) The Company and its Subsidiaries have withheld and paid all material
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, consultant, independent contractor, creditor, stockholder
or other party.
2.14 Trademarks, Patents and Copyrights. To the knowledge of the Company,
the Company or its Subsidiaries own or possess adequate licenses or other valid
rights to use all patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, copyrights, know-how and other proprietary information
used or held for use in connection with the business of the Company or any of
its Subsidiaries as currently being, or proposed to be, conducted (except where
the failure to own or possess such licenses or rights would not individually or
in the aggregate have a Material Adverse Effect) and is unaware of any
assertions or claims challenging the validity of any of the foregoing; and to
the knowledge of the Company, the conduct of the business of the Company and its
Subsidiaries as now conducted or proposed to be conducted does not and will not
conflict with any patents, patent rights, licenses, trademarks, trademark
rights, trade names, trade name rights or copyrights of others in any material
way. No material infringement of any proprietary right owned by or licensed by
or to the Company or any of its Subsidiaries is known to the Company.
2.15 Proxy Statement. The proxy statement to be sent to the stockholders
of the Company in connection with the Stockholders' Meeting (as hereinafter
defined) (such proxy statement, as amended or supplemented, being referred to
herein as the "Proxy Statement"), shall not, at the date the Proxy Statement (or
any amendment or supplement thereto) is first mailed to stockholders of the
Company, at the time of the Stockholders' Meeting or at the Effective Time, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders'
Meeting which shall have become false or misleading. The Proxy Statement shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
2.16 Company Products; Regulations.
(a) Except as disclosed in the SEC Reports and except as would not
individually or in the aggregate have a Material Adverse Effect, since December
31, 1996 there have been no written notices or citations received by the Company
or any of its Subsidiaries or, to the knowledge of the Company or any of its
Subsidiaries, decisions by any governmental or regulatory body that any product
produced, manufactured, marketed or distributed at any time by the Company or
its Subsidiaries (the "Products") is defective or fails to meet any applicable
standards promulgated by any such governmental or regulatory body. To the
Company's knowledge, the Company and its Subsidiaries have complied in all
material respects with the laws and regulations with respect to design,
manufacture, labeling, testing and inspection of Products promulgated by the
Food and Drug Administration (the "FDA"). Except as disclosed in the SEC
Reports, since December 31, 1996, there have been no recalls, field
notifications or seizures ordered or, to the Company's knowledge, threatened by
any such governmental or regulatory body with respect to any of the Products,
except for any of the foregoing that would not individually or in the aggregate
have a Material Adverse Effect. Except as disclosed in the SEC Reports, neither
the Company nor any of its Subsidiaries has received, and has no knowledge of
any facts that furnish any reasonable basis for, any Notice of Adverse Findings,
Regulatory Warning Letters, Section 305 notices, or other similar communications
or seizures requested or threatened relating to the Company's or any of its
Subsidiaries' Products.
(b) Except as set forth in the SEC Reports, the Company has obtained, in
all countries where the Company or the Subsidiaries are marketing or have
marketed the Products, all applicable licenses, registrations, approvals,
clearances and authorizations required by local, state or federal agencies
(including the FDA) in such countries regulating the safety, effectiveness and
market clearance of the Products which are currently marketed by the Company or
its Subsidiaries, except where the failure to obtain any of the foregoing would
not individually or in the aggregate have a Material Adverse Effect. The Company
has
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produced for examination by Parent and Purchaser all material information
relating to regulation of its Products in the United States, including licenses,
registrations, approvals, permits, device listings, inspections, Company recalls
and product actions, audits and the Company's ongoing clinical studies. The
Company has identified in writing to Parent and Purchaser, to Company's
knowledge, all international locations where regulatory information and
documents regarding the Company's or any of its Subsidiary's products are kept.
2.17 Brokers and Finders. The Company has furnished or will furnish prior
to the Effective Time to Parent or its counsel a true and complete copy of that
certain letter agreement between the Company and Vector Securities (the
"Company's Financial Advisor"), such letter agreement being the only agreement
pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder. No broker, finder or investment banker
other than the Company's Financial Advisor is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company or any of its Subsidiaries.
2.18 Material Agreements. Except as set forth in the SEC Reports and
except for this Agreement and the agreements specifically referred to herein,
neither the Company nor any of its Subsidiaries is a party to or bound by any of
the following agreements (with the following agreements, and the agreements
included as exhibits to the SEC Reports, collectively referred to as the
"Material Agreements"):
(a) any contract or agreement or amendment thereto that would be
required to be filed as an exhibit to a registration statement on Form S-1 filed
by the Company as of the date hereof;
(b) any confidentiality agreement, non-competition agreement or other
contract or agreement that contains covenants limiting the Company's or any of
its Subsidiaries' freedom to compete in any line of business or in any location
or with any Person; and
(c) any loan agreement, indenture, note, bond, debenture or any other
document or agreement evidencing a capitalized lease obligation or other
Indebtedness (as hereinafter defined) to any Person, other than any Indebtedness
in a principal amount less than $25,000 individually or $100,000 in the
aggregate.
The Company has made available to the Parent true, correct and complete
copies of all Material Agreements together with all modifications and
supplements thereto. For purposes of this Agreement "Indebtedness" means (i) all
indebtedness of the Company or any of its Subsidiaries for borrowed money,
whether current or funded, or secured or unsecured, (ii) all indebtedness of the
Company or any of its Subsidiaries for the deferred purchase price of property
or services represented by a note or other security, (iii) all indebtedness of
the Company created or arising under any conditional sale or other title
retention agreement with respect to property acquired by the Company or any of
its Subsidiaries (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), (iv) all indebtedness of the Company or any of its
Subsidiaries secured by a purchase money mortgage or other lien to secure all or
part of the purchase price of property subject to such mortgage or lien, (v) all
obligations under leases which shall have been or must be, in accordance with
generally accepted accounting principles, recorded as capital leases in respect
of which the Company or any of its Subsidiaries is liable as lessee, (vi) any
liability of the Company or any of its Subsidiaries in respect of banker's
acceptances or letters of credit, and (vii) all indebtedness referred to in
clause (i), (ii), (iii), (iv), (v) or (vi) above which is directly or indirectly
guaranteed by the Company or any of its Subsidiaries or which the Company or any
of its Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which it has otherwise assured a creditor
against loss.
2.19 Year 2000 Compliance. The Company's statements in its 1998 10-K under
the heading "Year 2000 Compliance" are an accurate summary, in all material
respects, of the "Year 2000" issues facing the Company and its Subsidiaries and
their ability and the total costs required to become Year 2000 compliant on a
timely basis.
2.20 Minute Books. The minute books of the Company and each of its
Subsidiaries made available or to be made available to Parent at or prior to the
Closing for inspection accurately record therein, in all material respects, all
actions taken by Company's and each of its Subsidiaries' Board of Directors and
stockholders.
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2.21 Environmental Matters.
Except as set forth in the 1998 10-K and as described in Section 2.21 of
the Company Disclosure Letter.
(a) neither the Company nor any of its Subsidiaries nor any operator of
their respective past or present properties is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"),
the Federal Water Pollution Control Act, the Solid Waste Disposal Act, as
amended, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, the Occupational Safety and Health Act of 1970, as
amended, or any state or local statute, regulation, ordinance, order or decree
relating to health, safety or the environment (hereinafter "Environmental
Laws"), which violation would have, either individually or in the aggregate, a
Material Adverse Effect; and
(b) to the knowledge of the Company or any of its Subsidiaries there
have been no releases (i.e., any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of any hazardous waste as defined
by 42 U.S.C. sec.6903(5), any hazardous substances as defined by 42 U.S.C.
sec.9601(33) or any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") on, upon, into or from any properties of the Company or its
Subsidiaries, which releases would individually or in the aggregate have a
Material Adverse Effect; and there have been no releases on, upon, from or into
any real property in the vicinity of the real properties of the Company or any
of its Subsidiaries which, through soil or groundwater contamination, may have
come to be located on the properties of the Company or any of its subsidiaries,
and which would have, either in any case or in the aggregate, a Material Adverse
Effect.
2.22 Insurance. Since the incorporation of the Company in 1996, the
Company and its Subsidiaries have been covered by insurance in scope and amount
customary and reasonable for the businesses in which they have engaged and are
engaged. This insurance coverage includes CGL coverage that covers product
liability claims for both products sold and products sampled or tested in trials
in both the Binova and Urology businesses of the Company and its Subsidiaries.
2.23 State Takeover Laws. The Company has taken all necessary action to
exempt the transactions contemplated by this Agreement from, or if necessary to
challenge the validity or applicability of, any applicable "moratorium," "fair
price," "business combination," "control share," or other anti-takeover laws,
including the provisions of Section 203 of the DGCL.
2.24 Stockholders' Voting Agreements. Holders of at least forty-eight
percent (48%) of the outstanding shares of the Company's Common Stock have
executed and delivered to the Parent a Stockholder Agreement.
2.25 Opinion of Financial Advisor. The Company has received the oral
opinion of the Company's Financial Advisor, as of the date of this Agreement, to
the effect that the Per Share Merger Consideration is fair, from a financial
point of view, to the Company's stockholders.
2.26 Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held, has by at least a majority vote of those directors
present (i) approved the Merger and declared it advisable, (ii) determined that
this Agreement and the transactions contemplated hereby, including the Merger,
are in the best interests of the stockholders of the Company, and (iii) resolved
to recommend that the stockholders of the Company adopt this Agreement.
2.27 Disclosure. No representation or warranty by the Company in this
Agreement or in any certificate delivered or to be delivered to Parent pursuant
hereto contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances under
which they were made, not false or misleading.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser, jointly and severally, represent and warrant to the
Company that:
3.1 Organization and Qualification. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite corporate power
and authority to own, operate and lease its properties and to carry on its
business as it is now being conducted. Purchaser is a new corporation that was
formed for the purpose of consummating the transactions contemplated by this
Agreement. It has conducted no business unrelated hereto.
3.2 Corporate Power, Authorization and Enforceability. Each of Parent and
Purchaser has full corporate power and authority to enter into this Agreement
and to perform its obligations hereunder and to consummate all the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent and
Purchaser, the performance by each of Parent and Purchaser of their respective
obligations hereunder and the consummation by Parent and Purchaser of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of each of Parent and Purchaser and no other corporate action
on the part of Parent or Purchaser is necessary to authorize this Agreement or
to consummate the transactions contemplated hereby (other than the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly executed and delivered by each of Parent and Purchaser
and is a legal, valid and binding obligation of each of Parent and Purchaser,
enforceable against Parent and Purchaser in accordance with its terms.
3.3 No Conflict; Required Filings and Consents.
(a) Assuming satisfaction of all applicable requirements referred to in
Section 3.3(b) below, the execution and delivery of this Agreement by Parent and
Purchaser, the compliance by Parent and Purchaser with the provisions hereof and
the consummation by Parent and Purchaser of the transactions contemplated hereby
will not conflict with or violate any statute, law, ordinance, rule, regulation,
order, writ, judgment, award, injunction, decree or ruling applicable to the
Parent or any of its Subsidiaries or any of their properties, or conflict with,
violate or result in any breach of or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, cancellation or acceleration of, or
the loss of a benefit under, or result in the creation of a lien, security
interest, charge or encumbrance on any of the properties or assets of the Parent
or any of its Subsidiaries pursuant to (i) the Certificate of Incorporation (or
other charter document) or bylaws of the Parent or any of its Subsidiaries or
(ii) any contract, lease, agreement, note, bond, mortgage, indenture, deed of
trust, or other instrument or obligation, or any license, authorization, permit,
certificate or other franchise, other than such conflicts, violations, breaches,
defaults, losses, rights of termination, amendment, cancellation or
acceleration, liens, security interests, charges or encumbrances as to which
requisite waivers have been obtained or which individually or in the aggregate
would not have a material adverse effect on the ability of the Parent to perform
its obligations under this Agreement.
(b) Other than in connection with or in compliance with the provisions
of the DGCL, the Exchange Act, the "blue sky" laws of various states and the HSR
Act, (i) neither Parent nor Purchaser is required to submit any notice, report,
registration, declaration or other filing with any Governmental Entity in
connection with the execution or delivery of this Agreement by Parent and
Purchaser or the performance by Parent and Purchaser of their obligations
hereunder or the consummation by Parent and Purchaser of the transactions
contemplated by this Agreement and (ii) no waiver, consent, approval, order or
authorization of any Governmental Entity is required to be obtained by Parent or
Purchaser in connection with the execution or delivery of this Agreement by
Parent and Purchaser or the performance by Parent and Purchaser of their
obligations hereunder or the consummation by Parent and Purchaser of the
transactions contemplated by this Agreement. None of the information supplied by
Parent or Purchaser for inclusion in the Proxy Statement shall, at the date the
Proxy Statement (or any amendment thereof or supplement thereto) is first mailed
to stockholders, at the time of the Company Stockholders' Meeting or at the
Effective Time, contain any untrue
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statement of a material fact required to be stated therein or necessary in order
to make the statements made therein in light of the circumstances under which
they were made, not misleading.
3.4 Available Funds. Parent has previously delivered to the Company a true
and correct copy of a commitment letter from Xxxxx Brothers Xxxxxxxx & Co. to
provide up to $30 million in acquisition debt financing (the "Commitment
Letter"). Assuming that the Commitment Letter is funded in accordance with its
terms, Parent has or has available to it, and will make available to Purchaser,
all funds necessary to satisfy all of Parent's and Purchaser's obligations under
this Agreement and in connection with the transactions contemplated hereby,
including, without limitation, the obligation to purchase all outstanding Shares
pursuant to the Merger and to pay all related fees and expenses in connection
with the Merger.
3.5 Board Approval. The Board of Directors of the Parent, at a meeting
duly called and held, has by at least a majority vote of those directors present
(i) approved the Merger and (ii) authorized the proper officers to execute and
deliver this Agreement.
3.6 Company Stock. As of the date of this Agreement, neither the Parent
nor any of its Subsidiaries beneficially owns any Shares.
3.7 Brokers and Finders. No broker, finder or investment banker other than
Xxxxxx & Company, the fees and expenses of which will be paid by Parent, is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Parent or any of its Subsidiaries.
3.8 No Litigation. As of the date of this Agreement, there are no actions,
suits or proceedings pending or, to the knowledge of the Parent, threatened
against the Parent or the Purchaser arising out of or in any way related to this
Agreement, the Merger or any of the transactions contemplated hereby or thereby.
ARTICLE IV
COVENANTS
4.1 Conduct of Business by the Company. Except as required or permitted by
this Agreement or as disclosed in Section 4.1 of the Company Disclosure
Schedule, during the period from the date of this Agreement until the Effective
Time, the Company agrees as to itself and its Subsidiaries that (except to the
extent that Parent shall otherwise consent in writing) the Company and its
Subsidiaries shall conduct their respective operations according to the ordinary
course of business consistent with past practice, and each of the Company and
its Subsidiaries will use its reasonable efforts to preserve intact its present
business organization, to keep available the services of its present officers
and employees and to maintain satisfactory relationships with licensors,
licensees, suppliers, contractors, distributors, customers and others having
business relationships with it. Without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time, neither the Company nor any of its Subsidiaries shall, without the prior
written consent of Parent:
(a) amend its Certificate of Incorporation or other charter document or
Bylaws;
(b) authorize for issuance, issue, sell, deliver, pledge or agree or
commit to issue, sell, deliver or pledge (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any capital stock of any class or any debt or other securities
convertible into capital stock or equivalents (including, without limitation,
stock appreciation rights), or amend any of the terms of any of the foregoing,
other than the issuance of shares of capital stock upon the exercise of
outstanding options or rights under the Identified Equity Plans;
(c) (i) split, combine or reclassify any shares of its capital stock, or
authorize or propose the issuance or authorization of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, or
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
adopt or approve any Rights Plan, or repurchase, redeem or otherwise acquire any
of its securities or any securities of its Subsidiaries, or (ii) make any
payment
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of cash or other property to terminate, cancel or otherwise settle any
outstanding Options or any rights under the ESPP, other than in the case of
clauses (i) or (ii) above for the issuance of Shares in connection with the
exercise of options or rights under the Identified Equity Plans or the
repurchase of Shares to the extent contractually required pursuant to the
standard terms of existing employee stock repurchase agreements;
(d) (i) incur or assume any long-term Indebtedness or increase any
amounts outstanding under long-term credit facilities existing as of the Balance
Sheet Date or grant, extend or increase the amount of a mortgage lien on any
Facility; or, except in the ordinary course of business consistent with past
practice in the case of clauses (ii) through (vi) below, (ii) incur or assume
any short-term debt or increase amounts outstanding under short-term credit
facilities existing as of the Balance Sheet Date; (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person; (iv) make
any loans, advances or capital contributions to, or investments in, any other
Person; (v) pledge or otherwise encumber shares of capital stock of the Company
or any of its Subsidiaries; or (vi) mortgage or pledge any of its assets,
tangible or intangible, or create or suffer to exist any lien thereon except as
existing on the date of this Agreement or as may be required under agreements
outstanding on the date of this Agreement to which the Company or any of its
Subsidiaries are parties;
(e) except as expressly provided in this Agreement, enter into, adopt or
amend in any manner or terminate any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right, restricted
stock, performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance, change-in-control or
other employee benefit agreement, trust, plan, fund or other arrangement for the
benefit or welfare of any director, officer or employee, or increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan or arrangement as in effect as of
the date of this Agreement or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing;
(f) sell, lease, license, pledge or otherwise dispose of or encumber any
material assets except in the ordinary course of business consistent with past
practice (including without limitation any indebtedness owed to it or any claims
held by it);
(g) except as otherwise permitted pursuant to Section 4.6, acquire or
agree to acquire by merging or consolidating with or by purchasing any portion
of the capital stock or assets of, or by any other manner, any business or any
corporation, partnership, limited liability company, association or other
business organization or division thereof, other than in the ordinary course of
business consistent with past practice;
(h) change any of the accounting principles or practices used by it
affecting its assets, liabilities or business, except for such changes required
by a change in generally accepted accounting principles;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(whether absolute, accrued, fixed, contingent, liquidated, unliquidated or
otherwise), other than the payment, discharge or satisfaction of liabilities (i)
in the ordinary course of business consistent with past practices or (ii) with
notice to Parent, in an amount which does not exceed $250,000 in the aggregate;
(j) except as required by their terms, enter into, terminate or breach
(or take or fail to take any action, that, with or without notice or lapse of
time or both, would become a breach) or materially amend any contract which is
or would be a Material Agreement;
(k) transfer the stock of any Subsidiary to any other Subsidiary or any
assets or liabilities to any new or, except in the ordinary course of business
consistent with past practice, existing Subsidiary;
(l) propose or, except pursuant to the terms of Section 4.6(b), enter
into an agreement with any Person other than Parent or its affiliates providing
for the acquisition of the Company (whether by way of merger, purchase of
capital stock, purchase of substantially all assets or otherwise);
(m) without prior consultation with the Parent (in addition to the
consent requirement described above) commence any litigation or arbitration
other than in accordance with past practice or settle any litigation or
arbitration for money damages in excess of $50,000 or if as part of such
settlement the Company or any Subsidiary would agree to any restrictions on its
operations;
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(n) grant any license with respect to or otherwise convey any
intellectual property rights;
(o) elect or appoint any new directors or officers of the Company or any
Subsidiary;
(p) waive, release or amend its rights under any confidentiality,
"standstill" or similar agreement that the Company entered into in connection
with its consideration of a potential strategic transaction; provided, however,
that the Company may waive, release or amend its rights under any such
confidentiality, "standstill" or similar agreement if the Company's Board
determines, based on the advice of independent legal counsel that failure to do
so would be reasonably likely to constitute a breach of its fiduciary duties to
the Company's stockholders under applicable law;
(q) take any action (other than (i) actions taken in the ordinary course
of business and (ii) actions contemplated by this Agreement, including but not
limited to, a Urology Disposition, a Urology Shutdown and the consummation of
the Merger) which would reduce the amount or availability of the Company's net
operating losses for federal income tax purposes; or
(r) take, or agree in writing or otherwise to take, (i) any of the
actions described in Sections 4.1(a) through 4.1(q) or (ii) any action which
would make any of the representations or warranties of the Company contained in
this Agreement untrue or incorrect in any material respect as of the date when
made.
4.2 Sale or Shutdown of Urology Division.
(a) Notwithstanding the restrictions set forth in Section 4.1, prior to
the Closing the Company shall either (i) sell, dispose of, or transfer control
of the assets of its Urology Division (a "Urology Disposition") or (ii)
terminate the business operations of its Urology Division (a "Urology
Shutdown"). Subject to compliance with paragraphs (b) and (c) below, the Company
may take any action, including any actions referred to in Section 4.1, to the
extent necessary or desirable to effect a Urology Sale or a Urology Shutdown.
(b) The Company will not enter into any agreement for a Urology
Disposition without the prior consent of the Parent, not to be unreasonably
withheld so long as under the terms of such agreement neither the Company, its
Subsidiaries nor Parent will have any obligation or liability to the transferee
in such Urology Disposition after the closing of such Urology Disposition and
the costs of completing such Urology Disposition are reflected in the
calculation of Net Current Assets pursuant to Section 1.6.
(c) If the Company elects to effect a Urology Shutdown in lieu of a
Urology Disposition, the design, terms and implementation of such Urology
Shutdown will be subject to the prior approval of the Parent, not to be
unreasonably withheld so long as (i) the costs of completing such Urology
Shutdown are reflected in the calculation of Net Current Assets pursuant to
Section 1.6 and (ii) the design, terms and implementation of such Urology
Shutdown will not otherwise have an adverse effect on the remaining business
operations of the Company and its Subsidiaries.
4.3 Access to Information; Confidentiality.
(a) Subject to and in accordance with the terms and conditions of that
certain letter dated March 2, 1999, between Parent and the Company (the
"Confidentiality Agreement"), from the date of this Agreement to the Effective
Time, the Company shall, and shall cause its Subsidiaries, officers, directors,
employees and agents to, afford the officers, employees and agents of Parent,
Purchaser and their affiliates and the attorneys, accountants, banks, other
financial institutions and investment banks working with Parent or Purchaser,
and their respective officers, employees and agents, reasonable access, at all
reasonable times upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of the Company's business, to its
officers, employees, agents, properties, books, records and contracts, and shall
furnish Parent, Purchaser and their affiliates and the attorneys, banks, other
financial institutions and investment banks working with Parent or Purchaser,
all financial, operating and other data and information as they reasonably
request.
(b) Subject to the requirements of law, Parent and Purchaser shall, and
shall cause their officers, employees, agents and affiliates and the attorneys,
banks, other financial institutions and investment banks who obtain such
information to, hold all information obtained pursuant to this Agreement or the
Confidentiality Agreement in confidence in accordance with the terms and
conditions of the Confidentiality Agreement
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and in the event of termination of this Agreement for any reason, Parent shall
promptly return all nonpublic documents obtained from the Company or any of its
Subsidiaries and any copies made of such documents for Parent and all
documentation and other material prepared by Parent, Purchaser or their advisors
based on written nonpublic information furnished by the Company or its advisors
shall be destroyed except for those which Parent or its counsel deems advisable
to retain in connection with pending or future litigation.
(c) No investigation pursuant to this Section 4.3 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
4.4 Proxy Statement. Promptly after execution and delivery of this
Agreement, the Company shall prepare and shall file with the SEC as soon as is
reasonably practicable a preliminary Proxy Statement, together with a form of
proxy, with respect to the meeting of the Company's stockholders at which the
stockholders of the Company will be asked to vote upon and approve this
Agreement and the Merger and shall use all reasonable efforts to have the Proxy
Statement and form of proxy cleared by the SEC as promptly as practicable, and
promptly thereafter shall mail the definitive Proxy Statement and form of proxy
to stockholders of the Company. The term "Proxy Statement" shall mean such proxy
or information statement at the time it initially is mailed to the Company's
stockholders and all amendments or supplements thereto, if any, similarly filed
and mailed. The information provided and to be provided by Parent, Purchaser and
the Company, respectively, for use in the Proxy Statement shall, on the date the
Proxy Statement is first mailed to the Company's stockholders and on the date of
the Special Meeting (as hereinafter defined), not contain an untrue statement of
a material fact or omit to state any material fact necessary in order to make
such information, in light of the circumstances under which it was provided, not
misleading, and the Company, Parent and Purchaser each agree to correct any
information provided by it for use in the Proxy Statement which shall have
become false or misleading in any material respect. The Proxy Statement shall
comply as to form in all material respects with all applicable requirements of
federal securities laws. The Proxy Statement shall contain the recommendation of
the Board of Directors that the stockholders of the Company vote to adopt and
approve the Merger and this Agreement.
4.5 Meeting of Stockholders of the Company. Promptly after execution and
delivery of this Agreement, the Company shall take all action necessary, in
accordance with the DGCL and its Amended and Restated Certificate of
Incorporation and Bylaws, to convene a meeting of its stockholders (the "Special
Meeting") as promptly as practicable to consider and vote upon this Agreement
and the Merger. The Company shall use reasonable efforts to solicit from
stockholders of the Company proxies in favor of such adoption and approval and
to take all other action necessary to secure the vote or consent of stockholders
required by the DGCL to effect the Merger. At the Special Meeting, Parent and
its direct and indirect Subsidiaries shall vote, or cause to be voted, all of
the Shares then owned by Parent and its direct and indirect Subsidiaries in
favor of the Merger.
4.6. No Solicitation by the Company.
(a) Except as provided in Section 4.2(a) or (b) or Section 4.6(b), the
Company agrees that, from the date of this Agreement until the earlier of the
Effective Time or the termination of this Agreement pursuant to Section 6.1, the
Company shall not, nor shall it permit any of its Subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees or any
representative retained by it (including the Company's Financial Advisor) or any
of its Subsidiaries to, directly or indirectly through another Person, (i)
solicit, initiate, entertain or encourage (including by way of furnishing
non-public information) any inquiries or the making of any proposal or offer
from any third party other than the Parent or its Affiliates regarding any
merger, sale of substantial assets, sale or purchase of (or right to sell or
purchase) shares of capital stock (other than pursuant to the exercise of stock
options outstanding on the date of this Agreement) or similar transactions
involving the Company or any of its Subsidiaries (an "Acquisition Proposal") or
(ii) participate in any discussions or negotiations regarding any Acquisition
Proposal; provided, however, that if, at any time, the Board of Directors of the
Company determines in good faith, after consultation with and receipt of advice
from outside counsel, that it is necessary to do so in order to act in a manner
consistent with its fiduciary duties to the Company's stockholders under
applicable law, the Company may, in response to what is reasonably likely to
lead to a Superior Proposal (as defined below) and subject to delivering a
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Company Notice (as defined in paragraph (c) below) and compliance with the other
provisions of paragraph (c) below, following delivery of the Company Notice (x)
furnish information with respect to the Company and its Subsidiaries to any
Person making such Acquisition Proposal pursuant to a confidentiality agreement
entered into between such Person and the Company with terms no less favorable to
the Company than those contained in the Confidentiality Agreement and (y)
participate in discussions or negotiations regarding such Acquisition Proposal.
Immediately following the execution and delivery of this Agreement by the
parties hereto, the Company will cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted with respect
to the foregoing. Promptly following the execution of this Agreement by the
parties hereto, the Company will request each Person that has, prior to the date
of this Agreement, executed a confidentiality agreement in connection with its
consideration of an Acquisition Proposal to return or destroy all confidential
information heretofore furnished to such Person by or on behalf of the Company
or any of its Subsidiaries.
(b) Except as expressly permitted by this Section 4.6, neither the Board
of Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to the
Parent, the approval or recommendation by such Board of Directors or such
committee of the Merger or this Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal, or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, a "Company Acquisition Agreement")
related to any Acquisition Proposal. Notwithstanding the foregoing, if at any
time the Board of Directors of the Company determines in good faith, after
consultation with and receipt of advice from outside counsel, that it is
necessary to do so in order to act in a manner consistent with its fiduciary
duties to the Company's stockholders under applicable law, subject to compliance
with paragraph (c) below, the Board of Directors of the Company (x) may withdraw
or modify, or propose publicly to withdraw or modify, any approval or
recommendation by such Board of Directors or such committee of the Merger or
this Agreement and (y) may approve or recommend, or propose publicly to approve
or recommend, a Superior Proposal and (z) may cause the Company to enter into a
Company Acquisition Agreement related to a Superior Proposal and may terminate
this Agreement pursuant to Section 6.1(d) and accept such Superior Proposal. For
purposes of this Agreement, a "Superior Proposal" means any Acquisition Proposal
providing for the merger of the Company or the acquisition of all or
substantially all of the capital stock or assets of the Company which (i) the
Board of Directors of the Company determines in good faith is reasonably likely
to be consummated, taking into account the Person making the proposal and all
legal, financial and regulatory aspects of the proposal, including any break-up
fees, expense reimbursement provisions and conditions to consummation, and (ii)
the Board of Directors determines in good faith (after consultation with and
based upon the advice of its outside financial advisors) would, if consummated,
result in a more favorable transaction to the Company's stockholders than the
transaction contemplated by this Agreement. Notwithstanding the existence of one
or more Superior Proposals or anything in this Section 4.6 to the contrary, the
stockholders of the Company that are parties to the Stockholder Agreements shall
remain bound thereby, and such Stockholder Agreements shall remain in full force
and effect.
(c) In addition to the obligations of the Company as set forth in
paragraphs (a) and (b) of this Section 4.6, the Company shall advise the Parent
orally and in writing of any request for non-public information, any Acquisition
Proposal, including all of the material proposed terms of such Acquisition
Proposal, or any decision by the Company to take any of the actions permitted in
clauses (x) or (y) of paragraph (a) above (with any such notice referred to as a
"Company Notice"). Any such Company Notice will be delivered promptly after (and
in no event later than 48 hours after) receipt of any request for non-public
information or of any Acquisition Proposal and prior to the Company taking any
of the actions permitted in clauses (x) or (y) of paragraph (a) above. In
addition, any Company Notice relating to any of those third parties previously
identified by Parent and listed in Section 4.6 of the Company Disclosure Letter
will disclose the identity of such third party. In addition, in the event the
Company intends to enter into a Company Acquisition Agreement relating to a
Superior Proposal, the Company will deliver a Company Notice at least 48 hours
prior to entering into such Company Acquisition Agreement, which Company Notice
will identify the third party (whether or not previously disclosed) and the
material proposed terms of such Superior Proposal. Subject to confidentiality
agreement requirements imposed by any such third party and
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which the Board of Directors determines in good faith, after consultation with
and receipt of advice from outside counsel, are necessary to enter into in order
to act in a manner consistent with its fiduciary duties to the Company's
stockholders under applicable law, the Company will keep the Parent reasonably
informed of the status of any such request or Acquisition Proposal and will
update the information required to be provided in the Company Notice upon the
request of the Parent.
4.7 Public Announcements. Parent and Purchaser on the one hand and the
Company on the other hand will consult with each other before, but will not be
required to obtain the other party's consent with respect to, issuing any press
release, any filing with the SEC on Form 8-K or otherwise making any public
statements with respect to this Agreement or the Merger or the other
transactions contemplated hereby, and shall not issue any such press release,
SEC Form 8-K filing or make any such public statement prior to such
consultation, except to the extent that compliance with legal requirements
requires a party to issue a press release or public announcement or make an 8-K
filing prior to such consultation. This Section 4.7 shall supersede any
conflicting provisions in the Confidentiality Agreement.
4.8 Notification of Certain Matters.
(a) The Company shall give prompt notice (which notice shall state that
it is delivered pursuant to Section 4.8 of this Agreement) in writing to Parent,
and Parent and Purchaser shall give prompt notice in writing to the Company, of
(i) the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement through the Effective Time and (ii) any material
failure of the Company, Parent or Purchaser, as the case may be, or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, no such notification shall affect the
representations or warranties of the parties or the conditions to the
obligations of the parties hereunder.
(b) The Company shall give prompt notice in writing (which notice shall
state that it is delivered pursuant to Section 4.8 of this Agreement) to Parent
of any occurrence that has had or may reasonably be expected to have a Material
Adverse Effect.
4.9 Officers' and Directors' Indemnification; Insurance.
(a) The Surviving Corporation agrees that for a period ending on the
third anniversary of the Effective Time, the Surviving Corporation will maintain
all rights to indemnification (including with respect to the advancement of
expenses incurred in the defense of any action or suit) existing on the date of
this Agreement in favor of the present and former directors, officers, employees
and agents of the Company as provided in the Company's Certificate of
Incorporation and By-laws and any agreements listed as exhibits to the 1998 Form
10-K ("Existing Indemnification Agreements"), in each case as in effect on the
date of this Agreement, and that during such period, neither the Certificate of
Incorporation nor the Bylaws of the Surviving Corporation nor any of such
Existing Indemnification Agreements shall be amended to reduce or limit the
rights of indemnity afforded to the present and former directors, officers,
employees and agents of the Company, or the ability of the Surviving Corporation
to indemnify them, nor to hinder, delay or make more difficult the exercise of
such rights or indemnity or the ability to indemnify.
(b) The Surviving Corporation agrees to indemnify to the fullest extent
permitted under its Certificate of Incorporation, its Bylaws, such Existing
Indemnification Agreements and applicable law the present and former directors,
officers, employees and agents of the Company against all losses, damages,
liabilities or claims made against them arising from their service in such
capacities prior to and including the Effective Time, to at least the same
extent as such persons are currently permitted to be indemnified pursuant to the
Company's Certificate of Incorporation and Bylaws and such Existing
Indemnification Agreements, for a period ending on the third anniversary of the
Effective Time.
(c) Should any claim or claims be made against any present or former
director, officer, employee or agent of the Company, arising from such person's
service as such, on or prior to the third anniversary of the Effective Time, the
provisions of this Section 4.9 respecting the Certificate of Incorporation and
Bylaws and
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the obligation of indemnity of the Surviving Corporation shall continue in
effect until the final disposition of all such claims.
(d) In the event that the Surviving Corporation or any of its successors
or assigns consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, then and in each such case, proper provisions shall be made so that the
successors and assigns of the Surviving Corporation shall assume the obligations
of the Surviving Corporation, set forth in this Section 4.9.
(e) The provisions of this Section 4.9 are intended to be for the
benefit of, and shall be enforceable by, each indemnified party and such party's
heirs and representatives.
(f) Parent will cause to be maintained for a period of three years from
the Effective Time the Company's current directors' and officers' insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Effective Time (the "D&O Insurance") for all persons who
are directors and officers of the Company on the date of this Agreement, so long
as the annual premium therefor would not be in excess of 200% of the last annual
premium paid prior to the date of this Agreement (the "Maximum Premium"). If the
existing D&O Insurance expires, is terminated or cancelled during such three-
year period, Parent will use all reasonable efforts to cause to be obtained as
much D&O Insurance as can be obtained for the remainder of such period for an
annualized premium not in excess of the Maximum Premium, on terms and conditions
no less advantageous than the existing D&O Insurance.
(g) The Parent agrees that during the period ending on the third
anniversary of the Effective Time it will either:
(i) cause the Surviving Corporation to maintain a Consolidated
Tangible Net Worth (as defined below) not less than the Company's Consolidated
Tangible Net Worth immediately prior to the Effective Time (the "Closing CTNW");
or
(ii) in the event it fails or elects not to comply with clause (i)
above, guaranty the Surviving Corporation's indemnification obligations set
forth in this Section 4.9, provided that the Parent's obligations under this
clause (ii) shall not exceed, in the aggregate, the Closing CTNW less the amount
of any proceeds funded under the D&O Insurance.
For purposes of this Agreement, "Consolidated Tangible Net Worth" means, at
any time, the (x) sum of the Company's tangible assets at such time less (y) the
Company's total liabilities at such time, determined on a consolidated basis in
accordance with GAAP.
4.10 Benefit Plans.
(a) [Intentionally Omitted.]
(b) Except as provided in paragraph (c) of this Section 4.10, the
Surviving Corporation shall honor, without modification, the employment and
consulting agreements of the Company and its Subsidiaries that are identified in
Section 4.10(b) of the Company Disclosure Letter, as such agreements shall be in
effect in accordance with the terms of this Agreement (including the Company
obligations under Section 4.1) at the Effective Time.
(c) With respect to those employees of the Company and its Subsidiaries
listed in Section 4.10(c) of the Company Disclosure Letter (including Schedule
4.1 thereto), the Company will terminate their employment effective at or before
the Effective Time. If such termination is not permitted pursuant to the
applicable employment agreement, if any, the Company will have received any
required consents prior to the Effective Time for the early termination thereof
in accordance with the preceding sentence. The Company shall pay, on or before
the Closing Date, to those employees of the Company and its Subsidiaries who are
listed in Section 4.10(c) of the Company Disclosure Letter (including Schedule
4.1 thereto), all severance and other payments required to be paid pursuant to
the terms of the employment agreement between such employee and the Company or
as otherwise set forth in Schedule 4.1 of the Company Disclosure Letter, as such
agreement shall then be in effect in accordance with the terms of this Agreement
(including the
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Company's obligations under Section 4.1). The Company will also maintain certain
benefits for such employees as set forth in paragraph (e) below. Notwithstanding
the foregoing, the payments to be made pursuant to this Section 4.10(c)
(including the cost of the benefits referred to in paragraph (e)) to employees
of the Company and its Subsidiaries shall not exceed $1.1 million in the
aggregate.
(d) Effective as of the Effective Time, the Parent agrees to cause the
Surviving Corporation to abide by the following employment arrangements for the
employees of the Company Xxxxxx'x Subsidiary:
(i) The Surviving Corporation will negotiate in good faith with the
President of the Company's Xxxxxx Subsidiary and those senior management
employees reporting directly to him (herein, "Xxxxxx Senior Managers") regarding
the terms of new employment agreements and, if agreement is reached on such
terms, to enter into new employment agreements. With respect to any existing
employment agreements that terminate prior to December 31, 1999, the Surviving
Corporation agrees (i) to honor the existing employment agreements (including
any severance provisions) of the Xxxxxx Senior Managers until the earlier of the
time new employment agreements are entered into and December 31, 1999 and (ii)
if any Xxxxxx Senior Managers subject to such existing employment agreements are
terminated without cause (as determined in good faith by the Surviving
Corporation's Board of Directors) on or after January 1, 2000 and prior to June
30, 2000, they will be entitled to six (6) months severance, to be paid out over
six (6) months and reduced dollar for dollar by any compensation earned by such
Binova Senior Manager from a third party during such period. The provisions of
the preceding sentence will be superseded by the terms of any new employment
agreement entered into by the Parent or the Surviving Corporation and the
applicable Xxxxxx Senior Manager. With respect to any existing employment
agreements that terminate after December 31, 1999, the Surviving Corporation
will honor such existing employment agreement (including any severance
provisions) until they are either superseded by any new employment agreement
entered into by the Parent or the Surviving Corporation and the applicable
Xxxxxx Senior Manager or the termination of such existing employment agreement
pursuant to its terms, whichever is earlier.
(ii) The Surviving Corporation will pay the Xxxxxx Senior Managers
and certain other eligible Xxxxxx Employees as described in Section 4.10(d) of
the Company Disclosure Letter the amount of any bonuses earned in accordance
with the current 1999 Bonus Plan on a pro rata basis for the period of fiscal
year 1999 prior to the Effective Time. The Company will not be obligated to pay
any amount in excess of the accrual for such bonus included in the calculation
of Net Current Assets pursuant to Section 1.6(f)(ii)(w). Any such bonuses will
be paid within 70 days after the Effective Time.
(iii) For all other employees of the Company's Xxxxxx Subsidiary who
are retained after the Effective Time as employees-at-will, the Surviving
Corporation agrees not to reduce their base wages or compensation and to
maintain comparable benefits, determined in the aggregate, for at least a period
of one year after the Effective Time, or for such shorter period as any such
employee remains employed by the Company or its Xxxxxx Subsidiary.
(e) Benefit Coverage. Any employee of the Company or its Urology
Division whose employment is terminated after the date of this Agreement and on
or before the Effective Time (with all such employees referred to as "Severed
Employees"), and his or her eligible spouse and dependents, shall be entitled to
continued coverage under the Company's medical and dental plans, life insurance
and accidental death and dismemberment insurance (collectively, the
"Continuation Benefits"), on and subject to all of the following terms and
conditions:
(i) Those Severed Employees who are listed in Schedule 4.1 to the
Company Disclosure Letter will be offered Continuation Benefits for themselves
and their eligible spouse and dependents pursuant to this paragraph 4.10(e)(i)
for the severance period listed in Schedule 4.1 (the "Severance Period"). In
this case and for this period such Continuation Benefits will be provided at
Company expense, provided that in no event will the Company be obligated to
spend more on such benefits than the amounts set forth for such Continuation
Benefits on Schedule 4.1 to the Company Disclosure Letter (under the heading
"Estimated Benefits").
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(ii) All Severed Employees (whether or not listed in Schedule 4.1 to
the Company Disclosure Letter) who elect to continue coverage under the
Company's medical plan pursuant to the federal law known as "COBRA" (or similar
state insurance continuation laws) will be offered Continuation Benefits for
themselves and their eligible spouse and dependents pursuant to this paragraph
4.10(e)(ii). In the case of Severed Employees not listed on Schedule 4.1 to the
Company Disclosure Letter, Continuation Benefits will be offered pursuant to
this paragraph (e)(ii) for the entire period during which the Company is
required under COBRA (or similar state insurance continuation laws) to offer
medical benefits (with such period referred to as the "COBRA Coverage Period").
In the case of Severed Employees listed in Schedule 4.1 to the Company
Disclosure Letter, Continuation Benefits will be offered pursuant to this
paragraph 4.10(e)(ii) for the period from the expiration of the Severed
Employee's Severance Period to the end of his or her COBRA Coverage Period. All
Continuation Benefits provided to Severed Employees not listed in Schedule 4.1
to the Company Disclosure Letter and all Continuation Benefits provided after
the end of the applicable Severance Period to Severed Employees listed in
Schedule 4.1 to the Company Disclosure Letter will be provided solely at the
expense of the Severed Employee or eligible spouse or dependent and otherwise on
the same terms and conditions generally applicable to COBRA recipients prior to
the Closing Date.
(iii) All Severed Employees participating in the Company's medical
expense reimbursement plan at termination will also be eligible for continued
participation under that plan at their expense for the COBRA Coverage Period,
but in no event beyond the end of the current fiscal year of the plan.
(iv) The Company may substitute comparable coverage of another
insurer for any Continuation Benefit provided through an insurance policy in the
event the issuer of such policy shall terminate or decline to renew at generally
applicable rates such policy. Maintenance of any of the Continuation Benefits
during the Severance Period or the COBRA Coverage Period is also subject to the
consent of any insurer providing a policy with respect to such Continuation
Benefit if necessary to enable the continued coverage of former employees and
their eligible spouses and dependents for the Severance Period or COBRA Coverage
Period, as applicable.
(v) Except as otherwise provided in paragraph (e)(i) above, neither
the Parent nor the Purchaser nor the Company will have any liability under this
paragraph (e) or otherwise if any Severed Employee or qualified beneficiary
fails for any reason to pay any required premiums or other amounts under the
applicable Continuation Benefit plan or medical expense reimbursement plan.
(vi) No Continuation Benefit shall be required to be offered to any
spouse or dependent of a Severed Employee if such spouse or dependent would not
otherwise be eligible for coverage as a spouse or dependent of an employee.
4.11 Additional Agreements.
(a) Subject to the terms and conditions hereof, each of the parties to
this Agreement agrees to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement (including consummation of the
Merger) and to cooperate with each other in connection with the foregoing.
(b) Subject to the terms and conditions hereof, each of the parties to
this Agreement agrees (i) to obtain all necessary waivers, consents and
approvals from other parties to loan agreements, leases, licenses and other
contracts, and (ii) to obtain all necessary consents, approvals and
authorizations as required to be obtained under any federal, state or foreign
law or regulations, including, but not limited to, those required under the HSR
Act, to defend all lawsuits or other legal proceedings challenging this
Agreement or the consummation of the transactions contemplated hereby, to lift
or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby, to effect all necessary registrations and filings, including, but not
limited to, filings under the HSR Act and submissions of information requested
by Governmental Entities, and to fulfill all conditions to this Agreement.
4.12 Company Indebtedness. Prior to the Effective Time, the Company shall
cooperate with Parent in taking such actions as are reasonably appropriate or
necessary in connection with the redemption, prepayment,
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modification, satisfaction or elimination of any outstanding Indebtedness of the
Company or any of its Subsidiaries with respect to which a consent is required
to be obtained to effectuate the Merger and the transactions contemplated by
this Agreement and has not been so obtained.
4.13 Other Actions by the Company. If any "fair price," "moratorium,"
"control share acquisition," "shareholder protection" or other form of
anti-takeover statute, regulation or charter provision or contract is or shall
become applicable to the Merger or the transactions contemplated hereby, the
Company and the Board of Directors of the Company shall grant such approvals and
take such actions as are necessary under such laws and provisions so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of such statute, regulation, provision or contract on the transactions
contemplated hereby.
4.14 Litigation Cooperation. Promptly upon execution of this Agreement and
until the Effective Time, each of the Company, Parent and Purchaser shall
cooperate with each other in connection with any litigation by a third party
arising out of or in connection with this Agreement or any of the transactions
contemplated by this Agreement, and shall take such steps as are necessary to
establish successfully a joint defense privilege, including without limitation
coordinating all depositions in such actions.
4.15 Stock Options.
(a) Immediately prior to the Effective Time, Company and its
Subsidiaries shall cancel all outstanding Options (as described in Section 1.7)
and shall comply with all requirements regarding income tax withholding in
connection therewith. In addition to the foregoing, Company will take all steps
necessary to cause the Plans and the ESPP to be terminated on or prior to the
Effective Time, and to satisfy Purchaser that no holder of Options or
participant in any Plans will have any right to acquire any interest in Company
or Purchaser as a result of the exercise of Options or other rights pursuant to
such Plans and the ESPP on or after the Effective Time.
(b) All amounts payable pursuant to this Section 4.15 shall be subject
to any required withholding of taxes and shall be paid without interest. The
Company shall use its best efforts to obtain all consents of the holders of the
Options as shall be necessary to effectuate the foregoing. Notwithstanding
anything to the contrary contained in this Agreement, payment shall, at Parent's
request, be withheld in respect of any Option until all necessary consents are
obtained.
4.16 Future Filings. The Company will deliver to Parent as soon as they
become available true and complete copies of any report or statement mailed by
it to its stockholders generally or filed by it with the SEC subsequent to the
date of this Agreement and prior to the Effective Time. As of their respective
dates, such reports and statements (excluding any information therein provided
by Parent or Purchaser, as to which the Company makes no representation) will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they are made, not misleading and will
comply as to form in all material respects with all applicable requirements of
law. The consolidated financial statements of the Company to be included in such
reports and statements (excluding any information therein provided by Parent or
Purchaser, as to which the Company makes no representation) will be prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except (i) as otherwise indicated in such
financial statements and the notes thereto or (ii) in the case of unaudited
interim statements, to the extent permitted under Form 10-Q under the Exchange
Act) and will present fairly the consolidated financial position, results of
operations and cash flows of the Company as of the dates thereof and for the
periods indicated therein (subject, in the case of any unaudited interim
financial statements, to normal year-end audit adjustments). Parent shall
deliver to the Company as soon as they become available, true and complete
copies of any report or statement mailed by it to the Company's stockholders
generally or filed by it with the SEC subsequent to the date of this Agreement
and prior to the Effective Time.
4.17 Section 203 of the DGCL. From and after the date of this Agreement,
the Company will not, except as otherwise provided herein, approve any
acquisition of shares of Common Stock by any Person which
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would result in such Person becoming an interested stockholder (as such term is
defined in Section 203 of the DGCL) or otherwise be subject to Section 203 of
the DGCL.
4.18 Company Actions Relating to Tax Matters. Without the prior consent of
Parent (which shall not be unreasonably withheld and which shall be deemed given
if there is no response within twenty business days of a request for consent),
neither the Company nor any Subsidiary shall make or change any election,
request permission of any Tax authority or to change any accounting method, file
any amended Tax return, enter into any closing agreement, settle any Tax claim
or assessment relating to the Company or its Subsidiaries, surrender any right
to claim a refund of Taxes, or consent to any extension or waiver of the
limitation period applicable to any Tax claim or assessment relating to the
Company or its Subsidiaries, if any such election, adoption, change, amendment,
agreement, settlement, surrender or consent would have the effect of materially
increasing the Tax liability of the Company, any Subsidiary, or the Surviving
Corporation (or Parent).
4.19 Environmental Testing and Accrual.
(a) Parent and/or Purchaser may cause such additional environmental
testing to be conducted at the Xxxxxx Site (as defined in Section 2.21 of the
Company Disclosure Letter) by its environmental consultants/engineers (the
"Environmental Consultants") as the Environmental Consultants, in their
professional judgment, deem necessary or advisable to address the Environmental
Contingency (as defined in Section 2.21 of the Company Disclosure Letter). The
procedure and scope of work to be followed by Parent and Purchaser and their
Environmental Consultants in connection with the additional environmental
testing to be conducted at the Xxxxxx Site will be agreed to by the Parent and
the Company. The procedure shall include, without limitation, the right of the
Company's environmental consultants to be present at any location where the
Environmental Consultants take samples in connection with the Environmental
Contingency, the right of the Company's environmental consultants to take split
samples at any such location, the selection of a testing laboratory satisfactory
to the Company and its environmental consultants and the simultaneous providing
of laboratory test results to Parent and Purchaser and the Company. Based on the
results of such tests and any reporting, remediation or containment recommended
by each party's consultants, the parties shall agree on an accrual for the
estimated costs and expenses to contain and remediate the contamination and/or
pollutants (including any off-site migration) at the Xxxxxx Site to the extent
required such that the Xxxxxx Site complies with Environmental Laws and the plan
of containment and remediation would receive any required approval of the
applicable Indiana regulatory authority (collectively, the "Remediation
Standard")(such estimated costs and expenses shall be referred to herein as the
"Environmental Estimate"). The following is referred to herein as the
"Environmental Accrual": the sum of (i) the Environmental Estimate, as
determined pursuant to this Section 4.19; and (ii) in the event the
Environmental Estimate exceeds $300,000 and Parent and the Company agree that
either (A) or (B) below is appropriate, either (A) the premium required to
obtain "cost-cap" insurance covering any costs required above the Environmental
Estimate to make the Xxxxxx Site meet the Remediation Standard (the
"Environmental Insurance"), the coverage limit of which Environmental Insurance
shall be no less than two (2) times the Environmental Estimate, or (B) the
difference between the Environmental Estimate and the total fixed price (the
"Fixed Price") for which an environmental consultant/engineer satisfactory to
Parent and the Company agrees (1) to execute and complete a plan of containment
and remediation meeting the Remediation Standard in a manner such that the
Xxxxxx Site meets the Remediation Standard and (2) to guarantee any cost over
such Fixed Price. Any election between (A) and (B) above shall be in the
Company's sole discretion.
(b) If the parties are unable to agree on the Remediation Standard
and/or the Environmental Estimate and/or the Environmental Accrual, the parties
will select a third independent environmental consultant/engineer (the "Third
Consultant") to review the parties' proposed Remediation Standards,
Environmental Estimates and Environmental Accruals. The Third Consultant shall
be instructed (i) to make its own determination of the Remediation Standard and
Environmental Estimate and Environmental Accrual meeting the requirements of
paragraph (a) above (including a determination whether or not (A) or (B) in
paragraph (a) above is appropriate, and the coverage limits of Environmental
Insurance, if any, to be obtained) within fourteen (14) days after selection by
the parties and (ii) that its Environmental Accrual is to be a fixed number (as
compared to a range of numbers) representing the Third Consultant's best
estimate of the costs and expenses referred to in paragraph (a) above, but the
Third Consultant's estimate of the
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Environmental Accrual is to fall within the range represented by the parties'
respective proposals for the Environmental Accrual. The Parent and the Company
and their environmental consultants shall meet with the Third Consultant as
requested to discuss the bases of their respective proposals. The Third
Consultant's determination of the Remediation Standard and the Environmental
Estimate and the Environmental Accrual will be final and binding on the parties
thereto.
ARTICLE V
CONDITIONS OF MERGER
5.1 Conditions to the Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) This Agreement and the Merger shall have been approved and adopted
by the requisite vote of the stockholders of the Company.
(b) Any waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) No temporary restraining order, preliminary or permanent injunction,
judgment or other order, decree or ruling nor any statute, rule, regulation or
order shall be in effect which would make the acquisition or holding by Parent
or its affiliates of Shares or shares of Common Stock of the Surviving
Corporation illegal or otherwise prevent the consummation of the Merger.
(d) The parties shall not have agreed pursuant to Section 4.19(a) that
the Environmental Accrual (as defined in Section 4.19) exceeds $1,000,000 and
the Third Consultant shall not have determined pursuant to Section 4.19(b) that
the Environmental Accrual exceeds $1,000,000; provided that, in the event that
the parties or the Third Consultant so determine that the Environmental Accrual
exceeds $1,000,000, this paragraph (d) shall not be a condition to the Company's
obligations to consummate the Merger if the Parent agrees that the Environmental
Accrual will be fixed and limited to $1,000,000 for purposes of the calculation
of Net Current Assets pursuant to Section 1.6(f)(ii)(x) above.
5.2. Conditions Precedent to Parent's and Purchaser's Obligations. Parent
and Purchaser shall be obligated to perform the acts contemplated for
performance by them under Article 1 only if each of the following conditions is
satisfied at or prior to the Closing Date, unless any such condition is waived
in writing by Parent and Purchaser:
(a) The representations and warranties of the Company set forth in
Article 2 shall, individually and in the aggregate, be true and correct in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of the
Closing Date with the same force and effect as though made again at and as of
the Closing Date, except for any representations and warranties that address
matters only as of a particular date (which shall remain true and correct in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of such
date) and except for changes required by this Agreement.
(b) The Company shall have performed and complied (i) in all respects
its covenants under Section 4.1(d)(i), Section 4.1(c), Section 4.2 and Section
4.15 and (ii) in all material respects (without giving duplicative effect to any
materiality qualification contained in the applicable obligation) with all other
covenants and agreements contained in this Agreement required to be performed or
complied with by it on or before the Closing Date.
(c) Since the date of this Agreement, there shall not have been the
occurrence of any event or condition that has had or could reasonably be
expected to have a Material Adverse Effect other than (i) changes relating to
the economy in general or the industries of the Company and its Subsidiaries in
general and not specifically relating to the Company or any of its Subsidiaries
or (ii) changes due to the disruption of the Company's or its Subsidiary's
businesses as a result of any rumors, speculation, or announcement of a
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potential merger involving the Company or the execution of this Agreement or the
Merger or (iii) changes related to the Environmental Contingency.
(d) The Company shall have executed and delivered to Purchaser and
Parent at and as of the Closing a certificate, duly executed by the Company's
President and Chief Financial Officer, in form and substance reasonably
satisfactory to Parent and Parent's counsel, certifying that to such officers'
knowledge, the conditions specified in (a), (b) and (c) have been satisfied.
(e) The aggregate NOLs existing immediately prior to the Effective Time
shall not be less than $7,500,000.
5.3 Conditions to Obligation of the Company. The Company shall be
obligated to perform the acts contemplated for performance by it under Article 1
only if each of the following conditions is satisfied at or prior to the Closing
Date, unless any such condition is waived in writing by the Company:
(a) The representations and warranties of the Parent and Purchaser set
forth in Article 3 shall, individually and in the aggregate, be true and correct
in all material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of the
Closing Date with the same force and effect as though made again at and as of
the Closing Date, except for any representations and warranties that address
matters only as of a particular date (which shall remain true and correct in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable representation or warranty) as of such
date) and except for changes required by this Agreement.
(b) The Parent and Purchaser shall have performed and complied in all
material respects (without giving duplicative effect to any materiality
qualification contained in the applicable obligation) with all covenants and
agreements contained in this Agreement required to be performed or complied with
by them on or before the Closing Date.
(c) The Parent and Purchaser shall have executed and delivered to the
Company at and as of the Closing a certificate, duly executed by the Parent's
and Purchaser's Presidents and Chief Financial Officers, in form and substance
reasonably satisfactory to the Company and the Company's counsel, certifying
that to such officers' knowledge, the conditions specified in (a) and (b) have
been satisfied.
(d) The Parent shall have received the financing referred to in Section
3.4 or other financing sufficient for it to perform its obligations under this
Agreement.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1 Termination. This Agreement may be terminated, at any time prior to
the Effective Time, whether before or after approval by the stockholders of the
Company:
(a) by mutual written agreement of the Boards of Directors of Parent and
the Company; or
(b) by either Parent or Company:
(i) if any court of competent jurisdiction in the United States or
other United States governmental body shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action shall have become
final and nonappealable; or
(ii) if there has been a material breach by the other party of any
representation, warranty, covenant or agreement set forth in this Agreement and
such breach is capable of being cured and is cured prior to the Closing Date,
except with respect to any breach of Section 4.6, which must be cured within
five (5) days after written notice from the Parent specifying such breach;
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(c) by Parent, if the Board of Directors of the Company or any committee
thereof shall have approved or recommended an Acquisition Proposal by a third
party, or withdrawn or modified in a manner adverse to Parent or Purchaser its
approval or recommendation of this Agreement or the transactions contemplated
hereby, or failed to mail the Proxy Statement to its stockholders or failed to
include in such Proxy Statement such recommendation (including the
recommendation that the stockholders of the Company vote in favor of the
Merger); or publicly resolved to do any of the foregoing; or
(d) by the Company, pursuant to Section 4.6, in the event the Company
has complied with all the provisions of Section 4.6 and has determined to accept
a Superior Proposal; provided that (A) at the time of terminating this Agreement
pursuant to this Section 6.1(d), the Company pay the Break-Up Fee referred to in
Section 6.3(b), (B) the Company shall have provided Parent with forty-eight (48)
hours' prior written notice of the Company's decision to so terminate (the
"Company Termination Notice"); and (C) the stockholders of the Company that are
parties to the Stockholder Agreement shall continue to be bound thereby. The
Company Termination Notice shall indicate in reasonable detail the terms and
conditions of such Superior Proposal, including, without limitation, the amount
and form of the proposed consideration and whether such Superior Proposal is
subject to any material conditions.
(e) by either the Company or the Parent in the event the Effective Time
has not occurred by the later to occur of (i) July 31, 1999, and (ii) 60 days
after the later of the clearance by the SEC of the Proxy Statement or the
expiration or termination of the waiting period (including any extensions) under
the HSR Act (with such date referred to as the "Outside Date").
6.2 Procedure and Effect of Termination. In the event of the termination
of this Agreement by the Company or Parent or both of them pursuant to Section
6.1, the terminating party shall provide written notice of such termination to
the other party and this Agreement shall forthwith become void and there shall
be no liability on the part of Parent, Purchaser or the Company, except as set
forth in this Section 6.2 and in Sections 4.3(b) and 6.3 of this Agreement. The
foregoing shall not relieve any party for liability for damages actually
incurred as a result of any breach of this Agreement. The Confidentiality
Agreement and Sections 4.3(b), 6.2, 6.3, 7.2, 7.3 and 7.5 of this Agreement
shall survive the termination of this Agreement.
6.3 Fees and Expenses. (a) Except as otherwise provided in this Agreement
and whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses. Parent and Purchaser understand and agree that the Company will pay at
the Closing its financial advisory, legal and accounting expenses, including
without limitation all amounts owed to the Company's Financial Advisor.
(b) In the event that the Parent terminates this Agreement pursuant to
Section 6.1(c) or the Company terminates this Agreement pursuant to Section
6.1(d), then the Company shall pay to the Parent the amount of $500,000 as
reimbursement of the Parent's expenses and as liquidated damages (the "Break-Up
Fee"). Any such payment shall be made within three (3) business days after a
termination pursuant to Section 6.1(c) or at the time of any termination
pursuant to Section 6.1(d).
6.4 Amendment. This Agreement may be amended by each of the parties by
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that (i) such amendment shall be
in writing signed by all of the parties, and (ii) after adoption of this
Agreement and the Merger by the stockholders of the Company, no amendment may be
made without the further approval of the stockholders of the Company which
reduces the Per Share Merger Consideration or changes the form thereof or
changes any other terms and conditions of this Agreement if the changes, alone
or in the aggregate, would materially adversely affect the stockholders of the
Company.
6.5 Waiver. At any time prior to the Effective Time, whether before or
after the Special Meeting, any party hereto, by action taken by its Board of
Directors, may (i) extend the time for the performance of any of the obligations
or other acts of any other party hereto or (ii) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
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party by a duly authorized officer of such party. Notwithstanding the above, any
waiver given shall not apply to any subsequent failure of compliance with
agreements of the other party or conditions to its own obligations.
ARTICLE VII
MISCELLANEOUS
7.1 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by rule of 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 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.
7.2 Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given, or made
as of the date delivered if sent via telecopier or delivered personally
(including, without limitation, delivery by commercial carrier warranting
next-day delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by similar notice, except that notices
of changes of address shall be effective upon receipt):
(a) If to Company:
UroQuest Medical Corporation
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
With copies to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
(b) If to Parent or Purchaser:
Chemfab Corporation
000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
With copies to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxxxx
Telecopier No.: (000) 000-0000
7.3 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
7.4 Representations and Warranties, etc. The respective representations
and warranties of the Company, Parent and Purchaser contained herein shall
survive until, and shall expire with, and be terminated and extinguished upon
the earlier to occur of (a) the termination of this Agreement pursuant to
Section 6.1 and
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(b) the Closing Date. This Section 7.4 shall have no effect upon any other
obligation of the parties hereto, whether to be performed before or after the
consummation of the Merger.
7.5 Miscellaneous. This Agreement, the documents delivered pursuant hereto
or in connection herewith and the Confidentiality Agreement (i) constitute the
entire agreement and supersede all other prior agreements and undertakings, both
written and oral (including, without limitation, any agreement or proposed
agreement relating to the timing of execution of this Agreement and the payment
of any amount in connection therewith), among the parties, or any of them, with
respect to the subject matter hereof, (ii) are not intended to confer upon any
Person other than the parties hereto any rights or remedies hereunder, (iii) may
not be assigned, except that Purchaser may assign its rights hereunder in whole
or in part to one or more direct or indirect Subsidiaries or affiliates of
Parent which, in written instruments reasonably satisfactory to the Company,
shall agree to make all representations and warranties of Purchaser set forth
herein and shall agree to assume all of such party's obligations hereunder and
be bound by all of the terms and conditions of this Agreement and Purchaser and
Parent may assign this Agreement to their lenders as collateral security;
provided, however, that no such assignment shall relieve the assignor of its
obligations hereunder, and (iv) shall be governed by and construed in accordance
with the laws of the State of Delaware (without reference to choice of law
rules). This Agreement may be executed in one or more counterparts which
together shall constitute a single agreement.
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32
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
CHEMFAB CORPORATION
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxx, President
UROK ACQUISITION CORP.
By: /s/ XXXX X. XXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxx, President
UROQUEST MEDICAL CORPORATION
By: /s/ XXXXX XXXXXXX
------------------------------------
Xxxxx Xxxxxxx, President
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EXHIBIT A
STOCKHOLDER VOTING AGREEMENT
THIS STOCKHOLDER VOTING AGREEMENT (this "Agreement") is made and entered
into as of June 3, 1999, by and among Chemfab Corporation, a Delaware
corporation ("Parent"), UroQuest Medical Corporation, a Delaware corporation
(the "Company"), and the undersigned (the "Stockholders").
WHEREAS, the Stockholders desire that Parent, UROK Acquisition Corp., a
wholly owned subsidiary of Parent ("Sub"), and the Company enter into an
Agreement and Plan of Merger dated the date hereof (as the same may be amended
or supplemented, the "Merger Agreement") with respect to the merger of Sub with
and into the Company (the "Merger"); and
WHEREAS, the Stockholders and the Company are executing this Agreement as
an inducement to Parent to enter into and execute, and to cause Sub to enter
into and execute, the Merger Agreement;
NOW, THEREFORE, in consideration of the execution and delivery by Parent
and Sub of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
1. Representations and Warranties.
(a) Each Stockholder represents and warrants to Parent as follows:
(i) The Stockholder is the record and beneficial owner of the number
of shares (the "Stockholder's Shares") of capital stock, $0.001 par value, of
the Company ("Company Capital Stock") set forth below such Stockholder's name on
the signature page hereof. This Agreement has been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, the Stockholder,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general application respecting creditors' rights and by
general equitable principles.
(ii) Neither the execution and delivery of this Agreement nor the
consummation by the Stockholder of the transactions contemplated hereby will
result in a violation of, or a default under, or conflict with, any contract,
trust, commitment, agreement, understanding, arrangement or restriction of any
kind to which the Stockholder is a party or bound or to which the Stockholder's
Shares are subject. If the Stockholder is married and the Stockholder's Shares
constitute community property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, the
Stockholder's spouse, enforceable against such person in accordance with its
terms. Consummation by the Stockholder of the transactions contemplated hereby
will not violate, or require any consent, approval, or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the Stockholder or the Stockholder's Shares.
(iii) The Stockholder's Shares and the certificates representing the
Stockholder's Shares are now, and at all times during the term hereof will be,
held by the Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, security interests, proxies, voting
trusts or voting agreements or any other encumbrances whatsoever, except for any
such encumbrances or proxies arising hereunder.
(iv) No broker, investment banker, financial adviser or other person
is entitled to any broker's, finder's, financial adviser's or other similar fee
or commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Stockholder.
(v) The Stockholder understands and acknowledges that Parent is
entering into, and causing Sub to enter into, the Merger Agreement in reliance
upon the Stockholder's execution and delivery of this Agreement. The Stockholder
acknowledges that the irrevocable proxy set forth in Section 4 and the option in
Section 5 are granted in consideration for the execution and delivery of the
Merger Agreement by Parent and Sub.
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(b) Parent represents and warrants to each of the Stockholders as follows:
(i) This Agreement has been duly authorized, executed and delivered
by, and constitutes a valid and binding agreement of, Parent, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general application respecting creditors' rights and by general equitable
principles.
(ii) Neither the execution and delivery of this Agreement nor the
consummation by Parent of the transactions contemplated hereby will result in a
violation of, or a default under, or conflict with, the Certificate of
Incorporation or Bylaws of Parent or any contract, trust, commitment, agreement,
understanding, arrangement to which Parent is a party or bound or to which
Parent is subject.
2. Voting Agreements. Each Stockholder agrees with, and covenants to,
Parent as follows:
(a) At any meeting of stockholders of the Company called to vote upon
the Merger and the Merger Agreement or at any adjournment thereof or in any
other circumstances upon which a vote, consent or other approval with respect to
the Merger and the Merger Agreement is sought (the "Stockholders' Meeting"), the
Stockholder shall vote (or cause to be voted) the Stockholder's Shares in favor
of the Merger, the execution and delivery by the Company of the Merger
Agreement, and the approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement.
(b) At any meeting of stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, the Stockholder shall vote (or cause to be voted) the
Stockholder's Shares against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by the Company or (ii) any amendment of the Company's
Certificate of Incorporation or Bylaws or other proposal or transaction
involving the Company or any of its subsidiaries which amendment or other
proposal or transaction would in any manner impede, frustrate, prevent or
nullify the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement (each of the foregoing in clause (i) or
(ii) above, a "Competing Transaction").
3. Covenants. Each Stockholder agrees with, and covenants to, Parent that
such Stockholder shall not (i) transfer (which term shall include, without
limitation, for the purposes of this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of the Stockholder's
Shares or any interest therein, except pursuant to the Merger; (ii) enter into
any contract, option or other agreement or understanding with respect to any
transfer of any or all of the Stockholder's Shares or any interest therein;
(iii) grant any proxy, power of attorney or other authorization in or with
respect to such shares, except for this Agreement; (iv) deposit such shares into
a voting trust or enter into a voting agreement or arrangement with respect to
such shares; (v) initiate, solicit or encourage, or take any action to
facilitate the making of, any offer or proposal which constitutes or is
reasonably likely to lead to an Acquisition Proposal (as defined in the Merger
Agreement); or (vi) in the event of any unsolicited proposed Acquisition
Proposal, engage in negotiations with or discussions with, or provide any
information or data to, any person or entity (other than Parent, any of its
affiliates or representatives) relating to any Acquisition Proposal, except as
expressly permitted by Section 4.6 of the Merger Agreement; provided, that the
Stockholder may transfer (as defined above) any of the Stockholder's Shares to
any other person or entity who is on the date hereof, or to any family member of
a person or to any charitable institution which prior to the Stockholders
Meeting and prior to such transfer becomes, a party to this Agreement bound by
all the obligations of the "Stockholder" hereunder.
4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Parent
and Xxxx X. Xxxxxxxx, Chief Executive Officer of Parent, and Xxxxx X. Xxxxx,
Chief Financial Officer of Parent, in their respective capacities as officers of
Parent, and any individual who shall hereafter succeed to any such office of
Parent, and each of them individually, the Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of the Stockholder, to vote the Stockholder's Shares, or grant a
consent or approval in respect of the Stockholder's Shares (i) in favor of the
Merger, the execution and delivery of the
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35
Merger Agreement and approval of the terms thereof and each of the other
transactions contemplated by the Merger Agreement, and (ii) against any
Competing Transaction.
(b) Each Stockholder represents that any proxies heretofore given in
respect of the Stockholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) Each Stockholder hereby affirms that the irrevocable proxy set forth
in this Section 4 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Stockholder under this Agreement. Each Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Each Stockholder hereby ratifies and confirms
all that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212 of the Delaware General
Corporation Law.
5. Option to Acquire Shares. In the event that the Merger Agreement is
terminated by Parent in accordance with Section 6.1(c) of the Merger Agreement
or by the Company in accordance with Section 6.1(d) of the Merger Agreement, at
the option of Parent, the Stockholders shall sell to Parent or an affiliate of
Parent all of the Shares, as well as any other shares of Company Capital Stock
of which the Stockholder acquires beneficial ownership and sole voting power, at
a purchase price equal to the Per Share Merger Consideration (as defined in the
Merger Agreement). The Company agrees that it will cooperate with the Parent in
order to prepare a calculation of the Per Share Merger Consideration as of the
Notice Date referred to below. In the event that Parent is entitled to and
wishes to purchase all or some of the Shares, Parent shall give the Stockholders
written notice (the date of which being herein referred to as the "Notice Date")
within ten (10) days of the termination of the Merger Agreement specifying (i)
the total number of Shares it will purchase, and (ii) a place and date not
earlier than three (3) business days nor later than sixty (60) business days
from the Notice Date for the closing of such purchase (the "Closing"); provided
that if prior notification to or approval of any regulatory agency is required
in connection with such purchase, Parent and the Stockholders shall promptly
file the required notice or application for approval and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required notification
periods have expired or been terminated or such approvals have been obtained and
any requisite waiting period or periods shall have passed. The term "business
day" for purposes of this Agreement means any day, excluding Saturdays, Sundays
and any other day that is a legal holiday in the State of New Hampshire or the
State of California or a day on which banking institutions in the State of New
Hampshire or the State of California are authorized by law or executive order to
close. At the Closing, Parent shall pay to each Stockholder the aggregate
purchase price for the Shares purchased from such Stockholder pursuant to this
Section 5 in immediately available funds by a wire transfer to a bank account
designated by such Stockholder. At such Closing, simultaneously with the
delivery of immediately available funds as provided in this Section 5, the
Stockholders shall deliver to Parent the certificate or certificates
representing the number of Shares held by the Stockholders and any other
documents reasonably requested by Parent to effect the transfer of the Shares
from the Stockholders to Parent.
6. Certain Events. Each Stockholder agrees that this Agreement and the
obligations hereunder shall attach to the Stockholder's Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of any
or all of the Stockholder's Shares shall pass, whether by operation of law or
otherwise, including without limitation the Stockholder's successors or assigns.
In the event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the Company
affecting the Company Capital Stock, or the acquisition of additional shares of
Company Capital Stock or other voting securities of the Company by any
Stockholder, the number of the Stockholder's Shares subject to the terms of this
Agreement shall be adjusted appropriately and this Agreement and the obligations
hereunder shall attach to any additional shares of Company Capital Stock or
other voting securities of the Company issued to or acquired by the Stockholder.
7. Stop Transfer. The Company agrees with, and covenants to, Parent that
the Company shall not register the transfer of any certificate representing any
of the Stockholder's Shares, unless such transfer is made to Parent or Sub or
otherwise in compliance with this Agreement.
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36
8. Further Assurances. Each Stockholder shall, upon request of Parent,
execute and deliver any additional documents and take such further actions as
may reasonably be deemed by Parent to be necessary or desirable to carry out the
provisions hereof and to vest the power to vote the Stockholder's Shares as
contemplated by Section 4 in Parent and the other irrevocable proxies described
therein at the expense of Parent.
9. Termination. This Agreement, and all rights and obligations of the
parties hereunder; shall terminate, and the proxy granted under paragraph 4
shall expire, upon the later of (i) the termination of the Merger Agreement
pursuant to and in accordance with Section 6.1(a) or Section 6.1(b)(i) thereof
or (ii) the Outside Date (as defined in the Merger Agreement); provided,
however, (A) that if the Company terminates the Merger Agreement pursuant to and
in accordance with Section 6.1(b)(ii) thereof, then this Agreement shall
terminate immediately, and/or (B) that if Parent terminates the Merger Agreement
pursuant to and in accordance with Section 6.1(c) of the Merger Agreement, then
this Agreement shall terminate immediately, and/or (C) no termination of the
Merger Agreement pursuant to Section 6.1(c) or Section 6.1(d) will affect
Parent's rights under Section 5 of this Agreement if it exercises its option
within fifteen (15) days after such termination.
10. Indemnification. In the event that the Merger occurs, then commencing
at the Effective Time (as defined in the Merger Agreement), Parent shall
indemnify and hold harmless the Stockholders and the Stockholders' affiliates,
agents, advisers and representatives (the "Indemnified Parties") against and
from any costs, expenses (including reasonable attorneys' fees), settlement
payments, claims, demands, judgments, fines, penalties, losses, damages and
liabilities incurred in connection with any claim, suit, action or proceeding
(whether asserted, commenced or arising before or after the Effective Time) that
arises directly or indirectly from or relates directly or indirectly to (a)
execution, delivery or performance of this Agreement, or (b) any of the
transactions contemplated by this Agreement; provided, that the Parent shall not
be obligated to indemnify the Indemnified Parties with respect to any claim,
suit, action or proceeding to the extent it arises out of or relates to any
breach or alleged breach of any representation or warranty or covenant in this
Agreement by the Company or any Stockholder or any breach or alleged breach by
the Company of any representation or warranty or covenant in the Merger
Agreement. In the event any such claim, suit, action or proceeding is asserted
or commenced against any Indemnified Party, (i) Parent shall advance and pay the
reasonable fees and expenses of any counsel retained by such Indemnified Party
in connection with such claim, suit, action or proceeding promptly after receipt
of a request therefor from such Indemnified Party, and (ii) Parent shall
cooperate with such Indemnified Party and such Indemnified Party's counsel in
the defense of such claim, suit, action or proceeding.
11. Enforcement Costs. If any party institutes an action for the
enforcement of this Agreement, the prevailing party shall be entitled to
reimbursement on demand of all costs and expenses of such action including
reasonable legal fees.
12. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement
shall have the respective meanings assigned to them in the Merger Agreement.
(b) All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to Parent, to the address provided in
the Merger Agreement; and (ii) if to a Stockholder, to its address shown below
its signature on the last page hereof.
(c) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(d) This Agreement may be executed in two or more counterparts, each of
which shall be considered an original hereof and one and the same agreement.
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37
(e) This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) 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.
(g) 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, except as expressly contemplated by the proviso to
Section 3. Any assignment in violation of the foregoing shall be void.
(h) Each Stockholder agrees that irreparable damage would occur and that
Parent would not have any adequate remedy at law 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 Parent
shall be entitled to an injunction or injunctions to prevent breaches by any
Stockholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court, 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 (i) consents to submit such party to the personal jurisdiction of
any Federal court located in the State of Delaware or any State of Delaware
state court in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court and (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a Federal court sitting in the State of Delaware or a
Delaware state court. The foregoing remedies are in addition to, and not in lieu
of, any payment required to be made by the Company pursuant to the terms of the
Merger Agreement.
(i) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any extent, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(j) No amendment, modification or waiver in respect of this Agreement
shall be effective against any party unless it shall be in writing and signed by
such party.
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IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Agreement as of the day and year first above written.
CHEMFAB CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
UROQUEST MEDICAL CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
STOCKHOLDERS:
By:
--------------------------------------
Name:
------------------------------------
Address:
------------------------------------
------------------------------------
Number of Shares
Beneficially Owned:
--------------------------------------------------------------------------
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EXHIBIT B
CERTIFICATE OF MERGER
OF
UROK ACQUISITION CORP.
AND
UROQUEST MEDICAL CORPORATION
It is hereby certified that:
1. The constituent business corporations participating in the merger herein
certified are:
(i) UROK ACQUISITION CORP., which is incorporated under the laws of
the State of Delaware; and
(ii) UROQUEST MEDICAL CORPORATION, which is incorporated under the
laws of the State of Delaware.
2. A Merger Agreement has been approved, adopted, certified, executed, and
acknowledged by each of the aforesaid constituent corporations in accordance
with the provisions of subsection (c) of Section 251 of the General Corporation
Law of the State of Delaware.
3. The name of the surviving corporation in the merger herein certified is
UROQUEST MEDICAL CORPORATION, which will continue its existence as said
surviving corporation under its present name upon the effective date of said
merger pursuant to the provisions of the General Corporation Law of the State of
Delaware.
4. The Certificate of Incorporation of UROQUEST MEDICAL CORPORATION shall
continue to be the Certificate of Incorporation of said surviving corporation
until further amended and changed in accordance with the provisions of the
General Corporation Law of the State of Delaware.
5. The executed Merger Agreement between the aforesaid constituent
corporations is on file at the principal place of business of the aforesaid
surviving corporation, the address of which is as follows:
UroQuest Medical Corporation
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
6. A copy of the aforesaid Merger Agreement will be furnished by the
aforesaid surviving corporation, on request, and without cost, to any
stockholder of each of the aforesaid constituent corporations.
7. The Merger Agreement between the aforesaid constituent corporations
provides that the merger herein certified shall be effective on ,
1999.
Dated: , 1999
UROK ACQUISITION CORP.
By:
-----------------------------------------
Name:
Title:
UROQUEST MEDICAL CORPORATION
By:
-----------------------------------------
Name:
Title:
