EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT, dated as of November 8, 1998, is by and
among XXXXXXXXXXX DRUG CO., INC., a Pennsylvania corporation having its
principal place of business at 000 Xxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 15235(the "Company"), COUNSEL CORPORATION, an Ontario corporation
having its principal place of business at Exchange Tower, 000 Xxxx Xxxxxx Xxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxx X0X 0X0 (the "Canadian Seller"), STADT HOLDINGS
INC., a Delaware corporation having its principal place of business at 000 Xxxx
Xxxxxx, Xxxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "US Seller"),
and BERGEN XXXXXXXX CORPORATION, a New Jersey corporation having its principal
place of business at 0000 Xxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 ("BBC" or
the "Purchaser").
RECITALS
1. The Canadian Seller is the legal and beneficial owner of fourteen
percent (14%) of the issued and outstanding capital stock of the Company. The US
Seller is the legal and beneficial owner of eighty six percent (86%) of the
issued and outstanding capital stock of the Company. The US Seller is an
indirect wholly-owned subsidiary of the Canadian Seller.
2. The Canadian Seller and the US Seller (collectively, the "Sellers")
desire to sell and transfer to the Purchaser, and the Purchaser desires to
purchase from the Sellers, all of the outstanding shares of capital stock of the
Company, all as more specifically provided herein.
3. The Canadian Seller and its subsidiaries are also the legal and
beneficial owners of 7,819,315 shares of the common stock, par value $.01 per
share, of PharMerica (the "PharMerica Shares").
4. The Purchaser desires to obtain certain rights with respect to the
PharMerica Shares, and the Canadian Seller is willing to confer such rights upon
the Purchaser, all as more specifically provided herein.
5. The Company would benefit substantially from being directly
affiliated with the Purchaser. The Company purchases a substantial amount of its
pharmaceutical supplies from the Purchaser. Furthermore, given the Purchaser's
access to capital and borrowing capacity, direct affiliation with the Purchaser
is expected to improve the Company's access to capital necessary for the
Company's continued growth.
6. The Boards of Directors (or Executive Committees of such Boards of
Directors) of each of the Canadian Seller, the US Seller, the Company and the
Purchaser have determined that it is in the best interests of such entity to
enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
Certain Definitions
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings set forth below.
"Accountants" means Xxxxxx Xxxxxxxx & Co., L.L.P., the Company's
independent accountants.
"Action" means any administrative, judicial or other legal proceeding
before any Governmental Authority.
"Affiliate" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
"Agreement" means this Stock Purchase Agreement.
"Associate" has the meaning ascribed to such term in Rule 405
promulgated by the SEC pursuant to the Act.
"Back-up Option Agreement" means an option agreement relating to
PharMerica, given by the Canadian Seller to the Purchaser, dated the Closing
Date, in the form and substance of the option agreement annexed hereto as
Appendix 1.1.
"BBC Common Stock" means the Class A Common Stock, par value $1.50 per
share, of the Purchaser.
"Business Day" means a day on which national banks are open for
business in New York City.
"Certificate of Net Debt" means a certificate, executed by the chief
financial officer of the Canadian Seller and dated three (3) Business Days prior
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to the Closing Date, setting forth (a) a statement by such officer as to such
officer's good faith estimate of the Net Debt as of the Closing Date and (b)
back-up documentation, in reasonable detail, evidencing such officer's
calculation of such Net Debt. "Certified Net Debt" means the aggregate amount of
Net Debt set forth in the Certificate of Net Debt.
"CEO Contract" means the employment agreement, made effective as of
July 6, 1998, by and between the Company and Xxxxxxx X. Xxxxxx.
"Claims" means any and all claims, demands, actions, causes of action
and legal proceedings.
"Companies" means the Company and each of the Subsidiaries.
"Competitive Business" means (a) a specialty mail order pharmaceutical
care delivery system business comparable to the specialty mail order
pharmaceutical care delivery system business as conducted by the Companies as of
the date hereof that is focused on one or more of the following specific disease
states: HIV/AIDS, organ transplantation, serious mental illnesses, and
infertility and (b) the business of delivering pharmaceutical products to
individuals incarcerated in corrections facilities pursuant to contracts with
commercial corrections management companies and governmental entities. Excluded
from the definition of "Competitive Business" are (w) any de minimis business of
the Companies not included within clauses (a) or (b) above, (x) the development
of pharmaceuticals for use primarily in the treatment of infertility, as
performed by Sage BioPharma, Inc., and the marketing of such pharmaceuticals so
developed, (y) the marketing and distribution of pharmaceuticals, as performed
by FARO Pharmaceuticals, Inc., and (z) all other activities not specifically
listed in clauses (a) or (b) above, including, but not limited to, specialty
mail order pharmaceutical care delivery systems and general mail order pharmacy
services that do not involve specialization in any of the above-mentioned
disease states; institutional pharmacy services; pharmacy management services;
home health care; the development of drug formularies; the development of "below
threshold" drugs; disease state management; treatment of hormone-dependent
ailments; and pharmaceutical sales and marketing.
"Code" means the Internal Revenue Code of 1986, as amended.
"CPA" means Deloitte & Touche LLP.
"Encumbrances" means security interests, liens, encumbrances, claims
and restrictions of any kind.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Final Net Debt" means the Net Debt as of the Closing Date, as set
forth in the Final Accounting Report.
"First Quarterly Period" means the period commencing on the Closing
Date and ending on the ninetieth (90th) calendar day after the Closing Date,
"Second Quarterly Period" means the period commencing on the ninety first (91st)
calendar day after the Closing Date and ending on the one hundred and eightieth
(180th) calendar day after the Closing Date, "Third Quarterly Period" means the
period commencing on the one hundred and eighty first (181st) calendar day after
the Closing Date and ending on the two hundred and seventieth (270th) calendar
day after the Closing Date, "Fourth Quarterly Period" means the period
commencing on the two hundred and seventy first (271st) calendar day after the
Closing Date and ending on the three hundred and sixtieth (360th) calendar day
after the Closing Date, "Fifth Quarterly Period" means the period commencing on
the three hundred and sixty first (361st) calendar day after the Closing Date
and ending on the four hundred and fiftieth (450th) calendar day after the
Closing Date and "Sixth Quarterly Period" means the period commencing on the
four hundred and fifty first (451st) calendar day after the Closing Date and
ending on the five hundred and fortieth (540th) calendar day after the Closing
Date.
"Xxxxxxx Agreement" means the employment agreement, made as of
September 18, 1998, between the Company and Xxxxxxx X. Xxxxxxx.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the date of this Agreement.
"Governmental Authority" means any national, federal, state,
provincial, county, municipal or local government, foreign or domestic, or the
government of any political subdivision of any of the foregoing, or any entity,
authority, agency, ministry or other similar body exercising executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to government, including any authority or other quasi-governmental
entity established to perform any of such functions.
"Xxxx Goods" means materials which have been purchased by the Companies
from a source other than the manufacturer or a distributor licensed to resell
the materials of such manufacturer.
"Limited Audit" means an audit performed in accordance with standard
auditing procedures as recognized by the American Institute of Certified Public
Accountants, subject to such modifications as shall be agreed upon in writing by
the Buyer and the Canadian Seller prior to the Closing.
"Limited Size Acquisition" means an acquisition for cash of a
substantial portion of the assets or the capital stock of a Person valued,
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giving effect to assumed indebtedness, at not more than $1,000,000 per
transaction and not more than $3,000,000 in the aggregate.
"Market Value" means the lesser of (a) $49.625 and (b) the average of
the last sale prices, quoted regular way, of the BBC Common Stock on the New
York Stock Exchange on each of the last ten (10) consecutive trading days ending
on the third trading day prior to the Closing Date (such ten day period, the
"Market Price Period"); provided, however, that both such $49.625 amount and
such average shall be equitably adjusted hereunder as necessary to reflect the
Stock Split if, on the date that any determination of Market Value is made
hereunder, the last sale price, quoted regular way, of the BBC Common Stock
reflects the Stock Split.
"Material Adverse Change" means, with respect to a Person, a material
adverse change in the business, condition (financial or otherwise), properties,
assets, liabilities or results of operations of such Person and its
subsidiaries, taken as a whole. When evaluated in the context of any of the
Companies, the term "Material Adverse Change" shall take into account all of the
Companies taken as a whole. When evaluated in the context of the Purchaser, the
term "Material Adverse Change" shall take into account the Purchaser and all of
its subsidiaries taken as a whole.
"Net Worth" means the consolidated net worth of the Company and its
Subsidiaries, as determined as of a particular date in accordance with GAAP,
consistently applied, subject to Section 2.5.4.
"Net Debt" means, as of a particular date, (x) the aggregate amount of
indebtedness (principal, interest and premium, if any), including amounts
payable on capital leases, owed by the Company and its Subsidiaries (other than
indebtedness of Stadt Solutions LLC as to which none of the Companies, other
than Stadt Solutions LLC, is liable) to banks, other secured lenders, the
Canadian Seller or any Affiliate of the Canadian Seller (other than the Company
and its Subsidiaries) minus (y) the aggregate amount of cash held by the Company
and its Subsidiaries (other than Stadt Solutions LLC) in bank and other similar
accounts on such date.
"Ordinary Course of Business" means actions which are (a) consistent
with the past practices of the designated entity, (b) similar in nature and
style to actions customarily taken by the designated entity and (c) do not
require, and in the past have not received, specific authorization by the board
of directors of the designated entity.
"Outside Date" means March 31, 1999, subject to the operation of
Section 6.22.4,; provided, however, if the Canadian Sellers' Shareholders'
Meeting shall not have been held by March 31, 1999, "Outside Date" means May 31,
1999, subject to the operation of Section 6.22.4.
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"PharMerica" means PharMerica, Inc., a Delaware corporation having its
principal place of business at 0000 Xxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxx 00000.
"PharMerica Business Combination" means (a) any merger, consolidation,
share exchange, business combination or similar transaction involving PharMerica
(other than a transaction in which the shareholders of PharMerica will, after
such transaction, continue to own at least 50.1% of the shares of the successor
corporation and the members of the Board of Directors immediately preceding the
transaction will continue to represent at least a majority of the members of the
Board of Directors of the successor corporation), (b) any sale, lease or
transfer of substantially all of the assets of PharMerica, (c) any tender or
exchange offer made generally to the shareholders of PharMerica and (d) any
other transaction which, if consummated, would be required by the SEC to be
reported in response to Item 1 of the Current Report on Form 8-K.
"PharMerica Shares" has the meaning set forth in the Recitals.
"Person" means an individual, partnership, corporation, limited
liability company, joint stock company, unincorporated organization or
association, trust or joint venture, or a governmental agency or political
subdivision thereof.
"Proprietary Rights" means all of the (i) patents, inventions,
trademarks, service marks, industrial designs, trade names, trade styles, trade
dress, service names, logos, slogans, brand names, brand marks, computer
software, copyrights and the like (whether registered with federal, state or
other governments of any country or unregistered) and applications,
registrations, permits and licenses relating thereto and any reissues,
continuations, continuations-in-part and extensions thereof, (ii) computer
software and licenses related thereto and (iii) processes, methods, information,
data, plans, art works, blueprints, specifications, designs, drawings,
engineering reports, test reports, material standards, processing standards,
performance standards, know-how, formulas, trade secrets, concepts,
applications, procedures, marketing and technical data, customer and vendor
lists and other confidential information used in or otherwise necessary for the
conduct of the Businesses of the Companies.
"Proxy" means a letter agreement and a related irrevocable proxy
relating to PharMerica, given by the Canadian Seller and any subsidiary of the
Canadian Seller that owns PharMerica Shares as of the Closing Date, to the
Purchaser, dated the Closing Date, in the form and substance of the letter
agreement and proxy annexed hereto as Appendix 1.3.
"Qualified Investor" means an investor that is not reasonably regarded
by the Purchaser as a competitor with respect to one or more of the Company's
products or services.
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"Regulated Substances" means pollutants, contaminants, hazardous or
toxic substances, compounds or related materials or chemicals, hazardous
materials, hazardous waste, flammable explosives, radon, radioactive materials,
asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products (including, but not limited to, waste petroleum
and petroleum products) as regulated under any applicable Environmental Law.
"Xxxxxxxxxxx Common Stock" means the Common Stock, no par value, of the
Company.
"Stock Split" means the two-for-one stock split announced by the Board
of Directors of the Purchaser on September 17, 1998 payable on December 1, 1998
to holders of record of BBC Common Stock on November 2, 1998.
"Subsidiaries" means, at any date, any Person (i) the accounts of which
would be consolidated with those of the Company in the Company's consolidated
financial statements if such financial statements were prepared in accordance
with GAAP as of such date, or (ii) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests or more than 50% of the profits or losses of which
are, as of such date, owned, controlled or held by the Company or one or more
subsidiaries of the Company. The term "Subsidiaries" shall include, with respect
to the Company, without limitation, the following entities: Stadtco Holdings,
Inc., Xxxxxxxxxxx Drug Distribution Co., Inc., Xxxxxxxxxxx U.S.A., Inc. and
Stadt Solutions LLC.
"Tax" means any of the following, and "Taxes" means all of the
following, imposed by or payable to any Governmental Authority: any income,
gross receipts, license, payroll, employment, excise, severance, stamp,
business, occupation, premium, windfall profits, environmental (including taxes
under section 59A of the Code), capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, or value added tax, any
alternative or add-on minimum tax, any estimated tax, and any levy, impost,
duty, assessment, withholding or any other governmental charge of any kind
whatsoever, in each case including any interest, penalty, or addition thereto,
whether disputed or not.
"Total Option Appreciation" means the total Aggregate Appreciation on
all Stock Options held by all Optionees immediately prior to the consummation of
the Closing.
"Transaction Agreements" means this Agreement and, in the case of the
Canadian Seller, the term "Transaction Agreements" also means the Voting Trust
Agreement, the Proxy, the Assignment and the Back-Up Option Agreement, in the
case of the US Seller the term "Transaction Agreements" also means the
Assignment and in the case of the Purchaser, the term "Transaction Agreements"
also means the Voting Trust Agreement.
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"Voting Trust Agreement" means a voting trust agreement among the
Purchaser, the Canadian Seller and those subsidiaries of the Canadian Seller
that own PharMerica Shares, dated the Closing Date, in the form and substance of
the voting trust agreement annexed hereto as Appendix 1.4.
Section 1.2 Terms Defined in Other Sections. The following terms are
defined elsewhere in this Agreement in the following Sections:
Acceleration Indebtedness 6.18
Acquisition Agreement 6.8.2
Act 2.3.1
Aggregate Appreciation 6.13.1.6
Allocation Schedule 6.9.1
Antitrust Division 6.10
Assignment 6.21
Audit Firm 6.22.4
Bank Debt 6.18
BBC Delivered Shares 2.4.2
BBC SEC Documents 5.6.1
BBC Shares 2.3.1
Bona Fide Offer 6.15.2
Businesses 3.1
Business Combination 8.8.2
Canadian Seller Debt 6.18
Canadian Seller's Board Recommendation 4.9
Canadian Seller's SEC Documents 4.8
Cash Election Notice 2.2.4.1
Closing 2.7
Closing Date 2.7
Companies' Disclosure Schedule 3.1
Company Permits 3.21.1
Company's Bylaws 3.1
Company's Articles 3.1
Competing Transaction 6.8.1
Confidential Information 6.6
Contract 3.17
Controlled Group Liability 3.16.1
Damages 9.2
Decreased Consideration 2.2.3.2
Designated Optionee 6.13.1.5
Designated Optionee Option Cancellation Agreements 7.2.9
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Disposition Notice 6.15.2
Employee Agreements 3.28
Environmental Laws 3.22
Environmental Permit 3.22
ERISA Affiliate 3.16.1
Estimated Net Purchase Price 2.2.1.1
Fee-Related Bank Debt 6.18
Final Accounting Report 2.5.1.2
Financial Statements 3.15.1
Firm 2.5.1.3
FDA 3.21.2.2
FTC 6.10
Fully Diluted Number 6.13.1.2
Gross-Up Amount 6.9.3
Hazardous Materials 3.22
HSR Act 3.5.4
Increased Consideration 2.2.3.1
Indemnified Party 9.2.3
Indemnifying Party 9.2.3
Information Circular 6.17.2
Initial Accounting Report 2.5.1.1
Interim Audited Balance Sheet 6.22.1
Interim Balance Sheet 3.15.1
Interim Income and Stockholders' Equity Statements 3.15.1
Interim Audited Financial Statements 6.22.1
Last Price 2.2.2.1
Material Contract 3.17
Multiemployer Plan 3.16.6
Multiple Employer Plan 3.16.6
Net Purchase Price 2.2.1.2
Non-Designated Optionee 6.13.1.5
Non-Designated Optionee Option Cancellation Agreements 7.2.9
Offeror 6.15.2
Option Cancellation Agreements 7.2.9
Optionee 6.13.1.5
Outside Date 8.1.3
Plans 3.16.1
Premises 6.16
Programs 3.12.2
Proposed Statement 2.5.1.1
Purchaser's Disclosure Schedule 5.4
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Qualified Plan 3.16.3
Quarterly Period 2.4.2
Registration Statement 2.3.3
Reimbursable Fees 6.18
Report 6.10
Retained Employees 6.14
SEC 2.3.3
September 30 Net Worth 6.22.5
Share Price 6.13.1.3
Xxxxxxxxxxx Shares 2.1
Stock Appreciation Figure 6.13.1.1
Stock Secured Debt 6.18
Stock Option 6.13.1.4
Subject PharMerica Shares 6.15
Support Agreements 3.25
Survival Period 9.1
Tax returns 3.8.4
Third Party Claim 9.3
Total Price 6.13.1.1
Transitional Consulting Agreements 6.14
Withdrawal Liability 3.16.1
Year 2000 Compliant 3.24
338(h)(10) Election 6.9
Section 1.3 Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein," "hereto,"
"hereof" and words of similar import refer to this Agreement as a whole and not
to any particular Section or paragraph hereof; (ii) words importing the
masculine gender shall also include the feminine and neutral genders, and vice
versa; (iii) words importing the singular shall also include the plural, and
vice versa; (iv) all references to "$" or "dollars" shall be references to U.S.
dollars; and (v) the word "including" means "including without limitation".
ARTICLE II
Purchase and Sale of Stock; Grant of the Back-up Option Agreement and
Other Rights; Additional Covenants
Section 2.1 Purchase and Sale of the Xxxxxxxxxxx Common Stock; Grant of
the Back-up Option Agreement and Other Rights. Upon the terms and subject to the
conditions of this Agreement and on the basis of the representations, warranties
and agreements contained herein, at the Closing, (i) the Canadian Seller shall
sell, assign, transfer, convey and deliver to the Purchaser an aggregate of
279,760 shares of Xxxxxxxxxxx Common Stock, constituting approximately 13.96% of
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the issued and outstanding shares of the Company's capital stock, (ii) the US
Seller shall sell, assign, transfer, convey and deliver to the Purchaser an
aggregate of 1,724,248 shares of Xxxxxxxxxxx Common Stock, constituting
approximately 86.04% of the issued and outstanding shares of the Company's
capital stock, (iii) the Canadian Seller shall (and shall cause its subsidiaries
to) grant to the Purchaser the Proxy and the Back-up Option Agreement and the
rights conferred upon the Purchaser pursuant to the Voting Trust Agreement and
(iv) the Purchaser shall pay the Estimated Net Purchase Price to the Sellers in
the manner provided for herein and thereby (a) purchase from the Canadian Seller
and the US Seller the shares of Xxxxxxxxxxx Common Stock referenced in clauses
(i) and (ii) of this Section 2.1 (the "Xxxxxxxxxxx Shares") and (b) receive from
the Canadian Seller and its subsidiaries the Back-up Option Agreement and the
Proxy and the rights conferred upon the Purchaser pursuant to the Voting Trust
Agreement.
Section 2.2 Estimated Net Purchase Price; Adjustments to the Estimated
Purchase Price; Payment of Consideration.
2.2.1 Certain Definitions.
2.2.1.1 The term "Estimated Net Purchase Price" shall
mean (i) Three Hundred Million
Dollars ($300,000,000) plus (ii) the amount, if any, by which the Certified Net
Debt is less than One Hundred Million Dollars ($100,000,000) minus (iii) the
amount, if any, by which the Certified Net Debt is greater than One Hundred
Million Dollars ($100,000,000) and minus (iv) the Total Option Appreciation.
2.2.1.2 The term "Net Purchase Price" shall mean (i)
Three Hundred Million Dollars
($300,000,000) plus (ii) the amount, if any, by which the Net Worth as of the
Closing Date (as reflected in the Final Accounting Report prepared pursuant to
Section 2.5) exceeds the September 30 Net Worth plus (iii) the amount, if any,
by which the Final Net Debt is less than One Hundred Million Dollars
($100,000,000) minus (iv) the amount, if any, by which the September 30 Net
Worth exceeds the Net Worth as of the Closing Date (as reflected in the Final
Accounting Report prepared pursuant to Section 2.5) minus (v) the amount, if
any, by which the Final Net Debt is greater than One Hundred Million Dollars
($100,000,000) and minus (vi) the Total Option Appreciation.
2.2.2 Payment of the Estimated Net Purchase Price. Subject to
Section 2.2.4, upon the terms and subject to the conditions of this Agreement
and on the basis of the representations, warranties and agreements contained
herein, at the Closing, the Purchaser shall pay the Estimated Net Purchase Price
to the Sellers by (i) paying to the Canadian Seller in cash a sum equal to
13.96% of the Estimated Net Purchase Price by wire transfer to an account or
accounts specified in writing by the Canadian Seller, (ii) paying to the US
Seller in cash a sum equal to 36.04% of the Estimated Net Purchase Price by wire
transfer to an account or accounts specified in writing by the US Seller and
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(iii) issuing and delivering to the US Seller a stock certificate, registered in
the US Seller's name, representing a number of shares of BBC Common Stock equal
to (x) 50% of the Estimated Net Purchase Price divided by (y) the Market Value.
In order to assure that the number of shares of BBC Common Stock to be issued
pursuant to this Section 2.2.2 properly gives effect to the Stock Split, the
following provisions shall apply:
2.2.2.1 In the event that the last sale price, regular way, of
the BBC Common Stock on the New York Stock Exchange (the "Last Price") does not
reflect the Stock Split for any trading day during the Market Price Period and
the Closing occurs prior to December 1, 1998, then, on December 1, 1998, the
Purchaser shall treat the shares issued pursuant to Section 2.2.2 as if they had
been issued on the record date for the Stock Split.
2.2.2.2 In the event that the Last Price does not reflect the
Stock Split for any trading day during the Market Price Period and the Closing
occurs on or after December 1, 1998, then the number of shares to be issued
pursuant to Section 2.2.2 at the Closing shall be equitably adjusted to give
effect to the Stock Split.
2.2.2.3 In the event that the Last Price reflects the Stock
Split for one or more trading days during the ten trading days utilized to
determine the Market Value, then the Closing shall not be held prior to December
1, 1998, notwithstanding any provision herein to the contrary.
2.2.3 Adjustments to the Estimated Net Purchase Price.
2.2.3.1 Increased Consideration. Subject to Section
2.2.4, if the Net Purchase Price is greater than the Estimated Net Purchase
Price, then, upon final determination of the Net Worth as of the Closing Date
and the Net Debt as of the Closing Date pursuant to Section 2.5 and calculation
of the amount by which the Net Purchase Price exceeds the Estimated Net Purchase
Price (such excess amount, the "Increased Consideration"), the Purchaser shall
pay the Increased Consideration to the Sellers by (i) paying to the Canadian
Seller in cash a sum equal to 13.96% of the Increased Consideration by wire
transfer to an account or accounts specified in writing by the Canadian Seller,
(ii) paying to the US Seller in cash a sum equal to 36.04% of the Increased
Consideration by wire transfer to an account or accounts specified in writing by
the US Seller and (iii) issuing and delivering to the US Seller a stock
certificate, registered in the US Seller's name, representing a number of shares
of BBC Common Stock equal to (x) 50% of the Increased Consideration divided by
(y) the Market Value.
2.2.3.2 Decreased Consideration. Subject to Section
2.2.4, if the Net Purchase Price is less than the Estimated Net Purchase Price,
then, upon final determination of the Net Worth as of the Closing Date and the
Net Debt as of the Closing Date pursuant to Section 2.5 and calculation of the
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amount by which the Estimated Net Purchase Price exceeds the Net Purchase Price
(such excess amount, the "Decreased Consideration"), the Sellers shall refund
the Decreased Consideration to the Purchaser as follows: (i) the Canadian Seller
shall pay to the Purchaser in cash a sum equal to 13.96% of the Decreased
Consideration by wire transfer to an account or accounts specified in writing by
the Purchaser, (ii) the US Seller shall pay to the Purchaser in cash a sum equal
to 36.04% of the Decreased Consideration by wire transfer to an account or
accounts specified in writing by the Purchaser and (iii) the US Seller shall
transfer to the Purchaser a stock certificate, registered in the US Seller's
name and duly endorsed for transfer, representing a number of shares of BBC
Common Stock equal to (x) 50% of the Decreased Consideration divided by (y) the
Market Value.
2.2.4 Notwithstanding any provision herein to the contrary, if
the Market Value is less than $49.625 (subject to the proviso in the definition
of the term "Market Value" regarding the Stock Split), the Purchaser shall have
the right to change the nature of the consideration to be paid to the Sellers in
accordance with the following provisions:
2.2.4.1 At any time prior to the consummation of the
Closing, the Purchaser shall have the right to deliver to the Sellers a notice
(the "Cash Election Notice") advising the Sellers that the Purchaser desires to
pay the entire Net Purchase Price in cash rather than pay the Net Purchase Price
partly in cash and partly in shares of BBC Common Stock. In the event that the
Purchaser delivers a Cash Election Notice to the Sellers prior to the
consummation of the Closing, then, notwithstanding any provision herein to the
contrary, the following provisions shall apply:
2.2.4.1.1 The Purchaser shall not have any
obligation to issue or deliver any shares of BBC Common Stock pursuant to
Section 2.2.2 and Sections 2.2.2.1, 2.2.2.2 and 2.2.2.3 shall cease to apply.
2.2.4.1.2 In addition to the cash payments
contemplated by clauses (i) and (ii) of Section 2.2.2 and in lieu of the
issuance of shares of BBC Common Stock pursuant to clause (iii) of Section
2.2.2, the Purchaser shall pay to the US Seller in cash a sum equal to 50% of
the Estimated Net Purchase Price by wire transfer to an account or accounts
specified in writing by the US Seller.
2.2.4.1.3 If the Net Purchase Price is
greater than the Estimated Net Purchase Price, the Purchaser shall not have any
obligation to issue or deliver any shares of BBC Common Stock pursuant to
Section 2.2.3.1.
2.2.4.1.4 If the Net Purchase Price is
greater than the Estimated Net Purchase Price, then, in addition to the cash
payments contemplated by clauses (i) and (ii) of Section 2.2.3.1 and in lieu of
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the issuance of shares of BBC Common Stock pursuant to clause (iii) of Section
2.2.3.1, the Purchaser shall pay to the US Seller in cash a sum equal to 50% of
the Increased Consideration by wire transfer to an account or accounts specified
in writing by the US Seller.
2.2.4.1.5 If the Net Purchase Price is less
than the Estimated Net Purchase Price, the Sellers shall not have any obligation
to refund any shares of BBC Common Stock pursuant to Section 2.2.3.2.
2.2.4.1.6 If the Net Purchase Price is less
than the Estimated Net Purchase Price, then, in addition to the cash refunds
contemplated by clauses (i) and (ii) of Section 2.2.3.2 and in lieu of the
refund of shares of BBC Common Stock pursuant to clause (iii) of Section
2.2.3.2, the US Seller shall refund to the Purchaser in cash a sum equal to 50%
of the Decreased Consideration by wire transfer to an account or accounts
specified in writing by the US Seller.
2.2.4.2 In the event that the Purchaser delivers
a Cash Election Notice to the Sellers prior to the consummation of the Closing,
Sections 2.3 and 2.4 of this Agreement shall cease to apply.
2.2.4.3 In the event that (i) the Purchaser delivers
a Cash Election Notice to the Sellers prior to the consummation of the Closing
and (ii) there is an inconsistency between this Section 2.2.4 and any other
provision of this Agreement, the provisions of this Section 2.2.4 shall govern.
2.2.5 Notwithstanding any provision herein to the contrary,
the Purchaser shall not issue fractional shares of BBC Common Stock hereunder.
In lieu of issuing a fractional share, the Purchaser shall pay a cash amount
equal to the applicable fraction multiplied by the Market Value, as equitably
adjusted to reflect the Stock Split.
Section 2.3 Securities Law Matters.
2.3.1 Private Offering. The Sellers acknowledge that the
shares of BBC Common Stock to be issued and delivered to the Sellers hereunder
(the "BBC Shares") will not be registered under the Securities Act of 1933, as
amended (the "Act"), but will be issued in reliance upon the exemption afforded
by Section 4(2) of the Act, and that the Purchaser is relying upon the truth and
accuracy of the representations set forth in Section 4.7. Each certificate
representing BBC Shares issued pursuant to this Agreement shall bear the
following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
WITHOUT REGISTRATION PURSUANT TO THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND
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MAY NOT BE TRANSFERRED UNLESS THEY ARE SO REGISTERED OR, IN THE OPINION
OF COUNSEL REASONABLY ACCEPTABLE TO THIS CORPORATION, SUCH TRANSFER IS
EXEMPT FROM REGISTRATION."
"IN THE EVENT THAT THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE REGISTERED FOR RESALE PURSUANT TO THE ABOVE-MENTIONED LAWS, SUCH
SHARES MAY ONLY BE TRANSFERRED BY SALE ON THE NEW YORK STOCK EXCHANGE
PURSUANT TO SEC RULE 153 WHILE SUCH REGISTRATION IS EFFECTIVE, UNLESS,
IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THIS CORPORATION,
SUCH TRANSFER IS EXEMPT FROM REGISTRATION."
The Purchaser shall give instructions to its transfer agent consistent with the
foregoing legends.
2.3.2 No Transfer. The Sellers will not sell, pledge or
otherwise transfer the BBC Shares unless the BBC Shares are registered under the
Act and under all applicable securities laws of other jurisdictions or are
exempt therefrom in the opinion of counsel reasonably satisfactory to the
Purchaser, it being agreed that Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C. is
acceptable to the Purchaser.
2.3.3 Agreement to Register. Prior to the Closing, the
Purchaser shall prepare a registration statement on Form S-3 (the "Registration
Statement") pursuant to the Act covering the resale of BBC Shares to be issued
pursuant to this Agreement and shall file such Registration Statement with the
SEC on or before the first Business Day following the Closing, provided that the
Purchaser has available to it, in form satisfactory for filing, any consolidated
financial information and pro forma financial information regarding the Company
necessary or appropriate for filing with the SEC. The Purchaser and the Sellers
shall both use their best efforts to expedite the preparation of such
information to the maximum extent practicable. Subsequent to the initial filing
of the Registration Statement, the Purchaser shall thereafter use its best
efforts to have such Registration Statement (covering the resale of all of the
BBC Shares to be issued pursuant to this Agreement) declared effective by the
Securities and Exchange Commission ("SEC") promptly after the Closing Date, and
to keep that Registration Statement current, subject to the provisions set forth
in Appendix 2.3.7 annexed hereto regarding the temporary suspension of use of
the Registration Statement, until the two year anniversary of the Closing Date.
The Purchaser reserves the right to include other shares of BBC Common Stock in
the Registration Statement, provided that such inclusion does not adversely
affect the Sellers in any substantive respect. The Purchaser agrees to use its
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best efforts to cover in the Registration Statement, either initially or by
amendment when applicable, any of the BBC Shares which are pledged by one or
more of the Sellers to a lender and subsequently resold by such lender upon a
default by the applicable borrower and any other BBC Shares which are held by a
Person to whom registration rights are transferred in accordance with Section
2.3.6.
2.3.4 Costs. The Purchaser shall bear all costs incurred in
preparing and filing the Registration Statement, including, without limitation,
all applicable legal fees (excluding the fees of counsel to the Sellers),
accounting fees, printing fees, and SEC filing fees; provided, however, that the
Purchaser shall not be responsible for any underwriting commissions or
discounts, brokerage fees or legal fees or disbursements incurred by any person
or entity (other than the Purchaser) that sells any shares of BBC Common Stock
pursuant to the Registration Statement. Subject to the qualifications in the
immediately preceding sentence, the Purchaser shall also bear all costs of
keeping the Registration Statement current during the applicable period
described in Section 2.3.3.
2.3.5 Information. The Sellers will furnish the Purchaser with
all information concerning the Sellers reasonably required for inclusion in the
Registration Statement. The Sellers and the Purchaser represent and warrant that
no information to be furnished for the Registration Statement will contain any
statement which, at the time and in the light of the circumstances under which
it is made, is false or misleading with respect to any material fact, or which
omits to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier information furnished hereunder which has become false or misleading.
2.3.6 Personal Rights. The registration rights set forth in
this Section 2.3 are personal to the Sellers and may not be transferred or
assigned by the Sellers to any other person or entity other than (a) an
Affiliate of the Canadian Seller or the US Seller, (b) a lender who receives
such shares in accordance with Section 2.4 and pursuant to a bona pledge by the
Canadian Seller or the US Seller or (c) a Qualified Investor, provided, however,
that such rights shall not be assigned to a Qualified Investor unless the
Purchaser was offered the opportunity, in writing , to purchase the BBC Shares
offered to the Qualified Investor on terms no less favorable to the Purchaser
than the terms offered to the Qualified Investor, the Purchaser did not accept
such offer within ten Business Days of the date that the offer is delivered to
the Purchaser and the Qualified Investor completes such purchase within 120 days
of the date that such offer was made to the Purchaser.
2.3.7 Registration Rights. The Purchaser and the Sellers shall
abide by the registration rights provisions set forth in Appendix 2.3.7 annexed
hereto.
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Section 2.4 Restrictions on Sales and Other Transfers.
2.4.1 General Restrictions. Except as otherwise provided in
Section 2.4.2, during the first 540 calendar days after the Closing Date, the
Sellers shall not (x) effect an offer, pledge (other than a pledge which, by its
terms, subjects the pledgee to the same restrictions to which the Sellers are
subject under this Section 2.4 pursuant to an agreement acceptable to the
Purchaser, such acceptance not to be unreasonably withheld), sale, contract of
sale, sale of any option or contract to purchase, purchase of any option or
contract to sell, grant of any option, right or warrant to purchase, or other
transfer or disposition of , directly or indirectly, any of the BBC Shares or
any securities convertible into or exercisable or exchangeable for the BBC
Shares (including, without limitation, BBC Shares or securities convertible into
or exercisable or exchangeable for BBC Shares which may be deemed to be
beneficially owned by the Sellers in accordance with the rules and regulations
of the SEC) or (y) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
BBC Shares (regardless of whether any of the transactions described in clause
(x) or (y) (each, a "Disposition") are to be settled by the delivery of BBC
Shares, or such other securities, in cash or otherwise). The Sellers authorize
the Purchaser to cause the Purchaser's transfer agent to decline to transfer
and/or to note stop transfer restrictions on the transfer books and records of
the Purchaser with respect to any of the BBC Shares and any securities
convertible into or exercisable or exchangeable for the BBC Shares for which the
Sellers are the beneficial or record holder and agree to cause the record holder
to cause the transfer agent to decline to transfer and/or to note stop transfer
restrictions on such books and records with respect to such shares or securities
except to the extent that such transfers are permitted pursuant to this
Agreement.
2.4.2 Sequential Lapse of Restrictions. During the First
Quarterly Period, the Sellers have the right to make a Disposition of up to
thirty percent (30%) of the BBC Shares issued to the Sellers at the Closing or
subsequent to the Closing pursuant to the terms hereof (the "BBC Delivered
Shares"), less any such BBC Delivered Shares which are subject to a Disposition
by or on behalf of any lender during the First Quarterly Period upon default of
any loan made to either of the Sellers. During each of the Second Quarterly
Period, Third Quarterly Period, Fourth Quarterly Period and Fifth Quarterly
Period (each, a "Quarterly Period"), the Sellers shall have the right to effect
a Disposition of up to (x) ten percent (10%) of the BBC Delivered Shares, less
any BBC Delivered Shares which are subject to a Disposition by or on behalf of
any lender during such current Quarterly Period upon default of any loan made to
either of the Sellers, plus any BBC Delivered Shares which the Sellers had the
right to subject to a Disposition, but did not subject to a Disposition, during
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any prior Quarterly Period; provided, however, that the Sellers shall not
subject to a Disposition more than thirty percent (30%) of the BBC Delivered
Shares in any one Quarterly Period, less any BBC Delivered Shares which are
subject to a Disposition by or on behalf of any lender during such Quarterly
Period upon default of any loan made to either of the Sellers. During the Sixth
Quarterly Period, the Sellers shall have the right to subject to a Disposition
up to thirty percent (30%) of the BBC Delivered Shares, less any BBC Delivered
Shares which are subject to a Disposition by or on behalf of any lender during
the Sixth Quarterly Period upon default of any loan made to either of the
Sellers. The restrictions set forth in Section 2.4.1 shall cease to apply after
the last day of the Sixth Quarterly Period. In the event that either of the
Sellers utilize any of the BBC Delivered Shares as collateral on a loan on or
before the last day of the Sixth Quarterly Period, the Sellers shall require
that the lender execute an agreement, a copy of which shall be delivered to the
Purchaser and shall be acceptable to the Purchaser, such acceptance not to be
unreasonably withheld, that (a) expressly states that the lender will not effect
a Disposition of a greater number of BBC Delivered Shares in any of the
above-mentioned periods than the Sellers are entitled to subject to a
Disposition in such periods and (b) acknowledges that the Purchaser is entitled
to rely upon such agreement.
2.4.3 The Sellers agree that the certificates representing the
BBC Shares shall also bear a legend referring to the restrictions set forth in
this Section 2.4.
Section 2.5 Determination of the Net Worth as of the Closing Date.
2.5.1 Accountants' Reports.
2.5.1.1 Proposed Statement and Initial Accounting
Report. The Sellers shall prepare at their expense, and furnish to the Purchaser
and CPA, a proposed consolidated balance sheet of the Company as of the Closing
Date prepared in accordance with GAAP, consistently applied (the "Proposed
Statement"). Such Proposed Statement shall provide sufficient detail to
establish, among other things, the Net Debt as of the Closing Date and the Net
Worth as of the Closing Date . The CPA shall submit the Proposed Statement to a
Limited Audit and, based upon the results of that Limited Audit, the Purchaser
shall render a draft report (the "Initial Accounting Report") to the Sellers and
the Purchaser with respect to the Net Worth as of the Closing Date and the Net
Debt as of the Closing Date. As soon as practicable, but, in any event, not more
than ninety (90) calendar days after the Purchaser receives the Proposed
Statement and any information that the Purchaser or the CPA reasonably and
promptly requests from the Sellers and/or the Accountants to complete the
Initial Accounting Report, the Purchaser shall furnish the Initial Accounting
Report to the Sellers, along with a schedule of the adjustments made to the
Proposed Statement.
2.5.1.2 Time for Objections. After the Purchaser
shall have furnished the Initial Accounting Report to the Sellers, if the
Sellers should object to that report on the grounds that it is not consistent
with GAAP, consistently applied, the Sellers may give written notice of their
objection to the Purchaser within twenty (20) calendar days after the Sellers'
receipt of that report. If requested by the Sellers at the time of delivery of
such notice, the Purchaser shall cause the CPA promptly to make available to the
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Sellers and the Accountants any report prepared by the CPA with respect to the
matters in dispute in connection with the Initial Accounting Report. If no such
objection is made within such twenty (20) day period, or if the Purchaser and
the Sellers agree upon all matters in dispute, that Initial Accounting Report,
as adjusted to reflect any such agreements, shall be final and binding on all
parties hereto for the purpose of determining the Net Worth as of the Closing
Date and the Net Debt as of the Closing Date and shall be referred to as the
"Final Accounting Report".
2.5.1.3 Dispute Resolution. If the Purchaser and
the Sellers are unable to resolve all items in dispute (with respect to the
calculation of the Net Worth as of the Closing Date and the Net Debt as of the
Closing Date) within fifteen (15) calendar days after the Purchaser's receipt of
the Sellers' written objections to the Initial Accounting Report, then those
items in dispute shall be submitted for resolution to a firm of independent
certified public accountants acceptable to the Sellers and the Purchaser (the
"Firm"). The Firm shall resolve such disputes by application of GAAP,
consistently applied, and such procedures as the Firm, in its discretion,
determines to be appropriate. The determination of the Firm with respect to
those items in dispute, together with the determinations of the Purchaser and
the Sellers with respect to those items not in dispute, shall become the "Final
Accounting Report" and shall be final and binding upon all parties hereto for
purposes of determining the Net Worth as of the Closing Date and the Net Debt as
of the Closing Date. The Purchaser and the Sellers will use reasonable efforts
to resolve these matters as rapidly as possible.
2.5.1.4. Payment of Fees. The Sellers shall pay
the fees of its accountants, including without limitation the Accountants to the
extent that the Accountants are involved, in connection with the preparation
and/or review of the Proposed Statement, the Initial Accounting Report and/or
the Final Accounting Report and the Purchaser shall pay the fees of the CPA,
including fees in connection with the preparation and/or review of the Initial
Accounting Report and the Final Accounting Report. The fees and disbursements of
any Firm employed pursuant to the provisions of Section 2.5.1.3 shall be borne
one-half by the Purchaser and one-half by the Sellers.
2.5.2 Asset Value. In determining the Net Worth as of the
Closing Date, the consolidated assets of the Company and its Subsidiaries shall
be valued as of the Closing Date in accordance with GAAP, consistently applied.
2.5.3 Liability Value. In determining the Net Worth as of the
Closing Date, the consolidated liabilities of the Company and its Subsidiaries
shall be valued as of the Closing Date in accordance with GAAP, consistently
applied, provided that notwithstanding any provision herein to the contrary and
regardless of the application of GAAP, any prepayment fees, breakage fees or
similar fees paid by any of the Companies or the Purchaser at or after the
Closing with respect to any indebtedness of any of the Companies as of the
Closing Date shall be treated as a liability of the Companies as of the Closing
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Date for purposes of determining the Net Worth as of the Closing Date.
Section 2.6 Determination of September 30 Net Worth. The September 30
Net Worth shall be determined in accordance with Section 6.22.
Section 2.7 Closing. Subject to the rights of the parties to terminate
this Agreement in accordance with Article VIII and subject to Sections 2.2.2.3
and 6.22.4, the closing of the transactions contemplated hereby (the "Closing")
shall take place at the offices of Xxxxxxxxxx Xxxxxxx PC, 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx, at 10:00 A.M. on the fifth Business Day after the
satisfaction or waiver of the conditions set forth in Article VII (but in no
event prior to the twenty-first calendar day after the Purchaser receives the
Interim Audited Financial Statements pursuant to Section 6.22), or at such other
time and place as is mutually agreed by the Purchaser and the Seller. The time
and date of the Closing is herein called the "Closing Date".
ARTICLE III
Representations and Warranties Regarding the Companies
The Company, the Canadian Seller and the US Seller jointly and
severally represent and warrant to the Purchaser as follows:
Section 3.1. Organization and Standing; Business. Each of the Companies
is a corporation or limited liability company duly organized, validly existing
and in good standing under the laws of the state of its organization with full
corporate power and authority to own, lease, use and operate its properties and
to conduct its business as and where now owned, leased, used, operated and
conducted. Each of the Companies is duly qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the property it owns, leases or operates requires it to so qualify, except
where the failure to be so qualified or in good standing in such jurisdiction
would not reasonably be expected to result in a Material Adverse Change with
respect to the Companies taken as a whole. None of the Companies is in default
in the performance, observance or fulfillment of any provision of its
certificate of incorporation, as amended and restated, or its Bylaws, as in
effect on the date hereof. The Company has heretofore furnished to the Purchaser
a complete and correct copy of the Company's Articles of Incorporation, as
amended and restated (the "Company's Articles"), and the Company's Bylaws, as in
effect on the date hereof (the "Company's By-Laws"). Listed in Section 3.1 to
the disclosure schedule delivered by the Sellers to the Purchaser and dated the
date hereof (the "Companies' Disclosure Schedule") is each jurisdiction in which
any of the Companies is qualified to do business and in good standing as of the
date of this Agreement. Section 3.1 of the Companies' Disclosure Schedule also
sets forth a brief description of each of the businesses in which the Companies
are engaged (the "Businesses").
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Section 3.2. Subsidiaries. The Company does not own, directly or
indirectly, any equity or other ownership interest in any corporation,
partnership, joint venture, limited liability company or other entity or
enterprise, except for the subsidiaries and other entities set forth in Section
3.2 to the Companies' Disclosure Schedule. Except as set forth in Section 3.2 to
the Companies' Disclosure Schedule, none of the Companies is subject to any
obligation or requirement to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any of the Companies that
is not wholly owned by one or more of the Companies. Except as set forth in
Section 3.2 to the Companies' Disclosure Schedule, the Company owns directly or
indirectly each of the outstanding shares of capital stock (or other ownership
interests having by their terms ordinary voting power to elect a majority of
directors or others performing similar functions with respect to such
subsidiary) of each of the subsidiaries and other entities identified in Section
3.2 of the Companies' Disclosure Schedule. Each of the outstanding shares of
capital stock or other ownership interests of each of such subsidiaries and
other entities is duly authorized, validly issued, fully paid and nonassessable,
and at Closing will be owned, directly or indirectly, by the Company free and
clear of all liens, pledges, security interests, claims or other encumbrances.
The following information for each subsidiary of the Company is set forth in
Section 3.2 to the Companies' Disclosure Schedule, as applicable: (i) its name
and jurisdiction of incorporation or organization; (ii) for a subsidiary which
is not wholly owned, directly or indirectly, by the Company, its authorized
capital stock or share capital or other authorized equity; and (iii) for a
subsidiary which is not wholly owned, directly or indirectly, by the Company,
the number of issued and outstanding shares of capital stock or share capital or
other equity interests, the record owner(s) thereof to the extent known to the
Sellers or the Company and the number of issued and outstanding shares of
capital stock or share capital or other equity interests beneficially owned,
directly or indirectly, by the Company. Other than as set forth in Section 3.2
to the Companies' Disclosure Schedule, there are no outstanding subscriptions,
options, warrants, puts, calls, agreements, understandings, claims or other
commitments or rights of any type relating to the issuance, sale or transfer of
any securities or other equity interests of any subsidiary or other entity
listed in Section 3.2 to the Companies' Disclosure Schedule, nor are there
outstanding any securities or other equity interests which are convertible into
or exchangeable for any shares of capital stock or other equity interests of any
such subsidiary or other entity, and none of the Companies has any obligation of
any kind to issue any additional securities or grant any additional equity
interests of any subsidiary or other entity listed in Section 3.2 of the
Companies' Disclosure Schedule or to pay for or repurchase any securities or
other equity interests of any such subsidiary or other entity or any predecessor
thereof.
Section 3.3. Corporate Power and Authority. The Company has all
requisite corporate power and authority to enter into and deliver the
Transaction Agreements, to perform its obligations hereunder and thereunder and
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to consummate the transactions contemplated hereby and thereby. The execution
and delivery of the Transaction Agreements by the Company have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company enforceable against it in
accordance with its terms, except insofar as its enforcement may be limited by
(a) bankruptcy, insolvency, moratorium or similar laws affecting the enforcement
of creditors' rights generally and (b) equitable principles limiting the
availability of equitable remedies. All persons who executed this Agreement on
behalf of the Company have been duly authorized to do so.
Section 3.4. Capitalization of the Company. As of the date hereof, the
Company's authorized capital stock consisted solely of 10,000,000 shares of
Xxxxxxxxxxx Common Stock, of which (i) 2,004,008 shares are issued and
outstanding, (ii) no shares are issued and held in treasury and no shares are
held by subsidiaries of the Company and (iii) 237,773 shares are reserved for
issuance upon the exercise of outstanding options, 162,227 shares are reserved
for issuance upon the exercise of options which have not been granted and no
shares are reserved for issuance for any other reason. Each outstanding share of
the Company's capital stock is duly authorized and validly issued, fully paid
and nonassessable, and has not been issued in violation of any preemptive or
similar rights. Other than as set forth in the first sentence hereof or in
Section 3.4 to the Companies Disclosure Schedule, there are no outstanding
subscriptions, options, warrants, puts, calls, agreements, understandings,
claims or other commitments or rights of any type relating to the issuance,
sale, repurchase or transfer by the Company of any securities of the Company,
nor are there outstanding any securities which are convertible into or
exchangeable for any shares of capital stock of the Company, and neither the
Company nor any subsidiary of the Company has any obligation of any kind to
issue any additional securities or to pay for or repurchase any securities of
the Company or any predecessor. Section 3.4 of the Companies' Disclosure
Schedule accurately sets forth as of the date hereof the names of, and the
number of shares of each class (including the number of shares issuable upon
exercise of stock options and the exercise price and vesting schedule with
respect thereto) and the number of options held by, all holders of options to
purchase the Company's capital stock. The Company has no agreement, arrangement
or understandings to register any securities of the Company or any of its
subsidiaries under the Securities Act of 1933, as amended, or under any state
securities law and has not granted registration rights to any person or entity
(other than agreements, arrangements or understandings with respect to
registration rights that are no longer in effect as of the date of this
Agreement). Unless any Stock Options are canceled, expire or are otherwise
terminated prior to the Closing, the Fully Diluted Number shall be 2,337,282
plus the number of shares subject to the options described in Section IV,C. of
the Xxxxxxx Agreement if any such options are granted.
Section 3.5. Conflicts; Consents and Approvals. Except as set forth in
Section 3.5 of the Companies' Disclosure Schedule, neither the execution and
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delivery of this Agreement or any of the other Transaction Agreements, nor the
consummation of the transactions contemplated hereby or thereby, will:
3.5.1 conflict with, or result in a breach of any provision
of, the Company's Articles, the Company's Bylaws or the certificate of
incorporation, bylaws or other organizational document of any subsidiary of the
Company that is not, directly or indirectly, wholly owned by the Company;
3.5.2 violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, modify or call a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of any of the Companies under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, deed of trust, license,
contract, undertaking, agreement, lease or other instrument or obligation to
which any of the Companies is a party;
3.5.3 violate any order, writ, injunction, decree, statute,
rule or regulation applicable to any of the Companies or any of their respective
properties or assets; or
3.5.4 require any action or consent or approval of, or review
by, or registration or filing by the Company or any of its affiliates with, any
third party or any Governmental Authority, other than (i) approval of the sale
of the Xxxxxxxxxxx Shares contemplated hereby by the shareholders of the
Canadian Seller, (ii) actions required by the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and (iii) registrations or
other actions required under Canadian, federal and state securities laws as are
contemplated by this Agreement.
except in the case of Sections 3.5.2, 3.5.3 and 3.5.4 for any of the foregoing
that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change with respect to the Companies taken as a
whole or a material adverse effect on the ability of the parties hereto to
consummate the transactions contemplated hereby.
Section 3.6. No Material Adverse Change; Other Changes. Except as
disclosed in any report filed by the Canadian Seller with the SEC prior to the
date of this Agreement, in the Financial Statements or in any other statement
made in the Companies' Disclosure Schedule, since December 31, 1997, there has
been no change in the assets, liabilities, results of operations or financial
condition of the Companies which would constitute a Material Adverse Change with
respect to the Companies taken as a whole or any event, occurrence or
development which would have a material adverse effect on the ability of the
Company or the Sellers to consummate the transactions contemplated hereby.
Except as disclosed in any report filed by the Canadian Seller with the SEC
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prior to the date of this Agreement, in the Financial Statements or in any other
statement made in the Companies' Disclosure Schedule, no event has occurred
since December 31, 1997 which, if such event had occurred subsequent to the date
hereof, would constitute a breach of Section 6.3.
Section 3.7 Intentionally omitted.
Section 3.8. Taxes. Except as set forth in Section 3.8 to the
Companies' Disclosure Schedule and except for such matters that would not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change with respect to the Companies taken as a whole:
3.8.1 The Companies (i) have duly filed, or have received
valid extensions for the filing of, all federal, state, local and foreign
income, franchise, excise, real and personal property and other Tax returns and
reports (including, but not limited to, those filed on a consolidated, combined
or unitary basis) required to have been filed by the Companies prior to the date
hereof, all of which foregoing Tax returns and reports are true and correct;
(ii) have within the time and manner prescribed by applicable law paid or, prior
to the Closing Date, will pay all Taxes, interest and penalties required to be
paid in respect of the periods covered by such returns or reports or otherwise
due to any federal, state, foreign, local or other taxing authority; (iii) have
adequate reserves on their financial statements for any Taxes in excess of the
amounts so paid; (iv) are not delinquent in the payment of any Tax and have not
requested or filed any document having the effect of causing any extension of
time within which to file any returns in respect of any fiscal year which have
not since been filed; and (v) have not received written notice of any
deficiencies for any Tax from any taxing authority, against any of the Companies
for which there are not adequate reserves. None of the Companies is the subject
of any currently ongoing Tax audit. As of the date of this Agreement, there are
no pending requests for waivers of the time to assess any Tax, other than those
made in the Ordinary Course of Business and for which payment has been made or
there are adequate reserves. With respect to any taxable period ended prior to
December 31, 1993, all federal income tax returns including any of the Companies
have been audited by the Internal Revenue Service or are closed by the
applicable statute of limitations. None of the Companies has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. There are no liens with respect to
Taxes upon any of the properties or assets, real or personal, tangible or
intangible, of any of the Companies (other than liens for Taxes not yet due).
Since January 1, 1996, no claim has been made in writing by an authority in a
jurisdiction where none of Companies and its subsidiaries files Tax returns that
any of the Companies is or may be subject to taxation by that jurisdiction. None
of the Companies has filed an election under Section 341(f) of the Code to be
treated as a consenting corporation.
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3.8.2 None of the Companies is obligated by any contract,
agreement or other arrangement to indemnify any other Person with respect to
Taxes. None of the Companies is now or has ever been a party to or bound by any
agreement or arrangement (whether or not written and including, without
limitation, any arrangement required or permitted by law) binding any of the
Companies which (i) requires any of the Companies to make any Tax payment to
(other than payments made prior to September 30, 1998 or payments which are
adequately reserved on the Company's consolidated balance sheet as of September
30, 1998 delivered to the Purchaser prior to the date hereof) or for the account
of any other Person, (ii) affords any other Person the benefit of any net
operating loss, net capital loss, investment Tax credit, foreign Tax credit,
charitable deduction or any other credit or Tax attribute which could reduce
Taxes (including, without limitation, deductions and credits related to
alternative minimum Taxes) of any of the Companies, or (iii) requires or permits
the transfer or assignment of income, revenues, receipts or gains to any of the
Companies, from any other Person.
3.8.3 The Companies have withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder or other third party,
other than Taxes the payment of which would not result in a Material Adverse
Change with respect to the Companies taken as a whole.
3.8.4 "Tax returns" means returns, reports and other forms to
be filed (whether on a mandatory or elective basis) with any Governmental
Authority of the United States or any other jurisdiction responsible for the
imposition or collection of Taxes.
Section 3.9. Compliance with Law. Except as set forth in Section 3.9 to
the Companies' Disclosure Schedule, each of the Companies is in compliance, and
at all times since June 30, 1996 has been in compliance, with all applicable
laws relating to the Companies or the Businesses or the Companies' properties,
except where the failure to be in compliance with such laws (individually or in
the aggregate) would not reasonably be expected to result in a Material Adverse
Change with respect to the Companies taken as a whole or where such
non-compliance has been cured prior to the date hereof. Except as disclosed in
Section 3.9 to the Companies' Disclosure Schedule, no investigation or review by
any Governmental Authority with respect to any of the Companies is pending, or,
to the knowledge of the Company or the Sellers, threatened, nor, to the
knowledge of the Company and the Sellers, has any Governmental Authority
indicated in writing an intention to conduct the same, other than those the
outcome of which would not reasonably be expected to result in a Material
Adverse Change with respect to the Companies taken as a whole.
Section 3.10. Intellectual Property. Except as would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
- 25 -
Change with respect to the Companies taken as a whole, the Companies own or
possess adequate licenses or other valid rights to use all of their Proprietary
Rights, and there has not been any written or, to the knowledge of the Company
and the Sellers, oral assertion or claim against any of the Companies
challenging the validity or the use by any of the Companies of any of the
foregoing. Other than licenses generally available to the public at reasonable
cost and material licenses or rights to use set forth in Section 3.10 to the
Companies' Disclosure Schedule, the Companies own all of the Proprietary Rights
and no material licenses or other grant of valid rights from any third party to
use any of the Companies' Proprietary Rights is necessary for the use of these
Proprietary Rights in substantially the same manner as they are presently used
by the Companies in the conduct of the Businesses. Except as set forth in
Section 3.10 of the Companies' Disclosure Schedule or with respect to
commercially and readily available third party software, the Companies have the
right and license to use, copy, modify, create derivative work from and
distribute all software programs and technical documentation therefor that is
included in the Proprietary Rights. The conduct of the Businesses as currently
conducted by the Companies does not conflict with or infringe upon any patent,
patent right, license, trademark, trademark right, trade dress, trade name,
trade name right, service xxxx, copyright or other intellectual property right
of any third party except for any conflict or infringement that, individually or
in the aggregate, would not reasonably be expected to result in a Material
Adverse Change with respect to the Companies taken as a whole. Except as would
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change with respect to the Companies taken as a whole, there
are no infringements by any third party of any of the Proprietary Rights owned
by or licensed by or to any of the Companies and no Proprietary Rights of any of
the Companies is the subject of any pending administrative, judicial or other
legal proceeding.
Section 3.11. Title to and Condition of Properties. The Companies own
or lease all real property, plants, machinery and equipment necessary for the
conduct of the Businesses of the Companies as presently conducted, except where
the failure to own or so hold such property, plants, machinery and equipment
would not reasonably be expected to result in a Material Adverse Change with
respect to the Companies taken as a whole.
Section 3.12. Medicare and Medicaid; Reimbursement by Payors; Related
Legislation and Regulations.
3.12.1 For each of the Companies, Section 3.12 of the
Companies' Disclosure Schedule contains a list of those jurisdictions in which
it is licensed under Medicare or Medicaid. The Companies have not received any
notice of investigation, evaluation or suspension of any such licenses, permits,
orders, approvals or authorizations. To the knowledge of the Company and the
Sellers, no suspension or cancellation of any such licenses, permits, orders,
approvals and authorizations has been threatened or is contemplated.
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3.12.2 One or more of the Companies participate in the
Medicare and Medicaid Programs (the "Programs"). Section 3.12 of the Companies'
Disclosure Schedule contains a list of all Medicare and Medicaid provider
numbers assigned to the Companies and other documents evidencing such
participation.
3.12.3 Except as set forth in Section 3.12 of the Companies'
Disclosure Schedule, the Companies have not received notice of any offsets
against future reimbursements under or pursuant to the Programs. To the
knowledge of the Company and the Sellers, no factual basis for any such offsets
exists. Except as set forth in Section 3.12 of the Companies' Disclosure
Schedule, there are no pending appeals, adjustments, challenges, audits,
litigation and notices of intent to recoup past or present reimbursements with
respect to the Programs. Except as set forth in Section 3.12 of the Companies'
Disclosure Schedule , the Companies have not been subject to, or threatened
with, loss or waiver of liability for utilization review denials with respect to
the Programs during the past 12 months, nor have the Companies received notice
of any pending, threatened or possible decertification, or audit, offset, other
action or other loss of participation in any of the Programs. Except as set
forth in Section 3.12 of the Companies' Disclosure Schedule, to the knowledge of
the Company and the Sellers, no validity review or program integrity review
related to any of the Companies has been conducted by any Governmental Authority
in connection with any of the Programs and no such review, audit or audit
assessment is scheduled, pending or threatened against any of the Companies,
their businesses or their assets.
3.12.4 Except as set forth in Section 3.12 of the Companies'
Disclosure Schedule , (i) the Companies have not failed to file cost reports or
other documentation or reports, if any, required to be filed by any commercial
third-party payors or Governmental Authorities in connection with applicable
contractual provisions and/or laws, regulations and rules, and (ii) there are no
Claims (including notices of any offsets against future reimbursements) pending
or, to the knowledge of the Company and the Seller, threatened or scheduled
before any Person, including without limitation any intermediary, carrier, the
Health Care Financing Administration, or any other state or federal agency with
respect to Medicare or Medicaid Claims filed by the Companies, or program
compliance matters, in either case (i.e., clause (i) or clause (ii)) which would
result in a Material Adverse Change with respect to the Companies taken as a
whole. The Companies have delivered to the Purchaser accurate and complete
copies of any Claims, actions, inquiries or other correspondence or appeals
listed in Section 3.12 of the Companies' Disclosure Schedule.
3.12.5 To the knowledge of the Company and the Sellers, (i)
the Companies deliver goods and services, charge rates and xxxx for services
which are in all material respects legal and proper, (ii) the Companies in all
material respects properly pay any appropriate refunds, xxxx and use all
reasonable efforts to collect deductibles and co-payment amounts and apply all
payments received, (iii) the Companies have not engaged in any activities in
- 27 -
connection with the Businesses which are prohibited under, and have complied in
all material respects with, the Controlled Substances Act, 21 U.S. C. Section
801 et seq., all legislation relating to the Programs and the regulations
promulgated pursuant to such statutes and any related state or local statutes or
regulations concerning the dispensing and sale of controlled substances and the
provision of healthcare products and service to the general public and (iv) the
Companies have complied in all material respects with all laws and regulations
pertaining to the return of pharmaceutical products.
Section 3.13. Litigation. Except as set forth in Section 3.13 to the
Companies' Disclosure Schedule, there is no Action pending or, to the knowledge
of the Company or the Sellers, threatened against any of the Companies or any
executive officer or director of the Companies which, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse Change
with respect to the Companies taken as a whole or a material adverse effect on
the ability of the Company and the Sellers to consummate the transactions
contemplated hereby. None of the Companies is subject to any outstanding order,
writ, injunction or decree which, individually or in the aggregate, insofar as
can be reasonably foreseen, would reasonably be expected to result in a Material
Adverse Change with respect to the Companies taken as a whole or a material
adverse effect on the ability of the Company or the Sellers to consummate the
transactions contemplated hereby. Except as set forth in Section 3.13 to the
Companies' Disclosure Schedule, since December 31, 1994, none of the Companies
has been subject to any outstanding order, writ, injunction or decree relating
to the Companies' methods of doing business or the Companies' relationships with
past, existing or future users or purchasers of any goods or services of any of
the Companies. To the knowledge of the Sellers and the Company, Section 3.13 of
the Companies' Disclosure Schedule sets forth an accurate description of any
pending or threatened investigations regarding the Companies, other than those
which, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Change with respect to the Companies taken as a
whole or a material adverse effect on the ability of the Company and the Sellers
to consummate the transactions contemplated hereby.
Section 3.14. Brokerage and Finder's Fees; Expenses. Neither any of the
Companies nor any stockholder, director, officer or employee thereof, has
incurred or will incur on behalf of any of the Companies, any brokerage,
finder's, legal, accounting or similar fee in connection with the transactions
contemplated by this Agreement.
Section 3.15. Financial Statements.
3.15.1 Section 3.15 of the Companies' Disclosure Schedule
contains the following annual and interim consolidated financial statements of
the Companies: the audited consolidated balance sheets of the Companies as of
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December 31, 1996 and 1997 and the related audited consolidated statements of
income, changes in stockholders' equity and cash flows of the Companies for the
period from June 23, 1997 through December 31, 1997, the period from January 1,
1997 through June 22, 1997, and the years ended December 31, 1996 and 1995 and
the unaudited consolidated balance sheet of the Companies as of September 30,
1998 (the "Interim Balance Sheet") and the related unaudited consolidated
statements of income and changes in stockholders' equity of the Companies for
the nine month periods ended September 30, 1997 and 1998 (the "Interim Income
and Stockholders' Equity Statements"). The audited and unaudited financial
statements delivered pursuant to this Section 3.15.1 are hereinafter referred to
as the "Financial Statements". The Financial Statements fairly present the
consolidated financial condition of the Companies and the consolidated results
of the Companies' operations and cash flows as at the dates and for the periods
to which they apply, as the case may be, and such statements have been prepared
in conformity with GAAP (except as may otherwise be indicated in the notes
thereto and except that certain footnotes required by GAAP and normal year-end
adjustments with respect to interim periods have been omitted). The Financial
Statements for all interim periods include all adjustments (subject only to
normal year-end adjustments) necessary for a fair presentation of the Companies'
consolidated financial position, results of operations and cash flows.
3.15.2 Section 3.15 of the Companies' Disclosure Schedule sets
forth the Companies' policy with respect to the capitalization and expensing of
software, which policy has been adhered to in all material respects by the
Companies for the periods covered by the Financial Statements.
3.15.3 Intentionally omitted.
3.15.4 Intentionally omitted.
3.15.5 No unrecorded funds or assets of the Companies have
been established for any purpose; no accumulation or use of the funds of the
Companies has been made without being properly accounted for in the respective
books and records of the Companies; all payments by or on behalf of the
Companies have been duly and properly recorded and accounted for in the
Companies' books and records; no false or artificial entry has been made in the
books and records of the Companies for any reason; no payment has been made by
or on behalf of the Companies with the understanding that any part of such
payment is to be used for any purpose other than that described in the documents
supporting such payment; and the Companies have not made, directly or
indirectly, any illegal contributions to any political party or candidate,
either domestic or foreign, or any contribution, gift, bribe, rebate, payoff,
influence payment or kickback, whether in cash, property or services, to any
individual, corporation, partnership or other entity, to secure business or to
pay for business secured.
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3.15.6 No operations have been discontinued by the Companies
within the last five years other than in the Ordinary Course of Business.
3.15.7 Intentionally omitted.
3.15.8 The Companies do not have any outstanding binding
commitments with respect to capital expenditures other than the commitments
described in Section 3.15 of the Companies' Disclosure Schedule.
Section 3.16. Employee Benefit Plans.
3.16.1 For purposes of this Section 3.16, the following terms
have the definitions given below:
"Controlled Group Liability" means any and all
liabilities under (i) Title IV of ERISA, (ii) section 302 of ERISA, (iii)
sections 412 and 4971 of the Code, (iv) the continuation coverage requirements
of section 601 et seq. of ERISA and section 4980B of the Code, and (v)
corresponding or similar provisions of foreign laws or regulations, in each case
other than pursuant to the Plans.
"ERISA Affiliate" means, with respect to any
entity, trade or business, any other entity, trade or business that is a member
of a group described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes the first entity, trade or business, or that
is a member of the same "controlled group" as the first entity, trade or
business pursuant to Section 4001(a)(13) of ERISA.
"Plans" means all "employee welfare benefit plans"
within the meaning of Section 3(1) of ERISA and all "employee pension benefit
plans" within the meaning of Section 3(2) of ERISA sponsored or maintained by
any of the Companies at any time since September 30, 1998 or to which any of the
Companies has contributed or has been obligated to contribute at any time since
September 30, 1998.
"Withdrawal Liability" means liability to a
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan, as those terms are defined in Part I of Subtitle E of Title
IV of ERISA.
3.16.2 With respect to each Plan in effect on the date hereof,
the Company has provided to the Purchaser a true, correct and complete copy of
the following (where applicable): (i) each writing constituting a part of such
Plan, including without limitation all plan documents, trust agreements, and
insurance contracts and other funding vehicles; (ii) the three most recent
Annual Reports (Forms 5500 Series) and accompanying schedules, if any; (iii) the
current summary plan description, if any; (iv) the most recent annual financial
report, if any; and (v) the most recent determination letter from the Internal
Revenue Service, if any.
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3.16.3 Except as set forth in Section 3.16(c) to the
Companies' Disclosure Schedule, the Internal Revenue Service has issued a
favorable determination letter with respect to each Plan that is intended to be
a "qualified plan" within the meaning of Section 401(a) of the Code (a
"Qualified Plan") and no circumstance exists nor has any event occurred that
could adversely affect the qualified status of any Qualified Plan or the related
trust in a manner that would result in a Material Adverse Change with respect to
the Companies taken as a whole.
3.16.4 All contributions required to be made to any Plan by
any applicable laws or by any plan document or other contractual undertaking,
and all premiums due or payable with respect to insurance policies funding any
Plan, before the date hereof have been made or paid in full on or before the
final due date thereof (or, if not made or paid in full, would not result in a
Material Adverse Change with respect to the Companies) and through the Closing
Date will be made or paid in full on or before the final due date thereof.
3.16.5 Each of the Companies has complied, and is now in
compliance, in all material respects, with all provisions of ERISA, the Code and
all laws and regulations applicable to the Plans. Each Plan has been operated in
material compliance with its terms. There is not now, and there are no existing
circumstances that would give rise to, any requirement for the posting of
security with respect to a Plan or the imposition of any lien on the assets of
any of the Companies under ERISA or the Code. No circumstance exists, and no
event has occurred, which could cause the Companies to incur liability, whether
directly or indirectly, through indemnification or otherwise, for any tax or
penalty imposed pursuant to Section 4971, 4972, 4975, 4976, 4977, 4978, 4978B,
4979, 4980 or 4980B of the Code or arising under Sections 502(i) or 502(l) of
ERISA.
3.16.6 Except as set forth in Section 3.16(f) to the
Companies' Disclosure Schedule, no Plan is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that
has two or more contributing sponsors at least two of whom are not under common
control, within the meaning of Section 4063 of ERISA (a "Multiple Employer
Plan"), nor have any of the Companies or any of their respective ERISA
Affiliates, at any time within six years before the date hereof, contributed to
or been obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan. With respect to each Multiemployer Plan described in Section 3.16(f) to
the Companies' Disclosure Schedule: (i) neither any of the Companies nor any of
their ERISA Affiliates has incurred any Withdrawal Liability that has not been
satisfied in full; and (ii) neither any of the Companies nor any of their ERISA
Affiliates has received any notification, nor has any reason to believe, that
any such plan is in reorganization, is insolvent, has been terminated, or would
be in reorganization, be insolvent, or be terminated. Except for Multiemployer
Plans described in Section 3.16(f) to the Companies' Disclosure Schedule, no
Plan is subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of
the Code.
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3.16.7 No circumstance exists, and no event has occurred, that
would result in, any material Controlled Group Liability that would be a
liability of any of the Companies following the Closing. Without limiting the
generality of the foregoing, neither any of the Companies nor any of their
respective ERISA Affiliates has engaged in any transaction described in Section
4069 or Section 4203 of ERISA.
3.16.8 Except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA and except as set forth
in Section 3.16(h) to the Companies Disclosure Schedule, none of the Companies
has any material liability for life, health, medical or other welfare benefits
to former employees or beneficiaries or dependents thereof.
3.16.9 Except as disclosed in Section 3.16(i) to the
Companies' Disclosure Schedule, neither the execution and delivery of any of the
Transaction Agreements nor the consummation of the transactions contemplated
hereby or thereby will result in, cause the accelerated vesting or delivery of,
or increase the amount or value of, any payment or benefit to any employee,
officer, director or consultant of any of the Companies. Without limiting the
generality of the foregoing, except as set forth in Section 3.16(i) to the
Companies' Disclosure Schedule, no amount paid or payable by any of the
Companies in connection with the transactions contemplated by the Transaction
Agreements either solely as a result thereof or as a result of such transactions
in conjunction with any other events will be an "excess parachute payment"
within the meaning of Section 280G of the Code.
3.16.10 Except as disclosed in Section 3.16(j) to the
Companies' Disclosure Schedule, there are no pending or, to the knowledge of the
Company or the Sellers, threatened claims (other than claims for benefits in the
Ordinary Course of Business), lawsuits or arbitrations which have been asserted
or instituted against the Plans, any fiduciaries thereof with respect to their
duties to the Plans or the assets of any of the trusts under any of the Plans.
3.16.11 Section 3.16(k) to the Companies' Disclosure Schedule
sets forth a list of each employment, severance or similar agreement under which
any of the Companies is or could become obligated to provide compensation or
benefits in excess of $200,000 in any one calendar year, and the Company has
provided to the Purchaser a copy of each such agreement.
3.17. Contracts. Section 3.17 to the Companies' Disclosure Schedule
lists all contracts, agreements, guarantees, leases and executory commitments
that exist as of the date hereof other than Plans (each a "Contract") to which
any of the Companies is a party and which fall within any of the following
categories: (a) Contracts not entered into in the Ordinary Course of Business
- 32 -
other than those that are not material to the Businesses, (b) joint venture and
partnership agreements, (c) Contracts containing covenants purporting to limit
the freedom of any of the Companies to compete in any line of business in any
geographic area or to hire any individual or group of individuals, (d) Contracts
which after the Closing Date would have the effect of limiting the freedom of
the Purchaser or its subsidiaries to compete in any line of business in any
geographic area or to hire any individual or group of individuals, (e) Contracts
which contain minimum purchase conditions in excess of $1,000,000 with respect
to inventory purchases for resale, and $500,000 in the case of everything else,
or requirements or other terms that restrict or limit the purchasing
relationships of any of the Companies, or any customer, licensee or lessee
thereof, (f) Contracts relating to any outstanding commitment for capital
expenditures in excess of $250,000, (g) indentures, mortgages, promissory notes,
loan agreements or guarantees of borrowed money in excess of $1,000,000, letters
of credit or other agreements or instruments of any of the Companies or
commitments for the borrowing or the lending of amounts in excess of $1,000,000
by any of the Companies or providing for the creation of any charge, security
interest, encumbrance or lien upon any of the assets of any of the Companies
with an aggregate value in excess of $100,000, (h) Contracts providing for
"earn-outs" or other contingent payments by any of the Companies involving more
than $100,000 over the term of the Contract, and (i) Contracts with or for the
benefit of any Affiliate of any of the Companies or immediate family member
thereof (other than subsidiaries of the Company) involving more than $60,000 in
the aggregate per Affiliate. All such Contracts and all contracts to which
Companies is a party and which involve annual revenues to the Businesses of the
Companies in excess of 2.5% of the Companies' consolidated annual revenues
(each, a "Material Contract") are valid and binding obligations of one or more
of the Companies and, to the knowledge of the Company and the Sellers, the valid
and binding obligation of each other party thereto except such Contracts or
Material Contracts which if not so valid and binding would not, individually or
in the aggregate, reasonably be expected to result in a Material Adverse Change
with respect to the Companies taken as a whole. Neither any of the Companies
nor, to the knowledge of the Company or the Sellers, any other party thereto is
in violation of or in default in respect of, nor has there occurred an event or
condition which with the passage of time or giving of notice (or both) would
constitute a default under or permit the termination of, any such Contract or
Material Contract except such violations or defaults under or terminations
which, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Change with respect to the Companies taken as a
whole. Set forth in Section 3.17(j) to the Companies' Disclosure Schedule is a
description of any material changes to the amount and terms of the indentures of
any of the Companies from the descriptions thereof in the notes to the financial
statements previously delivered to the Purchaser.
3.18. Labor Matters. Except as set forth in Section 3.18 to the
Companies' Disclosure Schedule, none of the Companies has any consulting
agreements providing for compensation of any individual in excess of $150,000
- 33 -
annually, or any labor contracts or collective bargaining agreements with any
persons employed by any of the Companies or any persons otherwise performing
services primarily for any of the Companies. There is no labor strike, dispute
or stoppage pending or, to the knowledge of the Company and the Sellers,
threatened against any of the Companies, and none of the Companies has
experienced any labor strike, dispute or stoppage since December 31, 1996.
3.19. Undisclosed Liabilities. Except (i) as and to the extent
disclosed or reserved against on the Company's consolidated balance sheet as of
September 30, 1998 previously furnished to the Purchaser, (ii) as incurred after
the date thereof in the Ordinary Course of Business consistent with prior
practice and not prohibited by this Agreement or (iii) as set forth in Section
3.19 to the Companies' Disclosure Schedule, the Companies do not have any
liabilities or obligations of any nature, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, that,
individually or in the aggregate, result or would result in a Material Adverse
Change with respect to the Companies taken as a whole.
3.20. Operation of the Businesses; Relationships.
3.20.1 Since September 30, 1998 through the date of this
Agreement, none of the Companies has engaged in any transaction which, if done
after execution of this Agreement, would violate in any material respect
Sections 6.2 or 6.3 except as set forth in Section 3.20.1 to the Companies'
Disclosure Schedule.
3.20.2 Except as set forth in Section 3.20.2 to the Companies'
Disclosure Schedule, since January 1, 1998 no material customer of any of the
Companies has indicated that it will stop or materially decrease purchasing
materials, products or services from any of the Companies and no material
supplier of any of the Companies has indicated that it will stop or materially
decrease the supply of materials, products or services to any of the Companies,
in each case, the effect of which would result in a Material Adverse Change with
respect to the Companies taken as a whole.
3.21. Permits; Compliance.
3.21.1 Each of the Companies is in possession of all material
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits"), except where the failure to be
in possession of such Companies Permits would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Change with
respect to the Companies taken as a whole or a material adverse effect on the
ability of the parties to consummate the transactions contemplated hereby, and
there is no Action pending or, to the knowledge of the Company and the Sellers,
threatened regarding any of the Company Permits which, if successful, would
- 34 -
result in a Material Adverse Change with respect to the Companies taken as a
whole or a material adverse effect on the ability of the parties to consummate
the transactions contemplated hereby. None of the Companies is in conflict with,
or in default (or would be in default with the giving of notice, the passage of
time, or both) or violation of, any of the Company Permits, except for any such
conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to result in a Material Adverse Change with respect
to the Companies taken as a whole.
3.21.2 Except as set forth in Section 3.21.2 of the Companies'
Disclosure Schedule or as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change with respect to
the Companies taken as a whole, none of the Companies or any of their officers
(during the term of such person's employment by any of the Companies) has made
any untrue statement of a material fact or fraudulent statement to any
Governmental Authority or failed to disclose a material fact required to be
disclosed to any Governmental Authority
Section 3.22. Environmental Matters. Except for matters disclosed in
Schedule 3.22 of the Companies' Disclosure Schedule and except for matters that
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Change with respect to the Companies taken as a whole, (a)
the properties, operations and activities of the Companies are in compliance
with all applicable Environmental Laws and all past noncompliance of any of the
Companies with any Environmental Laws or Environmental Permits that has been
resolved with any Governmental Authority has been resolved without any pending,
ongoing or future obligation, cost or liability; (b) the Companies and the
properties and operations of the Companies are not subject to any existing,
pending or, to the knowledge of the Company and the Sellers, threatened action,
suit, investigation, inquiry or proceeding by or before any court or
governmental authority under any Environmental Law; (c) there has been no
release of any hazardous substance, pollutant or contaminant into the
environment by any of the Companies or in connection with their properties or
operations; (d) to the best of the knowledge of the Company and the Sellers,
there has been no exposure of any person or property to any hazardous substance,
pollutant or contaminant in connection with the properties, operations and
activities of the Companies; and (e) the Companies have made available to the
Purchaser all internal and external environmental audits and reports (in each
case relevant to the Companies) prepared since January 1, 1994 and in the
possession of any of the Companies. The term "Environmental Laws" means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or industrial, toxic
or hazardous substances or wastes (collectively, "Hazardous Materials") into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
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as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder, as in
effect on the date hereof. "Environmental Permit" means any permit, approval,
identification number, license or other authorization required under or issued
pursuant to any applicable Environmental Law.
Sections 3.23. Intentionally omitted.
Section 3.24 Year 2000. The Companies have taken the steps described in
Section 3.24 with respect to the Companies' computer systems and software
relating to the specification of dates in, into and between the 20th and 21st
centuries.
3.25. Anti-takeover Laws; Support Agreements. Prior to the date hereof,
the Boards of Directors of the Company and the Sellers have taken all action
necessary to exempt under or make not subject to any takeover or other law that
purports to limit or restrict business combinations: (i) the execution of this
Agreement and the support agreements dated as of the date hereof between the
Purchaser and the Persons identified in Section 3.25 of the Companies'
Disclosure Schedule (the "Support Agreements")and (ii) the transactions
contemplated hereby and by the other Transaction Agreements. Copies of the
Support Agreements executed by the Persons identified in Section 3.25 of the
Companies' Disclosure Schedule have been delivered to the Purchaser. Section
3.25 of the Companies' Disclosure Schedule sets forth the number of shares of
the Canadian Seller's capital stock beneficially owned by each Person named
therein.
Section 3.26. Accounts Receivable and Inventories.
3.26.1 All accounts and notes receivable of the Companies have
arisen in the Ordinary Course of Business and the accounts receivable reserve
reflected in the Company's consolidated balance sheet as of September 30, 1998
previously furnished to the Purchaser was established in accordance with GAAP.
3.26.2 The Companies' assets which are inventories have a net
realizable value on September 30, 1998 at least equal to the FIFO value at which
such inventories are carried on the Company's consolidated balance sheet as of
September 30, 1998 previously furnished to the Purchaser; and have been
purchased by the Companies directly from the manufacturer thereof or from an
authorized distributor of such products in accordance with the Federal
Prescription Drug Marketing Act, if applicable.
Section 3.27. Insurance. Section 3.27 to the Companies' Disclosure
Schedule sets forth a list of the policies of fire, theft, liability and other
insurance maintained with respect to the assets or businesses of the Companies
(copies of all of which policies have been previously provided to the
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Purchaser), which policies have terms expiring as set forth in Section 3.27 to
the Companies' Disclosure Schedule.
Section 3.28. Employee Agreements; Option Cancellation Agreements. Each
of the employees of the Companies specified in Section 3.28 to the Companies'
Disclosure Schedule has duly executed and delivered an employment agreement or
an amendment to an existing employment agreement with the Company (the "Employee
Agreements"), and such Employee Agreements have not been amended or terminated.
The Designated Optionees other than Xxxxxx Xxxxxxx have executed Designated
Optionee Option Cancellation Agreements and such Option Cancellation Agreements
have not been amended or terminated. The Company has previously provided to the
Purchaser copies of all such Employee Agreements and Designated Optionee Option
Cancellation Agreements.
Section 3.29. Director Compensation. Section 3.29 to the Companies'
Disclosure Schedule sets forth a list and a brief summary of the material terms
of all plans, programs, agreements, arrangements or understandings of the
Companies under which any director of any of the Companies may be entitled to
payment or compensation from any of the Companies (i) in connection with or as a
result of any of the transactions contemplated by this Agreement or (ii) after
the Closing Date.
ARTICLE IV
Representations and Warranties Regarding the Sellers
The Sellers jointly and severally represent and warrant to the
Purchaser as follows:
Section 4.1 Organization and Qualification of the Sellers. The Canadian
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the Province of Ontario, with full power and authority,
corporate and other, to own or lease its property and assets and to carry on its
business as presently conducted. The US Seller is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware,
with full power and authority, corporate and other, to own or lease its property
and assets and to carry on its business as presently conducted.
Section 4.2 Corporate Power and Authority. Each of the Sellers has all
requisite corporate power and authority to enter into and deliver the
Transaction Agreements, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby, subject to
approval of the sale of the Xxxxxxxxxxx Shares contemplated hereby by the
shareholders of the Canadian Seller. The execution and delivery of the
Transaction Agreements by each of the Sellers have been duly authorized by all
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necessary corporate action on the part of each of the Sellers, subject to
approval of the sale of the Xxxxxxxxxxx Shares contemplated hereby by the
shareholders of the Canadian Seller. This Agreement has been duly executed and
delivered by the Sellers and constitutes the legal, valid and binding obligation
of the Sellers enforceable against the Sellers in accordance with its terms,
except insofar as its enforcement may be limited by (a) bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and (b) equitable principles limiting the availability of equitable
remedies. All persons who executed this Agreement on behalf of the Sellers have
been duly authorized to do so. Prior to the date hereof, the Sellers have taken
all actions, if any, necessary to exempt under or make not subject to any
takeover or other law that purports to limit or restrict business combinations:
(i) the execution of this Agreement and the Support Agreements and (ii) the
consummation of the transactions contemplated hereby and by the Support
Agreements.
Section 4.3 Conflicts; Consents and Approvals. Neither the execution
and delivery of this Agreement or any of the other Transaction Agreements, nor
the consummation of the transactions contemplated hereby or thereby, will:
4.3.1 conflict with, or result in a breach of any provision
of, the certificate of incorporation, bylaws or other organizational document of
the Sellers;
4.3.2 violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or otherwise)
to terminate, accelerate, modify or call a default under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of either of the Sellers under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, contract, undertaking, agreement, lease or other instrument or
obligation to which either of the Sellers is a party except to the extent waived
in writing by the other party thereto;
4.3.3 violate any order, writ, injunction, decree, statute,
rule or regulation applicable to either of the Sellers or any of their
respective properties or assets; or
4.3.4 require any action or consent or approval of, or review
by, or registration or filing by the Sellers or any of their affiliates with,
any third party or any Governmental Authority, other than (i) approval of the
sale of the Xxxxxxxxxxx Shares contemplated hereby by the shareholders of the
Canadian Seller, (ii) actions required by the HSR Act, (iii) registrations or
other actions required under Canadian, federal and state securities laws as are
contemplated by this Agreement and (iv) consents or approvals of any
Governmental Authority set forth in Section 4.3 to the Companies' Disclosure
Schedule;
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except in the case of Sections 4.3.2, 4.3.3 and 4.3.4 for any of the foregoing
that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Change with respect to the Sellers taken as a whole
or a material adverse effect on the ability of the parties hereto to consummate
the transactions contemplated hereby.
Section 4.4 Indemnification. Section 4.4 of the Companies' Disclosure
Schedule describes (a) all indemnification agreements or arrangements extended
to either of the Sellers with respect to any aspect of the Businesses or the
Companies and (b) all agreements, arrangements, documents and instruments that
expand, reduce, terminate or otherwise modify any such indemnification
agreements or arrangements.
Section 4.5 Ownership of Shares.
4.5.1 The Sellers own all of the outstanding shares of
Xxxxxxxxxxx Common Stock beneficially and of record. At the Closing, the Sellers
will own all of the outstanding shares of Xxxxxxxxxxx Common Stock free and
clear of any security interests, liens, encumbrances, claims or restrictions of
any kind. There are no voting trust arrangements, shareholder agreements or
other agreements (i) granting any option, warrant or right of first refusal with
respect to the Xxxxxxxxxxx Shares to any Person, (ii) restricting the right of
the Sellers to sell the Xxxxxxxxxxx Shares to the Purchaser, or (iii)
restricting any other right of the Sellers with respect to the Xxxxxxxxxxx
Shares. The Sellers have the absolute and unrestricted right, power and capacity
to sell, assign and transfer the Xxxxxxxxxxx Shares to the Purchaser free and
clear of any security interests, liens, encumbrances, claims or restrictions of
any kind (except for restrictions imposed generally by applicable securities
laws). Upon delivery to the Purchaser of the certificates representing the
Xxxxxxxxxxx Shares at the Closing in exchange for the consideration to be
delivered by the Purchaser at the Closing, the Purchaser will acquire good,
valid and marketable title to the Xxxxxxxxxxx Shares, free and clear of any
Encumbrances of any kind (except for restrictions created by the Purchaser and
restrictions imposed generally by applicable securities laws).
4.5.2 The Canadian Seller owns 6,994,315 PharMerica Shares
beneficially and of record, and as of the Closing will own such shares free and
clear of any security interests, liens, encumbrances, claims or restrictions of
any kind and Counsel Healthcare Assets, Inc., the only subsidiary of the
Canadian Seller that owns any PharMerica Shares, owns 825,00 PharMerica Shares
beneficially and of record, and as of the Closing will own such shares free and
clear of any security interests, liens, encumbrances, claims or restrictions of
any kind . Except as contemplated by the Transaction Agreements, there are no
voting trust arrangements, shareholder agreements or other agreements (i)
granting any option, warrant, right to vote or right of first refusal with
respect to such PharMerica Shares to any Person, (ii) restricting the right of
the Canadian Seller or its subsidiaries to execute, deliver and perform the
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Transaction Documents, or (iii) restricting any other right of the Canadian
Seller or its subsidiaries with respect to the PharMerica Shares. The Canadian
Seller and its subsidiaries have the absolute and unrestricted right, power and
capacity to confer upon the Purchaser, pursuant to this Agreement, the rights of
the Purchaser under the Voting Trust Agreement and the Proxy and the right to
vote the PharMerica Shares to the extent provided for therein and herein.
Section 4.6 Brokers. With the exception of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx, CIBC Xxxxxxxxxxx Corporation and CIBC Wood Gundy Toronto, no Person is
or will be entitled to a broker's, finder's, investment banker's, financial
adviser's or similar fee from either of the Sellers in connection with this
Agreement or any of the transactions contemplated hereby. Except as set forth in
Section 10.2, the fees and expenses of Xxxxxxxxx, Xxxxxx & Xxxxxxxx, CIBC
Xxxxxxxxxxx Corporation and CIBC Wood Gundy Toronto are the sole responsibility
of, and shall be paid by, the Sellers.
Section 4.7 Securities and Related Matters.
4.7.1 The Sellers have received copies of the following
documents:
(1) Beach's Annual Report on Form 10-K for the year
ended September 30, 1997, as
amended;
(2) Beach's Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1997,
March 31, 1998 and June 30, 1998;
(3) Beach's Current Reports on Form 8-K dated March
16, 1998 and August 7, 1998;
(4) Beach's proxy statement for its 1998 annual
meeting of shareowners; and
(5) Beach's press releases dated August 7, 1998,
September 1, 1998, September 24,
1998, October 2, 1998 and October 7, 1998.
4.7.2 Intentionally omitted
4.7.3 The Sellers acknowledge that the BBC Shares
are being acquired by the Sellers for investment purposes and not for purposed
of resale other than pursuant to the Registration Statement.
4.7.4 The Sellers understand that after the Closing, unless
the BBC Shares are sold pursuant to the Registration Statement, the BBC Shares
must be held indefinitely unless a subsequent disposition thereof is registered
under the Act and under all applicable securities laws of other jurisdictions or
is exempt from such registration requirements in the opinion of counsel
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reasonably acceptable to the Purchaser, it being agreed that Xxxxxxx Xxxxxx Xxxx
Xxxxxxx & Manner, P.C. is acceptable to the Purchaser. The Sellers agree that
they will not sell, transfer, pledge or otherwise dispose of the BBC Shares
unless such transaction is registered under the Act or such transaction is
exempt from such registration in the opinion of counsel reasonably satisfactory
to the Purchaser.
4.7.5 None of the information included in the Information
Circular, at the time that the Information Circular becomes effective, at the
date of mailing of the Information Circular and at the date of the Canadian
Seller's Shareholders' Meeting to be held to consider the transactions
contemplated hereby, will contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Information Circular will comply as to form
in all material respects with the provisions of all applicable laws and
regulations.
4.8. Intentionally omitted.
4.9. Board Recommendation. The Board of Directors of the Canadian
Seller has, by written consent signed by all of the Canadian Seller's directors
(who constituted 100% of the directors then in office), (i) determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of the Canadian Seller's shareholders and (ii) resolved to recommend
that the Canadian Seller's shareholders approve the sale of the Xxxxxxxxxxx
Shares contemplated hereby (the "Canadian Seller's Board Recommendation").
ARTICLE V
Representations and Warranties Regarding the Purchaser
The Purchaser represents and warrants to the Sellers and the Company as
follows:
Section 5.1 Organization and Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
state of New Jersey with full power and authority (corporate and other) to own,
lease, use and operate its properties and to conduct its business as and where
now owned, leased, used, operated and conducted. The Purchaser is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted by it or the property it owns, leases
or operates, makes such qualification necessary, except where the failure to be
so qualified or in good standing in such jurisdiction would not result in a
Material Adverse Change with respect to the Purchaser and its subsidiaries,
- 41 -
taken as a whole. The copies of the Restated Certificate of Incorporation and
by-laws of the Purchaser previously provided to the Sellers' counsel are true,
correct and complete copies of such documents as in effect as of the date of
this Agreement.
Section 5.2 Corporate Power and Authority. The Purchaser has all
requisite corporate power and authority to enter into the Transaction Agreements
and to consummate the transactions contemplated by the Transaction Agreements.
The execution and delivery of the Transaction Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of the Purchaser. No other corporate
proceedings on the part of the Purchaser are necessary to consummate the
transactions contemplated by the Transaction Agreements. Each of the Transaction
Agreements has been (or, in the case of agreements to be executed at the
Closing, will be) duly executed and delivered by the Purchaser, and constitutes
(or, in the case of agreements to be executed at the Closing, will constitute)
the legal, valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms, except insofar as its enforcement may be
limited by (a) bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (b) equitable principles limiting
the availability of equitable remedies. All persons who executed this Agreement
on behalf of the Purchaser have been duly authorized to do so.
Section 5.3 Capitalization of the Purchaser. As of September 30, 1998,
the Purchaser's outstanding capital stock consisted solely of shares of BBC
Common Stock, of which 51,441,165 shares were issued and outstanding. As of
September 30, 1998, 2,594,472 shares of BBC Common Stock were reserved for
issuance upon the exercise or conversion of outstanding options, warrants or
convertible securities granted or issuable by the Purchaser. Each outstanding
share of BBC Common Stock is, and all shares of BBC Common Stock to be issued in
connection with the transactions contemplated hereby will be, duly authorized
and validly issued, fully paid and nonassessable, with no personal liability
attaching to the ownership thereof, and each outstanding share of BBC Common
Stock has not been, and all shares of BBC Common Stock to be issued in
connection with the transactions contemplated hereby will not be, subject to or
issued in violation of any preemptive or similar rights. As of September 30,
1998, except as set forth above or in the "BBC SEC Documents" (as defined
herein) and except for shares issuable in connection with business acquisitions,
the Purchaser did not have and was not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase or issuance of any shares of BBC Common Stock or BBC Preferred
Stock or any other equity securities of the Purchaser or any securities
representing the right to purchase or otherwise receive any shares of BBC Common
Stock or BBC Preferred Stock.
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Section 5.4 Conflicts; Consents and Approvals. Except as set forth in
Section 5.4 to the disclosure schedule delivered by the Purchaser to the Sellers
and dated the date hereof (the "Purchaser's Disclosure Schedule"), neither the
execution and delivery of the Transaction Agreements by the Purchaser nor the
consummation of the transactions contemplated hereby or thereby will:
5.4.1 conflict with, or result in a breach of any provision
of, the Purchaser's restated certificate of incorporation or by-laws, as
amended;
5.4.2 violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with the giving of
notice, the passage of time or otherwise, would constitute a default) under,
or entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under, or result
in the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of the Purchaser or any of its subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease or
other instrument or obligation to which the Purchaser or any of its
subsidiaries is a party;
5.4.3 violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Purchaser or any of its subsidiaries or
their respective properties or assets; or
5.4.4 require any action or consent or approval of, or review
by, or registration or filing by the Purchaser or any of its Affiliates with,
any third party or any Governmental Authority, other than (i) registrations or
other actions required under federal and state securities laws as are
contemplated by this Agreement, or (ii) as required by the HSR Act,
except, in the case of Sections 5.4.2, 5.4.3 and 5.4.4, for any of the foregoing
that would not, individually or in the aggregate, have a material adverse effect
on the consolidated financial condition or consolidated results of operations of
the Purchaser or upon the ability of the parties to consummate the transactions
contemplated hereby.
Section 5.5 Brokers. With the exception of Xxxxxx Brothers, no Person
is or will be entitled to a broker's, finder's, investment banker's, financial
adviser's or similar fee from the Purchaser in connection with this Agreement or
any of the transactions contemplated hereby. The fees and expenses of Xxxxxx
Brothers are the sole responsibility of, and shall be paid by, the Purchaser.
- 43 -
Section 5.6 BBC SEC Documents and Other Public Disclosures.
5.6.1 The Purchaser has timely filed with the SEC all
forms, reports, schedules,
statements and other documents required to be filed by it since September 1,
1996 under the Exchange Act (such documents, as supplemented and amended since
the time of filing, collectively, the "BBC SEC Documents"). The BBC SEC
Documents, including, without limitation, any financial statements or schedules
included therein, at the time filed (a) did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (b) complied in
all material respects with the applicable requirements of the Exchange Act. The
Purchaser has previously provided to the Sellers" counsel true, correct and
complete copies of the BBC SEC Documents. The financial statements of the
Purchaser included in the BBC SEC Documents at the time filed complied as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q of the SEC), and fairly present (subject, in the case of unaudited
statements, to normal, recurring audit adjustments) the consolidated financial
position of the Purchaser and its consolidated subsidiaries as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended.
5.6.2 Since December 31, 1997, except for events publicly
disclosed by the Purchaser prior to the date hereof, there has been no change in
the assets, liabilities, results of operations or financial condition of the
Purchaser and its Subsidiaries which would constitute a Material Adverse Change
with respect to the Purchaser and its Subsidiaries taken as a whole or any
event, occurrence or development which would have a material adverse effect on
the ability of the Purchaser to consummate the transactions contemplated hereby.
ARTICLE VI
Covenants and Agreements
Section 6.1 Access and Information. Prior to the Closing, the Purchaser
shall be entitled to make or cause to be made such investigation of the
Companies, and the financial and legal condition thereof, as the Purchaser deems
necessary or advisable, and the Company and the Sellers shall cooperate with any
such investigation. In furtherance of the foregoing, but not in limitation
- 44 -
thereof, the Company shall (a) permit the Purchaser and its agents and
representatives or cause them to be permitted to have full and complete access
to the premises, operating systems, computer systems (hardware and software) and
books and records of the Companies upon reasonable notice during regular
business hours, (b) furnish or cause to be furnished to the Purchaser such
financial and operating data, projections, forecasts, business plans, strategic
plans and other data relating to the Companies and the Businesses as the
Purchaser shall request from time to time and (c) cause the Accountants to
furnish to the Purchaser and its accountants access to all work papers relating
to any of the periods covered by the Financial Statements. Prior to the Closing,
the Purchaser shall not use any information provided to it in confidence for any
purpose unrelated to the Transaction Agreements. The Sellers and the Company
shall not use any information provided to them in confidence by the Purchaser
for any purposes unrelated to the Transaction Agreements. Except with respect to
publicly available documents, in the event that this Agreement is terminated,
(a) the Purchaser will deliver to the Company all documents obtained by it from
the Companies or the Sellers in confidence and any copies thereof in the
possession of the Purchaser or its agents and representatives or, at the option
of the Purchaser, the Purchaser shall cause all of such documents and all of
such copies to be destroyed and shall certify the destruction thereof to the
Company and the Sellers and (b) the Sellers and the Company will deliver to the
Purchaser all documents obtained by them from the Purchaser in confidence and
any copies thereof in the possession of the Company and/or either of the Sellers
or their agents and representatives or, at the option of the Company and the
Sellers, the Company and the Sellers shall cause all of such documents and all
of such copies to be destroyed and shall certify the destruction thereof to the
Purchaser.
No investigation by the Purchaser heretofore or hereafter made shall
modify or otherwise affect (a) any representations and warranties of the Company
or the Sellers made pursuant to this Agreement, which shall survive any such
investigation, or (b) the conditions to the obligation of the Purchaser to
consummate the transactions contemplated hereby, provided that the Purchaser
shall promptly notify the Sellers in writing of any facts and circumstances of
which it obtains knowledge prior to the Closing that indicate that any such
representations and warranties are inaccurate in any material respect (except
for any representation and warranty which is qualified hereunder as to
materiality, as to which such notification shall be given if the Purchaser
obtains knowledge that such representation and warranty is inaccurate in any
respect); failure to comply with this notification obligation with respect to
particular facts and circumstances shall preclude the Purchaser from relying
upon such facts and circumstances in bringing any action hereunder for
indemnification.
Section 6.2 Affirmative Covenants. Prior to the Closing, except as
otherwise expressly provided herein, the Company shall (and the Company shall
cause each of its Subsidiaries to):
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6.2.1 conduct its business only in the ordinary and regular
course of business consistent with past practices;
6.2.2 use its best efforts to keep in full force and effect
its corporate existence and all material rights, franchises, Proprietary Rights
and goodwill relating or obtaining to the Businesses;
6.2.3 endeavor to retain its employees and preserve its
present relationships with customers, suppliers, contractors, distributors,
correctional facilities and employees, and continue to compensate its employees
consistent with past practices;
6.2.4 use its best efforts to maintain the Proprietary Rights
so as not to affect adversely the validity or enforcement thereof; maintain its
other assets in customary repair, order and condition and maintain insurance
reasonably comparable to that in effect on the date of this Agreement; and in
the event of any casualty, loss or damage to any of its assets repair or replace
such assets with assets of comparable quality;
6.2.5 maintain its books, accounts and records in accordance
with GAAP;
6.2.6 use its best efforts to obtain all authorizations,
consents, waivers, approvals or other actions and to make all filings and
applications necessary or desirable to consummate the transactions contemplated
hereby and to cause the other conditions to the Purchaser's obligation to close
to be satisfied; and
6.2.7 promptly notify the Purchaser in writing if, prior to
the consummation of the Closing, to its knowledge any of the representations and
warranties contained in Article III or Article IV cease to be accurate and
complete in all material respects (except for any representation and warranty
which is qualified hereunder as to materiality, as to which such notification
shall be given if the Company or its subsidiaries obtain knowledge that such
representation and warranty is inaccurate in any respect).
Section 6.3 Negative Covenants. Prior to the Closing, without the prior
written consent of the Purchaser (which, in the case of (x) a Limited Size
Acquisition or (y) a restructuring of indebtedness among the Companies which
would not affect the calculation of the Net Debt or Net Worth of the Companies,
shall not be unreasonably withheld) or as otherwise expressly provided herein,
the Company will not, the Company will cause the Subsidiaries not to, and the
Sellers will not:
6.3.1 take any action or omit to take any action which would
result in any of the Companies' (a) incurring any trade accounts payable outside
of the Ordinary Course of Business or making any commitment to purchase
quantities of any item of inventory in excess of quantities normally purchased
- 46 -
by any of the Companies in the Ordinary Course of Business; (b) increasing any
of the Companies' indebtedness for borrowed money except in the Ordinary Course
of Business; (c) guaranteeing the obligations of any Person other than Companies
which are wholly-owned, directly or indirectly, by the Company, (d) making any
purchases of Xxxx Goods; (e) merging or consolidating with, purchasing
substantially all of the assets of, or otherwise acquiring any business or any
proprietorship, firm, association, limited liability company, corporation or
other business organization; (f) increasing or decreasing the rate of
compensation of or paying any unusual compensation to any officer, employee or
consultant of any of the Companies (other than regularly scheduled increases in
base salary and annual bonuses consistent with prior practice); (g) entering
into or amending any collective bargaining agreement, or creating or modifying
any pension or profit-sharing plan, bonus, deferred compensation, death benefit,
or retirement plan, or any other employee benefit plan, or increasing the level
of benefits under any such plan, or increasing or decreasing any severance or
termination pay benefit or any other fringe benefit; (h) making any
representation to anyone indicating any intention of the Purchaser to retain,
institute, or provide any employee benefit plans; (i) declaring or paying any
dividend or making any distribution with respect to, or purchasing or redeeming,
shares of the capital stock of the Company; (j) selling or disposing of any
assets otherwise than in the Ordinary Course of Business of the Companies; (k)
making any capital expenditures other than those disclosed in Section 3.15 of
the Companies' Disclosure Schedule; (l) issuing any shares of the capital stock
of any kind of any of the Companies, transferring from the treasury of any of
the Companies any shares of the capital stock of any of the Companies or issuing
or granting any subscriptions, options, rights, warrants, convertible securities
or other agreements or commitments to issue, or contracts or any other
agreements obligating any of the Companies to issue, or to transfer from
treasury, any shares of capital stock of any class or kind, or securities
convertible into any such shares; (m) agreeing to any amendment or modification
of any of the Employee Agreements; (n) agreeing to do any of the foregoing; or
(o) entering into any other transaction outside of the Ordinary Course of
Business;
6.3.2 enter into any contract, agreement or commitment or take
any other action which, if entered into or taken prior to the date of this
Agreement, (i) would cause any representation or warranty herein of the Company
or the Sellers to be untrue or (ii) would be required to be disclosed in one or
more sections of the Companies' Disclosure Schedule;
6.3.3 incur or create any Encumbrance on the Xxxxxxxxxxx
Shares;
6.3.4 except as contemplated herein, take any action or omit
to take any action which would prejudice the Purchaser's rights to consummate
each of the transactions contemplated by this Agreement or to compel performance
of each of the obligations of the Company and the Sellers under this Agreement;
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6.3.5 take or omit to be taken any action, or permit its
Affiliates to take or to omit to take any action, which could reasonably be
expected to result in a Material Adverse Change with respect to the Companies;
6.3.6 take any action or omit to be taken any action, or
permit its Affiliates to take or to omit to take any action, which would result
in (a) the disposition, assignment or any other transfer of ownership by
Xxxxxxxxxxx U.S.A., Inc. of any intangible asset (including any trade name,
trademark or goodwill) or (b) any modification of any licensing agreement with
respect to any such intangible asset; or
6.3.7 agree or commit to take any action precluded by this
Section 6.3.
Section 6.4 Closing Documents. The Company and the Sellers shall, prior
to or on the Closing Date, execute and deliver, or cause to be executed and
delivered to the Purchaser, the documents or instruments described in Section
7.2. The Purchaser shall, prior to or on the Closing Date, execute and deliver,
or cause to be executed and delivered, to the Sellers, the documents or
instruments described in Section 7.3.
Section 6.5 Transfer and Other Taxes.
6.5.1 The Sellers shall pay any stamp, stock transfer, sales,
purchase, use or similar Tax under the laws of any Governmental Authority
arising out of or resulting from the purchase of the Xxxxxxxxxxx Shares. The
Sellers shall prepare and file the required Tax returns and other required
documents with respect to the Taxes and fees required to be paid by them
pursuant to the preceding sentence and shall promptly provide the Purchaser with
evidence of the payment of such Taxes and fees.
6.5.2 The US Seller shall include the income of the Companies
(including any deferred income triggered into income by Treas. Reg.
ss.ss.1.1502-13 or any predecessor regulation and any excess loss accounts taken
into income under Treas. Reg. ss.ss.1.1502-19) on the US Seller's consolidated
federal income Tax returns for all periods through the Closing Date and pay any
federal income taxes attributable to such income. The Companies shall furnish
Tax information to the US Seller for inclusion in the US Seller's consolidated
federal income tax return and state and local income or franchise tax returns
for the period which includes the Closing Date in accordance with the Companies'
past custom and practice. The US Seller shall allow the Purchaser an opportunity
to review and comment upon such Tax returns (including any amended returns) to
the extent that they relate to the Companies and would adversely affect the
Purchaser or the Companies after the Closing Date. The income of the Companies
shall be apportioned to the period up to and including the Closing Date and the
period after the Closing Date by closing the books of the Companies as of the
close of business on the Closing Date. Notwithstanding the foregoing,
information which is subject to a confidentiality agreement shall not be
released except to the extent required by law.
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6.5.3 Any Tax sharing agreement between any of the Sellers (or
any Affiliate of any of the Sellers) and any of the Companies shall be
terminated as of the Closing Date and shall have no further effect for any
taxable year (whether the current year, a future year or a past year). At or
before the Closing, the Sellers shall provide to the Purchaser evidence of such
termination, in form satisfactory to the Purchaser.
6.5.4 The US Seller shall allow the Purchaser and its counsel
to participate in any audits of the US Seller's consolidated federal income tax
returns to the extent that such returns relate to the Companies. The US Seller
shall not settle any such audit in a manner that would adversely affect the
Companies after the Closing Date without the Purchaser's prior written consent,
which consent shall not be unreasonably withheld.
6.5.5 The US Seller shall immediately pay to the Purchaser any
Tax refund (or reduction in Tax liability) resulting from a carryback of a
post-acquisition Tax attribute of any of the Companies into the US Seller's
consolidated Tax return, when such refund or reduction is realized by the US
Seller's group. The US Seller shall cooperate with the Companies in obtaining
any such refund (or reduction in Tax liability), including through the filing of
amended Tax returns or refund claims. The Purchaser agrees to indemnify the US
Seller for any Taxes resulting from the disallowance of such post-acquisition
Tax attribute on audit or otherwise.
6.5.6 The US Seller will not elect to retain any net operating
loss carryovers or capital loss carryovers of the Companies under Treas. Reg.
ss.1.1502-20(g).
6.5.7 Prior to the Closing, the Canadian Seller shall furnish
the Purchaser with a statement issued by the Company pursuant to Treas. Reg.
ss.1.897-2(h) by which statement the Company certifies that the Xxxxxxxxxxx
Shares are not United States real property interests within the meaning of
Section 897(c) of the Code.
Section 6.6 Non-Competition and Confidentiality Agreement. For a period
of five years after the Closing Date, the Sellers will not, and the Sellers will
cause their Subsidiaries (other than Subsidiaries that are not at least
majority-owned) not to, (a) directly or indirectly, anywhere within the United
States, engage in a Competitive Business or (b) without the written consent of
the Purchaser, directly or indirectly employ, engage, contract for or solicit
the services in any capacity of any Person (other than Xxxxx Xxxxxx, Xxxxxx
Xxxxxx or Xxxxx Sas) who is employed by any of the Companies on the date hereof,
unless the employment of such Person is terminated by the Purchaser prior to any
solicitation of employment or employment; or (c) use for its own benefit or
divulge or convey to any third party, any Confidential Information (as
hereinafter defined) relating to any of the Companies. For purposes of this
Agreement, the Sellers shall not be deemed to have violated clause (a) of this
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Section 6.6 in the event that (i) the Sellers or their Affiliates acquire the
capital stock or a substantial portion of the assets of a Person whose revenues
during its last fiscal year attributable to a Competitive Business represent (x)
less than $50,000,000 and (y) less than twenty five percent (25%) of such
Person's aggregate revenues, (ii) the Sellers promptly offer to sell such
Competitive Business to the Purchaser on commercially reasonable terms at a
price that is either agreed upon by the Sellers and the Purchaser or is
determined by a valuation firm mutually acceptable to the Sellers and the
Purchaser to represent the fair market value of such Competitive Business and
(iii) if the Purchaser does not accept such offer, the Sellers dispose of the
Competitive Business promptly, but in no event more than twelve months after the
acquisition of the Competitive Business by the Sellers. For purposes of this
Agreement, the Sellers shall not be deemed to have violated clause (a) of this
Section 6.6 by virtue of their combined ownership (together with the ownership
of their Subsidiaries) of (x) less than five percent (5%) of the issued and
outstanding stock of a publicly held corporation, (y) the shares of the capital
stock of PharMerica or (z) shares of the capital stock of American Home Patient
Inc., a Delaware corporation. For purposes of this Agreement, "Confidential
Information" consists of all information, knowledge or data relating to any of
the Companies including, without limitation, customer and supplier lists,
formulae, trade know-how, processes, secrets, consultant contracts, pricing
information, marketing plans, product development plans, business acquisition
plans and all other information relating to the operation of the Companies not
in the public domain or otherwise publicly available which are or were treated
as confidential by the Companies. Information which enters the public domain or
is publicly available loses its confidential status hereunder so long as neither
the Sellers nor its Affiliates directly or indirectly cause such information to
enter the public domain.
The Sellers acknowledge that the restrictions contained in this Section
6.6 are reasonable and necessary to protect the legitimate interests of the
Purchaser and that any breach by the Sellers of any provision of this Section
6.6 will result in irreparable injury to the Purchaser. The Sellers acknowledge
that, in addition to all remedies available at law, the Purchaser shall be
entitled to equitable relief, including injunctive relief, and an equitable
accounting of all earnings, profits or other benefits arising from any such
breach and shall be entitled to receive such other damages, direct or
consequential, as may be appropriate. The Purchaser shall not be required to
post any bond or other security in connection with any proceeding to enforce
this Section 6.6.
Section 6.7 Reasonable Efforts; Further Assurances. Subject to the
terms and conditions herein provided, each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Each of the Company, the Sellers
and the Purchaser will use all reasonable efforts to obtain consents of all
Governmental Authorities and third parties necessary to the consummation of the
transactions contemplated by this Agreement. In the event that at any time after
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Closing any further action is necessary to carry out the purposes of this
Agreement or to obtain any licenses required, necessary or advisable in
connection with the operation of any of the Businesses, the Sellers or the
Purchaser, as the case may be, shall take all such action without any further
consideration therefor.
Section 6.8 Third Party Proposals.
6.8.1 Each of the Company, the U.S. Seller and the Canadian
Seller agrees that, during the term of this Agreement, it shall not, and shall
not authorize or permit any of its subsidiaries or any of its or its
subsidiaries' directors, officers, employees, agents or representatives to,
directly or indirectly, solicit, initiate, encourage or facilitate, or furnish
or disclose non-public information in furtherance of, any inquiries or the
making of any proposal with respect to any recapitalization, merger,
consolidation or other business combination involving the Companies, or
acquisition of any capital stock from the Companies or any assets of the
Companies in a transaction outside of the Ordinary Course of Business, or any
acquisition by any of the Companies of any material assets or capital stock of
any other person or any combination of the foregoing (a "Competing
Transaction"), or negotiate, explore or otherwise engage in discussions with any
person (other than the Purchaser, a wholly-owned subsidiary of the Purchaser or
their respective directors, officers, employees, agents and representatives)
with respect to any Competing Transaction or enter into any agreement,
arrangement or understanding requiring it to terminate this Agreement or
abandon, terminate or fail to consummate the Closing or any other transactions
contemplated by this Agreement; provided that, at any time prior to the approval
of the sale of the Xxxxxxxxxxx Shares by the shareholders of the Canadian
Seller, the Canadian Seller may furnish information to, and negotiate or
otherwise engage in discussions with, any party who delivers a written proposal
for a Competing Transaction which was not solicited or encouraged after the date
of this Agreement if and so long as the Board of Directors of the Canadian
Seller determines in good faith by a majority vote, after consultation with and
receipt of advice from its outside legal counsel, that failing to take such
action would be inconsistent with the fiduciary duties of the Board of Directors
of the Canadian Seller under applicable laws and determines that such a proposal
is, after consulting with Xxxxxxxxx, Xxxxxx and Xxxxxxxx (or any other
nationally recognized investment banking firm), more favorable to the Canadian
Seller's shareholders from a financial point of view than the transactions
contemplated by this Agreement (including any adjustment to the terms and
conditions proposed by the Purchaser in response to such Competing Transaction).
The Company and the Sellers will immediately cease all existing activities,
discussions and negotiations with any parties conducted heretofore with respect
to any proposal for a Competing Transaction. Notwithstanding any other provision
of this Section 6.8.1, in the event that, prior to the approval of the sale of
the Xxxxxxxxxxx Shares to the Purchaser by the shareholders of the Canadian
Seller, the Board of Directors of the Canadian Seller determines in good faith
by a majority vote, after consultation with and receipt of advice from outside
legal counsel, that failure to do so would be inconsistent with the fiduciary
duties of the Canadian Seller's Board of Directors, the Board of Directors of
- 51 -
the Canadian Seller may (subject to this and the following sentences) withdraw,
modify or change, in a manner adverse to the Purchaser, its recommendation in
favor of the transactions contemplated hereby, provided that it uses all
reasonable efforts to give the Purchaser two calendar days prior written notice
of its intention to do so (provided that the foregoing shall in no way limit or
otherwise affect the Purchaser's right to terminate this Agreement pursuant to
Section 8.1.14). The Canadian Seller's Board of Directors shall not, in
connection with any such withdrawal, modification or change of its
recommendation with respect to the transactions contemplated hereby, take any
action to change the approval of the Board of Directors of the Canadian Seller
for purposes of causing any takeover statute or other law to be inapplicable to
the transactions contemplated hereby, including the Closing or the performance
of the Support Agreements. From and after the execution of this Agreement, the
Company and the Sellers shall immediately advise the Purchaser in writing of the
receipt, directly or indirectly, of any inquiries, discussions, negotiations, or
proposals relating to a Competing Transaction (including the specific terms
thereof and the identity of the other party or parties involved) and furnish to
the Purchaser within 24 hours of such receipt an accurate description of all
material terms (including any changes or adjustments to such terms as a result
of negotiations or otherwise) of any such written proposal in addition to any
information provided to any third party relating thereto. In addition, the
Company and the Sellers shall immediately advise the Purchaser, in writing, if
the Board of Directors of the Canadian Seller shall make any determination as to
any Competing Transaction as contemplated by the proviso to the first sentence
of this Section 6.8.1.
6.8.2 If, prior to the approval of the sale of the Xxxxxxxxxxx
Shares to the Purchaser by the shareholders of the Canadian Seller, the Board of
Directors of the Canadian Seller shall determine in good faith, after
consultation with its financial and legal advisors, with respect to any written
proposal from a third party for a Competing Transaction received after the date
hereof that was not solicited or encouraged by the Canadian Seller or any of its
subsidiaries or Affiliates in violation of this Agreement, that failure to enter
into such Competing Transaction would be inconsistent with the fiduciary duties
of the Board of Directors of the Canadian Seller and that such Competing
Transaction is more favorable to the shareholders of the Canadian Seller from a
financial point of view than the transactions contemplated by this Agreement
(including any adjustment to the terms and conditions of such transaction
proposed in writing by the Purchaser in response to such Competing Transaction)
and is in the best interest of the Canadian Seller's shareholders and the
Canadian Seller has received (x) the advice of its outside legal counsel as to
whether failure to enter into such a Competing Transaction would be inconsistent
with a breach of the Board of Directors' fiduciary duties and (y) advice from
Xxxxxxxxx, Lufkin & Xxxxxxxx (or any other nationally recognized investment
banking firm) that the Competing Transaction is more favorable from a financial
point of view to the Canadian Seller's shareholders than the transactions
contemplated by this Agreement (including any adjustment to the terms and
conditions of such transaction proposed in writing by the Purchaser), the
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Canadian Seller may terminate this Agreement and enter into a letter of intent,
agreement-in-principle, acquisition agreement or other similar agreement (each,
an "Acquisition Agreement") with respect to such Competing Transaction provided
that, prior to any such termination, (i) the Canadian Seller has provided the
Purchaser with written notice that it intends to terminate this Agreement
pursuant to this Section 6.8.2, identifying the Competing Transaction then
determined to be more favorable and the parties thereto and delivering an
accurate description of all material terms (including any changes or adjustments
to such terms as a result of negotiations or otherwise) of the Acquisition
Agreement to be entered into for such Competing Transaction, and (ii) at least
three full Business Days after the Canadian Seller has provided the notice
referred to in clause (i) above (provided that the advice referred to in clauses
(x) and (y) above shall continue in effect without revocation, revision or
modification), the Canadian Seller, as a condition to termination, delivers to
the Purchaser (A) a written notice of termination of this Agreement pursuant to
this Section 6.8.2 and (B) a certified or bank cashier's check in the amount of
twelve million dollars ($12,000,000).
Section 6.9 Tax Election. The US Seller shall join with the Purchaser
in making an election under Sections 338(g) and 338(h)(10) of the Code (and any
corresponding elections under state, local or foreign tax law) (collectively, a
"338(h)(10) Election") with respect to the purchase and sale of the Xxxxxxxxxxx
Shares hereunder.
6.9.1 The Purchaser shall determine the allocation of the Net
Purchase Price and the liabilities of the Companies (plus other relevant items)
to the assets of the Companies and shall furnish to the US Seller a schedule
(the "Allocation Schedule") setting forth that allocation. Neither the Purchaser
nor the US Seller shall take any action or any position that is inconsistent
with the Allocation Schedule on any Tax return or in any administrative or
judicial proceeding.
6.9.2 The Purchaser and the US Seller shall on a timely basis
file all forms required under federal, state, local or foreign law to effect the
338(h)(10) Election (including IRS Form 8023), which forms shall be prepared
consistently with the Allocation Schedule.
6.9.3 At the Closing, the Purchaser shall pay to the US Seller
the sum of twenty eight million dollars ($28,000,000) as consideration for the
US Seller's joining with the Purchaser in making the 338(h)(10) Election.
6.9.4 Notwithstanding any other provisions of this Section
6.9, the US Seller will be responsible for paying any Taxes attributable to the
making of the 338(h)(10) Election and the Sellers will indemnify and hold
harmless the Purchaser and the Companies against any costs arising out of any
failure to pay such Taxes.
Section 6.10 Xxxx-Xxxxx-Xxxxxx Filings. Each of the Purchaser, the
Company and the Sellers will use all reasonable efforts to file with the
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Antitrust Division of the Department of Justice (the "Antitrust Division") and
the Federal Trade Commission (the "FTC") within five Business Days after the
date hereof the notification and report form (the "Report") required under the
HSR Act with respect to the transactions contemplated hereby. Each of the
Company, the Sellers and the Purchaser shall cooperate with each other to the
extent necessary to assist each other in the preparation of its Report, shall
request early termination of the waiting period required by the HSR Act and, if
requested, will promptly amend or furnish additional information thereunder if
requested by the Antitrust Division and/or the FTC.
Section 6.11 Notification by the Purchaser. The Purchaser shall
promptly inform the Sellers in writing if, prior to the consummation of the
Closing, any of the representations and warranties contained in Article V cease
to be accurate and complete.
Section 6.12 Agreements. At the Closing, the Purchaser and the Canadian
Seller shall (and shall cause its subsidiaries to) execute and deliver the
Voting Trust Agreement and make all deliveries required thereunder and the
Canadian Seller shall (and shall cause its subsidiaries to) execute and deliver
the Proxy and the Back-Up Option Agreement.
Section 6.13 Company Options.
6.13.1 The following terms shall have the following meanings:
6.13.1.1 "Total Price" means (a) $300,000,000 plus
(b) the aggregate amount of cash
payable to the Company upon the exercise in full of all Stock Options
outstanding immediately prior to the consummation of the Closing plus (c) the
amount, if any, by which the Certified Net Debt is less than $100,000,000 plus
(d) the Stock Appreciation Figure minus (e) the amount, if any, by which the
Certified Net Debt is greater than $100,000,000. For purposes of this Agreement,
the term "Stock Appreciation Figure" shall mean 3,022,670 (representing
$150,000,000 divided by $49.625) multiplied by the extent, if any, by which the
Market Value exceeds $49.625; provided, however, that such $49.625 amount, the
Market Value and such 3,022,670 number shall be equitably adjusted hereunder as
necessary to reflect the Stock Split if, on the date that any determination of
Market Value is made hereunder, the last sale price, quoted regular way, of the
BBC Common Stock reflects the Stock Split. It is understood that the Stock
Appreciation Figure shall be zero in the event that the Market Value (as
equitably adjusted for the Stock Split) is less than or equal to $49.625 (as
equitably adjusted for the Stock Split) .
6.13.1.2 "Fully Diluted Number" means the sum of
(i) the aggregate number of shares of Xxxxxxxxxxx Common Stock outstanding on
the Closing Date plus (ii) the aggregate number of shares of Xxxxxxxxxxx Common
Stock covered by subscriptions, options, rights, warrants, convertible
- 54 -
securities or other agreements or commitments to issue, or contracts or any
other agreements obligating the Company to issue, or to transfer from treasury,
any shares of Xxxxxxxxxxx Common Stock, or securities convertible into any such
shares, which options, warrants or other rights are outstanding immediately
prior to the consummation of the Closing.
6.13.1.3 "Share Price" means the "Total Price"
divided by the Fully Diluted Number.
6.13.1.4 "Stock Option" means an option to purchase
one or more shares of Xxxxxxxxxxx Common Stock pursuant to the Company's 1996
Incentive and Non-qualified Stock Option Plan for Key Personnel and Directors or
pursuant to any other plan or agreement approved by the Board of Directors of
the Company; provided, however, that the exercise price of such option is the
same for each share of Xxxxxxxxxxx Common Stock covered thereby. Accordingly, a
Person who owns stock options to purchase Xxxxxxxxxxx Common Stock at more than
one exercise price shall be deemed to own one Stock Option for each separate
exercise price.
6.13.1.5 "Optionee" shall mean each Person who owns
one or more Stock Options immediately prior to the Closing. "Designated
Optionee" shall mean each of Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Sas and Xxxxxx
Xxxxxxx. "Non-Designated Optionee" shall mean each Optionee other than the
Designated Optionees.
6.13.1.6 "Aggregate Appreciation" for an Optionee
means, for each Stock Option held by such Optionee immediately prior to the
Closing, (a) the amount by which the Share Price exceeds the exercise price of
such Stock Option, multiplied by (b) the number of shares of Xxxxxxxxxxx Common
Stock covered by such Stock Option.
6.13.2 Prior to the Closing, the Company shall enter into
Designated Optionee Option Cancellation Agreements with each of the Designated
Optionees and Non-Designated Optionee Option Cancellation Agreements with each
of the Non-Designated Optionees. Each of the Option Cancellation Agreements
shall provide that (a) concurrent with the Closing, the Company shall pay to the
applicable Optionee, in cash, a dollar amount equal to such Optionee's Aggregate
Appreciation for each of such Optionee's Stock Options and (b) upon receipt of
such payment, all of such Designated Optionee's Stock Options shall be canceled.
Section 6.14 Retained Employees. It is understood that on and after the
Closing, Xxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxx Sas (the "Retained Employees")
shall cease to be employees of the Companies and shall become, or continue to
be, employees of the Sellers. The Sellers agree that, subject to the terms of
the Transitional Consulting Agreements, the Sellers shall assume, and shall
indemnify the Companies against, all liabilities arising after the Closing with
respect to the post-Closing employment of the Retained Employees, including
without limitation all liabilities arising under any employment agreement or
- 55 -
employment benefit plan applicable to any of the Retained Employees. Concurrent
with the execution of this Agreement, the Purchaser and the Retained Employees
have entered into transitional consulting agreements in the form and substance
of the agreements annexed hereto as Appendix 6.14 (the "Transitional Consulting
Agreements"). For the first thirty (30) days after the Closing, the Sellers
shall make Xxxxx Sas available to the Companies as a consultant on an as
requested basis for up to fifty percent (50%) of Xxxxx Sas' work week. For the
next one hundred and fifty (150) days thereafter, the Sellers shall make Xxxxx
Sas available to the Companies on an as requested basis for up to twenty percent
(20%) of Xxxxx Sas' work week. The Purchaser shall cause the Company to
reimburse the Sellers for work performed by Xxxxx Sas at the Company's request
at a rate of $130 per hour. In the performance of such work, Xxxxx Sas shall be
employed as an employee of one or both of the Sellers and shall be designated by
the Sellers to provide consulting services to the Purchaser in accordance with
this Section 6.14.
Section 6.15 PharMerica Shares. The Canadian Seller agrees as follows
with respect to the PharMerica Shares that it and its subsidiaries now or may
hereinafter beneficially own or otherwise hold (the "Subject PharMerica
Shares"):
6.15.1 Without the prior written consent of the Purchaser,
until December 31, 1999, the Canadian Seller will not (and will not permit its
subsidiaries to), directly or indirectly, offer, sell, pledge (other than the
pledge existing on the date hereof, which pledge does not preclude the Canadian
Seller or its Subsidiaries from voting any Subject PharMerica Shares), transfer,
contract to sell, grant any option to purchase or otherwise dispose of any
Subject PharMerica Shares or any securities convertible into, derivative of or
exercisable or exchangeable for any Subject PharMerica Shares, provided,
however, that this Section 6.15.1 shall not prohibit the Canadian Seller from
distributing Subject PharMerica Shares to its shareholders as a dividend at any
time after December 25, 1999 and shall not prohibit the Canadian Seller or its
subsidiaries from selling the Subject PharMerica Shares pursuant to Section
6.15.2 at any time. At or prior to the Closing, the Canadian Seller shall (and
shall cause each of its subsidiaries that then owns PharMerica Shares to) use
its best efforts to cause the stock certificates representing the Subject
PharMerica Shares to be legended, in a manner reasonably satisfactory to the
Purchaser, to reflect the restrictions set forth in this Section 6.15.
6.15.2 In the event that the Canadian Seller or any of its
subsidiaries receives, and desires to accept, a Bona Fide Offer from a
third-party (an "Offeror") to purchase for consideration any of the Subject
PharMerica Shares, the Canadian Seller will (or will cause its subsidiaries to)
promptly deliver to the Purchaser written notice of the intended disposition
(the "Disposition Notice") and the basic terms and conditions of the proposed
disposition, including the identity of the Offeror. The Purchaser will have the
right, exercisable upon written notice to the Canadian Seller within ten (10)
Business Days after receipt of the Disposition Notice, to purchase the Subject
- 56 -
PharMerica Shares covered by such Bona Fide Offer on the same terms and
conditions as those set forth in the Disposition Notice. The Canadian Seller
will not (and will cause its subsidiaries not to) sell any of such Subject
PharMerica Shares to the Offeror unless and until either (i) the Purchaser
notifies the Canadian Seller (or its subsidiaries, if applicable) that the
Purchaser does not intend to meet the terms set forth in the Disposition Notice
or (ii) the Purchaser fails to advise the Canadian Seller (or its subsidiaries,
if applicable) in writing, prior to the expiration of such ten (10) Business Day
period, that the Purchaser agrees to purchase such Subject PharMerica Shares on
the terms set forth in the Disposition Notice. In the event that the Purchaser
advises the Canadian Seller (or its subsidiaries, if applicable) of such
agreement within such ten (10) Business Day period, the Canadian Seller will (or
will cause its subsidiaries to) sell to the Purchaser, and the Purchaser will
purchase from the Canadian Seller (or its subsidiaries, if applicable), the
Subject PharMerica Shares covered by the Bona Fide Offer upon the terms and
conditions set forth in the Disposition Notice at a closing to be held on the
later of (x) the fifth Business Day after the Canadian Seller's (or its
subsidiaries', if applicable) receipt of notice of acceptance from the Purchaser
or (y) the second Business Day after the parties to such closing shall have
received all regulatory approvals necessary to consummate such closing. If the
Purchaser does not elect to purchase such Subject PharMerica Shares, the
Canadian Seller (or its subsidiaries, if applicable) will be permitted to sell
such Subject PharMerica Shares to the Offeror upon the terms and conditions set
forth in the Disposition Notice. If such sale is not consummated within 120
calendar days of the mailing of the original Disposition Notice, the procedures
of this paragraph shall be followed again. For purposes of this Agreement, the
term "Bona Fide Offer" shall mean a bona fide offer to acquire some or all of
the Subject PharMerica Shares, provided that (x) the Offeror is not an Affiliate
of the Canadian Seller, (b) if the offer is a cash offer, such offer is fully
financed, (c) if the offer is not a cash offer, it is an offer of marketable
securities having a readily ascertainable market and (d) the offer is not
subject to any conditions other than conditions, if any, imposed pursuant to the
HSR Act. The provisions of this Section 6.15.2 shall cease to apply on the
sooner of (x) December 31, 1999 and (y) the first date on which the Canadian
Seller and its subsidiaries, having complied with this Section 6.15, no longer
beneficially own or otherwise hold any Subject PharMerica Shares.
6.15.3 In the event that the shareholders of PharMerica are
asked to vote (either by vote, solicitation of proxies, solicitation of consents
or otherwise) with respect to a PharMerica Business Combination involving
PharMerica at any time prior to December 31, 2001, the Canadian Seller shall
(and shall cause its subsidiaries to) (a) notify the Purchaser that such vote is
being conducted promptly after the Canadian Seller is advised that such vote is
to be taken and (b) vote all of the Subject PharMerica Shares then owned by the
Canadian Seller in accordance with the Purchaser's written instructions if the
Purchaser provides the Canadian Seller and such subsidiaries with such
instructions prior to the date of the meeting of Party's shareholders or the
date three (3) Business Days prior to the last date on which consents may be
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submitted. The provisions of this Section 6.15.3 shall terminate as to Subject
PharMerica Shares transferred or distributed in accordance with Sections 6.15.1
or 6.15.2 upon such transfer or distribution.
Section 6.16 Environmental Matters. Prior to the Closing, the Purchaser
shall have the right, at its expense, to make such environmental studies of each
of the premises at which the Companies perform the Businesses (the "Premises"),
including reviewing records, inspecting the properties and testing the air,
subsoil, groundwater and building materials at the Premises, as it shall deem
necessary to determine whether the Premises are in compliance with all
applicable Environmental Laws and whether any Regulated Substances are present
at the Premises, but shall indemnify and hold the Companies harmless from any
loss, cost or damage proximately caused by such inspection. Such inspection
shall be scheduled and performed so as not to unreasonably interfere with the
Companies' business.
Section 6.17 Canadian Seller's Shareholders' Meeting.
6.17.1 The Canadian Seller shall take all action in accordance
with all applicable laws necessary to convene a special meeting of the
shareholders of the Canadian Seller (the "Canadian Sellers' Shareholders
Meeting") to be held on the earliest practical date after the date hereof and
use its best efforts to obtain the consent and approval of the Canadian Seller's
shareholders with respect to the sale of the Xxxxxxxxxxx Common Stock pursuant
to this Agreement, including recommending approval of such sale.
6.17.2 The Canadian Seller shall, as soon as is reasonably
practicable, prepare an information circular in accordance with all applicable
laws and regulations pertaining thereto (the "Information Circular") for review
by the Purchaser. Subject to the consent of the Purchaser (which shall not be
unreasonably withheld), the Canadian Seller shall prepare and file the
Information Circular with the requisite Canadian regulatory authorities as soon
as is reasonably practicable following receipt of comments from the Purchaser's
representatives and shall use all reasonable efforts to have the Information
Circular declared effective by the requisite Canadian regulatory authorities or
otherwise comply with all prerequisites to delivery of the Information Circular
to the Canadian Seller's shareholders and shall use all reasonable efforts to
comply with all applicable legal requirements with respect to the Information
Circular through the date of the Canadian Sellers' Shareholders Meeting. If, at
any time prior to the date of such meeting, the Canadian Seller shall obtain
knowledge of any information contained in or omitted from the Information
Circular that would require an amendment or supplement to the Information
Circular, the Canadian Seller will so advise the Purchaser in writing and will
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promptly take such action, if any, as shall be required by law to amend or
supplement the Information Circular. Such Information Circular shall include the
Canadian Seller's Board Recommendation. The Canadian Seller also shall take such
other reasonable actions (other than qualifying to do business in any
jurisdiction in which it is not so qualified) required to be taken under any
jurisdiction's securities laws in connection with the Canadian Seller's
Shareholders Meeting.
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Section 6.18 Payment of Certain Debt. Subsequent to the Closing, the
Purchaser shall cause the Companies to pay the debt of the Companies included
within the Net Debt as of the Closing Date, except that any such debt secured by
any assets of the Companies shall be paid contemporaneously with the Closing.
Pursuant to such obligation, the Purchaser shall cause the Company to pay,
contemporaneously with the Closing (to the extent that the debt is secured by
any assets of the Companies) or as soon as practicable after the Closing Date,
any such indebtedness owed by the Company to the Canadian Seller and, subject to
the next sentence hereof, any such indebtedness owed by the Company to any
financial institution ("Bank Debt"). Notwithstanding the foregoing, in the event
that at least three Business Days prior to the Closing, (a) the Canadian Seller
advises the Purchaser that such payment of any portion of the Bank Debt will
result in the payment of prepayment, breakage or other similar fees (which fees
will be included as liabilities in determining the Net Worth as of the Closing
Date pursuant to Section 2.5.3 if paid by any of the Companies), (b) the
Canadian Seller advises the Purchaser that the Canadian Seller is willing to
assume all of the Companies' obligations with respect to such portion of the
Bank Debt upon payment by the Company to the Canadian Seller of an amount equal
to the aggregate dollar amount of such obligations (limited to principal and
interest through the date of payment) as of the Closing Date (the "Fee-Related
Bank Debt") and (c) the lender of the Fee-Related Bank Debt provides the Company
with documentation, in form and substance satisfactory to the Purchaser, to the
effect that upon payment of the Fee-Related Bank Debt by the Company to the
Canadian Seller, (i) the Companies will be discharged from any and all liability
with respect to the Fee-Related Bank Debt (including, without limitation, any
obligation to pay any principal, interest or premium with respect to the
Fee-Related Bank Debt and any obligation to pay any prepayment, breakage or
similar fee) and (ii) such lender will release all liens, encumbrances and
security interests securing the payment of such Fee-Related Bank Debt with
respect to any assets or other property of the Companies, then, in lieu of
causing the Company to repay the Fee-Related Bank Debt, the Purchaser shall
cause the Company, contemporaneous with the Closing, to pay to the Canadian
Seller an amount equal to the Fee-Related Bank Debt, provided that at the time
of such payment the Companies shall receive such discharges and releases as the
Purchaser and the Company shall reasonably request. Any debt paid
contemporaneously with the Closing pursuant to this Section 6.18 and any amount
paid to the Canadian Seller contemporaneous with the Closing pursuant to this
Section 6.18 shall be deemed to be part of the Net Debt of the Companies as of
the Closing Date for purposes of Article II and shall be liabilities of the
Companies for purposes of determining the Net Worth as of the Closing Date,
notwithstanding any provision herein to the contrary.
Section 6.19 Pharmaceutical Supply Agreement and Shared Services
Agreement. The Canadian Seller has proposed that the Purchaser enter into a
pharmaceutical supply agreement and a shared services agreement, independent of
the terms of this Agreement. The Purchaser acknowledges receipt of drafts of
such agreements and agrees that it will negotiate such agreements in good faith,
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such negotiations to commence as promptly as practicable after the date hereof.
The parties hereto acknowledge that execution of one or both of such agreements
is not a condition to any party's obligations hereunder.
Section 6.20 Access to Prepare the Proposed Statement and to Review
Other Documents. Subsequent to the Closing, the Purchaser shall cause the
Companies to grant to the Sellers' representatives access to the premises, books
and records of the Companies upon reasonable notice during regular business
hours for the purpose of enabling the Sellers to prepare the Proposed Statement
and of enabling the Sellers to perform their responsibilities and exercise their
rights under Section 2.5. The Sellers shall not use any information obtained
pursuant to this Section 6.1 for any purpose unrelated to the matters referred
to in Section 2.5. Such information shall constitute "Confidential Information"
subject to the limitations provided for in Section 6.6.
Section 6.21 Assignment of Rights. At the Closing, the Sellers shall
execute a non-exclusive assignment (the "Assignment"), in the form and substance
of the assignment annexed hereto as Appendix 6.21, pursuant to which the Sellers
shall assign on a non-exclusive basis to the Purchaser all of the rights of
indemnification that the Sellers have received from third-parties with respect
to the Companies, including without limitation the rights of indemnification, if
any, granted to the Sellers with respect to the proceedings described in Section
3.13 of the Companies' Disclosure Schedule, to the extent that the Sellers have
the right to effect such assignments. At the Purchaser's request, the Sellers
will use commercially reasonable efforts to obtain any necessary consents to
such assignments.
Section 6.22 Audited Financial Statements.
6.22.1 As promptly as practicable after the execution of this
Agreement and, in all events, prior to the Closing, the Sellers shall provide to
the Purchaser an audited consolidated balance sheet of the Companies as of
September 30, 1998 (the "Interim Audited Balance Sheet") and audited
consolidated statements of income, cash flows and changes in shareholders'
equity of the Companies for the nine months ended September 30, 1998, together
with an unqualified report thereon of the Accountants which report is in form
and substance satisfactory to the Purchaser. Such financial statements (the
"Interim Audited Financial Statements") shall be prepared in accordance with
GAAP, consistently applied, and shall conform to all provisions of the SEC's
Regulation S-X, such that the Interim Audited Financial Statements are suitable
for filing by the Purchaser with the SEC in response to Items 2 and 7 of the
SEC's Current Report on Form 8-K.
6.22.2 At the Closing, the Sellers shall cause the Accountants
to deliver to the Purchaser an executed consent, in form and substance
satisfactory to the Purchaser and suitable for filing by the Purchaser with the
SEC, which consent shall authorize the Purchaser to file with the SEC the report
referred to in Section 6.22.1 and all reports delivered by the Accountants with
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respect to the Financial Statements included within Section 3.15 of the
Companies' Disclosure Schedule.
6.22.3 Upon the Purchaser's request, contemporaneous with the
delivery of the Interim Audited Financial Statements pursuant to Section 6.22.1,
the Sellers shall cause the Accountants to make available to the Purchaser and
its representatives the work papers generated in connection with the
Accountants' audit of the Interim Audited Financial Statements.
6.22.4 In the event that (i) the Purchaser disputes any aspect
of the Interim Audited Financial Statements on the basis that, in any respect,
the Interim Audited Financial Statements were not prepared in accordance with
GAAP, consistently applied, (ii) the Purchaser notifies the Sellers of such
dispute or disputes within fourteen (14) calendar days after the Purchaser's
receipt of such financial statements and (iii) the Purchaser and the Sellers are
unable to resolve such dispute or disputes within seven (7) calendar days after
the Purchaser delivers such notice to the Sellers, the Purchaser shall have the
right to refer such dispute or disputes to an independent accounting firm
mutually acceptable to the Purchaser and the Sellers (the "Audit Firm"). In the
event of such a referral, the Purchaser, the Sellers and the Company shall
cooperate with the Audit Firm in providing the Audit Firm with such information
as the Audit Firm shall reasonably request for purposes of resolving such
disputed items. The conclusions of the Audit Firm shall be binding upon the
parties hereto with respect to (a) any claims that may be made hereunder with
respect to the representations made by the Company and the Sellers regarding the
Interim Balance Sheet and the Interim Income, Stockholders' Equity and Cash Flow
Statements and (b) the calculation of the Net Worth as of September 30, 1998. In
the event that any such dispute or disputes is or are referred by the Purchaser
to the Audit Firm, (a) the Closing shall not be held prior to the fifth Business
Day after the Audit Firm has delivered to the parties hereto its written report
with respect to the items in dispute and (b) the Outside Date shall be extended
by the number of calendar days that elapse from the date of such referral to the
sixth Business Day after such delivery has been made. The Sellers shall pay the
fees of its accountants, including without limitation the Accountants, and the
Purchaser shall pay the fees of the CPA to the extent that the CPA is involved,
in connection with the preparation and review of the Interim Audited Financial
Statements. The fees and disbursements of any Audit Firm retained pursuant to
the provisions of this Section 6.22 shall be borne one-half by the Purchaser and
one-half by the Sellers.
6.22.5 For purposes of this Agreement, the term "September 30
Net Worth" shall mean (x) the Net Worth reflected in the Interim Audited Balance
Sheet in the event that the Purchaser does not provide the notice referred to in
clause (ii) of Section 6.22.4, (y) the Net Worth as of September 30, 1998 that
the Purchaser and the Sellers shall agree upon in writing in the event that the
Purchaser provides the notice referred to in clause (ii) of Section 6.22.4 but
such agreement of the Purchaser and the Sellers is reached prior to the
resolution of any disputed matters by the Audit Firm pursuant to this Section
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6.22 and (z) the Net Worth as of September 30, 1998 as determined by the Audit
Firm (which firm shall determine such Net Worth by combining its conclusions
with respect to all matters in dispute with the conclusions of the Sellers and
the Purchaser with respect to all matters not in dispute) in the event that the
Purchaser provides the notice referred to in clause (ii) of Section 6.22.4 and
the Purchaser and the Sellers are unable to agree upon the disputed matters
prior to the resolution of any disputed matters by the Audit Firm.
Section 6.23 Waiver The Purchaser waives compliance by the Sellers
with all applicable bulk sales laws.
ARTICLE VII
Conditions to Closing
Section 7.1 Mutual Conditions The respective obligations of each party
to consummate the transactions contemplated by this Agreement shall be subject
to the fulfillment at or prior to Closing of the following conditions:
7.1.1 No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order which is in effect or
commenced any action or proceeding, which in either case would prohibit
consummation of the transactions contemplated by this Agreement or would
threaten the imposition of material damages upon consummation of such
transactions.
7.1.2 The waiting period required by the HSR Act, and any
extensions thereof obtained by request or other action of the FTC and/or the
Antitrust Division, shall have expired or been terminated by the FTC and the
Antitrust Division.
7.1.3 The shareholders of the Canadian Seller shall have
approved the sale of the Xxxxxxxxxxx Shares contemplated hereby.
7.1.4 No third-party shall have instituted any suit or
proceeding against any party hereto to restrain, enjoin or otherwise prevent the
consummation of the transactions contemplated hereby, or to seek damages from or
impose obligations upon any party hereto by reason of the transactions
contemplated hereby, which, in such party's reasonable judgment, would involve
expense or lapse of time that would be materially adverse to such party's
interest.
7.1.5 The BBC Shares required to be delivered by the Purchaser
at the Closing shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance.
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Section 7.2 Conditions to the Purchaser's Obligations. The obligations
of the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment prior to or at Closing of each of the
following conditions:
7.2.1 The representations and warranties of the Company and
the Sellers set forth in Article III and IV shall be true and correct in all
material respects (other than representations and warranties which are qualified
as to materiality, which representations and warranties shall be true in all
respects) on the date hereof and on and as of the Closing Date as though made on
and as of the Closing Date (except for representations and warranties made as of
a specified date, which shall be measured only as of such specified date).
7.2.2 Each of the US Seller, the Canadian Seller and the
Company shall have performed in all material respects each obligation and
agreement and shall have complied in all material respects with each covenant to
be performed and complied with by it under the Transaction Agreements at or
prior to the Closing.
7.2.3 During the period from September 30, 1998 through the
Closing Date, there shall not have been any Material Adverse Change affecting
the Companies taken as a whole, nor any loss or damage to the assets of the
Companies, whether or not insured, which materially affects the Companies'
ability to conduct the Businesses. The Purchaser shall have received a
certificate (executed by the President or any Vice President of the Company to
such officer's best knowledge), dated the Closing Date, to the foregoing effect
and to the further effect that any liabilities of the Companies at the Closing
Date which were not reflected on the Interim Balance Sheet are either (a)
liabilities incurred in the Ordinary Course of Business subsequent to the date
of that Interim Balance Sheet, (b) liabilities contemplated by this Agreement or
(c) liabilities which are not required by GAAP to be disclosed in a balance
sheet or the notes thereto.
7.2.4 (i) All authorizations, consents, waivers, approvals or
other actions required in connection with the execution, delivery and
performance of this Agreement by the Company and the Sellers and the
consummation by the Company and the Sellers of the transactions contemplated
hereby shall have been obtained and shall be in full force and effect; (ii) the
Company and the Sellers shall have obtained any authorizations, consents,
waivers, approvals or other actions required to prevent a material breach or
default by any of the Companies under any contract to which any of the Companies
is a party or for the continuation of any agreement to which any of the
Companies is a party; and (iii) all authorizations, consents, waivers, approvals
or other actions necessary to permit the Purchaser to own the Xxxxxxxxxxx Shares
shall have been obtained and shall be in full force and effect.
7.2.5 Prior to or at the Closing, (i) the Sellers shall have
delivered to the Company for cancellation the certificates representing the
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Xxxxxxxxxxx Shares free and clear of any and all liens, claims or encumbrances,
together with duly endorsed stock powers transferring the Xxxxxxxxxxx Shares to
the Purchaser, (ii) the Company shall have canceled such certificates, and (iii)
the Company shall have issued to the Purchaser new certificates representing the
Xxxxxxxxxxx Shares registered in the name of the Purchaser or as otherwise
directed by the Purchaser. Prior to or at the Closing, the Canadian Seller and
each subsidiary of the Canadian Seller that own PharMerica Shares shall have
executed and delivered to the Purchaser the Voting Trust Agreement (and the
Canadian Seller and such subsidiaries shall have made all deliveries required
thereunder), the Proxy and the Back-Up Option Agreement. The Transitional
Consulting Agreements shall remain in full force and effect.
7.2.6 Each of the Employee Agreements and each of the Option
Cancellation Agreements executed by the Optionees shall remain in full force and
effect and shall not have been amended without the Purchaser's consent at any
time between the date hereof and the Closing Date.
7.2.7 Prior to or at the Closing, the Sellers and the Company
shall have delivered such other closing documents as shall be reasonably
requested by the Purchaser in form and substance acceptable to the Purchaser's
counsel (which acceptance shall not be unreasonably withheld), including the
following:
(i) a certificate of the President or a Vice
President of each of the US Seller, the Canadian Seller and the
Company, dated the Closing Date, to the effect that (1) the person
signing such certificate is familiar with this Agreement and (2) to the
best of such person's knowledge, the conditions specified in Section
7.2.1, 7.2.2, 7.2.3 and 7.2.4 have been satisfied;
(ii) a certificate of the Secretary or Assistant
Secretary of each of the US Seller, the Canadian Seller and the
Company, dated the Closing Date, as to the incumbency of any officer of
such entity executing this Agreement or any document related hereto and
covering such other matters as the Purchaser may reasonably request;
(iii) a certified copy of (1) the Certificate of
Incorporation and by-laws of the Company and all amendments thereto and
(2) the resolutions of the Company's Board of Directors authorizing the
execution, delivery and consummation of this Agreement and the
transactions contemplated hereby;
(iv) a certified copy of (1) the Certificate of
Incorporation and by-laws of the US Seller and all amendments thereto
and (2) the resolutions of the US Seller's Board of Directors
authorizing the execution, delivery and consummation of this Agreement,
the Assignment and the transactions contemplated hereby and thereby;
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(v) a certified copy of (1) the organizational
documents of the Canadian Seller and all amendments thereto and (2) the
resolutions of the Canadian Seller's Board of Directors authorizing the
execution, delivery and consummation of this Agreement, the Voting
Trust Agreement, the Proxy, the Assignment and the Back-Up Option
Agreement and the transactions contemplated hereby and thereby;
(vi) an opinion of Xxxxxxx Xxxxxx Xxxx Xxxxxxx &
Manner, P.C., counsel to the Company and the Sellers, dated the Closing
Date, and substantially in the form and substance of the letter annexed
hereto as Appendix 7.2.7A (provided that such firm may rely on other
attorneys with respect to issues of local law if such attorneys are
reasonably acceptable to the Purchaser, the firm of Xxxxxxx Xxxxxx Xxxx
Xxxxxxx & Manner, P.C. advises the Purchaser that it is reasonable to
rely on such attorneys and such attorneys' opinion is furnished
directly to the Purchaser); an opinion of Xxxxxxx, Xxxxxxxx and
Vineberg, counsel to the Canadian Seller, dated the Closing Date, and
substantially in the form and substance of the letter annexed hereto as
Appendix 7.2.7B; and an opinion of Xxxxxxx XxXxxxxxx, counsel to the
Company, dated the Closing Date, and substantially in the form and
substance of the letter annexed hereto as Appendix 7.2.7C.
(vii) such other documents or instruments as the
Purchaser reasonably requests to effect the transactions contemplated
hereby.
7.2.8 Prior to or at the Closing, to the extent requested by
the Purchaser, each of the Companies shall have received the written
resignations (in form and substance reasonably satisfactory to the Purchaser) of
each of its directors and officers or persons holding similar positions in
entities which do not have directors or officers, effective as of the Closing.
7.2.9 On or before the Closing Date, (a) the Company and each
of the Designated Optionees shall have entered into option cancellation
agreements in the form and substance of the agreement annexed hereto as Appendix
7.2.9A (the "Designated Optionee Option Cancellation Agreements") and (b) the
Company and each of the Non-Designated Optionees shall have entered into option
cancellation agreements in the form and substance of the agreement annexed
hereto as Appendix 7.2.9B (the "Non-Designated Optionee Option Cancellation
Agreements" and, collectively with the Designated Optionee Option Cancellation
Agreements, the "Option Cancellation Agreements") .
7.2.10 The operating agreement for Stadt Solutions LLC shall
have been amended, in form and substance satisfactory to the Purchaser, to
assure that neither the Purchaser nor any of its Subsidiaries (other than the
Companies) shall be obligated under any of the covenants set forth in that
agreement.
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7.2.11 The Sellers shall have provided to the Purchaser the
Interim Audited Financial Statements in accordance with Section 6.22.1, together
with an unqualified report thereon of the Accountants, which report shall be in
form and substance satisfactory to the Purchaser.
7.2.12 Intentionally omitted.
7.2.13 No shares of Xxxxxxxxxxx Common Stock shall have been
issued at any time from the date hereof through the consummation of the Closing,
and no shares of such stock shall be issuable subsequent to the Closing pursuant
to the exercise of any Stock Options.
7.2.14 Intentionally omitted.
Section 7.3 Conditions to the Sellers' Obligations. The obligations of
the Sellers to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the Closing of each of the
following conditions:
7.3.1 The representations and warranties of the Purchaser set
forth in Article V shall be true and correct in all material respects (other
than representations and warranties which are qualified as to materiality, which
representations and warranties shall be true in all respects) on the date hereof
and on and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date, which
shall be measured only as of such specified date).
7.3.2 The Purchaser shall have performed in all material
respects each obligation and agreement and shall have complied in all material
respects with each covenant to be performed and complied with by it under the
Transaction Agreements at or prior to the Closing.
7.3.3 All authorizations or approvals or other action required
in connection with the execution, delivery and performance of this Agreement by
the Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby and thereby shall have been obtained and shall be in full
force and effect.
7.3.4 Prior to or at the Closing, Purchaser shall have
delivered such other closing documents as shall be reasonably requested by the
Sellers in form and substance acceptable to the Sellers' counsel (which
acceptance shall not be unreasonably withheld), including the following:
(i) a certificate of the President or a Vice
President of the Purchaser, dated the Closing Date, to the effect that
(1) the person signing such certificate is familiar with this Agreement
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and (2) to the best of such person's knowledge, the conditions
specified in Section 7.3.1 and 7.3.2 have been satisfied;
(ii) a certificate of the Secretary or Assistant
Secretary of the Purchaser, dated the Closing Date, as to the
incumbency of any officer of the Purchaser executing this Agreement or
any document related hereto and covering such other matters as the
Sellers may reasonably request;
(iii) a certified copy of (1) the Certificate of
Incorporation and by-laws of the Purchaser and all amendments thereto
and (2) the resolutions of the Purchaser's Board of Directors (or
Executive Committee thereof) authorizing the execution, delivery and
consummation of this Agreement and the transactions contemplated hereby
and thereby;
(iv) an opinion of Xxxxxxxxxx Xxxxxxx PC, counsel to
the Purchaser, dated the Closing Date, and substantially in the form
and substance of the letter annexed hereto as Appendix 7.3.3 (provided
that such firm may rely on other attorneys with respect to issues of
local law if such attorneys are reasonably acceptable to the Sellers,
the firm of Xxxxxxxxxx Xxxxxxx PC advises the Sellers that it is
reasonable to rely on such attorneys and such attorneys' opinion is
furnished directly to the Sellers) , and
(v) such other documents or instruments as the
Sellers reasonably request to effect the transactions contemplated
hereby.
7.3.5 During the period from June 30,1998 through the
Closing Date, there shall not have been any Material Adverse Change
affecting the Purchaser, other than events publicly disclosed by the
Purchaser prior to the date hereof. The Sellers shall have received a
certificate (executed by the President or any Vice President of the
Purchaser to such officer's best knowledge), dated the Closing Date, to
the foregoing effect
7.3.6 Intentionally omitted.
7.3.7 At the Closing, the Purchaser shall have tendered
payment of the Estimated Net Purchase Price in accordance with Section 2.2.2 and
shall have executed and delivered the Voting Trust Agreement.
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ARTICLE VIII
Termination
8.1 Termination. This Agreement may be terminated at any time prior to
the consummation of the Closing, whether before or after approval and adoption
of this Agreement by the Canadian Seller's shareholders, under the following
circumstances:
8.1.1 by mutual written consent of the Sellers and the
Purchaser;
8.1.2 by either the Purchaser or the Sellers if any permanent
injunction or other order of a court or other competent governmental authority
preventing the consummation of the transactions contemplated hereby shall have
become final and nonappealable;
8.1.3 by either the Purchaser or the Sellers if the Closing
shall not have been consummated on or before the Outside Date (provided that the
right to terminate this Agreement under this Section 8.1.3 shall not be
available to any party whose willful act or willful failure to act or whose
Affiliate's willful act or willful failure to act has been the cause of or
resulted in the failure of the Closing to be consummated on or before the
Outside Date);
8.1.4 by the Purchaser or the Sellers if, at or before the
completion of the Closing, it shall have discovered that any representation or
warranty made in the Transaction Agreements for its benefit, or in any
certificate, exhibit or document furnished to it pursuant to the Transaction
Agreements, is untrue in any material respect (other than representations and
warranties which are qualified as to materiality, which representations and
warranties will give rise to termination if untrue in any respect);
8.1.5 by the Purchaser if the Sellers or the Company shall
have defaulted in the performance of any material obligation under the
Transaction Agreements; provided, however, that in order to terminate this
Agreement under this Section 8.1.5, the Purchaser shall, upon discovery of such
a breach or default, give written notice thereof to the breaching party and the
breaching party shall fail to cure the breach or default by the earlier of
twenty (20) calendar days after receipt of such notice or the Closing Date;
8.1.6 by the Sellers or the Company if the Purchaser shall
have defaulted in the performance of any material obligation under the
Transaction Agreements; provided, however, that in order to terminate this
Agreement under this Section 8.1.6, the Sellers and/or the Company shall, upon
discovery of such a breach or default, give written notice thereof to the
Purchaser and the Purchaser shall fail to cure the breach or default by the
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earlier of twenty (20) calendar days after receipt of such notice or the Closing
Date;
8.1.7 by either the Purchaser or the Sellers, if at the
Canadian Seller's Shareholders Meeting (including any adjournment or
postponement thereof) the requisite vote of the Canadian Seller's shareholders
to approve the sale of the Xxxxxxxxxxx Shares contemplated hereby shall not have
been obtained;
8.1.8 by the Purchaser if any authorization, consent, waiver
or approval required for the consummation of the transactions contemplated
hereby shall require the divestiture or cessation of any of the present business
or operations conducted by the Purchaser or the Companies or shall impose any
other condition or requirement, which divestiture, cessation, condition or
requirement the Purchaser determines, in its good faith judgment, to be
materially burdensome or to deny to the Purchaser in any material respect the
benefits intended to be obtained by the Purchaser pursuant to the transactions
contemplated by this Agreement;
8.1.9 by the Purchaser, in the event that the conditions to
its obligations set forth in Article VII hereof have not been satisfied or
waived by the date set for the Closing or in the event that the Purchaser
reasonably determines that any such condition cannot possibly be satisfied prior
to the Outside Date;
8.1.10 by the Sellers, in the event that the conditions to
their obligations set forth in Article VII hereof have not been satisfied or
waived by the date set for the Closing or in the event that the Sellers
reasonably determines that any such condition cannot possibly be satisfied prior
to the Outside Date;
8.1.12 by the Purchaser if any of the Persons designated in
Section 3.25 of the Companies' Disclosure Schedule shall have breached in any
material respect any of his, her or its obligations under any of the Support
Agreements;
8.1.13 by the Canadian Seller pursuant to Section 6.8.2;
8.1.14 by the Purchaser if the Board of Directors of the
Canadian Seller shall withdraw, modify or change its recommendation, made on or
before the date hereof, that the shareholders of the Canadian Seller approve the
sale of the Xxxxxxxxxxx Shares contemplated hereby, or if the Board of Directors
of the Canadian Seller shall have refused to affirm such recommendation as
promptly as practicable (but in any case within ten (10)Business Days) after
receipt of any request from the Purchaser which request was made on a reasonable
basis; or
8.1.15 by the Canadian Seller in the event that the Canadian
Seller determines, and the Purchaser concurs (such concurrence not to be
unreasonably withheld), that the number of shares of the Canadian Seller's
capital stock for which dissenters' rights have been exercised in connection
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with the Canadian Seller's Shareholders' Meeting is so substantial as to
materially adversely affect the Canadian Seller's financial condition.
Section 8.2 Effect of Termination
8.2.1 In the event of the termination of this Agreement
pursuant to Section 8.1, this Agreement, except for the provisions of Sections
6.1, 10.2 and 10.9 and this Section 8.2, shall become void and have no effect,
without any liability on the part of any party or its directors, officers or
stockholders. Notwithstanding the foregoing, nothing in this Section 8.2 shall
relieve any party to this Agreement of liability for a material breach of any
provision of this Agreement and provided, further, however, that if it shall be
judicially determined that termination of this Agreement was caused by an
intentional breach of this Agreement, then, in addition to other remedies at law
or equity for breach of this Agreement, the party so found to have intentionally
breached this Agreement shall indemnify and hold harmless the other parties for
their respective out-of-pocket costs, including the fees and expenses of their
counsel, accountants, financial advisors and other experts and advisors as well
as fees and expenses incident to the negotiation, preparation and execution of
this Agreement and related documentation.
8.2.2 The Canadian Seller agrees that, if:
8.2.2.1 the Canadian Seller terminates this
Agreement pursuant to Sections 6.8.2 and 8.1.13;
8.2.2.2 the Purchaser terminates this Agreement
pursuant to Section 8.1.12 or 8.1.14;
8.2.2.3 (A) the Purchaser or the Canadian Seller
terminates this Agreement pursuant to Section 8.1.7, (B) at the time of such
failure by the Canadian Seller's shareholders to so approve the sale of the
Xxxxxxxxxxx Shares contemplated hereby there is a publicly announced or
disclosed Competing Transaction with respect to any of the Companies or any of
the Sellers involving a third party, and (C) within 12 months after such
termination, any of the Companies shall enter into an Acquisition Agreement for
a Business Combination or consummates a Business Combination; or
8.2.2.4 the Canadian Seller terminates this Agreement
pursuant to Section 8.1.15, then, (W) in the case of a termination by the
Purchaser as described in Section 8.2.2.2, within three (3) Business Days
following any such termination, (X) in the case of a termination by the Canadian
Seller as described in Section 8.2.2.1, concurrently with such termination, (Y)
in the case of a termination by the Canadian Seller as described in Section
8.2.2.4 upon the earlier of a consummation of a Competing Transaction or
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execution of a definitive agreement with respect thereto if either such
consummation or such execution occurs within twelve months after such
termination by the Canadian Seller, or (Z) in the case of a termination by the
Canadian Seller or the Purchaser as described in Section 8.2.2.3 where a
Competing Transaction has been publicly announced or publicly disclosed prior to
the Canadian Seller's Shareholders Meeting (including any adjournment or
postponement thereof), prior to the earlier consummation of a Business
Combination or execution of a definitive agreement with respect thereto, in any
such case described in clauses (W), (X), (Y) or (Z), the Canadian Seller will
pay to the Purchaser in cash by wire transfer in immediately available funds to
an account designated by the Purchaser the sum of twelve million dollars
($12,000,000), inclusive of the Purchaser's costs. For purposes of this
Agreement, "Business Combination" means (i) a merger, consolidation, share
exchange, business combination or similar transaction involving any of the
Companies or either of the Sellers as a result of which the shareholders thereof
reduce their percentage ownership interest in the equity interests of the entity
surviving or resulting from such transaction (or the ultimate parent entity
thereof) below seventy-five percent (75%) of such percentage ownership interest
as such percentage ownership interest existed immediately prior to the
commencement of negotiations of such transaction, (ii) a sale, lease, exchange,
transfer or other disposition of all or substantially all of the assets of any
of the Companies, or (iii) the acquisition, by a Person (other than the
Purchaser or any affiliate thereof) or group (as such term is defined under
Section 13(d) of the Exchange Act and the rules and regulations thereunder) of
beneficial ownership (as defined in Rule 13d-3 under the Exchange Act) of an
equity interest of more than twenty-five percent (25%) in any of the Companies
or in either of the Sellers beyond the equity interests that such Person or
group beneficially owns on the date hereof.
ARTICLE IX
Survival of Representations and Warranties; Indemnification
Section 9.1 Survival of Representations and Warranties. Except as set
forth below, the representations and warranties provided for in this Agreement
shall survive the Closing and remain in full force and effect for one year from
the Closing Date for the benefit of the parties hereto and their successors and
assigns. The representations and warranties provided for in Section 3.8 shall
survive the Closing and remain in full force and effect for the benefit of the
parties hereto and their successors and assigns until thirty (30) calendar days
after the expiration of the applicable statute of limitations. The
representations and warranties provided for in Section 3.22 shall survive the
Closing and remain in full force and effect for two years from the Closing Date
for the benefit of the parties hereto and their successors and assigns. The
survival period of each representation or warranty as provided in this Section
9.1 is hereinafter referred to as the "Survival Period."
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Section 9.2 Indemnification
9.2.1 The Sellers, subject to the limitations set forth in
Section 9.2.4, shall jointly and severally indemnify and hold harmless the
Purchaser, its Affiliates, officers, directors, employees, agents and
representatives, the Companies, and any Person claiming by or through any of the
foregoing, against and in respect of any and all claims, costs, expenses,
damages, liabilities, losses or deficiencies (including, without limitation,
attorneys' fees and other costs and expenses incident to any suit, action or
proceeding) (the "Damages") arising out of, resulting from or incurred in
connection with (i) subject to Section 9.6, any inaccuracy in any representation
or the breach of any warranty made by the Sellers or the Company in this
Agreement for the applicable Survival Period, (ii) any claim made after the
Closing that any of the Companies are responsible for any Taxes with respect to
any period on or before the Closing Date, other than liabilities for Taxes
accrued in determining the Net Worth as of the Closing Date hereunder and other
than claims resulting from actions which the Companies voluntarily elect to take
after the Closing, but are not required to take, which actions are inconsistent
with positions taken by the Company prior to the Closing, (iii) any liabilities
of any of the Companies with respect to any of the Plans in effect as of the
Closing Date, other than liabilities accrued in determining the Net Worth as of
the Closing Date hereunder, (iv) any matter described in Section 3.13 of the
Companies' Disclosure Schedule, (v) any liability of any of the Companies for
Taxes of any Person, other than any of the Companies, under Treas. Reg.
ss.1.1502-6 or any comparable provision of state, local or foreign law, as a
transferee or successor, by contract, or otherwise, (vi) the breach by the
Sellers of any covenant or agreement to be performed by the Sellers hereunder;
(vii) any payment made by the Company pursuant to Sections VIII,A and/or XI,A of
the CEO Contract in excess of the amounts set forth in Section 9.2.1 of the
Companies' Disclosure Schedule; (viii) the failure by the Purchaser to acquire
at the Closing one hundred percent (100%) of the outstanding Xxxxxxxxxxx Common
Stock free and clear of all security interests, liens, encumbrances, claims or
restrictions of any kind or the failure by the Company to own, as of the
Closing, directly or indirectly, one hundred percent (100%) of the equity
interests in the Subsidiaries (except to the extent that the Company does not
own, as of the date hereof, one hundred percent (100%) of such equity interests,
as described in Section 3.2 of the Companies' Disclosure Schedule), free and
clear of all security interests, liens, encumbrances, claims or restrictions of
any kind; (ix) any claim by any Person that such Person owns more Stock Options
than the number of Stock Options set forth in Section 3.4 of the Companies'
Disclosure Schedule and/or that the exercise price of such Person's Stock
Options is different than the exercise price et forth in Section 3.4 of the
Companies' Disclosure Schedule; and (x) any failure by either of the Sellers to
comply with any applicable bulk sales law.
9.2.2 The Purchaser, subject to the limitations set forth in
Section 9.2.4, shall indemnify and hold harmless the Sellers and their
respective Affiliates, officers, directors, employees, agents and
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representatives, and any Person claiming by or through any of them, against and
in respect of any and all Damages arising out of, resulting from or incurred in
connection with (i) subject to Section 9.6, any inaccuracy in any representation
or the breach of any warranty made by the Purchaser in this Agreement for the
applicable Survival Period, (ii) the breach by the Purchaser of any covenant or
agreement to be performed by it hereunder or (iii) the operation of the Company
after the Closing, except to the extent that the Purchaser is indemnified
hereunder with respect to such matter.
9.2.3 Any Person providing indemnification pursuant to the
provisions of this Section 9.2 is hereinafter referred to as an "Indemnifying
Party" and any Person entitled to be indemnified pursuant to the provisions of
this Section 9.2 is hereinafter referred to as an "Indemnified Party."
9.2.4 The Sellers' indemnification obligations contained in
Sections 9.2.1(i), 9.2.1(iii) and 9.2.1(iv) hereunder shall not apply to any
claim for Damages until the aggregate of all such claims total $2,000,000, in
which event the Seller's indemnity obligation contained in Sections 9.2.1(i),
9.2.1(iii)and 9.2.1(iv) hereunder shall apply to the total amount in excess of
$2,000,000, subject to a maximum liability to the Purchaser of $25,000,000 for
all claims under Section 9.2.1(i), 9.2.1(iii) and 9.2.1(iv) in the aggregate.
The Purchaser's indemnification obligation contained in Sections 9.2.2(i) and
9.2.2(iii) hereunder shall not apply to any claim for Damages until the
aggregate of all such claims total $2,000,000, in which event the Purchaser's
indemnity obligation contained in Sections 9.2.2(i) and 9.2.2(iii) shall apply
to the total amount in excess of $2,000,000, subject to a maximum liability to
the Sellers of $25,000,000 for all claims under Sections 9.2.2(i) and 9.2.2(iii)
in the aggregate. All such claims made during the relevant Survival Period shall
be counted in determining whether the thresholds specified above have been
achieved.
9.2.5 The provisions of Article IX shall constitute the sole
and exclusive remedy of any Indemnified Party for Damages arising out of,
resulting from or incurred in connection with any inaccuracy in any
representation or the breach of any warranty made by the Purchaser, the Company
or the Sellers in this Agreement.
Section 9.3 Procedures for Third Party Claims. In the case of
any claim for indemnification arising from a claim of a third party (a "Third
Party Claim"), an Indemnified Party shall give prompt written notice to the
Indemnifying Party of any claim or demand of which such Indemnified Party has
knowledge and as to which it may request indemnification hereunder. The
Indemnifying Party shall have the right to defend and to direct the defense
against any such Third Party Claim, in its name or in the name of the
Indemnified Party, as the case may be, at the expense of the Indemnifying Party,
and with counsel selected by the Indemnifying Party unless (i) such Third Party
Claim seeks an order, injunction or other equitable relief against the
Indemnified Party, or (ii) the Indemnified Party shall have reasonably concluded
that (x) there is a conflict of interest between the Indemnified Party and the
Indemnifying Party in the conduct of the defense of such Third Party Claim or
- 74 -
(y) the Indemnified Party has one or more defenses not available to the
Indemnifying Party. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Party shall, at the expense of the Indemnifying Party, cooperate
with the Indemnifying Party, and keep the Indemnifying Party fully informed, in
the defense of such Third Party Claim. The Indemnified Party shall have the
right to participate in the defense of any Third Party Claim with counsel
employed at its own expense; provided, however, that, in the case of any Third
Party Claim described in clause (i) or (ii) of the second preceding sentence or
as to which the Indemnifying Party shall not in fact have employed counsel to
assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party.
The Indemnifying Party shall have no indemnification obligations with respect to
any Third Party Claim which shall be settled by the Indemnified Party without
the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
Section 9.4 Procedures for Inter-Party Claims. In the event that an
Indemnified Party determines that it has a claim for Damages against an
Indemnifying Party hereunder (other than as a result of a Third Party Claim),
the Indemnified Party shall give prompt written notice thereof to the
Indemnifying Party, specifying the amount of such claim and any relevant facts
and circumstances relating thereto. The Indemnified Party shall provide the
Indemnifying Party with reasonable access to its books and records for the
purpose of allowing the Indemnifying Party a reasonable opportunity to verify
any such claim for Damages. The Indemnified Party and the Indemnifying Party
shall negotiate in good faith regarding the resolution of any disputed claims
for Damages. Promptly following the final determination of the amount of any
Damages claimed by the Indemnified Party, the Indemnifying Party shall pay such
Damages to the Indemnified Party by wire transfer or check made payable to the
order of the Indemnified Party, without interest. In the event that the
Indemnified Party is required to institute legal proceedings in order to recover
Damages hereunder, the cost of such proceedings (including costs of
investigation and reasonable attorneys' fees and disbursements) shall be added
to the amount of Damages payable to the Indemnified Party.
Section 9.5 Intentionally omitted.
Section 9.6 Limitations Arising from Knowledge of Claims.
Notwithstanding any provision herein to the contrary, neither the Sellers nor
the Purchaser shall be entitled to indemnification with respect to any claim
under either Section 9.2.1(i) or 9.2.2(i) in the event that the party seeking
indemnification had knowledge of the substance and approximate magnitude of such
claim prior to the Closing.
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ARTICLE X
Miscellaneous
Section 10.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
facsimile, by overnight courier or sent by certified or registered mail, postage
prepaid, and shall be deemed given when so delivered personally, or when so
received by facsimile or courier, or if mailed, three calendar days after the
date of mailing, as follows:
If to the Purchaser: Bergen Xxxxxxxx Corporation
0000 Xxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Milan A. Sawdei, Esq.
with a copy (which shall not constitute
notice) to:
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000)000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to the Company/Sellers: Counsel Corporation
Exchange Tower
000 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Facsimile: 000-000-0000
Attention: Xxxxx Xxxxxx
With a copy (which shall not constitute
notice) to:
Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C.
18th Floor First American Center
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxx Manner, Esq.
- 76 -
or to such other address as any party hereto shall notify the other parties
hereto (as provided above) from time to time.
Section 10.2 Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated, except as otherwise provided herein, each
of the Canadian Seller, the US Seller and the Purchaser shall pay its own
expenses incident to this Agreement and the transactions contemplated herein
(including without limitation legal fees, accounting fees and investment banking
fees). No portion of such expenses shall be borne by any of the Companies.
Except in the event of a Special Termination, the Purchaser, upon receipt of
invoices from the Sellers, shall reimburse the Sellers for a portion of the fees
and disbursements paid to the investment bankers, attorneys and accountants
representing the Sellers and the Companies (the "Fees and Disbursements"), such
portion to equal the lesser of $2,500,000 and one half of such Fees and
Disbursements. The Purchaser shall not be responsible for any of the Fees and
Disbursements in the event of a Special Termination. For purposes of this
Agreement, the term "Special Termination" shall mean (a) any termination of this
Agreement described in Section 8.2.2 and (b) any termination resulting from a
breach of a covenant or representation by the Sellers or the Company.
Section 10.3 Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of Delaware, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction
of the courts of the states of Pennsylvania, New Jersey and California and the
United States District Court for any District within such states for the purpose
of any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Section 10.4 Assignment; Successors and Assigns; No Third Party Rights.
Except as otherwise provided herein, this Agreement may not be assigned by
operation of law or otherwise, and any attempted assignment shall be null and
void. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns and legal
representatives. This Agreement shall be for the sole benefit of the parties to
this Agreement, their respective successors, assigns and legal representatives,
and any Person who is an Indemnified Party, and is not intended, nor shall be
construed, to give any Person, other than the parties hereto and their
- 77 -
respective successors, assigns and legal representatives and any Person who is
an Indemnified Party, any legal or equitable right, remedy or claim hereunder.
Section 10.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original agreement, but all of
which together shall constitute one and the same instrument.
Section 10.6 Titles and Headings. The headings and table of contents in
this Agreement are for reference purposes only, and shall not in any way affect
the meaning or interpretation of this Agreement.
Section 10.7 Entire Agreement. This Agreement (including the disclosure
schedules delivered in connection with this Agreement and the agreements
referenced in the appendices attached hereto), the Support Agreements and the
confidentiality agreements among the parties dated as of September 30, 1998 and
August 27, 1998 constitute the entire agreement among the parties with respect
to the matters covered hereby and thereby and supersede all previous written,
oral or implied understandings among them with respect to such matters.
Section 10.8 Amendment and Modification. This Agreement may be amended
by the parties hereto, by action taken or authorized by their respective Boards
of Directors (or executive committees thereof), at any time before or after
approval by the shareholders of the Canadian Seller of the sale of the
Xxxxxxxxxxx Shares contemplated hereby, but after any such approval, no
amendment shall be made which by law requires further approval or authorization
by the shareholders of the Canadian Seller without such further approval or
authorization. Notwithstanding the foregoing, this Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 10.9 Publicity. Unless otherwise required by applicable laws or
the requirements of any national securities exchange (and in that event only if
time does not permit), at all times prior to the earlier of the consummation of
the Closing or termination of this Agreement pursuant to Section 8.1, the
Sellers and the Purchaser shall consult with each other before issuing any press
release with respect to the transactions contemplated hereby and shall not issue
any such press release prior to such consultation.
Section 10.10 Waiver. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the benefit
thereof, but only by a writing signed by the party or parties waiving such terms
or conditions.
Section 10.11 Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
- 78 -
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 10.12 No Strict Construction. Each of the Purchaser, the
Company and the Sellers acknowledge that this Agreement has been prepared
jointly by the parties hereto, and shall not be strictly construed against any
party.
Section 10.13 Knowledge. To the extent that any representation is made
to the knowledge of the Company and/or the Sellers and to the extent that
knowledge of the Sellers is relevant for purposes of Section 9.6, such knowledge
shall refer to the actual knowledge of Xxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxx, Xxxxx Sas, Xxxxxx Xxxxxxx, Xxxxxxx Law, Xxxx Xxxxxxx, Xxxx Xxxxxxx,
Xxxxxx Xxxxx and Xxxx Xxxxxxxx. To the extent that knowledge of the Purchaser is
relevant for purposes of Sections 6.1 and 9.6, such knowledge shall refer to the
actual knowledge of Xxxxxx Xxxxxxx, Xxx Xxxxx, Xxxx Xxxxxx, Milan Sawdei, Xxxxx
Xxxxxx, Xxxx Xxxxxxx and Xxxxx Xxxxx.
Section 10.14 Subsidiaries' Ownership of PharMerica Shares. To the
extent that any provisions of this Agreement require the Canadian Seller to take
certain actions with respect to its subsidiaries' conduct relating to the
PharMerica Shares, such provisions shall only relate to those subsidiaries of
the Canadian Seller that own any PharMerica Shares.
- 79 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXXXXXXXX DRUG CO.,INC.
By:_________________________________
Name:_______________________________
Title:______________________________
COUNSEL CORPORATION
By:_________________________________
Name:_______________________________
Title:______________________________
STADT HOLDINGS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
BERGEN XXXXXXXX CORPORATION
By:
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
[Stock Purchase Agreement]
- 80 -
TABLE OF CONTENTS
-----------------
Article I - Certain Definitions
-------------------------------
Section 1.1 Certain Definitions........................................ 2
Section 1.2 Terms Defined in Other Sections............................ 8
Section 1.3 Interpretation.............................................10
Article II - Purchase and Sale of Stock; Grant of the Back-up Option
Agreement and Other Rights; Additional Covenants
----------------------------------------------------------------------
Section 2.1 Purchase and Sale of the Xxxxxxxxxxx Common
Stock; Grant of the Back-up Option Agreement and
Other Rights...............................................11
Section 2.2 Estimated Net Purchase Price; Adjustments to the
Estimated Net Purchase Price; Payment of
Consideration..............................................11
Section 2.3 Securities Law Matters.....................................15
Section 2.4 Restrictions on Sales and Other Transfers..................17
Section 2.5 Determination of Net Worth as of the Closing Date..........18
Section 2.6 Determination of September 30 Net Worth....................20
Section 2.7 Closing....................................................20
Article III - Representations and Warranties Regarding the Companies
--------------------------------------------------------------------
Section 3.1 Organization and Standing; Business........................20
Section 3.2 Subsidiaries...............................................21
Section 3.3 Corporate Power and Authority..............................22
Section 3.4 Capitalization of the Company..............................22
Section 3.5 Conflicts, Consents and Approvals..........................23
Section 3.6 No Material Adverse Change.................................24
Section 3.7 Intentionally omitted......................................24
Section 3.8 Taxes......................................................24
Section 3.9 Compliance with Law........................................25
Section 3.10 Intellectual Property......................................26
Section 3.11 Title to and Condition of Properties.......................26
Section 3.12 Medicare and Medicaid; Reimbursement by Payors;
Related Legislation and Regulations........................26
Section 3.13 Litigation.................................................28
Section 3.14 Brokerage and Finder's Fees; Expenses......................28
Section 3.15 Financial Statements.......................................28
Section 3.16 Employee Benefit Plans.....................................30
Section 3.17 Contracts..................................................32
Section 3.18 Labor Matters..............................................33
Section 3.19 Undisclosed Liabilities....................................34
Section 3.20 Operation of the Businesses; Relationships.................34
Section 3.21 Permits; Compliance........................................34
Section 3.22 Environmental Matters......................................35
Section 3.23 Intentionally omitted......................................36
Section 3.24 Year 2000..................................................36
Section 3.25 Antitakeover Laws; Support Agreements......................36
Section 3.26 Accounts Receivable and Inventories........................36
Section 3.27 Insurance..................................................36
Section 3.28 Employee Agreements........................................37
Section 3.29 Director Compensation......................................37
Article IV - Representations and Warranties Regarding the Sellers
-----------------------------------------------------------------
Section 4.1 Organization and Qualification of the Seller...............37
Section 4.2 Corporate Power and Authority..............................37
Section 4.3 Conflicts; Consents and Approvals..........................38
Section 4.4 Indemnification............................................39
Section 4.5 Ownership of the Shares....................................39
Section 4.6 Brokers....................................................40
Section 4.7 Securities and Related Matters.............................40
Section 4.8 Intentionally omitted......................................41
Section 4.9 Board Recommendation.......................................41
Article V - Representations and Warranties Regarding the Purchaser
------------------------------------------------------------------
Section 5.1 Organization and Standing..................................41
Section 5.2 Corporate Power and Authority..............................42
Section 5.3 Capitalization of the Purchaser............................42
Section 5.4 Conflicts; Consents and Approvals..........................42
Section 5.5 Brokers....................................................43
Section 5.6 BBC SEC Documents and Other Public Disclosures.............43
Article VI - Covenants and Agreements
-------------------------------------
Section 6.1 Access and Information.....................................44
Section 6.2 Affirmative Covenants......................................45
Section 6.3 Negative Covenants.........................................46
Section 6.4 Closing Documents..........................................48
Section 6.5 Transfer and Other Taxes...................................48
Section 6.6 Non-Competition and Confidentiality Agreement..............49
Section 6.7 Reasonable Efforts; Further Assurances.....................50
Section 6.8 Third Party Proposals......................................50
Section 6.9 Tax Election...............................................53
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Section 6.10 Xxxx-Xxxxx-Xxxxxx Filings..................................53
Section 6.11 Notification by the Purchaser..............................53
Section 6.12 Agreements.................................................53
Section 6.13 Company Options...........................................54
Section 6.14 Retained Employees.........................................55
Section 6.15 PharMerica Shares..........................................56
Section 6.16 Environmental Matters......................................57
Section 6.17 Canadian Seller's Shareholders' Meeting....................57
Section 6.18 Payment of Certain Debt....................................58
Section 6.19 Pharmaceutical Supply Agreement and Shared
Services Agreement.........................................59
Section 6.20 Access to Prepare the Proposed Statement and to review
Other Documents............................................59
Section 6.21 Assignment of Rights.......................................59
Section 6.22 Audited Financial Statements...............................60
Article VII - Conditions to Closing
-----------------------------------
Section 7.1 Mutual Conditions..........................................61
Section 7.2 Conditions to the Purchaser's Obligations..................62
Section 7.3 Conditions to the Seller's Obligations.....................65
Article VIII - Termination
--------------------------
Section 8.1 Termination................................................67
Section 8.2 Effect of Termination......................................69
Article IX - Survival of Representations and Warranties; Indemnification
------------------------------------------------------------------------
Section 9.1 Survival of Representations and Warranties.................71
Section 9.2 Indemnification............................................71
Section 9.3 Procedures for Third Party Claims..........................73
Section 9.4 Procedures for Inter-Party Claims..........................73
Section 9.5 Right of Set-Off...........................................74
Section 9.6 Limitations Arising from Knowledge of Claims...............74
Article X - Miscellaneous
-------------------------
Section 10.1 Notices....................................................74
Section 10.2 Expenses...................................................75
Section 10.3 Governing Law; Consent to Jurisdiction.....................76
Section 10.4 Assignment; Successors and Assigns; No Third Party Rights..76
Section 10.5 Counterparts...............................................76
Section 10.6 Titles and Headings........................................76
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Section 10.7 Entire Agreement...........................................76
Section 10.8 Amendment and Modification.................................77
Section 10.9 Publicity..................................................77
Section 10.10 Waiver.....................................................77
Section 10.11 Severability...............................................77
Section 10.12 No Strict Construction.....................................77
Section 10.13 Knowledge..................................................77
Section 10.14 Subsidiaries' Ownership of PharMerica Shares...............78
Companies' Disclosure Schedule
------------------------------
Schedule 3.1 Organization and Standing; Business
Schedule 3.2 Subsidiaries
Schedule 3.4 Capitalization of the Company
Schedule 3.5 Conflicts; Consents and Approvals
Schedule 3.8. Taxes
Schedule 3.9 Compliance with Law
Schedule 3.10 Intellectual Property
Schedule 3.12 Medicare and Medicaid; Reimbursement by Payors; Related
Legislation and Regulations
Schedule 3.13 Litigation
Schedule 3.15 Financial Statements
Schedule 3.16 Employee Benefit Plans
Schedule 3.17 Contracts
Schedule 3.18 Labor Matters
Schedule 3.19 Undisclosed Liabilities
Schedule 3.20 Operation of the Businesses; Relationships
Schedule 3.21 Permits; Compliance
Schedule 3.22 Environmental Matters
Schedule 3.25 Anti-takeover Laws; Support Agreements
Schedule 3.27 Insurance
Schedule 3.28 Employee Agreements; Option Cancellation Agreements
Schedule 3.29 Director Compensation
Schedule 4.3 Conflicts; Consents and Approvals
Schedule 4.4 Indemnification
Schedule 9.2 Indemnification
Purchaser's Disclosure Schedule
-------------------------------
Schedule 5.4 Conflicts; Consents and Approvals
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Appendices
----------
Appendix 1.1 Back-up Option Agreement
Appendix 1.3 Irrevocable Proxy
Appendix 1.4 Voting Trust Agreement
Appendix 2.3.7 Registration Rights
Appendix 6.14 Transitional Consulting Agreements
Appendix 6.21 Assignment of Rights
Appendix 7.2.7A Form of Opinion of Xxxxxxx Xxxxxx Xxxx Xxxxxxx & Manner, P.C.,
Appendix 7.2.7B Form of Opinion of Xxxxxxx, Xxxxxxxx and Xxxxxxxx
Appendix 7.2.7C Form of Opinion of Xxxxxxx XxXxxxxxx
Appendix 7.2.9A Designated Optionee Option Cancellation Agreements
Appendix 7.2.9B Non-Designated Optionee Option Cancellation Agreements
Appendix 7.3.3 Form of Opinion of Xxxxxxxxxx Xxxxxxx PC
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