AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 21, 1998 (this
"AGREEMENT"), is made by and among IMMUCOR, INC., a Georgia corporation
("PARENT"), GAMMA ACQUISITION CORPORATION, a Texas corporation and wholly
owned subsidiary of Parent ("MERGER SUB"), and GAMMA BIOLOGICALS, INC., a
Texas corporation (the "COMPANY").
In consideration of the respective representations, warranties, and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE I.
THE TENDER OFFER AND MERGER
SECTION 1.01 TENDER OFFER
(a) As promptly as practicable, but in no event later than five
business days after the public announcement of the execution of this
Agreement, Merger Sub will, and Parent will cause Merger Sub to, offer to
purchase (the "OFFER") each outstanding share of Common Stock, $.10 par value
(the "COMMON STOCK"), of the Company, including the associated Company Right
(as defined in Section 3.06) (together with the Company Right, "COMPANY
STOCK"), tendered pursuant to the Offer at a price of $5.40 per share, net to
the seller in cash. The obligations of Merger Sub and Parent to consummate
the Offer and to accept for payment and purchase the Company Stock tendered
in the Offer will be subject only to the conditions set forth in Schedule
1.01(a) (Offer Conditions) (the "OFFER CONDITIONS"). The expiration date of
the Offer shall be twenty (20) business days after commencement. Parent and
Merger Sub agree that if all of the Offer Conditions are not satisfied on
such initial expiration date then, provided that Parent determines that all
Offer Conditions are reasonably capable of being satisfied and subject to
Securities and Exchange Commission (the "SEC") rules with respect to
extension of time periods, Merger Sub may extend the Offer from time to time
until all Offer Conditions have been satisfied or waived. Parent and Merger
Sub agree that upon the expiration date of the Offer, as the same may be
extended in accordance with the immediately preceding sentence, if all Offer
Conditions have been satisfied, Merger Sub shall accept the shares of Company
Stock properly tendered for purchase, subject to the right to extend the
Offer not more than ten (10) business days in the aggregate if less than 90%
of the Company Stock have been properly tendered, such 90% to be calculated
after giving effect to the conversion of any securities convertible into
Common Stock, and the exercise of any options, warrants or other rights to
acquire Common Stock.
(b) On the date of the commencement of the Offer, Merger Sub and
Parent will file with the SEC their Tender Offer Statement on Schedule 14D-1
(together with all supplements or amendments thereto, and including all
exhibits, the "OFFER DOCUMENTS"). Merger Sub and Parent will give the
Company and its counsel a reasonable opportunity to review and comment upon
the Offer Documents prior to their being filed with the SEC or disseminated
to the
Company's stockholders. Parent and Merger Sub agree that the Offer Documents
shall comply as to form in all material respects with the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), and the rules and regulations
promulgated thereunder, and the Offer Documents, on the date filed with the
SEC and on the date first published, sent, or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation or
warranty is made by Parent or Merger Sub with respect to information supplied
by the Company or any of its stockholders in writing specifically for
inclusion or incorporation by reference in the Offer Documents. Each of
Parent, Merger Sub, and the Company agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect, and Parent and Merger Sub further agree to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to the
Company's stockholders, in each case as and to the extent required by
applicable federal securities laws. Parent and Merger Sub agree to provide
the Company and its counsel any comments Parent, Merger Sub, or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments.
(c) As promptly as practicable, but in no event later than the
date on which Parent shall have notified the Company that the Offer Documents
initially are to be filed with the SEC, the Company will file its Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the Offer (together with all supplements or amendments thereto, and including
all exhibits, ("SCHEDULE 14D-9"), which shall include a recommendation by the
Company's Board of Directors that the Company's stockholders accept the Offer
and tender their Company Stock pursuant to the Offer. The Company agrees
that the Schedule 14D-9 shall comply as to form in all material respects with
the requirements of the Exchange Act and the rules and regulations
promulgated thereunder and, on the date filed with the SEC and on the date
first published, sent, or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty is made by the
Company with respect to information supplied by Parent or Merger Sub in
writing specifically for inclusion in the Schedule 14D-9. Each of the
Company, Parent, and Merger Sub agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect,
and the Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended
or supplemented to be filed with the SEC and disseminated to the Company's
stockholders, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given reasonable
opportunity to review and comment upon the Schedule 14D-9 prior to its filing
with the SEC or dissemination to stockholders of the Company. The Company
agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments. The Company's Board of
Directors has resolved to recommend that the Company's stockholders accept
the Offer and tender their Company Stock pursuant to the Offer and has
received an opinion from Dain
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Xxxxxxxx Xxxxxxx that, as of the date of such opinion, the consideration to
be received by the stockholders of the Company pursuant to the Offer and the
Merger is fair to such stockholders from a financial point of view. In
addition, the Company shall cause its transfer agent to furnish Parent and
Merger Sub with mailing labels, security position listings and any available
listings or computer files containing the names and addresses of record
holders of the Common Stock or the Company Stock as of a recent date, and
shall furnish to Parent and Merger Sub such information and assistance as the
Parent or Merger Sub may reasonably request in communicating the Offer to the
Company's stockholders.
(d) If requested by Parent or Merger Sub, the Company will,
promptly following the purchase by Merger Sub pursuant to the Offer of that
number of shares of Company Stock which, when aggregated with the shares of
Company Stock then owned by Parent and any of its affiliates, represents at
least a majority of the shares of Company Stock then outstanding on a fully
diluted basis, take all actions necessary to cause persons designated by
Merger Sub to become directors of the Company so that the total number of
directors so designated equals the product, rounded up to the next whole
number, of (i) the total number of directors of the Company multiplied by
(ii) the ratio of the number of shares of Company Stock beneficially owned by
Merger Sub or its affiliates at the time of such purchase over the number of
shares of Company Stock then outstanding. In furtherance thereof, the Company
will take whatever action is necessary, including but not limited to amending
the Company's bylaws, to increase the size of its Board of Directors, or use
reasonable efforts to secure the resignation of directors, or both, as is
necessary to permit that number of Merger Sub's designees to be elected to
the Company's Board of Directors; provided that, prior to the Effective Time,
the Company's Board of Directors will always have at least two members who
are not officers, designees, stockholders, or affiliates of Merger Sub
("INDEPENDENT DIRECTORS"). All of the Independent Directors will be
individuals who are currently directors of the Company, except to the extent
that no such individuals wish to be directors. The Company's obligations to
appoint designees to its Board of Directors will be subject to Section 14(f)
of the Exchange Act, and Rule 14f-1 promulgated thereunder. Parent and Merger
Sub will supply to the Company and will be solely responsible for any
information with respect to either of them and their nominees, officers,
directors, and affiliates required by Section 14(f) and Rule 14f-1. The
Company will promptly take all actions required pursuant to Section 14(f) and
Rule 14f-1 in order to fulfill its obligations under this Section 1.01 and
(provided that Merger Sub shall have provided to the Company on a timely
basis all information required to be included in the Information Statement
with respect to Merger Sub's designees) will include in the Schedule 14D-9
such information with respect to the Company and its officers and directors
as is required under Section 14(f) and Rule 14f-1.
(e) Following the election or appointment of Merger Sub's
designees pursuant to Section 1.01(d), any amendment to this Agreement, any
termination of this Agreement by the Company, any extension by the Company of
the time for the performance of any of the obligations of Merger Sub or
Parent under this Agreement, any recommendation to stockholders or any
modification or withdrawal of any such recommendation, the retention of
counsel and other advisors in connection with the transactions contemplated
hereby, or any waiver of any of the Company's rights under this Agreement
will require the concurrence of a majority of the Independent Directors,
unless no individuals who are currently directors of the Company wish to be
directors. In addition, the Independent Directors shall have the right to
retain, at the expense
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of the Company, one separate firm of counsel to represent them in connection
with the transactions contemplated hereby.
(f) The parties will cooperate with each other, including by
furnishing any necessary information and making any filings required by
applicable law, to ensure that the matters contemplated by this Section 1.01
are consummated as promptly as practicable.
SECTION 1.02 THE MERGER.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, at the Effective Time (as defined in Section 1.02(b)), Merger Sub
will be merged with and into the Company in accordance with the Texas
Business Corporation Act ("TEXAS LAW"). As a result of this merger (the
"MERGER"), the separate existence of Merger Sub will cease and the Company
will be the surviving corporation (the "SURVIVING CORPORATION").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger set forth in
Article VII, the parties will cause articles of merger in such form as is
required by, and executed in accordance with, Texas Law to be duly filed with
the Secretary of State of the State of Texas. The Merger will become
effective when the articles of merger are so filed and the certificate of
merger is issued by the Secretary of State of Texas (the "EFFECTIVE TIME").
(c) From and after the Effective Time, the Merger will have the
effects specified in Texas Law.
(d) The closing of the Merger (the "CLOSING") will take place (i)
at the offices of Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P., 000 Xxxxxxxxx
Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000, at 10:00 a.m. on the first
business day following the date on which the last to be fulfilled or waived
of the conditions set forth in Article VII (other than those conditions that
by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions at the Closing) have been satisfied
or waived in accordance with this Agreement or (ii) at such other place and
time as the parties may agree.
SECTION 1.03 CONVERSION OF SHARES.
At the Effective Time:
(a) Each share of Common Stock of Merger Sub (a share of "MERGER
SUB COMMON STOCK") issued and outstanding immediately prior to the Effective
Time will be converted into one share of Common Stock of the Surviving
Corporation.
(b) Each share of Company Stock issued and outstanding immediately
prior to the Effective Time will, except as otherwise provided in Section
1.03(c), be converted, by virtue of the Merger and without any action on the
part of the holder thereof, into the right to receive, without interest, an
amount in cash equal to the price per share paid in the Offer (the "MERGER
CONSIDERATION"). Subject to Section 1.06, from and after the Effective Time,
all shares of
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Company Stock, by virtue of the Merger and without any action on the part of
the holders thereof, will be canceled and retired and cease to exist, and
each holder of a certificate representing any shares of Company Stock
immediately prior to the Effective Time (a "STOCK CERTIFICATE") will
thereafter cease to have any rights with respect to such shares of Company
Stock, except the right to receive the Merger Consideration therefor upon the
surrender of the Stock Certificate in accordance with Section 1.04.
(c) Each outstanding share of Company Stock held by the Company as
a treasury share or owned by Parent, Merger Sub, or any other Subsidiary (as
defined in Section 3.07) of Parent immediately prior to the Effective Time
will be canceled, and no payment will be made with respect thereto.
SECTION 1.04 SURRENDER AND PAYMENT.
(a) Prior to the Effective Time, Parent will appoint a bank or
trust company reasonably acceptable to the Company (the "EXCHANGE AGENT") for
the purpose of exchanging Stock Certificates. Parent will make available to
the Exchange Agent funds in amounts and at the times necessary for the
payment of the Merger Consideration in accordance with this Section 1.04
(such cash is referred to as the "EXCHANGE FUND").
(b) Promptly, but in no event more than five business days, after
the Effective Time, Parent will send, or will cause the Exchange Agent to
send, to each holder of a Stock Certificate a letter of transmittal and
instructions for use in surrendering the Stock Certificates for payment in
accordance with this Section 1.04. The agreement with the Exchange Agent
will provide that, upon surrender to the Exchange Agent of such Stock
Certificates, together with the letter of transmittal, duly executed and
completed in accordance with the instructions thereto and such other
documents as may be reasonably required by the Exchange Agent, the Exchange
Agent shall promptly pay to the persons entitled thereto, out of the Exchange
Fund, a check in the amount to which such persons are entitled pursuant to
Section 1.03(b), after giving effect to any required tax withholdings, and
such Stock Certificate shall forthwith be canceled.
(c) After the Effective Time, Stock Certificates will represent
the right, upon surrender thereof to the Exchange Agent, together with a duly
executed and properly completed letter of transmittal relating thereto, to
receive (i) cash in the amount to which such holder is entitled under Section
1.03 after giving effect to any required tax withholding or (ii) payment from
the Surviving Corporation of the "fair value" of such shares of Company Stock
as determined under Articles 5.11, 5.12, and 5.16(E), as applicable, of Texas
Law, subject to the conditions set forth therein and in accordance with
Section 1.06 of this Agreement. No interest will be paid or will accrue on
such amount.
(d) If any cash is to be paid to a Person other than the
registered holder of the Stock Certificates surrendered in exchange therefor,
it will be a condition to such payment that the Stock Certificates so
surrendered be properly endorsed or otherwise in proper form for transfer and
that the Person requesting such payment pay to the Exchange Agent any
transfer or other taxes required as a result of such issuance or establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. For purposes of this Agreement, "PERSON"
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means an individual, a corporation, a partnership, a limited liability
company, an association, a trust, or any other entity or organization,
including a governmental or political subdivision or any agency or
instrumentality thereof.
(e) At and after the Effective Time, the stock transfer books of
the Company will be closed, and there will be no further registration of
transfers of shares of Company Stock outstanding prior to the Effective Time.
If, at or after the Effective Time, Stock Certificates are presented to the
Surviving Corporation, they will be canceled and exchanged in accordance with
this Article I.
(f) Any cash in the Exchange Fund that remains unclaimed by the
holders of shares of Company Stock six months after the Effective Time will
be returned to Parent, upon demand, and any such holder who has not
surrendered his shares of Company Stock in accordance with this Section 1.04
prior to that time will thereafter look only to Parent, as a general creditor
thereof, to pay the Merger Consideration to which such holder is entitled.
Notwithstanding the foregoing, Parent will not be liable to any holder of
shares of Company Stock for any amount paid to a public official pursuant to
applicable abandoned property, escheat, or similar laws.
(g) If any Stock Certificate is lost, stolen, or destroyed, upon
the making of an affidavit of that fact by the Person claiming such Stock
Certificate to be lost, stolen, or destroyed and, if required by the
Surviving Corporation, the posting by such Person of a bond in such
reasonable amount as Parent may direct as indemnity against any claim that
may be made against it with respect to such Stock Certificate, the Exchange
Agent will pay the Merger Consideration payable in respect of such Stock
Certificate pursuant to this Agreement.
SECTION 1.05 COMPANY OPTIONS.
The Board of Directors of the Company (or, if appropriate, any
committee administering the Stock Option Plans (as defined below)) shall
adopt such resolutions or take such other actions as are required to provide
that (i) each outstanding stock option or warrant to purchase shares of
Company Stock (a "STOCK OPTION") heretofore granted under any employee stock
option plan, stock option or warrant plan for directors, or other incentive
plan of the Company (collectively, the "STOCK OPTION PLANS") outstanding
immediately prior to the consummation of the Offer, whether or not then
exercisable, shall be cancelled immediately prior to the consummation of the
Offer in exchange for an amount in cash, payable at the time of such
cancellation, equal to the product of (y) the number of shares of Company
Stock subject to such Stock Option immediately prior to the consummation of
the Offer and (z) the excess of the price per share to be paid in the Offer
over the per share exercise price of such Stock Option. All Stock Option
Plans shall terminate as of the Effective Time and the provisions in any
other Company Benefit Arrangement (as defined herein) providing for the
issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be deleted as
of the Effective Time, and the Company shall ensure that following the
Effective Time no holder of a Stock Option or any participant in any Stock
Option Plan shall have any right thereunder to acquire any capital stock of
the Company, Parent or the Surviving Corporation, except as provided in
Section 1.05.
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SECTION 1.06 SHARES OF DISSENTING STOCKHOLDERS.
Notwithstanding anything in this Agreement to the contrary, any issued
and outstanding shares of Company Stock held by a person (a "DISSENTING
STOCKHOLDER") who objects to the Merger and complies with all the provisions
of Texas Law concerning the right of holders of shares of Company Stock to
dissent from the Merger and require appraisal of their shares shall not be
converted as described in Section 1.03(b), but shall be converted into the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to Texas Law. If, after the Effective Time,
such Dissenting Stockholder withdraws his demand for appraisal in accordance
with Article 5.13 of Texas Law or fails to perfect or otherwise loses his
right to appraisal, in any case pursuant to Texas Law, his shares of Company
Stock shall be deemed to be converted as of the Effective Time into the right
to receive the Merger Consideration. The Company shall give Parent (i)
prompt notice of any demands for appraisal of shares of Company Stock
received by the Company and (ii) the opportunity to participate in all
negotiations and proceedings with respect to any such demands. The Company
shall not, without the prior written consent of Parent, make any payment with
respect to, or settle, offer to settle, or otherwise negotiate, any such
demands.
SECTION 1.07 OTHER AGREEMENTS.
In connection with the execution and delivery of this Agreement, the
Company has granted to Merger Sub an option to purchase 19.9% of the
Company's Company Stock, giving effect to the exercise of such option (the
"PARENT STOCK OPTION"); and certain shareholders of the Company have granted
options to Merger Sub to purchase their shares of Company Stock (the "INSIDER
LOCK-UP OPTIONS").
ARTICLE II.
THE SURVIVING CORPORATION
SECTION 2.01 ARTICLES OF INCORPORATION.
The articles of incorporation of Merger Sub in effect immediately
prior to the Effective Time will be the articles of incorporation of the
Surviving Corporation after the consummation of the Merger until amended in
accordance with applicable law.
SECTION 2.02 BYLAWS.
The bylaws of Merger Sub in effect immediately prior to the Effective
Time will be the bylaws of the Surviving Corporation after the consummation
of the Merger until amended in accordance with applicable law.
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SECTION 2.03 DIRECTORS AND OFFICERS.
From and after the Effective Time, until successors are duly elected
or appointed and qualified in accordance with applicable law, the directors
and officers of Merger Sub immediately prior to the Effective Time will be
the directors and officers of the Surviving Corporation after the
consummation of the Merger.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent that:
SECTION 3.01 CORPORATE EXISTENCE AND POWER.
The Company is a corporation duly incorporated, validly existing, and
in good standing under the laws of the State of Texas and has all requisite
corporate power and authority to own, lease, and operate its properties and
to carry on its business as now conducted. The Company is duly qualified to
do business as a foreign corporation and is in good standing in each
jurisdiction where it is required to be so qualified by reason of the
character of the property owned or leased by it or the nature of its
activities, except where the failure to be qualified or in good standing is
not, individually or in the aggregate, reasonably likely to have a Company
Material Adverse Effect (as defined in the Offer Conditions).
SECTION 3.02 CORPORATE AUTHORIZATION.
The execution, delivery, and performance by the Company of this
Agreement and the consummation by the Company of the Merger and the other
transactions contemplated hereby are within the Company's corporate power and
authority and, except for any required approval by the Company's stockholders
in connection with the consummation of the Merger, 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, assuming the due
authorization, execution, and delivery hereof by Parent and Merger Sub,
constitutes a legal, valid, and binding agreement of the Company.
SECTION 3.03 GOVERNMENTAL AUTHORIZATION.
The execution, delivery, and performance by the Company of this
Agreement and the consummation by the Company of the Merger and the other
transactions contemplated hereby do not require any material consent,
approval, authorization, or permit of, other action by, or filing with, any
governmental body, agency, official, or authority other than (i) as set forth
on Section 3.03 of the Disclosure Schedule delivered by the Company to Parent
concurrently with the execution and delivery of this Agreement (the "COMPANY
DISCLOSURE SCHEDULE"), (ii) the filing of appropriate certificates of merger
in accordance with Texas Law, (iii) the filing and delivery of the Schedule
14D-9, and (iv) compliance with applicable requirements of the Exchange Act.
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SECTION 3.04 ARTICLES OF INCORPORATION AND BYLAWS.
Section 3.04 of the Company Disclosure Schedule includes true, correct
and complete copies of the articles of incorporation and the bylaws or the
equivalent organizational documents, in each case as amended or restated as
of the date hereof, of the Company and each of its Subsidiaries.
SECTION 3.05 NON-CONTRAVENTION.
The execution, delivery, and performance by the Company of this
Agreement, the purchase of shares of Company Stock by Merger Sub pursuant to
the Offer, and the consummation by the Company of the Merger and the other
transactions contemplated by this Agreement do not and will not (i)
contravene or conflict with the articles of incorporation or bylaws of the
Company or any of its Subsidiaries (ii) contravene, conflict with, or
constitute a violation of any provision of any law, rule, regulation,
judgment, injunction, order, or decree binding upon or applicable to the
Company or any of its Subsidiaries, (iii) constitute a default, give rise to
a right of termination, cancellation, or acceleration of any material right
or obligation of the Company or any of its Subsidiaries, or give rise to a
loss of any material benefit to which the Company or any of its Subsidiaries
is entitled, under any provision of any agreement or other instrument binding
upon the Company or any of its Subsidiaries or under any license, franchise,
permit, or other similar authorization held by the Company or any of its
Subsidiaries, or (iv) result in the creation or imposition of any Lien on any
asset of the Company or any of its Subsidiaries; in each case except as set
forth in Section 3.05 of the Company Disclosure Schedule and except for any
occurrences or results referred to in clauses (ii), (iii), and (iv) that
would not be reasonably likely to prevent or delay consummation of the Offer
or the Merger or, individually or in the aggregate, have a Company Material
Adverse Effect. For purposes of this Agreement, "Lien" means, with respect
to any asset, any mortgage, lien, pledge, charge, security interest,
encumbrance, or other right or interest of another to or in, or adverse claim
of any kind in respect of, such asset.
SECTION 3.06 CAPITALIZATION.
(a) The Company has 26,000,000 authorized shares, consisting of
25,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock,
$10.00 par value, of the Company ("COMPANY PREFERRED STOCK"). As of the date
hereof, (i) 4,625,762 shares of Company Stock were issued and outstanding,
(ii) 753,410 shares of Company Stock were reserved for future issuance upon
exercise of outstanding Company Options granted pursuant to the Company
Option Plans, and (iii) 4,625,762 shares of Company Common Stock were
reserved for issuance upon exercise of the rights (the "COMPANY RIGHTS" or,
individually, a "COMPANY RIGHT") distributed in connection with the Rights
Agreement, adopted as of September 5, 1989 and subsequently amended (as
amended, the "COMPANY RIGHTS AGREEMENT"). As of the date of this Agreement,
no shares of Company Preferred Stock were issued and outstanding. Except as
described in this Section 3.06 or in Section 3.06 of the Company Disclosure
Schedule, as of the date of this Agreement, no shares of capital stock of the
Company are reserved for issuance. Each of the issued and outstanding shares
of Common Stock is duly authorized, validly issued,
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and fully paid and nonassessable and has not been issued in violation of (nor
are any of the authorized shares of Common Stock subject to) any preemptive
or similar rights created by statute, the articles of incorporation or the
bylaws of the Company, or any agreement to which the Company is a party or is
bound, or any applicable provision of law. Each of the issued and
outstanding Company Rights is duly authorized and validly issued.
(b) Except as set forth in paragraph (a) of this Section 3.06 or
as set forth on Section 3.06 of the Company Disclosure Schedule, there are no
options, warrants, or other rights (including but not limited to registration
rights and conversion rights), agreements, arrangements, or commitments to
which the Company is a party relating to the issued or unissued capital stock
of the Company or obligating the Company to grant, issue, or sell any capital
stock of the Company or other security of the Company. Except as set forth
in Section 3.06 of the Company Disclosure Schedule, there are no obligations,
contingent or otherwise, of the Company to (i) purchase, redeem, or otherwise
acquire any shares of Company Stock, other capital stock of the Company, or
capital stock or other equity interests of any Subsidiary of the Company; or
(ii) (other than advances to Subsidiaries, and prepayments to other Persons
for goods or services, in the ordinary course of business) provide a material
amount of funds to, or make any material investment in, or provide any
guarantee with respect to the obligations of, any Subsidiary of the Company
or any other Person.
(c) Section 3.06 of the Company Disclosure Schedule lists, as of
the date indicated, the number of shares of Company Stock subject to
outstanding Company Options and the exercise price of each outstanding
Company Option. The Company has made available to Parent and Merger Sub
complete and correct copies of the Company Option Plans and all forms of
Company Options.
SECTION 3.07 SUBSIDIARIES.
(a) For purposes of this Agreement, "SUBSIDIARY" of any Person
means (i) any corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are,
directly or indirectly, owned by such Person, and (ii) any partnership of
which such Person is a general partner. Section 3.07 of the Company
Disclosure Schedule sets forth a complete and accurate list of the
Subsidiaries of the Company and indicates for each such Subsidiary the
jurisdiction of incorporation or organization. Each Subsidiary of the
Company is a corporation duly incorporated, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation or is a
partnership duly constituted under its governing law, has the requisite
corporate or partnership power and authority to own, lease, and operate its
properties and to carry on its business substantially as now conducted, and
is duly qualified to do business as a foreign corporation or partnership and
is in good standing in each jurisdiction where it is required to be so
qualified by reason of the character of the property owned or leased by it or
the nature of its activities, except where the failure to be qualified or in
good standing is not, individually or in the aggregate, reasonably likely to
have a Company Material Adverse Effect.
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(b) Except as set forth in Section 3.07 of the Company Disclosure
Schedule, all of the outstanding capital stock or other ownership interests
in each Subsidiary of the Company is owned by the Company, directly or
indirectly, free and clear of any Lien and free and clear of any other
limitation or restriction (including any restriction on the right to vote,
sell, or otherwise dispose of such capital stock or other ownership
interests). Except as set forth in Section 3.07 of the Company Disclosure
Schedule, there are no outstanding (i) securities of the Company or any of
its Subsidiaries convertible into or exchangeable for shares of capital stock
or other voting securities or ownership interests in any such Subsidiary of
the Company or (ii) options or other rights to acquire from the Company or
any of its Subsidiaries, and no other obligation of the Company or any of its
Subsidiaries to issue, any capital stock, voting securities, or other
ownership interests in, or any securities convertible into or exchangeable
for any capital stock, voting securities, or ownership interests in, any such
Subsidiary of the Company (the items in clauses (i) and (ii), including
capital stock, are collectively referred to as the "COMPANY SUBSIDIARY
SECURITIES"). There are no outstanding obligations of the Company or any of
its Subsidiaries to transfer, sell, pledge, repurchase, redeem, or otherwise
acquire any outstanding Company Subsidiary Securities.
SECTION 3.08 COMPANY SEC REPORTS.
Since April 1, 1993, the Company has filed all forms, reports,
registration statements and other documents required to be filed by it with
the SEC, including without limitation (i) all Annual Reports on Form 10-K,
(ii) all Quarterly Reports on Form 10-Q, (iii) all proxy statements relating
to meetings of stockholders (whether annual or special), and (iv) all Current
Reports on Form 8-K. (All of the documents filed by the Company with the SEC
during such period, including all exhibits contained or incorporated by
reference in such documents, are collectively referred to as the "COMPANY SEC
REPORTS"). The Company SEC Reports, as amended to date, (x) were prepared in
accordance with the requirements of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), or the Exchange Act, as the case may be, and (y) did
not at the time they were filed 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 the light of the
circumstances under which they were made, not misleading.
SECTION 3.09 FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES.
The audited consolidated financial statements and unaudited
consolidated interim financial statements (including the related notes and
schedules) of the Company and its Subsidiaries included or incorporated by
reference in the Company SEC Reports (the "COMPANY FINANCIAL STATEMENTS")
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes
thereto and except that such unaudited interim financial statements do not
contain full footnote disclosure) and fairly present the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations and cash flows for
the periods then ended, subject, in the case of any unaudited interim
financial statements, to normal year-end adjustments, none of which would be
reasonably likely to be, individually or in the aggregate, material in
amount. Neither the Company nor its Subsidiaries have any liabilities,
whether accrued, contingent, or otherwise, required by generally accepted
accounting principles
11
or applicable SEC rules to be disclosed by the Company in the Company
Financial Statements other than (i) liabilities disclosed in the Company
Financial Statements or the Company SEC Reports, and (ii) liabilities for
which the Company has made adequate reserves as reflected in the Company
Financial Statements.
SECTION 3.10 MATERIAL CONTRACTS.
Except as set forth in Section 3.10 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to, or
is bound by (a) any material agreement, indenture, or other instrument
relating to the borrowing of money by the Company or any of its Subsidiaries
or the guarantee by the Company or any of its Subsidiaries of any such
obligation or (b) any other contract or agreement or amendment thereto that
(i) should be or should have been filed as an exhibit to a Form 10-K filed or
to be filed by the Company with the SEC, (ii) places any material
restrictions on the right of the Company or any of its Subsidiaries to engage
in any material business activity currently conducted, or (iii) is otherwise
material to the financial condition, results of operations or business of the
Company and its Subsidiaries, taken as a whole (collectively, the "COMPANY
CONTRACTS"). Neither the Company nor any of its Subsidiaries is in material
default under any Company Contract, and there has not occurred any event that
with the lapse of time or the giving of notice or both would constitute such
a material default.
SECTION 3.11 ABSENCE OF CERTAIN CHANGES.
Except as disclosed in Section 3.11 of the Company Disclosure
Schedule, since March 31, 1998: (a) the Company and its Subsidiaries have
conducted their business in all material respects in the ordinary course
consistent with reasonable past practices, (b) there has not been any change
or development, or combination of changes or developments, in the business,
operations, or financial condition of the Company or any of its Subsidiaries
which are reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect, (c) there has not been any declaration,
setting aside, or payment of any dividend or other distribution with respect
to any shares of capital stock of the Company, or any repurchase, redemption,
or other acquisition by the Company or any of its Subsidiaries of any
outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company or any of its Subsidiaries, (d) there has
not been any amendment of any term of any outstanding security of the Company
or any of its Subsidiaries, (e) there has not been any incurrence,
assumption, or guarantee by the Company or any of its Subsidiaries of any
indebtedness for borrowed money other than in the ordinary course of business
and in amounts and on terms consistent with reasonable past practices, (f)
there has not been any creation or assumption by the Company or any of its
Subsidiaries of any Lien on a material amount of assets (including the sale,
pledge, or assignment of a material amount of receivables) other than in the
ordinary course of business consistent with past practices, and (g) there has
not been any change in any method of accounting or accounting practice by the
Company or any of its Subsidiaries, except for any such change required by
reason of a concurrent change in generally accepted accounting principles or
to conform a Subsidiary's accounting policies and practices to those of the
Company. Furthermore, except as disclosed in Section 3.11 of the Company
Disclosure Schedule, since March 31, 1998, there has not been any (i) grant
of any severance or termination pay or stay-in-place bonus to any director or
officer of the Company or any of its Subsidiaries, (ii) entering into
12
of any employment, deferred compensation, or other similar agreement (or any
amendment to any such existing agreement) with any director or officer of the
Company or any of its Subsidiaries, (iii) increase in benefits payable under
any existing severance or termination pay or stay-in-place bonus policies or
agreements with any director or officer of the Company or any of its
Subsidiaries, (iv) increase in compensation, bonus, or other benefits payable
to directors or executive officers of the Company or any of its Subsidiaries,
or (v) general increase in the compensation payable or benefits provided to
other employees of the Company or any of its Subsidiaries.
SECTION 3.12 LITIGATION.
Except as disclosed in Section 3.12 of the Company Disclosure
Schedule, (i) there are no actions, suits, or proceedings pending before,
and, to the knowledge of the Company, there is no pending investigation by,
any court or arbitrator or any governmental body, agency, official, or
authority against the Company, any of its Subsidiaries, or any of their
respective properties, (ii) to the knowledge of the Company, there is no
threat of any such action, suit, or proceeding, and (iii) no judgment,
decree, injunction, rule, order, or similar action of any court or arbitrator
or any governmental body, agency, official or authority, domestic or foreign,
is outstanding against the Company or any of its Subsidiaries.
SECTION 3.13 PERMITS; COMPLIANCE.
Except as is disclosed in Section 3.13 of the Company Disclosure
Schedule, the Company and its Subsidiaries are in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own,
lease and operate their properties and to carry on their businesses as they
are now being conducted (collectively, the "COMPANY PERMITS"). Except as set
forth in Section 3.13 of the Company Disclosure Schedule, neither the Company
nor any of its Subsidiaries is in conflict with, or in material default or
violation of, (a) any federal, state, or foreign law applicable to the
Company or such Subsidiary or by which any of its properties are bound or
subject or (b) any of the Company Permits. Except as set forth in Section
3.13 of the Company Disclosure Schedule, since March 31, 1993, the Company
has not received any notification with respect to possible conflicts,
defaults, or violations of any federal, state, or foreign law applicable to
the Company or any of its Subsidiaries or by which any of its or their
properties are bound or subject which have not been cured.
SECTION 3.14 PRODUCT WARRANTIES AND LIABILITIES.
Except as set forth in Section 3.14 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries knows or has any
reason to believe there is any basis for alleging any claim, liability,
damage, loss, cost or expense as a result of any defect or other deficiency
(whether of design, materials, workmanship, labeling instructions or
otherwise) ("PRODUCT LIABILITY") with respect to any product sold or services
rendered by or on behalf of the Company or any of its Subsidiaries now or in
the past, whether such Product Liability is incurred by reason of any express
warranty (including, without limitation, any warranty of merchantability or
fitness), any doctrine of common law (tort, contract or other), any statutory
13
provision, or otherwise and irrespective of whether such Product Liability is
covered by insurance.
SECTION 3.15 ERISA.
(a) As used in this Section 3.15, each of the following terms has the
indicated meaning:
(i) "AFFILIATE" of any Person means any other Person that,
together with such Person, would be treated as a single employer under
Section 414 of the Internal Revenue Code of 1986, as amended (the "CODE").
(ii) "COMPANY EMPLOYEE PLANS" means each "employee benefit
plan," as defined in Section 3(3) of ERISA that (A) is subject to any
provision of ERISA and (B) is maintained, administered, contributed to, or
required to be contributed to, as the case may be, by the Company or any
Affiliate (while it is or was an Affiliate of the Company) and covers any
employee or former employee of the Company or any such Affiliate or under
which the Company or any such Affiliate has any liability.
(iii) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
(iv) "COMPANY BENEFIT ARRANGEMENT" means each employment,
severance, welfare, or other similar contract, arrangement, or policy and
each plan or arrangement (written or oral) providing for compensation,
benefit, bonus, pension, retirement, profit-sharing, stock option or other
stock related rights, other forms of incentive or deferred compensation, and
each cafeteria, Section 125, medical, vision, dental, disability, death
benefit, life insurance, health and/or accident, sickness, vacation, paid
time off, sick pay, education-reimbursement, incentive, "change of control,"
and any other or similar plan, program, arrangement, agreement or
understanding, that (A) is not a Company Employee Plan, (B) is entered into,
maintained, or contributed to, as the case may be, by the Company or any of
its Affiliates (while it is or was an Affiliate of the Company), or (C)
covers any employee or former employee or director or former director of the
Company or any such Affiliate.
(v) "FOREIGN BENEFIT PLAN" means each "employee benefit
plan," as defined in Section 3(3) of ERISA that (A) is established and
maintained outside of the United States primarily for the benefit of
individuals substantially all of whom are nonresident aliens and which is not
subject to any provision of ERISA and (B) is maintained, administered,
contributed to, or required to be contributed to, as the case may be, by the
Company or any Affiliate (while it is or was an Affiliate of the Company) and
covers any employee or former employee of the Company or any such Affiliate
under which the Company or any such Affiliate has any liability, and means
each Company Benefit Arrangement that is established and maintained outside
of the United States primarily for the benefit of individuals substantially
all of whom are nonresident aliens and which is not subject to ERISA.
(b) The Company has heretofore made available to Parent, and agrees that
it will as soon as practicable after the date of this Agreement furnish Parent
upon Parent's request with, copies
14
of all Company Employee Plans (and, if applicable, related trust agreements)
and all amendments thereto and the most recent Forms 5500 required to be
filed with respect thereto, Internal Revenue Service determination letters,
and actuarial reports, in each case to the extent applicable. All annual
reports (as described in ERISA Section 103), Treasury Forms 5500, and other
documents or writings required to be filed or otherwise submitted in
connection with one or more of the Company Employee Plans or Company Benefit
Arrangements have been timely and properly filed or otherwise submitted in
accordance with applicable law.
(c) Section 3.15 of the Company Disclosure Schedule identifies each
Company Employee Plan, and further identifies whether a given Company
Employee Plan constitutes a "defined benefit plan" as defined in Section
3(35) of ERISA. Except as set forth on Section 3.15 of the Company Disclosure
Schedule, no Company Employee Plan constitutes a "multiemployer plan," as
defined in Section 3(37) of ERISA, and no Company Employee Plan or Company
Benefit Arrangement is maintained in connection with any trust described in
Section 501(c)(9) of the Code. Except as set forth on Section 3.15 of the
Company Disclosure Schedule, no Company Employee Plan provides retiree
medical or life insurance benefits or is subject to Title IV of ERISA.
Neither the Company nor any of its Affiliates has incurred, or will have
incurred as of Closing, any liability under Title IV of ERISA, including,
without limitation, arising in connection with the termination of, or
complete or partial withdrawal from, any plan currently or previously covered
by Title IV of ERISA, and the Pension Benefit Guarantee Corporation has not
instituted proceedings to terminate any such plan nor, to the knowledge of
the Company, do any conditions exist that present a risk of such occurrence.
Nothing done or omitted to be done by the Company or any of its Subsidiaries
or, to the knowledge of the Company, by any other Person, and no transaction
or holding of any asset under or in connection with any Company Employee Plan
by the Company or any of its Subsidiaries or, to the knowledge of the
Company, by any other Person, has or will make the Company or any of its
Subsidiaries or any officer or director of the Company or any of its
Subsidiaries subject to any liability under Title I of ERISA or for any tax,
penalty, assessment or material liability pursuant to Section 4975 of the
Code or Section 502 of ERISA. With respect to each Company Employee Plan
subject to Title IV of ERISA, the Company has made available to Parent the
most recent actuarial report showing the present value of accrued benefits
under such plan, based upon the actuarial assumptions used for funding
purposes with respect to such plan. No Company Employee Plan or any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each such plan
ended prior to the date hereof; and all contributions required to be made
with respect thereto (whether pursuant to the terms of any Company Employee
Plan or otherwise) on or prior to the date hereof have been timely made. All
Company Employee Plans and Company Benefit Arrangements are in compliance
with all applicable laws, and the consummation of the transactions
contemplated by this Agreement will not cause any such plan to violate any
applicable law or provision of any such plan.
(d) Each Company Employee Plan and Company Benefit Arrangement and
related trusts comply with and have been maintained, funded and administered
in compliance with all applicable provisions of the Code relating to
qualification and tax exemption, or other intended tax consequences, under
Code Sections 401(a), 501(a) and/or 125, and Company has received no notice
from any Person, government, instrumentality or agency challenging such
compliance.
15
Favorable IRS determination letters (to the extent such may be sought) on the
qualification of each such plan are in full force and effect.
(e) No termination or partial termination exists or will exist as
of the Closing with respect to any Company Benefit Arrangement or Company
Employee Plan.
(f) As of the Closing, full payment will have been made of all
amounts which the Company or each Subsidiary of the Company is required to
have made after or prior to such time, under any applicable law or terms of
an applicable such plan, as a contribution to or in relation to any such
plan, and no accumulated funding deficiency (as defined in ERISA Section 302
or Code Section 412), whether or not waived, will exist with respect to any
such plan.
(g) Except as disclosed in Section 3.15 of the Company Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not (i) give rise to any severance pay or any payment contingent upon or
as a result of a direct or indirect change in control or ownership of the
Company or any Subsidiary of the Company, or (ii) accelerate the time of
payment or vesting, or increase the amount of any compensation due to, or
benefits under any Company Benefit Arrangement or Company Employee Plan.
(h) Section 3.15 of the Company Disclosure Schedule lists each
material Company Benefit Arrangement currently in effect provided to any
director, executive officer, or employee of the Company or any former
director, executive officer, or employee of the Company and sets forth each
Company Benefit Arrangement with respect to which benefits will be
accelerated or paid as a result of the transactions contemplated by this
Agreement. Copies of all written Company Benefit Arrangements and all
amendments thereto have heretofore been made available to Parent, and will
promptly be furnished to Parent upon Parent's request after the date of this
Agreement. Each Company Benefit Arrangement has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules, and regulations that are applicable to such Company
Benefit Arrangement.
(i) There are no pending claims, or, to the knowledge of the
Company, threats of claims by, in relation to, or on behalf of any Company
Employee Plan or Company Benefit Arrangement, by any employee, former
employee or beneficiary covered under any such plan or arrangement, or any
government or governmental agency or instrumentality or otherwise involving
any such plan or arrangement other than claims for benefits in the ordinary
course.
(j) Section 3.15 of the Company Disclosure Schedule identifies
each Foreign Benefit Plan. The Foreign Benefit Plans maintained, contributed
to, or required to be contributed to, by one or more of the Company, any
Subsidiary of the Company, or any Affiliate of one or more of the foregoing,
have at all times complied with and been administered in all material
respects in accordance with all applicable laws, tax, funding, and other or
similar requirements, and the consummation of the transactions contemplated
by this Agreement will not cause any such plan to violate any such law or
requirement. Without limiting the foregoing, there is no failure to comply
with any applicable law, requirement or any other or similar circumstance
which would or is likely to result in a loss of tax-related approval or other
regulatory related approval for any Foreign Benefit Plan, regardless of
whether such approval is or is intended to be applicable.
16
SECTION 3.16 LABOR.
Neither the Company nor any of its Subsidiaries is a party to or bound
by any collective bargaining agreement respecting its employees, nor is there
existing, or to the knowledge of the Company any threat of, any strike,
organized walkout, or other organized work stoppage or labor organizational
effort by any employees of the Company or of any of its Subsidiaries.
SECTION 3.17 TAXES.
Except as set forth in the Company SEC Reports:
(a) the Company and its Subsidiaries have timely filed all Tax
Returns required to be filed by them with any taxing authority with respect
to Taxes for all periods heretofore ended, taking into account any extension
of time to file granted to or obtained on behalf of the Company and its
Subsidiaries;
(b) all Taxes required to be paid prior to the Effective Time have
been duly and timely paid or will be duly and timely paid by the Effective
Time;
(c) no material deficiency for any amount of Tax has been asserted
or assessed by a taxing authority against the Company or any of its
Subsidiaries, except for amounts for which the Company has made an adequate
reserve as reflected in the Company Financial Statements;
(d) all liability for Taxes of the Company or any of its
Subsidiaries that are or will become due or payable with respect to periods
covered by the Company Financial Statements have, in all material respects,
been paid or adequately reserved for in the Company Financial Statements to
the extent required by generally accepted accounting principles, and all
prepaid Taxes and other Tax assets reflected in the Company Financial
Statements represent valid accounts determined in accordance with generally
accepted accounting principles;
(e) neither the Company nor any of its Subsidiaries is liable for
any material amount of Taxes arising out of membership or participation in
any consolidated, affiliated, combined, or unitary group in which they were
at any time members, other than the group of which the Company is the common
parent;
(f) there are no material Liens for Taxes upon the assets of the
Company or of any of its Subsidiaries other than for Taxes not yet due and
payable;
(g) there are no outstanding waivers or comparable consents
extending the statute of limitations with respect to any Taxes or Tax Returns
of the Company or any of its Subsidiaries;
(h) there are no material audits, claims, actions, suits, or
proceedings now pending, nor, to the knowledge of the Company, is there a
material threat of any such audits, claims, actions, suits, or proceedings,
nor, to the knowledge of the Company, is there any material
17
pending investigation, against or with respect to the Company or any of its
Subsidiaries in respect of any Taxes;
(i) neither the Company nor any of its Subsidiaries is a party to
any agreement providing for the allocation or sharing of Taxes; and
(j) there has been no change in the method of accounting utilized
by the Company or any of its Subsidiaries that would require a material
adjustment to taxable income under Section 481 of the Code.
For purposes of this Agreement, "TAXES" or "TAX" means all federal,
state, local, and foreign taxes, levies, and other assessments, including
without limitation, all income, excise, property, sales, use, value added,
transfer, franchise, profits, withholding, payroll, social security,
Medicare, or other taxes including any interest, additions to tax, and
penalties applicable thereto; and "TAX RETURN" means any return, declaration,
statement, report, schedule, information return, and other document
(including any related or supporting information) with respect to Taxes.
SECTION 3.18 FDA AND RELATED MATTERS.
(a) Section 3.18 of the Company Disclosure Schedule sets forth a
complete and accurate list, referencing relevant records and documents, since
January 1, 1993, of (i) all Regulatory or Warning Letters, Notices of Adverse
Findings, and Section 305 Notices and similar letters or notices issued by
the Food and Drug Administration (the "FDA") or any other federal, state,
local, or foreign governmental entity that is concerned with the safety,
efficacy, reliability, or manufacturing of medical products, including drugs
and devices, relating to the conduct of the business of the Company and its
Subsidiaries, (ii) all United States Pharmacopoeia product problem reporting
program complaints or reports, MedWatch FDA Forms 3500, and device experience
network complaints received by the Company or any of its Subsidiaries and all
Drug and Medical Device Reports, adverse drug experience reports, and
therapeutic failure reports filed by the Company or any of its Subsidiaries,
which complaints or reports pertain to any incident involving death, serious
injury, or a serious adverse drug experience, and for which incident there
has been any (1) notice or follow up inquiry to the Company or any of its
Subsidiaries by the FDA, (2) litigation or arbitration claim or cause of
action commenced, or (3) notice to any insurance carrier of the Company or
any of its Subsidiaries tendering the defense or giving notice of a possible
or actual claim against the Company or any of its Subsidiaries, (iii) all
product recalls and safety alerts conducted by or issued to the Company or
any of its Subsidiaries and any requests from the FDA or any other drug and
medical device regulatory agency requesting the Company or any of its
Subsidiaries to cease to investigate, test, or market any product, (iv) any
civil penalty actions begun by the FDA or any other drug and medical device
regulatory agency against the Company or any of its Subsidiaries and all
consent decrees issued with respect to the Company or any of its
Subsidiaries, and (v) any other written communications between the FDA or any
other drug and medical device regulatory agency, on the one hand, and the
Company or any of its Subsidiaries, on the other hand. The Company has
delivered to Parent copies of all documents referred to in Section 3.18 of
the Company Disclosure Schedule, as well as copies of all complaints and other
18
information required to be maintained by the Company pursuant to Section 820
of Title 21 of the Code of Federal Regulations ("CFR") or 21 CFR Section 211.
(b) The Company and its Subsidiaries have obtained all consents,
approvals, certifications, authorizations, and permits of, and have made all
filings with, or notifications to, the FDA and all other drug and medical
device regulatory agencies pursuant to applicable requirements of all FDA
laws, rules, and regulations, and all corresponding state and foreign laws,
rules, and regulations applicable to the Company and its Subsidiaries. All
representations made by the Company or any of its Subsidiaries in connection
with any such consents, approvals, certifications, authorizations, permits,
filings, and notifications were true and correct in all material respects at
the time such representations were made, and the products of the Company and
its Subsidiaries comply with, and perform in accordance with the
specifications described in, such representations. The Company and its
Subsidiaries are in all material respects in compliance with all applicable
FDA laws, rules, and regulations, and all corresponding applicable state and
foreign laws, rules, and regulations (including Good Manufacturing Practices,
as defined in 21 CFR Parts 210, 211, and 820, Medical Device Reporting
requirements, and Adverse Experience Reporting) applicable to the business of
the Company. The Company has not received any notice that any of the
consents, approvals, certifications, authorizations, registrations, permits,
filings, or notifications that it has received or made to operate its
business have been or are being revoked or challenged. Except as set forth
on Section 3.18 of the Company Disclosure Schedule, to the knowledge of the
Company, there are no investigations or inquiries pending, and there is no
threat of any investigation or inquiry, by the FDA or any other drug and
medical device regulatory agency relating to the operation of the business of
the Company and its Subsidiaries or its compliance with FDA laws, rules, and
regulations, and corresponding state and foreign laws, rules, and
regulations, applicable to the business of the Company and its Subsidiaries.
None of the matters set forth on Section 3.18 of the Company Disclosure
Schedule is reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 3.19 INTELLECTUAL PROPERTY RIGHTS.
(a) Section 3.19 of the Company Disclosure Schedule lists each of
the following items that are related to the business of the Company and its
Subsidiaries: (i) patents and applications therefor, registrations of
trademarks (including service marks) and applications therefor, and
registrations of copyrights and applications therefor that are owned by the
Company or any of its Subsidiaries, (ii) unexpired licenses relating to
Intellectual Property Rights (as defined in paragraph (d) of this Section
3.19) that have been granted to or by the Company or any of its Subsidiaries,
and (iii) other agreements relating to Intellectual Property Rights (as
defined below).
(b) The Company and its Subsidiaries collectively own or have the
right to use all of the Intellectual Property Rights that are used in the
conduct of the business of the Company and its Subsidiaries. Except as set
forth in Section 3.19 of the Company Disclosure Schedule, such ownership and
right to use are free and clear of all Liens, claims, and rights of third
parties. Except as set forth in Section 3.19 of the Company Disclosure
Schedule, such ownership and right to use will not be affected by the
consummation of the Offer, the Merger, or by any of the
19
transactions contemplated herein whether because of non-assignment
provisions, change of control provisions, or otherwise. The Company and its
Subsidiaries have the right to license to others the use of all Intellectual
Property Rights owned by them.
(c) Except as set forth on Section 3.19 of the Company Disclosure
Schedule, to the knowledge of the Company there are no material allegations
or claims that any product or process manufactured, used, sold, or under
development by or for the Company or its Subsidiaries infringes on the
Intellectual Property Rights of any third party, and no challenges to the
validity, ownership, or right to use or license by the Company or any of its
Subsidiaries of any of the Intellectual Property Rights owned, used, or
licensed by the Company or any of its Subsidiaries.
(d) As used in this Agreement, the term "INTELLECTUAL PROPERTY
RIGHTS" includes patents, patent applications, trademarks, trademark
applications, service marks, service xxxx applications, copyrights, copyright
applications, and proprietary trade names, publication rights, computer
programs (including source codes and object codes), inventions, know how,
trade secrets, technology, processes, and formulae.
SECTION 3.20 ENVIRONMENTAL PROTECTION
(a) As used in this Agreement, each of the following terms has the
indicated meaning:
(i) "COMPANY REAL PROPERTY" means the real property now or
formerly owned or leased by the Company or any of its Subsidiaries, except as
otherwise expressly limited where the term is used.
(ii) "ENVIRONMENTAL LAW" means federal, state, local, or
foreign laws, statutes, rules, regulations, and ordinances relating to the
protection of the environment.
(iii) "HAZARDOUS MATERIAL" means any hazardous, toxic, or
dangerous substance defined as such in (or for purposes of) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), or any other Environmental Law.
(b) Except as set forth on Section 3.20 of the Company Disclosure
Schedule:
(i) The Company and each of its Subsidiaries is and has
been in compliance with all applicable Environmental Laws, except for any
such non-compliance which has been cured and for which neither the Company
nor any of its Subsidiaries has any further liability or obligation.
(ii) Neither the Company nor any of its Subsidiaries has
treated, stored, disposed of, or released any Hazardous Material on Company
Real Property in violation of any applicable Environmental Laws, and, to the
knowledge of the Company, none of the conditions at the Company Real Property
is reasonably likely to give rise to any remedial obligation of the Company
or any of its Subsidiaries under any Environmental Laws.
20
(iii) Neither the Company nor any of its Subsidiaries has
received any written notices, demand letters, or written requests for
information from any governmental body, agency, official, or authority or
from any third party indicating that the Company or any of its Subsidiaries
is in violation of, or liable in a amount to any Person under, any
Environmental Law, except for any such violation which has been cured and for
which neither the Company nor any of its Subsidiaries has any further
liability or obligation.
(iv) There are no actions, suits, or proceedings pending,
and, to the knowledge of the Company, there is no threat of any actions,
suits, or proceedings, and, to the knowledge of the Company, there are no
investigations pending, against the Company or any of its Subsidiaries or
involving any of the presently owned or leased Company Real Property before
any court or arbitrator or any governmental body, agency, official, or
authority relating to any violation, or alleged violation, by the Company or
any of its Subsidiaries of any Environmental Law or relating to the
contamination of any such Company Real Property.
(v) There are no underground storage tanks on any
presently owned or leased Company Real Property, and no underground storage
tanks have been closed or removed from any Company Real Property while the
Company Real Property was owned or leased by the Company or any of its
Subsidiaries, the closure or removal of which is reasonably likely to give
rise to a liability of the Company or any of its Subsidiaries under any
Environmental Law.
(vi) None of the Company, any of its Subsidiaries, or any
of the presently owned or leased Company Real Property is currently subject
to, any liabilities, fixed or contingent, relating to any suit, settlement,
court order, administrative order, judgment, or claim asserted under any
Environmental Law.
(vii) The Company and its Subsidiaries have made available
to Parent (A) all studies, reports, and similar documents that have been
generated by third-party consultants, internal compliance reports of the
Company or any of its Subsidiaries, and documents filed by the Company or any
of its Subsidiaries with any governmental agency, relating to environmental
matters at any Company Real Property, and (B) all other documents relating to
any actual or potential contamination of Company Real Property. The Company
has furnished Parent with copies of any such studies, reports, and documents
indicating that the conditions at any of the Company Real Property are
reasonably likely to give rise to a remedial obligation or other liability of
the Company or any of its Subsidiaries under any Environmental Laws.
(viii) The Company and its Subsidiaries have all permits
required by applicable Environmental Laws and are in all material respects in
compliance with the provisions of all such permits.
(ix) Neither the Company nor any of its Subsidiaries has
any obligation to any third party with respect to any previously owned, or
presently or previously leased, Company Real Property relating to the
remediation of any contamination under any Environmental Laws.
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(c) Neither the Company nor any of its Subsidiaries has received
written notice from any Person that any part of the Company Real Property has
been or is listed as a site containing Hazardous Material requiring
remediation under CERCLA or any other Environmental Law.
SECTION 3.21 FINDERS AND INVESTMENT BANKERS.
Except for Xxxx Xxxxxxxx Xxxxxxx, no investment banker, broker,
finder, or other similar intermediary has been retained by or is authorized
to act on behalf of the Company or any of its Subsidiaries, or otherwise is
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement. The Company has provided Parent with a copy
of the engagement letter with Xxxx Xxxxxxxx Xxxxxxx, as amended to date.
Xxxx Xxxxxxxx Xxxxxxx' fees will be paid by the Company.
SECTION 3.22 INSURANCE.
Section 3.22 of the Company Disclosure Schedule lists, and the Company
has made available to Parent or its representatives for review current and
complete copies of, all insurance policies, binders, and surety and fidelity
bonds relating to the Company and its Subsidiaries (including, without
limitation, all policies or binders of casualty, general liability, and
workers' compensation, but excluding the owner's and lessee's policies of
title insurance referred to in Section 3.30(h)), all of which are currently
in force and effect. All premiums and other amounts due and payable under
each such policy, binder, and bond have been paid. Neither the Company nor
any of its Subsidiaries is in default with respect to any material provision
contained in any such policy, binder, or bond and has not failed to give any
notice of or present any material claim thereunder as required under the
terms of the policy. There are no outstanding unpaid claims under any such
policy, binder, or bond, and neither the Company nor any of its Subsidiaries
has received any written notice of cancellation or non-renewal of any such
policy, binder, or bond. Neither the Company nor any of its Subsidiaries has
received any written notice from any of its insurance carriers that any
insurance premiums paid by it will be materially increased in the future as a
result of the claims experience of the Company or such Subsidiary.
SECTION 3.23 INDEMNIFICATION.
Except as set forth in the articles of incorporation and bylaws of the
Company or its Subsidiaries or as disclosed in the Company SEC Reports or on
Section 3.23 of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries is a party to any indemnification agreement with any of
its present or former directors, officers, employees, agents, or other
persons who serve in any similar capacity.
SECTION 3.24 BOARD APPROVAL AND RECOMMENDATION.
Prior to the execution of this Agreement, the Board of Directors of
the Company, at a meeting duly called and held, unanimously (a) determined
that this Agreement and the transactions contemplated hereby, including the
Merger, the Offer, and the Parent Stock Option, are fair to the stockholders
of the Company, (b) approved this Agreement and the transactions contemplated
hereby, including the Merger, the Offer, and the Parent Stock Option, and (c)
22
recommended that the Company's stockholders tender their shares of Company
Stock pursuant to the Offer and approve this Agreement and the transactions
contemplated herein, including the Merger (unless approval of this Agreement
and the Merger is not required by reason of the fact that immediately prior
to the Effective Time Merger Sub owns at least 90% of the Company Stock
outstanding at such time).
SECTION 3.25 VOTE REQUIRED.
The only vote of the holders of any class or series of capital stock
of the Company necessary to approve the Merger is the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Company Stock.
No such vote by the holders of any class or series of capital stock of the
Company will be necessary if at the Effective Time Merger Sub owns at least
90% of the shares of Company Stock outstanding at the Effective Time. There
is no vote of the holders of any class or series of capital stock of the
Company necessary in order for Merger Sub to commence and consummate the
Offer.
SECTION 3.26 OPINION OF FINANCIAL ADVISOR.
The Company has received the opinion of Xxxx Xxxxxxxx Xxxxxxx to the
effect that the consideration to be received by the stockholders of the
Company pursuant to the Offer and the Merger is fair to such stockholders
from a financial point of view.
SECTION 3.27 COMPANY RIGHTS AGREEMENT.
Neither Parent nor any of its affiliates or associates is an
"ACQUIRING PERSON" (as defined in the Company Rights Agreement) and there has
not been a "SHARES ACQUISITION DATE" or a "DISTRIBUTION DATE" (as defined in
the Company Rights Agreement) under the Company Rights Agreement. The
Company has amended the Company Rights Agreement to provide that (i) the
execution, delivery, and performance of this Agreement, the Parent Stock
Option and the Insider Lock-Up Options, the purchase of shares of Company
Stock pursuant to the Offer, the purchase of shares pursuant to the Parent
Stock Option and the Insider Lock-Up Options, and the consummation of the
Merger and the other transactions contemplated by this Agreement will not (A)
cause Parent or any of its affiliates or associates to become an Acquiring
Person or (B) otherwise cause a Shares Acquisition Date or Distribution Date
to occur, and (ii) upon purchase of shares of Company Stock pursuant to the
Offer, the Parent Stock Option or the Insider Lock-Up Options, the Company
Rights will no longer be exercisable, and the former holders of the Company
Rights will not have any claims or rights thereunder. The Company has filed
with the SEC and made available to Parent a true and correct copy of the
Company Rights Agreement, as amended through the date hereof.
SECTION 3.28 TAKEOVER STATUTES.
The Board of Directors of the Company has heretofore expressly
approved the acquisition of shares of Company Stock by Merger Sub pursuant to
the Offer, the Parent Stock Option and the Insider Lock-Up Options, and the
Merger for purposes of Article 13.03 of Texas Law, and such approval is
sufficient to render inapplicable to the Merger and the other
23
transactions contemplated by this Agreement the provisions of Article 13.03
of Texas Law. Except for Section 13.03, no "fair price," "moratorium," or
other similar antitakeover statute or provision applies or purports to apply
to the Offer, the Merger, the Parent Stock Option, or the other transactions
contemplated hereby. Except for the Company Rights Agreement and the related
shares of Common Stock issuable upon exercise of the Company Rights, no
provision of the articles of incorporation or bylaws of the Company or any of
its Subsidiaries would, directly or indirectly, restrict or impair the
ability of Merger Sub or Parent to vote, or otherwise to exercise the rights
of a stockholder with respect to, the Common Stock.
SECTION 3.29 INFORMATION SUPPLIED.
None of the information that is included in the Offer Documents in
reliance upon and in conformity with written information furnished to Parent
by the Company specifically for use in the Offer Documents will, at the time
such information is furnished to Parent, contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Schedule
14D-9, at the time the Schedule 14D-9 or any amendment thereto is filed with
the SEC, will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; except that, the foregoing does not apply to the extent
that any such untrue statement of a material fact or omission to state a
material fact was or is made by the Company in reliance upon and in
conformity with written information furnished to the Company by Merger Sub or
Parent specifically for use in the Schedule 14D-9.
SECTION 3.30 REAL AND PERSONAL PROPERTY.
(a) For purposes of this Section 3.30, "PERMITTED LIEN" means any
(A) Lien that does not materially interfere with the use of, or materially
diminish the value of, the property subject thereto and (B) capital lease
obligation entered into in the ordinary course of business.
(b) Section 3.30 of the Company Disclosure Schedule lists all of
the real property owned (the "OWNED REAL PROPERTY") or leased (the "LEASED
REAL PROPERTY") by the Company or any of its Subsidiaries.
(c) Except as set forth in Section 3.30 of the Company Disclosure
Schedule, the Company or its Subsidiary, as the case may be, has (i) good and
valid fee simple title to the Owned Real Property, (ii) good and valid title
to all of the tangible personal property recorded as an asset in the Company
Financial Statements as of June 30, 1998, and not disposed of since that date
in the ordinary course of business, and (iii) a valid and subsisting
leasehold interest in the Leased Real Property, that, in the case of each of
clauses (i), (ii), and (iii) above, is free and clear of any Lien other than
Permitted Liens.
(d) All of the buildings, improvements and other facilities
including in the Owned Real Property or Leased Real Property are in good
condition, normal wear and tear excepted, and
24
are suitable for their present purposes, and none of such buildings,
improvements or facilities is subject to any material structural defect.
(e) The primary business operations currently conducted on the
Owned Real Property and the Leased Real Property are not in violation of
applicable zoning laws and regulations, except for violations that
individually or in the aggregate are not material.
(f) The buildings and other structures located on the Owned Real
Property do not encroach on real property of another Person, and no building
or structure of any other Person encroaches on any of the Owned Real
Property, except for encroachments that individually or in the aggregate, are
not material.
(g) The buildings and structures on the Owned Real Property have
direct vehicular access (or indirect vehicular access through valid and
enforceable easements) to public roads and all appropriate utilities
necessary for the conduct of the business thereon as it is presently
conducted.
(h) The Company has made available to Parent all owner's policies
of title insurance as to Owned Real Property, lessee's policies of title
insurance as to Leased Real Property (if any), and related surveys that are
in its possession.
SECTION 3.31 RELATED PARTY TRANSACTIONS.
Except as set forth in Section 3.31 of the Company Disclosure
Schedule, no director, officer, partner, employee, "affiliate" or "associate"
(as such terms are defined in Rule 12b-2 under the Exchange Act) of the
Company or any of its Subsidiaries (i) has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to the Company or
any of its Subsidiaries; (ii) owns any direct or indirect interest of any
kind in, or is a director, officer, employee, partner, affiliate or associate
of, or consultant or lender to, or borrower from, or has the right to
participate in the management, operations or profit of, any person or entity
which is (1) a competitor, supplier, customer, distributor, lessor, tenant,
creditor or debtor of the Company or any of its Subsidiaries, (2) engaged in
a business related to the business of the Company or any of its Subsidiaries,
or (3) participating in any transaction to which the Company or any of its
Subsidiaries is a party; or (iii) is otherwise a party to any contract,
arrangement or understanding with the Company or any of its Subsidiaries.
SECTION 3.32 CERTAIN BUSINESS PRACTICES.
Neither the Company, any of its Subsidiaries, nor to the Company's
knowledge any directors, officers, agents or employees of the Company or any
of its Subsidiaries (i) has used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to political activity; (ii)
has made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or
violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; (iii) has made any other payment prohibited by applicable law; or
(iv) in the case of the Company, any of its Subsidiaries
25
or any of its officers or key employees, is a party to or bound by any
noncompetition or similar agreement or obligation with any third party, which
restricts its or his or her business practices.
SECTION 3.33 SUPPLIERS AND CUSTOMERS.
As of the date hereof, and except as set forth in Section 3.33 of the
Company Disclosure Schedule, the Company has received no written notice from
or, to its knowledge, any oral notice from any significant supplier to or
customer of the Company's business of such supplier's or customer's intention
to materially and adversely alter its existing business relationship with the
Company.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to the
Company that:
SECTION 4.01 CORPORATE EXISTENCE.
Parent and Merger Sub are corporations duly incorporated, validly
existing, and in good standing under the laws of the State of Georgia and
Texas, respectively.
SECTION 4.02 CORPORATE AUTHORIZATION.
The execution, delivery, and performance by Parent and Merger Sub of
this Agreement, the purchase by Merger Sub of shares of Company Stock
pursuant to the Offer and pursuant to the Parent Stock Option, and the
consummation of the Merger and the other transactions contemplated hereby by
Parent and Merger Sub are within their respective corporate power and
authority and have been duly authorized by all necessary corporate action on
the part of Parent and Merger Sub, respectively. This Agreement has been
duly executed and delivered by Parent and Merger Sub and, assuming the due
authorization, execution, and delivery hereof by the Company, constitutes a
legal, valid, and binding agreement of Parent and Merger Sub.
SECTION 4.03 GOVERNMENTAL AUTHORIZATION.
The execution, delivery, and performance by Parent and Merger Sub of
this Agreement, the purchase of shares of Company Stock by Merger Sub
pursuant to the Offer and pursuant to the Parent Stock Option, and the
consummation of the Merger and the other transactions contemplated hereby by
Parent and Merger Sub do not require any material consent, approval,
authorization, or permit of, other action by, or filing with, any
governmental body, agency, official, or authority other than (i) the filing
of appropriate certificates of merger in accordance with Texas Law, (ii) the
filing and delivery of the Offer Documents, and (iii) compliance with
applicable requirements of the Exchange Act.
26
SECTION 4.04 NON-CONTRAVENTION.
The execution, delivery, and performance by Parent and Merger Sub of
this Agreement, the purchase by Merger Sub of the shares of Company Stock
pursuant to the Offer, and the consummation of the Merger and the other
transactions contemplated hereby by Parent and Merger Sub do not and will not
(i) contravene or conflict with the articles of incorporation or bylaws of
Parent or the articles of incorporation or bylaws of Merger Sub, (ii)
materially contravene, conflict with, or constitute a violation of any
provision of any law, rule, regulation, judgment, injunction, order, or
decree binding upon or applicable to Parent, Merger Sub, or any of their
Subsidiaries, or (iii) constitute a default, give rise to a right of
termination, cancellation, or acceleration of any material right or
obligation of Parent, Merger Sub, or any of their Subsidiaries, or give rise
to a loss of any material benefit to which Parent, Merger Sub which would
prevent or materially delay consummation of the Offer or the Merger.
SECTION 4.05 PARENT SEC REPORT.
Parent's Annual Report on Form 10-K for the year ended May 31, 1998
and filed with the SEC was prepared in accordance with the requirements of
the Exchange Act, and did not at the time it was filed 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 the
light of the circumstances under which they were made, not misleading.
SECTION 4.06 AVAILABILITY OF FUNDS.
Parent and Merger Sub have available to them, and shall maintain the
availability of, sufficient funds to enable them to consummate the
transactions contemplated by this Agreement.
SECTION 4.07 INFORMATION SUPPLIED.
None of the information that is included in the Schedule 14D-9 in
reliance upon and in conformity with written information furnished to the
Company by Parent or Merger Sub specifically for use in the Offer Documents
will, at the time such information is furnished to the Company, contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Offer Documents, at the time they or any amendments thereto are filed with
the SEC or on the date first published, sent, or given to the Company's
stockholders, will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; except that, the foregoing does not apply to the extent
that any such untrue statement of a material fact or omission to state a
material fact was or is made by Parent or Merger Sub in reliance upon and in
conformity with written information furnished to Parent or Merger Sub by the
Company specifically for use in the Offer Documents.
27
SECTION 4.08 FINDERS AND INVESTMENT BANKERS.
Except for TM Capital Corp., no investment banker, broker, finder, or
other similar intermediary has been retained by or is authorized to act on
behalf of Parent, Merger Sub, or any of their Subsidiaries who might be
entitled to any fee or commission in connection with the transactions
contemplated by this Agreement.
SECTION 4.09 BOARD APPROVAL.
Prior to the execution of this Agreement, each of the Boards of
Directors of Parent and Merger Sub approved this Agreement and the
transactions contemplated hereby, including the Merger and the Offer.
ARTICLE V.
ADDITIONAL AGREEMENTS OF THE COMPANY
The Company agrees that:
SECTION 5.01 CONDUCT OF THE COMPANY.
Except as contemplated or permitted by this Agreement or as otherwise
approved in writing by Parent, from the date of this Agreement until the time
that the designees of Merger Sub have become members of the Board of
Directors of the Company in accordance with Section 1.01(d) hereof, the
Company will, and will cause its Subsidiaries to, conduct their respective
businesses in the ordinary course consistent with reasonable past practice.
Subject to the foregoing exceptions, from the date hereof until the time that
the designees of Merger Sub have become members of the Board of Directors of
the Company in accordance with Section 1.01(d) hereof:
(a) the Company will not adopt or approve any change or amendment
in its articles of incorporation or bylaws;
(b) the Company will not, and will not permit any of its
Subsidiaries to, merge, consolidate, or enter into a share exchange with any
other Person; acquire any material stock or any material amount of assets of
any other Person; or sell, lease, license, mortgage, pledge, or otherwise
dispose of any material assets except in the ordinary course of business
consistent with reasonable past practice, or transfers between the Company
and/or its wholly owned Subsidiaries;
(c) the Company will not declare, set aside, or pay any dividends
(other than dividends declared prior to the date hereof) or make any
distributions in respect of shares of Company Stock;
28
(d) the Company will not, and will not permit any of its
Subsidiaries to, (i) issue, deliver, sell, encumber, or authorize or propose
the issuance, delivery, sale, or encumbrance of, any capital stock or other
securities of the Company or any Company Subsidiary Securities, other than
(A) pursuant to the Company Rights Agreement (as amended pursuant to Section
3.27) and (B) the issuance of shares of Company Stock upon the exercise of
the Parent Stock Option or Company Options granted prior to the date hereof,
(ii) split, combine, or reclassify any shares of Company Stock or Company
Subsidiary Securities, (iii) repurchase, redeem, or otherwise acquire any
capital stock or other voting securities of the Company or any voting Company
Subsidiary Securities, or (iv) amend the terms of any outstanding voting
securities;
(e) the Company will not, without the prior written consent of
Parent, which consent shall not be unreasonably withheld or delayed, make any
commitment or enter into any contract or agreement that, individually or in
the aggregate, is reasonably likely to be material to the Company and its
Subsidiaries taken as a whole except in the ordinary course of business
consistent with reasonable past practices;
(f) except to the extent required by law or by existing written
agreements or plans disclosed in the Company SEC Reports, neither the Company
nor any of its Subsidiaries will increase in any manner the compensation or
fringe benefits of any of its directors, officers or employees (other than
increases in the ordinary course of business in the compensation or fringe
benefits of any officers or employees who are not executive officers); pay
any pension or retirement allowance to any such directors, officers or
employees; become a party to, amend, or commit itself to any pension,
retirement, profit-sharing, welfare benefit plan, or employment agreement
with or for the benefit of any such director, officer or employee; grant any
severance or termination pay or stay-in-place bonus to any such director,
officer or employee; or increase the benefits payable under any existing
severance or termination pay or stay-in-place bonus policies;
(g) the Company will not, and will not permit any of its
Subsidiaries to, make any material Tax election or settle or compromise any
material federal, state, local, or foreign Tax liability; and
(h) the Company will not agree to do any of the foregoing.
SECTION 5.02 ACCESS TO INFORMATION.
From the date hereof until the Effective Time or earlier termination
of this Agreement, the Company will give Parent and Merger Sub, their
counsel, financial advisors, auditors, and other authorized representatives
reasonable access during regular business hours to the offices, properties,
books, and records of the Company and its Subsidiaries, and will furnish to
Parent and Merger Sub, their counsel, financial advisors, auditors, and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request, and will instruct the
Company's employees, counsel, and financial advisors to cooperate with Parent
and Merger Sub in their evaluation.
29
SECTION 5.03 OTHER OFFERS.
(a) From the date hereof until the Effective Time or the earlier
termination of this Agreement, the Company will not, and will use its best
efforts to cause its Subsidiaries and the officers, directors, employees, and
agents of the Company and its Subsidiaries not to, directly or indirectly,
(i) take any action to solicit, to initiate, or knowingly to encourage any
Company Acquisition Proposal (as defined below), (ii) take any action
knowingly to facilitate (including, without limitation, amending the Company
Rights Agreement other than as contemplated herein or redeeming the rights
issued thereunder) any Company Acquisition Proposal, (iii) engage or
participate in discussions or negotiations, or enter into agreements, with
any Person with respect to a Company Acquisition Proposal, or (iv) in
connection with a Company Acquisition Proposal, disclose any nonpublic
information relating to the Company or any of its Subsidiaries or afford
access to the properties, books, or records of the Company or any of its
Subsidiaries to any Person; and further the Company agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing and each will take the necessary steps to
inform the individuals or entities referred to above of the obligations
undertaken in this Section 5.03. Notwithstanding the foregoing, the Company
may take the action described in clause (ii), (iii), or (iv) of the preceding
sentence if (A) such action is taken in connection with an unsolicited
Company Acquisition Proposal, (B) the Company's Board of Directors has
determined, based on the written advice of its independent financial
advisors, that such Company Acquisition Proposal would, if consummated,
result in a transaction more favorable to the Company's shareholders from a
financial point of view than the transactions contemplated by this Agreement,
(C) legal counsel to the Company has advised the Company's Board of Directors
in writing that the failure to take such action would be a breach of the
fiduciary duties of the Board of Directors under applicable law, and (D) in
the case of the disclosure of nonpublic information relating to the Company
or any of its Subsidiaries in connection with a Company Acquisition Proposal,
such information is covered by a confidentiality agreement that provides
substantially the same or better protection to the Company as is afforded by
the Confidentiality Agreement. The Company will immediately notify Parent
orally and in writing of any Company Acquisition Proposal or any inquiries
with respect thereto. Any such written notification will include the
identity of the Person making such inquiry or Company Acquisition Proposal
and a description of the material terms of such Company Acquisition Proposal
(or the nature of the inquiry) and will indicate whether the Company is
providing or intends to provide the person making the Company Acquisition
Proposal with access to nonpublic information relating to the Company or any
of its Subsidiaries. For purposes of this Agreement, "COMPANY ACQUISITION
PROPOSAL" means any good faith offer or proposal for (x) a merger or other
business combination involving the Company or any of its Subsidiaries and any
Person (other than Parent, Merger Sub, or any other Subsidiary of either
Parent or Merger Sub), (y) an acquisition by any Person (other than Parent,
Merger Sub, or any other Subsidiary of either Parent or Merger Sub) of assets
or earning power of the Company or any of its Subsidiaries, in one or more
transactions, representing 25% or more of the consolidated assets or earning
power of the Company and its Subsidiaries, or (z) an acquisition by any
Person (other than Parent, Merger Sub, or any other Subsidiary of either
Parent or Merger Sub) of securities representing 20% or more of the voting
power of the Company or any of its Subsidiaries.
30
(b) Except as set forth in this Section 5.03, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent or
Merger Sub, the approval or recommendation by such Board of Directors or such
committee of the Offer, the Merger, or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Company
Acquisition Proposal, or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "ACQUISITION AGREEMENT") related to any Company
Acquisition Proposal, except that, in any case set forth in clause (i), (ii),
or (iii) above, prior to the acceptance for payment of shares of Company
Stock pursuant to the Offer, the Board of Directors of the Company may, in
response to an unsolicited Company Acquisition Proposal, (A) withdraw or
modify its approval or recommendation of the Offer, the Merger, or this
Agreement or (B) approve or recommend any such Company Acquisition Proposal
if, in the case of any action described in clause (A) or (B), the events
stated in clauses (B) and (C) of the second sentence of Section 5.03(a) have
occurred, and, in the case of the actions described in clause (B),
concurrently with such approval or recommendation the Company terminates this
Agreement and promptly thereafter enters into an Acquisition Agreement with
respect to a Company Acquisition Proposal.
(c) Nothing contained in this Agreement shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by
Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders if, in the good faith judgment
of the Board of Directors of the Company, after consultation with outside
counsel, failure so to disclose would be a breach of applicable law; provided
that, neither the Company nor its Board of Directors nor any committee
thereof shall, except as permitted by Section 5.03(b), withdraw or modify, or
propose to withdraw or modify, its position with respect to the Offer, the
Merger, or this Agreement or approve or recommend, or propose to approve or
recommend, a Company Acquisition Proposal.
SECTION 5.04 NOTICES OF CERTAIN EVENTS.
The Company will promptly notify Parent of:
(a) any notice or other communication from any Person alleging
that the consent of any third party (other than consents listed in Section
3.03 or 3.05 of the Company Disclosure Schedule) is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) any actions, suits, claims, or proceedings commenced against,
or, to the knowledge of the Company, any threat of an action, suit, claim, or
proceeding made against, or any pending investigation of, the Company or any
of its Subsidiaries that, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.12 or that
relate to the consummation of the transactions contemplated by this
Agreement; and
31
(d) the receipt by the Company or any of its Subsidiaries
subsequent to the date of this Agreement of any notice of, or other
communication relating to, a default, or an event that with notice or lapse
of time or both would become a default, under any Company Contract.
SECTION 5.05 PATENT LITIGATION.
With respect to the law suit by MicroTyping Systems and Stiftung for
Diagnostiche Forschung against the Company concerning an alleged patent
infringement by the Company, without the express prior consent of Parent
the Company shall not make any filings with the court, comply with any
discovery requests, or engage in any discussions with the plaintiffs or their
respective legal counsel concerning the prosecution, defense or settlement of
such law suit, any claims covered thereby or any related claims.
SECTION 5.06 MERGER MEETING; PROXY STATEMENT.
(a) If required by applicable law, including Texas Law, in order
to consummate the Merger, as soon as practicable following the purchase of
shares of Company Stock pursuant to the Offer, the Company will take all
action necessary in accordance with applicable law and with the Company's
articles of incorporation and bylaws to convene a meeting of its stockholders
to approve the Merger and adopt this Agreement (the "MERGER MEETING"). The
Company's Board of Directors has heretofore recommended, and will continue to
recommend, that the Company's stockholders approve the Merger and adopt this
Agreement, and will cause the Company to use all reasonable efforts to
solicit from the stockholders proxies to vote therefor, unless (i) legal
counsel to the Company has advised the Company's Board of Directors in
writing that such recommendation would be a breach of the fiduciary duties of
the Board of Directors under applicable law or (ii) this Agreement is
terminated in accordance with Article VIII.
(b) The Company will, if required by law for the consummation of
the Merger, prepare and file with the SEC preliminary proxy materials
relating to the approval of the Merger and the adoption of this Agreement by
the Company's stockholders, and will file with the SEC revised preliminary
proxy materials, if appropriate, and definitive proxy materials in a timely
manner as required by the rules and regulations of the SEC. Subject to the
last sentence of Section 5.06(a), the proxy materials relating to the Merger
Meeting will include the recommendation of the Company's Board of Directors.
32
ARTICLE VI.
ADDITIONAL AGREEMENTS OF PARENT, MERGER SUB, AND THE COMPANY
Parent, Merger Sub, and the Company agree that:
SECTION 6.01 BEST EFFORTS.
Subject to the terms and conditions of this Agreement, each party will
use its best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement as
promptly as practicable.
SECTION 6.02 CERTAIN FILINGS AND CONSENTS.
The Company and Parent will cooperate with one another (a) in
determining whether any action by or in respect of, or filing with, any
governmental body, agency, official, or authority is required, or any
actions, consents, approvals, or waivers are required to be obtained from
parties to any Company Contracts ("THIRD PARTY CONSENTS") in connection with
the transactions contemplated by this Agreement and (b) in attempting to take
all such actions, to obtain all such consents, approvals, and waivers, and to
make all such filings.
SECTION 6.03 PUBLIC ANNOUNCEMENTS.
Parent and the Company will consult with each other before issuing any
press release or making any public statement with respect to this Agreement
and the transactions contemplated hereby and, except as may be required by
applicable law or any listing agreement with the American Stock Exchange,
Inc. or The Nasdaq Stock Market, Inc., will not issue any such press release
or make any such public statement prior to such consultation.
SECTION 6.04 STATE TAKEOVER LAWS.
If any "fair price," "moratorium," or other similar statute or
regulation becomes applicable to the transactions contemplated by this
Agreement, the Company, Parent, and Merger Sub and, subject to applicable
fiduciary duties, their respective Boards of Directors will use all
reasonable efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to minimize the effects of such statute or regulation on the
transactions contemplated hereby.
SECTION 6.05 MERGER MEETING.
The Merger will be consummated as soon as practicable (and in no event
later than two months) after the purchase of shares of Company Stock pursuant
to the Offer. If Merger Sub is able to do so under Texas Law, it will
consummate the Merger pursuant to Article 5.16 of Texas
33
Law. Each of the Merger Sub and Parent will vote, or cause to be voted, all
shares of Company Stock beneficially owned by it in favor of the Merger.
SECTION 6.06 DIRECTOR AND OFFICER LIABILITY. Parent and Merger Sub agree
that:
(a) The articles of incorporation and the bylaws of the Surviving
Corporation will contain provisions with respect to exculpation from
liability and indemnification substantially as set forth in the articles of
incorporation and bylaws of the Company as of the date hereof, which
provisions shall not be amended, repealed, or otherwise modified in any
manner that would adversely affect the rights thereunder of individuals who
at the Effective Time were present or former directors or officers of the
Company, unless such modification is required by law.
(b) Parent will use all reasonable efforts to, without any lapse
in coverage, either (i) for at least four years after the Effective Time,
provide officers' and directors' liability insurance ("D&O INSURANCE") in
respect of acts or omissions occurring at or prior to the Effective Time
covering each such Person currently covered by the Company's D&O Insurance
policy on terms with respect to coverage and amount no less favorable than
those of such policy in effect on the date hereof; provided that, in no event
will Parent be required to pay per annum more than the last premium
(annualized) paid by the Company for such policy prior to the date hereof,
(ii) purchase tail insurance in respect of the Company's existing D&O
Insurance for four years for a premium not to exceed the amount of the
customary premium for such tail insurance, or (iii) if such D&O Insurance or
tail insurance is only available at premiums in excess of the premiums set
forth in clauses (i) or (ii), as applicable, then purchase the highest level
of D&O Insurance or tail insurance available at such applicable premium.
SECTION 6.07 WAIVER.
The Company hereby waives the Company's rights under paragraph 8 of
that certain letter agreement dated October 28, 1997, by and between the
Company and Parent (the "STANDSTILL AGREEMENT") so that Parent's and Merger
Sub's execution, delivery and performance of this Agreement, the consummation
of the Offer and the Merger, and the exercise of the Parent Stock Option and
the Insider Lock-Up Options, and their consummation of the transactions
contemplated thereby, will not violate or breach any provision of the
Standstill Agreement. If any of the terms of the Standstill Agreement
conflict with the terms of this Agreement, the Parent Stock Option or the
Insider Lock-Up Options, the terms of this Agreement, the Parent Stock Option
or the Insider Lock-Up Options, as the case may be, shall control.
SECTION 6.08 COMPANY BENEFIT PLANS.
Parent shall cause the Surviving Corporation to take such actions as
are necessary so that, for a period of at least one year after the Effective
Time, employees of the Company and its Subsidiaries who continue their
employment after the Effective Time will be provided employee benefits which
in the aggregate are at least generally comparable to those provided to such
employees as of the date hereof; PROVIDED, that it is understood that after
the Effective Time (i) neither Parent nor the Surviving Corporation will have
any obligation to issue or adopt any plans or arrangements to provide for the
issuance of shares of capital stock, warrants, options, stock
34
appreciation rights or other rights in respect of any shares of capital stock
of any entity or any securities convertible or exchangeable into such shares
pursuant to any such plan or program, and (ii) nothing herein shall require
the Surviving Corporation to maintain any particular plan or arrangement.
ARTICLE VII.
CONDITIONS TO THE MERGER
SECTION 7.01 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.
The obligations of the Company, Parent, and Merger Sub to consummate
the Merger are subject to the satisfaction of the following conditions:
(a) if required by applicable law, the Merger has been approved,
and this Agreement has been adopted, by the requisite vote of the Company's
stockholders;
(b) Merger Sub shall have purchased all validly tendered and not
properly withdrawn shares of Company Stock in accordance with the Offer; and
(c) no provision of any applicable domestic law or regulation, and
no judgment, injunction, order, or decree of a court or governmental agency
or authority of competent jurisdiction, that has the effect of making the
Offer or the Merger illegal or otherwise restrains or prohibits the purchase
of shares of Company Stock pursuant to the Offer or the consummation of the
Merger is in effect.
SECTION 7.02 CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB.
The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) the Offer shall have been consummated;
(b) the Company shall have complied with its obligations under
Section 1.01(d); and
(c) if any holders of Company Stock exercise their rights, if any,
under Articles 5.11 and 5.12 of Texas Law (Appraisal Rights), such rights
shall not have been exercised as to more than 10% of the outstanding Company
Stock.
35
ARTICLE VIII.
TERMINATION
SECTION 8.01 TERMINATION.
This Agreement may be terminated and the Offer and the Merger may be
abandoned at any time prior to the Effective Time (notwithstanding any
approval of the Merger and adoption of this Agreement by the Company's
stockholders):
(a) by mutual written consent of the Company, Parent, and Merger
Sub;
(b) by either the Company or Parent and Merger Sub if the Merger
has not been consummated by March 30, 1999, provided that the right to
terminate this Agreement under this clause (b) will not be available to any
party that, at the time of termination, is in material breach of any of its
obligations under this Agreement;
(c) by either the Company or Parent and Merger Sub if any
applicable domestic law, rule, or regulation makes consummation of the Offer
or the Merger illegal or if any judgment, injunction, order, or decree of a
court or governmental agency or authority of competent jurisdiction restrains
or prohibits the consummation of the Offer or the Merger, and such judgment,
injunction, order, or decree has become final and nonappealable;
(d) by either the Company or Parent if the stockholder approval
referred to in Section 7.01(a) has not been obtained at the Merger Meeting;
(e) by either the Company or Parent if the Offer terminates
without the purchase of shares of Company Stock thereunder; provided that,
the right to terminate this Agreement pursuant to this Section 8.01(e) shall
not be available to (i) Parent, if Merger Sub shall have breached its
obligations under Section 1.01(a), or (ii) any party whose willful failure to
perform any of its obligations under this Agreement results in the failure of
any of the Offer Conditions or if the failure of any such Offer Conditions
results from facts or circumstances that constitute a material breach of the
representations or warranties of such party under this Agreement;
(f) by Parent and Merger Sub if (i) the Company violates its
obligations under Section 5.03 in any material respect and thereafter any
Person publicly makes a Company Acquisition Proposal or (ii) the Board of
Directors of the Company does not publicly recommend in the Schedule 14D-9
that the Company's stockholders accept the Offer and tender their shares of
Company Stock pursuant to the Offer and approve the Merger and adopt the
Agreement, or if the Board of Directors of the Company withdraws, modifies,
or changes such recommendation in any manner materially adverse to Parent; or
(g) by the Company if the Company receives an unsolicited Company
Acquisition Proposal and the events stated in clauses (B) and (C) of the second
sentence of Section 5.03(a) have occurred, provided that the Company has given
Parent at least five business days notice of the material terms of such Company
Acquisition Proposal and such termination shall not be
36
effective until the Company has paid the Termination Fee, if and to the
extent required under Section 9.04(b), to Parent either by delivery of a
certified or bank check payable to Parent or by wire transfer to an account
designated in writing by Parent, at the Company's option.
SECTION 8.02 EFFECT OF TERMINATION.
If this Agreement is terminated and the Offer and the Merger are
abandoned pursuant to Section 8.01, no party to this Agreement (or any of its
directors, officers, employees, agents, or advisors) will have any liability
or further obligation to any other party except (a) as provided in Section
9.04, (b) that the agreements contained in Section 9.04 and in the Standstill
Agreement will survive the termination hereof, and (c) that nothing herein
will relieve any party from liability for any breach of its covenants or
agreements under this Agreement.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.01 NOTICES.
All notices, requests, demands, consents and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been duly given when delivered by overnight courier or express mail
service or by postage pre-paid certified or registered mail, return receipt
requested (the return receipt constituting PRIMA FACIE evidence of the giving
of such notice, request, demand or other communication), by personal
delivery, or by fax with confirmation of receipt, to the following address or
such other address of which a party subsequently may give notice to all the
other parties:
If to Parent or Merger Sub, to:
Immucor Inc.
0000 Xxxxxxx Xxxxx,
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P.
000 Xxxxxxxxx Xxxxxx, X.X.
Suite 0000, Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
37
if to the Company, to:
Gamma Biologicals, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
Fax: (000) 000-0000
with a copy to:
Liddell, Sapp, Zivley, Hill & XxXxxx, L.L.P.
000 Xxxxxx Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
SECTION 9.02 SURVIVAL.
None of the representations and warranties, agreements, and other
provisions contained in this Agreement or in any certificate or other writing
delivered pursuant to this Agreement, other than Articles I and II, will
survive the Effective Time.
SECTION 9.03 AMENDMENTS; NO WAIVERS.
(a) Subject to the applicable provisions of Texas Law and Section
1.01(e) of this Agreement, any provision of this Agreement may be amended or
waived prior to the Effective Time if, and only if, such amendment or waiver
is in writing and duly executed and delivered, in the case of an amendment,
by the Company, Parent, and Merger Sub or, in the case of a waiver, by the
party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right,
power, or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege.
SECTION 9.04 FEES AND EXPENSES.
(a) Subject to paragraph (b) of this Section, all costs and
expenses incurred in connection with this Agreement will be paid by the party
incurring the costs and expenses.
(b) If (i) this Agreement is terminated by the Company pursuant to
Section 8.01(g)(pertaining to a Company Acquisition Proposal), (ii) any Person
publicly makes a Company Acquisition Proposal and thereafter this Agreement is
terminated pursuant to Section 8.01(e) because an insufficient number of shares
of Company Stock are tendered in the Offer, or (iii) any Person publicly makes a
Company Acquisition Proposal and thereafter this Agreement is terminated
pursuant to Section 8.01(f), then the Company will reimburse Parent and Merger
38
Sub for up to $500,000.00 of their reasonable documented out-of-pocket
expenses and fees actually incurred by Parent in connection with the
transactions contemplated by this Agreement prior to the termination of this
Agreement, and in enforcing its rights under this Section 9.04 after such
termination, including but not limited to all fees and expenses of counsel,
financial advisors, accountants, and environmental and other experts and
consultants to Parent and Merger Sub (the "TRANSACTION COSTS"). In addition,
the Company will pay to Parent a fee of $1,250,000.00 (the "TERMINATION
FEE"). The Termination Fee will be payable by delivery of immediately
available funds at the time of termination.
(c) If Parent receives such Transaction Costs and Termination Fee
under circumstances in which such Transaction Costs and Termination Fee are
payable, neither Parent, Merger Sub, nor any of their affiliates will assert
or pursue in any manner, directly or indirectly, any claim or cause of action
against the Company or any of its directors, officers, employees, agents, or
representatives based in whole or in part upon its or their receipt,
consideration, recommendation, or approval of a Company Acquisition Proposal,
including the Company's exercise of its right of termination of this
Agreement under Section 8.01(g).
SECTION 9.05 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARIES.
The provisions of this Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that no party may assign, delegate, or otherwise transfer any of its
rights or obligations under this Agreement without the consent of the other
parties. Notwithstanding the foregoing, Merger Sub shall have the right (a)
to assign to Parent or any direct or indirect wholly-owned subsidiary of
Parent any and all rights and obligations of Merger Sub under this Agreement,
including, without limitation, the right to substitute in its place such a
subsidiary as one of the constituent corporations in the Merger (such
subsidiary assuming all of the obligations of Merger Sub in connection with
the Merger) and may require subsidiaries of the Company to merge with
subsidiaries of Merger Sub (or its assignees) in connection with the Merger
and (b) to restructure the transaction to provide for the Merger of the
Company with and into Merger Sub or such other entity as provided above;
provided, however, that the Company shall not be deemed to have breached any
of its representations and warranties herein by reason of Merger Sub
exercising its rights hereunder, and by exercising such rights Parent will be
deemed to have waived the receipt of any additional consents of third parties
required by virtue thereof; and provided further that no such assignment
shall affect any obligation of Parent or Merger Sub hereunder and that it
shall remain primarily liable as to its assigned obligations. If Merger Sub
exercises its right to so restructure the transaction, the Company shall
promptly enter into appropriate agreements to reflect such restructuring.
SECTION 9.06 GOVERNING LAW.
The interpretation, validity, and enforceability of this Agreement
will be governed by the law of the State of Texas without regard to
principles of conflict of laws therein that would apply the laws of any other
jurisdiction.
39
SECTION 9.07 COUNTERPARTS; EFFECTIVENESS.
This Agreement may be signed in any number of counterparts, each of
which will be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
SECTION 9.08 ENTIRE AGREEMENT.
This Agreement, the Company Disclosure Schedule, the Parent Stock
Option, the Insider Lock-Up Options and the Standstill Agreement constitute
the entire agreement among the parties with respect to the subject matter
hereof and supersede all prior agreements, both written and oral, among the
parties with respect to the subject matter of this Agreement. No
representation, warranty, or inducement not set forth herein has been made or
relied upon by any party. Neither this Agreement nor any provision hereof is
intended to confer upon any Person other than the parties any rights or
remedies.
SECTION 9.09 HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
SECTION 9.10 SEVERABILITY.
If any term or other provision of this Agreement is invalid, illegal,
or unenforceable, all other provisions of this Agreement will remain in full
force and effect so long as the economic and legal substance of the
transactions contemplated hereby is not affected.
SECTION 9.11 SPECIFIC PERFORMANCE.
Except as set forth in Section 9.04, the parties agree that
irreparable damage would occur if any of the provisions of this Agreement is
not performed in accordance with the terms hereof and that the parties will
be entitled to specific performance of the terms hereof in addition to any
other remedies at law or in equity.
SECTION 9.12 "KNOWLEDGE" OF THE COMPANY.
For purposes of this Agreement, unless otherwise expressly provided
where the term is used, "knowledge" of the Company will be deemed to mean (i)
the actual knowledge of any director or executive officer of the Company and
(ii) the knowledge that any such director or executive officer would have had
if he or she, in connection with the confirmation of the accuracy of the
representations and warranties of the Company in this Agreement, had made due
inquiry of the officers, employees, advisors, and agents of the Company and
its Subsidiaries who are primarily responsible for the subject matter of such
representations and warranties.
40
SECTION 9.13 DEFINITIONS.
Terms defined in the Exchange Act, used herein and not otherwise
defined herein shall have the meaning given in the Exchange Act.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
written above.
IMMUCOR, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, President
GAMMA ACQUISITION CORPORATION
By:
----------------------------------
Xxxxxx X. Xxxxxx, President
GAMMA BIOLOGICALS, INC.
By:
----------------------------------
Xxxxx X. Xxxxxxx, President
41
LIST OF SCHEDULES
SCHEDULE DESIGNATION
---------------------------
1.01(a) Offer Conditions
3.05 Violations
3.06 Capitalization
3.07 Subsidiaries
3.10 Material Contracts
3.11 Absence of Certain Changes
3.12 Litigation
3.13 Permits; Compliance
3.14 Product Warranties and Liabilities
3.15 Employee Benefits
3.18 FDA and Related matters
3.20 Intellectual Property
3.21 Environmental
3.22 Finders and Investment Bankers
3.23 Insurance
3.24 Indemnification
3.31 Real and Personal Property
42
SCHEDULE 1.01(a)--OFFER CONDITIONS
Merger Sub will not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including, without
limitation, Rule 14e-1(c) under the Exchange Act (relating to Merger Sub's
obligation to pay for or return tendered shares after the termination or
withdrawal of the Offer), to pay for any shares of Company Stock not
theretofore accepted for payment or paid for pursuant to the Offer, if (1)
there are not validly tendered and not properly withdrawn prior to the
expiration of the Offer that number of shares of Company Stock which, when
aggregated with the shares of Company Stock then owned by Parent and any of
its affiliates, represents at least sixty-seven percent (67%) of the shares
of Company Stock then outstanding on a fully diluted basis, based on the
number of stock options and warrants exercised prior to the consummation of
the Offer (the "MINIMUM CONDITION"), or (2) at any time on or after the date
of the Agreement and at or before the time that any shares of Company Stock
are accepted for payment any of the following conditions exist:
(a) Any provision of any applicable domestic law or regulation, or
any judgment, injunction, order, or decree of a court or governmental agency
or authority of competent jurisdiction, is in effect that (i) makes the Offer
or the Merger illegal or otherwise, directly or indirectly or prohibits or
materially restrains the making of the Offer, the acceptance for payment of,
payment for, or ownership, directly or indirectly, of some or all of the
shares of Company Stock by Merger Sub or Parent, (ii) prohibits or materially
limits the ownership or operation by the Company or any of its Subsidiaries
that owns a material portion of the business and assets of the Company and
its Subsidiaries, taken as a whole, or by Parent, Merger Sub, or any
Subsidiaries of Parent of all or a material portion of the business or assets
of the Company and its Subsidiaries, taken as a whole, or of Parent and its
Subsidiaries, taken as a whole, as a result of the Offer, the Merger, or the
other transactions contemplated by the Agreement, or (iii) imposes material
limitations on the ability of Merger Sub or Parent to acquire, hold, or
exercise full rights of ownership of the shares of Company Stock, including
but not limited to the right to vote any shares of Company Stock acquired or
owned by Merger Sub or Parent on all matters properly presented to the
stockholders of the Company, including but not limited to the approval of the
Agreement and approval of the Merger and the right to vote any shares of
capital stock of any Subsidiaries of the Company (other than immaterial
Subsidiaries), or would impose any such limitations with respect to the
Common Stock of the Surviving Corporation after the Merger.
(b) Any consents, authorizations, orders, and approvals of, or
filings or registrations with, any governmental commission, board, or other
regulatory body required in connection with the execution, delivery, and
performance of the Agreement has not been obtained or made, except (i) the
filing of appropriate articles of merger in accordance with applicable law,
including Texas Law, (ii) compliance with applicable requirements of the
Exchange Act, and (iii) where Parent reasonably concludes that the failure to
obtain or make any such consent, authorization, order, approval, filing, or
registration (A) is not likely to have, individually or in the aggregate, a
material adverse effect on the financial condition, results of operations, or
business of the Company and its Subsidiaries before or after the Merger,
taken as a whole (a "COMPANY MATERIAL ADVERSE EFFECT"), or on the financial
condition, results of operations, or business of Parent and Merger Sub before
or after the Merger, taken as a whole (a "PARENT MATERIAL ADVERSE EFFECT"),
and (B) would not render the Offer or the Merger illegal or provide
43
a reasonable basis to conclude that the parties or their affiliates or any of
their respective directors or officers will be subject to a risk of criminal
liability.
(c) Any Third Party Consents have not been obtained except where
Parent reasonably concludes that the failure to obtain any Third Party
Consents is not likely to have, individually or in the aggregate, a Company
Material Adverse Effect.
(d) The Company has failed to perform in any material respect any
of its agreements, covenants, or other obligations to be performed by it
under the Agreement at or prior to such time, or any representations and
warranties of the Company contained in the Agreement are not true in any
material respect at such time as if made at and as of such time (unless the
representation or warranty is made as of a specified date, in which case such
representation or warranty is not true as of such date). For purposes of
determining whether this condition has been satisfied, all qualifications in
the representations and warranties as to the knowledge of the Company will be
disregarded.
(e) There shall have occurred any event or any development that,
insofar as reasonably can be foreseen, is reasonably likely to result in a
Company Material Adverse Effect;
(f) There shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the United States, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) any limitation (whether or not mandatory) by any U.S.
government or governmental, administrative or regulatory authority or agency,
on, or any other event that materially adversely affects, the extension of
credit by banks or other lending institutions, (iv) a commencement or a war
or armed hostilities or other national or international calamity directly or
indirectly involving the United States which would reasonably be expected to
have a Company Material Adverse Effect, a Parent Material Adverse Effect or
materially adversely affect (or materially delay) the consummation of the
Offer or (v) in the case of any of the foregoing existing at the time of the
execution of the Agreement, a material acceleration or worsening thereof
which acceleration of worsening is reasonably expected to have a Company
Material Adverse Effect, a Parent Material Adverse Effect or to materially
adversely affect the consummation of the Offer.
(g) It shall have been publicly disclosed that beneficial
ownership (determined for the purposes of this paragraph as set forth in
Rule 13d-3 promulgated under the Exchange Act) of 20% or more the Company
Stock, before any potential dilution related to such beneficial ownership,
has been acquired by any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person or other entity or group (as
defined in Section 13(d)(3) of the Exchange Act), other than Parent or any of
its affiliates, or (ii) (A) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a manner adverse to
Parent or Merger Sub the approval or recommendation of the Offer, the Merger
or the Agreement and, within ten business days of taking and disclosing to
its stockholders the aforementioned position, shall not have publicly
reconfirmed its recommendation of the Offer, the Merger or the Agreement; (B)
the Board of Directors of the Company or any committee thereof shall have
approved or recommended any takeover proposal or any other acquisition of
Company Stock other than the Offer and the Merger; (C) any such
44
corporation, partnership, person or other entity or group shall have entered
into a definitive agreement or an agreement in principle with the Company
with respect to a tender offer or exchange offer for any Company Stock or a
merger, consolidation or other business combination with or involving the
Company or any of its Subsidiaries or (D) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the
foregoing.
(h) The Agreement has been terminated in accordance with its terms.
The foregoing conditions are for the sole benefit of Merger Sub and Parent
and may, subject to the terms of the Agreement, be waived by Merger Sub and
Parent in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or Merger Sub at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such right, the
waiver of any such right with respect to particular facts and circumstances
shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
45
