Exhibit 99.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
AMONG
IPC ADVISORS S.a.r.l.,
IPBC ACQUISITION CORP.
AND
BALANCED CARE CORPORATION
MAY 15, 2002
TABLE OF CONTENTS
Page
I. DEFINITIONS.......................................................................... 1
1.01 Certain Definitions............................................. 1
II. THE MERGER........................................................................... 9
2.01 The Merger...................................................... 9
2.02 Effective Time of the Merger.................................... 9
2.03 Closing of the Merger........................................... 9
2.04 Effects of the Merger........................................... 9
2.05 Conversion of Shares........................................... 10
2.06 Closing of the Company's Transfer Books........................ 10
2.07 Exchange of Certificates....................................... 11
2.08 Stock Options.................................................. 12
2.09 Further Action................................................. 12
2.10 Subsequent Action.............................................. 12
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................... 13
3.01 Due Organization; Subsidiaries; Etc............................ 13
3.02 Capitalization................................................. 13
3.03 Authorization.................................................. 14
3.04 Reports........................................................ 14
3.05 No Undisclosed Liabilities..................................... 15
3.06 Compliance with Law; Governmental Authorizations............... 15
3.07 No Conflicts................................................... 16
3.08 Contracts...................................................... 16
3.09 Litigation..................................................... 18
3.10 Taxes.......................................................... 19
3.11 Absence of Certain Changes..................................... 19
3.12 Employee Benefit Plans......................................... 20
3.13 Intellectual Property.......................................... 21
3.14 Environmental Matters.......................................... 22
3.15 Labor Relations................................................ 23
3.16 Brokers and Finders............................................ 23
3.17 Board Recommendation........................................... 23
3.18 Fairness Opinion............................................... 24
IV. REPRESENTATIONS AND WARRANTIES OF IPC AND ACQUISITION............................... 24
4.01 Organization, Good Standing and Qualification.................. 24
4.02 Corporate Authority; Approval.................................. 24
4.03 No Conflicts................................................... 25
4.04 Financing...................................................... 25
4.05 Board Recommendation........................................... 25
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Page
4.06 Stockholder Consent............................................ 26
V. COVENANTS........................................................................... 26
5.01 Access......................................................... 26
5.02 Confidentiality................................................ 26
5.03 Conduct of the Business of the Company Pending the Closing
Date........................................................... 26
5.04 Conduct of Business of the Company............................. 27
5.05 Consents....................................................... 27
5.06 Stock Exchange De-listing...................................... 28
5.07 Employee Benefits.............................................. 28
5.08 Indemnification of Officers and Directors...................... 28
5.09 Compliance with Laws........................................... 29
5.10 Tax Matters.................................................... 29
5.11 Notice of Breach; Disclosure................................... 29
5.12 Closing Liabilities............................................ 30
5.13 No Solicitation................................................ 30
5.14 Additional Agreements.......................................... 31
5.15 Disclosure..................................................... 31
5.16 Proxy Statement................................................ 32
5.17 Company Stockholders' Meeting.................................. 32
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES.............................. 33
6.01 Stockholder Approval........................................... 33
6.02 Litigation..................................................... 33
VII. CONDITIONS PRECEDENT TO IPC'S AND ACQUISITION'S OBLIGATIONS......................... 33
7.01 Representations and Warranties................................. 33
7.02 Performance of Covenants....................................... 33
7.03 Notices and Consents........................................... 34
7.04 Agreements and Documents....................................... 34
7.05 Dissenting Stockholders........................................ 34
7.06 Company Warrants............................................... 34
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.................................. 34
8.01 Representations and Warranties................................. 34
8.02 Performance of Covenants....................................... 34
8.03 Documents...................................................... 34
IX. TERMINATION......................................................................... 35
9.01 Termination.................................................... 35
9.02 Effect of Termination.......................................... 36
9.03 Expenses; Termination Fees..................................... 36
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Page
X. MISCELLANEOUS....................................................................... 37
10.01 Successors..................................................... 37
10.02 Amendment...................................................... 37
10.03 Waiver......................................................... 37
10.04 Survival....................................................... 37
10.05 Entire Agreement; Counterparts................................. 38
10.06 Governing Law.................................................. 38
10.07 Disclosure Letter.............................................. 38
10.08 Assignment..................................................... 38
10.09 Notices........................................................ 38
10.10 Headings....................................................... 40
10.11 Exhibits and Schedules......................................... 40
10.12 Severability................................................... 40
10.13 No Third-Party Beneficiaries................................... 40
10.14 Pre-Closing Investment in Acquisition Corp..................... 40
EXHIBITS
Exhibit A Certificate of Merger
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "MERGER AGREEMENT"), is
made as of May 15, 2002, by and among IPC Advisors S.a.r.l., a Luxembourg
corporation ("IPC"), IPBC Acquisition Corp., a Delaware corporation and a
newly-formed wholly-owned first tier subsidiary of IPC ("ACQUISITION"), and
Balanced Care Corporation., a Delaware corporation (the "COMPANY").
WHEREAS, it is proposed that Acquisition acquire all of the
issued and outstanding shares of Common Stock, par value $0.001 per share, of
the Company (the "COMMON SHARES"), other than Common Shares beneficially owned
by IPC or Acquisition (references to IPC shall, where the context so requires,
be deemed to refer to Acquisition as well);
WHEREAS, the Company, IPC and Acquisition desire to make certain
representations, warranties, covenants and agreements in connection with this
Agreement;
WHEREAS, the Board of Directors of the Company (the "COMPANY
BOARD"), a special committee of disinterested directors of the Company Board
(the "Special Committee") and the Boards of Directors of Acquisition and IPC
have (i) determined that it is advisable and in the best interests of their
respective stockholders for Acquisition to merge with and into the Company, with
the result that the Company shall be the surviving corporation and shall become
a wholly-owned subsidiary of IPC (the "MERGER"), all upon the terms and
conditions set forth herein and in accordance with the provisions of the
Delaware General Corporation Law (the "DGCL"), and (ii) approved and adopted
this Merger Agreement and the transactions contemplated hereby; and
WHEREAS, the Merger requires the favorable vote of the holders of
a majority of the outstanding Common Shares entitled to vote for the approval
thereof (the "Company Stockholder Approval") and the Consent of IPC, as sole
stockholder of Acquisition; and
WHEREAS, IPC, as the sole stockholder of Acquisition, has
consented to the Merger and the Company's Board has recommended the adoption of
this Merger Agreement and the transactions contemplated hereby by the
stockholders of the Company;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
I. DEFINITIONS.
1.01 Certain Definitions. For purposes of this Merger Agreement, the
following terms shall have the following meanings:
"ACQUIRED CORPORATIONS" shall mean the Company, together with each of
its Subsidiaries.
"ACQUISITION" shall have the meaning set forth in the introductory
paragraph of this Merger Agreement.
"AFFILIATE" of any Person shall mean a Person which, directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person. For the purposes of this definition,
"control", as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person.
"AMEX" shall mean The American Stock Exchange LLC.
"APPROVAL DATE" shall have the meaning set forth in Section 3.17(a).
"BENEFIT PLANS" shall mean the benefits plans set forth in Section
3.12.
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section
2.02.
"CLOSING" shall have the meaning set forth in Section 2.03.
"CLOSING DATE" shall have the meaning set forth in Section 2.03.
"COBRA" shall have the meaning set forth in Section 3.12(e).
"CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMPANY" shall have the meaning set forth in the introductory
paragraph to this Merger Agreement.
"COMPANY ACQUISITION PROPOSAL" shall mean any offer, proposal, inquiry
or indication of interest (other than an offer, proposal, inquiry or indication
of interest by IPC) contemplating or otherwise relating to any Company
Acquisition Transaction.
"COMPANY ACQUISITION TRANSACTION" shall mean any transaction or series
of transactions involving:
(a) any merger, consolidation, share exchange, business combination,
issuance of securities, acquisition of securities, tender offer, exchange offer
or other similar transaction (i) in which the Company or any other Acquired
Corporation is a constituent corporation, (ii) in which a Person or "group" (as
defined in the Exchange Act and the rules promulgated thereunder) of Persons
directly or indirectly acquires beneficial or record ownership of securities
representing more than 20% of the outstanding securities of any class of voting
securities of the Company or another Acquired Corporation, or (iii) in which the
Company or an Acquired Corporation issues securities representing more than 20%
of the outstanding securities of any class of voting securities of the Company
or such Acquired Corporation;
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(b) any sale, lease, exchange, transfer, license, acquisition or
disposition of any business or businesses or assets that constitute or account
for 20% or more of the consolidated net revenues, net income or assets of the
Company or any other Acquired Corporation; or
(c) any liquidation or dissolution of the Company or any other Acquired
Corporation.
"COMPANY BOARD RECOMMENDATION" shall have the meaning set forth in
Section 5.17(b).
"COMPANY COMMON STOCK" shall mean the common stock of the Company, par
value $0.001 per share.
"COMPANY DISCLOSURE LETTER" shall mean the disclosure letter that has
been prepared by the Company in accordance with the requirements of Section
10.07 hereof and that has been delivered by the Company to IPC on the date of
this Merger Agreement and signed by the President of the Company.
"COMPANY FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 3.04.
"COMPANY OPTIONS" shall have the meaning set forth in Section 3.02.
"COMPANY PREFERRED STOCK" shall mean the preferred stock of the
Company, par value $0.001 per share.
"COMPANY SEC DOCUMENTS" shall mean each statement, report, registration
statement (including the related prospectus in the form filed pursuant to Rule
424(b) of the Securities Act) and definitive proxy statement, and all other
filings filed with the SEC by the Company since June 30, 2001 and prior to the
Effective Time.
"COMPANY STOCK CERTIFICATE shall have the meaning set forth in Section
2.06.
"COMPANY STOCK OPTIONS" shall mean any stock option outstanding on the
date of this Merger Agreement that is or in the future could be exercisable to
acquire Common Shares.
"COMPANY STOCKHOLDERS' MEETING" shall have the meaning set forth in
Section 5.17(a).
"COMPANY TRIGGERING EVENT" shall be deemed to have occurred if: (i) the
Board of Directors of the Company shall have failed to recommend that the
Company's stockholders vote to adopt this Merger Agreement, or shall have
withdrawn or modified the Company Board Recommendation in a manner opposing the
transaction with IPC; (ii) the Company shall have failed to include in the Proxy
Statement the Company Board Recommendation or a statement to the effect that the
Board of Directors of the Company has determined and believes that the Merger is
in the best interests of the Company's stockholders; (iii) the Board of
Directors of the Company shall have
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approved, endorsed or recommended any Company Acquisition Transaction other than
the Merger; (iv) the Company shall have entered into any letter of intent or
similar document or any Contract relating to any Company Acquisition Transaction
other then the Merger; or (v) any of the Acquired Corporations or any
Representative of any of the Acquired Corporations shall have violated in a
material manner any of the restrictions set forth in Section 5.13.
"COMPANY WARRANT" shall mean any warrant outstanding on the date
of this Merger Agreement that is or in the future could be exercisable to
acquire Common Shares.
"CONFIDENTIAL INFORMATION" shall mean all information furnished
by the Company (or its Representatives (as defined herein)) or another Acquired
Corporation (or its Representatives) to IPC or its Representatives, whether
disclosed or provided in oral, written, electronic or other form. However,
Confidential Information does not include any such information that, prior to
disclosure, is known to the public, or after disclosure, becomes generally known
or available to the public through no act or omission of IPC in violation of
this Merger Agreement.
"CONSENT" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any License or governmental
authorization).
"CONSTITUENT CORPORATIONS" shall have the meaning set forth in
Section 2.01.
"CONTINUING EMPLOYEES" shall have the meaning set forth in
Section 5.07.
"CONTRACT" shall mean any agreement, arrangement, commitment,
indemnity, indenture, instrument or lease, including any and all amendments,
supplements, and modifications (whether oral or written) thereto, whether or not
in writing.
"DGCL" shall have the meaning set forth in the first WHEREAS
clause to this Merger Agreement.
"EFFECTIVE TIME" shall have the meaning set forth in Section
2.02.
"ENVIRONMENT" shall mean the soil, land surface or subsurface
strata, surface waters (including navigable waters, ocean waters, streams,
ponds, drainage basins and wetlands), groundwaters; ambient air (including
indoor air), plant and animal life, and any other natural resource.
"ENVIRONMENTAL LAWS" shall mean any state, federal or local laws,
ordinances, codes, regulations, statutes, orders, judgments, decrees, permits or
licenses in effect as of the Closing Date relating to pollution, natural
resources, protection of the Environment or public health and safety, including,
without limitation, laws and regulations relating to the use, treatment,
storage, release, disposal or transportation of Hazardous Substances or the
handling and disposal of Medical Waste.
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"EQUITY SECURITIES" shall mean any (i) capital stock or any securities
representing any other equity interest or (ii) any securities convertible into
or exchangeable for capital stock or any other equity interest, or any other
rights, warrants or options to acquire any of the foregoing securities.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean, with respect to any Person, (i) any
corporation which is a member of a controlled group of corporations, within the
meaning of Section 414(b) of the Code, of which that Person is a member, (ii)
any trade or business (whether or not incorporated) which is a member of a group
of trades or businesses under common control, within the meaning of Section
414(c) of the Code, of which that Person is a member and (iii) any member of an
affiliated service group, within the meaning of Section 414(m) and (o) of the
Code, of which that Person or any Person described in clause (i) or (ii) is a
member.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE AGENT" shall mean American Stock Transfer & Trust Company.
"EXCHANGE FUND" shall have the meaning set forth in Section 2.07(a).
"FINANCIAL ADVISOR" shall mean Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.
"GAAP" shall mean United States generally accepted accounting
principles.
"GOVERNMENTAL AUTHORITY" shall mean any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"HAZARDOUS SUBSTANCES" shall mean (i) any hazardous or toxic waste,
substance or material defined as of the Closing Date as such in any
Environmental Law, (ii) asbestos-containing material, (iii) Medical Waste, (iv)
polychlorinated biphenyls, (v) petroleum products, including gasoline, fuel oil,
crude oil and petroleum by-products and (vi) any other chemicals, materials or
substances, defined or regulated as of the Closing Date under any Environmental
Laws.
"HIPAA" shall have the meaning set forth in Section 3.12(e).
"INCURABLE MATERIAL ADVERSE EFFECT" shall have the meaning set forth in
the paragraph following Section 9.01(g).
"INDEMNIFIED PERSONS" shall have the meaning set forth in Section
5.08(a).
"INTELLECTUAL PROPERTY" shall mean all patents and patent applications,
and inventions that may be patentable, all copyrights, all trademark and service
xxxx registrations
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(including foreign, federal, state or local), all know-how, trade secrets,
Confidential Information, customer lists, software (other than commercially
available "click- through" or "shrink-wrap" software), technical information,
data, process technology and plans owned by the Company or any of the other
Acquired Corporations, as set forth on Section 3.13(b) of the Company Disclosure
Letter.
"IPC" shall have the meaning set forth in the introductory paragraph of
this Merger Agreement.
"IPC DISCLOSURE LETTER" shall mean the disclosure letter that has been
prepared by IPC in accordance with the requirements of Section 10.07 hereof and
that has been delivered by IPC to the Company on the date of this Merger
Agreement and signed by the President of IPC.
"IRS" shall mean the Internal Revenue Service of the United States or
any successor agency, and, to the extent relevant, the United States Department
of the Treasury.
"KNOWLEDGE" shall mean, (i) with respect to an individual, the actual
knowledge of such individual and (ii) with respect to any Person other than an
individual, the actual knowledge of the executive officers and directors of a
corporate entity or other Persons performing similar functions for any other
type of non-individual Person.
"LAW" shall mean any constitutional provision or any statute or other
law, rule or regulation of any Governmental Authority and any decree,
injunction, judgment, order, ruling, assessment or writ.
"LEGAL PROCEEDING" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination or
investigation commenced, brought, conducted or heard by or before, or otherwise
involving, any court or other Governmental Authority or any arbitrator or
arbitration panel.
"LICENSES" shall have the meaning set forth in Section 3.06(b).
"LIEN" shall mean any lien, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, encroachment or other survey defect, transfer restriction or other
encumbrance of any nature whatsoever, except for liens for Taxes not yet due or
delinquent.
"MATERIAL ADVERSE EFFECT" shall mean (i) with respect to the Acquired
Corporations, a material adverse effect in the business, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole, and
(ii) with respect to IPC and Acquisition, a material adverse effect in the
ability of IPC and Acquisition to consummate the transactions contemplated by
this Merger Agreement.
"MATERIAL CONTRACT" shall mean any Contract required to be listed on
Section 3.08(a) of the Company Disclosure Letter.
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"MEDICAL WASTE" shall mean any wastes defined or regulated under
applicable Environmental Laws as "medical wastes," "infectious waste" or
"chemotherapeutic waste"or words of similar effect as of the Closing Date.
"MERGER" shall have the meaning set forth in the first WHEREAS clause
to this Merger Agreement.
"MERGER AGREEMENT" shall mean this Agreement and Plan of Merger, as
amended, supplemented or otherwise modified from time to time.
"MERGER CONSIDERATION" shall have the meaning set forth in Section
2.05(b).
"MULTIEMPLOYER PLAN" shall have the meaning set forth in Section
3.12(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERSON" shall mean any individual, corporation, limited liability
company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, or other entity or organization, whether or
not a legal entity, and including, without limitation, any Governmental
Authority.
"PROXY STATEMENT" shall mean the proxy statement/prospectus to be sent
to the Company's stockholders in connection with the Company Stockholders'
Meeting.
"RELEASE" shall mean any spilling, leaking, emitting, discharging,
depositing, escaping, leaching, dumping, or other releasing, whether intentional
or unintentional.
"REPRESENTATIVES" shall mean officers, directors, employees, agents,
attorneys, accountants, advisors and other representatives.
"REQUIRED COMPANY STOCKHOLDER VOTE" shall mean the affirmative vote of
the holders of a majority of the outstanding stock of the Company entitled to
vote on the approval of the Merger.
"RESIDENTIAL LEASE" shall mean a lease between an Acquired Corporation
as landlord and a residential tenant in a building owned by an Acquired
Corporation;
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SUBSIDIARY" A Person shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns, beneficially or of record,
(a) an amount of voting securities or other interests in such Person that is
sufficient to enable such Person to elect at least a majority
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of the members of such Person's Board of Directors or other governing body, or
(b) at least 50% of the outstanding entity or financial interests of such
Person.
"SUPERIOR COMPANY PROPOSAL" shall mean an unsolicited, bona fide
written offer made by a third party to acquire, directly or indirectly,
including pursuant to a tender offer, exchange offer, merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction, for consideration payable to the Company's stockholders consisting
of cash and/or securities, all outstanding Common Shares or substantially all of
the Company's assets on terms that the Special Committee determines in good
faith to be more favorable to the Company's stockholders than the terms of the
Merger, in their reasonable judgment, after having taken into account, among
other relevant considerations, the advice of an independent financial advisor of
nationally recognized reputation and whether any financing is required to
consummate the transaction contemplated by such offer.
"SURVIVING CORPORATION" shall have the meaning set forth in Section
2.01.
"TAX" or "TAXES" shall mean any and all taxes (whether Federal, state,
local or municipal, and whether domestic or foreign), including, without
limitation, income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupation, value added, ad
valorem, transfer and other taxes, duties or assessments of any nature
whatsoever, together with any interest, penalties or additions to tax imposed
with respect thereto.
"TAX RETURNS" shall mean any returns (including any information
returns), reports and forms required to be filed with any Governmental Authority
in connection with the determination, assessment, collection or payment of any
Taxes or in connection with the administration, implementation or enforcement of
or compliance with any Law relating to any Tax.
"TERMINATION FEE" shall have the meaning set forth in Section 9.03(b).
"THREATENED" A claim, proceeding, dispute, action or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing) that
would lead a prudent Person to conclude that such a claim, proceeding dispute,
action or other matter is likely to be asserted, commenced, taken or otherwise
pursued in the future.
II. THE MERGER.
2.01 The Merger. At the Effective Time of the Merger, Acquisition shall
be merged with and into the Company. The separate existence of Acquisition shall
thereupon cease and the Company shall continue its corporate existence as the
surviving corporation (the "SURVIVING CORPORATION") under the DGCL under its
present name. The Company and Acquisition are sometimes referred to collectively
herein as the "CONSTITUENT CORPORATIONS."
2.02 Effective Time of the Merger. At the Closing, the parties hereto
shall cause a certificate of merger substantially in the form of EXHIBIT A
annexed hereto (the "CERTIFICATE OF
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MERGER") to be executed and filed with the Secretary of State of the State of
Delaware, as provided in Section 252 of the DGCL, and shall take all such other
and further actions as may be required by Law to make the Merger effective. The
Merger shall become effective as of the date and time of the filing of the
Certificate of Merger or such other time as may be mutually agreed upon by the
parties and set forth in the Certificate of Merger. The date and time of such
effectiveness are referred to herein as the "EFFECTIVE TIME."
2.03 Closing of the Merger. Unless this Merger Agreement shall
theretofore have been terminated pursuant to the provisions of Section 9.01
hereof, the closing of the Merger (the "CLOSING") shall take place as promptly
as practicable, but no later than the second business day following the day on
which the last of the conditions (other than conditions which, by their nature,
are to be satisfied at Closing, but subject to those conditions) set forth in
Articles VI, VII and VIII hereof are fulfilled or waived (by the relevant party
or parties), subject to applicable Laws (the "CLOSING DATE"), at the offices of
Xxxx Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another
time, date or place is agreed to in writing by the parties hereto.
2.04 Effects of the Merger. At the Effective Time of the Merger:
(a) the separate existence of Acquisition shall cease and
Acquisition shall be merged with and into the Company, which shall be the
Surviving Corporation;
(b) the Certificate of Incorporation and By-Laws of the Company as
in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation, until each shall
thereafter be amended in accordance with each of their terms and as provided by
Law;
(c) the directors of the Surviving Corporation immediately after
the Effective Time shall be the respective individuals who are directors of
Acquisition immediately prior to the Effective Time;
(d) the officers of the Surviving Corporation immediately after
the Effective Time shall be the respective individuals who are officers of the
Company immediately prior the Effective Time;
(e) the Surviving Corporation shall possess all the rights,
privileges, immunities and franchises, of a public as well as of a private
nature, of each of the Constituent Corporations, and all property, real,
personal, and mixed, and all debts due on whatever account, and all other choses
in action, and all and every other interest of or belonging to or due to each of
the Constituent Corporations shall be taken and deemed to be transferred to and
vested in the Surviving Corporation without further act or deed; and
(f) the Surviving Corporation shall at all times after the
Effective Time be responsible and liable for all liabilities and obligations of
each of the Constituent Corporations, and any claim existing or action or
proceeding pending by or against either of the Constituent Corporations may be
prosecuted as if the Merger had not taken place or the Surviving Corporation
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may be substituted in its place. Neither the rights of creditors nor Liens upon
the property of either of the Constituent Corporations shall be impaired by the
Merger.
2.05 Conversion of Shares. As of the Effective Time, by virtue of the
Merger and without any further action on the part of IPC, Acquisition, the
Company or any holder of any Equity Securities of the Constituent Corporations:
(a) Each Common Share owned by IPC or Acquisition immediately
prior to the Effective Time shall be cancelled and retired and shall cease to
exist, and no payment shall be made with respect thereto.
(b) Except as provided in Section 2.05(a), each Common Share
issued and outstanding immediately prior to the Effective Time, shall be
converted into the right to receive an amount in cash equal to $0.25 (the
"MERGER CONSIDERATION").
(c) Each share of common stock, par value $0.001 per share, of
Acquisition issued and outstanding immediately prior to the Effective Time shall
be converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, par value $0.001 per share, of the
Surviving Corporation.
(d) All Common Shares, by virtue of the Merger and without any
action on the part of the holders thereof, shall no longer be outstanding and
shall be canceled and retired and shall cease to exist, and each holder of a
Company Stock Certificate shall thereafter cease to have any rights with respect
to the Common Shares represented thereby, except the right to receive the Merger
Consideration for such Common Shares upon the surrender of such Company Stock
Certificate in accordance with this Section and Section 2.07 hereof. All Company
Preferred Stock, and all securities convertible into or exercisable for any
class of capital stock of the Company, by virtue of the Merger, shall cease to
exist.
2.06 Closing of the Company's Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed with respect to all
Common Shares outstanding immediately prior to the Effective Time. No further
transfer of any such Common Shares shall be made on such stock transfer books
after the Effective Time. If, after the Effective Time, a valid certificate
previously representing any Common Shares (a "COMPANY STOCK CERTIFICATE") is
presented to the Exchange Agent or to the Surviving Corporation or IPC, such
Company Stock Certificate shall be canceled, and shall be exchanged as provided
in Section 2.07 hereof.
2.07 Exchange of Certificates.
(a) On the Closing Date, IPC shall deposit with the Exchange Agent
cash sufficient to make payments pursuant to this Article II. The cash amount so
deposited with the Exchange Agent, is referred to herein as the "EXCHANGE FUND."
(b) Immediately after the Effective Time, the Surviving
Corporation shall instruct the Exchange Agent to, as soon as reasonably
practicable, and in no event later than two (2)
10
business days following the Effective Time, mail to the record holders of
Company Stock Certificates: (i) a letter of transmittal in customary form and
containing such provisions as IPC may reasonably specify (including a provision
confirming that delivery of Company Stock Certificates shall be effected, and
risk of loss and title to Company Stock Certificates shall pass, only upon
delivery of such Company Stock Certificates to the Exchange Agent), and (ii)
instructions for use in effecting the surrender of Company Stock Certificates in
exchange for the Merger Consideration as contemplated by this Article II. Upon
surrender of a Company Stock Certificate to the Exchange Agent for exchange,
together with a duly executed letter of transmittal and such other documents as
may be reasonably required by the Exchange Agent or IPC, (1) the holder of such
Company Stock Certificate shall be entitled to receive in exchange therefor the
Merger Consideration, and (2) the Company Stock Certificate so surrendered shall
be canceled. Until surrendered as contemplated by this Section 2.07, each
Company Stock Certificate shall be deemed, from and after the Effective Time, to
represent only the right to receive the Merger Consideration as contemplated by
this Article II. If any Company Stock Certificate shall have been lost, stolen
or destroyed, the Surviving Corporation may, in its discretion and as a
condition precedent to the payment of the Merger Consideration, require the
owner of such lost, stolen or destroyed Company Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such sum as the Surviving
Corporation may reasonably direct) as indemnity against any claim that may be
made against the Exchange Agent, IPC or the Surviving Corporation with respect
to such Company Stock Certificate.
(c) Any portion of the Exchange Fund that remains undistributed as
of the date that is 180 days after the Effective Time shall be delivered to IPC
upon demand, and any holders of Company Stock Certificates who have not
theretofore surrendered their Company Stock Certificates in accordance with this
Section 2.07 shall thereafter look only to IPC for satisfaction of their claims
for the Merger Consideration.
(d) Each of the Exchange Agent, IPC and the Surviving Corporation
shall be entitled to deduct and withhold from any the Merger Consideration
payable pursuant to this Merger Agreement to any holder or former holder of
Common Shares such amounts as may be required to be deducted or withheld
therefrom under the Code or any provision of state, local or foreign Tax Law or
under any other applicable Law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Merger
Agreement as having been paid to the Person to whom such amounts would otherwise
have been paid.
(e) Neither IPC nor the Surviving Corporation shall be liable to
any holder or former holder of Common Shares or to any other Person with respect
to any cash amounts delivered to any public official pursuant to any applicable
abandoned property Law, escheat Law or similar Law.
2.08 Stock Options. Immediately prior to the Effective Time, each
Company Option, whether or not then exercisable or vested, shall become fully
exercisable and vested. At the Effective Time (A) each Company Option which is
then outstanding shall be cancelled and (B) in consideration of such
cancellation, and except to the extent that IPC and the holder of any such
Company Option otherwise agree, the Surviving Corporation shall pay to such
holders of Company Options an amount in respect thereof equal to the product of
(x) the excess of the Merger
11
Consideration over the exercise price thereof, if any, and (y) the number of
Common Shares subject thereto (such payment to be net of taxes required by law
to be withheld with respect thereto); provided however that in no event shall
the holder of a Company Option receive less than $.01 for each Common Share
subject to such Company Option. In the event that any Company Warrant only
provides for an aggregate exercise price, the per share exercise price shall be
determined for the purpose of making the calculations under this Section 2.08.
2.09 Further Action. If, at any time after the Effective Time, any
further action is determined by IPC to be necessary or desirable to carry out
the purposes of this Merger Agreement or to vest the Surviving Corporation with
full right, title and possession of and to all rights and property of
Acquisition and the Company, the officers and directors of the Surviving
Corporation and IPC shall be fully authorized (in the name and on behalf of
Acquisition, in the name and on behalf of the Company or otherwise) to take such
action.
2.10 Subsequent Action. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances and any other actions or things are necessary,
desirable or proper to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of the Constituent Corporations as a result of, or
in connection with, the Merger, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name and on
behalf of the Constituent Corporations or otherwise, all such deeds, bills of
sale, assignments and assurances and to take and do, in the name and on behalf
of the Constituent Corporations or otherwise, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
title and interest in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out this Merger Agreement.
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to IPC and Acquisition that,
except as set forth in the Company Disclosure Letter:
3.01 Due Organization; Subsidiaries; Etc. (a) The Company has no
Subsidiaries, except for the corporations identified in Section 3.01 of the
Company Disclosure Letter (which, together with the Company, constitute all of
the Acquired Corporations). Neither the Company nor any of the other Acquired
Corporations owns any capital stock or Equity Securities of, or any equity
interest of any nature in, any other Person, except as identified in Section
3.01 of the Company Disclosure Letter. Except as disclosed in Section 3.01 of
the Company Disclosure Letter, none of the Acquired Corporations has agreed or
is obligated to make, or is bound by any Contract under which it may become
obligated to make, any future investment in or capital contribution to any other
Person. Since January 1, 1998, none of the Acquired Corporations has, at any
time, been a general partner of any general partnership, limited partnership or
other Person.
(b) Section 3.01 of the Company Disclosure Letter identifies each
of the Acquired Corporations and the jurisdictions in which they were organized.
Each of the Acquired Corporations that generate revenue is a corporation or
limited liability company duly organized,
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validly existing and in good standing (in jurisdictions that recognize such
concept) under the Laws of the jurisdiction of its organization and has all
necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Contracts by which it is bound.
(c) Section 3.01 of the Company Disclosure Letter identifies each
Acquired Corporation that is qualified to do business as a foreign corporation
and the jurisdiction or jurisdictions in which each Acquired Corporation is so
qualified. Each of the Acquired Corporations that generate revenue is qualified
to do business as a foreign corporation, and is in good standing (in
jurisdictions that recognize such concept), under the laws of all jurisdictions
where the nature of its business requires such qualification, other than such
failures to be so qualified as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect on the Company.
3.02 Capitalization. (a) The authorized capital stock of the Company
consists of (i) 50,000,000 Common Shares, of which 34,172,847 are issued and
outstanding as of the date hereof, and (ii) 11,160,708 shares of Company
Preferred Stock, none of which are issued and outstanding as of the date hereof.
All of the outstanding Common Shares have been duly authorized and validly
issued and are fully paid and nonassessable and were issued in conformity with
applicable Laws.
(b) On the date hereof, 1,819,330.50 shares of Common Shares were
issuable upon the exercise of options granted under employee stock option plans,
as director options, or as warrants, as disclosed in Section 3.02(b) to the
Company Disclosure Letter (collectively, the "COMPANY OPTIONS"). Except for the
outstanding Common Shares and the Company Options, there are no outstanding
Equity Securities, or other obligations to issue or grant any rights to acquire
any Equity Securities, of the Company, or any Contracts to restructure or
recapitalize the Company. Except in connection with the Company Options, there
are no outstanding Contracts of the Company to repurchase, redeem or otherwise
acquire any Equity Securities of the Company. All outstanding Equity Securities
of each of the Acquired Corporations have been duly authorized and validly
issued in conformity with applicable laws. The Company owns (directly or
indirectly) all issued and outstanding Equity Securities of each other Acquired
Corporation.
3.03 Authorization. The Company has full corporate power and authority
to execute, deliver and perform this Merger Agreement and the Certificate of
Merger, and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Merger Agreement, the Certificate of Merger and
all other documents and agreements to be delivered pursuant hereto and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company (other than the Required Company
Stockholder Vote and the filing of the Certificate of Merger) are necessary to
authorize this Merger Agreement, the Certificate of Merger and any such related
documents or agreements or to consummate the transactions contemplated hereby.
This Merger Agreement has been duly and validly executed and delivered by the
Company and the Certificate of Merger, when executed at the Closing, will be
duly and validly
13
executed and delivered by the Company. This Merger Agreement, assuming the due
authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms, and the Certificate of Merger, when executed by the
Company at the Closing, assuming the due authorization, execution and delivery
by each of the other parties hereto, will be legal, valid and binding agreements
of the Company, enforceable in accordance with their respective terms except as
such enforceability may be limited by applicable bankruptcy, moratorium,
insolvency, reorganization, fraudulent conveyance or other Laws affecting the
enforcement of creditors' rights generally or by general equitable principles.
3.04 Reports. Except as disclosed in Section 3.04 of the Company
Disclosure Letter, all Company SEC Documents were filed as and when required by
the Exchange Act or the Securities Act, as applicable. All documents required to
be filed as exhibits to the Company SEC Documents have been so filed. As of
their respective filing dates, the Company SEC Documents complied in all
material respects with the requirements of the Exchange Act and the Securities
Act, as applicable, and none of the Company SEC Documents, as of their
respective filing dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent corrected by a subsequently
filed Company SEC Document. The financial statements of the Acquired
Corporations, including the notes thereto, included in the Company SEC Documents
(the "COMPANY FINANCIAL STATEMENTS"), complied in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto as of their respective dates (except as may be
indicated in the notes thereto or, in the case of unaudited statements included
in Quarterly Reports on Form 10-Q, as permitted by Form 10-Q of the SEC). The
Company Financial Statements fairly present, in all material respects, the
consolidated financial condition, operating results and cash flows of the
Acquired Corporations at the dates and during the periods indicated therein in
accordance with GAAP consistently applied as of their respective dates (subject,
in the case of unaudited statements, to normal, recurring year-end adjustments
and abbreviated footnote disclosures). Since July 1, 2001, there has been no
material change in the Company's accounting policies except as described in the
notes to the Company Financial Statements. Except as disclosed in Section 3.04
of the Company Disclosure Letter, at all times since January 1, 1999 the Company
has (i) filed as and when due all documents required to be filed with the AMEX,
and (ii) otherwise timely performed all of the Company's obligations pursuant to
the rules and regulations of the AMEX.
3.05 No Undisclosed Liabilities. Except (i) in connection with the
matters disclosed in Section 3.09 of the Company Disclosure Letter and (ii) as
disclosed in Section 3.05 of the Company Disclosure Letter, the Acquired
Corporations do not have any obligation or liability of any nature (matured or
unmatured, fixed or contingent) other than those (i) set forth or adequately
provided for in the balance sheet of the Company as at Xxxxx 00, 0000, (xx) not
required to be set forth on such balance sheet under GAAP, (iii) incurred in the
ordinary course of business since March 31, 2002, and consistent with past
practice (iv) disclosed in the Company SEC Documents, or (v) which, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company.
14
3.06 Compliance with Law; Governmental Authorizations. (a) Except as
disclosed in Section 3.06 of the Company Disclosure Letter, each of the Acquired
Corporations has complied in all material respects with, is not in violation of,
and has not received notices of violation with respect to, any Law with respect
to the conduct of its business, or the ownership or operation of its business,
except for instances of possible noncompliance which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company.
(b) Except as disclosed in Section 3.06 of the Company Disclosure
Letter, each of the Acquired Corporations has obtained all licenses, permits,
certificates, consents and approvals from Governmental Authorities (the
"LICENSES") that are necessary for its business and operations as currently
conducted except where the failure to obtain such Licenses would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. No written notice of any material violation has
been received by any Acquired Corporation in respect of any such License. Except
as disclosed Section 3.06 of the Company Disclosure letter, the consummation of
the transactions contemplated hereunder and the operation of the business of the
Acquired Corporations by the Surviving Corporation in the manner in which it is
currently operated will not require the transfer of any such License that may
not be transferred to the Surviving Corporation without the Consent of any
Governmental Authority or other Person, except where the failure to transfer
such license or obtain such Consent, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.
(c) This Section 3.06 does not apply to environmental matters,
including without limitation compliance with Environmental Matters, which are
addressed exclusively in Section 3.14 of this Merger Agreement.
3.07 No Conflicts. (a) Except as disclosed in Section 3.07(a) of the
Company Disclosure Letter, no filing or registration with, or permit,
authorization, Consent or approval of, or notification or disclosure to, any
Governmental Authority is required by the Company in connection with the
execution and delivery of this Merger Agreement or the consummation by the
Company of the Merger and the other transactions contemplated hereby, except (i)
in connection with the provisions of the Securities Act and the rules and
regulations promulgated thereunder, the Exchange Act and the rules and
regulations promulgated thereunder and the rules and regulations of the AMEX,
(ii) the filing of appropriate merger documents as required by the DGCL
(including the Certificate of Merger), and (iii) where the failure to obtain
such Consent or approval or to provide such notice or disclosure, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
(b) Except as disclosed in Section 3.07(b) of the Company
Disclosure Letter, the execution, delivery and performance by the Company of
this Merger Agreement and the consummation of the Merger and the other
transactions contemplated hereby will not (i) violate any provision of the
Amended and Restated Certificate of Incorporation or Amended and Restated By-
Laws or other organizational documents of the Company, (ii) violate, or be in
conflict with, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in, or provide the
basis for, the termination of, or accelerate the performance required by, or
excuse performance by any Person of any of its obligations under, or cause the
15
acceleration of the maturity of any debt or obligation pursuant to, or result in
the creation or imposition of any Lien upon any property or assets of any
Acquired Corporation under, any Material Contract to which any Acquired
Corporation is a party or by which any of its property or assets is bound, or to
which any of the property or assets of any Acquired Corporation is subject,
except for Contracts the other party to which has consented to or received
notice of the execution and delivery of this Merger Agreement or the
consummation of the Merger (as appropriate under the terms of such Contract),
(iii) violate any Law applicable to any Acquired Corporation or (iv) violate or
result in the revocation or suspension of any License; except, with respect to
items (iii) and (iv), for such violations which, individually or in the
aggregate, would not reasonably be expected to result in a Material Adverse
Effect..
3.08 Contracts. (a) Except as attached as an exhibit to the Company SEC
Documents or disclosed in Section 3.08(a) of the Company Disclosure Letter, the
Company is not a party to:
(i) any Contract that is executory in whole or in part and involves
performance of services or delivery of goods or materials by the Company or
any other Acquired Corporation of an amount or value in excess of $100,000;
(ii) any Contract that is executory in whole or in part and was not
entered into in the ordinary course of business and that involves
expenditures or receipts of the Company or any other Acquired Corporation
in excess of $100,000;
(iii) any lease (other than a Residential Lease), rental or occupancy
agreement, license agreement, installment and conditional sale agreement,
and any other Contract affecting the ownership of, leasing of, title to,
use of, or any leasehold or other interest in, any real or personal
property of any Acquired Corporation (except personal property leases and
installment sales agreements entered into in the ordinary course of
business and other agreements having a value per item or annual payments of
less than $100,000);
(iv) any material licensing agreement or any other material Contract
with respect to patents, trademarks, copyrights or other Intellectual
Property, except as contained in or ancillary to any lease or loan
agreements disclosed or not required to be disclosed herein;
(v) any collective bargaining agreement and any other Contract to or
with any labor union or other employee representative of a group of
employees of any Acquired Corporation;
(vi) any joint venture, partnership and any other Contract (however
named) involving a sharing of profits, losses, costs or liabilities by an
Acquired Corporation with any other Person;
(vii) any Contract containing covenants that in any way purport to
materially restrict the business activity of an Acquired Corporation or
limit the freedom of an Acquired Corporation to engage in any line of
business or to compete with any Person, except as
16
contained in or ancillary to any lease or loan agreement disclosed or
not required to be disclosed herein;
(viii) any power of attorney that is currently effective and
outstanding granted by and relating to an Acquired Corporation, except as
contained in or ancillary to any lease or loan agreement disclosed or not
required to be disclosed herein;
(ix) each Contract that is executory in whole or in part and involves
capital expenditures by an Acquired Corporation in excess of $100,000,
except as contained in or ancillary to any lease or loan agreement
disclosed or not required to be disclosed herein;
(x) each written warranty, guaranty and/or other similar undertaking
with respect to contractual performance extended by an Acquired Corporation
other than in the ordinary course of business; and
(xi) any Contract with any executive officer or director of an Acquired
Corporation.
(b) Each Material Contract is in full force and effect and
enforceable in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, moratorium, insolvency, reorganization,
fraudulent conveyance and other Laws affecting the enforcement of creditors'
rights generally or by general principles of equity.
(c) Except as disclosed in Section 3.08 of the Company Disclosure
Letter, each Acquired Corporation has fulfilled all obligations required
pursuant to each Material Contract to have been performed by it, except where
the failure to perform such obligations, either individually or in the
aggregate, has not and could not reasonably be expected to have a Material
Adverse Effect.
(d) Except as disclosed in Section 3.08 of the Company Disclosure
Letter, no Acquired Corporation has received any written notice of default under
any Material Contract, no default (beyond any applicable grace or cure period)
has occurred under any Material Contract on the part of an Acquired Corporation
or, to the Company's knowledge, on the part of any other party thereto, nor has
any event occurred which with the giving of notice or the lapse of time, or
both, would constitute any default on the part of an Acquired Corporation under
any Material Contract nor, to the Company's knowledge, has any event occurred
which with the giving of notice or lapse of time, or both, would constitute any
default on the part of any other party to any Material Contract.
(e) Except as disclosed in Section 3.07(b) to the Company
Disclosure Letter, no Consent or approval of or notice to any party to any of
the Material Contracts is required for the execution, delivery or performance of
this Merger Agreement or the consummation of the Merger or the other
transactions contemplated hereby to which the Company is a party, except where
the failure to obtain such Consent or approval or to deliver such notice would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.
17
(f) To the knowledge of the Company, no officer, director,
agent or employee of the Company is bound by any Contract that purports to limit
the ability of such officer, director, agent or employee to (i) engage in or
continue any conduct, activity or practice relating to the business of an
Acquired Corporation, or (ii) assign to the Company or any other Acquired
Corporation or to any other Person any rights to any invention, improvement or
discovery, except as contained in or ancillary to any lease or loan agreement
disclosed or not required to be disclosed herein.
3.09 Litigation. Except as disclosed in Section 3.09 of the Company
Disclosure Letter, there are no actions, suits or legal, administrative,
arbitration or other Legal Proceedings or governmental investigations pending
or, to the Company's knowledge, Threatened against the Company or any other
Acquired Corporation before or by any Governmental Authority in excess of
$100,000 and not covered by insurance, except for such as would not individually
or in the aggregate either impair the Company's or any other Acquired
Corporation's ability to consummate the Merger or have or reasonably be expected
to have a Material Adverse Effect on the Company. No Acquired Corporation is a
party to or subject to any judgment, order, writ, injunction, decree or award of
any Governmental Authority, except for those that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company.
3.10 Taxes. Except as set forth in Section 3.10 to the Company
Disclosure Letter, the Company and each of the other Acquired Corporations has
filed or caused to be filed on a timely basis all Tax Returns that are or were
required to be filed by the Company and/or any of the other Acquired
Corporations, either separately or as part of an affiliated group of
corporations, pursuant to the Laws of any Governmental Authority with taxing
power over any Acquired Corporation or its assets and business, except to the
extent that the failure to do so, individually or in the aggregate, has not
resulted and would not reasonably be expected to result in a Material Adverse
Effect. All Tax Returns filed by any of the Acquired Corporations were true,
correct and complete in all material respects when filed. The Company and each
of the other Acquired Corporations has paid all Taxes that have become due by it
pursuant to those Tax Returns, or otherwise, or pursuant to any assessment
received by any of the Acquired Corporations, except such Taxes, if any, as are
being contested in good faith and as to which adequate reserves have been
provided in the Company Financial Statements. The Company has made available to
IPC complete copies of all Tax Returns that any of the Acquired Corporations has
filed for the past three years. All Taxes that the Company or any of the
Acquired Corporations is, or was, required by Law to withhold and collect have
been duly withheld and collected and, to the extent required, have been paid to
the appropriate Governmental Authority, except to the extent that the failure to
do so, individually or in the aggregate, has not resulted or would not
reasonably be expected to result in a Material Adverse Effect. There is no
agreement, plan, arrangement or other contract covering any employee or
independent contractor of the Company or any of the other Acquired Corporations
that could give rise to the payment of any material amount that could not be
deductible by the Company or any of the other Acquired Corporations or IPC
pursuant to Section 280G or Section 162(m) of the Code. The charges, accruals
and reserves with respect to Taxes on the Company Financial Statements with
respect to each of the Acquired Corporations (excluding any provision for
deferred income taxes established to reflect timing differences between book and
tax income) for all tax periods (or
18
portions thereof) ending on or before the Closing Date (including any period for
which no Tax Return has yet been filed) are adequate for GAAP purposes.
3.11 Absence of Certain Changes. Except as disclosed in the Company SEC
Documents and in Section 3.11 of the Company Disclosure Letter, since March 31,
2002, the Acquired Corporations have conducted their business in the ordinary
course consistent with past practice and there has not occurred: (i) any change,
event or condition (whether or not covered by insurance) that has resulted in,
or might reasonably be expected to result in, a Material Adverse Effect to the
Company, other than any change, event or development resulting from general
economic conditions or affecting, in general, persons engaged in the business of
designing, developing, operating or managing assisted living facilities or
skilled nursing facilities; (ii) any acquisition, sale or transfer of any
material asset of the Acquired Corporations other than in the ordinary course of
business and consistent with past practice; (iii) any material change in
accounting methods or practices (including any change in depreciation or
amortization policies or rates) by the Company or any revaluation by the Company
of any of its assets; (iv) any declaration, setting aside, or payment of a
dividend or other distribution with respect to the shares of the Company, or any
direct or indirect redemption, purchase or other acquisition by the Company of
any of its shares of capital stock; (v) any material Contract entered into by
any Acquired Corporation, other than in the ordinary course of business, or any
material amendment or termination of, or default under, any material Contract to
which any Acquired Corporation is a party or by which any of them is bound; or
(vi) any agreement by any Acquired Corporation to do any of the things described
in the preceding clauses (i) through (v) (other than negotiations with IPC and
its Representatives regarding the transactions contemplated by this Merger
Agreement).
3.12 Employee Benefit Plans. (a) Section 3.12 of the Company Disclosure
Schedule sets forth all of the Company's employee benefits plans (the "BENEFIT
PLANS"). None of the Benefit Plans is, and the Company (or any of its ERISA
Affiliates) has not during the past five years maintained or had an obligation
to contribute to, or incurred any other obligation with respect to (i) a defined
benefit pension plan that is subject to Section 412 of the Code or Title IV of
ERISA, (ii) a multiemployer plan, as defined in Section 3(37) of ERISA (a
"Multiemployer Plan"), (iii) a multiple employer plan, as defined in ERISA or
the Code, or (iv) a funded welfare benefit plan, as defined in Section 419 of
the Code.
(b) Except as set forth in Section 3.12 of the Company
Disclosure Letter, with respect to each Benefit Plan, the Company has heretofore
delivered or caused to be delivered or made available to IPC true, correct and
complete copies of (i) all documents which comprise the most current version of
each such Benefit Plan, (ii) the most recent Annual Report (Form 5500) and
accompanying schedules for each of the Benefit Plans for which such a report is
required, and (iii) for each Benefit Plan intended to be "qualified" within the
meaning of Section 401(a) of the Code, the most current summary plan description
issued with respect to such Plan. Since the date of the documents delivered, to
the best of the Company's knowledge there has not been any material change in
the assets or liabilities of any of the Benefit Plans or any change in their
terms and operations which could reasonably be expected to affect or alter the
tax status or materially affect the cost of maintaining such Plan, other than
any change that would not have a Material Adverse Effect on the
19
Company, and none of the Benefit Plans has been or will be amended prior to the
Closing Date, other than as required by Law, regulation or tax qualification
requirement.
(c) Except as set forth in Section 3.12 of the Company
Disclosure Letter, with respect to each Benefit Plan, to the best of the
Company's knowledge, the Company or the relevant ERISA Affiliate thereof has
performed and complied in all material respects with all of its obligations
under and with respect to the Benefit Plans and each of the Benefit Plans has,
at all times, in form, operation and administration complied in all material
respects with its terms, and, where applicable, the requirements of the Code,
ERISA and all other applicable Laws. Except as set forth in Section 3.12 of the
Company Disclosure Letter, with respect to each Benefit Plan, each Benefit Plan
which is intended to be "qualified" within the meaning of Section 401(a) of the
Code has been determined by the IRS to be so qualified.
(d) There are no material unpaid contributions due prior to
the date hereof with respect to any Benefit Plan that are required to have been
made under its terms and provisions or any related insurance contract.
(e) To the best of the Company's knowledge all group health
plans covering employees of the Company have been operated in material
compliance with the continuation coverage requirements of Section 4980B of the
Code (and any predecessor provisions) and Part 6 of Title I of ERISA ("COBRA"),
the provisions of law enacted by the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA") and any similar state Law.
(f) Neither the Company nor any other "disqualified person" or
"party in interest," as defined in Section 4975 of the Code and Section 3(14) of
ERISA, respectively, has engaged in any "prohibited transaction," as defined in
Section 4975 of the Code or Section 406 of ERISA, with respect to any Benefit
Plan which could have a Material Adverse Effect, nor have there been any
fiduciary violations under ERISA which could subject the Company, any ERISA
Affiliate thereof (or any officer, director or employee thereof) to any material
penalty or Tax under Section 502(i) of ERISA or Sections 4971 and 4975 of the
Code.
(g) Except as set forth in Section 3.12 of the Company
Disclosure Letter, with respect to any Benefit Plan: (i) no filing, application
or other matter is pending with the IRS, the PBGC, the United States Department
of Labor or any other governmental body, (ii) there is no action, suit or claim
pending or, to the Company's knowledge, Threatened, other than routine claims
for benefits and (iii) there are no outstanding material liabilities for Taxes,
penalties or fees.
(h) Except as set forth in Section 3.12 of the Company
Disclosure Letter, neither the execution and delivery of this Merger Agreement
nor the consummation of any or all of the contemplated transactions will: (i)
entitle any current or former employee of the Company or any ERISA Affiliate
thereof to severance pay, unemployment compensation or any similar payment, (ii)
accelerate the time of payment or vesting or increase the amount of any
compensation due to any such employee or former employee or (iii) directly or
indirectly result in any payment made or to be made to or on behalf of any
person to constitute a "parachute payment" within the meaning of Section 280G of
the Code.
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3.13 Intellectual Property. (a) The Company owns or has the right to
use each item of Intellectual Property used in its business as presently
conducted, except for failures to own or have the rights to Intellectual
Property that, individually or in the aggregate have not resulted and would not
reasonably be expected to result in a Material Adverse Effect.
(b) Section 3.13(b) of the Company Disclosure Letter identifies all
patents, registered copyrights, registered service marks, registered trademarks,
registered trade names and registrations and applications therefor which are
owned by the Company and each of the other Acquired Corporations. Except as
disclosed in Section 3.13(b) of the Company Disclosure Letter, there are no
licenses, sublicenses or other agreements to which the Company or any of the
other Acquired Corporations is a party relating to the use by third parties of
any material Intellectual Property of the Company or any of the other Acquired
Corporations.
(c) Except as disclosed in Section 3.13(c) of the Company Disclosure
Letter, neither the Company nor any of the other Acquired Corporations has
instituted any action, suit or proceeding in which an act constituting an
infringement of any Intellectual Property was alleged to have been committed by
a third party. To the knowledge of the Company, no use of the Intellectual
Property by the Company or any of the other Acquired Corporations, currently or
in the past three (3) years, has or does violate or infringe upon the rights of
any other party or constitute a breach of any material agreement, obligation or
promise by which the Company or any of the other Acquired Corporations may be
bound or constitute a material violation of any Laws, regulations, ordinances,
codes or statutes in any jurisdiction to which the Company, the other Acquired
Corporations or their property is subject.
(d) Except as disclosed in Section 3.13(d) of the Company Disclosure
Letter, (i) neither the Company nor any of the other Acquired Corporations has
an obligation to grant licenses with respect to any material Intellectual
Property and (ii) neither the Company nor any of the other Acquired Corporations
has received any notice, claim or allegation from any other party challenging
the right of the Company or any of the other Acquired Corporations to make use,
possess, transfer, convey or otherwise dispose of any material Intellectual
Property.
3.14 Environmental Matters. Except as disclosed in those certain Phase
I Site Assessment Reports listed in, or as otherwise disclosed in, Section
3.14(a) of the Company Disclosure Letter:
(a) the Acquired Corporations' ownership and operation of
their business is in material compliance with all Environmental Laws. The
Acquired Corporations have obtained all material approvals necessary or required
under all applicable Environmental Laws for the ownership and operation of their
business as currently conducted, all such approvals are in effect, the Acquired
Corporations have not received written notice of any action to revoke or modify
any of such approvals, and, to the Company's knowledge the ownership and
operation of the Acquired Corporations' business is in material compliance with
all terms and conditions thereof. The Acquired Corporations have not received
any written notice of any pending or Threatened claim or investigation by any
Governmental Authority or any other Person concerning potential liability of
21
any of the Acquired Corporations under Environmental Laws in connection with the
ownership or operation of its business. To the Company's knowledge, there has
not been a Release of any Hazardous Substance by any Acquired Corporation, other
than in material compliance with Environmental Laws, nor by any other Person at,
upon, in, from or under any premises owned or occupied by an Acquired
Corporation or upon which its assets are located. No Acquired Corporation's real
properties (whether owned or leased) is currently, and, to the Company's
knowledge, no such real property has been, used as a treatment, storage or
disposal facility for Hazardous Substances; and to the knowledge of the Company
no Hazardous Substances are present on any such real property, except in such
quantities as are handled in material compliance with all applicable
manufacturer's instructions and in material compliance with all applicable
Environmental Laws and as are used in the operation of the Acquired
Corporations' business.
(b) The Company has provided or made available to IPC or its
representatives all environmental assessments, investigations, studies, reviews
and audits in an Acquired Corporation's possession with respect to an Acquired
Corporation's real property (whether owned or leased) and any real property
previously owned or occupied by an Acquired Corporation.
(c) No Acquired Corporation has received any written notice,
or to the Company's knowledge otherwise obtained knowledge, of the existence of
any circumstances or conditions that have a reasonable likelihood of resulting
in any damages for which the Company could be liable arising pursuant to any
Environmental Law.
(d) To the Company's knowledge, no Acquired Corporation has
material liability with respect to any Hazardous Substance which it has
transported or arranged for the transportation of to premises not owned or
operated by an Acquired Corporation.
3.15 Labor Relations. The Acquired Corporations are conducting their
businesses in material compliance with all applicable Laws relating to
employment or labor, including, without limitation, those Laws relating to
wages, hours, collective bargaining, unemployment insurance, workers'
compensation and equal employment opportunity, except where the failure to be in
compliance would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. No union or other collective bargaining unit has been
certified as representing any of the employees of any Acquired Corporation, nor
has any Acquired Corporation agreed to recognize any union or other collective
bargaining unit. The Company is not a party to a collective bargaining
agreement. There are no labor disputes pending or, to the Company's knowledge,
Threatened involving strikes, work stoppages, slowdowns or lockouts. There are
no grievance proceedings or claims of unfair labor practices filed or, to the
Company's knowledge, Threatened to be filed with the National Labor Relations
Board against any Acquired Corporation. There is no union representation or
organizing effort pending or, to the Company's knowledge, Threatened against any
Acquired Corporation.
3.16 Brokers and Finders. No broker, finder, agent or similar
intermediary has acted on the Company's behalf in connection with this Merger
Agreement or the transactions contemplated hereby, and there are no brokerage
commissions, finders' fees or similar fees or
22
commissions payable in connection therewith based on any Contract with the
Company or any action taken by the Company, other than fees due to the Financial
Advisor.
3.17 Board Recommendation.
(a) The Special Committee has, by a unanimous vote of its
members at a meeting of such Special Committee duly held on May 15, 2002 (the
"APPROVAL DATE"), approved and adopted this Merger Agreement, the Merger and the
other transactions contemplated hereby, and resolved to recommend that the
Company Board recommend that the holders of Common Shares approve and adopt this
Merger Agreement, the Merger and the other transactions contemplated hereby.
(b) The Board of Directors of the Company has, by a unanimous
vote of directors present at a meeting of such Board or Directors duly held on
the Approval Date, approved and adopted this Merger Agreement, the Merger and
the other transactions contemplated hereby, and resolved to recommend that the
holders of Common Shares approve and adopt this Merger Agreement, the Merger and
the other transactions contemplated hereby.
3.18 Fairness Opinion. The Special Committee has received the oral
opinion of the Financial Advisor (to be confirmed in writing) to the effect that
on the Approval Date, the Merger Consideration was fair from a financial point
of view to the stockholders of the Company.
IV. REPRESENTATIONS AND WARRANTIES OF IPC AND ACQUISITION.
IPC and Acquisition, jointly and severally, hereby represent and
warrant to the Company that, except as disclosed in a specific subsection of the
IPC Disclosure Letter:
4.01 Organization, Good Standing and Qualification. (a) Each of IPC and
Acquisition is a corporation duly organized, validly existing and in good
standing (in jurisdictions which recognize such concept) under the Laws of its
jurisdiction of incorporation, and is qualified or licensed as a foreign
corporation to do business in each other jurisdiction where the failure to so
qualify would have a Material Adverse Effect upon its business or operations.
Each of IPC and Acquisition has all requisite corporate power to own, operate
and lease its assets and to carry on its business as now being conducted.
4.02 Corporate Authority; Approval
(a) Each of IPC and Acquisition has full corporate power and
authority to execute, deliver and perform this Merger Agreement and, in the case
of Acquisition, the Certificate of Merger, and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Merger
Agreement, the Certificate of Merger and all other documents and agreements to
be delivered pursuant hereto and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the boards of
directors of IPC and Acquisition and by IPC as the sole stockholder of
Acquisition, and, except for the approval by the stockholders of IPC of the
Merger Agreement, no other corporate proceedings on the part of IPC or
23
Acquisition are necessary to authorize this Merger Agreement, the Certificate of
Merger and any related documents or agreements or to consummate the transactions
contemplated hereby. This Merger Agreement has been duly and validly executed
and delivered by IPC and Acquisition, and the Certificate of Merger, when
executed at the Closing, will be duly and validly executed and delivered by
Acquisition. This Merger Agreement, assuming the due authorization, execution
and delivery by each other party hereto, constitutes a legal, valid and binding
agreement of both IPC and Acquisition, enforceable in accordance with its terms,
and the Certificate of Merger, when executed by IPC and Acquisition at the
Closing, assuming the due authorization, execution and delivery by each other
party hereto, will be legal, valid and binding agreements of Acquisition,
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization, fraudulent
conveyance or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
(b) Acquisition is a newly formed wholly-owned first tier
Subsidiary of IPC and has conducted and will conduct no business or activity and
has not incurred and will not incur any liability or obligation, other than
hereunder or in accordance with the Merger.
4.03 No Conflicts.
(a) No filing or registration with, or permit, authorization,
Consent or approval of, or notification or disclosure to, any Governmental
Authority is required by either of IPC or Acquisition in connection with the
execution and delivery of this Merger Agreement or the consummation by IPC and
Acquisition of the Merger and the other transactions contemplated hereby, except
(i) the filing of appropriate Merger documents as required by the DGCL
(including the Certificate of Merger) and (ii) where the failure to obtain such
Consent or approval or to provide such notice or disclosure, individually or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Effect.
(b) The execution, delivery and performance by IPC and
Acquisition of this Merger Agreement and the consummation of the Merger and the
other transactions contemplated hereby will not (i) violate any provision of the
Certificate of Incorporation or By-Laws or other organizational documents of
either of IPC or Acquisition, (ii) violate or be in conflict with any Contract
or other obligation or (iii) violate any Law applicable to IPC or Acquisition,
except such violations, which individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.
4.04 Financing. IPC has available, and will have available as of the
time of acceptance for payment and purchase of the Common Shares pursuant to the
Merger, and will timely provide Acquisition with, all funds necessary to pay for
all Common Shares that Acquisition becomes obligated to accept for payment and
pay for pursuant to the Merger and to consummate the Merger and the transactions
contemplated by this Agreement.
4.05 Board Recommendation.
24
(a) The Board of Directors of IPC has, by a unanimous vote at
a meeting of such Board of Directors duly held on May 15, 2002, approved and
adopted this Merger Agreement, the Merger and the other transactions
contemplated hereby.
(b) The Board of Directors of Acquisition has, by a unanimous
vote at a meeting of such Board of Directors duly held on May 15, 2002, approved
and adopted this Merger Agreement, the Merger and the other transactions
contemplated hereby.
4.06 Stockholder Consent. IPC, in its capacity as the sole stockholder
of Acquisition, has, by unanimous written consent dated May 15, 2002, approved
and adopted this Merger Agreement, the Merger and the other transactions
contemplated hereby.
V. COVENANTS.
5.01 Access. Between the date hereof and the Closing Date, the Company
shall, and shall cause each of the other Acquired Corporations to, provide IPC,
Acquisition and each of their authorized Representatives with access at
reasonable times upon prior notice to the properties, books, records, Tax
Returns, Contracts, information, documents and personnel of the Acquired
Corporations as they relate to the Acquired Corporations' business as IPC or
Acquisition may reasonably request for the purpose of making such investigation
of the business, properties, financial condition and results of operations of
the Acquired Corporations' business as IPC or Acquisition may deem appropriate
or necessary. Notwithstanding anything to the contrary herein, if any Acquired
Corporation is prohibited from disclosing Confidential Information to another
party by this Agreement or by Law or by preexisting confidentiality obligations,
then such party shall inform the other party of such prohibition and the parties
shall work together to resolve any related due diligence matters without
violating such Laws or confidentiality obligations, including using reasonable
best efforts to obtain third party consents to such disclosure, if appropriate.
Any information obtained by IPC and Acquisition under this Section 5.01 relating
to the Company or any of the other Acquired Corporations shall be subject to the
requirements of Section 5.02.
5.02 Confidentiality. From the date hereof until the Effective Time,
IPC and Acquisition shall keep secret and retain in strictest confidence, and
shall not, without the express written consent of the Company, directly or
indirectly disclose, disseminate, publish, reproduce, retain, use (for the
benefit of IPC and Acquisition or for the benefit of others), or otherwise make
available in any manner whatsoever, any Confidential Information regarding the
Company or any of the other Acquired Corporations, except to those
Representatives of IPC who have a need to know such information in connection
with the consummation of the transactions contemplated by this Merger Agreement,
and only if each such Representative is informed by IPC of the confidential
nature of such information and of the confidentiality undertakings of IPC
contained herein; provided, however, that should this Merger Agreement be
terminated pursuant to any of the provisions of Article IX hereto, the
provisions of this Section 5.02 shall survive such termination and IPC and
Acquisition shall be obligated to keep secret and retain in strictest confidence
all Confidential Information regarding the Company until the earlier of (i) the
second anniversary of the date of termination, (ii) public disclosure of such
information by a party other than IPC or Acquisition and (iii) the receipt by
IPC or Acquisition of the express written consent of the Company to the
25
disclosure of such information. IPC shall be responsible for any breach of the
confidentiality provisions of this Section 5.02 of this Merger Agreement by its
Representatives.
5.03 Conduct of the Business of the Company Pending the Closing Date.
Except as otherwise expressly permitted by this Merger Agreement or as disclosed
on Section 5.03 of the Company Disclosure Letter, between the date hereof and
the Closing Date, the Company shall not, and shall cause the other Acquired
Corporations not to, without the prior consent of IPC, which consent shall not
be unreasonably withheld or delayed, take any affirmative action, or fail to
take any reasonable action within their control, as a result of which any of the
changes or events listed in Section 3.11 of this Merger Agreement is reasonably
likely to occur. Without limiting the foregoing, except as expressly
contemplated by this Merger Agreement, the Company shall not do, cause or permit
any of the following without the prior written consent of IPC (which consent
will not be unreasonably withheld or delayed):
(a) Charter Documents. Cause or permit any amendments to its
Certificate of Incorporation or Bylaws;
(b) Changes in Capital Stock. Split, combine or reclassify any
of its capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock, or
repurchase or otherwise acquire, directly or indirectly, any shares of its
capital stock except from former employees, directors and consultants in
accordance with currently effective agreements providing for the repurchase of
shares in connection with any termination of service to it or its Subsidiaries,
or sell or otherwise issue any shares of its capital stock or securities
exercisable or exchangeable for or convertible into shares of its capital stock,
other than in accordance with or pursuant to existing option plans or upon the
exercise or conversion of Company Options outstanding as of the date of this
Merger Agreement or other convertible or exchangeable securities outstanding as
of the date of this Merger Agreement.
(c) Changes to Stock Option Plans. Cause or permit any
amendments to the Company's 1996 Stock Incentive Plan.
5.04 Conduct of Business of the Company. During the period from the
date of this Merger Agreement and continuing until the earlier of the
termination of this Merger Agreement or the Effective Time, the Company agrees
(except to the extent expressly contemplated by this Merger Agreement or as
consented to in writing by IPC, where required) to, and to cause each of the
other Acquired Corporations to, carry on its business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, to pay
debts and Taxes when due (subject (i) to available cash flow, (ii) to good faith
disputes over such debts or Taxes and (iii) in the case of Taxes of the Acquired
Corporations, to IPC's consent (which consent will not be unreasonably withheld
or delayed) to the filing of material Tax Returns if applicable), to pay or
perform other obligations in accordance with past practices, and to use
commercially reasonable efforts consistent with past practice and policies to
(x) preserve intact its present business organization, (y) keep available the
services of its present officers and key employees and agents and (z) preserve
its relationships and good will with customers, suppliers, distributors,
licensors, licensees, landlords, creditors, employees, agents and others having
business dealings with it. The Company shall confer
26
with its Board of Directors concerning operational matters of the Acquired
Corporations of a material nature and otherwise report periodically to IPC
concerning the status of the Acquired Corporations' business, operations and
finances.
5.05 Consents. The Company shall use its commercially reasonable
efforts to obtain, prior to the Effective Time, all licenses, permits, Consents,
approvals, authorizations, qualifications and orders of Governmental
Authorities, parties to the Material Contracts and any other Persons as are
necessary for consummation of the transactions contemplated by this Merger
Agreement and for the Surviving Corporation to enjoy all rights under such
Material Contracts after the consummation of the transactions contemplated by
this Merger Agreement.
5.06 Stock Exchange De-listing. The Surviving Corporation shall use its
best efforts to cause the Common Shares to be de-listed from the AMEX and
de-registered under the Exchange Act as soon as practicable following the
Effective Time.
5.07 Employee Benefits. The Surviving Corporation will honor, in
accordance with their respective terms as in effect on the date hereof, the
employment, severance and bonus agreements and arrangements to which the Company
is a party. All employees of the Company and its Subsidiaries who continue
employment with IPC, the Surviving Corporation or any Subsidiary of the
Surviving Corporation after the Effective Time ("CONTINUING EMPLOYEES") shall be
eligible to continue to participate in the Surviving Corporation's health,
vacation and other non-equity based employee benefit plans; provided, however,
that nothing in this Section 5.07 or elsewhere in this Merger Agreement shall
limit the right of the Surviving Corporation to amend or terminate any such
health, vacation or other employee benefit plan at any time after the Effective
Time. Nothing in this Section 5.07 or elsewhere in this Merger Agreement shall
be construed to create a right in any employee to employment with the Surviving
Corporation or any other Subsidiary of IPC and, subject to any other binding
agreement between an employee and the Surviving Corporation or any other
Subsidiary of IPC, the employment of each Continuing Employee shall be "at will"
employment.
5.08 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of those
Persons who are directors and officers of the Company as of the date of this
Merger Agreement (the "INDEMNIFIED PERSONS") for acts and omissions occurring
prior to the Effective Time, as provided in the Company's By-Laws (as in effect
as of the date of this Merger Agreement), shall survive the Merger and shall be
observed by the Surviving Corporation to the fullest extent permitted by
Delaware law for a period of six years from the Effective Time, provided that,
in the event any claim or claims are asserted or made within such six-year
period, all rights to indemnification in respect of any such claim or claims
shall continue until final disposition of any and all such claims. IPC also
agrees that the Surviving Corporation shall indemnify all Indemnified Persons to
the fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' service as officers, directors,
employees or agents of the Company or any of the other Acquired Corporations, or
as trustees or fiduciaries of any plan for the benefit of employees, or
otherwise, on behalf of the Company or any of the other Acquired Corporations,
occurring prior to the Effective Time, including the transactions contemplated
by this Merger Agreement. Without limiting the
27
foregoing, in the event any such Indemnified Person is or becomes involved in
any capacity in any action, proceeding or investigation in connection with any
matter, including the transactions contemplated by this Merger Agreement,
occurring prior to, and including, the Effective Time, the Surviving Corporation
will pay as incurred such Indemnified Person's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith.
(b) Subject to Section 5.08(c) below, IPC agrees that from and
after the Effective Time, the Surviving Corporation shall cause to be maintained
in effect for not less than six (6) years from the Effective Time the current
policies of the directors' and officers' liability insurance maintained by the
Company; provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous and provided that such substitution shall not result in any
gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time.
(c) In lieu of its obligations under Section 5.08(b) above,
IPC may provide, prior to Closing, a guarantee of the Surviving Corporation's
obligations under Section 5.08(a) above in form and substance reasonably
satisfactory to the Company and the Special Committee.
5.09 Compliance with Laws. The Company and the Surviving Corporation
shall comply in a timely fashion with the material requirements of all Laws
triggered by the consummation of the transactions contemplated by this
Agreement, including Environmental laws.
5.10 Tax Matters. Between the date hereof and the Closing Date, the
Company shall file or cause to be filed on a timely basis all Tax Returns that
are required to be filed by it or by any of the other Acquired Corporations,
either separately or as part of an affiliated group of corporations, pursuant to
the Laws of each Governmental Authority with taxing power over it or any of the
other Acquired Corporations or any of the Acquired Corporations' assets and
businesses. Each of such Tax Returns will be true, correct and complete in all
material respects when filed. Unless required by law, neither the Company nor
any other Acquired Corporation shall make any election or file any amended Tax
Return reflecting any position that could result in a material adverse Tax
consequence to IPC, Acquisition or the Company or any other Acquired Corporation
for any period beginning on or after the Effective Time. All transfer,
documentary, gross receipts, sales, use and property gains Taxes, and
liabilities similar in nature, imposed or payable on the sale or transfer of the
Acquired Corporations' business pursuant to this Merger Agreement or the
consummation of any of the transactions contemplated hereby shall be paid by the
Surviving Corporation. The Company shall timely file all required transfer Tax
Returns and/or notices of the transfer of the Acquired Corporations' business
with the appropriate Governmental Authority.
5.11 Notice of Breach; Disclosure. Each party shall promptly notify the
other of (i) any event, condition or circumstance of which such party becomes
aware after the date hereof and prior to the Closing Date that, if the same were
to continue to exist as of the Closing Date, would constitute the
non-satisfaction of any of the conditions set forth in Article VI, VII or VIII
hereof, as the case may be or (ii) any event, occurrence, transaction, or other
item of which such party becomes aware which would have been required to have
been disclosed on any Schedule or statement
28
delivered hereunder had such event, occurrence, transaction or item existed as
of the date hereof. The disclosure of any matter as provided in this Section
shall not affect the right of any party to terminate this Merger Agreement under
Section 9.01(e) or 9.01(f) on the basis thereof.
5.12 Closing Liabilities. Following the Closing, the Surviving
Corporation will be responsible and liable for all accounts payable and other
expenses and for all other liabilities and obligations of each of the
Constituent Corporations which arise in the ordinary course of business prior to
the Effective Time.
5.13 No Solicitation. (a) The Company shall not directly or indirectly,
and shall not authorize or permit any of the other Acquired Corporations or any
Representative of any of the Acquired Corporations directly or indirectly, to,
(i) solicit, initiate, encourage, induce or knowingly facilitate the making,
submission or announcement of any Company Acquisition Proposal, (ii) furnish any
nonpublic information regarding any of the Acquired Corporations to any Person
in connection with or in response to a Company Acquisition Proposal or an
inquiry or indication of interest that could reasonably be expected to lead to a
Company Acquisition Proposal, (iii) engage in discussions or negotiations with
any Person with respect to any Company Acquisition Proposal, (iv) approve,
endorse or recommend any Company Acquisition Proposal or (v) enter into any
letter of intent or similar document or any Contract contemplating or otherwise
relating to any Company Acquisition Transaction; provided, however, that prior
to the adoption of this Merger Agreement by the Required Company Stockholder
Vote, this Section 5.13(a) shall not prohibit the Company from engaging in
discussions and taking such other actions as may be reasonably required for the
purpose of becoming informed with respect to an unsolicited written Company
Acquisition Proposal that is submitted to the Company (and not withdrawn) if the
Board of Directors of the Company reasonably determines in good faith after due
consideration that such Company Acquisition Proposal would reasonably be likely
to result in a Superior Company Proposal and (1) neither the Company nor any
Representative of any of the Acquired Corporations shall have violated any of
the restrictions set forth in this Section 5.13, (2) the Board of Directors of
the Company concludes in good faith that such action is required in order for
the Board of Directors of the Company to comply with its fiduciary obligations
to the Company's stockholders under applicable Law, after having taken into
account, among other relevant considerations, the advice of its outside legal
counsel, (3) at least five (5) business days prior to furnishing any nonpublic
information to such Person, the Company gives IPC written notice of the identity
of such Person and of the Company's intention to furnish nonpublic information
to such Person, and the Company receives from such Person an executed
confidentiality agreement containing customary limitations on the use and
disclosure of all nonpublic written and oral information furnished to such
Person by or on behalf of the Company and containing "standstill" provisions no
less favorable to the Company than the "standstill" provisions contained in that
certain letter dated March 18, 2002 from IPC to the Company and (4) at least
five (5) business days prior to furnishing any such nonpublic information to
such Person, the Company furnishes such nonpublic information to IPC (to the
extent such nonpublic information has not been previously furnished by the
Company to IPC). Without limiting the generality of the foregoing, the Company
acknowledges and agrees that any violation of any of the restrictions set forth
in the preceding sentence by any Representative of any of the Acquired
Corporations, whether or not such Representative is purporting to act on behalf
of any of the Acquired Corporations, shall be deemed to constitute a breach of
this Section 5.13 by the Company.
29
(b) The Company shall promptly (and in no event later than 24
hours after receipt of any Company Acquisition Proposal, or any request for
nonpublic information that could reasonably lead to a Company Acquisition
Proposal) advise IPC orally and in writing of any Company Acquisition Proposal,
or any request for nonpublic information relating to any of the Acquired
Corporations that could reasonably lead to a Company Acquisition Proposal
(including the identity of the Person making or submitting such Company
Acquisition Proposal or request, and the terms thereof) that is made or
submitted by any Person after the date of this Merger Agreement. The Company
shall inform IPC with respect to the material terms and the status of any
Company Acquisition Proposal.
(c) On the date hereof, the Company shall immediately cease
and cause to be terminated any existing discussions with any Person that relate
to any Company Acquisition Proposal or Company Acquisition Transaction.
(d) The Company agrees not to release or permit the release of
any Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which any of the Acquired
Corporations is a party, and will use commercially reasonable efforts to enforce
or cause to be enforced each such agreement at the request of IPC. The Company
also will promptly request each Person that has executed, within 12 months prior
to the date of this Merger Agreement, a confidentiality agreement in connection
with its consideration of a possible Company Acquisition Transaction or equity
investment, to return all Confidential Information heretofore furnished to such
Person by or on behalf of any of the Acquired Corporations.
5.14 Additional Agreements. Subject to Section 5.13, the Company, IPC
and Acquisition shall use all reasonable efforts to take, or cause to be taken,
all actions necessary to consummate the Merger and make effective the other
transactions contemplated by this Merger Agreement, as promptly as practicable
following the execution and delivery of this Merger Agreement. Without limiting
the generality of the foregoing, but subject to Section 5.05, the Company, IPC
and Acquisition shall (i) make all filings (if any) and give all notices (if
any) required to be made and given by such party in connection with the Merger
and the other transactions contemplated by this Merger Agreement, (ii) use all
reasonable efforts to obtain each Consent (if any) required to be obtained
(pursuant to any applicable Law or Contract, or otherwise) by such party in
connection with the Merger or any of the other transactions contemplated by this
Merger Agreement, and (iii) use all reasonable efforts to lift any restraint,
injunction or other legal bar to the Merger. The receiving party shall promptly
deliver to the other parties a copy of such notice given and each such Consent
obtained following the date hereof.
5.15 Disclosure. IPC and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to the Merger or any of the other transactions contemplated by this
Merger Agreement. Without limiting the generality of the foregoing, the Company
shall not, and shall not permit any of its Representatives to, make any public
disclosure regarding the Merger or any of the other transactions contemplated by
this Merger Agreement unless (a) IPC shall have approved such disclosure or (b)
the Company shall have been
30
advised by its outside legal counsel that such disclosure is required by
applicable Law or is required under a regulation of AMEX.
5.16 Proxy Statement. As promptly as practicable after the date of this
Merger Agreement, and in any event, within twenty-five days thereafter, the
Company shall prepare and cause to be filed with the SEC the Proxy Statement and
the Company shall use all reasonable efforts to cause the Proxy Statement to
comply with the rules and regulations promulgated by the SEC and to respond
promptly to any comments of the SEC or its staff. The Company will use all
reasonable efforts to cause the Proxy Statement to be mailed to the Company's
stockholders, as promptly as practicable after the final version of the Proxy
Statement is filed with the SEC. The Company shall promptly furnish to IPC all
information concerning the Acquired Corporations and the Company's stockholders
that may be required or reasonably requested by IPC in connection with any
action contemplated by this Section 5.16. If any event relating to any of the
Acquired Corporations occurs, or if the Company becomes aware of any material
information, that should be disclosed in an amendment or supplement to the Proxy
Statement, then the Company shall promptly inform IPC thereof and shall promptly
mail such amendment or supplement to the stockholders of the Company.
5.17 Company Stockholders' Meeting. (a) The Company shall take all
action necessary under all applicable Laws to call, give notice of and hold a
meeting of the holders of Common Shares to vote on a proposal to adopt this
Merger Agreement (the "COMPANY STOCKHOLDERS' MEETING"). The Company
Stockholders' Meeting shall be held (on a date agreed to by IPC and the Company)
as promptly as practicable, subject to compliance with federal securities laws,
after the final version of the Proxy Statement is filed with the SEC. The
Company shall ensure that all proxies solicited in connection with the Company
Stockholders' Meeting are solicited in compliance with all applicable Laws.
(b) Subject to Section 5.17(c): (i) the Proxy Statement shall
include a statement to the effect that the Board of Directors of the Company
unanimously recommends that the Company's stockholders vote to adopt this Merger
Agreement at the Company Stockholders' Meeting (such unanimous recommendation of
the Company's Board of Directors that the Company's stockholders vote to adopt
this Merger Agreement being referred to as the "COMPANY BOARD RECOMMENDATION");
and (ii) the Company Board Recommendation shall not be withdrawn or modified in
a manner opposing the transaction with IPC, and no resolution by the Board of
Directors of the Company or any committee thereof to withdraw or modify the
Company Board Recommendation in a manner opposing the transaction with IPC shall
be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in
Section 5.17(b), at any time prior to the adoption of this Merger Agreement by
the Required Company Stockholder Vote, the Company Board Recommendation may be
withdrawn or modified in a manner opposing the transaction with IPC if: (i) a
proposal to acquire (by merger or otherwise) all of the outstanding Common
Shares is made to the Company and is not withdrawn; (ii) the Company provides
IPC with at least five (5) business days' prior written notice of any meeting of
the Special Committee at which such Special Committee will consider and
determine whether such offer is a Superior Company Proposal; (iii) the Special
Committee determines in good faith that such offer constitutes a Superior
Company Proposal; (iv) the Company's Board of Directors determines in good
faith, after having
31
taken into account, among other relevant considerations, the advice of the
Company's outside legal counsel, that, in light of such Superior Company
Proposal, the withdrawal or modification of the Company Board Recommendation is
required in order for the Company's Board of Directors to comply with its
fiduciary obligations to the Company's stockholders under applicable Law; and
(v) neither the Company nor any of its Representatives shall have violated any
of the restrictions set forth in Section 5.13.
(d) The Company's obligation to call, give notice of and hold
the Company Stockholders' Meeting in accordance with Section 5.17(a) hereof
shall not be limited or otherwise affected by the commencement, disclosure,
announcement or submission of any Superior Company Proposal or other Acquisition
Proposal, or by any withdrawal or modification of the Company Board
Recommendation.
VI. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES.
The obligations of each party to complete the Closing are conditioned
upon the satisfaction or waiver in writing by the parties, on or before the
Closing Date, of the following conditions:
6.01 Stockholder Approval. This Merger Agreement shall have been duly
adopted by the Required Company Stockholder Vote.
6.02 Litigation. No suit, action or other Legal Proceeding by any
domestic Governmental Authority, or injunction or final judgment shall be
pending on the Closing Date before any court or Governmental Authority in which
it is sought to restrain or prohibit or to obtain damages or other relief in
connection with this Merger Agreement or the consummation of the transactions
contemplated hereby.
VII. CONDITIONS PRECEDENT TO IPC'S AND ACQUISITION'S OBLIGATIONS.
The obligations of IPC and Acquisition to complete the Closing are
conditioned upon the satisfaction or waiver in writing by IPC (on behalf of IPC
and Acquisition), on or before the Closing Date, of the following conditions:
7.01 Representations and Warranties. The representations and warranties
of the Company contained in this Merger Agreement shall be accurate as of the
Closing Date as if made on and as of the Closing Date, except any
representations and warranties which address matters only as of a particular
date shall have been true and correct as of such date.
7.02 Performance of Covenants. The Company shall have performed and
complied in all material respects with all of the agreements, covenants and
conditions required by this Merger Agreement to be performed and complied with
by it prior to or on the Closing Date.
32
7.03 Notices and Consents. The notices and consents identified on
Section 3.07(a) and Section 3.07(b) of the Company Disclosure Letter, which
represent all of the notices and Consents required to be obtained in connection
with the Merger and the other transactions contemplated by this Merger
Agreement, shall have been obtained and shall be in full force and effect, other
than such Consents, the failure of which to be obtained would not result,
individually or in the aggregate, in a Material Adverse Effect on the Company.
7.04 Agreements and Documents. IPC and Acquisition shall have received
a certificate, dated the Closing Date, executed on behalf of the Company by its
Chief Executive Officer, confirming that the conditions set forth in Sections
7.01, 7.02 and 7.03 hereof have been duly satisfied or waived.
7.05 Dissenting Stockholders. Holders of no more than 10% of the
Company Common Stock outstanding immediately prior to the Effective Time shall
have delivered a written demand for appraisal of its Company Common Stock in the
time manner provided in Section 262 of the DGCL.
7.06 Company Warrants. (i) The Company shall have used its reasonable
best efforts to enter into agreements with holders of Company Warrants set forth
in Section 3.02(b) of the Company Disclosure Letter, in form and substance
reasonably satisfactory to IPC, which agreements shall terminate all rights of
such holders under their respective Company Warrants effective immediately prior
to the Effective Time and shall contain a consent of such holders to the
treatment of their Company Warrants in the manner described in Section 2.08 of
this Merger Agreement and (ii) holders of at least 80% of the Company Warrants
outstanding on the date hereof shall have entered into such agreements with the
Company.
VIII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.
The Company's obligation to complete the Closing is conditioned upon
the satisfaction or waiver in writing by the Company, on or before the Closing
Date, of all of the following conditions:
8.01 Representations and Warranties. The representations and warranties
of IPC and Acquisition contained in this Merger Agreement shall be accurate as
of the Closing Date as if made on and as of the Closing Date.
8.02 Performance of Covenants. Each of IPC and Acquisition shall have
performed and complied in all material respects with all of the agreements,
covenants and conditions required by this Merger Agreement to be performed and
complied with by them prior to or on the Closing Date.
8.03 Documents. The Company shall have received a certificate executed
on behalf of IPC by an executive officer of IPC, confirming that conditions set
forth in Sections 8.01 and 8.02 hereof have been duly satisfied.
33
IX. TERMINATION.
9.01 Termination. This Merger Agreement may be terminated prior to the
Effective Time (whether before or after adoption of this Merger Agreement by the
Company's stockholders):
(a) by mutual written consent of IPC, Acquisition and the
Company;
(b) by either IPC and Acquisition or the Company if the Merger
shall not have been consummated by the later of September 30, 2002 and the day
following the last day of any cure period under Section 9.01(e) or 9.01(f)
(unless the failure to consummate the Merger is attributable to a failure on the
part of the party seeking to terminate this Merger Agreement to perform any
material obligation required to be performed by such party at or prior to the
Effective Time);
(c) by either IPC and Acquisition or the Company if (i) a
court of competent jurisdiction or other Governmental Authority shall have
issued a final and nonappealable order, decree or ruling, or shall have taken
any other action, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger or (ii) if a suit, action or other Legal
Proceeding by any domestic Governmental Authority shall be pending, in which it
is sought to restrain or prohibit or to obtain damages or other relief in
connection with, this Merger Agreement or the consummation of the transactions
contemplated hereby;
(d) by IPC and Acquisition or the Company (at any time prior
to the adoption of the Merger Agreement by the Required Company Stockholder
Vote) if a Company Triggering Event shall have occurred;
(e) by IPC and Acquisition if (i) any of the Company's
representations and warranties contained in this Merger Agreement shall be
inaccurate as of the date of this Merger Agreement, or shall have become
inaccurate as of a date subsequent to the date of this Merger Agreement (as if
made on such subsequent date, other than representations and warranties which
address matters only as of a particular date) (and such breach, if capable of
cure, has not been cured within fifteen days after notice thereof), such that
the condition set forth in Section 7.01 would not be satisfied, or (ii) any of
the Company's covenants contained in this Merger Agreement shall have been
breached (and any such breach shall not have been cured within fifteen days
after notice thereof) such that the condition set forth in Section 7.02 would
not be satisfied;
(f) by the Company if (i) any of IPC's and Acquisition's
representations and warranties contained in this Merger Agreement shall be
inaccurate as of the date of this Merger Agreement, or shall have become
inaccurate as of a date subsequent to the date of this Merger Agreement (as if
made on such subsequent date) (and such breach, if capable of cure, has not been
cured within fifteen days after notice thereof), such that the condition set
forth in Section 8.01 would not be satisfied, or (ii) if any of IPC's and
Acquisition's covenants contained in this Merger Agreement shall have been
breached (and any such breach shall not have been cured within fifteen days
after notice thereof) such that the condition set forth in Section 8.02 would
not be satisfied;
34
(g) by IPC and Acquisition if, there shall have been any
Incurable Material Adverse Effect (as defined below) with respect to the Company
from the date hereof to the Closing Date or there shall exist any condition
which could reasonably be expected to result in such an Incurable Material
Adverse Effect (as defined below).
As used in this Section 9.01, an "INCURABLE MATERIAL ADVERSE EFFECT"
shall mean a Material Adverse Effect on the Company, which Material Adverse
Effect is not reasonably capable of being cured prior to September 30, 2002.
9.02 Effect of Termination. In the event of the termination of this
Merger Agreement as provided in Section 9.01, this Merger Agreement shall be of
no further force or effect; provided, however, that (i) this Section 9.02,
Section 9.03 and Article X shall survive the termination of this Merger
Agreement and shall remain in full force and effect, and (ii) the termination of
this Merger Agreement shall not relieve any party from any liability for any
willful breach of any representation, warranty or covenant contained in this
Merger Agreement.
9.03 Expenses; Termination Fees.
(a) Except as set forth in this Section 9.03, all fees and
expenses incurred in connection with this Merger Agreement and the transactions
contemplated by this Merger Agreement shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; provided however that (i) if
this Merger Agreement is terminated by IPC pursuant to Section 9.01(e) as a
result of an intentional act or omission by the Company, then the Company shall
make a nonrefundable cash payment to IPC, at the time specified in the next
sentence, in an amount equal to the aggregate amount of all fees and reasonable,
documented, out-of-pocket expenses (including with respect to fees, all
attorneys' fees, accountants' fees and filing fees) that have been paid or that
may become payable by or on behalf of IPC in connection with the preparation and
negotiation of this Merger Agreement and otherwise in connection with the
Merger; and (ii) if this Merger Agreement is terminated by the Company pursuant
to Section 9.01(f), then IPC shall make a nonrefundable cash payment to the
Company, at the time specified in the last sentence of this Section 9.03, in an
amount equal to the aggregate amount of all fees and reasonable, documented,
out-of-pocket expenses (including with respect to fees, all attorneys' fees,
accountants fees, financial advisory fees and filing fees) that have been paid
or that may become payable by or on behalf of the Company in connection with the
preparation and negotiation of this Merger Agreement and otherwise in connection
with the Merger. In the case of termination of this Merger Agreement by IPC
pursuant to Section 9.01(e), the nonrefundable payment referred to in clause
"(i)" of the proviso to the first sentence of this Section 9.03 shall be made by
the Company within two business days after such termination. In the case of
termination of this Merger Agreement by the Company pursuant to Section 9.01(f),
the nonrefundable payment referred to in clause "(ii)" of the proviso to the
first sentence of this Section 9.03 shall be paid by IPC within two business
days afer such termination.
(b) If this Merger Agreement is terminated by the Company
pursuant to Section 9.01(d), then the Company shall make a nonrefundable cash
payment to IPC, at the time
35
specified in the next sentence, in an amount equal to the aggregate amount of
all fees and reasonable, documented, out-of-pocket expenses (including with
respect to fees, all attorneys' fees, accountants' fees and filing fees) that
have been paid or that may become payable by or on behalf of IPC in connection
with the preparation and negotiation of this Merger Agreement and otherwise in
connection with the Merger, up to a maximum of $250,000. In the case of
termination of this Merger Agreement by the Company pursuant to Section 9.01(d),
the Termination Fee shall be paid by the Company to IPC within two business days
after such termination.
X. MISCELLANEOUS.
10.01 Successors. This Merger Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
10.02 Amendment. This Merger Agreement may be amended with the approval
of the respective Boards of Directors of the Company, IPC and Acquisition at any
time (whether before or after adoption of this Merger Agreement by the
stockholders of the Company); provided, however, that after any such adoption of
this Merger Agreement by the Company's stockholders, no amendment shall be made
which by Law requires further approval of the stockholders of the Company
without the further approval of such stockholders. This Merger Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
10.03 Waiver. (a) No failure on the part of any party to exercise any
power, right, privilege or remedy under this Merger Agreement, and no delay on
the part of any party in exercising any power, right, privilege or remedy under
this Merger Agreement, shall operate as a waiver of such power, right, privilege
or remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No party shall be deemed to have waived any claim arising
out of this Merger Agreement, or any power, right, privilege or remedy under
this Merger Agreement, unless the waiver of such claim, power, right, privilege
or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of such party; and any such waiver shall not be applicable
or have any effect except in the specific instance in which it is given.
10.04 Survival. None of the representations and warranties contained in
this Merger Agreement or in any certificate delivered pursuant to this Merger
Agreement shall survive the Merger. Notwithstanding any other provision of this
Merger Agreement, the covenants contained in Article V that require action
following the Effective Time shall survive the consummation of the Merger. This
Article X and the agreements of the parties contained in Section 9.02 (Effect of
Termination), Section 9.03 (Expenses) and the confidentiality agreement
contained in the letter from IPC to the Company dated March 18, 2002 shall
survive the termination of this Merger Agreement.
10.05 Entire Agreement; Counterparts. This Merger Agreement (together
with the agreements, certificates and other documents referred to herein, the
Schedules and Exhibits hereto and the Company Disclosure Letter and the IPC
Disclosure Letter) constitutes the entire agreement
36
among the parties with respect to its subject matter and supersedes all other
prior and contemporaneous agreements and understandings, both written and oral,
among or between any of the parties with respect to the subject matter hereof.
This Merger Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall constitute one and the same
instrument.
10.06 Governing Law. THIS MERGER AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND PERFORMED IN SUCH STATE AND WITHOUT REGARD TO CONFLICTS OF
LAW DOCTRINES EXCEPT TO THE EXTENT THAT CERTAIN MATTERS ARE PREEMPTED BY FEDERAL
LAW OR ARE GOVERNED BY THE LAW OF THE JURISDICTION OF ORGANIZATION OF THE
RESPECTIVE PARTIES.
10.07 Disclosure Letter. The Company Disclosure Letter shall be
arranged in separate parts corresponding to the numbered Sections contained in
Article III, and the information disclosed in any numbered part shall be deemed
to relate to and to qualify only the particular representation or warranty set
forth in the correspondingly numbered Section in Article III, and shall not be
deemed to relate to or to qualify any other representation or warranty, unless
it is clear on its face that it also applies to another representation or
warranty or there is a cross-reference to another Section of the Company
Disclosure Letter. The IPC Disclosure Letter shall be arranged in separate parts
corresponding to the numbered Sections contained in Article IV, and the
information disclosed in any numbered or lettered part shall be deemed to relate
to and to qualify only the particular representation or warranty set forth in
the correspondingly numbered Section in Article IV, and shall not be deemed to
related to or to qualify any other representation or warranty, unless it is
clear on its face that it also applies to another representation or warranty or
there is a cross-reference to another Section of the IPC Disclosure Letter.
Except as required by Section 5.11, there shall be no duty to update the Company
Disclosure Letter.
10.08 Assignment. Neither IPC, Acquisition nor the Company may assign
this Merger Agreement to any other Person without the prior written consent of
the other parties hereto.
10.09 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given (a) when delivered
personally, (b) when transmitted by telecopy (transmission confirmed), (c) on
the fifth business day following mailing by registered or certified mail (return
receipt requested), or (d) on the next business day following deposit with an
overnight delivery service of national reputation, to the parties at the
following addresses and telecopy numbers (or at such other address or telecopy
number for a party as may be specified by like notice):
37
If to IPC or Acquisition:
c/o IPC Advisors S.a.r.l.
28 xxx Xxxx-Xxxxxxxx Xxxxxx
Luxembourg X-0000
Xxxxxxxxx: X.X. Xxxxxxxx
Telecopy: 352 26 20 17 13
With a copy to:
Xxxx Xxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Company:
Balanced Care Corporation
0000 Xxxxx Xxxxx
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Xxxxx X. Xxxxxx Building
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx Xxxxxxx
Telephone: (000) 000.0000
Telecopy: (000) 000.0000
With an additional copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000.0000
38
10.10 Headings. The headings contained in this Merger Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Merger Agreement.
10.11 Exhibits and Schedules. The Exhibits and Schedules to this Merger
Agreement are incorporated by reference herein and are made a part hereof as if
they were fully set forth herein. References herein to "this Merger Agreement,"
"herein," "hereof" and phrases of like import are references to this Merger
Agreement, together with the Exhibits and Schedules hereto, including the
Company Disclosure Letter and the IPC Disclosure Letter.
10.12 Severability. The invalidity of any term or terms of this Merger
Agreement shall not affect any other term of this Merger Agreement, which shall
remain in full force and effect.
10.13 No Third-Party Beneficiaries. Other than the Indemnified Persons
and the stockholders of the Company with respect to their rights to receive the
Merger Consideration, there are no third party beneficiaries of this Merger
Agreement or of the transactions contemplated hereby and nothing contained
herein shall be deemed to confer upon anyone other than the parties hereto (and
their permitted successors and assigns) and, with respect to the obligations of
IPC pursuant to Section 5.08 the Indemnified Persons, any right to insist upon
or to enforce the performance of any of the obligations contained herein.
10.14 Pre-Closing Investment in Acquisition Corp. Prior to the merger,
the principals of IPC may offer a small number of current Company shareholders
an opportunity to purchase for cash a small minority interest in Acquisition
Corp. on such terms and conditions as are mutually agreed between them and IPC.
* * * * *
39
IN WITNESS WHEREOF, the parties have executed this Merger Agreement as
of the date first above written.
IPC ADVISORS S.A.R.L.
By: /s/ X.X. Xxxxxxxx
--------------------------------
Name: X.X. Xxxxxxxx
Title: Manager
IPBC ACQUISITION CORP.
By: /s/ X.X. Xxxxxxxx
--------------------------------
Name: X.X. Xxxxxxxx
Title: President
BALANCED CARE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Interim Chief Executive
Officer
