1
Exhibit 2.4
Agreement and Plan of Merger between Registrant and Acquitron Medical.
2
APPENDIX A
AGREEMENT
AND PLAN OF MERGER
3
TABLE OF CONTENTS
PAGE
----
ARTICLE I: THE MERGER......................................................... A-1
1.1 The Merger......................................................... A-1
1.2 Effective Time of the Merger....................................... A-1
ARTICLE II: THE SURVIVING CORPORATION.......................................... A-1
2.1 Certificate of Incorporation....................................... A-1
2.2 By-laws............................................................ A-1
2.3 Directors and Officers of Surviving Corporation.................... A-1
ARTICLE III: CONVERSION OF SHARES............................................... A-2
3.1 Exchange Ratio..................................................... A-2
3.2 Exchange of Shares................................................. A-2
3.3 Dividends; Transfer Taxes.......................................... A-3
3.4 No Fractional Shares............................................... A-3
3.5 Closing of AMI Transfer Books...................................... A-4
3.6 Closing............................................................ A-4
3.7 Supplementary Action............................................... A-4
3.8 Dissenting Shares.................................................. A-4
ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF AMI.............................. A-4
4.1 Organization....................................................... A-5
4.2 Capitalization..................................................... A-5
4.3 Authority Relative to this Agreement............................... A-5
4.4 Consents and Approvals; No Violations.............................. A-6
4.5 Reports and Financial Statements................................... A-6
4.6 Absence of Certain Changes or Events............................... A-6
4.7 Information in Registration Statement and Proxy Statement.......... A-7
4.8 Litigation......................................................... A-7
4.9 Contracts.......................................................... A-7
4.10 Employee Benefit Plans............................................. A-8
4.11 Tax Matters........................................................ A-9
4.12 Compliance with Applicable Law..................................... A-11
4.13 Subsidiaries....................................................... A-11
4.14 Interested Party Transactions...................................... A-11
4.15 Labor and Employment Matters....................................... A-11
4.16 Ownership of Shares of NPB Common Stock............................ A-11
4.17 Insurance.......................................................... A-11
4.18 Contracts with Physicians, Hospitals, HMOs and Third Party
Providers.......................................................... A-12
4.19 Environmental Protection........................................... A-12
4.20 Intellectual Property Rights....................................... A-13
4.21 FDA and Related Matters............................................ A-14
4.22 Real Property...................................................... A-14
4.23 Complete Copies of Requested Reports............................... A-15
4.24 Share Ownership.................................................... A-15
4.25 Opinion of Financial Advisors...................................... A-15
i
4
PAGE
----
4.26 Pooling of Interests............................................... A-15
4.27 Accounts Receivable................................................ A-15
4.28 Customers and Suppliers............................................ A-16
4.29 Representations Complete........................................... A-16
4.30 Takeover Statutes.................................................. A-16
4.31 Voting Arrangements................................................ A-16
4.32 Ownership of Shares................................................ A-16
4.33 Inventories........................................................ A-16
4.34 Product Liability Matters.......................................... A-16
4.35 No Undisclosed Liabilities......................................... A-17
ARTICLE V: REPRESENTATIONS AND WARRANTIES OF NPB.............................. A-17
5.1 Organization....................................................... A-17
5.2 Capitalization..................................................... A-17
5.3 Authority Relative to this Agreement............................... A-18
5.4 Consents and Approvals; No Violations.............................. A-18
5.5 Reports and Financial Statements; Absence of Certain Changes....... A-18
5.6 Information in Registration Statement and Proxy Statement.......... A-19
5.7 Share Ownership.................................................... A-19
5.8 Compliance With Applicable Law..................................... A-19
5.9 Ownership of Shares of AMI Common Stock............................ A-19
5.10 Complete Copies of Requested Reports............................... A-19
5.11 Pooling of Interests............................................... A-19
5.12 Representations Complete........................................... A-19
ARTICLE VI: CONDUCT OF BUSINESS PENDING THE MERGER............................. A-20
6.1 Conduct of Business by AMI and NPB Pending the Merger.............. A-20
6.2 Compensation Plans................................................. A-22
6.3 Current Information................................................ A-22
6.4 Letters of AMI's and NPB's Auditors................................ A-22
6.5 Legal Conditions to Merger......................................... A-22
6.6 Affiliates; Pooling of Interests................................... A-23
6.7 Advice of Changes; Government Filings.............................. A-23
6.8 Accounting Methods................................................. A-24
ARTICLE VII: ADDITIONAL AGREEMENTS.............................................. A-24
7.1 Access and Information............................................. A-24
7.2 No Solicitation of Transactions.................................... A-24
7.3 Registration Statement............................................. A-24
7.4 Proxy Statement; Stockholder Approval.............................. A-24
7.5 Nasdaq National Market............................................. A-25
7.6 Antitrust Laws..................................................... A-25
7.7 Certain Employee Benefit Plans Matters............................. A-25
7.8 Stock Options and Warrants......................................... A-26
7.9 Director and Officer Indemnification, Etc.......................... A-26
7.10 Public Announcements............................................... A-26
7.11 Expenses........................................................... A-27
ii
5
PAGE
----
7.12 Additional Agreements.............................................. A-27
7.13 AMI Accruals and Reserves.......................................... A-27
7.14 FIRPTA............................................................. A-27
7.15 Takeover Statutes.................................................. A-27
7.16 Management Incentive Plan.......................................... A-28
7.17 Existing Agreements With AMI Officers and Employees................ A-28
7.18 Consulting Agreements.............................................. A-28
ARTICLE VIII: CONDITIONS TO CONSUMMATION OF THE MERGER........................... A-28
8.1 Conditions to Each Party's Obligation to Effect the Merger......... A-28
8.2 Conditions to Obligation of AMI to Effect the Merger............... A-29
8.3 Conditions to Obligations of NPB to Effect the Merger.............. A-30
ARTICLE IX: TERMINATION, AMENDMENT AND WAIVER.................................. A-30
9.1 Termination........................................................ A-30
9.2 Effect of Termination.............................................. A-31
9.3 Cancellation Fees; Expenses........................................ A-31
9.4 Amendment.......................................................... A-32
9.5 Extension; Waiver.................................................. A-32
ARTICLE X: GENERAL PROVISIONS................................................. A-32
10.1 Survival of Representations, Warranties and Agreements............. A-32
10.2 Brokers............................................................ A-32
10.3 Notices............................................................ A-33
10.4 Descriptive Headings............................................... A-33
10.5 Entire Agreement; Assignment....................................... A-33
10.6 Governing Law...................................................... A-33
10.7 Counterparts....................................................... A-33
10.8 Validity........................................................... A-33
10.9 Jurisdiction and Venue............................................. A-34
10.10 Investigation...................................................... A-34
10.11 Consents........................................................... A-34
iii
6
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 9, 1996 by and among
Nellcor Puritan Xxxxxxx Incorporated, Delaware corporation ("NPB"), and
Aequitron Medical, Inc., a Minnesota corporation ("AMI").
WHEREAS, the Boards of Directors of NPB and AMI each have determined that
the acquisition of AMI by NPB is in the best interests of their respective
companies and stockholders and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits, and accordingly
have agreed to effect the merger provided for herein upon the terms and subject
to the conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the merger
contemplated herein shall qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
and for financial accounting purposes shall be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.2 hereof), AMI shall be merged with
and into NPB, NPB shall be the surviving corporation (the "Surviving
Corporation") and the separate existence of AMI shall thereupon cease (the
"Merger"). The Merger shall have the effects set forth in Section 259 of the
General Corporation Law of the State of Delaware (the "DGCL") and Section
302A.641 of the Minnesota Business Corporations Act ("MBCA").
1.2 Effective Time of the Merger. The Merger shall become effective when a
properly executed Certificate of Merger is duly filed with the Secretary of
State of the State of Delaware and the Secretary of State of the State of
Minnesota, which filings shall be made as soon as practicable after the closing
of the transactions contemplated by this Agreement in accordance with Section
3.6 hereof upon satisfaction or waiver of the conditions set forth in Article
VIII. When used in this Agreement, the term "Effective Time" shall mean the date
and time at which both such Certificates of Merger have been so filed.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of Incorporation of NPB
shall be the Certificate of Incorporation of the Surviving Corporation, until
duly amended in accordance with the terms thereof and the DGCL.
2.2 Bylaws. The Bylaws of NPB as in effect at the Effective Time shall be
the Bylaws of the Surviving Corporation, until duly amended in accordance with
the terms thereof and the DGCL.
2.3 Directors and Officers of Surviving Corporation.
(a) The directors of NPB shall be the directors of the Surviving
Corporation and shall hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified or until their earlier
death, resignation or removal in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided
by law.
(b) The officers of NPB at the Effective Time shall be the initial officers
of the Surviving Corporation and shall hold office from the Effective Time until
removed or until their respective successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Certificate of Incorporation and Bylaws of the Surviving Corporation,
or as otherwise provided by law.
A-1
7
ARTICLE III
CONVERSION OF SHARES
3.1 Exchange Ratio. At the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof:
(a) Subject to Section 3.4 hereof, each share of common stock, no par value
("AMI Common Stock"), of AMI that is issued and outstanding immediately prior to
the Effective Time (other than shares of AMI Common Stock to be canceled
pursuant to Section 3.1(b)) shall be converted at the Effective Time into the
right to receive that fraction of a share of NPB of common stock, par value
$0.001 per share, of NPB equal to the Exchange Ratio (as defined below) together
with the corresponding preferred stock purchase rights associated with such
shares of NPB common stock in accordance with the NPB Rights Agreement (as
defined in Section 5.2(b)) ("NPB Common Stock"). All references herein to NPB
Common Stock, including the shares issuable in the Merger, shall be deemed to
include the associated preferred stock purchase rights, except where the context
otherwise clearly requires.
The exchange ratio for the Merger ("Exchange Ratio") shall be calculated as
follows:
1. If the Closing Market Value (as defined below) is greater than or equal
to $23.14 and less than or equal to $26.61, the Exchange Ratio will be .432;
2. If the Closing Market Value is greater than $26.61, the Exchange Ratio
will be the quotient of (A) $11.50 divided by (B) the Closing Market Value,
rounded to the nearest one-one thousandth of a share;
3. If the Closing Market Value is less than $23.14 and greater than or
equal to $22.75, the Exchange Ratio will be the quotient of (A) $10.00 divided
by (B) the Closing Market Value, rounded to the nearest one-one thousandth of a
share; and
4. If the Closing Market Value is less than $22.75, the Exchange Ratio will
be .440.
For purposes of this Agreement, the "Closing Market Value" shall mean the
average of the closing prices of NPB Common Stock as reported by the Nasdaq
National Market for the ten trading days ending on the fifth trading day prior
to the AMI shareholders meeting referred to in Section 7.4.
At the Effective Time, all such shares of AMI Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and shall cease
to exist, and each certificate previously representing any such shares of AMI
Common Stock (a "Certificate") shall thereafter represent the right to receive
(i) the number of whole shares of NPB Common Stock and (ii) cash in lieu of
fractional shares into which the shares of AMI Common Stock represented by such
Certificate have been converted pursuant to Section 3.2 and Section 3.4 hereof.
Each Certificate shall be exchanged for (x) certificates representing whole
shares of NPB Common Stock, and (y) cash in lieu of fractional shares, issued in
consideration therefor upon the surrender of such Certificate in accordance with
the provisions hereof, without interest thereon. If prior to the Effective Time
NPB should split or combine the shares of NPB Common Stock, or pay a stock
dividend or other stock distribution, in, or in exchange of, shares of NPB
Common Stock, or engage in any similar transaction, then the Exchange Ratio will
be appropriately adjusted to reflect such split, combination, dividend, exchange
or other distribution or similar transaction.
At the Effective Time, all stock options, warrants and convertible
securities to purchase AMI Common Stock then outstanding shall be assumed by NPB
in accordance with Section 7.8.
(b) Each share of AMI Common Stock held in the treasury of AMI and each
share of AMI Common Stock held by NPB or any subsidiary of NPB immediately prior
to the Effective Time shall be canceled and retired and cease to exist, and no
shares of NPB Common Stock shall be issued in exchange therefor. All shares of
NPB Common Stock owned by AMI or any subsidiary of AMI shall become treasury
stock of NPB.
3.2 Exchange of Shares.
(a) Prior to the Effective Time, NPB shall select, and enter into an
agreement (in form and substance reasonably satisfactory to AMI) with, a bank or
trust company to act as Exchange Agent hereunder (the
A-2
8
"Exchange Agent"). Within a reasonable period of time after the Effective Time,
NPB shall make available, and each holder of shares of AMI Common Stock (other
than Excluded Shares) will be entitled to receive upon surrender to the Exchange
Agent of one or more Certificates, certificates representing the number of whole
shares of NPB Common Stock and cash in lieu of fractional shares into which such
shares of AMI Common Stock are converted in the Merger. The shares of NPB Common
Stock into which the shares of AMI Common Stock shall be converted in the Merger
shall be deemed to have been issued at the Effective Time.
(b) As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of AMI Common Stock (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as NPB may reasonably specify that are not inconsistent with the
terms of this Agreement) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of NPB Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor (i)
a certificate representing that number of whole shares of NPB Common Stock and
(ii) a check representing the amount of cash in lieu of fractional shares, if
any, which such holder has the right to receive in respect of the Certificate so
surrendered pursuant to the provisions of this Article III.
(c) In the event that any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed, NPB will issue or cause to be
issued in exchange for such lost, stolen or destroyed Certificate the number of
whole shares of NPB Common Stock and cash in lieu of fractional shares into
which the shares of AMI Common Stock represented by the Certificate are
converted in the Merger in accordance with this Article III. When authorizing
such issuance in exchange therefor, NPB may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Certificate to give NPB a bond in such sum as it may direct
as indemnity, or such other form of indemnity, as it shall direct, against any
claim that may be made against NPB with respect to the Certificate alleged to
have been lost, stolen or destroyed.
3.3 Dividends; Transfer Taxes. No dividends that are declared on shares of
NPB Common Stock after the Effective Time will be paid to persons entitled to
receive certificates representing shares of NPB Common Stock until such persons
surrender their Certificates. Upon such surrender, there shall be paid to the
person in whose name the certificates representing such shares of NPB Common
Stock shall be issued, any dividends which shall have become payable with
respect to such shares of NPB Common Stock between the Effective Time and the
time of such surrender. In no event shall the person entitled to receive such
dividends be entitled to receive interest on such dividends. If any certificates
for any shares of NPB Common Stock are to be issued in a name other than that in
which the Certificate surrendered in exchange therefor is registered, it shall
be a condition of such exchange that the person requesting such exchange shall
(a) pay to the Exchange Agent any transfer or other taxes required by reason of
the issuance of certificates for such shares of NPB Common Stock in a name other
than that of the registered holder of the Certificate surrendered or (b)
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not applicable. Notwithstanding anything in this Agreement to the
contrary, neither the Exchange Agent nor any party hereto shall be liable to a
holder of shares of AMI Common Stock for any shares of NPB Common Stock or
dividends thereon or, in accordance with Section 3.4 hereof, the cash payment
for fractional interests, delivered to a public official pursuant to applicable
escheat laws following the passage of time specified therein.
3.4 No Fractional Shares. No fractional shares of NPB Common Stock shall
be issued pursuant to the Merger. In lieu of the issuance of any such fractional
share of NPB Common Stock pursuant to Section 3.2, cash adjustments will be paid
to holders in respect of any fractional share of NPB Common Stock that would
otherwise be issuable. The amount of such adjustment shall be the product of
such fraction of a share of NPB Common Stock multiplied by the closing sales
price per share of NPB Common Stock on the Nasdaq National Market on the
business day immediately preceding the Closing Date.
A-3
9
3.5 Closing of AMI Transfer Books. At the Effective Time, the stock
transfer books of AMI shall be closed and no transfer of shares of AMI Common
Stock shall thereafter be made. If, after the Effective Time, Certificates are
presented to the Surviving Corporation, they shall be canceled and exchanged for
certificates representing shares of NPB Common Stock or cash in lieu of
fractional shares in accordance with the terms hereof. At and after the
Effective Time, the holders of shares of AMI Common Stock to be exchanged for
shares of NPB Common Stock pursuant to this Agreement shall cease to have any
rights as stockholders of AMI, except for the right to surrender such
Certificates in exchange for shares of NPB Common Stock as provided hereunder or
such dissenters' rights as are provided under applicable law.
3.6 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Xxxxxxxx &
Xxxxxxxx, 00000 XxxXxxxxx Xxxxxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000 at
9:00 a.m., local time, on the first business day (the "Closing Date") following
the date on which the AMI stockholders' meeting referred to in Section 7.4
hereof shall have occurred; provided that if all of the other conditions set
forth in Article VIII hereof are not satisfied or waived at such date the
Closing Date shall be the business day following the day on which all such
conditions have been satisfied or waived, or at such other date, time and place
as NPB and AMI shall agree.
3.7 Supplementary Action. If at any time after the Effective Time, any
further assignments or assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in the Surviving
Corporation the title to any property or rights of AMI, or otherwise to carry
out the provisions of this Agreement, the officers and directors of the
Surviving Corporation are hereby authorized and empowered on behalf of AMI in
the name of and on behalf of AMI to execute and deliver any and all things
necessary or proper to vest or to perfect or confirm title to such property or
rights in the Surviving Corporation, and otherwise to carry out the purposes and
provisions of this Agreement.
3.8 Dissenting Shares. If holders of AMI Common Stock are entitled to
dissent from the Merger and demand appraisal of any such AMI Common Stock under
applicable law (each person electing to exercise such rights, a "Dissenting
Holder"), any shares of AMI Common Stock held by a Dissenting Holder as to which
appraisal has been so demanded ("Excluded Shares") shall not be converted as
described in Section 3.1, but shall from and after the Effective Time represent
only the right to receive such consideration as may be determined to be due such
Dissenting Holder pursuant to applicable law; provided, however, that each share
of AMI Common Stock held by a Dissenting Holder who shall, after the Effective
Time, withdraw its demand for appraisal or lose its rights of appraisal with
respect to such shares of AMI Common Stock, in either case pursuant to
applicable law, shall not be deemed an Excluded Share, but shall be deemed to be
converted, as of the Effective Time, into the right to receive NPB Common Stock
in accordance with the Exchange Ratio.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AMI
As used in this Agreement, (a) the term "Material Adverse Effect" means,
with respect to AMI or NPB, as the case may be, a material adverse effect on the
business, assets, operations or results of operation or condition (financial or
otherwise) of AMI or NPB, in each case including its subsidiaries taken as a
whole, or on its ability to perform its obligations hereunder and (b) the word
"subsidiary" when used with respect to any party means any corporation or other
organization, whether incorporated or unincorporated, of which such party or any
other subsidiary of such party is a general partner (excluding partnerships the
general partnership interests of which held by such party or any subsidiary of
such party do not have a majority of the voting interests in such partnership)
or of which at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporations or
other organizations is directly or indirectly owned or controlled by such party
and/or by any one or more of the subsidiaries.
A-4
10
Except as set forth in the disclosure letter delivered to NPB at or prior
to the execution of this Agreement ("AMI Disclosure Schedule"), AMI represents
and warrants to NPB as follows:
4.1 Organization. AMI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota and has the
corporate power to carry on its business as it is now being conducted. AMI is
duly qualified as a foreign corporation to do business, and is in good standing
in each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified will not in the aggregate have a Material
Adverse Effect. Each subsidiary of AMI is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate power to carry on its business
as it is now being conducted and is duly qualified as a foreign corporation to
do business, and is in good standing in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so duly organized,
validly existing and in good standing, to have such corporate power or to be so
qualified will not in the aggregate have a Material Adverse Effect. AMI has
delivered to NPB or its counsel complete and correct copies of its and its
subsidiaries' Articles of Incorporation and Bylaws.
4.2 Capitalization.
(a) As of September 1, 1996, the authorized capital stock of AMI consists
of 15,000,000 shares of AMI Common Stock. As of September 1, 1996, 4,950,842
shares of AMI Common Stock were issued and outstanding, stock options to acquire
1,177,400 shares of AMI Common Stock (the "AMI Stock Options") were outstanding
under all stock option plans of AMI, 417,955 additional shares of AMI Common
Stock were reserved for issuance under AMI's stock option plans. No changes have
occurred in such capitalization since September 1, 1996 that, in the aggregate,
would be material to AMI, except for option exercises in the ordinary course of
business. All of the issued and outstanding shares of AMI Common Stock are
validly issued, fully paid, nonassessable and free of preemptive rights or
similar rights created by statute, the Articles of Incorporation or Bylaws of
AMI or any agreement to which AMI or any of its subsidiaries is a party or by
which AMI or any of its subsidiaries is bound. Since September 1, 1996, AMI has
not issued any shares of its capital stock, except upon the exercise of AMI
Stock Options.
(b) Except as set forth in Section 4.2, there are not now, and at the
Effective Time there will not be, any shares of capital stock of AMI issued or
outstanding or any options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating AMI to issue, transfer
or sell any shares of its capital stock. As of the date hereof, no bonds,
debentures, notes or other indebtedness having the right to vote (or convertible
into or exercisable for securities having the right to vote) on any matters on
which stockholders may vote ("Voting Debt") of AMI were issued or outstanding,
nor will there be any issued or outstanding at the Effective Time. All
outstanding shares of the capital stock of AMI's subsidiaries are validly
issued, fully paid, non-assessable and owned by AMI or one of its subsidiaries
free and clear of any liens, security interest, pledges, agreements, claims,
charges or encumbrances of any nature whatsoever. There are no voting trust or
other agreements or understandings to which AMI is a party with respect to the
voting of the capital stock of AMI or any of its subsidiaries. None of AMI or
its subsidiaries is required to redeem, repurchase or otherwise acquire shares
of capital stock of AMI, or any of its subsidiaries, respectively, as a result
of the transactions contemplated by this Agreement. Immediately after the
Effective Time, there will be no option, warrant, call, right or agreement
obligating AMI or any subsidiary of AMI to issue, deliver or sell, or cause to
be issued, delivered or sold, any shares of AMI Common Stock or any Voting Debt,
or obligating AMI or any subsidiary of AMI to grant, extend or enter into any
such option, warrant, call, right or agreement.
4.3 Authority Relative to this Agreement. AMI has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by AMI and the consummation by AMI of
the transactions contemplated hereby have been duly authorized by AMI's Board of
Directors and, except for the favorable vote of a majority of the shares of
outstanding capital stock of AMI entitled to vote thereon in accordance with
applicable law, no other corporate proceedings on the part of AMI are necessary
to approve this Agreement or the transactions contemplated hereby. This
Agreement has been
A-5
11
duly and validly executed and delivered by AMI and constitutes a valid and
binding agreement of AMI, enforceable against AMI in accordance with its terms.
4.4 Consents and Approvals; No Violations. Except for applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx"), the Securities Act of 1933, as amended (the "Securities Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), state or
foreign laws relating to takeovers, if applicable, state securities or blue sky
laws, and the filing and recordation of a Certificate of Merger as required by
the DGCL and MBCA, no filing with, and no permit, authorization, consent or
approval of, any public or governmental body or authority is necessary for the
consummation by AMI of the transactions contemplated by this Agreement, except
where a failure to make such filing or to obtain such permit, registration,
authorization, consent or approval will not in the aggregate have a Material
Adverse Effect. Neither the execution and delivery of this Agreement by AMI, nor
the consummation by AMI of the transactions contemplated hereby, nor compliance
by AMI with any of the provisions hereof, will (a) conflict with or result in
any breach of any provisions of the Articles of Incorporation or Bylaws of AMI
or any of its subsidiaries, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, acceleration or change in
the award, grant, vesting or determination) under, or give rise to creation of
any lien, charge, security interest or encumbrance upon any of the respective
properties or assets of AMI or any of its subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, contract, lease, agreement, arrangement or other instrument or
obligation to which AMI or any of its subsidiaries is a party or by which any of
them or any of their properties or assets may be bound or affected or (c)
violate any order, writ, injunction, decree, statute, rule or regulation of any
court or government authority applicable to AMI, any of its subsidiaries or any
of their properties or assets, except in the case of clauses (b) and (c) for
violations, breaches, defaults (or rights of termination, cancellation,
acceleration or change), liens, charges, security interests or encumbrances
which would not in the aggregate have a Material Adverse Effect.
4.5 Reports and Financial Statements. AMI has filed all reports required
to be filed with the Securities and Exchange Commission (the "SEC") pursuant to
the Exchange Act since May 1980 including, without limitation, Annual Reports on
Form 10-K for the years ended April 30, 1994, April 30, 1995 and April 30, 1996
(all such reports and amendments thereto, collectively, the "AMI SEC Reports"),
and has previously furnished or made available to NPB true and complete copies
of all AMI SEC Reports filed with respect to periods beginning after April 30,
1992 (including any exhibits thereto) and will promptly deliver to NPB any AMI
SEC Reports filed between the date hereof and the Effective Time. None of such
AMI SEC Reports, as of their respective dates (as amended through the date
hereof), contained or, with respect to the AMI SEC Reports filed after the date
hereof, will contain any untrue statement of a material fact or omitted or, with
respect to the AMI SEC Reports filed after the date hereof, will omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the balance sheets (including the related notes) included in
the AMI SEC Reports fairly presents the consolidated financial position of AMI
and its subsidiaries as of the date thereof, and the other related statements
(including the related notes) included therein fairly present the results of
operations and the changes in cash flows of AMI and its subsidiaries for the
respective periods set forth therein, all in conformity with generally accepted
accounting principles consistently applied during the periods involved, except
as otherwise noted therein and subject, in the case of the unaudited interim
financial statements, to (a) normal year end adjustments which would not in the
aggregate be material in amount or effect and (b) the permitted exclusion of all
footnotes that would otherwise be required by generally acceptable accounting
principles.
4.6 Absence of Certain Changes or Events. Except as disclosed in the AMI
SEC Reports filed prior to the date of this Agreement, since April 30, 1996,
neither AMI nor any of its subsidiaries: (a) has taken any of the actions
prohibited in Section 6.1 or Section 6.2 hereof; (b) has incurred any material
liability, except in the ordinary course of its business and consistent with
past practices; (c) has suffered any change, or any event involving a
prospective change, in its business, assets, financial condition or results of
operation which has had, or is reasonably likely to have, in the aggregate a
Material Adverse Effect (other than as a result of changes or proposed changes
in federal or state health care (including health care reimbursement) laws or
regulations of
A-6
12
general applicability or interpretations thereof, changes in generally accepted
accounting principles and changes that could, under the circumstances,
reasonably have been anticipated in light of disclosures made in writing by AMI
to NPB prior to the execution of this Agreement); or (d) subsequent to the date
hereof, except as permitted by Section 6.1 or Section 6.2 hereof, will conduct
its business and operations other than in the ordinary course of business and
consistent with past practices.
4.7 Information in Registration Statement and Proxy Statement. The
information relating to AMI and its subsidiaries to be contained in (a) the
Registration Statement on Form S-4 to be filed with the SEC by NPB under the
Securities Act for the purpose of registering the shares of NPB Common Stock to
be issued in the Merger or pursuant to this Agreement (the "Registration
Statement") and (b) the proxy statement to be distributed in connection with
AMI's meeting of stockholders to vote upon this Agreement and related matters
(the "Proxy Statement"), will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
4.8 Litigation. As of the date of this Agreement, except as disclosed in
the AMI SEC Reports filed prior to the date of this Agreement and except to the
extent that in the aggregate they would not reasonably be expected to have a
Material Adverse Effect: (a) there is no action, suit, judicial or
administrative proceeding, arbitration or investigation pending or, to the best
knowledge of AMI, threatened against or involving AMI or any of its
subsidiaries, or any of their properties or rights, before any court,
arbitrator, or administrative or governmental body; (b) there is no judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator outstanding against AMI or any
of its subsidiaries; and (c) AMI and its subsidiaries are not in violation of
any term of any judgments, decrees, injunctions or orders outstanding against
them.
4.9 Contracts.
(a) Each of the material contracts, instruments, mortgages, notes, security
agreements, leases, agreements or understandings, whether written or oral, to
which AMI or any of its subsidiaries is a party that relates to or affects the
assets or operations of AMI or any of its subsidiaries or to which AMI or any of
its subsidiaries or their respective assets or operations may be bound or
subject is a valid and binding obligation of AMI and in full force and effect
with respect to AMI or such subsidiary and, to the best knowledge of AMI, with
respect to all other parties thereto. Except to the extent that the consummation
of the transactions contemplated by this Agreement may require the consent of
third parties, there are no existing defaults by AMI or any of its subsidiaries
thereunder or, to the knowledge of AMI, by any other party thereto, and no event
of default has occurred, and no event, condition or occurrence exists, that
(whether with or without notice, lapse of time, the declaration of default or
other similar event) would constitute a default by AMI or any of its
subsidiaries thereunder, other than defaults that would not in the aggregate
have a Material Adverse Effect. Section 4.9(a) of the AMI Disclosure Schedule
lists all consents of third parties required for the consummation of the
transactions contemplated by this Agreement.
(b) Except (i) as set forth in the AMI SEC Reports (including the exhibits
thereto) filed prior to the date of this Agreement, and (ii) for this Agreement,
as of the date of this Agreement neither AMI nor any of its subsidiaries is a
party to any oral or written (v) consulting agreement, (w) joint venture, (x)
noncompetition or similar agreement that restricts AMI or its subsidiaries from
engaging in a line of business, (y) agreement with any executive officer or
other employee of AMI or any subsidiary the benefits of which are contingent, or
the terms of which are altered, upon the occurrence of a transaction involving
AMI of the nature contemplated by this Agreement, or (z) agreement with respect
to any executive officer of AMI or any subsidiary providing any term of
employment or compensation guaranty. AMI has no agreement or plan, including any
stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
A-7
13
(c) AMI has no agreements or arrangements to sell or otherwise dispose of,
or lease, acquire or otherwise invest in, any property, lines of business or
other assets that are in the aggregate material to AMI's business.
4.10 Employee Benefit Plans.
(a) Section 4.10(a) of the AMI Disclosure Schedule sets forth a true and
complete list of each written or oral employee benefit plan (including, without
limitation, any "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), policy or
agreement (including, without limitation, any employment agreement or severance
agreement) that is maintained (all of the foregoing, the "AMI Plans"), or is or
was contributed to by AMI or pursuant to which AMI is still potentially liable
for payments, benefits or claims. A copy of each AMI Plan as currently in effect
and, if applicable, the most recent Annual Report, Actuarial Report or
Valuation, Summary Plan Description, Trust Agreement and a Determination Letter
issued by the IRS for each AMI Plan have heretofore been delivered to NPB or its
counsel. Neither AMI nor any trade or business, whether or not incorporated (an
"ERISA Affiliate"), which together with AMI would be deemed a "single employer"
within the meaning of Section 4001 of ERISA, has maintained or contributed to
any plan subject to Title IV of ERISA or Section 412 of the Code (including any
"multiemployer plan," as defined in Section 3(37) of ERISA ("Multiemployer
Plan")) during the six calendar years preceding the date of this Agreement.
(b) Each AMI Plan which is an "employee benefit plan," as defined in
Section 3(3) of ERISA, complies by its terms and in operation with the
requirements provided by any and all statutes, orders or governmental rules or
regulations currently in effect and applicable to AMI Plans, including but not
limited to ERISA and the Code, except for instances of noncompliance that would
not in the aggregate have a Material Adverse Effect.
(c) All reports, forms and other Reports required to be filed with any
government entity with respect to any AMI Plan (including without limitation,
summary plan descriptions, Forms 5500 and summary annual reports) have been
timely filed and are accurate, except for instances of noncompliance that would
not in the aggregate have a Material Adverse Effect.
(d) Each AMI Plan intended to qualify under Section 401(a) of the Code has
been determined by the Internal Revenue Service to so qualify after January 1,
1985, and each trust maintained pursuant thereto has been determined by the
Internal Revenue Service to be exempt from taxation under Section 501 of the
Code. Nothing has occurred since the date of the Internal Revenue Service's
favorable determination letter that could adversely affect the qualification of
the AMI Plan and its related trust, except such adverse effects as would not in
the aggregate constitute a Material Adverse Effect. AMI and each ERISA Affiliate
of AMI have timely and properly applied for a written determination by the
Internal Revenue Service on the qualification of each such AMI Plan and its
related trust under Section 401(a) of the Code, as amended by the Tax Reform Act
of 1986 and subsequent legislation enacted through the date hereof, and Section
501 of the Code.
(e) All contributions or other amounts payable by AMI or its subsidiaries
as of the Effective Time with respect to each AMI Plan and in respect of current
or prior plan years have been or will be (prior to the Effective Time) either
paid or accrued on the Financial Statements of AMI in accordance with past
practice and the recommended contribution in any actuarial report.
(f) No AMI Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees for periods extending beyond their retirement or other termination of
service (other than (i) continuation group health coverage pursuant to Section
4980B of the Code, (ii) death benefits or retirement benefits under any
"employee pension plan," as that term is defined in Section 3(2) of ERISA, (iii)
deferred compensation benefits with respect to which there is an accrual of
liability on the books of AMI or its ERISA Affiliates, or (iv) benefits the full
cost of which is borne by the current or former employee (or his or her
beneficiary)).
(g) All insurance premiums (including premiums to the Pension Benefit
Guaranty Corporation) have been paid in full, subject only to normal
retrospective adjustments in the ordinary course, with regard to AMI Plans for
plan years ending on or before the date hereof.
A-8
14
(h) As of the date hereof, no AMI Plan subject to Title IV of ERISA, and no
employee benefit plan maintained by an ERISA Affiliate of AMI and subject to
Title IV of ERISA, has benefit liabilities (as defined in Section 4001(a)(16) of
ERISA) exceeding the assets of such plan or has been completely or partially
terminated.
(i) With respect to each AMI Plan:
(i) no prohibited transactions (as defined in Section 406 or 407 of
ERISA or Section 4975 of the Code) have occurred for which a statutory
exemption is not available;
(ii) no reportable event (as defined in Section 4043 of ERISA) has
occurred as to which a notice would be required to be filed with the
Pension Benefit Guaranty Corporation;
(iii) no action or claims (other than routine claims for benefits made
in the ordinary course of Plan administration for which Plan administrative
review procedures have not been exhausted) are pending or, to the knowledge
of AMI, threatened or imminent against or with respect to AMI Plan, any
employer who is participating (or who has participated) in any Plan or any
fiduciary (as defined in Section 3(21) of ERISA), of the AMI Plan; and
(iv) neither AMI nor any fiduciary has any knowledge of any facts
which could give rise to any such action or claim.
(j) Neither AMI nor any ERISA Affiliate of AMI has any liability or is
threatened with any liability (whether joint or several) (i) for the termination
of any single employer plan under Sections 4062 or 4064 of ERISA or any multiple
employer plan under Section 4063 of ERISA, (ii) for any lien imposed under
Section 302(f) of ERISA or Section 412(n) of the Code, (iii) for any interest
payments required under Section 302(e) of ERISA or Section 412(m) of the Code,
(iv) for any excise tax imposed by Sections 4971, 4975, 4976, 4977 or 4979 of
the Code, (v) for any minimum funding contributions under Section 302(c)(11) of
ERISA or Section 412(c)(11) of the Code, (vi) to a fine under Section 502 of
ERISA, or (vii) for any transaction within the meaning of Section 4069 of ERISA.
(k) AMI has not incurred any withdrawal liability with respect to any
Multiemployer Plan within the meaning of Sections 4201 and 4204 of ERISA, and no
liabilities exist with respect to withdrawals from any Multiemployer Plans which
could subject AMI to any controlled group liability under Section 4001(b) of
ERISA.
(l) All of the AMI Plans, to the extent applicable, are in compliance with
the continuation of group health coverage provisions contained in Section 4980B
of the Code and Section 601 through 608 of ERISA, except for such instances of
noncompliance which would not in the aggregate have a Material Adverse Effect.
4.11 Tax Matters. AMI makes the following representations and warranties
with respect to tax matters.
(a) Definitions. For purposes of this Section 4.11, the following
definitions shall apply:
(i) The term "AMI Group" shall mean, individually and collectively,
(A) AMI and (B) any individual, trust, corporation, partnership or any
other entity as to which AMI is liable for Taxes incurred by such
individual or entity either as a transferee, or pursuant to Treasury
Regulations Section 1.1502-6, or pursuant to any other provision of
federal, territorial, state, local or foreign law or regulations.
(ii) The term "Taxes" shall mean all taxes, however denominated,
including any interest, penalties or other additions to tax that may become
payable in respect thereof, imposed by any federal, territorial, state,
local or foreign government or any agency or political subdivision of any
such government, which taxes shall include, without limiting the generality
of the foregoing, all income or profits taxes (including, but not limited
to, federal income taxes and state income taxes), payroll and employee
withholding taxes, unemployment insurance, social security taxes, sales and
use taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
taxes, business license taxes, occupation taxes, real and personal property
taxes, stamp taxes, transfer taxes, workers' compensation, Pension Benefit
Guaranty Corporation premiums and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing,
which the AMI Group is required to pay, withhold or collect.
A-9
15
(iii) The term "Returns" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns relating
to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.
(b) Returns Filed and Taxes Paid. (i) All Returns required to be filed by
or on behalf of members of the AMI Group have been duly filed on a timely basis
and such Returns are true, complete and correct in all material respects, (ii)
all Taxes shown to be payable on the Returns or on subsequent assessments with
respect thereto have been paid in full on a timely basis, and (iii) no other
Taxes are payable by the AMI Group with respect to items or periods covered by
such Returns (whether or not shown on or reportable on such Returns) or with
respect to any period prior to the date of this Agreement. Each member of the
AMI Group has withheld and paid over all Taxes required to have been withheld
and paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records with respect
thereto, in connection with amounts paid or owing to any employee, creditor,
independent contractor, or other third party. There are no liens on any of the
assets of any member of the AMI Group with respect to Taxes, other than liens
for Taxes not yet due and payable or for Taxes that a member of the AMI Group is
contesting in good faith through appropriate proceedings and for which
appropriate reserves have been established.
(c) Tax Reserves. The amount of AMI's liability for unpaid Taxes for all
periods ending on or before the date of this Agreement does not in the aggregate
exceed the amount of the current liability accruals for Taxes (excluding
reserves for deferred Taxes) reflected on the consolidated balance sheet of AMI
included in the AMI SEC Report for the quarter ending closest to the date of
this Agreement, and the amount of AMI's liability for unpaid Taxes for all
periods ending on or before the Effective Time shall not in the aggregate
materially exceed the amount of the current liability accruals for Taxes
(excluding reserves for deferred Taxes), as such accruals are reflected on the
consolidated balance sheet of AMI included in the AMI SEC Report for the quarter
ending closest to the Effective Time, plus additions thereto accrued through the
Effective Time that are consistent with past practice and in the ordinary course
of business.
(d) Consolidated Returns Furnished. NPB has been furnished by AMI true and
complete copies of (i) income tax audit reports, statements of deficiencies,
closing or other agreements received by AMI Group or on behalf of the AMI Group
relating to federal income taxes, and (ii) all federal income tax returns for
the AMI Group, in each case for all periods ending on and after April 30, 1992.
AMI has never been a member of an affiliated group filing consolidated returns
other than a group of which AMI was the common parent.
(e) Tax Deficiencies; Audits; Statutes of Limitations. No deficiencies
exist or have been asserted (either in writing or verbally, formally or
informally) or are expected to be asserted with respect to Taxes of the AMI
Group that would cause AMI's reserves for taxes to be understated by an amount
material to AMI. No federal income tax returns of the AMI Group are currently
under audit, and no waiver or extension of the statute of limitations is in
effect with respect to any federal income tax returns.
(f) Tax Sharing Agreements. AMI is not (nor has it ever been) a party to
any tax sharing agreement.
(g) Tax Elections and Special Tax Status. NPB is not required to withhold
tax on the acquisition of the stock of AMI by reason of Section 1445 of the
Code. No member of the AMI Group is a "consenting corporation" under Section
341(f) of the Code.
(h) Section 6038A Compliance. (i) AMI has filed all reports and has
created and/or retained all records required under Section 6038A of the Code
with respect to its ownership by and transactions with related parties; (ii)
each related foreign person required to maintain records under Section 6038A
with respect to transactions between AMI and the related foreign person has
maintained such records; (iii) all material Reports that are required to be
created and/or preserved by the related foreign person with respect to
transactions with AMI are either maintained in the United States, or AMI is
exempt from the record maintenance requirements of Section 6038A with respect to
such transactions under Treasury Regulation section 1.6038A-1; (iv) AMI is not a
party to any record maintenance agreement with the Internal Revenue Service with
respect to Section 6038A; and (v) each related foreign person that has engaged
in transactions with AMI has authorized AMI to act as its limited agent solely
for purposes of Sections 7602, 7603, and 7604
A-10
16
of the Code with respect to any request by the Internal Revenue Service to
examine records or produce testimony related to any transaction with AMI, and
each such authorization remains in full force and effect.
4.12 Compliance With Applicable Law. AMI and each of its subsidiaries
holds all licenses, franchises, permits, variances, exemptions, orders,
approvals and authorizations necessary for the lawful conduct of its business
under and pursuant to, and the business of each of AMI and its subsidiaries is
not being conducted in violation of, any provision of any federal, state, local
or foreign statute, law, ordinance, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license or other governmental
authorization or approval applicable to AMI or any of its subsidiaries, except
to the extent that the failure or violation would not in the aggregate have a
Material Adverse Effect.
4.13 Subsidiaries. Exhibit 21 to AMI's most recent Form 10-K included in
the AMI SEC Reports lists all the subsidiaries of AMI as of the date of this
Agreement and indicates for each such subsidiary as of such date the
jurisdiction of incorporation or organization.
4.14 Interested Party Transactions. Except as disclosed in the AMI SEC
Reports, neither AMI nor any of its subsidiaries is indebted to any director,
officer, employee or agent of AMI or any of its subsidiaries (except for amounts
due as normal salaries and bonuses and in reimbursement of ordinary expenses),
and no such person is indebted to AMI or any of its subsidiaries, and there have
been no other transactions of the type required to be disclosed pursuant to
Items 402 and 404 of Regulation S-K promulgated under the Securities Act and
Exchange Act since April 30, 1992.
4.15 Labor and Employment Matters.
(a) (i) Except for such matters that would not in the aggregate have a
Material Adverse Effect, AMI and its subsidiaries are and have been in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including,
without limitation, the Immigration Reform and Control Act, the Worker
Adjustment and Retraining Notification Act, and such laws respecting employment
discrimination, equal opportunity, affirmative action, worker's compensation,
occupational safety and health requirements and unemployment insurance and
related matters, and are not engaged in and have not engaged in any unfair labor
practice. (ii) No investigation or review by or before any governmental entity
concerning any violations of any such applicable laws is pending or, to the
knowledge of AMI, threatened, nor has any such investigation occurred during the
last seven years, and no governmental entity has provided any notice to AMI or
any of its subsidiaries asserting an intention to conduct any such
investigation. (iii) There is no labor strike, dispute, slowdown or stoppage
actually pending or, to the knowledge of AMI, threatened against AMI or any of
its subsidiaries. (iv) No union representation question or union organizational
activity exists respecting the employees of AMI or any of its subsidiaries. (v)
Neither AMI nor any of its subsidiaries has experienced any work stoppage or
other labor difficulty. (vi) No collective bargaining agreement exists which is
binding on AMI or any of its subsidiaries.
(b) In the event of termination of the employment of any officers,
directors, employees or agents of AMI or any of its subsidiaries, neither AMI,
any of its subsidiaries, NPB, the Surviving Corporation, nor any other
subsidiaries of NPB, will pursuant to any agreement or by reason of anything
done prior to the Effective Time by AMI or any of its subsidiaries be liable to
any of said officers, directors, employees or agents for so-called "severance
pay" or any other similar payments or benefits, including, without limitation,
post-employment healthcare (other than pursuant to COBRA) or insurance benefits.
4.16 Ownership of Shares of NPB Common Stock. As of the date hereof,
neither AMI nor, to its knowledge, any of its affiliates or associates (as such
terms are defined under the Exchange Act), (a) beneficially owns, directly or
indirectly, or (b) is party to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of, in each case, shares
of NPB Common Stock, except for shares of NPB Common Stock in the aggregate
representing less than 1% of the outstanding shares of NPB Common Stock.
4.17 Insurance. As of the date hereof, AMI and each of its subsidiaries
are insured by insurers reasonably believed by AMI to be of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which they are engaged. All material policies of
insurance
A-11
17
and fidelity or surety bonds insuring AMI or any of its subsidiaries or their
respective businesses, assets, employees, officers and directors are in full
force and effect. As of the date hereof, there are no material claims by AMI or
any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause.
4.18 Contracts with Physicians, Hospitals, HMOs and Third Party
Providers. AMI has made available to representatives of NPB a list and copies
of all outstanding contracts, partnerships, joint ventures and other
arrangements or understandings (written or oral) that are material to AMI's
business and that are between (a) AMI or any of its subsidiaries and (b) any
physician, hospital, HMO, other managed care organization, home care or other
third-party provider relating to the sale or supply of medical devices, the
provision of medical or consulting services, treatments or patient referrals or
any other similar activities.
4.19 Environmental Protection.
(a) None of AMI, AMI's subsidiaries, or any AMI Property (as defined in
subsection (d) below) is or has been in violation of any federal, state or local
law, ordinance or regulation concerning industrial hygiene or environmental
conditions, including, but not limited to, soil and groundwater conditions
("Environmental Laws").
(b) Neither AMI nor any of its subsidiaries has reported any, or has had
knowledge of any circumstances giving rise to any reporting requirement under
applicable Environmental Laws as to any, spills or releases of any Hazardous
Materials on, under or about any AMI Property, nor has AMI or any of its
subsidiaries received any notices of spills or releases of Hazardous Materials
on, under or about any AMI Property. "Hazardous Material" shall mean any
substance, chemical, waste or other material which is listed, defined or
otherwise identified as hazardous, toxic or dangerous under any applicable law;
as well as any petroleum, petroleum product or by-product, crude oil, natural
gas, natural gas liquids, liquefied natural gas, or synthetic gas useable for
fuel, and "source," "special nuclear," and "by-product" material as defined in
the Atomic Energy Act of 1954, 42 U.S.C. sec.sec. 2011 et seq.
(c) There is no proceeding or investigation pending or, to the knowledge of
AMI, threatened by any governmental entity or other person with respect to the
presence of Hazardous Material on, under or about AMI Properties or the
migration thereof from or to other property. Neither AMI nor any of its
subsidiaries has ever been required by any governmental entity to treat, clean
up, or otherwise dispose of, remove or neutralize any Hazardous Material on,
under or about any AMI Property.
(d) Neither AMI, any current or former subsidiary of AMI, nor to AMI's
knowledge, any other person has engaged in any activity that might reasonably be
expected to involve the generation, use, manufacture, treatment, transportation,
storage in tanks or otherwise, or disposal of Hazardous Material on or from any
property that AMI or any of its current or former subsidiaries now owns or
leases or has previously owned or leased or in which AMI or any such subsidiary
now holds or has previously held any security interest, mortgage, or other lien
or interest ("AMI Property") which generation, use, manufacture, treatment,
transportation, storage or disposal would in the aggregate have a Material
Adverse Effect, and no (i) presence, release, threatened release, discharge,
spillage or migration of Hazardous Material, (ii) condition that has resulted or
could result in any use, ownership or transfer restriction, or (iii) to the
knowledge of AMI, condition of actual or potential nuisance has occurred on or
from such AMI Property, and to the knowledge of AMI, no condition exists that
could give rise to any suit, claim, action, proceeding or investigation by any
person or governmental entity against AMI, any of its subsidiaries or any other
person or such AMI Property as a result of or in connection with (a) any of the
foregoing events, (b) any failure to obtain any required permits or approvals of
any governmental entity, (c) the violation of any terms or conditions of such
permits, or (d) any other violation of Environmental Laws.
(e) To the knowledge of AMI, there are no substances or conditions in or on
AMI Property which may support claims or causes of action under any applicable
Environmental Law.
(f) For purposes of this Section 4.19, the term "Material Adverse Effect"
includes (i) any material injunction or criminal action or proceeding against or
involving AMI and (ii) any requirement that executive
A-12
18
officers of NPB or AMI be subjected to a consent decree or become individually
involved in any proceeding in clause (i) above.
4.20 Intellectual Property Rights.
(a) Section 4.20(a) of the AMI Disclosure Schedule sets forth an accurate
and complete list of all (i) patents, applications for patents, registrations of
trademarks (including service marks) and applications therefor and registrations
of copyrights and applications therefor that are owned by AMI or any of AMI's
subsidiaries; (ii) other Intellectual Property Rights (as defined below) that
are owned by AMI or AMI's subsidiaries; (iii) unexpired licenses relating to AMI
Intellectual Property Rights (as defined in (i) below) that have been granted to
or by AMI or any of AMI's subsidiaries; and (iv) other agreements relating to
Intellectual Property Rights.
(b) AMI and AMI's subsidiaries collectively own and have the right to use,
and to license others to use, all AMI Intellectual Property Rights. Such
ownership and right to use, and to license others to use, are free and clear of,
and without liability under, all liens and security interests of third parties.
Such ownership and right to use, and to license others to use, are free and
clear of, and without liability under, all claims and rights of third parties.
(c) AMI has taken reasonable steps sufficient to safeguard and maintain the
secrecy and confidentiality of, or AMI's proprietary rights in, the unpatented
know-how, technology, proprietary processes, formulae and other information that
is utilized in the conduct of AMI's business, including, without limitation, the
know-how, technology, proprietary processes, formulae, and other information
listed as trade secrets in Section 4.20(c) of the AMI Disclosure Schedule.
Without limitation of the generality of the foregoing, AMI and AMI's
subsidiaries have obtained confidentiality and inventions assignment agreements
from all AMI's and such subsidiaries' past and present employees and independent
contractors involved in the creation or development of AMI Intellectual Property
Rights (including, without limitation, from all employees and contractors who
are inventors, authors, creators or developers of AMI Intellectual Property
Rights).
(d) There are no royalties, honoraria, fees or other payments payable by
AMI or AMI subsidiaries to any person by reason of the ownership, use, license,
sale or disposition of any of AMI Intellectual Property Rights.
(e) Neither AMI nor any of AMI's subsidiaries (i) knows of any infringement
in the conduct of AMI's business the right or claimed right of any other party
with respect to any Intellectual Property Rights known to AMI, or (ii) has
knowledge of any alleged or claimed infringement by any product or process
manufactured, used, sold or under development by or for AMI or AMI's
subsidiaries in the conduct of AMI's business.
(f) No independent contractors who have performed services related to AMI's
business have any right, title or interest in AMI Intellectual Property Rights.
(g) The execution, delivery and performance of this Agreement by AMI, and
the consummation by AMI of the transactions contemplated hereby, will not
breach, violate or conflict with any agreement governing AMI Intellectual
Property Rights, will not cause the forfeiture or termination or give rise to a
right of forfeiture or termination of AMI's Intellectual Property Right or in
any way impair the right of AMI to use, sell, license or dispose of, or bring
any action for the infringement of, AMI Intellectual Property Rights or any
portion thereof.
(h) For purposes of this Section 4.20, "use," with respect to Intellectual
Property Rights, includes make, reproduce, display or perform (publicly or
otherwise), prepare derivative works based on, sell, distribute, disclose and
otherwise exploit such Intellectual Property Rights and products incorporating
or subject to such Intellectual Property Rights.
(i) As used in this Agreement, the term "Intellectual Property Rights"
means intellectual property rights, including, without limitation, patents,
patent applications, patent rights, trademarks, trademark applications, trade
names, service marks, service xxxx applications, copyrights, copyright
applications, publication rights, computer programs and other computer software
(including source codes and object codes), inventions, know-how, trade secrets,
technology, proprietary processes and formulae. As used in this
A-13
19
Agreement, the term "AMI Intellectual Property Rights" means all Intellectual
Property Rights that are part of the conduct of the business of AMI.
4.21 FDA and Related Matters.
(a) AMI has made and will continue to make available to NPB (i) all
Regulatory or Warning Letters, Notices of Adverse Findings and Section 305
notices and similar letters or notices issued by the Food and Drug
Administration ("FDA") or any other governmental entity that is concerned with
the safety, efficacy, reliability or manufacturing of the medical products sold
by AMI or its subsidiaries (hereafter in this Section 4.21 "Medical Device
Regulatory Agency") to AMI or any of its subsidiaries; (ii) all United States
Pharmacopoeia product problem reporting program complaints or reports, MedWatch
FDA forms 3500 and device experience network complaints received by AMI or any
of its subsidiaries and all Medical Device Reports filed by AMI or any of its
subsidiaries, which complaints or reports pertain to any incident involving
death or serious injury, and for which incident there has been (x) a notice or
followup inquiry to AMI by the FDA, (y) a litigation or arbitration claim or
cause of action commenced, or (z) a notice to any insurance carrier of AMI
tendering the defense or giving any notice of a possible or actual claim against
AMI; (iii) all product recalls and safety alerts conducted by or issued to AMI
or any of its subsidiaries and any requests from the FDA or any Medical Device
Regulatory Agency requesting AMI or any of its subsidiaries to cease to
investigate, test or market any product; (iv) any civil penalty actions begun by
FDA or any Medical Device Regulatory Agency against AMI or any of its
subsidiaries and known about by AMI or any of its subsidiaries and all consent
decrees entered into by the FDA and AMI or AMI's subsidiaries; and (v) any other
written communications between AMI or any of its subsidiaries, on the one hand,
and the FDA or any Medical Device Regulatory Agency, on the other hand.
(b) Except to the extent that such items would not, individually or in the
aggregate, have a Material Adverse Effect: (i) AMI (or, if applicable, a
subsidiary of AMI) has obtained all consents, approvals, certifications,
authorizations and permits of, and has made all filings with, or notifications
to, all Medical Device Regulatory Agencies pursuant to applicable requirements
of all FDA laws, rules and regulations, and all corresponding state and foreign
laws, rules and regulations applicable to AMI or any of its subsidiaries and
relating to its medical device business or otherwise applicable to AMI's or its
subsidiaries' business; (ii) all representations made by AMI or any of its
subsidiaries in connection with any such consents, approvals, certifications,
authorizations, permits, filings and notifications were true and correct in all
material respects at the time such representations and warranties were made, and
AMI's products, and the products of AMI's subsidiaries, comply with, and perform
in accordance with the specifications described in, such representation; (iii)
AMI and AMI's subsidiaries are in compliance with all applicable FDA laws, rules
and regulations, (including Good Manufacturing Practices and Medical Device
Reporting requirements) and all corresponding applicable state and foreign laws,
rules and regulations relating to medical device manufacturers and distributors
or otherwise applicable to AMI's or AMI's subsidiaries' business; (iv) AMI has
no reason to believe that any of the consents, approvals, authorizations,
registrations, certifications, permits, filings or notifications that it or any
of its subsidiaries has received or made to operate their respective businesses
have been or are being revoked or challenged; and (v) there are no
investigations or inquiries pending or threatened relating to the operation of
AMI's or its subsidiaries' businesses or AMI's or its subsidiaries' compliance
with applicable laws relating to its medical device business or otherwise
applicable to AMI's or its subsidiaries' businesses.
4.22 Real Property.
(a) Section 4.22(a) of the AMI Disclosure Schedule lists all of the real
property owned, leased or currently used by AMI or its subsidiaries in the
course of their businesses (the "AMI Real Property"). Section 4.22(a)of the AMI
Disclosure Schedule also lists all material real property owned or used by AMI
or its subsidiaries in the course of their businesses at any time since April
30, 1992, other than AMI Real Property.
(b) All AMI Real Property is in all material respects suitable and adequate
for the uses for which it is currently devoted. AMI or its subsidiaries has good
and marketable title in fee simple absolute to AMI Real Property indicated on
Section 4.22(a) of the AMI Disclosure Schedule to be owned by it, and to the
buildings,
A-14
20
structures and improvements thereon, and a valid leasehold interest in all other
AMI Real Property, in each case free and clear of all Material Encumbrances.
"Material Encumbrance" means any mortgage, lien, pledge, encumbrance, security
interest, deed of trust, option, encroachment, reservation, order, decree,
judgment, condition, restriction, charge, Other Agreement, claim or equity of
any kind, except for any of the foregoing which (i) secures a liability which is
accurately reflected in the financial statements of the party whose interest in
property is affected thereby; (ii) liens for taxes not yet due; (iii) easements
or other similar rights which do not in the aggregate materially interfere with
the present use of the property affected thereby; and (iv) other encumbrances.
"Other Agreements" means any agreement or arrangement between two or more
persons (or entities) with respect to their relative rights and/or obligations
or with respect to a thing done or to be done (whether or not conditional,
executory, express, implied, in writing or meeting the requirements of
contract), including, without limitation, contracts, leases, promissory notes,
covenants, easements, rights of way, commitments or understanding.
(c) All buildings, structures, fixtures and other improvements on AMI Real
Property are in good repair, to the knowledge of AMI free of defects (latent or
patent), and fit for the uses to which they are currently devoted. To the
knowledge of AMI, all such buildings, structures, fixtures and improvements on
AMI's Real Property conform to all applicable laws. To the knowledge of AMI, the
buildings, structures, fixtures and improvements on each parcel of AMI Real
Property lie entirely within the boundaries of such parcel of AMI Real Property,
and no structures of any kind encroach on AMI Real Property.
(d) To the knowledge of AMI, none of the AMI Real Property is subject to
any Other Agreement or other restriction of any nature whatsoever (recorded or
unrecorded) preventing or limiting AMI's right to use it in the manner that such
property is currently being used or that it is contemplated to be used.
(e) No portion of the AMI Real Property or any building, structure, fixture
or improvement thereon is the subject of, or affected by, any condemnation,
eminent domain or inverse condemnation proceeding currently instituted or
pending, and AMI has no knowledge that any of the foregoing are, or will be, the
subject of, or affected by, any such proceeding.
(f) The AMI Real Property has direct and unobstructed access to adequate
electric, gas, water, sewer and telephone lines, and public streets, all of
which are adequate for the uses to which the AMI Real Property is currently
devoted.
4.23 Complete Copies of Requested Reports. AMI has delivered or made
available true and complete copies of each document that has been requested by
NPB or its counsel in connection with their legal and accounting review of AMI
and its subsidiaries. The minute books of AMI and its subsidiaries made
available to NPB contain a complete and accurate summary of all meetings of
directors and stockholders or actions by written consent since the time of
incorporation of AMI and its subsidiaries through the date of this Agreement,
and reflect all transactions referred to in such minutes accurately.
4.24 Share Ownership. Except as reflected in the AMI SEC Reports as of the
date hereof, to AMI's knowledge there are no stockholders with beneficial
ownership (as defined in the Exchange Act) of more than 5% of AMI Common Stock.
4.25 Opinion of Financial Advisors. AMI has received the opinion of Xxxx
Xxxxxxxx Incorporated to the effect that, as of the date hereof, the Exchange
Ratio is fair to the holders of AMI Common Stock from a financial point of view.
4.26 Pooling of Interests. Based upon consultation with its independent
accountants, neither AMI nor any of its subsidiaries, nor any of their
respective directors, officers or, to the knowledge of AMI, stockholders, has
taken any action that would interfere with NPB's ability to account for the
Merger as a pooling of interests.
4.27 Accounts Receivable. The accounts receivable disclosed in the AMI SEC
Reports as of April 30, 1996, and, with respect to accounts receivable created
since such date, disclosed in any subsequently filed AMI SEC Reports, or as
accrued on the books of AMI in the ordinary course of business consistent with
past practices in accordance with generally accepted accounting principles since
the last filed AMI SEC Reports
A-15
21
represent and will represent bona fide claims against debtors for sales and
other charges, are not subject to discount except for normal cash and immaterial
trade discounts, and the amount reserved for doubtful accounts and allowances
disclosed in lieu of such AMI SEC Reports or accrued on such books is sufficient
to provide for any losses that may be sustained or realized of tax receivables.
4.28 Customers and Suppliers. As of the date hereof, no customers that
individually accounted for more than 5% of AMI's gross revenues during the
12-month period preceding the date hereof has indicated to AMI that it will
stop, or decrease the rate of, buying services or products of AMI, or has at any
time on or after April 30, 1996 decreased materially its purchase of the
products of AMI. As of the date hereof, no material supplier of AMI has
indicated that it will stop, or decrease the rate of, supplying materials,
products or services to AMI. AMI has not knowingly breached, so as to provide a
benefit to AMI that was not intended by the parties, any agreement with, or
engaged in any fraudulent conduct with respect to, any customer or supplier of
AMI.
4.29 Representations Complete. None of the representations or warranties
made by AMI herein or in any schedule hereto, including the AMI Disclosure
Schedule, or certificate furnished by AMI pursuant to this Agreement, or the AMI
SEC Reports, contain or will contain at the Effective Time any untrue statement
of a material fact or omits or will omit at the Effective Time to state any
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. To the extent such representations permit omissions of items
otherwise required to be discussed because they are not material or do not or
would not have a Material Adverse Effect on AMI, such omissions in the aggregate
would not and do not have a Material Adverse Effect on AMI.
4.30 Takeover Statutes. No "fair price," "moratorium," "control share
acquisition" or other similar antitakeover statute (each, a "Takeover Statute")
is applicable to the Merger, except for such statutes or regulations as to which
all necessary action has been taken by AMI and its Board of Directors to permit
the consummation of the Merger in accordance with the terms hereof.
4.31 Voting Arrangements. To the knowledge of AMI, there are no
outstanding stockholder agreements, voting trusts, proxies or other arrangements
or understandings among the stockholders of AMI relating to the voting of their
respective shares.
4.32 Ownership of Shares. As of the date hereof, neither AMI nor its
affiliates and associates (as such terms are defined under the Exchange Act) (a)
beneficially own, directly or indirectly, or (b) are parties to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing in each case, shares of capital stock of another company that in the
aggregate represents 10% or more of the outstanding shares of capital stock of
such other company.
4.33 Inventories. The inventories of AMI reflected in the April 30, 1996
balance sheet consist of items that are usable or salable in the ordinary course
of business and do not include below-standard quality, damaged, defective or
obsolete items the value of which has not been fully written down or with
respect to which adequate reserves have not been provided, adjusted for
operations and transactions through the Effective Time in accordance with the
past custom and practice of AMI. The AMI Disclosure Schedule discloses the
addresses of all warehouses or other facilities and customers, if any, in which
or with whom any material amounts of the inventories of AMI are located.
4.34 Product Liability Matters. As of the date of this Agreement, neither
AMI nor any of its subsidiaries has submitted to its product liability insurance
carriers any claims with respect to potential product liability of AMI nor knows
of any such claims which should have been submitted to its product liability
insurance carriers. NPB has previously been afforded access to all files
containing, or been furnished with copies of, all pleadings, claims complaints
and relevant Reports in connection with the foregoing. Neither AMI, nor any of
its subsidiaries, nor to AMI's knowledge, any employee or agent of AMI or any of
its subsidiaries, has made any untrue statement of a material fact or omitted to
state a material fact in connection with obtaining or renewing any insurance
policy providing product liability coverage in respect of the products of AMI or
any of its subsidiaries which could reasonably result in the loss of any
material portion of such coverage and AMI has not received any written notice
from any insurance company stating that any insurance
A-16
22
policy of AMI or any of its subsidiaries may not provide coverage up to the
limits of such policy for any liability, loss or damage which may be incurred or
suffered by AMI in connection with product liability claims other than the
possible lack of coverage for punitive damages and claims for deductible
amounts.
4.35 No Undisclosed Liabilities. Except to the extent specifically
reflected or reserved against in the Balance Sheet of AMI as of April 30, 1996,
or as otherwise set forth on the AMI Disclosure Schedule, AMI does not have any
material liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and obligations arising after April 30, 1996 in the
ordinary course of business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF NPB
Except as set forth in the disclosure letter delivered to AMI at or prior
to the execution of this Agreement ("NPB Disclosure Schedule"), NPB represents
and warrants to AMI as follows:
5.1 Organization. NPB is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to carry on its business as it is now being conducted. NPB is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities makes such qualification necessary, except
where the failure to be so qualified will not in the aggregate have a Material
Adverse Effect. Each subsidiary of NPB is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate power to carry on its business
as it is now being conducted and is duly qualified to do business, and is in
good standing in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so duly organized, validly existing
and in good standing, to have such corporate power or to be so qualified will
not in the aggregate have a Material Adverse Effect. NPB has delivered to AMI or
its counsel complete and correct copies of its Certificate of Incorporation and
Bylaws.
5.2 Capitalization.
(a) As of September 1, 1996, the authorized capital stock of NPB consists
of 150,000,000 shares of NPB Common Stock, and 5,000,000 shares of Preferred
Stock, par value $0.001 per share (the "NPB Preferred Stock"). As of September
1, 1996, 59,915,374 shares of NPB Common Stock were issued and outstanding,
stock options to acquire 7,313,881 shares of NPB Common Stock were outstanding
under all stock option plans of NPB, no warrants to acquire shares of NPB Common
Stock were outstanding, no shares of NPB Preferred Stock were issued and
outstanding, and 3,623,772 additional shares of NPB Common Stock (under NPB's
stock option plans) and 500,000 shares of NPB Preferred Stock were reserved for
issuance. No changes in such capitalization have occurred since September 1,
1996 that, in the aggregate, would be material to NPB, except for option
exercises in the ordinary course of business. All of the issued and outstanding
shares of NPB Common Stock are validly issued, fully paid, nonassessable and
free of preemptive rights or similar rights created by statute, the Certificate
of Incorporation or Bylaws of NPB or any agreement to which NPB or any of its
subsidiaries is a party or by which NPB or any of its subsidiaries is bound.
Since September 1, 1996, NPB has not issued any shares of its capital stock,
except upon the exercise of stock options to acquire shares of NPB Common Stock
to employees under employee benefit plans. All of the shares of NPB Common Stock
issuable in exchange for shares of Common Stock at the Effective Time in
accordance with this Agreement will be, when so issued, duly authorized, validly
issued, fully paid and nonassessable.
(b) Except pursuant to NPB's employee benefit plans and as otherwise
provided in this Agreement and that certain Rights Agreement dated September 1,
1992, as amended, between NPB and The First National Bank of Boston as Rights
Agent (the "NPB Rights Agreement"), there are not now, and at the Effective Time
there will not be, any shares of capital stock of NPB issued or outstanding or
any options, warrants, subscriptions, calls, rights, convertible securities or
other agreements or commitments obligating NPB to issue, transfer or sell any
shares of its capital stock. As of the date hereof, no Voting Debt of NPB was
issued and outstanding and none will be outstanding as of the Effective Time.
All outstanding shares of the capital stock
A-17
23
of NPB's subsidiaries are validly issued, fully paid, non-assessable and owned
by NPB or one of its subsidiaries free and clear of any liens, security
interest, pledges, agreements, claims, charges, or encumbrances of any nature
whatsoever. There are no voting trust or other agreements or understandings to
which NPB is a party with respect to the voting of the capital stock of NPB or
any of its subsidiaries. None of NPB or its subsidiaries is required to redeem,
repurchase or otherwise acquire shares of capital stock of NPB, or any of its
subsidiaries, respectively, as a result of the transactions contemplated by this
Agreement. Except for options and warrants described above or as contemplated by
Section 7.8 below, immediately after the Effective Time, there will be no
option, warrant, call, right or agreement obligating NPB or any subsidiary of
NPB to issue, deliver or sell, or cause to be issued, delivered or sold, any
shares of NPB Common Stock or any Voting Debt, or obligating NPB or any
subsidiary of NPB to grant, extend, or enter into any such option, warrant,
call, right or agreement.
5.3 Authority Relative to this Agreement. NPB has the corporate power to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by NPB and the consummation by NPB of
the transactions contemplated hereby have been duly authorized by the Board of
Directors of NPB and no other corporate proceedings on the part of NPB are
necessary to approve this Agreement or the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by NPB and
constitutes a valid and binding agreement of NPB, enforceable against NPB in
accordance with its terms.
5.4 Consents and Approvals; No Violations. Except for applicable
requirements of the HSR Act, Securities Act, Exchange Act, state or foreign laws
relating to takeovers, if applicable, state securities or blue sky laws, and the
filing and recordation of a Certificate of Merger as required by the DGCL and
MBCA, no filing with, and no permit, authorization, consent or approval of, any
public or governmental body or authority is necessary for the consummation by
NPB of the transactions contemplated by this Agreement, except where a failure
to make such filing or to obtain such permit, registration, authorization,
consent or approval will not in the aggregate have a Material Adverse Effect.
Neither the execution and delivery of this Agreement by NPB, nor the
consummation by NPB of the transactions contemplated hereby, nor compliance by
NPB with any of the provisions hereof, will (a) result in any breach of the
Certificate of Incorporation or Bylaws of NPB or any of its subsidiaries, (b)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, acceleration or change in the award, grant, vesting or
determination) under, or give rise to creation of any lien, charge, security
interest or encumbrance upon, any of the respective properties or assets of NPB
or any of its subsidiaries under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust, license, contract, lease,
agreement, arrangement, or other instrument or obligation to which NPB or any of
its subsidiaries is a party or by which any of them or any of their properties
or assets may be bound or affected, or (c) violate any order, writ, injunction,
decree, statute, rule or regulation of any court or government authority
applicable to NPB, any of its subsidiaries, or any of their properties or
assets, except in the case of clauses (b) and (c) for violations, breaches,
defaults (or rights of termination, cancellation, acceleration or change),
liens, charges, security interests or encumbrances that would not in the
aggregate have a Material Adverse Effect.
5.5 Reports and Financial Statements; Absence of Certain Changes. NPB has
filed all reports required to be filed with the SEC pursuant to the Exchange Act
since July 7, 1984 including, without limitation, an Annual Report on Form 10-K
for the fiscal year ended July 3, 1995 and Quarterly Reports on Form 10-Q dated
November 15, 1995, February 14, 1996 and May 15, 1996 (all such reports,
collectively, the "NPB SEC Reports"), and has previously furnished or made
available to AMI true and complete copies of all NPB SEC Reports filed with
respect to periods beginning after December 31, 1992 (including any exhibits
thereto) and will promptly deliver to AMI any NPB SEC Reports filed between the
date hereof and the Effective Time. None of such NPB SEC Reports, as of their
respective dates (as amended through the date hereof), contained or, with
respect to the NPB SEC Reports filed after the date hereof, will contain any
untrue statement of a material fact or omitted or, with respect to the NPB SEC
Reports filed after the date hereof, will omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Each of the
balance sheets (including the related notes) included in the NPB SEC Reports
fairly presents the consolidated financial position of NPB
A-18
24
and its subsidiaries as of the date thereof, and the other related statements
(including the related notes) included therein fairly present the results of
operations and the changes in cash flows of NPB and its subsidiaries for the
respective periods set forth therein, all in conformity with generally accepted
accounting principles consistently applied during the periods involved, except
as otherwise noted therein and subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments which would not in the
aggregate be material in amount or effect. Except as specifically contemplated
by this Agreement or reflected in the NPB SEC Reports, since May 15, 1996 there
has not been (a) any change or event having a Material Adverse Effect on NPB,
(b) any declaration setting aside or payment of any dividend or distribution
with respect to the NPB Common Stock other than consistent with past practices,
or (c) any material change in NPB's accounting principles, procedures or
methods.
5.6 Information in Registration Statement and Proxy Statement. The
information relating to NPB and its subsidiaries to be contained in the
Registration Statement and the Proxy Statement will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading.
5.7 Share Ownership. Except as reflected in the NPB SEC Reports, as of the
date hereof, to NPB's knowledge there are no stockholders with beneficial
ownership (as defined in the Exchange Act) of more than 5% of the NPB Common
Stock.
5.8 Compliance With Applicable Law. Except as disclosed in the NPB SEC
Reports filed prior to the date of this Agreement, NPB and each of its
subsidiaries holds all licenses, franchises, permits, variances, exemptions,
orders, approvals and authorizations necessary for the lawful conduct of its
business under and pursuant to, and the business of each of NPB and its
subsidiaries is not being conducted in violation of, any provision of any
federal, state, local or foreign statute, law, ordinance, rule, regulation,
judgment, decree, order, concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to NPB or any of its
subsidiaries, except to the extent that the failure or violation would not in
the aggregate have a Material Adverse Effect.
5.9 Ownership of Shares of AMI Common Stock. As of the date hereof,
neither NPB nor, to its knowledge, any of its affiliates or associates (as such
terms are defined under the Exchange Act), (a) beneficially owns, directly or
indirectly, or (b) is party to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of, in each case, shares
of AMI Common Stock, except for (i) shares of AMI Common Stock in the aggregate
representing less than 1% of the outstanding shares of AMI Common Stock and (ii)
the "standstill" provisions of the Confidentiality Agreement, dated July 3,
1996, as amended September 5, 1996 (the "Confidentiality Agreement") relating to
the acquisition of AMI Common Stock.
5.10 Complete Copies of Requested Reports. NPB has delivered or made
available (through public sources or directly) true and complete copies of each
document that has been requested by AMI or its counsel in connection with their
legal and accounting review of NPB and its subsidiaries.
5.11 Pooling of Interests. Based upon consultation with its independent
accountants, neither NPB nor any of its subsidiaries, nor any of their
respective directors, officers or, to the knowledge of NPB, stockholders, has
taken any action that would interfere with NPB's ability to account for the
Merger as a pooling of interests.
5.12 Representations Complete. None of the representations or warranties
made by NPB herein or in any Schedule hereto, including the NPB Disclosure
Schedule, or certificate furnished by NPB pursuant to this Agreement, or the NPB
SEC Reports, contain or will contain at the Effective Time any untrue statement
of a material fact or omits or will omit at the Effective Time to state any
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. To the extent such representations permit omissions of items
otherwise required to be disclosed because they are not material or do not or
would not have a Material Adverse Effect on NPB, such omissions in the aggregate
would not and do not have a Material Adverse Effect on NPB.
A-19
25
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 Conduct of Business by AMI and NPB Pending the Merger. During the
period from the date of this Agreement and continuing until the Effective Time,
except as agreed to in writing by the other party or as set forth in Section 6.1
of the AMI Disclosure Schedule or NPB Disclosure Schedule:
(a) the respective businesses of AMI and its subsidiaries shall be
conducted only in the ordinary and usual course of business and consistent with
past practices;
(b) neither AMI nor its subsidiaries shall (i) sell or pledge or agree to
sell or pledge any stock owned by it in any of its subsidiaries; (ii) amend its
Articles of Incorporation or Bylaws; or (iii) split, combine or reclassify any
shares of its outstanding capital stock or declare, set aside or pay any
dividend or other distribution payable in cash, stock or property in respect of
its capital stock, or directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or other securities or shares of the
capital stock or other securities of any of its subsidiaries, other than in
connection with the use of shares of capital stock to pay the exercise price or
tax withholdings in connection with its stock-based employee benefit plans in
the ordinary course of business in accordance with past practice;
(c) neither AMI nor any of its subsidiaries shall (i) authorize for
issuance, issue, sell, pledge, dispose of, encumber, deliver or agree or commit
to issue, sell, pledge, or deliver any additional shares of, or rights of any
kind to acquire any shares of, its capital stock of any class or exchangeable
into shares of stock of any class or any Voting Debt (whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise), except for unissued shares of AMI Common Stock reserved
for issuance upon the exercise of the stock options or warrants described in the
AMI Disclosure Schedule pursuant to AMI's employee stock plans; (ii) acquire,
dispose of, transfer, lease, license, mortgage, pledge or encumber any fixed or
other assets, other than in the ordinary course of business and consistent with
past practices; (iii) incur, assume or prepay any indebtedness, liability or
obligation or any other liabilities or issue any debt securities, other than in
the ordinary course of business and consistent with past practices; (iv) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person (other than a
wholly-owned subsidiary), other than in the ordinary course of business and
consistent with past practices; (v) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
wholly-owned subsidiaries), other than in the ordinary course of business and
consistent with past practices; or (vi) fail to maintain adequate insurance
consistent with past practices for their businesses and properties;
(d) AMI shall use its best efforts to preserve intact the business
organization of AMI and its subsidiaries to keep available the services of its
and its subsidiaries' present officers and key employees, and to preserve the
goodwill of those having business relationships with it and its subsidiaries;
provided, however, that no breach of this representation shall be deemed to have
occurred if a failure to comply with this Section 6.1(d) occurs as a result of
any matter arising out of the transactions contemplated by this Agreement or any
acquisition proposals made to AMI or the public announcement thereof;
(e) neither AMI nor any of its subsidiaries, nor NPB nor any of its
subsidiaries shall (i) take, or allow to be taken, any action which would
jeopardize the treatment of the Merger as a pooling of interests for accounting
purposes or (ii) take, or allow to be taken or fail to take any action which act
or omission would jeopardize qualification of the Merger as a reorganization
within the meaning of Section 368(a) of the Code;
(f) AMI shall pay and cause its subsidiaries to pay debts and taxes when
due subject to good faith disputes thereof, and pay or perform other obligations
when due;
(g) neither AMI nor any of its subsidiaries, nor NPB nor any of its
subsidiaries shall fail to use all reasonable efforts to take or omit to take
any action nor shall they agree, in writing or otherwise, to take or omit to
take any action, which would make any representation or warranty of AMI or NPB,
respectively, herein untrue or incorrect;
A-20
26
(h) AMI and its subsidiaries shall not enter into any contract or
commitment, or violate, amend or otherwise modify or waive any of the terms of
any contract or commitment, other than in the ordinary course of business
consistent with past practice;
(i) AMI and its subsidiaries shall not transfer to any person or entity any
AMI Intellectual Property Rights other than in the ordinary course of business
consistent with past practice;
(j) AMI and its subsidiaries shall not enter into or amend any agreements
pursuant to which any other party is granted distribution, marketing or other
rights of any type or scope with respect to any of its products or technology;
(k) AMI and its subsidiaries shall not enter into any operating lease other
than in the ordinary course of business consistent with past practices and in no
event in excess of an aggregate of $10,000 over the term of such lease;
(l) AMI and its subsidiaries shall not pay, discharge or satisfy in an
amount in excess of $10,000 in any one case or $100,000 in the aggregate, any
claim, liability or obligation (absolute, accrued, asserted or unasserted,
contingent or otherwise) arising other than in the ordinary course of business,
other than the payment, discharge or satisfaction of liabilities reflected or
reserved against in the AMI Financial Statements or reasonably incurred in
connection with the transactions contemplated by this Agreement;
(m) AMI and its subsidiaries shall not make any capital expenditures,
capital additions or capital improvements except in the ordinary course of
business and consistent with past practice;
(n) AMI and its subsidiaries shall not materially reduce the amount of any
material insurance coverage provided by existing insurance policies;
(o) AMI and its subsidiaries shall not (i) hire any new director level or
officer level employee, (ii) pay any special bonus or special remuneration to
any employee or member of the Board of Directors other than automatic grants, or
(iii) increase the salaries, wage rates, fringe benefits or other compensation
of its members of the Board of Directors, officers or employees, except in the
case of (ii) and (iii) with respect to non-officer employees in the ordinary
course of business and consistent with past practices;
(p) AMI and its subsidiaries shall not grant any severance or termination
pay (i) to any director or officer or (ii) to any other employee except (A)
payments made pursuant to standard written agreements outstanding on the date
hereof or (B) grants which are made in the ordinary course of business in
accordance with its standard past practice;
(q) AMI and its subsidiaries shall not commence a lawsuit other than (i)
for the routine collection of bills, (ii) in such cases where it in good faith
determines that failure to commence suit would result in the material impairment
of a valuable aspect of its business, provided that it consults with NPB prior
to the filing of such a suit, or (iii) for a breach of this Agreement or related
agreements (e.g., the Confidentiality Agreement);
(r) AMI and its subsidiaries shall not acquire or agree to acquire by
merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to its and its subsidiaries' business, taken as a whole;
(s) AMI and its subsidiaries shall not other than in the ordinary course of
business, make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, file any material Return or
any amendment to a material Return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes, or consent to any extension or waiver
of the limitation period applicable to any claim or assessment in respect to
Taxes;
(t) AMI and its subsidiaries shall give all notices and other information
required prior to the Effective Time to be given to the employees of AMI, any
collective bargaining unit representing any group of employees of AMI, and any
applicable government authority under the WARN Act, the National Labor Relations
Act,
A-21
27
the Internal Revenue Code, the Consolidated Omnibus Budget Reconciliation Act,
and other applicable law in connection with the transactions provided for in
this Agreement and NPB shall cooperate with AMI to give such notices and
information;
(u) AMI and its subsidiaries shall not revalue any of its assets, including
without limitation, writing down the value of inventory or writing off notes or
accounts receivable, except as required under generally accepted accounting
practices and in the ordinary course of business; and
(v) AMI and its subsidiaries shall not enter into any contract, agreement,
commitment or arrangement with respect to any of the items prohibited by this
Section 6.1.
(w) NPB shall not amend its Certificate of Incorporation in any manner that
would adversely affect the rights, preferences, or privileges of the holders of
Common Stock.
6.2 Compensation Plans. During the period from the date of this Agreement
and continuing until the Effective Time, AMI agrees as to itself and its
subsidiaries that it will not, without the prior written consent of NPB (except
as required by applicable law or pursuant to existing contractual arrangements
or solely to the extent necessary to make compensation increases in the ordinary
course of business consistent with past practices or make available existing
benefit arrangements to new or promoted employees in the ordinary course of
business in accordance with past practice): (a) enter into, adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment, severance or other employee benefit plan, agreement,
trust, plan, fund or other arrangement between AMI and one or more of its
officers, directors or employees (collectively, "Compensation Plans"), (b)
institute any new employee benefit, welfare program or Compensation Plan, (c)
make any change in any Compensation Plan or other employee welfare or benefit
arrangement or enter into any employment or similar agreement or arrangement
with any employee, or (d) enter into or renew any contract, agreement,
commitment or arrangement providing for the payment to any director, officer or
employee of compensation or benefits contingent, or the terms of which are
materially altered in favor of such individual, upon the occurrence of any of
the transactions contemplated by this Agreement.
6.3 Current Information. From the date of this Agreement to the Effective
Time, AMI will cause one or more of its designated representatives to confer on
a regular and frequent basis (not less than semi-monthly) with representatives
of NPB and to report the general status of its ongoing operations and to deliver
to NPB (not less than quarterly) unaudited consolidated balance sheets and
related consolidated statements of income, changes in stockholders equity and
changes in financial position for the period since the last such report. AMI
will promptly notify the other of any material change in the normal course of
its or its subsidiaries' business or in its or its subsidiaries' properties.
6.4 Letters of AMI's and NPB's Auditors. AMI shall use all reasonable
efforts to cause to be delivered to NPB a letter of Ernst & Young LLP ("Ernst &
Young"), AMI's independent auditors, and NPB shall use all reasonable efforts to
cause to be delivered to AMI a letter of Price Waterhouse, LLP ("Price
Waterhouse"), NPB's independent auditors, each such letter dated a date within
two business days before the date on which the Registration Statement shall
become effective and addressed to NPB or AMI, as applicable, in form and
substance reasonably satisfactory to such recipient, and in scope and substance
consistent with applicable professional standards for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement. Each of AMI and NPB shall use reasonable
efforts to cause to be delivered to the other an update, dated the Closing Date,
of the letter of its independent auditors described in the preceding sentence.
6.5 Legal Conditions to Merger. Each of AMI and NPB shall, and shall cause
its subsidiaries to, use all reasonable efforts (a) to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements that
may be imposed on such party or its subsidiaries with respect to the Merger and
the consummation of the transactions contemplated by this Agreement, subject to
the appropriate vote or consent of stockholders and (b) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order or
approval of, or any exemption by, any governmental entity or any other public or
private third party that is required to be obtained or made by such party or any
of its subsidiaries in connection with the Merger
A-22
28
and the transactions contemplated by this Agreement; provided, however, that a
party shall not be obligated to take any action pursuant to the foregoing if the
taking of such action or such compliance or the obtaining of such consent,
authorization, order, approval or exemption would, in such party's reasonable
opinion, (i) be materially burdensome to such party and its subsidiaries taken
as a whole or impact in such a materially adverse manner the economic or
business benefits of the transactions contemplated by this Agreement as to
render inadvisable the consummation of the Merger or (ii) to result in the
imposition of a condition or restriction on such party or on the Surviving
Corporation of the type referred to in Section 8.1(e). Each of AMI and NPB will
promptly cooperate with and furnish information to the other in connection with
any such burden suffered by, or requirement imposed upon, any of them or any of
their subsidiaries in connection with the foregoing.
6.6 Affiliates; Pooling of Interests. Neither NPB nor AMI shall take or
case to be taken any action, whether before or after the Closing Date, which
would disqualify the transaction contemplated herein as a pooling of interests
for accounting purposes. NPB and AMI shall use their best efforts to prevent
their stockholders from taking any action prohibited under the Affiliate
Agreements that would disqualify the transaction contemplated herein as a
pooling of interests for accounting purposes.
(a) The parties shall deliver to one another a list identifying all
persons, if any, who at the time the Merger is submitted for approval to the
stockholders of AMI ("Affiliates"), may be deemed "affiliates" of AMI and NPB
for purposes of Rule 145 under the Securities Act and for purposes of qualifying
for pooling of interests accounting treatment. AMI and NPB shall use their best
efforts to cause each Affiliate to deliver to the other party, on or prior to
October 1, 1996, a written agreement ("Affiliate Agreement"), in the form of
Exhibit 6.6 hereto, that such Affiliate will not sell, pledge, transfer or
otherwise dispose of any shares of NPB Common Stock issued to such Affiliate
pursuant to the Merger, except pursuant to an effective registration statement
or in compliance with Rule 145 or an exemption from the registration
requirements of the Securities Act. The parties shall promptly advise one
another if any person becomes or ceases to be an Affiliate.
(b) The parties shall use their best efforts to cause each person who is
identified as an Affiliate to deliver to the other party, on or prior to the
mailing of the Proxy Statement referred to in Section 7.4, a written agreement
in the form of Exhibit 6.6, providing that such Affiliate will not thereafter
sell or in any way reduce such Affiliate's risk relative to any shares of AMI
Common Stock during the period commencing 30 days prior to the AMI stockholders
meeting and will not sell or otherwise reduce such person's risk relative to any
shares of NPB Common Stock acquired under this Agreement until publication of
financial results covering at least 30 days of combined operations of NPB and
AMI within the meaning of the Securities and Exchange Commission's Financial
Reporting Release No. 1, "Codification of Financial Reporting Policies,"
sec.201.01 47 F.R. 21039 (April 15, 1982), except as permitted by Staff
Accounting Bulletin No. 76 issued by the Securities Exchange Commission, or such
later time as notified by NPB so as to ensure that the transactions contemplated
by this Agreement qualify as a pooling of interests. During the period between
the date of this Agreement and the thirtieth day prior to the AMI stockholders
meeting, AMI shall use its best efforts to cause each person who is identified
as an Affiliate to formally notify AMI of any and all proposed sales or
acquisitions of AMI or NPB Common Stock in advance of any such acquisition or
sale. Such notification will permit NPB to review the circumstances of the
proposed transaction with its advisors to ensure that pooling of interests
accounting is not compromised by such sales or purchases.
6.7 Advice of Changes; Government Filings. Each party shall confer on a
regular and frequent basis with the other, report on operational matters and
shall promptly advise the other both orally and in writing of any change or
event having, or which, insofar as can reasonably be foreseen, could have, a
Material Adverse Effect on such party or which would cause or constitute a
material breach of any of the representations, warranties or covenants of such
party contained herein. NPB and AMI shall file all reports required to be filed
by each of them with the SEC between the date of this Agreement and the
Effective Time and shall deliver to the other party copies of all such reports
promptly after the same are filed. Except where prohibited by applicable
statutes and regulations, and subject to Section 7.1 hereof, each party shall
promptly provide the other (or its counsel) with copies of all other filings
made by such party with any state or federal government entity in connection
with this Agreement or the transactions contemplated hereby.
A-23
29
6.8 Accounting Methods. Except as otherwise contemplated by Section 7.13,
AMI shall not change its methods of accounting in effect at April 30, 1996,
except as required by changes in generally accepted accounting principles as
concurred in by such party's independent auditors. AMI will not change its
fiscal year.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Access and Information.
(a) AMI and NPB and their respective subsidiaries shall each afford to the
other and to the other's financial advisors, legal counsel, accountants,
consultants and other representatives access during normal business hours
throughout the period from the date hereof to the Effective Time to all of its
books, records, properties, facilities, personnel commitments and records
(including but not limited to Returns) and, during such period, each shall
furnish promptly to the other all information concerning its business,
properties and personnel as such other party may reasonably request. No
investigation pursuant to this Section 7.1 shall affect any representations or
warranties made herein or the conditions to the obligations of the respective
parties to consummate the Merger.
(b) All information furnished by AMI to NPB or furnished by NPB to AMI
pursuant hereto shall be treated as the sole property of the party furnishing
the information until consummation of the Merger contemplated hereby. The
parties will hold any such information which is nonpublic in confidence to the
extent required by, and in accordance with the Confidentiality Agreement, and
such Confidentiality Agreement shall survive the termination of this Agreement.
7.2 No Solicitation of Transactions. From the date hereof until the
earlier of termination of this Agreement or consummation of the Merger, neither
AMI nor any of its subsidiaries will, directly or indirectly, whether through
any director, officer, employee, financial advisor, legal counsel, accountant,
other agent or representative (as used in this Section 7.2, "affiliates") or
otherwise, (a) initiate, solicit or encourage, or take any other action to
facilitate any inquiries or the making of any proposal with respect to, or (b)
except to the extent required in the exercise of the fiduciary duties of the
Board of Directors of AMI under applicable law as advised by independent counsel
in connection with an unsolicited proposal, engage or participate in
negotiations concerning, provide any nonpublic information or data to, or have
any discussions with, any person other than a party hereto or their affiliates
relating to, any (i) acquisition, (ii) tender offer (including a self-tender
offer), (iii) exchange offer, (iv) merger, (v) consolidation, (vi) acquisition
of beneficial ownership of (or the right to vote securities representing) 10% or
more of the total voting power of such entity or any of its subsidiaries, (vii)
dissolution, (viii) business combination, (ix) purchase of all or any
significant portion of the assets or any division of (or any equity interest in)
such entity or any subsidiary, or (x) any similar transaction other than the
Merger (such proposals, announcements, or transactions being referred to as
"Acquisition Proposals"). AMI will notify NPB orally (within one business day)
and in writing (as promptly as practicable) if any such Acquisition Proposals
(including the identity of the persons making such proposals and, subject to the
fiduciary duties of the Board of Directors of AMI, the terms of such proposals)
are received and furnish to NPB a copy of any written proposal relating thereto.
7.3 Registration Statement. As promptly as practicable, NPB and AMI shall
cooperate and prepare and NPB shall file with the SEC the Registration Statement
and use reasonable efforts to have the Registration Statement declared
effective. NPB shall also use reasonable efforts to take any action required to
be taken under state securities or blue sky laws in connection with the issuance
of the shares of NPB Common Stock pursuant hereto. AMI shall furnish NPB with
all information concerning AMI and the holders of its capital stock and shall
take such other action as NPB may reasonably request in connection with such
Registration Statement and issuance of shares of NPB Common Stock.
7.4 Proxy Statement; Stockholder Approval. AMI, acting through its Board
of Directors, shall, in accordance with applicable law and its Articles of
Incorporation and Bylaws:
(a) promptly and duly call, give notice of, convene and hold as soon as
practicable following the date upon which the Registration Statement becomes
effective a meeting of its stockholders for the purpose of
A-24
30
voting to approve and adopt this Agreement and shall use its best efforts,
except to the extent required in the exercise of the fiduciary duties of the
Board of Directors of AMI under applicable law as advised by independent
counsel, to obtain such stockholders' approval; and
(b) except to the extent required in the exercise of the fiduciary duties
of the Board of Directors of AMI under applicable law as advised by independent
counsel, recommend approval and adoption of this Agreement by the stockholders
of AMI, and include in the Proxy Statement such recommendation, and take all
lawful action to solicit such approval.
(c) As promptly as practicable, the parties shall prepare and file with the
SEC a preliminary Proxy Statement and, after consultation with each other,
respond to any comments of the SEC with respect to the preliminary Proxy
Statement and cause the definitive Proxy Statement to be mailed to AMI
stockholders. At the stockholders' meeting of AMI, NPB shall vote or cause to be
voted in favor of approval and adoption of this Agreement all shares of AMI
Common Stock which it beneficially owns at such time, if any. Whenever any event
occurs which should be set forth in an amendment or a supplement to the Proxy
Statement or any filing required to be made with the SEC, each party will
promptly inform the other and will cooperate in filing with the SEC and/or
mailing to AMI's stockholders such amendment or supplement. The Proxy Statement,
and all amendments and supplements thereto, shall comply with applicable law and
be in form and substance satisfactory to NPB and AMI.
7.5 Nasdaq National Market. NPB shall notify the Nasdaq National Market of
the listing of the shares of NPB Common Stock to be issued pursuant to the
Merger.
7.6 Antitrust Laws. As promptly as practicable, AMI and NPB shall make all
filings and submissions under the HSR Act as may be reasonably required to be
made in connection with this Agreement and the transactions contemplated hereby.
Subject to Section 7.1 hereof, AMI will furnish to NPB, and NPB will furnish to
AMI, such information and assistance as the other may reasonably request in
connection with the preparation of any such filings or submissions. Subject to
Section 7.1 hereof, AMI will provide NPB, and NPB will provide AMI, with copies
of all correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or any of its representatives, on the one
hand, and any governmental agency or authority or members of their respective
staffs, on the other hand, with respect to this Agreement and the transactions
contemplated hereby, except to the extent that NPB or AMI is advised by
independent counsel that the provision of such information would be inadvisable
under applicable antitrust laws.
7.7 Certain Employee Benefit Plans Matters.
(a) NPB confirms to AMI that it is NPB's present intent to provide after
the Effective Time to continuing employees of AMI and its subsidiaries employee
benefit programs that in the aggregate are generally not less favorable to such
employees than those being provided to NPB's employees on the date of this
Agreement, except as otherwise provided in Schedule 7.7(a). To the extent the
NPB employee benefit programs provide medical or dental welfare benefits after
the Closing Date, NPB shall cause all pre-existing condition exclusions and
actively at work requirements to be waived, and NPB shall provide that any
expenses incurred on or before the Closing Date shall be taken into account
under the NPB employee benefit programs for purposes of satisfying the
applicable deductible, coinsurance and maximum out-of-pocket provisions for such
employees and their covered dependents.
(b) AMI hereby confirms to NPB that (i) all AMI Stock Options under the AMI
1985 Incentive Stock Option Plan and Amended and Restated 1988 Stock Option Plan
shall carry over and become options to acquire NPB Common Stock, and (ii) AMI's
Board of Directors shall not cause such options vesting or exercisability to be
accelerated unless and except to the extent that such acceleration is automatic
under the terms of the applicable agreement.
(c) AMI shall take no action from and after the date hereof to deposit into
any trust (including any "rabbi trust") amounts in respect of any employee
benefit obligations.
A-25
31
7.8 Stock Options and Warrants.
(a) As of the Effective Time, any stock options, warrants or convertible
securities, which are outstanding as of the date hereof and have not expired as
of the Effective Time shall be assumed by NPB and converted into options,
warrants or convertible securities, as the case may be to purchase the number of
shares of NPB Common Stock (rounded up to the nearest whole share) equal to the
number of shares of AMI Common Stock subject to such options, warrants or
convertible security, as the case may be, multiplied by the Exchange Ratio, at
an exercise price per share of NPB Common Stock (rounded down to the nearest
xxxxx) equal to the former exercise price per share of AMI Common Stock under
such options, warrants or convertible securities, as the case may be,
immediately prior to the Effective Time divided by the Exchange Ratio; provided,
however, that in the case of any AMI stock option to which Section 421 of the
Code applies by reason of its qualification under Section 422 of the Code, the
conversion formula shall be adjusted, if necessary, to comply with Section
424(a) of the Code to the effect that the number of shares shall be rounded down
to the nearest whole share and the exercise price shall be rounded up to the
nearest xxxxx. Except as provided above, the converted stock options, warrants
or convertible securities, as the case may be, shall be subject to the same
terms and conditions (including, without limitation, expiration date, vesting
and exercise provisions) as were applicable to stock options, warrants or
convertible securities, as the case may be, immediately prior to the Effective
Time.
(b) No such option, warrant or convertible security shall be converted into
a stock option, warrant or convertible security to purchase a partial share of
NPB Common Stock.
(c) The consummation of the Merger shall not be treated as a termination of
employment for purposes of such stock options, warrants or convertible
securities.
(d) NPB agrees that as soon as practicable after the Effective Time it will
cause to be filed one or more registration statements on Form S-8 under the
Securities Act, or amendments to its existing registration statements on Form
S-8 or amendments to the Registration Statement, in order to register the shares
of NPB Common Stock issuable upon exercise of the aforesaid converted AMI Stock
Options.
7.9 Director and Officer Indemnification, Etc.
(a) For a period of six (6) years from the Effective Time, NPB and the
Surviving Corporation each agrees that for acts occurring prior to the Effective
Time, all rights to indemnification and advancement of expenses existing in
favor of the directors and officers of AMI (the "Indemnified Parties") under the
provisions existing on the date hereof of the Articles of Incorporation, Bylaws
and indemnification agreements of AMI shall survive the Effective Time, and NPB
and the Surviving Corporation each agrees to indemnify and advance expenses to
the Indemnified Parties to the full extent required or permitted under the
provisions existing on the date hereof of AMI's Articles of Incorporation and
Bylaws and indemnification agreements of AMI. The provisions of this Section 7.9
shall be binding on NPB's successors and assigns.
(b) For a period of six (6) years after the Effective Time, NPB shall
maintain, with respect to claims arising from facts or events which occurred
before the Effective Time, officers' and directors' liability insurance covering
the Indemnified Parties who are currently covered (in their capacities as
officers and directors) by AMI's existing officers' and directors' liability
insurance policies, on terms substantially no less advantageous to such officers
and directors than such existing insurance.
7.10 Public Announcements. The initial press release relating to this
Agreement shall be a joint press release and thereafter, so long as this
Agreement is in effect, NPB and AMI agree that they will each obtain the
approval of the other party prior to issuing any press release or any other
written communication (including any written communication to employees) and
that they will use their best efforts to consult with one another before
otherwise making any public statement or responding to any press inquiry with
respect to this Agreement or the transactions contemplated hereby, except as may
be required by law or any governmental agency if required by such agency or the
rules of the National Association of Securities Dealers, Inc.
A-26
32
7.11 Expenses. Except as provided in Section 9.3, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby (whether or not the Merger is consummated) shall be paid by the party
incurring such expenses, except that if the Merger is not consummated NPB and
AMI shall share equally the expenses incurred in connection with filings under
the HSR Act, printing and mailing the Proxy Statement and all aspects of the
Registration Statement.
7.12 Additional Agreements.
(a) Subject to the terms and conditions herein provided, each of the
parties hereto agrees to use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts to obtain all necessary waivers, consents and approvals, and
to effect all necessary registrations and filings and to obtain from each
natural person who owns of record any shares of the capital stock of any
subsidiary of AMI a power of attorney, in form acceptable to NPB and its
counsel, appointing one or more representatives of NPB as attorney in fact for
such person, effective as of the Effective Time, for purposes of executing any
Reports and taking any other actions required to transfer record ownership of
such shares to such entity as NPB shall determine. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of NPB and AMI
shall take all such necessary action.
(b) NPB and AMI each will cooperate with one another and use all reasonable
efforts to prepare all necessary documentation to effect promptly all necessary
filings and to obtain all necessary permits, consents, approvals, orders and
authorizations of or any exemptions by, all third parties and governmental
bodies necessary to consummate the transactions contemplated by this Agreement.
(c) Each party will keep the other party apprised of the status of any
inquiries made of such party by the Department of Justice, the SEC, or any other
governmental agency or authority or members of their respective staffs with
respect to this Agreement or the transactions contemplated herein.
7.13 AMI Accruals and Reserves. Prior to the Closing Date, AMI shall
review and, to the extent determined necessary or advisable, consistent with
generally accepted accounting principles and the accounting rules, regulations
and interpretations of the SEC and its staff, modify and change its accrual,
reserve and provision policies and practices to (a) reflect the Surviving
Corporation's plans with respect to the conduct of AMI's business following the
Merger and (b) make adequate provision (for the costs and expenses relating
thereto) so as to be applied consistently on a mutually satisfactory basis with
those of NPB. The parties agree to cooperate in preparing for the implementation
of the adjustments contemplated by this Section 7.13. Notwithstanding the
foregoing, AMI shall not be obligated to take in any respect any such action
pursuant to this Section 7.13 (other than pursuant to the preceding sentence)
unless and until NPB acknowledges that all conditions to its obligation to
consummate the Merger have been satisfied.
7.14 FIRPTA. AMI shall, prior to the Closing Date, provide NPB with a
properly executed Foreign Investment and Real Property Tax Act of 1980
("FIRPTA") Notification Letter which states that shares of capital stock of AMI
do not constitute "United States real property interests" under Section 897(c)
of the Code, for purposes of satisfying NPB's obligations under Treasury
Regulation Section 1.1445-2(c)(3). In addition, simultaneously with delivery of
such Notification Letter, AMI shall have provided NPB, as agent for AMI, a form
of notice to the Internal Revenue Service in accordance with the requirements of
Treasury Regulation Section 1.897-2(h)(2) along with written authorization for
Acquiror to deliver such notice form to the Internal Revenue Service on behalf
of AMI upon the Closing of the Merger.
7.15 Takeover Statutes. If any Takeover Statute shall become applicable to
the transaction contemplated hereby, AMI and the members of the Board of
Directors of AMI shall grant such approvals and take such actions as are
necessary so that the Merger and the transactions contemplated hereby may be
commenced as promptly as practicable in the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or regulation
in the transaction contemplated hereby, except, in each such case, to the extent
required in the exercise of the fiduciary duties of the Board of Directors of
AMI under applicable law as advised by independent counsel.
A-27
33
7.16 Management Incentive Plan. AMI shall cause its current Management
Incentive Plan ("MIC Plan") to terminate effective as of the Closing Date. Each
of the participants in the MIC Plan on the Closing Date shall be entitled to
receive a pro rata amount equal to the amounts accrued with respect to such
participant under the MIC Plan as of such date.
7.17 Existing Agreements With AMI Officers and Employees. NPB confirms
that upon consummation of the Merger, it shall assume the obligations of AMI
under those certain agreements with AMI officers and employees set forth on
Schedule 7.17.
7.18 Consulting Agreements. NPB shall enter into consulting agreements on
the terms and conditions set forth on Schedule 7.18 with the individuals
indicated on such schedule.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any one of which may be waived by both AMI and NPB:
(a) Any waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(b) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act, and shall be
effective at the Effective Time, and no stop order suspending effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceedings or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities laws relating to the issuance or trading
of the NPB Common Stock to be issued to AMI stockholders in connection with
the Merger shall have been received.
(c) This Agreement and the transactions contemplated hereby shall have
been approved and adopted by the favorable vote of a majority of the shares
of outstanding capital stock of AMI entitled to vote thereon at a
stockholders meeting at which a quorum is present in accordance with
applicable law.
(d) No preliminary or permanent injunction or other order by any
federal, state or foreign court of competent jurisdiction which prohibits
the consummation of the Merger shall have been issued and remain in effect.
No statute, rule, regulation, executive order, stay, decree, or judgment
shall have been enacted, entered, issued, promulgated or enforced by any
court or governmental authority which prohibits or restricts the
consummation of the Merger. Other than the filing of the Certificate of
Merger with the Secretary of State of Delaware and the Secretary of State
of Minnesota, all authorizations, consents, orders or approvals of, or
declarations or filings with, and all expirations of waiting periods
imposed by, any governmental entity (all of the foregoing, "Consents")
which are necessary for the consummation of the Merger, other than Consents
the failure to obtain which would not materially, adversely affect the
consummation of the Merger or in the aggregate have a Material Adverse
Effect on the Surviving Corporation and its subsidiaries, taken as a whole,
shall have been filed, occurred or been obtained (all such permits,
approvals, filings and consents and the lapse of all such waiting periods
being referred to as the "Requisite Regulatory Approvals") and all such
Requisite Regulatory Approvals shall be in full force and effect. NPB shall
have received all state securities or blue sky permits and other
authorizations necessary to issue the shares of NPB Common Stock in
exchange for the shares of AMI Common Stock and to consummate the Merger.
(e) There shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, by any federal or state governmental entity which, in connection
with the grant of a Requisite Regulatory Approval, imposes any condition or
restriction upon the Surviving Corporation or its subsidiaries (or, in the
case of any disposition of assets required in connection with such
Requisite Regulatory Approval, upon NPB or its subsidiaries or AMI or its
A-28
34
subsidiaries), including, without limitation, requirements relating to the
disposition of assets, which in any such case would so materially adversely
impact the economic or business benefits of the transactions contemplated
by this Agreement as to render inadvisable the consummation of the Merger.
(f) NPB and AMI shall have received (i) a letter, dated the Closing
Date, addressed to NPB from Price Waterhouse, in response to a letter from
NPB summarizing the relevant facts and in form and substance reasonably
satisfactory to NPB, a copy of which shall be provided to AMI, and (ii) a
letter, dated the Closing Date, addressed AMI from Ernst & Young LLP, in
response to a letter from AMI summarizing the relevant facts and in form
and substance reasonably satisfactory to AMI, a copy of which shall be
given to NPB, in each case to the effect that Price Waterhouse and Ernst &
Young LLP concur with NPB management's and AMI management's conclusion,
respectively, that the Merger qualifies for "pooling of interests"
treatment for financial reporting purposes and that such accounting
treatment is in accordance with generally accepted accounting principles.
Price Waterhouse shall also have received from Ernst & Young, a letter in
form and substance satisfactory to Price Waterhouse, that Ernst & Young is
not aware of any fact concerning AMI or any of its affiliates that would
preclude NPB from accounting for the Merger by the "pooling of interests"
method for financial reporting purposes.
(g) The aggregate amount of cash required to paid on account of all
Excluded Shares and with respect to any cash payments for fractional shares
pursuant to Section 3.4 shall not exceed ten percent (10%) of the value
(determined in accordance with APB Opinion No. 16) of the shares of NPB
Common Stock issuable in exchange for shares of AMI Common Stock at the
Effective Time.
8.2 Conditions to Obligation of AMI to Effect the Merger. The obligation
of AMI to effect the Merger shall be further subject to the satisfaction at or
prior to the Effective Time of the following additional conditions, which may be
waived by AMI:
(a) NPB shall have performed in all material respects its obligations
under this Agreement required to be performed by it at or prior to the
Effective Time and the representations and warranties of NPB contained in
this Agreement shall be true and correct in all material respects at and as
of the Effective Time as if made at and as of such time, except as
contemplated by this Agreement, and AMI shall have received a certificate
of the President or an Executive Vice President of NPB as to the
satisfaction of this condition.
(b) AMI shall have received an opinion of Best & Xxxxxxxx, PLLP,
counsel to AMI, dated the Closing Date, substantially to the effect that,
on the basis of facts, representations, and assumptions set forth in such
opinion which are consistent with the state of facts existing at the
Closing Date, the Merger will be treated for federal income tax purposes as
a reorganization within the meaning of Section 368(a) of the Code and that
NPB and AMI will each be a party to the reorganization within the meaning
of Section 368(b) of the Code. In rendering any such opinion, such counsel
may require and, to the extent they deem necessary and appropriate, may
rely upon representations made in certificates of officers of NPB, AMI,
affiliates of the foregoing and others. In addition, AMI shall have
received the opinion, dated the Closing Date, of Xxxxxxxx & Xxxxxxxx,
counsel for NPB, covering the matters set forth in Exhibit 8.2(b).
(c) There shall not have occurred following the date of this Agreement
and prior to the Closing Date any change, or any event involving a
prospective change, in NPB's business, assets, financial condition or
results of operation which has had, or is reasonably likely to have, in the
aggregate a Material Adverse Effect (other than as a result of changes or
proposed changes in federal or state health care (including health care
reimbursement) laws or regulations of general applicability or
interpretations thereof, changes in generally accepted accounting
principles and changes that could, under the circumstances, reasonably have
been anticipated in light of disclosures made in writing by NPB to AMI
prior to the execution of this Agreement).
(d) The shares of NPB Common Stock to be issued in connection with the
Merger shall have been approved for listing on the Nasdaq National Market.
A-29
35
8.3 Conditions to Obligations of NPB to Effect the Merger. The obligations
of NPB to effect the Merger shall be further subject to the satisfaction at or
prior to the Effective Time of the following additional conditions, which may be
waived by NPB:
(a) AMI shall have performed in all material respects its obligations
under this Agreement required to be performed and complied with by it at or
prior to the Effective Time and the representations and warranties of AMI
contained in this Agreement shall be true and correct in all material
respects at and as of the Effective Time as if made at and as of such time,
except as contemplated by this Agreement, and NPB shall have received a
Certificate of the President or an Executive Vice President of AMI as to
the satisfaction of this condition.
(b) AMI shall have obtained the consent or approval of each person
whose consent or approval shall be required in order to permit the
succession by the Surviving Corporation pursuant to the Merger to any
obligation, right or interest of AMI or any subsidiary under any loan or
credit agreement, note, mortgage, indenture, lease, license or other
agreement or instrument, except those for which failure to obtain such
consents and approvals would not materially adversely affect the
consummation of the transactions contemplated hereby or in the aggregate
have a Material Adverse Effect on the Surviving Corporation and its
subsidiaries taken as a whole.
(c) NPB shall have received the opinion of Xxxxxxxx & Xxxxxxxx,
counsel to NPB, dated the Closing Date and addressed to NPB, to the effect
that, on the basis of facts, representations, and assumptions set forth in
such opinion which are consistent with the state of facts existing at the
Effective Time, the Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code, and
that NPB and AMI will each be a party to that reorganization within the
meaning of Section 368(b) of the Code. In rendering any such opinion, such
counsel may require and, to the extent they deem necessary and appropriate,
may rely upon representations made in certificates of officers of AMI, NPB,
affiliates of the foregoing and others. In addition, NPB shall have
received the opinion, dated the Closing Date, of Best & Xxxxxxxx, PLLP,
counsel for AMI, covering the matters set forth in Exhibit 8.3(c).
(d) There shall not have occurred following the date of this Agreement
and prior to the Closing Date any change, or any event involving a
prospective change, in AMI's business, assets, financial condition or
results of operation which has had, or is reasonably likely to have, in the
aggregate a Material Adverse Effect (other than as a result of changes or
proposed changes in federal or state health care (including health care
reimbursement) laws or regulations of general applicability or
interpretations thereof, changes in generally accepted accounting
principles and changes that could, under the circumstances, reasonably have
been anticipated in light of disclosures made in writing by AMI to NPB
prior to the execution of this Agreement).
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby abandoned at any time prior to the Effective Time, whether
before or after approval by the stockholders of AMI or NPB:
(a) by mutual written consent of NPB and AMI;
(b) by either NPB or AMI if the Merger shall not have been consummated
on or before February 28, 1997
(c) by AMI if there shall have been any material breach of a
representation and warranty or material obligation of NPB hereunder and, if
such breach is curable, such default shall have not been remedied within 10
days after receipt by NPB of notice in writing from AMI specifying such
breach and requesting that it be remedied; provided, that such 10 day
period shall be extended for so long as NPB shall be making all reasonable
attempts to cure such breach, unless the breach is not susceptible of a
cure;
X-00
00
(x) by NPB if there shall have been any material breach of a
representation and warranty or material obligation of AMI hereunder and, if
such breach is curable, such default shall not have been remedied within 10
days after receipt by AMI of notice in writing from NPB specifying such
breach and requesting that it be remedied; provided, that such 10 day
period shall be extended for so long as AMI shall be making all reasonable
attempts to cure such breach, unless the breach is not susceptible of a
cure;
(e) by NPB if the Board of Directors of AMI shall have (i) withdrawn
or modified in a manner adverse to NPB its approval or recommendation (or
failed to make such recommendation) of this Agreement or the Merger, or
shall have resolved to do any of the foregoing, or (ii) recommended an
Acquisition Proposal other than the Merger;
(f) by either NPB or AMI if any court of competent jurisdiction in the
United States or other United States governmental body shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or any
other action shall have become final and non-appealable; provided, that the
party seeking to terminate this Agreement pursuant to this clause (f) shall
have used all reasonable efforts to remove such order, decree or ruling;
(g) by NPB, upon written notice to AMI, if any approval of the
stockholders of AMI required for the consummation of the Merger submitted
for approval shall not have been obtained by reason of the failure to
obtain the required vote at a duly held meeting of stockholders or at any
adjournment thereof;
(h) by AMI, if its Board of Directors, in the exercise of its good
faith judgment as to its fiduciary duties to its stockholders under
applicable law as advised by independent counsel, determines that such
termination is required by reason of another Acquisition Proposal being
made with respect to AMI; or
(i) by AMI, if the Closing Market Value of NPB Common Stock is less
than $22.75; provided that NPB may negate such termination by notifying
AMI, within 24 hours of receiving AMI's termination notice (both of which
notices may be given orally), of NPB's election to determine the Exchange
Ratio by dividing (A) $10.00 by (B) the Closing Market Value.
9.2 Effect of Termination. In the event of termination of this Agreement
as provided above, this Agreement shall forthwith become of no further effect
and, except for a termination resulting from a breach by a party of this
Agreement, there shall be no liability or obligation on the part of either NPB
or AMI or their respective officers or directors (except as set forth in Section
7.1(b) hereof and except for Sections 7.11, 9.3, and 10.2 hereof which shall
survive the termination). Moreover, in the event of termination of this
Agreement pursuant to Section 9.1(c) or 9.1(d), nothing herein shall prejudice
the ability of the non-breaching party from seeking damages from any other party
for any breach of this Agreement, including, without limitation, attorneys' fees
and the right to pursue any remedy at law or in equity. Upon request therefor,
each party will redeliver or, at the option of the party receiving such request,
destroy all Reports, work papers and other material of any other party relating
to the transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing same.
9.3 Cancellation Fees; Expenses.
(a) If at any time (i) AMI shall have entered into an agreement, including
without limitation an agreement in principle, with respect to an Acquisition
Proposal, other than the Merger contemplated by this Agreement; (ii) AMI shall
breach any of the provisions of Section 7.2 above or shall recommend or approve
an Acquisition Proposal pursuant to Section 7.2; or (iii) any person, entity or
group of persons or entities acting in concert shall acquire beneficial
ownership of more than fifteen percent (15%) of the voting securities of AMI as
a result of an Acquisition Proposal and, in the case of (i) or (ii), this
Agreement is terminated pursuant to Section 9.1(d), Section 9.1(e), Section
9.1(g) or Section 9.1(h); then NPB shall be entitled to be paid by AMI a fee in
cash or immediately available funds of One Million Eight Hundred Thousand U.S.
Dollars ($1,800,000) (the "Cancellation Fee").
(b) AMI shall pay to NPB the Cancellation Fee provided in Section 9.3(a)
above within ten (10) days of written demand therefor by the NPB. The payment of
the Cancellation Fee shall be conditioned on there
A-31
37
being no material breach of the obligations of NPB hereunder. If AMI fails to
pay any amount due NPB pursuant to this Section 9.3 when due, AMI shall pay
interest thereon, from the date due until the date paid in full, at the Prime
Rate as announced from time to time by Bank of America or any successor thereto
(the "Prime Rate") and shall reimburse NPB for all reasonable attorneys' fees
and other costs and expenses incurred by NPB in collecting such amount from AMI.
(c) In the event that either AMI or NPB terminates this Agreement pursuant
to, respectively, Section 9.1(c) or Section 9.1(d) hereof, then the
nonterminating party shall pay to the terminating party the terminating party's
reasonable out-of-pocket expenses incurred in connection with the negotiation,
execution and performance of this Agreement and the transactions contemplated
hereby (including, without limitation, the fees and expenses of its advisors,
accountants and legal advisors) ("Expense Reimbursement Payment"); provided,
however, that the terminating party shall not be entitled to any Expense
Reimbursement Payment pursuant to this Section 9.3(c) if at the time of
termination the nonterminating party also would have been entitled to terminate
this Agreement pursuant to Section 9.1(c) or Section 9.1(d), as applicable.
(d) In the event that this Agreement is terminated pursuant to Section
9.1(a), (b), or (f), then NPB shall pay to AMI a reimbursement fee equal to the
lesser of $500,000 or all of AMI's documented out-of-pocket expenses with
respect to the matters set forth in Schedule 9.3(d).
9.4 Amendment. This Agreement may be amended by action taken by NPB and
AMI at any time before or after approval hereof by the stockholders of AMI, but,
after any such approval, no amendment shall be made which alters the Exchange
Ratio or which in any way materially adversely affects the rights of such
stockholders, without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
9.5 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. Such waiver shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations, Warranties and Agreements. No
representations, warranties or agreements contained herein shall survive beyond
the Effective Time except that the agreements contained in Sections 3.1, 3.2,
3.3, 3.4, 3.5, 3.7, 7.7, 7.8, 7.9, 7.11, 7.12(a), 7.16, 7.17, 7.18, 9.3, 10.1,
10.6 and 10.7 hereof shall survive beyond the Effective Time, and the agreements
of the Affiliates delivered pursuant to Section 6.6 shall survive beyond the
Effective Time.
10.2 Brokers.
(a) AMI represents and warrants to NPB that, (i) except for its financial
advisor, Xxxx Xxxxxxxx Incorporated, no broker, finder or financial advisor is
entitled to any brokerage, finder's or other fee or commission in connection
with the Merger or the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of AMI and (ii) a true and complete copy of
all engagement letters or agreements between AMI and Xxxx Xxxxxxxx Incorporated
and between AMI and any third party for whom any amounts payable contingent upon
consummation of the Merger, have previously been delivered to NPB.
(b) NPB represents and warrants to AMI that, (i) except for its financial
advisors, Xxxxxxxxx, Xxxxxxxx & Company, L.P., no broker, finder or financial
advisor is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger or the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of NPB and (ii) a true and complete
copy of engagement letter or agreement between NPB and Xxxxxxxxx, Xxxxxxxx &
Company, L.P. and between NPB and any third party
A-32
38
for whom any amounts payable are contingent upon consummation of the Merger,
have previously been delivered to AMI.
10.3 Notices. All notices, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by telex or telecopy or mailed by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to NPB, to:
Nellcor Puritan Xxxxxxx Incorporated
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention:Xxxxxxx XxXxxxx
Executive Vice President, Human Resources,
General Counsel and Corporate Secretary
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
Twelfth Floor
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Xx., Esq.
(b) If to AMI, to:
Aequitron Medical, Inc.
14800 -- 00xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention:Xxxx Xxxxx
Chief Financial Officer
with a copy to:
Best & Xxxxxxxx, XXXX
0000 First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Esq.
10.4 Descriptive Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.5 Entire Agreement; Assignment. This Agreement (including the Exhibits,
Disclosure Schedules and other Reports and instruments referred to herein) and
the Confidentiality Agreement (a) constitute the entire agreement and supersedes
all other prior agreements and understandings, both written and oral, among the
parties or any of them, with respect to the subject matter hereof; (b) except
for Sections 7.7, 7.8, 7.9, 7.16, 7.17, and 7.18, is not intended to confer upon
any other person any rights or remedies hereunder; and (c) shall not be assigned
by operation of law or otherwise, provided that NPB may assign its rights and
obligations hereunder to a direct or indirect subsidiary of NPB, but no such
assignment shall relieve NPB of its obligations hereunder.
10.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
provisions thereof relating to conflicts of law.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
10.8 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not effect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
A-33
39
10.9 Jurisdiction and Venue. Each party hereto hereby agrees that any
proceeding relating to this Agreement and the Merger shall be brought in a state
court of Delaware. Each party hereto hereby consents to personal jurisdiction in
any such action brought in any such Delaware court, consents to service of
process by registered mail made upon such party and such party's agent and
waives any objection to venue in any such Delaware court or to any claim that
such Delaware court is an inconvenient forum.
10.10 Investigation. The respective representations of warranty of NPB and
AMI contained herein or in the certificates or other Reports delivered prior to
the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party hereto.
10.11 Consents. For purposes of any provision of this Agreement requiring,
permitting or providing for the consent of NPB or AMI, the written consent of
the Chief Executive Officer of NPB or AMI, as the case may be shall be
sufficient to constitute such consent.
IN WITNESS WHEREOF, each of NPB and AMI has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized, all as of the
date first above written.
Nellcor Puritan Xxxxxxx Incorporated
By: /s/ C. XXXXXXX XXXXXX,
XX.
------------------------------------
Name: C. Xxxxxxx Xxxxxx, Xx.
Title: President and Chief
Executive Officer
Aequitron Medical, Inc.
By: /s/ XXXXX X. XXXXXX, XX.
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Executive Officer and
President
A-34
