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AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF FEBRUARY 4, 1996
BY AND BETWEEN
X. X. XXXXX & CO.
AND
FRESENIUS AG
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TABLE OF CONTENTS
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RECITALS
A. Defined Terms ........................................ 1
B. Newco ................................................ 1
C. The Contribution ..................................... 1
D. The Distribution ..................................... 1
E. The Recapitalization ................................. 1
F. The Mergers and the Recapitalization ................. 1
G. Financing ............................................ 2
H. Intention of the Parties ............................. 2
I. Approvals ............................................ 2
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
Section 1.1. The Distribution, Newco and the
Contribution .............................. 2
Section 1.2. The Recapitalization and the Mergers ................. 3
Section 1.3. Effective Time ....................................... 3
Section 1.4. Closing .............................................. 3
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
Section 2.1. Grace Certificate of Incorporation .................... 3
Section 2.2. Grace By-laws ......................................... 4
Section 2.3. Fresenius USA Articles of Organization ................ 4
Section 2.4. Fresenius USA By-laws ................................. 4
ARTICLE III
DIRECTORS AND OFFICERS
Section 3.1. Grace Directors ....................................... 4
Section 3.2. Grace Officers ........................................ 4
Section 3.3. Fresenius USA Directors ............................... 4
Section 3.4. Fresenius USA Officers ................................ 4
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ARTICLE IV
MERGER CONSIDERATION; CONTRIBUTION CONSIDERATION;
CONVERSION OR CANCELLATION OF SHARES IN THE MERGERS
Section 4.1. Grace Merger Consideration; Conversion or
Cancellation of Grace Capital Stock ................. 4
Section 4.2. Fresenius USA Merger Consideration; Conversion or
Cancellation of Fresenius USA Capital Stock ........ 5
Section 4.3. Fresenius AG Consideration ............................ 6
Section 4.4. Exchange of Old Certificates for New
Certificates ....................................... 6
(a) Appointment of Exchange Agent .......... 6
(b) Exchange Procedures .................... 6
(c) Fractional Shares ...................... 7
(d) Distributions with Respect to
Unexchanged Shares .................. 8
(e) No Transfers ........................... 8
(f) No Liability ........................... 8
(g) Withholding Rights ..................... 8
(h) Transfer Taxes ......................... 9
(i) Stock Options and Warrants ............. 9
Section 4.5. Dissenters' Rights .................................... 9
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Representations and Warranties of Grace ....... 10
(a) Capital Stock .......................... 10
(b) Corporate Organization and
Qualification ...................... 11
(c) Corporate Authority .................... 11
(d) Governmental Filings; No Violations .... 11
(e) SEC Documents; Financial Statements;
No Undisclosed Liabilities .......... 12
(f) Absence of Certain Events and Changes .. 13
(g) Compliance with Laws ................... 14
(h) Title to Assets ........................ 14
(i) Litigation ............................. 14
(j) Taxes .................................. 14
(k) Employee Benefits ...................... 15
(l) Environmental Matters .................. 17
(m) Rights Plan ............................ 17
(n) Takeover Statutes ...................... 17
(o) Brokers and Finders .................... 17
(p) Tax Matters ............................ 17
(q) Information in Disclosure Documents
and Registration Statements ......... 17
(r) Trademarks, Patents and Copyrights ..... 18
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(s) Assets 18
(t) Disclosure ............................. 18
Section 5.2. Representations and Warranties of Fresenius
USA ................................ 18
(a) Capital Stock .......................... 18
(b) Corporate Organization and
Qualification ...................... 19
(c) Corporate Authority .................... 20
(d) Governmental Filings; No Violations .... 20
(e) SEC Documents; Financial Statements;
No Undisclosed Liabilities .......... 21
(f) Absence of Certain Events and Changes .. 22
(g) Compliance with Laws ................... 22
(h) Title to Assets ........................ 22
(i) Litigation ............................. 23
(j) Taxes .................................. 23
(k) Employee Benefits ...................... 23
(l) Environmental Matters .................. 25
(m) Takeover Statutes ...................... 25
(n) Brokers and Finders .................... 25
(o) Information in Disclosure
Documents and Registration
Statements ....................... 25
(p) Trademarks, Patents and Copyrights ..... 26
(q) Disclosure ............................. 26
Section 5.3. Representations and Warranties of
Fresenius AG ............................ 26
(a) Corporation Organization and
Qualification ....................... 26
(b) Corporate Authority .................... 27
(c) Governmental Filings; No Violations .... 27
(d) Takeover Statutes ...................... 28
(e) Brokers and Finders .................... 28
(f) Contribution ........................... 28
(g) Tax Matters ............................ 28
(h) Information in Disclosure
Documents and
Registration Statements ............. 28
(i) Disclosure ............................. 29
Section 5.4. Representations and Warranties for the
FWD Business .............................. 29
(a) Corporate Organization and
Qualification ....................... 29
(b) Corporate Authority .................... 29
(c) Capitalization ......................... 29
(d) Financial Statements; No Undisclosed
Liabilities ......................... 30
(e) Absence of Certain Events and Changes .. 30
(f) Compliance with Laws ................... 30
(g) Title to Assets ........................ 31
(h) Litigation ............................. 31
(i) Taxes .................................. 31
(j) Environmental Matters .................. 32
(k) Governmental Filings; No Violations .... 32
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(l) Contracts and Commitments .............. 33
(m) Employee Benefit Plans ................. 33
(n) Lease 34
(o) Trademarks, Patents and Copyrights ..... 34
Section 5.5. Certain Definitions Relating to the
FWD Business .............................. 35
(a) FWD Business .............................. 35
(b) FWD Business Assets ....................... 35
(c) FWD Business Subsidiaries ................. 35
(d) Fresenius AG Restructuring ................ 35
ARTICLE VI
COVENANTS
Section 6.1. Interim Operations ............................ 35
Section 6.2. Newco Capital ................................. 37
Section 6.3. Acquisition Proposals ......................... 38
Section 6.4. Information Supplied .......................... 39
Section 6.5. Shareholder Approvals ......................... 39
Section 6.6. Filings; Other Actions ........................ 40
Section 6.7. Audited Financial Statements .................. 41
Section 6.8. Access ........................................ 43
Section 6.9. Notification of Certain Matters ............... 43
Section 6.10. Publicity ..................................... 43
Section 6.11. [Intentionally Omitted] ....................... 43
Section 6.12. Employee Benefits ............................. 43
Section 6.13. Expenses and Liquidated Damages ............... 44
Section 6.14. Grace Rights Agreement ........................ 45
Section 6.15. Antitakeover Statutes ......................... 45
Section 6.16. Securities Act Compliance ..................... 45
Section 6.17. Stock Exchange Listing ........................ 45
Section 6.18. Transaction Agreements ........................ 45
Section 6.19. Tax Matters ................................... 45
ARTICLE VII
CONDITIONS
Section 7.1. Conditions to Each Party's Obligation ......... 46
(a) Shareholder Approval ................... 46
(b) Governmental and Regulatory Consents ... 46
(c) Third-Party Consents ................... 46
(d) Litigation ............................. 46
(e) Grace Tax Opinion ...................... 46
(f) Registration Statements ................ 47
(g) Financing .............................. 47
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(h) The Distribution ....................... 47
(i) Stock Exchange Listing ................. 47
(j) Fresenius AG Debt ...................... 47
(k) Grace Debt ............................. 47
Section 7.2. Conditions to Obligation of Grace ............. 47
(a) Representations and Warranties ......... 47
(b) Performance of Obligations ............. 47
(c) Pooling Agreement Opinion............... 47
(d) Fresenius AG Tax Opinion ............... 48
Section 7.3. Conditions to Obligation
Concerning Fresenius USA ........... 48
(a) Representations and Warranties ......... 48
(b) Performance of Obligations ............. 48
(c) Pooling Agreement Opinion .............. 48
Section 7.4. Conditions to Obligation of Fresenius AG ...... 48
(a) Representations and Warranties ......... 48
(b) Performance of Obligations ............. 48
ARTICLE VIII
TERMINATION
Section 8.1. Termination by Mutual Consent ................. 49
Section 8.2. Termination by any Party Hereto ............... 49
Section 8.3. Termination by Grace .......................... 49
Section 8.4. Termination by Either Fresenius Party ......... 49
Section 8.5. Effect of Termination and Abandonment ......... 49
ARTICLE IX
MISCELLANEOUS AND GENERAL
Section 9.1. Survival ...................................... 50
Section 9.2. Modification or Amendment ..................... 50
Section 9.3. Waiver of Conditions .......................... 50
Section 9.4. Counterparts .................................. 50
Section 9.5. Governing Law ................................. 50
Section 9.6. Notices ....................................... 50
Section 9.7. Entire Agreement, etc. ........................ 51
Section 9.8. Definitions of "Subsidiary" and "Significant
Subsidiary" ................................ 51
Section 9.9. Captions ...................................... 52
Section 9.10. Specific Performance .......................... 52
Section 9.11. Severability .................................. 52
Section 9.12. No Third-Party Beneficiaries .................. 52
Section 9.13. Fresenius AG Covenant ......................... 52
Section 9.14. Further Assurances ............................ 52
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Annex A Defined Terms
Exhibit A Distribution Agreement
Exhibit B [Intentionally omitted]
Exhibit C Certain Terms of NY Preferred Shares
Exhibit D Certain Terms of Newco Pooling Agreement
Exhibit E Contribution Agreement
Exhibit F [Intentionally omitted]
Exhibit G Tax Matters Certificates
Exhibit H Form of Grace Tax Opinions
Exhibit I Form of Fresenius AG Tax Opinion
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AGREEMENT AND PLAN OF REORGANIZATION, dated as of February 4,
1996 (this "Agreement" or the "Reorganization Agreement"), by and between X. X.
XXXXX & CO., a New York corporation ("Grace"), and FRESENIUS AG, an
Aktiengesellschaft organized under the laws of the Federal Republic of Germany
("Fresenius AG").
RECITALS
A. Defined Terms. Certain capitalized terms used herein shall
have the meanings set forth in Annex A hereto.
B. Newco. Prior to the Effective Time, Fresenius AG intends
(a) to convert a wholly owned GmbH subsidiary into an Aktiengesellschaft
organized under the laws of the Federal Republic of Germany ("Newco"), having
charter documents (the "Newco Charter Documents") and other organizational
documents consistent with the terms set forth in Exhibit D hereto and subject to
the approval of each party hereto, and (b) to enter into a Pooling Agreement
consistent with the terms set forth in Exhibit D hereto and subject to the
approval of each party hereto (the "Newco Pooling Agreement").
C. The Contribution. Prior to the Effective Time, Fresenius AG
intends to contribute its worldwide dialysis business (including its shares of
capital stock of Fresenius USA) to Newco (the "Contribution") pursuant to the
Contribution Agreement attached hereto as Exhibit E (the " Contribution
Agreement"), and shall retain and lease to Newco its real property and buildings
in the Federal Republic of Germany to the extent used in connection with the FWD
Business pursuant to a lease (or leases) (the "Lease") consistent with the terms
set forth in Exhibit B to the Contribution Agreement, and subject to the
approval of each party hereto, and shall retain and license to Newco its name
and certain related marks pursuant to a license consistent with the terms set
forth in Exhibit C to the Contribution Agreement, and subject to the approval of
each party hereto.
D. The Distribution. Simultaneously herewith, X. X. Xxxxx &
Co.-Xxxx., a Connecticut corporation ("Grace-Conn."), are entering into the
Distribution Agreement attached hereto as Exhibit A (the "Distribution
Agreement") and, prior to the Effective Time, intend to consummate the
transactions contemplated thereby. Prior to the Effective Time, Grace intends to
transfer to (or retain in) Grace-Conn. all non-healthcare assets and
liabilities, its interests in the Amicon bioseparations business and GN
Holdings, Inc. and certain other assets, as contemplated by the Distribution
Agreement, and to effect a distribution to its common shareholders of all of its
equity interest in Grace-Conn. (the "Distribution").
E. The Recapitalization. Immediately prior to the Effective
Time, but following the Distribution, Grace shall be recapitalized (the
"Recapitalization") so that each holder of a Grace Common Share shall thereafter
hold one Grace Common Share and one one-hundredth of a NY Preferred Share.
F. The Mergers. At the Effective Time, the parties intend to
effect a merger of a wholly owned New York corporate subsidiary of Newco ("Grace
Merger Sub") with and into Grace, with Grace being the surviving corporation
(the "Grace Merger"), and that
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the Certificate of Incorporation of Grace shall be amended (the "Grace
Amendment") to change the name of Grace to a name mutually acceptable to the
parties hereto. Also at the Effective Time, the parties intend to effect a
merger of a wholly owned Massachusetts corporate subsidiary of Newco ("Fresenius
USA Merger Sub") with and into Fresenius USA, Inc., a Massachusetts corporation
("Fresenius USA" and, together with Fresenius AG, the "Fresenius Parties"), with
Fresenius USA being the surviving corporation (the "Fresenius USA Merger" and,
together with the Grace Merger, the "Mergers"), and Fresenius AG has committed
to vote its shares of Fresenius USA in favor of the Fresenius USA Merger, as
provided herein.
G. Financing. It is the intention of the parties hereto that,
prior to the Distribution: (i) Grace and Grace-Conn. shall use reasonable
efforts to cause NMC to arrange new credit facilities so that the transactions
contemplated by the Transaction Agreements may be consummated; (ii) Fresenius AG
shall use reasonable efforts to arrange new credit facilities for the FWD
Business so that the transactions contemplated by the Transaction Agreements may
be consummated; and (iii) the parties shall cooperate with one another with
respect to the foregoing.
H. Intention of the Parties. It is the intention of the
parties to this Agreement that for United States federal income tax purposes (a)
the Contribution shall qualify as a tax-free exchange under the Code, (b) the
Distribution shall qualify as a tax-free distribution under the Code, (c) the
Recapitalization shall be tax-free to Grace under the Code and (d) each of the
Mergers shall qualify as a "reorganization" within the meaning of Section 368(a)
of the Code.
I. Approvals. The Board of Directors of each party hereto has
determined that this Agreement is in the best interests of such party and its
shareholders and has duly approved this Agreement and authorized its execution
and delivery.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE REORGANIZATION; CLOSING; EFFECTIVE TIME
SECTION 1.1. The Distribution, Newco and the Contribution. (a)
Subject to the terms and conditions of the Distribution Agreement, prior to the
Effective Time, the parties thereto shall effect the various transactions
contemplated thereby including, immediately prior to the Effective Time, the
Distribution.
(b) Prior to the Effective Time, Fresenius AG shall cause
Newco to adopt the Newco Charter Documents (which shall be satisfactory to the
other parties hereto), shall cause Newco to adopt other organizational documents
as may be necessary or advisable (which shall be satisfactory to the other
parties hereto) and shall enter into, and shall cause Newco to enter into, the
Newco Pooling Agreement (which shall be satisfactory to the other parties
hereto).
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(c) Subject to the terms and conditions of the Contribution
Agreement, prior to the Effective Time, Fresenius AG shall effect the various
transactions contemplated by the Contribution Agreement including the
Contribution.
SECTION 1.2. The Recapitalization and the Mergers. (a) Subject
to the terms and conditions of this Agreement, immediately prior to the
Effective Time, but following the Distribution, Grace shall consummate the
Recapitalization.
(b) At the Effective Time, Grace and Grace Merger Sub shall
consummate the Grace Merger in which Grace Merger Sub shall be merged with and
into Grace and the separate corporate existence of Grace Merger Sub shall
thereupon cease. Grace shall be the surviving corporation of the Grace Merger
(the "Grace Surviving Corporation") and shall continue to be governed by the
laws of the State of New York.
(c) Subject to the terms and conditions of this Agreement, at
the Effective Time, Fresenius USA and Fresenius USA Merger Sub shall consummate
the Fresenius USA Merger in which Fresenius USA Merger Sub shall be merged with
and into Fresenius USA and the separate corporate existence of Fresenius USA
Merger Sub shall thereupon cease. Fresenius USA shall be the surviving
corporation of the Fresenius USA Merger (the "Fresenius USA Surviving
Corporation") and shall continue to be governed by the laws of the Commonwealth
of Massachusetts.
SECTION 1.3. Effective Time. Fresenius USA and Fresenius USA
Merger Sub shall cause a certificate of merger to be submitted to the Department
of State of the Commonwealth of Massachusetts as provided in the MBCL (the
"Massachusetts Certificate"). The Fresenius USA Merger shall become effective at
such time as the Massachusetts Certificate has been filed by the Department of
State of the Commonwealth of Massachusetts in accordance with the provisions of
the MBCL or at such other time as may be specified in the Massachusetts
Certificate in accordance with applicable law. The date and time when the
Fresenius USA Merger shall become effective is referred to herein as the
"Effective Time." Grace and Grace Merger Sub shall cause articles of merger to
be submitted to the Department of State of the State of New York as provided in
the NYBCL (the "New York Certificate "). The New York Certificate shall provide
that the Grace Merger shall become effective at the Effective Time in accordance
with applicable law.
SECTION 1.4. Closing. The closing of the Reorganization (the
"Closing") shall take place at the offices of Wachtell, Lipton, Xxxxx & Xxxx,
New York, New York, at 10:00 A.M. on the first business day on which all the
conditions set forth in Article VII can be fulfilled or are waived, or at such
other place and/or time as the parties hereto may agree. The date upon which the
Closing shall occur is herein called the "Closing Date."
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
SECTION 2.1. Grace Certificate of Incorporation. The
certificate of incorporation of Grace, as in effect at the Effective Time and
taking into account the Grace Amendment, shall be the certificate of
incorporation of the Grace Surviving Corporation
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(the "Grace Certificate of Incorporation"), until duly amended in accordance
with the terms thereof and the NYBCL.
SECTION 2.2. Grace By-laws. The By-laws of Grace, as in effect
at the Effective Time, shall continue as the By-laws of the Grace Surviving
Corporation until duly amended in accordance with the terms thereof, the Grace
Certificate of Incorporation and the NYBCL.
SECTION 2.3. Fresenius USA Articles of Organization. The
articles of organization of Fresenius USA, as in effect at the Effective Time,
shall be the articles of organization of the Fresenius USA Surviving Corporation
(the "Fresenius USA Articles of Organization"), until duly amended in
accordance with the terms thereof and the MBCL.
SECTION 2.4. Fresenius USA By-laws. The By-laws of Fresenius
USA, as in effect at the Effective Time, shall continue as the By-laws of the
Fresenius USA Surviving Corporation, until duly amended in accordance with the
terms thereof, the Fresenius USA Articles of Organization and the MBCL.
ARTICLE III
DIRECTORS AND OFFICERS
SECTION 3.1. Grace Directors. Immediately after the Effective
Time, the directors of Grace Merger Sub shall be the directors of the Grace
Surviving Corporation.
SECTION 3.2. Grace Officers. Immediately after the Effective
Time, the officers of Grace Merger Sub shall be the officers of the Grace
Surviving Corporation.
SECTION 3.3. Fresenius USA Directors. Immediately after the
Effective Time, the directors of Fresenius USA Merger Sub shall be the directors
of the Fresenius USA Surviving Corporation.
SECTION 3.4. Fresenius USA Officers. Immediately after the
Effective Time, the officers of Fresenius USA Merger Sub shall be the officers
of the Fresenius USA Surviving Corporation.
ARTICLE IV
MERGER CONSIDERATION; CONTRIBUTION CONSIDERATION;
CONVERSION OR CANCELLATION OF SHARES IN THE MERGERS
SECTION 4.1. Grace Merger Consideration; Conversion or
Cancellation of Grace Capital Stock. At the Effective Time, by virtue of the
Grace Merger and without any action on the part of the holder of any capital
stock of Grace:
(a) Subject to Section 4.4(c), each Grace Common Share issued
and outstanding immediately prior to the Effective Time (other than any
Grace Common
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Share owned by Fresenius AG or its subsidiaries or
Fresenius USA or its subsidiaries or any Grace subsidiary or held in
Grace's treasury or any Grace Common Dissenting Share) shall be
converted at the Effective Time into the right to receive the Grace
Consideration Per Share.
(b) Each Grace Preferred Share and each NY Preferred Share
issued and outstanding immediately prior to the Effective Time shall
remain issued and outstanding and shall be unchanged by the Grace
Merger.
(c) All Grace Common Shares shall cease to be outstanding,
shall be cancelled and retired and shall cease to exist, and each
holder of an Old Grace Common Certificate (other than holders of Old
Grace Common Certificates representing Grace Common Dissenting Shares)
shall there after cease to have any rights with respect to such Old
Grace Common Certificates, except the right to receive, without
interest, upon exchange of such Old Grace Common Certificates in
accordance with Section 4.4, the Newco Ordinary Share Certificates and
payments to which such holder is entitled pursuant to this Article IV.
(d) Each Grace Common Share issued and outstanding immediately
prior to the Effective Time and owned by Fresenius AG or its
subsidiaries or Fresenius USA or its subsidiaries or any Grace
subsidiary or held in Grace's treasury shall cease to be outstanding,
shall be cancelled and retired without payment of any consideration
therefor and shall cease to exist.
(e) Each share of Grace Merger Sub common stock issued and
outstanding immediately prior to the Effective Time shall be converted
into and become one share of common stock of the Grace Surviving
Corporation.
SECTION 4.2. Fresenius USA Merger Consideration; Conversion or
Cancellation of Fresenius USA Capital Stock. At the Effective Time, by virtue of
the Fresenius USA Merger and without any action on the part of the holder of any
capital stock of Fresenius USA:
(a) Subject to Section 4.4(c), each Fresenius USA Common Share
issued and outstanding immediately prior to the Effective Time
(other than any Fresenius USA Common Share owned by
Fresenius AG or its subsidiaries or Grace or its subsidiaries or any
Fresenius USA subsidiary or held in Fresenius USA's treasury or any
Fresenius USA Common Dissenting Share) shall be converted at the
Effective Time into the right to receive the Fresenius USA
Consideration Per Share.
(b) All Fresenius USA Common Shares and Fresenius USA
Preferred Shares shall cease to be outstanding, shall be cancelled and
retired and shall cease to exist, and each holder of an Old Fresenius
USA Common Certificate (other than holders of Old Fresenius USA Common
Certificates representing Fresenius USA Common Dissenting Shares) shall
thereafter cease to have any rights with respect to such Old Fresenius
USA Common Certificates, except the right to receive, without interest,
upon exchange of such Old Fresenius USA Common Certificates in
accordance with Section 4.4, the Newco Ordinary Share Certificates and
payments to which such holder is entitled pursuant to this Article IV.
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(c) Each Fresenius USA Common Share issued and outstanding
immediately prior to the Effective Time and owned by Grace or its
subsidiaries or Fresenius AG or its subsidiaries or Newco or any
Fresenius USA subsidiary or held in Fresenius USA's treasury, and each
Fresenius USA Preferred Share, shall cease to be outstanding, shall be
cancelled and retired without payment of any consideration therefor
(except, as provided in Section 4.3) and shall cease to exist.
(d) Each share of Fresenius USA Merger Sub capital stock
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock of the Fresenius
USA Surviving Corporation.
(e) Prior to the vote of holders of Fresenius USA Common
Shares to be held with respect to the Fresenius USA Merger, Fresenius
AG shall advise Grace in writing as to the aggregate consideration to
be given to Fresenius USA shareholders (other than Fresenius AG and its
subsidiaries) in the Fresenius USA Merger (the "Aggregate Fresenius
USA Common Share Consideration"); provided that (i) to the extent that
the Aggregate Fresenius USA Common Share Consideration includes any
Newco Ordinary Shares, such shares shall be allocated to the holders of
Fresenius USA Common Share Equivalent (other than Fresenius AG and
its subsidiaries) in lieu of Newco Ordinary Shares which would
otherwise have been allocated to Fresenius AG under Section 4.3; (ii)
holders of Grace Common Share Equivalents shall be allocated in the
Reorganization, in the aggregate, 44.8% of Newco's equity securities
outstanding immediately following the Reorganization on a fully
diluted basis; (iii) Fresenius AG shall be allocated in the
Reorganization, in the aggregate, no less than 51%
of Newco's equity securities outstanding immediately following the Re
organization on a fully diluted basis; (iv) such transaction shall not
adversely affect the tax-free nature of the Distribution, the
Contribution or the Grace Merger; and (v) no additional costs or
expenses (including applicable taxes) shall be borne by Grace,
Fresenius USA or Newco as a result thereof, other than costs and
expenses for which Fresenius AG has agreed to reimburse Grace,
Fresenius USA or Newco, as applicable, at the Closing.
SECTION 4.3. Fresenius AG Consideration. At the Effective
Time, in consideration of the Contribution and the contribution to Newco of the
Fresenius USA Common Shares and the Fresenius USA Preferred Shares owned by
Fresenius AG and its subsidiaries (as provided in the Contribution Agreement),
and in consideration of the Fresenius USA Merger, Fresenius AG shall be
allocated 55.2% of the Newco Ordinary Shares that will be outstanding
immediately following consummation of the Reorganization on a fully diluted
basis.
SECTION 4.4. Exchange of Old Certificates for New
Certificates. (a) Appointment of Exchange Agent. From and after the Effective
Time until the end of the six-month period following the Effective Time, the
Surviving Corporations shall make available or cause to be made available to an
exchange agent appointed prior to the Effective Time by Newco with the approval
of each of Grace and Fresenius AG (the "Exchange Agent") Newco Ordinary Share
Certificates and cash in amounts sufficient to allow the Exchange Agent to make
all deliveries of Newco Ordinary Share Certificates and payments that may be
required in exchange for Old Certificates pursuant to this Article IV.
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(b) Exchange Procedures. Promptly after the Effective Time,
the Surviving Corporations shall cause the Exchange Agent to mail or deliver to
each person (other than any party hereto or its subsidiaries and any holder of
Dissenting Shares) who was, at the Effective Time, a holder of record of Grace
Common Shares or, if applicable, Fresenius USA Common Shares a form (the terms
of which shall be mutually agreed upon by the parties hereto prior to the
Effective Time) of letter of transmittal containing instructions for use in
effecting the surrender of the Old Certificates in exchange for ADRs or Newco
Ordinary Share Certificates and payments pursuant to this Article IV. Upon
surrender to the Exchange Agent of an Old Certificate for cancellation together
with such letter of transmittal, duly executed and completed in accordance with
the instructions thereto, the holder of such Old Certificate shall be entitled
to receive in exchange therefor ADRs or a Newco Ordinary Share Certificate
representing the Newco Ordinary Shares, and a check in the amount to which such
holder is entitled pursuant to this Article IV, and the Old Certificate so
surrendered shall forthwith be cancelled. No interest shall be paid or shall
accrue on the amount payable upon surrender of Old Certificates. If any ADR or
Newco Ordinary Share Certificate is to be issued in a name other than that in
which the Old Certificate surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the person requesting such exchange
shall pay any transfer or other taxes required by reason of the issuance of such
ADR or Newco Ordinary Share Certificate in a name other than that of the
registered holder of the Old Certificate surrendered, or shall establish to the
satisfaction of the applicable Surviving Corporation that any such taxes have
been paid or are not applicable. Six months after the Effective Time, each
Surviving Corporation shall be entitled to cause the Exchange Agent to deliver
to it any applicable ADRs or Newco Ordinary Share Certificates and cash
(including any interest thereon) made available to the Exchange Agent that are
unclaimed by the former shareholders of its constituent corporations. Any such
former shareholders who have not theretofore exchanged their Old Certificates
for ADRs or Newco Ordinary Share Certificates and cash pursuant to this Article
IV shall thereafter be entitled to look exclusively to the applicable Surviving
Corporation and only as general creditors thereof for the Newco Ordinary Shares
and cash to which they become entitled upon exchange of their Old Certificates
pursuant to this Article IV. Each Surviving Corporation shall pay all applicable
charges and expenses, including its applicable share of those of the Exchange
Agent, in connection with the exchange of ADRs or Newco Ordinary Share
Certificates and cash for Old Certificates as contemplated hereby.
(c) Fractional Shares. No fractional ADRs or Newco Ordinary
Shares shall be issued in the Reorganization. In lieu of any such fractional
shares, each person who would otherwise have been entitled to a fraction of an
ADR or Newco Ordinary Share upon surrender of an Old Certificate for exchange
pursuant to this Article IV shall be paid an amount in cash (without interest)
equal to such holder's proportionate interest in the net proceeds from the sale
or sales in the open market by the Exchange Agent, on behalf of all such
holders, of the aggregate fractional ADRs or Newco Ordinary Shares issued
pursuant to this Article IV. As soon as practicable following the Effective
Time, the Exchange Agent shall determine the excess of (i) the number of full
ADRs or Newco Ordinary Shares delivered to the Exchange Agent over (ii) the
aggregate number of full ADRs or Newco Ordinary Shares to be distributed in
respect of Grace Common Shares or Fresenius USA Common Shares (such excess being
herein called the "Excess Shares"), and the Exchange Agent, as agent for the
former holders of such shares, shall sell the Excess Shares at the prevailing
prices on the open market. The sale of the Excess Shares by the Exchange Agent
shall be executed on a public exchange through one or more firms and shall be
executed in round lots to the extent practicable; and, at the discretion of the
Exchange Agent, the
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Excess Shares may be exchanged for ADRs pursuant to the ADR Facility and such
ADRs shall be sold on the Exchange as aforesaid in lieu of the Excess Shares.
Newco shall pay all commissions, transfer taxes and other out-of-pocket
transaction costs, including the expenses and compensation of the Exchange
Agent, incurred in connection with such sale of Excess Shares. Until the net
proceeds of such sale or sales have been distributed, the Exchange Agent shall
hold such proceeds in trust for such former stockholders (the "Fractional
Securities Fund"). As soon as practicable after the determination of the amount
of cash to be paid in lieu of any fractional interests, the Exchange Agent shall
make available in accordance with this Agreement such amounts to such former
stockholders.
(d) Distributions with Respect to Unexchanged Shares.
Notwithstanding any other provisions of this Agreement, no dividends shall be
paid to any person holding an Old Certificate until such Old Certificate is
surrendered for exchange as provided herein. Subject to the effect of applicable
laws, following surrender of any such Old Certificate by any holder thereof
other than an Old Certificate representing Dissenting Shares, there shall be
paid to the holder of the Newco Ordinary Share Certificate issued in exchange
therefor, without interest, (i) at the time of such surrender, the amount of
dividends or other distributions with a record date after the Effective Time
theretofore payable with respect to the Newco Ordinary Shares represented
thereby and not paid, less the amount of any withholding taxes which may be
required thereon, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective Time but
prior to the time of such surrender and a payment date subsequent to the time of
such surrender payable with respect to the Newco Ordinary Shares represented
thereby, less the amount of any withholding taxes which may be required thereon.
(e) No Transfers. At or after the Effective Time, there shall
be no transfers on the stock transfer books of either Surviving Corporation of
Grace Common Shares, Fresenius USA Common Shares or Fresenius USA Preferred
Shares which were outstanding immediately prior to the Effective Time.
(f) No Liability. If any Old Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Old Certificate to be lost, stolen or destroyed and, if required
by the applicable Surviving Corporation, the posting by such person of a bond in
such reasonable amount as the applicable Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to such Old
Certificate, the applicable Surviving Corporation shall, in exchange for such
lost, stolen or destroyed Old Certificates, issue or cause to be issued the
Newco Ordinary Shares and pay or cause to be paid the amounts deliverable in
respect thereof pursuant to this Article IV. None of any party hereto, the
Exchange Agent, Newco or any Surviving Corporation shall be liable to any holder
of Grace Common Shares or Fresenius USA Common Shares for any cash from the
payment fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(g) Withholding Rights. The Surviving Corporations shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Grace Common Shares or Fresenius USA
Common Shares such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Code, or under any provision of
state, local or foreign tax law. To the extent that amounts are so withheld and
paid over to the appropriate taxing authority, such withheld
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amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Grace Common Shares or Fresenius USA Common Shares in
respect of which such deduction and withholding was made.
(h) Transfer Taxes. Except as provided above, Fresenius USA
and Grace shall pay or cause to be paid any transfer or gains tax (including,
without limitation, any real property gains or transfer tax), other than any
income tax, imposed in connection with or as a result of the Contribution or
Fresenius USA Merger, on the one hand, or the Distribution or Grace Merger, on
the other hand, respectively.
(i) Stock Options and Warrants. At the Effective Time, each
option, warrant or other security convertible into, exchangeable for or
exercisable for the purchase of Grace Common Shares, after taking into account
adjustments pursuant to the Distribution Agreement (each, a "Grace Option"), and
each option, warrant or other security convertible into, exchangeable for or
exercisable for the purchase of Fresenius USA Common Shares (each, a "Fresenius
USA Option") which is outstanding and unconverted, unexchanged or unexercised,
as the case may be, shall cease to represent a right to acquire Grace Common
Shares or Fresenius USA Common Shares, as the case may be, and shall be
converted automatically into an option, warrant or other security, as the case
may be, to purchase Newco Ordinary Shares in an amount and at an exercise price
determined as provided below:
(A) The number of Newco Ordinary Shares to be subject to the
new option, warrant or other security shall be equal to the product of
the number of shares subject to the original option, warrant or other
security and the Grace Exchange Ratio (in the case of a Grace Option)
or the Fresenius USA Exchange Ratio (in the case of a Fresenius USA
Option), rounded down to the nearest whole number of shares; and
(B) The exercise price per share of Newco Ordinary Shares
under the new option, warrant or other security shall be equal to the
exercise price per share of Grace Common Shares or Fresenius USA Common
Shares under the original Grace Option or Fresenius USA Option, as the
case may be, divided by the Grace Exchange Ratio (in the case of a
Grace Option) or the Fresenius USA Exchange Ratio (in the case of a
Fresenius USA Option), rounded up to the nearest whole cent.
The duration and other terms of the new option, warrant or
other security shall be the same as the remaining duration and other terms of
the original Grace Option or Fresenius USA Option, as the case may be, except
that all references to Grace or Fresenius USA shall be deemed to be references
to Newco. The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code) shall be, and
is intended to be, effected in a manner which is consistent with Section 424(a)
of the Code.
SECTION 4.5. Dissenters' Rights. If any holder of Grace Common
Shares or Fresenius USA Common Shares shall file written objection or provide
notice to Grace or Fresenius USA, respectively, in order to seek appraisal with
respect to such shares, pursuant to applicable statutory procedures, Grace or
Fresenius USA, as applicable, shall give the other notice thereof. If any such
holder of Grace Common Shares or Fresenius USA Common Shares shall fail to
perfect or shall have effectively withdrawn such objection or notice or lost the
right to appraisal with respect to such shares, such shares
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shall thereupon be treated as though such shares had been converted pursuant to
Section 4.1 or Section 4.2, as applicable.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.1. Representations and Warranties of Grace. Grace
hereby represents and warrants to Fresenius AG that, except as set forth in a
letter (the "Grace Disclosure Letter") delivered to Fresenius AG simultaneously
with the execution and delivery of this Agreement (provided that, as used
herein, all references to Grace (and/or its Affiliates) shall be deemed to refer
to Grace and its Affiliates which conduct the NMC Business, consistent with
Section 9.8 hereof, except as otherwise specifically provided):
(a) Capital Stock. The authorized capital stock of Grace
consists of 300,000,000 Grace Common Shares, par value $1.00 per share,
of which 97,375,339 were outstanding as of December 31, 1995, and
5,130,000 Grace Preferred Shares, par value $1.00 per share (consisting
of 40,000 authorized Grace 6% Preferred Shares, 50,000 authorized Class
A Preferred Shares, 40,000 authorized Class B Preferred Shares and
5,000,000 authorized Class C Preferred Shares), of which 36,460 were
outstanding as Grace 6% Preferred Shares, 16,356 were outstanding as
Grace Class A Preferred Shares, 21,577 were outstanding as Grace Class
B Preferred Shares and none were outstanding as Grace Class C Preferred
Shares, in each case as of December 31, 1995. As of December 31, 1995,
53,153 Grace Common Shares were held by Grace and its subsidiaries
(other than any shares held in a fiduciary capacity and beneficially
owned by a third party) . As of December 31, 1995, there were
outstanding under the Grace 1994 Stock Incentive Plan, the Grace 1989
Stock Incentive Plan, the Grace 1986 Stock Incentive Plan, the Grace
1981 Stock Incentive Plan and the Grace 1994 Stock Retainer Plan for
Non-Employee Directors (collectively, the "Grace Stock Plans") options
to acquire an aggregate of 5,694,196 Grace Common Shares (subject to
adjustment on the terms set forth in the Grace Stock Plans). As of the
date of this Agreement, there are no Grace Common Shares reserved for
issuance, other than 105,083,951 Grace Common Shares reserved for
issuance in connection with the Grace Rights and 7,655,459 Grace Common
Shares reserved for issuance pursuant to the Grace Stock Plans. All
outstanding Grace Common Shares and
Grace Preferred Shares have been duly authorized and validly issued and
are fully paid and nonassessable. Except for the Grace Common Shares
and Grace Preferred Shares, Grace has outstanding no bonds, debentures,
notes or other obligations the holders of which have the right to vote
(or are convertible or exchangeable into or exercisable for securities
having the right to vote) with the shareholders of Grace on any matter.
Each of the outstanding shares of capital stock of each of Grace's
subsidiaries has been duly authorized and validly issued and is fully
paid and nonassessable and, except for an immaterial number of shares
held by officers and directors of Grace and its subsidiaries as
nominees and for the benefit of Grace or any of its subsidiaries, is
owned, either directly or indirectly, by Grace free and clear of all
liens, pledges, security interests, claims, proxies, preemptive or
subscriptive rights or other encumbrances or restrictions of any kind.
Except as set forth above and except for Grace Common Shares issued
after December 31, 1995 pursuant to the terms of options, securities
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or plans referred to above and except for certain preemptive rights of
certain Grace Preferred Shares as set forth in the Grace Certificate of
Incorporation, there are no shares of capital stock of Grace
authorized, issued or outstanding and there are no preemptive rights or
any outstanding subscriptions, options, puts, calls, warrants, rights,
convertible or exchangeable securities or other agreements or
commitments of Grace or any of its significant subsidiaries of any
character relating to the issued or unissued capital stock or other
securities of Grace or any of its subsidiaries (including, without
limitation, the issuance, sale, purchase, redemption, conversion,
exchange, redemption, voting or transfer thereof). Exhibit 21 to its
Annual Report on Form 10-K for the year ended December 31, 1994, as
filed with the SEC, is an accurate and correct statement of all of the
information required to be set forth therein by the regulations of the
SEC and is an accurate and correct list of all Grace subsidiaries as of
the date hereof having a book value as of December 31, 1995 or net
income for the fiscal year ended December 31, 1995 in excess of
$25,000,000. Except as set forth in such Exhibit, as of the date
hereof, Grace does not, directly or indirectly, own any capital stock
or other ownership interest in any corporation, partnership, joint
venture or other entity having a book value as of December 31, 1995 or
net income for the fiscal year ended December 31, 1995 in excess of
$25,000,000.
(b) Corporate Organization and Qualification. Each of Grace
and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of its or such subsidiary's
jurisdiction of organization and is in good standing as a foreign
corporation in each jurisdiction where the properties owned, leased or
operated, or the business conducted, by it or such subsidiary require
such qualification, except for any such failure so to qualify or be in
good standing which, when taken together with all other such failures,
is not reasonably likely to have a Material Adverse Effect with respect
to Grace. Each of Grace and its subsidiaries has the requisite
corporate power and authority to carry on its businesses as they are
now being conducted. Grace has made available to the other parties
hereto a complete and correct copy of its Certificate of Incorporation
and By-laws (or similar organizational documents), each as amended to
date and currently in full force and effect.
(c) Corporate Authority. Subject only to the receipt of the
requisite approval of its shareholders, Grace has the requisite
corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform each Transaction
Agreement to which it is a party and to consummate the transactions
contemplated hereby and thereby including, without limitation, the
approval of the Board of Directors of Grace and the resolution of the
Board of Directors of Grace to recommend the transactions contemplated
hereby and thereby for approval by Grace shareholders, subject to their
fiduciary duties. Each Transaction Agreement to which Grace is a party
is, or when executed and delivered shall be, a valid and binding
agreement of Grace enforceable in accordance with its terms.
(d) Governmental Filings; No Violations. (i) Other than the
filings provided for in the Transaction Agreements, and other than as
may be required under the HSR Act and similar statutes in other
countries, the Exchange Act, the Securities Act, and state securities
laws, no notices, reports or other filings are required to be
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made by Grace or any subsidiary with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by it or any subsidiary from, any governmental or
regulatory authority, agency, court, commission or other entity,
domestic or foreign ("Governmental Entity"), in connection with the
execution, delivery or performance of each Transaction Agreement to
which it or any subsidiary is a party by it or any subsidiary and
the consummation by it of the transactions contemplated hereby and
thereby, the failure to make or obtain any or all of which,
individually or in the aggregate, is reasonably likely to have a
Material Adverse Effect with respect to Grace or enable any person to
enjoin or prevent or materially delay consummation of the
transactions contemplated hereby and thereby.
(ii) The execution, delivery and performance by Grace or any
subsidiary of each Transaction Agreement to which it is a party does
not or will not, and the consummation by it of any of the transactions
contemplated hereby and thereby will not, constitute or result in (A) a
breach or violation of, or a default under, its Certificate of
Incorporation or By-laws, or the comparable governing instruments of
any of its subsidiaries, or (B) assuming receipt of any consents and
the occurrence of any events disclosed in the Grace Disclosure Letter
as contemplated in the last sentence of this paragraph, a breach or
violation of, or a default under, or the acceleration of or the
creation of a lien, pledge, security interest or other encumbrance on
assets of it, Newco or the Surviving Corporations or any of their
respective subsidiaries (with or without the giving of notice, the
lapse of time or both) pursuant to, any provision of any agreement,
lease, contract, note, mortgage, indenture, arrangement or other
obligation or commitment ("Contracts") of it or any of its subsidiaries
or any law, rule, ordinance or regulation or judgment, decree, order,
award or governmental or non-governmental permit or license to which it
or any of its subsidiaries is subject, or any change in the rights or
obligations of any party under, or give rise to any rights of
termination under, any of the Contracts, except, in the case of clause
(B) above, for such breaches, violations, defaults, accelerations or
changes that are disclosed in the Grace Disclosure Letter or,
individually and in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to Grace. The Grace Disclosure
Letter sets forth a list of all consents required under any Contracts
to be obtained by it or any subsidiary or events required to occur
prior to consummation of the Reorganization (other than consents the
failure to obtain of which, individually and in the aggregate, is not
reasonably likely to have a Material Adverse Effect with respect to
Grace).
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. (i) Grace has delivered to the other parties hereto each
SEC Document prepared and filed with the SEC by it or its subsidiaries
since December 31, 1994, including, without limitation, (A) its Annual
Report on
Form 10-K for the year ended December 31, 1994, and (B) its Quarterly
Reports on Form 10-Q for the periods ended March 31, June 30 and
September 30, 1995. As of its filing date, each such SEC Document
filed, and each SEC Document that will be filed by it or its
subsidiaries prior to the Effective Time, as amended or supplemented,
if applicable, pursuant to the Exchange Act (A) complied or will comply
in all material respects with the applicable requirements of the
Exchange Act and (B) did not or will not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. Each of
Grace's consolidated balance sheets
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included in or incorporated by
reference into its SEC Documents (including the related notes and
schedules) fairly presents in all material respects the consolidated
financial position of it and its subsidiaries as of its date and each
of the consolidated statements of income, cash flows and shareholders'
equity included in or incorporated by reference into its SEC Documents
(including any related notes and schedules) fairly presents in all
material respects the consolidated results of operations, retained
earnings and cash flows, as the case may be, of it and its subsidiaries
for the periods set forth therein (subject, in the case of unaudited
statements, to normal year-end audit adjustments), in each case in
accordance with US GAAP.
(ii) Each SEC Document which is a final registration statement
filed, and each final registration statement that will be filed by it
or any subsidiary prior to the Effective Time, as amended or
supplemented, if applicable, pursuant to the Securities Act, as of the
date such statement or amendment became or will become effective (A)
complied or will comply in all material respects with the applicable
requirements of the Securities Act and (B) did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading (in the case of any prospectus, in light of the
circumstances under which they were made).
(iii) Included in the Grace Disclosure Letter are a special
purpose consolidated balance sheet as of, and special purpose
consolidated statements of income, cash flows and shareholders' equity
for Grace for the year ended, December 31, 1995, for Grace, in each
case exclusive of the Grace-Conn. Business and the assets, liabilities,
income, cash flows and shareholders' equity thereof (such
financial statements, the "Grace Disclosure Letter Financial
Statements" and the balance sheet as of December 31, 1995 included
therein, the "Grace Disclosure Letter Balance Sheet"). The Grace
Disclosure Letter Balance Sheet (including any related notes and
schedules) fairly presents in all material respects, and the special
purpose consolidated balance sheet to be included in the Grace Audited
Financial Statements (including any related notes and schedules) shall
fairly present in all material respects, the consolidated financial
position of Grace and its included subsidiaries as of its date; and
each of the special purpose consolidated statements of income, cash
flows and shareholders' equity included in the Grace Disclosure Letter
Financial Statements (including any related notes and schedules) fairly
presents in all material respects, and each such statement to be
included in the Grace Audited Financial Statements (including any
related notes and schedules) shall fairly present in all material
respects, the consolidated re sults of operations, retained earnings
and cash flows, as the case may be, of Grace and its included
subsidiaries for the periods set forth therein, in each case in
accordance with US GAAP and in each case exclusive of the Grace-Conn.
Business and the assets, liabilities, income, cash flows and
shareholders' equity thereof.
(iv) Except as disclosed in the Grace Disclosure Letter
Balance Sheet or the notes thereto or in its SEC Documents filed with
the SEC prior to the date hereof, neither Grace nor its subsidiaries
has any liabilities, whether or not accrued, contingent or otherwise,
that, individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect with respect to Grace.
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(f) Absence of Certain Events and Changes. Except as disclosed
in its SEC Documents filed with the SEC prior to the date hereof, since
September 30, 1995, Grace and its subsidiaries have conducted their
respective businesses only in the ordinary and usual course of such
businesses and there has not been any change or development or
combination of changes or developments (including any worsening of any
condition currently existing) which, individually and in the aggregate,
is reasonably likely to result in a Material Adverse Effect with
respect to Grace.
(g) Compliance with Laws. Except as disclosed in its SEC
Documents filed with the SEC prior to the date hereof, Grace and its
subsidiaries have complied, in the conduct of their respective
businesses, with all applicable federal, state, local and foreign
statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable
thereto, except where the failure to comply is not reasonably likely,
individually and in the aggregate, to have a Material Adverse Effect
with respect to Grace. To the knowledge of its executive officers, each
of Grace and its subsidiaries has, and, immediately after the Grace
Merger, will have, all permits, licenses, certificates of authority,
orders, and approvals of, and has made all filings, applications, and
registrations with, federal, state, local, and foreign governmental or
regulatory bodies that are required in order to permit it or such
subsidiary to carry on its business as it is presently conducted,
except for such permits, licenses, certificates, orders, filings,
applications and registrations, the failure to have or make which,
individually and in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to Grace.
(h) Title to Assets. Grace and its subsidiaries have and,
immediately after the Grace Merger, the NMC Group will have, good and,
with respect to real property, marketable title to its properties and
assets (other than property as to which it is lessee), except for those
defects in title which are not, individually and in the aggregate,
reasonably likely to have a Material Adverse Effect with respect to
Grace. Grace and its subsidiaries have, and immediately after the Grace
Merger, the NMC Group will either own or have adequate rights to use
(on the same basis as currently owned or used by Grace or such
subsidiaries), all assets predominantly used or useful in the NMC
Business as currently conducted and all assets reflected on the Grace
Disclosure Letter Balance Sheet, except for assets disposed of in
accordance with this Agreement and except for those failures to own or
have which are not, individually and in the aggregate, reasonably
likely to have a Material Adverse Effect with respect to Grace.
(i) Litigation. Except as disclosed in Grace's SEC Documents
filed with the SEC prior to the date hereof, there are no civil,
criminal or administrative actions, suits, claims, hearings or
proceedings pending or, to the knowledge of its executive officers,
threatened, or investigations pending, against it or any of its
subsidiaries that, individually or in the aggregate, are reasonably
likely to have a Material Adverse Effect with respect to Grace. There
are no judgments or outstanding orders, writs, injunctions, decrees,
stipulations or awards (whether rendered or issued by a court or
Governmental Entity, or by arbitration) against Grace or any of its
subsidiaries or their respective properties or businesses, which are
reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect with respect to Grace.
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(j) Taxes. Except as disclosed in its SEC Documents filed with
the SEC prior to the date hereof, all material federal, state, local
and foreign tax returns required to be filed by or on behalf of Grace
or any of its subsidiaries have been timely filed or requests for
extensions have been timely filed and any such extension shall have
been granted and not have expired, and all such filed returns are
complete and accurate in all material respects. Except as disclosed in
its SEC Documents filed with the SEC prior to the date hereof, all
material taxes required to be shown on returns filed by Grace, as of
the date of such SEC Document, have been paid in full or have been
recorded as a liability on its consolidated balance sheet (in
accordance with US GAAP). Except as disclosed in its SEC Documents
filed with the SEC prior to the date hereof, there is no outstanding
audit examination, deficiency, or refund litigation with respect to any
taxes of Grace that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect with respect to Grace. Except
as disclosed in its SEC Documents filed with the SEC prior to the date
hereof, all material taxes, interest, additions, and penalties due with
respect to completed and settled examinations or concluded litigation
relating to Grace have been paid in full or have been recorded as a
liability on its balance sheet (in accordance with US GAAP). Except as
disclosed in its SEC Documents filed with the SEC prior to the date
hereof, neither Grace nor any of its subsidiaries is a party to a tax
sharing or similar agreement or any agreement pursuant to which it or
any of its subsidiaries has indemnified another party with respect to
taxes (other than the tax sharing agreement attached to the
Distribution Agreement), except for any such agreement under which the
liabilities of Grace and its subsidiaries would not be reasonably
likely to have a Material Adverse Effect with respect to Grace. Except
as set forth in SEC Documents filed prior to the date hereof, neither
Grace nor its subsidiaries have waived any applicable statute of
limitations with respect to federal income taxes or any material state
income taxes.
(k) Employee Benefits. (i) Grace's SEC Documents filed prior
to the date hereof disclose all material information required under the
applicable rules and regulations of the SEC with respect to Grace's
bonus, deferred compensation, pension, retirement, profit sharing,
thrift, savings, employee stock ownership, stock bonus, stock purchase,
restricted stock and stock option plans, all material employment or
severance Contracts, all other material employee benefit plans and all
applicable "change of control" or similar provisions in any material
plan, Contract or arrangement which covers employees or former
employees of Grace or its subsidiaries ("Grace Compensation Plans").
True and complete copies of the Grace Compensation Plans and all other
benefit plans, Contracts or arrangements (regardless of whether they
are funded or unfunded or foreign or domestic) covering employees or
former employees of Grace and its subsidiaries (the "Grace Employees"),
including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA, and all amendments thereto, have been
made available to each other party hereto.
(ii) All Grace Compensation Plans that are "employee benefit
plans", other than "multiemployer plans" within the meaning of Sections
3(37) or 4001(a)(3) of ERISA, covering Grace Employees (the "Grace
Plans"), to the extent subject to ERISA, are in substantial compliance
with ERISA, except where the failure to be so would not reasonably be
expected to have a Material Adverse Effect with respect to Grace. There
is no pending or, to the knowledge of executive officers, threatened
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litigation relating to any Grace Plan which is reasonably likely to
have a Material Adverse Effect with respect to Grace.
(iii) No material liability that has not previously been fully
satisfied under Subtitle C or D of Title IV of ERISA, under Section 412
of the Code or under Section 302 of ERISA has been or is expected to be
incurred by Grace or any of its subsidiaries with respect to any
"single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by any of them, or the
single-employer plan of any entity which is considered one employer
with it under Section 4001 of ERISA or Section 414 of the Code (a
"Grace ERISA Affiliate"). Grace and its subsidiaries and the Grace
ERISA Affiliates have not incurred and do not expect to incur any
material withdrawal liability with respect to a multiemployer plan
under Subtitle E of Title IV of ERISA. No notice of a "reportable
event," within the meaning of Section 4043 of ERISA, for which the
30-day reporting requirement has not been waived, has been required to
be filed for any of the Grace Plans or by any of the Grace ERISA
Affiliates within the 12-month period ending on the date hereof.
(iv) As of January 1, 1995, the "full-funding limitation" (as
defined in Section 412(c)(9) of the Code) has been satisfied with
respect to each Grace Pension Plan which is a single-employer plan
(within the meaning of Section 4001(a)(15) of ERISA), and there has
been no change in the financial condition of any such Grace Pension
Plan since that date that is reasonably likely to have a Material
Adverse Effect with respect to Grace. The withdrawal liability of Grace
and its subsidiaries under each Grace Plan which is a multiemployer
plan to which Grace, its subsidiaries or its ERISA Affiliates has
contributed during the preceding 12 months, determined as if a
"complete withdrawal," within the meaning of Section 4203 of ERISA, had
occurred as of the date hereof, is not reasonably likely to have a
Material Adverse Effect with respect to Grace.
(v) Except as disclosed in its SEC Documents filed prior to
the date hereof, neither Grace nor its subsidiaries have any material
obligations for retiree health and life benefits under any Grace Plan.
Except as disclosed in its SEC Documents filed prior to the date
hereof, there are no restrictions on the right of Grace to amend or
terminate any Grace Plan that provides retiree health or life benefits
to Grace Employees without Grace incurring any material liability
thereunder as a result of such amendment or termination.
(vi) All Grace Compensation Plans covering foreign Employees
comply with applicable local law except when the failure to so comply,
individually and in the aggregate, would not have a Material Adverse
Effect with respect to Grace. Grace and its subsidiaries have no
unfunded liabilities with respect to any Grace Pension Plan which cover
foreign Employees in an amount which is reasonably likely to have a
Material Adverse Effect with respect to Grace.
(vii) Except as disclosed in its SEC Documents filed prior to
the date hereof or as provided in this Agreement, the transactions
contemplated by this Agreement will not result in the vesting or
acceleration of any material amounts under any Grace Compensation Plan,
any material increase in benefits under any
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24
Grace Compensation Plan or payment of any severance or similar
compensation under any Grace Compensation Plan, and the amounts,
if any, payable under the Grace Compensation Plans and not
deductible by it by reason of Section 280G
of the Code will not exceed the maximum amount previously disclosed to
the other parties hereto. Except as disclosed in its SEC Documents
filed prior to the date hereof, Grace and its subsidiaries have not
entered into any change-of-control agreement under which Grace will be
obligated to make change-of-control payments following the Closing.
(l) Environmental Matters. Except as disclosed in its SEC
Documents filed prior to the date hereof and except for such matters
that, individually and in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to Grace, to the knowledge
of its executive officers, (i) Grace and its subsidiaries are in
compliance with all applicable Environmental Laws; and (ii) neither
Grace nor any of its subsidiaries has any outstanding notices, demand
letters or requests for information from any Government Entity or any
third party that assert that Grace or any of its subsidiaries may be in
violation of, or liable under, any Environmental Law and none of Grace,
its subsidiaries or its properties are subject to any court order,
administrative order or decree arising under any Environmental Law.
(m) Rights Plan. After giving effect to any amendments that
will be made prior to the Effective Time, execution, delivery and
performance of this Agreement and consummation of the transactions
contemplated hereby will not cause or permit shareholders to exercise
rights under the Grace Rights Agreement or the Grace Rights issued
pursuant thereto and the Grace Rights will not become unredeemable or
exercisable as a result of the execution, delivery or performance of
this Agreement or the consummation of the transactions contemplated
hereby.
(n) Takeover Statutes. Execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby
will not cause to be applicable to Grace any "fair price,"
"moratorium," "control share acquisition" or other similar antitakeover
statute or regulation enacted under state or federal laws in the United
States or any foreign jurisdiction (each a "Takeover Statute") (after
giving effect to any actions that will be taken prior to the Effective
Time).
(o) Brokers and Finders. Neither it nor any of its officers,
directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated herein except pursuant to
arrangements disclosed in writing to the other parties hereto prior to
the date hereof.
(p) Tax Matters. At the Effective Time, the representations
set forth in the numbered paragraphs of the form of Tax Matters
Certificate of Grace attached hereto as Exhibit G (the "Grace Tax
Matters Certificate") will be true and correct in all respects, and
such representations are hereby incorporated herein by reference with
the same effect as if set forth herein in their entirety.
(q) Information in Disclosure Documents and Registration
Statements. None of the information supplied or to be supplied by Grace
for inclusion or incorporation by reference in any Registration
Statement will, at the time such Registration
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Statement becomes effective under the Securities Act and at
the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Grace Proxy Statement will not, at the date mailed
to Grace shareholders and at the time of the Grace Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are
made, not misleading. The Grace Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder, except that no representation is
made by Grace with respect to statements made therein based on
information supplied by Fresenius AG or Fresenius USA or their
respective subsidiaries.
(r) Trademarks, Patents and Copyrights. Grace and its
subsidiaries own or possess adequate licenses or other rights to use,
all patents, trademarks, trade names, service marks, copyrights,
licenses and product licenses or registrations (including applications
for any of the fore going), as are used or useful predominantly in
connection with the NMC Business (the "NMC Business Intellectual
Property") the lack of which would reasonably be expected to have a
Material Adverse Effect with respect to Grace; and none of Grace or any
of its subsidiaries has any knowledge of any conflict with the
proprietary intellectual property rights of any of Grace or its
subsidiary therein or any knowledge of any conflict by Grace or its
subsidiary with the rights of others therein which would have a
Material Adverse Effect with respect to Grace. Immediately after the
Grace Merger, Newco or its subsidiaries will own or possess adequate
licenses or other rights to use (on substantially the same basis as
currently owned or possessed by Grace and its subsidiaries) all of
the NMC Business Intellectual Property. There are no Contracts,
agreements and licenses pursuant to which Grace or any of its
subsidiaries which will not be subsidiaries of Newco after the
Grace Merger will retain rights or interests of any kind in or
affecting the NMC Business Intellectual Property.
(s) Assets. Except as contemplated herein, at the Effective
Time, the NMC Group will contain the worldwide health care business of
Grace and all assets and services predominantly used in the conduct of
Grace's worldwide health care business as presently conducted.
(t) Disclosure. Neither the representations and warranties of
Grace contained in this Agreement nor in any written instrument, list,
exhibit or certificate furnished or to be furnished by Grace to
Fresenius AG pursuant hereto or in connection herewith contains or will
contain any untrue statement of a material fact or omits or will omit
to state a material fact necessary in order to make the statements not
misleading.
SECTION 5.2. Representations and Warranties of Fresenius USA.
Subject to Section 9.13, Fresenius AG hereby represents and warrants to
Grace that, except as set forth in a letter (the "Fresenius USA
Disclosure Letter") delivered to Grace simultaneously with the
execution and delivery of this Agreement:
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26
(a) Capital Stock. The authorized capital stock of Fresenius
USA consists of 40,000,000 Fresenius USA Common Shares, par value $.01
per share, of which 21,464,874 were outstanding as of December 31,
1995, and 600,000 Fresenius USA Preferred Shares, par value $1.00 per
share, of which 200,000 were outstanding as Fresenius USA Series F
Preferred Shares as of such date. Fresenius USA Series F Preferred
Shares are convertible into an aggregate of 3,129,883 Fresenius USA
Common Shares. No Fresenius USA Common Shares were held by Fresenius
USA and its subsidiaries (other than any shares held in a fiduciary
capacity and beneficially owned by a third party) as of December 31,
1995. As of December 31, 1995, there were outstanding under the
Fresenius USA 1976 Stock Option Plan, the Fresenius USA 1985 Special
Stock Option Plan, the Fresenius USA 1987 Stock Option Plan, the
Fresenius USA 1989 Special Stock Option Plan and the Fresenius USA
Directors' Stock Option Plan (collectively, the "Fresenius USA Stock
Plans") options to acquire an aggregate of 2,146,395 Fresenius USA
Common Shares (subject to adjustment on the terms set forth in the
Fresenius USA Stock Plans). As of the date of this Agreement, there are
no Fresenius USA Common Shares reserved for issuance, other than
155,550 Fresenius USA Common Shares reserved for issuance upon exercise
of stock options, 4,512,500 Fresenius USA Common Shares reserved for
issu ance pursuant to outstanding warrants and 1,990,845 Fresenius USA
Common Shares reserved for issuance pursuant to the Fresenius USA Stock
Plans. All outstanding Fresenius USA Common Shares and Fresenius USA
Preferred Shares have been duly authorized and validly issued and are
fully paid and nonassessable. Except for the Fresenius USA Common
Shares and the Fresenius USA Preferred Shares, Fresenius USA has
outstanding no bonds, debentures, notes or other obligations the
holders of which have the right to vote (or are convertible or
exchangeable into or exercisable for securities having the right to
vote) with the shareholders of Fresenius USA on any matter. Each of the
outstanding shares of capital stock of each of Fresenius USA's
subsidiaries has been duly authorized and validly issued and is fully
paid and nonassessable and, except for an immaterial number of shares
held by officers and directors of Fresenius USA and its subsidiaries as
nominees and for the benefit of Fresenius USA or any of its
subsidiaries, is owned, either directly or indirectly, by Fresenius USA
free and clear of all liens, pledges, security interests, claims,
proxies, preemptive or subscriptive rights or other encumbrances or
restrictions of any kind. Except as set forth above and except for
Fresenius USA Common Shares issued after December 31, 1995 pursuant to
the terms of options, securities or plans referred to above, there are
no shares of capital stock of Fresenius USA authorized, issued or
outstanding and there are no preemptive rights or any outstanding
subscriptions, options, puts, calls, warrants, rights, convertible or
exchangeable securities or other agreements or commitments of Fresenius
USA or any of its subsidiar ies of any character relating to the issued
or unissued capital stock or other securities of Fresenius USA or any
of its subsidiaries (including, without limitation, the issuance, sale,
purchase, redemption, conversion, exchange, redemption, voting or
transfer thereof). Exhibit 21 to Fresenius USA's Annual Report on Form
10-K for the year ended December 31, 1994, as filed with the SEC,
contains an accurate and correct statement of all of the information
required to be set forth therein by the regulations of the SEC and is
an accurate and correct list of all Fresenius USA subsidiaries as of
the date hereof, other than subsidiaries not engaged in an active
business. Except as set forth in
such exhibit, as of the date hereof, Fresenius USA does not, directly
or indirectly, own any
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capital stock or other ownership interest in any
corporation, partnership, joint venture or other entity, other than
subsidiaries not engaged in an active business.
(b) Corporate Organization and Qualification. Each of
Fresenius USA and its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its or such
subsidiary's jurisdiction of organization and is in good standing as a
foreign corporation in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it or such subsidiary
require such qualification, except for any such failure so to qualify
or be in good standing which, when taken together with all other such
failures, is not reasonably likely to have a Material Adverse Effect
with respect to Fresenius USA. Each of Fresenius USA and its
subsidiaries has the requisite corporate power and authority to carry
on its businesses as they are now being conducted. Fresenius USA has
made available to the other parties hereto a complete and correct copy
of its Certificate of Incorporation and By-laws, each as amended to
date and currently in full force and effect.
(c) Corporate Authority. Except as contemplated by Section
9.13 hereof, Fresenius USA has the requisite corporate power and
authority and has taken all corporate action necessary in order to
execute, deliver and perform each Transaction Agreement to which it is
a party and to consummate the transactions contemplated hereby and
thereby. Each Transaction Agreement to which Fresenius USA is a party
is, or when executed and delivered shall be, a valid and binding
agreement of Fresenius USA enforceable in accordance with its terms.
(d) Governmental Filings; No Violations. (i) Other than the
filings provided for in the Transaction Agreements, and other than as
may be required under the HSR Act and similar statutes in other
countries, the Exchange Act, the Securities Act, and state securities
laws, no notices, reports or other filings are required to be made by
Fresenius USA or any subsidiary with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by it or any subsidiary from, any Governmental Entity in
connection with the execution, delivery or performance of each
Transaction Agreement to which it or any subsidiary is a party by it or
any subsidiary and the consummation by it or any subsidiary of the
transactions contemplated hereby and thereby, the failure
to make or obtain any or all of which, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect with
respect to Fresenius USA or enable any person to enjoin or prevent or
materially delay consummation of the transactions contemplated hereby
and thereby.
(ii) The execution, delivery and performance by Fresenius USA
or any subsidiary of each Transaction Agreement to which it is a party
does not or will not, and the consummation by it of any of the
transactions contemplated hereby and thereby will not, constitute or
result in (A) a breach or violation of, or a default under, its
Certificate of Incorporation or By-laws, or the comparable governing
instruments of any of its subsidiaries, or (B) assuming receipt of any
consents and the occurrence of any events disclosed in the Fresenius
USA Disclosure Letter as contemplated in the last sentence of this
paragraph, a breach or violation of, or a default under, or the
acceleration of or the creation of a lien, pledge, security interest or
other encumbrance on assets of it, Newco or the Surviving Corporations
or any of their respective subsidiaries (with or without the giving of
notice, the lapse of
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time or both) pursuant to, any provision of any
Contracts of it or any of its subsidiaries or any law, rule, ordinance
or regulation or judgment, decree, order, award or governmental or
non-governmental permit or license to which it or any of its
subsidiaries is subject, or any change in the rights or obligations of
any party under, or give rise to any rights of termination under, any
of the Contracts, except, in the case of clause (B) above, for such
breaches, violations, defaults, accelerations or changes that are
disclosed in the Fresenius USA Disclosure Letter or, individually and
in the aggregate, are not reasonably likely to have a Material Adverse
Effect with respect to Fresenius USA. The Fresenius USA Disclosure
Letter sets forth a list of all consents required under any Contracts
to be obtained by it or events required to occur prior to consummation
of the Reorganization (other than consents the failure to obtain of
which, individually and in the aggregate, is not reasonably likely to
have a Material Adverse Effect with respect to Fresenius USA).
(e) SEC Documents; Financial Statements; No Undisclosed
Liabilities. (i) Fresenius USA has delivered to the other parties
hereto each SEC Document prepared and filed with the SEC by it or its
subsidiaries since December 31, 1994, including, without limitation,
(A) its Annual Report on Form 10-K for the year ended December 31,
1994, and (B) its Quarterly Reports on Form 10-Q for the periods ended
March 31, June 30 and September 30, 1995.
As of its filing date, each such SEC Document filed, and each SEC
Document that will be filed by Fresenius USA or its subsidiaries prior
to the Effective Time, as amended or supplemented, if applicable,
pursuant to the Exchange Act (A) complied or will comply in all
material respects with the applicable requirements of the Exchange Act
and (B) did not or will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which
they were made, not misleading. Each of Fresenius USA's consolidated
balance sheets included in or incorporated by reference into its SEC
Documents fairly presents in all material respects the consolidated
financial position of it and its subsidiaries as of its date and each
of the consolidated statements of income, cash flows and shareholders'
equity included in or incorporated by reference into its SEC Documents
(including any related notes and schedules) fairly presents in all
material respects the consolidated results of operations, retained
earnings and cash flows, as the case may be, of Fresenius USA and its
subsidiaries for the periods set forth therein (subject, in the case
of unaudited statements, to normal year-end audit adjustments), in
each case in accordance with US GAAP.
(ii) Each SEC Document which is a final registration
statement filed, and each final registration statement that will be
filed by it or any subsidiary prior to the Effective Time, as amended
or supplemented, if applicable, pursuant to the Securities Act, as of
the date such statement or amendment became or will become effective
(A) complied or will comply in all material respects with the
applicable requirements of the Securities Act and (B) did not or will
not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of any prospectus,
in light of the circumstances under which they were made).
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(iii) Included in the Fresenius USA Disclosure Letter are a
consolidated balance sheet as of, and consolidated statements of
income, cash flows and shareholders' equity for the year ended,
December 31, 1995 for Fresenius USA (such financial statements, the
"Fresenius USA Disclosure Letter Financial Statements"), and the
balance sheet as of December 31, 1995 included therein, (the
"Fresenius USA Disclosure Letter Balance Sheet"). The Fresenius USA
Disclosure Letter Balance Sheet (including any related notes and
schedules) fairly presents in all material respects, and the
consolidated balance sheet to be included in the
Fresenius USA Audited Financial Statements (including any related
notes and schedules) shall fairly present in all material respects,
the consolidated financial position of Fresenius USA and its
subsidiaries as of its date; and each of the consolidated statements
of income, cash flows and shareholders' equity included in the
Fresenius USA Disclosure Letter Financial Statements (including any
related notes and schedules) fairly presents in all material respects,
and each such statement to be included in the Fresenius USA Audited
Financial Statements (including any related notes and schedules) shall
fairly present in all material respects, the consolidated results of
operations, retained earnings and cash flows, as the case may be, of
Fresenius USA, and its subsidiaries for the periods set forth therein,
in each case in accordance with US GAAP.
(iv) Except as disclosed in the Fresenius USA Disclosure
Letter Balance Sheet or the notes thereto or in its SEC Documents
filed with the SEC prior to the date hereof, neither Fresenius USA nor
its subsidiaries has any liabilities, whether or not accrued,
contingent or otherwise, that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect with respect to
Fresenius USA.
(f) Absence of Certain Events and Changes. Except as
disclosed in its SEC Documents filed with the SEC prior to the date
hereof, since September 30, 1995, Fresenius USA and its subsidiaries
have conducted their respective businesses only in the ordinary and
usual course of such businesses and there has not been any change or
development or combination of changes or developments (including any
worsening of any condition currently existing) which, individually and
in the aggregate, is reasonably likely to result in a Material Adverse
Effect.
(g) Compliance with Laws. Except as disclosed in its SEC
Documents filed with the SEC prior to the date hereof, Fresenius USA
and its subsidiaries have complied, in the conduct of their respective
businesses, with all applicable federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders or
decrees applicable thereto, except where the failure to comply is not
reasonably likely, individually and in the aggregate, to have a
Material Adverse Effect with respect to Fresenius USA. To the
knowledge of its executive officers, each of Fresenius USA and its
subsidiaries has, and, immediately after the Fresenius USA Merger,
will have, all permits, licenses, certificates of authority,
orders, and approvals of, and has made all filings, applications, and
registrations with, federal, state, local, and foreign governmental or
regulatory bodies that are required in order to permit it or such
subsidiary to carry on its business as it is presently conducted,
except for such permits, licenses, certificates, orders, filings,
applications and registrations, the failure to have or make which,
individually and in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to Fresenius USA.
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(h) Title to Assets. Fresenius USA or its subsidiaries have
and, immediately after the Fresenius USA Merger, will have, good and,
with respect to real property, marketable title to its properties and
assets (other than property as to which it is lessee), except for
those defects in title which are not, individually and in the
aggregate, reasonably likely to have a Material Adverse Effect with
respect to Fresenius USA. Fresenius USA and its subsidiaries have,
and immediately after the Fresenius USA Merger, will either own or
have adequate rights to use (on the same basis as currently owned or
used by Fresenius USA or such subsidiaries), all assets used or useful
in Fresenius USA's business as currently conducted and all assets
reflected on the Fresenius USA Disclosure Letter Balance Sheet, except
for assets disposed of in accordance with this Agreement and except
for those failures to own or have which are not, individually and in
the aggregate, reasonably likely to have a Material Adverse Effect
with respect to Fresenius USA.
(i) Litigation. Except as disclosed in Fresenius USA's SEC
Documents filed with the SEC prior to the date hereof, there are no
civil, criminal or administrative actions, suits, claims, hearings or
proceedings pending or, to the knowledge of its executive officers,
threatened, or investigations pending, against Fresenius USA or any of
its subsidiaries that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect with respect to
Fresenius USA. There are no judgments or outstanding orders, writs,
injunctions, decrees, stipulations or awards (whether rendered or
issued by a court or Governmental Entity, or by arbitration) against
Fresenius USA or any of its subsidiaries or their respective
properties or businesses, which are reasonably likely, individually or
in the aggregate, to have a Material Adverse Effect with respect to
Fresenius USA.
(j) Taxes. Except as disclosed in Fresenius USA's SEC
Documents filed with the SEC prior to the date hereof,
all material federal, state, local and foreign tax returns required to
be filed by or on behalf of Fresenius USA or any of its subsidiaries
have been timely filed or requests for extensions have been timely
filed and any such extension shall have been granted and not have
expired, and all such filed returns are complete and accurate in all
material respects. Except as disclosed in its SEC Documents filed
with the SEC prior to the date hereof, all material taxes required to
be shown on returns filed by Fresenius USA, as of the date of such SEC
Document, have been paid in full or have been recorded as a liability
on its consolidated balance sheet (in accordance with US GAAP).
Except as disclosed in its SEC Documents filed with the SEC prior to
the date hereof, there is no outstanding audit examination,
deficiency, or refund litigation with respect to any taxes of
Fresenius USA that, individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect with respect to Fresenius
USA. Except as disclosed in its SEC Documents filed with the SEC
prior to the date hereof, all material taxes, interest, additions, and
penalties due with respect to completed and settled examinations or
concluded litigation relating to Fresenius USA have been paid in full
or have been recorded as a liability on its balance sheet (in
accordance with US GAAP). Except as disclosed in its SEC Documents
filed with the SEC prior to the date hereof, neither Fresenius USA nor
any of its subsidiaries is a party to a tax sharing or similar
agreement or any agreement pursuant to which it or any of its
subsidiaries has indemnified another party with respect to taxes
(other than the tax sharing agreement attached to the Contribution
Agreement), except for any such agreement under which the liabilities
of Fresenius USA and its subsidiaries would not be
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reasonably likely to have a Material Adverse Effect with respect to
Fresenius USA. Except as set forth in SEC Documents filed prior to
the date hereof, neither Fresenius USA nor its subsidiaries have
waived any applicable statute of limitations with respect to federal
income taxes or any material state income taxes.
(k) Employee Benefits. (i) Fresenius USA's SEC Documents
filed prior to the date hereof disclose all material information
required under the applicable rules and regulations of the SEC with
respect to Fresenius USA's bonus, deferred compensation, pension,
retirement, profit sharing, thrift, savings, employee stock ownership,
stock bonus, stock purchase, restricted stock and stock option plans,
all material employment or severance Contracts, all other material
employee benefit plans and all applicable "change of control" or
similar provisions in any material
plan, Contract or arrangement which covers employees or former
employees of Fresenius USA or its subsidiaries ("Fresenius USA
Compensation Plans"). True and complete copies of the Fresenius USA
Compensation Plans and all other benefit plans, Contracts or
arrangements (regardless of whether they are funded or unfunded or
foreign or domestic) covering employees or former employees of
Fresenius USA and its subsidiaries (the "Fresenius USA Employees"),
including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of ERISA, and all amendments thereto, have been
made available to each other party hereto.
(ii) All Fresenius USA Compensation Plans that are
"employee benefit plans", other than "multiemployer plans" within the
meaning of Sections 3(37) or 4001(a)(3) of ERISA, covering Fresenius
USA Employees (the "Fresenius USA Plans"), to the extent subject to
ERISA, are in substantial compliance with ERISA, except where the
failure to be so would not reasonably be expected to have a Material
Adverse Effect with respect to Fresenius USA. There is no pending or,
to the knowledge of executive officers, threatened litigation relating
to any Fresenius USA Plan which is reasonably likely to have a
Material Adverse Effect with respect to Fresenius USA.
(iii) No material liability that has not previously been
fully satisfied under Subtitle C or D of Title IV of ERISA, under
Section 412 of the Code or Section 302 of ERISA has been or is
expected to be incurred by Fresenius USA or any of its subsidiaries
with respect to any "single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or the single-employer plan of any entity which is considered
one employer with it under Section 4001 of ERISA or Section 414 of the
Code (a "Fresenius USA ERISA Affiliate"). Fresenius USA and its
subsidiaries and the Fresenius USA ERISA Affiliates have not incurred
and do not expect to incur any material withdrawal liability with
respect to a multiemployer plan under Subtitle E of Title IV of ERISA.
No notice of a "reportable event," within the meaning of Section 4043
of ERISA, for which the 30-day reporting requirement has not been
waived, has been required to be filed for any of the Fresenius USA
Plans or by any of the Fresenius USA ERISA affiliates within the
12-month period ending on the date hereof.
(iv) As of January 1, 1995, the "full-funding limitation"
(as defined in Section 412(c)(9) of the Code) has been satisfied with
respect to each Fresenius USA Pension
Plan which is a single-employer plan (within the meaning of Section
4001(a)(15) of ERISA), and there has been no change in the financial
condition of
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any such Fresenius USA Pension Plan since that date that
is reasonably likely to have a Material Adverse Effect with respect to
Fresenius USA. The withdrawal liability of Fresenius USA and its
subsidiaries under each Fresenius USA Plan which is a multiemployer
plan to which Fresenius USA, its subsidiaries or its ERISA Affiliates
has contributed during the preceding 12 months, determined as if a
"complete withdrawal," within the meaning of Section 4203 of ERISA,
had occurred as of the date hereof, is not reasonably likely to have a
Material Adverse Effect with respect to Fresenius USA.
(v) Except as disclosed in its SEC Documents filed prior
to the date hereof, neither Fresenius USA nor its subsidiaries have
any obligations for retiree health and life benefits under any
Fresenius USA Plan. Except as disclosed in its SEC Documents filed
prior to the date hereof, there are no restrictions on the right of
Fresenius USA to amend or terminate any Fresenius USA Plan that
provides retiree health or life benefits to Fresenius USA Employees
without Fresenius USA incurring any material liability thereunder as a
result of such amendment or termination.
(vi) All Fresenius USA Compensation Plans covering foreign
Employees comply with applicable local law except when the failure to
so comply, individually and in the aggregate, would not have a
Material Adverse Effect with respect to Fresenius USA. Fresenius
USA's and its subsidiaries have no unfunded liabilities with respect
to any Fresenius USA Pension Plan which cover foreign Employees in an
amount which is reasonably likely to have a Material Adverse Effect
with respect to Fresenius USA.
(vii) Except as disclosed in its SEC Documents filed prior
to the date hereof or as provided in this Agreement, the transactions
contemplated by this Agreement will not result in the vesting or
acceleration of any material amounts under any Fresenius USA
Compensation Plan, any material increase in benefits under any
Fresenius USA Compensation Plan or payment of any severance or similar
compensation under any Fresenius USA Compensation Plan, and the
amounts, if any, payable under the Fresenius USA Compensation Plans
and not deductible by it by reason of Section 280G of the Code will
not exceed the maximum amount previously disclosed to the other
parties hereto. Except as disclosed in its SEC Documents filed prior
to the date hereof, Fresenius USA and its subsidiaries have not
entered into any change-of-control agreement under which Fresenius USA
will be obligated to make change-of-control payments following the
Closing.
(l) Environmental Matters. Except as disclosed in its SEC
Documents filed prior to the date hereof and except for such matters
that, individually and in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to Fresenius USA, to the
knowledge of its executive officers, (A) Fresenius USA and its
subsidiaries are in compliance with all applicable Environmental Laws;
and (B) neither Fresenius USA nor any of its subsidiaries has any
outstanding notices, demand letters or requests for information from
any Government Entity or any third party that assert that Fresenius
USA or any of its subsidiaries may be in violation of, or liable
under, any Environmental Law and none of Fresenius USA, its
subsidiaries or its properties are subject to any court order,
administrative order or decree arising under any Environmental Law.
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(m) Takeover Statutes. Execution, delivery and performance
of this Agreement and consummation of the transactions contemplated
hereby will not cause to be applicable to Fresenius USA any Takeover
Statute (after giving effect to any actions that will be taken prior
to the Effective Time).
(n) Brokers and Finders. Neither it nor any of its officers,
directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated herein except pursuant
to arrangements disclosed in writing to the other parties hereto prior
to the date hereof.
(o) Information in Disclosure Documents and Registration
Statements. None of the information supplied or to be supplied by
Fresenius USA for inclusion or incorporation by reference in any
Registration Statement will, at the time such Registration Statement
becomes effective under the Securities Act and at the Effective Time,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading; and the Fresenius USA Proxy Statement will
not, at the date mailed to Fresenius USA shareholders and at the time
of the meeting of Fresenius USA shareholders to be held in
connection with the Fresenius USA Merger, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they are made, not
misleading. The Fresenius USA Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder, except that no representation is
made by Fresenius USA with respect to statements made therein based on
information supplied by Grace or its subsidiaries.
(p) Trademarks, Patents and Copyrights. Fresenius USA and
its subsidiaries own or possess adequate licenses or other rights to
use, all patents, trademarks, trade names, service marks, copyrights,
licenses and product licenses or registrations (including applications
for any of the foregoing), as are used or useful in connection with
its business (the "Fresenius USA Intellectual Property") the lack of
which would reasonably be expected to have a Material Adverse Effect
with respect to Fresenius USA; and none of Fresenius USA or any of its
subsidiaries has any knowledge of any conflict with the proprietary
intellectual property rights of any of Fresenius USA or its subsidiary
therein or any knowledge of any conflict by Fresenius USA or its
subsidiary with the rights of others therein which would have a
Material Adverse Effect with respect to Fresenius USA. Immediately
after the Fresenius USA Merger, Newco and its subsidiaries will own or
possess adequate licenses or other rights to use (on substantially the
same basis as currently owned or possessed by Fresenius USA and its
subsidiaries) all of the Fresenius USA Intellectual Property. Except
as disclosed in its SEC Documents filed with the SEC prior to the date
hereof, there are no Contracts, agreements and licenses pursuant to
which Fresenius USA or any subsidiaries of Fresenius USA which will
not be subsidiaries of Newco after the Fresenius USA Merger will
retain rights or interests of any kind in or affecting the Fresenius
USA Intellectual Property.
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(q) Disclosure. Neither the representations and warranties
of Fresenius USA or Fresenius AG contained in this Agreement nor in
any written instrument, list, exhibit or certificate furnished or to
be furnished by Fresenius USA or Fresenius AG to Grace pursuant hereto
or in connection herewith contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements not misleading.
SECTION 5.3. Representations and Warranties of Fresenius AG.
Fresenius AG hereby represents and warrants to Grace that, except as set forth
in a letter (the "Fresenius AG Disclosure Letter") delivered to Grace
simultaneously with the execution and delivery of this Agreement:
(a) Corporate Organization and Qualification. Fresenius AG
is an Aktiengesellschaft duly organized, validly existing and in good
standing under the laws of the Federal Republic of Germany and is in
good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by it
require such qualification, except for any such failure so to qualify
or be in good standing which, when taken together with all other such
failures, is not reasonably likely to have a Material Adverse Effect
with respect to the FWD Business. Fresenius AG has the requisite
corporate power and authority to carry on its businesses as they are
now being conducted. Fresenius AG has made available to the other
parties hereto a complete and correct copy of its Certificate of
Incorporation and By-laws (or similar organizational documents), each
as amended to date and currently in full force and effect.
(b) Corporate Authority. Subject only to the receipt of the
requisite approval of its shareholders (and, with respect to Fresenius
USA, as contemplated by Section 9.13 hereof), Fresenius AG and its
subsidiaries have the requisite corporate power and authority and have
taken all corporate action necessary in order to execute, deliver and
perform each Transaction Agreement to which any of them are a party
and to consummate the transactions contemplated hereby and thereby
including, without limitation, the approval of the Fresenius AG
Supervisory Board and the affirmative vote of all shareholder
representatives thereon. Each Transaction Agreement to which
Fresenius AG or its subsidiary is a party is, or when executed and
delivered shall be, a valid and binding agreement of Fresenius AG or
such subsidiary enforceable in accordance with its terms. Fresenius
AG is the legal and beneficial owner of 18,673,324 Fresenius USA
Common Shares (13,793,441 of which are owned beneficially and of
record by Fresenius AG or its subsidiaries, 3,129,883 of which are
issuable upon conversion of Fresenius USA Series F Preferred Shares
and 1,750,000 of which are issuable upon the exercise of currently
exercisable warrants) and 200,000 Fresenius USA Series F Preferred
Shares.
(c) Governmental Filings; No Violations. (i) Other than the
filings provided for in the Transaction Agreements, and other than as
may be required under the HSR Act and similar statutes in other
countries, the Exchange Act, the Securities Act, and state securities
laws, except as set forth in the Fresenius AG Disclosure Letter, no
notices, reports or other filings are required to be made by Fresenius
AG or any subsidiary with, nor are any consents, registrations,
approvals, permits or
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authorizations required to be obtained by it or
any subsidiary from, any Governmental Entity in connection with the
execution, delivery or performance of each Transaction Agreement to
which it is a party by it or any subsidiary and the consummation by it
or any subsidiary of the transactions contemplated hereby and thereby,
the failure to make or obtain any or all of which, individually or in
the aggregate, is reasonably likely to have a Material Adverse Effect
with respect to the FWD Business or enable any person to enjoin or
prevent or materially delay consummation of the transactions
contemplated hereby and thereby.
(ii) The execution, delivery and performance by Fresenius
AG or any subsidiary of each Transaction Agreement to which it is a
party does not or will not, and the consummation by it of any of the
transactions contemplated thereby will not, constitute or result in
(A) a breach or violation of, or a default under, its Certificate of
Incorporation or By-laws, or the comparable governing instruments of
any of its subsidiaries, or (B) assuming receipt of any consents and
the occurrence of any events disclosed in the Fresenius AG Disclosure
Letter as contemplated in the last sentence of this paragraph (ii), a
breach or violation of, or a default under, or the acceleration of or
the creation of a lien, pledge, security interest or other encumbrance
on assets of it, Newco or the Surviving Corporations or any of their
respective subsidiaries (with or without the giving of notice, the
lapse of time or both) pursuant to, any provision of any Contract of
it or any of its subsidiaries or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or
non-governmental permit or license to which it or any of its
subsidiaries is subject, or any change in the rights or obligations of
any party under, or give rise to any rights of termination under, any
of the Contracts, except, in the case of clause (B) above, for such
breaches, violations, defaults, accelerations or changes that are
disclosed in the Fresenius AG Disclosure Letter or, individually and
in the aggregate, are not reasonably likely to have a Material Adverse
Effect with respect to the FWD Business. The Fresenius AG Disclosure
Letter sets forth a list of all consents required under any Contracts
to be obtained by it or any subsidiary or events required to occur
prior to consummation of the Reorganization (other than consents the
failure to obtain of which, individually and in the aggregate, is not
reasonably likely to have a Material Adverse Effect with respect to
the FWD Business).
(d) Takeover Statutes. Execution, delivery and performance
of this Agreement and consummation of the transactions contemplated
hereby will not cause to be applicable to Fresenius AG any Takeover
Statute (after giving effect to any actions that will be taken prior
to the Effective Time).
(e) Brokers and Finders. Neither it nor any of its officers,
directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated herein except pursuant
to arrangements disclosed in writing to the other parties hereto prior
to the date hereof.
(f) Contribution. Except for the shares of capital stock of
Fresenius USA, the FWD Business Assets, which are to be contributed
pursuant to the Contribution, represent the worldwide dialysis
business of Fresenius AG and all assets and services
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predominantly used in the conduct of Fresenius AG's worldwide
dialysis business as presently conducted.
(g) Tax Matters. At the Effective time, the representations
set forth in the numbered paragraphs of the form of Tax Matters
Certificate of Fresenius AG attached hereto as Exhibit G (the
"Fresenius AG Tax Matters Certificate") will be true and correct in all
respects, and such representations are hereby incorporated herein by
reference with the same effect as if set forth herein in their
entirety.
(h) Information in Disclosure Documents and Registration
Statements. None of the information supplied or to be supplied by
Fresenius AG for inclusion or incorporation by reference in any
Registration Statement will, at the time such Registration Statement
becomes effective under the Securities Act and at the Effective Time,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading;
and the Fresenius USA Proxy Statement will not, at the date mailed to
Fresenius USA shareholders and at the time of the Fresenius USA
Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Fresenius USA Proxy
Statement will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations
thereunder, except that no representation is made by Fresenius AG with
respect to statements made therein based on information supplies by
Grace or its subsidiaries.
(i) Disclosure. Neither the representations and warranties
of Fresenius USA or Fresenius AG contained in this Agreement nor in
any written instrument, list, exhibit or certificate furnished or to
be furnished by Fresenius USA or Fresenius AG to Grace pursuant hereto
or in connection herewith contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements not misleading.
(j) Assets. Except as contemplated herein, at the Effective
Time, the FWD Business Group will contain the worldwide dialysis
business of Fresenius AG and all assets and services predominantly
used in the conduct of Fresenius AG's worldwide dialysis business as
presently conducted.
SECTION 5.4. Representations and Warranties for the FWD
Business. Fresenius AG hereby represents and warrants to Grace that, except as
set forth in a letter (the "FWD Business Disclosure Letter") delivered to Grace
simultaneously with the execution and delivery of this Agreement:
(a) Corporate Organization and Qualification. A true and
complete list of all FWD Business Subsidiaries, together with the
jurisdiction of organization of each such FWD Business Subsidiary, is
set forth in the FWD Business Disclosure Letter. Each FWD Business
Subsidiary is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and is in good
standing (if recognized in such jurisdiction, or, if not, duly
qualified) as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business
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conducted, by such FWD Business Subsidiary require such qualification,
except for any such failure so to qualify or be in good standing
which, when taken together with all other such failures, is not
reasonably likely to have a Material Adverse Effect with respect
to the FWD Business. Each FWD Business Subsidiary has the requisite
corporate power and authority to carry on its business as now being
conducted. Fresenius AG has made available to the other parties
hereto a complete and correct copy of the Certificate of
Incorporation and By-laws (or similar organizational documents) of
each FWD Business Subsidiary, each as amended to date and currently
in full force and effect.
(b) Corporate Authority. Each FWD Business Subsidiary has
the requisite corporate power and authority and has taken all
corporate action necessary in order to consummate the transactions
contemplated hereby and by the other Transaction Agreements.
(c) Capitalization. The authorized capital stock, and the
number of shares of such capital stock issued and outstanding, of each
FWD Business Subsidiary is set forth in the FWD Business Disclosure
Letter, and all such issued and outstanding shares of capital stock
are owned of record and beneficially by Fresenius AG or another FWD
Business Subsidiary, free and clear of all liens, pledges, security
interests, claims, proxies, preemptive or subscriptive rights or other
encumbrances or restrictions of any kind. There are no options,
warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of any
FWD Business Subsidiary or obligating any FWD Business Subsidiary to
issue or sell any shares of capital stock of, or other equity
interests in, any FWD Business Subsidiary. There are no outstanding
contractual obligations of any FWD Business Subsidiary to repurchase,
redeem or otherwise acquire any capital stock of any FWD Business
Subsidiary or to provide funds to make any investment (in the form of
a loan, capital contribution or otherwise) in any FWD Business
Subsidiary or any other entity. Each of the outstanding shares of
capital stock of each FWD Business Subsidiary is duly authorized,
validly issued, fully paid and nonassessable.
(d) Financial Statements; No Undisclosed Liabilities. (i)
Included in the FWD Business Disclosure Letter are a consolidated
balance sheet as of December 31, 1995, and consolidated statements of
income, cash flows and shareholders' equity for the years ended
December 31, 1995 for the FWD Business (such financial statements, the
"FWD Business Disclosure Letter Financial Statements," and the
balance sheet as of December 31, 1995 included therein,
the "FWD Business Disclosure Letter Balance Sheet"). The FWD Business
Disclosure Letter Balance Sheet (including any related notes and
schedules) fairly presents in all material respects, and the
consolidated balance sheet to be included in the FWD Business Audited
Financial Statements (including any related notes and schedules) shall
fairly present in all material respects, the consolidated financial
position of the FWD Business as of its date; and each of the
consolidated statements of income, cash flows and shareholders' equity
included in the FWD Business Disclosure Letter Financial Statements
(including any related notes and schedules) fairly presents in all
material respects, and each such statement to be included in the FWD
Business Audited Financial Statements (including any related notes and
schedules) shall fairly present in all material respects, the
consolidated results of operations, retained earnings and
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cash flows, as the case may be, of the FWD Business for the periods
set forth therein, in each case in accordance with US GAAP.
(ii) Except as disclosed on the FWD Business
Disclosure Letter Balance Sheet or the notes thereto, neither the FWD
Business nor any FWD Business Subsidiary has any liabilities, whether
or not accrued, contingent or otherwise, that, individually or in the
aggregate are reasonably likely to have a Material Adverse Effect with
respect to the FWD Business.
(e) Absence of Certain Events and Changes. Except as
disclosed in the FWD Business Disclosure Letter, since September 30,
1995, Fresenius AG, with respect to the FWD Business, and the FWD
Business Subsidiaries, have conducted their respective businesses only
in the ordinary and usual course of such businesses and there has not
been any change or development or combination of changes or
developments (including any worsening of any condition currently
existing) which, individually and in the aggregate, is reasonably
likely to result in a Material Adverse Effect with respect to the FWD
Business.
(f) Compliance with Laws. Fresenius AG has complied, in the
conduct of the FWD Business, and each FWD Business Subsidiary has
complied, in the conduct of its respective business, with all
applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable thereto, except where the failure to comply is not
reasonably likely, individually and in the aggregate, to have a
Material Adverse Effect with respect to the FWD Business. To the
knowledge of the executive officers of Fresenius AG,
Fresenius AG has, with respect to the FWD Business, each FWD Business
Subsidiary has, and, immediately after the Contribution, an FWD
Business Subsidiary will have, all permits, licenses, certificates of
authority, orders, and approvals of, and has made all filings,
applications, and registrations with, federal, state, local, and
foreign governmental or regulatory bodies that are required in order
to permit such party to carry on its business as it is presently
conducted, except for such permits, licenses, certificates, orders,
filings, applications and registrations, the failure to have or make
which, individually and in the aggregate, are not reasonably likely to
have a Material Adverse Effect with respect to the FWD Business.
(g) Title to Assets. Fresenius AG and the FWD Business
Subsidiaries have and, immediately after the Contribution, the FWD
Business Subsidiaries will have, good and, with respect to real
property, marketable title to its properties and assets (other than
property as to which it is lessee), except for those defects in title
which are not, individually and in the aggregate, reasonably likely to
have a Material Adverse Effect with respect to the FWD Business.
Fresenius AG and the FWD Business Subsidiaries have, and immediately
after the Contribution, the FWD Business Subsidiaries will either own
or have adequate rights to use (on the same basis as currently owned
or used by the FWD Business), all assets predominantly used or useful
in the FWD Business as currently conducted and all assets reflected on
the FWD Business Balance Sheet, except for those properties subject to
the Lease and assets disposed of in accordance with this Agreement and
except for those failures to own or have which are not, individually
and in the aggregate, reasonably likely to have a Material Adverse
Effect with respect to the FWD Business.
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(h) Litigation. There are no civil, criminal or
administrative actions, suits, claims, hearings or proceedings pending
or, to the knowledge of its executive officers, threatened, or
investigations pending, against Fresenius AG or its subsidiaries
(other than Fresenius USA) with respect to the FWD Business, or any
FWD Business Subsidiary that, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect with respect to
the FWD Business. There are no judgments or outstanding orders,
writs, injunctions, decrees, stipulations or awards (whether rendered
or issued by a court or Governmental Entity, or by arbitration)
against Fresenius AG or its subsidiaries (other than Fresenius USA)
with respect to the FWD Business, or any FWD Business Subsidiary, or
any of their respective properties or businesses, which are reasonably
likely, individually or in the aggregate, to have a Material Adverse
Effect with respect to the FWD Business.
(i) Taxes. All material federal, state, local and foreign
tax returns required to be filed with respect to the FWD Business or
any FWD Business Subsidiary have been timely filed or requests for
extensions have been timely filed and any such extension shall have
been granted and not have expired, and all such filed returns are
complete and accurate in all material respects. All material taxes
required to be shown on returns filed with respect to the FWD Business
or any FWD Business Subsidiary, have been paid in full or have been
recorded as a liability on the FWD Business Disclosure Letter Balance
Sheet. There is no outstanding audit examination, deficiency, or
refund litigation with respect to any taxes with respect to the FWD
Business or any FWD Business Subsidiary that, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect with
respect to the FWD Business. All material taxes, interest, additions,
and penalties due with respect to completed and settled examinations
or concluded litigation relating to the FWD Business or any FWD
Business Subsidiary have been paid in full or have been recorded as a
liability on the FWD Business Balance Sheet (in accordance with US
GAAP). Neither Fresenius AG nor any FWD Business Subsidiary is a
party to a tax sharing or similar agreement or any agreement with
respect to the FWD Business or any FWD Business Subsidiary, except for
any such agreement under which the liabilities of FWD Business and its
subsidiaries would not be reasonably likely to have a Material Adverse
Effect with respect to FWD Business. Neither Fresenius AG (with
respect to the FWD Business) nor the FWD Business Subsidiaries have
waived any applicable statute of limitations with respect to German
tax or any material German state income taxes.
(j) Environmental Matters. Except for such matters that,
individually and in the aggregate, are not reasonably likely to have a
Material Adverse Effect with respect to the FWD Business, to the
knowledge of its executive officers (i) Fresenius AG, with respect to
the FWD Business, and the FWD Business Subsidiaries are in compliance
with all applicable Environmental Laws; and (ii) neither Fresenius AG
with respect to the FWD Business, nor any of the FWD Business
Subsidiaries has any outstanding notices,
demand letters or requests for information from any Government Entity
or any third party that assert that Fresenius AG, with respect to the
FWD Business, or any of the FWD Business Subsidiaries may be in
violation of, or liable under, any Environmental Law and none of
Fresenius AG with respect to the FWD Business, the FWD Business
Subsidiaries or its properties are subject to any court order,
administrative order or decree arising under any Environmental Law.
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(k) Governmental Filings; No Violations. (i) Other than the
filings provided for in the Transaction Agreements, and other than as
may be required under the HSR Act and similar statutes in other
countries, the Exchange Act, the Securities Act, and state securities
laws, no notices, reports or other filings are required to be made by
any FWD Business Subsidiaries with, nor are any consents,
registrations, approvals, permits or authorizations required to be
obtained by it from, any Governmental Entity, in connection with the
execution, delivery or performance of each Transaction Agreement to
which Fresenius AG is a party by it and the consummation by it of the
transactions contemplated hereby and thereby, the failure to make or
obtain any or all of which, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect with respect to
the FWD Business or enable any person to enjoin or prevent or
materially delay consummation of the transactions contemplated hereby
and thereby.
(ii) The execution, delivery and performance by each FWD
Business Subsidiary of each Transaction Agreement to which Fresenius
AG is a party does not or will not, and the consummation by it of any
of the transactions contemplated hereby and thereby will not,
constitute or result in (A) a breach or violation of, or a default
under, its Certificate of Incorporation or By-laws (or similar
organizational document), or the comparable governing instruments of
any of its subsidiaries, or (B) assuming receipt of any consents and
the occurrence of any events disclosed in the FWD Business Disclosure
Letter as contemplated in the last sentence of this paragraph, a
breach or violation of, or a default under, or the acceleration of or
the creation of a lien, pledge, security interest or other encumbrance
on assets of it, Newco or the Surviving Corporations or any of their
respective subsidiaries (with or without the giving of notice, the
lapse of time or both) pursuant to, any provision of any Contract of
it or any of its subsidiaries or any law, rule, ordinance or
regulation or judgment, decree, order, award or governmental or
non-governmental permit or license to which it or any of its
subsidiaries is subject, or any change in the rights or obligations of
any party under, or give rise to any rights of termination under, any
of the Contracts, except, in the case of clause (B) above, for such
breaches, violations, defaults, accelerations or changes that are
disclosed in the FWD Business Disclosure Letter or, individually and
in the aggregate, are not reasonably likely to have a Material Adverse
Effect with respect to the FWD Business. The FWD Business Disclosure
Letter sets forth a list of all consents required under any Contracts
to be obtained by any FWD Business Subsidiary or events required to
occur prior to consummation of the Reorganization (other than consents
the failure to obtain of which, individually and in the aggregate, is
not reasonably likely to have a Material Adverse Effect with respect
to the FWD Business).
(l) Contracts and Commitments. Except as set forth in the
FWD Business Disclosure Letter, none of Fresenius AG or any of its
subsidiaries, with respect to the FWD Business, nor any FWD Business
Subsidiary is a party to any Contract that would be required to be
filed as an exhibit to a registration statement for the FWD Business
and Fresenius USA, taken as a whole, under the Exchange Act.
(m) Employee Benefit Plans. (i) The FWD Business Disclosure
Letter lists each material employee benefit plan, program, policy,
practice and arrangement and all material bonus, stock option, stock
purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance
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or other benefit plans, programs or arrangements, and all material
employment, termination, severance or other contracts or agreements,
whether legally enforceable or not, to which Fresenius AG, its
subsidiaries or any of the FWD Business Subsidiaries is a party, with
respect to which Fresenius AG, its subsidiaries or any of the FWD
Business Subsidiaries has or could incur any obligation or
which are maintained, contributed to or sponsored by Fresenius AG,
its subsidiaries or any of the FWD
Business Subsidiaries for the benefit of any current or former
employee, officer or director of Fresenius AG, its subsidiaries or any
of the FWD Business Subsidiaries, (collectively, the "Fresenius AG
Plans"). With respect to each Fresenius AG Plan, Fresenius AG has
caused to be made available to the other parties hereto a true,
correct and complete copy of: (A) each writing constituting a part of
such Fresenius AG Plan, including without limitation all plan
documents, benefit schedules, participant agreements, trust
agreements, and insurance contracts and other funding vehicles; (B)
the current summary plan description, if any; (C) the
most recent annual financial report and actuarial valuations, if any;
and (D) the most recent determination letter from the relevant
governmental authority, if any. All financial statements and
actuarial reports for each Fresenius AG Plan have been prepared in
accordance with applicable accounting principles and actuarial
principles, applied on a uniform and consistent basis.
(ii) In all material respects, each Fresenius AG Plan
complies with, and has been managed in accordance with, all applicable
laws, regulations and requirements. Each Fresenius AG Plan required
to be registered has been registered and has been maintained in good
standing with applicable legal and regulatory authorities. Where
Fresenius AG Plans are funded or insured, all contributions and other
amounts due to or in respect of them or any state pension arrangements
by Fresenius AG, its subsidiaries or any of the FWD Business
Subsidiaries have been fully paid at the Effective Time. The fair
market value of the assets of each such funded Fresenius AG Plan, or
the liability of each insurer for any Fresenius AG Plan funded through
insurance or the book reserve established for any such Fresenius AG
Plan on the FWD Business Balance Sheet, together with any accrued
contributions, is sufficient to procure or provide for the accrued
benefit obligations, as of the Closing Date, with respect to all
current and former participants in such Fresenius AG Plan according to
the actuarial assumptions utilized in the actuary's report described
in Section 5.4(m)(i) above, and no transaction contemplated by this
Agreement shall cause such assets, book reserves or insurance
obligations to be less than such benefit obligations, and nothing has
happened since the date of that information which would have a
Material Adverse Effect on the funding position of the Fresenius AG
Plans. Where Fresenius AG Plans are unfunded or underfunded,
appropriate reserves are established therefore on the FWD Business
Balance Sheet. Fresenius AG, its subsidiaries and the FWD Business
Subsidiaries have not by any act or omission, direct or indirect,
materially increased their liabilities or obligations to the Fresenius
AG Plans since the date of the last actuary's report described in
Section 5.4(m)(i) above.
(iii) There is no dispute about the entitlements or
benefits payable under the Fresenius AG Plans, no claim by or against
the managers or administrators of the Fresenius AG Plans, Fresenius
AG, its subsidiaries or any of the FWD Business Subsidiaries has been
made or threatened, and there are no circumstances which
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might give rise to any such claim except where any such event could
not have, individually and in the aggregate, a Material Adverse
Effect with respect to the FWD Business. Except as set forth in the
FWD Business Disclosure Letter Balance Sheet, there exists no
liability (contingent or otherwise), and no event has occurred, with
respect to any Fresenius AG Plan which could reasonably be expected
to have a Material Adverse Effect with respect to the FWD Business.
(n) Lease. The Lease, pursuant to which Newco (or its
subsidiary) shall lease certain real property in Germany from
Fresenius AG, as provided therein, when executed and delivered, shall
be a valid and binding agreement of Fresenius AG, enforceable in
accordance with the terms thereof; and the total rental to be paid
pursuant to such Lease of the equivalent of $12,000,000 per year
beginning January 1, 1997 (subject to adjustment, as provided therein)
is a fair market rental for such property.
(o) Trademarks, Patents and Copyrights. Fresenius AG or a
FWD Business Subsidiary owns or possesses adequate licenses or other
rights to use, all patents, trademarks, trade names, service marks,
copyrights, licenses and product licenses or registrations (including
applications for any of the foregoing), technology, know-how, tangible
or intangible proprietary intellectual property rights, information or
material (whether conceived, reduced to practice or under
development), formulae, inventions and new and investigational
applications (including all options or other rights to acquire any of
the foregoing) as are necessary, used or useful in connection with the
FWD Business (the "FWD Business Intellectual Property"), the lack of
which would reasonably be expected to have a Material Adverse Effect
with respect to the FWD Business; and none of Fresenius AG or any of
its subsidiaries has any knowledge of any conflict with the
proprietary intellectual property rights of any of Fresenius AG or any
FWD Business Subsidiary therein or any knowledge of any conflict by
Fresenius AG or any FWD Business Subsidiary with the rights of others
therein which would have a Material Adverse Effect with respect to the
FWD Business. Immediately after the Contribution, Newco or its
Subsidiary will own or possess adequate licenses or other rights to
use (on substantially the same basis as currently owned or possessed
by the FWD Business) all of the FWD Business Intellectual Property.
There are no Contracts, agreements and licenses pursuant to which
Fresenius AG or any subsidiaries of Fresenius AG which are not FWD
Business Subsidiaries will retain rights or interests of any kind in
or affecting the FWD Business Intellectual Property.
SECTION 5.5. Certain Definitions Relating to the FWD
Business. (a) "FWD Business" means the dialysis and renal medical products
business conducted worldwide by Fresenius AG (including, without limitation,
the FWD Business Subsidiaries), other than the dialysis business of Fresenius
USA.
(b) "FWD Business Assets" means all the property and assets
(including intangible assets, goodwill and leaseholds) of the FWD Business
which are reflected on the FWD Business Balance Sheet or otherwise
predominately relating to or predominately used or useful in the business and
operations of the FWD Business (other than the property subject to the Lease),
plus (i) all property and assets which have been or will be acquired in the
ordinary course of business since the date of the FWD Business Balance Sheet,
less (ii) any property and assets which have been or will be disposed of or
consumed in the ordinary
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course of business since the date of the FWD Business Balance Sheet consistent
with the terms hereof.
(c) "FWD Business Subsidiaries" means all subsidiaries of
Fresenius AG and all other entities in which Fresenius AG holds any direct or
indirect equity interest, other than Fresenius USA and its subsidiaries, which
conduct any of the FWD Business (it being agreed and understood that (i) as of
the date hereof, the FWD Business is conducted, and the FWD Business Assets are
held, by Fresenius AG and certain of its subsidiaries (all such entities, the
"Current Subsidiaries"), (ii) as of the Contribution, by virtue of the
Fresenius AG Restructuring, the FWD Business will be conducted, and the FWD
Business Assets will be held, by certain Fresenius AG subsidiaries which may
include the Current Subsidiaries as well as other subsidiaries (all such
entities, the "Closing Subsidiaries", and (iii) all references herein to FWD
Business Subsidiaries shall be deemed to refer to the Current Subsidiaries as
of the date hereof and to the Closing Subsidiaries as of the Contribution).
(d) "Fresenius AG Restructuring" means the actions taken and
proposed to be taken by Fresenius AG and its subsidiaries to restructure the
FWD Business so that, at or prior to Contribution, the FWD Business
Subsidiaries shall own all FWD Business Assets.
ARTICLE VI
COVENANTS
SECTION 6.1. Interim Operations. Each of Grace and Fresenius
AG (for itself and on behalf of Fresenius AG) covenants and agrees as to itself
and its subsidiaries that, from and after the date hereof until the Effective
Time, except insofar as the other parties shall otherwise consent or except as
otherwise contemplated by this Agreement, the Contribution Agreement, the
Distribution Agreement or its Disclosure Letter (provided that, as used herein,
all references to Grace (and/or its Affiliates) shall be deemed to refer to
Grace and its Affiliates which conduct the NMC Business, consistent with
Section 9.8 hereof, except as otherwise specifically provided):
(a) To the extent reasonably practicable, taking into account
any operational matters that may arise that are primarily attributable
to the pendency of the Reorganization, the business of it and its
subsidiaries will be conducted only in the ordinary and usual course
consistent with past practice and existing business plans previously
disclosed to the other parties and, to the extent consistent
therewith, it and its subsidiaries will use all reasonable efforts to
preserve their business organization intact and maintain their
existing relations with customers, suppliers, employees and business
associates.
(b) It will not (i) sell or pledge or agree to sell or pledge
any stock owned by it in any of its subsidiaries or, in the case of
Fresenius AG, any FWD Business Subsidiary; (ii) amend its Certificate
of Incorporation or By-laws (or similar organizational document);
(iii) split, combine or reclassify any outstanding capital stock; or
(iv) declare, set aside or pay any dividend payable in stock or
property with respect to any of its capital stock.
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(c) Neither Grace, Fresenius USA, nor any of their respective
subsidiaries or, Fresenius AG, solely with respect to any FWD Business
Subsidiary, will issue, sell, pledge, dispose of or encumber, or
authorize or propose the issuance, sale, pledge, disposition or
encumbrance of, any shares of, or securities convertible or
exchangeable for, or options, puts, warrants, calls, commitments or
rights of any kind to acquire, any shares of its capital stock of any
class other than common shares issuable pursuant to options, warrants
and other convertible securities outstanding on the date hereof and
disclosed in its Disclosure Letter, and employee stock options
granted after the date hereof in the ordinary course of business.
(d) None of Grace, Fresenius USA or Fresenius AG, with
respect to the FWD Business, will (i) transfer, lease, license,
guarantee, sell, mortgage, pledge or dispose of any property or assets
encumber any property or assets other than in the ordinary and usual
course of business; (ii) authorize or make capital expenditures; (iii)
make any acquisition of, or investment in, assets, stock or other
securities of any other person or entity other than its wholly owned
subsidiaries or (iv) make any divestiture.
(e) Except as required by agreements or arrangements
disclosed in its SEC Documents or its Disclosure Letter, neither it
nor any of its subsidiaries or, in the case of Fresenius AG, any FWD
Business Subsidiary, will grant any severance or termination pay to,
or enter into, extend or amend any employment, consulting, severance
or other compensation agreement with, any director, officer or other
of its employees, except to other employees in the ordinary course in
a manner consistent with past practice, which would bind Newco (or its
subsidiary) after the Reorganization.
(f) Except as may be required to satisfy contractual
obligations existing as of the date hereof (and disclosed to the other
parties hereto) and the requirements of applicable law, and except in
the ordinary course of business, neither it nor any of its
subsidiaries or, in the case of Fresenius AG, any FWD Business
Subsidiary, will establish, adopt, enter into, make, amend or make any
elections under any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, employee stock ownership, deferred compensation,
employment, termination, severance or other plan, agreement, trust,
fund, policy or arrangement for the benefit of any directors, officers
or employees which would affect Newco (or its subsidiary), except in a
manner consistent with past practice.
(g) It will not implement any change in its accounting
principles, practices or methods, other than as may be required by
German GAAP, in the case of Fresenius AG, or US GAAP, in the case of
Grace and Fresenius USA, other than as may be necessary or advisable
in connection with the Distribution.
(h) Neither it nor any of its subsidiaries will authorize or
enter into an agreement to take any of the actions referred to in
paragraphs (a) through (g) above.
SECTION 6.2. Certain Transactions. (a) Prior to the
Distribution: (i) Grace and Grace-Conn. shall use reasonable efforts to cause
NMC to arrange new credit facilities so that the transactions contemplated by
the Transaction Agreements may be consummated; (ii) Fresenius AG shall use
reasonable efforts to arrange new credit facilities
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for the FWD Business so that the transactions contemplated by the Transaction
Agreements may be consummated; and (iii) the parties hereto shall cooperate with
respect to the foregoing.
(b) Prior to or concurrent with the Reorganization, the
parties hereto shall use reasonable efforts to satisfy the conditions set forth
in Sections 7.1(j) and 7.1(k).
(c) It is understood and agreed by the parties hereto that,
at the time of the Reorganization, none of Grace, Fresenius USA and the FWD
Business shall have cash or marketable securities, it being contemplated that,
in connection with the Reorganization, such cash and marketable securities
shall be provided to Grace-Conn. and Fresenius AG, respectively, and that new
working capital facilities to finance working capital needs shall be obtained.
(d) It is the intention of the parties hereto that (i) Newco
shall pay dividends to the holders of its outstanding ordinary shares in the
amounts set forth in the business plan previously disclosed to the parties
hereto beginning in January 1997, subject to the declaration of such dividends
by the Newco Board, and (ii) Newco (or its subsidiary) shall lease real
property and buildings in Germany from Fresenius AG, for a total rental of the
equivalent $12 million per year beginning January 1997 pursuant to the Lease to
be consistent with the terms set forth in Exhibit D to the Contribution
Agreement.
(e) It is the intention of the parties hereto that, following
the Reorganization, Newco shall seek to refinance up to $700 million of credit
facilities through the sale of preferred securities which will be primarily
"mezzanine" capital, which could be classified as equity under German generally
accepted accounting principles and whose interest stream would be tax
deductible. The sale (or commitments for sale) of such preferred securities
shall not be a condition to the consummation of the Reorganization.
(f) It is the intention of the parties hereto that, to the
extent that it is not possible to obtain the credit facilities and/or arrange
for the sale of the preferred securities contemplated by paragraphs (a) and (e)
above on terms which will permit the payment of cash pursuant to the lease and
dividends pursuant to paragraph (d) above, prior to the Effective Time, the
parties shall endeavor to restructure the transactions contemplated hereby so
that, commencing in January 1997, Fresenius AG shall receive cash flow from
Newco in the amount that otherwise would have been received pursuant to
paragraph (d) above.
SECTION 6.3. Acquisition Proposals. Each party hereto agrees
that neither it nor any of its subsidiaries nor any of its respective officers
and directors or the officers and directors of its subsidiaries shall, and it
shall each direct and use its best efforts to cause its employees, agents and
representatives (including, without limitation, any investment banker, attorney
or accountant retained by it or any of its subsidiaries) not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, it or any of its
subsidiaries (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal") or engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
person relating to an Acquisition Proposal; provided, however, that the Grace
Board may furnish or
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cause to be furnished information (pursuant to confidentiality arrangements) and
may participate in such discussions and negotiations directly or through its
representatives if (i) the failure to provide such information or participate in
such negotiations and discussions could, in the opinion of its outside counsel,
reasonably be deemed to cause the members of the Grace Board to breach their
fiduciary duties under applicable law or (ii) another corporation, partnership,
person or other entity or group makes a written offer or written proposal which,
based upon the identity of the person or entity making such offer or proposal
and the terms thereof, and the availability of adequate financing therefor, the
Grace Board believes, in the good faith exercise of its business judgment and
based upon advice of its outside legal and financial advisors, could reasonably
be expected to be consummated and represents a transaction more favorable to its
shareholders than the Reorganization (a "Higher Offer"); provided further,
however, that the foregoing restriction shall not apply to an Acquisition
Proposal exclusively involving all or part of the stock or assets of
Grace-Conn. Grace shall notify the other parties hereto as soon as practicable
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with it.
SECTION 6.4. Information Supplied. Each of parties hereto
agrees that none of the information supplied or to be supplied by it for
inclusion or incorporation by reference in any Registration Statement, Proxy
Statement or Schedule 14A, or any amendment or supplement thereto, will, in the
case of a Registration Statement, at the time such Registration Statement and
each amendment and supplement thereto becomes effective under the Securities
Act, or, in the case of a Proxy Statement or Schedule 14A, at the time such
Proxy Statement or Schedule 14A and each amendment and supplement thereto is
filed in definitive form with the SEC or mailed to shareholders and at the time
of the applicable Meeting, 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 not misleading.
SECTION 6.5. Shareholder Approvals. (a) Each of Grace and
Fresenius AG (on behalf of Fresenius USA) agrees to take, in accordance with
applicable law and its Certificate of Incorporation and By-laws, all action
necessary to convene a meeting of holders of Grace Common Shares and Grace
Preferred Shares and Fresenius USA Common Shares and Fresenius USA Preferred
Shares, respectively, as promptly as practicable after the Newco Registration
Statement and the ADR Registration Statement are declared effective (and, in
the case of Grace, the NY Preferred Registration Statement and the Grace-Conn.
Registration Statement are declared effective), and its Proxy Statement is
cleared, by the SEC, to consider and vote upon the approval of the transactions
contemplated by the Transaction Agreements (including, without limitation, the
Grace Amendment). Subject to the remainder of this Section 6.5, each of the
Grace Board and the Fresenius USA Board shall recommend such adoption and
approval and shall take all lawful action to solicit such approval by
shareholders. The Grace Board may fail to make such a recommendation, or
withdraw, modify, or change any such recommendation, or recommend any other
offer or proposal, if the Grace Board, based on the opinion of its outside
counsel, determines that making such recommendation, or the failure to
recommend any other offer or proposal, or the failure to so withdraw, modify,
or change its recommendation, or the failure to recommend any other offer or
proposal, could reasonably be deemed to cause the members of the Grace Board to
breach their fiduciary duties under applicable law in connection with a Higher
Offer. In such event, notwithstanding anything contained in this Agreement to
the contrary, any such failure to recommend, withdrawal, modification, or change
of
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recommendation or recommendation of such other offer or proposal, or the
entering by Grace into an agreement with respect to a Higher Offer (provided
that Grace shall have provided Fresenius AG with at least 72 hours notice of its
intention to so enter and the identity of the other party thereto), shall not
constitute a breach of this Agreement by Grace.
(b) Fresenius AG agrees to take, in accordance with
applicable law and its organizational documents, all action necessary to
convene a meeting of Fresenius AG shareholders as promptly as practicable after
the date hereof to consider and vote upon the approval of the transactions
contemplated hereby. The Fresenius AG Management Board shall recommend such
adoption and approval and shall take all lawful action to solicit such approval
by Fresenius AG shareholders.
SECTION 6.6. Filings; Other Actions. (a) Subject to the
obligations of consultation contained herein, Grace shall promptly prepare for
filing with the SEC the Grace Proxy Statement, the Grace Schedule 14A and the
Grace-Conn. Registration Statement, Fresenius USA shall promptly prepare for
filing with the SEC the Fresenius USA Proxy Statement and Fresenius USA
Schedule 14A, and the parties hereto shall cooperate to promptly prepare for
filing with the SEC the Newco Registration Statement, the NY Preferred
Registration Statement and the ADR Registration Statement (including all
required financial statements). In connection with the foregoing, Fresenius AG
shall prepare audited financial statements prepared in accordance with US GAAP
for the FWD Business and such financial statement shall be included in the
Newco Registration Statement (and in such other Registration Statements and
Proxy Statements as may be appropriate). Each party hereto shall use its
reasonable efforts, after consultation with the other parties hereto, to
respond promptly to any comments made by the SEC with respect to such filings,
to have such filings declared effective or cleared, as the case may be, and
cause such filings to be mailed at the earliest reasonably practicable time.
Each party hereto and its counsel shall be given a reasonable opportunity to
review and comment on each version of such filings prior to the filing thereof
with the SEC. Each party hereto also shall use its reasonable efforts to
obtain all necessary state securities law or blue sky permits and approvals
required to carry out the transactions contemplated hereby and shall furnish
all information as may be reasonably requested in connection with any such
action.
(b) Each party hereto shall cooperate with the other parties
hereto, subject to the terms and conditions set forth herein, use its
reasonable efforts promptly to prepare and file all necessary documentation, to
effect all necessary applications, notices, petitions, filings and other
documents, and to obtain as promptly as reasonably practicable all necessary
permits, consents, orders, approvals and authorizations of, or any exemption by,
all third parties and Governmental Entities necessary or advisable to consummate
the transactions contemplated hereby. Each party hereto shall consult with the
other parties hereto with respect to the obtaining of all permits, consents,
approvals and authorizations of all third parties and Governmental Entities
necessary or advisable to consummate the transactions contemplated hereby and
each party shall keep the other parties hereto apprised of the status of matters
relating to completion of the transactions contemplated hereby.
(c) Each party hereto shall, upon reasonable request and
except as otherwise may be required by applicable law, furnish the other
parties hereto with all information concerning itself, its subsidiaries,
directors, officers and shareholders and other Affiliates and such other
matters as may be reasonably necessary or advisable in connection any
statement, filing, notice or application made by or on behalf of such other
party or any of
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its Affiliates to any Governmental Entity in connection with any transactions
contemplated by this Agreement.
(d) Each party hereto shall, subject to applicable laws
relating to the disclosure and exchange of information, promptly furnish the
other parties hereto with copies of written communications received by each
such party or any of its subsidiaries, from, or delivered by any of the
foregoing to, any Governmental Entity in respect of the transactions
contemplated hereby.
(e) Each party hereto shall cooperate with each other party
hereto and promptly take or cause to be taken all actions and do or cause to be
done all things necessary, proper or advisable to obtain favorable review of
the proposed transaction under the HSR Act and any foreign antitrust or
competition laws, which efforts shall include, without limitation, undertaking
litigation and/or agreeing to hold aside or divest, or enter into any conduct
restriction with respect to, any asset or business to be part of Newco after
the Effective Time (all such decisions to be made by the parties in
consultation with one another taking into consideration the effect on Newco);
provided, however, that the foregoing shall not require that any action be
taken with respect to (or by) Grace-Conn. or its business; provided further,
however, that Grace shall not be required to commit to any action that is to be
taken prior to the Effective Time.
SECTION 6.7. Audited Financial Statements. (a) Not later
than March 31, 1996, Grace shall deliver to the other parties hereto an audited
special purpose consolidated balance sheet as of, and audited special purpose
consolidated statements of income, cash flows and shareholders' equity for the
year ended December 31, 1995, in each case for Grace and exclusive of the
Grace- Conn. Business and the assets, liabilities, income cash flows and
shareholders' equity thereof (such financial statements, the "Grace Audited
Financial Statements"), together with the unqualified opinion of Grace's
independent accountants thereon to the effect that such special purpose
consolidated balance sheet fairly presents in all material respects the
consolidated financial position of Grace and its included subsidiaries as of
its date and such special purpose consolidated statements of income, cash flows
and shareholders' equity fairly present in all material respects the
consolidated results of operations, retained earnings and cash flows, as the
case may be, of Grace and its included subsidiaries for the periods set forth
therein, in each case in accordance with US GAAP and exclusive of the
Grace-Conn. Business and the assets, liabilities, income, cash flows and
shareholders' equity thereof.
(b) Not later than March 31, 1996, Fresenius USA shall
deliver to the other parties hereto an audited consolidated balance sheet as
of, and audited consolidated statements of income, cash flows and shareholders'
equity for Fresenius USA for the year ended December 31, 1995 (such financial
statements, the "Fresenius USA Audited Financial Statements"), together with
the unqualified opinion of Fresenius USA's independent accountants thereon to
the effect that such consolidated balance sheet fairly presents in all material
respects the consolidated financial position of Fresenius USA and its
subsidiaries as of its date and such consolidated statements of income, cash
flows and shareholders' equity fairly present in all material respects the
consolidated results of operations, retained earnings and cash flows, as the
case may be, of Fresenius USA and its subsidiaries for the periods set forth
therein, in each case in accordance with US GAAP.
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(c) Not later than March 31, 1996, Fresenius AG shall deliver
to the other parties hereto: (i) an audited consolidated balance sheet as of,
and audited consolidated statements of income, cash flows and shareholders'
equity for the FWD Business for the years ended December 31, 1994 and December
31, 1995 showing consolidating adjustments made in connection with the
consolidation of Fresenius USA with the FWD Business (such financial
statements, the "FWD Business Audited Financial Statements"), together with the
unqualified opinion of Fresenius AG's independent accountants thereon to the
effect that such consolidated balance sheet fairly presents in all material
respects the consolidated financial position of the FWD Business as of its date
and such consolidated statements of income, cash flows and shareholders' equity
fairly presents in all material respects the consolidated results of operations,
retained earnings and cash flows, as the case may be, of the FWD Business for
the periods set forth therein, in each case in accordance with US GAAP, (ii) an
audited consolidated balance sheet as of, and audited consolidated statements of
income, cash flows and shareholders' equity for Fresenius AG for the year ended
December 31, 1994 and December 31, 1995 (such financial statements, the
"Fresenius AG Audited Financial Statements"), together with the unqualified
opinion of Fresenius AG's independent accountants thereon to the effect that
such consolidated balance sheet fairly presents in all material respects the
consolidated financial position of Fresenius AG as of its date and such
consolidated statements of income, cash flows and shareholders' equity fairly
presents in all material respects the consolidated results of operations,
retained earnings and cash flows, as the case may be, of Fresenius AG for the
periods set forth therein, in each case in accordance with German GAAP, and
(iii) a reconciliation showing, with such level of detail provided to support
each of the adjustments made to the 1995 Fresenius AG Audited Financial
Statements to derive the 1995 FWD Business Audited Financial Statements.
(d) If (i) there exists any material difference between the
Grace Audited Financial Statements, the Fresenius USA Audited Financial
Statements or the FWD Business Audited Financial Statements, on the one hand,
and the Grace Disclosure Letter Financial Statements, the Fresenius USA
Disclosure Letter Financial Statements or the FWD Business Disclosure Letter
Financial Statements, respectively, on the other hand, and such material
difference adversely affects a party hereto (other than the party the financial
statements of which contain such material difference, and treating, for
purposes of this parenthetical, Fresenius AG and Fresenius USA as a single
party) (such party, the "Affected Party"), and such Affected Party notifies the
other parties hereto of such difference within 10 days following receipt of the
applicable Audited Financial Statements, or (ii) if Grace believes in good
faith that the Fresenius USA Audited Financial Statements and the FWD Business
Audited Financial Statements, or if Fresenius AG believes in good faith that
the Grace Audited Financial Statements, reflect a material adverse change in
the prospects of the business of Fresenius USA and the FWD Business or Grace,
as the case may be, from the business plans previously disclosed by the parties
hereto and not otherwise disclosed in connection with this Agreement (a party
so believing being a "Change Party"), and such Change Party notifies the other
parties hereto of such change within 10 days following receipt of the applicable
Audited Financial Statements, then the parties hereto shall negotiate in good
faith to adjust the relative economics of the transactions contemplated hereby,
in consultation with financial and accounting advisors, in light of the
foregoing. If the parties do not reach agreement on such an adjustment within
14 days of notice, this Agreement shall be terminable by an Affected Party or a
Change Party.
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(e) After delivery of the Audited Financial Statements as
contemplated by this Section 6.7 (if there is no material difference or
material adverse change as contemplated by the immediately preceding paragraph)
or after the reaching of agreement as contemplated by the immediately preceding
paragraph (if there is a material difference or material adverse change as
contemplated by the immediately preceding paragraph), all references herein to
the Disclosure Letter Financial Statements shall be deemed to refer to the
Audited Financial Statements.
(f) Each party hereto shall use all reasonable efforts to
cause to be delivered to the other party is, as appropriate, and its directors
a letter of its independent accountants, dated (i) the date on which each
Registration Statement shall become effective and (ii) a date shortly prior to
the Effective Date, and addressed to such other party and its directors, in
form and substance customary for "comfort" letters delivered by independent
accountants in connection with registration statements.
(g) Time shall be of the essence with respect to the delivery
of the Audited Financial Statements.
SECTION 6.8. Access. Upon reasonable notice, and except as
may otherwise be required by applicable law, each party hereto shall afford
each other party's Representatives access, during normal business hours
throughout the period until the Effective Time to its properties, books,
Contracts and records and, during such period, shall (and shall cause each of
its subsidiaries to) furnish promptly to the other party all information
concerning its business, properties and personnel as may reasonably be
requested; provided that no investigation pursuant to this Section 6.8 shall
affect or be deemed to modify any representation or warranty made by the party
furnishing such information; provided further that with respect to the work
papers of independent accountants, the provision of access shall be subject to
the permission of such independent accountants, and each party hereto shall use
reasonable best efforts to secure such permission for the other. Each party
hereto shall not, and shall cause its respective Representatives not to, use
any information obtained pursuant to this Section for any purpose unrelated to
the consummation of the transactions contemplated by this Agreement. All
information obtained pursuant to this paragraph shall be subject to the
provisions of the written confidentiality arrangements existing among the
parties hereto.
SECTION 6.9. Notification of Certain Matters. Each party
shall give prompt notice to the other party of any change that is reasonably
likely to result in any Material Adverse Effect to the knowledge of the
executive officers.
SECTION 6.10. Publicity. The initial press release relating
hereto shall be a joint press release and, thereafter, each party hereto shall
consult with each other party hereto prior to issuing any press releases or
otherwise making public statements with respect to the transactions
contemplated hereby and prior to making any filings with any Governmental
Entity or stock exchange with respect thereto; provided that if a party shall
be advised by counsel that any such press release, statement or filing is
required by applicable law and it shall not be practicable to consult with the
other parties prior to the time such press release, statement or filing is
required, a party may make such press release, statement or filing and shall
promptly notify the other parties thereof.
SECTION 6.11. [Intentionally omitted.]
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SECTION 6.12. Employee Benefits. (i) All Grace Employees
who are actively employed by Grace or its subsidiaries on the Effective Time
(including any Grace Employees who are receiving long term disability as of the
Effective Time) shall be provided with compensation and benefits (including,
without limitation, severance benefits and retiree benefits) substantially the
same as those benefits provided to Grace Employees as of the date hereof. In
addition, Grace Employees shall be given service credit for all periods of
employment with Grace or its Affiliates prior to the Effective Date for
purposes of eligibility and vesting (but not for benefit accrual) under any
plan adopted by Newco or any of their respective subsidiaries or Affiliates
with respect to Grace Employees to provide retirement or welfare benefits.
Following the Effective Time, NMC and Grace, and not Grace- Conn., shall bear
any costs and expenses associated with the termination of employees involved in
the NMC Business. It is the intention of Fresenius AG to consider the adoption
by Newco of a broad based equity incentive program for employees in the United
States.
(ii) Upon the request of Fresenius AG, prior to the
Effective Time, Grace shall amend or cause to be amended each Grace Pension
Plan which is a single-employer plan within the meaning of Section 4001(a)(15)
of ERISA (and which covers employees in the NMC Business) to delete any
provision that would become applicable on or after a Change of Control (as
defined in such Pension Plan), requiring (i) that Grace fund the Pension Plan
on a termination basis, and/or (ii) that benefit accruals under the Plan become
nonforfeitable as of the date of a Change of Control.
SECTION 6.13. Expenses and Liquidated Damages. (a) Except
as set forth in paragraph (b) below, whether or not the Reorganization is
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such expense; provided, however, that the costs and expenses of printing and
mailing the Grace Proxy Statement, Fresenius USA Proxy Statement, the NY
Preferred Registration Statement and the Newco Registration Statement, and all
filing and other fees paid to the SEC or antitrust authorities in connection
with the Reorganization, shall be borne by Newco.
(b) In the event that:
(A) (1) this Agreement shall be terminated pursuant to either
Section 8.3(ii) or Section 8.3(iii) or (2) this Agreement shall be
terminated pursuant to Section 8.2(ii) (due to a failure to obtain
Grace shareholder approval) and, at the time of the meeting called for
the approval of Grace shareholders referred to in Section 7.1(a), the
Grace Board shall have failed to recommend to its shareholders the
approval of the transactions contemplated hereby, or shall have
withdrawn, modified or changed such recommendation, or (3) this
Agreement shall be terminated pursuant to Section 8.2(ii) (due to a
failure to obtain Grace shareholder approval) and, at the time of the
meeting called for the approval of Grace shareholders referred to in
Section 7.1(a), there shall have been made an Acquisition Proposal
that has become public and, within six months following such
termination, Grace shall enter into a definitive agreement with
respect to the sale of Grace's healthcare business; and
and (B), at the time of such termination, neither Fresenius
Party shall be in material breach of its covenants or agreements
contained in this Agreement;
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then, Grace shall pay to Fresenius AG, as liquidated damages, in exchange for a
complete release of any liabilities of Grace hereunder, the amount of $35
million plus actual out of pocket expenses incurred to third parties in
connection with the transactions contemplated hereby after the date of this
Agreement, payable by wire transfer of immediately available funds within 24
hours to the account specified by Fresenius AG in writing; provided that, if the
approval of the transactions contemplated hereby by the shareholders of
Fresenius AG, as contemplated by Section 6.5, or an irrevocable written
commitment to vote in favor of such transactions from the holder of an amount of
Fresenius AG capital stock sufficient under applicable law to give such
approval, shall have been obtained, the amount of liquidated damages payable
pursuant to this Section 6.13 shall be $75 million plus actual out of pocket
expenses incurred to third parties in connection with the transactions
contemplated hereby after the date of this Agreement.
SECTION 6.14. Grace Rights Agreement. The Grace Board shall
take all requisite action in order to render the Grace Rights inapplicable to
the Grace Merger and the other transactions contemplated by this Agreement and
the Distribution Agreement and to extinguish the Grace Rights in connection
with the Reorganization.
SECTION 6.15. Antitakeover Statutes. If any Takeover Statute
is or may become applicable to the transactions contemplated hereby, each of
the parties hereto and the members of its Board of Directors shall grant such
approvals and take such actions as are necessary so that the transactions
contemplated by this Agreement may be consummated as promptly as practicable on
the terms contemplated hereby and otherwise act to eliminate or minimize the
effects of any Takeover Statute on any of the transactions contemplated by this
Agreement.
SECTION 6.16. Securities Act Compliance. As soon as
practicable after the date of the Meetings, each party hereto shall identify to
Newco all persons who were, at the time of the Meetings, possible Affiliates,
shall use its reasonable efforts to obtain a written agreement in the usual and
customary form from each person who is so identified as a possible Affiliate
and shall deliver such written agreements to Newco as soon as practicable after
the Meetings.
SECTION 6.17. Stock Exchange Listing. Prior to the Effective
Time, Fresenius AG shall use reasonable efforts to cause the ADR Facility and
the listing of the ADRs on the Exchange to become effective.
SECTION 6.18. Transaction Agreements. (a) Prior to the
Effective Time, the parties shall consummate any transactions to be consummated
prior to the Effective Time pursuant to the Distribution Agreement or the
Contribution Agreement.
(b) The parties shall not waive or amend any terms of the
Distribution Agreement or the Contribution Agreement without the consent of the
other parties hereto, which consent shall not be unreasonably withheld.
(c) The parties hereto acknowledge that the indemnities of
Grace-Conn. and of Fresenius AG contained in the Distribution Agreement and the
Contribution Agreement, respectively, shall inure to the benefit of each other
and to the benefit of Newco.
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SECTION 6.19. Tax Matters. Each party agrees to report the
Distribution as a tax-free distribution under the Code and the Grace Merger as
a tax-free reorganization under the Code on all tax returns and other filings,
and take no position inconsistent therewith, except where, in the opinion of
nationally recognized tax counsel to such party, there is not "substantial
authority," as defined in Section 6662 of the Code, to support such a position.
ARTICLE VII
CONDITIONS
SECTION 7.1. Conditions to Each Party's Obligation. The
respective obligation of each party hereto to consummate the Reorganization is
subject to the fulfillment of each of the following conditions:
(a) Shareholder Approval. To the extent required by law or
stock exchange regulations, the transactions contemplated by the
Transaction Agreements shall have been duly approved by the holders of
Grace Common Shares and Grace Preferred Shares in accordance with the
NYBCL, other applicable law and the Certificate of Incorporation and
By-laws of Grace, and by the shareholders of Fresenius AG in
accordance with applicable law.
(b) Governmental and Regulatory Consents. The waiting
periods applicable to the consummation of the transactions
contemplated by the Transaction Agreements under the HSR Act shall
have expired or been terminated; and all filings required to be made
prior to the Closing by any party hereto or any of its respective
subsidiaries with,
and all consents, approvals and authorizations required to be obtained
prior to the Closing by any party hereto or any of its respective
subsidiaries from, any Governmental Entity in connection with the
execution and delivery of the Transactions Agreements and the
consummation of the transactions contemplated by the Transaction
Agreements shall have been made or obtained, except where the failure
to obtain such consents is not reasonably likely to have a Material
Adverse Effect and could not reasonably be expected to subject the
parties hereto or their Affiliates or any directors or officers of any
of the foregoing to the risk of criminal liability.
(c) Third-Party Consents. All consents or approvals of all
persons (other than Governmental Entities) required for or in
connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by the
Transaction Agreements shall have been obtained and shall be in full
force and effect, except for those the failure to obtain of which
would not have a Material Adverse Effect with respect to all parties
and Newco.
(d) Litigation. No United States or state court or other
Governmental Entity of competent jurisdiction shall have enacted,
issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by the Transaction
Agreements.
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(e) Grace Tax Opinion. Grace shall have received opinions of
Wachtell, Lipton, Xxxxx & Xxxx and of Xxxxxx & Xxxxxxxxx, Chartered,
dated the Effective Date, substantially in the form of Exhibit H
hereto. In rendering such opinions, such firms may receive and rely
upon representations contained in certificates of the Grace, Fresenius
AG, Newco and others, including, without limitation, the Grace Tax
Matters Certificate and the Fresenius AG Tax Matters Certificate.
(f) Registration Statements. The Registration Statements
shall have become effective under the Securities Act or Exchange Act
(as applicable), and no stop order suspending the effectiveness of any
Registration Statement shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the SEC.
(g) Financing. The parties hereto shall have obtained the
financing necessary to consummate the transactions contemplated by the
Transaction Agreements on terms satisfactory to the parties.
(h) The Distribution. The Distribution shall have been
consummated.
(i) Stock Exchange Listing. The ADR Facility and the listing
of the ADRs on the Exchange shall have become effective; provided,
however, that the foregoing shall not apply to obligations of
Fresenius USA and Fresenius AG unless Fresenius AG has satisfied the
obligations contained in Section 6.18 hereof.
(j) Fresenius AG Debt. As of the Effective Time, Fresenius
USA and the FWD Business and their respective subsidiaries (taken
together, on a consolidated basis) shall have no Debt other than Debt
not in excess of an aggregate amount of $170 million.
(k) Grace Debt. As of the Effective Time, Grace and its
subsidiaries (on a consolidated basis) shall have no Debt, other than
Debt not in excess of an aggregate amount of (i) $2.263 billion plus
(ii) any amounts incurred to finance capital expenditures or
acquisitions permitted to be made hereunder.
SECTION 7.2. Conditions to Obligation of Grace. The
obligation of Grace to consummate the Reorganization is also subject to the
fulfillment or waiver by Grace prior to the Closing of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of each Fresenius Party set forth in this Agreement shall
be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date as though made on and as of the
Closing Date (except that representations and warranties that by their
terms speak as of the date of this Agreement or some other date shall
be true and correct as of such date), and Grace shall have received
certificates signed on behalf of each Fresenius Party by an officer to
such effect.
(b) Performance of Obligations. Each Fresenius Party shall
have performed in all material respects all obligations required to be
performed by it under this Agreement or the Contribution Agreement at
or prior to the Closing Date, and
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Grace shall have received a certificate signed on behalf of each
Fresenius Party by an officer to such effect.
(c) Pooling Agreement. Fresenius AG and Newco shall have
entered into the Newco Pooling Agreement; and Grace shall have
received an opinion of nationally recognized counsel, dated the
Closing Date, to the effect that the Newco Pooling Agreement is a
valid and binding agreement, enforceable against Newco and Fresenius
AG in accordance with the terms thereof, under the laws of the Federal
Republic of Germany, respectively. Such opinion shall be reasonably
acceptable to the other parties hereto.
(d) Fresenius AG Tax Opinion. Grace shall have received the
opinion of nationally recognized tax counsel (which may be, for
purposes of this provision, KPMG Deutsche Treuhand Gesellschaft AG
and/or KPMG Peat Marwick LLP), dated the Closing Date, substantially
in the form of Exhibit I hereto, to the effect that Newco shall have
no liability with respect to the Fresenius AG Restructuring and the
Contribution under the relevant provisions of the Code and applicable
law of the Federal Republic of Germany.
SECTION 7.3. Conditions to Obligation Concerning Fresenius
USA. The obligation of Fresenius AG to cause Fresenius USA to consummate the
Reorganization is also subject to the fulfillment or waiver by Fresenius USA
prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Grace set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date
(except that representations and warranties that by their terms speak
as of the date of this Agreement or some other date shall be true and
correct as of such date) and Fresenius USA shall have received a
certificate signed on behalf of Grace by an officer to such effect.
(b) Performance of Obligations. Grace shall have performed
in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and Fresenius
USA shall have received a certificate signed on behalf of Grace by an
officer to such effect.
(c) Pooling Agreement Opinion. Fresenius AG and Newco shall
have entered into the Newco Pooling Agreement;
and Fresenius USA shall have received an opinion of nationally
recognized counsel, dated the Closing Date, to the effect that the
Newco Pooling Agreement is a valid and binding agreement, enforceable
against Newco and Fresenius AG in accordance with the terms thereof,
under the laws of the Federal Republic of Germany, respectively. Such
opinion shall be reasonably acceptable to the other parties hereto.
SECTION 7.4. Conditions to Obligation of Fresenius AG. The
obligation of Fresenius AG to consummate the Reorganization is also subject to
the fulfillment or waiver by Fresenius AG prior to the Closing of each of the
following conditions:
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(a) Representations and Warranties. The representations and
warranties of Grace set forth in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date
(except that representations and warranties that by their terms speak
as of the date of this Agreement or some other date shall be true and
correct as of such date) and Fresenius AG shall have received a
certificate signed on behalf of Grace by an officer to such effect.
(b) Performance of Obligations. Grace shall have performed
in all material respects all obligations required to be performed by
it under this Agreement or the Distribution Agreement at or prior to
the Closing Date, and Fresenius AG shall have received a certificate
signed on behalf of Grace by an officer to such effect.
ARTICLE VIII
TERMINATION
SECTION 8.1. Termination by Mutual Consent. This Agreement
may be terminated, and the Reorganization may be abandoned, at any time prior
to the Effective Time, before or after the approval by the shareholders of
Grace, Fresenius AG and/or Fresenius USA, by the mutual consent of each party
hereto, which consent shall be effected by action of its Board of Directors.
SECTION 8.2. Termination by any Party Hereto. This Agreement
may be terminated, and the Reorganization may be abandoned, by action of the
Board of Directors of any party hereto, if (i) the Reorganization shall not have
been consummated by September 1, 1996 or (ii) at the Grace Meeting or at any
adjournment thereof, the approval of Grace's shareholders, or, at a meeting of
Fresenius AG shareholders or any adjournment thereof, the approval of Fresenius
AG's shareholders, each as referred to in Section 7.1(a), shall not have been
obtained or (iii) pursuant to Section 6.7.
SECTION 8.3. Termination by Grace. This Agreement may be
terminated and the Reorganization may be abandoned at any time prior to the
Effective Time, before or after the adoption and approval by shareholders of
Grace referred to in Section 7.1(a), by action of the Grace Board, if (i)
either Fresenius Party shall have failed to comply in any material respect with
any of the covenants or agreements contained herein to be performed by such
Fresenius Party at or prior to the time of termination, which failure is not
cured or capable of being cured within 30 days after notice thereof, or (ii)
the Grace Board shall have failed to recommend to its shareholders the approval
of the transactions contemplated hereby, or shall have withdrawn, modified or
changed such recommendation, in a manner permitted by Section 6.5, or (iii)
Grace shall have entered into an agreement respect to a Higher Offer in a
manner permitted by Section 6.5.
SECTION 8.4. Termination by Fresenius AG. This Agreement may
be terminated and the Reorganization may be abandoned at any time prior to the
Effective Time by action of the Board of Directors of Fresenius AG, if (i)
Grace shall have failed to comply in any material respect with any of the
covenants or agreements contained herein to be performed by it at or prior to
the time of termination, which failure is not cured or capable of being cured
within 30 days after notice thereof, or (ii) the Grace Board shall
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have failed to recommend to its shareholders the approval of the transactions
contemplated hereby or shall have withdrawn, modified or changed in a manner
materially adverse to such Fresenius Party its approval or recommendation of
this Agreement.
SECTION 8.5. Effect of Termination and Abandonment. In the
event of termination of this Agreement and the abandonment of the
Reorganization pursuant to this Article VIII, other than as set forth in
Section 6.13, no party hereto (or any of its directors or officers) shall have
any liability or further obligation to any other party, except that nothing
herein will relieve any party from liability for any material and willful
breach of any covenant contained herein.
ARTICLE IX
MISCELLANEOUS AND GENERAL
SECTION 9.1. Survival. Only those agreements and covenants
of the parties which by their express terms apply in whole or in part after the
Effective Time shall survive the Effective Time. All other representations,
warranties, agreements and covenants shall be deemed only to be conditions of
the Reorganization and shall not survive the Effective Time.
SECTION 9.2. Modification or Amendment. Subject to the
applicable provisions of the NYBCL and the MBCL, at any time prior to the
Effective Time, the parties hereto may modify or amend this Agreement, by
written agreement executed and delivered by duly authorized officers of the
respective parties.
SECTION 9.3. Waiver of Conditions. The conditions to each
party's obligation to consummate the Reorganization are for the sole benefit of
such party and may be waived by such party in whole or in part to the extent
permitted by applicable law.
SECTION 9.4. Counterparts. For the convenience of the
parties hereto, this Agreement may be executed in any number of separate
counterparts signed by one or more of the parties hereto, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
SECTION 9.5. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
SECTION 9.6. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
cable, telegram, telex or other standard form of telecommunications, or by
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
(a) If to Grace and Grace-Conn.:
X. X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
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Attention: Secretary
Fax: (000) 000-0000
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
(b) If to Fresenius AG:
Fresenius AG
Borkenberg 14
61440 Xxxxxxxxx
00000 Xxx Xxxxxxx
Xxxxxxx
Attention: Xx. Xxx Xxxxx
Fax: 000-00-0000-00-0000
with copies to:
O'Melveny & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxxxx
Fax: (000) 000-0000
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section.
SECTION 9.7. Entire Agreement, etc. This Agreement (and the
Exhibits and Disclosure Letters hereto) (a) constitute the entire agreement,
and supersede all other prior agreements, understandings, representations and
warranties, both written and oral, among the parties, with respect to the
subject matter hereof other than the written confidentiality arrangements
existing among the parties hereto, which shall survive, and (b) shall not be
assignable by operation of law or otherwise.
SECTION 9.8. Definitions of "Subsidiary" and "Significant
Subsidiary." (a) When a reference is made in this Agreement to a subsidiary
of a party, the term "subsidiary" means any corporation or other organization
whether incorporated or unincorporated of which at least a majority of the
securities or interests having by the terms thereof ordinary voting power to
elect at least a majority of the board of directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or more
of its subsidiaries, or by such party and one or more of its subsidiaries;
provided, however, that except in the context of references herein to financial
statements of Grace and its subsidiaries or as otherwise specified herein, (i)
no member of the Grace-Conn. Group shall be deemed to be
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x xxxxxxxxxx xx Xxxxx, (xx) each member of the Grace-Conn. Group (other than
Grace-Conn.) shall be deemed to be a subsidiary of Grace-Conn., (iii) no member
of the NMC Group shall be deemed to be a subsidiary of Grace-Conn. and (iv) each
member of the NMC Group (other than Grace) shall be deemed to be a subsidiary of
Grace.
(b) When a reference is made in this Agreement to a
significant subsidiary of a party, the term "significant subsidiary" shall mean
a subsidiary of such party meeting the standards specified in clause (1) or (2)
of the definition of such term in Rule 1-02 of the SEC's Regulation S-X.
SECTION 9.9. Captions. The Article, Section and paragraph
captions herein are for convenience of reference only, do not constitute part
of this Agreement and shall not be deemed to limit or otherwise affect any of
the provisions hereof.
SECTION 9.10. Specific Performance. In the event of any
actual or threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are or are to be thereby
aggrieved shall have the right of specific performance and injunctive relief
giving effect to its or their rights under this Agreement, in addition to any
and all other rights and remedies at law or in equity, and all such rights and
remedies shall be cumulative. The parties agree that the remedies at law for
any breach or threatened breach, including monetary damages, are inadequate
compensation for any loss and that any defense in any action for specific
performance that a remedy at law would be adequate is waived.
SECTION 9.11. Severability. If any provision of this
Agreement or the application thereof to any person or circumstance is
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions hereof, or the application of such
provision to persons or circumstances other than those as to which it has been
held invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, so long as the economic
or legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party.
SECTION 9.12. No Third-Party Beneficiaries. Nothing
contained in this Agreement, expressed or implied, is intended to confer upon
any person or entity other than the parties hereto and Grace-Conn., any
benefit, right or remedies, other than the provisions of Section 6.11 hereof.
SECTION 9.13. Fresenius AG Covenant. (i) As between
Fresenius AG and Grace, prior to the Effective Time, Fresenius AG shall cause
the Fresenius USA Board to adopt, approve and ratify this Agreement and the
other Transaction Agreements and to submit the Fresenius USA Merger to a vote
of Fresenius USA shareholders. As a result of the foregoing, without limiting
any obligations of Fresenius AG with respect to Fresenius USA hereunder,
Fresenius USA will undertake the obligations contained herein as a "party"
hereto and make the representations and warranties contained herein with
respect to itself directly to Grace. Fresenius AG will vote its shares of
Fresenius USA in favor of the Fresenius USA Merger.
(ii) All obligations of Fresenius USA herein shall also be
obligations of Fresenius AG.
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(iii) Notwithstanding the foregoing, nothing in this
provision shall be construed to prevent the Special Committee of the Board of
Directors of Fresenius USA or any similar committee evaluating the Fresenius
USA Merger from making a determination with respect to the adequacy of the
Aggregate Fresenius USA Common Share Consideration and the entire fairness of
the transaction to the shareholders of Fresenius USA consistent with their
fiduciary duties.
SECTION 9.14. Further Assurances. In addition to the actions
specifically provided for elsewhere in this Agreement, but subject to Section
9.1 hereof, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all things
reasonably necessary, proper or advisable under applicable laws, regulations
and agreements to consummate and make effective the transactions contemplated
by this Agreement. Without limiting the foregoing the parties will as promptly
as practicable (and in the case of this Agreement and the Contribution
Agreement within one week after the signing hereof in Germany or Switzerland)
apply for any notarial or similar registrations with respect to the
transactions contemplated hereby in foreign jurisdictions.
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first hereinabove written.
X. X. XXXXX & CO.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name:
Title:
FRESENIUS AG
By: /s/ Xxxx Xxxxx
-----------------------------------
Name:
Title:
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ANNEX A
DEFINED TERMS
Acquisition Proposal: as defined in Section 6.3 hereof.
ADR: an American depositary receipt for Newco Ordinary Shares
issued pursuant to the ADR Facility.
ADR Facility: a facility for exchanging Newco Ordinary Shares
for American depositary receipts suitable for listing on the Exchange in form
and substance satisfactory to Grace and Fresenius AG.
ADR Registration Statement: the registration statement filed
in connection with the ADR Facility.
Affected Party: as defined in Section 6.7(d) hereof.
Affiliate: as defined in Rule 12b-2 under the Exchange Act.
Aggregate Fresenius USA Common Share Consideration: as defined
in Section 4.2(e).
Aggregate Grace Common Share Consideration: Newco Ordinary
Shares in an amount that represents 44.8% of the number of Newco Ordinary Shares
that will be outstanding immediately following consummation of the
Reorganization on a fully diluted basis.
Agreement: as defined in the Preamble hereof.
Audited Financial Statements: the Grace Audited Financial
Statements, the Fresenius USA Audited Financial Statements and the FWD Business
Audited Financial Statements.
Change Party: as defined in Section 6.7(d) hereof.
Closing: as defined in Section 1.4 hereof.
Closing Date: as defined in Section 1.4 hereof.
Closing Subsidiaries: as defined in Section 5.5(c) (ii)
hereof.
Code: the Internal Revenue Code of 1986, as amended.
Contracts: as defined in Section 5.1(d)(ii).
Contribution: as defined in Recital C hereof.
Contribution Agreement: as defined in Recital C hereof.
Current Subsidiaries: as defined in Section 5.5(c)(ii) hereof.
X-0
00
Xxxx: (a) all obligations for borrowed money, whether or not
represented by a note, bond or debenture, (b) off balance sheet financing
including, without limitation, off balance sheet receivables financings at NMC,
(c) any obligation created or arising under any conditional sale agreement or
other title retention agreement that is treated as a liability under a balance
sheet prepared in accordance with US GAAP, (d) the portion of the obligations
with respect to capital leases that is properly classified as a liability on a
balance sheet in accordance with US GAAP, (e) a reasonable estimate, to be
agreed by Fresenius and Grace, of the amounts payable in respect of Dissenting
Shares of Fresenius USA or Grace, as the case may be, (f) any obligation owed in
respect of the deferred purchase price of property (excluding any obligations
incurred in the ordinary course of business), and (g) the liquidation preference
of, and accrued dividends on, preferred stock outstanding at the Effective Time
(other than NY Preferred Shares).
Disclosure Letters: the Fresenius AG Disclosure Letter, the
Fresenius USA Disclosure Letter and the Grace Disclosure Letter.
Disclosure Letter Financial Statements: the Grace Disclosure
Letter Financial Statements, the Fresenius USA Disclosure Letter Financial
Statements and the FWD Business Disclosure Letter Financial Statements.
Dissenting Shares: Grace Common Dissenting Shares and
Fresenius USA Common Dissenting Shares.
Distribution: as defined in Recital D hereof.
Distribution Agreement: as defined in Recital D hereof.
Effective Time: as defined in Section 1.3 hereof.
Employees: the Grace Employees and the Fresenius USA
Employees.
Environmental Law: any federal, state, foreign or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, common law, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any governmental entity, (a) relating
to the protection, preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (b) the exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous Substances, in
each case as amended and as now in effect.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
ERISA Affiliates: the Grace ERISA Affiliates and the Fresenius
USA ERISA Affiliates.
Excess Shares: as defined in Section 4.4(c) (ii) hereof.
A-2
64
Exchange: the New York Stock Exchange, Inc. or the NASDAQ
Stock Market.
Exchange Act: the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
Exchange Agent: as defined in Section 4.4(a) hereof.
Fractional Securities Fund: as defined in Section 4.4(c) (ii)
hereof.
Fresenius AG: as defined in the Preamble hereof.
Fresenius AG Disclosure Letter: as defined in Section 5.3
hereof.
Fresenius AG Plans: as defined in Section 5.4(m)(i) hereof.
Fresenius AG Restructuring: as defined in Section 5.5(d)
hereof.
Fresenius AG Tax Matters Certificate: as defined in Section
5.3(g) hereof.
Fresenius Parties: as defined in Recital F hereof.
Fresenius USA: as defined in Recital F hereof.
Fresenius USA Articles of Organization: as defined in Section
2.3 hereof.
Fresenius USA Audited Financial Statements: as defined in
Section 6.7(b) hereof.
Fresenius USA Board: the Board of Directors of
Fresenius USA.
Fresenius USA Common Dissenting Shares: Fresenius USA Common
Shares as to which rights of appraisal have been perfected pursuant to the MBCL.
Fresenius USA Common Share Equivalents: at any time, (i) the
aggregate number of Fresenius USA Common Shares outstanding at such time (other
than any Fresenius USA Common Share owned by Fresenius AG or its subsidiaries or
Newco or Fresenius USA or its subsidiaries or any Fresenius USA subsidiary or
held in Fresenius USA's treasury or any Fresenius USA Common Dissenting Share)
plus (ii) the aggregate number of Fresenius USA Options (other than any
Fresenius USA Option on an outstanding Fresenius USA Common Share).
Fresenius USA Common Shares: shares of common stock, par value
$.01 per share, of Fresenius USA.
Fresenius USA Compensation Plans: as defined in Section
5.2(k)(i).
Fresenius USA Consideration Per Share: the amount into which
each Fresenius USA Common Share will be converted in the Fresenius USA Merger,
to be calculated as the quotient of the Aggregate Fresenius USA Common Share
Consideration
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divided by the number of Fresenius USA Common Share Equivalents outstanding
immediately prior to the Fresenius USA Merger.
Fresenius USA Disclosure Letter: as defined in Section 5.2
hereof.
Fresenius USA Disclosure Letter Balance Sheet: as defined in
Section 5.2(e)(iii) hereof.
Fresenius USA Disclosure Letter Financial Statements: as
defined in Section 5.2(e)(iii) hereof.
Fresenius USA Employees: as defined in Section 5.2(k)(i)
hereof.
Fresenius USA ERISA Affiliate: as defined in Section
5.2(k)(iii) hereof.
Fresenius USA Exchange Ratio: the Fresenius USA Consideration
Per Share, expressed as the numerical ratio of Newco Ordinary Shares per
Fresenius USA Common Share.
Fresenius USA Intellectual Property: as defined in Section
5.2(p) hereof.
Fresenius USA Meeting: a duly convened meeting of holders of
Fresenius USA Common Shares and Fresenius USA Preferred Shares called to vote on
and approve the transactions contemplated hereby.
Fresenius USA Merger: as defined in Recital F hereof.
Fresenius USA Merger Sub: as defined in Recital F hereof.
Fresenius USA Option: as defined in Section 4.4(i) hereof.
Fresenius USA Plans: as defined in Section 5.2(k)(ii) hereof.
Fresenius USA Preferred Shares: shares of preferred stock, par
value $1.00 per share, of Fresenius USA.
Fresenius USA Proxy Statement: the proxy statement (including
all proxy solicitation materials constituting a part thereof) to be mailed to
the holders of Fresenius USA Common Shares and Fresenius USA Preferred Shares in
connection with the Fresenius USA Meeting.
Fresenius USA Schedule 14A: the Schedule 14A filed by
Fresenius USA with the SEC including the Fresenius USA Proxy Statement.
Fresenius USA Series F Preferred Shares: Fresenius USA
Preferred Shares designated as Series F Series Convertible Preferred Stock.
Fresenius USA Stock Plans: as defined in Section 5.2(a)
hereof.
Fresenius USA Surviving Corporation: as defined in Section
1.2(c) hereof.
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FWD Business: as defined in Section 5.5(a) hereof.
FWD Business Assets: as defined in Section 5.5(b) hereof.
FWD Business Audited Financial Statements: as defined in
Section 6.7(c) hereof.
FWD Business Disclosure Letter: as defined in Section 5.4
hereof.
FWD Business Disclosure Letter Balance Sheet: as disclosed in
Section 5.4(d)(i) hereof.
FWD Business Disclosure Letter Financial Statements: as
defined in Section 5.4(d)(i) hereof.
FWD Business Intellectual Property: as defined in Section
5.4(o) hereof.
FWD Business Subsidiary: as defined in Section 5.5(c) hereof.
German GAAP: German generally accepted accounting principles
consistently applied.
Governmental Entity: as defined in Section 5.1(d)(i) hereof.
Grace: as defined in the Preamble hereof.
Grace Amendment: as defined in Recital F hereof.
Grace Audited Financial Statements: as defined in Section
6.7(a) hereof.
Grace Board: the Board of Directors of Grace.
Grace Certificate of Incorporation: as defined in Section 2.1
hereof.
Grace Class A Preferred Shares: Grace Preferred Shares
designated as Class A.
Grace Class B Preferred Shares: Grace Preferred Shares
designated as Class X.
Xxxxx Class C Preferred Shares: Grace Preferred Shares
designated as Class X.
Xxxxx Common Dissenting Shares: Grace Common Shares as to
which rights of appraisal have been perfected pursuant to the NYBCL.
Grace Common Share Equivalents: at any time, (i) the aggregate
number of Grace Common Shares outstanding at such time (other than any Grace
Common Share owned by Fresenius AG or its subsidiaries or Fresenius USA or its
subsidiaries or any Grace subsidiary or held in Grace's treasury or any Grace
Common Dissenting Share) plus
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(ii) the aggregate number of Grace Options (other than any Grace Option on an
outstanding Grace Common Share).
Grace Common Shares: shares of common stock, par value $1.00
per share, of Grace (including the associated Grace Rights).
Grace Compensation Plans: as defined in Section 5.1(k)(i)
hereof.
Grace-Conn.: as defined in Recital D hereof.
Grace-Conn. Business: as defined in the Distribution
Agreement.
Grace-Conn. Group: as defined in the Distribution Agreement.
Grace-Conn. Registration Statement: the registration statement
filed by Grace-Conn. with the SEC in connection with the Distribution.
Grace Consideration Per Share: Newco Ordinary Shares in the
amount into which each Grace Common Share (and associated Grace Right) will be
converted in the Grace Merger, to be calculated as the quotient of the Aggregate
Grace Common Share Consideration divided by the number of Grace Common Share
Equivalents outstanding immediately prior to the Grace Merger after giving
effect to the Distribution.
Grace Disclosure Letter: as defined in Section 5.1 hereof.
Grace Disclosure Letter Balance Sheet: as defined in Section
5.1(e)(iii) hereof.
Grace Disclosure Letter Financial Statements: as defined in
Section 5.1(e)(iii) hereof.
Grace Employees: as defined in Section 5.1(k)(i) hereof.
Grace ERISA Affiliate: as defined in Section 5.1(k)(iii)
hereof.
Grace Exchange Ratio: the Grace Consideration Per Share,
expressed as the numerical ratio of Newco Ordinary Shares per Grace Common
Share.
Grace Meeting: a duly convened meeting of holders of Grace
Common Shares and Grace Preferred Shares called to vote on and approve the
transactions contemplated hereby.
Grace Merger: as defined in Recital F hereof.
Grace Merger Sub: as defined in Recital F hereof.
Grace Option: as defined in Section 4.4(i) hereof.
Grace Preferred Shares: shares of preferred stock, par value
$1.00 per share, of Grace (other than NY Preferred Shares).
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Grace Proxy Statement: the proxy statement (including all
proxy solicitation materials constituting a part thereof) to be mailed to the
holders of Grace Common Shares and Grace Preferred Shares in connection with
the Grace Meeting.
Grace Rights: the common stock purchase rights of Grace issued
pursuant to the Rights Agreement.
Grace Rights Agreement: the Amended and Restated Rights
Agreement, dated as of June 7, 1990, between Grace and Manufacturers Hanover
Trust Company, as supplemented and amended.
Grace Schedule 14A: the Schedule 14A filed by Grace with the
SEC including the Grace Proxy Statement.
Grace 6% Preferred Shares: Grace Preferred Shares designated
as 6%.
Grace Stock Plans: as defined in Section 5.1(a) hereof.
Grace Surviving Corporation: as defined in Section 1.2(b)
hereof.
Grace Tax Matters Certificate: as defined in Section 5.1(p)
hereof.
Hazardous Substance: any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, whether by type or by
quantity, including any substance containing any such substance as a component.
Higher Offer: as defined in Section 6.3 hereof.
HSR Act: the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
IRS: the United States Internal Revenue Service.
Lease: as defined in Recital D hereof.
knowledge of executive officers: shall mean, in the case of
Grace, the knowledge of each officer of Grace subject to Section 16 of the
Exchange Act pursuant to Rule 16a-2 under the Exchange Act.
Massachusetts Certificate: as defined in Section 1.3 hereof.
material: with respect to any party, material to such party
and its subsidiaries, taken as a whole; provided, however, that when determining
materiality with respect to Grace, only that property, business, financial
condition, results of operations or prospects which are included in or
exclusively related to the NMC Business shall be included.
Material Adverse Effect: with respect to any party, an effect
which would be materially adverse to the properties, business, financial
condition, results of operations or prospects of such party and its subsidiaries
taken as a whole; provided, however, that when
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determining Material Adverse Effect with respect to Grace, only that property,
business, financial condition, results of operations or prospects which are
included in or exclusively relate to the NMC Business shall be included.
MBCL: the Massachusetts Business Corporation Law.
Meetings: the Grace Meeting and the Fresenius USA Meeting.
Mergers: as defined in Recital F hereof.
NMC: National Medical Care, Inc., a Delaware corporation and
an indirect wholly owned subsidiary of Grace.
NMC Business: as defined in the Distribution Agreement.
NMC Business Intellectual Property: as defined in Section
5.1(r) hereof.
NMC Group: as defined in the Distribution Agreement.
Newco Board: the Supervisory Board of Newco.
Newco Charter Documents: as defined in Recital B hereof.
Newco Ordinary Share Certificate: certificates for Newco
Ordinary Shares.
Newco Ordinary Shares: ordinary shares in the capital of
Newco.
Newco Pooling Agreement: as defined in Recital B hereof.
Newco Registration Statement: the registration statement filed
with the SEC in connection with the issuance of Newco Ordinary Shares in the
Mergers.
New York Certificate: as defined in Section 1.3 hereof.
NYBCL: the New York Business Corporation Law.
NY Preferred Registration Statement: the registration
statement filed with the SEC in connection with the issuance of NY Preferred
Shares in the Recapitalization.
NY Preferred Shares: shares of a new series of preferred stock
of Grace to be issued in the Recapitalization having the terms set forth in
Exhibit C hereto.
Old Certificates: Old Grace Certificates and Old Fresenius USA
Certificates.
Old Fresenius USA Certificate: a certificate for Fresenius USA
Common Shares or Fresenius USA Preferred Shares.
Old Grace Certificate: a certificate for Grace Common Shares.
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Other Agreements: (i) as defined in the Contribution Agreement
plus (ii) as defined in the Distribution Agreement.
Proxy Statements: the Fresenius USA Proxy Statement and the
Grace Proxy Statement.
Recapitalization: as defined in Recital E hereof.
Registration Statements: the Newco Registration Statement, the
Grace-Conn. Registration Statement, the NY Preferred Registration Statement and
the ADR Registration Statement.
Reorganization: the Contribution, the Recapitalization, the
Distribution and the Mergers.
Reorganization Agreement: as defined in the Preamble hereof.
Representatives: with respect to any party, such party's
officers, employees, counsel, accountants and other authorized representatives.
Schedules 14A: the Grace Schedule 14A and the Fresenius USA
Schedule 14A.
SEC: the Securities and Exchange Commission.
SEC Documents: with respect to any party, all filings made by
such party or its Subsidiaries with the SEC since December 31, 1994, including
notes, schedules, amendments and exhibits thereto.
Securities Act: the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
significant subsidiary: as defined in Section 9.9(b) hereof.
subsidiary: as defined in Section 9.9(a) hereof.
Surviving Corporations: the Grace Surviving Corporation and
the Fresenius USA Surviving Corporation.
Takeover Statute: as defined in Section 5.1(n) hereof.
Transaction Agreements: the Reorganization Agreement, the
Newco Pooling Agreement, the Distribution Agreement, the Contribution Agreement
and the Other Agreements.
US GAAP: United States generally accepted accounting
principles consistently applied.
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