ACQUISITION AGREEMENT
Among
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION,
XXXXXX LABORATORIES
and
AAC ACQUISITION LTD.
dated as of March 13, 1998
TABLE OF CONTENTS
PAGE
----
ARTICLE I THE OFFER......................................................-2-
Section 1.1 The Offer................................................-2-
Section 1.2 Company Action...........................................-3-
Section 1.3 Boards of Directors and Committees; Section 14(f)........-5-
ARTICLE II THE COMPLETION OF THE ACQUISITION..............................-7-
Section 2.1 The Compulsory Acquisition...............................-7-
Section 2.2 The Amalgamation.........................................-7-
ARTICLE III EXCHANGE OF SHARE CAPITAL......................................-8-
Section 3.1 Exchange of Share Capital. .............................-8-
Section 3.2 Exchange of Certificates.................................-8-
Section 3.3 Shareholders' Meeting...................................-10-
Section 3.4 Dissenting Shares.......................................-11-
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................-11-
Section 4.1 Organization and Qualification; Subsidiaries............-11-
Section 4.2 Capitalization of the Company and Its Subsidiaries......-12-
Section 4.3 Authority Relative to This Agreement....................-13-
Section 4.4 Non-Contravention; Required Filings and Consents........-13-
Section 4.5 SEC Reports.............................................-14-
Section 4.6 Absence of Certain Changes; Derivatives.................-15-
Section 4.7 Board Recommendation Statement; Offer Documents.........-15-
Section 4.8 Finder's Fee; Professional Expenses.....................-15-
Section 4.9 Absence of Litigation...................................-16-
Section 4.10Taxes...................................................-16-
Section 4.11Employee Benefits.......................................-17-
Section 4.12Compliance..............................................-20-
Section 4.13Environmental Matters...................................-20-
Section 4.14Intellectual Property...................................-21-
Section 4.15Significant Agreements..................................-22-
Section 4.16Insurance...............................................-23-
Section 4.17Properties..............................................-24-
Section 4.18Labor Matters...........................................-24-
Section 4.19Regulatory Matters......................................-24-
i
Section 4.20Voting Requirements.....................................-26-
ARTICLE V REPRESENTATIONS AND WARRANTIES OF
PARENT AND SUBSIDIARY...................................-26-
Section 5.1 Organization............................................-26-
Section 5.2 Authority Relative to this Agreement....................-26-
Section 5.3 Non-Contravention; Required Filings and Consents........-26-
Section 5.4 Offer Documents; Board Recommendation Statement;
Proxy Statement...................................-27-
Section 5.5 No Prior Activities.....................................-28-
Section 5.6 Financing...............................................-28-
Section 5.7 No Share Ownership......................................-28-
ARTICLE VI COVENANTS.....................................................-28-
Section 6.1 Conduct of Business of the Company......................-28-
Section 6.2 Access to Information...................................-30-
Section 6.3 Reasonable Best Efforts.................................-31-
Section 6.4 Public Announcements....................................-31-
Section 6.5 Indemnification.........................................-32-
Section 6.6 Notification of Certain Matters.........................-32-
Section 6.7 Termination of Stock Plans..............................-33-
Section 6.8 No Solicitation.........................................-33-
Section 6.9 Chiron License Agreement. .............................-35-
ARTICLE VII CONDITIONS TO THE COMPLETION OF THE ACQUISITION...............-36-
Section 7.1 Conditions to Each Party's Obligation to Effect the
Completion of the Acquisition..................... -36-
Section 7.2 Conditions to the Obligation of Parent and
Subsidiary to Effect the Completion of the Acquisition -37-
Section 7.3 Conditions to the Obligation of the Company to
Effect the Completion of the Acquisition.......... -37-
ARTICLE VIIITERMINATION; EXPENSES; AMENDMENT; WAIVER......................-37-
Section 8.1 Termination.............................................-37-
Section 8.2 Effect of Termination...................................-39-
Section 8.3 Fees and Expenses.......................................-39-
Section 8.4 Amendment...............................................-39-
Section 8.5 Extension; Waiver.......................................-40-
ARTICLE IX MISCELLANEOUS.................................................-40-
ii
Section 9.1 Nonsurvival of Representations and Warranties...........-40-
Section 9.2 Entire Agreement; Assignment............................-40-
Section 9.3 Notices.................................................-40-
Section 9.4 Governing Law...........................................-41-
Section 9.5 Parties in Interest.....................................-41-
Section 9.6 Specific Performance....................................-41-
Section 9.7 Severability............................................-41-
Section 9.8 Descriptive Headings....................................-42-
Section 9.9 Certain Definitions.....................................-42-
Section 9.10Counterparts............................................-45-
iii
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT, dated as of March 13, 1998, is among
INTERNATIONAL MUREX TECHNOLOGIES CORPORATION, a British Columbia
company (the "Company"), XXXXXX LABORATORIES, an Illinois corporation
("Parent") and AAC ACQUISITION LTD., a British Columbia company and an
indirect wholly owned subsidiary of Parent ("Subsidiary").
WHEREAS, the Boards of Directors of Parent, Subsidiary and the
Company have each approved the acquisition of the Company by Parent
and Subsidiary upon the terms and subject to the conditions set forth
in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Subsidiary
shall make a tender offer to acquire all outstanding common shares,
without par value, of the Company (the "Shares"), for a net cash
amount of U.S.$13.00 per Share (such amount, or any greater amount per
Share paid pursuant to the tender offer, being hereinafter referred to
as the "Per Share Amount") in accordance with the terms and subject to
the conditions provided for herein (the "Offer");
WHEREAS, the Board of Directors of the Company (the "Board") has
(i) determined that the consideration to be paid for each Share in the
Offer and the Completion of the Acquisition (as defined in the recital
below) is fair to and in the best interests of the shareholders of the
Company and (ii) approved this Agreement and the transactions
contemplated hereby and resolved to recommend acceptance of the Offer
and approval and, if necessary, the adoption of this Agreement by the
shareholders of the Company; and
WHEREAS, the Boards of Directors of Parent and Subsidiary have
each approved the completion of the acquisition of the Company by
Parent and Subsidiary (the "Completion of the Acquisition") through
either (1) the acquisition procedure (as contemplated under Section
255 of the BC Act (as defined along with certain other terms in
Section 9.9)) (the "Compulsory Acquisition") if Subsidiary has
purchased enough Shares in the Offer to permit a Compulsory
Acquisition or, if not, (2) an amalgamation, arrangement or other
business combination (as contemplated under the BC Act) (the
"Amalgamation") of Subsidiary with the Company following the Offer
upon the terms and subject to the conditions set forth herein and in
any other agreement required to effect the Amalgamation.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally
bound hereby, the Company, Parent and Subsidiary hereby agree as
follows.
1
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Provided that this Agreement shall not
---------
have been terminated in accordance with Section 8.1 and no
event shall have occurred or circumstance shall exist which
constitutes a failure to satisfy any of the conditions set forth in
Annex A hereto, Subsidiary shall commence the Offer as promptly as
practicable, but in no event later than the fifth business day
following the public announcement of the terms of this Agreement. The
obligation of Subsidiary to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition that
a number of Shares representing not less than 75% of the Company's
outstanding voting power (assuming the exercise of all outstanding
options to purchase Shares which options are not subject to binding
agreements to cancel) shall have been validly tendered and not
withdrawn prior to the expiration of the Offer (the "Minimum
Condition"), and the obligation of Subsidiary to commence the Offer
and accept for payment and pay for Shares tendered pursuant to the
Offer shall be subject to the other conditions set forth in Annex A
hereto. It is agreed that the Minimum Condition and the other
conditions set forth in Annex A hereto are for the sole benefit of
Subsidiary and may be asserted by Subsidiary regardless of the
circumstances giving rise to any such condition. Subsidiary expressly
reserves the right in its sole discretion to waive, in whole or in
part, at any time or from time to time, any such condition, to
increase the price per Share payable in the Offer or to make any other
changes in the terms and conditions of the Offer; provided that
---------
Subsidiary may only waive the Minimum Condition as long as
Subsidiary purchases at least a majority of the Shares outstanding
(assuming the exercise of all outstanding options to purchase Shares
which options are not subject to binding agreements to cancel) and
that, unless previously approved by the Company in writing, no change
may be made that decreases the price per Share payable in the Offer,
changes the form of consideration payable in the Offer, reduces the
maximum number of Shares that Subsidiary offers to purchase in the
Offerbelow a majority of the Shares outstanding (assuming the exercise
of all outstanding options to purchase Shares which options are not
subject to binding agreements to cancel), imposes conditions to the
Offer in addition to those set forth in Annex A hereto or otherwise
amends the terms of the Offer in any way that would be materially
adverse to holders of Shares. Subject to the next sentence, Subsidiary
covenants and agrees that, subject to the terms and conditions of this
Agreement, including, without limitation, the conditions of the Offer
set forth in Annex A hereto, Subsidiary shall accept for payment and
pay for Shares which have been validly tendered and not withdrawn
pursuant to the Offer as soon as it is permitted to do so under
applicable law. Notwithstanding the foregoing, Subsidiary (i) may
extend the Offer to purchase Shares in excess of the Shares required
to satisfy the Minimum Condition up to the tenth business day
following the date on which all conditions to the Offer shall first
have been satisfied or waived, provided that, by virtue of making any
such extension, Subsidiary shall be deemed to waive and thereafter
shall not be entitled to assert any of the conditions to the
consummation of the Offer contained in subsections (b), (c), (d) and
(e) to Annex A hereto, (ii) shall extend the Offer at least until
11:59 p.m. New York City time on the sixth business day following the
delivery to Parent of a Notice of Superior Proposal (as defined in
Section 6.8) and (iii) shall extend the Offer at least until the
expiration of the period set forth in paragraph (d) or (e) of Annex A
if a notice of breach has been delivered in accordance therewith. The
Per Share Amount payable in the Offer shall be paid net to the seller
in cash, upon the terms and subject to the conditions of the Offer.
(b) As soon as practicable on the date of commencement of the
Offer, Parent and Subsidiary shall file (i) with the Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule
14D-1 with respect to the Offer and (ii) with the appropriate Canadian
authorities any required filings with respect to the Offer, which in
the case of both (i) and (ii) will contain the offer to purchase, form
of the related letter of transmittal and related documents published
or filed by Parent or Subsidiary (together with any supplements or
amendments thereto, the "Offer Documents"). Parent, Subsidiary and the
Company each agrees promptly to correct any information provided by it
for use in the Offer Documents if and to the extent that any such
information shall have become false or misleading in any material
respect and Parent and Subsidiary each further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be
filed with the SEC and the appropriate Canadian authorities and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable laws. The Company and its counsel shall be
given a reasonable opportunity to review and comment on the Offer
Documents prior to their filing with the SEC and the appropriate
Canadian authorities and shall be provided with any comments Parent,
Subsidiary and their counsel may receive from the SEC or the
appropriate Canadian authorities with respect to the Offer Documents
promptly after receipt of such comments.
Section 1.2 Company Action. (a) The Company hereby approves of
---------------
and consents to the Offer and represents and warrants
that the Board, at a meeting duly called and held on March 15, 1998,
unanimously (i) determined that this Agreement and the transactions
contemplated hereby, including the Offer and the Completion of the
Acquisition, are fair to and in the best interests of the shareholders
of the Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Completion of the
Acquisition and (iii) resolved to recommend that the shareholders of
the Company accept the Offer, tender their Shares thereunder to
Subsidiary and, if required by applicable law, approve and adopt this
Agreement and the Completion of the Acquisition. The Company further
represents and warrants that Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation ("DLJ") has delivered to the Board its written opinion
dated March 15, 1998 to the effect that, as of the date of such
opinion, subject to the assumptions and limitations expressed therein,
the consideration to be received by the holders of Shares in the Offer
and the Completion of the Acquisition pursuant to this Agreement is
fair to such holders from a financial point of view. The Company
hereby consents to the inclusion in the Offer Documents of the fact of
the recommendations of the Board described in this Section 1.2(a). The
Company represents and warrants that the Board has made appropriate
amendments to and determinations under the Rights Plan (the "Rights
Plan Amendments and Determinations"), including without limitation:
(A) an amendment to the definition of "Acquiring Person" under the
Rights Plan to exclude Parent, Subsidiary and their subsidiaries from
that definition; (B) an amendment to the definition of "Separation
Time" under the Rights Plan to provide that the Separation Time shall
not occur by virtue of the execution of this Agreement or the
Shareholder Agreements, the consummation of the transactions
contemplated or permitted hereunder or thereunder or the acquisition
or purchase of Shares by Parent, Subsidiary so their subsidiaries and
a determination by the Board to the same effect; and (C) a
determination under Section 1.1(a)(v) by the Board approving the
acquisition of Shares by Parent, Subsidiary or their subsidiaries
pursuant to this Agreement or the Shareholder Agreements, or any other
acquisition or purchase of Shares by Parent, Subsidiary or their
subsidiaries. The Company further represents and warrants that,
because of the Rights Plan Amendments and Determinations, (i) the
Rights Plan is inapplicable to Parent's and Subsidiary's entering into
this Agreement and the Shareholder Agreements and (ii) the Rights Plan
would not impede or cause an adverse effect on, or otherwise be
applicable to Parent, Subsidiary or any of their subsidiaries if,
Parent, Subsidiary or any of their subsidiaries (A) purchases or
acquires, or proposes to purchase or acquire, any securities of the
Company pursuant to the Offer, the Completion of the Acquisition or
the Shareholder Agreements or (B) purchases or acquires or proposes to
purchase or acquire any securities of the Company or enters into any
agreement requiring or permitting the purchase or acquisition of any
securities of the Company after Parent, Subsidiary or any of their
subsidiaries has purchased or has acquired Shares pursuant to the
Offer or upon exercise of an Option (as defined in each of the
Shareholder Agreements).
(b) As soon as practicable on the date of commencement of the
Offer, the Company shall file a combined Solicitation/Recommendation
Statement on Schedule 14D-9 and any Directors' Circular required by
Canadian law (together with any amendments or supplements thereto, the
"Board Recommendation Statement"), shall file such Board
Recommendation Statement with both the SEC and the appropriate
Canadian authorities and shall mail the combined Board Recommendation
Statement to the shareholders of the Company at the time of
commencement of the Offer, together with the Offer Documents. The
Board Recommendation Statement shall at all times contain the
determinations, approvals and recommendations described in Section
1.2(a), unless, subject to the requirements of Section 6.8, the
Company's directors determine in good faith, based upon the written
advice of independent legal counsel, that the withdrawal of any of
such determinations is required for the discharge of their fiduciary
duties to shareholders under applicable law. Parent, Subsidiary and
the Company each agrees promptly to correct any information provided
by it for use in the Board Recommendation Statement if and to the
extent that any such information shall have become false or misleading
in any material respect. The Company further agrees to take all steps
necessary to cause the Board Recommendation Statement as so corrected
to be filed with the SEC and the appropriate Canadian authorities and
to be disseminated to holders of Shares, in each case as and to the
extent required by applicable U.S. federal and Canadian securities
laws. Parent, Subsidiary and their counsel shall be given a reasonable
opportunity to review and comment on the Board Recommendation
Statement prior to its filing with the SEC and the appropriate
Canadian authorities and shall be provided with any comments the
Company and its counsel may receive from the SEC or the appropriate
Canadian authorities with respect to the Board Recommendation
Statement promptly after receipt of such comments.
(c) In connection with the Offer, the Company will promptly
furnish Subsidiary with mailing labels, security position listings and
any available listing or computer file containing the names and
addresses of the record holders of the Shares as of a recent date and
shall furnish Subsidiary with such additional information and
assistance (including, without limitation, updated lists of
shareholders, mailing labels and lists of securities positions) as
Subsidiary or its agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares. Subject to the
requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Completion of the Acquisition, Subsidiary
and its affiliates and associates shall hold in confidence the
information contained in any such labels, listings and files, will use
such information only in connection with the Offer and the Completion
of the Acquisition, and, if this Agreement shall be terminated, will
deliver to the Company all copies of such information then in their
possession.
Section 1.3 Boards of Directors and Committees; Section 14(f).
-------------------------------------------------
(a) Promptly upon the purchase by Subsidiary of Shares pursuant to the
Offer and from time to time thereafter, so long as Parent and
Subsidiary are not in material breach of their respective obligations
hereunder, Subsidiary shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Board that
equals the product of (i) the total number of directors on the Board
(giving effect to the election of any additional directors pursuant to
this Section) and (ii) the percentage that the number of Shares owned
by Subsidiary and its affiliates (including any Shares purchased
pursuant to the Offer) bears to the total number of outstanding
Shares, and the Company shall, upon request by Subsidiary, promptly
either increase the size of the Board to the extent permitted by
applicable law or use its reasonable best efforts to secure the
resignation of such number of directors as is necessary to enable
Subsidiary's designees to be elected to the Board and shall cause
Subsidiary's designees to be so elected; provided, however, that at
all times prior to the Completion of the Acquisition at least two
persons who are directors of the Company as of the date hereof and
designated by the Company as soon as reasonably practicable after the
date hereof (or who are designated by such designated directors) shall
be entitled to remain directors of the Company (the "Continuing
Directors"). Promptly upon request by Subsidiary, the Company will use
its reasonable best efforts to cause persons designated by Subsidiary
to constitute the same percentage as the number of Subsidiary's
designees to the Board bears to the total number of directors on the
Board on (i) each committee of the Board, (ii) each board of directors
or similar governing body or bodies of each subsidiary of the Company
designated by Subsidiary and (iii) each committee of each such board
or body. Notwithstanding the foregoing, until the completion of the
Offer, the Company shall use its reasonable best efforts to ensure
that all of the members of the Board and of such boards, bodies and
committees as of the date hereof who are not employees of the Company
shall remain members of the Board and such boards, bodies and
committees. In complying with this subsection (a) and without
restricting the right of the two Continuing Directors to serve on the
Board, the parties shall cause the composition of the Board and its
committees to comply with applicable law and listing requirements.
(b) The Company's obligations to appoint designees to the Board
shall be subject to Section 14(f) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Rule 14f-1 promulgated
thereunder. The Company shall promptly take all actions required
pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.3 and shall include in the Board
Recommendation Statement such information with respect to the Company
and its officers and directors as is required under Section 14(f) and
Rule 14f-1. Parent or Subsidiary will supply to the Company in writing
and be solely responsible for any information with respect to either
of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Subsidiary's
designees to the Board pursuant to this Section 1.3 and prior to the
Effective Time, any amendment or modification of this Agreement or the
Articles of Association or Memorandum of Association of the Company,
any termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or
other acts of Parent or Subsidiary, any waiver of any of the Company's
rights hereunder or any other action with respect to this Agreement or
the transactions contemplated hereby which is materially adverse to
holders of Shares generally (other than Subsidiary) will require the
concurrence of at least fifty percent of the Continuing Directors.
Section 1.4 Company Stock Options. (a) Unless Parent and the
---------------------
Company make the Option Election (as defined below), the Company
shall, prior to completion of the Offer: (i) use its best efforts to
amend each outstanding stock option, warrant or other right to acquire
Shares ("Company Options") or any plans with respect to Company
Options to permit vesting of unvested and exercise of Company Options
contingent on consummation of the Offer; (ii) declare all Company
Options to be fully exercisable and vested prior to the completion of
the Offer and contingent on consummation of the Offer; and (iii) use
its best efforts to cause the holders of Company Options to exercise
their Company Options and tender the Shares so acquired in the Offer.
(b) Parent and the Company may agree, after consulting their
respective counsel, to implement the steps set forth in this Section
1.4(b) instead of the steps set forth in Section 1.4(a) (the "Option
Election"). If the parties make the Option Election: (i) immediately
prior to consummation of the Offer, the Company shall offer to pay to
the holder of each Company Option, in exchange for the agreement by
such holder to cancel his, her or its Company Options, an amount equal
to (x) the difference between the Per Share Amount and the per Share
exercise price of such Company Option, multiplied by (y) the number of
Shares underlying such holder's Company Option; (ii) the Company will
use its best efforts to cause the holders of Company Options to accept
the Company's offer set forth above and enter into appropriate
cancellation agreements; and (iii) Parent shall, immediately following
consummation of the Offer, lend to (subject to any of the Company's
contractual restrictions and at the Applicable Federal Rate) or
contribute to the capital of the Company cash in an amount equal to
the amount necessary to satisfy payment by the Company of the amounts
required under this Section 1.4(b).
6
(c) The Company, Parent and the Board shall take whatever actions
are required such that, as of the Effective Time, any Company Options
not exercised or canceled pursuant to Section 1.4(a) or 1.4(b) above
are converted into a fully vested and exercisable right to acquire
common stock of Parent in a manner that is substantially consistent
with the requirements applicable to "issuing or assuming a stock
option in a transaction to which section 424(a) applies," as that
phrase is defined in Section 424(a) of the Code (as defined in Section
4.2); provided that the Company Options (and any replacements) shall
not confer on the holders thereof any rights to acquire securities of
the Company. Parent shall cooperate in whatever actions are required
for the Company and the Board to implement this Section 1.4(c).
ARTICLE II
THE COMPLETION OF THE ACQUISITION
Section 2.1 The Compulsory Acquisition. Subject to the
--------------------------
satisfaction or waiver of the conditions set forth in Article VII, if
after purchasing Shares in the Offer (and, if Subsidiary chooses to do
so, through open market purchases for 30 days or less), Subsidiary
owns enough Shares to effectuate a Compulsory Acquisition, Subsidiary
shall as promptly as practicable thereafter, effectuate a Compulsory
Acquisition in which every shareholder of the Company other than
Subsidiary surrenders his, her or its ownership of Shares to
Subsidiary in exchange for the payment by Subsidiary to each such
shareholder of the Per Share Amount, all in accordance with the
provisions of Section 255 of the BC Act. Subsidiary shall as promptly
as practicable make such filings and take such other actions as are
necessary to implement the Compulsory Acquisition.
Section 2.2 The Amalgamation. Subject to the satisfaction or
----------------
waiver of the conditions set forth in Article VII, if after purchasing
Shares in the Offer, Subsidiary does not own enough Shares to
effectuate a Compulsory Acquisition (and has not acquired enough
Shares within 30 days through open market purchases if Subsidiary has
chosen to make such open market purchases), the parties shall as soon
as practicable thereafter consummate the Amalgamation as provided in
the remainder of this Section 2.2 and in Article III and in any
amalgamation agreement entered into to effect the Amalgamation (the
"Amalgamation Agreement"). Subject to the terms and conditions of this
Agreement, the Amalgamation Agreement and applicable provisions of the
BC Act, at the Effective Time: (i) Subsidiary will amalgamate with the
Company; (ii) the separate existence of Subsidiary and the Company
will cease; and (iii) Amalco will continue as the successor
corporation to the business and undertaking theretofore undertaken by
the Company and Subsidiary. From and after the Effective Time, and
without any further action on the part of any person, the Amalgamation
will have all the effects provided by applicable Legal Requirements,
the effects described in Section 3.1 hereof with respect to the
exchange of share capital and the effects to be set forth in the
Amalgamation Agreement.
Section 2.3 Meeting and Voting. Parent shall, and shall cause
------------------
Subsidiary to, cause all Shares beneficially owned by them to be
present and voting for the purpose of a quorum and to be voted
affirmatively in favor of the Amalgamation at any meeting or
solicitation of consents with respect thereto.
ARTICLE III
EXCHANGE OF SHARE CAPITAL
Section 3.1 Exchange of Share Capital. At the Effective Time, by
-------------------------
virtue of the Amalgamation and without any action on the part of
Parent, Subsidiary, the Company or the holders of any of the following
securities, the parties agree as follows:
(a) Exchange Consideration. Each Share outstanding
----------------------
immediately prior to the Effective Time (except Shares subject to
Section 3.1 (b)) shall be exchanged for one Preference Share as
contemplated in the Amalgamation Agreement. In turn, each Preference
Share will be immediately redeemed by Amalco upon payment to each
remaining holder of Shares of the Per Share Amount for each Share.
(b) Subsidiary-Owned Shares. Any Shares issued and
-----------------------
outstanding immediately prior to the Effective Time and owned directly
or indirectly by Subsidiary, if any, will be canceled and retired, and
no consideration will be delivered in exchange therefor.
(c) Subsidiary Exchange. Each common share of Subsidiary
-------------------
(the "Subsidiary Common Shares") outstanding immediately prior to the
Effective Time will be exchanged for an identical number of Amalco
common shares.
Section 3.2 Exchange of Certificates.
------------------------
(a) Exchange Agent. In the event of either the Compulsory
--------------
Acquisition or the Amalgamation, as of the Effective Time, Parent
shall enter into an agreement with a bank or trust company selected by
the Company to act as exchange agent (the "Exchange Agent") in
connection with the surrender of certificates that, prior to the
Effective Time, evidenced outstanding Shares ("Share Certificates").
Prior to the Closing Date, Parent will deposit with the Exchange Agent
for exchange in accordance with this Section 3.2 cash funds, as they
are needed, required to pay the Per Share Amount to all holders of the
Shares outstanding immediately prior to the Effective Time (other than
Shares owned by Parent or any of its subsidiaries).
(b) Exchange. As soon as practicable after the Effective
--------
Time, Parent will cause the Exchange Agent to mail to each person who
was a holder of record of Shares and Company Options at the Effective
Time: (i) a letter of transmittal (which will specify that delivery
will be effective, and risk of loss and title to any Share
Certificates will pass, only upon delivery of the Share Certificates
to the Exchange Agent and will be in such form and will have such
other provisions as are specified by Parent and reasonably acceptable
to the Company); and (ii) instructions for use in effecting the
surrender of Share Certificates in exchange for the aggregate Per
Share Amount due each holder of Shares at the Effective Time. Upon
surrender of Share Certificates for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by Parent,
together with such letter of transmittal, duly executed, and such
other documents as may be required by the Exchange Agent or such other
agent, the holder of such Share Certificate will be entitled to
receive in exchange therefor the aggregate amount of the Per Share
Amount due each holder of Shares at the Effective Time and the Share
Certificate so surrendered will be canceled. In the event of a
transfer of ownership of Shares that is not registered in the transfer
records of the Company, the aggregate amount of the Per Share Amount
may be paid to a person other than the person in whose name the
surrendered Share Certificate is registered if the Share Certificate
representing such Shares is presented to the Exchange Agent
accompanied by all documents required to evidence and effect such
transfer and by evidence reasonably satisfactory to Parent that any
applicable stock transfer tax has been paid. Parent will not directly
or indirectly pay or reimburse any person for any transfer taxes of
the type referred to in the preceding sentence. If any Per Share
Amount to be paid to a person other than the person in whose name the
Share Certificates surrendered in exchange therefor are registered, it
will be a condition to the delivery of such Per Share Amount that the
Share Certificates so surrendered are properly endorsed or accompanied
by appropriate stock powers and otherwise in proper form for transfer,
that such transfer otherwise is proper and that the person requesting
such transfer pays to the Exchange Agent any transfer or other taxes
payable by reason of the foregoing or establishes to the satisfaction
of the Exchange Agent that such taxes have been paid or are not
required to be paid.
(c) Certificates Not Exchanged. After the Effective Time,
--------------------------
each outstanding Company Share Certificate will, until surrendered for
exchange in accordance with this Section 3.2, be deemed for all
purposes to evidence only the right to receive the aggregate Per Share
Amount in respect of such Share Certificate.
(d) Expenses. Except as otherwise expressly provided in this
--------
Agreement, Parent will pay all charges and expenses, including those
of the Exchange Agent, in connection with the exchange of the Shares
for the appropriate Per Share Amount, except any charges or expenses
that are otherwise solely the liability of one or more holders of
Shares. Any funds deposited with the Exchange Agent that remain
unclaimed by the former shareholders of the Company after nine (9)
months following the Effective Time will be delivered to Parent upon
its demand, and any former shareholders of the Company who have not
then complied with the instructions for exchanging their Company Share
Certificates will thereafter look only to Parent for exchange payment
of the appropriate Per Share Amount in Share Certificates.
(e) No Liability. None of Parent, Subsidiary, the Company,
------------
Amalco or the Exchange Agent will be liable to any holder of Shares
for any cash funds delivered to a state or provincial abandoned
property administrator or other public official pursuant to any
applicable abandoned property, escheat or similar law.
(f) Lost Certificates. If any Share Certificate is lost,
-----------------
stolen or destroyed, the Exchange Agent will issue in exchange for
such lost, stolen or destroyed Share Certificate the aggregate Per
Share Amount payable in respect thereof as determined in accordance
with the terms of this Agreement, subject to the condition that the
person to whom the Per Share Amount is to be paid shall have (a)
delivered to Parent an affidavit claiming such Share Certificate to be
lost, stolen, or destroyed and (b) if required by Parent, given Parent
an indemnity satisfactory to Parent against any claim that may be made
against Parent with respect to the Share Certificate alleged to have
been lost, stolen or destroyed.
(g) At the consummation of the Offer, the Board of Directors
of the Company shall (i) terminate the ESPP and (ii) notify all
participants thereunder of its termination.
(h) Closing of the Company's Transfer Books. At the
---------------------------------------
Effective Time, the stock transfer books of the Company shall be
closed and no transfer of shall be made thereafter. In the event that,
after the Effective Time, Company Share Certificates are presented to
Amalco, they shall be exchanged for the appropriate Per Share Amount
as provided in Section 3.2(b) hereof.
(i) Closing. The closing of the transactions contemplated by
-------
this Agreement (the "Closing") will take place (i) at the offices of
Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, at
9:00 a.m. local time on the date that is the first business day after
the day on which the last of the conditions set forth in Article VIII
(excluding delivery of opinions and certificates) is fulfilled or
waived or (ii) at such other place and time as Parent and the Company
agree in writing. The date on which the Closing occurs is referred to
in this Agreement as the "Closing Date."
Section 3.3 Shareholders' Meeting. The Company, acting through
the Board, shall, in accordance with applicable law as soon as
practicable following the consummation of the Offer:
(i) duly call, give notice of, convene and hold an
annual or special meeting of its shareholders (the
"Shareholders' Meeting") for the purpose of considering the
Amalgamation;
(ii) subject to the Board's fiduciary obligations
under applicable law, include in the Proxy Statement for the
Shareholders' Meeting the recommendation of the Board that
shareholders of the Company vote in favor of the approval
and adoption of this Agreement and the transactions
contemplated hereby; and
(iii) use its reasonable best efforts (A) to
obtain and furnish the information required to be included
by it in the Proxy Statement and, after consultation with
Parent, respond promptly to any comments made by the SEC or
the appropriate Canadian authorities with respect to the
Proxy Statement and any preliminary version thereof and
cause the Proxy Statement to be mailed to its shareholders
at the earliest practicable time following the consummation
of the Offer and (B) to obtain the necessary approvals by
its shareholders of the Amalgamation.
Section 3.4 Dissenting Shares. Notwithstanding anything in this
-----------------
Agreement to the contrary, a shareholder of the Company who did not
tender Shares pursuant to the Offer may exercise the rights granted
under the BC Act to apply to court in connection with the Subsidiary's
plan to acquire any outstanding Shares pursuant to the Compulsory
Acquisition. A shareholder of the Company who did not tender Shares
pursuant to the Offer may exercise rights of dissent in the manner set
forth in Section 207 of the BC Act in connection with the
Amalgamation. If, after the Effective Time, such holder fails to
perfect or withdraws or loses his, her or its right to apply to court
to dissent, as applicable, such Shares shall be treated as if they had
been converted, as of the Effective Time, into a right to receive the
Per Share Amount without interest thereon. The Company shall give
Parent prompt notice of any notices or demands received by the Company
for appraisal of Shares, and, prior to the Effective Time, Parent
shall have the right to participate in all negotiations and
proceedings with respect to such demands. Prior to the Effective Time,
the Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to
settle, any such demands.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Subsidiary as
follows:
Section 4.1 Organization and Qualification; Subsidiaries.
---------------------------------------------
(a) Each of the Company and its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on
its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and
authority would not, individually or in the aggregate, have a material
adverse effect on the business, assets, liabilities, results of
operations, or financial condition of the Company and its
subsidiaries, taken as a whole, but specifically excluding any adverse
change in the general economy in the United States, any adverse change
in the diagnostic industry generally, any adverse change arising from
the transactions contemplated hereby and any adverse change resulting
from any change in generally accepted accounting principles required
to be made as a result of the issuance of a new accounting standard or
change to an existing accounting standard (a "Material Adverse
Effect").
(b) Each of the Company and its subsidiaries is duly
qualified or licensed and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified
or licensed and in good standing would not, individually or in the
aggregate, have a Material Adverse Effect.
(c) The Company has heretofore furnished to Parent complete
and correct copies of the Company's Memorandum of Association and
Articles of Association, each as amended, and the equivalent
organizational documents of each of its subsidiaries, each as amended
to the date hereof. Such Memorandum of Association and Articles of
Association and equivalent organizational documents are in full force
and effect and no other organizational documents are applicable to or
binding upon the Company or its subsidiaries. The Company is not in
violation of any of the provisions of its Memorandum of Association or
Articles of Association and no subsidiary of the Company is in
violation of any of the provisions of such subsidiary's equivalent
organizational documents.
(d) The Company has heretofore furnished to Parent a
complete and correct list of all entities in which the Company owns,
directly or indirectly, any equity or voting interest, which list sets
forth the amount of capital stock of or other equity interests in such
entities, directly or indirectly. No entity in which the Company owns,
directly or indirectly, less than a 50% equity interest is,
individually or when taken together with all other such entities,
material to the business of the Company and its subsidiaries, taken as
a whole.
Section 4.2 Capitalization of the Company and Its Subsidiaries.
--------------------------------------------------
The authorized capital stock of the Company consists of 200,000,000
Shares of which, as of March 12, 1998, 16,826,599 Shares were issued
and outstanding (together with the associated common share purchase
rights), 16,816 Shares were subject to issuance under a restricted
bonus plan and up to 600,000 shares were authorized for issuance under
the ESPP. All outstanding shares of capital stock of the Company have
been validly issued, and are fully paid, nonassessable and free of
preemptive rights. As of March 12, 1998, Company Options to purchase
an aggregate of 1,655,000 Shares were outstanding. Schedule 4.2 sets
forth the complete list of all outstanding Company Options, including
the exercise prices thereof, as of March 12, 1998. Except as set forth
above and except pursuant to any common share purchase rights under
the Rights Plan, there are outstanding (i) no shares of capital stock
or other voting securities of the Company, (ii) no securities of the
Company convertible into or exchangeable for shares of capital stock
or voting securities of the Company, (iii) no options, subscriptions,
warrants, convertible securities, calls or other rights to acquire
from the Company, and no obligation of the Company to issue, deliver
or sell any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the
Company and (iv) no equity equivalents, interests in the ownership or
earnings of the Company or other similar rights (collectively,
"Company Securities"). None of the Company Options are "incentive
stock options" (within the meaning of section 422 of the United States
Federal Internal Revenue Code of 1986, as amended (the "Code")). There
are no outstanding obligations of the Company or any of its
subsidiaries to repurchase, redeem or otherwise acquire any Company
Securities, other than the Company's obligations hereunder respecting
the Company Options. Each of the outstanding shares of capital stock
of each of the Company's subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and is directly or indirectly
owned by the Company, free and clear of all security interests, liens,
claims, pledges, charges, voting agreements or other encumbrances of
any nature whatsoever (collectively, "Liens"). There are no existing
options, calls or commitments of any character relating to the issued
or unissued capital stock or other securities of any subsidiary of the
Company. Since March 11, 1998, no Company Options have been granted
and no Shares have been issued except pursuant to Company Options, the
Company's restricted bonus plan and the ESPP as disclosed above.
Section 4.3 Authority Relative to This Agreement. The Company has
------------------------------------
all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board
and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than, with respect to the
Amalgamation, the approval (i) required by Policy 9.1 of the Ontario
Securities Commission ("OSC") and (ii) of the holders of 75% of all
outstanding Shares and the filing of the appropriate documents as
required by the BC Act and the federal laws of Canada). This Agreement
has been duly and validly executed and delivered by the Company and
constitutes a legal, valid and binding agreement of the Company
enforceable against the Company in accordance with its terms except as
such enforceability may be limited by equity principles, bankruptcy
laws and other similar laws affecting creditors' rights generally.
Section 4.4 Non-Contravention; Required Filings and Consents.
------------------------------------------------
(a) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby
(including the Completion of the Acquisition) do not and shall not (i)
contravene or conflict with the Memorandum of Association or Articles
of Association of the Company or the equivalent organizational
documents of any of its subsidiaries; (ii) assuming that all consents,
authorizations and approvals contemplated by subsection (b) below have
been obtained and all filings described therein have been made,
contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company, any of its subsidiaries or any of
their respective properties; (iii) conflict with, or result in the
breach or termination of any provision of or constitute a default
(with or without the giving of notice or the lapse of time or both)
under, or give rise to any right of termination, cancellation, or loss
of any benefit to which the Company or any of its subsidiaries is
entitled under any provision of any agreement, contract, license or
other instrument binding upon the Company, any of its subsidiaries or
any of their respective properties, or allow the acceleration of the
performance of, any obligation of the Company or any of its
subsidiaries under any indenture, mortgage, deed of trust, lease,
license, contract, instrument or other agreement to which the Company
or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries or any of their respective assets or properties is
subject or bound; or (iv) result in the creation or imposition of any
Lien on any asset of the Company or any of its subsidiaries, except in
the case of clauses (ii), (iii) and (iv) for any such contraventions,
conflicts, violations, breaches, terminations, defaults,
cancellations, losses, accelerations and Liens which would not
individually or in the aggregate have a Material Adverse Effect or
materially interfere with the consummation by the Company of the
transactions contemplated by this Agreement.
(b) The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions
contemplated hereby (including the Completion of the Acquisition) by
the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority (whether domestic,
foreign or supranational) other than (i) the filing of a compulsory
acquisition notice, in the case of the Compulsory Acquisition, or the
filing and approval of amalgamation documents with the British
Columbia Registrar of Companies and the filing and approval of an
application to the Supreme Court of British Columbia in the case of
the Amalgamation in accordance with the BC Act and any other Canadian
provincial authorities; (ii) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (iii) compliance with the Canadian
Competition Act; (iv) compliance with the Investment Canada Act; (v)
compliance with any applicable requirements of any laws or regulations
relating to the regulation of monopolies or competition in Germany and
compliance with any applicable requirements of the United Kingdom Fair
Trading Act; (vi) compliance with any applicable requirements of the
Exchange Act and state and provincial securities, takeover and Blue
Sky laws; and (vii) such actions or filings which, if not taken or
made, would not, individually or in the aggregate, have a Material
Adverse Effect or materially interfere with the consummation by the
Company of the transactions contemplated by this Agreement.
Section 4.5 SEC Reports.(a) The Company has filed all required
-----------
forms, reports and documents with the SEC and all applicable Canadian
provincial regulators since January 1, 1996 (collectively, the "SEC
Reports"), each of which has complied in all material respects with
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act. As of their respective dates,
none of the SEC Reports, including, without limitation, any financial
statements or schedules included therein, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial
statements and unaudited consolidated interim financial statements of
the Company included in the SEC Reports fairly present in all material
respects, in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then
ended (subject to normal year-end adjustments and the absence of
footnotes in the case of any unaudited interim financial statements).
The Company has heretofore provided complete and correct copies of
each of the SEC Reports to Parent.
(b) Except as reflected or reserved against in the audited
consolidated balance sheet of the Company and its subsidiaries at
December 31, 1997 the Company and its subsidiaries have no liabilities
of any nature (whether accrued, absolute, contingent or otherwise),
except for liabilities incurred in the ordinary course of business
since December 31, 1997, or which would not, individually or in the
aggregate, have a Material Adverse Effect.
14
Section 4.6 Absence of Certain Changes; Derivatives
---------------------------------------
Since December 31, 1997, except as specifically disclosed in the SEC
Reports filed prior to the date of this Agreement, neither the Company
nor any of its subsidiaries has (i) taken any of the actions set forth
in Section 6.1 except as permitted thereunder, or (ii) entered into any
transaction, or conducted its business or operations, other than in
the ordinary course of business consistent with past practice. Since
December 31, 1997, there has not been any event or change related to
the Company which has had a Material Adverse Effect.
(b) Schedule 4.6(b) sets forth a complete and correct list
of all Derivative Financial Instruments (as defined below) (including
the face, contract or notional amount of and any open position
relating to such Derivative Financial Instruments and a brief summary
of the nature and terms thereof) to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or any of their respective assets or properties is
subject or bound (including, without limitation, funds of the Company
or any of its subsidiaries invested by any other person). For purposes
of this Agreement, "Derivative Financial Instrument" means any
futures, forward, swap, option or swaption contract, or any other
financial instrument with similar characteristics and/or generally
characterized as a "derivative" security.
Section 4.7 Board Recommendation Statement; Offer Documents.
-----------------------------------------------
Neither the Board Recommendation Statement, nor any of the information
provided by the Company and/or by its auditors, legal counsel,
financial advisors or other consultants or advisors specifically for
use in the Offer Documents or any supplements or amendments thereto
when filed with the SEC or any Canadian regulatory authority and on
the date first published, sent or given to the Company's shareholders,
as the case may be, will contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 4.8 Finder's Fee; Professional Expenses. Except as set
-----------------------------------
forth on Schedule 4.8(a), no broker, finder, investment banker or
other intermediary is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of the
Company. The maximum amounts payable to each such person is set forth
on Schedule 4.8(a). The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and
the persons identified on Schedule 4.8(a) pursuant to which such
persons would be entitled to any payment relating to the transactions
contemplated hereby. The maximum amount paid, payable or to become
payable by the Company or any of its subsidiaries to any attorney,
financial advisor, broker, consultant, accountant or other advisor
("Professionals") other than Willkie, Xxxx & Xxxxxxxxx in connection
with the evaluation, negotiation, execution or performance of this
Agreement or the consummation of the transactions contemplated to be
effected pursuant hereto will not exceed U.S.$8 million (other than
such amounts payable to accountants in connection with the Company
complying with the provisions of this Agreement). Since December 31,
1997, and other than ordinary course expenses consistent with the
historical amounts and frequency reflected in the financial statements
contained in the SEC Reports filed prior to the date hereof, the
Company has not incurred, and will not incur any costs, fees or
expenses (i) as of the date hereof related to the services of
Professionals for any other purpose in excess of U.S.$1,750,000, which
amount is summarized on Schedule 4.8(b) or (ii) payable to Willkie,
Xxxx & Xxxxxxxxx other than the amount set forth on Schedule 4.8(a).
Section 4.9 Absence of Litigation. There is no action, suit,
---------------------
claim, investigation or proceeding (or, to the knowledge of the
Company, any basis for any person to assert any claim likely to result
in liability or any other adverse determination) pending against, or
to the knowledge of the Company, threatened against or affecting, the
Company or any of its subsidiaries or any of their respective
properties before any court or arbitrator or any administrative,
regulatory or governmental body, or any agency or official
(collectively, "Litigation"), that individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect. The
Company and its subsidiaries are not party to any Litigation initiated
by them other than Litigation with Parent or its subsidiaries or in
connection with the collection of accounts receivable in the ordinary
course of business. Without limiting the generality of the foregoing,
as of the date hereof, there is no Litigation to which the Company or
any of its subsidiaries is a party that (i) in any manner challenges
or seeks to prevent, enjoin, alter or delay the Offer or the
Completion of the Acquisition or any of the other transactions
contemplated hereby; or (ii) alleges criminal action or inaction by
the Company or any of its Subsidiaries. As of the date hereof, neither
the Company nor any of its subsidiaries nor any of their respective
properties is subject to any order, writ, judgment, injunction,
decree, determination or award having, or which would reasonably be
expected to have, a Material Adverse Effect or which would prevent or
delay the consummation of the transactions contemplated hereby.
Section 4.10 Taxes. (a) All material federal, state, provincial,
-----
local, foreign and other governmental Tax (as defined below) returns,
reports, information returns and statements of the Company and each of
its subsidiaries (including any consolidated Tax returns that include
the income or loss of the Company or any of its subsidiaries) required
by law to be filed or sent as of the Effective Time have been or shall
be duly filed or sent, and such returns, reports and statements are or
shall be true, complete and correct in all material respects. All
material federal, provincial, state, local, foreign and other
governmental taxes, assessments, fees and similar charges, including
without limitation, income, gross receipts, net proceeds, alternative
or add-on minimum, ad valorem, value added, turnover, sales, use,
property, personal property (tangible and intangible), stamp, leasing,
lease, user, excise, duty, franchise, transfer, license, withholding,
payroll, employment, fuel, excess profits, environmental, occupational
and interest equalization, windfall profits, severance, and other
charges (including interest and penalties) (collectively, "Taxes")
imposed upon the Company or any of its subsidiaries or any of the
properties, assets or income of the Company or any of its subsidiaries
which are due and payable through the Effective Time or claimed by any
taxing authority to be due and payable through the Effective Time have
been or shall be paid or reserved for, or adequate provision shall be
made therefor, as of the Effective Time, other than Taxes being
contested in good faith by the Company or any of its subsidiaries
concerning an aggregate amount which is not material to the business
of the Company or such of its subsidiaries. The most recent financial
statements contained in the SEC Reports reflect an adequate Tax
reserve in accordance with generally accepted accounting principles.
(b) As of the date hereof, (i) there are no material Tax
claims pending against the Company or any of its subsidiaries and the
Company has no knowledge of any threatened claim for material Tax
deficiencies or any basis for such claims, (ii) no Tax returns for the
Company or any of its subsidiaries have been or are currently being
audited by any taxing authority, (iii) to the Company's knowledge,
there are no material issues have been raised in any examination by
any taxing authority with respect to the Company or any of its
subsidiaries which, by application of similar principles, reasonably
could be expected to result in a proposed deficiency for any other
period not so examined and (iv) there are not now in force any waivers
or agreements by the Company or any of its subsidiaries for the
extension of time for the assessment of any material Tax, nor has any
such waiver or agreement been requested by the Internal Revenue
Service, Revenue Canada or any other taxing authority. The statute of
limitations with respect to any year or period to and including the
fiscal year ended 1991 has expired.
(c) The Company and all of its subsidiaries have paid or are
withholding and shall pay when due to the proper taxing authorities
all material withholding amounts required to be withheld with respect
to all Taxes, including without limitation, sales and use Taxes and
Taxes on income or benefits and Taxes for unemployment, social
security or other similar programs with respect to salary and other
compensation of directors, officers and employees of the Company and
its subsidiaries.
(d) Neither the Company nor any of its subsidiaries has any
liability for any material federal, provincial, state, local, foreign
or other Taxes of any corporation or entity other than the Company and
its subsidiaries, including without limitation any liability arising
from the application of U.S. Treasury Regulation ss. 1.1502-6 or any
analogous provision of provincial, state, local or foreign law.
(e) Neither the Company nor any of its subsidiaries is or
has been a party to any material Tax sharing agreement with any
corporation other than the Company and its subsidiaries.
(f) To the best of the Company's knowledge and as of the
date hereof, no person who holds five (5) percent or more of the stock
of the Company is a "foreign person" as defined in Section 1445(f)(3)
of the Code.
Section 4.11 Employee Benefits. (a) Schedule 4.11(a) contains a
-----------------
true and complete list of each material bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or
termination pay, hospitalization or other medical, life, disability or
other insurance, supplemental unemployment benefits, fringe benefit,
profit-sharing, pension, or retirement plan, program, agreement or
arrangement, each material employment agreement and each other
material employee benefit plan, program, agreement or arrangement
sponsored, maintained or contributed to or required to be contributed
to by the Company, or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), that together with the Company
would be deemed a "single employer" within the meaning of section 4001
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or with respect to which the Company or any ERISA Affiliate
has any liability or contingent liability (collectively, the "Plans"
and, individually, a "Plan"), whether or not any such Plan is subject
to ERISA. Schedule 4.11(a) identifies each of the Plans that is an
"employee benefit plan" as that term is defined in section 3(3) of
ERISA (the "ERISA Plans").
(b) Other than with respect to the matters addressed in
Section 4.11(p) below, the Company has heretofore delivered to Parent
true and complete copies of each of the Plans and all material
contracts relating thereto, or to the funding thereof, including,
without limitation, all material trust agreements, insurance
contracts, administration contracts, investment management agreements,
subscription and participation agreements, and recordkeeping
agreements, each as in effect on the date hereof. In the case of any
Plan which is not in written form, Parent has been supplied with an
accurate description of such Plan as in effect on the date hereof. A
true and correct copy of the most recent annual report, actuarial
report, accountant's opinion of the Plan's financial statements, and
Internal Revenue Service determination letter with respect to each
Plan, to the extent applicable, and a current schedule of assets (and
the fair market value thereof assuming liquidation of any asset which
is not readily tradable) held with respect to any funded Plan has been
supplied to the Parent, and there have been no material changes in the
financial condition in the respective Plans from that stated in the
annual reports and actuarial reports supplied.
(c) None of the Plans is subject to title IV of ERISA and
none of the Plans is a multiemployer plan (as defined in section 3(37)
of ERISA).
(d) With respect to any Plan subject to ERISA, neither the
Company nor any ERISA Affiliate, nor any Plan, nor any trust created
thereunder, nor any trustee or administrator thereof has engaged in a
prohibited transaction (as defined in section 406 of ERISA or section
4975 of the Code) with respect to any such Plan nor have there been
any other prohibited transactions with respect to any such Plans.
(e) Each Plan complies and has been operated and
administered in form and operation in all material respects in
accordance with its terms and applicable law, including but not
limited to ERISA and the Code, and no event has occurred which will or
could cause any Plan to fail to comply with such requirements and no
notice has been issued by any governmental authority questioning or
challenging such compliance.
(f) Except as set forth on Schedule 4.11(f), each Plan which
is an "employee pension benefit plan" (as defined in section 3(2) of
ERISA) complies in form and in operation with all applicable
requirements of sections 401(a) and 501(a) of the Code; there have
been no amendments to any such Plan which are not the subject of a
favorable determination letter issued with respect thereto by the
Internal Revenue Service; and no event has occurred which will or
could give rise to disqualification of any such Plan under such
sections or to a tax under section 511 of the Code. Each ERISA Plan
which is a "voluntary employees' beneficiary association" (within the
meaning of section 501(c)(9) of the Code) is the subject of a
favorable determination letter issued with respect thereto by the
Internal Revenue Service, a copy of which has been heretofore provided
to Parent, and no event has occurred which will or could give rise to
loss of any such Plan's exemption from taxation under section 501(a)
of the Code or to a tax under section 511 of the Code.
(g) Except as set forth on Schedule 4.11(g), none of the
assets of any Plan are invested in employer securities or employer
real property.
(h) There have been no acts or omissions by the Company or
any ERISA Affiliate which have given rise to or may give rise to
fines, penalties, taxes or related charges under section 502 of ERISA
or Chapters 43, 47, 68 or 100 of the Code for which the Company or any
ERISA Affiliate may be liable.
(i) Actuarially adequate accruals for all obligations under
the Plans are reflected in the financial statements of the Company.
(j) Each Plan which is intended to be "qualified" within the
meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of
the Code.
(k) The Company has the right to amend or terminate any
Plan.
(l) Except as set forth on Schedule 4.11(l), no Plan
provides benefits, including without limitation, death or medical
benefits (whether or not insured), with respect to current or former
employees of the Company or any ERISA Affiliate beyond their
retirement or other termination of service (other than (i) coverage
mandated by applicable law or (ii) death benefits or retirement
benefits under any employee pension benefit plan).
(m) Except as provided in Schedule 4.11(m), the consummation
of the transactions contemplated by this Agreement will not (i)
entitle any current or former employee or officer of the Company or
any ERISA Affiliate to severance pay, unemployment compensation or any
other payment, except as expressly provided in this Agreement or (ii)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer.
(n) As of the date hereof, there are no pending (or, to the
knowledge of the Company, threatened or anticipated) material claims
by, on behalf of, or against any Plan, by any employee or beneficiary
covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits).
(o) Except for the options listed in Schedule 4.2 under the
heading, "Outside of any Plan" each of the outstanding Company Options
was granted under the International Murex Technologies Corporation
Amended and Restated Employee Equity Incentive Plan (the "Equity
Incentive Plan") and, (except for the name and address of the grantee,
the date, the exercise price, the vesting schedule, the number of
Shares subject to the option, and the expiration date) is evidenced by
an award agreement that is identical in all material respects to one
of the two award agreements attached to Schedule 4.11(o)(1). Except
for the name and address of the grantee, the date, the exercise price,
the number of Shares subject to the option, and the expiration date,
each of the options listed in Schedule 4.2 under the heading "Outside
of any Plan" is evidenced by an option agreement that is identical in
all material respects to the option agreement attached to Schedule
4.11(o)(2).
Section 4.12 Compliance. Neither the Company nor any of its
----------
subsidiaries is in violation of, or has violated, any applicable
provisions of (i) any laws, rules, statutes, orders, ordinances or
regulations or (ii) any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, or other instrument or
obligations to which the Company or its subsidiaries is a party or by
which the Company or any of its subsidiaries or its or any of their
respective properties are bound or affected, which in either case,
individually or in the aggregate, would result in a Material Adverse
Effect. Without limiting the generality of the foregoing, neither the
Company nor any of its subsidiaries is in violation of, or has
violated any applicable provisions of the Foreign Corrupt Practices
Act, the Trading with the Enemy Act, the Anti- Economic Discrimination
Act, the International Emergency Economic Powers Act, the Export
Administration Regulations or any law or regulation relating to
Medicare or Medicaid anti- kickback fraud and abuse or any Canadian
equivalent of the foregoing.
Section 4.13 Environmental Matters. (a) The Company and its
---------------------
subsidiaries are in compliance with all applicable Environmental Laws
(which compliance includes, but is not limited to, the possession by
the Company and its subsidiaries of all permits and other governmental
authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof), except for any
noncompliance that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any of its subsidiaries has received any communication
(written or oral), whether from a governmental authority, citizens
group, employee or otherwise, that alleges that the Company or any of
its subsidiaries is not in such compliance, and there are no present
actions, activities, circumstances, conditions, events or incidents
that may prevent or interfere with such compliance in the future
which, individually or in the aggregate, would have a Material Adverse
Effect.
(b) There is no Environmental Claim pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries, or, to the knowledge of the Company, against any person
or entity whose liability for any Environmental Claim the Company or
any of its subsidiaries has or may have retained or assumed either
contractually or by operation of law, which individually or in the
aggregate would reasonably be expected to have a Material Adverse
Effect.
(c) There are no present actions, activities, circumstances,
conditions, events or incidents (including, without limitation, the
release, emission, discharge, presence or disposal of any Hazardous
Material) which could form the basis of any Environmental Claim
against the Company or any of its subsidiaries, or, to the knowledge
of the Company, against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has or may
have retained or assumed either contractually or by operation of law,
which individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect.
(d) Neither the Company nor any of its subsidiaries has, and
to the knowledge of Company, no other person has Released (as defined
below), placed, stored, buried or dumped Hazardous Materials or any
other wastes (including, but not limited to, biological wastes)
produced by, or resulting from, any business, commercial or industrial
activities, operations or processes, on, beneath or adjacent to any
property owned, operated or leased or formerly owned, operated or
leased by the Company or any of its subsidiaries, and neither the
Company nor any of its subsidiaries has received notice that it is a
potentially responsible party for the Cleanup of any property, whether
or not owned or operated by the Company or any of its subsidiaries,
which individually or in the aggregate would reasonably be expected to
have a Material Adverse Effect.
(e) The Company has no material reports, studies, analyses,
tests or monitoring possessed or initiated by the Company or any of
its subsidiaries pertaining to Hazardous Materials in, on, beneath or
adjacent to the property owned or leased by the Company or any of its
subsidiaries or regarding the Company's and its subsidiaries'
compliance with applicable Environmental Laws.
(f) Except as set forth in Schedule 4.13, no transfers of
material permits or other material governmental authorizations under
Environmental Laws, and no additional material permits or other
material governmental authorizations under Environmental Laws, will be
required to permit the Company and its subsidiaries, as the case may
be, to be in compliance in all material respects with all applicable
Environmental Laws immediately following the transactions contemplated
hereby.
(g) To the knowledge of the Company, as of the date hereof,
there is not any noncompliance, allegation of noncompliance, pending
or threatened Environmental Claim, actions, circumstances, conditions,
events, incidents, Releases, placement, storage, burial or dumping
described in paragraphs (a) through (d) above which represents a
current liability or could reasonably be expected to result in
liability exceeding $200,000 in the aggregate, other than as disclosed
in the SEC Reports filed prior to the date hereof.
Section 4.14 Intellectual Property.
---------------------
(a) Schedule 4.14(a) sets forth a complete list of all
patents, all material patent applications, all trademarks and all
service marks owned by the Company and each of its subsidiaries. The
Company warrants that the Company or one of its subsidiaries is the
sole owner of the property identified in Schedule 4.14(a), and that
the Company and its subsidiaries have not granted or promised to grant
any exclusive licenses or any material non-exclusive licenses or
covenants not to xxx thereunder to any third party (other than to
Parent or its subsidiaries and other than trademark or service xxxx
licenses entered into in the ordinary course of business under
distribution and supply agreements).
(b) Except as set forth on Schedule 4.14(b): (1) the Company
and each of its subsidiaries owns, or is licensed to use (in each
case, free and clear of any Liens in respect of the Company's or any
of its subsidiaries' interests therein) all Intellectual Property (as
defined below) used in or necessary for the conduct of its business as
currently conducted; (2) the use of any Intellectual Property by the
Company and its subsidiaries does not infringe on or otherwise violate
the rights of any person; (3) no product (or component thereof or
process) used, sold or manufactured by the Company or any of its
subsidiaries infringes or otherwise violates the Intellectual Property
of any other person; and (4) no person is challenging, infringing on
or otherwise violating any right of the Company or any of its
subsidiaries with respect to any Intellectual Property owned by and/or
licensed to the Company and its subsidiaries, except for (2) through
(4) as would not have a Material Adverse Effect. Without limiting the
generality of the foregoing in parts (b)(2), (b)(3) and (b)(4) hereof,
except as set forth on Schedule 4.14(b), the use, sale and/or
manufacture by Company and its subsidiaries of microtitre products,
LiPA products, rapid HIV diagnostic products, and bacteriology
products, does not constitute a material violation of the rights or
Intellectual Property of any other person. For purposes of this
Agreement "Intellectual Property" shall mean trademarks, service
marks, brand names, certification marks, trade dress, assumed names,
trade names and other indications of origin, the goodwill associated
with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including
any extension, modification or renewal of any such registration or
application; inventions, discoveries and ideas, whether patentable or
not in any jurisdiction; patents, applications for patents (including,
without limitation, division, continuations, continuations in part and
renewal applications), and any renewals, extensions or reissues
thereof, in any jurisdiction; nonpublic information, trade secrets and
confidential information and rights in any jurisdiction to limit the
use or disclosure thereof by any person; writings and other works,
whether copyrightable or not in any jurisdiction; registrations or
applications for registration of copyrights in any jurisdiction, and
any renewals or extensions thereof; any similar intellectual property
or proprietary rights; and any claims or causes of action arising out
of or related to any infringement or misappropriation of any of the
foregoing.
Section 4.15 Significant Agreements. Schedule 4.15, Section A,
----------------------
sets forth a complete and correct list of all of the following
contracts, agreements, indentures, leases, mortgages, licenses, plans,
arrangements, understandings, commitments (whether oral or written)
and instruments (collectively, "Contracts") in effect as of the date
hereof: (i) each Contract filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 and
that would be required to be filed by the Company as an exhibit to an
Annual Report Form 10-K under applicable rules and regulations of the
SEC; (ii) any Contract (other than the leases) that are material to
the business of the Company and its subsidiaries, taken as a whole (it
being understood that, for the purposes hereof, any Contracts not
calling for annual payments in excess of U.S.$500,000 in the next 12
months or for aggregate payments in excess of U.S.$5,000,000 or any
Contracts terminable by the Company or its subsidiaries without
payment or penalty on 90 days' notice or less shall not be deemed to
be material); and (iii) any Contract relating to Intellectual Property
and set forth on Schedule 4.15, Section C (the contracts, agreements
and commitments listed in Schedule 4.15, collectively, the
"Significant Agreements"). Except as noted on Schedule 4.15, the
Company has heretofore furnished to Parent complete and correct copies
of the Significant Agreements, each as amended or modified to the date
hereof (including any waivers with respect thereto). Except as set
forth on Schedule 4.15 or pursuant to Significant Agreements or as set
forth in the SEC Reports filed prior to the date hereof, since
December 31, 1997, there have been no transactions between the Company
or any of its subsidiaries, on the one hand, and the other parties to
the Significant Agreements or any of their respective affiliates, on
the other hand, other than transactions in the ordinary course of
business consistent with past practice. As of the date hereof, each of
the Significant Agreements is in full force and effect and enforceable
in accordance with its terms subject to equity principles and
bankruptcy laws and other similar laws effecting creditors' rights
generally. As of the date hereof, neither the Company nor any of its
subsidiaries has received any notice (written or oral) of cancellation
or termination of, or any expression or indication of an intention or
desire to cancel or terminate, any of the Significant Agreements. As
of the date hereof, no Significant Agreement is the subject of, or, to
the Company's knowledge, has been threatened to be made the subject
of, any arbitration, suit or other legal proceeding. As of the date
hereof, with respect to any Significant Agreement which by its terms
will terminate as of a certain date unless renewed or unless an option
to extend such Significant Agreement is exercised, neither the Company
nor any of its subsidiaries has received any notice (written or oral),
or otherwise has any knowledge, that any such Significant Agreement
shall not be, or is not likely to be, so renewed or that any such
extension option shall not be exercised. As of the date hereof, there
exists no event of default or occurrence, condition or act on the part
of the Company or any of its subsidiaries or, to the knowledge of the
Company, on the part of the other parties to the Significant
Agreements which constitutes or would constitute (with notice or lapse
of time or both) a breach of or default under any of the Significant
Agreements and which, individually or in the aggregate, would have a
Material Adverse Effect. As of the date hereof, without limiting the
generality of the foregoing, the Company and its subsidiaries are not
in material breach or default of any of the terms of any of the
agreements identified on Schedule 4.15, Section C. Except as set forth
on Schedule 4.15, Section B, the execution, delivery and performance
by the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and shall not conflict with,
or result in the breach or termination of any provision of or
constitute a default (with or without the giving of notice or the
lapse of time or both) under, or give rise to any right of
termination, cancellation, or loss of any benefit to which the Company
or any of its subsidiaries is entitled under any provision of any
Significant Agreement.
Section 4.16 Insurance. Schedule 4.16 sets forth a complete and
---------
correct list of all material insurance policies in effect as of the
date hereof (including a brief summary of the nature and terms thereof
and any amounts paid or payable to the Company or any of its
subsidiaries thereunder) providing coverage in favor of the Company or
any of its subsidiaries or any of their respective properties. Each
such policy is in full force and effect, no notice of termination,
cancellation or reservation of rights has been received with respect
to any such policy, to the knowledge of the Company there is no
default with respect to any provision contained in any such policy,
and there has not been any failure to give any notice or present any
claim under any such policy in a timely fashion or in the manner or
detail required by any such policy, except for any such failures to be
in full force and effect, any such terminations, cancellations,
reservations or defaults, or any such failures to give notice or
present claims which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. The coverage
provided by such policies is reasonable in scope and amount, in light
of the risks attendant to the business and activities of the Company
and its subsidiaries except for such absences of coverage which would
not, individually or in the aggregate, have a Material Adverse Effect.
Section 4.17 Properties. The Company and its subsidiaries do not
----------
own any real property. As of the date hereof, to the knowledge of the
Company, the plants and buildings of the Company and its subsidiaries
used in the operation of their business are structurally sound, have
no known material defects and are in good operating condition and
repair (normal wear and tear excepted). Schedule 4.17 sets forth a
complete list of all material real property and personal property
leases of the Company and its subsidiaries. All such leases are valid,
binding and enforceable against the Company and its subsidiaries (and,
to the knowledge of the Company, against each other party thereto) in
accordance with their respective terms, and there does not exist,
under any lease of real property or personal property calling for
annual payments exceeding $100,000 or more, any material defect or any
event which, with notice or lapse of time or both, would constitute a
material default by the Company or its subsidiaries or, to the
knowledge of the Company, by any other party thereto except for such
third party breaches as would not have a Material Adverse Effect and
except as such enforceability may be limited by equity principles,
bankruptcy laws and other similar laws affecting creditors' rights
generally.
Section 4.18 Labor Matters. Except as set forth in Schedule 4.18,
-------------
as of the date hereof, neither the Company nor any of its subsidiaries
is a party to any collective bargaining or other labor union contract
applicable to more than 10 persons employed by the Company or any of
its subsidiaries, no collective bargaining agreement is being
negotiated by the Company or any of its subsidiaries and the Company
has no knowledge of any activities or proceedings of any labor union
to organize any of their respective employees. There is no labor
dispute, strike or work stoppage against the Company or any of its
subsidiaries pending or, to the Company's knowledge, threatened which
may interfere with the respective business activities of the Company
or any of its subsidiaries, except where such dispute, strike or work
stoppage would not reasonably be expected to have a Material Adverse
Effect.
Section 4.19 Regulatory Matters.
------------------
(a) (i) With respect to each product that is, directly or
indirectly, being (i) researched for human diagnostics or (ii)
distributed for commercial sale by the Company or any of its
subsidiaries (the "Products"): (a)(i)(A) the Company and its
subsidiaries have obtained all applicable approvals, clearances,
authorizations, licenses and registrations required by United States
or foreign governments or government agencies, to permit the
manufacture, distribution, sale (including reimbursement and pricing),
marketing or human research of such Product (collectively,
"Licenses"); (B) the Company and its subsidiaries are in compliance in
all material respects with all terms and conditions of each License in
each country in which such Product is marketed, and with all
requirements pertaining to the manufacture, distribution, sale or
human research of such Product which is not required to be the subject
of a License; (C) the Company and its subsidiaries are in compliance
in all material respects with all applicable requirements (as set
forth in relevant statutes and regulations) regarding registration,
licensure or notification for each site (in any country) at which such
Product is manufactured, processed, packed, held for distribution or
from which it is distributed; and (D) to the extent such Product is
intended for export from the United States, the Company and its
subsidiaries are in compliance in all material respects with either
all United States Food and Drug Administration ("FDA") requirements
for marketing or 21 U.S.C. ss.381(e) or 382; (ii) all manufacturing
operations performed by the Company and its subsidiaries have been and
are being conducted in full compliance with the current good
manufacturing practice, including, but not limited to, the good
manufacturing practice regulations issued by the FDA and counterpart
requirements in the European Union and other countries; (iii) all
nonclinical laboratory studies, as described in 21 C.F.R. ss.58.3(d),
sponsored by the Company or any of its subsidiaries have been and are
being conducted in full compliance with the good laboratory practice
regulations set forth in 21 C.F.R. Part 58 and counterpart
requirements in the European Union and other countries; and (iv) the
Company and its subsidiaries are in full compliance with all reporting
requirements for all Licenses or plant registrations described in the
preceding clauses (a)(i)(A) and (a)(i)(C), including, but not limited
to, the adverse event reporting requirements for drugs in 21 C.F.R.
Parts 312 and 314 and for devices in 21 C.F.R. Parts 812 and 803;
except, in the case of the preceding clauses (a)(i)(A) through
(a)(i)(D), inclusive, (a)(ii), (a)(iii) and (a)(iv), for any such
failures to obtain or noncompliance which, individually or in the
aggregate, would not have a Material Adverse Effect. Without limiting
the generality of the foregoing definition of "Licenses", such
definition shall specifically include, with respect to the United
States, new drug applications, abbreviated new drug applications,
product license applications, investigational new drug applications,
premarket approval applications, premarket notifications under Section
510(k) of the Federal Food, Drug and Cosmetic Act, investigational
device exemptions, and product export applications issued by the FDA,
as well as registrations issued by the Drug Enforcement Administration
of the Department of Justice.
(b) The Company will provide to Parent as promptly as
practicable after the date hereof a complete and correct list of all
Products as of the date hereof other than those not representing
annual revenue in excess of U.S. $100,000 unless the aggregate annual
revenue of all excluded Products exceeds U.S. $10,000,000.
(c) To the knowledge of the Company, neither the Company nor
any of its subsidiaries nor any of their officers, employees or agents
has made any untrue statement of a material fact or fraudulent
statement to the FDA or any foreign equivalent, failed to disclose a
fact required to be disclosed to the FDA or any foreign equivalent, or
committed any act, made any statement, or failed to make any
statement, that would reasonably be expected to provide a basis for
the FDA and any foreign equivalent to invoke its policy respecting,
"Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991).
Section 4.20 Voting Requirements. The affirmative vote (i)
--------------------
required by Policy 9.1 of the OSC and (ii) of the holders of 75% of
all outstanding Shares present and voting and the filing of the
appropriate documents as required by the BC Act and the federal laws
of Canada) respecting the Amalgamation is the only vote of the holders
of any class or series of Company Securities necessary to approve this
Agreement and the transactions contemplated by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBSIDIARY
Each of Parent and Subsidiary represents and warrants to the
Company as follows:
Section 5.1 Organization. Each of Parent and Subsidiary is a
------------
corporation duly organized, validly existing and in good standing
under the laws of the state or province of its incorporation and has
all requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as now being conducted,
except where the failure to be so organized, existing and in good
standing or to have such power and authority would not, individually
or in the aggregate, materially and adversely affect Parent's and
Subsidiary's ability to consummate the transactions contemplated
hereby.
Section 5.2 Authority Relative to this Agreement. Each of Parent
-----------------------------------
and Subsidiary has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by the boards of directors of Subsidiary and
Parent and by the sole shareholder of Subsidiary, and no other
corporate proceedings on the part of Parent or Subsidiary are
necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly and validly
executed and delivered by each of Parent and Subsidiary and
constitutes a legal, valid and binding agreement of each of Parent and
Subsidiary, enforceable against each of Parent and Subsidiary in
accordance with its terms except as such enforceability may be limited
by equity principles and by bankruptcy laws and other similar laws
affecting creditors' rights generally.
Section 5.3 Non-Contravention; Required Filings and Consents. (a)
------------------------------------------------
The execution, delivery and performance by Parent and Subsidiary of
this Agreement and the consummation of the transactions contemplated
hereby (including the Completion of the Acquisition) do not and shall
not (i) contravene or conflict with the Certificate of Incorporation
or By-Laws of Parent or the Articles of Association or Memorandum of
Association of Subsidiary; (ii) assuming that all consents,
authorizations and approvals contemplated by subsection (b) below have
been obtained and all filings described therein have been made,
contravene or conflict with or constitute a violation of any provision
of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to Parent or Subsidiary or any of their respective
properties; (iii) conflict with, or result in the breach or
termination of any provision of or constitute a default (with or
without the giving of notice or the lapse of time or both) under, or
give rise to any right of termination, cancellation, or loss of any
benefit to which Parent or Subsidiary is entitled under any provision
of any agreement, contract, license or other instrument binding upon
Parent, Subsidiary or any of their respective properties, or allow the
acceleration of the performance of, any obligation of Parent or
Subsidiary under any indenture, mortgage, deed of trust, lease,
license, contract, instrument or other agreement to which Parent or
Subsidiary is a party or by which Parent or Subsidiary or any of their
respective assets or properties is subject or bound; or (iv) result in
the creation or imposition of any Lien on any asset of Parent or
Subsidiary, except in the case of clauses (ii), (iii) and (iv) for any
such contraventions, conflicts, violations, breaches, terminations,
defaults, cancellations, losses, accelerations and Liens which,
individually or in the aggregate, would not reasonably be expected to
prevent or materially impair the ability of Parent and Subsidiary to
consummate the Offer and the Completion of the Acquisition.
(b) The execution, delivery and performance by Parent and
Subsidiary of this Agreement and the consummation of the transactions
contemplated hereby (including the Completion of the Acquisition) by
Parent and Subsidiary require no action by or in respect of, or filing
with, any governmental body, agency, official or authority (whether
domestic, foreign or supranational) other than (i) the filing of a
compulsory acquisition notice, in the case of the Compulsory
Acquisition, or the filing of amalgamation documents with the British
Columbia Registrar of Companies and the filing and approval of an
application to the Supreme Court of British Columbia in the case of
the Amalgamation in accordance with the BC Act and any other Canadian
provinical authorities; (ii) compliance with any applicable
requirements of the HSR Act; (iii) compliance with the Canadian
Competition Act; (iv) compliance with the Investment Canada Act and
any other Canadian provincial authorities; (v) compliance with any
applicable requirements of any laws or regulations relating to the
regulation of monopolies or competition in Germany and compliance with
any applicable requirements of the United Kingdom Fair Trading Act,
(vi) compliance with any applicable requirements of the Exchange Act
and state and provincial securities, takeover and Blue Sky laws; and
(vii) such actions or filings which, if not taken or made, would not,
individually or in the aggregate, materially interfere with the
consummation by Parent and Subsidiary of the transactions contemplated
by this Agreement.
Section 5.4 Offer Documents; Board Recommendation Statement;
------------------------------------------------
Proxy Statement. Neither the Offer Documents, nor any of the
---------------
information provided by Parent or Subsidiary and/or by their auditors,
legal counsel, financial advisors or other consultants or advisors
specifically for use in the Board Recommendation Statement shall, on
the respective dates on which the Offer Documents, the Board
Recommendation Statement or any supplements or amendments thereto are
filed with the SEC or the appropriate Canadian authorities or on the
date first published, sent or given to the Company's shareholders, as
the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Notwithstanding the foregoing, neither Parent nor Subsidiary makes any
representation or warranty with respect to any information provided by
the Company and/or by its auditors, legal counsel, financial advisors
or other consultants or advisors specifically for use in the Offer
Documents. None of the information provided by or prepared by Parent
or Subsidiary and/or by their auditors, attorneys, financial advisors
or other consultants or advisors specifically for use in the Proxy
Statement shall, at the time filed with the SEC or any appropriate
Canadian authority, at the time mailed to the Company's shareholders,
at the time of the Shareholders' Meeting or 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 in order to
make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents shall comply as to
form in all material respects with the provisions of the Exchange Act
and the rules and regulations thereunder.
Section 5.5 No Prior Activities. Since the date of its
-------------------
incorporation, neither Subsidiary nor Amalco has not engaged in any
activities other than in connection with or as contemplated by this
Agreement or in connection with arranging any financing required to
consummate the transactions contemplated hereby.
Section 5.6 Financing. Subsidiary has or shall have available to
---------
it all funds necessary to satisfy its obligations hereunder,
including, without limitation, the obligation to pay the Per Share
Amount pursuant to the Offer and the Completion of the Acquisition and
to pay all related fees and expenses in connection with the Offer and
the Completion of the Acquisition.
Section 5.7 No Share Ownership. Immediately prior to the
------------------
execution of this Agreement, neither Parent nor Subsidiary is the
beneficial or record owner of any Shares.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business of the Company. Except as
----------------------------------
otherwise expressly provided in this Agreement, during the period from
the date hereof to the time Subsidiary's designees are elected as
directors of the Company pursuant to Section 1.3, the Company and its
subsidiaries shall each conduct its operations in the ordinary course
of business consistent with past practice, and the Company and its
subsidiaries shall each use its reasonable best efforts to preserve
intact its business organization, to keep available the services of
its officers and employees and to maintain existing relationships with
licensors, licensees, suppliers, contractors, distributors, customers
and others having business relationships with it. Without limiting the
generality of the foregoing, and except as otherwise expressly
provided in this Agreement, prior to the Effective Time, neither the
Company nor any of its subsidiaries shall, without the prior written
consent of Subsidiary, which consent shall not unreasonably be
withheld or delayed:
(a) amend or propose to amend its Articles of Association or
Memorandum of Association or equivalent organizational documents, or
increase or propose to increase the number of directors of the
Company;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any stock of any class or any other securities
or equity equivalents (including, without limitation, stock
appreciation rights), except (i) under the ESPP, (ii) the issuance of
up to 16,816 Shares pursuant to the Company's bonus plan or (iii) as
required by option agreements as in effect as of the date hereof, or
amend any of the terms of any such securities or agreements
outstanding as of the date hereof;
(c) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock, or property or any combination thereof) in
respect of its capital stock, or redeem, repurchase or otherwise
acquire any of its securities or any securities of its subsidiaries;
(d) (i) incur any indebtedness for borrowed money or issue
any debt securities or, except in the ordinary course of business
consistent with past practice, assume, guarantee or endorse the
obligations of any other person (other than to wholly owned
subsidiaries of the Company); (ii) make any loans, advances or capital
contributions to, or investments in, any other person (other than to
wholly owned subsidiaries of the Company); (iii) pledge or otherwise
encumber shares of capital stock of the Company or any of its
subsidiaries; or (iv) except in the ordinary course of business
consistent with past practice, mortgage or pledge any of its assets,
tangible or intangible, or create or suffer to exist any Lien
thereupon other than Permitted Liens;
(e) enter into, adopt or (except as may be required by law)
amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance or other
employee benefit agreement, trust, plan, fund or other arrangement for
the benefit or welfare of any director, officer or employee, or
(except, in the case of employees who are not officers or directors,
for normal compensation increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not result in
a material increase in benefits or compensation expense to the
Company) increase in any manner the compensation or benefits of any
director, officer or employee or pay any benefit not required by any
plan or arrangement as in effect as of the date hereof (including,
without limitation, the granting or repricing of stock options,
restricted stock, stock appreciation rights or performance units);
(f) acquire, sell, lease, encumber, transfer or dispose of
any assets outside the ordinary course of business consistent with
past practice or any assets which in the aggregate are material to the
Company and its subsidiaries, taken as a whole, or enter into any
contract, agreement, commitment or transaction outside the ordinary
course of business consistent with past practice;
(g) except as may be required as a result of a change in law
or in generally accepted accounting principles, change any of the
accounting principles or practices used by it;
(h) (i) acquire (by amalgamation, merger, consolidation or
acquisition of stock or assets) any corporation, partnership or other
business organization or division thereof; (ii) authorize any new
capital expenditure or expenditures which, individually, is in excess
of U.S.$200,000 between the date hereof and March 31, 1998 and,
thereafter, in excess of the amounts set forth in the monthly capital
budgets to be prepared by the Company and approved by Parent in its
reasonable discretion; (iii) settle any litigation; or (iv) enter into
or amend any contract, agreement, commitment or arrangement with
respect to any of the foregoing;
(i) make any material Tax election or settle or compromise
any material Tax liability;
(j) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business consistent with past practice or in
accordance with their terms;
(k) terminate, modify, amend or waive compliance with any
material provision of, any of the Significant Agreements, or fail to
take any action necessary to preserve the material benefits of any
Significant Agreement to the Company or any of its subsidiaries;
(l) enter into any agreement providing for the acceleration
of payment or performance or other consequence as a result of a change
in control of the Company;
(m) enter into any agreement providing for any license
(other than trademark or service xxxx licenses under supply or
distribution contracts entered into in the ordinary course of
business), sale, assignment or otherwise transfer any Intellectual
Property or grant any covenant not to xxx with respect to any of its
Intellectual Property;
(n) enter into any commitments to Professionals outside the
ordinary course of business or in excess of the amounts permitted by
Section 4.8;
(o) cancel or terminate any material insurance policies
(other than in connection with acquiring substantially equivalent
replacement policies) or reduce the amount of coverage thereunder; or
(p) take, or agree in writing or otherwise to take, any of
the actions described above in Section 6.1.
Section 6.2 Access to Information. (a) Subject to applicable law,
---------------------
any third party confidentiality agreements and the agreements set
forth in Section 6.2(b), between the date hereof and the Effective
Time, the Company shall give each of Parent and Subsidiary and their
counsel, financial advisors, auditors, and other authorized
representatives reasonable access to all employees, plants, offices,
warehouses and other facilities and to all books and records of the
Company and its subsidiaries, including its outside auditors, shall
permit each of Parent and Subsidiary and their respective counsel,
financial advisors, auditors and other authorized representatives to
make such inspections as Parent or Subsidiary may reasonably require
and shall cause the Company's officers or representatives and those of
its subsidiaries to furnish promptly to Parent or Subsidiary or their
representatives such financial and operating data and other
information with respect to the business and properties of the Company
and any of its subsidiaries as Parent or Subsidiary may from time to
time request. No investigation pursuant to this Section 6.2 shall
affect any representations or warranties of the parties herein or the
conditions to the obligations of the parties hereunder. Information to
which the Company shall afford Parent access that pertains to the
Company's leased properties includes copies of all of the leases as
well as copies of all documents, reports, studies, inspections,
surveys, title reports, building occupancy and zoning permits,
easements, recorded instruments and other information in the Company's
possession which pertain to utilities, infrastructure, zoning,
environmental condition, the leases, and any other condition affecting
the leased properties, and such copies are, to the knowledge of the
Company, correct and complete.
(b) Notwithstanding any provision of the Confidentiality
Agreement dated February 22, 1998 between Parent and the Company,
Parent and Subsidiary may (i) enter into this Agreement, (ii) acquire
Shares pursuant to the Offer and the Completion of the Acquisition and
(iii) make such disclosures in connection with the Offer, the Offer
Documents and the Proxy Statement as Parent and Subsidiary may
determine in their reasonable discretion is required by applicable
law.
Section 6.3 Reasonable Best Efforts. Subject to the terms and
-----------------------
conditions herein provided, each of the parties hereto agrees to use
its reasonable best 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 and regulations
to consummate and make effective the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, Parent,
Subsidiary and the Company shall cooperate with one another (i) in the
preparation and filing of the Offer Documents, the Board
Recommendation Statement, the Proxy Statement and any required filings
under the HSR Act and the other laws referred to in Sections 4.4(b)
and 5.3(b); (ii) in determining whether action by or in respect of, or
filing with, any governmental body, agency, official or authority
(either domestic or foreign) is required, proper or advisable or any
actions, consents, waivers or approvals are required to be obtained
from parties to any contracts, in connection with the transactions
contemplated by this Agreement; and (iii) in seeking timely to obtain
any such actions, consents and waivers and to make any such filings.
Section 6.4 Public Announcements. Parent and Subsidiary, on the
--------------------
one hand, and the Company, on the other hand, shall consult with each
other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required
by applicable law or by applicable rules of any securities exchange or
inter-dealer quotation system. The initial joint announcement of the
transactions contemplated by this Agreement shall be in the form
attached hereto as Annex B.
Section 6.5 Indemnification. (a) For a period not less than six
---------------
years from the Effective Time, Parent shall (i) indemnify and hold
harmless the directors, officers, employees and agents of the Company
(the "Indemnified Parties") from and against claims, losses or
obligations arising out of events occurring prior to the Effective
Time and relating to their service as a director, officer, employee or
agent of the Company except to the extent an Indemnified Party has
acted in bad faith or in a manner he did not reasonably believe to be
in or not opposed to the best interests of the Company or, with
respect to any criminal action or proceeding, had reasonable cause to
believe his conduct was unlawful and (ii) cause the Company or Amalco,
as the case may be, to maintain in effect the provisions in its
Articles of Association and Memorandum of Association containing the
provisions with respect to exculpation of director and officer
liability and indemnification set forth in the Articles of Association
and Memorandum of Association of the Company on the date of this
Agreement to the fullest extent permitted under applicable law, which
provisions shall not be amended, repealed or otherwise modified except
as required by applicable law or except to make changes permitted by
applicable law that would enlarge the exculpation or rights of
indemnification thereunder. In the event of any claim made against an
Indemnified Party covered by this Section 6.5(a), unless Parent, the
Company or Amalco has elected to defend that claim, Parent, the
Company or Amalco shall advance the reasonable fees and expenses of
counsel selected by that Indemnified Party (which counsel shall be
reasonably satisfactory to Parent and which counsel shall be the same
for all Indemnified Parties unless a conflict of interest between them
requires more than one counsel), upon receipt of a written undertaking
by or on behalf of that Indemnified Party to repay such amounts if it
shall ultimately be determined that Indemnified Party is not entitled
to be indemnified under this Section 6.5(a). In the event of any claim
made against an Indemnified Party covered by this Section 6.5(a),
unless Parent, the Company or Amalco has elected to defend that claim,
Parent, the Company or Amalco shall advance the reasonable fees and
expenses of counsel selected by that Indemnified Party (which counsel
shall be reasonably satisfactory to Parent and which counsel shall be
the same for all Indemnified Parties unless a conflict of interest
between them requires more than one counsel), upon receipt of a
written undertaking by or on behalf of that Indemnified Party to repay
such amounts if it shall ultimately be determined that Indemnified
Party is not entitled to be indemnified under this Section 6.5(a).
(b) Parent shall cause Amalco to maintain in effect for six
years from the Effective Time, to the extent available, the coverage
provided by the current directors' and officers' liability insurance
policies maintained by the Company (provided that Amalco may
substitute therefor policies of at least the same coverage containing
terms and conditions which are not materially less favorable) with
respect to matters occurring prior to the Effective Time; provided,
however, that nothing contained herein shall require Amalco to incur
any annual premium in excess of 200% of the last annual aggregate
premium paid prior to the date of this Agreement for all current
directors' and officers' liability insurance policies maintained by
the Company which the Company represents and warrants to be not in
excess of U.S.$225,000 (the "Current Premium") as of the date hereof.
If such premiums for such insurance would at any time exceed 200% of
the Current Premium, then Amalco shall maintain policies of insurance
which, in Amalco's good faith determination, provide the maximum
coverage available at an annual premium equal to 200% of the Current
Premium.
Section 6.6 Notification of Certain Matters. The Company shall
-------------------------------
give prompt notice to Parent or Subsidiary, and Parent or Subsidiary
shall give prompt notice to the Company, as the case may be, of (i)
the occurrence, or non-occurrence, of any event the respective
occurrence, or non-occurrence, of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure of the Company, Parent or Subsidiary,
as the case may be, to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder;
provided, that the delivery of any notice pursuant to this Section 6.6
shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 6.7 Termination of Stock Plans.
--------------------------
(a) The Board (or, if appropriate, any committee thereof)
shall adopt such resolutions or take such other actions as are
required (i) to suspend the ESPP and employee contributions thereto
effective as of Xxxxx 00, 0000, (xx) to terminate the ESPP as of the
date that Shares are purchased in the Offer and (iii) to ratify, for
purposes of Section 16(b) of the Exchange Act, the transactions under
this clause (a). If the date of the consummation of the Offer occurs
prior to the next Investment Date (as defined in the ESPP), then the
ESPP will refund the payroll deductions made by the ESPP participants
during the Offering Period (as defined in the ESPP) immediately
preceding that Investment Date to the participants. If the date of the
consummation of the Offer occurs on or after the Investment Date, then
as the payroll deductions will be applied to make purchases of Shares
as provided in the ESPP.
(b) Prior to the consummation of the Offer, the Board (or,
if appropriate, any committee thereof) shall adopt such resolutions or
take such other actions as are required to ensure that, following the
Effective Time, no participant in any stock, stock option, stock
appreciation or other benefit plan of the Company or any of its
subsidiaries shall have any right thereunder to acquire any capital
stock of the Company or Amalco.
Section 6.8 No Solicitation. (a) The Company will immediately
---------------
cease any existing discussions or negotiations with any third parties
conducted prior to the date hereof with respect to any Acquisition
Proposal (as defined below). The Company shall not, directly or
indirectly, through any officer, director, employee, representative or
agent or any of its subsidiaries, (i) solicit, initiate, continue or
encourage any inquiries, proposals or offers that constitute an
inquiry, proposal or offer relating to an amalgamation, merger,
consolidation, business combination, sale of substantial assets, sale
of shares of capital stock (including, without limitation, by way of a
tender offer) or similar transactions involving the Company or any of
its subsidiaries, other than the transactions contemplated by this
Agreement (any of the foregoing inquiries or proposals being referred
to in this Agreement as an "Acquisition Proposal"), (ii) solicit,
initiate, continue or engage in negotiations or discussions
concerning, or provide any non-public information or data to any
person or entity relating to, any Acquisition Proposal, or (iii) agree
to, approve or recommend any Acquisition Proposal; provided, that
nothing contained in this Section 6.8 shall prevent the Company from
(A) prior to the purchase by Subsidiary of Shares pursuant to the
Offer, furnishing non-public information or data to, or entering into
discussions or negotiations with, any person in connection with an
unsolicited bona fide written Acquisition Proposal by such person or
recommending an unsolicited bona fide written Acquisition Proposal to
the shareholders of the Company, if and only to the extent that (1)
the Board determines in good faith, based upon the written advice of
its independent financial advisors, that such Acquisition Proposal
would, if consummated, result in a transaction more favorable to the
Company's shareholders from a financial point of view than the
transactions contemplated by this Agreement and the Board determines
in good faith, based upon the written advice of independent legal
counsel, that such action is required for the discharge of their
fiduciary duties to shareholders under applicable law, (2) prior to
furnishing such non-public information to, or entering into
discussions or negotiations with, such person, the Company receives
from such person an executed confidentiality agreement with terms no
less favorable to the Company than those contained in the
Confidentiality Agreement dated February 22, 1998 between Parent and
the Company and (3) prior to furnishing such non-public information to
such person, the Company delivers to Parent a copy of all such
information concurrently with its delivery to the requesting party; or
(B) complying with Rule 14e-2 promulgated under the Exchange Act with
regard to an Acquisition Proposal. If the Board determines in good
faith that any Acquisition Proposal constitutes a Superior Proposal
(as defined below), the Board shall promptly give written notice,
specifying the identity of the other party and the structure and
material terms of such Superior Proposal (a "Notice of Superior
Proposal"), to Parent. The Board may (subject to the following
sentences of this subsection and compliance with Section 8.1(e) and
Section 8.2(a)), to the extent the Board determines in good faith
based upon written advice of independent legal counsel to be necessary
in order to comply with their fiduciary duties under applicable law,
approve or recommend any such Superior Proposal, approve or authorize
the Company's entering into an agreement with respect to such Superior
Proposal, approve or authorize the Company's entering into an
agreement with respect to such Superior Proposal, approve the
solicitation of additional takeover or other investment proposals or
terminate this Agreement, in each case at any time after the fifth
business day following delivery to Parent of the Notice of Superior
Proposal. The Company may take any of the foregoing actions pursuant
to the preceding sentence only if an Acquisition Proposal that was a
Superior Proposal at the time of delivery of a Notice of Superior
Proposal continues to be a Superior Proposal in light of any improved
transaction proposed by Parent prior to the expiration of the five
business day period specified in the preceding sentence. For purposes
of this Agreement, a "Superior Proposal" means any bona fide proposal
for an Acquisition Proposal that the Board determines in their good
faith reasonable judgment based on the written advice of its financial
advisors, to be made by a person with the financial ability to
consummate such proposal and to provide greater aggregate value to the
Company and/or the Company's shareholders than the transactions
contemplated by this Agreement or otherwise proposed by Parent as
contemplated above.
(b) The Company shall notify Parent immediately (and in no
event later than 24 hours) after receipt by the Company of any
Acquisition Proposal or any request for non-public information in
connection with an Acquisition Proposal or for access to the
properties, books or records of the Company by any person or entity
that informs the Company that it is considering making, or has made,
an Acquisition Proposal. Such notice shall be made orally and in
writing and shall indicate in reasonable detail the identity of the
offeror and the terms and conditions of such proposal, inquiry or
contract.
Section 6.9 Chiron License Agreement. Immediately following the
-----------------------
execution of this Agreement, the Company shall deliver the notice
previously furnished to Parent to Chiron and Ortho pursuant to Clause
27 of the Agreement dated August 27, 1996 among Chiron Corporation,
Xxxxxxx & Xxxxxxx/Ortho Diagnostics Systems, Inc. and the Company (the
"Chiron/Ortho Agreement"). From and after the date hereof, the Company
shall promptly notify Parent of and consult with Parent on all
contacts or discussions with any other party to the Chiron/Ortho
Agreement. Without the prior written consent, of Parent, the Company
shall not amend, waive, modify, supplement or otherwise alter any
provision of the Chiron/Ortho Agreement, nor shall the Company offer
to enter into or enter into any contract, agreement, understanding or
other arrangement with any person respecting the Chiron/Ortho
Agreement or the subject matter thereof. Without the prior written
consent of Parent under no circumstances shall the Company propose,
negotiate or agree to any "fair value" as that term is described in
Clause 27 of the Chiron/Ortho Agreement except, after consultation
with Parent, as is otherwise specifically required to comply with the
Chiron/Ortho Agreement or required by applicable law. The Company and
its affiliates shall receive and retain respectively, in the Company
and, as the case may be, its affiliates, any and all proceeds of any
sale of the HCV immunoassay business for fair value pursuant to Clause
27 of the Chiron/Ortho Agreement. No exercise of the option contained
in Clause 27 of the Chiron/Ortho Agreement or the sale of HCV
immunoassay business resulting therefrom shall be deemed to be a
breach of any representation, warranty or covenant contained in this
Agreement, nor shall any such exercise be deemed to cause any
condition contained in this Agreement or the Offer to be unsatisfied.
Section 6.10 Litigation Between Parent and the Company.
-----------------------------------------
Immediately after the execution of this Agreement, the parties shall
(i) cease to actively prosecute the litigation between the Company and
Parent, described under the heading "Abbott Litigation" in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Abbott Litigation") and (ii) ask the court in
the Abbott Litigation to stay that litigation. Promptly after the
purchase by Subsidiary of Shares pursuant to the Offer, the Company
and Parent shall take all steps necessary to dismiss with prejudice
the Abbott Litigation.
Section 6.11 Rights Plan. Unless this Agreement and the
-----------
Shareholder Agreements have terminated without the purchase or
acquisition by Parent or one of its Subsidiaries of Shares pursuant to
one or both of those agreements, the Company shall not amend or modify
its Rights Plan in a manner that would in any way nullify or conflict
with the Rights Plan Amendments and Determinations, and shall not
adopt any new shareholder rights plan or agreement or similar
agreement, plan or measure that would nullify or conflict with the
Rights Plan Amendments and Determinations have an adverse effect on
Parent, Subsidiary or any of their subsidiaries if Parent, Subsidiary
or any of their subsidiaries purchase or acquire, or propose to
purchase or acquire, any securities of the Company or enters into any
agreement requiring or permitting the purchase or acquisition of any
securities of the Company. Promptly after the date hereof, the Company
shall deliver the certificate required by Section 5.5(d) of the Rights
Plan respecting the Rights Plan Amendments and Determinations to the
Rights Agent (as defined in the Rights Plan).
Section 6.12 Post-Option Exercise. If this Agreement has been
--------------------
terminated and Parent or any of its subsidiaries have purchased any
Shares pursuant to any Shareholder Agreement: (a) Parent and
Subsidiary shall for six months following such purchase use reasonable
best efforts to consummate the Amalgamation on essentially the same
terms and conditions provided herein, except that the conditions to
Closing in Sections 7.1(d), 7.2 and 7.3 shall be deemed to be waived;
and (b) if, despite the transaction contemplated by (a) above, the
Amalgamation is not effected, Parent agrees that it and its affiliates
shall not, for three (3) years following the purchase of Shares
pursuant to any Shareholder Agreement, acquire Beneficial Ownership of
any Shares at less than the Per Share Amount (as adjusted for stock
splits and similar events); provided, however, that the restrictions
of this Section 6.12(b) shall not apply to the acquisition of less
than two percent of the outstanding Shares by pension plans or similar
fiduciary entities of Parent.
ARTICLE VII
CONDITIONS TO THE COMPLETION OF THE ACQUISITION
Section 7.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Completion of the Acquisition. The respective obligations of each
-----------------------------
party hereto to effect the Completion of the Acquisition is subject to
the satisfaction at or prior to the Effective Time of the following
conditions:
(a) if required by applicable law, the Amalgamation shall
have been approved by the affirmative vote of the shareholders of the
Company by the requisite vote in accordance with applicable law and
any court approval required for the Amalgamation shall have been
obtained;
(b) there shall not be in effect any order, decree or ruling
or other action restraining, enjoining or otherwise prohibiting the
Completion of the Acquisition, which order, decree, ruling or action
shall have been issued or taken by any court of competent jurisdiction
or other governmental body located or having jurisdiction within the
United States, Canada, Germany, the United Kingdom, the European Union
or any other country or economic region in which the Company or any of
its subsidiaries or Parent or any of its affiliates, directly or
indirectly, has material assets or operations;
(c) (i) any waiting period applicable to the Completion of
the Acquisition under the HSR Act, the Canadian Competition Act or the
Investment Canada Act or any applicable requirements of any laws or
regulations relating to the regulation of monopolies or competition in
Germany shall have terminated or expired and (ii) the Office of Fair
Trading has indicated, in terms satisfactory to the Parent and
Subsidiary, that it is not the intention of the Secretary of State for
Trade and Industry to refer the proposed acquisition of the Company,
or any matter arising therefrom which directly affects the Parent,
Subsidiary or the Company, to the Monopolies and Mergers Commission
and;
(d) Subsidiary shall have purchased Shares pursuant to the
Offer.
Section 7.2 Conditions to the Obligation of Parent and Subsidiary
-----------------------------------------------------
to Effect the Completion of the Acquisition. The obligations of Parent
-------------------------------------------
and Subsidiary to effect the Completion of the Acquisition are subject
to the satisfaction or waiver by Parent at or prior to the Effective
Time of the following further conditions:
(a) The Company shall have performed in all material
respects its covenants, agreements and obligations in Articles I, II
and III up to the Effective Time; and
(b) Unless Subsidiary shall have purchased Shares pursuant
to the Offer and except as otherwise contemplated by this Agreement,
the representations and warranties of the Company contained in this
Agreement which are qualified as to materiality shall be true and
correct and those which are not so qualified shall be true and correct
in all material respects, in each case, as of the date when made and
at and as of the Closing as though newly made at and as of that time.
Section 7.3 Conditions to the Obligation of the Company to Effect
-----------------------------------------------------
the Completion of the Acquisition. The obligations of the Company to
---------------------------------
effect the Completion of the Acquisition are subject to the
satisfaction or waiver by the Company at or prior to the Effective
Time of the following further condition:
(a) Parent and Subsidiary shall have performed in all
material respects their respective covenants, agreements and
obligations under Articles I, II and III up to the Effective Time.
ARTICLE VIII
TERMINATION; EXPENSES; AMENDMENT; WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
-----------
Offer and the Completion of the Acquisition may be abandoned,
notwithstanding approval thereof by the shareholders of the Company:
(a) at any time prior to the Consummation of the Offer by
mutual written consent of Parent, Subsidiary and the Company;
(b) at any time prior to the Effective Time by Parent or the
Company if any court of competent jurisdiction or other governmental
body located or having jurisdiction within or over the United States,
Canada, the European Union, Germany, the United Kingdom or any other
country or economic region in which the Company or any of its
subsidiaries or Parent or any of its affiliates, directly or
indirectly, has material assets or operations, shall have issued an
order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the Offer or the Completion of the
Acquisition and such order, decree, ruling or other action shall have
become final and nonappealable;
(c) by Parent or the Company at any time on or after August
31, 1998 if Subsidiary shall not have purchased any Shares pursuant to
the Offer; provided, that the right to terminate this Agreement under
the foregoing shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause or
resulted in such failure to purchase;
(d) by Parent prior to the purchase by Subsidiary of Shares
pursuant to the Offer, if (i) there shall have been a breach of any
representation or warranty of the Company contained herein which would
reasonably be expected to materially and adversely affect the expected
benefits for Parent of the transactions contemplated hereunder or
prevent the consummation of the Offer or the Completion of the
Acquisition or (ii) there shall have been a breach of any covenant or
agreement of the Company contained herein which would reasonably be
expected to materially and adversely affect the expected benefits for
Parent of the transactions contemplated hereunder or prevent the
consummation of the Offer or the Completion of the Acquisition and
which, in the case of either (i) or (ii) above, if curable, shall not
have been cured prior to ten business days following notice of such
breach;
(e) prior to the purchase of Shares pursuant to the Offer
and no earlier than five business days after the receipt by Parent of
a Notice of Superior Proposal, if the Superior Proposal described in
such Notice of Superior Proposal continues to be a Superior Proposal
in light of any transaction proposed by Parent prior to the expiration
of the fifth business day after the receipt by Parent of such Notice
of Superior Proposal, by the Company if the Company's directors
determine in good faith, based upon the written advice of its
independent financial advisors, that such Acquisition Proposal would,
if consummated, result in a transaction more favorable to the
Company's shareholders from a financial point of view than the
transactions contemplated by this Agreement and the Company's
directors determine in good faith, based upon the written advice of
independent legal counsel, that such action is required for the
discharge of their fiduciary duties to shareholders under applicable
law;
(f) at any time prior to the Consummation of the Offer by
Parent if the Board shall have withdrawn or modified in a manner
adverse to Parent or Subsidiary its approval of the Offer, this
Agreement, the Completion of the Acquisition, its recommendation that
the Company's shareholders accept the Offer or the Company shall have
entered into an agreement providing for an Acquisition Proposal or the
Board shall have resolved to do any of the foregoing; or
(g) by the Company prior to the purchase by Subsidiary of
Shares pursuant to the Offer, if (i) there shall have been a breach of
any representation or warranty of Parent or Subsidiary contained
herein which would reasonably be expected to materially and adversely
affect the expected benefits for the Company's shareholders of the
transactions contemplated hereunder or prevent the consummation of the
Offer or the Completion of the Acquisition or (ii) there shall have
been a breach of any covenant or agreement of Parent or Subsidiary
contained herein which would reasonably be expected to materially and
adversely affect the expected benefits for the Company's shareholders
of the transactions contemplated hereunder or prevent the consummation
of the Offer or the Completion of the Acquisition and which, in the
case of either (i) and (ii) above, if curable, shall not have been
cured prior to ten business days following notice of such breach.
Section 8.2 Effect of Termination. (a) If this Agreement is
terminated pursuant to (i) Section 8.1(c) due to a failure to satisfy
the Minimum Condition at any time after any person has made an
Acquisition Proposal and, within twelve months of the date of such
termination, the Company enters into a definitive agreement relating
to an Acquisition Proposal at a price per Share that exceeds the Per
Share Amount with any person, (ii) Section 8.1(d), (iii) Section
8.1(e) or (iv) Section 8.1(f), the Company shall pay Parent a
non-refundable fee ofU.S.$10 million plus expenses of U.S.$2 million
(except for a termination under Section 8.1(d), in which case only
expenses of U.S.$2 million shall be payable) U.S.$10 million plus
expenses of U.S.$2 million (except for a termination under Section
8.1(d), in which case only expenses of U.S.$2 million shall be
payable), which amounts shall be payable, in the case of Section
8.2(a)(i) above, by wire transfer of same day funds within two
business days after the date the Company enters into any such
definitive agreement and, in the case of Sections 8.2(a)(ii),
8.2(a)(iii) or 8.2(a)(iv) above, by wire transfer of same day funds
within two business days after this Agreement is so terminated. In the
event of the circumstances described in this Section 8.2(a) and upon
the timely payment of such non-refundable fee and/or expenses, such
non-refundable fee and/or expenses shall be Parent's and Subsidiary's
sole and exclusive remedy for any breach of any representation,
warranty or covenant hereunder by the Company.
(b) In the event of the termination of this Agreement
pursuant to Section 8.1, this Agreement shall forthwith become void
and have no effect, other than provisions of this Section 8.2 and
Section 8.3 (and, only if Parent or any of its subsidiaries have
purchased Shares pursuant to the Shareholder Agreements, the
representations and warranties about the Rights Plan Amendments and
Determinations in Section 1.2 and the provisions of Section 6.11 and
6.12), which shall survive the termination of this Agreement;
provided, however, that no termination of this Agreement and nothing
contained in this Section 8.2(b) shall relieve any party from
liability for any breach of this Agreement.
Section 8.3 Fees and Expenses. Subject to Section 8.2(a) above,
-----------------
each party shall bear its own expenses and costs in connection with
this Agreement and the transactions contemplated hereby.
Section 8.4 Amendment. Subject to Section 1.3(c), this Agreement
---------
may be amended by action taken by the Company, Parent and Subsidiary
at any time before or after adoption of the Amalgamation by the
shareholders of the Company (if required by applicable law) but, after
any such approval, no amendment shall be made which decreases the Per
Share Price or changes the form thereof or which adversely affects the
rights of the Company's shareholders hereunder without the approval of
such shareholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 8.5 Extension; Waiver. Subject to Section 1.3(c), at any
-----------------
time prior to the Effective Time, the Company, on the one hand, and
Parent and Subsidiary, on the other hand, may (i) extend the time for
the performance of any of the obligations or other acts of the other
party, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document,
certificate or writing delivered pursuant hereto, or (iii) waive
compliance by the other party with any of the agreements or conditions
contained herein. Any agreement on the part of any party hereto to any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of
any party hereto to assert any of its rights hereunder shall not
constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations and Warranties. The
---------------------------------------------
representations and warranties made herein shall not survive beyond
the consummation of the Offer. The covenants and agreements herein
shall survive in accordance with their respective terms, including,
but not limited to Section 6.5.
Section 9.2 Entire Agreement; Assignment. This Agreement, the
----------------------------
Shareholder Agreements and the Confidentiality Agreement between
Parent and the Company dated February 22, 1998 (i) constitute the
entire agreement among the parties hereto with respect to the subject
matter hereof and supersede all other prior agreements and
understandings, both written and oral, among the parties with respect
to the subject matter hereof, and (ii) shall not be assigned by
operation of law or otherwise; provided that Subsidiary may assign its
rights and obligations in whole or in part to Parent or any subsidiary
of Parent with prior written notice to the Company, but no such
assignment shall relieve Subsidiary of its obligations hereunder if
such assignee does not perform such obligations.
Section 9.3 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 facsimile or by registered or certified mail (postage
prepaid, return receipt requested), to the other party as follows:
if to Parent or Subsidiary:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: President Diagnostics Division
with copies to:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attn: Divisional Vice President,
Domestic Legal Operations (D-322)
if to the Company:
International Murex Technologies Corporation
2255 B. Xxxxx Xxxxxx, Xxxx, Xxxxx 000
Xxxxxxx, XX X0X 0X0
Attn: President
with a copy to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxx
or to such other address as the person to whom notice is given may
have previously furnished to the other in writing in the manner set
forth above.
Section 9.4 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the state of Illinois,
without regard to the principles of conflict of laws thereof.
Section 9.5 Parties in Interest. Except for Section 6.5, which
-------------------
shall inure to the benefit of the persons identified therein, this
Agreement shall be binding upon and inure solely to the benefit of
each party hereto and its successors and permitted assigns, and
nothing in this Agreement, express or implied, is intended to or shall
confer upon any other person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
Section 9.6 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this
Agreement was not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
Section 9.7 Severability. The provisions of this Agreement shall
------------
be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity and enforceability of the
other provisions hereof. If any provision of this Agreement, or the
application thereof to any person or entity or any circumstance, is
invalid or unenforceable, (a) a suitable and equitable provision shall
be substituted therefor in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid and
unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other persons, entities or
circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect
the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
Section 9.8 Descriptive Headings. The descriptive headings herein
--------------------
are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this
Agreement.
Section 9.9 Certain Definitions. For purposes of this Agreement,
-------------------
the term:
"affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person;
"Amalco" means the corporation that is a wholly-owned indirect or
direct subsidiary of Parent and continuing as a result of the
Amalgamation.
"associate" of a person means a corporation or organization of
which such person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10 percent or more of any class of
equity securities or any person who is a director or officer of such
person or any of its parents or subsidiaries;
"Beneficial Ownership" has the meaning set forth in Rule 13d-3
under the Exchange Act, excluding for these purposes the 60-day
exercise and/or conversion limitation therein.
"BC Act" means the Company Act (British Columbia), RSBC 1996, c.
62.
"business day" shall mean any day other than a Saturday, Sunday
or U.S. (or, if applicable under the context, Canadian) federal
holiday.
"Cleanup" means all actions required to: (1) cleanup, remove,
treat or remediate Hazardous Materials in the indoor or outdoor
environment; (2) prevent the Release of Hazardous Materials so that
they do not migrate, endanger or threaten to endanger public health or
welfare of the indoor or outdoor environment; (3) perform pre-remedial
studies and investigations and post-remedial monitoring and care; or
(4) respond to any government requests for information or documents in
any way relating to cleanup, removal, treatment or remediation or
potential cleanup, removal, treatment or remediation of Hazardous
Materials in the indoor or outdoor environment.
43
"control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of
the management policies of a person, whether through the ownership of
stock, as trustee or executor, by contract or credit arrangement or
otherwise;
"Effective Time" means (i) in the case of the Compulsory
Acquisition, such time as all outstanding Shares are owned, directly
or indirectly, by Parent or Subsidiary, and (ii) in the case of the
Amalgamation, the time at which a certificate of amalgamation is
issued by the British Columbia Registrar of Companies.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity
alleging potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages, personal
injuries, or penalties) arising out of, based on or resulting from (a)
the presence, or Release into the indoor or outdoor environment, of
any Hazardous Materials at any location, whether or not owned or
operated by the Company or any of its subsidiaries or (b)
circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law.
"Environmental Laws" means all federal, state, local and foreign
laws and regulations relating to pollution or protection of human
health or the environment, including without limitation, laws relating
to Releases or threatened Releases of Hazardous Materials into the
indoor or outdoor environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata)
or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, Release, disposal, transport or handling of
Hazardous Materials and all laws and regulations with regard to
recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials.
"ESPP" means the International Murex Technologies Corporation
Amended and Restated Employee Stock Purchase Plan.
"Hazardous Materials" means all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5,
or defined as such by, or regulated as such under, and Environmental
Law, or which otherwise may be the basis for any federal, state, local
or foreign government requiring cleanup, removal, treatment or
remediation.
"generally accepted accounting principles" shall mean the
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a
significant segment of the accounting profession in the United States,
in each case applied on a basis consistent with the manner in which
the audited financial statements for the fiscal year of the Company
ended December 31, 1997 were prepared;
44
"knowledge" means actual knowledge of an executive officer of the
Company after reasonable inquiry;
"Legal Requirement" means any statute, treaty ordinance, code,
law, rule, regulation, order or other requirement, standard or
procedure enacted, adopted or applied by any Governmental Entity, as
well as any judicial decisions applying common law or interpreting any
other Legal Requirement and/or any agreement entered into with a
Governmental Entity in resolution of a dispute or otherwise.
"Permitted Liens" means (i) Liens specifically disclosed in the
SEC Reports filed prior to the date hereof, (ii) Liens for Taxes,
assessments and other governmental charges not yet due and payable,
(iii) immaterial mechanics', workmen's, repairmen's, warehousemen's,
carriers' or other like Liens arising or incurred in the ordinary
course of business, (iv) easements, quasi- easements, licenses,
covenants, rights-of-way, and other similar restrictions, in each
case, which are a matter of public record, (v) any conditions that
would be apparent during a physical inspection, (vi) zoning, building
and other similar restrictions and (vii) other Liens which,
individually or in the aggregate, would not and would not reasonably
be expected to have a Material Adverse Effect.
"person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act); and
"Proxy Statement" means the proxy or information statement or
similar materials distributed to the Company's shareholders in
connection with the Amalgamation, including any amendments or
supplements thereto.
"Release" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment (including,
without limitation, ambient air, surface water, groundwater and land
surface or subsurface strata) or into or out of any property,
including the movement of Hazardous Materials through or in the air,
soil, surface water, groundwater or property.
"Rights Plan" means the Shareholder Protection Rights Agreement
dated August 31, 1995 between the Company and The Bank of New York.
"Shareholder Agreements" mean the letter agreements dated as of
the date hereof among Parent and Xxxxxx X. XxXxxxxxx, Xx., The Estate
of Xxxxxx X. XxXxxxxxx, University of Notre Dame, Xxxxxx Xxxxxx and
Xxxxxxx Xxxxxx.
"subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which
such person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holder of which is generally entitled to
vote for the election of the board of directors or other governing
body of such corporation, partnership, joint venture or other legal
entity. For the purposes hereof, wholly-owned subsidiaries shall
include subsidiaries of a person the only shares not owned by such
person are statutory qualifying shares.
Section 9.10 Counterparts. This Agreement may be executed in two
------------
or more counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its representatives thereunto duly
authorized, all as of the day and year first above written.
INTERNATIONAL MUREX TECHNOLOGIES
CORPORATION
By:/s/ F. Xxxxxxx X. Xxxxxx
_____________________________
Name: F. Xxxxxxx X. Xxxxxx
Title: Chairman
By:/s/ C. Xxxxxx Xxxxxx
_____________________________
Name: C. Xxxxxx Xxxxxx
Title: President
XXXXXX LABORATORIES
By:/s/ Miles X. Xxxxx
____________________________
Name: Miles X. Xxxxx
Title: Executive Vice President
AAC ACQUISITION LTD.
By:/s/ Xxxxxx X. Xxxxx
_____________________________
Name: Xxxxxx X. Xxxxx
Title: Vice President
ANNEX A
OFFER CONDITIONS
The capitalized terms used in this Annex A have the meanings set
forth in the attached Agreement, except that the term "Acquisition
Agreement" shall be deemed to refer to the attached Agreement and the
term "Commission" shall be deemed to refer to the SEC.
Notwithstanding any other provision of the Offer, Subsidiary
shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including without
limitation, Rule 14e-1(c) under the Exchange Act (relating to
Subsidiary's obligation to pay for or return Shares promptly after
termination or withdrawal of the Offer), pay for any Shares tendered
pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares
tendered pursuant to the Offer, and may terminate or amend the Offer
and not accept for payment any Shares, if (i) the Minimum Condition
shall not have been satisfied, (ii) any applicable waiting period
under the HSR Act, the Canadian Competition Act, the Investment Canada
Act, any applicable requirements of any laws or regulations relating
to the regulation of monopolies or competition in Germany or any
applicable requirements of the United Kingdom Fair Trading Act shall
not have expired or been terminated, (iii) any other material
applicable approval, permit, authorization, consent or waiting period
of any domestic, foreign or supranational governmental, administrative
or regulatory agency located or having jurisdiction within the United
States or any other country or economic region in which the Company or
any of its subsidiaries or Parent or any of its subsidiaries, directly
or indirectly, has material assets or operations, shall not have been
obtained or satisfied on terms satisfactory to Parent in its
reasonable discretion; provided, that prior to August 31, 1998,
Subsidiary shall not terminate the Offer by reason of the
nonsatisfaction of any of the conditions set forth in clauses (ii) or
(iii) above or in paragraphs (a) or (b) below if such nonsatisfaction
is curable and shall extend the Offer (it being understood that this
proviso shall not prohibit Subsidiary from terminating the Offer or
failing to extend the Offer by reason of the nonsatisfaction of any
other condition of the Offer), or (iv) at any time on or after March
20, 1998 and prior to the acceptance for payment of Shares, any of the
following conditions occurs or has occurred or Subsidiary makes a good
faith determination that any of the following conditions has occurred:
(a) there shall have been any action or proceeding brought
by any governmental authority before any court, or any order or
preliminary or permanent injunction entered in any action or
proceeding before any court or governmental, administrative or
regulatory authority or agency, located or having jurisdiction within
the United States or any other country or economic region in which the
Company or any of its subsidiaries or Parent or any of its
subsidiaries, directly or indirectly, has material assets or
operations, or any other action taken, proposed or threatened, or
statute, rule, regulation, legislation, interpretation, judgment or
order proposed, sought, enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to Subsidiary, the Company or any
subsidiary or affiliate of Subsidiary or the Company or the Offer, the
Completion of the Acquisition or the transactions contemplated by the
Acquisition Agreement, by any legislative body, court, government or
governmental, administrative or regulatory authority or agency located
or having jurisdiction within the United States or any other country
or economic region in which the Company or any of its subsidiaries or
Parent or any of its subsidiaries, directly or indirectly, has
material assets or operations, which could reasonably be expected to
have a Material Adverse Effect or to have the effect of: (i) making
illegal, or otherwise directly or indirectly restraining or
prohibiting the making of the Offer, the acceptance for payment of,
payment for, or ownership, directly or indirectly, of some of or all
the Shares by Parent or Subsidiary, the consummation of any of the
transactions contemplated by the Acquisition Agreement or materially
delaying the Completion of the Acquisition; (ii) prohibiting or
materially limiting the ownership or operation by the Company or any
of its subsidiaries, or by Parent or any of its subsidiaries, of all
or any material portion of the business or assets of the Company or
any of its subsidiaries or Parent or any of its subsidiaries, or
compelling Subsidiary, Parent or any of Parent's subsidiaries to
dispose of or hold separate all or any material portion of the
business or assets of the Company or any of its subsidiaries or Parent
or any of its subsidiaries, as a result of the transactions
contemplated by the Acquisition Agreement; (iii) imposing or
confirming limitations on the ability of Subsidiary, Parent or any of
Parent's subsidiaries effectively to acquire or hold or to exercise
full rights of ownership of Shares, including, without limitation, the
right to vote any Shares on all matters properly presented to the
shareholders of the Company, including, without limitation, the
adoption and approval of the Acquisition Agreement and the Completion
of the Acquisition or the right to vote any shares of capital stock of
any subsidiary of the Company; or (iv) requiring divestiture by Parent
or Subsidiary, directly or indirectly, of any Shares; or
(b) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any securities
exchange or in the over-the-counter market in the United States, (ii)
the declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States (whether or not mandatory),
(iii) any limitation (whether or not mandatory), by any United States
governmental authority or agency on the extension of credit by banks
or other financial institutions, or (iv) in the case of any of the
situations described in clauses (i) through (iii) inclusive, existing
as of the date of the Acquisition Agreement or at the date of the
commencement of the Offer, a material acceleration or worsening
thereof; or
(c) there shall have occurred or be occurring, or Subsidiary
shall have become aware of any event or condition that would
reasonably be expected to have a Material Adverse Effect; or
(d) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the
Acquisition Agreement and, if curable, shall have failed to cure such
breach within ten business days of receipt of notice of such breach or
failure to perform; or
ii
(e) any of the representations and warranties of the Company
set forth in the Acquisition Agreement that are qualified as to
materiality shall not be true and correct or any of the
representations and warranties of the Company set forth in the
Acquisition Agreement that are not so qualified shall not be true and
correct in any material respect, in each case as if such
representations and warranties were made at the time of such
determination (or, in the case of any representation and warranty made
as of a specified date, as of such date) and if curable, shall have
failed to cure such failure to be true and correct within ten business
days of receipt of notice of such failure to be true and correct; or
(f) the Acquisition Agreement shall have been terminated in
accordance with its terms; or
(g) the Board shall have withdrawn or modified in a manner
adverse to Subsidiary its approval or recommendation of the Offer, the
Acquisition Agreement or the Consummation of the Acquisition or shall
have recommended, or the Company shall have entered into an agreement
providing for, a Superior Proposal, or the Board shall have resolved
to do any of the foregoing; or
(h) the Company shall have failed to adopt the Rights Plan
Amendment and Determinations or shall have failed to comply with
Section 6.11 of the Agreement;
which, in the reasonable judgment of Subsidiary in any such case, and
regardless of the circumstances (including any action or omission by
Subsidiary) giving rise to any such condition makes it inadvisable to
proceed with such acceptance for payment or payments of Shares.
The foregoing conditions are for the sole benefit of
Subsidiary and may be asserted by Subsidiary regardless of the
circumstances giving rise to any such condition or may be waived by
Subsidiary in whole or in part at any time or from time to time in its
sole discretion. The failure by Subsidiary at any time to exercise any
of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts
or circumstances shall not be deemed a waiver with respect to any
other facts or circumstances, and each such right shall be deemed an
ongoing right that may be asserted at any time or from time to time.
iii
