ASSET ACQUISITION AGREEMENT
This Agreement is entered into as of February 26, 1996, by and among
Sterigenics International, a California corporation ("Sterigenics"), and RTI
Inc., a New York corporation ("RTI").
RECITAL
RTI desires to sell and Sterigenics desires to purchase certain tangible
and intangible assets of RTI, and Sterigenics agrees to assume certain
liabilities and obligations of RTI, as set forth under the terms of this
Agreement.
NOW, THEREFORE, in consideration of the representations, warranties and
agreements herein contained, the parties agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined herein, when used in this Agreement the following
terms shall have the following meanings:
"ASSUMED LIABILITIES" shall mean (a) the Contracts, (b) the Trade Payables,
(c) the Salem Guarantee, to the extent RTI is not released therefrom at or
prior to the Closing, and (d) the obligations of RTI under leases and notes
related to the financing of the Cobalt set forth on Schedule 1.1 attached
hereto and any leases or notes related to the financing of Cobalt acquired by
RTI in the ordinary course of business from the date hereof through the Closing
Date.
1.2 "CLOSING" shall mean the closing of the transactions contemplated by
this Agreement.
1.3 "CLOSING DATE" shall mean the third business day after the conditions
set forth in Articles IX and X are satisfied but not later than November 27,
1996, or such other date as the parties mutually have agreed to in writing.
1.4 "COBALT" shall mean the Cobalt 60 listed by serial number on
Schedule 1.4 attached hereto and any additional Cobalt 60 acquired hereafter by
RTI through the Closing in the ordinary course of business.
1.5 "CONTRACTS" shall mean the contracts calling for future payments to or
from RTI of less than $25,000 per annum, the contracts listed on Schedule 1.5
attached hereto and any contracts entered into by RTI through the Closing in
accordance with Section 6.3.
1.6 "EXCLUDED LIABILITIES" shall mean any and all liabilities, obligations
or commitments of any nature of RTI and its Subsidiaries (other than the South
Jersey Subsidiary),
whether known or unknown, contingent or fixed or otherwise, including without
limitation, all liabilities related to Hazardous Materials or compliance with
Environmental Laws (each as defined in Section 4.15 below), all liabilities
related to the employment and/or termination of personnel on or prior to the
Closing, all taxes due and all sales, use, withholding and payroll taxes
accrued to (but not including) the Closing, except the Assumed Liabilities.
1.7 "IMMATERIAL LIENS" shall include liens on any Purchased Assets where
the aggregate value of the Purchased Assets subject to all such liens is less
than $30,000.
1.8 "IMPROVEMENTS" shall mean all structures, buildings, improvements and
fixtures, including without limitation all equipment and appliances used in
connection with the operation or occupancy thereof, such as heating and air-
conditioning systems and facilities used to provide any utility services,
parking services, refrigeration, ventilation, trash disposal or other services
owned by RTI or its Subsidiaries and located on or used in connection with the
Real Properties.
1.9 "INTANGIBLE ASSETS" shall mean all of RTI's and its Subsidiaries'
interests in intellectual property rights, including without limitation,
patents, trademarks, service marks, copyrights and applications therefor and
registrations thereof, trade names, trade styles, trade secrets, know-how,
processes, formulae, business and marketing plans, and confidential and other
proprietary information that are owned by RTI and its Subsidiaries or that may
be assigned by RTI and its Subsidiaries; and all of RTI's and its Subsidiaries'
interest in computer software and data, including without limitation, all
source and object codes, all manuals and other user materials, and all
intangible data contained in or stored on computer hardware used in RTI's and
its Subsidiaries' business as of the Closing Date.
1.10 "IRB" shall mean the City of Salem Municipal Port Authority Port
Development Revenue Bond (South Jersey Process Technology, Inc. Project) Series
of 1984 Financing.
1.11 "IRB DOCUMENTATION" shall mean all documents relating to the
indebtedness evidencing the IRB, including without limitation all indenture
agreements, lease agreements, security agreements, guaranties, and bonds
relating to the Salem Property (all as amended) and as set forth in Exhibit
10.1 to RTI's Annual Report on Form 10-KSB for the year ended December 31, 1994
and as set forth in the Trust Indenture dated as of December 1, 1984 between
the City of Salem Municipal Port Authority and The Farmers and Merchants
National Bank of Bridgeton.
1.12 "NORTH CAROLINA PROPERTY" means the real property and the Improvements
thereon located in Haw River, North Carolina, owned by RTI or its Subsidiary
and legally described in EXHIBIT 1.12 hereof.
1.13 "PERMITTED ENCUMBRANCES" shall mean (i) the assessments due under the
IRB, (ii) the liens and encumbrances incurred by RTI or its Subsidiaries in
connection with obtaining financing for the purchase of the Cobalt, (iii) the
Permitted Exceptions (as defined in Section 6.5(a) hereof), (iv) liens for
taxes not yet due, (v) Immaterial Liens, (vi) encumbrances other than liens
which do not materially affect or interfere with the use of the Real Property
in
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the manner presently used by RTI, value or transferability of the Purchased
Assets, (vii) UCC financing statements filed by lessors of personal property
which relate solely to property owned by such lessors and leased to RTI; and
(viii) liens held by NJDEP provided that the condition set forth in Section 9.8
below is satisfied.
1.14 "PREPAID EXPENSES" shall mean any prepaid expenses of RTI in the
following categories: prepaid taxes, prepaid insurance premiums (to the extent
such insurance policy is assignable) and prepaid supplies.
1.15 "PURCHASED ASSETS" shall mean the Cobalt, the Tangible Assets, the
Real Property Assets, the Subsidiary Stock, the Prepaid Expenses, the
Receivables and the Intangible Assets.
1.16 "REAL PROPERTY" and "REAL PROPERTIES" means, individually and
collectively as the case may be, each of the North Carolina Property, the
Rockaway Property and the Salem Property.
1.17 "REAL PROPERTY ASSETS" means the right, title and interest of RTI in
the North Carolina Property and RTI's right to lease the Rockaway Property,
together with the right, title and interest of RTI in the Improvements (other
than improvements located on the Rockaway Property which shall be leased to
Sterigenics) and in and to all intangible property owned by RTI and used in
connection with such Real Properties (other than the Rockaway Property),
including (i) all right, title and interest in all plans, drawings,
specifications, land surveys, entitlements and approvals, engineering reports
and other technical reports, if any, in the possession of RTI or which are
available to RTI without additional cost and which were prepared in connection
with the development of the Real Properties or the construction of the
Improvements for such Real Properties; (ii) all hereditaments, privileges,
tenements and appurtenances belonging to the Real Properties; (iii) all right,
title and interest of RTI in and to all open or proposed xxxxxxxx, xxxxxxx,
xxxxx, xxxxxxx, alleys, easements, strips, gores and rights-of-way in, on,
across, in front of, contiguous to, abutting or adjoining the Real Properties;
(iv) all right, title and interest of RTI in and to any transferable licenses,
permits and warranties now in effect with respect to the Improvements; and
(v) all right, title and interest of RTI in and to any transferable warranties,
guaranties, indemnities and claims relating to the construction, operation or
maintenance of the Real Properties and/or the Improvements.
1.18 "RECEIVABLES" shall mean all accounts receivable of RTI as of the
Closing.
1.19 "ROCKAWAY PROPERTY" shall mean the real property shown as lots 1
through 10 of Block 30102 as shown on the assessment maps for the Township of
Rockaway attached as Exhibit 1.19 hereof and the Improvements (including RTI's
irradiation facility) thereon located in Rockaway, New Jersey, owned by RTI or
its Subsidiary.
1.20 "SALEM GUARANTEE" shall mean the obligations of RTI pursuant to the
IRB Documentation and the Agreement dated December 28, 1994 among the City of
Salem, Municipal Port Authorities, RTI and the South Jersey Subsidiary, as
amended.
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1.21 "SALEM PROPERTY" shall mean the real property legally described on
Exhibit 1.21 hereof and the Improvements (including RTI's irradiation facility)
thereon located in Salem, New Jersey, which is leased by the South Jersey
Subsidiary.
1.22 "SUBSIDIARY" or "SUBSIDIARIES" shall mean, with respect to any party,
any corporation or other organization, whether incorporated or unincorporated,
of which (i) such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of which
held by such party or any Subsidiary of such party do not have a majority of
the voting interest in such partnership) or (ii) at least a majority of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.
1.23 "SUBSIDIARY STOCK" shall mean all the outstanding shares of Capital
Stock of South Jersey Process Technology, Inc., a New Jersey corporation and a
wholly-owned subsidiary of RTI (the "South Jersey Subsidiary").
1.24 "TANGIBLE ASSETS" shall mean all of the fixed assets, furniture,
equipment and other tangible assets (other than cash, cash equivalents,
Rockaway Property and the fixtures located on the Rockaway Property) as of the
Closing Date.
1.25 "TRADE PAYABLES" shall mean the accounts payable of RTI which are
incurred through the Closing in the ordinary course of business.
ARTICLE II
PURCHASE AND SALE
2.1 PURCHASE AND SALE. Subject to and upon the terms and conditions of
this Agreement, on the Closing Date, RTI shall sell, assign, transfer, convey
and deliver to Sterigenics (or its wholly-owned Subsidiaries) and Sterigenics
(or its wholly-owned Subsidiaries) shall purchase from RTI, free and clear of
all liens and encumbrances, except the Permitted Encumbrances, all of RTI's
right, title and interest in and to the Purchased Assets (the "Acquisition").
RTI acknowledges that Sterigenics intends to assign certain of its rights and
obligations hereunder to its wholly-owned Subsidiaries.
2.2 FURTHER ASSURANCES; INSTRUMENTS OF TRANSFER. RTI shall execute and
deliver such bills of sale and other recordable instruments of assignment,
transfer and conveyance as Sterigenics shall reasonably request to document the
sale, assignment, transfer, conveyance and delivery of the Purchased Assets;
provided, however, that to the extent that any such request is made after the
Closing, Sterigenics shall pay the out-of-pocket costs incurred by RTI
responding to such request.
2.3 CLOSING BALANCE SHEET. The book value of the Purchased Assets and
Assumed Liabilities shall be set forth on a separate statement of the
consolidated assets and liabilities as of commencement of business on the
Closing Date (the "Closing Balance Sheet")
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which shall be delivered by RTI to Sterigenics within thirty (30) days of the
Closing Date. The book value of the Subsidiary Stock for purposes of the
Closing Balance Sheet shall exclude any intercompany transactions and any
assets and liabilities unrelated to the business of the Salem Property
facility. The Closing Balance Sheet shall be prepared by RTI in accordance
with generally accepted accounting principles ("GAAP"), applied on a consistent
basis with RTI's preceding year's audited consolidated financial statements.
The Closing Balance Sheet shall contain appropriate pro-rata accruals to the
Closing Date with respect to the Assumed Liabilities. Within thirty (30) days
following the delivery of the Closing Balance Sheet, Sterigenics shall advise
RTI as to whether Sterigenics elects, at its option and sole expense, to have
the Closing Balance Sheet audited by Ernst & Young LLP ("Ernst & Young"). Such
audit shall commence within such thirty (30) day period and shall proceed
diligently to completion. In auditing the Closing Balance Sheet, Ernst & Young
shall apply GAAP on a basis consistent with RTI's prior year's audited
consolidated financial statements and, to the extent consistent with GAAP,
shall follow the same accounting practices as employed by RTI's independent
accountants. Sterigenics' failure to audit the Closing Balance Sheet shall in
no manner limit Sterigenics' claims related to a breach of any representation
or warranty contained in Article IV below.
2.4 CONSIDERATION. As consideration for the Purchased Assets, Sterigenics
(or its wholly-owned Subsidiaries) shall pay RTI a sum equal to the book value
of the Purchased Assets less the book value of the Assumed Liabilities (as
derived from RTI's Quarterly Report on Form 10-QSB (the "March Form 10-QSB")
for the period ended March 31, 1996, plus $18,000 (the "Purchase Price"),
subject to adjustment as provided below, to be payable as follows:
(a) Subject to Section 9.1 and Section 9.4, an amount equal to the
Purchase Price less (i) $1,036,000 and (ii) the amount required to be paid to
the New Jersey Department of Environmental Protection ("NJDEP") to release its
liens on the Purchased Assets as specified in a letter to RTI from the NJDEP
dated within five (5) business days prior to the Closing (the "Lien Amount")
shall be paid at the Closing, payable, at the option of RTI, by delivery of a
certified check of immediately available funds to RTI or by wire transfer to an
account designated in writing by RTI.
(b) The Lien Amount shall be paid at the Closing by delivery to RTI by
certified check made payable to NJDEP which RTI shall deliver by courier to
NJDEP within one (1) business day following the Closing.
(c) 118,000 shares of convertible, redeemable Series A Preferred Stock of
RTI, valued at $2.00 per share or an aggregate of Two Hundred Thirty-Six
Thousand Dollars ($236,000), to be tendered to RTI.
(d) The sum of Eight Hundred Thousand Dollars ($800,000) (the "Escrow
Amount"), subject to adjustment as described below, shall be held in escrow and
paid as follows: (i) upon the resolution of all claims for a Purchase Price
Adjustment (as defined in Section 11.2 below) or the expiration of the period
in which Sterigenics is entitled to make such a claim as set forth in clause
(e) below, an aggregate of Four Hundred Thousand Dollars ($400,000) less any
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amount of any such Purchase Price Adjustment, and (ii) upon the six-month
anniversary of the Closing, an aggregate of Four Hundred Thousand Dollars
($400,000), less any amounts delivered to Sterigenics in satisfaction of Claims
(as defined in Section 11.2 below), other than Claims for a Purchase Price
Adjustment, made by Sterigenics and any amounts subject to pending but
unresolved Claims of Sterigenics pursuant to the terms of the Escrow Agreement
attached hereto as EXHIBIT 2.4(d) (the "Escrow Agreement"). At the Closing,
Sterigenics shall deposit the Escrow Amount with Xxxxxxxxxx, Sandler, Kohl,
Xxxxxx & Xxxxxx (the "Escrow Agent"), located at 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000-0000, pursuant to the terms of the Escrow Agreement.
(e) If the book value of the Purchased Assets less the book value of the
Assumed Liabilities, as contained in the Closing Balance Sheet, is greater than
the Purchase Price less $18,000 (the "Adjusted Price"), Sterigenics shall pay
to RTI by wire transfer to an account designated in writing by RTI an
additional amount equal to the amount of such difference within ten (10) days
of the earlier of (i) the completion of any audit of the Closing Balance Sheet
by Ernst & Young or (ii) Sterigenics' election not to have the Closing Balance
Sheet audited by Ernst & Young, as provided in Section 2.3 above. If the book
value of the Purchased Assets less the book value of the Assumed Liabilities,
as contained in the Closing Balance Sheet, is less than the Adjusted Price,
Sterigenics shall be entitled to indemnification for the amount of any such
difference as provided in Section 11.2 below. If Ernst & Young has conducted
an audit of the Closing Balance Sheet, the book value of the Purchased Assets
and the Assumed Liabilities shall be determined by the Closing Balance Sheet as
audited by Ernst & Young and any differences between the Closing Balance Sheet
provided by RTI and the Closing Balance Sheet as audited by Ernst & Young shall
be identified in reasonable detail to RTI at the time the audit is delivered to
RTI; provided, however, that if RTI objects in writing to the Closing Balance
Sheet as audited by Ernst & Young within thirty (30) days after the delivery by
Sterigenics to RTI of the results of the Ernst & Young audit, the dispute shall
be conclusively settled by arbitration in accordance with Section 13.14;
provided, however, that the arbitrator shall be a partner of one of the ten
largest certified public accounting firms in the United States, excluding Ernst
& Young and BDO Xxxxxxxx, who shall be selected by agreement of RTI and
Sterigenics. If RTI and Sterigenics are unable to agree upon an arbitrator
within fifteen (15) days, RTI and Sterigenics shall each select an arbitrator,
and the two arbitrators so selected shall select a third arbitrator who meets
the above criteria.
2.5 ASSUMPTION OF LIABILITIES. (a) Subject to the terms and conditions
herein, effective upon the Closing, Sterigenics hereby assumes and agrees to
perform, pay and discharge the Assumed Liabilities. Notwithstanding the
foregoing, Sterigenics does not hereby assume or agree to perform, pay or
discharge, and RTI shall remain unconditionally liable for, from and after the
date hereof, any and all Excluded Liabilities. (b) Nothing herein shall be
deemed to deprive Sterigenics of any defenses, set-offs or counterclaims
against third parties which RTI may have had or which Sterigenics shall have
with respect to any of the obligations, liabilities and commitments hereby
assumed (the "Defenses and Claims"). Effective at the Closing, RTI hereby
transfers, conveys and assigns to Sterigenics all Defenses and Claims and
agrees to cooperate with Sterigenics at Sterigenics' expense to maintain,
secure, perfect and enforce such Defenses and Claims, including the signing of
any documents, the giving of any testimony or the taking of any such other
action as is reasonably requested by Sterigenics in connection with such
Defenses and Claims. (c) Sterigenics shall pay all sales, use and transfer
taxes, if any, due upon the sale or transfer of the Purchased Assets. All
non-delinquent personal and real property taxes
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arising as a result of the operation of RTI's business (other than taxes on
income) shall be pro-rated between the parties as of the Closing Date based on
most recently available figures, provided that RTI shall be solely responsible
for all real property taxes related to the Rockaway Property, except as
otherwise provided in the Rockaway Lease (as defined in Section 9.7 hereof).
Any supplemental taxes attributable to events occurring prior to the Closing
Date shall be the sole responsibility of RTI, irrespective of when such taxes
are assessed. If supplemental taxes for which RTI is responsible hereunder are
assessed after the Closing Date, RTI shall promptly pay the same upon receiving
notice thereof from Sterigenics.
2.6 CLOSING COSTS. Sterigenics shall pay all transfer taxes and all costs
for preparing, executing and acknowledging the deeds and other conveyance
documents (including without limitation lease assignment and assumption
instruments) transferring title or a leasehold interest, as the case may be, in
the Real Properties to Sterigenics and any other recorded documents together
with the cost of the Title Policies (as defined in Section 6.5(e) hereof).
2.7 PURCHASE PRICE ALLOCATION. The Purchase Price shall be allocated as
set forth in the Allocation of Purchase Price to be provided to RTI by
Sterigenics with ten (10) days prior to Closing. RTI and Sterigenics each
agree to use such allocation in filing Internal Revenue Form 8594.
ARTICLE III
THE CLOSING
3.1 THE CLOSING. The Closing shall take place at the offices of Xxxxxxx
Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP or at such other location as RTI and
Sterigenics may agree, at 10:00 a.m. Eastern Daylight Savings Time, on the
Closing Date.
3.2 INSTRUMENTS OF TRANSFER AND SALE. At the Closing, RTI will deliver to
Sterigenics (or its wholly-owned Subsidiaries) all documents and instruments,
including bills of sale and the like, described in Section 9.20 and Sterigenics
(or its wholly-owned Subsidiaries) will deliver to RTI all documents and
instruments described in Section 10.9.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF RTI
RTI hereby represents and warrants to Sterigenics that the statements
contained in this Article IV are true and correct, except as set forth in the
disclosure schedule delivered by RTI to Sterigenics on or before the date of
this Agreement (the "RTI Disclosure Schedule"). The RTI Disclosure Schedule
shall be arranged in Sections corresponding to the numbered and lettered
Sections contained in this Article IV; provided, however, that the failure to
make a disclosure in reference to a particular representation shall not give
rise to a breach of this Agreement if the applicability to such representation
of exceptions to other representations is obvious on its face without any
investigation by Sterigenics. No fact or circumstance disclosed to Sterigenics
shall constitute an exception to these representations and warranties unless
such fact or circumstance is set forth in the RTI Disclosure Schedule. As used
in this Agreement,
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"knowledge" shall mean the actual knowledge of the executive officers of RTI
after reasonable inquiry.
4.1 ORGANIZATION. Each of RTI and the South Jersey Subsidiary is a
corporation duly and validly existing and in good standing under the laws of
the State of New York and New Jersey, respectively. Each of RTI and the South
Jersey Subsidiary is qualified to do business as a foreign corporation in each
state of the United States in which it is required to be qualified, except in
states in which the failure to qualify, in the aggregate, would not have a
material adverse effect on the Purchased Assets or the assets of the South
Jersey Subsidiary. All of the outstanding shares of capital stock of the South
Jersey Subsidiary are duly authorized, validly issued, fully paid and
nonassessable and all such shares are owned by RTI and are held by RTI free and
clear of all limitations on voting rights.
4.2 SUBSIDIARIES. Other than the South Jersey Subsidiary, RTI has no
Subsidiaries which currently are engaged in any active business or have any
material assets or liabilities.
4.3 AUTHORIZATION. This Agreement and the Option Agreement have been, and
each of the Escrow Agreement, the Rockaway Lease (as defined in Section 9.7)
and lease memorandum, and all deeds and other conveyance documents used in
order to consummate the Acquisition (collectively, the "Ancillary Documents")
will prior to the Closing be, duly and validly executed and delivered by RTI.
This Agreement and the Option Agreement do and the Ancillary Agreements will
constitute valid and binding agreements of RTI, enforceable against RTI in
accordance with their terms. RTI has all requisite power and authority to
execute and deliver this Agreement, the Option Agreement and the Ancillary
Documents and, subject to approval by RTI's shareholders, at the time of the
Closing will have all requisite power and authority to enable it to carry out
the transactions contemplated by this Agreement and the Ancillary Documents.
All necessary corporate action on the part of RTI and its Subsidiaries has been
taken to authorize the execution and delivery of this Agreement, the Option
Agreement and the Ancillary Documents and, subject to shareholder approval,
consummation of the transactions contemplated thereby.
4.4 NO CONFLICTS; CONSENTS.
(a) The execution and the delivery of this Agreement, the Option
Agreement and the Series A preferred stock purchase agreement to be entered
into concurrently with this Agreement between RTI and Sterigenics dated as of
the date hereof do not, the execution and delivery of the other Ancillary
Documents by RTI will not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not,
conflict with, result in a breach by RTI of, constitute a default (with or
without notice or lapse of time, or both) by RTI under or violation by RTI of,
or result in the creation of any lien, charge or encumbrance pursuant to any
provision of the Certificate of Incorporation or Bylaws of RTI or its
Subsidiaries, any order, rule, law or regulation of any court or governmental
authority, foreign or domestic, or any provision of any material agreement,
instrument, understanding, order, judgment or decree to which RTI or its
Subsidiaries is a party or by which any of RTI or its Subsidiaries or any of
their properties or assets is bound or affected, nor will such actions give to
any other person or entity any interests or rights of any kind, including
rights of termination,
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acceleration or cancellation, in or with respect to any of the Purchased Assets
or the assets of the South Jersey Subsidiary.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other governmental authority or instrumentality ("Governmental Entity") is
required by or with respect to RTI or its Subsidiaries in connection with the
execution and delivery of this Agreement by RTI or the consummation by RTI of
the transactions contemplated hereby, except for (i) filings in order to comply
with all applicable bulk sales laws, (ii) the filing of a definitive proxy
statement with the Securities and Exchange Commission (the "SEC") in accordance
with the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(iii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws and the laws of any foreign country in which RTI conducts any
business or owns any property or assets, (iv) the filing by RTI of a Current
Report on Form 8-K with the SEC, and (v) such other consents, authorizations,
filings, approvals and registrations which, if not obtained or made, would not
be reasonably likely to have a material adverse effect on RTI.
4.5 SEC FILINGS; FINANCIAL STATEMENTS. (a) RTI has filed all forms,
reports and documents required to be filed by RTI with the SEC since January 1,
1995 (collectively, the "RTI SEC Reports"). The RTI SEC Reports (i) at the
time filed, complied in all material respects with the applicable requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of this Agreement,
then on the date of such filing) contain any untrue statement of a material
fact or omit to state a material fact required to be stated in such RTI SEC
Reports or necessary in order to make the statements in such RTI SEC Reports,
in the light of the circumstances under which they were made, not misleading;
(b) each of the financial statements (including, in each case, any related
notes) contained in the RTI SEC Reports, including any RTI SEC Reports filed
after the date of this Agreement until the Closing, complied or will comply as
to form in all material respects with the applicable published rules and
regulations of the SEC with respect thereto, was or will be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited statements, as permitted by Form 10-QSB of the
SEC) and fairly presented or will fairly present in all material respects the
consolidated financial position of RTI as at the respective dates and the
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which are not expected as of the date of this
Agreement to be material in amount. The audited year-end consolidated
financial statements of RTI as of December 31, 1994 and the unaudited interim
consolidated financial statements for the quarter ended September 30, 1995 are
referred to herein as the "RTI Financial Statements." The date of the RTI
Financial Statements shall be the date of the latest interim balance sheet,
unless otherwise specified; (c) RTI's consolidated balance sheet as of March
31, 1996 (the "March Balance Sheet"), when delivered prior to Closing, will be
accurate and complete in all material respects and will have been prepared in
accordance with GAAP applied on a basis consistent with the preparation of the
RTI Financial Statements; (d) the Closing Balance Sheet, when delivered
pursuant to Section 2.3 above, shall fairly state the Purchased Assets
and Assumed Liabilities and shall have been prepared in
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accordance with GAAP on a basis consistent with the preparation of the March
Balance Sheet. Other than the IRB, there are no liabilities of the South
Jersey Subsidiary that, if they were liabilities of RTI, would not constitute
Assumed Liabilities under the terms of this Agreement.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date of the RTI
Financial Statements, RTI and the South Jersey Subsidiary have conducted their
respective businesses in the ordinary course and in a manner consistent with
past practices, and since such date, except as disclosed in the SEC Reports,
RTI has not: (a) suffered any material adverse change in its financial
condition, results of operations or business, or any material adverse changes
in its consolidated balance sheet (analyzed as if prepared according to GAAP)
(a "Material Adverse Change"), including but not limited to cash distributions
or material decreases in the net assets of RTI; (b) suffered any damage,
destruction or loss, whether covered by insurance or not, materially and
adversely affecting the Purchased Assets, the Rockaway Property, the assets of
the South Jersey Subsidiary or RTI's business; (c) sold, leased, abandoned or
otherwise disposed of any real property or any material amounts of machinery,
equipment or other operating property other than in the ordinary course of
business; (d) sold, assigned, transferred, licensed or otherwise disposed of
any material patent, trademark, trade name, brand name, copyright (or pending
application for any patent, trademark or copyright), invention, work of
authorship, process, know-how, formula or trade secret or interest thereunder
or other material intangible asset except in the ordinary course of its
business; (e) entered into any material commitment or transaction (including
without limitation any borrowing or capital expenditure) that would be included
in the Assumed Liabilities under the terms of this Agreement, other than in the
ordinary course of business; (f) incurred any liabilities that would be
included in the Assumed Liabilities under the terms of this Agreement, except
in the ordinary course of business and consistent with past practice which
would be required to be disclosed in financial statements prepared in
accordance with GAAP; (g) permitted or allowed any of the Purchased Assets, the
assets of the South Jersey Subsidiary or the Rockaway Property to be subjected
to any mortgage, deed of trust, pledge, lien, security interest or other
encumbrance of any kind, except Permitted Encumbrances and any purchase money
security interests incurred in the ordinary course of business and mechanic's
or materialmen's liens incurred in connection with ongoing construction of an
addition to the North Carolina Property; (h) made any material amendment to or
terminated any agreement which, if such agreement not so amended or terminated,
would be required to be disclosed on the RTI Disclosure Schedule; (i) agreed to
take any action described in Section 6.3 or which would constitute a material
breach of any of the representations contained in this Agreement; or (j) taken
any other action that would have required the consent of Sterigenics pursuant
to Section 6.3 of this Agreement (and which has not been obtained) had such
action occurred after the date of this Agreement and that would be reasonably
likely to have a material adverse effect on RTI.
4.7 NO UNDISCLOSED LIABILITIES. Except as disclosed in the RTI SEC
Reports, the South Jersey Subsidiary does not have any liabilities, either
accrued or contingent (whether or not required to be reflected in financial
statements in accordance with GAAP), and whether due or to become due, which
individually or in the aggregate, would be reasonably likely to have a material
adverse effect on the South Jersey Subsidiary other than (i) liabilities
reflected in the RTI Financial Statements, (ii) liabilities specifically
described in this Agreement, and
10
(iii) normal or recurring liabilities incurred since the date of the RTI
Financial Statements in the ordinary course of business consistent with past
practices.
4.8 TANGIBLE ASSETS. The Tangible Assets being used in the operation of
RTI's business are, and at the Closing Date will be, in good operating condition
and repair, ordinary wear and tear and routine maintenance excepted.
4.9 RECEIVABLES. The Receivables constitute all of the accounts
receivable of RTI and its Subsidiaries and are valid and genuine; have arisen
solely out of bona fide sales and deliveries of goods, performance of services
and other business transactions in the ordinary course of business consistent
with past practice; are not subject to valid defenses, set-offs or
counterclaims; and are collectible (using a level of effort consistent with that
currently used by RTI) within 12 months of the date hereof at the full recorded
amount thereof, less the customary allowance for collection losses, which
allowance has been determined in accordance with GAAP consistent with past
practices; provided, however, that RTI makes no representation or warranty as to
the ultimate collection thereof.
4.10 COMPLIANCE WITH OTHER INSTRUMENTS. Neither RTI nor its Subsidiaries
is a party to, nor bound by, any written or oral material contract, agreement,
license, indenture, mortgage, debenture, note or other instrument under the
terms of which performance by RTI or its Subsidiaries according to the terms of
this Agreement, the Option Agreement and the Ancillary Documents will be a
default or an event of acceleration, or whereby timely performance by RTI or its
Subsidiaries according to the terms of this Agreement, the Option Agreement and
the Ancillary Documents may be prohibited, prevented or delayed.
4.11 LITIGATION. Except as disclosed in the RTI SEC Reports, there is no
material action, suit, proceeding or investigation in progress or pending before
any court or governmental agency, against or relating to RTI or its Subsidiaries
or their properties (including the Real Properties), assets or business, nor, to
the knowledge of RTI, any threat thereof. Neither RTI nor its Subsidiaries is a
party to any decree, order or arbitration award (or agreement entered into in
any administrative, judicial or arbitration proceeding with any governmental
authority) with respect to any material portion of the properties, assets,
personnel or business activities of RTI's and its Subsidiaries' business.
4.12 COMPLIANCE WITH LAWS AND REGULATIONS; GOVERNMENTAL LICENSES, ETC.
Except as set forth in the RTI SEC Reports, to RTI's knowledge, each of RTI and
its Subsidiaries and each of the Real Properties and the Improvements are in
compliance in all material respects with all statutes, laws, rules and
regulations with respect to or affecting the Real Properties, the Improvements
and Sterigenics' continued use and enjoyment of the Purchased Assets and the
assets of the South Jersey Subsidiary, including, without limitation, laws,
rules and regulations relating to occupational health and safety, equal
employment opportunities, fair employment practices, and sex, race, religious
and age discrimination, except where the failure to comply would not have a
material adverse effect on RTI. Neither RTI nor its Subsidiaries is subject to
any order, injunction or decree issued by any governmental body, agency,
authority or court which could impair the ability of RTI to consummate the
transactions contemplated hereby or which could materially adversely affect
Sterigenics' ownership, use and enjoyment of the Purchased Assets or the assets
of the South Jersey Subsidiary or the value thereof. RTI and its
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Subsidiaries (i) possess all licenses, permits and governmental or other
regulatory approvals and authorizations which are required in order for RTI and
its Subsidiaries to operate their facilities or carry on their sterilization
business as presently conducted, including, without limitation, all required
licenses, permits and approvals of the Nuclear Regulatory Commission ("NRC"),
NJDEP, the North Carolina Department of Radiological Health ("NCDRH") and the
Food and Drug Administration ("FDA") and (ii) are in compliance in all material
respects with all such licenses, permits, approvals and authorizations, except
where the failure to comply would not have a material adverse effect on RTI.
4.13 TAXES. All Federal, state, local and other returns and reports
relating to any and all taxes or any other governmental charges, obligations or
fees for taxes and any related interest or penalties ("Tax" or "Taxes") required
to be filed with respect to the South Jersey Subsidiary have been timely filed
within the time period for filing or any extension granted with respect thereto
and such returns and reports are true and correct, unless such late filings or
inaccuracies would not have a material adverse effect on the Purchased Assets,
the assets of the South Jersey Subsidiary, the Rockaway Property or the business
of RTI. The South Jersey Subsidiary has paid all Taxes, if any, shown to be due
and payable on said returns and reports and has withheld with respect to
employees all Federal and state income Taxes, FICA, FUTA and other Taxes
required to be withheld and has timely paid all sales, use and similar Taxes.
No income, sales, use or similar Tax return or report with respect to the South
Jersey Subsidiary has been examined or audited by the Internal Revenue Service
or any state taxing authority. There are no pending or, to RTI's knowledge,
threatened audits, examinations, assessments, asserted deficiencies or claims
for additional Taxes with respect to the South Jersey Subsidiary.
4.14 EMPLOYEES. Neither RTI nor the South Jersey Subsidiary is a party to
any collective bargaining agreement, nor has RTI experienced any strikes,
written material grievances, claims of unfair labor practices or other
collective bargaining disputes within the past two (2) years. As of the date of
this Agreement, RTI and the South Jersey Subsidiary have not been notified of
any pending claims by employees or former employees for xxxxxxx'x compensation.
4.15 ENVIRONMENTAL MATTERS.
(a) Except as separately and specifically disclosed otherwise in the
RTI SEC Reports: (i) RTI has obtained all Material Environmental Approvals
required in connection with its business, and all such Environmental Approvals
are current, valid and in good standing in all Material respects, and there are
no proceedings commenced or to RTI's knowledge threatened to revoke or amend any
Environmental Approvals; (ii) all operations of the business on the Real
Property while occupied by RTI, have been and are now in compliance with all
Environmental Laws; (iii) neither RTI nor its operations has been or is now the
subject of any Remedial Order, nor does RTI have any knowledge of any
investigation or evaluation commenced as to whether any such Remedial Order is
necessary nor has any threat of any such Remedial Order been made nor are there
any circumstances which could result in the issuance of any such Remedial Order;
(iv) within the past 10 years, RTI has never been prosecuted for or convicted of
any offense under Environmental Laws, nor has RTI been found liable in any
proceeding to pay any fine or judgment to any Person as a result of any Release
or threatened Release of any Hazardous Material into the Environment or the
breach of any Environmental
12
Law and to the knowledge of RTI, there is no basis for any such proceeding;
(v) all material environmental data and studies (including, without limitation,
the results of any environmental audit) relating to the business have been
delivered or made available to Sterigenics; (vi) RTI is not aware of any Release
which is now present in, on or under any of the Real Properties (including
underlying soils and substrata, surface water and groundwater) at levels which
exceed any action levels or remediation standards under any Environmental laws
or standards published or administered by those Governmental Authorities
responsible for establishing or applying such standards; (vii) RTI has no
knowledge of any Hazardous Materials in, on, or under the Real Properties or any
other assets relating to RTI's business; (viii) RTI has no knowledge of any
Hazardous Materials originating from any neighboring or adjoining properties
which has migrated onto, or is migrating towards any of the Real Properties or
any other asset of RTI's business; and (ix) the business of RTI in New Jersey is
not in a Standard Industrial Classification code covered by the Industrial Site
Recovery Act.
(b) With respect to Environmental Matters separately and specifically
disclosed in the RTI SEC Reports: (i) RTI is in full compliance with all
Remedial Orders; (ii) RTI is current with respect to all charges, assessments,
or claims for which a lien against the Real Properties or other assets of RTI's
business under any Environmental Law may be filed or asserted, and there are no
unpaid liens or assessments outstanding; and (iii) RTI is not in default of any
obligation or demand from any Governmental Authority with respect to
investigations or remediation activities which RTI is obligated to undertake.
(c) As used in this Section 4.15, the following terms have these
meanings:
(i) "Environmental Laws" means all applicable statutes, rules,
regulations, ordinances, orders, decrees, judgments, permits, licenses,
consents, approvals, authorizations, and governmental requirements or directives
or other obligations lawfully imposed by governmental authority under federal,
state or local law pertaining to the protection of the environment, protection
of public health, protection of worker health and safety (excluding OSHA and
comparable state laws, which are covered under Section 4.12 above), the
treatment, emission and/or discharge of gaseous, particulate and/or effluent
pollutants, and/or the Handling of Hazardous Materials, including without
limitation, the Clean Air Act, 42 U.S.C. Section 7 401, et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. Section 9601, et seq., the Federal Water Pollution
Control Act, 33 U.S.C. Section 1321, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq. ("RCRA"), and
the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq.
(ii) "Hazardous Material(s)" means any substance, waste,
material, chemical, compound or mixture which is (or which contains any
substance, waste, material, chemical, compound, or mixture which is) flammable,
ignitable, corrosive, reactive, radioactive, or explosive, or is defined,
listed, designated, described or characterized under Environmental Laws or under
any rules, guidances, policies, or regulations promulgated thereunder, as
hazardous, toxic, a contaminant, a pollutant or words of similar import, and
includes without limitation any "hazardous substance" under CERCLA, any
"hazardous waste"
13
under RCRA, asbestos, petroleum (including crude oil or any fraction or
distillate thereof), natural gas, natural gas liquids, and liquified natural
gas.
(iii) "Material" means anything that reasonably could be
expected to lead to the imposition of any significant penalties or fines, that
could reasonably be expected to require a capital expenditure of more than
$100,000, or that reasonably could be expected to interfere, interrupt or
threaten to interfere or interrupt in a significant manner the continued
operation of RTI's business as currently conducted.
(iv) "Person" means any natural person, corporation, partnership,
business trust or other business entity or enterprise.
(v) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing.
(vi) "Environmental Approval(s)" means all permits, certificates,
licenses, authorizations, consents, instructions, registrations, directions or
approvals, issued or required by Governmental Authorities pursuant to
Environmental Laws with respect to the operations of RTI in connection with its
business.
(vii) "Governmental Authorities" means any government,
regulatory authority, governmental department, agency, commission, board,
tribunal, or court or other law, rule or regulation-making entity having or
purporting to have jurisdiction over Environmental Laws on behalf of the
United States, or any state or other subdivision thereof, or any municipality.
(viii) "Remedial Order(s)" means any judicial or
administrative order, directive, complaint or sanction issued, filed or imposed
by any Governmental Authority pursuant to any Environmental Laws, and includes,
without limitation, any order requiring any remediation or cleanup of any
Hazardous Materials, or requiring that any Release or any other activity be
reduced, modified, abated, or eliminated.
4.16 PROPRIETARY RIGHTS. RTI owns all right, title and interest in and to
or has a license to use all technology, software, software tools, know-how,
processes, trade secrets, trade names and other proprietary rights used in or
necessary for the conduct of RTI's and its Subsidiaries' business as conducted
on the date hereof or contemplated by RTI free and clear of all liens, claims
and encumbrances (all of which are referred to as "Proprietary Rights"). No
material claims have been asserted against RTI or its Subsidiaries (and RTI is
not aware of any claims which are likely to be asserted against RTI or its
Subsidiaries or which have been asserted against others) by any person
challenging RTI's or its Subsidiaries' use of any trademarks, tradenames,
copyrights, trade secrets, software, technology, know-how or processes utilized
by RTI or its Subsidiaries or challenging or questioning the validity or
effectiveness of any license or agreement relating thereto.
4.17 EMPLOYEE BENEFIT PLANS. There is no unfunded prior service cost with
respect to any bonus, deferred compensation, pension, profit-sharing,
retirement, stock purchase, stock option, or other employee benefit or fringe
benefit plans, whether formal or informal,
14
maintained by RTI. RTI has no bonus, deferred compensation, pension,
profit-sharing, retirement, stock purchase, stock option, or other employee
benefit or fringe benefit plans, whether formal or informal, which is required
to conform with the Employees Retirement Income Security Act of 1974.
4.18 CONTRACTS.
(a) None of the Contracts related to irradiation services are
currently expected to result in any loss (before allocation of Cobalt
amortization, overhead and administrative costs) upon completion or performance
thereof. Except for the Contracts listed on Schedule 1.5, none of the Contracts
call for fixed and/or contingent payments or expenditures by or to RTI and its
Subsidiaries of more than $50,000.
(b) All material contracts, agreements and instruments to which RTI
and its Subsidiaries are a party are valid, binding, in full force and effect,
and, assuming each is a valid obligation of the other party, enforceable by RTI
in accordance with their respective terms. No such material contract, agreement
or instrument contains any material liquidated-damages, penalty or similar
provision. To RTI's knowledge, no party to any such material contract,
agreement or instrument intends to cancel, withdraw, modify or amend such
contract, agreement or arrangement.
(c) RTI and its Subsidiaries are not in default under or in breach or
violation of, nor, to RTI's knowledge, is there any valid basis for any claim of
default by RTI or its Subsidiaries under, or breach or violation by RTI or its
Subsidiaries of, any material contract, commitment or restriction to which RTI
or its Subsidiaries is a party or to which it or any of its properties is bound,
where such defaults, breaches, or violations would, in the aggregate, have a
material adverse effect on the Purchased Assets, the assets of the South Jersey
Subsidiary, the Rockaway Property or the operation of the business of RTI. To
RTI's knowledge, no other party is in default under or in breach or violation of
any Contract listed in Schedule 1.5.
4.19 NO MISREPRESENTATION. No representation, warranty or covenant by RTI
in this Agreement, the Option Agreement, any other Ancillary Document, nor any
statement, certificate or schedule furnished or to be furnished by or on behalf
of RTI pursuant to this Agreement, when taken together with the foregoing,
contains or shall contain any untrue statement of material fact or omits or
shall omit to state a material fact required to be stated therein or necessary
in order to make such statements, in light of the circumstances under which they
were made, not materially misleading. RTI has delivered or otherwise made
available true and complete copies of all documents requested by Sterigenics and
which are referred to in this Article IV or in any Schedule delivered by RTI to
Sterigenics.
4.20 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material agreement,
judgment, injunction, order or decree binding on RTI or its Subsidiaries which
has or reasonably would be expected to have the effect of prohibiting or
materially impairing any material current business practice of RTI and its
Subsidiaries, any acquisition of material property by RTI or its Subsidiaries,
or the conduct of business by RTI as currently conducted or as proposed to be
conducted.
15
4.21 TRANSFERS. Except for this Agreement, the Option Agreement and the
Ancillary Documents, neither RTI nor its Subsidiaries have entered into any
pending agreement to convey, sell, assign, lease, transfer or encumber the Real
Properties or any material portion of the other Purchased Assets or the assets
of the South Jersey Subsidiary, and neither RTI nor its Subsidiaries shall do so
prior to the Closing Date without Sterigenics' prior written consent, which may
be granted or withheld in Sterigenics' discretion reasonably exercised.
4.22 TITLE.
(a) Except as set forth in the RTI SEC Reports, RTI or its
Subsidiaries owns the North Carolina Property and the Rockaway Property free and
clear of all liens, leases, occupancy agreements, licenses, encumbrances,
covenants, conditions, restrictions, rights-of-way, easements, and other matters
affecting title, except as to the Permitted Encumbrances, those particular items
disclosed in the applicable Title Reports (as defined in Section 6.5(a) hereof)
and other encumbrances and restrictions which in the aggregate would not have a
material adverse effect on the use in the manner presently used by RTI, value or
transferability of the Real Property Assets. Except as set forth in the RTI SEC
Reports, the South Jersey Subsidiary has a binding and enforceable leasehold
interest in the Salem Property. To RTI's knowledge, except as disclosed in the
Title Reports, no other person or entity has claimed or is entitled to claim any
legal or equitable interest in the Real Properties.
(b) RTI and its Subsidiaries have good and marketable title to all of
the Purchased Assets (excluding the Real Property Assets) and the assets of the
South Jersey Subsidiary owned by RTI and its Subsidiaries and valid, binding and
enforceable leasehold interests in all Tangible Assets that are subject to
leases. Except as disclosed in the RTI SEC Reports, all of the Purchased Assets
(except the Real Property Assets) and all of the assets of the South Jersey
Subsidiary are free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of all claims, liabilities, liens, pledges,
mortgages, restrictions and encumbrances of any kind, whether accrued, absolute,
contingent or otherwise ("Encumbrances") affecting the Purchased Assets (except
the Real Property Assets) or the assets of the South Jersey Subsidiary except
for Permitted Encumbrances. At the Closing, RTI will sell, convey, assign,
transfer and deliver to Sterigenics good, valid and marketable title and all
RTI's right and interest in and to all of the Purchased Assets (excluding the
Real Property Assets), free and clear of any Encumbrances, except for Permitted
Encumbrances. At the Closing, all of the assets of the South Jersey Subsidiary
will be free and clear of any Encumbrances, except for Permitted Encumbrances.
4.23 NO CONDEMNATION. To RTI's knowledge, there is no condemnation or other
like proceeding pending or threatened against the Real Properties or any part
thereof and no such proceeding is being contemplated.
4.24 GOVERNMENTAL COMMITMENTS. To RTI's knowledge, no commitment to or
agreement with any governmental or quasi-governmental authority exists which
could affect the Real Properties, including but not limited to any formation of
any special assessment district or community facilities district, except as
disclosed in this Agreement.
16
4.25 EASEMENTS. To RTI's knowledge, all existing water, drainage, sewage
and utility facilities relating to the Real Properties, from the boundary
thereof until entering the public right-of-way or other public facility, are
situated within valid easements granted by all persons or other entities having
any interest in or right or title to any property which is subject to such
easement and are referenced in the Title Reports.
4.26 MAINTENANCE OF REAL PROPERTIES. Prior to the Closing Date and the
actual transfer to Sterigenics of title to the North Carolina Property and the
Subsidiary Stock and delivery of the executed Rockaway Lease, RTI shall maintain
the Real Properties and the Improvements in substantially their present
condition, reasonable wear and tear or loss due to the elements excepted. In
the event that prior to the Closing any of the Real Properties or the
Improvements are destroyed or damaged and the cost to repair such damage exceeds
Two Hundred Fifty Thousand Dollars ($250,000), such event shall be deemed to
constitute a material adverse change under Section 9.12 hereof.
4.27 CONDITION OF IMPROVEMENTS. To RTI's knowledge the Improvements
(including the roof and roof membrane, exterior and structural walls,
foundations, floor slabs, and other load-bearing components of the Improvements)
are in operable condition and repair (as hereinafter defined). To RTI's
knowledge all elevators, heating, ventilation and air conditioning systems
("HVAC"), plumbing, electrical, wiring, life safety, and other equipment,
appurtenances, systems and improvements are in operable condition and repair.
For purposes of this Section, the term "operable condition and repair" means
that there are no material defects or state of disrepair that have a material
adverse effect on the operations of the business as currently conducted by RTI
from each of the Real Properties.
4.28 COMPLIANCE WITH LAWS. RTI has received no written notice from any
governmental authority that the Improvements fail to comply with any applicable
codes, statutes, ordinances, regulations, permits, orders, directives, or other
laws in any material respects. As of the Closing the Improvements and all parts
thereof shall be in a safe and habitable condition.
4.29 INDUSTRIAL REVENUE BONDS. RTI has provided Sterigenics with true,
complete and correct copies of the IRB Documentation. Except with the prior
written consent of Sterigenics, which may be withheld or granted in Sterigenics'
sole and absolute discretion, RTI and its Subsidiaries shall not amend or modify
the IRB Documentation.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF STERIGENICS
Sterigenics hereby represents and warrants to RTI as follows:
5.1 ORGANIZATION. Sterigenics is a corporation duly organized, validly
existing and in good standing under the laws of the State of California.
5.2 AUTHORIZATION. This Agreement has been, and each of the Ancillary
Documents will prior to the Closing be, duly and validly executed and delivered
by Sterigenics. This Agreement does and the Ancillary Agreements will
constitute valid and binding agreements
17
of Sterigenics, enforceable against Sterigenics in accordance with their terms.
Sterigenics has all requisite power and authority to execute and deliver this
Agreement and the Ancillary Documents and to enable it to carry out the
transactions contemplated by this Agreement and the Ancillary Documents. All
necessary corporate action on the part of Sterigenics has been taken to
authorize the execution and delivery of the Agreement and the Ancillary
Documents.
5.3 EFFECT OF AGREEMENT; CONSENTS. The execution and delivery of this
Agreement by Sterigenics and the execution and delivery of the Ancillary
Documents by Sterigenics do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, conflict
with, result in a breach of, constitute a default (with or without notice or
lapse of time, or both) under or violation of, or result in the creation of any
lien, charge or encumbrance pursuant to any provision of the Articles of
Incorporation or Bylaws of Sterigenics, any order, rule, law or regulation of
any court or governmental authority, foreign or domestic, or any provision of
any material agreement, instrument, understanding, order, judgment or decree to
which Sterigenics is a party or by which Sterigenics is bound. No consent or
approval of any third party or any governmental authority is required to be
obtained on the part of Sterigenics to permit the consummation of the
transactions contemplated by this Agreement or the Ancillary Documents.
5.4 COMPLIANCE WITH OTHER INSTRUMENTS. Sterigenics is not a party to, or
bound by, any written or oral contract, agreement, license, indenture, mortgage,
debenture, note or other instrument under the terms of which performance by
Sterigenics according to the terms of this Agreement and the Ancillary Documents
will be a default or an event of acceleration, or whereby timely performance by
Sterigenics according to the terms of this Agreement and the Ancillary Documents
may be prohibited, prevented or delayed.
5.5 SUFFICIENT FINANCING. Sterigenics has, and at the Closing will have,
sufficient financing available to it to consummate the Acquisition.
ARTICLE VI
COVENANTS OF RTI
6.1 NO SOLICITATION.
(a) From and after the date of this Agreement until the Closing Date,
RTI shall not, directly or indirectly, through any officer, director, employee,
representative or agent of RTI (i) solicit, initiate, or encourage any inquiries
or proposals that constitute, or could reasonably be expected to lead to, a
proposal or offer for a merger, consolidation, business combination, sale of all
or substantially all of the assets, sale of shares of capital stock (including
without limitation by way of a tender offer) or similar transactions involving
RTI, 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) engage in negotiations or discussions concerning,
or provide any non-public information to any person or entity relating to, any
Acquisition Proposal, or (iii) agree to, approve or recommend any Acquisition
Proposal; PROVIDED, HOWEVER, that nothing contained in this Agreement shall
prevent RTI or its Board of Directors from (A) furnishing non-public information
to, or entering into discussions or
18
negotiations with, any person or entity in connection with an unsolicited bona
fide written Acquisition Proposal by such person or entity which is received
after the date hereof or recommending an unsolicited bona fide written
Acquisition Proposal which is received after the date hereof to the shareholders
of RTI, if and only to the extent that (1) the Board of Directors of RTI
believes in good faith (after consultation with its financial advisor) that such
Acquisition Proposal would, if consummated, result in a transaction more
favorable to RTI's shareholders from a financial point of view than the
transaction contemplated by this Agreement (any such more favorable Acquisition
Proposal being referred to in this Agreement as a "Superior Proposal") and the
Board of Directors of RTI determines in good faith after consultation with
outside legal counsel that such action is necessary to comply with its fiduciary
duties to shareholders under applicable law and (2) prior to furnishing such
non-public information to, or entering into discussions or negotiations with,
such person or entity, the Board of Directors receives from such person or
entity an executed confidentiality agreement with terms no less favorable to
such party than those contained in the Confidentiality Agreement dated October
3, 1995 between Sterigenics and RTI (the "Confidentiality Agreement") or (B)
complying with Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal. Notwithstanding the provisions of this Section 6.1(a), in
connection with furnishing non-public information under Section (A), RTI may
refer any third party to this Section 6.1 or make a copy of this Agreement
available to a third party, and in response to an unsolicited oral Acquisition
Proposal, RTI may notify the party making the proposal that it is unable to
respond to oral offers and provide such third party with a copy of this Section
6.1(a).
(b) RTI shall notify Sterigenics no later than one (1) business day
after receipt by RTI of any Acquisition Proposal or any request for nonpublic
information in connection with an Acquisition Proposal or for access to the
properties, books or records of RTI by any person or entity that informs RTI
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 contact.
6.2 COOPERATION. RTI will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed with respect to the
consummation of the transactions contemplated by this Agreement and will
promptly cooperate with and furnish information to Sterigenics in connection
with any such requirements imposed upon Sterigenics in connection with the
consummation of the transactions contemplated by this Agreement. RTI will take
all reasonable actions necessary to obtain (and will cooperate with Sterigenics
in obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any governmental entity, domestic or
foreign, or other person, required to be obtained or made by RTI (or by
Sterigenics) in connection with the taking of any action contemplated by this
Agreement. Sterigenics shall reimburse RTI for all out-of-pocket costs incurred
after the Closing Date pursuant to compliance with this Section 6.2.
6.3 CONDUCT OF BUSINESS. During the period on and from the date of this
Agreement to the Closing, RTI will use its reasonable commercial efforts to
maintain and preserve intact (i) the business organization, rights and
privileges pertinent to RTI's business, and (ii) RTI's relationships with its
employees, consultants, independent contractors, licensors,
19
suppliers, distributors and other customers and all others with whom it deals,
all in accordance with the ordinary and usual course of business. During the
period on and from the date of this Agreement to the Closing, RTI and its
Subsidiaries will not without the prior written consent of Sterigenics, which
consent shall not be unreasonably withheld or delayed: (a) encumber or permit
to be further encumbered any of the Purchased Assets, any of the assets of the
South Jersey Subsidiary or the Rockaway Property, except mechanic's or
materialmen's liens incurred in connection with ongoing construction of an
addition to the North Carolina Property; (b) dispose of any Purchased Assets,
the Rockaway Property or any assets of the South Jersey Subsidiary, except in
the ordinary course of business; (c) fail to operate its business and facilities
in compliance in all material respects with all material requirements of the
NRC, the NJDEP, the NCDRH and the FDA; (d) fail to maintain the Purchased
Assets, the Rockaway Property and the Improvements thereon and the assets of the
South Jersey Subsidiary in good working condition and repair according to the
general standards it has maintained up to the date of this Agreement, subject
only to ordinary wear and tear; (e) fail to pay and discharge any Trade Payables
in the ordinary course unless disputed in good faith; (f) change accounting
methods; (g) amend or terminate any Contract listed on Schedule 1.5, except in
the ordinary course of business; (h) waive or release any material right or
claim relating to any Purchased Assets or the assets of the South Jersey
Subsidiary, except in the ordinary course of business; (i) enter into any
contract providing for a term of over one (1) year or providing for payments to
or from RTI of more than $50,000 per annum; (j) incur any indebtedness or
obligation that would become an Assumed Liability under the terms of this
Agreement other than in the ordinary course of business; (k) take any action or
fail to take any action where such action or failure to act would not be in the
ordinary course of business; or (l) agree to do any of the things described in
the preceding clauses of this Section 6.3.
6.4 ACCESS TO INFORMATION. RTI shall make available to Sterigenics and
Sterigenics' agents and representatives all information concerning the
operation, business and prospects of RTI and related entities as may be
reasonably requested by Sterigenics, including, without limitation, the
accounting and tax working papers of RTI's independent certified public
accountants. After the last to occur of (i) satisfaction of the condition set
forth in Section 9.18(ii) and termination or waiver of all contingencies
permitting termination of the Agreement under Section 6.5 hereof, RTI will
reasonably cooperate with Sterigenics for the purpose of permitting Sterigenics
to discuss RTI's business and prospects with RTI's customers, creditors,
suppliers and other persons having business dealings with RTI; provided,
however, that Sterigenics agrees that it shall not have any discussions with
RTI's customers unless a representative of RTI is present. RTI agrees to make a
representative available for such purposes during normal business hours upon at
least three (3) business days' prior notice. Sterigenics further agrees that,
without RTI's prior written consent, it will have discussions with no more than
ten (10) of RTI's top twenty (20) customers, and will have no discussions with
other customers of RTI. Unless otherwise required by law, the parties will hold
any such information which is nonpublic in confidence in accordance with the
Confidentiality Agreement. No information or knowledge obtained in any
investigation pursuant to this Section 6. 4 shall affect or be deemed to
modify any representation or warranty construed in this Agreement or the
conditions to the obligations of the parties to consummate the Acquisition. RTI
shall permit Sterigenics to audit the financial statements contained in the
March Form 10-QSB; provided, however, that no adjustment shall be required to be
made thereto by RTI as a result thereof.
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6.5 REAL ESTATE MATTERS.
(a) APPROVAL OF TITLE. Sterigenics hereby approves the
condition of title of the Rockaway Property, as shown on the title commitment
for the Rockaway Property attached hereto as EXHIBIT 6.5(a), excluding only
Exception No's 5(a-h), 6, 9, 11, 12, 13, 14, 18, 19 through 22 and 25 thereof
(but with respect to exceptions 19 through 22 and 25 only to the extent that
(i) such exceptions materially adversely impact or could materially adversely
impact the use of the Rockaway Property as the site of a contract irradiation
facility in the manner heretofore used and (ii) in such event, RTI does not
provide Sterigenics with a title policy insuring that such encumbrances will
not interfere with Sterigenics use of the Rockaway Property as currently used).
Sterigenics hereby approves the condition of title of the North Carolina
Property, as shown on the title commitment attached hereto as EXHIBIT 6.5(c),
excluding only Exception No's 3, 4, 5 (items a, b, c and g), 6 and 7 thereof.
The foregoing title commitments are referred to herein as the "Title Reports,"
and the exceptions to title approved by Sterigenics including such exceptions
as are approved with respect to the Salem Property under paragraph (b) below
and with respect to the Rockaway Property under paragraph (c) below, are
collectively referred to herein as the "Permitted Exceptions." The title
insurance companies issuing the Title Reports are referred to herein
individually as a "Title Company" and collectively as the "Title Companies."
(b) APPROVAL OF SALEM TITLE. Sterigenics shall cause to be
prepared a title report or title commitment showing the condition of title to
the Salem property. Sterigenics shall have five business (5) days after
receipt of such title commitment and copies of all exceptions thereto to
deliver to RTI and the applicable Title Company written notice (the
"Preliminary Title Notice") of Sterigenics' approval, conditional approval, or
disapproval of the title matters disclosed in the title commitment. All
matters with respect to the Salem Property not approved in writing by
Sterigenics except the Permitted Encumbrances shall be deemed disapproved and
are referred to herein as "Salem Disapproved Exceptions;" provided, however,
that Sterigenics agrees that the Salem Disapproved Exceptions shall be limited
to those exceptions which (i) relate to monetary liens securing obligations
with a face amount of $10,000 or more individually or $50,000 or more in the
aggregate or (ii) materially adversely impact or could materially adversely
impact the use of the Salem Property as the site of a contract irradiation
facility in the manner currently used. RTI shall have five (5) business days
(or such longer period as RTI may reasonably request) after receipt of
Sterigenics' Preliminary Title Notice to give Sterigenics and the Title Company
written notice (the "Salem Removal Notice") of those Disapproved Exceptions
that have been or will be removed from title on or before the Closing. If RTI
is unable or unwilling to remove a Salem Disapproved Exception or fails to give
notice as to whether it will remove a Salem Disapproved Exception, Sterigenics
shall have the option, within five (5) business days of receipt of the Salem
Removal Notice or, if RTI fails to deliver such notice, within ten (10)
business days (which period shall be extended on a day for day basis as a
result of any extension requested by RTI for delivery of the Salem Renewal
Notice) after delivery of the Preliminary Title Notice, to terminate this
Agreement by written notice to RTI, or to waive its objection to the
Disapproved Exceptions in question by delivering notice of such waiver to
RTI and thereafter proceed to the Closing. If Sterigenics fails to deliver
the waiver notice described in the preceding sentence, Sterigenics shall be
deemed to have elected to terminate this Agreement.
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(c) ROCKAWAY SURVEY. RTI and Sterigenics hereby acknowledge
that the Title Report prepared for the Rockaway Property (the "Rockaway Title
Report") describes the real property defined herein as the "Rockaway Property"
together with certain other real property (the "Excluded Property") that RTI
intends to retain and that shall not be leased or otherwise transferred to
Sterigenics pursuant to this Agreement. The parties believe that certain
exceptions in the Title Report relating to tax liens shown in Schedule B of the
Rockaway Title Report relate solely to the Excluded Property and not to the
Rockaway Property. In order to determine the exact boundaries of the Rockaway
Property and which of the title exceptions apply to the Rockaway Property,
Sterigenics shall obtain at its cost an ALTA survey (the "Survey") of the
Rockaway Property which Survey shall locate the easements described in
exceptions Nos. 19-22 and 25 to the extent they affect the Rockaway Property.
During such period, RTI hereby grants Sterigenics and its agents, contractors
and employees the right to enter upon the Rockaway Property to prepare the
Survey and to prepare a legal description of the Rockaway Property. Upon
completion of the Survey, (i) Sterigenics shall provide RTI with a copy of the
Survey and legal description, (ii) from and after the delivery to RTI of the
Survey and the legal description, all references in this Agreement to the
Rockaway Property shall be deemed to mean the real property shown on the Survey
as the Rockaway Property and described by such legal description, and (iii)
Sterigenics shall deliver the Survey and the legal description to the Title
Company and shall cause the Title Company to prepare an update to the Rockaway
Title Report to reflect the new legal description and the title exceptions
thereto. If such updated Title Report shows exceptions other than those shown
on the prior Rockaway Title Report, Sterigenics shall have five (5) business
days after receipt of such updated title report and copies of all exceptions to
title referred to therein to deliver to RTI and the Title Company written
notice (the "Rockaway Title Notice") of Sterigenics' approval, conditional
approval, or disapproval of the title matters disclosed in the updated title
commitment. All matters with respect to the Rockaway Property not approved in
writing by Sterigenics except the Permitted Encumbrances shall be deemed
disapproved and are referred to herein as "Rockaway Disapproved Exceptions;"
provided, however, that Sterigenics agrees that the Rockaway Disapproved
Exceptions shall be limited to those exceptions which (i) relate to monetary
liens securing obligations with a face amount of $10,000 or more individually
or $50,000 or more in the aggregate or (ii) materially adversely impact or
could materially adversely impact the use of the Rockaway Property as the site
of a contract irradiation facility in the manner currently used. RTI shall
have five (5) business days (or such longer period as RTI shall reasonably
request) after receipt of Sterigenics' notice to give Sterigenics and the Title
Company written notice (the "Rockaway Removal Notice") of those Rockaway
Disapproved Exceptions that have been or will be removed from title on or
before the Closing. If RTI is unable or unwilling to remove a Rockaway
Disapproved Exception or fails to give notice as to whether it will remove a
Rockaway Disapproved Exception, Sterigenics shall have the option, within five
(5) business days of receipt of the Rockaway Removal Notice or, if RTI fails to
deliver such notice, within ten (10) business days (which period shall be
extended on a day for day basis as a result of any extension requested by RTI
for delivery of the Rockaway Removal Notice) after delivery of the Rockaway
Title Notice to terminate this Agreement by written notice to RTI, or to waive
its objection to the Rockaway Disapproved Exceptions in question by delivering
notice of such waiver to RTI and thereafter proceed to the Closing. If
Sterigenics fails to deliver the waiver notice described in the preceding
sentence, Sterigenics shall be deemed to have elected to terminate this
Agreement.
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(d) ENVIRONMENTAL INSPECTION. RTI hereby grants Sterigenics the
right to enter upon and to inspect the Real Properties and the environmental
risks and conditions (including the soil and groundwater) of the Real
Properties. For the purpose of Sterigenics' physical inspections, RTI agrees
to provide Sterigenics and its authorized agents reasonable access to each Real
Property during normal business hours during the period starting on the date of
this Agreement and ending thirty (30) days thereafter (the "Initial Due
Diligence Period"), upon at least twelve (12) hours' prior notice to RTI, and
Sterigenics shall use reasonable good faith efforts to avoid disruption of the
operation of the Real Properties. Sterigenics may, at its option, extend the
Initial Due Diligence Period for an additional sixty (60) days by giving notice
to RTI prior to the expiration of the Initial Due Diligence Period that it
intends to conduct Phase II environmental investigation at one or more of the
Real Properties. The Initial Due Diligence Period and any such extension are
referred to collectively as the "Due Diligence Period." Without limiting the
foregoing, Sterigenics and Sterigenics' agents may, at the sole cost of
Sterigenics and upon prior notice to RTI, perform engineering and soils
surveys, geological work or other studies desired by Sterigenics. Sterigenics
and Sterigenics' agents shall be entitled, at Sterigenics' own expense, to
conduct Phase I and Phase II environmental investigations of the Real
Properties. Sterigenics agrees to hire as its contractor for such
environmental investigation a firm which maintains adequate liability
insurance. If the Closing does not occur, Sterigenics shall provide to RTI
copies of all environmental reports it caused to be prepared. If the Closing
does not occur, Sterigenics promptly shall repair and restore any damage caused
to the North Carolina Property and the Salem Property by reason of Sterigenics'
or Sterigenics' agents' entry on or investigation of the North Carolina
Property and the Salem Property. Whether or not the Closing occurs,
Sterigenics shall promptly repair and restore any damage caused to the Rockaway
Property by reason of Sterigenics' or Sterigenics' agents' entry on or
investigation of the Rockaway Property. Sterigenics shall provide to RTI
copies of all invoices for work performed to repair and restore any damage to
the Real Properties along with evidence that such invoices have been paid.
Sterigenics hereby agrees to indemnify RTI and to hold RTI, RTI's agents and
employees and the Real Properties harmless from and against any and all losses,
costs, damages, claims or liabilities including, but not limited to, mechanic's
and materialmen's liens and reasonable attorneys' fees, arising out of or in
connection with Sterigenics' or its agent's access to or entry upon the Real
Properties under this Section 6.5. If, upon any such inspection, any aspect of
the condition of the Property would have a material adverse effect on
Sterigenics' ability to operate the business of RTI as currently operated or
could result in any material liability on the part of Sterigenics for
environmental remediation, Sterigenics shall have the right during the Due
Diligence Period, which it shall exercise promptly, to terminate this
Agreement by delivering three (3) business days' prior written notice of such
termination to RTI, which notice shall specifically identify the conditions
providing the basis for termination.
(e) TITLE POLICIES. At the Closing for the North Carolina
Property the applicable Title Company shall issue to Sterigenics, at
Sterigenics' expense, an ALTA owner's policy of title insurance, form B (as
amended 10-17-92) (the "North Carolina Title Policy"), in the amount of the
Purchase Price allocated thereto pursuant to SECTION 2.7, subject only to the
Permitted Exceptions therefor. In addition, the Title Company shall issue to
Sterigenics ALTA leasehold and optionee's policies of title insurance, form B
(as amended 10-17-92) for the Rockaway Property (collectively, the "Leasehold
Policy"), in an amount determined by
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Sterigenics, insuring the validity and priority of the Rockaway Lease and
Sterigenics' option to purchase the Rockaway Property granted pursuant to the
Rockaway Lease. Sterigenics shall have the right to have an ALTA survey the
(the "ALTA Survey") prepared for any Real Property, the costs of which shall be
paid by Sterigenics. The North Carolina Title Policy and the Leasehold Title
Policy individually are referred to herein as a "Title Policy" and collectively
as the "Title Policies."
6.6 PROXY STATEMENT. As promptly as practical after the execution of
this Agreement and in conjunction with the filing of its Annual Report on Form
10- KSB, RTI shall prepare a proxy statement (the "Proxy Statement") to obtain
the approval of shareholders of RTI for this Agreement and the transactions
contemplated hereby. RTI shall provide reasonable opportunity for Sterigenics
to review and comment on the contents of the Proxy Statement. The Proxy
Statement shall include the recommendation of the Board of Directors of RTI in
favor of this Agreement and Acquisition; provided that the Board of Directors
of RTI may withdraw such recommendation if such Board of Directors believes in
good faith that a Superior Proposal has been made and shall have determined in
good faith, after consultation with its outside legal counsel, that the
withdrawal of such recommendation is necessary for such Board of Directors to
comply with its fiduciary duties under applicable law. Promptly after the last
to occur of (i) satisfaction of the condition set forth in Section 9.18(ii) and
termination or waiver of all contingencies permitting termination of the
Agreement under Section 6.5 hereof, RTI shall complete and file the Proxy
Statement with the SEC. Within ten (10) business days after all SEC comments
on the Proxy Statement have been resolved, RTI will cause the Proxy Statement
to be sent to the shareholders of RTI.
6.7 SHAREHOLDERS MEETING. RTI shall call a meeting of its
shareholders (the "RTI Shareholders' Meeting) to be held as promptly as
practicable after RTI has been advised by the SEC that it has no further
comments on the Proxy Statement for the purpose of voting upon this Agreement
and the Acquisition. RTI shall use reasonable efforts, including the
engagement of a proxy solicitation firm reasonably acceptable to Sterigenics
(one half of the cost of which will be paid directly by Sterigenics), to
solicit from its shareholders proxies in favor of such matters.
6.8 RISK OF LOSS. Until the Closing, all risk of loss, damages or
destruction to the Purchased Assets or the assets of the South Jersey
Subsidiary shall be borne by RTI.
6.9 REGULATORY APPROVALS; TRANSFER OF PERMITS. Prior to the Closing,
at Sterigenics' expense, RTI will execute and file, or join in the execution
and filing, of any application or other document that may be necessary in order
to obtain the authorization, approval or consent of any governmental entity
that may be reasonably required, or that Sterigenics may reasonably request, in
connection with the consummation of the transactions contemplated by this
Agreement. RTI will promptly prepare and file with the appropriate
Governmental Entity all applications necessary to obtain the transfer of the
licenses, approvals and permits referred to in Section 9.5. Sterigenics will
reimburse RTI for all out of pocket costs, including reasonable legal fees,
incurred in connection with obtaining such transfers.
6.10 EXECUTION OF AMENDMENT AGREEMENT. RTI shall use its best efforts
(not including the payment of any monetary amounts) to promptly cause Farmers
Merchant National
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Bank of Bridgeton, as trustee under the IRB, to execute that certain Amendment
Agreement dated April 2, 1985 amending the designation of the Salem Property as
attached as Exhibit A to the sublease for the Salem Property.
ARTICLE VII
COVENANTS OF STERIGENICS
7.1 ACCESS TO DOCUMENTS. If, after the Closing Date, (i) in order to
properly prepare its tax returns or other documents or reports required to be
filed with governmental authorities or its financial statements; (ii) in
connection with any threatened or pending litigation or claim which involves or
may involve RTI; or (iii) for any other reasonable purpose, it is necessary
that RTI be furnished with additional information or documents relating to the
Purchased Assets, the assets of the South Jersey Subsidiary or the Assumed
Liabilities and such information or documents are in Sterigenics' possession,
and can reasonably be furnished to RTI, Sterigenics shall, upon written request
therefor, promptly furnish such information or documents to RTI. RTI shall
reimburse Sterigenics for the cost of copying or shipping any requested
documents.
7.2 COOPERATION. Sterigenics will take all reasonable actions
necessary to comply promptly with all legal requirements which may be imposed
with respect to the consummation of the transactions contemplated by this
Agreement and will promptly cooperate with and furnish information to RTI in
connection with any such requirements imposed upon RTI in connection with the
consummation of the transactions contemplated by this Agreement. Sterigenics
will take all reasonable actions necessary to obtain (and will cooperate with
RTI in obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any governmental entity, domestic or
foreign, or other person, required to be obtained or made by Sterigenics (or by
RTI) in connection with the taking of any action contemplated by this
Agreement.
7.3 FUTURE ADMINISTRATIVE SUPPORT RELATED TO ENVIRONMENTAL ISSUES.
Until the date five (5) years after the Closing, Sterigenics shall provide RTI
with certain administrative services, including (a) supervision of the Rockaway
Property monitoring program (including payment of costs up to $10,000 per
annum) following completion of the clean-up program at the Rockaway Property,
and (b) general corporate administrative support, including reasonable access
to use of former RTI employees who are employed by Sterigenics.
7.4 EMPLOYMENT OF RTI EMPLOYEES BY STERIGENICS. Sterigenics (or its
wholly-owned Subsidiary) shall offer employment to all existing employees (as
of the Closing) of RTI except Xxxx Xxxxxx. Sterigenics agrees not to terminate
any former RTI employee for at least 90 days after the Closing except for
cause.
7.5 RELEASE OF SALEM GUARANTEE. Sterigenics shall use reasonable
efforts to cause RTI to be released from the Salem Guarantee.
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ARTICLE VIII
COVENANTS OF STERIGENICS AND RTI
8.1 LEGAL CONDITIONS. Subject, as to RTI, to Section 6.1(a), each of
Sterigenics and RTI will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on it with respect to
the Acquisition (which actions shall include, without limitation, furnishing
all information required in connection with approvals of or filings with any
Governmental Entity) and will promptly cooperate with and furnish information
to each other in connection with any such requirements imposed upon either of
them in connection with the Acquisition.
8.2 PUBLIC DISCLOSURE. Prior to Closing, Sterigenics and RTI shall
consult with each other before issuing any press release or otherwise making
any public statement (other than at the RTI Shareholders' Meeting) with respect
to the Acquisition or 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 law.
8.3 ADDITIONAL AGREEMENTS; REASONABLE EFFORTS. Subject to the terms
and conditions of this Agreement, including Section 6.1(a), each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, subject to the appropriate vote of
shareholders of RTI described in Section 6.7, including cooperating fully with
the other party, including by provision of information. In case at any time
after the Closing Date any further action is necessary or desirable to carry
out the purposes of this Agreement or to vest Sterigenics with full title to
all properties, assets, rights, approvals, immunities and franchises of the
Purchased Assets or the assets of the South Jersey Subsidiary, the proper
officers and directors of each party to this Agreement shall take all such
necessary action; provided, however that out-of-pocket costs incurred by RTI
pursuant to this Section 8.3 after the Closing Date shall be reimbursed by
Sterigenics.
8.4 ACCESS TO DOCUMENTS. If, after the Closing Date, (i) in order to
properly prepare its tax returns or other documents or reports required to be
filed with governmental authorities or its financial statements; (ii) in
connection with any threatened or pending litigation or claim which involves or
may involve Sterigenics or RTI; or (iii) for any other reasonable purpose, it
is necessary that Sterigenics or RTI be furnished with additional information
or documents relating to the Purchased Assets, the assets of the South Jersey
Subsidiary or the Assumed Liabilities and such information or documents are in
the possession of the other party, and can reasonably be furnished to the
requesting party, the other party shall, upon written request therefor,
promptly furnish such information or documents to the requesting party. The
requesting party shall reimburse the other party for the cost of copying or
shipping any requested documents.
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ARTICLE IX
STERIGENICS' CONDITIONS PRECEDENT TO CLOSING
The obligations of Sterigenics at the Closing are subject to
satisfaction of the following conditions (any or all of which may be waived by
Sterigenics in its sole discretion), all of which are for Sterigenics' sole
benefit:
9.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of RTI contained in this Agreement shall be true and correct in all
material respects on the Closing Date with the same effect as though made on
that date; provided that this condition will be deemed satisfied if
inaccuracies in the representations and warranties of RTI would merely result
in (a) positive adjustments to RTI's consolidated balance sheet or (b) negative
adjustments to RTI's consolidated balance sheet of (i) up to $200,000 in the
aggregate (which would give rise to a Purchase Price Adjustment in a
corresponding amount), or (ii) an amount between $200,000 and $500,000 in the
aggregate if the cash portion of the Purchase Price as set forth in Section
2.4(a) is reduced by the aggregate amount of the resulting adjustments to the
consolidated balance sheet. To the extent that any inaccuracies in the
representations and warranties would not result in adjustments to RTI's
consolidated balance sheet, this condition will be deemed satisfied unless such
inaccuracies, in the aggregate, would have a material adverse effect on the
value of the Purchased Assets or the assets of the South Jersey Subsidiary or
on the ability of Sterigenics to conduct the business of RTI as conducted prior
to the Closing.
9.2 SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated by it shall have been approved by RTI's shareholders and RTI shall
have delivered to Sterigenics copies, certified by the Secretary of RTI, of the
resolutions of the shareholders of RTI regarding such approval.
9.3 OWNERSHIP OF PURCHASED ASSETS BY RTI. RTI or its Subsidiaries
shall hold all right, title and interest in the Purchased Assets and the assets
of the South Jersey Subsidiary.
9.4 NET BOOK VALUE OF PURCHASED ASSETS. The net book value of the
Purchased Assets (as determined by RTI in good faith) at the Closing shall be
at least $3,500,000; provided, however, that if the net book value (as
determined by RTI in good faith) is between $3,000,000 and $3,500,000, this
condition will be deemed satisfied if the cash portion of the Purchase Price as
set forth in Section 2.4(a) is reduced by an amount equal to the difference
between $3,500,000 and the net book value of the Purchased Assets.
9.5 RECEIPT OF REQUIRED PERMITS. Sterigenics shall have received all
licenses, permits and governmental or other regulatory approvals and
authorizations which are required in order for Sterigenics to engage in the
full operation of RTI's sterilization facilities located on the Real
Properties, including, without limitation, all necessary permits, approvals and
authorizations of the NRC, the NJDEP, the NCDRH and the FDA; provided, if all
of the other conditions set forth in Article IX and X have been satisfied or
waived and this condition is not satisfied by June 30, 1996, Sterigenics shall
be required to waive this condition if RTI undertakes, subject to the terms of
a management agreement to be negotiated in good faith by RTI and Sterigenics,
such management activities as are necessary to permit the full operation by
Sterigenics of RTI's
27
sterilization facilities as currently operated until all necessary permits,
approvals and authorizations are obtained and all costs and expenses incurred
by RTI pursuant to its performance of such agreement shall be reimbursed or
paid by Sterigenics as incurred.
9.6 DELIVERY OF ALL ASSETS. RTI shall have delivered and conveyed
all of the Purchased Assets and the assets of the South Jersey Subsidiary free
and clear of all Encumbrances, whether direct or indirect, accrued, absolute,
contingent or otherwise, except the Permitted Encumbrances.
9.7 ROCKAWAY PROPERTY LEASE AND PURCHASE OPTION. Sterigenics and RTI
shall have entered into a six-year lease and purchase option, with an option
for Sterigenics to extend the lease for five (5) additional years, for the
Rockaway Property in substantially the form attached hereto as EXHIBIT 9.7,
including a six-year option for Sterigenics to purchase the Rockaway Property
(the "Rockaway Lease"). Pursuant to the Rockaway Lease, RTI shall have the
right to require Sterigenics to exercise the purchase option on the sixth
anniversary of the Closing if the environmental remediation has been completed
to such an extent that Sterigenics would not have any material liability for
further environmental remediation and the Rockaway Property has been removed
from the National Priorities List. In addition, a memorandum or short-form of
the Rockaway Lease shall have been provided to Sterigenics in recordable form
in accordance with applicable New Jersey law so as to impart constructive
notice of the Rockaway Lease to third parties.
9.8 LETTER REGARDING SPILL ACT LIEN. RTI shall have delivered to
Sterigenics a letter from the NJDEP dated within five (5) business days prior
to the Closing Date stating that NJDEP will take all actions and execute all
documents necessary to release all liens it has on the Purchased Assets and the
Rockaway Property upon receipt of a certified check in the Lien Amount if such
check is delivered within ten (10) days following the date of the letter.
9.9 TITLE POLICIES. The Title Companies shall have committed in
writing to issue the Title Policies to Sterigenics for each of the North
Carolina Property and the Rockaway Property, subject only to the Permitted
Exceptions applicable thereto.
9.10 FIRPTA. RTI shall have executed and delivered to the Title
Company a certificate satisfying the requirements of Section 1445 of the
Internal Revenue Code of 1986, as amended (the "FIRPTA Certificate").
9.11 NO INSOLVENCY EVENT. At the Closing there shall not be any
pending sequestration, attachment or foreclosure of or execution on any
material part of the Purchased Assets or any of the material assets of the
South Jersey Subsidiary or any proceeds from the sale thereof nor shall RTI be
subject to a voluntary or involuntary petition to commence a proceeding under
the United States Bankruptcy Code to declare RTI to be bankrupt or insolvent.
9.12 NO MATERIAL ADVERSE CHANGE. No material adverse change shall
have occurred in the business of RTI or the assets of the South Jersey
Subsidiary since the execution of this Agreement which, in the reasonable
judgment of Sterigenics, may have a material adverse effect on the value to
Sterigenics of the Purchased Assets or the assets of the South Jersey
Subsidiary.
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9.13 NO LEGAL PROHIBITION. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Acquisition or limiting or restricting
Sterigenics' conduct or operation of the business of RTI after the Acquisition
shall have been issued, nor shall any action or suit related to the Acquisition
or its consummation which could, in the opinion of Sterigenics' counsel, result
in material liability for Sterigenics, be pending or threatened, nor shall any
proceeding brought by an administrative agency or commission or other
governmental entity, seeking any of the foregoing, be pending; nor shall there
be any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Acquisition which makes the
consummation of the Acquisition illegal.
9.14 ESCROW AGREEMENT. Sterigenics and RTI shall have entered into
the Escrow Agreement.
9.15 CLOSING CERTIFICATE. RTI shall deliver to Sterigenics a
certificate dated the Closing Date and signed by the President of RTI
confirming that the conditions set forth in Sections 9.1, 9.2, 9.4, 9.6, 9.11,
9.12 and 9.17 have been satisfied.
9.16 RECORDABLE DOCUMENTS. RTI shall have provided the appropriate
Title Company issuing the Title Policies the special warranty deed for the
North Carolina Property and the memorandum of lease for the Rockaway Property
duly executed, notarized, and otherwise in recordable form at least two (2)
business days prior to the Closing so that the documents are in a position to
be recorded in the applicable public records immediately upon Closing.
9.17 APPRAISAL RIGHTS. Holders of less than 20% of the outstanding
shares of RTI Common Stock shall continue to be entitled to seek appraisal
rights with respect to the Acquisition pursuant to the New York Business
Corporation Law.
9.18 ENVIRONMENTAL MATTERS. RTI shall have obtained from the NJDEP:
(i) a letter of non-applicability pursuant to the Industrial Site Recovery Act
(ISRA), N.J.S.A. 13:1K-6 et seq., with respect to the transactions contemplated
by this Agreement; and (ii) written acknowledgment, in form reasonably
satisfactory to Sterigenics' counsel, that the NJDEP does not and will not
regard Sterigenics or any of its subsidiaries as the successor or assign of RTI
or as otherwise responsible for any ongoing environmental liability of RTI.
9.19 Removal of Title Exceptions. RTI shall provide Sterigenics with
evidence of the removal of all Salem Disapproved Exceptions and all Rockaway
Disapproved Exceptions which were set forth in the Salem Removal Notice and the
Rockaway Removal Notice, respectively.
9.20 CLOSING DELIVERIES. Sterigenics shall have received at or prior
to the Closing each of the following documents: (a) a xxxx of sale in a form
reasonably satisfactory to Sterigenics; (b) such instruments of conveyance,
assignment and transfer, in form and substance reasonably satisfactory to
Sterigenics, as shall be appropriate to convey, transfer and assign to, and to
vest in, Sterigenics, good, clear and marketable title to the Purchased Assets
and the assets of the South Jersey Subsidiary; (c) evidence of termination of
all liens (other than Permitted Encumbrances) filed against the Purchased
Assets and the assets of the South Jersey Subsidiary
29
reasonably satisfactory to Sterigenics; (d) cross-receipt executed by
Sterigenics and RTI; (e) March Balance Sheet; (f) with respect to the North
Carolina Property, a special warranty deed in recordable form and in the form
previously approved by Sterigenics properly executed on behalf of RTI,
conveying to Sterigenics title to the Real Properties and the Improvements in
fee simple, subject only to the Permitted Exceptions therefor; (g) with respect
to the Rockaway Property, the Rockaway Lease and a memorandum or short-form
thereof, in form and content approved by Sterigenics, which shall be recorded,
at Sterigenics' expense, in the manner provided under applicable New Jersey law
to impart constructive notice thereof to third parties; and (h) any other
documents, records or agreements called for hereunder that have not been
previously delivered to Sterigenics.
9.21 LANDLORD LETTER. RTI shall deliver to Sterigenics a letter from
the City of Salem Municipal Port Authority confirming that the South Jersey
Subsidiary has a valid and binding leasehold interest in the Salem Property.
ARTICLE X
RTI'S CONDITIONS PRECEDENT TO CLOSING
The obligations of RTI at the Closing are subject to satisfaction of
the following conditions (any or all of which may be waived by RTI), all of
which are for RTI's sole benefit:
10.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Sterigenics contained in this Agreement will be true and correct
in all material respects at the date of the Closing with the same effect as
though made at that date, and Sterigenics will have delivered to RTI a
certificate dated that date and signed by the President of Sterigenics to that
effect.
10.2 SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated by it shall have been approved by RTI's shareholders.
10.3 ROCKAWAY LEASE. Sterigenics and RTI have entered into the
Rockaway Lease.
10.4 INSOLVENCY EVENT. At the Closing, Sterigenics shall not have
been subject to a voluntary or involuntary petition to commence a proceeding
under the United States Bankruptcy Code to declare Sterigenics to be bankrupt
or insolvent.
10.5 NO LEGAL PROHIBITION. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint or prohibition
preventing the consummation of the Acquisition or limiting or restricting RTI's
conduct or operation of the business of RTI after the Acquisition shall have
been issued, nor shall any proceeding brought by an administrative agency or
commission or other governmental entity, seeking any of the foregoing be
pending, nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the Acquisition
which makes the consummation of the Acquisition illegal, nor shall any action
or suit related to the Acquisition or its consummation which could, in the
opinion of RTI's counsel,
30
result in material personal liability for RTI directors. be pending or
threatened; provided, however, that RTI shall be required to waive this
condition as to any pending or threatened action or suit if Sterigenics agrees
to indemnify the directors of RTI against any costs, expenses or judgments
resulting from such action or suit.
10.6 ESCROW AGREEMENT. Sterigenics, RTI and the Escrow Agent shall
have entered into the Escrow Agreement.
10.7 CLOSING CERTIFICATE. Sterigenics shall deliver to RTI a
certificate dated the Closing Date and signed by an officer of Sterigenics
confirming that the conditions set forth in Sections 10.1, 10.2, 10.4 and 10.5
have been satisfied.
10.8 APPRAISAL RIGHTS. Holders of less than 20% of the outstanding
shares of RTI Common Stock shall continue to be entitled to seek appraisal
rights with respect to the Acquisition pursuant to the New York Business
Corporation Law.
10.8 CLOSING DELIVERIES. RTI shall have received at or prior to the
Closing each of the following documents: (a) payment of the Purchase Price in
accordance with Section 2.4; (b) cross-receipt executed by Sterigenics and RTI;
and (c) such instruments, in form and substance satisfactory to RTI, as shall
be necessary and appropriate for Sterigenics to assume and agree to perform the
Assumed Liabilities.
ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; ESCROW
11.1 SURVIVAL OF REPRESENTATIONS. The representations and warranties
made by the parties in Articles IV (except Section 4.22(a) and 4.23 through
4.27, which shall terminate upon the Closing) and V of this Agreement shall
survive the Closing for a period of twelve (12) months and shall in no manner
be limited by any investigation of the subject matter thereof made by or on
behalf of either party or by the satisfaction of any condition to the Closing,
provided, however, that if RTI gives Sterigenics written notice prior to
Closing specifying a breach of a representation or warranty and as a result
would not be able to meet the condition in Section 9.1 and Sterigenics waives
such breach in order to proceed to Closing, Sterigenics shall not be entitled
to make a Claim (as defined below) as a result of such specified breach. After
the expiration of such period, such representations and warranties shall expire
and be of no further force and effect unless a Claim or Claims (as defined in
Section 11.2 below) with respect to any such representation or warranty shall
have been asserted by Sterigenics with respect thereto on or before the
expiration of such period.
11.2 INDEMNIFICATION BY PARTIES.
(a) RTI shall indemnify and save harmless Sterigenics, its
wholly-owned Subsidiaries and its and their respective shareholders, directors,
officers and agents from and against (A) any difference between (i) the
Adjusted Price and (ii) the book value of the Purchased Assets less the book
value of the Assumed Liabilities, as contained in the Closing
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Balance Sheet (as audited by the independent certified accounting firm of Ernst
& Young, if Sterigenics elected to have Ernst & Young audit the Closing Balance
Sheet, provided that RTI may object as set forth in Section 2.4(d) (the
"Purchase Price Adjustment") and (B) any and all losses, liabilities, expenses
(including, without limitation, fees and disbursements of counsel and expenses
of investigation), claims, liens, damages, demands, judgments, fines, penalties,
costs or other obligations whatsoever (hereinafter individually a "Claim" or
collectively "Claims"), which shall not include any component of damages for
business lost after the Closing, imposed on or incurred by Sterigenics or any
such indemnified party as a result of (i) the breach of any representation or
warranty made by RTI in this Agreement or otherwise thereafter made in writing
and delivered by RTI to Sterigenics in connection with the transactions
contemplated hereby; (ii) any failure of RTI to perform or comply in any
material respect with any of its covenants and agreements set forth herein or in
any other document executed in connection with the transactions contemplated
hereby; (iii) any liabilities, obligations or commitments of, and all claims
against RTI, its shareholders, directors, officers and agents, other than with
respect to the Assumed Liabilities and claims arising as a result of a breach by
Sterigenics; (iv) any Excluded Liabilities or (v) the waiver by Sterigenics of
compliance by RTI with the provisions of applicable bulk sales laws. "Claims"
as used herein are not limited to matters asserted by third parties, but include
claims incurred, sustained or properly accrued by Sterigenics in the absence of
claims by a third party; provided that the amount of any accrual that is not
ultimately utilized shall be paid to RTI. Claims shall first be satisfied
pursuant to the terms of the Escrow Agreement. Notwithstanding anything to the
contrary set forth in this Agreement, RTI shall be liable only as to any
individual Claim, other than Claims with respect to any Purchase Price
Adjustment, if it exceeds Five Thousand Dollars ($5,000). Other than with
respect to any Purchase Price Adjustment, no indemnification obligation shall
arise hereunder unless and until the aggregate amount of Claims which
individually exceed Five Thousand Dollars ($5,000.00) hereunder exceeds One
Hundred Thousand Dollars ($100,000) (the "Basket"). In the event that the
amount of all Claims which individually exceed Five Thousand Dollars ($5,000.00)
exceeds the Basket, Sterigenics shall be entitled to collect the full amount of
such Claims.
(b) From and after the Closing, Sterigenics shall indemnify
and save harmless RTI, its shareholders, directors, officers and agents from and
against any and all losses, liabilities or expenses imposed on or incurred by
RTI or any such indemnified party as a result of (i) any failure by Sterigenics
to discharge the Assumed Liabilities or (ii) any failure of Sterigenics to
perform or comply in any material respect with any of the covenants and
agreements of Sterigenics set forth herein or in any document executed in
connection with the transactions contemplated hereby.
(c) As used in this Article XI, the term "Indemnitor" means
the party against whom indemnification hereunder is sought, and the term
"Indemnitee" means the party seeking indemnification hereunder. The following
are conditions precedent to any liability of an Indemnitor under Section 11.2(a)
or 11.2(b): (i) Indemnitee shall give Indemnitor prompt written notice of any
event or assertion of which it has knowledge concerning any Claims and as to
which it may request indemnification, which notice must be given within twelve
(12) months of the Closing; (ii) Indemnitee shall cooperate with and assist
Indemnitor in defending or settling the Claims; (iii) Indemnitee shall permit
Indemnitor to control the defense or settlement of the Claims, including
selection of counsel to represent Indemnitor and Indemnitee, provided that
32
such counsel shall be reasonably satisfactory to Indemnitee; provided that
Indemnitee may maintain separate counsel at its own cost and expense in
connection with any Claim; (iv) in no event shall Indemnitee compromise or
settle a Claim without the prior written approval of Indemnitor, which approval
shall not be unreasonably withheld; and (v) the assumption of the defense of any
Claim by Indemnitor shall be an acknowledgment by Indemnitee that such Claim is
subject to indemnification under the provisions of this Article XI unless notice
to the contrary is given and that such provisions are binding on Indemnitee.
If, however, Indemnitor fails or refuses to undertake the defense of such Claim
within ten (10) days after written notice of such Claim has been delivered to
Indemnitor by Indemnitee, Indemnitee shall have the right to undertake the
defense, and, subject to Subsection (iv) above, compromise and settlement of
such Claim with counsel of its own choosing. Failure of Indemnitee to furnish
written notice to Indemnitor of a Claim shall not release Indemnitor from
Indemnitor's obligations hereunder, except to the extent Indemnitor is
prejudiced by such failure.
(d) The indemnification obligations of Indemnitor under
Section 11.2(c) shall continue in full force and effect as to any Claim as to
which notice has been given pursuant to Section 11.2(c)(i) above until such
Claim has been settled either by mutual agreement of the parties concerned, by
arbitration in accordance with the provisions of this Agreement or, in the event
of a Claim resulting from legal action by a third party, by the final order,
decree or judgment of a court of competent jurisdiction in the United States of
America (the time for appeal having expired with no appeal having been taken).
The right of an Indemnitee to be indemnified under this Section 11.2 shall not
limit, reduce or otherwise affect any other rights and remedies each may have
with respect to the matters indemnified under this Agreement.
11.3 RESOLUTION OF DISPUTES. Any dispute over an indemnity claim
under Section 11.2 above (a "Contested Claim") shall be settled by arbitration
in the New York City metropolitan area and, except as herein specifically
stated, in accordance with Section 13.15 below. Sterigenics and RTI agree that
any of the parties may elect to postpone the arbitration of all Contested Claims
until one year from the Closing in order to consolidate the arbitration of all
Contested Claims.
ARTICLE XII
TERMINATION AND AMENDMENT
12.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing (with respect to Sections 12.1(b) through 12.1(g), by
written notice by the terminating party to the other party), whether before or
after approval of the matters presented in connection with the purchase and sale
of the Purchased Assets by the shareholders of RTI: (a) by mutual written
consent of Sterigenics and RTI; or (b) by either Sterigenics and RTI if the
Acquisition shall not have been consummated by November 27, 1996 (provided that
the right to terminate this Agreement under this Section 12.1(b) shall not be
available to any party whose failure to fulfill any material obligation under
this Agreement has been the cause of or resulted in the failure of the
Acquisition to occur on or before such date); or (c) by either Sterigenics or
RTI, if a court of competent jurisdiction or other Governmental Entity shall
have issued a nonappealable final order, decree or ruling or taken any other
action, in each case having the effect of
33
permanently restraining, enjoining or otherwise prohibiting the Acquisition,
except, if the party relying on such order, decree or ruling or other action has
not materially complied with its obligations under Article IX or Article X, as
applicable, of this Agreement; or (d) by Sterigenics if any of the conditions to
Sterigenics' obligations to effect the Acquisition which are specified in
Article IX have not been met or waived by Sterigenics at such time as such
condition is no longer reasonably capable of satisfaction, including the failure
to obtain any required approval of shareholders of RTI at a duly held meeting of
shareholders or at an adjournment or postponement thereof (provided Sterigenics
is not otherwise in material breach of its representations, warranties,
covenants or agreements under this Agreement); (e) by RTI if any of the
conditions to RTI's obligation to effect the Acquisition which are specified in
Article X have not been met or waived by RTI at such time as such condition is
no longer reasonably capable of satisfaction (provided RTI is not otherwise in
material breach of its representations, warranties, covenants or agreements
under this Agreement); (f) by Sterigenics or RTI, if there has been a material
breach of any representation, warranty, covenant or agreement on the part of the
other party set forth in this Agreement, which breach shall not have been cured
(in the case of RTI, a breach of representation and warranty will be deemed to
have been cured for purposes of this Section 12.1 if the condition to Closing
set forth in Section 9.1 can be met), in the case of a representation or
warranty, prior to the Closing or, in the case of a covenant or agreement,
within (ten) 10 business days following receipt by the breaching party of
written notice of such breach from the other party; or (g) by Sterigenics, if
(i) the Board of Directors of RTI shall have withdrawn or modified in a manner
adverse to Sterigenics its recommendation of this Agreement and the Acquisition
in a manner adverse to Sterigenics or shall have resolved to do either of the
foregoing; (ii) the Board of Directors of RTI shall have recommended to the
shareholders of RTI an Acquisition Proposal; (iii) a tender offer or exchange
offer for 15% or more of the outstanding shares of RTI Common Stock is commenced
(other than by Sterigenics or an affiliate of Sterigenics) and the Board of
Directors of RTI recommends that the shareholders of RTI tender their shares in
such tender or exchange offer; or (iv) for any reason RTI fails to hold the RTI
Shareholders' Meeting by November 27, 1996.
12.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 12.1, this Agreement shall immediately become
void and there shall be no liability or obligation on the part of Sterigenics,
RTI or their respective officers, directors, stockholders or shareholders, as
the case may be, or affiliates, except as set forth in Sections 12.3 and 12.4
and further except to the extent that such termination results from the
intentional breach by a party of any of its representations, warranties or
covenants set forth in this Agreement; provided that the provisions of
Sections 6.4 (5th sentence), 6.5(d) (5th, 6th, 7th and 8th sentences), 12.3 and
12.4 of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.
12.3 FEES AND EXPENSES.
(a) Subject to Section 12.3(b) and 12.3(c), if (i) the
Acquisition is consummated or (ii) this Agreement is terminated in accordance
with Section 12.1(b), 12.1(c), 12.1(d) or 12.1(e) hereof other than as a result
of a breach by either party, all costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense.
34
(b) Except as otherwise provided in this Section 12.3(b):
(i) if this Agreement is terminated as provided in Section 12.1(f) hereof, the
breaching party shall pay to the terminating party, within five business days
after receipt of a written request therefor, in same day funds, an amount equal
to all costs and expenses reasonably incurred by the terminating party in
connection with this Agreement and the transactions contemplated hereby,
including all reasonable legal, accounting, financial advisory, printing and
other professional and service fees and expenses not to exceed Two Hundred Fifty
Thousand Dollars ($250,000); provided, however, in the event that this Agreement
is terminated by a party as provided in Section 12.1(f) and the breaching party
also has the right to terminate this Agreement as provided in Section 12.1(f)
and notifies the terminating party thereof within ten (10) days after receipt by
the breaching party of notice of termination pursuant to this Section 12.1(f),
then the costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid only as set forth in
Section 12.3(a); (ii) if this Agreement is terminated (x) by Sterigenics
pursuant to Section 12.1(b) hereof or (y) by Sterigenics pursuant to
Section 12.1(d) as a result of the failure to receive the requisite vote to
approve this Agreement and the Acquisition at the RTI Shareholders' Meeting
(including any adjournments or postponements thereof) in each case if, at the
time of such failure, there shall have been announced an Acquisition Proposal
which shall not have been absolutely and unconditionally withdrawn or abandoned,
RTI shall pay Sterigenics, within five (5) business days after receipt of a
written request therefor, in same day funds, an amount equal to all costs and
expenses reasonably incurred by Sterigenics in connection with this Agreement
and the transactions contemplated hereby, including all reasonable legal,
accounting, financial advisory, printing and other professional and service fees
and expenses, not to exceed Two Hundred Fifty Thousand Dollars ($250,000).
(c) If this Agreement is terminated by Sterigenics as
provided in Section 12.1 as a result of the failure of Sterigenics to obtain the
permits necessary to operate the business of RTI, Sterigenics shall pay RTI,
within five (5) business days after receipt of a written request therefor, in
same day funds, an amount equal to all costs and expenses reasonably incurred by
RTI in connection with this Agreement and the transactions contemplated hereby,
including all reasonable legal, accounting, financial advisory, printing and
other professional and service fees and expenses, not to exceed Two Hundred
Fifty Thousand Dollars ($250,000).
12.4 OPTION TO PURCHASE NORTH CAROLINA PROPERTY. Upon the
execution by RTI of a definitive agreement resulting from an Acquisition
Proposal, Sterigenics shall have the option to purchase the North Carolina
Property, including its Improvements and the plant, property, equipment located
thereon, but excluding all Cobalt, free and clear of all Encumbrances other than
the Permitted Encumbrances for a purchase price equal to the book value of the
North Carolina Property as of the closing associated with the exercise of the
option plus Four Hundred Thousand Dollars ($400,000). The purchase option may be
exercised within sixty (60) days after the execution of such definitive
agreement, and the closing of Sterigenics' acquisition of the North Carolina
Property pursuant to the purchase option shall occur immediately prior to the
closing of the transaction contemplated by such definitive agreement. The terms
of such purchase option shall be as specified in the Option Agreement attached
hereto as EXHIBIT 12.4.
12.5 AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after
35
approval of the matters presented in connection with the Acquisition by the
shareholders of RTI, but, after any such approval, no amendment shall be made
which by law requires further approval by such shareholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
12.6 EXTENSION; WAIVER. At any time prior to the Closing Date,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
ARTICLE XIII
GENERAL
13.1 EXPENSES. Except as otherwise provided below in this
Agreement, the parties will each pay their own legal, accounting and other
professional expenses in connection with the transactions contemplated hereby.
13.2 BROKERS. Each party represents and warrants to the other
that no person has acted as a broker, a finder or in any similar capacity in
connection with the transactions contemplated hereby, except TM Capital
Corporation who shall be paid by Sterigenics. Each party shall indemnify the
other against, and agrees to hold the other harmless from, all liabilities and
expenses (including reasonable attorneys' fees and expenses) in connection with
any claim by anyone for compensation as a broker, a finder or in any similar
capacity, other than TM Capital Corporation, who is to be paid by Sterigenics at
the Closing, by reason of services allegedly rendered to the indemnifying party
in connection with the transactions contemplated hereby.
13.3 ENTIRE AGREEMENT. Except for that certain Confidentiality
Agreement by and between RTI and Sterigenics, dated October 3, 1995, this
Agreement, the Option Agreement and the Ancillary Documents contain the entire
agreement among the parties with respect to the matters contemplated hereby and
all prior negotiations, understandings and agreements among them, are superseded
by this Agreement.
13.4 ASSIGNMENT. Neither this Agreement nor any right of any
party under it may be assigned without the prior written consent of the other
party, which consent shall not be unreasonably withheld; provided, however, that
Sterigenics may assign its rights under this Agreement following the Closing to
any party that acquires Sterigenics through a merger or consolidation, purchase
of substantially all of Sterigenics' stock or a purchase of substantially all of
Sterigenics' assets. Notwithstanding the foregoing, RTI agrees that Sterigenics
may assign its rights to purchase the Purchased Assets and lease the Rockaway
Property and its obligations to assume the Assumed Liabilities to one or more
wholly-owned subsidiaries of Sterigenics; provided, however, that in the event
of such assignment, Sterigenics shall remain liable for the
36
performance of such subsidiaries under the terms of this Agreement and shall
execute and deliver to RTI a guarantee in a form reasonably satisfactory to RTI
with respect thereto.
13.5 NOTICES. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing and will be
deemed effective when delivered in person, on the first business day after the
day on which sent by confirmed facsimile, if promptly confirmed in writing, on
the third business day after the day on which mailed by first class mail from
within the United States of America, or the business day following delivery to a
national overnight courier service to the following addresses or to such other
address as either party may specify in writing to the other party in accordance
with the provisions of this Section 13.5.
If to Sterigenics: With a copy to:
Sterigenics International Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx
0000 Xxxxxxx Xxxxx Xxxxxxxx & Xxxxxxxxx, XXX
Xxxxxxx, XX 00000-0000 000 Xxxxxx Xxx, Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Facsimile No. (000) 000-0000 Facsimile No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx Attention: Xxxxx X. Xxxxxx
If to RTI: With a copy to:
RTI, Inc. Xxxxxxx Xxxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxx Xxxxxxxxxxx & Xxx, XXX
Xxxxxxxx, Xxx Xxxxxx 00000 000 Xxxxx Xxxxxx
Attention: Xxxx Xxxxxx Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxx
13.6 GOVERNING LAW. This Agreement will be governed by, and
construed under, the laws of the State of California without reference to
principles of conflicts of laws.
13.7 AMENDMENT. This Agreement may be amended only by a document
in writing signed by the parties.
13.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same agreement.
13.9 PUBLIC DISCLOSURE. No party shall disclose the terms of
this Agreement without the written consent of Sterigenics and RTI, except as
required by law or pursuant to the disclosure obligations of RTI under the rules
and regulations of the Securities and Exchange Commission.
37
13.10 FURTHER ASSURANCES. Each party agrees to execute such
further instruments and documents and to do such further acts as may be
reasonably requested by any other party to carry out the transactions
contemplated hereby.
13.11 NO RIGHTS CONFERRED UPON THIRD PARTIES. No provisions
of this Agreement are intended or shall be interpreted to provide or create any
rights of any kind in any third party unless specifically provided otherwise
herein, and, except as so provided, all provisions hereof shall be personal
solely to the parties to this Agreement.
13.12 ATTORNEYS' FEES. In any litigation relating to this
Agreement, including litigation with respect to any instrument, document or
agreement made under or in connection with this Agreement, the prevailing party
shall be entitled to recover its costs and reasonable attorneys' fees and
expenses.
13.13 HEADINGS. Captions and headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing it.
13.14 ARBITRATION. Any disputes between Sterigenics and RTI
with respect to this Agreement shall be settled by binding, final arbitration in
the New York City metropolitan area and in accordance with the commercial
arbitration rules of the American Arbitration Association then in effect ("AAA
Rules"). However, in all events, the following arbitration provisions shall
govern over any conflicting rules which may now or hereafter be contained in the
AAA Rules. Any judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction over the subject matter thereof. The
arbitrator shall have the authority to grant any equitable and legal remedies
that would be available. Sterigenics and RTI shall each advance fifty percent
(50%) of the initial compensation to be paid to the arbitrator in any such
arbitration and fifty percent (50%) of the costs of transcripts and other normal
and regular expenses of the arbitration proceedings; provided, however, that the
arbitrator shall have the discretion to grant to the prevailing party in any
arbitration an award of attorneys' fees and costs, and all costs of arbitration.
Arbitration shall be the sole and exclusive remedy of the parties for a breach
of this Agreement in the absence of fraud.
38
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
shown on the first page.
STERIGENICS INTERNATIONAL RTI INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxxxx Xxxx Xxxxxx
Title: President Title: President
----------------- -----------------
39
