Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
Among
XXXXXXX MEDICAL PRODUCTS,
XXXXXXXX-XXXXX CORPORATION
and
JAZZ ACQUISITION CORP.
Dated as of December 23, 1998
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME . . . . . . . . . . . . 2
1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Closing . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Effective Time . . . . . . . . . . . . . . . . . . . . 2
1.4. Further Assurances . . . . . . . . . . . . . . . . . . 2
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION . . . . . . . . . . . . . . . . 3
2.1. The Certificate of Incorporation . . . . . . . . . . . 3
2.2. The By-Laws . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION . . . . . . . . . . . . . . . . 3
3.1. Directors . . . . . . . . . . . . . . . . . . . . . . . 3
3.2. Officers . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES . . . . . . . . . . . . . . . . . . 4
4.1. Effect on Capital Stock . . . . . . . . . . . . . . . . 4
4.2. Exchange of Certificates for Shares . . . . . . . . . . 5
4.3. Dissenters' Rights . . . . . . . . . . . . . . . . . . 8
4.4. Adjustments of Exchange Ratio . . . . . . . . . . . . . 8
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 8
5.1. Representations and Warranties of the Company . . . . . 8
(a) Organization, Good Standing and Qualification . . 8
(b) Capital Structure . . . . . . . . . . . . . . . . 9
(c) Corporate Authority; Approval and Fairness . . . . 10
(d) Governmental Filings; No Violations . . . . . . . 11
(e) Company Reports; Financial Statements. . . . . . . 12
(f) Absence of Certain Changes . . . . . . . . . . . . 12
(g) Litigation and Liabilities . . . . . . . . . . . . 13
(h) Employee Matters . . . . . . . . . . . . . . . . . 13
(i) Compliance with Laws; Permits . . . . . . . . . . 15
(j) Takeover Statutes . . . . . . . . . . . . . . . . 16
(k) Environmental Matters . . . . . . . . . . . . . . 16
(l) Tax Matters . . . . . . . . . . . . . . . . . . . 17
(m) Taxes . . . . . . . . . . . . . . . . . . . . . . 17
(n) Intellectual Property . . . . . . . . . . . . . . 18
(o) Brokers and Finders . . . . . . . . . . . . . . . 19
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5.2. Representations and Warranties of Parent and Merger Sub 19
(a) Capitalization of Merger Sub . . . . . . . . . . . 20
(b) Organization, Good Standing and Qualification . . 20
(c) Capital Structure . . . . . . . . . . . . . . . . 20
(d) Corporate Authority . . . . . . . . . . . . . . . 21
(e) Governmental Filings; No Violations . . . . . . . 21
(f) Parent Reports; Financial Statements . . . . . . . 23
(g) Absence of Certain Changes . . . . . . . . . . . . 23
(h) Litigation and Liabilities . . . . . . . . . . . . 23
(i) Compliance with Laws; Permits . . . . . . . . . . 24
(j) Environmental Matters . . . . . . . . . . . . . . 24
(k) Tax Matters . . . . . . . . . . . . . . . . . . . 25
(l) Ownership of Shares . . . . . . . . . . . . . . . 25
(m) Brokers and Finders . . . . . . . . . . . . . . . 25
ARTICLE VI
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.1. Interim Operations . . . . . . . . . . . . . . . . . . 25
6.2. Acquisition Proposals . . . . . . . . . . . . . . . . . 28
6.3. Information Supplied . . . . . . . . . . . . . . . . . 29
6.4. Stockholders Meeting . . . . . . . . . . . . . . . . . 29
6.5. Filings; Other Actions; Notification . . . . . . . . . 29
6.6. Taxation . . . . . . . . . . . . . . . . . . . . . . . 31
6.7. Access . . . . . . . . . . . . . . . . . . . . . . . . 31
6.8. Affiliates . . . . . . . . . . . . . . . . . . . . . . 32
6.9. Stock Exchange Listing and De-listing . . . . . . . . . 32
6.10.Publicity . . . . . . . . . . . . . . . . . . . . . . . 33
6.11.Options and Benefits . . . . . . . . . . . . . . . . . 33
6.12.Fees and Expenses . . . . . . . . . . . . . . . . . . . 34
6.13.Indemnification; Directors' and Officers' Insurance . . 34
6.14.Takeover Statute . . . . . . . . . . . . . . . . . . . 36
6.15.Parent Vote . . . . . . . . . . . . . . . . . . . . . . 36
6.16.Notification of Certain Matters . . . . . . . . . . . . 36
ARTICLE VII
CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.1. Conditions to Each Party's Obligation to Effect the
Merger . . . . . . . . . . . . . . . . . . . . . . . . 36
7.2. Conditions to Obligations of Parent and Merger Sub . . 37
7.3. Conditions to Obligation of the Company . . . . . . . . 39
ARTICLE VIII
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 40
8.1. Termination . . . . . . . . . . . . . . . . . . . . . . 40
8.2. Effect of Termination . . . . . . . . . . . . . . . . . 43
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ARTICLE IX
MISCELLANEOUS AND GENERAL . . . . . . . . . . . . . . . . . 44
9.1. Survival . . . . . . . . . . . . . . . . . . . . . . . 44
9.2. Modification or Amendment . . . . . . . . . . . . . . . 44
9.3. Waiver of Conditions . . . . . . . . . . . . . . . . . 44
9.4. Counterparts . . . . . . . . . . . . . . . . . . . . . 44
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL . . . . . 45
9.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . 45
9.7. Entire Agreement; No Other Representations. . . . . . . 46
9.8. No Third Party Beneficiaries . . . . . . . . . . . . . 47
9.9. Obligations of Parent and of the Company . . . . . . . 47
9.10.Severability . . . . . . . . . . . . . . . . . . . . . 47
9.11.Interpretation . . . . . . . . . . . . . . . . . . . . 47
9.12.Assignment . . . . . . . . . . . . . . . . . . . . . . 47
9.13.Specific Performance . . . . . . . . . . . . . . . . . 48
9.14.Projections and Forward-Looking Information . . . . . . 48
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this
"Agreement"), dated as of December 23, 1998, among Xxxxxxx Medical
Products, a Utah corporation (the "Company"), Xxxxxxxx-Xxxxx
Corporation, a Delaware corporation ("Parent"), and Jazz Acquisition
Corp., a Utah corporation and a wholly-owned subsidiary of Parent
("Merger Sub," the Company and Merger Sub sometimes being
hereinafter collectively referred to as the "Constituent Corporations").
RECITALS
WHEREAS, the respective Boards of Directors of each of Parent,
Merger Sub and the Company have approved and declared advisable the
merger of Merger Sub with and into the Company (the "Merger") and
approved the Merger upon the terms and subject to the conditions set
forth in this Agreement, whereby each issued and outstanding share
of the Common Stock, par value $.10 per share, of the Company (a
"Share" or, collectively, the "Shares"), not owned directly or
indirectly by Parent or the Company, will be converted into shares
of Common Stock, $1.25 par value, of Parent ("Parent Common Stock");
WHEREAS, the respective Boards of Directors of Parent and the
Company have determined that the Merger is in furtherance of and
consistent with their respective long-term business strategies and
is fair to and in the best interests of their respective stockholders;
WHEREAS, it is intended that, for federal income tax purposes,
the Merger shall qualify as a reorganization under the provisions of
Section 368(a) of the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder (the "Code");
WHEREAS, for financial accounting purposes, it is intended that
the Merger will be accounted for as a "purchase;"
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition to Parent's willingness to enter into
this Agreement, Xxxx X. Xxxxxxx, solely in his capacity as a
stockholder of the Company (the "Stockholder"), has entered into an
agreement with Parent, in the form attached hereto as Exhibit A (the
"Company Stockholder Agreement"), pursuant to which the Stockholder
has agreed, among other things, to vote his Shares in favor of the
Merger; and
WHEREAS, as a condition to Parent's willingness to enter into
this Agreement, concurrently herewith: (i) the Company and Parent
are entering into a Consulting Agreement, a Severance Agreement and
Release, and a Noncompetition Agreement with Xxxx X. Xxxxxxx, dated
as of the date hereof; and (ii) the Company and Parent are entering
into Noncompetition Agreements with certain other officers and key
employees of the Company, each dated as of the date hereof
(collectively, such Consulting Agreement, Severance Agreement and
Release, and Noncompetition Agreements are referred to herein as the
"Executive Agreements");
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WHEREAS, as a condition to Parent's willingness to enter into
this Agreement, the Company and Parent are simultaneously entering
into the option agreement attached hereto as Exhibit B (the "Company
Option Agreement") pursuant to which the Company is granting an
option to Parent to purchase Shares on the terms and subject to the
conditions set forth therein; and
WHEREAS, the Company, Parent and Merger Sub desire to make
certain representations, warranties, covenants and agreements in
connection with this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained
herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. The Merger. Upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the Utah Revised
Business Corporation Act, as amended (the "URBCA"), at the Effective
Time (as defined in Section 1.3) Merger Sub shall be merged with and
into the Company and the separate corporate existence of Merger Sub
shall thereupon cease. The Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the
"Surviving Corporation"), and the separate corporate existence of
the Company with all its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger, except as set
forth in Article III. The Merger shall have the effects specified
in Section 16-10a-1106 of the URBCA.
1.2. Closing. The closing of the Merger (the "Closing") shall
take place (i) at the offices of Coudert Brothers, 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 9:00 A.M. on the third
business day after the day on which the last to be fulfilled or
waived of the conditions set forth in Article VII (other than those
conditions that by their nature are to be satisfied at the Closing,
but subject to the fulfillment or waiver of those conditions) shall
be satisfied or waived in accordance with this Agreement or (ii) at
such other place and time and/or on such other date as the Company
and Parent may agree in writing (the "Closing Date").
1.3. Effective Time. As soon as practicable following the
Closing, the Company and Parent will cause Articles of Merger (the
"Utah Articles of Merger") to be executed, acknowledged and filed
with the Secretary of State of Utah as provided in Section 16-10a-
1105 of the URBCA. The Merger shall become effective when the Utah
Articles of Merger have been duly filed with the Secretary of State
of Utah or, if otherwise agreed by the Company and Parent, such
later date or time as is established by the Utah Articles of Merger
(the "Effective Time").
1.4. Further Assurances. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that
any deeds, bills of sale, assignments or assurances or any other
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acts, agreements or things are necessary, desirable or proper (i) to
vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title and interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations or (ii) otherwise to carry
out the purposes of this Agreement, the Surviving Corporation and
its proper officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of
either Constituent Corporation, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of
either Constituent Corporation, all such other acts and things as
may be necessary, desirable or proper to vest, perfect or confirm
the Surviving Corporation's right, title and interest in, to and
under any of the rights, privileges, powers, franchises, properties
or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
ARTICLE II
CERTIFICATE OF INCORPORATION AND BY-LAWS
OF THE SURVIVING CORPORATION
2.1. The Certificate of Incorporation. The certificate of
incorporation of the Company as in effect immediately prior to the
Effective Time shall be the certificate of incorporation of the
Surviving Corporation (the "Charter"), until duly amended as
provided therein or by applicable law, except that Article IV of the
Articles of Incorporation shall be amended to read in its entirety
as follows: "Article IV. Shares. The aggregate number of shares
which this corporation shall have authority to issue is one hundred
(100) shares, par value $.10 per share. All shares of the
corporation shall be of the same class and shall have the same
rights and preferences. Fully paid stock of this corporation shall
not be liable to any further call or assessment."
2.2. The By-Laws. The by-laws of the Company in effect
immediately prior to the Effective Time shall be the by-laws of the
Surviving Corporation (the "By-Laws"), until thereafter amended as
provided therein or by applicable law, except that Sections 2 and 3
of Article V of the By-Laws shall be deleted and the remainder of
Article V and all cross-references to sections within Article V
shall be renumerated accordingly.
ARTICLE III
OFFICERS AND DIRECTORS
OF THE SURVIVING CORPORATION
3.1. Directors. The directors of Merger Sub immediately prior
to the Effective Time shall, from and after the Effective Time, be
the directors of the Surviving Corporation until their successors
have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Charter
and the By-Laws.
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3.2. Officers The officers of Merger Sub immediately prior to
the Effective Time shall, from and after the Effective Time, be the
officers of the Surviving Corporation until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Charter and the By-Laws.
ARTICLE IV
EFFECT OF THE MERGER ON CAPITAL STOCK;
EXCHANGE OF CERTIFICATES
4.1. Effect on Capital Stock. At the Effective Time, as a
result of the Merger and without any action on the part of the
holder of any capital stock of the Company:
(a) Merger Consideration. Each Share issued and
outstanding immediately prior to the Effective Time (other than
Shares owned by Parent, Merger Sub or any other direct or indirect
subsidiary of Parent (collectively, the "Parent Companies") or
Shares that are owned by the Company or any direct or indirect
subsidiary of the Company and in each case not held on behalf of
third parties (collectively, "Excluded Shares")) shall be converted
into, and become exchangeable for, that percentage of a validly
issued, fully paid and nonassessable share of Parent Common Stock
which is equal to the Exchange Ratio (as defined below), together
with the corresponding percentage of a right (such rights being
hereinafter referred to collectively as the "Parent Rights") to
purchase shares of Series A Junior Participating Preferred Stock of
Parent (the "Parent Series A Preferred Stock") pursuant to the
Rights Agreement, dated as of June 21, 1988, as amended and restated
as of June 8, 1995 (as so amended and restated, the "Parent Rights
Agreement") between Parent and The First National Bank of Boston, as
Rights Agent. All references in this Agreement to Parent Common
Stock to be received in accordance with the Merger shall be deemed,
from and after the Effective Time, to include the associated Parent
Rights. At the Effective Time, all Shares shall no longer be
outstanding and shall be canceled and retired and shall cease to
exist, and each certificate (a "Certificate") formerly representing
any of such Shares (other than Excluded Shares) shall thereafter
represent only the right to receive the shares of Parent Common
Stock into which such Shares have been converted, the right to
purchase the Parent Series A Preferred Stock pursuant to the Parent
Rights Agreement and the right, if any, to receive pursuant to
Section 4.2(e) cash in lieu of fractional shares into which such
Shares have been converted pursuant to this Section 4.1(a) and any
distribution or dividend pursuant to Section 4.2(c). As used in
this Agreement, the "Exchange Ratio" shall mean the quotient
(rounded to the nearest 1/10,000) determined by dividing $25.00 by
the average of the closing price per share of Parent Common Stock
on the New York Stock Exchange (the "NYSE") for the 10 trading days
immediately preceding the fifth trading day preceding the Closing
Date (the "Exchange Rate Period").
(b) Cancellation of Shares. Each Excluded Share issued
and outstanding immediately prior to the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof,
shall cease to be outstanding, shall be canceled and retired without
payment of any consideration therefor and shall cease to exist.
4
(c) Merger Sub. At the Effective Time, each share of
Common Stock, par value $0.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be
converted into one share of the Common Stock, par value $.10 per
share, of the Surviving Corporation.
4.2. Exchange of Certificates for Shares.
(a) Exchange Agent. As of the Effective Time, Parent
shall deposit, or shall cause to be deposited, with Boston
Equiserve, L.P. or a commercial bank having capital of not less than
$5 billion selected by Parent with the Company's prior approval,
which shall not be unreasonably withheld (the "Exchange Agent"), for
the benefit of the holders of Shares, certificates representing the
shares of Parent Common Stock, and, after the Effective Time, if
applicable, any cash, dividends or other distributions, with respect
to the Parent Common Stock, to be issued or paid pursuant to the
next to last sentence of Section 4.1(a) in exchange for Shares
outstanding immediately prior to the Effective Time upon due
surrender of the Certificates (or affidavits of loss and, if
reasonably required by Parent, indemnity bonds in lieu thereof)
pursuant to the provisions of this Article IV (such certificates for
shares of Parent Common Stock, together with the amount of any
dividends or other distributions payable with respect thereto, being
hereinafter referred to as the "Exchange Fund").
(b) Exchange Procedures. Promptly after the Effective
Time, the Surviving Corporation shall cause the Exchange Agent to
mail to each holder of record of Shares (other than holders of
Excluded Shares) (i) a letter of transmittal specifying that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates (or
affidavits of loss and, if reasonably required by Parent, indemnity
bonds in lieu thereof) to the Exchange Agent, such letter of
transmittal to be in such form and have such other provisions as
Parent and the Company may reasonably agree, and (ii) instructions
for use in effecting the surrender of the Certificates in exchange
for (A) certificates representing shares of Parent Common Stock and
(B) any unpaid dividends and other distributions and cash in lieu of
fractional shares. Upon surrender of a Certificate for cancellation
to the Exchange Agent together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to
receive in exchange therefor (x) a certificate representing that
number of whole shares of Parent Common Stock that such holder is
entitled to receive pursuant to this Article IV, (y) a check in the
amount (after giving effect to any required tax withholdings) of (A)
any cash in lieu of fractional shares plus (B) any unpaid non-stock
dividends and any other dividends or other distributions that such
holder has the right to receive pursuant to the provisions of this
Article IV, and the Certificate so surrendered shall forthwith be
canceled. No interest will be paid or accrued on any amount payable
upon due surrender of the Certificates. In the event of a transfer
of ownership of Shares that is not registered in the transfer
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records of the Company, a certificate representing the proper number
of shares of Parent Common Stock, together with a check for any cash
to be paid upon due surrender of the Certificate and any other
dividends or distributions in respect thereof, may be issued and/or
paid to such a transferee if the Certificate formerly representing
such Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and to
evidence that any applicable stock transfer taxes have been paid.
If any certificate for shares of Parent Common Stock is to be issued
in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of such
exchange that (i) the Person (as defined below) requesting such
exchange shall pay any transfer or other taxes required by reason of
the issuance of certificates for shares of Parent Common Stock in a
name other than that of the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of Parent or the
Exchange Agent that such tax has been paid or is not applicable, and
(ii) that the Certificate so surrendered shall be properly endorsed
and otherwise in proper form for transfer. Parent or the Exchange
Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any
holder of the Shares such amounts as Parent or the Exchange Agent
are required to deduct and withhold under the Code, or any provision
of state, local or foreign tax law, with respect to the making of
such payment. To the extent that amounts are so withheld by Parent
or the Exchange Agent, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of
the Shares in respect of whom such deduction and withholding was
made by Parent or the Exchange Agent.
For the purposes of this Agreement, the term "Person" shall
mean any individual, corporation (including not-for-profit), general
or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity (as
defined in Section 5.1(d)) or other entity of any kind or nature.
(c) Distributions with Respect to Unexchanged Shares;
Voting. (i) All shares of Parent Common Stock to be delivered
pursuant to the Merger shall be deemed issued and outstanding as of
the Effective Time and whenever a dividend or other distribution is
declared by Parent in respect of the Parent Common Stock, the record
date for which is at or after the Effective Time, that declaration
shall include dividends or other distributions in respect of all
shares issuable pursuant to this Agreement, provided that no
dividends or other distributions declared or made in respect of the
Parent Common Stock with a record date that is 10 days or more after
the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock
represented thereby until the holder of such Certificate shall
surrender such Certificate or affidavit of loss and, if reasonably
required by Parent, indemnity bond in lieu thereof in accordance
with this Article IV. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be issued
and/or paid to the holder of the certificates representing whole
shares of Parent Common Stock delivered in exchange therefor,
without interest, (A) at the time of such surrender, the dividends
6
or other distributions with a record date at or after the Effective
Time theretofore payable with respect to such whole shares of Parent
Common Stock and not paid and (B) at the appropriate payment date,
the dividends or other distributions payable with respect to such
whole shares of Parent Common Stock with a record date at or after
the Effective Time but with a payment date subsequent to surrender.
(ii) Holders of unsurrendered Certificates shall be
entitled to vote after the Effective Time at any meeting of Parent
stockholders the number of whole shares of Parent Common Stock
represented by such Certificates, regardless of whether such holders
have exchanged their Certificates.
(d) Transfers. After the Effective Time, there shall be
no transfers on the stock transfer books of the Company of the
Shares that were outstanding immediately prior to the Effective
Time.
(e) Fractional Shares. No certificates or scrip
representing fractional shares of Parent Common Stock shall be
issued upon the surrender for exchange of Certificates pursuant to
this Article IV; no dividend or other distribution by Parent and no
stock split, combination or reclassification shall relate to any
such fractional share; and no such fractional share shall entitle
the record or beneficial owner thereof to vote or to any other
rights of a stockholder of Parent. In lieu of any such fractional
share, each holder of Shares who would otherwise have been entitled
thereto upon the surrender of Certificate(s) for exchange pursuant
to this Article IV will be paid an amount in cash (without interest)
rounded up to the nearest whole cent, determined by multiplying (i)
the per share closing price on the NYSE of Parent Common Stock (as
reported in the NYSE Composite Transactions) on the date on which
the Effective Time shall occur (or, if the Parent Common Stock shall
not trade on the NYSE on such date, the first day of trading in
Parent Common Stock on the NYSE thereafter) by (ii) the fraction of
a share of Parent Common Stock to which such holder would otherwise
be entitled.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund (including the proceeds of any investments thereof and
any Parent Common Stock) that remains unclaimed by the stockholders
of the Company for 180 days after the Effective Time shall be paid
to Parent. Any stockholders of the Company who have not theretofore
complied with this Article IV shall thereafter look only to Parent
for payment of their shares of Parent Common Stock and any cash,
dividends and other distributions in respect thereof payable and/or
issuable pursuant to Section 4.1, Section 4.2(c) or Section 4.2(e)
upon due surrender of their Certificates (or affidavits of loss and,
if reasonably required by Parent, indemnity bonds in lieu thereof),
in each case, without any interest thereon. Notwithstanding the
foregoing, none of Parent, the Surviving Corporation, the Exchange
Agent or any other Person shall be liable to any former holder of
Shares for any amount properly delivered to a public official
pursuant to applicable abandoned property, escheat or similar laws.
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(g) Lost, Stolen or Destroyed Certificates. In the event
any Certificate shall have been lost, stolen or destroyed, upon the
making and delivery to the Exchange Agent of an affidavit of that
fact by the Person claiming such Certificate to be lost, stolen or
destroyed, a properly completed letter of transmittal and, if
reasonably required by Parent, the posting by such Person of a bond
in customary amount as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will
deliver in exchange for such lost, stolen or destroyed Certificate
the shares of Parent Common Stock and any cash payable and any
unpaid dividends or other distributions in respect thereof pursuant
to Section 4.2(c) or Section 4.2(e) upon due surrender of, and
deliverable in respect of the Shares represented by, such
Certificate pursuant to this Agreement.
4.3. Dissenters' Rights. In accordance with Section 16-10a-
1302 of the URBCA, no appraisal rights shall be available to holders
of Shares in connection with the Merger.
4.4. Adjustments of Exchange Ratio. In the event that the
Company changes the number of Shares or securities convertible or
exchangeable into or exercisable for Shares or, during the period
between the commencement of the Exchange Rate Period and the Closing
Date, Parent changes the number of shares of Parent Common Stock or
securities convertible or exchangeable into or exercisable for
shares of Parent Common Stock, issued and outstanding prior to the
Effective Time as a result of a reclassification, stock split
(including a reverse split), dividend or distribution (other than
quarterly cash dividends), recapitalization, merger (other than the
Merger), subdivision, issuer tender or exchange offer for the
issuer's own shares (other than repurchases by Parent between the
date hereof and the Effective Time of less than 5% of the
outstanding shares of Parent Common Stock pursuant to Rule 10b-18,
promulgated under the Securities Exchange Act of 1934, as amended),
or other similar transaction with a materially dilutive effect, or
if a record date with respect to any of the foregoing shall occur
prior to the Effective Time, the Exchange Ratio shall be equitably
adjusted.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1. Representations and Warranties of the Company. Except as
set forth in the disclosure letter (any matter disclosed in any
section thereof being deemed to have been disclosed with respect to
all other sections thereof) delivered to Parent by the Company on or
prior to entering into this Agreement (the "Company Disclosure
Letter"), the Company hereby represents and warrants to Parent and
Merger Sub that:
(a) Organization, Good Standing and Qualification. Each
of the Company and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction of organization and has all requisite
corporate or similar power and authority to own and operate its
8
properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in
good standing is not reasonably likely to have, individually or in
the aggregate, a Company Material Adverse Effect (as defined below).
The Company has made available to Parent a complete and correct copy
of the Company's and its Subsidiaries' certificates of incorporation
and by-laws, each as amended to date. The Company's and its
Subsidiaries' certificates of incorporation and by-laws so made
available are in full force and effect.
As used in this Agreement, the terms (i) "Subsidiary" means,
with respect to the Company, Parent or Merger Sub, as the case may
be, any entity, whether incorporated or unincorporated, of which at
least a majority of the securities or ownership interests having by
their terms ordinary voting power to elect a majority of the Board
of Directors or other persons performing similar functions is
directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries or by such party and any one
or more of its respective Subsidiaries and (ii) "Company Material
Adverse Effect" means a material adverse effect on the financial
condition, properties or results of operations of the Company and
its Subsidiaries taken as a whole; provided, however, that any such
effect resulting from any change (A) in law, rule or regulation
applicable to all companies and businesses generally, or to the
disposable medical products industry specifically, (B) in economic
or business conditions generally, or in the disposable medical
products industry specifically, or (C) in the securities markets in
general, shall not be considered when determining if a Company
Material Adverse Effect has occurred.
(b) Capital Structure. The authorized capital stock of
the Company consists of 75,000,000 shares of common stock, par value
$.10 per share, of which 30,548,908 Shares were outstanding as of
the close of business on December 15, 1998. All of the outstanding
Shares have been duly authorized and are validly issued, fully paid
and nonassessable. The Company has no Shares reserved for issuance,
except for (i) Shares reserved for issuance upon exercise of options
pursuant to the Company Option Agreement, (ii) as of December 15,
1998, 750,018 Shares reserved under the Company's 1988 Incentive
Stock Option Plan, 1,125,021 Shares reserved under the Company's
1990 Incentive Stock Option Plan, 750,000 Shares reserved under the
Company's 1991 Incentive Stock Option Plan, 200,000 Shares reserved
under the Company's 1992 Incentive Stock Option Plan, 600,000 Shares
reserved under the Company's 1993 Incentive Stock Option Plan,
600,000 Shares reserved under the Company's 1994 Incentive Stock
Option Plan, 700,000 Shares reserved under the Company's 1995
Incentive Stock Option Plan, 700,000 Shares reserved under the
Company's 1996 Incentive Stock Option Plan, 750,000 Shares reserved
under the Company's 1997 Incentive Stock Option Plan, and 750,000
Shares reserved under the Company's 1998 Incentive Stock Option Plan
(which Incentive Stock Option Plans are hereinafter collectively
referred to as the "Stock Plans") and (iii) 10,000 Shares reserved
pursuant to options granted to a consultant. No stock options or
9
other rights have been granted to any person under the 1998
Incentive Stock Option Plan. The Company Disclosure Letter contains
a correct and complete list as of December 15, 1998 of each
outstanding option to purchase Shares under the Stock Plans (each a
"Company Option"), including the holder, grant date, vesting date,
exercise price and number of Shares subject thereto. Each of the
outstanding shares of capital stock or other securities of each of
the Company's Subsidiaries is duly authorized, validly issued, fully
paid and nonassessable and owned by the Company or a direct or
indirect wholly-owned subsidiary of the Company, free and clear of
any lien, pledge, security interest, right of first refusal
agreement, limitation on voting rights, claim or other encumbrance.
Except as set forth above, there are no preemptive or other
outstanding rights (other than rights accruing to the Company or its
Subsidiaries), options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments by the Company to issue or
sell any shares of capital stock or other securities of the Company
or any of its Subsidiaries or any securities or obligations
convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the
Company or any of its Subsidiaries, and no securities or obligations
evidencing such rights are authorized, issued or outstanding. The
Company does not have outstanding any bonds, debentures, notes or
other obligations the holders of which have the right to vote (or
convertible into or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter.
(c) Corporate Authority; Approval and Fairness. As of
the date hereof, the Board of Directors of the Company has duly
approved this Agreement, the Company Option Agreement and the
Executive Agreements and has resolved to recommend the adoption of
this Agreement by the Company's stockholders and directed that this
Agreement be submitted to the Company's stockholders for approval.
The Company has all corporate power and authority to enter into this
Agreement, the Company Option Agreement and the Executive Agreements
and to consummate the transactions contemplated hereby and thereby,
subject to the adoption of this Agreement by the holders of at least
a majority of the outstanding Shares (the "Company Requisite Vote").
The execution, delivery and performance of this Agreement, the
Company Option Agreement and the Executive Agreements by the Company
and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to adoption of
this Agreement by the stockholders of the Company. This Agreement,
the Company Option Agreement and the Executive Agreements have been
duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of such agreements by each
other party thereto) constitute valid and binding agreements of the
Company enforceable against the Company in accordance with their
terms, except that enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights (the "Bankruptcy Exception") and is subject to
general equity principles (the "Equity Exception").
10
(d) Governmental Filings; No Violations. (i) Other
than the filings and/or notices (A) pursuant to Section 1.3, (B)
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), and comparable international antitrust
laws, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the Securities Act of 1933, as amended (the "Securities
Act"), (C) to comply with state securities or "blue-sky" laws, if
any, and (D) required to be made with the NYSE, no notices, reports
or other filings are required to be made by the Company or any of
its Subsidiaries with, nor are any consents, registrations,
approvals, permits or authorizations required to be obtained by the
Company or any of its Subsidiaries from, any governmental or
regulatory authority, agency, commission, body or other governmental
entity ("Governmental Entity"), in connection with the execution and
delivery of this Agreement or the Company Option Agreement by the
Company and the consummation by the Company of the Merger and the
other transactions contemplated hereby or thereby, except those that
the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Company Material Adverse
Effect or prevent, materially delay or materially impair the ability
of the Company to consummate the transactions contemplated by this
Agreement.
(ii) The execution, delivery and performance of this
Agreement, the Company Option Agreement and the Executive Agreements
by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated hereby or thereby
will not, constitute or result in (A) a breach or violation of, or a
default under, the certificate of incorporation or by-laws of the
Company or the comparable governing instruments of any of its
Subsidiaries, (B) a breach or violation of, or a default under, the
acceleration of any obligations or the creation of a lien, pledge,
security interest or other encumbrance on the assets of the Company
or any of its Subsidiaries (with or without notice, lapse of time or
both) pursuant to, any loan or credit agreement, note, bond,
indenture or other instrument evidencing indebtedness for borrowed
money ("Debt Contracts") or any other agreement, lease, contract,
arrangement or other obligation ("Other Contracts") binding upon the
Company or any of its Subsidiaries or any Law (as defined in Section
5.1(i)) or governmental or non-governmental permit or license to
which the Company or any of its Subsidiaries is subject or any
judgment, order or decree to which the Company or any of its
Subsidiaries or any of its properties is subject or (C) any change
in the rights or obligations of any party under any of the Debt
Contracts or Other Contracts, except, in the case of clause (B) or
(C) above, for any breach, violation, default, acceleration,
creation or change that, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect or
prevent, materially delay or materially impair the ability of the
Company to consummate the transactions contemplated by this
Agreement or the Company Option Agreement.
(iii) (A) There is no event of default, or event
that, but for the giving of notice or lapse of time, or both, would
constitute an event of default under any Debt Contract binding upon
the Company or any of its Subsidiaries, and (B) there is no event of
11
default, or event that, but for the giving of notice or lapse of
time, or both, would constitute an event of default under any Other
Contract binding upon the Company or any of its Subsidiaries which
would, in either case (A) or (B), individually or in the aggregate,
be reasonably likely to have a Company Material Adverse Effect.
(e) Company Reports; Financial Statements. Since
September 30, 1996 (the "Audit Date"), the Company has filed all
reports and other documents that it was required to file with the
Securities and Exchange Commission (the "SEC"). Each registration
statement, report, proxy statement or information statement
(including exhibits, annexes and any amendments thereto) filed by it
with the SEC (collectively, including any such reports filed
subsequent to the date hereof, the "Company Reports") since the
Audit Date was filed with the SEC electronically via and is
available on the SEC's XXXXX system. As of their respective dates,
the Company Reports did not, and any Company Reports filed with the
SEC subsequent to the date hereof will not, contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
made therein, in light of the circumstances in which they were made,
not misleading. Each of the consolidated balance sheets included in
or incorporated by reference into the Company Reports (including the
related notes and schedules) fairly presents, or will fairly
present, in all material respects, the consolidated financial
position of the Company and its Subsidiaries as of its date and each
of the consolidated statements of operations, stockholders' equity
and of cash flows included in or incorporated by reference into the
Company Reports (including any related notes and schedules) fairly
presents, or will fairly present, in all material respects, the
results of consolidated operations, stockholders' equity and cash
flows, as the case may be, of the Company and its Subsidiaries for
the periods set forth therein (subject, in the case of unaudited
statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in accordance
with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except as may be noted therein.
(f) Absence of Certain Changes. Except as disclosed or
reflected in the Company Reports filed prior to the date hereof or
disclosed or reflected in the Company's 1998 audited financial
statements, a copy of which has been furnished to Parent (the
"Audited Financials"), since September 30, 1997 the Company and its
Subsidiaries have conducted their respective businesses only in, and
have not entered into or engaged in any material transaction other
than in, the ordinary and usual course of such businesses and there
has not been (i) any change in the financial condition, properties,
business or results of operations of the Company and its
Subsidiaries that, individually or in the aggregate, has had or is
reasonably likely to have a Company Material Adverse Effect; (ii)
any damage, destruction or other casualty loss with respect to any
asset or property owned, leased or otherwise used by the Company or
any of its Subsidiaries, whether or not covered by insurance except
as is not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect; (iii) any declaration,
setting aside or payment of any dividend or other distribution in
12
respect of the capital stock of the Company, except for dividends or
other distributions on its capital stock publicly announced prior to
the date hereof; or (iv) any material change by the Company in
accounting principles, practices or methods. Since September 30,
1997, except as provided for herein or as disclosed in the Company
Reports filed prior to the date hereof or as disclosed or reflected
in the Audited Financials, there has not been any increase in the
compensation payable or that could become payable by the Company or
any of its Subsidiaries to officers or key employees or any
amendment of any of the Compensation and Benefit Plans (as defined
in Section 5.1(h)) other than increases or amendments in the
ordinary course.
(g) Litigation and Liabilities. Except as disclosed or
reflected in the Company Reports filed prior to the date hereof or
as disclosed in the Audited Financials, and except for obligations
and liabilities arising in the ordinary and usual course since the
date on which the Company's Quarterly Report in Form 10-Q for its
third fiscal quarter ended June 30, 1998 was filed with the SEC
(which obligations and liabilities have not had, and are not
reasonably expected to have, individually or in the aggregate, a
Company Material Adverse Effect), there are no (i) civil, criminal
or administrative actions, suits, claims, hearings, investigations
or proceedings pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any
current or former director or officer of the Company or any of its
Subsidiaries (in their capacity as such) or (ii) obligations or
liabilities, whether or not accrued, contingent or otherwise,
including those relating to matters involving any Environmental Law
(as defined in Section 5.1(k)), that, in the case of either clause
(i) or (ii), individually or in the aggregate, are reasonably likely
in either such case to have a Company Material Adverse Effect or
prevent or materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by this
Agreement or, as of the date hereof, the Company Option Agreement.
Except as disclosed in the Company Reports filed prior to the date
hereof or as disclosed in the Audited Financials, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against the Company or any of its Subsidiaries,
any of its or their properties, assets or business, or, to the
knowledge of the executive officers of the Company, any of its or
their current or former directors or officers (in their capacity as
such), that is reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
(h) Employee Matters.
(i) Neither the Company nor its Subsidiaries has any
labor contracts or collective bargaining agreements with respect to
any persons employed by the Company or its Subsidiaries. Neither
the Company nor its Subsidiaries has engaged in any unfair labor
practice except as is not reasonably likely to have, individually or
in the aggregate, a Company Material Adverse Effect. As of the date
hereof, there is no unfair labor practice complaint pending or, to
the knowledge of the executive officers of the Company, threatened
against the Company or any of its Subsidiaries. There is no labor
13
strike, dispute, slowdown, or stoppage pending or, to the knowledge
of the executive officers of the Company, threatened against the
Company or its Subsidiaries, and neither the Company nor its
Subsidiaries has experienced any primary work stoppage or labor
difficulty involving its employees during the last three years,
except in each case as is not reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect.
(ii) Set forth in Section 5.1(h) of the Company
Disclosure Letter is a true and complete list of each bonus,
deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase,
restricted stock, stock option, employment, termination, severance,
compensation, medical, health, welfare, fringe benefits or other
plan, agreement, policy or arrangement which the Company or any of
its Subsidiaries maintains, or as to which the Company or any of its
Subsidiaries is or will be required to make any payment for the
benefit of any employee, director, former employee or former
director of the Company and its Subsidiaries (the "Compensation and
Benefit Plans"). The Company has delivered or made available to
Parent with respect to each Compensation and Benefit Plan correct
and complete copies, where applicable, of (i) all plan documents and
amendments thereto, trust agreements and amendments thereto and
insurance and annuity contracts and policies, (ii) the current
summary plan description, (iii) the Annual Reports (Form 5500
series) and accompanying schedules, as filed, for the most recently
completed two plan years for which such reports have been filed,
(iv) the financial statements for the most recently completed two
plan years for which statements have been prepared, (v) the most
recent determination letter issued by the Internal Revenue Service
(the "IRS") and the application submitted with respect to such
letter, and (vi) all correspondence with the IRS or Department of
Labor concerning any pending controversy. Any "change of control"
or similar provisions contained in any Compensation and Benefit Plan
are specifically identified in Section 5.1(h) of the Company
Disclosure Letter.
(iii) All Compensation and Benefit Plans have
been established and administered in all material respects in
accordance with their terms and are in compliance in all material
respects with all applicable laws, including the Code and the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"). Each Compensation and Benefit Plan that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA (a
"Pension Plan") and that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter
from the IRS, and the Company is not aware as of the date hereof of
any circumstances likely to result in revocation of any such
favorable determination letter or of any circumstance indicating
that any such plan is not so qualified in operation. As of the date
hereof, there is no pending or, to the knowledge of the executive
officers of the Company, material threatened litigation, claim
(other than routine claims for benefits) or audit by any Person
relating to the Compensation and Benefit Plans. To the knowledge of
the executive officers of the Company, no prohibited transaction
described in Section 406 of ERISA or Section 4975 of the Code has
14
occurred which would be expected to result in material liability to
the Company or its Subsidiaries, assuming that, for purposes of
determining materiality, the "taxable period" within the meaning of
Section 4975 of the Code with respect to such prohibited transaction
had expired as of the date hereof.
(iv) As of the date hereof, no liability under
Subtitle C or D of Title IV of ERISA has been or is expected to be
incurred by the Company or any Subsidiary with respect to any
ongoing, frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by any of them, or the single-employer plan of any entity
which is considered one employer with the Company under Section 4001
of ERISA or Section 414 of the Code (an "ERISA Affiliate"). None of
the Company, its Subsidiaries and their ERISA Affiliates have
contributed, or been obligated to contribute, to a multiemployer
plan under Subtitle E of Title IV of ERISA at any time, and no
liability has been or is expected to be incurred by the Company or
any Subsidiary with respect to any such plan. None of the Company,
any of its Subsidiaries or any ERISA Affiliate contributes to or
maintains a Pension Plan subject to Title IV of ERISA or has
contributed to or maintained any such plan at any time during the
six-year period prior to the date hereof.
(v) All contributions required to be made under the
terms of any Compensation and Benefit Plan as of the date hereof,
have been timely made or have been reflected on the most recent
consolidated balance sheet filed or incorporated by reference in the
Company Reports prior to the date hereof.
(vi) Neither the Company nor its Subsidiaries have
any obligations for retiree health and life benefits under any
Compensation and Benefit Plan, except as required under Part 6 of
Title I of ERISA.
(vii)Except as contemplated by this Agreement or
disclosed in Section 5.1(h) of the Company Disclosure Letter, the
consummation of the Merger and the other transactions contemplated
by this Agreement and the Company Option Agreement will not (x)
entitle any employees of the Company or its Subsidiaries to
severance pay or entitle them to severance pay upon their
termination of employment, (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation
pursuant to, any of the Compensation and Benefit Plans or the Stock
Plans or (z) result in any material breach or violation of, or a
material default under, any of the Compensation and Benefit Plans or
the Stock Plans.
(i) Compliance with Laws; Permits. Except as set forth
in the Company Reports filed prior to the date hereof, the
businesses of each of the Company and its Subsidiaries are being
conducted in compliance with applicable federal, state, local and
foreign laws (collectively, "Laws"), except for such violations
that, individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect or prevent or materially
15
burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement or the Company
Option Agreement. The Company and its Subsidiaries each has all
permits, licenses, franchises, variances, exemptions, orders and
other governmental authorizations, consents and approvals necessary
to own or lease and operate their respective properties and conduct
its business as presently conducted except those the absence of
which are not, individually or in the aggregate, reasonably likely
to have a Company Material Adverse Effect or prevent or materially
burden or materially impair the ability of the Company to consummate
the Merger and the other transactions contemplated by this Agreement
and the Company Option Agreement.
(j) Takeover Statutes. No "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute
or regulation (including the Utah Control Shares Acquisitions Act)
(each a "Takeover Statute") or any applicable anti-takeover
provision in the Company's certificate of incorporation and by-laws
or any shareholder rights agreement is, or at the Effective Time
will be, applicable to the Company, the Shares, the Merger or the
other transactions contemplated by this Agreement or the Company
Option Agreement.
(k) Environmental Matters. Except as disclosed in the
Company Reports filed prior to the date hereof and except for such
matters that, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect (i) to the
knowledge of the Company, the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws; (ii) neither the
Company nor any of its Subsidiaries has received any written notices
from any Governmental Entity or any other person or entity alleging
the violation of any applicable Environmental Law (as defined
below); (iii) the Company and its Subsidiaries are not the subject
of any court order, administrative order or decree arising under any
Environmental Law; (iv) to the knowledge of the executive officers
of the Company, there has not been a release of Hazardous Substances
(as defined below) on any of the properties owned or operated by the
Company or any of its Subsidiaries; and (v) to the knowledge of the
Company, neither the Company nor any of its Subsidiaries has
generated, stored, used, emitted, discharged or disposed of any
Hazardous Substances in violation of or giving rise to liability
under applicable Environmental Laws.
As used in this Agreement (i) the term "Environmental Law"
means any federal, state or local law, statute, ordinance, rule,
regulation, code, license, permit, order, decree or injunction
relating to the protection of the environment (including air, water,
soil and natural resources) or regulating or imposing standards of
care with respect to the use, storage, handling, release or disposal
of any Hazardous Substance, including petroleum; and (ii) the term
"Hazardous Substance" means any substance listed, defined,
designated, regulated or classified as hazardous, toxic or
radioactive under any applicable Environmental Law, including
petroleum and petroleum products.
16
(l) Tax Matters. As of the date hereof, neither the
Company nor any of its Affiliates (as defined below) has taken or
agreed to take any action, nor do the executive officers of the
Company have any knowledge of any fact or circumstance, that would
prevent the Merger and the other transactions contemplated by this
Agreement from qualifying as a "reorganization" within the meaning
of Section 368(a) of the Code. An "Affiliate" of a party is a
Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with it.
(m) Taxes. The Company and each of its Subsidiaries (i)
have prepared in good faith and duly and timely filed (taking into
account any extension of time within which to file) all Tax Returns
(as defined below) required to be filed by any of them; (ii) have
paid all Taxes (as defined below) that are shown as due on such
filed Tax Returns except for Taxes provided for in a reserve which
is adequate for the payment of such Taxes and is reflected in the
financial statements included in or incorporated by reference into
the Company Reports filed prior to the date hereof or the books and
records of the Company; and (iii) as of the date hereof, have not
waived any statute of limitations with respect to Taxes or agreed to
any extension of time with respect to a Tax assessment or
deficiency. There are not, to the knowledge of the Company, any
unresolved questions or claims concerning the Company's or any of
its Subsidiaries' Tax liability that are reasonably likely to have a
Company Material Adverse Effect. As of the date hereof, there are no
pending or, to the knowledge of the Company, threatened audits,
examinations, investigations or other proceedings in respect of
Taxes or Tax matters. The Company has made available to Parent true
and correct copies of the United States federal income Tax Returns
filed by the Company and its Subsidiaries for each of the fiscal
years ended 1997, 1996, and 1995. As a result of the transactions
contemplated by this Agreement, the Company Option Agreement and the
Executive Agreements or the transactions contemplated hereby or
thereby, none of the Company, Parent or their Subsidiaries will be
obligated to make a payment that would be an "excess parachute
payment" to an individual that is currently a "disqualified
individual" with respect to the Company as those terms are defined
in Section 280G of the Code, without regard to whether such payment
is reasonable compensation for personal services performed or to be
performed in the future. The Company is not, nor has it ever been,
a party to any Tax sharing agreement and has not assumed the Tax
liability of any other person. The Company has disclosed on its
federal income tax returns all positions it has taken that could
give rise to a substantial understatement penalty within the
meaning of Code Section 6662. To the knowledge of the executive
officers of the Company, the representations set forth in the
Company Tax Certificate (as defined in Section 7.2 (d)) attached to
the Company Disclosure Letter are true and correct in all material
respects.
As used in this Agreement, (i) the term "Tax" (including,
with correlative meaning, the terms "Taxes" and "Taxable") includes
all federal, state, local and foreign income, profits, franchise,
gross receipts, environmental, customs duty, capital stock,
17
severance, stamp, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value
added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts and any interest in
respect of such penalties and additions, and (ii) the term "Tax
Return" includes all returns and reports (including elections,
declarations, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to
Taxes.
(n) Intellectual Property.
(i) The Company and/or its Subsidiaries owns all
right, title and interest to, or has the right to use pursuant to a
valid license (each of which licenses is listed under Section 5.1(n)
of the Company Disclosure Letter), as the case may be, all
Intellectual Property Rights (as defined below) used in the business
of the Company and its Subsidiaries as presently conducted, except
for any failure to own or right to use that, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect. None of the Intellectual Property Rights are
subject to any lien of any third party recorded in the U.S. Patent
and Trademark Office.
(ii) Defendants in the litigation captioned Xxxxxxx
Medical Products v. Allegiance Healthcare Corporation and Xxxxxxxx
Critical Care, Inc., C. D. Utah, Civil No: 2:97 CV 0985J have
alleged that the patents-in-suit are invalid and unenforceable. The
Company denies such allegations and believes that the patents will
be held to be valid and enforceable.
(iii) Other than as described in subparagraph
(ii) above, all issued patents and registered trademarks owned by
the Company and its Subsidiaries are valid and enforceable, except
for any invalidity or unenforceability that, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(iv) Except as is not reasonably likely to have a
Company Material Adverse Effect:
(A) Neither the Company nor any of its
Subsidiaries is, nor will the Company or any of its Subsidiaries be,
as a result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in violation of any
license, sublicense, or other agreement as to which the Company or
any of its Subsidiaries is a party and pursuant to which the Company
or any of its Subsidiaries is authorized to use any third-party
Intellectual Property Rights or computer software programs or
applications; and
(B) To the knowledge of the Company, there are
no infringements, misappropriations or violations of any
Intellectual Property Rights of any other person that has occurred
or results in any way from the operations of the respective
businesses (excluding products under development) of the Company or
18
its Subsidiaries. No claim of any infringement, misappropriation or
violation of any Intellectual Property Rights of any other person
has been made or asserted in respect of the operations of the
respective businesses of the Company or its Subsidiaries. Neither
the Company nor any of its Subsidiaries has had notice of, nor does
the Company have knowledge of any valid grounds for, any bona fide
claim against the Company or its Subsidiaries that its Intellectual
Property Rights, operations, activities, products (excluding
products under development) software, equipment, machinery or
processes infringe, misappropriate or violate any Intellectual
Property Rights of any other Person.
(C) The Company and its Subsidiaries do not own
any software.
(v) The Company has paid all maintenance and annuity
fees for all patents and patent applications that are material to
the Company and its Subsidiaries.
(vi) As used in this Agreement, the term
"Intellectual Property Rights" means:
(A) All United States and foreign patents,
patent applications, continuations, continuations-in-part,
continuing prosecution applications, divisions, reissues, patent
disclosures, extensions, re-examinations, inventions (whether or not
patentable) or improvements thereto;
(B) All United States, state, foreign, and
common law trademarks, service marks, domain names, logos, trade
dress and trade names (including all assumed or fictitious names
under which the Company and each Subsidiary is conducting its
business), whether registered or unregistered, and pending
applications to register the foregoing;
(C) All United States and foreign copyrights,
whether registered or unregistered and pending applications to
register the same; and
(D) All confidential ideas, trade secrets,
know-how, concepts, methods, processes, formulae, reports, data,
customer lists, mailing lists, business plans and other proprietary
information.
(o) Brokers and Finders. Neither the Company nor any of
its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the Merger or the other
transactions contemplated by this Agreement, except that the Company
has employed Bear, Xxxxxxx & Co. Inc. as its financial advisor,
pursuant to arrangements which have been disclosed to Parent prior
to the date hereof.
5.2. Representations and Warranties of Parent and Merger Sub.
Except as set forth in the corresponding sections or subsections of
the disclosure letter delivered to the Company by Parent on or prior
19
to entering into this Agreement (the "Parent Disclosure Letter"),
Parent and Merger Sub each hereby represent and warrant to the
Company that:
(a) Capitalization of Merger Sub. The authorized capital
stock of Merger Sub consists of 100 shares of Common Stock, par
value $0.01 per share, 100 shares of which are validly issued and
outstanding. All of the issued and outstanding capital stock of
Merger Sub is, and at the Effective Time will be, owned by Parent,
and there are (i) no other shares of capital stock or voting
securities of Merger Sub, (ii) no securities of Merger Sub
convertible into or exchangeable for shares of capital stock or
voting securities of Merger Sub and (iii) no options or other rights
to acquire from Merger Sub, and no obligations of Merger Sub to
issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting
securities of Merger Sub. Merger Sub has not conducted any business
prior to the date hereof and has no, and prior to the Effective Time
will have no, assets, liabilities or obligations of any nature other
than those incident to its formation and pursuant to this Agreement
and the Merger and the other transactions contemplated by this
Agreement.
(b) Organization, Good Standing and Qualification. Each
of Parent and its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its
respective jurisdiction of organization and has all requisite
corporate or similar power and authority to own and operate its
properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as
a foreign corporation in each jurisdiction where the ownership or
operation of its properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in
such good standing is not reasonably likely to have, individually or
in the aggregate, a Parent Material Adverse Effect (as defined
below). Parent has made available to the Company a complete and
correct copy of Parent's and Merger Sub's certificates of
incorporation and by-laws, each as amended to the date hereof.
Parent's and Merger Sub's certificates of incorporation and by-laws
so made available are in full force and effect.
As used in this Agreement, the term "Parent Material
Adverse Effect" means a material adverse effect on the financial
condition, properties or results of operations of the Parent and its
Subsidiaries taken as a whole; provided, however, that any such
effect resulting from any change (i) in law, rule or regulation
applicable to all companies and businesses generally or to the
consumer products, tissue, paper or forest products industries
specifically, (ii) in economic or business conditions generally, or
in the consumer products, tissue, paper or forest products
industries specifically, or (iii) in the securities markets in
general, shall not be considered when determining if a Parent
Material Adverse Effect has occurred.
(c) Capital Structure. The authorized capital stock of
Parent consists of 1,200,000,000 shares of Parent Common Stock, and
20
20,000,000 shares of Preferred Stock, without par value (the "Parent
Preferred Stock") of which 2,000,000 shares have been designated as
Series A Junior Participating Preferred Stock (the "Parent Series A
Preferred Stock"). As of December 15, 1998, 541,561,949 shares of
Parent Common Stock were outstanding, and no shares of Parent
Preferred Stock were issued and outstanding. All of the shares of
Parent Common Stock deliverable in exchange for the Shares at the
Effective Date in accordance with this Agreement and all of the
shares of Parent Series A Preferred Stock deliverable to the holders
of such Parent Common Stock pursuant to the Parent Rights Agreement
if and when deliverable to them under the Parent Rights Agreement
will be, when so issued, duly authorized, validly issued, fully paid
and nonassessable and free of preemptive rights. All of the
outstanding shares of Parent Common Stock have been duly authorized
and are validly issued, fully paid and nonassessable. Parent has no
Parent Common Stock or Parent Preferred Stock reserved for issuance,
except that, as of December 15, 1998, (i) there were 2,000,000
shares of Parent Series A Preferred Stock reserved for issuance
under the Parent Rights Agreement, and (ii) there were outstanding:
(A) options to purchase 898,928 shares of Parent Common Stock under
Parent's 1986 Equity Participation Plan, (B) options to purchase
12,648,831 shares of Parent Common Stock under Parent's 1992 Equity
Participation Plan (C) options to purchase up to 678,668 shares of
Parent Common Stock under Parent's Global Stock Option Plan, and (D)
options to purchase 698,048 shares of Parent Common Stock under the
stock option plans of Xxxxxxxx-Xxxxx Tissue Company (formerly Xxxxx
Paper Company). Except as set forth above or in the Parent Reports
(as defined in Section 5.2(f)), as of the date hereof there are no
preemptive or other outstanding rights, options, warrants,
conversion rights, redemption rights, repurchase rights, agreements,
arrangements or commitments by Parent to issue or to sell any shares
of Parent Common Stock or Parent Preferred Stock or any securities
or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire Parent
Common Stock or Parent Preferred Stock, and no securities or
obligation evidencing such rights is authorized, issued or
outstanding.
(d) Corporate Authority.
(i) No vote of holders of capital stock of Parent is
necessary to approve this Agreement and the Merger and the other
transactions contemplated hereby. The execution, delivery and
performance of this Agreement, the Company Option Agreement and any
Executive Agreements to which Parent is a party by Parent and, where
applicable, Merger Sub and the consummation by Parent and Merger Sub
of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of Parent
and, where applicable, Merger Sub. This Agreement, the Company
Option Agreement and any Executive Agreements to which Parent is a
party have been duly executed and delivered by Parent and, where
applicable, Merger Sub and (assuming the valid authorization,
execution and delivery of such agreements by the other parties
thereto) constitute the valid and binding agreements of Parent and,
where applicable, Merger Sub, enforceable against each of Parent
and, where applicable, Merger Sub in accordance with their terms,
21
except that enforceability may be limited by the Bankruptcy
Exception and is subject to the Equity Exception.
(ii) Prior to the Effective Time, Parent will have
taken all necessary action to permit it to deliver the number of
shares of Parent Common Stock required to be delivered pursuant to
Article IV. The Parent Common Stock, when delivered, will be
validly issued, fully paid and nonassessable, and no stockholder of
Parent will have any preemptive right of subscription or purchase in
respect thereof.
(e) Governmental Filings; No Violations. (i) Other than
the filings and/or notices (A) pursuant to Section 1.3, (B) under
the HSR Act, and comparable international antitrust laws, the
Securities Act and the Exchange Act, (C) to comply with state
securities or "blue sky" laws, if applicable, and (D) required to be
made with the NYSE, no notices, reports or other filings are
required to be made by Parent or any of its Subsidiaries, including
Merger Sub, with, nor are any consents, registrations, approvals,
permits or authorizations required to be obtained by Parent or any
of its Subsidiaries, including Merger Sub, from, any Governmental
Entity, in connection with the execution and delivery of this
Agreement, the Company Option Agreement and any Executive Agreements
to which Parent is a party by Parent and, where applicable, Merger
Sub and the consummation by Parent and Merger Sub of the Merger and
the other transactions contemplated hereby and thereby, except those
that the failure to make or obtain are not, individually or in the
aggregate, reasonably likely to have a Parent Material Adverse
Effect or prevent, materially delay or materially impair the ability
of Parent or Merger Sub to consummate the transactions contemplated
hereby and thereby.
(ii) The execution, delivery and performance of this
Agreement, the Company Option Agreement and any Executive Agreements
to which it is a party by Parent and, where applicable, Merger Sub
do not, and the consummation by Parent and Merger Sub of the Merger
and the other transactions contemplated hereby and thereby will not,
constitute or result in (A) a breach or violation of, or a default
under, the certificate of incorporation or by-laws of Parent or
Merger Sub or the comparable governing instruments of any of their
respective Subsidiaries, (B) a breach or violation of, or a default
under, or an acceleration of any obligations or the creation of a
lien, pledge, security interest or other encumbrance on the assets
of Parent or any of its Subsidiaries (with or without notice, lapse
of time or both) pursuant to, any Debt Contracts or Other Contracts
binding upon Parent or any of its Subsidiaries or any Law or
governmental or non-governmental permit or license to which Parent
or any of its Subsidiaries is subject or any judgment, order or
decree to which the Parent or any of its Subsidiaries or any of its
properties is subject or (C) any change in the rights or obligations
of any party under any such Debt Contracts or Other Contracts,
except, in the case of clause (B) or (C) above, for any breach,
violation, default, acceleration, creation or change that,
individually or in the aggregate, is not reasonably likely to have a
Parent Material Adverse Effect or prevent, materially delay or
22
materially impair the ability of Parent or Merger Sub to consummate
the transactions contemplated hereby and thereby.
(f) Parent Reports; Financial Statements. Each
registration statement, report, proxy statement or information
statement filed by Parent with the SEC since December 31, 1996
(including exhibits, annexes and any amendments thereto)
(collectively, including any such reports filed subsequent to the
date hereof, the "Parent Reports") was filed with the SEC
electronically via and is available on the SEC's XXXXX system. As
of their respective dates, the Parent Reports did not, and any
Parent Reports filed with the SEC subsequent to the date hereof will
not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated
balance sheets included in or incorporated by reference into the
Parent Reports (including the related notes and schedules) fairly
presents, or will fairly present, in all material respects, the
consolidated financial position of Parent and its Subsidiaries as of
its date and each of the consolidated statements of income and cash
flows included in or incorporated by reference into the Parent
Reports (including any related notes and schedules) fairly presents,
or will fairly present, in all material respects, the results of
operations and changes in financial position, as the case may be, of
Parent and its Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to notes and normal
year-end audit adjustments that will not be material in amount or
effect), in each case in accordance with GAAP consistently applied
during the periods involved, except as may be noted therein.
(g) Absence of Certain Changes. Except as disclosed in
the Parent Reports filed prior to the date hereof, since December
31, 1997 Parent and its Subsidiaries have conducted their respective
businesses only in, and have not entered into or engaged in any
material transaction other than in the ordinary and usual course of
business and there has not been (i) any change in the financial
condition, properties, business or results of operations of Parent
and its Subsidiaries that, individually or in the aggregate, has had
or is reasonably likely to result in a Parent Material Adverse
Effect; (ii) any damage, destruction or other casualty loss with
respect to any asset or property owned, leased or otherwise used by
Parent or any of its Subsidiaries, whether or not covered by
insurance, except as is not reasonably likely to have, individually
or in the aggregate, a Parent Material Adverse Effect; (iii) any
material change by Parent in accounting principles, practices or
methods; or (iv) any declaration, setting aside or payment of any
dividend or other distribution in respect of the capital stock of
Parent, except for dividends or other distributions on its capital
stock publicly announced prior to the date hereof or Parent's
regular quarterly dividends or increases in such dividends which are
not materially in excess of past practice.
(h) Litigation and Liabilities. Except as disclosed in
the Parent Reports filed prior to the date hereof, there are no (i)
civil, criminal or administrative actions, suits, claims, hearings,
23
investigations or proceedings pending or, to the knowledge of the
executive officers of Parent, threatened against Parent or any of
its Subsidiaries or any current or former director or officer of
Parent or any of its Subsidiaries (in their capacity as such) or
(ii) obligations or liabilities, whether or not accrued, contingent
or otherwise, including those relating to matters involving any
Environmental Law, that, in the case of either clause (i) or (ii),
individually or in the aggregate, are reasonably likely, in either
such case, to have a Parent Material Adverse Effect or prevent or
materially burden or materially impair the ability of Parent or
Merger Sub to consummate the transactions contemplated by this
Agreement or, as of the date hereof, the Company Option Agreement.
Except as disclosed in the Parent Reports filed prior to the date
hereof, there are no outstanding orders, judgments, injunctions,
awards or decrees of any Governmental Entity against the Parent or
any of its Subsidiaries, any of its or their properties, assets or
business, or, to the knowledge of the executive officers of the
Parent, any of its or their current or former directors or officers
(in their capacity as such), that is reasonably likely to have,
individually or in the aggregate, a Parent Material Adverse Effect.
(i) Compliance with Laws; Permits. Except as set forth
in the Parent Reports filed prior to the date hereof, the businesses
of each of Parent and its Subsidiaries are being conducted in
compliance with applicable Laws, except for such violations that,
individually or in the aggregate, are not reasonably likely to have
a Parent Material Adverse Effect or prevent or materially burden or
materially impair the ability of Parent or Merger Sub to consummate
the transactions contemplated by this Agreement. Parent and its
Subsidiaries each has all permits, licenses, trademarks, patents,
trade names, copyrights, service marks, franchises, variances,
exemptions, orders and other governmental authorizations, consents
and approvals necessary to own or lease and operate their respective
properties and conduct its business as presently conducted except
those the absence of which are not, individually or in the
aggregate, reasonably likely to have a Parent Material Adverse
Effect or prevent or materially burden or materially impair the
ability of Parent or Merger Sub to consummate the Merger and the
other transactions contemplated by this Agreement.
(j) Environmental Matters. Except as disclosed in the
Parent Reports filed prior to the date hereof and except for such
matters that, individually or in the aggregate, are not reasonably
likely to have a Parent Material Adverse Effect: (i) to the
knowledge of Parent, Parent and its Subsidiaries are in compliance
with all applicable Environmental Laws; (ii) neither Parent nor any
of its Subsidiaries has received any written notice from any
Governmental Entity or any other person or entity alleging the
violation of any applicable Environmental Law; (iii) Parent and its
Subsidiaries are not the subject of any court order, administrative
order or decree arising under any Environmental Law; (iv) to the
knowledge of the executive officers of Parent, there has not been a
release of Hazardous Substances on any of the properties owned or
operated by Parent or any of its Subsidiaries; and (v) to the
knowledge of Parent, neither Parent nor any of its Subsidiaries has
generated, stored, used, emitted, discharged or disposed of any
24
Hazardous Substances in violation of or giving rise to liability
under applicable Environmental Laws.
(k) Tax Matters. As of the date hereof, neither Parent
nor any of its Affiliates has taken or agreed to take any action,
nor do the executive officers of Parent have any knowledge of any
fact or circumstance, that would prevent the Merger and the other
transactions contemplated by this Agreement from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
(l) Ownership of Shares. Except as to Shares which may
be acquired by Parent pursuant to the Company Option Agreement,
neither Parent nor any of its Subsidiaries is the "Beneficial Owner"
(as such term is defined in Rule 13d-3 of the Exchange Act) of any
Shares.
(m) Brokers and Finders. Neither Parent nor any of its
officers, directors or employees has employed any broker or finder
or incurred any liability for any brokerage fees, commissions or
finders' fees in connection with the Merger or the other
transactions contemplated by this Agreement, except that Parent has
engaged Xxxxxxx Xxxxx & Co. as its financial advisor.
ARTICLE VI
COVENANTS
6.1. Interim Operations. The Company covenants and agrees as
to itself and each of its Subsidiaries that, after the date hereof
and prior to the Effective Time (unless Parent shall otherwise
approve, and except as set forth in the Company Disclosure Letter or
as otherwise expressly contemplated by this Agreement):
(a) the business of it and its Subsidiaries shall be
conducted in the ordinary and usual course and, to the extent
consistent therewith, it and its Subsidiaries shall use all
reasonable efforts to preserve its business organization intact and
maintain its existing relations and goodwill with customers,
suppliers, distributors, creditors, lessors, employees and business
associates;
(b) neither it nor any of its Subsidiaries shall (i)
sell, pledge, dispose of or encumber any capital stock owned by it
or any of its Subsidiaries in any of its Subsidiaries or other
Affiliates; (ii) amend its certificate of incorporation or by-laws;
(iii) split, combine or reclassify its outstanding shares of capital
stock; (iv) declare, set aside or pay any dividend payable in cash,
stock or property in respect of any capital stock other than
dividends on its capital stock publicly announced prior to the date
hereof or the Company's regular semi-annual dividends or increases
in such dividends which are not materially in excess of past
practice or dividends from its direct or indirect wholly-owned
Subsidiaries; or (v) repurchase, redeem or otherwise acquire, or
permit any of its Subsidiaries to purchase or otherwise acquire, any
shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock;
25
(c) neither it nor any of its Subsidiaries shall (i)
issue, sell, pledge, dispose of or encumber any shares of, or
securities convertible into or exchangeable or exercisable for, or
options, warrants, calls, commitments or rights of any kind to
acquire, any shares of its capital stock of any class (other than
Shares issuable pursuant to options outstanding on December 15, 1998
under the Stock Plans or that certain consulting arrangement
referred to Section 5.1(b) hereof); (ii) purchase, transfer, lease,
sell, mortgage, pledge, dispose of or encumber any real property,
effect any improvements or expansions thereon; (iii) other than in
the ordinary and usual course of business, purchase, transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of or
encumber any other property or assets (including capital stock of
any of its Subsidiaries) or incur or modify any material
indebtedness or other liability; (iv) make or authorize or commit
for any capital expenditures other than in the ordinary and usual
course of business (provided that any such expenditures do not
exceed $500,000 individually or $2,000,000 in the aggregate); or (v)
by any means, make any acquisition of, or investment in any
business, through acquisition of assets or stock of any other Person
or entity;
(d) except as may be required by applicable law, and
except as provided in Section 6.11, neither it nor any of its
Subsidiaries shall terminate, establish, adopt, enter into, make any
new grants or awards under, amend or otherwise modify any
Compensation and Benefit Plans or increase the salary, wage, bonus,
severance, incentive or other compensation of any employees, except
for salary or wage increases occurring in the ordinary and usual
course of business;
(e) neither it nor any of its Subsidiaries shall settle
or compromise any material claims or litigation or, except in the
ordinary and usual course of business, enter into any material Debt
Contracts or Other Contracts or modify, amend or terminate any of
its material Debt Contracts or Other Contracts or waive, release or
assign any material rights or claims;
(f) neither it nor any of its Subsidiaries shall make any
Tax election or permit any insurance policy naming it as a
beneficiary or loss-payable payee to be canceled or terminated
except in the ordinary and usual course of business;
(g) neither it nor any of its Subsidiaries shall take any
action, other than reasonable and usual actions in the ordinary and
usual course of business consistent with past practice, with respect
to accounting policies or procedures, except as may be required by
changes in GAAP (in which case the Company will so advise Parent in
advance in writing);
(h) neither it nor any of its Subsidiaries shall sell,
transfer, assign or (except as contemplated by subsection (n) below)
abandon any patents or trademarks which are owned or controlled
directly or indirectly by the Company or any of its Subsidiaries,
except for any abandonment of a non-material trademark or any
26
intercompany transfer among the Company and its Subsidiaries, in
either case, in the ordinary and usual course of business;
` (i) neither it nor any of its Subsidiaries shall license
or in any way encumber any patents or trademarks which are owned or
controlled directly or indirectly by the Company or any of its
Subsidiaries, except in the ordinary and usual course of business;
(j) neither it nor any of its Subsidiaries shall make any
modification to employee or customer incentives or trade policies
which would reasonably be expected to cause the Company's
distributors or end-user customers to increase purchases above those
levels normally required to meet their respective needs or cause an
excessive increase or decrease in the Company's inventories or
working capital, provided, however, that the Company and its
Subsidiaries may continue, in a manner consistent with past
practices, to give incentives to distributors, from time to time, to
encourage larger purchases of Company products by said distributors;
(k) neither it nor any of its Subsidiaries shall
authorize or announce an intention to do any of the foregoing, or
enter into any contract, agreement, commitment or arrangement to do
any of the foregoing;
(l) the Company agrees that it will not settle,
compromise or dismiss its ongoing litigation with Allegiance
Healthcare Corporation and Xxxxxxxx Critical Care, Inc.
(collectively, the "Allegiance Litigation"), and that it will allow
Parent to actively participate as a consultant in, and will provide
to Parent regular reports regarding the status of, such litigation
and shall give due and careful consideration to suggestions on all
aspects of said pending litigation from counsel for and executives
of Parent;
(m) the Company shall promptly notify Parent if the
Company or its Subsidiaries become aware of any material
infringement by the Company or its Subsidiaries of the Intellectual
Property Rights of any third party or any material infringement by a
third party of the Company's or its Subsidiaries' Intellectual
Property Rights;
(n) except where the Company has, prior to the date
hereof, given instruction for maintenance and annuity fees not to be
paid, the Company shall timely pay all maintenance and annuity fees
for its and its Subsidiaries' patents and patent applications; and
(o) the Company agrees that, with respect to the matters
disclosed under Section 5.1(k) of the Company Disclosure Letter, the
Company will consult with Parent before taking any material action
with respect to such matters, and will provide to Parent regular
reports regarding the status of such matters and shall give due and
careful consideration to suggestions on all aspects of such matters,
from counsel for and executives of Parent.
For the avoidance of misunderstanding, it is understood and
agreed that, notwithstanding anything in this Section 6.1 to the
27
contrary, the Company and its Subsidiaries intend to continue to
review potential acquisitions and acquisition candidates during the
period between the date hereof and the Effective Time, provided that
neither the Company nor any of its Subsidiaries shall consummate any
acquisition or enter into any agreement with respect thereto without
the prior written approval of Parent.
6.2. Acquisition Proposals. From and after the date hereof,
the Company shall not, and shall use its best efforts not to permit
any of its directors, officers, employees, attorneys, financial
advisors, agents or other representatives or those of any of its
Subsidiaries to, directly or indirectly, solicit, initiate or
knowingly encourage (including by way of furnishing information) any
Takeover Proposal (as hereinafter defined) from any Person, or
engage in or continue discussions or negotiations relating to any
Takeover Proposal; provided, however, that the Company may engage in
discussions or negotiations with, and furnish information to, any
Person that makes a written Takeover Proposal in respect of which
the Board of Directors of the Company concludes in good faith if
consummated would constitute a Superior Proposal (as hereinafter
defined), but only if the Board of Directors of the Company shall
conclude in good faith on the basis of the advice of its outside
counsel that the failure to take such action would be inconsistent
with the fiduciary obligations of such Board of Directors under
applicable law; and provided further that notwithstanding anything
to the contrary herein contained, the Board of Directors of the
Company may take and disclose to the Company's stockholders a
position contemplated by Rule 14e-2 promulgated under the Exchange
Act, comply with Rule 14d-9 thereunder and make all disclosures
required by applicable law in connection therewith. The Company
shall as soon as practicable and in any event no later than the date
on which such Takeover Proposal is presented to the Company's Board
of Directors notify Parent of any Takeover Proposal received by it
or any of its directors, officers, employees, attorneys, financial
advisors, agents or other representatives or those of any of its
Subsidiaries or the receipt by the Company or any of the foregoing
of any notice of any intention to make a Superior Proposal,
including the identity of the person making such Takeover Proposal
or intending to make a Superior Proposal and the material terms of
any such Takeover Proposal. As used in this Agreement: (i) "Takeover
Proposal" means any proposal or offer (other than a proposal or
offer by Parent or any of its Affiliates) by any Person relating to
any actual or potential merger, consolidation or other business
combination involving the Company or any of its Subsidiaries or any
acquisition in any manner (including, without limitation, by tender
or exchange offer) of a substantial equity interest in, or a
substantial portion of the assets of, the Company or any of its
Subsidiaries; and (ii) "Superior Proposal" means a bona fide
proposal or offer made by any Person (x) to acquire the Company
pursuant to any tender or exchange offer or any acquisition of all
or substantially all of the assets of the Company and its
Subsidiaries as a whole or (y) to enter into a merger, consolidation
or other business consolidation with the Company or any of its
Subsidiaries, in each case on terms which a majority of the members
of the Board of Directors of the Company determines in good faith,
and based on the advice of independent financial advisors, to be
28
more favorable to the Company and its stockholders than the
transactions contemplated hereby (including any revised transaction
proposed by Parent pursuant to Section 8.1(f)). During the period
from the date of this Agreement through the Effective Time, the
Company shall not terminate, amend, modify or waive any provision of
any confidentiality agreement pertaining to the Company or its
Subsidiaries or any standstill agreement to which it or any of its
Subsidiaries is a party. During such period, the Company shall
enforce, to the fullest extent permitted under applicable law, but
subject to the exercise by the Board of Directors of the Company of
their fiduciary obligations after consultation with outside counsel,
the provisions of any such agreement, including, but not limited to,
by obtaining injunctions to prevent any breaches of such agreements
and to enforce specifically the terms and provisions thereof in any
court of the United States of America or of any state having
jurisdiction.
6.3. Information Supplied. The Company and Parent each agrees,
as to itself and its Subsidiaries, that none of the information
supplied or to be supplied by it or its Subsidiaries for inclusion
or incorporation by reference in (i) the Registration Statement on
Form S-4 to be filed with the SEC by Parent in connection with the
issuance of shares of Parent Common Stock in the Merger (including
the proxy statement and prospectus (the "Prospectus/Proxy
Statement") constituting a part thereof) (the "S-4 Registration
Statement") will, at the time the S-4 Registration Statement becomes
effective under the Securities Act, contain any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (ii) the Prospectus/Proxy Statement and any
amendment or supplement thereto will, at the date of mailing to the
Company's stockholders and at the time of the meeting of
stockholders of the Company to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
6.4. Stockholders Meeting. The Company will take, in
accordance with applicable law and its certificate of incorporation
and by-laws, all action necessary to convene a meeting of holders of
Shares (the "Stockholders Meeting") as promptly as practicable after
the S-4 Registration Statement is declared effective to consider and
vote upon the approval of this Agreement. The Company's Board of
Directors shall recommend such approval and shall take all lawful
action to solicit such approval; provided, however, that the
Company's Board of Directors shall not be required to make, and
shall be entitled to withdraw, such recommendation (and cease such
solicitation) if such Board of Directors concludes in good faith on
the basis of the advice of its outside counsel that the making of,
or the failure to withdraw, such recommendation would violate the
fiduciary obligations of such Board of Directors under applicable
law.
6.5. Filings; Other Actions; Notification. (a) Parent and the
Company shall promptly prepare and file with the SEC the
29
Prospectus/Proxy Statement, and Parent shall prepare and file with
the SEC the S-4 Registration Statement as promptly as practicable.
Parent shall use its best efforts (and the Company shall cooperate
therewith) to have the S-4 Registration Statement declared effective
under the Securities Act as promptly as practicable after such
filing, and promptly thereafter Parent and the Company shall mail
the Prospectus/Proxy Statement to the stockholders of the Company.
Parent shall also use its best efforts to obtain prior to the
effective date of the S-4 Registration Statement all necessary state
securities law or "blue sky" permits and approvals, if any, required
in connection with the Merger and to consummate the other
transactions contemplated by this Agreement and will pay all
expenses incident thereto.
(b) The Company and Parent each shall use its best
efforts to cause to be delivered to the other party and its
directors a letter of its independent auditors, dated (i) the date
on which the S-4 Registration Statement shall become effective and
(ii) the Closing Date, and addressed to the other party and its
directors, in form and substance customary for "comfort" letters
delivered by independent public accountants in connection with
registration statements similar to the S-4 Registration Statement.
(c) The Company and Parent shall cooperate with each
other and use (and shall cause their respective Subsidiaries to use)
their respective best efforts to take or cause to be taken all
actions, and do or cause to be done all things, necessary, proper or
advisable on its part under this Agreement and applicable Laws to
consummate and make effective the Merger and the other transactions
contemplated by this Agreement as soon as practicable, including
preparing and filing as promptly as practicable all documentation to
effect all necessary notices, reports and other filings and
responding promptly to any requests for further information, in
order to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary or
advisable to be obtained from any third party and/or any
Governmental Entity in order to consummate the Merger or any of the
other transactions contemplated by this Agreement as promptly as
practicable. Subject to applicable laws relating to the exchange of
information, Parent and the Company shall have the right to review
in advance, and to the extent practicable each will consult the
other on, all the information relating to the other and any of its
respective Subsidiaries that appear in any filing made with, or
written materials submitted to, any third party and/or any
Governmental Entity in connection with the Merger and the other
transactions contemplated by this Agreement. In exercising the
foregoing right, each of the Company and Parent shall act reasonably
and as promptly as practicable.
(d) The Company and Parent each shall, upon request by
the other, furnish the other with all information concerning itself,
its Subsidiaries, directors, officers and stockholders and such
other matters as may be reasonably necessary or advisable in
connection with the Prospectus/Proxy Statement, the S-4 Registration
Statement or any other statement, filing, notice or application made
by or on behalf of Parent, the Company or any of their respective
30
Subsidiaries to any third party and/or any Governmental Entity in
connection with the Merger and the transactions contemplated by this
Agreement.
(e) The Company and Parent each shall keep the other
apprised of the status of matters relating to completion of the
transactions contemplated hereby, including promptly furnishing the
other with copies of notices or other communications received by
Parent or the Company, as the case may be, or any of its
Subsidiaries, from any third party and/or any Governmental Entity
with respect to the Merger and the other transactions contemplated
by this Agreement.
(f) Without limiting the generality of the undertakings
pursuant to this Section 6.5, (i) the Company and Parent agree to
provide promptly to any and all federal, state, local or foreign
court or Government Entity with jurisdiction over enforcement of any
applicable antitrust laws ("Government Antitrust Entity")
information and documents requested by any Government Antitrust
Entity or necessary, proper or advisable to permit consummation of
the Merger and the transactions contemplated by this Agreement and
the Company Option Agreement; and (ii) in connection with any filing
or submission or other action required to be made or taken by either
Parent or the Company to effect the Merger and to consummate the
other transactions contemplated hereby or thereby, the Company shall
not, without Parent's prior written consent, commit to any
divestiture transaction, and neither Parent nor any of its
Affiliates shall be required to divest or hold separate or otherwise
take or commit to take any action that limits its freedom of action
with respect to, or its ability to retain, the Company or, in any
material respect, any portions thereof or any of the business,
product lines, properties or assets of Parent or any of its
Affiliates.
6.6. Taxation. Subject to Section 6.2, neither Parent nor the
Company shall take or cause to be taken any action, whether before
or after the Effective Time, that would disqualify the Merger as a
"reorganization" within the meaning of Section 368(a) of the Code.
6.7. Access. Upon reasonable notice, and except as may
otherwise be required by applicable law, the Company shall (and
shall cause its Subsidiaries to) afford Parent's officers,
employees, counsel, accountants and other authorized representatives
("Representatives") access, during normal business hours throughout
the period prior to the Effective Time, to its properties, books,
contracts and records (including its audit work papers and related
documents) and, during such period, shall (and shall cause its
Subsidiaries to) furnish promptly to Parent all information
concerning its business, properties and personnel as may reasonably
be requested, provided that no investigation pursuant to this
Section shall affect or be deemed to modify any representation or
warranty made by the Company, and provided, further, that the
foregoing shall not require the Company to permit any inspection, or
to disclose any information, that in the reasonable judgment of the
Company, would conflict with applicable laws relating to the
exchange of information or result in the disclosure of any trade
31
secrets of it or third parties or violate any of its obligations
with respect to confidentiality if the Company shall have used
reasonable efforts to obtain the consent of such third party to such
inspection or disclosure. All requests for information made
pursuant to this Section shall be directed to an executive officer
of the Company or such Person as may be designated by the Company's
officers. In requesting information hereunder, Parent shall cause
its Representatives to act in a manner reasonably designed to
minimize, to the extent practicable, disruption of the normal
business operations of the Company and its Subsidiaries. Parent and
the Company shall each designate two representatives to meet on a
monthly basis to discuss the Company's capital expenditures,
inventory management, sales promotions, distribution arrangements,
construction projects, group purchasing organization contracts,
other material contracts, patent licenses and such other business
matters concerning the Company's operations as are desired. All
such information shall be governed by the terms of the
Confidentiality Agreement (as defined in Section 8.2).
6.8. Affiliates. Prior to the Effective Time, the Company
shall deliver to Parent a list of names and addresses of those
Persons who are, in the opinion of the Company, as of the time of
the Stockholders Meeting, "affiliates" of the Company within the
meaning of Rule 145 under the Securities Act. The Company shall
provide to Parent such information and documents as Parent shall
reasonably request for purposes of reviewing such list. There shall
be added to such list the names and addresses of any other Person
subsequently identified by either Parent or the Company as a Person
who may be deemed to be such an affiliate of the Company; provided,
however, that no such Person identified by Parent shall be added to
the list of affiliates of the Company if Parent shall receive from
the Company, on or before the date of the Stockholders Meeting, an
opinion of counsel reasonably satisfactory to Parent to the effect
that such Person is not such an affiliate. The Company shall
exercise its best efforts to deliver or cause to be delivered to
Parent, prior to the date of the Stockholders Meeting, from each
affiliate of the Company identified in the foregoing list (as the
same may be supplemented as aforesaid), a letter dated as of the
Closing Date substantially in the form attached as Exhibit C (the
"Affiliates Letter"). Parent shall not be required to maintain the
effectiveness of the S-4 Registration Statement or any other
registration statement under the Securities Act for the purposes of
resale of Parent Common Stock by such affiliates received in the
Merger and the certificates representing Parent Common Stock
received by such affiliates shall bear a customary legend regarding
applicable Securities Act restrictions and the provisions of this
Section.
6.9. Stock Exchange Listing and De-listing. Parent shall use
its best efforts to cause the shares of Parent Common Stock to be
issued in the Merger to be approved for listing on the NYSE, subject
to official notice of issuance, prior to the Closing Date. The
Surviving Corporation shall use its best efforts to cause the Shares
to no longer be listed on the NYSE and de-registered under the
Exchange Act as soon as practicable following the Effective Time.
32
6.10. Publicity. The initial press releases by Parent and
the Company concerning this Agreement and the transaction
contemplated hereby shall be mutually agreed as to content prior to
issuance and thereafter the Company and Parent shall consult with
each other prior to issuing any press releases or otherwise making
public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and prior to making any
filings with any third party and/or any Governmental Entity
(including any national securities exchange) with respect thereto,
except as may be required by law or by obligations pursuant to any
listing agreement with or rules of any national securities exchange.
6.11. Options and Benefits.
(a) Stock Options. At the Effective Time, all outstanding
Company Options which have not been exercised shall become and
represent an option to purchase the number of shares of Parent
Common Stock (a "Substitute Option") decreased to the nearest whole
share, determined by multiplying (i) the number of Company Shares
subject to such Company Options immediately prior to the Effective
Time by (ii) the Exchange Ratio, at an exercise price per share of
Parent Common Stock (increased to the nearest whole cent) equal to
the exercise price per Company Share immediately prior to the
Effective Time divided by the Exchange Ratio. Parent shall pay cash
as soon as practicable after the Effective Time to the holders of
Substitute Options in lieu of issuing fractional shares of Parent
Common Stock upon the exercise thereof. After the Effective Time,
except as provided in this Section 6.11(a), each Substitute Option
shall be exercisable upon the same terms, conditions and
restrictions as were applicable to the related Company Option
immediately prior to the Effective Time.
(b) Employee Benefits. Parent agrees that for a period
of not less than 12 months following the Effective Time, the
employees of the Company and its Subsidiaries in the United States
(the "Employees") will be provided with employee benefit plans and
programs that are no less favorable in value in the aggregate, as
determined by Parent in good faith in accordance with any reasonable
method customarily used by Parent for making benefit comparisons, to
those provided to the Employees immediately prior to the Effective
Time, as set forth in Section 5.1(h)(ii) of the Company Disclosure
Letter, excluding the Stock Plans and the 401(k) Plan (as defined
below); provided that nothing in this Agreement shall limit the
right of Parent or the Surviving Corporation to amend, terminate or
discontinue any particular employee benefit plan or program in
accordance with the terms thereof. Employees who become
participants in any employee benefit plan or program of the Parent
or any of its Subsidiaries, excluding any program with respect to
retiree medical or retiree life insurance benefits, will be given
credit under such plans and programs, for purposes of eligibility
and vesting thereunder, for all service with the Company or its
Subsidiaries.
Parent agrees that it shall, and shall cause the Surviving
Corporation to, honor all employment and severance agreements
disclosed in Section 6.11 of the Company Disclosure Letter (except
33
to the extent such employment and severance agreements are amended
as of the date hereof pursuant to the Executive Agreements or are
amended after the date hereof in contravention of Section 6.1(d) of
this Agreement) in accordance with the terms thereof and subject to
the rights of termination provided therein.
(c) 401(k) Plan. After the Effective Time, Parent agrees
to cause the Surviving Corporation to take all actions necessary to
fully vest the account balances in the Company's 401(k) Plan (the
"401(k) Plan") of all participants who are involuntarily terminated
within two years after the Effective Time.
6.12. Fees and Expenses. Except as otherwise provided in
this Section 6.12, whether or not the Merger shall be consummated,
all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby, including, without
limitation, the fees and disbursements of counsel, financial
advisors, accountants, actuaries and consultants, shall be paid by
the party incurring such costs and expenses, provided that all
expenses incurred in connection with the filing fees for the
Prospectus/Proxy Statement and the Registration Statement on Form
S-4 and the printing and mailing of the Prospectus/Proxy Statement
shall be shared equally by the Parent and the Company.
6.13. Indemnification; Directors' and Officers' Insurance.
(a) Parent shall indemnify and hold harmless, to the
fullest extent permitted under applicable law (and Parent shall also
advance expenses as incurred to the fullest extent permitted under
applicable law provided the Person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately
determined that such Person is not entitled to indemnification),
each present and former director and officer of the Company and its
Subsidiaries (collectively, the "Indemnified Parties") against any
costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively,
"Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of or pertaining to matters existing
or occurring at or prior to the Effective Time, including the
transactions contemplated by this Agreement; provided, that Parent
shall not have any obligation hereunder to any Indemnified Party (i)
if and when a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law, or (ii) if such matter is
attributable to the gross negligence or willful misconduct of the
Indemnified Party. All rights to indemnification in respect of any
such claim or claims shall continue until final disposition of any
and all such claims.
(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 6.13, upon
learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify Parent thereof, but the failure
to so notify shall not relieve Parent of any liability it may have
34
to such Indemnified Party unless (and only to the extent) such
failure materially prejudices the indemnifying party. In the event
of any such claim, action, suit, proceeding or investigation
(whether arising before or after the Effective Time), (i) Parent or
the Surviving Corporation shall have the right to assume the defense
thereof and Parent shall not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if Parent or the Surviving
Corporation elects not to assume such defense or counsel for the
Indemnified Parties advises that there are issues which raise
conflicts of interest between Parent or the Surviving Corporation
and the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and Parent or the Surviving
Corporation shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as statements therefor
are received; provided, however, that Parent shall be obligated
pursuant to this paragraph (b) to pay for only one firm of counsel
for all Indemnified Parties in any jurisdiction unless the use of
one counsel for such Indemnified Parties would present such counsel
with a conflict of interest, (ii) the Indemnified Parties will
cooperate in the defense of any such matter and (iii) Parent shall
not be liable for any settlement effected without its prior written
consent. If such indemnity is not available with respect to any
Indemnified Party, then the Surviving Corporation and the
Indemnified Party shall contribute to the amount payable in such
proportion as is appropriate to reflect relative faults and
benefits.
(c) The Surviving Corporation shall use its best efforts
to maintain the Company's existing officers' and directors'
liability insurance ("D&O Insurance") for a period of six years from
and after the Effective Time so long as the annual premium therefor
is not in excess of the last annual premium paid prior to the date
hereof (the "Current Premium"); provided, however, that if the
existing D&O Insurance expires, is terminated or canceled during
such six-year period, the Surviving Corporation will use its best
efforts to obtain as much substantially similar D&O Insurance as
can be obtained for the remainder of such period but in no event for
a premium in excess (on an annualized basis) of two times the
Current Premium.
(d) If the Surviving Corporation or any of its successors
or assigns (i) shall consolidate with or merge into any other
corporation or entity and shall not be the continuing or surviving
corporation or entity of such consolidation or merger or (ii) shall
transfer all or substantially all of its properties and assets to
any individual, corporation or other entity, then, and in each such
case, proper provisions shall be made so that the successors and
assigns of the Surviving Corporation shall assume all of the
obligations set forth in this Section.
(e) The provisions of this Section are intended to be for
the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs, their representatives and assigns.
35
6.14.Takeover Statute. If any Takeover Statute is or may
become applicable to the Merger or the other transactions
contemplated by this Agreement, the Company Stockholder Agreement or
the Company Option Agreement, each of Parent and the Company and its
Board of Directors shall grant such approvals and take such actions
as are necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by this Agreement,
the Company Stockholder Agreement and the Company Option Agreement
or by the Merger and otherwise act to eliminate or minimize the
effects of such statute or regulation on such transactions.
6.15.Parent Vote. Parent shall vote (or consent with respect
to) or cause to be voted (or a consent to be given with respect to)
any Shares and any shares of common stock of Merger Sub beneficially
owned by it or any of its Affiliates or with respect to which it or
any of its Affiliates has the power (by agreement, proxy or
otherwise) to cause to be voted (or to provide a consent), in favor
of the adoption and approval of this Agreement at any meeting of
stockholders of the Company or Merger Sub, respectively, at which
this Agreement shall be submitted for adoption and approval and at
all adjournments or postponements thereof (or, if applicable, by any
action of stockholders of either the Company or Merger Sub by
consent in lieu of a meeting).
6.16.Notification of Certain Matters. Parent shall give prompt
notice to the Company, and the Company shall give prompt notice to
Parent, of: (i) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which would cause (A) any
representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect or (B) any covenant, condition
or agreement contained in this Agreement not to be complied with or
satisfied in any material respect; and (ii) any failure of Parent or
the Company, as the case may be, to comply with any covenant or
agreement to be complied with by it hereunder in any material
respect; provided, however, that the delivery of any notice pursuant
to this Section 6.16 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
ARTICLE VII
CONDITIONS
7.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the
Merger is subject to the satisfaction or waiver at or prior to the
Effective Time of each of the following conditions:
(a) Stockholder Approval. This Agreement shall have been
duly approved by holders of Shares constituting the Company
Requisite Vote and shall have been duly approved by the sole
stockholder of Merger Sub in accordance with applicable law and the
certificate or articles of incorporation, as the case may be, and
by-laws of each such corporation.
(b) NYSE Listing. The shares of Parent Common Stock
deliverable to the Company stockholders pursuant to this Agreement
36
shall have been authorized for listing on the NYSE upon official
notice of issuance.
(c) Regulatory Consents. The waiting period applicable
to the consummation of the Merger under the HSR Act shall have
expired or been terminated and, other than the filing provided for
in Section 1.3, all notices, reports and other filings required to
be made prior to the Effective Time by the Company or Parent or any
of their respective Subsidiaries with, and all consents,
registrations, approvals, permits and authorizations required to be
obtained prior to the Effective Time by the Company or Parent or any
of their respective Subsidiaries from, any Governmental Entity
(collectively, "Governmental Consents") in connection with the
execution and delivery of this Agreement and the consummation of the
Merger and the other transactions contemplated hereby by the
Company, Parent and Merger Sub shall have been made or obtained (as
the case may be), except those that the failure to make or to obtain
are not, individually or in the aggregate, reasonably likely to have
a Company Material Adverse Effect or a Parent Material Adverse
Effect.
(d) Litigation. No court or Governmental Entity of
competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, statute, ordinance, rule, regulation,
judgment, decree, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and restrains, enjoins
or otherwise prohibits consummation of the Merger (collectively, an
"Order").
(e) S-4. The S-4 Registration Statement shall have
become effective under the Securities Act. No stop order suspending
the effectiveness of the S-4 Registration Statement shall have been
issued, and no proceedings for that purpose shall have been
initiated or be threatened, by the SEC.
(f) Blue Sky Approvals. Parent shall have received all
state securities and "blue sky" permits and approvals, if any,
necessary to consummate the transactions contemplated hereby.
7.2. Conditions to Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to effect the Merger are also
subject to the satisfaction or waiver by Parent at or prior to the
Effective Time of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement that is qualified by materiality shall have been true and
correct when made and shall be true and correct at and as of the
Closing Date as if made at and as of the Closing Date and each of
such representations and warranties that is not so qualified shall
have been true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of the Closing Date, in each case
except as contemplated or permitted by this Agreement; and Parent
shall have received a certificate signed on behalf of the Company by
its Chief Executive Officer and its Treasurer to such effect.
37
(b) Performance of Obligations of the Company. The
Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement at
or prior to the Closing Date and Parent shall have received a
certificate signed on behalf of the Company by its Chief Executive
Officer and its Treasurer to such effect.
(c) Consents Under Agreements. The Company shall have
obtained the consent or approval of each Person whose consent or
approval shall be required under any Debt Contract or Other Contract
to which the Company or any of its Subsidiaries is a party, except
those for which the failure to obtain such consent or approval,
individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect.
(d) Tax Opinion. Parent shall have received an opinion
of Xxxxx Xxxxxxx & Xxxx LLP dated the Closing Date, in form and
substance reasonably satisfactory to Parent, substantially to the
effect that, for federal income tax purposes;
(i) The Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Company,
Merger Sub and Parent will each be a party to such reorganization
within the meaning of Section 368(b) of the Code.
(ii) No gain or loss will be recognized by Parent or
the Company as a result of the Merger.
(iii) No gain or loss will be recognized by the
stockholders of the Company upon the exchange of their Shares solely
for shares of Parent Common Stock pursuant to the Merger, except
with respect to cash, if any, received in lieu of fractional shares
of Parent Common Stock.
(iv) The aggregate tax basis of the shares of Parent
Common Stock received by a stockholder solely in exchange for Shares
pursuant to the Merger (including fractional shares of Parent Common
Stock for which cash is received) will be the same as the aggregate
tax basis of the Shares exchanged therefor.
(v) The holding period for shares of Parent Common
Stock received by a stockholder in exchange for Shares pursuant to
the Merger will include the holding period that such Shares were
held by the stockholder, provided such Shares were held as capital
assets by such stockholder at the Effective Time.
(vi) A stockholder of the Company who receives cash
in lieu of a fractional share of Parent Common Stock will recognize
gain or loss equal to the difference, if any, between such
stockholder's basis in such fractional share and the amount of cash
received.
In rendering such opinion, Xxxxx Liddell & Xxxx LLP may receive
and rely upon representations contained in a certificate of Parent
(the "Parent Tax Certificate") substantially in the form attached to
38
the Parent Disclosure Letter, a certificate of the Company (the
"Company Tax Certificate") substantially in the form attached to the
Company Disclosure Letter and other appropriate certificates of
Parent, the Company and others.
(e) Cash Position. Immediately prior to the Effective
Time, the Company shall have at least $63 million (reduced on a
dollar for dollar basis by the amount of any cash expended by the
Company or its Subsidiaries between the date hereof and the Closing
Date as the purchase price for any business acquisition which is
approved in advance by Parent in the manner contemplated by the last
paragraph of Section 6.1) in the form of cash and cash equivalents
on deposit with one or more financial institutions and shall have
furnished written documentation, reasonably acceptable to Parent,
evidencing such cash position.
7.3. Conditions to Obligation of the Company. The obligation
of the Company to effect the Merger is also subject to the
satisfaction or waiver by the Company at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Parent and Merger Sub contained in
this Agreement that is qualified by materiality shall have been true
and correct when made and shall be true and correct at and as of the
Closing Date as if made at and as of the Closing Date and each of
such representations and warranties that is not so qualified shall
have been true and correct in all material respects when made and
shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of the Closing Date, in each case
except as contemplated or permitted by this Agreement; and the
Company shall have received a certificate signed on behalf of Parent
by its Chief Executive Officer and its Chief Financial Officer.
(b) Performance of Obligations of Parent and Merger Sub.
Each of Parent and Merger Sub shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date and the Company shall have
received a certificate signed on behalf of Parent by its Chief
Executive Officer and its Chief Financial Officer to such effect.
(c) Consents Under Agreements. Parent shall have
obtained the consent or approval of each Person whose consent or
approval shall be required in order to consummate the transactions
contemplated by this Agreement under any Debt Contract or Other
Contract to which Parent or any of its Subsidiaries is a party,
except those for which failure to obtain such consents and
approvals, individually or in the aggregate, is not reasonably
likely to have a Parent Material Adverse Effect.
(d) Tax Opinion. The Company shall have received an
opinion of Coudert Brothers, dated the Closing Date, in form and
substance reasonably satisfactory to the Company, substantially to
the effect that, for federal income tax purposes;
39
(i) The Merger will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Company,
Merger Sub and Parent will each be a party to such reorganization
within the meaning of Section 368(b) of the Code.
(ii) No gain or loss will be recognized by Parent or
the Company as a result of the Merger.
(iii) No gain or loss will be recognized by the
stockholders of the Company upon the exchange of their Shares solely
for shares of Parent Common Stock pursuant to the Merger, except
with respect to cash, if any, received in lieu of fractional shares
of Parent Common Stock.
(iv) The aggregate tax basis of the shares of Parent
Common Stock received by a stockholder solely in exchange for Shares
pursuant to the Merger (including fractional shares of Parent Common
Stock for which cash is received) will be the same as the aggregate
tax basis of the Shares exchanged therefor.
(v) The holding period for shares of Parent Common
Stock received by a stockholder in exchange for Shares pursuant to
the Merger will include the holding period that such Shares were
held by the stockholder, provided such Shares were held as capital
assets by such stockholder at the Effective Time.
(vi) A stockholder of the Company who receives cash
in lieu of a fractional share of Parent Common Stock will recognize
gain or loss equal to the difference, if any, between such
stockholder's basis in such fractional share and the amount of cash
received.
In rendering such opinion, Coudert Brothers may receive and
rely upon representations contained in a certificate of Parent
substantially in the form of the Parent Tax Certificate, a
certificate of the Company substantially in the form of the Company
Tax Certificate and other appropriate certificates of Parent, the
Company and others.
ARTICLE VIII
TERMINATION
8.1. Termination. This Agreement may be terminated, and the
Merger abandoned, at any time prior to the Effective Time, whether
before or after any approval by the stockholders of Merger Sub or
the Company of the matters presented in connection with the Merger:
(a) by mutual written consent of Parent and the Company;
(b) by Parent, by written notice to the Company, if (i)
the Company shall have failed to comply in any material respect with
any of its covenants or agreements contained in this Agreement
required to be complied with prior to the date of such termination,
which failure to comply has not been cured within fifteen business
days after receipt by the Company of written notice of such failure
40
to comply or (ii) the stockholders of the Company shall not approve
the Merger at the Stockholders Meeting or any adjournment thereof;
(c) by the Company, by written notice to Parent, if (i)
Parent or Merger Sub shall have failed to comply in any material
respect with any of its respective covenants or agreements contained
in this Agreement required to be complied with prior to the date of
such termination, which failure to comply has not been cured within
fifteen business days after receipt by Parent of written notice of
such failure to comply or (ii) the stockholders of the Company shall
not approve the Merger at the Stockholders Meeting or any
adjournment thereof;
(d) by either Parent or the Company, by written notice
from the terminating party to the other parties, if there has been
(i) a breach by the other (or Merger Sub if the Company is the
terminating party) of any representation or warranty made as of the
date hereof that is not qualified by reference to a Material Adverse
Effect, the effect of which has a Company Material Adverse Effect or
a Parent Material Adverse Effect, as the case may be, or (ii) a
breach by the other (or Merger Sub if the Company is the terminating
party) of any representation or warranty made as of the date hereof
that is qualified by reference to a Material Adverse Effect, in each
case, which breach has not been cured (if capable of being cured)
within fifteen business days after receipt by the breaching party of
written notice of the breach;
(e) by either Parent or the Company, by written notice
from the terminating party to the other parties, if: (i) the Merger
has not been effected on or prior to the close of business on
September 30, 1999, whether such date is before or after the date of
approval by the stockholders of the Company; provided, however, that
the right to terminate this Agreement pursuant to this clause (e)
shall not be available to any party whose failure to fulfill any
obligation of this Agreement has been the cause of, or resulted in,
the failure of the Merger to have occurred on or prior to such date;
or (ii) any court or other Governmental Entity having jurisdiction
over a party hereto shall have issued an injunction, order, decree
or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated
by this Agreement and such order, decree, ruling or other action
shall have become final and nonappealable;
(f) by the Company, by written notice to Parent, if the
Board of Directors of the Company shall determine in good faith that
a Takeover Proposal constitutes a Superior Proposal; provided,
however, that the Company may not terminate this Agreement pursuant
to this clause (f) unless (i) five business days shall have elapsed
after delivery to Parent of a written notice of such determination
by such Board of Directors and at all reasonable times during such
five business day period the Company shall have provided Parent a
reasonable opportunity, during such five business day period, to
propose a modification of the terms and conditions of this Agreement
so that a business combination between the Company and Parent (or an
Affiliate of Parent) may be effected, and (ii) at the end of such
five business day period such Board of Directors shall continue to
41
believe in good faith that such Takeover Proposal constitutes a
Superior Proposal and simultaneously therewith the Company shall
enter into a definitive acquisition, merger or similar agreement to
effect such Superior Proposal;
(g) by Parent, by written notice to the Company, if (i)
the Board of Directors of the Company shall not have recommended the
Merger to the Company's stockholders, or shall have resolved not to
make such recommendation, or shall have modified in a manner adverse
to Parent or rescinded its recommendation of the Merger to the
Company's stockholders as being advisable and fair to and in the
best interests of the Company and its stockholders, or shall have
modified in a manner adverse to Parent or rescinded its approval of
the Agreement, or shall have resolved to do any of the foregoing,
(ii) the Board of Directors of the Company shall have recommended to
the stockholders of the Company any Takeover Proposal (other than by
Parent or an Affiliate of Parent) or shall have resolved to do so,
(iii) a tender offer or exchange offer (other than by Parent or an
Affiliate of Parent) for 20% or more of the outstanding shares of
capital stock of the Company is commenced, and the Board of
Directors of the Company fails to recommend against acceptance of
such tender offer or exchange offer by its stockholders within the
10 business day period (or such shorter period) required by Section
14e-2 of the Exchange Act (the taking of no position by the
expiration of such ten business day period (or such shorter period)
with respect to the acceptance of such tender offer or exchange
offer by its stockholders constituting such a failure), or (iv) the
Company or any of its Subsidiaries, without having received prior
written consent from Parent, shall have entered into, authorized,
recommended, proposed, or publicly announced its intention to enter
into, authorize, recommend or propose to its shareholders an
agreement, arrangement, understanding or letter of intent with any
Person (other than Parent or any of its Affiliates) to (A) effect a
merger or consolidation or similar transaction involving the Company
or any of its Subsidiaries, (B) purchase, lease, or otherwise
acquire all or a substantial portion of the assets of the Company or
any of its Subsidiaries or (C) purchase or otherwise acquire
(including by way of merger, consolidation, share exchange or
similar transaction) Beneficial Ownership (as defined in the Company
Option Agreement) of securities representing 20% or more of the
voting power of the Company (in each case other than any such
merger, consolidation, purchase, lease or other transaction
involving only the Company and one or more of its Subsidiaries or
involving only any two or more of its Subsidiaries); and
(h) by Parent or the Company, by written notice to the
other party, if ten business days elapse after all the conditions
set forth in Article VII (other than conditions that by their nature
are to be satisfied at the Closing) shall be satisfied or waived and
the Closing shall not have occurred through no fault of the
terminating party.
The right of Parent or the Company to terminate this Agreement
pursuant to this Section 8.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
42
behalf of such party, whether prior to or after the execution of
this Agreement.
8.2. Effect of Termination.
(a) In the event of the termination of this Agreement
by either Parent or the Company as provided in Section 8.1, this
Agreement shall forthwith become void without any liability
hereunder on the part of the Company, Parent, Merger Sub or their
respective directors or officers, except that the agreements of the
Company, Parent and Merger Sub contained in Section 6.12 (Expenses)
and this Section 8.2, in Article IX and in the Confidentiality
Agreement dated August 3, 1998 between Parent and the Company (the
"Confidentiality Agreement") shall survive any such termination;
provided, however, that nothing contained in this Section 8.2 shall
relieve any party hereto from any liability for any breach of this
Agreement.
(b) The Company and Parent agree that if (i) if a
Purchase Event (as defined in the Company Option Agreement) shall
have occurred, (ii) this Agreement is terminated by Parent because
the Company settles, compromises or dismisses the Allegiance
Litigation without the prior written consent of Parent, or (iii) the
stockholders of the Company fail to approve the Merger at the
Stockholders Meeting or any adjournment thereof and, immediately
prior to such vote, there exists (x) a Takeover Proposal (other than
by Parent or any Affiliate of Parent) or (y) an outstanding tender
offer or exchange offer by any person (other than Parent or any
Affiliate of Parent) for 20% or more of the outstanding shares of
capital stock of the Company (any transaction described in the
preceding clauses (x) or (y) being a "Third Party Transaction"),
and the Company or its Affiliates consummates such Third Party
Transaction within one year of the date of the Stockholders Meeting
or any adjournment thereof (the "Meeting Date"); then in the case of
any event described in the preceding clause (i), (ii) or (iii), the
Company shall pay to Parent an amount in cash equal to $15,000,000
(the "$15,000,000 Termination Fee"). If the stockholders of the
Company fail to approve the Merger at the Stockholder Meeting or any
adjournment thereof and, immediately prior to such vote, there
exists a Third Party Transaction, then within five business days of
the Meeting Date the Company shall pay to Parent all of Parent's and
Merger Sub's expenses incurred in connection herewith (the "Merger
Expenses") up to a maximum amount of $1,000,000 (the "Expense Cap").
If the Company subsequently pays the $15,000,000 Termination Fee
pursuant to clause (iii) of this Section 8.2(b), such amount shall
be offset and reduced by the amount of the Merger Expenses actually
paid to Parent by the Company under this Section 8.2(b).
(c) The Company and Parent agree that if the Company's
stockholders do not approve the Merger at the Stockholders Meeting
or any adjournment thereof and, immediately prior to such vote,
there exists no Third Party Transaction, then within five business
days of the Meeting Date the Company shall pay to Parent an amount
in cash equal to the Merger Expenses up to the Expense Cap. If,
however, during the 180-day period following the Meeting Date, there
exists a Third Party Transaction and the Company or its Affiliates
43
consummates such Third Party Transaction within one year of the
Meeting Date, the Company shall pay to Parent on the date of
consummation of such Third Party Transaction an amount in cash equal
to $7,500,000 (the "$7,500,000 Fee") less the amount of the Merger
Expenses actually paid to the Parent by the Company under this
Section 8.2(c).
(d) Any payment of the $15,000,000 Termination Fee (i)
made pursuant to clause (i) or (ii) of Section 8.2(b) shall be made
within five business days of the occurrence of the events described
therein or (ii) made pursuant to clause (iii) of Section 8.2(b)
shall be made on the date of consummation of the Third Party
Transaction, in each case by wire transfer of immediately available
funds to an account designated in writing by Parent.
Notwithstanding anything in this Agreement (including Section 9.13)
to the contrary, if either the $15,000,000 Termination Fee or the
$7,500,000 Fee is paid under this Section 8.2, such payment shall
constitute (together with rights, if any, arising under the Company
Option Agreement) liquidated damages in full and complete
satisfaction of, and shall be Parent's and Merger Sub's sole and
exclusive remedy for, any loss, liability, damage or expense arising
out of or in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1. Survival. This Article IX and the agreements of the
Company, Parent and Merger Sub contained in Article IV and in
Sections 6.6 (Taxation), 6.9 (Stock Exchange Listing and
De-listing), 6.11 (Options and Benefits), 6.12 (Fees and Expenses)
and 6.13 (Indemnification; Directors' and Officers' Insurance) shall
survive the consummation of the Merger. This Article IX, the
agreements of the Company, Parent and Merger Sub contained in
Section 6.12 (Expenses), Section 8.2 (Effect of Termination and
Abandonment) and the Confidentiality Agreement shall survive the
termination of this Agreement. All other representations,
warranties, covenants and agreements in this Agreement shall not
survive the consummation of the Merger or the termination of this
Agreement.
9.2. Modification or Amendment. Subject to the provisions of
the applicable law and the rules of the NYSE, at any time prior to
the Effective Time, the parties hereto may modify or amend this
Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
9.3. Waiver of Conditions. The conditions to each of the
parties' obligations to consummate the Merger are for the sole
benefit of such party and may be waived by such party in whole or in
part to the extent permitted by applicable law.
9.4. Counterparts. This Agreement may be executed in any
number of counterparts, each such counterpart being deemed to be an
44
original instrument, and all such counterparts shall together
constitute the same agreement.
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. THIS
AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE
LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF, EXCEPT THAT MATTERS RELATING TO THE INTERNAL
CORPORATE LAW OF THE COMPANY SHALL BE GOVERNED BY THE URBCA. Except
as permitted by Section 9.13, the parties hereby irrevocably submit
to the jurisdiction of the courts of the State of Delaware and the
Federal courts of the United States of America located in the State
of Delaware solely in respect of the interpretation and enforcement
of the provisions of this Agreement and of the documents referred to
in this Agreement, and in respect of the transactions contemplated
hereby, and hereby waive, and agree not to assert, as a defense in
any action, suit or proceeding for the interpretation or enforcement
hereof or of any such document, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be
enforced in or by such courts, and the parties hereto irrevocably
agree that all claims with respect to such action or proceeding
shall be heard and determined in such a Delaware State or Federal
court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other
papers in connection with any such action or proceeding in the
manner provided in Section 9.6 or in such other manner as may be
permitted by law shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH
PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH
PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.5.
9.6. Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the others shall be
in writing and delivered personally or sent by overnight courier or
by registered or certified mail, postage prepaid, or by facsimile:
45
if to Parent or Merger Sub:
Xxxxxxxx-Xxxxx Corporation
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx-Xxxxx Corporation
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Senior Vice President - Law
and Government Affairs
Xxxxx Liddell & Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
if to the Company:
Xxxxxxx Medical Products
00000 Xxxx Xxxx Xxxxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx and Xxxx Xxxx
Facsimile: (000) 000-0000
with a copy to:
Coudert Brothers
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
or to such other persons or addresses as may be designated in
writing by the party to receive such notice as provided above.
9.7. Entire Agreement; No Other Representations. This
Agreement (including any exhibits hereto), the Company Option
Agreement, the Company Disclosure Letter, the Parent Disclosure
Letter, the Company Stockholder Agreement, the Executive Agreements,
the Confidentiality Agreement and the Confidentiality Agreement
dated December 16, 1998, by and between Parent and the Company
constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT, NEITHER
PARENT AND MERGER SUB NOR THE COMPANY MAKES ANY OTHER
REPRESENTATIONS OR WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY OF ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR OTHER
46
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING
THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH
RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
9.8. No Third Party Beneficiaries. Except as provided in
Section 6.13 (Indemnification; Directors' and Officers' Insurance),
this Agreement is not intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
9.9. Obligations of Parent and of the Company. Whenever this
Agreement requires a Subsidiary of Parent to take any action, such
requirement shall be deemed to constitute an undertaking on the part
of Parent to cause such Subsidiary to take such action. Whenever
this Agreement requires a Subsidiary of the Company to take any
action, such requirement shall be deemed to constitute an
undertaking on the part of the Company to cause such Subsidiary to
take such action and, after the Effective Time, on the part of the
Surviving Corporation to cause such Subsidiary to take such action.
9.10. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability or the
other provisions hereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be
substituted therefor in order to carry out, so far as may be valid
and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other Persons or circumstances
shall not be affected by such invalidity or unenforceability, nor
shall such invalidity or unenforceability affect the validity or
enforceability of such provision, or the application thereof, in any
other jurisdiction.
9.11. Interpretation. The table of contents and headings
herein are for convenience of reference only, do not constitute part
of this Agreement and shall not be deemed to limit or otherwise
affect any of the provisions hereof. Where a reference in this
Agreement is made to a Section or Exhibit, such reference shall be
to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including"
are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
9.12. Assignment. This Agreement shall not be assignable
by operation of law or otherwise; provided, however, that Parent may
designate, by written notice to the Company, another wholly-owned
direct Subsidiary to be a Constituent Corporation in lieu of Merger
Sub, in which event all references herein to Merger Sub shall be
deemed references to such other Subsidiary, except that all
representations and warranties made herein with respect to Merger
Sub as of the date of this Agreement shall be deemed representations
47
and warranties made with respect to such other Subsidiary as of the
date of such designation.
9.13. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the terms or
provisions of this Agreement were not performed in accordance with
their specific wording or were otherwise breached. It is
accordingly agreed that each of the parties hereto shall be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States of America or any state
having jurisdiction, such remedy being in addition to any other
remedy to which any party may be entitled at law or in equity.
9.14. Projections and Forward-Looking Information. Certain
statements (i) contained in the Company Reports or in materials made
available by the Company to Parent or in statements made by the
Company to Parent in connection with the transactions contemplated
by this Agreement or (ii) contained in the Parent Reports or in
materials made available by Parent to the Company or in statements
made by Parent to the Company in connection with the transactions
contemplated by this Agreement may contain projections or other
forward-looking information which indicate the Company's or the
Parent's (as the case may be) current expectations or forecasts of
future events. Such statements may often be identified by terms
such as "anticipate," "believe," "estimate," "expect," "intend,"
"may," "could," "possible," "plan," "project," "will," "forecast"
and similar words or expressions. Such forward-looking information
inherently involves a variety of risks and uncertainties, known and
unknown, and may be affected by inaccurate assumptions and numerous
other factors, including risks not identified in any discussion of
risk factors contained in the Company Reports or the Parent Reports.
Actual results may vary materially. With respect to all such
projections and other forward-looking information and data, it is
acknowledged and agreed by the parties that none of the parties
hereto is making any representation or warranty with respect to the
fulfillment of any such projection or forward-looking information
and data.
[Remainder of Page Intentionally Left Blank]
48
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as
of the date first written above.
XXXXXXXX-XXXXX CORPORATION
By:/s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
XXXXXXX MEDICAL PRODUCTS
By:/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: President
JAZZ ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
D1995A-136517.21
49
