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EXHIBIT 2(a)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXX-FIELD HEALTH PRODUCTS, INC.
GFHP ACQUISITION CORP.,
AND
XXXXX ENTERPRISES, INC.
Dated as of September 5, 1997
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TABLE OF CONTENTS
Page
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PARTIES.................................................................. 1
PREAMBLE................................................................. 1
ARTICLE 1-TRANSACTIONS AND TERMS OF MERGER .............................. 2
1.1 Merger ........................................................ 2
1.2 Time and Place of Closing ..................................... 2
1.3 Effective Time ................................................ 2
ARTICLE 2 TERMS OF MERGER ............................................... 2
2.1 Charter ....................................................... 2
2.2 Bylaws ........................................................ 2
2.3 Directors and Officers ........................................ 2
ARTICLE 3 MANNER OF CONVERTING SHARES ................................... 3
3.1 Conversion of Shares .......................................... 3
3.2 Anti-Dilution Provisions ...................................... 3
3.3 Shares Held by Target or Buyer ................................ 4
3.4 Fractional Shares ............................................. 4
3.5 Stock Options ................................................. 5
ARTICLE 4 EXCHANGE OF SHARES ............................................ 6
4.1 Exchange Procedures ........................................... 6
4.2 Rights of Former Target Stockholders .......................... 7
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF TARGET ...................... 7
5.1 Organization, Standing, and Power ............................. 7
5.2 Authority of Target; No Breach By Agreement ................... 8
5.3 Capital Stock ................................................. 9
5.4 Target Subsidiaries ........................................... 9
5.5 SEC Filings; Financial Statements ............................. 10
5.6 Absence of Undisclosed Liabilities ............................ 11
5.7 Absence of Certain Changes or Events .......................... 11
5.8 Tax Matters ................................................... 11
5.9 Assets ........................................................ 13
5.10 Intellectual Property ......................................... 13
5.11 Environmental Matters ......................................... 14
5.12 Compliance with Laws .......................................... 15
5.13 Labor Relations ............................................... 15
5.14 Employee Benefit Plans ........................................ 15
5.15 Material Contracts ............................................ 17
5.16 Legal Proceedings ............................................. 18
5.17 Reports ....................................................... 18
5.18 Statements True and Correct ................................... 19
5.19 Tax and Regulatory Matters .................................... 19
5.20 State Takeover Laws ........................................... 19
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5.21 Charter Provisions ............................................ 19
5.22 Opinion of Financial Advisor .................................. 19
5.23 Affiliate Transactions ........................................ 20
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER ....................... 20
6.1 Organization, Standing, and Power ............................. 20
6.2 Authority; No Breach By Agreement ............................. 20
6.3 Capital Stock ................................................. 21
6.4 Buyer Subsidiaries ............................................ 22
6.5 SEC Filings; Financial Statements ............................. 23
6.6 Absence of Undisclosed Liabilities ............................ 23
6.7 Absence of Certain Changes or Events .......................... 23
6.8 Tax Matters ................................................... 24
6.9 Assets ........................................................ 24
6.10 Intellectual Property ......................................... 25
6.11 Environmental Matters ......................................... 26
6.12 Compliance With Laws .......................................... 27
6.13 Labor Relations ............................................... 27
6.14 Employee Benefit Plans ........................................ 27
6.15 Material Contracts ............................................ 29
6.16 Legal Proceedings ............................................. 29
6.17 Reports ....................................................... 29
6.18 Statements True and Correct ................................... 30
6.19 Authority of Sub .............................................. 30
6.20 Tax and Regulatory Matters .................................... 31
6.21 Rights Agreement .............................................. 31
6.22 Affiliate Transactions ........................................ 31
6.23 Vote Required ................................................. 31
ARTICLE 7 CONDUCT OF BUSINESS PENDING CONSUMMATION ...................... 32
7.1 Affirmative Covenants of Target ............................... 32
7.2 Negative Covenants of Target .................................. 32
7.3 Covenants of Buyer ............................................ 34
7.4 Adverse Changes in Condition .................................. 35
7.5 Reports ....................................................... 35
ARTICLE 8 ADDITIONAL AGREEMENTS ......................................... 36
8.1 Registration Statement; Proxy Statement; Stockholder Approval.. 36
8.2 Exchange Listing .............................................. 37
8.3 Applications; Antitrust Notification .......................... 37
8.4 Filings with State Offices .................................... 37
8.5 Agreement as to Efforts to Consummate ......................... 37
8.6 Investigation and Confidentiality ............................. 38
8.7 Press Releases ................................................ 38
8.8 No Solicitations, etc ......................................... 38
8.9 Tax Treatment ................................................. 39
8.10 State Takeover Laws ........................................... 39
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8.11 Agreement of Affiliates ....................................... 39
8.12 Employee Benefits and Contracts ............................... 39
8.13 Indemnification ............................................... 40
8.14 Related Party Contracts and Transactions ...................... 41
ARTICLE 9 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE ............. 42
9.1 Conditions to Obligations of Each Party ....................... 42
9.2 Conditions to Obligations of Buyer ............................ 43
9.3 Conditions to Obligations of Target ........................... 43
ARTICLE 10 TERMINATION .................................................. 44
10.1 Termination ................................................... 44
10.2 Effect of Termination ......................................... 45
10.3 Non-Survival of Representations and Covenants ................. 46
ARTICLE 11 MISCELLANEOUS ................................................ 46
11.1 Definitions ................................................... 46
11.2 Expenses ...................................................... 54
11.3 Brokers and Finders ........................................... 54
11.4 Entire Agreement .............................................. 54
11.5 Amendments .................................................... 55
11.6 Waivers ....................................................... 55
11.7 Assignment .................................................... 56
11.8 Notices ....................................................... 56
11.9 Governing Law ................................................. 57
11.10 Counterparts .................................................. 57
11.11 Captions; Articles and Sections ............................... 57
11.12 Interpretations ............................................... 57
11.13 Severability .................................................. 57
11.14 Enforcement of Agreement ...................................... 57
SIGNATURES .............................................................. 58
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LIST OF EXHIBITS
Exhibit Number Description
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1. Form of Stockholders Agreement dated as of September 5, 1997
by and among Xxxxxx-Field Health Products, Inc. BIL (Far
East Holdings) Limited, BIL Securities (Offshore) Ltd. and
the Individuals and Entities listed on the Signature Pages
Thereto.
2. Form of Voting Agreement dated as of September 5, 1997 by
and between Xxxxxx-Field Health Products, Inc. and Xxxx X.
Xxxxxxx
3. Form of agreement of affiliates of Target
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of September 5, 1997, by and among XXXXXX-FIELD HEALTH PRODUCTS, INC.
("Buyer"), a Delaware corporation; GFHP ACQUISITION CORP. ("Sub"), a Delaware
corporation; and XXXXX ENTERPRISES, INC. ("Target"), a Delaware corporation.
PREAMBLE
The respective Boards of Directors of Target, Sub and Buyer are of the
opinion that the transactions described herein are in the best interests of the
parties to this Agreement and their respective stockholders. This Agreement
provides for the acquisition of Target by Buyer pursuant to the merger of Sub
with and into Target. At the effective time of such merger, the outstanding
shares of the capital stock of Target shall be converted into the right to
receive shares of the common stock of Buyer (except as provided herein). As a
result, stockholders of Target shall become stockholders of Buyer and Target
shall continue immediately following such merger to conduct its business and
operations as a wholly owned subsidiary of Buyer. The transactions described in
this Agreement are subject to the approvals of the stockholders of Target, the
stockholders of Buyer, expiration of the required waiting period under the HSR
Act, and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the Merger
for federal income tax purposes shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code.
In consideration of the transactions contemplated hereby and in order to
induce the parties to enter into this Agreement, BIL (Far East Holdings)
Limited, BIL Securities (Offshore) Ltd., Xxxxx Holdings I, L.P., J. Xxx Xxxxx,
X.X. Xxxxx, The X.X. Xxxxx Foundation, Inc., The Xxxxxxxx Xxxxxxx Xxxxx Trust
and The Xxxxxx Xxxxxx Xxxxx Trust have concurrently with the execution and
delivery of this Agreement executed and delivered to Buyer a Stockholders
Agreement in the form attached hereto as Exhibit 1. Additionally, in
consideration of the transactions contemplated hereby and in order to induce the
parties to enter into this Agreement, Xxxx X. Xxxxxxx has concurrently with the
execution and delivery of this Agreement executed and delivered to Buyer a
Voting Agreement in the form attached hereto as Exhibit 2.
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement,
at the Effective Time, Sub shall be merged with and into Target in accordance
with the provisions of Section 251 of the DGCL and with the effect provided in
Section 251 of the DGCL (the "Merger"). Target shall be the Surviving
Corporation resulting from the Merger and shall become a wholly owned Subsidiary
of Buyer and shall continue to be governed by the Laws of the State of Delaware.
The Merger shall be consummated pursuant to the terms of this Agreement, which
has been approved and adopted by the respective Boards of Directors of Target,
Sub and Buyer and by Buyer, as the sole stockholder of Sub.
1.2 TIME AND PLACE OF CLOSING. The closing of the transactions
contemplated hereby (the "Closing") will take place at 9:00 A.M. on the date
that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their authorized officers, may mutually agree. The Closing shall
be held at such location as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated
by this Agreement shall become effective on the date and at the time the
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Delaware (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the authorized officers of each Party, the Parties shall use their
reasonable efforts to cause the Effective Time to occur on the first business
day following the last to occur of (i) the effective date (including expiration
of any applicable waiting period) of the last required Consent of any Regulatory
Authority having authority over and approving or exempting the Merger, and (ii)
the date on which the stockholders of Target and Buyer approve this Agreement to
the extent such approval is required by applicable Law.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Certificate of Incorporation of Target in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until duly amended or repealed;
provided that such Certificate of Incorporation shall be amended to reflect that
the name of the Surviving Corporation shall be "Lumex/Basic American Holdings,
Inc."
2.2 BYLAWS. The Bylaws of Target in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until duly
amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Sub in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance with
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the Bylaws of the Surviving Corporation. The officers of Sub in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the officers of the Surviving
Corporation from and after the Effective Time in accordance with the Bylaws of
the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any action
on the part of Buyer, Target, Sub or the stockholders of any of the foregoing,
the shares of the constituent corporations shall be converted as follows:
(a) Each share of capital stock of Buyer issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of Sub Common Stock issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
be converted into one share of Target Common Stock.
(c) Each share of Target Common Stock (excluding shares held by
any Target Entity or any Buyer Entity) issued and outstanding immediately prior
to the Effective Time shall cease to be outstanding and shall be converted into
and exchanged for the right to receive 2.1 shares of Buyer Common Stock (the
"Base Exchange Ratio" and, subject to the provisions of the remainder of this
sentence, the "Exchange Ratio"); provided, that, in the event that the Average
Closing Price shall be greater than $17.6190 (the "Upper Threshold Price"), the
Exchange Ratio shall equal that multiple of a share of Buyer Common Stock
(rounded to the nearest ten thousandth of a share) obtained by dividing the
product of the Base Exchange Ratio and the Upper Threshold Price by the Average
Closing Price; provided further, that in the event that the Average Closing
Price shall be less than $13.5714 (the "Lower Threshold Price"), the Exchange
Ratio shall equal that multiple of a share of Buyer Common Stock (rounded to the
nearest ten thousandth of a share) obtained by dividing the product of the Base
Exchange Ratio and the Lower Threshold Price by the Average Closing Price. For
purposes of this Agreement, "Average Closing Price" is defined to mean the
average of the daily closing prices for the shares of Buyer Common Stock for the
ten (10) consecutive trading days on which such shares are actually traded on
the NYSE (as reported by The Wall Street Journal or, if not reported thereby,
any other authoritative source selected by Buyer) ending at the close of trading
on the second trading day immediately preceding the Closing Date). Pursuant to
the Buyer Rights Agreement, each share of Buyer Common Stock issued in
connection with the Merger upon conversion of Target Common Stock shall be
accompanied by a Buyer Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Buyer changes the
number of shares of Buyer Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date
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therefor (in the case of a stock dividend) or the effective date thereof (in the
case of a stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted. In the event Buyer changes the number of shares of
Buyer Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be after the
Exchange Ratio has been determined in accordance with Section 3.1(c) and prior
to the Effective Time, the Exchange Ratio shall be proportionately adjusted. In
the event Buyer changes the number of shares of Buyer Common Stock issued and
outstanding prior to the Effective Time as a result of a stock split, stock
dividend, or similar recapitalization with respect to such stock and the record
date therefor (in the case of a stock dividend) or the effective date thereof
(in the case of a stock split or similar recapitalization for which a record
date is not established) shall be prior to the date on which the Exchange Ratio
is determined in accordance with Section 3.1(c), (i) the Average Closing Price
Limitations shall be adjusted to appropriately adjust the ratio under which
shares of Target Common Stock will be converted into shares of Buyer Common
Stock pursuant to Section 3.1(c), and (ii) if necessary, the anticipated
Effective Time shall be postponed for an appropriate period of time agreed upon
by the parties in order for the Average Closing Price to reflect the market
effect of such stock split, stock dividend, or similar recapitalization.
3.3 SHARES HELD BY TARGET OR BUYER. Each of the shares of Target
Common Stock held by any Target Entity or by any Buyer Entity shall be canceled
and retired at the Effective Time and no consideration shall be issued in
exchange therefor.
3.4 FRACTIONAL SHARES.
(a) No certificate or scrip representing fractional
shares of Buyer Common Stock to which holders of Target Common Stock would
otherwise be entitled pursuant to this Agreement will be issued in the Merger
upon the surrender for exchange of certificates representing shares of Target
Common Stock, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of Buyer.
(b) As promptly as practicable following the Effective
Time, the Exchange Agent (as defined in Section 4.1) shall determine the
aggregate number of whole shares of Buyer Common Stock represented by fractional
shares of Buyer Common Stock to which holders of Target Common Stock would be
entitled but for the provisions of paragraph (a) of this Section 3.4 (such
number of shares being herein called the "Excess Shares"). As soon after the
Effective Time as practicable, the Exchange Agent, as agent for the holders of
Target Common Stock, shall sell the Excess Shares at then prevailing prices on
the NYSE, all in the manner provided in paragraph (c) of this Section 3.4.
(c) The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through a member firm of the NYSE and shall be
executed in round lots to the extent practicable. Until the net proceeds of such
sale or sales have been distributed to the holders of Target Common Stock, the
Exchange Agent will hold such proceeds in trust for the holders of Target Common
Stock (the "Common Stock Trust"). Buyer shall pay all commissions, transfer
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taxes and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent , incurred in connection with such sale of
the Excess Shares. In addition, Buyer shall pay the Exchange Agent's
compensation and expenses in connection with such sale. The Exchange Agent shall
determine the portion of the Common Stock Trust to which each holder of Target
Common Stock shall be entitled, if any, by multiplying the amount of the
aggregate net proceeds comprising the Common Stock Trust by a fraction, the
numerator of which is the amount of the fractional share interest to which such
holder of Target Common Stock is entitled and the denominator of which is the
aggregate amount of fractional share interests to which all holders of Target
Common Stock are entitled.
(d) As soon as practicable after the determination of the
amount of cash to be paid to holders of Target Common Stock in lieu of any
fractional share interests in accordance with the immediately preceding
paragraph, the Exchange Agent shall make available such amounts to such holders
of Target Common Stock in a manner consistent with paragraphs (b) and (c) of
this Section 3.4
3.5 STOCK OPTIONS.
(a) At the Effective Time, each option or other right to
purchase shares of Target Common Stock pursuant to stock options ("Target
Options") granted by Target under the Target Stock Plans, which are outstanding
at the Effective Time, whether or not exercisable, shall be converted into and
become rights with respect to Buyer Common Stock, and Buyer shall assume each
Target Option, in accordance with the terms of the Target Stock Plan and stock
option agreement by which it is evidenced, except that from and after the
Effective Time, (i) Buyer and its Compensation Committee shall be substituted
for Target and the Committee of Target's Board of Directors (including, if
applicable, the entire Board of Directors of Target) administering such Target
Stock Plan, (ii) each Target Option assumed by Buyer may be exercised solely for
shares of Buyer Common Stock, (iii) the number of shares of Buyer Common Stock
subject to such Target Option shall be equal to the number of shares of Target
Common Stock subject to such Target Option immediately prior to the Effective
Time multiplied by the Exchange Ratio (as the same may have been adjusted in
accordance with Section 3.2) and (iv) the per share exercise price under each
such Target Option shall be adjusted by dividing the per share exercise price
under each such Target Option by the Exchange Ratio (as the same may have been
adjusted in accordance with Section 3.2) and rounding up to the nearest cent. In
addition, notwithstanding the provisions of clauses (iii) and (iv) of the first
sentence of this Section 3.5, with respect to each Target Option which is an
"incentive stock option" Buyer shall take no action that would constitute a
modification, extension, or renewal of the option, within the meaning of Section
424(h) of the Internal Revenue Code.
(b) As soon as practicable after the Effective Time,
Buyer shall deliver to the participants in each Target Stock Plan an appropriate
notice setting forth such participant's rights pursuant thereto and the grants
pursuant to such Target Stock Plan shall continue in effect on the same terms
and conditions (subject to the adjustments required by Section 3.5(a) after
giving effect to the Merger), and Buyer shall comply with the terms of each
Target Stock Plan to ensure,
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to the extent required by, and subject to the provisions of, such Target Stock
Plan, that Target Options which qualified as incentive stock options prior to
the Effective Time continue to qualify as incentive stock options after the
Effective Time. At or prior to the Effective Time, Buyer shall take all
corporate action necessary to reserve for issuance sufficient shares of Buyer
Common Stock for delivery upon exercise of Target Options assumed by it in
accordance with this Section 3.5. As soon as practicable after the Effective
Time, Buyer shall file a registration statement on Form S-8 (or any successor or
other appropriate form), with respect to the shares of Buyer Common Stock
subject to such options and shall use its reasonable efforts to maintain the
effectiveness of such registration statements (and maintain the current status
of the prospectus or prospectuses with respect thereto) for so long as such
options remain outstanding.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective
Time, Buyer and Target shall cause the exchange agent selected by Buyer (the
"Exchange Agent") to mail to each holder of record of a certificate or
certificates which represented shares of Target Common Stock immediately prior
to the Effective Time (the "Certificates") appropriate transmittal materials and
instructions (which shall specify that delivery shall be effected, and risk of
loss and title to such Certificates shall pass, only upon proper delivery of
such Certificates to the Exchange Agent). The Certificate or Certificates of
Target Common Stock so delivered shall be duly endorsed as the Exchange Agent
may require. In the event of a transfer of ownership of shares of Target Common
Stock represented by Certificates that are not registered in the transfer
records of Target, the consideration provided in Section 3.1 may be issued to a
transferee if the Certificates representing such shares are delivered to the
Exchange Agent, accompanied by all documents required to evidence such transfer
and by evidence satisfactory to the Exchange Agent that any applicable stock
transfer taxes have been paid. If any Certificate shall have been lost, stolen,
mislaid or destroyed, upon receipt of (i) an affidavit of that fact from the
holder claiming such Certificate to be lost, mislaid, stolen or destroyed, (ii)
such bond, security or indemnity as Buyer and the Exchange Agent may reasonably
require and (iii) any other documents necessary to evidence and effect the bona
fide exchange thereof, the Exchange Agent shall issue to such holder the
consideration into which the shares represented by such lost, stolen, mislaid or
destroyed Certificate shall have been converted. The Exchange Agent may
establish such other reasonable and customary rules and procedures in connection
with its duties as it may deem appropriate. After the Effective Time, each
holder of shares of Target Common Stock (other than shares to be canceled
pursuant to Section 3.3) issued and outstanding at the Effective Time shall
surrender the Certificate or Certificates representing such shares to the
Exchange Agent and shall promptly upon surrender thereof receive in exchange
therefor the consideration provided in Section 3.1, together with all
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2. Buyer shall not be obligated to
deliver the consideration to which any former holder of Target Common Stock is
entitled as a result of the Merger until such holder surrenders such holder's
Certificate or Certificates for exchange as provided in this Section 4.1. Any
other provision of this Agreement notwithstanding, neither Buyer, the Surviving
Corporation nor the Exchange Agent shall be liable to a holder of Target Common
Stock for any
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amounts paid or property delivered in good faith to a public official pursuant
to any applicable abandoned property, escheat or similar Law. Adoption of this
Agreement by the stockholders of Target shall constitute ratification of the
appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER TARGET STOCKHOLDERS. At the Effective Time,
the stock transfer books of Target shall be closed as to holders of Target
Common Stock immediately prior to the Effective Time and no transfer of Target
Common Stock by any such holder shall thereafter be made or recognized. Until
surrendered for exchange in accordance with the provisions of Section 4.1, each
Certificate theretofore representing shares of Target Common Stock (other than
shares to be canceled pursuant to Section 3.3) shall from and after the
Effective Time represent for all purposes only the right to receive the
consideration provided in Sections 3.1 and 3.4 in exchange therefor, subject,
however, to the Surviving Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to the Effective Time which
have been declared or made by Target in respect of such shares of Target Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. To the extent permitted by Law, former stockholders of
record of Target shall be entitled to vote after the Effective Time at any
meeting of Buyer stockholders the number of whole shares of Buyer Common Stock
into which their respective shares of Target Common Stock are converted,
regardless of whether such holders have exchanged their Certificates for
certificates representing Buyer Common Stock in accordance with the provisions
of this Agreement. Whenever a dividend or other distribution is declared by
Buyer on the Buyer Common Stock, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all shares of Buyer Common Stock issuable pursuant to this Agreement, but
beginning six months after the Effective Time no dividend or other distribution
payable to the holders of record of Buyer Common Stock as of any time subsequent
to the Effective Time shall be delivered to the holder of any Certificate until
such holder surrenders such Certificate for exchange as provided in Section 4.1.
However, upon surrender of such Certificate, both the Buyer Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) and any undelivered dividends and cash payments payable
hereunder (without interest) shall be delivered and paid with respect to each
share represented by such Certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TARGET
Target hereby represents and warrants to Buyer as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Target is a corporation
duly incorporated, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on its
business as now conducted and to own, lease and operate its material Assets.
Target is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Target Material
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Adverse Effect. The minute books and other organizational documents for Target
have been made available to Buyer for its review and, except as disclosed in
Section 5.1 of the Target Disclosure Memorandum, are true and complete in all
material respects as in effect as of the date of this Agreement and accurately
reflect in all material respects all amendments thereto and all proceedings of
the Board of Directors and stockholders thereof.
5.2 AUTHORITY OF TARGET; NO BREACH BY AGREEMENT.
(a) Target has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution, delivery,
and performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of Target,
subject to the adoption of this Agreement by the holders of a majority of the
outstanding shares of Target Common Stock, which is the only stockholder vote
required for approval of this Agreement and consummation of the Merger by
Target. This Agreement has been duly executed and delivered by Target and,
subject to such requisite stockholder approval, this Agreement represents a
legal, valid, and binding obligation of Target, enforceable against Target in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, receivership,
conservatorship, moratorium, or similar Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by Target, nor the consummation by Target of the transactions contemplated
hereby, nor compliance by Target with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Target's Certificate of
Incorporation or Bylaws or the certificate or articles of incorporation or
bylaws of any Target Subsidiary or any resolution adopted by the board of
directors or the stockholders of any Target Entity, or (ii) except as disclosed
in Section 5.2 of the Target Disclosure Memorandum, constitute or result in a
Default under, or require any Consent pursuant to, or result in the creation of
any Lien on any Asset of any Target Entity under, any Contract or Permit of any
Target Entity, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the aggregate, a
Target Material Adverse Effect, or, (iii) subject to receipt of the requisite
Consents referred to in Section 9.1(b), constitute or result in a Default under,
or require any Consent pursuant to, any Law or Order applicable to any Target
Entity or any of their respective Assets where such Default, or any failure to
obtain such Consent is reasonably likely to have, individually or in the
aggregate, a Target Material Adverse Effect.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities as described in Section 5.2 of the Target Disclosure Memorandum, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are
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not reasonably likely to have, individually or in the aggregate, a Target
Material Adverse Effect, no notice to, filing with, or Consent of, any public
body or authority is necessary for the consummation by Target of the Merger and
the other transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Target consists of
(i) 20,000,000 shares of Target Common Stock, par value $2.50 per share, of
which 4,482,709 shares are issued and outstanding as of the date of this
Agreement and not more than 5,055,109 shares will be issued and outstanding at
the Effective Time, and (ii) 8,000,000 shares of preferred stock, par value
$1.00 per share, none of which are issued and outstanding. All of the issued and
outstanding shares of capital stock of Target are duly and validly issued and
outstanding and are fully paid and nonassessable under the DGCL. None of the
outstanding shares of capital stock of Target has been issued in violation of
any preemptive rights of the current or past stockholders of Target.
(b) Except as set forth in Section 5.3(a), or as
disclosed in Section 5.3 of the Target Disclosure Memorandum, there are no
shares of capital stock or other equity securities of Target outstanding and no
outstanding Equity Rights relating to the capital stock of Target, and all
shares of Target Common Stock issuable upon the exercise or conversion of such
outstanding Equity Rights will, when so issued, be duly and validly issued and
outstanding and fully paid and nonassessable under the DGCL.
5.4 TARGET SUBSIDIARIES. Target has disclosed in Section 5.4 of
the Target Disclosure Memorandum all of the Target Subsidiaries that are
corporations (identifying its jurisdiction of incorporation, each jurisdiction
in which it is qualified and/or licensed to transact business, and the number of
shares owned and percentage ownership interest represented by such share
ownership) and all of the Target Subsidiaries that are general or limited
partnerships, limited liability companies, or other non-corporate entities
(identifying the Law under which such entity is organized, each jurisdiction in
which it is qualified and/or licensed to transact business, and the amount and
nature of the ownership interest therein). Except as disclosed in Section 5.4 of
the Target Disclosure Memorandum, Target or one of its Subsidiaries owns all of
the issued and outstanding shares of capital stock (or other equity interests)
of each Target Subsidiary. No capital stock (or other equity interest) of any
Target Subsidiary is or may become required to be issued (other than to another
Target Entity) by reason of any Equity Rights, and there are no Contracts by
which any Target Subsidiary is bound to issue (other than to another Target
Entity) additional shares of its capital stock (or other equity interests) or
Equity Rights or by which any Target Entity is or may be bound to transfer any
shares of the capital stock (or other equity interests) of any Target Subsidiary
(other than to another Target Entity). Except as disclosed in Section 5.4 of the
Target Disclosure Memorandum, there are no Contracts relating to the rights of
any Target Entity to vote or to dispose of any shares of the capital stock (or
other equity interests) of any Target Subsidiary. All of the shares of capital
stock (or other equity interests) of each Target Subsidiary held by a Target
Entity are fully paid and nonassessable under the applicable corporation Law of
the jurisdiction in which such Subsidiary is incorporated or organized and are
owned by the Target Entity free and clear of any Lien. Except as disclosed in
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Section 5.4 of the Target Disclosure Memorandum, each Target Subsidiary is a
corporation, and each such Subsidiary is duly incorporated, validly existing,
and (as to corporations) in good standing under the Laws of the jurisdiction in
which it is incorporated or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its Assets and to carry on its
business as now conducted. Each Target Subsidiary is duly qualified or licensed
to transact business as a foreign corporation in good standing in the States of
the United States and foreign jurisdictions where the character of its Assets or
the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the aggregate,
a Target Material Adverse Effect. The minute books and other organizational
documents for each Target Subsidiary have been made available to Buyer for its
review, and, except as disclosed in Section 5.4 of the Target Disclosure
Memorandum, are true and complete in all material respects as in effect as of
the date of this Agreement and accurately reflect in all material respects all
amendments thereto and all proceedings of the Board of Directors and
stockholders thereof.
5.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Except as disclosed in Section 5.5 of the Target
Disclosure Memorandum, Target has timely filed and made available to Buyer all
SEC Documents required to be filed by Target since December 31, 1993 (the
"Target SEC Reports"). The Target SEC Reports (i) at the time filed, complied in
all material respects with the applicable requirements of the Securities Laws
and other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Target SEC Reports or
necessary in order to make the statements in such Target SEC Reports, in light
of the circumstances under which they were made, not misleading; provided, that
any pro forma financial statements contained in the Target SEC Reports are not
necessarily indicative of the consolidated financial position of the Target
Entities as of the respective dates thereof and the consolidated results of
operations and cash flows of the Target Entities for the periods indicated. No
Target Subsidiary is required to file any SEC Documents.
(b) Each of the Target Financial Statements (including,
in each case, any related notes) contained in the Target SEC Reports, including
any Target SEC Reports filed after the date of this Agreement until the
Effective Time, complied as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC), and fairly presented in all material respects the consolidated
financial position of Target and its Subsidiaries as at the respective dates and
the consolidated results of operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are subject to
normal and recurring year-end adjustments which were not or are not expected to
be material in amount or effect and that any pro forma financial statements
contained in the Target SEC Reports are not necessarily indicative of the
consolidated financial position of the Target Entities as of the respective
dates thereof and
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the consolidated results of operations and cash flows of the Target Entities for
the periods indicated.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
Section 5.6 of the Target Disclosure Memorandum, no Target Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Target Material Adverse Effect, other than Liabilities or
allowances which are disclosed or accrued or reserved against in the
consolidated balance sheets of Target as of December 31, 1996 and June 30, 1997,
included in the Target Financial Statements delivered prior to the date of this
Agreement or reflected in the notes thereto. Except as disclosed in Section 5.6
of the Target Disclosure Memorandum, no Target Entity has incurred or paid any
Liability since June 30, 1997, except for such Liabilities incurred or paid (i)
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Target Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement. Except as disclosed in Section 5.6 of the Target
Disclosure Memorandum, no Target Entity is directly or indirectly liable, by
guarantee, indemnity, or otherwise, upon or with respect to, or obligated, by
discount or repurchase agreement or in any other way, to provide funds in
respect to, or obligated to guarantee or assume any Liability of any Affiliate
(other than another Target Entity) for any amount, individually or in the
aggregate, in excess of $100,000.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1997,
except as disclosed in the Target Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 5.7 of the Target Disclosure
Memorandum, (a) there have been no events, changes, or occurrences which have
had, or are reasonably likely to have, individually or in the aggregate, a
Target Material Adverse Effect, (b) the Target Entities have conducted their
respective businesses only in the ordinary course consistent with past practice
and (c) none of the Target Entities has taken any action which, if taken after
the date hereof, would constitute a breach of any provision of Section 7.2.
5.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the Target Entities have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a Target Material Adverse
Effect, and all Tax Returns filed are complete and accurate in all material
respects, or except as disclosed in Section 5.8 of the Target Disclosure
Memorandum. All Taxes shown on filed Tax Returns have been paid. As of the date
of this Agreement, there is no audit examination, deficiency, or refund
Litigation with respect to any Taxes that is reasonably likely to result in a
determination that would have, individually or in the aggregate, a Target
Material Adverse Effect, except as reserved against in the Target Financial
Statements delivered prior to the date of this Agreement or as disclosed in
Section 5.8 of the Target Disclosure Memorandum. The applicable statutes of
limitations with respect to Target's federal income Tax Returns have expired
through December 31, 1992. All Taxes and other Liabilities due with respect to
completed and settled examinations or concluded Litigation have been paid. There
are no Liens with respect to Taxes upon any of the
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Assets of the Target Entities, except for any such Liens which are not
reasonably likely to have a Target Material Adverse Effect.
(b) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, none of the Target Entities has executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination by
the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) The provision for any Taxes due or to become due for
any of the Target Entities for the period or periods through and including the
date of the respective Target Financial Statements that has been made and is
reflected on such Target Financial Statements is sufficient to cover all such
Taxes.
(d) Deferred Taxes of the Target Entities have been
provided for in accordance with GAAP.
(e) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, since March 27, 1989, and to the Knowledge of Target
prior to March 27, 1989, none of the Target Entities is a party to any Tax
allocation or sharing agreement and none of the Target Entities has been a
member of an affiliated group filing a consolidated federal income Tax Return
(other than a group the common parent of which was Target), has any Liability
for Taxes of any Person (other than Target and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
Law) as a transferee or successor or by Contract or otherwise.
(f) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, each of the Target Entities is in compliance with, and
its records contain all information and documents (including properly completed
IRS Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Target Material Adverse Effect.
(g) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, none of the Target Entities has made any payments, is
obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction under
Section 280G or 162(m) of the Internal Revenue Code.
(h) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, there has not been an ownership change, as defined in
Internal Revenue Code Section 382(g), of the Target Entities that occurred
during or after any Taxable Period in which the Target Entities incurred a net
operating loss that carries over to any Taxable Period ending after December 31,
1996.
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(i) Except as disclosed in Section 5.8 of the Target
Disclosure Memorandum, no Target Entity has or has had in any foreign country a
permanent establishment, as defined in any applicable tax treaty or convention
between the United States and such foreign country.
5.9 ASSETS.
(a) Except as disclosed in Section 5.9 of the Target
Disclosure Memorandum or as disclosed or reserved against in the Target
Financial Statements delivered prior to the date of this Agreement, the Target
Entities have good and marketable title, free and clear of all Liens, to all of
their respective Assets, except for any such Liens or other defects of title
which are not reasonably likely to have a Target Material Adverse Effect.
(b) All items of inventory of the Target Entities
reflected on the most recent balance sheet included in the Target Financial
Statements delivered prior to the date of this Agreement and prior to the
Effective Time, except as reserved for in the Target Financial Statements,
consisted and will consist, as applicable, of items of a quality and quantity
usable and saleable in the ordinary course of business and conform to generally
accepted standards in the industry in which the Target Entities are a part.
(c) The accounts receivable of the Target Entities as set
forth on the most recent balance sheet included in the Target Financial
Statements delivered prior to the date of this Agreement or arising since the
date thereof are valid and genuine; have arisen solely out of bona fide sales
and deliveries of goods, performance of services and other business transactions
in the ordinary course of business consistent with past practice; are not
subject to valid defenses, set-offs or counterclaims; and are collectible at the
full recorded amount thereof less, in the case of accounts receivable appearing
on the most recent balance sheet included in the Target Financial Statements
delivered prior to the date of this Agreement, the recorded allowance for
collection losses, returns and allowances on such balance sheet. The allowance
for collection losses on such balance sheet has been determined in accordance
with GAAP.
(d) The Target Entities currently maintain insurance
similar in amounts, scope, and coverage as Target believes is adequate to
conduct its business. Except as disclosed in Section 5.9 of the Target
Disclosure Memorandum, there are presently no claims for amounts exceeding in
any individual case $250,000 pending under such policies of insurance and no
notices of claims in excess of such amounts have been given by any Target Entity
under such policies.
(e) The Assets of the Target Entities include all Assets
required to operate the businesses of the Target Entities as presently
conducted.
5.10 INTELLECTUAL PROPERTY. Except as disclosed in Section 5.10 of
the Target Disclosure Memorandum, (i) each Target Entity owns or has a valid and
binding license to use all of the Intellectual Property used by such Target
Entity in the course of its business, (ii) each Target Entity is the owner of or
has a valid and binding license to any Intellectual Property sold or licensed to
a third party by such Target Entity in connection with such Target Entity's
business
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operations, and such Target Entity has the right to convey by sale or license
any Intellectual Property so conveyed and (iii) no Target Entity is in Default
under any of its Intellectual Property licenses and no proceedings have been
instituted, or are pending or to the Knowledge of Target threatened, which
challenge the rights of any Target Entity with respect to Intellectual Property
used, sold or licensed by such Target Entity in the course of its business, nor
to the Knowledge of Target has any person claimed or alleged any rights to such
Intellectual Property, except for any failure to own or license, Default or
proceeding which is not reasonably likely to have a Target Material Adverse
Effect. All Intellectual Property owned by a Target Entity is owned free and
clear of any Liens, and none of such Intellectual Property is subject to any
outstanding Order or Contract restricting the scope of the use thereof, and
there are no claims or demands of any other Person pertaining to Intellectual
Property owned or used by any Target Entity or any license with respect thereto,
and no actions or proceedings, judicial or administrative or otherwise, have
been instituted, are pending or, to the Knowledge of Target, are threatened
which challenge or affect the rights of any Target Entity in respect thereof,
except for any Liens, Orders, Contracts, claims, demands, actions or proceedings
which are not reasonably likely to have a Target Material Adverse Effect. Except
as disclosed in Section 5.10 of the Target Disclosure Memorandum, to the
Knowledge of Target, the conduct of the business of the Target Entities does not
infringe any Intellectual Property of any other person. Except as disclosed in
Section 5.10 of the Target Disclosure Memorandum, no Target Entity is obligated
to pay any recurring royalties to any Person with respect to any such
Intellectual Property.
5.11 ENVIRONMENTAL MATTERS.
(a) Each Target Entity and its Operating Properties are,
and have been, in compliance with all Environmental Laws, except for violations
which are not reasonably likely to have, individually or in the aggregate, a
Target Material Adverse Effect or except as disclosed in Section 5.11 of the
Target Disclosure Memorandum.
(b) Except as disclosed in Section 5.11 of the Target
Disclosure Memorandum, there is no Litigation pending or, to the Knowledge of
Target, threatened before any court, governmental agency, or authority or other
forum in which any Target Entity or any of its Operating Properties (or Target
in respect of such Operating Property) has been or, with respect to threatened
Litigation, may be named as a defendant (nor to the Knowledge of Target are
there any facts or circumstances reasonably likely to give rise to any such
Litigation) (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release, discharge, spillage, or
disposal into the environment of any Hazardous Material, whether or not
occurring at, on, under, adjacent to, or affecting (or potentially affecting) a
site owned, leased, or operated by any Target Entity or any of its Operating
Properties, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Target Material
Adverse Effect.
(c) Except as disclosed in Section 5.11 of the Target
Disclosure Memorandum, during the period of (i) any Target Entity's ownership or
operation of any of their respective current properties, (ii) any Target
Entity's participation in the management of a Participation Facility or (iii)
any Target Entity's holding of a security interest in an Operating
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Property there have been no releases, discharges, spillages, or disposals of
Hazardous Material in, on, under, adjacent to, or affecting (or potentially
affecting) any property owned by a Target Entity, except such as are not
reasonably likely to have, individually or in the aggregate, a Target Material
Adverse Effect.
(d) Each of the Target Entities has obtained all
licenses, permits, authorizations, approvals and consents from Regulatory
Authorities which are required under any applicable Environmental Law in respect
of its business or operations ("Environmental Permits") and each of such
Environmental Permits is in full force and effect, except for such failures to
have Environmental Permits which, individually or in the aggregate, could not
reasonably be expected to have a Target Material Adverse Effect and each of the
Target Entities is in compliance with the terms and conditions of all such
Environmental Permits, except for such failure to be in compliance which,
individually or in the aggregate, is not reasonably likely to have a Target
Material Adverse Effect.
5.12 COMPLIANCE WITH LAWS. Each Target Entity has in effect all
Permits necessary for it to own, lease, or operate its Assets and to carry on
its business as now conducted, except for those Permits the absence of which are
not reasonably likely to have, individually or in the aggregate, a Target
Material Adverse Effect, and there has occurred no Default under any such
Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Target Material Adverse Effect. Except as
disclosed in Section 5.12 of the Target Disclosure Memorandum, none of the
Target Entities:
(a) is in Default under any of the provisions of its
Certificate of Incorporation or Bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders, or Permits
applicable to its business or employees conducting its business, except for
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Target Material Adverse Effect.
5.13 LABOR RELATIONS. Except as disclosed in Section 5.13 of the
Target Disclosure Memorandum, no Target Entity is the subject of any Litigation
asserting that it or any other Target Entity has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state law) or seeking to compel it or any other Target Entity to bargain with
any labor organization as to wages or conditions of employment, nor is any
Target Entity party to any collective bargaining agreement, nor is there any
strike involving any Target Entity, pending or threatened, or to the Knowledge
of Target, is there any activity involving any Target Entity's employees seeking
to certify a collective bargaining unit or engaging in any other organization
activity.
5.14 EMPLOYEE BENEFIT PLANS.
(a) Target has disclosed in Section 5.14 of the Target
Disclosure Memorandum, and has delivered or made available to Buyer prior to the
execution of this Agreement copies in each case of, all pension, retirement,
profit-sharing, deferred compensation,
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stock option, employee stock ownership, severance pay, vacation, bonus, or other
incentive plan, all other written employee programs, arrangements, or
agreements, all medical, vision, dental, or other health plans, all life
insurance plans, and all other employee benefit plans or fringe benefit plans,
including "employee benefit plans" as that term is defined in Section 3(3) of
ERISA, and any related trust agreements, service provider agreements, insurance
contracts or agreements with investment managers, currently adopted, maintained
by, sponsored in whole or in part by, or contributed to by any Target Entity or
ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and under
which employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries are eligible to participate (collectively,
the "Target Benefit Plans"). Any of the Target Benefit Plans which is an
"employee pension benefit plan," as that term is defined in Section 3(2) of
ERISA, is referred to herein as a "Target ERISA Plan." Each Target ERISA Plan
which is also a "defined benefit plan" (as defined in Section 414(j) of the
Internal Revenue Code) is referred to herein as a "Target Pension Plan." No
Target Pension Plan is or has been a multiemployer plan within the meaning of
Section 3(37) of ERISA. Target has also delivered or made available to Buyer
prior to the execution of this Agreement, with respect to each Target Benefit
Plan maintained by any Target Entity, copies of (i) the current summary plan
description (and/or any similar description), (ii) the most recent Form 5500
series filing and schedules thereto, if such plan is subject to ERISA reporting
requirements, (iii) the most recent determination of the Internal Revenue
Service with respect to the qualified status of such plan, if Section 401(a) of
the Internal Revenue Code applies to such plan, (iv) the most recent accounting
with respect to such plan if funded through a trust, and (v) the most recent
actuarial report of the qualified actuary of such plan if actuarial valuations
are conducted in respect of such plan.
(b) Except as disclosed in Section 5.14 of the Target
Disclosure Memorandum, all Target Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Target Material Adverse Effect. Each Target
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received or has filed for a favorable determination
letter from the Internal Revenue Service, and Target is not aware of any
circumstances likely to result in revocation or denial of any such favorable
determination letter. To the Knowledge of Target, no Target Entity has engaged
in a transaction with respect to any Target Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
any Target Entity to a Tax imposed by either Section 4975 of the Internal
Revenue Code or Section 502(i) of ERISA in amounts which are reasonably likely
to have, individually or in the aggregate, a Target Material Adverse Effect.
(c) No Target Entity currently maintains a Target Pension
Plan. Neither any Target Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
Target Entity, or the single-employer plan of any entity which is considered one
employer with Target under Section 4001 of ERISA or Section 414 of the Internal
Revenue Code or Section 302 of ERISA (whether or not waived) (an "ERISA
Affiliate") has an "accumulated funding deficiency" within the meaning of
Section 412 of the Internal Revenue Code or Section 302 of ERISA, which is
reasonably likely to have a Target
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Material Adverse Effect. Except as disclosed in Section 5.14 of the Target
Disclosure Memorandum, other than routine claims for benefits, there are no
pending or, to the Knowledge of Target, threatened claims by or on behalf of any
Target Benefit Plan, by any person covered thereby, or otherwise, which allege
violations of Law which could reasonably be expected to result in a Target
Material Adverse Effect, nor are there any ongoing Internal Revenue Service,
U.S. Department of Labor or other agency audits or investigations of any Target
Benefit Plans.
(d) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any Target Entity with respect to any ongoing,
frozen, or terminated single-employer plan or the single-employer plan of any
ERISA Affiliate, which Liability is reasonably likely to have a Target Material
Adverse Effect.
(e) Except as disclosed in Section 5.14 of the Target
Disclosure Memorandum, no Target Entity has any Liability for retiree health and
life benefits under any of the Target Benefit Plans which Liability is
reasonably likely to have a Target Material Adverse Effect.
(f) Except as disclosed in Section 5.14 of the Target
Disclosure Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any director or any employee of any Target Entity
from any Target Entity under any Target Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any Target Benefit Plan, or (iii) result in
any acceleration of the time of payment or vesting of any such benefit, where
such payment, increase, or acceleration is reasonably likely to have,
individually or in the aggregate, a Target Material Adverse Effect.
(g) The actuarial present values of all accrued deferred
compensation entitlements (including entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of any Target Entity and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to the
provisions of Section 412 of the Internal Revenue Code or Section 302 of ERISA,
have been fully reflected on the Target Financial Statements to the extent
required by and in accordance with GAAP. No Target Entity is in Default in
performing any of its contractual obligations under any Target Benefit Plan or
any related trust agreement or insurance contract or its obligations under an
agreement with any Regulatory Authority, except for such Defaults which are not
reasonably likely to have a Target Material Adverse Effect. Except as disclosed
in Section 5.14 of the Target Disclosure Memorandum, no employer securities,
employer real property or other employer property is included in the assets of
any funded Target Benefit Plan.
5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of the
Target Disclosure Memorandum or as set forth in the Target SEC Reports, none of
the Target Entities, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting, or
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retirement Contract providing for aggregate payments to any Person in any
calendar year in excess of $50,000, (ii) any Contract relating to the borrowing
of money by any Target Entity or the guarantee by any Target Entity of any such
obligation (other than Contracts evidencing trade payables and Contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any Contract which prohibits or restricts any Target Entity from engaging
in any business activities in any geographic area, line of business or otherwise
in competition with any other Person, (iv) any Contract between or among Target
Entities, (v) any Contract involving Intellectual Property (other than Contracts
entered into in the ordinary course with customers and "shrink-wrap" software
licenses), (vi) any Contract relating to the purchase or sale of any goods or
services (other than Contracts entered into in the ordinary course of business
and involving payments under any individual Contract not in excess of $250,000
per year), and (vii) any other Contract or amendment thereto that would be
required to be filed as an exhibit to a Form 10-K filed by Target with the SEC
as of the date of this Agreement (together with all Contracts referred to in
Section 5.14(a), the "Target Contracts"). With respect to each Target Contract
and except as disclosed in Section 5.15 of the Target Disclosure Memorandum: (i)
the Contract is in full force and effect; (ii) no Target Entity is in Default
thereunder, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Target Material Adverse Effect; (iii) no
Target Entity has repudiated or waived any material provision of any such
Contract; and (iv) no other party to any such Contract is, to the Knowledge of
Target, in Default in any respect, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Target Material Adverse
Effect, or has repudiated or waived any material provision thereunder. Except as
disclosed in Section 5.15 of the Target Disclosure Memorandum, all of the
indebtedness of any Target Entity for money borrowed in excess of $100,000 in
any single instrument, is prepayable at any time by such Target Entity without
penalty or premium.
5.16 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of Target, threatened against any Target Entity,
or against any director, employee or employee benefit plan of any Target Entity,
or against any Asset, interest, or right of any of them, that is reasonably
likely to have, individually or in the aggregate, a Target Material Adverse
Effect, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any Target Entity,
that are reasonably likely to have, individually or in the aggregate, a Target
Material Adverse Effect.
5.17 REPORTS. Since January 1, 1994, or the date of organization if
later, each Target Entity has timely filed all reports and statements, together
with any amendments required to be made with respect thereto, that it was
required to file with Regulatory Authorities (except for failures to file which
are not reasonably likely to have, individually or in the aggregate, a Target
Material Adverse Effect). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied with all applicable Laws, except where the failure to comply is not
reasonably likely to have a Target Material Adverse Effect. As of its respective
date, each such report and document did not contain any untrue statement of a
fact or omit to state a fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they were
made, not misleading, except for such untrue statements or omissions which are
not reasonably likely to have a Target Material Adverse Effect.
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5.18 STATEMENTS TRUE AND CORRECT. No statement or certificate
furnished or to be furnished by any Target Entity to Buyer pursuant to this
Agreement or any other document referred to herein contains or will contain any
untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any Target Entity for inclusion in the Joint Proxy Statement to be
mailed to each Party's stockholders in connection with the Stockholders'
Meetings, and any other documents to be filed by a Target Entity with the SEC or
any other Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Joint Proxy Statement, when first mailed to the stockholders of Target
and Buyer, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meetings. All documents that any Target Entity is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
5.19 TAX AND REGULATORY MATTERS. No Target Entity or, to Target's
Knowledge, any Affiliate thereof has taken or agreed or failed to take any
action and Target does not have any Knowledge of any fact or circumstance that
is reasonably likely to (i) prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
5.20 STATE TAKEOVER LAWS. Each Target Entity has taken all
necessary action to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the validity or applicability of, any applicable
"moratorium," "fair price," "business combination," "control share," or other
anti-takeover Laws (collectively, "Takeover Laws"), including Section 203 of the
DGCL.
5.21 CHARTER PROVISIONS. Each Target Entity has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not result
in the grant of any rights to any Person under the Certificate of Incorporation,
Bylaws or other governing instruments of any Target Entity or restrict or impair
the ability of Buyer or any of its Subsidiaries to vote, or otherwise to
exercise the rights of a stockholder with respect to, shares of any Target
Entity that may be directly or indirectly acquired or controlled by them.
5.22 OPINION OF FINANCIAL ADVISOR. Target has received the opinion
of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, dated the date of this
Agreement, to the effect that the
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Exchange Ratio is fair, from a financial point of view, to such holders, a
signed copy of which has been delivered to Buyer.
5.23 AFFILIATE TRANSACTIONS. Except as disclosed in Section 5.23 of
the Target Disclosure Memorandum, (i) there is no indebtedness outstanding
between any Target Entity, on the one hand, and any Affiliate of any Target
Entity, on the other hand, (ii) no Affiliate of any Target Entity provides or
causes to be provided any assets, services or facilities to any Target Entity,
(iii) no Target Entity provides or causes to be provided any assets, services or
facilities to any Affiliate of any Target Entity and (iv) no Target Entity
beneficially owns, directly or indirectly, any Investment Assets (as defined
below) issued by any Affiliate of any Target Entity (other than another Target
Entity). Except as disclosed in Section 5.23 of the Target Disclosure
Memorandum, each of the transactions disclosed thereon was incurred or engaged
in, as the case may be, on an arm's-length basis and, since December 31, 1996,
all settlements of liabilities between any Target Entity, on the one hand, and
any Affiliate of any Target Entity (other than another Target Entity), on the
other hand, have been made in the ordinary course of business consistent with
past practice. For purposes hereof, the term "Investment Assets" shall mean
debentures, notes and other evidences of indebtedness, stocks, securities
(including rights to purchase and securities convertible into or exchangeable
for other securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio assets.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Target as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Buyer is a corporation duly
incorporated, validly existing, and in good standing under the Laws of the State
of Delaware, and has the corporate power and authority to carry on its business
as now conducted and to own, lease and operate its material Assets. Buyer is
duly qualified or licensed to transact business as a foreign corporation in good
standing in the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually or
in the aggregate, a Buyer Material Adverse Effect.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Buyer has the corporate power and authority necessary
to execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein, including the Merger, have been duly and validly authorized
by all necessary corporate action in respect thereof on the part of Buyer,
subject to the approval of the issuance of the shares of Buyer Common Stock
pursuant to the Merger by a majority of the votes cast at the Buyer
Stockholders' Meeting (assuming for such purpose that the votes cast in respect
of such proposal represent a majority of the outstanding
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Buyer Common Stock), which is the only stockholder vote required for approval of
this Agreement and consummation of the merger by Buyer. This Agreement has been
duly executed and delivered by Buyer, and subject to such requisite stockholder
approval, this Agreement represents a legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by Buyer, nor the consummation by Buyer of the transactions contemplated hereby,
nor compliance by Buyer with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of Buyer's Certificate of
Incorporation or Bylaws, or (ii) constitute or result in a Default under, or
require any Consent pursuant to, or result in the creation of any Lien on any
Asset of any Buyer Entity under, any Contract or Permit of any Buyer Entity,
where such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Buyer Material Adverse
Effect, or, (iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b), constitute or result in a Default under, or require any Consent
pursuant to, any Law or Order applicable to any Buyer Entity or any of their
respective Assets where such Default, or any failure to obtain such Consent is
reasonably likely to have, individually or in the aggregate, in a Buyer Material
Adverse Effect.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NYSE, and other than Consents required from Regulatory
Authorities as described in Section 6.2 of the Buyer Disclosure Memorandum, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit plans,
or under the HSR Act, and other than Consents, filings, or notifications which,
if not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Buyer Material Adverse Effect, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation by
Buyer of the Merger and the other transactions contemplated in this Agreement.
6.3 CAPITAL STOCK.
(a) The authorized capital stock of Buyer consists of (i)
60,000,000 shares of Buyer Common Stock, par value $0.025 per share, of which
21,013,117 shares are issued and outstanding as of the date of this Agreement,
and (ii) 1,000,000 shares of Buyer Preferred Stock, par value $.001 per share,
of which 7,100 shares are issued and outstanding. All of the issued and
outstanding shares of Buyer Capital Stock are, and all of the shares of Buyer
Common Stock to be issued in exchange for shares of Target Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement, will be, duly and validly issued and outstanding and fully paid and
nonassessable under the DGCL. None of the outstanding shares of Buyer Capital
Stock has been, and none of the shares of Buyer Common Stock to be issued in
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exchange for shares of Target Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
stockholders of Buyer.
(b) Except as set forth in Section 6.3(a), or as provided
pursuant to the Buyer Rights Agreement, or as disclosed in Section 6.3 of the
Buyer Disclosure Memorandum, there are no shares of capital stock or other
equity securities of Buyer outstanding and no outstanding Equity Rights relating
to the capital stock of Buyer, and all shares of Buyer Common Stock issuable
upon the exercise or conversion of such outstanding Equity Rights will, when so
issued, be duly and validly issued and outstanding and fully paid and
nonassessable under the DGCL.
6.4 BUYER SUBSIDIARIES. Buyer has disclosed in Section 6.4 of the
Buyer Disclosure Memorandum all of the Buyer Subsidiaries as of the date of this
Agreement that are corporations (identifying its jurisdiction of incorporation,
each jurisdiction in which the character of its Assets or the nature or conduct
of its business requires it to be qualified and/or licensed to transact
business, and the number of shares owned and percentage ownership interest
represented by such share ownership) and all of the Buyer Subsidiaries that are
general or limited partnerships or other non-corporate entities (identifying the
Law under which such entity is organized, each jurisdiction in which the
character of its Assets or the nature or conduct of its business requires it to
be qualified and/or licensed to transact business, and the amount and nature of
the ownership interest therein). Except as disclosed in Section 6.4 of the Buyer
Disclosure Memorandum, Buyer or one of its Subsidiaries owns all of the issued
and outstanding shares of capital stock (or other equity interests) of each
Buyer Subsidiary. No capital stock (or other equity interest) of any Buyer
Subsidiary are or may become required to be issued (other than to another Buyer
Entity) by reason of any Equity Rights, and there are no Contracts by which any
Buyer Subsidiary is bound to issue (other than to another Buyer Entity)
additional shares of its capital stock (or other equity interests) or Equity
Rights or by which any Buyer Entity is or may be bound to transfer any shares of
the capital stock (or other equity interests) of any Buyer Subsidiary (other
than to another Buyer Entity). There are no Contracts relating to the rights of
any Buyer Entity to vote or to dispose of any shares of the capital stock (or
other equity interests) of any Buyer Subsidiary. All of the shares of capital
stock (or other equity interests) of each Buyer Subsidiary held by a Buyer
Entity are fully paid and nonassessable under the applicable corporation Law of
the jurisdiction in which such Subsidiary is incorporated or organized and are
owned by the Buyer Entity free and clear of any Lien. Each Buyer Subsidiary is a
corporation, and is duly incorporated, validly existing, and (as to
corporations) in good standing under the Laws of the jurisdiction in which it is
incorporated or organized, and has the corporate power and authority necessary
for it to own, lease and operate its Assets and to carry on its business as now
conducted. Each Buyer Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed is
not reasonably likely to have, individually or in the aggregate, a Buyer
Material Adverse Effect.
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6.5 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Buyer has timely filed and made available to Target
all SEC Documents required to be filed by Buyer since December 31, 1993 (the
"Buyer SEC Reports"). The Buyer SEC Reports (i) at the time filed, complied in
all material respects with the applicable requirements of the Securities Laws
and other applicable Laws and (ii) did not, at the time they were filed (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing) contain any untrue statement of a material fact or omit
to state a material fact required to be stated in such Buyer SEC Reports or
necessary in order to make the statements in such Buyer SEC Reports, in light of
the circumstances under which they were made, not misleading; provided, that any
pro forma financial statements contained in the Buyer SEC Reports are not
necessarily indicative of the consolidated financial position of the Buyer
Entities as of the respective dates thereof and the consolidated results of
operations and cash flows of the Buyer Entities for the periods indicated. No
Buyer Subsidiary is required to file any SEC Documents.
(b) Each of the Buyer Financial Statements (including, in
each case, any related notes) contained in the Buyer SEC Reports, including any
Buyer SEC Reports filed after the date of this Agreement until the Effective
Time, complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial statements
or, in the case of unaudited interim statements, as permitted by Form 10-Q of
the SEC), and fairly presented in all material respects the consolidated
financial position of Buyer and its Subsidiaries as at the respective dates and
the consolidated results of operations and cash flows for the periods indicated,
except that (i) the unaudited interim financial statements were or are subject
to normal and recurring year-end adjustments which were not or are not expected
to be material in amount or effect and (ii) any pro forma financial statements
contained in the Buyer SEC Reports are not necessarily indicative of the
consolidated financial position of the Buyer Entities as of the respective dates
thereof and the consolidated results of operations and cash flows of the Buyer
Entities for the periods indicated.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. No Buyer Entity has any
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect, except Liabilities which are accrued
or reserved against in the consolidated balance sheets of Buyer as of December
31, 1996 and June 30, 1997, included in the Buyer Financial Statements delivered
prior to the date of this Agreement or reflected in the notes thereto. Except as
reflected in the Buyer SEC Reports, no Buyer Entity has incurred or paid any
Liability since June 30, 1997, except for such Liabilities incurred or paid (i)
in the ordinary course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the aggregate, a
Buyer Material Adverse Effect or (ii) in connection with the transactions
contemplated by this Agreement.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1996,
except as disclosed in the Buyer Financial Statements delivered prior to the
date of this Agreement or as disclosed in Section 6.7 of the Buyer Disclosure
Memorandum, (a) there have been no events,
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changes or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Buyer Material Adverse Effect, (b) the Buyer
Entities have conducted their respective businesses only in the ordinary course
consistent with past practice and (c) none of the Buyer Entities has taken any
action which, if taken after the date hereof, would constitute a breach of any
provision of Section 7.3.
6.8 TAX MATTERS.
(a) All Tax Returns required to be filed by or on behalf
of any of the Buyer Entities have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a Buyer Material Adverse
Effect, and all Tax Returns filed are complete and accurate in all material
respects. All Taxes shown on filed Tax Returns have been paid. As of the date of
this Agreement, there is no audit examination, deficiency, or refund Litigation
with respect to any Taxes that is reasonably likely to result in a determination
that would have, individually or in the aggregate, a Buyer Material Adverse
Effect, except as reserved against in the Buyer Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 6.8 of the Buyer
Disclosure Memorandum. Buyer's federal income Tax Returns have not been audited
for over ten years. All Taxes and other Liabilities due with respect to
completed and settled examinations or concluded Litigation have been paid.
(b) None of the Buyer Entities has executed an extension
or waiver of any statute of limitations on the assessment or collection of any
Tax due (excluding such statutes that relate to years currently under
examination by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) The provision for any Taxes due or to become due for
any of the Buyer Entities for the period or periods through and including the
date of the respective Buyer Financial Statements that has been made and is
reflected on such Buyer Financial Statements is sufficient to cover all such
Taxes.
(d) Deferred Taxes of the Buyer Entities have been
provided for in accordance with GAAP.
(e) None of the Buyer Entities is a party to any Tax
allocation or sharing agreement and none of the Buyer Entities has been a member
of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was Buyer) or has any Liability for
Taxes of any Person (other than Buyer and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or foreign
Law) as a transferee or successor or by Contract or otherwise.
6.9 ASSETS.
(a) Except as disclosed in Section 6.9 of the Buyer
Disclosure Memorandum or as disclosed or reserved against in the Buyer Financial
Statements delivered prior to the date of
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this Agreement, the Buyer Entities have good and marketable title, free and
clear of all Liens, to all of their respective Assets, except for any such Liens
or other defects of title which are not reasonably likely to have a Buyer
Material Adverse Effect.
(b) All items of inventory of the Buyer Entities
reflected on the most recent balance sheet included in the Buyer Financial
Statements delivered prior to the date of this Agreement and prior to the
Effective Time consisted and will consist, as applicable, of items of a quality
and quantity usable and saleable in the ordinary course of business and conform
to generally accepted standards in the industry in which the Buyer Entities are
a part.
(c) The accounts receivable of the Buyer Entities as set
forth on the most recent balance sheet included in the Buyer Financial
Statements delivered prior to the date of this Agreement or arising since the
date thereof are valid and genuine; have arisen solely out of bona fide sales
and deliveries of goods, performance of services and other business transactions
in the ordinary course of business consistent with past practice; are not
subject to valid defenses, set-offs or counterclaims; and are collectible at the
full recorded amount thereof less, in the case of accounts receivable appearing
on the most recent balance sheet included in the Buyer Financial Statements
delivered prior to the date of this Agreement, the recorded allowance for
collection losses on such balance sheet. The allowance for collection losses on
such balance sheet has been determined in accordance with GAAP.
(d) The Buyer Entities currently maintain insurance
similar in amounts, scope and coverage as Buyer believes adequate to conduct its
business. Except as disclosed in Section 6.9 of the Buyer Disclosure Memorandum,
there are presently no claims for amounts exceeding in any individual case
$250,000 pending under such policies of insurance and no notices of claims in
excess of such amounts have been given by any Buyer Entity under such policies.
(e) The Assets of the Buyer Entities include all assets
required to operate the business of the Buyer Entities as presently conducted.
6.10 INTELLECTUAL PROPERTY. Each Buyer Entity owns or has a valid
and binding license to use all of the Intellectual Property used by such Buyer
Entity in the course of its business. Each Buyer Entity is the owner of or has a
valid and binding license to any Intellectual Property sold or licensed to a
third party by such Buyer Entity in connection with such Buyer Entity's business
operations, and such Buyer Entity has the right to convey by sale or license any
Intellectual Property so conveyed. No Buyer Entity is in Default under any of
its Intellectual Property licenses. No proceedings have been instituted, or are
pending or to the Knowledge of Buyer threatened, which challenge the rights of
any Buyer Entity with respect to Intellectual Property used, sold or licensed by
such Buyer Entity in the course of its business, nor to the Knowledge of Buyer
has any person claimed or alleged any rights to such Intellectual Property,
except for any failure to own or license, Default or proceeding which is not
reasonably likely to have a Buyer Material Adverse Effect. All Intellectual
Property owned by a Buyer Entity is owned free and clear of any Liens, and none
of such Intellectual Property is subject to any outstanding Order or Contract
restricting the scope of the use thereof, and there are no claims or demands of
any other Person pertaining to the Intellectual Property owned or used by any
Buyer
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Entity or any license with respect thereto, and no actions or proceedings,
judicial or administrative or otherwise, have been instituted, are pending or to
the Knowledge of Buyer are threatened which challenge or affect the rights of
any Buyer Entity in respect thereof, except for any Liens, Orders, Contracts,
claims, demands, actions or proceedings which are not reasonably likely to have
a Buyer Material Adverse Effect. To the Knowledge of Buyer the conduct of the
business of the Buyer Entities does not infringe any Intellectual Property of
any other person. Except as disclosed in Section 6.10 of the Buyer Disclosure
Memorandum, no Buyer Entity is obligated to pay any recurring royalties to any
Person with respect to any such Intellectual Property.
6.11 ENVIRONMENTAL MATTERS.
(a) Each Buyer Entity, its Participation Facilities, and
its Operating Properties are, and have been, in compliance with all
Environmental Laws, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Buyer Material Adverse Effect or
except as disclosed in Section 6.11 of the Buyer Disclosure Memorandum.
(b) Except as disclosed in Section 6.11 of the Buyer
Disclosure Memorandum, there is no Litigation pending or, to the Knowledge of
Buyer, threatened before any court, governmental agency, or authority or other
forum in which any Buyer Entity or any of its Operating Properties or
Participation Facilities (or Buyer in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened Litigation, may
be named as a defendant (nor, to the Knowledge of Buyer, are there any facts or
circumstances reasonably likely to give rise to any such litigation), (i) for
alleged noncompliance (including by any predecessor) with any Environmental Law
or (ii) relating to the release, discharge, spillage, or disposal into the
environment of any Hazardous Material, whether or not occurring at, on, under,
adjacent to, or affecting (or potentially affecting) a site owned, leased, or
operated by any Buyer Entity or any of its Operating Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Buyer Material
Adverse Effect.
(c) Except as disclosed in Section 6.11 of the Buyer
Disclosure Memorandum, during the period of (i) any Buyer Entity's ownership or
operation of any of their respective current properties, (ii) any Buyer Entity's
participation in the management of any Participation Facility, or (iii) any
Buyer Entity's holding of a security interest in an Operating Property, there
have been no releases, discharges, spillages, or disposals of Hazardous Material
in, on, under, adjacent to, or affecting (or potentially affecting) such
properties, except such as are not reasonably likely to have, individually or in
the aggregate, a Buyer Material Adverse Effect.
(d) Each of the Buyer Entities has obtained all licenses,
permits, authorizations, approvals and consents from Regulatory Authorities
which are required under any applicable Environmental Law in respect of its
business or operations ("Environmental Permits") and each of such Environmental
Permits is in full force and effect, except for such failures to have
Environmental Permits which, individually or in the aggregate, could not
reasonably be expected to have a Buyer Material Adverse Effect and each of the
Buyer Entities is in compliance with the terms and conditions of all such
Environmental Permits, except for such failure to be in
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compliance which, individually or in the aggregate, is not reasonably likely to
have a Buyer Material Adverse Effect.
6.12 COMPLIANCE WITH LAWS. Each Buyer Entity has in effect all
Permits necessary for it to own, lease or operate its Assets and to carry on its
business as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Buyer Material
Adverse Effect, and there has occurred no Default under any such Permit, other
than Defaults which are not reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect. Except as disclosed in Section 6.12
of the Buyer Disclosure Memorandum, none of the Buyer Entities:
(a) is in Default under its Certificate of Incorporation
or Bylaws (or other governing instruments); or
(b) is in Default under any Laws, Orders or Permits
applicable to its business or employees conducting its business, except for
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect.
6.13 LABOR RELATIONS. No Buyer Entity is the subject of any
Litigation asserting that it or any other Buyer Entity has committed an unfair
labor practice (within the meaning of the National Labor Relations Act or
comparable state law) or seeking to compel it or any other Buyer Entity to
bargain with any labor organization as to wages or conditions of employment, nor
is any Buyer Entity party to any collective bargaining agreement, nor is there
any strike involving any Buyer Entity, pending or threatened, or to the
Knowledge of Buyer, is there any activity involving any Buyer Entity's employees
seeking to certify a collective bargaining unit or engaging in any other
organization activity.
6.14 EMPLOYEE BENEFIT PLANS.
(a) Buyer has delivered or made available to Target prior
to the execution of this Agreement copies in each case of all pension,
retirement, profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all other
written employee programs, arrangements, or agreements, all medical, vision,
dental, or other health plans, all life insurance plans, and all other employee
benefit plans or fringe benefit plans, including "employee benefit plans" as
that term is defined in Section 3(3) of ERISA, and any related trust agreements,
service provider agreements, insurance contracts or agreements with investment
managers, currently adopted, maintained by, sponsored in whole or in part by, or
contributed to by any Buyer Entity or ERISA Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent contractors, or
other beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "Buyer Benefit Plans"). Any of the Buyer Benefit
Plans which is an "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "Buyer ERISA Plan." Each Buyer
ERISA Plan which is also a "defined benefit plan" (as defined in Section 414(j)
of the Internal Revenue Code) is referred to herein as a "Buyer Pension Plan."
No Buyer Pension Plan is or has
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been a multiemployer plan within the meaning of Section 3(37) of ERISA. Buyer
has also delivered or made available to Target prior to the execution of this
Agreement, with respect to each Buyer Benefit Plan maintained by any Buyer
Entity, copies of (i) the current summary plan description (and/or any similar
description), (ii) the most recent Form 5500 series filing and schedules
thereto, if such plan is subject to ERISA reporting requirement, (iii) the most
recent determination of the Internal Revenue Service with respect to the
qualified status of such plan, if Section 401(a) of the Internal Revenue Code
applies to such plan, (iv) the most recent accounting with respect to such plan
if funded through a trust, and (v) the most recent actuarial report of the
qualified actuary of such plan if actuarial valuations are conducted in respect
of such plan.
(b) All Buyer Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
Laws the breach or violation of which are reasonably likely to have,
individually or in the aggregate, a Buyer Material Adverse Effect. Each Buyer
ERISA Plan which is intended to be qualified under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service, and Buyer is not aware of any circumstances likely to
result in revocation of any such favorable determination letter. To the
Knowledge of Buyer, no Buyer Entity has engaged in a transaction with respect to
any Buyer Benefit Plan that, assuming the taxable period of such transaction
expired as of the date hereof, would subject any Buyer Entity to a Tax imposed
by either Section 4975 of the Internal Revenue Code or Section 502(i) of ERISA
in amounts which are reasonably likely to have, individually or in the
aggregate, a Buyer Material Adverse Effect.
(c) Except as disclosed in Section 6.14 of the Buyer
Disclosure Memorandum, no Buyer Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, based on
actuarial assumptions set forth for such plan's most recent actuarial valuation.
Since the date of the most recent actuarial valuation, there has been (i) no
material change in the financial position of a Buyer Pension Plan, (ii) no
change in the actuarial assumptions with respect to any Buyer Pension Plan, and
(iii) no increase in benefits under any Buyer Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Buyer Material Adverse Effect or materially
adversely affect the funding status of any such plan. Neither any Buyer Pension
Plan nor any "single-employer plan," within the meaning of Section 4001(a)(15)
of ERISA, currently or formerly maintained by any Buyer Entity, or the
single-employer plan of any ERISA Affiliate has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA, which is reasonably likely to have a Buyer Material
Adverse Effect. Except as disclosed in Section 6.14 of the Buyer Disclosure
Memorandum, other than routine claims for benefits, there are no pending or, to
the Knowledge of Buyer, threatened claims by or on behalf of any Buyer Benefit
Plan, by any person covered thereby, or otherwise, which allege violations of
Law which could reasonably be expected to result in a Buyer Material Adverse
Effect, nor are there any ongoing Internal Revenue Service, U.S. Department of
Labor or other agency audits or investigations of any Buyer Benefit Plans.
(d) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any Buyer Entity with respect to any ongoing, frozen
or terminated single-employer plan or the single-employer
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plan of any ERISA Affiliate, which Liability is reasonably likely to have a
Buyer Material Adverse Effect. No Buyer Entity has incurred any withdrawal
Liability with respect to a multiemployer plan under Subtitle B of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate),
which Liability is reasonably likely to have a Buyer Material Adverse Effect. No
notice of a "reportable event," within the meaning of Section 4043 of ERISA for
which the 30-day reporting requirement has not been waived, has been required to
be filed for any Buyer Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
6.15 MATERIAL CONTRACTS. Except as disclosed in Section 6.15 of the
Buyer Disclosure Memorandum or as set forth in the Buyer SEC Reports, none of
the Buyer Entities, nor any of their respective Assets, businesses, or
operations, is a party to, or is bound or affected by, or receives benefits
under, (i) any employment, severance, termination, consulting or retirement
Contract providing for aggregate payments to any Person in any calendar year in
excess of $50,000, (ii) any Contract relating to the borrowing of money by any
Buyer Entity or the guarantee by any Buyer Entity of any such obligation (other
than Contracts evidencing trade payables and Contracts relating to borrowings or
guarantees made in the ordinary course of business), or (iii) any other Contract
or amendment thereto that would be required to be filed as an exhibit to a Form
10-K filed by Buyer with the SEC as of the date of this Agreement that has not
been filed as an exhibit to Buyer's Form 10-K filed for the fiscal year ended
December 31, 1996, or in an SEC Document and identified to Target (together with
all Contracts referred to in Sections 6.9 and 6.14(a), the "Buyer Contracts").
With respect to each Buyer Contract and except as disclosed in Section 6.15 of
the Buyer Disclosure Memorandum: (i) the Contract is in full force and effect;
(ii) no Buyer Entity is in Default thereunder, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Buyer Material
Adverse Effect; (iii) no Buyer Entity has repudiated or waived any material
provision of any such Contract; and (iv) no other party to any such Contract is,
to the Knowledge of Buyer, in Default in any respect, other than Defaults which
are not reasonably likely to have, individually or in the aggregate, a Buyer
Material Adverse Effect, or has repudiated or waived any material provision
thereunder. Except as reflected in the Buyer SEC Reports, all of the
indebtedness of any Buyer Entity for money borrowed in excess of $100,000 is
prepayable at any time by such Buyer Entity without penalty or premium.
6.16 LEGAL PROCEEDINGS. There is no Litigation instituted or
pending, or, to the Knowledge of Buyer, threatened against any Buyer Entity, or
against any director, employee or employee benefit plan of any Buyer Entity, or
against any Asset, interest, or right of any of them, that is reasonably likely
to have, individually or in the aggregate, a Buyer Material Adverse Effect, nor
are there any Orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against any Buyer Entity, that are
reasonably likely to have, individually or in the aggregate, a Buyer Material
Adverse Effect.
6.17 REPORTS. Since January 1, 1994, or the date of organization if
later, each Buyer Entity has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was required to
file with Regulatory Authorities (except for failures to file which are not
reasonably likely to have, individually or in the aggregate, a Buyer Material
Adverse Effect). As of their respective dates, each of such reports and
documents, including the
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financial statements, exhibits, and schedules thereto, complied with all
applicable Laws, except where the failure to comply is not reasonably likely to
have a Buyer Material Adverse Effect. As of its respective date, each such
report and document did not contain any untrue statement of a fact or omit to
state a fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading, except for such untrue statements or omissions which are not
reasonably likely to have a Buyer Material Adverse Effect.
6.18 STATEMENTS TRUE AND CORRECT. No statement or certificate
furnished or to be furnished by any Buyer Entity to Target pursuant to this
Agreement or any other document referred to herein contains or will contain any
untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to be
supplied by any Buyer Entity for inclusion in the Registration Statement to be
filed by Buyer with the SEC, will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein not misleading.
None of the information supplied or to be supplied by any Buyer Entity or any
Affiliate thereof for inclusion in the Joint Proxy Statement to be mailed to
each Party's stockholders in connection with the Stockholders' Meetings, and any
other documents to be filed by any Buyer Entity with the SEC or any other
Regulatory Authority in connection with the transactions contemplated hereby,
will, at the respective time such documents are filed, and with respect to the
Joint Proxy Statement, when first mailed to the stockholders of Target and
Buyer, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, or, in the case of
the Joint Proxy Statement or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meetings, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Stockholders' Meetings. All documents that any Buyer Entity is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material respects
with the provisions of applicable Law.
6.19 AUTHORITY OF SUB. Sub is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware as a
wholly owned Subsidiary of Buyer. The authorized capital stock of Sub shall
consist of 100 shares of Sub Common Stock, all of which is validly issued and
outstanding, fully paid and nonassessable and is owned by Buyer free and clear
of any Lien. Sub has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Sub. This Agreement
represents a legal, valid, and binding obligation of Sub, enforceable against
Sub in accordance with its terms (except in all cases as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and except
that the availability of the equitable remedy of specific
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performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought). Buyer, as the sole stockholder of
Sub, has voted prior to the Effective Time the shares of Sub Common Stock in
favor of adoption of this Agreement, as and to the extent required by applicable
Law.
6.20 TAX AND REGULATORY MATTERS. No Buyer Entity or, to Buyer's
Knowledge, any Affiliate thereof has taken or agreed or failed to take any
action and Target does not have any Knowledge of any fact or circumstance that
is reasonably likely to (i) prevent the Merger from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, or (ii) materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) or result in the imposition of a
condition or restriction of the type referred to in the last sentence of such
Section.
6.21 RIGHTS AGREEMENT. Execution of this Agreement and consummation
of the Merger and the other transactions contemplated by this Agreement will not
result in the grant of any rights to any Person under the Buyer Rights Agreement
(other than as contemplated by Section 3.1) or enable or require the Buyer
Rights to be exercised, distributed or triggered. No "Shares Acquisition Date"
or "Distribution Date" (as such terms are defined in the Buyer Rights Agreement)
has occurred. No event or sequence of events has occurred that has resulted in
or may result in any Person becoming an Acquiring Person, as such term is
defined in the Buyer Rights Agreement.
6.22 AFFILIATE TRANSACTIONS. Except as disclosed in Section 6.22 of
the Buyer Disclosure Memorandum, (i) there is no indebtedness outstanding
between any Buyer Entity, on the one hand, and any Affiliate of any Buyer
Entity, on the other hand, (ii) no Affiliate of any Buyer Entity provides or
causes to be provided any assets, services or facilities to any Buyer Entity,
(iii) no Buyer Entity provides or causes to be provided any assets, services or
facilities to any Affiliate of any Buyer Entity and (iv) no Buyer Entity
beneficially owns, directly or indirectly, any Investment Assets (as defined
below) issued by any Affiliate of any Buyer Entity. Except as disclosed in
Section 6.22 of the Buyer Disclosure Memorandum, each of the transactions
disclosed thereon was incurred or engaged in, as the case may be, on an
arm's-length basis and, since December 31, 1996, all settlements of liabilities
between any Buyer Entity, on the one hand, and any Affiliate of any Buyer
Entity, on the other hand, have been made in the ordinary course of business
consistent with past practice.
6.23 VOTE REQUIRED. The affirmative vote of a majority of the votes
cast of the outstanding shares of Buyer Capital Stock entitled to vote and
voting as a single class with respect to the adoption of this Agreement is the
only vote of the holders of any class or series of the capital stock of Buyer
required to approve the issuance of shares of Buyer Common Stock pursuant to the
Merger and the Plan Amendment (as defined in Section 8.1), as and to the extent
required by Law, by the provisions of any governing instruments, or by the rules
of the NYSE.
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ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF TARGET. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement, unless the prior written consent of Buyer shall have been obtained
(which consent shall not be unreasonably withheld), and except as otherwise
expressly contemplated herein, Target shall and shall cause each of its
Subsidiaries to (a) operate its business only in the usual, regular, and
ordinary course, (b) preserve intact its business organization and Assets and
maintain its rights and franchises, and (c) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby, or (ii) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement.
7.2 NEGATIVE COVENANTS OF TARGET. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
unless the prior written consent of Buyer shall have been obtained (which
consent shall not be unreasonably withheld), and except as otherwise expressly
contemplated herein, or as disclosed in Section 7.2 of the Target Disclosure
Memorandum, Target covenants and agrees that it will not do or agree or commit
to do, or permit any of its Subsidiaries to do or agree or commit to do, any of
the following:
(a) amend the Certificate of Incorporation, Bylaws or
other governing instruments of any Target Entity, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than (i) indebtedness of a Target Entity to
another Target Entity and (ii) indebtedness under any of the Target Entities'
existing credit facilities up to $5.0 million more than the indebtedness
currently oustanding under such facilities as of the date hereof) (for the
Target Entities on a consolidated basis) or impose, or suffer the imposition, on
any Asset of any Target Entity of any Lien or permit any such Lien to exist
(other than in connection with Liens in effect as of the date hereof that are
disclosed in the Target Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of any Target Entity, or declare or pay any
dividend or make any other distribution in respect of Target's capital stock; or
(d) except for this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof, or as disclosed in Section 7.2 of
the Target Disclosure Memorandum, issue, sell, pledge, encumber, authorize the
issuance of, enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of, or otherwise permit to become outstanding, any
additional shares of Target Common Stock or any other capital stock of any
Target Entity, or any stock appreciation rights, or any option, warrant, or
other Equity Right; or
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(e) adjust, split, combine or reclassify any capital
stock of any Target Entity or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Target Common Stock,
or sell, lease, mortgage or otherwise dispose of or otherwise encumber any
shares of capital stock of any Target Subsidiary (unless any such shares of
stock are sold or otherwise transferred to another Target Entity) or any Asset
having a book value in excess of $100,000 other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or
U.S. Government agency securities, which in either case have maturities of three
years or less, purchase any securities or make any material investment, either
by purchase of stock or securities, contributions to capital, Asset transfers,
or purchase of any Assets, in any Person other than a wholly owned Target
Subsidiary, or otherwise acquire direct or indirect control over any Person,
other than in connection with (i) foreclosures in the ordinary course of
business, or (ii) the creation of new wholly owned Subsidiaries organized to
conduct or continue activities otherwise permitted by this Agreement, or (iii)
investments in connection with cash management activities consistent with past
practices; or
(g) grant any increase in compensation or benefits to the
employees or officers of any Target Entity, except as required by Law; or enter
into or amend any severance agreements with officers of any Target Entity; grant
any material increase in fees or other increases in compensation or other
benefits to directors of any Target Entity; or
(h) enter into or amend any employment Contract between
any Target Entity and any Person having a salary thereunder in excess of
$100,000 per year (unless such amendment is required by Law) that the Target
Entity does not have the unconditional right to terminate without Liability
(other than Liability for services already rendered), at any time on or after
the Effective Time; or
(i) adopt any new employee benefit plan of any Target
Entity or terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of any Target Entity other than any such change
that is required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan, or make any
distributions from such employee benefit plans, except as required by Law, the
terms of such plans or consistent with past practice; or
(j) make any material change in any Tax or accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in Tax Laws or regulatory accounting requirements or GAAP;
or
(k) enter into any Contract or amend or modify any
existing Contract, or engage in any new transaction outside the ordinary course
of business consistent with past practice or not on an arm's-length basis, with
any Affiliate of any Target Entity; or
(l) make any capital expenditures or commitments for
additions to plant, property or equipment constituting capital assets not in the
ordinary course of business consistent
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with past practice (excluding any capital expenditures required to be made by
Irving Tanning Company arising in connection with the upgrade of the water/waste
treatment facility operated by the Town of Hartland, Maine); or
(m) make any change in the lines of business in which it
participates or is engaged; or
(n) except in the ordinary course of business, enter
into, modify, amend or terminate any material Contract or waive, release,
compromise or assign any material rights or claims.
7.3 COVENANTS OF BUYER. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of Target shall have been obtained (which consent shall
not be unreasonably withheld), and except as otherwise expressly contemplated
herein, Buyer shall and shall cause each of its Subsidiaries to (x) operate its
business only in the usual, regular, and ordinary course, (y) preserve intact
its business organization and Assets and maintain its rights and franchises, and
(z) take no action which would (i) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby, or (ii) materially adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement; provided, that the foregoing
shall not prevent any Buyer Entity from discontinuing or disposing of any of its
Assets or business if such action is, in the judgment of Buyer, desirable in the
conduct of the business of Buyer and its Subsidiaries. Buyer further covenants
and agrees that it will not do or agree or commit to do, or permit any of its
Subsidiaries to do or agree or commit to do, any of the following without the
prior written consent of Target, which consent shall not be unreasonably
withheld:
(a) amend the Certificate of Incorporation or Bylaws of
Buyer or the Buyer Rights Agreement, in each case, in any manner adverse to the
holders of Target Common Stock, or
(b) incur any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a Buyer Entity to
another Buyer Entity) except (i) in the ordinary course of the business
consistent with past practices, (ii) in order to finance the purchase price,
including related expenses, of acquisitions (including the Merger) and joint
ventures, (iii) pursuant to the Buyer's credit facilities as in effect on the
date hereof, (iv) in order to finance the construction of an additional facility
in Canada, or (v) in order to finance additional Buyer Express facilities; or
impose, or suffer the imposition, on any Asset of any Buyer Entity of any Lien
or permit any such Lien to exist (other than in connection with Liens in effect
as of the date hereof that are disclosed in the Buyer Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of Buyer (other than in connection with the
conversion of currently outstanding shares of Buyer Preferred Stock) , or
declare or pay any dividend or make any other distribution in respect of Buyer's
capital stock
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(other than regularly scheduled dividends payable on the outstanding shares of
Buyer Preferred Stock); or
(d) except for this Agreement, or pursuant to the
exercise of stock options outstanding as of the date hereof and pursuant to the
terms thereof in existence on the date hereof or granted after the date hereof
in the ordinary course consistent with past practice, or as disclosed in Section
7.3 of the Buyer Disclosure Memorandum or in connection with acquisitions or
upon the conversion of currently outstanding shares of Buyer Preferred Stock or
warrants to purchase Buyer Common Stock, issue, sell, pledge, encumber,
authorize the issuance of, enter into any Contract to issue, sell, pledge,
encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Buyer Common Stock or any other capital
stock of any Buyer Entity, or any stock appreciation rights, or any option,
warrant, conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine or reclassify any shares of
Buyer Capital Stock or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of Buyer Capital Stock (other than
in connection with the conversion of currently outstanding shares of Buyer
Preferred Stock or the exercise of currently outstanding warrants to purchase
Buyer Common Stock) or sell, lease, mortgage or otherwise dispose of or
otherwise encumber any shares of capital stock of any Buyer Subsidiary (unless
any such shares of stock are sold or otherwise transferred to another Buyer
Entity) or any Asset having a book value in excess of $1,000,000 other than in
the ordinary course of business for reasonable and adequate consideration; or
(f) make any material change in any Tax or accounting
methods or systems of internal accounting controls, except as may be appropriate
to conform to changes in applicable Tax Laws or regulatory accounting
requirements or GAAP; or
(g) make any single acquisition of capital stock or
assets of any entity or enter into any joint venture in which the total
consideration paid or contributed by Buyer or any Buyer Entity exceeds $25
million or any combination of acquisitions of capital stock or assets of one or
more entities or joint ventures in which the aggregate consideration paid or
contributed exceeds $50 million.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the occurrence
or impending occurrence of any event or circumstance relating to it or any of
its Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Target Material Adverse Effect or a Buyer Material Adverse Effect,
as applicable, or (ii) would cause or constitute a material breach of any of its
representations, warranties, or covenants contained herein, and to use its
reasonable efforts to prevent or promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If
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financial statements are contained in any such reports filed with the SEC, such
financial statements will fairly present the consolidated financial position of
the entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in stockholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material); provided, that any pro forma financial statements contained in such
reports filed with the SEC are not necessarily indicative of the consolidated
financial position of the Target Entities or the Buyer Entities, as the case may
be, as of the respective dates thereof and the consolidated results of
operations and cash flows of the Target Entities or the Buyer Entities, as the
case may be, for the periods indicated. As of their respective dates, such
reports filed with the SEC will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in all material
respects in accordance with Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER APPROVAL.
As soon as reasonably practicable after execution of this Agreement, Buyer shall
prepare and file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act and take any action reasonably required to be taken under the
applicable state Blue Sky or securities Laws in connection with the issuance of
the shares of Buyer Common Stock upon consummation of the Merger. Target shall
cooperate in the preparation and filing of the Registration Statement and shall
furnish all information concerning it and the holders of its capital stock as
Buyer may reasonably request in connection with such action. Target shall call a
Stockholders' Meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC (and, to the extent
practicable, on the same day as Buyer's Stockholders' Meeting), for the purpose
of voting upon adoption of this Agreement and such other related matters (with
the consent of Buyer which shall not be unreasonably withheld) as it deems
appropriate. Buyer shall call a Stockholders' Meeting, to be held as soon as
reasonably practicable after the Registration Statement is declared effective by
the SEC, for the purpose of voting upon the issuance of shares of Buyer Common
Stock pursuant to the Merger, the adoption of an amendment to increase the
number of shares that may be issued under the Buyer's Incentive Program by
1,500,000 and to authorize shares of Buyer Common Stock to be issued in
connection with the performance of the obligations set forth in Section 3.5
(collectively, the "Plan Amendment") and such other related matters as it deems
appropriate. In connection with the Stockholders' Meetings, (i) Target and Buyer
shall prepare and file with the SEC a Joint Proxy Statement and mail such Joint
Proxy Statement to their respective stockholders, (ii) the Parties shall furnish
to each other all information concerning them that they may reasonably request
in connection with such Joint Proxy Statement, (iii) the Board of Directors of
Target and Buyer shall recommend to their respective stockholders the approval
of the matters submitted for approval (subject to the Board of Directors of
Target, after having
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consulted with and based on the written opinion of outside counsel (a copy of
which shall be furnished to Buyer), reasonably determining in good faith that
the making of such recommendation, or the failure to withdraw or modify its
recommendation, would be reasonably likely to constitute a breach of fiduciary
duties of the members of such Board of Directors to Target's stockholder under
applicable law), and (iv) the Board of Directors and officers of Target and
Buyer shall use their reasonable efforts to obtain such stockholders' approval
(subject to the Board of Directors of Target, after having consulted with and
based on the written opinion of outside counsel (a copy of which shall be
furnished to Buyer), reasonably determining in good faith that the taking of
such actions would be reasonably likely to constitute a breach of fiduciary
duties of the members of such Board of Directors to Target's stockholder under
applicable law). Buyer and Target shall make all necessary filings with respect
to the Merger under the Securities Laws.
8.2 EXCHANGE LISTING. Buyer shall use its reasonable efforts to
list, prior to the Effective Time, on the NYSE, subject to official notice of
issuance, the shares of Buyer Common Stock to be issued to the holders of Target
Common Stock pursuant to the Merger, and Buyer shall give all notices and make
all filings with the NYSE required in connection with the transactions
contemplated herein.
8.3 APPLICATIONS; ANTITRUST NOTIFICATION. Buyer shall promptly
prepare and file, and Target shall cooperate in the preparation and, where
appropriate, filing of, applications with all Regulatory Authorities having
jurisdiction over the transactions contemplated by this Agreement seeking the
requisite Consents necessary to consummate the transactions contemplated by this
Agreement. To the extent required by the HSR Act, each of the Parties will
promptly file with the United States Federal Trade Commission and the United
States Department of Justice the notification and report form required for the
transactions contemplated hereby and any supplemental or additional information
which may reasonably be requested in connection therewith pursuant to the HSR
Act and will comply in all material respects with the requirements of the HSR
Act. The Parties shall deliver to each other copies of all filings,
correspondence and orders to and from all Regulatory Authorities in connection
with the transactions contemplated hereby.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Target shall execute and file the Certificate of
Merger with the Secretary of State of the State of Delaware in connection with
the Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
reasonably practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including using its reasonable efforts to lift
or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article 9; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Without limiting the
generality of the foregoing, each
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Party agrees to use all reasonable efforts to cause the Effective Time to occur
not later than the first business day following the last to occur of (i) the
Effective Date (including expiration of any applicable waiting period) of the
last required Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, and (ii) the date on which the shareholders
of Target and Buyer approve this Agreement to the extent such approval is
required by applicable Law or the rules of the NYSE. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all material developments relevant to its business
and to consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests, provided that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations. No investigation by a Party shall affect
the representations and warranties of the other Party.
(b) The Parties' respective obligations under the
Confidentiality Agreements, which are hereby reaffirmed and adopted, and
incorporated by reference herein, shall apply to all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions pursuant to this Agreement.
(c) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent, either
a material breach of any representation, warranty, covenant or agreement of the
other Party or which has had or is reasonably likely to have a Target Material
Adverse Effect or a Buyer Material Adverse Effect, as applicable.
8.7 PRESS RELEASES. Prior to the Effective Time, Target and Buyer
shall consult and cooperate with each other as to the timing, form and substance
of any press release or other public disclosure related to this Agreement or any
other transaction contemplated hereby, and will not issue any such press release
or make any such public disclosure without the prior consent of the other, which
consent shall not be unreasonably withheld; provided, that nothing in this
Section 8.7 shall be deemed to prohibit any Party from making any disclosure
which its outside counsel deems necessary or advisable in order to satisfy such
Party's disclosure obligations imposed by Law.
8.8 NO SOLICITATIONS, ETC.
(a) Except with respect to this Agreement and the
transactions contemplated hereby, no Target Entity nor any Affiliate thereof nor
any Representatives thereof retained by any Target Entity shall directly or
indirectly solicit, initiate or encourage the making of any
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Acquisition Proposal by any Person. No Target Entity or any Affiliate or
Representative thereof shall furnish any non-public information to any Person or
engage in any discussions or negotiate with respect to, or enter into any
Contract with respect to, any Acquisition Proposal, but Target Company may
communicate information about an unsolicited Acquisition Proposal to its
stockholders if and to the extent that it is required to do so, based on the
advice of outside counsel, in order to comply with its legal obligations. Target
Company shall promptly (i) cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons (other than Buyer) with
respect to any Acquisition Proposal and (ii) notify Buyer in the event that it
receives any Acquisition Proposal.
(b) During the period from the date of this Agreement
through the Effective Time (or earlier termination hereof), none of the Target
Entities shall terminate, amend, modify or waive any provision of any
confidentiality or standstill agreement to which it is a party. During such
period, the Target Entities shall enforce, to the fullest extent permitted under
applicable law, the provisions of any such agreement, including, but not limited
to, by obtaining injunctions to prevent any breaches of any such agreements and
to enforce specifically the terms and provisions thereof in any court having
jurisdiction.
8.9 TAX TREATMENT. Each of the Parties undertakes and agrees to
use its reasonable efforts to cause the Merger, and to take no action or fail to
take any action which would cause the Merger not, to qualify for treatment as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code for federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each Target Entity shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary to challenge the applicability of, any applicable Takeover Law,
including Section 203 of the DGCL.
8.11 AGREEMENT OF AFFILIATES. Target has disclosed in Section 8.11
of the Target Disclosure Memorandum all Persons whom it reasonably believes is
an "affiliate" of Target for purposes of Rule 145 under the 1933 Act. Target
shall use its reasonable efforts to cause each such Person to deliver to Buyer
not later than 30 days after the date of this Agreement, a written agreement,
substantially in the form of Exhibit 3. Buyer shall not be required to maintain
the effectiveness of the Registration Statement under the 1933 Act for the
purposes of resale of Buyer Common Stock by such affiliates.
8.12 EMPLOYEE BENEFITS AND CONTRACTS. Following the Effective Time,
Buyer shall provide generally to officers and employees of the Target Entities
employee benefits under employee benefit and welfare plans (other than stock
option or other plans involving the potential issuance of Buyer Common Stock),
on terms and conditions which when taken as a whole are substantially similar to
those currently provided by the Buyer Entities to their similarly situated
officers and employees; provided, that, for a period of 12 months after the
Effective Time, Buyer shall provide generally to officers and employees of
Target Entities severance benefits in accordance with the policies of either (i)
Target as disclosed in Section 8.12 of the Target Disclosure Memorandum, or (ii)
Buyer, whichever of (i) or (ii) will provide the greater benefit to the officer
or employee. For purposes of participation, vesting and (except in the case of
Buyer
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retirement plans) benefit accrual under Buyer's employee benefit plans, the
service of the employees of the Target Entities prior to the Effective Time
shall be treated as service with a Buyer Entity participating in such employee
benefit plans. Buyer also shall cause the Surviving Corporation and its
Subsidiaries to honor in accordance with their terms all employment, severance,
consulting and other compensation Contracts disclosed in Section 8.13 of the
Target Disclosure Memorandum to Buyer between any Target Entity and any current
or former director, officer, or employee thereof, and all provisions for vested
benefits or other vested amounts earned or accrued through the Effective Time
under the Target Benefit Plans.
8.13 INDEMNIFICATION.
(a) Buyer shall, and shall cause the Surviving
Corporation to, indemnify, defend and hold harmless the present and former
directors and officers of the Target Entities (each, an "Indemnified Party")
against all Liabilities arising out of actions or omissions arising out of the
Indemnified Party's service or services as directors or officers of Target or,
at Target's request, of another corporation, partnership, joint venture, trust
or other enterprise affiliated with Target occurring at or prior to the
Effective Time (including the transactions contemplated by this Agreement) to
the fullest extent permitted under Delaware Law and by Target's Certificate of
Incorporation and Bylaws as in effect on the date hereof, including provisions
relating to advances of expenses incurred in the defense of any Litigation and
whether or not any Buyer Entity is insured against any such matter. Without
limiting the foregoing, in any case in which approval by the Surviving
Corporation is required to effectuate any indemnification, the Surviving
Corporation shall direct, at the election of the Indemnified Party, that the
determination of any such approval shall be made by independent counsel mutually
agreed upon between Buyer and the Indemnified Party.
(b) Buyer, shall, or shall cause the Surviving
Corporation to, maintain in effect for the Indemnified Parties for not less than
seven years after the Effective Time policies of directors' and officers'
liability insurance with respect to matters occurring at or prior to the
Effective Time (including, without limitation, the transactions contemplated by
this Agreement) providing substantially the same coverage and containing terms
and conditions which are no less advantageous, in any material respect, to these
currently maintained by Target for the benefit of the Company's present or
former directors, employees or agents covered by such insurance policies prior
to the Effective Time; provided, however, that Buyer may, in lieu of maintaining
such existing insurance as provided above, cause comparable coverage to be
provided with any policy maintained for the benefit of Buyer or any of the Buyer
Subsidiaries, so long as the material terms are no less advantageous than such
existing insurance.
(c) Any Indemnified Party wishing to claim
indemnification under paragraph (a) of this Section 8.13, upon learning of any
such Liability or Litigation, shall promptly notify Buyer thereof. In the event
of any such Litigation (whether arising before or after the Effective Time), (i)
Buyer or the Surviving Corporation shall have the right to assume the defense
thereof and neither Buyer nor the Surviving Corporation shall 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 Buyer or the Surviving
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Corporation elects not to assume such defense or counsel for the Indemnified
Parties advises that there are substantive issues which raise conflicts of
interest between Buyer or the Surviving Corporation and the Indemnified Parties,
the Indemnified Parties may retain counsel satisfactory to them, and Buyer 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, that Buyer and the Surviving Corporation shall be obligated
pursuant to this paragraph (c) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction, unless such Indemnified Parties shall
have been advised in writing by counsel that there exist conflicts of interest
among such Indemnified Parties that preclude one firm of counsel from
representing the interests of all such Indemnified Parties, (ii) Buyer, the
Surviving Corporation and the Indemnified Parties will cooperate in the defense
of any such Litigation, and (iii) neither Buyer nor the Surviving Corporation
shall be liable for any settlement effected without its prior written consent,
which consent shall not be unreasonably withheld; and provided further that
neither Buyer nor the Surviving Corporation shall have any obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
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.
(d) If Buyer or the Surviving Corporation or any
successors or assigns shall consolidate with or merge into any other Person and
shall not be the continuing or surviving Person of such consolidation or merger
or shall transfer all or substantially all of its assets to any Person, then and
in each case, proper provision shall be made so that the successors and assigns
of Buyer or the Surviving Corporation shall assume the obligations set forth in
this Section 8.13.
(e) The provisions of this Section 8.13 shall survive the
Effective Time are intended expressly to be for the benefit of and shall be
enforceable by, each Indemnified Party and their respective heirs and
representatives. Buyer hereby guarantees the performance by the Surviving
Corporation of the indemnification obligations of the Surviving Corporation
pursuant to this Section 8.13.
8.14 RELATED PARTY CONTRACTS AND TRANSACTIONS. Except as
contemplated by this Agreement and the transactions contemplated hereby and
except as set forth in Section 8.14 of the Target Disclosure Memorandum, any and
all Contracts and transactions between any of the Target Entities, on the one
hand, and an Affiliate of any of the Target Entities (other than another Target
Entity), on the other hand, shall be canceled by the Closing Date (at no expense
to the Target Entities) such that the Target Entities will have no rights to any
Assets of any such Affiliate or obligations whatsoever with respect to such
Contracts and transactions, and no such Affiliate will have any rights to any
Assets of any of the Target Entities or obligations whatsoever with respect to
such Contracts or transactions.
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6:
(a) STOCKHOLDER APPROVAL. The stockholders of Target
shall have adopted this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by Law,
by the provisions of any governing instruments, or by the rules of the NYSE. The
stockholders of Buyer shall have approved the issuance of shares of Buyer Common
Stock pursuant to the Merger and the Plan Amendment, as and to the extent
required by Law, by the provisions of any governing instruments, or by the rules
of the NYSE.
(b) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger (other than Consents and filing, registration and
notice requirements which if not obtained, made or complied with are not
reasonably likely to have, individually or in the aggregate, a Target Material
Adverse Effect or a Buyer Material Adverse Effect, as applicable ("Excluded
Consents")) shall have been obtained or made and shall be in full force and
effect and all waiting periods required by Law shall have expired (other than
waiting periods the failure to comply with is not reasonably likely to have a
Target Material Adverse Effect or a Buyer Material Adverse Effect, as
applicable).
(c) LEGAL PROCEEDINGS. No court or governmental or
regulatory authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by this
Agreement.
(d) REGISTRATION STATEMENT. The Registration Statement
shall be effective under the 1933 Act, no stop orders suspending the
effectiveness of the Registration Statement shall have been issued, no action,
suit, proceeding or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary approvals
under state securities Laws or the 1933 Act or 1934 Act relating to the issuance
or trading of the shares of Buyer Common Stock issuable pursuant to the Merger
shall have been received.
(e) EXCHANGE LISTING. The shares of Buyer Common Stock
issuable pursuant to the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(f) TAX MATTERS. Each Party shall have received a written
opinion of counsel from Buyer's Counsel, in form reasonably satisfactory to such
Parties (the "Tax Opinion"), to the effect that (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code, (ii) the exchange in the Merger of Target Common Stock for Buyer
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Common Stock will not give rise to gain or loss to the stockholders of Target
with respect to such exchange (except to the extent of any cash received in lieu
of fractional shares), and (iii) none of Target, Sub or Buyer will recognize
gain or loss as a result of the Merger (except for amounts resulting from any
required change in accounting methods and any income and deferred gain
recognized pursuant to Treasury regulations issued under Section 1502 of the
Internal Revenue Code). In rendering such Tax Opinion, such counsel shall be
entitled to rely upon representations of officers of Target and Buyer reasonably
satisfactory in form and substance to such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Buyer pursuant to Section 11.6(a):
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of Target set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties set forth in
Sections 5.3 and 11.3 shall be true and correct (except for inaccuracies which
are de minimis in amount). The representations and warranties set forth in
Sections 5.19, 5.20, 5.21 and 5.23 shall be true and correct in all material
respects. There shall not exist inaccuracies in the representations and
warranties of Target set forth in this Agreement (including the representations
and warranties set forth in Sections 5.3, 5.19, 5.20, 5.21 and 5.23) such that
the aggregate effect of such inaccuracies has, or is reasonably likely to have,
a Target Material Adverse Effect.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all
of the agreements and covenants of Target to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
material respects.
(c) CERTIFICATES. Target shall have delivered to Buyer
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Target and in Section
9.2(a) and 9.2(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Target's Board of Directors and stockholders evidencing the
taking of all corporate action necessary to authorize the execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated hereby.
9.3 CONDITIONS TO OBLIGATIONS OF TARGET. The obligations of Target
to perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by Target pursuant to Section 11.6(b):
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(a) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of Buyer set
forth in this Agreement shall be assessed as of the date of this Agreement and
as of the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties set forth in
Sections 6.3 and 11.3 shall be true and correct (except for inaccuracies which
are de minimis in amount). The representations and warranties of Buyer set forth
in Sections 6.20, 6.21, 6.22 and 6.23 shall be true and correct in all material
respects. There shall not exist inaccuracies in the representations and
warranties of Buyer set forth in this Agreement (including the representations
and warranties set forth in Section 6.20) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Buyer Material Adverse
Effect.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all
of the agreements and covenants of Buyer to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior to
the Effective Time shall have been duly performed and complied with in all
material respects.
(c) CERTIFICATES. Buyer shall have delivered to Target
(i) a certificate, dated as of the Effective Time and signed on its behalf by
its chief executive officer and its chief financial officer, to the effect that
the conditions set forth in Section 9.1 as relates to Buyer and in Section
9.3(a) and 9.3(b) have been satisfied, and (ii) certified copies of resolutions
duly adopted by Buyer's Board of Directors and stockholders and Sub's Board of
Directors and sole stockholder evidencing the taking of all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby.
(d) EXCHANGE AGENT CERTIFICATION. The Exchange Agent
shall have delivered to Target a certificate, dated as of the Effective Time, to
the effect that the Exchange Agent has received from Buyer appropriate
instructions and authorization for the Exchange Agent to issue a sufficient
number of shares of Buyer Common Stock in exchange for outstanding shares of
Target Common Stock.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Target and Buyer or both, this Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of Buyer and Target; or
(b) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this
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Agreement) in the event of a material breach by the other Party of any
representation or warranty contained in this Agreement which cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching Party of such breach and which breach is reasonably likely, in the
opinion of the non-breaching Party, to have, individually or in the aggregate, a
Target Material Adverse Effect or a Buyer Material Adverse Effect, as
applicable, on the breaching Party; or
(c) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event of a material breach
by the other Party of any covenant or agreement contained in this Agreement
which cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach; or
(d) By either Party (provided that the terminating Party
is not then in material breach of any representation, warranty, covenant, or
other agreement contained in this Agreement) in the event (i) any Consent of any
Regulatory Authority required for consummation of the Merger and the other
transactions contemplated hereby shall have been denied by final nonappealable
action of such authority or if any action taken by such authority is not
appealed within the time limit for appeal, or (ii) the stockholders of Target or
Buyer fail to vote their approval of the matters relating to this Agreement and
the transactions contemplated hereby at the Stockholders' Meetings where such
matters were presented to such stockholders for approval and voted upon; or
(e) By either Party in the event that the Merger shall
not have been consummated by March 31, 1998, if the failure to consummate the
transactions contemplated hereby on or before such date is not caused by any
breach of this Agreement by the Party electing to terminate pursuant to this
Section 10.1(e); or
(f) By Target, in the event (i) of the acquisition, by
any person or group of persons, of beneficial ownership of 50% or more of the
outstanding shares of Buyer Common Stock (the terms "person," "group" and
"beneficial ownership" having the meanings ascribed thereto in Section 13(d) of
the Exchange Act and the regulations promulgated thereunder), or (ii) the Board
of Directors of Buyer accepts or publicly recommends acceptance of an offer from
a third party (including, without limitation, BIL (Far East Holdings) Limited or
BIL Securities (Offshore) Ltd. or their respective Affiliates) to acquire 50% or
more of the outstanding shares of Buyer Common Stock or of Buyer's consolidated
assets; or
(g) By Target, in the event Buyer terminates, amends,
modifies or novates in any way the standstill provisions contained in that
certain Amended and Restated Stockholder Agreement by and among BIL (Far East
Holdings) Limited, Buyer and Xxxxx Xxxxxxxx, as amended on May 1, 1997.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1, this Agreement shall
become void and have no effect, except that (i) the provisions of this Section
10.2 and Article 11 and Section 8.6(b) shall survive any such termination and
abandonment, and (ii) a termination pursuant to Sections 10.1(b), 10.1(c),
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10.1(d), 10.1(e), 10.1(f) or 10.1(g) shall not relieve the breaching Party from
Liability for an uncured willful breach of a representation, warranty, covenant,
or agreement giving rise to such termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 1, 2, 3, 4 and 11 and Sections 8.12 and 8.13.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger,
acquisition of all of the stock or assets of, or other business
combination involving the acquisition of such Party or any of its
Subsidiaries or the acquisition of a substantial equity interest in, or
a substantial portion of the assets of, such Party or any of its
Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries,
controlling, controlled by or under common control with such Person;
(ii) any officer, director, partner, employer, or direct or indirect
beneficial owner of any 10% or greater equity or voting interest of
such Person; or (iii) any other Person for which a Person described in
clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"BUYER CAPITAL STOCK" shall mean, collectively, the Buyer
Common Stock, the Buyer Preferred Stock and any other class or series
of capital stock of Buyer.
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"BUYER COMMON STOCK" shall mean the $0.025 par value common
stock of Buyer.
"BUYER DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Xxxxxx-Field Health Products, Inc. Disclosure
Memorandum" delivered prior to the date of this Agreement to Target
describing in reasonable detail the matters contained therein.
"BUYER ENTITIES" shall mean, collectively, Buyer and all Buyer
Subsidiaries.
"BUYER FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of Buyer
as of June 30, 1997, and as of December 31, 1996 and 1995, and the
related statements of operations, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) for the six
months ended June 30, 1997, and for each of the three fiscal years
ended December 31, 1996, 1995 and 1994, as filed by Buyer in SEC
Documents, and (ii) the consolidated balance sheets of Buyer (including
related notes and schedules, if any) and related statements of
operations, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to June 30, 1997.
"BUYER MATERIAL ADVERSE EFFECT" shall mean an event, change or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial
position, business, or results of operations of Buyer and its
Subsidiaries, taken as a whole, or (ii) the ability of Buyer to perform
its obligations under this Agreement or to consummate the Merger or the
other transactions contemplated by this Agreement, provided that
"Material Adverse Effect" shall not be deemed to include the impact of
(a) changes in Laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally
accepted accounting principles, (c) actions and omissions of Buyer (or
any of its Subsidiaries) taken with the prior informed written Consent
of Target in contemplation of the transactions contemplated hereby, and
(d) the direct effects of compliance with this Agreement on the
operating performance of Buyer, including expenses incurred by Buyer in
consummating the transactions contemplated by this Agreement.
"BUYER PREFERRED STOCK" shall mean the preferred stock, $0.01
par value per share, of Buyer and shall include the Series A Junior
Participating Preferred Stock, the Series B Cumulative Convertible
Preferred Stock and the Series C Cumulative Convertible Preferred
Stock.
"BUYER RIGHTS AGREEMENT" shall mean that certain Rights
Agreement, dated as of September 3, 1996, between Buyer and American
Stock Transfer & Trust Company, as Rights Agent.
"BUYER RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the Buyer Rights Agreement.
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"BUYER STOCK PLAN" shall mean the existing stock option plan
of Buyer designated as follows: the Incentive Program, as amended
through the date hereof.
"BUYER SUBSIDIARIES" shall mean the Subsidiaries of Buyer,
which shall include the Buyer Subsidiaries described in Section 6.4 and
any corporation or other organization acquired as a Subsidiary of Buyer
in the future and held as a Subsidiary by Buyer at the Effective Time.
"CERTIFICATE OF MERGER" shall mean the Certificate of Merger
to be executed by Target and filed with the Secretary of State of the
State of Delaware relating to the Merger as contemplated by Section
1.1.
"CLOSING DATE" shall mean the date on which the Closing
occurs.
"CONFIDENTIALITY AGREEMENTS" shall mean that certain
Confidentiality Agreement, dated June 20, 1997, between Target and
Buyer and that certain Confidentiality Agreement, dated August 19,
1997, between Target and Buyer.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person
pursuant to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement,
arrangement, authorization, commitment, contract, indenture,
instrument, lease, obligation, plan, practice, restriction,
understanding, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any
Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of, default
under, contravention of, or conflict with, any Contract, Law, Order, or
Permit, (ii) any occurrence of any event that with the passage of time
or the giving of notice or both would constitute a breach or violation
of, default under, contravention of, or conflict with, any Contract,
Law, Order, or Permit, or (iii) any occurrence of any event that with
or without the passage of time or the giving of notice would give rise
to a right of any Person to exercise any remedy or obtain any relief
under, terminate or revoke, suspend, cancel, or modify or change the
current terms of, or renegotiate, or to accelerate the maturity or
performance of, or to increase or impose any Liability under, any
Contract, Law, Order, or Permit..
"DGCL" shall mean the Delaware General Corporation Law.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface strata)
and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies
with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and
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Liability Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et
seq. ("RCRA"), and other Laws relating to emissions, discharges,
releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"EQUITY RIGHTS" shall mean all arrangements, calls,
commitments, Contracts, options, rights to subscribe to, scrip,
understandings, warrants, or other binding obligations of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of a Person or by which a
Person is or may be bound to issue additional shares of its capital
stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"EXHIBITS" 1 through 3, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits
are hereby incorporated by reference herein and made a part hereof, and
may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as added
by Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean copyrights, patents,
trademarks, service marks, service names, trade names, applications
therefor, technology rights and licenses, computer software (including
any source or object codes therefor or documentation relating thereto),
trade secrets, franchises, know-how, inventions, and other intellectual
property rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated
thereunder.
"JOINT PROXY STATEMENT" shall mean the proxy statement used by
Target and Buyer to solicit the approval of their respective
stockholders of the transactions
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contemplated by this Agreement, which shall include the prospectus of
Buyer relating to the issuance of the Buyer Common Stock to holders of
Target Common Stock.
"KNOWLEDGE" as used with respect to any Target Entity
(including references to any such Target Entity being aware of a
particular matter) shall mean the actual knowledge of X.X. Xxxxx, J.
Xxx Xxxxx, Xxxxxxxx X. Xxxxxx, Xxxx X. Xxxxx, Xx. or Xxxxx X. Xxxxxxxx,
Xx. and as used with respect to any Buyer Entity (including references
to such Buyer Entity being aware of a particular matter) shall mean the
actual knowledge of Xxxxx Xxxxxxxx, Xxxx X. Xxxxxx or Xxxxxxx X.
Xxxxxxx.
"LAW" shall mean any code, law (including common law),
ordinance, regulation, reporting or licensing requirement, rule, or
statute applicable to a Person or its Assets, Liabilities, or business,
including those promulgated, interpreted or enforced by any Regulatory
Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or
expense (including costs of investigation, collection and defense),
claim, deficiency, guaranty or endorsement of or by any Person (other
than endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation,
infringement, lien, mortgage, pledge, reservation, restriction,
security interest, title retention or other security arrangement, or
any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable, and (ii) Liens which do not materially impair the use of
or title to the Assets subject to such Lien.
"LITIGATION" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, governmental or other
examination or investigation, hearing, administrative or other
proceeding relating to or affecting a Party, its business, its Assets
(including Contracts related to it), or the transactions contemplated
by this Agreement.
"MATERIAL" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement
shall determine materiality in that instance.
"NYSE" shall mean the New York Stock Exchange, Inc.
"OPERATING PROPERTY" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries, and,
where required by the context, includes the owner or operator of such
property, but only with respect to such property.
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"ORDER" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award,
ruling, or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"PARTICIPATION FACILITY" shall mean any facility or property
in which the Party in question or any of its Subsidiaries participates
in the management and, where required by the context, said term means
the owner or operator of such facility or property, but only with
respect to such facility or property.
"PARTY" shall mean either Target or Buyer, and "Parties" shall
mean both Target and Buyer.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.
"REGISTRATION STATEMENT" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Buyer under the 1933 Act with respect to the shares of Buyer Common
Stock to be issued to the stockholders of Target in connection with the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the SEC,
the NYSE, the Federal Trade Commission, the United States Department of
Justice, and all other federal, state, county, local or other
governmental or regulatory agencies, authorities (including
self-regulatory authorities), instrumentalities, commissions, boards or
bodies having jurisdiction over the Parties and their respective
Subsidiaries.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative
engaged by a Person.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents (and
all amendments and supplements thereto) filed, or required to be filed,
by a Party or any of its Subsidiaries with any Regulatory Authority
pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act
of 1940, as amended, the
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Trust Indenture Act of 1939, as amended, and the rules and regulations
of any Regulatory Authority promulgated thereunder.
"STOCKHOLDERS' MEETINGS" shall mean the respective meetings of
the stockholders of Target and Buyer to be held pursuant to Section
8.1, including any adjournment or adjournments thereof.
"SUB COMMON STOCK" shall mean the $0.01 par value common stock
of Sub.
"SUBSIDIARIES" shall mean all those corporations,
associations, or other business entities of which the entity in
question either (i) owns or controls 50% or more of the outstanding
equity securities either directly or through an unbroken chain of
entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided,
there shall not be included any such entity the equity securities of
which are owned or controlled in a fiduciary capacity), (ii) in the
case of partnerships, serves as a general partner, (iii) in the case of
a limited liability company, serves as a managing member, or (iv)
otherwise has the ability to elect a majority of the directors,
trustees or managing members thereof.
"SURVIVING CORPORATION" shall mean Target as the surviving
corporation resulting from the Merger.
"TARGET COMMON STOCK" shall mean the $2.50 par value common
stock of Target.
"TARGET DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Xxxxx Enterprises, Inc. Disclosure Memorandum"
delivered prior to the date of this Agreement to Buyer describing in
reasonable detail the matters contained therein.
"TARGET ENTITIES" shall mean, collectively, Target and all
Target Subsidiaries.
"TARGET FINANCIAL STATEMENTS" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of
Target as of June 30, 1997, and as of December 31, 1996 and 1995, and
the related statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any) for the six
months ended June 30, 1997, and for each of the three fiscal years
ended December 31, 1996, 1995 and 1994, as filed by Target in SEC
Documents, and (ii) the consolidated balance sheets of Target
(including related notes and schedules, if any) and related statements
of income, changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to June 30, 1997.
"TARGET MATERIAL ADVERSE EFFECT" shall mean an event, change
or occurrence which, individually or together with any other event,
change or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of Target and
its Subsidiaries, taken as a whole, or (ii) the ability of Target to
perform its obligations
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under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, provided that "Material
Adverse Effect" shall not be deemed to include the impact of (a)
changes in Laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in generally accepted
accounting principles, (c) actions and omissions of Target (or any of
its Subsidiaries) taken with the prior informed written Consent of
Buyer in contemplation of the transactions contemplated hereby, and (d)
the direct effects of compliance with this Agreement on the operating
performance of Target, including expenses incurred by Target in
consummating the transactions contemplated by this Agreement and any
demonstrable losses of revenues of Target that are directly
attributable to the acquisition of Medical Supplies of America, Inc. by
Buyer.
"TARGET STOCK PLANS" shall mean the existing stock option and
other stock-based compensation plans of Target designated as follows:
1989 Stock Option Plan, 1992 Stock Option Plan, the 1995 Long-Term
Incentive Plan and the 1995 Stock Option Plan for Outside Directors.
"TARGET SUBSIDIARIES" shall mean the Subsidiaries of Target,
which shall include the Target Subsidiaries described in Section 5.4
and any corporation or other organization acquired as a Subsidiary of
Target in the future and held as a Subsidiary by Target at the
Effective Time.
"TAX RETURN" shall mean any report, return, information
return, or other information required to be supplied to a taxing
authority in connection with Taxes, including any return of an
affiliated or combined or unitary group that includes a Party or its
Subsidiaries.
"TAX" OR "TAXES" shall mean any federal, state, county, local,
or foreign taxes, fees or other assessments, including, income, excise,
sales, use, transfer, payroll, franchise, real property or personal
property, including any interest and penalties thereon or with respect
thereto.
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Average Closing Price Section 3.1(c)
Base Exchange Ratio Section 3.1(c)
Business Combination Section 11.2
Buyer Benefit Plans Section 6.14
Buyer Contracts Section 6.15
Buyer ERISA Plan Section 6.14
Buyer Pension Plan Section 6.14
Buyer Plan Amendment Section 8.1
Buyer SEC Reports Section 6.5(a)
Certificates Section 4.1
Closing Section 1.2
Common Stock Trust Section 3.4
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Effective Time Section 1.3
ERISA Affiliate Section 5.14(c)
Exchange Agent Section 4.1
Exchange Ratio Section 3.1(c)
Excess Shares Section 3.4
Excluded Consents Section 9.1(b)
Indemnified Party Section 8.14
Investment Assets Section 5.23
Lower Threshold Price Section 3.1(c)
Merger Section 1.1
Takeover Laws Section 5.20
Target Benefit Plans Section 5.14
Target Contracts Section 5.15
Target ERISA Plan Section 5.14
Target Options Section 3.5
Target Pension Plan Section 5.14
Target SEC Reports Section 5.5(a)
Tax Opinion Section 9.1(g)
Upper Threshold Price Section 3.1(c)
(c) Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES. Except for filing fees associated with filings under
the HSR Act, which shall be split equally between the Parties, each of the
Parties shall bear and pay all direct costs and expenses incurred by it or on
its behalf in connection with the transactions contemplated hereunder, including
filing, registration and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants, and
counsel, except that each of the Parties shall bear and pay one-half of the
filing fees payable in connection with the Registration Statement and the Joint
Proxy Statement and printing costs incurred in connection with the printing of
the Registration Statement and the Joint Proxy Statement.
11.3 BROKERS AND FINDERS. Except for Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation as to Target and except for Xxxxx Xxxxxx Inc. as to
Buyer, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by Target or by Buyer, each of
Target and Buyer, as the case may be, agrees to indemnify and hold the other
Party harmless of and from any Liability in respect of any such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire
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agreement between the Parties with respect to the transactions contemplated
hereunder and supersedes all prior arrangements or understandings with respect
thereto, written or oral (except, as to Section 8.6(b), for the Confidentiality
Agreements). Nothing in this Agreement expressed or implied, is intended to
confer upon any Person, other than the Parties or their respective successors,
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, other than as provided in Section 8.13.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may
be amended by a subsequent writing signed by each of the Parties upon the
approval of each of the Parties, whether before or after stockholder approval of
this Agreement has been obtained; provided, that after any such approval by the
holders of Target Common Stock, there shall be made no amendment that pursuant
to Section 251(d) of the DGCL requires further approval by such stockholders
without the further approval of such stockholders; and further provided, that
after any such approval by the holders of Buyer Common Stock, the provisions of
this Agreement relating to the manner or basis in which shares of Target Common
Stock will be exchanged for shares of Buyer Common Stock shall not be amended
after the Stockholders' Meetings in a manner adverse to the holders of Buyer
Common Stock without any requisite approval of the holders of the issued and
outstanding shares of Buyer Common Stock entitled to vote thereon.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Buyer, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Target, to waive or extend the time for the compliance
or fulfillment by Target of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of Buyer
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Buyer.
(b) Prior to or at the Effective Time, Target, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Buyer, to waive or extend the time for the compliance
or fulfillment by Buyer of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of Target
under this Agreement, except any condition which, if not satisfied, would result
in the violation of any Law. No such waiver shall be effective unless in writing
signed by a duly authorized officer of Target.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
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11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre-paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
Target: Xxxxx Enterprises, Inc.
One Atlantic Center
Xxxxx 0000
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx,Xxxxxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Attention: J. Xxx Xxxxx
Copy to Counsel: Xxxxxx & Bird LLP
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
Buyer: Xxxxxx-Field Health Products, Inc.
000 Xxxxx Xxxxx, Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Copy to Counsel: Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: (000)000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
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11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, without regard
to any applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS; ARTICLES AND SECTIONS. The captions contained in
this Agreement are for reference purposes only and are not part of this
Agreement. Unless otherwise indicated, all references to particular Articles or
Sections shall mean and refer to the referenced Articles and Sections of this
Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of all parties
hereto.
11.13 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.14 ENFORCEMENT OF AGREEMENT. The Parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specified terms or was otherwise breached.
It is accordingly agreed that the Parties 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 competent jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by its duly authorized officers as of the day and year
first above written.
XXXXXX-FIELD HEALTH PRODUCTS, INC.
By: s/s XXXXX XXXXXXXX
---------------------------------
Chairman of the Board
and Chief Executive Officer
GFHP ACQUISITION CORP.
By: s/s XXXXX XXXXXXXX
---------------------------------
Chairman of the Board
and Chief Executive Officer
XXXXX ENTERPRISES, INC.
By: s/s J. XXX XXXXX
----------------------------------
Chairman of the Board of Directors
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Exhibit 1
of
Exhibit 2(a)
Form of Stockholders Agreement
dated as of September __, 1997
by and among
XXXXXX-FIELD HEALTH PRODUCTS, INC.,
BIL (FAR EAST HOLDINGS) LIMITED,
BIL SECURITIES (OFFSHORE) LTD.,
XXXXX XXXXXXXX
and
THE INDIVIDUALS AND ENTITIES LISTED
ON THE SIGNATURE PAGES THERETO
65
TABLE OF CONTENTS
This Table of Contents is not part of the Stockholders
Agreement to which it is attached but is inserted for convenience only.
Page
No.
---
ARTICLE I
DEFINITIONS
1.01 Definitions...................................................................................... 2
ARTICLE II
BOARD OF DIRECTORS
2.01 Composition of Board of Directors................................................................ 5
2.02 Resignations and Designations.................................................................... 6
ARTICLE III
TRANSFER OF SHARES
3.01 Restriction on Certain Transfers................................................................. 6
3.02 Legend ......................................................................................... 7
ARTICLE IV
STANDSTILL
4.01 Limitation on Acquisition of Equity Securities................................................... 8
4.02 Standstill....................................................................................... 8
ARTICLE V
COVENANTS OF THE STOCKHOLDERS IN CONNECTION WITH THE MERGER
5.01 Ownership of Target Shares; Approval of Merger
Agreement................................................................................ 9
5.02 No Solicitation.................................................................................. 10
5.03 Director Actions................................................................................. 10
ARTICLE VI
COVENANTS OF BIL ENTITIES IN CONNECTION WITH THE MERGER
6.01 Approval of Merger Agreement..................................................................... 10
6.02 Director Actions................................................................................. 11
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Page
No.
---
ARTICLE VII
COVENANTS OF XX. XXXXXXXX IN CONNECTION WITH THE MERGER
7.01 Approval of Merger Agreement..................................................................... 11
7.02 Director Actions................................................................................. 12
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
8.01 Authority........................................................................................ 12
8.02 No Conflicts..................................................................................... 12
8.03 Governmental Approvals and Filings............................................................... 13
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
9.01 Incorporation.................................................................................... 13
9.02 Authority........................................................................................ 13
9.03 No Conflicts..................................................................................... 13
9.04 Governmental Approvals and Filings............................................................... 14
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF THE BIL ENTITIES
10.01 Incorporation................................................................................... 14
10.02 Authority....................................................................................... 14
10.03 No Conflicts.................................................................................... 15
10.04 Governmental Approvals and Filings.............................................................. 15
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF XX. XXXXXXXX
11.01 Authority....................................................................................... 15
11.02 No Conflicts.................................................................................... 16
11.03 Governmental Approvals and Filings.............................................................. 16
ARTICLE XII
GENERAL PROVISIONS
12.01 Survival of Representations, Warranties,
Covenants and Agreements................................................................. 16
12.02 Termination..................................................................................... 17
12.03 Amendment and Waiver............................................................................ 17
12.04 Notices......................................................................................... 17
12.05 Irrevocable Appointment of Agent................................................................ 19
12.06 Entire Agreement................................................................................ 19
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Page
No.
---
12.07 No Third Party Beneficiary...................................................................... 20
12.08 No Assignment; Binding Effect................................................................... 20
12.09 Specific Performance; Legal Fees................................................................ 20
12.10 Headings........................................................................................ 20
12.11 Invalid Provisions.............................................................................. 20
12.12 Governing Law................................................................................... 21
12.13 Consent to Jurisdiction and Service of Process.................................................. 21
12.14 Counterparts.................................................................................... 21
SCHEDULES
Schedule I Target Shares Owned by the Stockholders
Schedule II Company Shares Owned by the BIL Entities
Schedule III Company Shares Owned by Xx. Xxxxxxxx
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This STOCKHOLDERS AGREEMENT dated as of September __, 1997 is
made and entered into by and among Xxxxxx-Field Health Products, Inc., a
Delaware corporation (the "Company"), BIL (Far East Holdings) Limited, a Hong
Kong corporation ("BIL Far East"), BIL Securities (Offshore) Ltd., a New Zealand
corporation ("BIL Securities" and, together with BIL Far East, the "BIL
Entities"), Xxxxx Xxxxxxxx ("Xx. Xxxxxxxx") and each of the stockholders of
Xxxxx Enterprises, Inc., a Delaware corporation ("Target"), listed on the
signature pages hereto (the "Stockholders").
WHEREAS, the Company, GFHP Acquisition Corp., a Delaware
corporation wholly-owned by the Company ("Sub"), and Target have entered into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
which provides for the merger of Sub with and into Target and for Target to
become a wholly-owned subsidiary of the Company (the "Merger");
WHEREAS, at the Effective Time (as defined below) and in
accordance with the terms of the Merger Agreement, each share of common stock,
par value $2.50 per share, of Target (the "Target Common Stock") will be
converted into shares of common stock, par value $.025 per share, of the Company
(the "Company Common Stock"), all as more fully described in the Merger
Agreement;
WHEREAS, each Stockholder owns the number of shares of Target
Common Stock set forth opposite such Stockholder's name on Schedule I hereto,
each of the BIL Entities owns the number of shares of Company Common Stock and
other shares of capital stock of the Company set forth on Schedule II hereto and
Xx. Xxxxxxxx owns the number of shares of Company Common Stock set forth on
Schedule III hereto;
WHEREAS, simultaneously with the execution and delivery of
this Stockholders Agreement, the Stockholders and the Company are entering into
a registration rights agreement providing for the registration for sale, under
certain circumstances, of their shares of Company Common Stock (the
"Registration Rights Agreement"); and
WHEREAS, as a condition to the Company's willingness to
consummate the Merger and to the Stockholders' willingness to vote their shares
of Target Common Stock in favor of the Merger, the Stockholders, the Company,
the BIL Entities and Xx. Xxxxxxxx desire to establish in this Stockholders
Agreement certain terms and conditions concerning the acquisition and
disposition of securities of the Company by the Stockholders and the corporate
governance of the Company after the Effective Time;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Stockholders Agreement, and for other good and
valuable consideration, the
69
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. (a) Except as otherwise specifically
indicated, the following terms have the following meanings for all purposes of
this Stockholders Agreement:
"Affiliate" shall have the meaning assigned thereto in Rule
405, as presently promulgated under the Securities Act.
"beneficially owns" (or comparable variations thereof) has the
meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
"Board of Directors" means the Board of Directors of the
Company.
"Change of Control" means and shall be deemed to have occurred
if after the Effective Time individuals who qualify as Continuing Directors
shall have ceased for any reason to constitute at least a majority of the Board
of Directors.
"Continuing Director" means (i) any individual serving as a
member of the Board of Directors at the Effective Time (including the designee
of the Restricted Group pursuant to Section 2.01), for so long as such
individual is a member of the Board of Directors, and (ii) any individual who is
recommended or elected to serve as a member of the Board of Directors by at
least a majority of the Continuing Directors then in office, for so long as such
individual is a member of the Board of Directors.
"DGCL" means the General Corporation Law of the State of
Delaware.
"Effective Time" means the time at which the Merger becomes
effective under the DGCL.
"Equity Securities" means Voting Securities,
Convertible Securities and Rights to Purchase Voting Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
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"Liens" means any lien, claim, mortgage, encumbrance, pledge,
security interest, equity or charge of any kind.
"Person" means any individual, corporation, partnership,
trust, other entity or group (within the meaning of Section 13(d)(3) of the
Exchange Act).
"Representatives" of any entity means such entity's directors,
officers, employees, legal, investment banking and financial advisors,
accountants and any other agents and representatives of such entity.
"Restricted Group" means (i) any Stockholder, (ii) any and all
Persons directly or indirectly controlled by or under common control with any
Stockholder, (iii) if such Stockholder is an individual, (a) any member of such
Stockholder's family (including any spouse, parent, sibling, child, grandchild
or other lineal descendant, including adoptive children), (b) the heirs,
executors, personal representatives and administrators of any of the foregoing
persons, (c) any trust established for the benefit of any of the foregoing
persons and (d) any charitable foundations established by any of the foregoing
persons, and (iv) any and all groups (within the meaning of Section 13(d)(3) of
the Exchange Act) of which any Stockholder or any Person directly or indirectly
controlling, controlled by or under common control with such Stockholder is a
member, other than any such group not acting for the purpose of acquiring,
holding or beneficially owning Equity Securities.
"Rule 144" means Rule 144 as presently promulgated under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Subsidiary" means any Person in which the Company or Target,
as the case may be, directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than fifty percent (50%) of either the equity interest
in, or the Voting Power of, such Person.
"Voting Power" means, with respect to any Outstanding Voting
Securities, the highest number of votes that the holders of all such Outstanding
Voting Securities would be entitled to cast for the election of directors or on
any other matter (except to the extent such voting rights are dependent upon
events of default or bankruptcy), assuming, for purposes of this computation,
the conversion or exchange into Voting Securities of Convertible Securities
(whether presently convertible or exchangeable or not) and the exercise of
Rights to Purchase Voting Securities (whether presently exercisable or not), in
either case to the extent that any such action would increase the number of such
votes.
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"Voting Securities" means the Company Common Stock and any
other securities of the Company of any kind or class having power generally to
vote for the election of directors; "Convertible Securities" means securities of
the Company which are convertible or exchangeable (whether presently convertible
or exchangeable or not) into Voting Securities; "Rights to Purchase Voting
Securities" means options and rights issued by the Company (whether presently
exercisable or not) to purchase Voting Securities or Convertible Voting
Securities; and "Outstanding Voting Securities" means at any time the then
issued and outstanding Voting Securities, Convertible Securities (which shall be
counted at the maximum number of Voting Securities for which they can be
converted or exchanged) and Rights to Purchase Voting Securities (which shall be
counted at the maximum number of Voting Securities for which they can be
exercised).
(b) In addition, the following terms are defined in
the Sections set forth below:
"Agent" -- Section 12.05
"Alternative Proposal" -- Section 5.02
"BIL Entities" -- Preamble
"BIL Far East" -- Preamble
"BIL Securities" -- Preamble
"Business Combination" -- Section 4.02
"Company" -- Preamble
"Company Common Stock" -- Preamble
"Company Stockholders' Meeting" -- Section 5.01(c)
"Dispose" or "Disposition" -- Section 3.01(a)
"Merger" -- Preamble
"Merger Agreement" -- Preamble
"Xx. Xxxxxxxx" -- Preamble
"Registration Rights Agreement" -- Preamble
"Requisite Stockholders" -- Section 12.05
"Xxxxxxxx Shares" -- Section 7.01(a)
"Sub" -- Preamble
"Target" -- Preamble
"Target Common Stock" -- Preamble
"Target Shares" -- Section 5.01(a)
"Target Stockholders' Meeting" -- Section 5.01(c)
(c) Unless the context of this Stockholders Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative or
similar words refer to this entire Stockholders Agreement; and (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Stockholders Agreement. Whenever this Stockholders Agreement refers to a number
of days, such number shall refer to calendar days unless business days are
specified.
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ARTICLE II
BOARD OF DIRECTORS
2.01 Composition of Board of Directors. (a) Effective at the
Effective Time, there shall be at least one vacancy on the Board of Directors
either by (i) an increase in the Board of Directors in accordance with the terms
of the Company's Certificate of Incorporation and Bylaws or (ii) director
resignations. Effective at the Effective Time, the Board of Directors shall
elect one designee of the Restricted Group to fill one vacancy on the Board of
Directors created in accordance with the preceding sentence, to serve from the
Effective Time until the end of his or her term.
(b) Thereafter, and subject to the next succeeding sentence,
the Board of Directors shall, at each meeting of stockholders of the Company at
which the term of any director designated by the Restricted Group expires,
nominate for election as a director of the Company, in accordance with the
Company's procedures for nomination of directors as provided for in its Bylaws,
a designee of the Restricted Group to stand for election for a succeeding term,
and shall vote all management proxies in favor of such nominee, except for such
proxies that specifically indicate to the contrary. Notwithstanding the
foregoing, the Stockholders shall cease to have the right to designate, or cause
the nomination or election of, any member of the Board of Directors from and
after such date as the Restricted Group beneficially owns Outstanding Voting
Securities representing less than 5% of the Voting Power of all Outstanding
Voting Securities. The obligation of the Board of Directors hereunder to
nominate for election as a director an individual designated by the Restricted
Group shall be subject to the foregoing limitation.
(c) Until such time as the Restricted Group beneficially owns
Outstanding Voting Securities representing less than 5% of the Voting Power of
all Outstanding Voting Securities, if any director designated by the Restricted
Group in accordance with this Section 2.01 shall decline or be unable to serve
for any other reason, the Board of Directors shall promptly upon the request of
the Restricted Group nominate or elect, as the case may be, a qualified person
recommended by the Restricted Group to replace such designee; provided that the
Restricted Group shall have such right only if and to the extent consistent with
the foregoing provisions of this Section 2.01.
(d) Until such time as the Restricted Group beneficially owns
Outstanding Voting Securities representing less than 5% of the Voting Power of
all Outstanding Voting Securities, at each meeting of stockholders of the
Company, the Restricted Group shall vote the Voting Securities held by the
Restricted Group (x) for the nominees recommended by the Board of Directors
(provided such nominees include the nominee referred to in paragraphs (a) and
(b) above), (y) on all other proposals of the
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Board of Directors, as the Restricted Group determines in its sole discretion,
and (z) on all proposals of any other stockholder of the Company, in accordance
with the recommendation of the Board of Directors. Notwithstanding the
foregoing, (i) to the extent that any member of the Restricted Group holds or is
empowered to vote or to effect the voting of Voting Securities in a fiduciary or
comparable capacity and, in the exercise of such duties, such member of the
Restricted Group determines that it is not appropriate to vote such Voting
Securities in accordance with the recommendation of the Board of Directors as
contemplated by clause (z) above, then such member of the Restricted Group may
vote such Voting Securities in such manner as he or she determines is
appropriate, and (ii) the provisions of this paragraph (d) shall terminate and
be of no further force or effect at such time as the members of the Restricted
Group notify the Company in writing that they irrevocably waive their right
under Article II to nominate a director and they cause their designee on the
Board of Directors to resign.
(e) The Restricted Group shall promptly provide to the
Company, as the Company may from time to time reasonably request, information
regarding any designee of the Restricted Group for the Board of Directors, for
inclusion in any form, report, schedule, registration statement, definitive
proxy statement or other documents required to be filed by the Company with the
Securities and Exchange Commission.
2.02 Resignations and Designations. At such time as the
Restricted Group no longer has the right to designate a director in accordance
with this Article II, the Restricted Group will cause the director designated by
the Restricted Group to resign from the Board of Directors.
ARTICLE III
TRANSFER OF SHARES
3.01 Restriction on Certain Transfers. Until such time as the
Restricted Group beneficially owns Outstanding Voting Securities representing
less than 5% of the Voting Power of all Outstanding Voting Securities, no member
of the Restricted Group shall, directly or indirectly, assign, sell, pledge,
hypothecate or otherwise transfer or dispose of ("Dispose" or a "Disposition")
any Equity Securities beneficially owned by such member of the Restricted Group,
except (A) a Disposition to a member of the Restricted Group who simultaneously
with such Disposition agrees in a written instrument in form and substance
satisfactory to the Company to be bound by the provisions of this Stockholders
Agreement as though an original signatory hereto, (B) a Disposition through a
bona fide underwritten public offering registered under the Securities Act
effected in accordance with the provisions of the Registration Rights
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Agreement, (C) a Disposition in a "brokers' transaction" pursuant to Rule
144(f), provided that, until such time as the Restricted Group beneficially owns
Outstanding Voting Securities representing less than 5% of the Voting Power of
all Outstanding Voting Securities, any sales pursuant to this clause (C) shall
be subject to the volume limitations set forth in Rule 144(e) (regardless of
whether such volume limitations are applicable to such sale), (D) pursuant to a
merger or consolidation of the Company or a recapitalization of any Equity
Securities, (E) pursuant to a self-tender or exchange offer by the Company or a
third party tender offer recommended by the Board of Directors, (F) a
Disposition by way of gift to any tax-exempt charitable organization or
educational institution, (G) a Disposition to a Person who is eligible to file a
statement on Schedule 13G promulgated by the Securities and Exchange Commission
with respect to its holdings of Equity Securities pursuant to Rule 13d-1(b)(1)
promulgated under the Exchange Act, or (H) to a Person who, after giving effect
to such Disposition, would beneficially own less than 5% of the Voting Power of
all Outstanding Voting Securities (determined pursuant to the provisions of
Regulation 13D under the Exchange Act, except that a Person shall be deemed to
be the beneficial owner of a security if that Person has the right to acquire
beneficial ownership of such security without regard to the 60-day provision in
Rule 13d-3(d)(1)(i)).
3.02 Legend. Any Disposition of Equity Securities by any
member of the Restricted Group also shall be subject to the terms and conditions
of this Section 3.02. Each certificate representing Equity Securities
beneficially owned by any member of the Restricted Group shall be imprinted with
a legend in the following form until such time (subject to the provisions of the
final sentence of this Section 3.02) as all restrictions on the Disposition of
such Equity Securities hereunder are terminated:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF UNLESS THEY ARE REGISTERED
OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. SUCH SHARES MAY
ONLY BE TRANSFERRED PURSUANT TO THE PROVISIONS OF ARTICLE III OF A
CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF SEPTEMBER __, 1997, BY AND
AMONG XXXXXX-FIELD HEALTH PRODUCTS, INC., BIL (FAR EAST HOLDINGS)
LIMITED, BIL SECURITIES (OFFSHORE) LTD., XXXXX XXXXXXXX AND THE OTHER
INDIVIDUALS AND ENTITIES LISTED ON THE SIGNATURE PAGES THERETO, COPIES
OF WHICH AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."
The Company shall not (i) give effect on its books to an attempted Disposition
of any Equity Securities which shall have been Disposed of in violation of any
provision of this Stockholders Agreement, or (ii) treat any transferee who
obtains any Equity Securities in violation of any provision of this Stockholders
Agreement as the owner of such Equity Securities or
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accord any transferee thereof the right to vote or to receive dividends in
respect of such Equity Securities. The Company will issue new certificates not
imprinted with the foregoing legend to any holder of Equity Securities not
subject to the restrictions on Disposition contained in this Stockholders
Agreement; provided that the Company may require an opinion of counsel
reasonably satisfactory to it to the effect that no legend is required under the
Securities Act or applicable state securities or blue sky laws.
ARTICLE IV
STANDSTILL
4.01 Limitation on Acquisition of Equity Securities. Following
the Effective Time and until the Restricted Group beneficially owns Outstanding
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities, no member of the Restricted Group shall, directly
or indirectly, purchase or acquire, or make any offer to or agree to purchase or
acquire, beneficial ownership of any Equity Securities, except (i) the
acquisition of Company Common Stock pursuant to the Merger Agreement, (ii) by
way of stock dividends, stock splits or other distributions or offerings made
available to holders of Equity Securities generally, (iii) in connection with a
Disposition permitted by Section 3.01(A) or (iv) pursuant to plans established
by the Company for members of the Board of Directors, officers and other
employees.
4.02 Standstill. Following the Effective Time and thereafter
until such time as the Restricted Group beneficially owns Outstanding Voting
Securities representing less than 5% of the Voting Power of all Outstanding
Voting Securities, no member of the Restricted Group will, and they will not
assist or encourage others (including by providing financing) to, directly or
indirectly (i) acquire or agree, offer, seek or propose (whether publicly or
otherwise) to acquire ownership (including but not limited to beneficial
ownership) of any substantial portion of the assets or Equity Securities of the
Company, whether by means of a negotiated purchase of assets, tender or exchange
offer, merger or other business combination, recapitalization, restructuring or
other extraordinary transaction (a "Business Combination"), (ii) engage in any
"solicitation" of "proxies" (as such terms are used in the proxy rules
promulgated under the Exchange Act, but disregarding clause (iv) of Rule
14a-1(1)(2) and including any exempt solicitation pursuant to Rule 14a-2(b)(1)
or (2)), or form, join or in any way participate in a "group" (as defined under
the Exchange Act), other than a group consisting solely of members of the
Restricted Group, with respect to any Equity Securities, (iii) subject to the
obligation of the designee of the Restricted Group on the Board of Directors to
exercise his or her fiduciary
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duties as a director, otherwise seek or propose to acquire control of the Board
of Directors, (iv) take any action that could reasonably be expected to force
the Company to make a public announcement regarding any of the types of matters
referred to in clause (i), (ii) or (iii) above, or (v) enter into any
discussions, negotiations, agreements, arrangements or understandings with any
third party with respect to any of the foregoing. No member of the Restricted
Group will request the Company or any of its Representatives to amend or waive
any provision of this paragraph (including this sentence) or Section 4.01 during
such period. If at any time during such period a member of the Restricted Group
is approached by any third party concerning its participation in any of the
types of matters referred to in clause (i), (ii) or (iii) above, such member
will promptly inform the Company of the nature of such contact and the parties
thereto.
ARTICLE V
COVENANTS OF THE STOCKHOLDERS IN CONNECTION WITH THE MERGER
5.01 Ownership of Target Shares; Approval of Merger Agreement.
(a) Each Stockholder represents and warrants to the Company that such
Stockholder owns, beneficially and of record, as of the date hereof, the number
of shares of Target Common Stock listed on Schedule I hereto (collectively, the
"Target Shares"), subject to no rights of others and free and clear of all
Liens. Such Stockholder's right to vote or Dispose of the Target Shares
beneficially owned by such Stockholder is not subject to any voting trust,
voting agreement, voting arrangement or proxy and such Stockholder has not
entered into any contract, option or other arrangement or undertaking with
respect thereto.
(b) Until the Effective Time, no Stockholder will Dispose of
any of the Target Shares owned by such Stockholder or any interest therein,
exercise any right of conversion with respect to any such Target Shares, deposit
any of such Target Shares into a voting trust or enter into a voting agreement
or arrangement or grant any proxy with respect thereto or enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect Disposition of any of the Target Shares.
(c) Each Stockholder will, with respect to those Target Shares
that such Stockholder either owns of record on the record date for voting at any
annual or special meeting of Target stockholders to be held for the purpose of
voting on the adoption of the Merger Agreement or for granting any written
consent in connection with the solicitation of written consents in lieu of such
a meeting (collectively, the "Target Stockholders' Meeting") or with respect to
which such Stockholder otherwise controls the vote, vote or cause to be voted
such shares (or execute written consents with respect to such shares) (i) in
favor of the
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adoption of the Merger Agreement and the approval of the Merger and the other
transactions contemplated by the Merger Agreement, (ii) against any Alternative
Proposal (as defined in Section 5.02) and (iii) in favor of any other matter
necessary for the consummation of the transactions contemplated by the Merger
Agreement, including without limitation at the Target Stockholders' Meeting.
5.02 No Solicitation. Prior to the Effective Time, and subject
to Section 5.03, each Stockholder shall not, and each Stockholder shall use best
efforts to cause such Stockholder's Affiliates and Representatives not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making or implementation of any proposal or offer (including, without
limitation, any proposal or offer to the stockholders of Target) with respect to
a merger, consolidation or other business combination including Target or any of
its Subsidiaries or any acquisition or similar transaction (including, without
limitation, a tender or exchange offer) involving the purchase of all or any
significant portion of the assets of Target and its Subsidiaries taken as a
whole or any outstanding shares of the capital stock of Target or any Subsidiary
of Target (any such proposal or offer being hereinafter referred to as an
"Alternative Proposal"), or engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions or enter into
any agreements, arrangements or understandings, whether written or oral, with,
any Person relating to an Alternative Proposal (excluding the transactions
contemplated by the Merger Agreement), or otherwise facilitate any effort or
attempt to make or implement an Alternative Proposal. The Stockholders will
promptly notify the Company if any such inquiries, proposals or offers are
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, such Stockholder or
any of such Persons.
5.03 Director Actions. Notwithstanding any other provision of
this Stockholders Agreement to the contrary, the covenants and agreements set
forth herein shall not prevent any member of the Restricted Group, or any
designees of the members of the Restricted Group, who serve on Target's Board of
Directors from taking any action, subject to the applicable provisions of the
Merger Agreement, while acting in such member's or designee's capacity as a
director of Target in accordance with his or her fiduciary duties.
ARTICLE VI
COVENANTS OF BIL ENTITIES IN CONNECTION WITH THE MERGER
6.01 Approval of Merger Agreement. (a) Each of the
BIL Entities represents and warrants to the Stockholders that it
owns, beneficially and of record, as of the date hereof, the
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number of shares of each class of capital stock of the Company listed on
Schedule II hereto (collectively, the "Company Shares").
(b) Until the Effective Time, none of the BIL Entities will
Dispose of any of the Company Shares or any interest therein, deposit any of the
Company Shares into a voting trust or enter into a voting agreement or
arrangement or grant any proxy with respect thereto or enter into any contract,
option or other arrangement or undertaking with respect to the direct or
indirect Disposition of any of the Company Shares.
(c) Each of the BIL Entities will, with respect to those
Company Shares that such BIL Entity either owns of record on the record date for
voting at any annual or special meeting of Company stockholders to be held for
the purpose of voting on the adoption of the Merger Agreement or for granting
any written consent in connection with the solicitation of written consents in
lieu of such a meeting (collectively, the "Company Stockholders' Meeting") or
with respect to which such BIL Entity otherwise controls the vote, vote or cause
to be voted such shares (or execute written consents with respect to such
shares) (i) in favor of the adoption of the Merger Agreement and the approval of
the Merger and the other transactions contemplated by the Merger Agreement, and
(ii) in favor of any other matter necessary for the consummation of the
transactions contemplated by the Merger Agreement, including without limitation
at the Company Stockholders' Meeting.
6.02 Director Actions. Notwithstanding any other provision of
this Stockholders Agreement to the contrary, the covenants and agreements set
forth herein shall not prevent any designees of either of the BIL Entities who
serve on the Company's Board of Directors from taking any action, subject to the
applicable provisions of the Merger Agreement, while acting in such designees'
capacity as a director of the Company in accordance with their fiduciary duties.
ARTICLE VII
COVENANTS OF XX. XXXXXXXX IN CONNECTION WITH THE MERGER
7.01 Approval of Merger Agreement. (a) Xx. Xxxxxxxx represents
and warrants to the Stockholders that he owns, beneficially and of record, as of
the date hereof, the number of shares of each class of capital stock of the
Company listed on Schedule III hereto (collectively, the "Xxxxxxxx Shares").
(b) Until the Effective Time, Xx. Xxxxxxxx will not deposit
any of the Xxxxxxxx Shares into a voting trust or enter into a voting agreement
or arrangement or grant any proxy with respect thereto.
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(c) Xx. Xxxxxxxx will, with respect to those Xxxxxxxx Shares
that Xx. Xxxxxxxx either owns of record on the record date for voting at the
Company Stockholders' Meeting or with respect to which Xx. Xxxxxxxx otherwise
controls the vote, vote or cause to be voted such shares (or execute written
consents with respect to such shares) (i) in favor of the adoption of the Merger
Agreement and the approval of the Merger and the other transactions contemplated
by the Merger Agreement, and (ii) in favor of any other matter necessary for the
consummation of the transactions contemplated by the Merger Agreement, including
without limitation at the Company Stockholders' Meeting.
7.02 Director Actions. Notwithstanding any other provision of
this Stockholders Agreement to the contrary, the covenants and agreements set
forth herein shall not prevent Xx. Xxxxxxxx from taking any action, subject to
the applicable provisions of the Merger Agreement, while acting in his capacity
as a director of the Company in accordance with his fiduciary duties.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents and warrants to the Company
as follows:
8.01 Authority. This Stockholders Agreement has been duly and
validly executed and delivered by each Stockholder and constitutes a legal,
valid and binding obligation of such Stockholder enforceable against such
Stockholder in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
8.02 No Conflicts. The execution and delivery by each
Stockholder of this Stockholders Agreement do not, and the performance by each
Stockholder of such Stockholder's obligations under this Stockholders Agreement
and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to such
Stockholder or any of such Stockholder's properties or assets; or
(b) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require such Stockholder to obtain any consent, approval or action
of, make any filing with
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or give any notice to any Person as a result or under the terms of, or (iv)
result in the creation or imposition of any Lien upon any of such Stockholder's
properties or assets under, any contract, agreement, plan, permit or license to
which such Stockholder is a party.
8.03 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of any Stockholder is required in connection with the execution,
delivery and performance of this Stockholders Agreement or the consummation of
the transactions contemplated hereby, other than filings under the Exchange Act
in connection with such Stockholder's acquisition of Equity Securities and the
other transactions contemplated by this Stockholders Agreement and the Merger
Agreement.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholders
as follows:
9.01 Incorporation. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Company has the requisite corporate power and authority to
execute and deliver this Stockholders Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
9.02 Authority. The execution and delivery by the Company of
this Stockholders Agreement, and the performance by the Company of its
obligations hereunder, have been duly and validly authorized by the Board of
Directors of the Company, no other corporate action on the part of the Company
or its stockholders being necessary. This Stockholders Agreement has been duly
and validly executed and delivered by the Company and constitutes a legal, valid
and binding obligation of the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
9.03 No Conflicts. The execution and delivery by the Company
of this Stockholders Agreement do not, and the performance by the Company of its
obligations under this Stockholders Agreement and the consummation of the
transactions contemplated hereby will not:
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(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws of the Company;
(b) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to the Company
or any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require the Company to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of or (iv) result in the creation or imposition of any Lien upon the
Company or any of its properties or assets under, any contract, agreement, plan,
permit or license to which the Company is a party.
9.04 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Company is required in connection with the execution,
delivery and performance of this Stockholders Agreement or the consummation of
the transactions contemplated hereby, other than filings under the Exchange Act
in connection with the Stockholders' voting agreement contained in this
Stockholders Agreement and the other transactions contemplated by this
Stockholders Agreement and the Merger Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF THE BIL ENTITIES
Each of the BIL Entities hereby represents and warrants to the
Stockholders as follows:
10.01 Incorporation. Each of the BIL Entities is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the BIL Entities has the requisite
corporate power and authority to execute and deliver this Stockholders
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
10.02 Authority. The execution and delivery by each of the BIL
Entities of this Stockholders Agreement, and the performance by each of the BIL
Entities of its obligations hereunder, have been duly and validly authorized by
all necessary corporate actions on the part of such BIL Entity, no other
corporate action on the part of such BIL Entity or its stockholders being
necessary. This Stockholders Agreement has been duly and validly executed and
delivered by each of the BIL
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Entities and constitutes a legal, valid and binding obligation of each of the
BIL Entities in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
10.03 No Conflicts. The execution and delivery by each of the
BIL Entities of this Stockholders Agreement do not, and the performance by each
of the BIL Entities of its obligations under this Stockholders Agreement and the
consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the corporate charter documents of such
BIL Entity;
(b) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to such BIL
Entity or any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require such BIL Entity to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of or (iv) result in the creation or imposition of any Lien upon such
BIL Entity or any of its properties or assets under, any contract, agreement,
plan, permit or license to which such BIL Entity is a party.
10.04 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of either BIL Entity is required in connection with the execution,
delivery and performance of this Stockholders Agreement or the consummation of
the transactions contemplated hereby, other than filings under the Exchange Act
in connection with the BIL Entities' voting agreement contained in this
Stockholders Agreement and the other transactions contemplated by this
Stockholders Agreement and the Merger Agreement.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF XX. XXXXXXXX
Xx. Xxxxxxxx hereby represents and warrants to the
Stockholders as follows:
11.01 Authority. This Stockholders Agreement has been duly and
validly executed and delivered by Xx. Xxxxxxxx and
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constitutes a legal, valid and binding obligation of Xx. Xxxxxxxx enforceable
against Xx. Xxxxxxxx in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
11.02 No Conflicts. The execution and delivery by Xx. Xxxxxxxx
of this Stockholders Agreement do not, and the performance by Xx. Xxxxxxxx of
his obligations under this Stockholders Agreement and the consummation of the
transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to Xx. Xxxxxxxx
or any of his properties or assets; or
(b) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require Xx. Xxxxxxxx to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon any of
Xx. Xxxxxxxx'x properties or assets under, any contract, agreement, plan, permit
or license to which Xx. Xxxxxxxx is a party.
11.03 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of Xx. Xxxxxxxx is required in connection with the execution,
delivery and performance of this Stockholders Agreement or the consummation of
the transactions contemplated hereby, other than filings under the Exchange Act
in connection with Xx. Xxxxxxxx'x voting agreement contained in this
Stockholders Agreement and the other transactions contemplated by this
Stockholders Agreement and the Merger Agreement.
ARTICLE XII
GENERAL PROVISIONS
12.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Stockholders Agreement, each party hereto has the right
to rely fully upon the representations and warranties of the others contained in
this Stockholders Agreement. Except as provided in Section 12.02, the
representations, warranties, covenants and
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agreements of each party hereto contained in this Stockholders Agreement will
survive until the termination of this Stockholders Agreement.
12.02 Termination. This Stockholders Agreement and all rights
and obligations of the parties hereunder, including, without limitation, the
provisions of Section 5.01 and Section 5.02, shall automatically terminate, and
shall cease to be of any further force and effect, upon the earlier to occur of
(i) the termination of the Merger Agreement in accordance with its terms, (ii)
the mutual written agreement of the Stockholders and the Company, (iii) such
time following the Effective Time as the Restricted Group beneficially owns
Voting Securities representing less than 5% of the Voting Power of all
Outstanding Voting Securities and (iv) a Change of Control. Notwithstanding the
termination of this Stockholders Agreement, nothing contained herein shall
relieve any party hereto from liability for breach of any of such party's
representations, warranties, covenants or agreements contained in this
Stockholders Agreement.
12.03 Amendment and Waiver. (a) This Stockholders Agreement
may be amended, supplemented or modified only by a written instrument duly
executed by or on behalf of each party hereto.
(b) Any term or condition of this Stockholders Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Stockholders Agreement, in any one
or more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Stockholders Agreement on any future
occasion. All remedies, either under this Stockholders Agreement or by law or
otherwise afforded, will be cumulative and not alternative.
12.04 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to any Stockholder, to:
c/o Fuqua Capital Corporation
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: J. Xxx Xxxxx
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with a copy to:
Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. X'Xxxxxxx, Esq.
If to either of the BIL Entities, to:
BIL (Far East Holdings) Limited
c/o Brierley Investments Limited
00 Xxxxxxxxx, 0xx Xxxxx
Xxxxxx XX 0X 0XX
Xxxxxx Xxxxxxx
Facsimile No.: 011-44-171-369-9112
Attn: Xxxxxx X. Xxxxx, Chairman
with a copy to:
Brierley Investments Limited
00-00 Xxxxxxxx Xxxxxx
Xxxxx 0, Xxxxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxx Xxxxxxx
Facsimile: 000-000-000-0000
Attn: Xxxx Xxxxxx, Corporate Secretary
If to the Company, to:
Xxxxxx-Field Health Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Xx. Xxxxxxxx, to:
Xx. Xxxxx Xxxxxxxx
Xxxxxx-Field Health Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
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with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
12.05 Irrevocable Appointment of Agent. By the execution and
delivery of this Stockholders Agreement, including counterparts hereof, each
Stockholder hereby irrevocably constitutes and appoints J. Xxx Xxxxx as the true
and lawful agent and attorney-in-fact of each such Stockholder (such individual,
or such other individual as Stockholders who own a majority of the aggregate
Equity Securities then owned by all the Stockholders (the "Requisite
Stockholders") shall designate in writing to the Company from time to time, is
herein referred to as the "Agent"), to do or refrain from doing all such further
acts and things, and to execute all such documents, as the Agent shall deem
necessary or appropriate in connection with this Stockholders Agreement. Unless
there is no existing person that has been designated to act as Agent by the
Requisite Stockholders, all rights of the Stockholders under this Stockholders
Agreement (including without limitation the right to designate a director
pursuant to Section 2.01) shall be exercised by the Stockholders only through or
by the Agent in his or her capacity as agent of the Stockholders hereunder, and
the Company shall not be required to take directions from any other Stockholder
for so long as such Agent continues to serve and has not otherwise been removed
as Agent pursuant to notice to the Company from the Requisite Stockholders. If
at any time no Person is serving as Agent, the Company shall not be required to
take action except upon the direction of the Requisite Stockholders.
12.06 Entire Agreement. This Stockholders Agreement
supersedes all prior discussions and agreements among the parties
hereto with respect to the subject matter hereof, and contains,
together with the Registration Rights Agreement, the sole and
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87
entire agreement among the parties hereto with respect to the subject matter
hereof.
12.07 No Third Party Beneficiary. The terms and provisions of
this Stockholders Agreement are intended solely for the benefit of each party
hereto, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person.
12.08 No Assignment; Binding Effect. Neither this Stockholders
Agreement nor any right, interest or obligation hereunder may be assigned by any
parties hereto without the prior written consent of the other party hereto and
any attempt to do so will be void. Subject to the preceding sentence, this
Stockholders Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns
and legal representatives.
12.09 Specific Performance; Legal Fees. The parties
acknowledge that money damages are not an adequate remedy for violations of any
provision of this Stockholders Agreement and that any party may, in such party's
sole discretion, apply to a court of competent jurisdiction for specific
performance for injunctive or such other relief as such court may deem just and
proper in order to enforce any such provision or prevent any violation hereof
and, to the extent permitted by applicable law, each party waives any objection
to the imposition of such relief. The parties hereto agree that, in the event
that any party to this Stockholders Agreement shall bring any legal action or
proceeding to enforce or to seek damages or other relief arising from an alleged
breach of any term or provision of this Stockholders Agreement by any other
party, the prevailing party in any such action or proceeding shall be entitled
to an award of, and the other party to such action or proceeding shall pay, the
reasonable fees and expenses of legal counsel to the prevailing party.
12.10 Headings. The headings used in this Stockholders
Agreement have been inserted for convenience of reference only and do not define
or limit the provisions hereof.
12.11 Invalid Provisions. If any provision of this
Stockholders Agreement is held to be illegal, invalid or unenforceable under any
present or future law, and if the rights or obligations of any party hereto
under this Stockholders Agreement will not be materially and adversely affected
thereby, (i) such provision will be fully severable, (ii) this Stockholders
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof and (iii) the
remaining provisions of this Stockholders Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
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88
12.12 Governing Law. Except to the extent that the DGCL is
mandatorily applicable to the rights and obligations of the parties, this
Stockholders Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to a contract executed and performed in
such State, without giving effect to the conflicts of laws principles thereof.
12.13 Consent to Jurisdiction and Service of Process. Each
party hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York or any court of the
State of New York located in the Borough of Manhattan in the City of New York in
any action, suit or proceeding arising in connection with this Stockholders
Agreement, agrees that any such action, suit or proceeding shall be brought only
in such court (and waives any objection based on forum non conveniens or any
other objection to venue therein to the extent permitted by law), and agrees to
delivery of service of process by any of the methods by which notices may be
given pursuant to Section 12.04, with such service being deemed given as
provided in such Section; provided, however, that such consent to jurisdiction
is solely for the purpose referred to in this Section 12.13 and shall not be
deemed to be a general submission to the jurisdiction of said courts or in the
State of New York other than for such purpose. Nothing herein shall affect the
right of any party to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the other in any other
jurisdiction.
12.14 Counterparts. This Stockholders Agreement may be
executed in any number of counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
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89
IN WITNESS WHEREOF, each party hereto has signed this
Stockholders Agreement, or caused this Stockholders Agreement to be signed by
its officer thereunto duly authorized, as of the date first above written.
XXXXXX-FIELD HEALTH PRODUCTS, INC.
By: ___________________________
Name:
Title:
BIL (FAR EAST HOLDINGS) LIMITED
By: ___________________________
Name:
Title:
BIL SECURITIES (OFFSHORE) LTD.
By: ___________________________
Name:
Title:
-----------------------------------
XXXXX XXXXXXXX
-----------------------------------
X. X. XXXXX
-----------------------------------
J. XXX XXXXX
XXXXX HOLDINGS - I, L.P.
By: XXXXX HOLDINGS, INC., its
General Partner
By: ______________________
Name: J. Xxx Xxxxx
Title: President
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90
THE XXXXXXXX XXXXXXX XXXXX TRUST
By: ___________________________
Name: X. X. Xxxxx
Title: Trustee
THE XXXXXX XXXXXX XXXXX TRUST
By: ___________________________
Name: X. X. Xxxxx
Title: Trustee
THE X. X. XXXXX FOUNDATION, INC.
By: ___________________________
Name: X. X. Xxxxx
Title: Chairman, President
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SCHEDULE I
Target Shares Owned by the Stockholders
Stockholder Number
----------- ------
X. X. Xxxxx 372,232
J. Xxx Xxxxx 310,142
Xxxxx Holdings - I, L.P. 366,000
The Xxxxxxxx Xxxxxxx Xxxxx Trust 160,843
The Xxxxxx Xxxxxx Xxxxx Trust 160,842
The X. X. Xxxxx Foundation, Inc. 69,698
92
SCHEDULE II
Company Shares Owned by the BIL Entities
BIL Far East
Class Number
----- ------
Common Stock 2,118,696
Series B Cumulative Convertible
Preferred Stock 3,527
BIL Securities
Common Stock 1,942,882
Series B Cumulative Convertible
Preferred Stock 2,573
Series C Cumulative Convertible
Preferred Stock 1,000
93
SCHEDULE III
Company Shares Owned by Xx. Xxxxxxxx
Class Number
Common Stock(1) 1,262,384
(1) Includes 332,271 shares currently issuable upon the exercise of stock
options issued pursuant to the Company's Incentive Program and 5,500 shares
owned by Xx. Xxxxxxxx'x wife as to which shares Xx. Xxxxxxxx disclaims any
beneficial interest.
94
Exhibit 2
of
Exhibit 2(a)
Form of Voting Agreement
dated as of September __, 1997
by and between
XXXXXX-FIELD HEALTH PRODUCTS, INC.
and
XXXX X. XXXXXXX
95
TABLE OF CONTENTS
This Table of Contents is not part of the Voting Agreement to
which it is attached but is inserted for convenience only.
Page
No.
---
ARTICLE I
DEFINITIONS
1.01 Definitions...................................................................................... 1
ARTICLE II
TRANSFER OF SHARES
2.01 Restriction on Certain Transfers................................................................. 3
ARTICLE III
COVENANTS OF THE STOCKHOLDER IN CONNECTION WITH THE MERGER
3.01 Ownership of Target Shares; Approval of Merger
Agreement................................................................................ 4
3.02 No Solicitation.................................................................................. 4
3.03 Director Actions................................................................................. 5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
4.01 Authority........................................................................................ 5
4.02 No Conflicts..................................................................................... 5
4.03 Governmental Approvals and Filings............................................................... 6
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.01 Incorporation.................................................................................... 6
5.02 Authority........................................................................................ 6
5.03 No Conflicts..................................................................................... 7
5.04 Governmental Approvals and Filings............................................................... 7
ARTICLE VI
GENERAL PROVISIONS
6.01 Survival of Representations, Warranties,
Covenants and Agreements................................................................. 7
6.02 Termination...................................................................................... 8
6.03 Amendment and Waiver............................................................................. 8
- i -
96
Page
No.
---
6.04 Notices ......................................................................................... 8
6.05 Entire Agreement................................................................................. 9
6.06 No Third Party Beneficiary....................................................................... 9
6.07 No Assignment; Binding Effect.................................................................... 10
6.08 Specific Performance; Legal Fees................................................................. 10
6.09 Headings......................................................................................... 10
6.10 Invalid Provisions............................................................................... 10
6.11 Governing Law.................................................................................... 10
6.12 Consent to Jurisdiction and Service of Process................................................... 10
6.13 Counterparts..................................................................................... 11
SCHEDULE
Schedule I Target Shares Owned by the Stockholder
- ii -
97
This VOTING AGREEMENT dated as of September__, 1997 is made
and entered into by and between Xxxxxx-Field Health Products, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Stockholder").
WHEREAS, the Company, GFHP Acquisition Corp., a Delaware
corporation wholly-owned by the Company ("Sub"), and Xxxxx Enterprises, Inc., a
Delaware corporation ("Target"), have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which provides for the
merger of Sub with and into Target and for Target to become a wholly-owned
subsidiary of the Company (the "Merger");
WHEREAS, at the Effective Time (as defined below) and in
accordance with the terms of the Merger Agreement, each share of common stock,
par value $2.50 per share, of Target (the "Target Common Stock") will be
converted into shares of common stock, par value $.025 per share, of the Company
(the "Company Common Stock"), all as more fully described in the Merger
Agreement;
WHEREAS, the Stockholder owns the number of shares of Target
Common Stock set forth opposite the Stockholder's name on Schedule I hereto; and
WHEREAS, as a condition to the Company's willingness to
consummate the Merger and to the Stockholder's willingness to vote his shares of
Target Common Stock in favor of the Merger, the Stockholder and the Company
desire to establish in this Voting Agreement certain terms and conditions
concerning the voting of the Stockholder's shares of Target Common Stock with
respect to the Merger and the disposition of his shares of Company Common Stock
received in the Merger;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Voting Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Definitions. (a) Except as otherwise specifically
indicated, the following terms have the following meanings for all purposes of
this Voting Agreement:
"Affiliate" shall have the meaning assigned thereto in Rule
405, as presently promulgated under the Securities Act.
98
"beneficially owns" (or comparable variations thereof) has the
meaning set forth in Rule 13d-3 promulgated under the Exchange Act.
"Board of Directors" means the Board of Directors of the
Company.
"DGCL" means the General Corporation Law of the State of
Delaware.
"Effective Time" means the time at which the Merger becomes
effective under the DGCL.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
"Liens" means any lien, claim, mortgage, encumbrance, pledge,
security interest, equity or charge of any kind.
"Person" means any individual, corporation, partnership,
trust, other entity or group (within the meaning of Section 13(d)(3) of the
Exchange Act).
"Representatives" of the Stockholder means the Stockholder's
legal, investment banking and financial advisors, accountants and any other
agents and representatives.
"Rule 145" means Rule 145 as presently promulgated under the
Securities Act.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Subsidiary" means any Person in which the Company or Target,
as the case may be, directly or indirectly through Subsidiaries or otherwise,
beneficially owns more than fifty percent (50%) of either the equity interest
in, or the Voting Power of, such Person.
(b) In addition, the following terms are defined in the
Sections set forth below:
"Alternative Proposal" -- Section 3.02
"Company" -- Preamble
"Company Common Stock" -- Preamble
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99
"Dispose" or "Disposition" -- Section 2.01(a)
"Merger" -- Preamble
"Merger Agreement" -- Preamble
"Registration Rights Agreement" -- Section 2.01(b)
"Stockholder" -- Preamble
"Sub" -- Preamble
"Target" -- Preamble
"Target Common Stock" -- Preamble
"Target Shares" -- Section 3.01(a)
"Target Stockholders' Meeting" -- Section 3.01(c)
(c) Unless the context of this Voting Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using the singular or
plural number also include the plural or singular number, respectively; (iii)
the terms "hereof," "herein," "hereby" and derivative or similar words refer to
this entire Voting Agreement; and (iv) the terms "Article" or "Section" refer to
the specified Article or Section of this Voting Agreement. Whenever this Voting
Agreement refers to a number of days, such number shall refer to calendar days
unless business days are specified.
ARTICLE II
TRANSFER OF SHARES
2.01 Restriction on Certain Transfers. (a) Following the
Effective Time, the Stockholder will not assign, sell, pledge, hypothecate or
otherwise transfer or dispose of ("Dispose" or a "Disposition") any shares of
Company Common Stock received by him in the Merger except in compliance with
federal and state securities laws, including without limitation, Rule 145. The
certificates representing the shares of Company Common Stock to be received by
the Stockholder in the Merger in exchange for the certificates representing his
shares of Target Common Stock will not contain any legend, other than any legend
required under Rule 145.
(b) Following the date hereof and prior to the Effective Time,
the Company and the Stockholder will negotiate in good faith such amendments to
the terms of the Registration Rights Agreement dated the 8th day of November,
1995 by and among Target and the Stockholder (the "Registration Rights
Agreement") as may be necessary in order to make the Registration Rights
Agreement applicable to the shares of Company Common Stock to be received by the
Stockholder in the Merger on a basis consistent, and not in conflict, with
registration rights agreements to which the Company is currently a party, while
at the same time preserving, to the extent practicable, the Stockholder's rights
under the Registration Rights Agreement. Nothing contained in the previous
sentence shall require the Company to obtain any
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100
consent or waiver of any other party to any registration rights agreement to
which the Company is currently a party.
ARTICLE III
COVENANTS OF THE STOCKHOLDER IN CONNECTION WITH THE MERGER
3.01 Ownership of Target Shares; Approval of Merger Agreement.
(a) The Stockholder represents and warrants to the Company that the Stockholder
owns, beneficially and of record, as of the date hereof, the number of shares of
Target Common Stock listed on Schedule I hereto (collectively, the "Target
Shares"), subject to no rights of others and free and clear of all Liens. The
Stockholder's right to vote or Dispose of the Target Shares is not subject to
any voting trust, voting agreement, voting arrangement or proxy and the
Stockholder has not entered into any contract, option or other arrangement or
undertaking with respect thereto.
(b) Until the Effective Time, the Stockholder will not Dispose
of any of the Target Shares or any interest therein, exercise any right of
conversion with respect to the Target Shares, deposit any of the Target Shares
into a voting trust or enter into a voting agreement or arrangement or grant any
proxy with respect thereto or enter into any contract, option or other
arrangement or undertaking with respect to the direct or indirect Disposition of
any of the Target Shares.
(c) The Stockholder will, with respect to those Target Shares
that the Stockholder either owns of record on the record date for voting at any
annual or special meeting of Target stockholders to be held for the purpose of
voting on the adoption of the Merger Agreement or for granting any written
consent in connection with the solicitation of written consents in lieu of such
a meeting (collectively, the "Target Stockholders' Meeting") or with respect to
which the Stockholder otherwise controls the vote, vote or cause to be voted
such shares (or execute written consents with respect to such shares) (i) in
favor of the adoption of the Merger Agreement and the approval of the Merger and
the other transactions contemplated by the Merger Agreement, (ii) against any
Alternative Proposal (as defined in Section 3.02) and (iii) in favor of any
other matter necessary for the consummation of the transactions contemplated by
the Merger Agreement, including without limitation at the Target Stockholders'
Meeting.
3.02 No Solicitation. Prior to the Effective Time, and subject
to Section 3.03, the Stockholder shall not, and the Stockholder shall use his
best efforts to cause his Affiliates and Representatives not to, initiate,
solicit or encourage, directly or indirectly, any inquiries or the making or
implementation of any proposal or offer (including, without limitation, any
proposal or offer to the stockholders of Target)
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101
with respect to a merger, consolidation or other business combination including
Target or any of its Subsidiaries or any acquisition or similar transaction
(including, without limitation, a tender or exchange offer) involving the
purchase of all or any significant portion of the assets of Target and its
Subsidiaries taken as a whole or any outstanding shares of the capital stock of
Target or any Subsidiary of Target (any such proposal or offer being hereinafter
referred to as an "Alternative Proposal"), or engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions or enter into any agreements, arrangements or understandings,
whether written or oral, with, any Person relating to an Alternative Proposal
(excluding the transactions contemplated by the Merger Agreement), or otherwise
facilitate any effort or attempt to make or implement an Alternative Proposal.
The Stockholder will promptly notify the Company if any such inquiries,
proposals or offers are received by, any such information is requested from, or
any such negotiations or discussions are sought to be initiated or continued
with, him or any of such Persons.
3.03 Director Actions. Notwithstanding any other provision of
this Voting Agreement to the contrary, the covenants and agreements set forth
herein shall not prevent the Stockholder from taking any action, subject to the
applicable provisions of the Merger Agreement, while acting in his capacity as a
director of Target in accordance with his fiduciary duties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Company
as follows:
4.01 Authority. This Voting Agreement has been duly and
validly executed and delivered by the Stockholder and constitutes a legal, valid
and binding obligation of the Stockholder enforceable against the Stockholder in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
4.02 No Conflicts. The execution and delivery by the
Stockholder of this Voting Agreement do not, and the performance by the
Stockholder of his obligations under this Voting Agreement
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and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to the
Stockholder or any of his properties or assets; or
(b) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require the Stockholder to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or under
the terms of, or (iv) result in the creation or imposition of any Lien upon any
of the Stockholder's properties or assets under, any contract, agreement, plan,
permit or license to which the Stockholder is a party.
4.03 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Stockholder is required in connection with the execution,
delivery and performance of this Voting Agreement or the consummation of the
transactions contemplated hereby, other than filings under the Exchange Act in
connection with the Stockholder's acquisition of Company Common Stock and the
other transactions contemplated hereby and by the Merger Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholder
as follows:
5.01 Incorporation. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Company has the requisite corporate power and authority to
execute and deliver this Voting Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby.
5.02 Authority. The execution and delivery by the Company of
this Voting Agreement, and the performance by the Company of its obligations
hereunder, have been duly and validly authorized by the Board of Directors of
the Company, no other corporate action on the part of the Company or its
stockholders being necessary. This Voting Agreement has been duly and validly
executed and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws
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affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.03 No Conflicts. The execution and delivery by the Company
of this Voting Agreement do not, and the performance by the Company of its
obligations under this Voting Agreement and the consummation of the transactions
contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the certificate of incorporation or
bylaws of the Company;
(b) conflict with or result in a violation or breach of any
term or provision of any law, statute, rule or regulation or any order, judgment
or decree of any Governmental or Regulatory Authority applicable to the Company
or any of its properties or asset; or
(c) (i) conflict with or result in a violation or breach of,
(ii) constitute (with or without notice or lapse of time or both) a default
under, (iii) require the Company to obtain any consent, approval or action of,
make any filing with or give any notice to any Person as a result or under the
terms of, or (iv) result in the creation or imposition of any Lien upon the
Company or any of its properties or assets under, any contract, agreement, plan,
permit or license to which the Company is a party.
5.04 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Company is required in connection with the execution,
delivery and performance of this Stockholders Agreement or the consummation of
the transactions contemplated hereby, other than filings under the Exchange Act
in connection with the Stockholder's voting agreement contained in this Voting
Agreement and the other transactions contemplated hereby and by the Merger
Agreement.
ARTICLE VI
GENERAL PROVISIONS
6.01 Survival of Representations, Warranties, Covenants and
Agreements. Notwithstanding any right of any party (whether or not exercised) to
investigate the accuracy of the representations and warranties of the other
party contained in this Voting Agreement, each party hereto has the right to
rely fully upon the representations and warranties of the other contained in
this Voting Agreement. Except as provided in Section 6.02, the representations,
warranties, covenants and
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agreements of each party hereto contained in this Voting Agreement will survive
until the termination of this Voting Agreement.
6.02 Termination. This Voting Agreement and all rights and
obligations of the parties hereunder, including, without limitation, the
provisions of Section 3.01 and Section 3.02, shall automatically terminate, and
shall cease to be of any further force and effect, upon the earlier to occur of
(i) the termination of the Merger Agreement in accordance with its terms, and
(ii) the mutual written agreement of the Stockholder and the Company.
Notwithstanding the termination of this Voting Agreement, nothing contained
herein shall relieve any party hereto from liability for breach of any of his or
its representations, warranties, covenants or agreements contained in this
Voting Agreement.
6.03 Amendment and Waiver. (a) This Voting Agreement may be
amended, supplemented or modified only by a written instrument duly executed by
or on behalf of each party hereto.
(b) Any term or condition of this Voting Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Voting Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Voting Agreement on any future occasion. All
remedies, either under this Voting Agreement or by law or otherwise afforded,
will be cumulative and not alternative.
6.04 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to the Stockholder, to:
Xx. Xxxx X. Xxxxxxx
000 Xxxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
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with a copy to:
Dow, Xxxxxx & Xxxxxxxxx
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. X'Xxxxxxx, Esq.
If to the Company, to:
Xxxxxx-Field Health Products, Inc.
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice, request or other communication is to be delivered pursuant
to this Section). Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
6.05 Entire Agreement. This Voting Agreement supersedes all
prior discussions and agreements between the parties hereto with respect to the
subject matter hereof, and contains the sole and entire agreement between the
parties hereto with respect to the subject matter hereof.
6.06 No Third Party Beneficiary. The terms and provisions of
this Voting Agreement are intended solely for the benefit of each party hereto,
and it is not the intention of the parties to confer third-party beneficiary
rights upon any other Person.
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6.07 No Assignment; Binding Effect. Neither this Voting
Agreement nor any right, interest or obligation hereunder may be assigned by any
party hereto without the prior written consent of the other party hereto and any
attempt to do so will be void. Subject to the preceding sentence, this Voting
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties hereto and their respective successors and assigns and legal
representatives.
6.08 Specific Performance; Legal Fees. The parties acknowledge
that money damages are not an adequate remedy for violations of any provision of
this Voting Agreement and that any party may, in his or its sole discretion,
apply to a court of competent jurisdiction for specific performance for
injunctive or such other relief as such court may deem just and proper in order
to enforce any such provision or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection to the imposition
of such relief. The parties hereto agree that, in the event that any party to
this Voting Agreement shall bring any legal action or proceeding to enforce or
to seek damages or other relief arising from an alleged breach of any term or
provision of this Voting Agreement by the other party, the prevailing party in
any such action or proceeding shall be entitled to an award of, and the other
party to such action or proceeding shall pay, the reasonable fees and expenses
of legal counsel to the prevailing party.
6.09 Headings. The headings used in this Voting Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
6.10 Invalid Provisions. If any provision of this Voting
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Voting Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Voting Agreement will be construed
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof and (iii) the remaining provisions of this Voting
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom.
6.11 Governing Law. Except to the extent that the DGCL is
mandatorily applicable to the rights and obligations of the parties, this Voting
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to a contract executed and performed in such State,
without giving effect to the conflicts of laws principles thereof.
6.12 Consent to Jurisdiction and Service of Process. Each
party hereby irrevocably submits to the exclusive
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jurisdiction of the United States District Court for the Southern District of
New York or any court of the State of New York located in the Borough of
Manhattan in the City of New York in any action, suit or proceeding arising in
connection with this Voting Agreement, agrees that any such action, suit or
proceeding shall be brought only in such court (and waives any objection based
on forum non conveniens or any other objection to venue therein to the extent
permitted by law), and agrees to delivery of service of process by any of the
methods by which notices may be given pursuant to Section 6.04, with such
service being deemed given as provided in such Section; provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 6.12 and shall not be deemed to be a general submission to the
jurisdiction of said courts or in the State of New York other than for such
purpose. Nothing herein shall affect the right of any party to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against the other in any other jurisdiction.
6.13 Counterparts. This Voting Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each party hereto has signed this Voting
Agreement, or caused this Voting Agreement to be signed by its officer thereunto
duly authorized, as of the date first above written.
XXXXXX-FIELD HEALTH PRODUCTS, INC.
By:
------------------------------
Name:
Title:
---------------------------------
XXXX X. XXXXXXX
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SCHEDULE I
Target Shares Owned by Stockholder
Stockholder Number
----------- ------
Xxxx X. Xxxxxxx(1) 700,000
(1) Includes 100,000 shares issuable upon the exercise of outstanding stock
options.
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Exhibit 3
of
Exhibit 2(a)
Form of Affiliate Agreement
111
EXHIBIT 3 OF EXHIBIT 2(a)
FORM OF AFFILIATE AGREEMENT
Gentlemen:
The undersigned is a holder of shares of Common Stock, par value $2.50 per
share ("Xxxxx Common Stock"), of Xxxxx Enterprises, Inc., a Delaware corporation
("Xxxxx"), or may become a holder of shares of Xxxxx Common Stock prior to the
effective time of the Merger (as hereinafter defined) upon exercise of certain
options held by the undersigned to purchase shares of Xxxxx Common Stock. As
such, the undersigned will be entitled to receive in connection with the merger
(the "Merger") of GFHP Acquisition Corp., a Delaware corporation and a
subsidiary of Xxxxxx-Field Health Products, Inc., a Delaware corporation
("GFI"), with and into Xxxxx, shares of Common Stock, par value $.025 per share,
of GFI (the "Securities") in exchange for any such shares of Xxxxx Common Stock
held by the undersigned prior to the effective time of the Merger.
The undersigned acknowledges that the undersigned may be deemed an
"affiliate" of Xxxxx within the meaning of Rule 145 ("Rule 145") promulgated
under the Securities Act of 1933, as amended (the "Act") of the Securities and
Exchange Commission (the "Commission"), although nothing contained herein shall
be construed as an admission of such status.
If in fact the undersigned were an affiliate of Xxxxx under the Act, the
undersigned's ability to sell, assign or transfer any Securities received by the
undersigned in exchange for any shares of Xxxxx Common Stock pursuant to the
Merger may be restricted unless such transaction is registered under the Act or
an exemption from such registration is available. The undersigned understands
that such exemptions are limited and the undersigned has obtained advice of
counsel as to the nature and conditions of such exemptions, including
instructions with respect to the applicability to the sale of such Securities of
Rules 144 and 145(d) promulgated under the Act.
The undersigned hereby represents to and covenants to GFI that the
undersigned will not sell, assign or transfer any Securities received by the
undersigned in exchange for shares of Xxxxx Common Stock pursuant to the Merger
except (i) pursuant to an effective registration statement under the Act, (ii)
by a transaction in conformity with the volume and other limitations of Rule 145
or Rule 144 under the Act ("Rule 144"), to the extent applicable, or any other
applicable rules promulgated by the Commission or (iii) in a transaction which,
in the opinion of independent counsel reasonably satisfactory to Xxxxx, or as
described in a "no-action" or interpretive letter from the Staff of the
Commission, is not required to be registered under the Act.
In the event of a sale of Securities pursuant to Rule 145, or, if
applicable, Rule 144, the undersigned will supply GFI with evidence of
compliance with such Rule, in the form of customary seller's or broker's Rule
145 or, if applicable, Rule 144, representation letters or as GFI may otherwise
reasonably request. The undersigned understands that GFI may instruct its
transfer agent to withhold the transfer of any Securities disposed of by the
undersigned in a manner inconsistent with this letter.
The undersigned acknowledges and agrees that appropriate legends will be
placed on certificates representing Securities received by the undersigned in
the Merger or held by a transferee thereof, which legends will be removed (i)
by delivery of substitute certificates upon
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receipt of an opinion in form and substance reasonably satisfactory to GFI to
the effect that such legends are no longer required for the purposes of the Act
and the rules and regulations of the Commission promulgated thereunder or (ii)
in the event of a sale of the Securities which has been registered under the
Act.
The undersigned acknowledges that it has carefully reviewed this letter
and understands the requirements hereof and the limitations imposed upon the
distribution, sale, transfer or other disposition of Securities. Nothing
contained herein shall be deemed to limit any registration rights granted to
the undersigned pursuant to any agreement between the undersigned and Xxxxx or
GFI, as the case may be.
Very truly yours,
-------------------------------
Dated: , 1997
---------------------
As an inducement to the above individual to deliver this letter, GFI agrees
that for so long and to the extent necessary to permit such individual to sell
the Securities pursuant to Rule 145 and, to the extent applicable, Rule 144
under the Act, GFI shall use all reasonable efforts to file, on a timely basis,
all reports and data required to be filed by it with the Commission pursuant to
Section 13 of the Securities and Exchange Act of 1934.
Very truly yours,
XXXXXX-FIELD HEALTH PRODUCTS, INC.
By:
-------------------------------
Name:
Title:
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