EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
among
INTERNATIONAL SPECIALTY PRODUCTS INC.,
[PURCHASER]
and
DEXTER CORPORATION
Dated as of May , 2000
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32
AGREEMENT AND PLAN OF MERGER, dated as of May [day], 2000 (the
"Agreement"), among International Specialty Products Inc., a Delaware
corporation (the "Parent"), Purchaser, a Connecticut corporation (the
"Purchaser"), and DEXTER CORPORATION, a Connecticut corporation (the "Company").
WHEREAS, the Boards of Directors of the Parent, the Purchaser
and the Company deem it advisable and in the best interests of their respective
shareholders that the Parent acquire the Company upon the terms and subject to
the conditions provided for in this Agreement;
WHEREAS, in furtherance thereof it is proposed that the
acquisition be accomplished by (a) the Purchaser commencing a cash tender offer
(as it may be amended from time to time as permitted by this Agreement, the
"Offer") to purchase all of the issued and outstanding shares of common stock,
par value $1 per share, of the Company (the "Company Common Stock") and the
associated Rights (the shares of Company Common Stock and any associated Rights
are referred to herein as "Shares") not beneficially owned by the Parent and its
subsidiaries for $xx.xx per Share (such amount or any greater amount per Share
paid pursuant to the Offer being hereinafter referred to as the "Offer Price"),
subject to any required withholding of Taxes, net to the seller in cash, upon
the terms and subject to the conditions set forth in this Agreement, and (b)
following consummation of the Offer, the merger (the "Merger") of the Purchaser
with and into the Company, with the Company being the surviving corporation in
the Merger, pursuant to which each Share will be converted into the right to
receive the Offer Price, without interest;
WHEREAS, the Board of Directors of the Company has approved
the Offer and the Merger and approved and adopted the Merger Agreement and
resolved to recommend that holders of Shares tender their Shares pursuant to the
Offer and approve and adopt this Agreement and the Merger; and
WHEREAS, the Boards of Directors of the Parent (on its own
behalf and as the controlling stockholder of the Purchaser), the Purchaser and
the Company have each approved this Agreement and the Merger in accordance with
the Connecticut Business Corporation Act (the "CBCA"), in the case of each of
the Company and the Purchaser, and in accordance with the Delaware General
Corporation Law, in the case of the Parent, and upon the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and intending
to be legally bound hereby, the Parent, the Purchaser and the Company agree as
follows:
ARTICLE I
Section 1.1 The Offer.
---------
(a) Provided that this Agreement shall not have been terminated in accordance
with Section 7.1 and none of the events set forth in paragraphs (a) through
(g) of Annex A hereto shall have occurred or be existing (and shall not
have been waived by the Purchaser), the Purchaser shall commence (within
the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) the Offer as promptly as reasonably
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practicable after the date hereof, but in any event within five business
days after the public announcement of the execution of this Agreement. The
obligation of the Purchaser to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject only to the satisfaction of
the condition that there be validly tendered and not withdrawn prior to the
expiration of the Offer that number of Shares when taken together with the
Shares then beneficially owned by the Parent or any of its Subsidiaries
which represents at least two-thirds of the then outstanding Shares (the
"Minimum Condition") and to the satisfaction or waiver by the Purchaser of
the other conditions set forth in Annex A hereto. The Company agrees that
no Shares held by the Company or any of its Subsidiaries will be tendered
to the Purchaser pursuant to the Offer. The Purchaser expressly reserves
the right to waive any of such conditions (other than the Minimum
Condition), to increase the price per Share payable in the Offer and to
make any other changes in the terms of the Offer; provided, however, that
no change may be made without the prior written consent of the Company
which decreases the price per Share payable in the Offer, reduces the
maximum number of Shares to be purchased in the Offer, changes the form of
consideration to be paid in the Offer or amends any of the conditions set
forth in Annex A hereto, imposes conditions to the Offer in addition to the
conditions set forth in Annex A hereto, waives the Minimum Condition or
makes other changes in the terms of the Offer that are in any manner
adverse to the holders of Shares or, except as provided below, extends the
Offer. Subject to the terms of the Offer and this Agreement and the
satisfaction or earlier waiver of all the conditions of the Offer set forth
in Annex A hereto as of any expiration date of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable law. Notwithstanding the foregoing, the Purchaser shall, until
the Drop Dead Date, (i) extend the Offer beyond the scheduled expiration
date, which shall be 20 business days following the date of commencement of
the Offer, if, at the scheduled expiration of the Offer, any of the
conditions to the Purchaser's obligation to accept for payment and to pay
for the Shares shall not be satisfied or, to the extent permitted by this
Agreement, waived; provided, however, the Purchaser shall not be required
to extend the Offer if any such condition is incapable of being satisfied
and the Parent simultaneously terminates the Agreement in accordance with
the provisions of Article VII or (ii) extend the Offer for any period
required by any rule, regulation or interpretation of the SEC or the staff
thereof applicable to the Offer. Any extension of the Offer pursuant to
clause (i) of the preceding sentence or this Section 1.1 shall not exceed
the lesser often business days or such fewer number of days that the
Purchaser reasonably believes are necessary to cause the conditions of the
Offer set forth in Annex A hereto to be satisfied. The Purchaser shall
provide a "subsequent offering period" (as contemplated by Rule 14d-11
under the Exchange Act) of not less than three business days following its
acceptance for payment of Shares in the Offer. On or prior to the date that
the Purchaser becomes obligated to accept for payment and pay for Shares
pursuant to the Offer, the Parent shall provide or cause to be provided to
the Purchaser the funds necessary to pay for all Shares that the Purchaser
becomes so obligated to accept for payment and pay for pursuant to the
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Offer. The Offer Price shall, subject to any required withholding of Taxes,
be net to the seller in cash, upon the terms and subject to the conditions
of the Offer.
(b) As promptly as practicable on the date of commencement of the Offer, the
Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "Schedule TO")
with respect to the Offer. The Schedule TO shall contain or incorporate by
reference an offer to purchase (the "Offer to Purchase") and forms of the
related letter of transmittal and all other ancillary Offer documents
(collectively, together with all amendments and supplements thereto, the
"Offer Documents"). The Parent and the Purchaser shall cause the Offer
Documents to be disseminated to the holders of the Shares as and to the
extent required by applicable federal securities laws. The Parent and the
Purchaser, on the one hand, and the Company, on the other hand, will
promptly correct any information provided by it for use in the Offer
Documents if and to the extent that it shall have become false or
misleading in any material respect, and the Purchaser will cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated
to holders of the Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be
given a reasonable opportunity to review and comment upon the Schedule TO
before it is filed with the SEC. In addition, the Parent and the Purchaser
agree to provide the Company and its counsel with any comments, whether
written or oral, that the Parent or the Purchaser or their counsel may
receive from time to time from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments and to consult
with the Company and its counsel prior to responding to any such comments.
Section 1.2 Company Actions.
---------------
(a) The Company hereby approves of and consents to the Offer and represents and
warrants that the Company's Board of Directors, at a meeting duly called
and held, has (i) determined that the terms of the Offer and the Merger are
fair to and in the best interests of the shareholders of the Company, (ii)
approved and adopted this Agreement and approved the transactions
contemplated hereby, including the Offer and the Merger and (iii) resolved
to recommend that the shareholders of the Company accept the Offer, tender
their Shares to the Purchaser thereunder and approve and adopt this
Agreement and the Merger. Subject to Section 5.7, the Company hereby
consents to the inclusion in the Offer Documents of the recommendation of
the Board described in the immediately preceding sentence.
(b) As promptly as practicable on the date of commencement of the Offer, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, the
"Schedule 14D-9") which shall contain the recommendation referred to in
clause (iii) of Section 1.2(a) hereof. The Company further agrees to take
all steps necessary to cause the Schedule 14D-9 to be disseminated to
holders of the Shares as and to the extent required by applicable federal
securities laws. The Company, on the one hand, and each of the Parent and
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the Purchaser, on the other hand, will promptly correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that it
shall have become false or misleading in any material respect, and the
Company will cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to
the extent required by applicable federal securities laws. The Parent and
its counsel shall be given a reasonable opportunity to review and comment
upon the Schedule 14D-9 before it is filed with the SEC. In addition, the
Company agrees to provide the Parent, the Purchaser and their counsel with
any comments, whether written or oral, that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments and to consult
with the Parent, the Purchaser and their counsel prior to responding to any
such comments.
(c) The Company shall promptly furnish the Purchaser with mailing labels
containing the names and addresses of all record holders of Shares and with
security position listings of Shares held in stock depositories, each as of
a recent date, together with all other available listings and computer
files containing names, addresses and security position listings of record
holders and non-objecting beneficial owners of Shares. The Company shall
furnish the Purchaser with such additional information, including, without
limitation, updated listings and computer files of shareholders, mailing
labels and security position listings, and such other assistance as the
Parent, the Purchaser or their agents may reasonably require in
communicating the Offer to the record and beneficial holders of Shares.
Subject to the requirements of applicable law, and except for such steps as
are necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Offer or the Merger, the Parent and the
Purchaser shall hold in confidence the information contained in such
labels, listings and files, shall use such information solely in connection
with the Offer and the Merger, and, if this Agreement is terminated in
accordance with Section 7.1 or if the Offer is otherwise terminated, shall
promptly deliver or cause to be delivered to the Company all copies of such
information, labels, listings and files then in their possession or in the
possession of their agents or representatives.
Section 1.3 Directors of the Company.
------------------------
(a) Promptly upon the purchase of and payment for Shares by the Purchaser or
any of its affiliates pursuant to the Offer, the Parent shall be entitled
to designate such number of directors, rounded up to the next whole number,
on the Board of Directors of the Company as is equal to the product
obtained by multiplying the total number of directors on such Board (giving
effect to the directors designated by the Parent pursuant to this sentence)
by the percentage that the number of Shares so purchased and paid for bears
to the total number of Shares then outstanding. In furtherance thereof, the
Company shall, upon request of the Purchaser, promptly increase the size of
its Board of Directors or exercise its best efforts to secure the
resignations of such number of directors, or both, as is necessary to
enable the Parent's designees to be so elected to the Company's Board and,
subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, shall cause the Parent's designees to be so elected. At such
36
time, the Company shall, if requested by the Parent, also cause directors
designated by the Parent to constitute at least the same percentage
(rounded up to the next whole number) as is on the Company's Board of
Directors of each committee of the Company's Board of Directors.
Notwithstanding the foregoing, if Shares are purchased pursuant to the
Offer, there shall be until the Effective Time at least two members of the
Company's Board of Directors who are directors on the date hereof and are
not employees of the Company.
(b) The Company shall promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to
fulfill its obligations under Section 1.3(a), including mailing to
shareholders together with the Schedule 14D-9 the information required by
such Section 14(f) and Rule 14f-1 as is necessary to enable the Parent's
designees to be elected to the Company's Board of Directors. The Parent and
the Purchaser will supply the Company and be solely responsible for any
information with respect to them and their nominees, officers, directors
and affiliates required by such Section 14(f) and Rule 14f-1.
(c) Following the election of the Parent's designees to the Company's Board of
Directors pursuant to this Section 1.3, prior to the Effective Time (i) any
amendment or termination of this Agreement by the Company, (ii) any
extension or waiver by the Company of the time for the performance of any
of the obligations or other acts of the Parent or the Purchaser under this
Agreement, or (iii) any waiver of any of the Company's rights hereunder
shall, in any such case, require the concurrence of a majority of the
directors of the Company then in office who neither were designated by the
Purchaser nor are employees of the Company (the "Independent Director
Approval").
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the CBCA, at the Effective Time
the Purchaser shall merge with and into the Company, and the separate
corporate existence of the Purchaser shall thereupon cease, and the Company
shall be the surviving corporation in the Merger (the "Surviving
Corporation"). The Surviving Corporation shall possess all the rights,
privileges, powers and franchises of a public as well as of a private
nature and shall be subject to all of the restrictions, disabilities,
duties, debts and obligations of the Company and the Purchaser, all as
provided in the CBCA.
Section 2.2 Closing. The closing of the Merger (the "Closing") will take place
at 10:00 a.m. on a date to be specified by the parties (the "Closing
Date"), which shall be no later than the second business day after
satisfaction or waiver of the conditions set forth in Article VI, unless
another time or date, or both, are agreed to in writing by the parties
hereto. The Closing will be held at the offices of Skadden, Arps, Slate,
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Xxxxxxx & Xxxx LLP, Four Times Square, New York, New York, unless another
place is agreed to by the parties hereto.
Section 2.3 Effective Time. Subject to the provisions of this Agreement, on the
Closing Date the parties shall file with the Secretary of State of the
State of State of Connecticut a certificate of merger pursuant to Section
33-818 of the CBCA (the "Certificate of Merger") or a certificate of merger
pursuant to Section 33-818 (the "Certificate of Ownership and Merger"), as
applicable, executed in accordance with the relevant provisions of the CBCA
and shall make all other filings or recordings required under the CBCA in
order to effect the Merger. The Merger shall become effective upon the
filing of the Certificate of Merger or Certificate of Ownership and Merger
or at such other time as is agreed by the parties hereto and specified in
the Certificate of Merger or Certificate of Ownership and Merger (the time
at which the Merger becomes fully effective being hereinafter referred to
as the "Effective Time").
Section 2.4 Effects of the Merger. The Merger shall have the effects set
forth in Section 33-820 of the CBCA.
Section 2.5 Certificate of Incorporation; By-laws.
-------------------------------------
(a) At the Effective Time, the Certificate of Incorporation of the Purchaser,
as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation; provided,
however, that Article FIRST of the Certificate of Incorporation of the
Surviving Corporation shall be amended to read in its entirety as follows:
"FIRST: The name of the corporation is Dexter Corporation" and as so
amended shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended as provided by the CBCA and such
Certificate of Incorporation.
(b) At the Effective Time, the By-laws of the Purchaser, as in effect
immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter amended as provided by the CBCA, the
Certificate of Incorporation of the Surviving Corporation and such By-laws.
Section 2.6 Directors; Officers of Surviving Corporation.
--------------------------------------------
(a) The directors of the Purchaser at the Effective Time shall be the directors
of the Surviving Corporation until their respective successors are duly
elected and qualified or their earlier death, resignation or removal in
accordance with the Certificate of Incorporation and By-laws of the
Surviving Corporation.
(b) The officers of the Purchaser at the Effective Time shall be the officers
of the Surviving Corporation until their respective successors are duly
elected and qualified or their earlier death, resignation or removal in
accordance with the Certificate of Incorporation and By-laws of the
Surviving Corporation.
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Section 2.7 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of the holders of any securities
of the Purchaser or the Company:
(a) Each Share that is owned by the Parent, the Purchaser, any of their
respective Subsidiaries, the Company (including treasury stock) or any
Subsidiary of the Company shall automatically be cancelled and retired and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(b) Each issued and outstanding Share, other than Shares to be cancelled in
accordance with Section 2.7(a) and Dissenting Shares, shall automatically
be converted into the right to receive the Offer Price in cash (the "Merger
Consideration"), payable, without interest, to the holder of such Share,
upon surrender, in the manner provided in Section 2.8, of the certificate
that formerly evidenced such Share. All such Shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon
the surrender of such certificate in accordance with Section 2.8.
(c) Each issued and outstanding share of common stock, par value $.0l per
share, of the Purchaser shall be converted into one validly issued, fully
paid and nonassessable share of common stock of the Surviving Corporation.
Section 2.8 Exchange of Certificates.
------------------------
(a) Exchange Agent. Prior to the Effective Time, the Parent shall designate a
bank or trust company reasonably acceptable to the Company to act as agent
for the holders of the Shares (other than Shares held by the Parent and its
Subsidiaries, the Company and its Subsidiaries, and Dissenting Shares) in
connection with the Merger (the "Exchange Agent") to receive in trust, the
aggregate Merger Consideration to which holders of Shares shall become
entitled pursuant to Section 2.7(b). The Parent shall deposit such
aggregate Merger Consideration with the Exchange Agent promptly following
the Effective Time. Such aggregate Merger Consideration shall be invested
by the Exchange Agent as directed by the Parent or the Surviving
Corporation.
(b) Exchange Procedures. Promptly after the Effective Time, the Parent and the
Surviving Corporation shall cause to be mailed to each holder of record, as
of the Effective Time, of a certificate or certificates, which immediately
prior to the Effective Time represented outstanding Shares (the
"Certificates"), whose Shares were converted pursuant to Section 2.7(b)
into the right to receive the Merger Consideration, a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as the Parent may reasonably specify) and instructions for
use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Upon surrender of a Certificate for cancellation to
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the Exchange Agent or to such other agent or agents as may be appointed by
the Parent, together with such letter of transmittal, properly completed
and duly executed in accordance with the instructions thereto, the holder
of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each Share formerly represented by such
Certificate, and the Certificate so surrendered shall forthwith be
cancelled. No interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. If payment of the Merger Consideration is to
be made to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and that the Person requesting such payment
shall have paid all transfer and other Taxes required by reason of the
issuance to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such Tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 2.8, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration for each Share in cash as contemplated by
this Section 2.8.
(c) Transfer Books; No Further Ownership Rights in the Shares. At the Effective
Time, the stock transfer books of the Company shall be closed, and
thereafter there shall be no further registration of transfers of the
Shares on the records of the Company. From and after the Effective Time,
the holders of Certificates evidencing ownership of the Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares, except as otherwise provided for herein or by
applicable law. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be cancelled and
exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following the six-month
anniversary of the Effective Time, the Surviving Corporation shall be
entitled to require the Exchange Agent to deliver to it any funds
(including any interest received with respect thereto) which had been made
available to the Exchange Agent, and holders shall be entitled to look to
the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates without any
interest thereon. Notwithstanding the foregoing, neither the Surviving
Corporation nor the Exchange Agent shall be liable to any holder of a
Certificate for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Lost, Stolen or Destroyed Certificates. In the event any Certificates for
Shares shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate(s) to be
lost, stolen or destroyed and, if required by the Parent, the posting by
such Person of a bond in such sum as the Parent may reasonably direct as
indemnity against any claim that may be made against it or the Surviving
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Corporation with respect to such Certificate(s), the Exchange Agent will
issue the Merger Consideration pursuant to Section 2.8(b) deliverable in
respect of the Shares represented by such lost, stolen or destroyed
Certificates.
(f) Withholding Taxes. The Parent and the Purchaser shall be entitled to deduct
and withhold, or cause the Exchange Agent to deduct and withhold, from the
Offer Price or the Merger Consideration payable to a holder of Shares
pursuant to the Offer or the Merger any such amounts as are required under
the Internal Revenue Code of 1986, as amended (the "Code"), or any
applicable provision of state, local or foreign Tax law. To the extent that
amounts are so withheld by the Parent or the Purchaser, such withheld
amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the Shares in respect of which such deduction and
withholding was made by the Parent or the Purchaser.
Section 2.9 Appraisal Rights. Notwithstanding anything in this Agreement to the
contrary, Shares that are issued and outstanding immediately prior to the
Effective Time and which are held by shareholders who did not vote in favor
of the Merger and who comply with all of the relevant provisions of Section
33-861 of the CBCA (the "Dissenting Shareholders") shall not be converted
into or be exchangeable for the right to receive the Merger Consideration
(the "Dissenting Shares"), unless and until the holder or holders thereof
shall have failed to perfect or shall have effectively withdrawn or lost
their rights to appraisal under the CBCA. If any Dissenting Stockholder
shall have failed to perfect or shall have effectively withdrawn or lost
such right, such holder's Shares shall thereupon be converted into and
become exchangeable for the right to receive, as of the Effective Time, the
Merger Consideration for each Share without any interest thereon. The
Company shall give the Parent (i) prompt notice of any written demands for
appraisal of any Shares, attempted withdrawals of such demands and any
other instruments served pursuant to the CBCA and received by the Company
relating to shareholders' rights of appraisal, and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for
appraisal under the CBCA; provided, however, the Company shall have the
right to participate in any such negotiations and proceedings. The Company
shall not, except with the prior written consent of the Parent, voluntarily
make any payment with respect to, or settle or offer to settle, any such
demand for payment. If any Dissenting Stockholder shall fail to perfect or
shall have effectively withdrawn or lost the right to dissent, the Shares
held by such Dissenting Stockholder shall thereupon be treated as though
such Shares had been converted into the right to receive the Merger
Consideration pursuant to Section 27(b).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the schedule delivered by the Company
to Parent in connection with the execution and delivery of this Agreement (the
"Company Disclosure Schedule"), the Company represents and warrants to the
Parent as set forth below:
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Section 3.1 Organization, Qualification, Etc.
--------------------------------
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Connecticut and has the corporate
power and authority required for it to own its properties and assets and to
carry on its business as it is now being conducted. The Company is duly
qualified to do business and is in good standing in each jurisdiction in
which the ownership of its properties or the conduct of its business
requires such qualification, except for jurisdictions in which the failure
to be so qualified or in good standing would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on the
Company or substantially delay consummation of the transactions
contemplated by this Agreement or otherwise prevent the Company from
performing its obligations hereunder. As used in this Agreement, any
reference to any state of facts, event, change or effect having a "Material
Adverse Effect" on or with respect to the Company or the Parent, as the
case may be, means a material adverse effect on the financial condition,
business or results of operations of the Company and its Subsidiaries,
taken as a whole, or the Parent and its Subsidiaries, taken as a whole, as
the case may be, excluding any such effect resulting from or arising in
connection with (A) this Agreement, the transactions contemplated hereby or
the announcement thereof, or (B) changes in general economic, regulatory or
political conditions. The Company has made available to the Parent copies
of the certificate of incorporation and bylaws of the Company. Such
certificate of incorporation and bylaws are complete and correct and in
full force and effect, and the Company is not in violation of any of the
provisions of its certificate of incorporation or bylaws.
(b) Each of the Company's Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization. Each of the Company's
Significant Subsidiaries has the corporate power and authority required for
it to own its properties and assets and to carry on its business as it is
now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the ownership of its properties or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified or in good standing
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Company. All the outstanding shares of
capital stock of, or other ownership interests in, the Company's
Subsidiaries are duly authorized, validly issued, fully paid and
non-assessable and, with respect to such shares or ownership interests that
are owned by the Company and its Subsidiaries, are owned free and clear of
all liens, claims, mortgages, encumbrances, pledges and security interests
of any kind (each, a "Lien"). All the outstanding shares of capital stock
of, or other ownership interests in, the Company's Subsidiaries are owned
by the Company, directly or indirectly, except for the Life Technologies
Common Stock of which the Company beneficially owns as of the date hereof
18,815,447 shares.
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Section 3.2 Capital Stock.
-------------
(a) The authorized capital stock of the Company consists of 100,000,000 shares
of Company Common Stock, 400,000 shares of preferred stock, without par
value, designated as "Preferred Stock" (the "Company Preferred Stock"),
500,000 shares of preferred stock, without par value, designated as "Class
I Preferred Stock" (the "Company Class I Preferred Stock") and 500,000
shares of preferred stock, without par value, designated as "Class II
Preferred Stock" (the "Company Class II Preferred Stock"). As of the date
hereof, (i) [23,080,406] shares of Company Common Stock are issued and
outstanding; (ii) [xxx,xxx] shares of Company Common Stock are subject to
outstanding options issued under the Company's 1999 Long-Term Incentive
Plan; (iii) [xxx,xxx] shares of Company Common Stock are subject to
outstanding options issued under the Company's 1994 Long Term Incentive
Plan; (iv) [309,870] shares of Company Common Stock are subject to
outstanding options issued under the Company's 1988 Stock Option Plan; (v)
no shares of Company Preferred Stock are issued, outstanding or reserved
for issuance, except for 250,000 shares of the Company Preferred Stock
which have been designated as Series A Preferred Stock and reserved for
issuance in connection with the Rights Agreement; and (v) no shares of
Company Class I Preferred Stock or Company Class II Preferred Stock are
issued, outstanding or reserved for issuance.
(b) The authorized capital stock of Life Technologies consists of 50,000,000
shares of Life Technologies Common Stock, and 1,000,000 shares of preferred
stock, par value $.01 per share ("Life Technologies Preferred Stock"). As
of the date hereof, (i) [25,039,402] shares of Life Technologies Common
Stock are issued and outstanding; (ii) [$827,972] shares of Life
Technologies Common Stock are subject to outstanding options issued under
Life Technologies' 1997 Long-Term Incentive Plan; (iii) 47,250 shares of
Life Technologies Common Stock are subject to outstanding options issued
under Life Technologies' 1996 Non-Employee Directors Stock Option Plan;
(iv) [xxx,xxx] shares of Life Technologies Common Stock are subject to
options issued under Life Technologies' 1995 Long-Term Incentive Plan; (v)
[xx,xxx] shares of Life Technologies Common Stock are subject to options
issued under Life Technologies' 1991 Stock Option Plan; and (vi) no shares
of Life Technologies Preferred Stock are issued, outstanding or reserved
for issuance.
(c) All the outstanding Shares are duly authorized, validly issued, fully paid
and non-assessable. Except as set forth in paragraphs (a) and (b) above,
except for the Company's obligations under the Rights Agreement, and except
for the transactions contemplated by this Agreement, (1) there are no
shares of capital stock of the Company authorized or as of the date of this
Agreement issued or outstanding, (2) as of the date of this Agreement there
are no authorized or outstanding options, warrants, calls, preemptive
rights, subscriptions or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital
stock of the Company or any of its Subsidiaries, obligating the Company or
any of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or other equity interest in
43
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company
or any of its Subsidiaries to grant, extend or enter into any such option,
warrant, call, subscription or other right, agreement, arrangement or
commitment, and (3) there are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any Shares or other capital stock of the Company or any Subsidiary
or to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or other entity.
Section 3.3 Corporate Authority Relative to this Agreement; No Violation.
------------------------------------------------------------
(a) The Company has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of the Company and, except for obtaining the Company Shareholder
Approval and the filing of the Certificate of Merger or the Certificate of
Ownership and Merger, no other corporate proceedings on the part of the
Company are necessary to authorize the consummation of the transactions
contemplated hereby. The Board of Directors of the Company has approved the
entry into this Agreement and the consummation of the transactions
contemplated hereby by the Company and has taken all appropriate action
such that Sections 33-841 and 33-844 of the CBCA will not be applicable to
the Company, the Parent or the Purchaser by virtue of any of them entering
into this Agreement or consummating the transactions contemplated hereby.
The Board of Directors of Life Technologies has approved for purposes of
Section 203 of the DGCL the Parent's and the Purchaser's becoming
"interested stockholders" by reason of their entry into this Agreement and
the consummation of the transactions contemplated hereby and has taken all
appropriate action so that Section 203 of the DGCL, with respect to Life
Technologies, will not be applicable to the Parent or the Purchaser by
virtue of such actions. This Agreement has been duly and validly executed
and delivered by the Company and, assuming this Agreement constitutes a
valid and binding agreement of each of the Parent and the Purchaser,
constitutes a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(b) Except for the filings, permits, authorizations, consents and approvals set
forth in Section 3.3(b) of the Company Disclosure Schedule or as may be
required under, and other applicable requirements of, the Securities Act of
1933, as amended, and the rules and regulations promulgated thereunder (the
"Securities Act"), the Exchange Act, the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), state securities or
blue sky laws, the rules and regulations of the New York Stock Exchange
(the "NYSE"), and the filing of the Certificate of Merger under the CBCA,
none of the execution, delivery or performance of this Agreement by the
Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
(i) conflict with or result in any breach of any provision of the
certificate of incorporation, bylaws or similar organizational documents of
the Company or any of its Subsidiaries, (ii) require any filing with, or
44
permit, authorization, consent or approval of, any federal, regional, state
or local court, arbitrator, tribunal, administrative agency or commission
or other governmental or other regulatory authority or agency, whether U.S.
or foreign (a "Governmental Entity"), (iii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation
or acceleration) under, or result in the creation of a Lien on any property
or asset owned by the Company or any Subsidiary pursuant to, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to
which the Company or any of its Subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, judgment, permit, license, ordinance, law,
statute, rule or regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (ii), (iii) and (iv) such filings, permits,
authorizations, consents, approvals, violations, breaches, defaults or
Liens which are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect on the Company or prevent or substantially
delay the consummation of the transactions contemplated hereby.
Section 3.4 Reports and Financial Statements. The Company has previously
furnished or otherwise made available (by electronic filing or otherwise)
to the Parent true and complete copies of:
(a) Annual Reports on Form 10-K filed with the SEC for each of the years ended
December 31, 1998 and 1999 for each of the Company and Life Technologies;
(b) each definitive proxy statement filed with the SEC since December 31, 1998
for each of the Company and Life Technologies;
(c) each final prospectus filed with the SEC since December 31, 1998, except
any final prospectus on Form S-8 for each of the Company and Life
Technologies; and
(d) all Current Reports on Form 8-K filed with the SEC since January 1, 2000
for each of the Company and Life Technologies.
As of their respective dates, such reports, proxy statements and prospectuses
filed with the SEC by the Company (collectively with, and giving effect to, all
amendments, supplements and exhibits thereto, the "Company SEC Reports") and
filed with the SEC by Life Technologies (collectively with, and giving effect
to, all amendments, supplements and exhibits thereto, the "LTI SEC Reports," and
together with the Company SEC Reports, the "Group SEC Reports") (i) complied as
to form in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Other than Life
Technologies which is registered under Section 12(b) of the Exchange Act, none
of the Company's Subsidiaries is required to file any forms, reports or other
documents with the SEC. The audited consolidated financial statements and
unaudited consolidated interim financial statements included in the Group SEC
45
Reports (including any related notes and schedules) were prepared in accordance
with past practice and generally accepted accounting principles in the United
States ("GAAP") consistently applied during the periods involved (except as
otherwise disclosed in the notes thereto) and each fairly presents in all
material respects the financial position of the Company and its consolidated
Subsidiaries or Life Technologies and its consolidated Subsidiaries, as the case
may be, as of the dates thereof and the results of operations and cash flows for
the periods or as of the dates then ended (subject, in the case of the unaudited
interim financial statements, to normal recurring year-end adjustments). Since
January 1, 1998, each of the Company and Life Technologies has timely filed all
reports, registration statements and other filings required to be filed by it
with the SEC under the rules and regulations of the SEC.
Section 3.5 No Undisclosed Liabilities. Neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature required to
be set forth on a balance sheet of the Company under GAAP, whether or not
accrued, contingent or otherwise, and there is no existing condition,
situation or set of circumstances which would be expected to result in such
a liability or obligation, except (a) liabilities or obligations reflected
in the Group SEC Reports filed prior to the date of this Agreement or (b)
liabilities and obligations which are not, individually or in the
aggregate, reasonably expected to have a Material Adverse Effect on the
Company.
Section 3.6 No Violation of Law. The businesses of the Company and its
Subsidiaries are not being conducted in violation of any order, writ,
injunction, decree, judgment, permit, license, ordinance, law, statute,
rule or regulation of any Governmental Entity (provided that no
representation or warranty is made in this Section 3.6 with respect to
Environmental Laws), except (a) as described in the Group SEC Reports filed
prior to the date of this Agreement, and (b) for violations or possible
violations which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
Section 3.7 Environmental Matters.
---------------------
(a) Each of the Company and its Subsidiaries has obtained all licenses,
permits, authorizations, approvals and consents from Governmental Entities
which are required under any applicable Environmental Law and necessary for
it to carry on its business or operations as now conducted ("Environmental
Permits"), except for such failures to have Environmental Permits which,
individually or in the aggregate, are not reasonably expected to have a
Material Adverse Effect on the Company. Each of such Environmental Permits
is in full force and effect, and each of the Company and its Subsidiaries
is in compliance with the terms and conditions of all such Environmental
Permits and with all applicable Environmental Laws, except for such
failures to be in full force and effect or to be in compliance which,
individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect on the Company.
(b) There are no Environmental Claims pending, or to the knowledge of the
Company, threatened, against the Company or any of its Subsidiaries, or, to
the knowledge of the Company, any Person whose liability for any such
46
Environmental Claim the Company or any of its Subsidiaries has or may have
retained or assumed either contractually or by operation of law for which
reserves have not been established in accordance with GAAP, that,
individually or in the aggregate, would have a Material Adverse Effect on
the Company.
(c) To the knowledge of the Company, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including,
without limitation, the release, threatened release or presence of any
Hazardous Material, that would form the basis of any Environmental Claim
against the Company or any of its Subsidiaries, or for which the Company or
any of its Subsidiaries is liable, except for such liabilities which,
individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect on the Company.
(d) As used in this Agreement:
(i) "Environmental Claim" means any claim, action, lawsuit or proceeding by any
Person which seeks to impose liability (including, without limitation,
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources, damages, property damages, personal injuries or
penalties) arising out of, based on or resulting from (A) the presence, or
release or threatened release, of any Hazardous Materials at any location,
whether or not owned or operated by the Company or any of its Subsidiaries,
or (B) circumstances which would give rise to any violation, or alleged
violation, of any Environmental Law.
(ii) "Environmental Law" means any law or order of any Governmental Entity
relating to (A) the generation, treatment, storage, disposal, use,
handling, manufacturing, transportation or shipment of, or (B) the
environment or to emissions, discharges, releases or threatened releases
of, Hazardous Materials, into the environment, and includes, without
limitation, the Clean Air Act, 42 X.X.X.xx. 7401 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 X.X.X.xx. 9601
et seq.; Emergency Planning and Community Right to Know Act, 42 X.X.X.xx.
11000 et seq.; Federal Insecticide, Fungicide and Rodenticide Act, 7
X.X.X.xx. 136 et seq.; Clean Water Act, 33 X.X.X.xx. 1251 et seq.; Oil
Pollution Act, 33 X.X.X.xx. 2701 et seq.; Resource Conservation and
Recovery Act, 42 X.X.X.xx. 6901 et seq.; Safe Water Drinking Act, 42
X.X.X.xx. 300f et seq.; Toxic Substance Control Act, 15 X.X.X.xx. 2601 et
seq.; and Occupational Safety and Health Act, 29 X.X.X.xx. 651 et seq.
(iii)"Hazardous Materials" means (A) any petroleum or petroleum products,
radioactive materials or friable asbestos; (B) any chemicals or other
materials or substances which are now defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," or "toxic pollutants" under any Environmental Law; and
(C) pesticides.
47
Section 3.8 Employee Benefit Plans; ERISA.
-----------------------------
(a) Section 3.8(a) of the Company Disclosure Schedule contains a true and
complete list of each deferred compensation, incentive compensation or
equity compensation plan; "welfare" plan, fund or program (within the
meaning of section 3(1) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")); "pension" plan, fund or program (within the
meaning of section 3(2) of ERISA); each material employment, termination or
severance agreement; and each other material employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to by the
Company or Life Technologies or by any trade or business, whether or not
incorporated (an "ERISA Affiliate"), that together with the Company or Life
Technologies would be deemed a "single employer" within the meaning of
section 4001(b) of ERISA, for the benefit of any employee or former
employee of the Company or any Subsidiary (the "Group Plans").
(b) No liability under Title IV or section 302 of ERISA has been incurred by
the Company, Life Technologies or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a material risk to
the Company, Life Technologies or any ERISA Affiliate of incurring any such
liability, other than liability for premiums due the Pension Benefit
Guaranty Corporation (which premiums have been paid when due), except as
are not reasonably likely to have a Material Adverse Effect on the Company.
(c) Each Group Plan has been operated and administered in accordance with its
terms and applicable law, including but not limited to ERISA and the Code,
except as are not reasonably likely to have a Material Adverse Effect on
the Company, and each Group Plan intended to be "qualified" within the
meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the
Code, except for failures to so qualify or be exempt to are not,
individually or in the aggregate, reasonably likely to have a Material
Adverse Effect on the Company.
(d) Section 3.8(e) of the Company Disclosure Schedule sets forth each Group
Plan under which as a result of the consummation of the transactions
contemplated by this Agreement, either alone or in combination with another
event, (A) any current or former employee or officer of the Company or any
ERISA Affiliate may become entitled to severance pay or any other payment,
except as expressly provided in this Agreement, or (B) any compensation due
any such employee or officer may be increased or the time of payment or
vesting may become accelerated. Except as set forth on Schedule 3.8(d)),
neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will result in any payment becoming
due, or increase the compensation due, to any current or former employee or
director of the Company or any of its Subsidiaries.
48
(e) Except as disclosed in the Group SEC Reports filed prior to the date
hereof, there are no pending, or to the knowledge of the Company,
threatened claims by or on behalf of any Group Plan, by any employee or
beneficiary covered under any such Group Plan, or otherwise involving any
such Group Plan (other than routine claims for benefits).
(f) No disallowance of a deduction under Sections 162(m) and 280G of the Code
for employee remuneration for any amount paid or payable by the Company,
any Company Affiliated Group, Life Technologies or any Life Technologies
Affiliated Group would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on the Company.
Section 3.9 Absence of Certain Changes or Events. Except as disclosed in the
Group SEC Reports filed prior to the date of this Agreement or set forth in
Schedule 3.9 hereto, since December 31, 1999 (a) the businesses of the
Company and its Subsidiaries have been conducted in all material respects
in the ordinary course and (b) there has not been any event, occurrence,
development or state of circumstances or facts that has had, or is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on the Company.
Section 3.10 Schedule 1 4D-9; Offer Documents; and Proxy Statement. Neither the
Schedule 14D-9 nor any information supplied by or on behalf of the Company
for inclusion in the Offer Documents will, at the respective times the
Schedule 14D-9, the Offer Documents or any amendments or supplements
thereto are filed with the SEC or are first published, sent or given to
shareholders of the Company, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading. The Proxy Statement will not, on the date the Proxy Statement
(or any amendment or supplement thereto) is first mailed to shareholders of
the Company, contain any untrue statement of a material fact, or omit to
state any material fact required to be stated therein or necessary in order
to make the statements made therein, in the light of the circumstances
under which they are made, not misleading or will, at the time of the
Company Shareholders Meeting, omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Company's Shareholders Meeting which shall
have become false or misleading in any material respect. The Schedule 14D-9
and the Proxy Statement will, when filed by the Company with the SEC,
comply as to form in all material respects with the applicable provisions
of the Exchange Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to information supplied by or on
behalf of the Parent or the Purchaser which is contained in any of the
foregoing documents.
49
Section 3.11 Tax Matters.
-----------
(a) All federal, state, local and foreign Tax Returns required to be filed by
or on behalf of the Company, each affiliated, combined, consolidated or
unitary group of which the Company is a member (a "Company Affiliated
Group"), Life Technologies, and each affiliated, combined, consolidated or
unitary group of which Life Technologies is a member (a "Life Technologies
Affiliated Group") have been timely filed or requests for extensions have
been timely filed and any such extension has been granted and has not
expired, and all such filed Tax Returns are complete and accurate except to
the extent any failure to file or any inaccuracies in filed Tax Returns
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Company. All Taxes due and owing by the
Company, any Company Affiliated Group, Life Technologies or any Life
Technologies Affiliated Group have been paid, or adequately reserved for in
accordance with GAAP, except to the extent any failure to pay or reserve
for would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on the Company. There is no audit or
examination, asserted deficiency, refund litigation, proposed adjustment or
matter in controversy with respect to any Taxes of or against the Company,
any Company Affiliated Group, Life Technologies or any Life Technologies
Affiliated Group which if determined adversely would, individually or in
the aggregate, be reasonably likely to have a Material Adverse Effect on
the Company. All material assessments for Taxes due and owing by the
Company, any Company Affiliated Group, Life Technologies or any Life
Technologies Affiliated Group with respect to completed and settled
examinations or concluded litigation have been paid, except to the extent
adequately reserved for (i) in the Group SEC Reports filed prior to the
date of this Agreement, or (ii) with respect to such material assessments
accruing after December 31, 1999, in accordance with GAAP.
(b) The Company has not (i) entered into a closing agreement or other similar
agreement with a taxing authority relating to Taxes of the Company, any
Company Affiliated Group, Life Technologies or any Life Technologies
Affiliated Group with respect to a taxable period for which the statute of
limitations is still open, or (ii) with respect to U.S. federal income
Taxes, granted any waiver of any statute of limitations with respect to, or
any extension of a period for the assessment of, any income Tax, in either
case, that is still outstanding. There are no Liens relating to Taxes upon
the assets of the Company, any Company Affiliated Group, Life Technologies
or any Life Technologies Affiliated Group other than Liens relating to
Taxes not yet due and Liens that would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the
Company, any Company Affiliated Group, Life Technologies or any Life
Technologies Affiliated Group is a party to or is bound by any Tax sharing
agreement, Tax indemnity obligation or similar agreement in respect of
Taxes (other than with respect to agreements solely between or among
members of the consolidated group of which the Company or Life Technologies
is the common parent and agreements and obligations that would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company).
50
(c) For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto and whether payable by reason of contract, assumption,
transferee liability, combined, unitary or consolidated reporting,
operation of law or otherwise) imposed by any taxing authority, including,
without limitation, taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales,
use, capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation or net worth, and taxes or other
charges in the nature of excise, withholding, ad valorem or value added,
and (ii) "Tax Return" means any return, report or similar statement
(including the attached schedules) required to be filed with respect to any
Tax, including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
Section 3.12 Opinion of Financial Advisors. The Board of Directors of the
Company has received the opinion of Xxxxxx Brothers Inc., dated the date of
this Agreement, substantially to the effect that, as of such date, the
consideration to be received by the Company's shareholders (other than the
Parent and its Subsidiaries) in the Offer and the Merger is fair to such
holders from a financial point of view.
Section 3.13 Required Vote of the Company Shareholders. The affirmative vote of
the holders of two-thirds of the outstanding shares of Company Common Stock
(the "Company Shareholder Approval") is the only vote of the holders of any
class or series of the Company's capital stock which is necessary to
approve and adopt this Agreement and the transactions contemplated hereby.
Section 3.14 Rights Agreement. The Company has duly amended the Rights Agreement
so that the Rights Agreement will not be applicable to the Parent, the
Purchaser, this Agreement, the Offer or the Merger or any other transaction
contemplated by this Agreement, in each case to the extent provided for and
made consistent with the terms of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE PARENT AND THE PURCHASER
Except as set forth on the schedule delivered by the Parent to
the Company in connection with the execution of this Agreement (the "Parent
Disclosure Schedule," and together with the Company Disclosure Schedule, the
"Disclosure Schedule"), the Parent and the Purchaser jointly and severally
represent and warrant to the Company as set forth below:
Section 4.1 Organization, Qualification, Etc. Each of the Parent and the
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and authority required for it to own its properties and
assets and to carry on its business as it is now being conducted. Each of
51
the Parent and the Purchaser is duly qualified to do business and is in
good standing in each jurisdiction in which the ownership of its properties
or the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified and in good standing
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect on the Parent or substantially delay consummation
of the transactions contemplated by this Agreement or otherwise prevent the
Parent from performing its obligations hereunder. The Purchaser is a wholly
owned, indirect Subsidiary of the Parent.
Section 4.2 Corporate Authority Relative to this Agreement; No Violation.
------------------------------------------------------------
(a) Each of the Parent and the Purchaser has the corporate power and authority
to enter into this Agreement and to carry out its obligations hereunder.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of each of the Parent and the Purchaser. The Parent,
as the sole stockholder of the Purchaser, has duly and validly approved and
adopted this Agreement. Other than the filing of the Certificate of Merger
or the Certificate of Ownership and Merger no other corporate proceedings
on the part of the Parent or the Purchaser (including their respective
shareholders) are necessary to authorize the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Parent and the Purchaser and, assuming this
Agreement constitutes a valid and binding agreement of the Company,
constitutes a valid and binding agreement of each of the Parent and the
Purchaser, enforceable against each of the Parent and the Purchaser in
accordance with its terms.
(b) Except for the filings, permits, authorizations, consents, approvals and
other matters set forth in Section 4.2(b) of the Parent Disclosure Schedule
or as may be required under, and other applicable requirements of the
Securities Act, the Exchange Act, the HSR Act, state securities or blue sky
laws, the rules and regulations of the NYSE, or the anti-competition laws
or regulations of the European Union or any foreign jurisdiction in which
the Company or the Parent (directly or through Subsidiaries, in each case)
has material assets or conducts material operations, and the filing of the
Certificates of Merger or the Certificate of Merger and Ownership under the
CBCA, none of the execution, delivery or performance of this Agreement by
the Parent, the consummation by the Parent of the transactions contemplated
hereby or compliance by the Parent with any of the provisions hereof or
thereof will (i) conflict with or result in any breach of any provision of
the certificate of incorporation or bylaws of the Parent or the certificate
of incorporation, bylaws or similar organizational documents of any of its
Subsidiaries, (ii) require any filing with, or permit, authorization,
consent or approval of, any Governmental Entity, (iii) result in a
violation or breach of, or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, or result in the creation
of a Lien on any property or asset owned by the Company or any Subsidiary
pursuant to, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Parent, any of its Subsidiaries is a
52
party or by which any of them or any of their respective properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
judgment, permit, license, ordinance, law, statute, rule or regulation
applicable to the Parent, any of its Subsidiaries or any of their
respective properties or assets, excluding from the foregoing clauses (ii),
(iii) and (iv) such violations, breaches or defaults which are not,
individually or in the aggregate, reasonably likely to have a Material
Adverse Effect on the Parent or prevent or substantially delay the
consummation of the transactions contemplated hereby.
Section 4.3 Offer Documents; Proxy Statement; Schedule 14D-9. Neither the Offer
Documents nor any information supplied by or on behalf of the Parent or the
Purchaser for inclusion in the Schedule 14D-9 will, at the time the Offer
Documents, the Schedule I 4D-9, or any amendments or supplements thereto,
are filed with the SEC or are first published, sent or given to
shareholders of the Company, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they are made, not
misleading. The information supplied by the Parent for inclusion in the
Proxy Statement will not, on the date the Proxy Statement (or any amendment
or supplement thereto) is first mailed to shareholders of the Company,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading, or shall, at the time of the Special Meeting,
omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Special Meeting which shall have become false or misleading.
Notwithstanding the foregoing, the Parent and the Purchaser make no
representation or warranty with respect to any information supplied by or
on behalf of the Company which is contained in any of the Offer Documents,
the Proxy Statement or any amendment or supplement thereto. The Offer
Documents shall comply as to form in all material respects with the
requirements of the Exchange Act.
Section 4.4 Financing. The Parent has delivered to the Company complete and
correct executed copies of the letter committing The Chase Manhattan Bank
to provide senior debt financing to ISP Opco Holdings Inc., a Delaware
corporation and a wholly owned subsidiary of the Parent, in an aggregate
amount of up to $x.xxxx million (the "Commitment Letter"). The Commitment
Letter provides for all of the financing necessary to complete the Offer
and the Merger, and the other transactions contemplated by this Agreement,
and to pay all related fees and expenses (the "Requisite Financing"). As of
the date hereof, the Commitment Letter provided to the Company is in full
force and effect and has not been amended in any respect. The Parent is not
aware of any fact or circumstance that would cause the conditions set forth
in the Commitment Letter not to be satisfied in full at the time all
conditions to the Offer have been either satisfied or waived by the
53
Purchaser and the Purchaser becomes obligated to purchase Shares in the
Offer, or to otherwise cause it to be unable to obtain the Requisite
Financing in accordance with the terms of the Commitment Letter.
Section 4.5 Ownership of Shares. Except as disclosed in the Parent's reports on
Schedule 13D under the Exchange Act filed with the SEC, as of the date
hereof; the Parent does not beneficially own directly or indirectly any
securities of the Company or Life Technologies.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business by the Company.
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(a) From and after the date hereof and until the Effective Time or the date, if
any, on which this Agreement is earlier terminated pursuant to Section 7.1
(the "Termination Date"), and except with the prior written consent of the
Parent (which consent will not be unreasonably withheld or delayed) or as
may be expressly permitted pursuant to this Agreement, the Company:
(i) shall, and shall cause each of its Subsidiaries to, conduct its operations
according to their ordinary and usual course of business consistent with
past practice;
(ii) shall use its reasonable best efforts, and cause each of its Subsidiaries
to use its reasonable best efforts, to preserve intact its present business
organization and goodwill, keep available the services of its current
officers and other key employees and preserve its relationships with those
Persons having material business dealings with the Company and its
Subsidiaries;
(iii)shall not, and shall not permit its Subsidiaries to, authorize or pay any
dividends on or make any distribution with respect to its outstanding
shares of capital stock (other than (A) regular quarterly cash dividends by
the Company consistent in timing and amount with past practice or (B) any
dividends or distribution by a wholly owned Subsidiary of the Company to
the Company or any of its wholly owned Subsidiaries);
(iv) shall not, and shall not permit any of its Subsidiaries to establish, enter
into or amend any severance plan, agreement or arrangement or any Group
Plan or increase the compensation payable or to become payable or the
benefits provided to its officers or employees, other than as contemplated
by law or any existing contract, employee benefit or welfare plan or
policy, or in the ordinary course of business consistent with past practice
with respect to employees who are not officers of the Company, and other
than as set forth in Section 5.1(a)(iv) of the Company Disclosure Schedule;
(v) shall not, and shall not permit any of its Subsidiaries to, authorize, or
announce an intention to authorize, or enter into an agreement with respect
to, any merger, consolidation or business combination (other than the
54
Merger), any acquisition of a material amount of assets or securities, any
disposition of a material amount of assets or securities or any other
similar extraordinary transaction;
(vi) shall not, and shall not permit any of its Subsidiaries to, propose or
adopt any amendments to its certificate of incorporation or bylaws (or
other similar organizational documents);
(vii)shall not, and shall not permit any of its Subsidiaries to, issue or
authorize the issuance of, or agree to issue or sell any shares of capital
stock of any class (whether through the issuance or granting of options,
warrants, commitments, convertible securities, subscriptions, rights to
purchase or otherwise), except for (1) the issuance of Company Common Stock
pursuant to options and grants outstanding as of the date hereof under the
Company's 1999 Long-Term Incentive Plan, or 1994 Long-Term Incentive Plan
and 1988 Long-Term Incentive Plan (each such plan, a "Company Equity
Plan"), or (2) the issuance of Life Technologies Common Stock pursuant to
options and grants outstanding as of the date hereof under Life
Technologies' 1997 Long-Term Incentive Plan, 1996 Non-Employee Directors
Stock Option Plan, 1995 Long-Term Incentive Plan and 1991 Stock Option Plan
(each such plan, a "Life Technologies Equity Plan");
(viii) shall not, and shall not permit any of its Subsidiaries to, reclassify,
combine, split, purchase or redeem any shares of its capital stock or
purchase or redeem any rights, warrants or options to acquire any such
shares;
(ix) shall not, and shall not permit any of its Subsidiaries to, (A) incur,
assume or prepay any indebtedness or any other liabilities for borrowed
money or issue any debt securities other than (i) incurrences and
repayments of indebtedness under the Company's or its Subsidiaries' credit
facilities in existence on the date of this Agreement and (ii) in an amount
not to exceed $[xx] million in the aggregate, or (B) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person (other
than wholly owned Subsidiaries), except for guarantees by Subsidiaries of
the Company indebtedness permitted under the preceding clause (A);
(x) shall not, and shall not permit any of its Subsidiaries to (or consent to
any proposal by any Person in which the Company has an investment to), make
or forgive any loans, advances or capital contributions to, or investments
in, any other Person other than the Company or any wholly owned Subsidiary
of the Company (including any intercompany loans, advances or capital
contributions to, or investments in, any affiliate) other than advances to
employees in the ordinary course of business in accordance with the
Company's or its Subsidiaries' established policies;
(xi) shall not, and shall not permit any of its Subsidiaries to, (A) enter into
any material lease or license or otherwise subject to any material Lien any
of its properties or assets (including securitizations), other than in the
ordinary course of business consistent with past practice; (B) modify,
55
amend in any material respect, or terminate any of its material contracts;
(C) waive, release or assign any rights that are material to the Company
and its Subsidiaries taken as a whole; or (D) permit any insurance policy
naming it as a beneficiary or a loss payable payee to lapse, be cancelled
or expire unless a new policy with substantially identical coverage is in
effect as of the date of lapse, cancellation or expiration;
(xii)shall not, and shall not permit any of its Subsidiaries to change any of
the financial accounting methods or practices used by it unless required by
GAAP;
(xiii) shall not make any material Tax election or settle or compromise any
material Tax liability; and
(xiv)shall not, and shall not permit any of its Subsidiaries to, agree, in
writing or otherwise, to take any of the foregoing actions or take any
action which would result in any of the conditions to the Merger set forth
in Article VI hereof not being satisfied;
(xv) shall not (A) amend the Rights Agreement or (B) take any action
with respect to, or make any determination under, the Rights Agreement,
including a redemption of the Rights or any action to facilitate an
Acquisition Proposal, unless this Agreement shall have been terminated in
accordance with Section 7.1 hereof and the Company shall have paid to the
Parent the fee described in Section 7.3 hereof and shall have complied with
the provisions of Section 5.7(b) hereof; provided, however, that this
Section 5.1(a) shall not prevent the Company from taking such actions as it
determines are necessary to prevent the occurrence of a Distribution Date
following the commencement of a tender or exchange offer unless doing so is
intended or could reasonably be expected to facilitate an Acquisition
Proposal, this Agreement shall have been terminated in accordance with
Section 7.1 hereof and the Company shall have paid to the Parent the fee
described in Section 7.3 hereof and shall have complied with the provisions
of Section 5.7(b) hereof; and
(b) The Parent agrees that, from and after the date hereof and prior to the
earlier of the Effective Time and the Termination Date, and except as may
be agreed in writing by the Company or as may be expressly permitted
pursuant to this Agreement, the Parent shall not, and shall not permit any
of its Subsidiaries to (i) agree, in writing or otherwise, to take any
action which would result in any of the conditions to the Offer set forth
in Annex A hereto or any of the conditions to the Merger set forth in
Article VI hereof not being satisfied or (ii) delay the consummation of the
Offer.
Section 5.2 Access; Confidentiality.
-----------------------
(a) Subject to legal and contractual restrictions, the Company shall (and shall
cause each of its Subsidiaries to) afford to the Parent's officers,
employees, accountants, counsel and other authorized representatives
reasonable access during normal business hours upon reasonable notice,
56
throughout the period prior to the earlier of the Effective Time or the
Termination Date, to its properties, offices, employees, contracts,
commitments, books and records and any report, schedule or other document
filed or received by it pursuant to the requirements of federal or state
securities laws and shall (and shall cause each of its Subsidiaries to)
furnish to the Parent such additional financial and operating data and
other information as to its and its Subsidiaries' respective businesses and
properties as the Parent may from time to time reasonably request. The
Parent will make all reasonable best efforts to minimize any disruption to
the businesses of the Company and the Company's Subsidiaries which may
result from the requests for access, data and information hereunder.
(b) No investigation pursuant to this Section 5.2 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All requests for access
and information shall be coordinated through designated senior executives
of the parties. The Parent will hold any information provided under this
Section 5.2 in confidence to the extent required by, and in accordance
with, the provisions of the letter dated February 22, 2000, between the
Company and the Parent.
Section 5.3 Special Meeting; Proxy Statement.
--------------------------------
(a) Following the purchase of Shares pursuant to the Offer, if required by
applicable law in order to consummate the Merger, the Company, acting
through its Board of Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, solicit proxies for (if necessary), convene and
hold an annual or special meeting of its shareholders (the "Company
Shareholders Meeting") for the purposes of considering and taking action
upon the approval and adoption of this Agreement; and
(ii) prepare and file with the SEC a preliminary proxy or information statement
relating to the Merger and this Agreement and obtain and furnish the
information required to be included by the SEC in the Proxy Statement and,
after consultation with the Parent, respond promptly to any comments made
by the SEC with respect to the preliminary proxy or information statement
and cause a definitive proxy or information statement, including any
amendments or supplements thereto (the "Proxy Statement") to be mailed to
its shareholders at the earliest practicable date; provided that no
amendments or supplements to the Proxy Statement will be made by the
Company without consultation with the Parent and its counsel.
(b) The Parent shall vote, or cause to be voted, all of the Shares acquired in
the Offer or otherwise then owned by it, the Purchaser or any of the
Parent's other Subsidiaries in favor of the approval and adoption of this
Agreement.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above, in the
event that the Parent, the Purchaser and any other Subsidiaries of the
Parent shall acquire in the aggregate at least 90% of the outstanding
57
shares of each class of capital stock of the Company pursuant to the Offer
or otherwise, the parties hereto shall, subject to Article VI hereof, take
all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting
of shareholders of the Company, in accordance with Section 33-818 of the
CBCA.
Section 5.4 Reasonable Best Efforts; Further Assurances.
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(a) Subject to the terms and conditions of this Agreement and applicable law,
each of the parties shall act in good faith and use reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done,
all things necessary, proper or advisable to consummate and make effective
the transactions contemplated by this Agreement as soon as practicable.
Without limiting the foregoing, the parties shall, and shall cause their
respective Subsidiaries, and use reasonable best efforts to cause their
(and their respective Subsidiaries') directors, officers, employees,
agents, attorneys, accountants and representatives, to (i) consult and
cooperate with and provide assistance to each other in the preparation and
filing with the SEC of the Offer Documents, the Schedule 14D-9, the
preliminary Proxy Statement and the Proxy Statement and all necessary
amendments or supplements thereto; (ii) obtain all consents, approvals,
waivers, licenses, permits, authorizations, registrations, qualifications
or other permissions or actions by, and give all necessary notices to, and
make all filings with and applications and submissions to, any Governmental
Entity or other Person necessary in connection with the consummation of the
transactions contemplated by this Agreement as soon as reasonably
practicable; (iii) provide all such information concerning such party, its
Subsidiaries and its officers, directors, employees, partners and
affiliates as may be necessary or reasonably requested in connection with
any of the foregoing; (iv) avoid the entry of, or have vacated or
terminated, any injunction, decree, order, or judgment that would restrain,
prevent, or delay the consummation of the Offer or the Merger, including
but not limited to defending through litigation on the merits any claim
asserted in any court by any Person; and (v) take any and all reasonable
steps necessary to avoid or eliminate every impediment under any antitrust,
competition, or trade regulation law that is asserted by any Governmental
Entity with respect to the Offer or the Merger so as to enable the
consummation of the Offer and the Merger to occur as expeditiously as
possible; provided, however, that notwithstanding anything to the contrary
in this Section 5.4, the Parent and the Purchaser shall not be required to
consent to any limitations on their ownership or operation of all or a
material portion of the Company's business or assets, or to dispose of or
hold separate any material portion of the business or assets of the Parent
or the Company. Prior to making any application to or filing with a
Governmental Entity or other entity in connection with this Agreement
(other than filing under the HSR Act), each party shall provide the other
party with drafts thereof and afford the other party a reasonable
opportunity to comment on such drafts.
(b) The Company and the Parent shall keep the other reasonably apprised of the
status of matters relating to the completion of the transactions
contemplated hereby, including promptly furnishing the other with copies of
58
notices or other communications received by the Parent or the Company, as
the case may be, or by any of their respective Subsidiaries, from any third
party and/or any Governmental Entity with respect to the transactions
contemplated by this Agreement.
Section 5.5 Employee Stock Options and Other Employee Benefits.
--------------------------------------------------
(a) The Company shall take all such actions as shall be necessary to cause each
outstanding stock option to purchase shares of Company Common Stock
(including any related alternative rights) granted under any stock option
or compensation plan or arrangement of the Company or its Subsidiaries
(collectively, the "Company Option Plans") (including those granted to
current or former employees and directors of the Company or any of its
Subsidiaries) (the "Employee Stock Options") to become exercisable either
prior to the purchase of the Shares pursuant to the Offer or immediately
prior to the Effective Time, as permitted pursuant to the terms and
conditions of the applicable Company Option Plan. The Company shall take
all such actions as shall be necessary to cause all Employee Stock Options
that are outstanding immediately prior to the Effective Time (whether or
not then presently exercisable or vested) to be cancelled. In exchange for
the cancellation of each such Employee Stock Option (whether or not
presently exercisable or vested), the holder thereof shall be entitled to
receive from the Company an amount in cash equal to the product obtained by
multiplying (x) the difference between the Offer Price and the per share
exercise price of such Employee Stock Option, and (y) the number of shares
of Company Common Stock covered by such Employee Stock Option. All payments
in respect of such Employee Stock Options shall be made as promptly as
practicable after the Effective Time, subject to the Company's collection
of all applicable withholding Taxes required by law to be collected by the
Company. The Company Option Plans shall be terminated as of the Effective
Time and thereafter the only rights of participants therein shall be the
right to receive the consideration set forth in this Section 5.5(a). Prior
to the Effective Time, the Company shall take all action as may be
necessary to carry out the terms of this Section 5.5.
(b) For the period beginning on the date of purchase of Shares pursuant to the
Offer (the "Purchase Date") through and including December 31, 2000, the
Parent shall, or shall cause its Subsidiaries to, maintain (i) employee
benefit plans, programs and arrangements (including retiree medical
benefits), salaries and bonus programs for each individual who was an
employee or retiree of the Company or any Subsidiary of the Company
immediately prior to the Purchase Date, which are, in the aggregate, no
less favorable than those provided by the Company and its Subsidiaries as
of immediately before the Purchase Date and (ii) contribution levels and
loan provisions under the defined contribution plans of the Company and its
Subsidiaries and the level of benefits provided under the retiree medical
plans of the Company, in each case, at levels which are no less favorable
in the aggregate than those provided by the Company and its Subsidiaries as
of immediately prior to the Purchase Date. After December 31, 2000 and
until December 31, 2002, the Parent shall provide benefits to each
individual who was an employee or retiree of the Company or any Subsidiary
59
of the Company immediately prior to the Purchase Date which are no less
favorable in the aggregate than benefits provided to similarly situated
employees or retirees of the Parent. Each Person who is an employee or
former employee of the Company or its Subsidiaries immediately prior to the
Purchase Date (a "Company Employee") shall be given credit for all service
with the Company or any of its Subsidiaries (and service credited by the
Company or any of its Subsidiaries) prior to the Purchase Date, using the
same methodology utilized by the Company as of immediately before the
Purchase Date for crediting service and determining levels of benefits,
under (i) all employee benefit plans, programs and arrangements maintained
by or contributed to by the Parent and its Subsidiaries (including, without
limitation, the Surviving Corporation) in which such Company Employees
become participants for purposes of eligibility to participate, vesting and
determination of level of benefits (excluding, however, benefit accrual
under any defined benefit plans), and (ii) severance plans for purposes of
calculating the amount of each Company Employee's severance benefits. The
Parent and the Surviving Corporation shall (x) waive all limitations as to
preexisting conditions exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Company Employees
under any welfare benefit plans that such Company Employees may be eligible
to participate in after the Purchase Date, other than limitations or
waiting periods that are already in effect with respect to such employees
and that have not been satisfied as of the Purchase Date under any welfare
benefit plan maintained for the Company Employees immediately prior to the
Purchase Date, and (y) provide each Company Employee with credit for any
co-payments and deductibles paid prior to the Purchase Date in satisfying
any applicable deductible or out-of-pocket requirements under any welfare
plans that such Company Employees are eligible to participate in after the
Purchase Date. Without limiting the generality of the foregoing: (i) the
Parent shall, and shall cause its Subsidiaries to, assume and honor all
employment, consulting, termination and severance agreements set forth in
Section 5.5(b) of the Company Disclosure Schedule to which the Company or
any of its Subsidiaries is a party.
(c) The parties hereto agree that the transactions contemplated by this
Agreement shall constitute a "change of control" for purposes of the Group
Plans as well as any other agreement that would have been a Group Plan but
for the fact that it is not material.
Section 5.6 Takeover Statute. If any "fair price," "moratorium," "control share
acquisition" or other form of anti-takeover statute or regulation shall
become applicable to the transactions contemplated hereby, each of the
Company, the Parent and the Purchaser and the members of their respective
Boards of Directors shall grant such approvals and take such actions as are
reasonably necessary so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated hereby and
otherwise act to eliminate or minimize the effects of such statute or
regulation on the transactions contemplated hereby.
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Section 5.7 No Solicitation by the Company.
------------------------------
(a) Neither the Company nor any of its Subsidiaries nor any of the officers and
directors of any of them shall, and the Company shall direct and use its
reasonable best efforts to cause its and its Subsidiaries' employees,
agents and representatives, including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries (the Company, its
Subsidiaries and their respective officers, directors, employees, agents
and representatives being the "Company Representatives") not to, directly
or indirectly through another Person, (i) initiate, solicit, encourage or
otherwise knowingly facilitate any inquiries (by way of furnishing
information or otherwise) or the making of any Acquisition Proposal or (ii)
participate in any discussions or engage in any negotiations concerning an
Acquisition Proposal; provided, however, that the Company's Board of
Directors may, or may authorize the Company Representatives to, in response
to an unsolicited bona fide written Acquisition Proposal that the Board of
Directors of the Company concludes in good faith is, or is reasonably
likely to become, a Superior Proposal, (x) furnish information with respect
to the Company and its Subsidiaries to any Person making such Superior
Proposal and (y) participate in discussions or negotiations regarding such
Superior Proposal; provided that, prior to taking any such action, the
Company provides reasonable advance notice to the Parent that it is taking
such action. The Company will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to the actions described in clauses (i)
and (ii) above. The Company agrees that it will take the necessary steps to
inform promptly the Company Representatives of the obligations undertaken
in this Section 5.7. The Company also will promptly request each Person
that has heretofore executed a confidentiality agreement in connection with
its consideration of an Acquisition Proposal to return or destroy (and
certify the destruction of, if required under the terms of the
confidentiality agreement) all confidential information heretofore
furnished to such Person by or on behalf of the Company or any of its
subsidiaries in accordance with the terms of such confidentiality
agreement, and the Company will use its best efforts, subject to Section
5.7(b), to enforce the provisions of such confidentiality agreements,
including, without limitation, any standstill provisions. For purposes of
this Agreement "Acquisition Proposal" means any direct or indirect inquiry,
proposal or offer relating to the acquisition or purchase of a business or
shares of any class of equity securities of the Company or any of its
Subsidiaries, any tender offer or exchange offer that, if consummated,
would result in any Person beneficially owning any class of equity
securities of the Company or any of its Subsidiaries, or any merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction (a
"Business Combination Transaction") involving the Company or any of its
Subsidiaries, or any purchase or sale of a substantial portion of the
consolidated assets (including without limitation stock of Subsidiaries
owned directly or indirectly by the Company) of the Company or any of its
Subsidiaries (an "Asset Transaction"). For purposes of this Agreement
"Superior Proposal" shall mean an unsolicited bona fide written Acquisition
61
Proposal that the Board of Directors of the Company concludes in good faith
(after consultation with the Company's legal and financial advisors) would,
taking into account all terms and conditions of the Acquisition Proposal,
including any break-up fees, expense reimbursement provisions and
conditions to consummation, provide greater aggregate value to the
Company's shareholders from a financial point of view than the transactions
contemplated by this Agreement and for which the Person making such
proposal has the necessary funds or has obtained financing commitments
which in the good faith judgment of the Board of Directors (after
consultation with the Company's financial advisors) are satisfactory in
form and substance for the intended purpose; provided that for purposes of
this definition the term "Acquisition Proposal" shall have the meaning set
forth above, except that (x) references to "shares of any class of equity
securities of the Company" shall be deemed to be references to "100% of the
outstanding Shares" and (y) an "Acquisition Proposal" shall be deemed to
refer only to a Business Combination Transaction involving the Company or,
with respect to an Asset Transaction, such transaction must involve all of
the assets of the Company and its Subsidiaries, taken as a whole, and not
any Subsidiary of the Company alone.
(b) Except as expressly permitted by this Section 5.7, neither the Company's
Board of Directors nor any committee thereof shall (i) withdraw, modify or
change, or propose publicly to withdraw, modify or change, in a manner
adverse to the Parent, the recommendation by such Board of Directors or
such committee of the Merger or this Agreement unless the Board of
Directors of the Company shall have determined in good faith, after
consultation with its legal and financial advisors, that the Offer, the
Merger or this Agreement is no longer in the best interests of the
Company's shareholders and that such withdrawal, modification or change is,
therefore, required in order to satisfy its fiduciary duties to the
Company's shareholders under applicable law, (ii) approve or recommend, or
propose publicly to approve or recommend, or publicly takes a "neutral"
position with respect to, any Acquisition Proposal, or (iii) waive, cancel
or otherwise make inapplicable any standstill agreement or provision or
cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"Acquisition Agreement") related to any Acquisition Proposal.
Notwithstanding the foregoing, the Company may, in response to a Superior
Proposal, (x) take any of the actions described in clauses (i) or (ii)
above or (y) subject to this paragraph (b), terminate this Agreement and
pay the termination fee in accordance with Section 7.3 (and concurrently
with or after such termination, if it so chooses, cause the Company to
enter into any Acquisition Agreement with respect to any Superior Proposal)
but only after the third business day following the Parent's receipt of
written notice advising the Parent that the Company's Board of Directors is
prepared to accept an Acquisition Proposal, and attaching the most current
version of any such Superior Proposal or any draft of an Acquisition
Agreement.
(c) Nothing contained in this Section 5.7 shall prohibit the Company or its
Board of Directors from at any time taking and disclosing to its
shareholders a position contemplated by Rule 14e-2 promulgated under the
62
Exchange Act or from making any disclosure to the Company's shareholders
required by applicable law.
Section 5.8 Public Announcements. The Parent and the Company agree that neither
one of them will issue any press release or otherwise make any public
statement or respond to any press inquiry with respect to this Agreement or
the transactions contemplated hereby without prior consultation with the
other party, except as may be required by applicable law or the rules of
any stock exchange on which such party's securities are listed.
Section 5.9 Indemnification; Insurance; Release.
-----------------------------------
(a) From and after the Purchase Date, the Parent will cause the Company (or any
successor to the Company whether by means of merger, sale of assets or
other similar business combination) to indemnify and hold harmless each
present and former director and officer of the Company and its Subsidiaries
(the "Indemnified Parties"), against any costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding
or investigation, whether civil, criminal, administrative or investigative,
by reason of the fact that such individual is or was a director, officer,
employee or agent of the Company or any of its Subsidiaries, or is or was
serving at the request of the Company or any of its Subsidiaries as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, whether asserted or claimed prior
to, at or after the Purchase Date, to the fullest extent permitted under
applicable law, and the Parent shall also advance fees and expenses
(including attorneys fees) as incurred to the fullest extent permitted
under applicable law.
(b) For six years from the Purchase Date, the Parent shall maintain in effect
the Company's and its Subsidiaries' current directors' and officers'
liability insurance policies (the "Company Policies") covering those
Persons who are currently covered by the Company Policy; provided, however,
that in no event shall the Parent be required to expend in any one year an
amount in excess of 150% of the annual premiums currently paid by the
Company for such insurance, and, provided, further, that if the annual
premiums of such insurance coverage exceeds such amount, the Parent shall
be obligated to obtain a policy with the greatest coverage available for a
cost not exceeding such amount; and provided, further, that the Parent may
meet its obligations under this paragraph by covering the above Persons
under the Parent's insurance policy or policies on the terms described
above.
(c) The Parent and the Purchaser, from and after the Purchase Date, fully and
unconditionally release from any and all claims, actions, causes of action,
lawsuits, damages, liabilities, costs, losses, expenses, assessments, sums
of money, promises and demands of any nature whatsoever of the Company,
each of its Subsidiaries, the Parent and each of its Subsidiaries (other
than as may arise out of ordinary business transactions with the Parent,
the Company or any of their respective Subsidiaries) against each of the
63
members of the Board of Directors of the Company and each of its
Subsidiaries, and each officer of the Company or any of its Subsidiaries
(i) which are related to or arise out of (A) action taken or omitted to be
taken (including any untrue statements made or any statements omitted to be
made) in connection with or in anticipation of the transactions
contemplated by this Agreement or (B) actions taken or omitted to be taken
by Parent, the Purchaser or any of their affiliates in connection with the
transactions contemplated by this Agreement, (ii) which are otherwise
related to or arise out of the transactions contemplated by this Agreement
or (iii) by reason of the fact that such Person is or was a member of the
Board of Directors of the Company or any of its Subsidiaries or an officer
of the Company or any of its Subsidiaries, as the case may be provided,
however, that such release shall not prevent any assertion of a claim or
institution of a cause of action arising out of any of the following:
fraud; embezzlement; intentional wrongdoing; conduct resulting in criminal
convictions; knowing violations of law; breach of non-competition or
non-solicitation agreements; repayment of loans or advances; diversion of
corporate opportunity; or misappropriation or improper use of trade
secrets.
Section 5.10 Certain Litigation. Each of the parties shall prior to or at the
Effective Time cease, terminate and dismiss, with prejudice, any and all
actions, proceedings or lawsuits initiated, commenced or filed by such
party in connection with the 2000 Annual Meeting of the Company.
Section 5.11 Additional Reports and Information. The Company shall furnish to
the Parent copies of all reports of the type referred to in Section 3.4
which it or Life Technologies files with the SEC on or after the date
hereof, and the Company represents and warrants that as of the respective
dates thereof, such reports will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and the unaudited consolidated interim
financial statements included in such reports (including any related notes
and schedules) will fairly present the financial position of the Company
and its consolidated Subsidiaries or Life Technologies and its consolidated
Subsidiaries, as the case may be, as of the dates thereof and the results
of operations and cash flows or other information included therein for the
periods or as of the date then ended (subject, in the case of the interim
financial statements, to normal, recurring year-end adjustments), in each
case in accordance with GAAP consistently applied during the periods
involved (except as otherwise disclosed in the notes thereto).
Section 5.12 Disclosure Schedule Supplements. From time to time after the date
of this Agreement and prior to the Effective Time, the Company will
promptly supplement or amend the Company Disclosure Schedule with respect
to any matter hereafter arising which, if existing or occurring at or prior
to the date of this Agreement, would have been required to be set forth or
described in the Company Disclosure Schedule or which is necessary to
correct any information in a schedule or in any representation and warranty
of the Company which has been rendered inaccurate thereby in any material
64
respect. From time to time after the date of this Agreement and prior to
the Effective Time, the Parent will promptly supplement or amend the Parent
Disclosure Schedule with respect to any matter hereafter arising which, if
existing or occurring at or prior to the date of this Agreement, would have
been required to be set forth or described in the Parent Disclosure
Schedule or which is necessary to correct any information in a schedule or
in any representation and warranty of the Parent which has been rendered
inaccurate thereby in any material respect. For purposes of determining the
accuracy of the representations and warranties of the Company contained in
this Agreement in order to determine the fulfillment of the condition set
forth in paragraph (d) of Annex A, the Company Disclosure Schedule shall be
deemed to include only that information contained therein on the date of
this Agreement and shall be deemed to exclude any information contained in
any subsequent supplement or amendment thereto.
ARTICLE VI
CONDITIONS TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) The Company Stockholder Approval shall have been obtained, if required by
applicable law.
(b) No statute, rule, regulation, executive order, decree, ruling or permanent
injunction shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits the consummation of the Merger
substantially on the terms contemplated hereby or has the effect of making
the acquisition of Shares by the Parent or the Purchaser or any affiliate
of either of them illegal.
(c) The Company or the Purchaser or any affiliate of either of them shall have
purchased Shares pursuant to the Offer, except that this condition shall
not be a condition to the Parent's and the Purchaser's obligation to effect
the Merger if the Parent, the Purchaser or such affiliate shall have failed
to purchase Shares pursuant to the Offer in breach of their obligations
under this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the other
transactions contemplated herein abandoned at any time prior to the
Effective Time, whether before or after obtaining the Company Stockholder
Approval:
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(a) by the mutual written consent of the Company (including, from and after the
Purchase Date, the Independent Director Approval contemplated by Section 1
3(c)), the Parent and the Purchaser;
(b) by either the Parent or the Company if (i) (1) the Offer shall have expired
without any Shares being purchased pursuant thereto, or (2) the Offer has
not been consummated on or before October 31, 2000 (the "Drop Dead Date");
provided, however, that the right to terminate this Agreement pursuant to
this Section 7.1(b)(i) shall not be available to any party whose failure to
fulfill any obligation under this Agreement or the Offer has been the cause
of, or resulted in, the failure of the Shares to have been purchased
pursuant to the Offer; (ii) a statute, rule, regulation or executive order
shall have been enacted, entered or promulgated prohibiting the
consummation of the Offer or the Merger substantially on the terms
contemplated hereby; or (iii) an order, decree, ruling or injunction shall
have been entered permanently restraining, enjoining or otherwise
prohibiting the consummation of the Offer or the Merger substantially on
the terms contemplated hereby and such order, decree, ruling or injunction
shall have become final and non-appealable; provided, that the party
seeking to terminate this Agreement pursuant to this Section 7.1(b)(iii)
shall have used its reasonable best efforts to remove such order, decree,
ruling or injunction and shall not be in violation of Section 5.4;
(c) by the Parent, if due to an occurrence or circumstance, other than as a
result of a breach by the Parent or the Purchaser of its obligations
hereunder or under the Offer, resulting in a failure to satisfy any
condition set forth in Annex A hereto, the Purchaser shall have (i) failed
to commence the Offer within 30 days following the date of this Agreement,
or (ii) terminated the Offer without having accepted any Shares for payment
thereunder;
(d) by the Company, upon approval of its Board of Directors, if the Purchaser
shall have terminated the Offer without having accepted any Shares for
payment thereunder, other than as a result of a breach by the Company of
its obligations hereunder, that would result in a failure to satisfy any of
the conditions set forth in Annex A hereto; or
(e) by the Company, in accordance with Section 5.7(b); provided, that such
termination shall not be effective unless and until the Company shall have
paid to the Parent the fee described in Section 7.3 hereof and shall have
complied with the provisions of Sections 5.7(b).
Section 7.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 7.1, written notice thereof shall forthwith be given to
the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement shall terminate and be
of no further force and effect (except for the provisions of Sections
5.2(b), 7.3 and 8.2 in the case of termination of this Agreement at any
time, and Sections 5.5, 5.9 and 5.10 in the case of a termination following
the purchase of Shares pursuant to the Offer), and there shall be no other
66
liability on the part of the Parent, the Purchaser or the Company or their
respective officers or directors except liability arising out of a willful
breach of this Agreement. In the event of termination of this Agreement
pursuant to Section 7.1 prior to the expiration of the Offer, the Parent
and the Purchaser will promptly terminate the Offer upon such termination
of this Agreement without the purchase of Shares thereunder.
Section 7.3 Termination Fee. In the event that (i) this Agreement shall have
been terminated pursuant to Section 7.1(c) as a result of the failure of
the condition of the Offer set forth in paragraph (c) of Annex A hereto
this Agreement shall have been terminated pursuant to Section 7.1(c) as a
result of the failure of the condition of the Offer set forth in paragraph
(e) of Annex A hereto and within 270 days thereafter, the Company enters
into a merger agreement, acquisition agreement or similar agreement
(including, without limitation, a letter of intent) with respect to an
Acquisition Proposal, or an Acquisition Proposal is consummated, or (iii)
this Agreement shall have been terminated pursuant to Section 7.1(e), the
Company shall immediately pay the Parent a fee equal to $[ ] million (the
"Termination Fee"), payable by wire transfer of immediately available
funds, the receipt of which by the Parent in the case of termination
pursuant to Section 7.1(e), shall be a condition to the effectiveness of
such termination. The Company acknowledges that the agreements contained in
this Section 7.3 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, the Parent and the
Purchaser would not enter into this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time.
Section 8.2 Expenses. Except as otherwise expressly contemplated by this
Agreement, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
Section 8.3 Counterparts; Effectiveness. This Agreement may be executed in two
or more separate counterparts, each of which shall be deemed to be an
original but all of which shall constitute one and the same agreement. This
Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by each of the other parties hereto.
Section 8.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
principles of conflicts of laws thereof, except to the extent the
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provisions of this Agreement are expressly governed by or derive their
authority from the CBCA.
Section 8.5 Notices. All notices and other communications hereunder shall be in
writing (including telecopy or similar writing) and shall be effective (a)
if given by telecopy, when such telecopy is transmitted to the telecopy
number specified in this Section 8.5 and the appropriate telecopy
confirmation is received or (b) if given by any other means, when delivered
at the address specified in this Section 8.5:
To the Parent or the Purchaser:
c/o ISP Management Company, Inc.
0000 Xxxx Xxxx
Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy:
copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
To the Company:
Dexter Corporation
Xxx Xxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
Telecopy: (000) 000-0000
copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: J. Xxxxxxx Xxxxxx, Esq.
Xxxxxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
Section 8.6 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that the Purchaser may assign,
in its sole discretion, all or any of its rights and interests hereunder to
the Parent or to any direct or indirect wholly owned Subsidiary of the
Parent, provided that no such assignment shall relieve the Purchaser of its
68
obligations hereunder if such assignee does not perform such obligations.
Subject to the preceding sentence, this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Any assignment not permitted under this
Section 8.6 shall be null and void.
Section 8.7 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 in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
Section 8.8 Enforcement of Agreement. The parties hereto agree that money
damages or other remedy at law would not be sufficient or adequate remedy
for any breach or violation of, or a default under, this Agreement by them
and that in addition to all other remedies available to them, each of them
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without
limitation, specific performance, without bond or other security being
required.
Section 8.9 Entire Agreement; No Third-Party Beneficiaries. This Agreement, the
Confidentiality Agreement, the Company Disclosure Schedule, the Parent
Disclosure Schedule and exhibits hereto constitute the entire agreement,
and supersede all other prior agreements and understandings, both written
and oral, among the parties, or any of them, with respect to the subject
matter hereof and thereof and except for the provisions of Sections 5.5 and
5.9 hereof, is not intended to and shall not confer upon any Person other
than the parties hereto any rights or remedies hereunder.
Section 8.10 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given
no substantive or interpretive effect whatsoever.
Section 8.11 Definitions. References in this Agreement to (a) "Subsidiaries" of
the Company or the Parent shall mean any corporation or other form of legal
entity of which more than 50% of the outstanding voting securities are on
the date hereof directly or indirectly owned by the Company or the Parent
or in which the Company or the Parent has the right to elect a majority of
the members of the board of directors or other similar governing body; (b)
"affiliates" shall mean, as to any Person, any other Person which, directly
or indirectly, controls, or is controlled by, or is under common control
with, such Person; (c) "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including, without limitation, a Governmental Entity. As used in the
definition of "affiliates," "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the
69
direction of management or policies of a Person, whether through the
ownership of securities or partnership or other ownership interests, by
contract or otherwise. "Including," as used herein, shall mean "including,
without limitation."
Section 8.12 Finders or Brokers. Except for Xxxxxx Brother Inc., with respect to
the Company, and The Chase Manhattan Bank and Chase Securities Inc. with
respect to the Parent, neither the Company nor the Parent nor any of their
respective Subsidiaries has employed any investment banker, broker, finder
or intermediary in connection with the transactions contemplated hereby who
would be entitled to any fee or any commission in connection with or upon
consummation of the Offer or the Merger.
Section 8.13 Amendment or Supplement. At any time prior to the Effective Time,
this Agreement may be amended or supplemented in any and all respects,
whether before or after the Company Stockholder Approval, by written
agreement of the parties hereto, by action taken by their respective Boards
of Directors (which in the case of the Company shall include the
Independent Director Approval contemplated in Section 1.3(c)), with respect
to any of the terms contained in this Agreement; provided, however that
following the Company Stockholder Approval there shall be no amendment or
change to the provisions hereof which would reduce the amount or change the
type of consideration into which each Share shall be converted upon
consummation of the Merger or other change requiring stockholder approval
without further approval by the shareholders of the Company.
Section 8.14 Extension of Time, Waiver, Etc. At any time prior to the Effective
Time, any party may (a) extend the time for the performance of any of the
obligations or acts of any other party hereto; (b) waive any inaccuracies
in the representations and warranties of any other party hereto contained
herein or in any document delivered pursuant hereto; or (c) subject to the
proviso of Section 8.13 waive compliance with any of the agreements or
conditions of any other party hereto contained herein; provided, however,
in the case of the Company following the acceptance of Shares for payment
in the Offer, the Independent Director Approval contemplated in Section
1.3(c) is obtained. Notwithstanding the foregoing no failure or delay by
the Company, the Parent or the Purchaser in exercising any right hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of
any other right hereunder. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above written.
INTERNATIONAL SPECIALTY PRODUCTS INC.
By:
----------------------------------
Name:
Title:
[PURCHASER]
By:
----------------------------------
Name:
Title:
DEXTER CORPORATION
By:
----------------------------------
Name:
Title:
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ANNEX A
-------
Conditions to the Offer
-----------------------
The capitalized terms used in this Annex A have the meanings
set forth in the attached Agreement, except that the term "the Agreement" shall
be deemed to refer to the attached Agreement.
Notwithstanding any other provision of the Offer, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares promptly after termination or withdrawal of the Offer),
pay for, and may postpone the acceptance for payment of and payment for Shares
tendered, and, except as set forth in the Agreement, terminate the Offer as to
any Shares not then paid for if (i) the Minimum Condition shall not have been
satisfied at the scheduled expiration date of the Offer, (ii) any applicable
waiting period under the HSR Act shall not have expired or been terminated prior
to the expiration of the Offer, or (iii) immediately prior to the expiration of
the Offer, any of the following conditions shall exist:
(a) there shall have been entered, enforced, issued, pending
or threatened in writing by any Governmental Entity, any judgment, order,
injunction or decree (i) which makes illegal or otherwise directly or indirectly
restrains or prohibits or makes materially more costly the making of the Offer,
the acceptance for payment of, or payment for, any Shares by the Parent, the
Purchaser or any other affiliate of the Parent, or the consummation of the
Merger transaction; (ii) which prohibits or materially limits the ownership or
operation by the Company, the Parent or any of their Subsidiaries of all or any
material portion of the business or assets of the Company, the Parent or any of
their Subsidiaries; (iii) which imposes limitations on the ability of the
Parent, the Purchaser or any other affiliate of the Parent to exercise full
rights of ownership of any Shares, including, without limitation, the right to
vote any Shares acquired by the Purchaser pursuant to the Offer or otherwise on
all matters properly presented to the Company's shareholders, including, without
limitation, the approval and adoption of this Agreement and the transactions
contemplated by this Agreement; or (iv) which compels the Company, the Parent or
any of its Subsidiaries to dispose of or hold separate all or a material portion
of the business or assets of the Company;
(b) there shall have been any order or injunction issued, or
any statute, rule, regulation, legislation or interpretation enacted, enforced,
promulgated, amended, or issued by any Governmental Entity or deemed by any
Governmental Entity applicable to (i) the Parent, the Company or any Subsidiary
or affiliate of the Parent or the Company or (ii) any transaction contemplated
by this Agreement, other than the HSR Act, which is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (iv) of paragraph (a) above;
(c) the Board of Directors of the Company or any committee
thereof shall have (A) withdrawn, modified or changed, in a manner adverse to
the Parent or the Purchaser, the recommendation by such Board of Directors or
such committee of the Offer, the Merger or this Agreement, (B) approved,
recommended or taken a "neutral" position, or proposed publicly to approve,
recommend or take a "neutral" position with respect to, an Acquisition Proposal,
(C) caused the Company to enter into any Acquisition Agreement relating to any
Acquisition Proposal or caused the Company to take any of the other actions
specified in clauses (a)(i) or (ii) or (b)(i) of Section 5.7 of the Agreement,
or (D) resolved to do any of the foregoing;
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(d) any of the representations or warranties of the Company
set forth in the Agreement that are qualified by materiality or Material Adverse
Effect shall not be true and correct, or any of the representations and
warranties of the Company set forth in the Agreement that are not so qualified
shall not be true and correct in all material respects, in each case, as if such
representations or warranties were made as of such time on or after the date of
the Agreement (except to the extent such representations and warranties speak as
of a specific date or as of the date hereof, in which case such representations
and warranties shall not be so true and correct or true and correct in all
material respects, as the case may be, as of such specific date or as of the
date hereof, respectively);
(e) the Company or any of its Subsidiaries shall have failed
to perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of the Company to be performed or
complied with by it under the Agreement;
(f) the Agreement shall have been terminated in accordance
with its terms; or
(g) The proceeds of the Requisite Financing shall not be
available to Parent and Purchaser on the terms set forth in the Commitment
Letter which, in the reasonable good faith judgment of the Purchaser in any such
case, and regardless of the circumstances (including any action or inaction by
the Parent or any of its affiliates) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the benefit of the Purchaser
and the Parent and may be asserted by the Purchaser or the Parent regardless of
the circumstances giving rise to any such condition or may be waived by the
Purchaser or the Parent in whole or in part at any time and from time to time in
their reasonable discretion. The failure by the Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right; the waiver of any such right with respect to particular facts and
other circumstances shall not be deemed a waiver with respect to any other facts
and circumstances; and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time.
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