EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION ("Reorganization Agreement" or
"Agreement"), dated as of March 22, 2002, by and among SPACELABS MEDICAL, INC.
("Company"), a Delaware corporation having its principal executive office at
00000 X.X. 00xx Xxxxxx, Xxxxxxx, XX 00000-0000, INSTRUMENTARIUM CORPORATION
("Buyer"), a Finnish corporation, having its principal executive office at
Xxxxxxxxxxxxxx 0, Xxxxxxxx, X.X. Xxx 000, FIN-00031 INSTRUMENTARIUM, and BOXER
ACQUISITION CORP. ("Merger Sub"), a Delaware corporation having its principal
executive office at Xxxxxxxxxxxxxx 0, Xxxxxxxx, X.X. Xxx 000, FIN-00031
INSTRUMENTARIUM.
WITNESSETH
WHEREAS, the parties hereto desire that the Company shall be acquired by
Buyer through the merger ("Merger") of Merger Sub with and into the Company,
with the Company as the surviving corporation, pursuant to an Agreement and Plan
of Merger substantially in the form attached hereto as Annex A ("Plan of
Merger");
WHEREAS, the parties hereto desire to provide for certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.01 "Closing Date" shall mean the date determined pursuant to Section
4.07 hereof as the date on which the parties hereto shall close the transactions
contemplated herein.
1.02 "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.03 "Commission" or "SEC" shall mean the Securities and Exchange
Commission.
1.04 "Company Financial Statements" shall mean (a) the audited
consolidated balance sheets of the Company as of December 31, 2001, and December
31, 2000, and the related consolidated statements of income, cash flows and
changes in stockholders' equity (including related notes, if any) for each of
the three years ended December 31, 2001, 2000 and 1999, in each case as filed by
the Company in SEC Documents and (b) the consolidated balance sheets of the
Company and related consolidated statements of income, cash flows and changes in
stockholders' equity (including related notes, if any) as filed by Company in
SEC Documents with respect to periods ended subsequent to December 31, 2001.
1.05 "DGCL" shall mean the Delaware General Corporation Law.
1.06 "Effective Date" shall mean the date specified pursuant to Section
4.07 hereof as the effective date of the Merger.
1.07 "Encumbrance" shall mean any lien, claim, mortgage, conditional or
installment sales agreement, security interest, pledge, option, easement, right
of way, right of first refusal, agreement or limitation on voting rights, charge
or any other encumbrance of any nature whatsoever.
1.08 "Environmental Claim" shall mean any written notice from any
Governmental Entity or third party alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries or penalties) arising out of, based on, or resulting from the
presence, or release into the environment, of any Materials of Environmental
Concern or any materials containing Materials of Environmental Concern.
1.09 "Environmental Laws" shall mean any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction, any administrative or
judicial interpretation thereof, or any agreement with any Governmental Entity
relating to (a) the pollution, protection, preservation or restoration of the
environment (including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil, plant and
animal life or any other natural resource), health, safety or natural resources,
and/or (b) the manufacture, use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release, threatened
release or disposal of Materials of Environment Concern or materials containing
Materials of Environmental Concern. The term Environmental Law includes, without
limitation, (x) the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601, et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901, et seq.; the
Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq.; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 9601, et seq.; the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Section 1101, et
seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq.; the
Hazardous Materials Transportation Act, as amended, 49 U.S.C. Section 5101, et
seq.; the Atomic Energy Act, as amended, 42 U.S.C. Section 2014, et seq.; and
all comparable state and local laws, and (y) any common law (including, without
limitation, common law that may impose strict liability) that may impose
liability or obligations for injuries or damages due to, or threatened as a
result of, the presence of or exposure to any Materials of Environmental Concern
or any materials containing Materials of Environmental Concern.
1.10 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.11 "ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company is treated as a "single employer"
under Section 414 of the Code.
1.12 "Governmental Entity" shall mean any United States federal state,
county or local or non-United States or supra-national court, tribunal, judicial
or arbitral body, administrative agency or commission or other governmental
authority or instrumentality.
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1.13 "Intellectual Property" means (i) patents and patent applications,
(ii) trademarks, service marks, domain names, trade dress, logos, trade names,
corporate names and other source identifiers, and registrations and applications
for registration thereof, (iii) copyrightable works, copyrights, and
registrations and applications for registration thereof, (iv) confidential and
proprietary information, including trade secrets and know-how, manufacturing
processes and methods, formulae and technology, and (v) computer software.
1.14 "Licensed Intellectual Property" means Intellectual Property
licensed to the Company or a Company Subsidiary and material to the business,
financial condition or results of operations of the Company and the Company
Subsidiaries taken as a whole.
1.15 "Material Adverse Effect" shall mean, with respect to the Company
or Buyer, as the case may be, any event, circumstance, change or effect that,
individually or in the aggregate with all other events, circumstances, changes
and effects (i) has had, has, or could reasonably be expected to have, a
material adverse effect on the financial condition, results of operations or
business of such party and its subsidiaries taken as a whole or (ii) materially
delays, or could reasonably be expected to materially delay, consummation of the
Merger or otherwise prevent or materially delay the Company or the Buyer, as the
case may be, from performing its obligations under this Reorganization Agreement
or the Plan of Merger; provided, however, that Material Adverse Effect shall not
be deemed to include (a) the impact of changes in general economic and/or
financial market conditions, (b) the impact of changes affecting the medical
device industry generally, except those events, circumstances, changes or
effects that adversely affect the Company and the Company Subsidiaries to a
greater extent than they affect other entities operating in such industry, (c)
the impact of changes affecting the clinical information systems industry
generally, except those events, circumstances, changes or effects that adversely
affect the Company and the Company Subsidiaries to a greater extent than they
affect other entities operating in such industry, (d) actions or omissions of a
party (or any of its subsidiaries) taken with the prior consent of the other
party in contemplation of the transactions contemplated hereby, (e) the fees and
expenses of the Company's third party advisors engaged in connection with the
transactions contemplated hereby or any filing or other governmental fees
related to the transactions contemplated hereby, or (f) the impact of changes
resulting from the identity of the Buyer.
1.16 "Materials of Environmental Concern" shall mean pollutants,
contaminants, wastes, toxic or hazardous substances, materials or chemicals
defined in or regulated under Environmental Laws, including petroleum, petroleum
products, crude oil and any fractions thereof, natural gas, synthetic gas and
any mixtures thereof, polychlorinated biphenyls, asbestos and radon.
1.17 "Owned Intellectual Property" means Intellectual Property owned by
the Company or a Company Subsidiary and material to the business, financial
condition or results of operations of the Company and the Company Subsidiaries
taken as a whole.
1.18 "Previously Disclosed" shall mean disclosed prior to the execution
hereof in (a) an SEC Document filed with the SEC subsequent to January 1, 2000
and prior to the date hereof, or (b) the disclosure letter dated of even date
herewith (the "Disclosure Letter") from the party making such disclosure and
delivered to the other party prior to the execution hereof. Any
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information so disclosed by one party to the other shall be deemed to be
disclosed for all purposes hereunder, so long as such disclosure contains
sufficient factual detail to render its relevance to such other purpose readily
apparent. The inclusion of any matter in information Previously Disclosed shall
not be deemed an admission or otherwise to imply that any such matter is
material for purposes of this Reorganization Agreement.
1.19 "Proxy Statement" shall mean the proxy statement (or similar
document), together with any supplements thereto, sent to the stockholders of
the Company to solicit their votes in connection with this Reorganization
Agreement and the Plan of Merger.
1.20 "Rights" shall mean warrants, options, rights, convertible
securities and other agreements, arrangements or commitments of any character
which obligate an entity to issue or dispose of any of its capital stock or
other equity interests, and stock appreciation rights, performance units and
other similar stock-based rights whether they obligate the issuer thereof to
issue stock or other securities or to pay cash.
1.21 "Rights Agreement" shall mean the Rights Agreement dated June 26,
1992, as amended, between the Company and First Chicago Trust Company of New
York, as Rights Agent.
1.22 "SEC Documents" shall mean all reports, forms and schedules and
registration statements filed, or required to be filed, by a party hereto
pursuant to the Securities Laws.
1.23 "Securities Act" shall mean the Securities Act of 1933, as amended.
1.24 "Securities Laws" shall mean the Securities Act; the Securities
Exchange Act of 1934, as amended; the Investment Company Act of 1940, as
amended; the Investment Advisers Act of 1940, as amended; the Trust Indenture
Act of 1939, as amended; and the rules and regulations of the Commission
promulgated thereunder.
1.25 "Tax" or "Taxes" means any federal, state, local or foreign income,
gross receipts, property, sales, use, license, excise, franchise, employment,
payroll, withholding, alternative or add on minimum, ad valorem, transfer or
excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto,
imposed by any Governmental Entity.
1.26 "Tax Return" means any federal, state, local, foreign and other
applicable return, declaration, report, claim for refund, information return or
similar statement required to be filed by or with a Governmental Entity with
respect to any Tax (including any attached schedules) and including any
amendments thereof.
1.27 The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise (i) any definition of or reference to any agreement,
instrument or other
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document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (ii) any reference herein to any entity shall be construed to
include the entity's successors and permitted assigns, (iii) the words "herein,"
"hereof" and "hereunder," and words of similar import, shall be construed to
refer to this Reorganization Agreement in its entirety and not to any particular
provision hereof, (iv) all references herein to Articles, Sections or Exhibits
shall be construed to refer to Articles, Sections or Exhibits of this
Reorganization Agreement, and (v) all references to any statute, ordinance or
other law shall mean such statute, ordinance or other law as amended as of the
date of this Reorganization Agreement.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer as follows:
2.01 Capital Structure of the Company
(a) The authorized capital stock of the Company consists of (i)
50,000,000 shares of common stock, $0.01 par value ("Company Common Stock"), and
(ii) 6,000,000 shares of preferred stock, par value $1.00 per share ("Company
Preferred Stock"), 500,000 shares of which have been designated as "Series A
Participating Cumulative Preferred Stock" and reserved for issuance upon the
exercise of preferred share purchase rights under the Rights Agreement. As of
March 21, 2002, (i) 9,764,904 shares of Company Common Stock are issued and
outstanding (which number includes all shares of restricted stock), (ii)
1,525,914 shares of Company Common Stock are held in treasury of the Company,
and (iii) no shares of Company Preferred Stock are issued and outstanding or
held in treasury of the Company.
(b) As of March 21, 2002, 3,420,948 shares of Company Common Stock were
reserved for issuance, of which 2,597,775 shares of Company Common Stock were
reserved for issuance upon the exercise of stock options to purchase shares of
Company Common Stock (the "Company Options") heretofore granted pursuant to the
Company 1993 Non-Officer Employee Option, Stock Appreciation Right, Restricted
Stock, Stock Grant and Performance Unit Plan, as amended, effective November 18,
1993 (the "1993 Plan"), the Company 1992 Option, Stock Appreciation Right,
Restricted Stock, Stock Grant and Performance Unit Plan, as amended and restated
May 10, 1995 (the "1992 Plan"), the Lifeclinic Holding Corporation 2000
Long-Term Incentive Plan, and any other stock option, stock purchase or
restricted stock plan or arrangement (collectively, the "Company Option Plans").
No other shares of Company Common Stock are reserved for issuance. Except as set
forth in Section 2.01(a), there are no shares of Company Preferred Stock
reserved for issuance. Since December 31, 2001, no shares of Company Common
Stock and no shares of Company Preferred Stock have been issued other than
pursuant to Rights outstanding as of such date. All outstanding shares of
Company Common Stock have been duly issued and are validly outstanding, fully
paid and nonassessable.
(c) The Company does not have and is not bound by any Rights which are
authorized, issued or outstanding with respect to the capital stock of the
Company, except as
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Previously Disclosed and except for Rights issued pursuant to the Rights
Agreement. None of the shares of the Company's capital stock has been issued in
violation of the preemptive rights of any person.
(d) Except as set forth in Section 2.01(d) of the Disclosure Letter,
there are no commitments or agreements of any character to which the Company is
bound obligating the Company to accelerate the vesting of any Company Option as
a result of the Merger. All outstanding shares of Company Common Stock, all
outstanding Company Options, and all outstanding shares of capital stock of each
Company Subsidiary have been issued and/or granted in compliance with (i) all
applicable Securities Laws and other applicable laws and (ii) all requirements
set forth in applicable contracts.
2.02 Organization, Standing and Authority of the Company
The Company is a duly organized corporation, validly existing and in
good standing under the laws of Delaware and has full corporate power and
authority to carry on its business as it is now conducted and is duly licensed
or qualified to do business, and is in good standing, in the states of the
United States and foreign jurisdictions where its ownership or leasing of
property or the conduct of its business requires such licensing or
qualification, except where the failure to be so licensed or qualified would not
have a Material Adverse Effect on the Company. The Company has heretofore
delivered to Buyer true and complete copies of the Certificate of Incorporation
("Articles") and Bylaws ("Bylaws") of the Company as in effect at the date
hereof. The Company is not in violation of any of the provisions of its
articles/certificate of incorporation or bylaws, except as Previously Disclosed.
The Company Subsidiaries are not in violation of any of their respective
articles/certificate of incorporation or bylaws, which violations, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect on the Company.
2.03 Ownership of Company Subsidiaries; Capital Structure of Company
Subsidiaries
(a) Section 2.03(a) of the Disclosure Letter contains a true and
complete list of all corporations, partnerships, joint ventures and other
associations or entities of which the Company owns, directly or indirectly,
fifty percent (50%) or more of the outstanding capital stock, voting securities
or other equity interests (collectively, the "Company Subsidiaries" and,
individually, a "Company Subsidiary"), together with the jurisdiction of
incorporation of each Company Subsidiary and the percentage of the outstanding
capital stock, voting interests or other equity interests held by the Company in
each such Company Subsidiary. The outstanding shares of capital stock of each
Company Subsidiary that is a corporation and the outstanding equity interests of
each Company Subsidiary that is not a corporation are duly authorized, validly
issued and outstanding, fully paid and nonassessable and, except as Previously
Disclosed, all such shares and equity interests are directly or indirectly owned
by Company free and clear of all Encumbrances. Except as Previously Disclosed,
no Company Subsidiary has or is bound by any Rights, which are authorized,
issued or outstanding with respect to the capital stock of any Company
Subsidiary, and, except as Previously Disclosed, there are no agreements,
understandings or commitments relating to the right of the Company to dispose of
said shares and there are no agreements, understandings or commitments with any
person that is not an affiliate of the Company or an officer, director, employee
or agent of the Company or a
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Company Subsidiary relating to the right of the Company to vote said shares.
None of the shares of capital stock of any Company Subsidiary has been issued in
violation of the preemptive rights of any person. There are no outstanding
contractual obligations of the Company or any Company Subsidiary to repurchase,
redeem or otherwise acquire any shares of any capital stock of any Company
Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Company Subsidiary or any other
person.
(b) Section 2.03(b) of the Disclosure Letter lists any and all
corporations, partnerships, joint ventures or other business associations or
entities of which the Company directly or indirectly owns an equity or similar
interest, or an interest convertible into or exchangeable or exercisable for an
equity or similar interest, of less than fifty percent (50%) (collectively, the
"Investments"). Except as Previously Disclosed, the Company or the Company
Subsidiary, as the case may be, owns all Investments free and clear of all
Encumbrances. There are no outstanding contractual obligations of the Company or
any Company Subsidiary permitting the repurchase, redemption or other
acquisition of any of its interest in the Investments or to provide funds to, or
make any investment (in the form of a loan, capital contribution or otherwise)
in, or provide any guarantee with respect to, any Investment.
2.04 Organization, Standing and Authority of Company Subsidiaries
Each Company Subsidiary is a duly organized corporation or limited
liability company, validly existing and in good standing under applicable laws.
Each Company Subsidiary (a) has full power and authority to carry on its
business as it is now conducted, and (b) is duly licensed or qualified to do
business, and is in good standing, in the states of the United States and
foreign jurisdictions where its ownership or leasing of property or the conduct
of its business requires such licensing or qualification and where failure to be
so licensed or qualified would have a Material Adverse Effect on the Company.
2.05 Authorized and Effective Agreement
(a) The Company has all requisite corporate power and authority to
execute and deliver this Reorganization Agreement and the Plan of Merger and to
perform all of its obligations under this Reorganization Agreement and the Plan
of Merger. The execution and delivery of this Reorganization Agreement and the
Plan of Merger and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
in respect thereof on the part of the Company, except that, with respect to the
Merger, the affirmative vote of the holders of a majority of the outstanding
shares of Company Common Stock is the only stockholder vote required to approve
the Plan of Merger pursuant to the Delaware General Corporation Law and the
Company's Articles and Bylaws. The Board of Directors of the Company has
directed that this Reorganization Agreement and the Plan of Merger be submitted
to the Company's stockholders for approval at a special meeting to be held as
soon as practicable.
(b) This Reorganization Agreement and the Plan of Merger each have been
duly and validly executed and delivered by the Company and, assuming the
accuracy of the representation contained in Section 3.02(b) hereof, constitute
legal, valid and binding obligations of the Company, enforceable against it in
accordance with their respective terms, subject, as to
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enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
2.06 Consents and Approvals; No Violation
(a) Except as set forth in Section 2.06 of the Disclosure Letter, the
execution and delivery of this Reorganization Agreement and the Plan of Merger
by the Company do not, and the performance of the obligations contained in this
Reorganization Agreement and the Plan of Merger by the Company will not, (i)
conflict with, violate or result in a breach of any provision of the articles or
certificate of incorporation or association, charter or bylaws of the Company or
any Company Subsidiary; (ii) constitute or result in a breach of any term,
condition or provision of, or constitute a default (or an event which, with
notice or the passage of time or both, would become a default) under, or give
rise to any right of termination, amendment, cancellation, payment or
acceleration with respect to, or result in the creation of any Encumbrance upon
any property or asset of the Company or any Company Subsidiary pursuant to, any
note, bond, mortgage, indenture, contract, lease, permit, franchise, license,
agreement or other instrument or obligation; or (iii) conflict with or violate
any United States or non-United States law, ordinance, code, judgment, order,
writ, injunction, decree, statute, rule or regulation applicable to the Company
or any Company Subsidiary or by which any property or asset of the Company or
any Company Subsidiary is bound or affected, except (in the case of clauses (ii)
and (iii) above) for such violations, rights, conflicts, breaches, creations or
defaults which, either individually or in the aggregate, will not have a
Material Adverse Effect on the Company.
(b) Except as contemplated by this Agreement, as Previously Disclosed,
as may be required in connection, or in compliance, with the provisions of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), or as may be required under similar foreign or supranational competition
laws, no consent, approval, permit or authorization of, or declaration, notice,
filing or registration with, any Governmental Entity, or any other person, is
required to be made or obtained by the Company or any Company Subsidiary in
connection with the execution, delivery and performance of this Reorganization
Agreement and the Plan of Merger or the consummation of the transactions
contemplated hereby or thereby, other than consents, approvals, authorizations,
declarations, notices, filings or registrations that if not obtained or made
would not have a Material Adverse Effect on the Company.
2.07 SEC Documents
The Company has filed all SEC Documents required to be filed by it under
the Securities Law. The SEC Documents (i) were prepared in accordance with the
requirements of the Securities Laws, and (ii) did not, at the time they were
filed, or, if amended, as of the date of such amendment, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. No
Company Subsidiary is required to file any form, report, schedule or other
document with the SEC.
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2.08 Financial Statements; Books and Records
The Company Financial Statements were prepared in accordance with United
States generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q of
the SEC) and fairly present the consolidated financial position, results of
operation, changes in stockholders' equity and cash flows of the Company and its
consolidated subsidiaries as at the respective dates thereof and for the
respective periods indicated therein. The books and records of the Company and
each Company Subsidiary fairly reflect in all material respects the transactions
to which it is a party or by which its properties are subject or bound. Such
books and records have been properly kept and maintained and are in compliance
in all material respects with all applicable legal and accounting requirements.
The minute books of the Company and the Company Subsidiaries each contain
records which are accurate in all material respects of all corporate actions of
such entity's stockholders and Board of Directors (including committees of its
Board of Directors).
2.09 Material Adverse Change
Except as Previously Disclosed, since December 31, 2001, (a) the Company
has and the Company Subsidiaries have conducted their respective businesses only
in the ordinary course and in a manner consistent with past practice (excluding
the incurrence of expenses in connection with this Reorganization Agreement and
the transactions contemplated hereby), and (b) no event has occurred or
circumstance arisen that, individually or in the aggregate, has had a Material
Adverse Effect on Company.
2.10 Absence of Undisclosed Liabilities
Except as Previously Disclosed, neither the Company nor any Company
Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise), that is material to the Company on a
consolidated basis, or that, when combined with all similar liabilities, would
be material to the Company on a consolidated basis, except as and to the extent
disclosed in the Company Financial Statements, and except for liabilities
incurred in the ordinary course of business consistent with past practice
subsequent to December 31, 2001.
2.11 Properties
All real and personal property owned by the Company or any Company
Subsidiary or presently used by any of them in its respective business is in
good working condition (ordinary wear and tear excepted) and is sufficient to
carry on its business in the ordinary course of business consistent with its
past practices. Except as Previously Disclosed, the Company and the Company
Subsidiaries have good and marketable title free and clear of all Encumbrances
to all of the properties and assets, real and personal, which, individually or
in the aggregate, are material to the business of the Company and the Company
Subsidiaries taken as a whole, and which are reflected on the Company Financial
Statements, as of December 31, 2001, or acquired after such date, except (a)
liens for current taxes not yet due and payable, (b) such imperfections of
title, easements and encumbrances, if any, as are not, individually or in the
aggregate, material in character, amount or extent, and (c) dispositions and
encumbrances for adequate consideration
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in the ordinary course of business consistent with past practice. Except as
Previously Disclosed, all real and personal property which is material to the
business of the Company and the Company Subsidiaries taken as a whole, and which
is leased or licensed by the Company or a Company Subsidiary is held pursuant to
leases or licenses which are valid and enforceable in accordance with their
respective terms (including all amendments and modifications thereto); such
leases and licenses will not terminate or lapse prior to the Effective Date; and
there exists no default by the Company or any Company Subsidiary under any such
lease or license, nor has any event occurred which, with the giving of notice or
the passage of time or both, would constitute a default thereunder by the
Company or any Company Subsidiary, except as would not have a Material Adverse
Effect on the Company. Except as Previously Disclosed, there are no contractual
or legal restrictions that preclude or restrict the ability to use any real
property owned or leased by the Company or any Company Subsidiary for the
purposes for which it is currently being used. There are no latent defects or
adverse physical conditions affecting the real property, and improvements
thereon, owned or leased by the Company or any Company Subsidiary other than
those that would not have a Material Adverse Effect on the Company.
2.12 Tax Matters
Except as Previously Disclosed:
(a) Each of the Company and the Company Subsidiaries has timely filed
(or there has been filed on its behalf) all Tax Returns required to have been
filed by each of them under applicable law, except where the failure to file
such Tax Returns would not, in the aggregate, have a Material Adverse Effect on
the Company. All such filed Tax Returns are complete and accurate in all
material respects. All Taxes shown to be due on such filed Tax returns have been
timely paid or adequate reserves have been established for the payment of such
Taxes, except where any such failure to pay or establish adequate reserves would
not, in the aggregate, have a Material Adverse Effect on the Company.
(b) The Company and the Company Subsidiaries have withheld or collected
and paid over to the appropriate governmental authorities (or are properly
holding for such payment) all Taxes required by law to be withheld or collected,
except for amounts that would not, in the aggregate, have a Material Adverse
Effect on the Company.
(c) There are no ongoing audits, examinations or other administrative or
court proceedings of any Tax Returns of the Company or the Company Subsidiaries,
and none of the Company or the Company Subsidiaries has received written
notification from any taxing authority that any such audit, examination or
proceeding is contemplated or pending. None of the Company or any Company
Subsidiary is delinquent in the payment of any material Taxes, and none of them
has requested any extension of time within which to file any Tax Returns which
have not since been filed. No material deficiencies for any Taxes have been
proposed, asserted or assessed in writing against the Company or any Company
Subsidiary which have not been settled and paid. There are currently no
agreements or waivers in effect with respect to the Company or any Company
Subsidiary to extend the period of limitations for the assessment or collection
of any Tax.
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(d) There are no material Tax liens upon any property or assets of the
Company or any of the Company Subsidiaries other than for Taxes not yet due and
payable. Neither the Company nor any of the Company Subsidiaries (i) has filed a
consent to the application of Section 341(f) of the Code; (ii) is a party to any
Tax sharing, allocation or indemnification agreement or arrangement other than
an agreement exclusively among the Company and the Company Subsidiaries; (iii)
is a party to any agreement or arrangement that would result, separately or in
the aggregate, in the actual or deemed payment by the Company or any of the
Company Subsidiaries of any "excess parachute payments" within the meaning of
Section 280G of the Code (without regard to Section 280G(b)(4)); and (iv) has
been a member of an affiliated group filing a consolidated, combined or unitary
Tax Return (other than the affiliated group of which the Company is the common
parent) or has any liability for the Taxes of any person (other than the Company
or the Company Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any
similar provision of state, local or foreign law). No power of attorney that is
currently in force has been granted with respect to any matter relating to Taxes
that could affect the Company or the Company Subsidiaries.
2.13 Employee Benefit Plans
(a) Section 2.13(a) of the Disclosure Letter lists all material employee
benefit plans (as defined in Section 3(3) of ERISA), stock option plans, stock
purchase plans, restricted stock plans, supplemental retirement plans and
severance pension or profit-sharing plans that are intended to be tax-qualified,
deferred compensation, incentive, bonus or insurance contracts and other
material employee benefit plans and all material employment, termination,
severance or other contracts or arrangements maintained by the Company or any
Company Subsidiary for the benefit of employees or former employees of the
Company or any Company Subsidiary (the "Company Plans"), and the Company has
made available to Buyer true and complete copies of all such Company Plans. The
Company has made available to Buyer true and complete copies of (i) the most
recent actuarial and financial reports, if any, prepared by or on behalf of any
Company or any Company Subsidiary with respect to the Company Plans; (ii) the
most recent annual reports, if any, filed by or on behalf of any Company or any
Company Subsidiary with any government agency with respect to the Company Plans;
and (iii) the most recent determination letter, if any, for each Company Plan
that is intended to be tax-qualified. Each of the Company Plans has been
operated and administered in all material respects in accordance with its terms
and applicable laws, including, but not limited to, ERISA and the Code, except
to the extent that any failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. Except as Previously Disclosed, no material action, claim or proceeding
is pending or, to the knowledge of the Company, threatened with respect to any
Company Plan (other than claims for benefits in the ordinary course) and no fact
or event exists that could reasonably be expected to give rise to any such
action, claim or proceeding.
(b) No liability under Title IV of ERISA has been incurred by the
Company or by any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to the Company or any ERISA
Affiliate of incurring a liability under such Title other than liability for the
payment of PBGC premiums, which have been or will be paid when due.
-11-
(c) None of the Company Plans is a "multiemployer plan" (as defined in
Section 3(37) of ERISA) or a single employer plan that has two or more
contributing sponsors, at least two of whom are not under common control, within
the meaning of Section 4063(a) of ERISA.
(d) A favorable determination letter has been issued by the Internal
Revenue Service with respect to each Company Plan that is intended to be a
tax-qualified plan to the effect that such Company Plan is qualified under
Section 401 of the Code, and no such letter has been revoked by the Internal
Revenue Service. Except as Previously Disclosed, to the knowledge of the
Company, no fact or event has occurred since the date of such determination
letter which could reasonably be expected to adversely affect the qualified
status of any such Company Plan.
(e) No prohibited transaction (which shall mean any transaction
prohibited by Section 406 of ERISA and not exempt under Section 408 of ERISA)
has occurred with respect to any Company Plan which would result in the
imposition, directly or indirectly, of an excise tax under Section 4975 of the
Code that would have, individually or in the aggregate, a Material Adverse
Effect on the Company.
(f) Except as would not have a Material Adverse Effect on the Company,
all contributions, premiums or payments required to have been made prior to the
date hereof with respect to any Company Plan have been made. No Company Plan had
an accumulated funding deficiency (within the meaning of section 302 of ERISA or
Section 412 of the Code), whether or not waived, as of the most recently ended
plan year of such Company Plan.
(g) Except as set forth in Section 2.13(g) of the Disclosure Letter, no
Company Plan provides benefits, including, without limitation, death or medical
benefits (whether or not insured), with respect to current or former employees
after retirement or other termination of service, other than (i) coverage
mandated by applicable law; (ii) death benefits or retirement benefits under any
"employee pension plan," as that term is defined in Section 3(2) of ERISA; (iii)
deferred compensation benefits accrued as liabilities on the books of the
Company or the ERISA Affiliates; or (iv) benefits, the full cost of which is
borne by the current or former employee (or his beneficiary).
(h) Except as set forth in Section 2.13(h) of the Disclosure Letter,
none of the Company Plans would, as a result of this Agreement or the
transactions contemplated hereby, (i) result in the payment of any "excess
parachute payment" within the meaning of Section 280G of the Code, (ii)
materially increase any benefits payable under any Company Plan, (iii) result in
the acceleration of vesting under any Company Plan, or (iv) result in any
material payment becoming due under any Company Plan.
(i) Except as set forth in Section 2.13(i) of the Disclosure Letter
neither the Company nor any Company Subsidiary is a party to any collective
bargaining or other labor union contract applicable to persons employed by the
Company or any Company Subsidiary. As of the date of this Agreement, there is no
labor dispute, strike or work stoppage against the Company or any Company
Subsidiary pending or, to the knowledge of the Company, threatened except where
such dispute, strike or work stoppage would not have a Material Adverse Effect
on the Company. As of the date of this Agreement, there is no charge or
complaint against the
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Company or any Company Subsidiary by the National Labor Relations Board or any
comparable state agency pending or threatened in writing.
(j) With respect to each Company Plan that is not subject to United
States Law (a "Foreign Benefit Plan"), to the knowledge of the Company:
(i) all material employer and employee contributions to each
Foreign Benefit Plan required by Law or by the terms of such Foreign
Benefit Plan have been made or, if applicable, accrued in accordance
with normal accounting practices;
(ii) the fair market value of the assets of each funded Foreign
Benefit Plan, the liability of each insurer for any Foreign Benefit Plan
funded through insurance or the book reserve established for any Foreign
Benefit Plan, together with any accrued contributions, is not materially
less than the amount necessary to procure or provide for the accrued
benefit obligations, as of the date of this Agreement, with respect to
all Foreign Benefit Plans and no transaction contemplated by this
Agreement shall cause such assets or insurance obligations to be
materially less than such benefit obligations; and
(iii) each Foreign Benefit Plan required to be registered has
been registered and has been maintained in good standing with applicable
regulatory authorities.
2.14 Certain Contracts
(a) Except as Previously Disclosed, neither the Company nor any Company
Subsidiary is a party to, or is bound by,
(i) any "material contract" as defined in Item 601(b)(10) of
Regulation S-K under the Securities Laws;
(ii) any written contracts or agreements pursuant to which the
Company paid any third party vendor in excess of $1,000,000 during the
twelve-month period prior to February 24, 2002;
(iii) any agreement, indenture or other instrument relating to
the borrowing of money by the Company or any Company Subsidiary of an
amount exceeding $250,000 or any guarantee by the Company or any Company
Subsidiary of any such obligation, or any guarantee by the Company or
any Company Subsidiary of any other indebtedness other than a guarantee
of the indebtedness of the Company or another Company Subsidiary;
(iv) any agreement, arrangement or commitment relating to the
employment of a consultant who was formerly a director or executive
officer or the employment, election, retention in office or severance of
any present or former director or executive officer;
(v) any contract, agreement or understanding with a labor union,
in each case whether written or oral;
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(vi) any contract, agreement or understanding with any current
or former officer, director or employee of the Company or any Company
Subsidiary relating to the provision of benefits (other than the Company
Plans);
(vii) any contract or agreement that limits, or purports to
limit, in a manner material to the Company or any Company Subsidiary,
the ability of the Company or any Company Subsidiary to compete in any
line of business or with any person or entity or in any geographic area
or during any period of time;
(viii) any contract, arrangement or agreement that results in
any person or entity that is not an affiliate, officer or director,
employee or agent of the Company or any Company Subsidiary holding a
power of attorney from the Company or any Company Subsidiary that
relates to the Company, any Company Subsidiary or their respective
businesses;
(ix) any contract, arrangement or agreement that results in an
affiliate, officer or director, employee or agent of the Company or any
Company Subsidiary holding an irrevocable power of attorney from the
Company or any Company Subsidiary that relates to the Company, any
Company Subsidiary or their respective businesses; or
(x) any contract or agreement that restricts the use by the
Company or any Company Subsidiary of any Owned Intellectual Property or
the Licensed Intellectual Property (other than, in the case of the
Licensed Intellectual Property, the contract, license or other agreement
granting the Company or any Company Subsidiary the right to use such
Licensed Intellectual Property).
Any and all contracts, agreements and arrangements listed in Section 2.14 of the
Disclosure Letter and all other contracts, arrangements and agreements, whether
or not made in the ordinary course of business, which are material to the
Company and the Company Subsidiaries taken as a whole or the absence of which
would have a Material Adverse Effect on the Company, are collectively referred
to herein as the "Material Contracts."
(b) Except as Previously Disclosed in Section 2.14(b) of the Disclosure
Letter, (i) each Material Contract is a legal, valid and binding agreement, and
neither the Company nor any Company Subsidiary is in any material respect in
breach or violation, or default under, any Material Contract, and no Material
Contract has been canceled by the other party; (ii) to the Company's knowledge,
no other party is in breach or violation of, or default under, any Material
Contract; (iii) the Company and the Company Subsidiaries are not in receipt of
any claim of default under any Material Contract; and (iv) neither the execution
of this Reorganization Agreement and the Plan of Merger nor the consummation of
the transactions contemplated hereby or thereby shall constitute a default, give
rise to cancellation rights, or otherwise adversely affect any of the Company's
rights under any Material Contract. The Company has furnished or made available
to Buyer true and complete copies of all Material Contracts, including any
amendments thereto.
(c) The Company has heretofore furnished to Buyer complete and correct
copies of all amendments and modifications that have not been filed by the
Company with the SEC to all
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agreements, documents and other instruments that previously had been filed by
the Company with the SEC which are currently in effect.
2.15 Environmental Matters
Except as Previously Disclosed:
(a) The Company and the Company Subsidiaries are in compliance with all
Environmental Laws, except for any violations of any Environmental Law which
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. All past non-compliance with Environmental Laws has been resolved
without any pending, on-going or future obligation, cost or liability which
would, individually or in the aggregate, have a Material Adverse Effect on the
Company. Neither the Company nor any Company Subsidiary has received any
communication alleging that the Company or a Company Subsidiary is not in such
compliance and, to the Company's knowledge, there are no present circumstances
that would prevent or interfere with the continuation of such compliance,
including with respect to any off-site disposal location presently or formerly
used by the Company or any Company Subsidiary or any of its predecessors, or
with respect to any previously owned or operated facilities.
(b) None of the properties owned, leased or operated by the Company or a
Company Subsidiary has been or is in violation of or liable under any
Environmental Law, except any violations or liabilities which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
None of the properties owned, leased or operated by the Company or any Company
Subsidiary is listed or proposed for listing, or adjoins any other property that
is listed or proposed for listing, on the National Priorities List or the
Comprehensive Environmental Response, Compensation and Liability Information
System under the federal Comprehensive Environmental Response, Compensation, and
Liability Act or any analogous federal, state or local list.
(c) There are no past or present actions, activities, circumstances,
conditions, events or incidents that could reasonably form the basis of any
Environmental Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any Environmental
Law against the Company or a Company Subsidiary or against any person or entity
whose liability for any Environmental Claim the Company or a Company Subsidiary
has or may have retained or assumed either contractually or by operation of law,
except such which would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(d) Section 2.15(d) of the Disclosure Letter lists all material
environmental assessments or audit reports or other similar environmental
studies or analyses relating to any properties owned, leased or operated by the
Company or any Company Subsidiary, and the Company has made available true and
correct copies of all such reports, studies, and analyses to the Buyer.
2.16 Legal Proceedings
Except as Previously Disclosed, there is no litigation, claim, action,
suit, investigation or proceeding (an "Action") instituted, pending or, to the
knowledge of the Company, threatened
-15-
against the Company or any Company Subsidiary or against any property, asset,
interest or right of the Company or any Company Subsidiary as to which there is
a reasonable probability of an unfavorable outcome and which, if such an
unfavorable outcome was rendered, would, individually or in the aggregate, have
a Material Adverse Effect on the Company. There are no Actions instituted,
pending or, to the knowledge of the Company, threatened which present a claim to
(a) materially delay, restrain or prohibit, the Merger and/or the transactions
contemplated herein or (b) impose any liability in connection therewith as to
which there is a reasonable probability of an unfavorable outcome and which, if
such an unfavorable outcome was rendered, would, individually or in the
aggregate, have a Material Adverse Effect on the Company. Except as Previously
Disclosed, neither the Company nor any Company Subsidiary nor any property or
asset of the Company or any Company Subsidiary is subject to any continuing
order of, consent decree, settlement agreement or other similar written
agreement with, or, to the knowledge of the Company, continuing investigation
by, any Governmental Entity, or any order, writ, judgment, injunction, decree,
determination or award of any Governmental Entity that would have a Material
Adverse Effect on the Company.
2.17 Permits; Compliance with Laws
Except as Previously Disclosed, each of the Company and the Company
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for each of the
Company or the Company Subsidiaries to own, lease and operate its properties or
to carry on its business as it is now being conducted or as is contemplated to
be conducted (the "Permits"), except where the failure to have, or the
suspension or cancellation of, any of the Permits would not have a Material
Adverse Effect on the Company. As of the date of this Agreement, no suspension
or cancellation of any of the Permits is pending or, to the knowledge of the
Company, threatened, except where the failure to have, or the suspension or
cancellation of, any of the Permits would not have a Material Adverse Effect on
the Company. Except as Previously Disclosed, neither the Company nor any Company
Subsidiary is in conflict with, or in default under, breach or violation of, (a)
any law applicable to the Company or any Company Subsidiary or by which any
property or asset of the Company or any Company Subsidiary is bound or affected,
or (b) any note, bond, mortgage, indenture, contract, agreement, lease, license,
Permit, franchise or other instrument or obligation to which the Company or any
Company Subsidiary is a party or by which the Company or any Company Subsidiary
or any property or asset of the Company or any Company Subsidiary is bound,
except for any such conflicts, defaults, breaches or violations that would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
2.18 Intellectual Property
(a) Section 2.18 of the Disclosure Letter sets forth a true and complete
list of all patents, patent applications, registered trademarks, trademark
applications, registered copyrights and applications for copyright
registrations, and domain names included in the (i) Owned Intellectual Property
or (ii) Licensed Intellectual Property.
(b) The Company and each Company Subsidiary owns or has the right to
use, and after consummation of the transactions contemplated in this
Reorganization Agreement will own
-16-
or have the right to use, free and clear of any material outstanding decrees,
orders, injunctions, judgments or claims by any third party, all Owned
Intellectual Property and all Licensed Intellectual Property, and, to the
knowledge of the Company, such Owned Intellectual Property and Licensed
Intellectual Property are valid and enforceable. The Owned Intellectual Property
and the Licensed Intellectual Property include all of the material Intellectual
Property used in the ordinary day-to-day conduct of the business of the Company
and the Company Subsidiaries.
(c) Neither the Company nor any Company Subsidiary is, or will be, as a
result of the execution, delivery or performance of this Reorganization
Agreement, the Plan of Merger or the transactions contemplated hereby and
thereby, materially infringing or otherwise in material violation of any
third-party Intellectual Property rights.
(d) Except as Previously Disclosed, no claims contesting the validity,
enforceability, ownership or right to use, sell, license or dispose of (i) any
Owned Intellectual Property rights or (ii) any Licensed Intellectual Property
are currently pending or, to the knowledge of the Company, have been threatened
or asserted against the Company or any Company Subsidiary as to which there is a
reasonable probability of an unfavorable outcome and which, if such unfavorable
outcome was rendered, would have a Material Adverse Affect on the Company.
(e) Except as Previously Disclosed, the Company has not received any
written claim (i) to the effect that the making, using, selling, offering for
sale or licensing of any product or services now made, used, sold, offered for
sale or licensed by the Company or any Company Subsidiary, infringes any
Intellectual Property of any third party; (ii) against the use by the Company or
any Company Subsidiary of any Intellectual Property used in the business of the
Company or any Company Subsidiary as currently conducted or as proposed to be
conducted; (iii) challenging the ownership, validity or enforceability of any of
the Company's or any Company Subsidiary's rights with respect to the Owned
Intellectual Property; or (iv) challenging the Company's or any Company
Subsidiary's license to use any Licensed Intellectual Property.
(f) Except as Previously Disclosed, the Company has not received any
written claim to the effect that the operation of the business of the Company or
any Company Subsidiary as currently conducted and the use of the Owned
Intellectual Property and the Licensed Intellectual Property in connection
therewith, infringes the Intellectual Property or other proprietary rights of
any third party, and no actions or claims are pending or, to the knowledge of
the Company after due inquiry, there are no actions or claims threatened against
the Company or any Company Subsidiary alleging any of the foregoing as to which
there is a reasonable probability of an unfavorable outcome and which, if such
unfavorable outcome was rendered, would have a Material Adverse Effect on the
Company. To the knowledge of the Company, no third-party is engaging in any
activity that materially infringes or otherwise violates the Owned Intellectual
Property or the Licensed Intellectual Property.
2.19 Brokers and Finders
Neither the Company nor any Company Subsidiary, nor any of their
respective officers, directors or employees, has employed any broker, finder or
financial advisor or incurred or will incur any liability for any fees or
commissions in connection with the transactions contemplated herein or in the
Plan of Merger, except for the Company's retention of Xxxxxx Xxxxxx Xxxxxxxx &
-17-
Co., Inc. ("GKM") to perform certain financial advisory services. The Company
has heretofore furnished to Buyer a complete and current copy of all agreements
between the Company or any Company Subsidiary and GKM pursuant to which such
firm would be entitled to any payment relating to the transactions contemplated
hereby.
2.20 Insurance
(a) Section 2.20 of the Disclosure Letter sets forth a complete list of
the insurance coverage currently maintained by the Company and the Company
Subsidiaries. All material insurable risks of the Company and the Company
Subsidiaries in respect of the businesses of each are covered by such insurance
policies and the types and amounts of coverage provided therein are usual and
customary in the context of the businesses and operations in which the Company
and the Company Subsidiaries are engaged. Neither the Company nor any Company
Subsidiary has received any notice of a material premium increase or
cancellation with respect to any such insurance policies or bonds, and within
the last three years, neither the Company nor any Company Subsidiary has been
refused any insurance coverage sought or applied for or made any material
reduction in the scope or amount of its insurance coverage, and the Company has
no reason to believe that existing insurance coverage cannot be renewed as and
when the same shall expire, upon terms and conditions as favorable as those
presently in effect, other than possible increases in premiums or unavailability
in coverage that have not resulted from any loss experience of the Company or
any Company Subsidiary.
(b) Except as Previously Disclosed, with respect to each such insurance
policy maintained by the Company or any Company Subsidiary: (i) the policy is
legal, valid, binding and enforceable in accordance with its terms and, except
for policies that have expired under their terms in the ordinary course, is in
full force and effect; (ii) neither the Company nor any Company Subsidiary is in
material breach or default (including any such breach or default with respect to
the payment of premiums or the giving of notice), and no event has occurred
which, with notice or the lapse of time or both, would constitute such a breach
or default, or permit termination or modification, under the policy; and (iii)
to the knowledge of the Company, no insurer on the policy has been declared
insolvent or placed in receivership, conservatorship or liquidation.
2.21 Anti-takeover Provisions; Rights Agreement
(a) The Board of Directors of the Company has, to the extent such
statutes are applicable, taken all action (including the approval of the Board
of Directors of the Company) necessary to render the provisions of Section 203
of the DGCL inapplicable to the Merger, this Reorganization Agreement, the Plan
of Merger and the transactions contemplated hereby and thereby. To the knowledge
of the Company, no other state takeover statute or similar charter or bylaw
provisions are applicable to the Merger, this Reorganization Agreement, the Plan
of Merger and the transactions contemplated hereby and thereby.
(b) The Company has irrevocably and validly amended, and the Board of
Directors of the Company has taken all necessary action to irrevocably amend,
the Rights Agreement so that (a) none of the execution or delivery of this
Reorganization Agreement or the Plan of Merger or the consummation of the
transactions contemplated hereby or thereby will result in (i) the
-18-
occurrence of any of the events described in Section 11 of the Rights Agreement
or (ii) the Rights (as defined in the Rights Agreement) becoming evidenced by,
and transferable pursuant to, certificates separate from the certificates
representing shares, and (b) at the Effective Time, the Company Common Stock
will be converted into the consideration provided in the Plan of Merger and all
Rights (as defined in the Rights Agreement) attached thereto shall
simultaneously be extinguished.
2.22 Board Approval; Vote Required
(a) The Board of Directors of the Company, by resolutions duly adopted
by unanimous vote of those voting at a meeting duly called and held and not
subsequently rescinded or modified in any way, has duly (i) determined that this
Reorganization Agreement and the Plan of Merger are fair to and in the best
interests of the Company and its stockholders, (ii) approved this Reorganization
Agreement and the Plan of Merger and declared their advisability, and (iii)
recommended that the stockholders of the Company approve and adopt this
Reorganization Agreement and the Plan of Merger and directed that this
Reorganization Agreement and the Plan of Merger and the transactions
contemplated hereby and thereby be submitted for consideration by the Company's
stockholders at the Company Stockholders' Meeting.
(b) The only vote of the holders of any class or series of capital stock
of the Company necessary to approve this Reorganization Agreement, the Plan of
Merger and the transactions contemplated hereby and thereby is the affirmative
vote of the holders of a majority of the outstanding shares of Company Common
Stock in favor of the approval and adoption of this Reorganization Agreement and
the Plan of Merger.
2.23 Opinion of Financial Advisor
The Company has received the written opinion of GKM, dated the date of
this Reorganization Agreement, to the effect that, as of the date of this
Reorganization Agreement, the Merger Consideration is fair, from a financial
point of view, to the Company's stockholders, a copy of which opinion will be
delivered to Buyer promptly after the date of this Reorganization Agreement.
2.24 The Microsoft Lease
Upon the effectiveness of the Merger, the Lease Agreement dated as of
September 12, 2001 between Spacelabs Medical, Inc., a California corporation,
and Microsoft Corporation, a Washington corporation ("Microsoft") (the "Lease"),
will remain valid and in full force and effect. The consummation of the
transactions contemplated by this Agreement and the Plan of Merger will not give
Microsoft any right to terminate the Lease or to otherwise impair the rights of
the tenant thereunder.
-19-
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF BUYER AND MERGER SUB
Buyer and Merger Sub hereby jointly and severally represent and warrant
to the Company as follows:
3.01 Organization, Standing and Authority of Buyer and Merger Sub
Each of Buyer and Merger Sub is a duly organized corporation, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to carry on its business
as now conducted.
3.02 Authorized and Effective Agreement
(a) Each of Buyer and Merger Sub has all requisite corporate power and
authority to enter into and perform all of its obligations under this
Reorganization Agreement and the Plan of Merger. The execution and delivery of
this Reorganization Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
Buyer and Merger Sub.
(b) This Reorganization Agreement and the Plan of Merger each have been
duly and validly executed and delivered by Buyer and Merger Sub and, assuming
the accuracy of the representation contained in Section 2.05(b) hereof,
constitute legal, valid and binding obligations of Buyer and Merger Sub, in each
case enforceable against it in accordance with their respective terms, subject,
as to enforceability, to bankruptcy, insolvency and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
3.03 Consents and Approvals; No Violation
(a) Neither the execution and delivery of this Reorganization Agreement
and the Plan of Merger, nor consummation of the transactions contemplated hereby
or thereby, nor compliance by Buyer or Merger Sub with any of the provisions
hereof or thereof shall (i) conflict with or result in a breach of any provision
of the articles or certificate of incorporation or association, charter or
bylaws of Buyer or Merger Sub; (ii) constitute or result in a breach of any
term, condition or provision of, or constitute a default under, or pursuant to,
any note, bond, mortgage, indenture, license, agreement or other instrument or
obligation; or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Buyer or Merger Sub, except (in the case of clauses
(ii) and (iii) above) for such violations, rights, conflicts, breaches,
creations or defaults which, either individually or in the aggregate, will not
have a Material Adverse Effect on Buyer.
(b) Except as Previously Disclosed, or in connection, or in compliance,
with the provisions of the HSR Act, or as may be required under similar foreign
or supranational competition laws, no consent, approval, permit or authorization
of, or declaration, notice, filing or registration with, any Governmental
Entity, or any other person, is required to be made or obtained by Buyer or
Merger Sub in connection with the execution, delivery and performance of
-20-
this Reorganization Agreement and the Plan of Merger or the consummation of the
transactions contemplated hereby or thereby other than consents, approvals,
permits declarations, notices, filings or registrations that if not obtained or
made would not have a Material Adverse Effect on Buyer.
3.04 Legal Proceedings
There are no actions, suits or proceedings instituted, pending or, to
the knowledge of Buyer, threatened against Buyer or Merger Sub which present a
claim to restrain or prohibit the transactions contemplated hereby.
3.05 Brokers and Finders
Neither Buyer nor any subsidiary of Buyer, nor any of their respective
officers, directors or employees, has employed any broker, finder or financial
advisor or incurred any liability for any fees or commissions in connection with
the transactions contemplated herein or the Plan of Merger, except for Buyer's
retention of Credit Suisse First Boston Corporation to perform certain financial
advisory services.
3.06 Financial Resources
Buyer has available to it sufficient financial resources to fulfill its
obligations hereunder.
3.07 Operations of Merger Sub
Merger Sub is an indirect, wholly-owned subsidiary of Buyer, was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations only as
contemplated hereby.
ARTICLE 4.
COVENANTS
4.01 Stockholders' Meeting
The Company shall submit this Reorganization Agreement and the Plan of
Merger to its stockholders for approval at a special meeting to be held as soon
as practicable after the date hereof (the "Company Stockholders' Meeting"). The
Company shall postpone its annual meeting of stockholders until a date after the
Company Stockholders' Meeting. Subject to the proviso in Section 4.02(b), the
Board of Directors of the Company shall recommend at the Company Stockholders'
Meeting that the stockholders vote in favor of such approval. Further, the
Company shall solicit from its stockholders proxies in favor of the approval and
adoption of this Reorganization Agreement and the Plan of Merger and shall take
all other action necessary or advisable to secure the required vote or consent
of its stockholders.
-21-
4.02 Proxy Statement
(a) As promptly as practicable after the date hereof, Buyer and the
Company shall cooperate in the preparation filing with the SEC of a proxy
statement to be mailed to the stockholders of the Company in connection with the
Company Stockholder's Meeting (the "Proxy Statement"). No amendment or
supplement to the Proxy Statement will be made by Buyer or the Company without
the approval of the other party (such approval not to be unreasonably withheld
or delayed).
(b) None of the Board of Directors of the Company or any committee
thereof shall withdraw or modify, or propose to withdraw or modify, in a manner
adverse to Buyer or Merger Sub, the approval or recommendation by the Board of
Directors of the Company or any committee thereof of this Reorganization
Agreement or the Plan of Merger and the Proxy Statement shall include the
recommendation of the Board of Directors of the Company to the stockholders of
the Company in favor of approval and adoption of this Reorganization Agreement
and the Plan of Merger; provided, however, that the Board of Directors of the
Company may, at any time prior to the approval by the stockholders of this
Reorganization Agreement and the Plan of Merger, withdraw or modify any such
recommendation to the extent that the Board of Directors of the Company
determines, in its good faith judgment after consultation with independent legal
counsel (who may be the Company's regularly engaged independent legal counsel),
that the failure to so withdraw or modify its recommendation could cause the
Board of Directors of the Company to breach its fiduciary duties to the
stockholders of the Company under applicable law.
(c) The information supplied by the Company for inclusion in the Proxy
Statement shall not, at (i) the time the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to the stockholders of the
Company, (ii) the time of the Company Stockholders' Meeting and (iii) the
Effective Date, contain any untrue statement of a material fact or fail to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. If, at any time prior to the Effective Date, any event or
circumstance relating to the Company or any Company Subsidiary, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Proxy Statement, the
Company shall promptly inform Buyer. All documents that the Company is
responsible for filing with the SEC in connection with the Merger or the other
transactions contemplated by this Reorganization Agreement and the Plan of
Merger will comply as to form and substance in all material respects with the
applicable requirements of the Securities Laws.
4.03 Efforts to Close
Buyer, Merger Sub and the Company shall each use commercially reasonable
efforts in good faith, and each of them shall cause its subsidiaries to use
commercially reasonable efforts in good faith, to (i) furnish such information
as may be required in connection with the preparation of the documents referred
to in Section 4.02 above; and (ii) take or cause to be taken all action
necessary or desirable on its part so as to permit consummation of the Merger at
the earliest possible date, including, without limitation, (A) making promptly
its respective filings, and thereafter making any other required submissions,
under the HSR Act, (B) obtaining the consent
-22-
or approval of each individual, partnership, corporation, association or other
business or professional entity whose consent or approval is required for
consummation of the transactions contemplated hereby, and (C) obtaining all
necessary Permits, waivers, consents, authorizations, qualifications, orders and
approvals from any Governmental Entity. Using its commercially reasonable
efforts in good faith, no party hereto shall take or fail to take, or cause or
permit its subsidiaries to take or fail to take, or permit to be taken or
omitted to be taken by any third persons, any action that would substantially
impair the prospects of completing the Merger pursuant to this Reorganization
Agreement and the Plan of Merger, or that would materially delay such
completion. In case, at any time after the Effective Date, any further action is
necessary or desirable to carry out the purposes of this Reorganization
Agreement or the Plan of Merger, the proper officers and directors of each party
to this Reorganization Agreement shall use their reasonable best efforts to take
all such action.
4.04 Investigation and Confidentiality
The Company will keep Buyer advised of all material developments
relevant to its business and to consummation of the transactions contemplated
herein and in the Plan of Merger. Buyer may make or cause to be made such
investigation of the financial and legal condition of the Company and the
Company Subsidiaries as Buyer reasonably deems necessary or advisable in
connection with the transactions contemplated herein and in the Plan of Merger;
provided, however, that such investigation shall be reasonably related to such
transactions and shall not interfere unnecessarily with normal operations. The
Company agrees to (and shall cause the Company Subsidiaries and their respective
officers, directors, employees, accountants, consultants, legal counsel, agents
and other representatives to): (i) provide to Buyer (and Buyer's officers,
directors, employees, accountants, consultants, legal counsel, agents and other
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the Company or the Company Subsidiaries and to the books and
records thereof; and (ii) furnish promptly to Buyer such information concerning
the business, properties, contracts, assets, liabilities, personnel and other
aspects of the company and the Company Subsidiaries as Buyer or its
Representatives may reasonably request. Buyer may communicate with and have
access to the officers and employees of the Company and the Company Subsidiaries
for purposes of negotiating and entering into retention agreements with any
officer or employee of the Company or any Company Subsidiary. No investigation
pursuant to this Section 4.04 shall affect or be deemed to modify any
representation or warranty made by, or the conditions to the obligations to
consummate the Merger of, any party hereto. Each party hereto shall hold all
information furnished by the other party or any of such party's subsidiaries or
representatives pursuant to this Section 4.04 in confidence to the extent
required by, and in accordance with, the provisions of the confidentiality
agreement, dated December 14, 2001, between Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc.
(on behalf of the Company) and Buyer (the "Confidentiality Agreement").
4.05 Press Releases
The Company and Buyer shall agree with each other as to the form and
substance of any press release related to this Reorganization Agreement and the
Plan of Merger or the transactions contemplated hereby or thereby, and shall
consult each other as to the form and substance of other public disclosures
related thereto; provided, however, that nothing contained herein shall
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prohibit any party, following notification to the other parties, from making any
disclosure which is required by applicable law or the rules of the Helsinki
Stock Exchange or Nasdaq.
4.06 Covenants of the Company
(a) Prior to the Closing Date, and, except as Previously Disclosed or
otherwise provided for by this Reorganization Agreement, the Plan of Merger, or
consented to or approved in writing by Buyer, the Company agrees that it shall,
and shall cause each of the Company Subsidiaries to, conduct the businesses of
the Company and the Company Subsidiaries only in the ordinary course of business
and in a manner consistent with past practice, and to use its reasonable best
efforts to preserve intact the business organization of the Company and the
Company Subsidiaries, their respective properties, business and relationships
with customers, suppliers, employees and other persons.
(b) By way of amplification and not limitation, except with the prior
written consent of Buyer (which shall not be unreasonably withheld or delayed)
and except as Previously Disclosed or expressly contemplated or permitted by
this Reorganization Agreement or the Plan of Merger, neither the Company nor any
Company Subsidiary shall, between the date of this Reorganization Agreement and
the Effective Date, directly or indirectly, do, or propose to do, any of the
following:
(i) except as Previously Disclosed, carry on its business other
than in the ordinary course and in manner consistent with past practice;
(ii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(iii) issue, sell, pledge, dispose of, grant or encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance
of, (i) any shares of any class of capital stock of the Company or any
Company Subsidiary, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital stock, or
any other ownership interest (including, without limitation, any phantom
interest), of the Company or any Company Subsidiary or (ii) any assets
of the Company or any Company Subsidiary, except in the ordinary course
of business and in a manner consistent with past practice; (iv) except
as Previously Disclosed, incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise
become responsible for, the obligations of any person, or make any loans
or advances, or grant any security interest in any of its assets except
in the ordinary course of business and consistent with past practice;
(v) issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like
change in capitalization, or redeem, combine, split, subdivide,
reclassify, repurchase or otherwise acquire, directly or indirectly, any
shares of its capital stock;
(vi) amend its articles or certificate of incorporation or
bylaws;
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(vii) merge with any other corporation or permit any other
corporation to merge into it or consolidate with any other corporation;
acquire control over any other corporation or organization or create any
subsidiary;
(viii) liquidate or sell or dispose of any material assets,
including, without limitation, any Company Subsidiary or any business
segment or division or any product line, or acquire any material assets;
(ix) except as contemplated by the Company's current capital
budget, authorize, or make any commitment with respect to, any capital
expenditures in excess of $1,000,000 in the aggregate;
(x) except as Previously Disclosed or as contemplated by Section
4.06(c), enter into any contract or agreement other than in the ordinary
course of business and consistent with past practice;
(xi) except as Previously Disclosed, increase the rate of
compensation payable or to become payable to, pay or agree to pay any
bonus to, or provide any other employee benefit or incentive to, any of
its directors, officers or employees other than increases in the
ordinary course of business in a manner consistent with past practice in
salaries or wages of employees who are not directors or officers, enter
into or modify any employment or severance contracts with, or grant any
severance or termination pay to, any of its present or former directors,
officers or employees; or enter into or modify (except as may be
required by applicable law) any pension, retirement, stock option, stock
purchase, stock appreciation right, savings, profit sharing, deferred
compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any
trust agreement related thereto, in respect of any of its directors,
officers or other employees;
(xii) change its methods of accounting in effect at December 31,
2001, except as required by changes in generally accepted accounting
principles concurred in by its independent certified public accountants,
or materially change any of its methods of reporting income and
deductions for United States federal income Tax purposes from those
employed in the preparation if its United States federal income Tax
Returns for the year ended December 31, 2001, except as required by law;
(xiii) directly or indirectly solicit, initiate or encourage, or
take any other action to facilitate, or authorize or permit any of its
officers, directors, employees, subsidiaries or agents to directly or
indirectly solicit, initiate or encourage, or take any other action to
facilitate, any inquiries relating to, or the making of any proposal or
offer which constitutes or may reasonably be expected to lead to, a
"takeover proposal" as defined below), or, except to the extent that the
Board of Directors of the Company determines, in its good faith judgment
after consultation with independent legal counsel (who may be the
Company's regularly engaged independent legal counsel), that the failure
to do so could cause the Board of Directors of the Company to breach its
fiduciary duties to the stockholders of the Company under applicable
law, recommend or endorse any takeover proposal, or participate in any
discussions or negotiations, or provide third parties with
-25-
any nonpublic information, relating to any such inquiry or proposal or
otherwise facilitate any effort or attempt to make or implement a
takeover proposal; provided, however, that the Company may communicate
information about any such takeover proposal to its stockholders if, in
the judgment of the Company's Board of Directors, based upon advice of
outside counsel, such communication is required under applicable law.
The Company will take all actions necessary or advisable to inform the
appropriate individuals or entities referred to in the first sentence
hereof of the obligations undertaken herein. The Company will notify
Buyer immediately if any such inquiries or takeover proposals are
received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued
with, the Company, and the Company will promptly inform Buyer in writing
of all of the relevant details with respect to the foregoing. The
Company immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with
respect to a takeover proposal. The Company shall not release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which it is a party. As used in this Reorganization
Agreement, "takeover proposal" shall mean any tender or exchange offer,
proposal for a merger, consolidation or other business combination
involving the Company or any Company Subsidiary or any proposal or offer
to acquire in any manner a substantial equity interest in, or a
substantial portion of the assets of, the Company or any Company
Subsidiary other than the transactions contemplated or permitted by this
Reorganization Agreement and the Plan of Merger;
(xiv) make any material Tax election or settle or compromise any
material Tax liability;
(xv) except as Previously Disclosed, pay, discharge or satisfy
any claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge
or satisfaction of individual claims, liabilities or obligations for
less than $100,000 and $500,000 in the aggregate;
(xvi) except as Previously Disclosed, amend, modify or consent
to the termination of any Material Contract, or amend, waive, modify or
consent to the termination of the Company's or any Company Subsidiary's
rights thereunder, other than in the ordinary course of business
consistent with past practice;
(xvii) except as Previously Disclosed, commence or settle any
litigation, claim, action, suit or proceeding;
(xviii) except as contemplated by Section 4.06(c), enter into or
renew any lease of real property or, except in the ordinary course of
business consistent with past practice, enter into any material
contract, agreement or arrangement relating to Intellectual Property;
(xix) enter into any contract or agreement of employment with
any person to be the chief executive officer or to hold any other office
of the Company, Spacelabs Medical, Inc., a California corporation, or
Spacelabs Xxxxxxx, Inc. or to hold any executive office of any foreign
Company Subsidiary;
-26-
(xx) enter into any contract or agreement containing a
non-competition clause or similar provision; or
(xxi) announce an intention, enter into any formal or informal
agreement or otherwise make a commitment, to do any of the foregoing.
(c) (i) During the four week period following the date hereof (the
"Planning Period"), Buyer and Company agree that each shall cooperate with the
other in good faith to develop a facilities plan for the Company that takes into
account both (x) the Company's facilities needs as a stand-alone entity if the
transactions contemplated hereby are not consummated and (y) the Buyer's plans
if the transactions contemplated hereby are consummated. In particular, during
the Planning Period Buyer and Company shall cooperate in good faith with respect
to (i) the selection of office and/or manufacturing space necessitated by the
expiration of the Lease, and (ii) the negotiation and execution of a lease for
such space (the "Replacement Lease").
(ii) If at the end of the Planning Period (a) the Company and
the Buyer have not mutually agreed to a Replacement Lease; (b) the
Company has proposed a Replacement Lease consistent with Section
4.06(c)(ii) of the Disclosure Letter (the "Company Proposed Lease"); (c)
the Buyer does not consent to the Company's execution of the Company
Proposed Lease; and (d) this Agreement is terminated following the
Planning Period, then Buyer shall indemnify the Company and any Company
Subsidiaries for any losses, claims, damages, liabilities, costs, and
expenses incurred by the Company or any Company Subsidiary that the
Company would not have incurred if the Company had entered into the
Company Proposed Lease. Notwithstanding the foregoing, Buyer shall not
have any obligation under this Section 4.06(c)(ii) (x) if the Company
terminates the Agreement pursuant to Section 6.01(f), (y) if the Buyer
terminates the Agreement pursuant to Section 6.01(b)(i) because the
Company has willfully breached its covenants and agreements under the
Agreement or, (z) if the Buyer terminates this Agreement pursuant to
Section 6.01(g). If the Agreement is terminated pursuant to Section
6.01(d) under circumstances that would entitle the Buyer to the Fee (as
defined herein) pursuant to Section 7.01(b)(ii) if a takeover proposal
were consummated by the Company, Buyer shall not be required to provide
any indemnity under this Section 4.06(c)(ii) until such time as Buyer is
not entitled to receive such Fee pursuant to Section 7.01(b)(ii). If
Buyer becomes entitled to the Fee pursuant to Section 7.01(b)(ii) Buyer
shall have no indemnity obligation under this Section 4.06(c)(ii).
4.07 Closing; Articles of Merger
The transactions contemplated by this Reorganization Agreement and the
Plan of Merger shall be consummated at a closing to be held at the offices of
Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, on the first
business day following satisfaction of the conditions to consummation of the
Merger set forth in ARTICLE 5 hereof (other than such conditions relating to the
receipt of officers' certificates). In connection with such Closing, Buyer and
the Company shall execute a certificate of merger and shall cause such
certificate of merger to be delivered to the Delaware Secretary of State in
accordance with Section 251 of the
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DGCL. The Merger shall be effective at the time and on the date specified in
such articles of merger (the "Effective Date").
4.08 Company Employees; Directors and Management; Indemnification
(a) Buyer hereby agrees that, for a period of six months immediately
following the Effective Date, it shall, or shall cause the Surviving Corporation
and its subsidiaries to, maintain all Company Plans in effect as of the
Effective Date other than the Company Option Plans for the benefit of employees
of the Surviving Corporation and shall honor, and shall cause the Surviving
Corporation and its subsidiaries to honor, in accordance with their terms and
without any material reduction in benefits, such Company Plans.
(b) Except with respect to Company Plans, employees of the Surviving
Corporation shall receive credit for purposes of eligibility to participate,
vesting and eligibility to receive benefits under any employee benefit plan,
program or arrangement established or maintained by the Buyer, the Surviving
Corporation or any of their respective subsidiaries for service accrued or
deemed accrued prior to the Effective Date with the Company or any Company
Subsidiary. With respect to the Company Plans, all service prior to the
Effective Date credited under such Company Plans for all purposes shall remain
credited for all such purposes on and after the Effective Date.
(c) Buyer shall cause the Surviving Corporation to honor all the
obligations under the Company Plans and all employment and severance agreements
to which the Company or any of its affiliates is party as of the Closing Date,
including, without limitation, those agreements listed in Schedule 4.08(c)
attached hereto. Buyer acknowledges that approval by the stockholders of the
Company of this Reorganization Agreement and Plan of Merger will constitute a
"Change of Control" within the meaning of the Company Plans listed in Section
4.08(c) of the Disclosure Letter.
(d) From and after the Effective Date, in the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether civil, criminal
or administrative, including, without limitation, any such claim, action, suit,
proceeding or investigation in which any person who is now, or has been at any
time prior to the date of this Agreement, or who becomes prior to the Effective
Date, a director or officer of the Company or any Company Subsidiary (the
"Indemnified Parties") is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director, officer or employee of the Company, any of
the Company Subsidiaries or any of their respective predecessors; or (ii) this
Reorganization Agreement, the Plan of Merger, or any of the transactions
contemplated hereby or thereby, whether in any case asserted or arising before
or after the Effective Date, the Surviving Corporation shall indemnify and hold
harmless, as and to the fullest extent permitted by law, each such Indemnified
Party against any losses, claims, damages, liabilities, costs, expenses
(including reasonable attorney's fees and expenses in advance of the final
disposition of any claim, suit, proceeding or investigation to each Indemnified
Party to the fullest extent permitted by law upon receipt of any undertaking
required by applicable law), judgments, fines and amounts paid in settlement in
connection with any such threatened or actual claim, action, suit, proceeding or
investigation, and in the event of any such threatened or actual claim, action,
suit, proceeding or investigation (whether asserted or arising
-28-
before or after the Effective Date), the Indemnified Parties may retain counsel
reasonably satisfactory to them; provided, however, that (1) the Surviving
Corporation shall have the right to assume the defense thereof and upon such
assumption the Surviving Corporation shall not be liable to any Indemnified
Party for any legal expenses of other counsel or any other expenses subsequently
incurred by any Indemnified Party in connection with the defense thereof, except
that if the Surviving Corporation elects not to assume such defense or counsel
for the Indemnified Parties reasonably advises the Indemnified Parties that
there are issues which raise conflicts of interest between the Surviving
Corporation and the Indemnified Parties, the Indemnified Parties may retain
counsel reasonably satisfactory to them, and the Surviving Corporation shall pay
the reasonable fees and expenses of such counsel for the Indemnified Parties,
(2) the Surviving Corporation shall not be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld), and (3) the Surviving Corporation shall have no obligation hereunder
to any Indemnified Party when and if a court of competent jurisdiction shall
ultimately determine, and such determination shall have become final and
nonappealable, that indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law. The Surviving Corporation's
obligations under this Section 4.08(d) continue in full force and effect for a
period of six (6) years from the Effective Date; provided, however, that all
rights to indemnification in respect of any claim (a "Claim") asserted or made
within such period shall continue until the final disposition of such Claim.
Buyer hereby fully and unconditionally guarantees the payment obligations of the
Surviving Corporation contained in this Section 4.08(d).
(e) Buyer agrees that all rights to indemnification and all limitations
on liability existing in favor of the directors, officers and employees of
Company and the Company Subsidiaries (the "Covered Parties") as provided in
their respective articles or certificate of incorporation, charter or bylaws as
in effect as of the date of this Reorganization Agreement with respect to
matters occurring prior to the Effective Date shall survive the Merger and shall
continue in full force and effect, without any amendment thereto, for a period
of six (6) years from the Effective Date; provided, however, that all rights to
indemnification in respect of any Claim asserted or made within such period
shall continue until the final disposition of such Claim; provided, further,
that nothing contained in this Section 4.08(e) shall be deemed to preclude the
liquidation, consolidation or merger of the Company or any Company Subsidiary,
in which case all of such rights to indemnification and limitations on liability
shall be deemed to so survive and continue notwithstanding any such liquidation,
consolidation or merger.
(f) Buyer, from and after the Effective Date, shall use its commercially
reasonable efforts to cause the persons who served as directors or officers of
the Company and the Company Subsidiaries on or before the Effective Date to be
covered by the Company's or respective Company Subsidiary's existing directors'
and officers' liability insurance policy (provided, that Buyer may substitute
therefor policies of at least the same coverage and amounts containing terms and
conditions which are not materially less favorable than such policy) (the
"Insurance Policy"); provided, however, that (i) in no event shall the Surviving
Corporation be required to expend pursuant to this Section 4.08(f) more than
$1,920,000 for such insurance (the "Insurance Amount"), (ii) the Surviving
Corporation shall use its reasonable best efforts to use the Insurance Amount to
obtain the Insurance Policy commencing on the Effective Date and keep such
policy in effect until the earlier of (x) the entire Insurance Amount is spent
or (y) the sixth anniversary of the Effective Date; provided that if the
Surviving Corporation is unable to obtain or maintain
-29-
the Insurance Policy, the Surviving Corporation shall use the Insurance Amount
to obtain an alternate insurance policy with as much coverage as is commercially
obtainable. The Company represents and warrants that the current annual premiums
paid by the Company for such insurance is approximately $320,000.
(g) In the event Buyer or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger;
or (ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Buyer
assume the obligations set forth in this section.
(h) The provisions of Sections 4.09(d), (e), (f) and (g) are intended to
be for the benefit of, and shall be enforceable by, each Indemnified Party and
their respective heirs and representatives.
ARTICLE 5.
CONDITIONS PRECEDENT
5.01 Conditions Precedent -- Buyer, Merger Sub and the Company
The respective obligations of the parties to effect the Merger are
subject to the satisfaction or waiver (where permissible) of the following
conditions at or prior to the Closing Date:
(a) All corporate action necessary to authorize the execution, delivery
and performance of this Reorganization Agreement and the Plan of Merger and
consummation of the transactions contemplated hereby and thereby (including the
requisite affirmative vote of a majority of the stockholders of the Company in
accordance with the DGCL and the Company's certificate of incorporation and
bylaws) shall have been duly and validly taken.
(b) The parties hereto shall have received all regulatory approvals
required or mutually deemed necessary in connection with the transactions
contemplated by this Reorganization Agreement and the Plan of Merger, all notice
periods and waiting periods (including those required under the HSR Act and any
extensions thereof) required after the granting of any such approvals shall have
passed and all conditions contained in any such approval required to have been
satisfied prior to consummation of such transactions shall have been satisfied.
(c) No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, judgment, decree, executive order
or award which is then in effect and has the effect of making the Merger illegal
or otherwise prohibiting consummation of the Merger.
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5.02 Conditions Precedent - the Company
The obligations of the Company to effect the Merger are subject to the
satisfaction or waiver (where permissible) of the following additional
conditions at or prior to the Closing Date:
(a) The representations and warranties of Buyer and Merger Sub set forth
in ARTICLE 3 hereof shall be true and correct in all material respects as of the
date of this Reorganization Agreement and as of the Closing Date as though made
on and as of the Closing Date (or on the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except as consented to in writing by Company; provided, however, that (i) in
determining whether or not the condition contained in this paragraph (a) shall
be satisfied, no effect shall be given to any exceptions in such representations
and warranties relating to materiality or Material Adverse Effect; and (ii) the
condition contained in this paragraph (a) shall be deemed to be satisfied unless
the failure of such representations and warranties to be so true and correct
constitute, individually or in the aggregate, a Material Adverse Effect on
Buyer;
(b) Buyer and Merger Sub shall have in all material respects performed
all obligations and complied with all covenants required by this Reorganization
Agreement and the Plan of Merger to be performed or complied with by it on or
prior to the Closing Date; and
(c) Buyer shall have delivered to the Company a certificate, dated the
Closing Date and signed by its Chairman, President, or Executive Vice President
to the effect that the conditions set forth in paragraphs (a) and (b) of this
Section have been satisfied.
5.03 Conditions Precedent -- Buyer and Merger Sub
The respective obligations of Buyer and Merger Sub to effect the Merger
are subject to the satisfaction or waiver (where permissible) of the following
additional conditions at or prior to the Closing Date:
(a) The representations and warranties of the Company set forth in
ARTICLE 2 hereof shall be true and correct in all material respects as of the
date of this Reorganization Agreement and as of the Closing Date as though made
on and as of the Closing Date (or on the date when made in the case of any
representation and warranty which specifically relates to an earlier date),
except as consented to in writing by Buyer; provided, however, that (i) in
determining whether or not the condition contained in this paragraph (a) shall
be satisfied, no effect shall be given to any exceptions in such representations
and warranties relating to materiality or Material Adverse Effect; and (ii) the
condition contained in this paragraph (a) shall be deemed to be satisfied unless
the failure of such representations and warranties to be so true and correct
constitute, individually or in the aggregate, a Material Adverse Effect on the
Company;
(b) The Company shall have in all material respects performed all
obligations and complied with all covenants required by this Reorganization
Agreement and the Plan of Merger to be performed or complied with by it prior to
the Closing Date;
-31-
(c) The Company shall have delivered to Buyer and Merger Sub a
certificate, dated the Closing Date and signed by its Chairman, President or any
Executive Vice President to the effect that the conditions set forth in
paragraphs (a) and (b) of this Section have been satisfied;
(d) To the extent that any lease, license, loan, financing agreement or
other contract or agreement to which the Company or any Company Subsidiary is a
party requires the consent of or waiver from the other party thereto as a result
of the transactions contemplated by this Reorganization Agreement or the Plan of
Merger, such consent or waiver shall have been obtained, unless the failure to
obtain such consents or waivers would not have a Material Adverse Effect on the
Company.
ARTICLE 6.
TERMINATION, WAIVER AND AMENDMENT
6.01 Termination
This Reorganization Agreement and the Plan of Merger may be terminated,
at any time before the Effective Date, notwithstanding any approval or adoption
of this Reorganization Agreement and the Plan of Merger by the stockholders of
the Company as follows:
(a) by the mutual consent in writing of the parties hereto;
(b) by Buyer in writing, if the Company has, or by the Company in
writing, if Buyer or Merger Sub has, in any respect, breached (i) any covenant
or agreement contained herein or in the Plan of Merger; or (ii) any
representation or warranty contained herein (or any representation or warranty
contained herein shall have become untrue), and in either case such that the
conditions set forth in Section 5.02(a) and (b) or Section 5.03(a) and (b), as
the case may be, would not be satisfied; provided, however, that, if such breach
is curable, the non-breaching party may not terminate this Reorganization
Agreement and the Plan of Merger under this Section 6.01(b) for so long as the
breaching party continues to exercise its best efforts to cure such breach,
unless such breach shall not have been cured within thirty (30) days after the
date on which written notice of such breach is given to the party committing
such breach.
(c) by any party hereto in writing, if any Governmental Entity shall
have enacted, issued, promulgated, enforced or entered any injunction, order,
decree or ruling which is then in effect and has the effect of making
consummation of the Merger illegal or otherwise preventing or prohibiting
consummation of the Merger;
(d) by any party hereto in writing, if the stockholders of the Company
do not approve the transactions contemplated herein at the special meeting duly
called for that purpose or if such meeting is adjourned until a date later than
August 31, 2002;
(e) by any party hereto in writing, if the Closing Date shall not have
occurred by the close of business on August 31, 2002, unless the failure of the
Closing to occur by such date shall be due to the failure of the party seeking
to terminate this Agreement to perform or observe the covenants and agreements
set forth herein;
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(f) by the Company, upon the execution by the Company of a definitive
agreement relating to a takeover proposal (as defined in Section 4.06(b)(xiii));
provided, that (i) the Company shall have complied with its obligations under
Section 4.06(b)(xiii) hereof; (ii) the Board of Directors of the Company shall
have determined, in its good faith judgment after consultation with independent
legal counsel (who may be the Company's regularly engaged independent legal
counsel), that such action is necessary for the Board of Directors to act in a
manner consistent with its fiduciary duties to the stockholders of the Company
under applicable law; (iii) the Company shall have fully negotiated the terms of
such takeover proposal and provided to Buyer in writing the identity of the
person making, and the final terms and conditions of, such takeover proposal;
and (iv) Buyer shall not have made, by the end of the third business day after
Buyer's receipt of the final terms and conditions of such takeover proposal, a
substantially similar or superior proposal to such takeover proposal; provided
further, that any termination of this Reorganization Agreement pursuant to this
Section 6.01(f) shall not be effective until the Company has made full payment
of all amounts provided under Section 7.01; or
(g) by Buyer, if: (i) the Board of Directors of the Company withdraws,
modifies or changes its recommendation of this Reorganization Agreement, the
Plan of Merger or the transactions contemplated hereby or thereby in a manner
adverse to Buyer or shall have resolved to do so; (ii) the Board of Directors of
the Company shall have recommended to the stockholders of the Company a takeover
proposal or shall have resolved to do so or shall have entered into any letter
of intent or similar document or any agreement, contract or commitment accepting
any takeover proposal; (iii) the Company shall have failed to include in the
Proxy Statement the recommendation of the Board of Directors of the Company in
favor of the approval and adoption of this Reorganization Agreement and the Plan
of Merger; (iv) the Board of Directors of the Company fails to reaffirm its
recommendation in favor of the approval and adoption of this Reorganization
Agreement and the Plan of Merger within five business days after Buyer requests
in writing that such recommendation be reaffirmed; (v) through the fault
(whether by commission or omission) of the Company, the Company Stockholders'
Meeting to approve the Plan of Merger shall not have been called prior to June
30, 2002; (vi) the Company shall have intentionally breached its obligations
under Section 4.06(b)(xiii); or (vii) a tender offer or exchange offer for 25%
or more of the outstanding shares of capital stock of the Company is commenced,
and the Board of Directors of the Company fails to recommend against acceptance
of such tender offer or exchange offer by its stockholders (including by taking
no position with respect to the acceptance of such tender offer or exchange
offer by its stockholders); it being understood that the fact that the Company
or any of the other persons described in Section 4.06(xiii) has taken any of the
actions set forth in Section 4.06(xiii) in compliance with the terms of Section
4.06(xiii), together with a statement that the Board of Directors of the Company
continues to recommend the Merger and this Agreement, shall not be considered to
be a withdrawal, adverse modification or adverse amendment in any material
respect of such approval or recommendation or a failure to reconfirm its
recommendation of this Agreement.
6.02 Effect of Termination
In the event this Reorganization Agreement and the Plan of Merger are
terminated pursuant to Section 6.01 hereof, this Reorganization Agreement and
the Plan of Merger shall become void and have no effect and there shall be no
liability under the Reorganization
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Agreement or the Plan of Merger, except that (a) the provisions relating to
confidentiality and expenses set forth in Sections 4.04 and 7.01 hereof,
respectively, shall survive any such termination, (b) the provisions relating to
the Replacement Lease set forth in Section 4.06(c) shall survive any such
termination, and (c) a termination pursuant to Section 6.01(b)(i) shall not
relieve the breaching party from liability for an uncured willful breach of any
representation, warranty, covenant or agreement contained in this Reorganization
Agreement.
6.03 Survival of Representations, Warranties and Covenants
All representations, warranties and covenants in this Reorganization
Agreement and the Plan of Merger or in any instrument delivered pursuant hereto
or thereto shall expire on, and be terminated and extinguished at, the Effective
Date other than covenants that by their terms are to survive or be performed
after the Effective Date; provided, that no such representations, warranties or
covenants shall be deemed to be terminated or extinguished so as to deprive
Buyer, Merger Sub or the Company (or any director, officer or controlling person
thereof) of any defense in law or equity which otherwise would be available
against the claims of any person, including, without limitation, any stockholder
or former stockholder of either Buyer or the Company, the aforesaid
representations, warranties and covenants being material inducements to the
consummation by Buyer, Merger Sub and the Company of the transactions
contemplated herein.
6.04 Waiver
Except with respect to any required stockholder or regulatory approval,
Buyer and the Company, respectively, by written instrument signed by an
executive officer of such party, may at any time (whether before or after
approval of this Reorganization Agreement and the Plan of Merger by the
stockholders of the Company) extend the time for the performance of any of the
obligations or other acts of the Company, on the one hand, or Buyer, on the
other hand, and may waive (a) any inaccuracies of such parties in the
representations or warranties contained in this Reorganization Agreement, the
Plan of Merger or any document delivered pursuant hereto or thereto, (b)
compliance with any of the covenants, undertakings or agreements of such
parties, or satisfaction of any of the conditions precedent to its obligations,
contained herein or in the Plan of Merger, or (c) the performance by such
parties of any of its obligations set out herein or therein; provided, however,
that no such waiver executed after approval of this Reorganization Agreement and
the Plan of Merger by the stockholders of the Company shall change the
consideration to be paid for each share of Company Common Stock pursuant to the
Merger.
6.05 Amendment or Supplement
This Reorganization Agreement and the Plan of Merger may be amended or
supplemented at any time by mutual agreement of the parties hereto or thereto.
Any such amendment or supplement must be in writing and approved by their
respective boards of directors and/or officers authorized thereby and shall be
subject to the proviso in Section 6.04 hereof; provided, however, that, after
the approval and adoption of this Agreement and the Plan of Merger by the
stockholders of the Company, no amendment may be made to this Agreement or the
Plan of Merger that would reduce the amount or change the type of the
consideration into
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which each share of common stock of the Company shall be converted upon
consummation of the Merger.
ARTICLE 7.
MISCELLANEOUS
7.01 Fees and Expenses
(a) Each party hereto shall bear and pay all Expenses incurred by it in
connection with the transactions contemplated in this Reorganization Agreement
and the Plan of Merger, whether or not consummated. "Expenses", as used in this
Reorganization Agreement, shall include all reasonable out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Reorganization
Agreement and the Plan of Merger, the preparation, printing, filing and mailing
of the Proxy Statement, the solicitation of stockholder approvals, the filing of
any required notices under the HSR Act or other similar regulations and all
other matters related to the closing of the Merger and the other transactions
contemplated by this Reorganization Agreement and the Plan of Merger.
(b) The Company agrees that:
(i) if Buyer or the Company shall terminate this Agreement
pursuant to Section 6.01(d), then the Company shall pay to Buyer
promptly the amount of Buyer's Expenses;
(ii) if (A) Buyer or the Company shall terminate this
Reorganization Agreement pursuant to Section 6.01(d), (B) but prior to
the time of such failure to so approve this Reorganization Agreement and
the Plan of Merger, or prior to the time such meeting is so adjourned, a
takeover proposal shall have been publicly announced with respect to the
Company, and (C) the transaction contemplated by the takeover proposal
is either (x) consummated within 12 months after the date of such
termination or (y) an agreement with respect to such takeover proposal
is executed within 12 months after the date of such termination and such
takeover proposal is consummated within 18 months after the date of such
termination, then the Company shall pay to Buyer on the date such
transaction is consummated a fee of $5,600,000 (the "Fee"), which amount
shall be payable in immediately available funds;
(iii) if Buyer shall terminate this Agreement pursuant to
Section 6.01(g), then the Company shall pay to Buyer promptly (but in
any event no later than one business day after the first of such events
shall have occurred) the Fee, which amount shall be payable in
immediately available funds, plus the amount of Buyer's Expenses; and
(iv) if Company shall terminate this Agreement pursuant to
Section 6.01(f), then the Company shall pay to Buyer promptly (but in
any event no later than one business day after the first of such events
shall have occurred) the Fee, which amount shall be payable in
immediately available funds, plus the amount of Buyer's Expenses.
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(c) The Company acknowledges that the agreements contained in this
Section 7.01 are an integral part of the transactions contemplated by this
Reorganization Agreement. In the event that the Company shall fail to pay the
Fee or any Expenses when due, the term "Expenses" shall be deemed to include the
costs and expenses actually incurred or accrued by Buyer (including, without
limitation, fees and expenses of counsel) in connection with the collection
under and enforcement of this Section 7.01, together with interest on such
unpaid Fee and Expenses, commencing on the date that the Fee or such Expenses
became due, at a rate equal to the rate of interest publicly announced by
Citibank, N.A., from time to time, in The City of New York, as such bank's prime
rate plus 1.00 %. Payment of the fees and expenses described in this Section
7.01 shall not be in lieu of any damages incurred in the event of willful or
intentional breach of this Reorganization Agreement.
7.02 Entire Agreement
This Reorganization Agreement and the Plan of Merger contain the entire
agreement among the parties with respect to the transactions contemplated
hereunder and thereunder and supersede all prior arrangements or understandings
with respect thereto, written or oral, other than documents referred to herein
or therein and the Confidentiality Agreement. The terms and conditions of this
Reorganization Agreement and the Plan of Merger shall inure to the benefit of
and be binding upon the parties hereto and thereto and their respective
successors and permitted assigns. Except as specifically set forth herein, or in
the Plan of Merger, nothing in this Reorganization Agreement or the Plan of
Merger, expressed or implied, is intended to confer upon any party, other than
the parties hereto and thereto, and their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities.
7.03 No Assignment
No party hereto may assign any of its rights or obligations under this
Reorganization Agreement to any other person, except that Buyer and Merger Sub
may assign all or any of their rights and obligations hereunder to any affiliate
of Buyer, provided that no such assignment shall relieve the assigning party of
its obligations hereunder if such assignee does not perform such obligations.
7.04 Notices
All notices, requests, claims, demands or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
personally or sent by facsimile transmission or overnight express or by
registered or certified mail, postage prepaid, addressed as follows (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 7.04):
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If to Company:
Spacelabs Medical, Inc.
00000 X.X. 00xx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxx
Tele. No.: (000) 000-0000
Fax No.: (000) 000-0000
With a required copy to:
Xxxxxx & Xxxxxx
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxxxx, Esq.
Tele. No.: (000) 000-0000
Fax No.: (000) 000-0000
If to Buyer or Merger Sub:
Instrumentarium Corporation
Xxxxxxxxxxxxxx 0, Xxxxxxxx
X.X. Xxx 000, FIN-00031 INSTRUMENTARIUM
Attention: Olli Riikkala, President and CEO
Tele. No.: 011-358-10-394-11
Fax No.: 000-000-00-000-0000
With a required copy to:
Instrumentarium Corporation
Xxxxxxxxxxxxxx 0, Xxxxxxxx
X.X. Xxx 000, FIN-00031 INSTRUMENTARIUM
Attention: Xxxxx Xxxxxxx, Legal Affairs
Tele. No.: 011-358-10-394-11
Fax No.: 000-000-00-000-0000
and
Xxxx X. Xxxxxxxx, Xx.
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Tele. No.: 000-000-0000
Fax No.: 000-000-0000
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7.05 Captions
The captions contained in this Reorganization Agreement are for
reference purposes only and are not part of and shall not affect the meaning or
interpretation of this Reorganization Agreement.
7.06 Counterparts
This Reorganization Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
7.07 Severability
If any term or other provision of this Reorganization Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Reorganization Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Reorganization Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
7.08 Specific Performance
The parties hereto agree that irreparable damage would occur in the
event any provision of this Reorganization Agreement were not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.
7.09 Governing Law
This Reorganization Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and entirely to be performed within such jurisdiction. All actions and
proceedings arising out of or relating to this Reorganization Agreement and the
Plan of Merger shall be heard and determined exclusively in any Delaware state
or federal court. The parties hereto hereby (a) submit to the exclusive
jurisdiction of any Delaware state or federal court for the purpose of any
Action arising out of or relating to this Reorganization Agreement or the Plan
of Merger brought by any party hereto, and (b) irrevocably waive, and agree not
to assert by way of motion, defense, or otherwise, in any such Action, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
Action is brought in an inconvenient forum, that the venue of the Action is
improper, or that this Reorganization Agreement or the Plan of Merger may not be
enforced in or by any of the above-named courts.
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7.10 Waiver of Jury Trial
Each of the parties hereto hereby waives to the fullest extent permitted
by applicable law any right it may have to a trial by jury with respect to any
litigation directly or indirectly arising out of, under or in connection with
this Reorganization Agreement, the Plan of Merger or the transactions
contemplated hereby or thereby. Each of the parties hereto (a) certifies that no
representative, agent or attorney of any other party has represented, expressly
or otherwise, that such other party would not, in the event of litigation, seek
to enforce that foregoing waiver and (b) acknowledges that it and the other
hereto have been induced to enter into this Reorganization Agreement and the
Plan of Merger, as applicable, by, among other things, the mutual waivers and
certifications in this Section 7.10.
7.11 Disclaimer of Warranties
EXCEPT AS TO THOSE MATTERS EXPRESSLY COVERED BY THE REPRESENTATIONS AND
WARRANTIES IN THIS AGREEMENT, EACH PARTY HERETO DISCLAIMS ALL OTHER WARRANTIES,
REPRESENTATIONS AND GUARANTIES WHETHER EXPRESS OR IMPLIED. NO PARTY MAKES ANY
REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE AND ANY IMPLIED WARRANTIES WHATSOEVER. Each party acknowledges that no
other party nor any of its representatives or any other person has made any
representation or warranty, express or implied, as to the accuracy or
completeness of any memoranda, charts or summaries heretofore made available by
one party or its representatives to any other party or any other information
which is not included in this Agreement or the documents referred to herein, and
no party nor any of its representatives or any other person will have or be
subject to any liability to another party or any other person resulting from the
distribution of any such information to, or use of any such information. No
party makes any representations or warranties with respect to any estimates,
projections, forecasts or forward-looking information provided to another party.
There is no assurance that any estimated, projected or forecasted results will
be achieved. It is understood that any cost estimates, forecasts, projections or
other predictions contained or referred to in any materials that have been or
shall hereafter be provided to a party are not and shall not be deemed to be
representations or warranties by the party providing such information. Each
party acknowledges that (i) there are uncertainties inherent in attempting to
make such estimates, projections and other predictions; (ii) it is familiar with
such uncertainties; (iii) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all estimates, projections and other
predictions so furnished to it; and (iv) it shall have no claim against any
other party or any of its officers, directors, or agents with respect thereto.
[Remainder of page left intentionally blank; signatures appear on the
following page.]
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Reorganization Agreement to be executed in counterparts
by their duly authorized officers as of the day and year first above written.
INSTRUMENTARIUM CORPORATION
By /s/ Olli Riikkala
---------------------------
Olli Riikkala
Chief Executive Officer
BOXER ACQUISITION CORP.
By /s/ Xxxxxxx Xxxxx
---------------------------
Xxxxxxx Xxxxx
President
SPACELABS MEDICAL, INC.
By /s/ Xxxx X. Xxxxxxxx
---------------------------
Xxxx X. Xxxxxxxx
President and Chief Executive Officer
