EXHIBIT 2.1
TRIAD MEDICAL INC.
UNIFORM PROVISIONS
FOR THE
ACQUISITION
OF
FOUNDING COMPANIES
WORDS AND TERMS USED IN THESE UNIFORM PROVISIONS WHICH ARE
DEFINED IN THE AGREEMENT AND PLAN OF REORGANIZATION AMONG TRIAD MEDICAL INC.
[NEWCO] , [NAME OF ACQUISITION CANDIDATE] AND ITS STOCKHOLDERS (CALLED THEREIN
AND HEREIN "THIS AGREEMENT") TO WHICH THESE UNIFORM PROVISIONS ARE ATTACHED AS
ANNEX I, ARE USED HEREIN AS DEFINED THEREIN.
TABLE OF CONTENTS
Page
ARTICLE I ADDITIONAL DEFINITIONS......................................1
Section 1.02 ADDITIONAL DEFINED TERMS................................1
Section 1.03. OTHER DEFINITIONAL PROVISIONS..........................14
Section 1.04 CAPTIONS...............................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
EACH STOCKHOLDER...........................................15
Section 3.02. OWNERSHIP AND STATUS OF COMPANY CAPITAL STOCK..........15
Section 3.03. POWER OF THE STOCKHOLDER; APPROVAL OF THE MERGER.......15
Section 3.04. NO CONFLICTS OR LITIGATION............................16
Section 3.05. NO BROKERS............................................16
Section 3.06. PREEMPTIVE AND OTHER RIGHTS; WAIVER...................16
Section 3.07. CONTROL OF RELATED BUSINESSES..........................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE STOCKHOLDERS...........................17
Section 4.02. QUALIFICATION.........................................17
Section 4.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF
CONFLICTS; REQUIRED CONSENTS..........................17
Section 4.04. CHARTER DOCUMENTS AND RECORDS; NO VIOLATION...........18
Section 4.05. NO DEFAULTS...........................................18
Section 4.06. COMPANY SUBSIDIARIES..................................19
Section 4.07. CAPITAL STOCK OF THE COMPANY AND THE COMPANY
SUBSIDIARIES..........................................19
Section 4.08. TRANSACTIONS IN CAPITAL STOCK.........................19
Section 4.09. NO BONUS SHARES.......................................19
Section 4.10. PREDECESSOR STATUS; ETC...............................20
Section 4.11. RELATED PARTY AGREEMENTS..............................20
Section 4.12. LITIGATION............................................20
Section 4.13. FINANCIAL STATEMENTS; DISCLOSURE......................20
Section 4.14. COMPLIANCE WITH LAWS..................................21
Section 4.15. CERTAIN ENVIRONMENTAL MATTERS.........................22
Section 4.16. LIABILITIES AND OBLIGATIONS...........................22
Section 4.17. RECEIVABLES...........................................23
Section 4.18. OWNED AND LEASED REAL PROPERTIES......................23
Section 4.19. OWNED AND LEASED PROPERTY, PLANT AND EQUIPMENT........24
Section 4.20. PROPRIETARY RIGHTS....................................25
Section 4.21. TITLE TO OTHER PROPERTIES.............................25
Section 4.22. COMMITMENTS...........................................25
Section 4.23. CAPITAL EXPENDITURES..................................27
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Section 4.24. INVENTORIES...........................................27
Section 4.25. INSURANCE.............................................27
Section 4.26. EMPLOYEE MATTERS......................................28
Section 4.27. COMPLIANCE WITH ERISA, ETC............................30
Section 4.28. TAXES.................................................33
Section 4.29. GOVERNMENT CONTRACTS..................................34
Section 4.30. ABSENCE OF CHANGE.....................................34
Section 4.31. BANK RELATIONS; POWERS OF ATTORNEY....................35
Section 4.32. RELATIONS WITH GOVERNMENTS, ETC.......................36
ARTICLE V REPRESENTATIONS AND WARRANTIES OF TMI AND NEWCO............37
Section 5.02. ORGANIZATION; POWER...................................37
Section 5.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF
CONFLICTS; REQUIRED CONSENTS..........................37
Section 5.04. CHARTER DOCUMENTS.....................................38
Section 5.05. CAPITAL STOCK OF TMI AND NEWCO........................38
Section 5.06. SUBSIDIARIES..........................................39
Section 5.07. LIABILITIES...........................................39
Section 5.08. COMPLIANCE WITH LAWS; NO LITIGATION...................39
Section 5.09. NO BROKERS............................................39
Section 5.10. PRIVATE PLACEMENT MEMORANDUM..........................39
Section 5.11. REGISTRATION AND OTHER RIGHTS.........................40
Section 5.12 STOCKHOLDERS AGREEMENT.................................40
ARTICLE VI COVENANTS EXTENDING TO THE EFFECTIVE TIME..................40
Section 6.02 ACCESS AND COOPERATION; DUE DILIGENCE..................40
Section 6.03. CONDUCT OF BUSINESS PENDING CLOSING...................41
Section 6.04. PROHIBITED ACTIVITIES.................................42
Section 6.05. NO SHOP: RELEASE OF DIRECTORS.........................43
Section 6.06. NOTIFICATION OF CERTAIN MATTERS.......................44
Section 6.07. SUPPLEMENTAL INFORMATION..............................44
Section 6.08. COOPERATION IN CONNECTION WITH THE IPO................45
Section 6.09. ADDITIONAL FINANCIAL STATEMENTS.......................45
Section 6.10. TERMINATION OF PLANS..................................46
Section 6.11. DISPOSITION OF UNWANTED ASSETS........................46
Section 6.12. HSR ACT MATTERS.......................................46
Section 6.13. TMI ACTIONS PENDING IPO...............................46
ARTICLE VII THE CLOSING AND CONDITIONS TO CLOSING
AND CONSUMMATION...........................................47
Section 7.02. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY...........47
Section 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
AND THE STOCKHOLDERS..................................49
Section 7.04. CONDITIONS TO THE OBLIGATIONS OF TMI AND NEWCO........50
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ARTICLE VIII COVENANTS FOLLOWING THE EFFECTIVE TIME.....................52
Section 8.02. DISCLOSURE............................................52
Section 8.03. PREPARATION AND FILING OF TAX RETURNS.................52
Section 8.04. DIRECTORS.............................................52
Section 8.05. REMOVAL OF GUARANTIES.................................52
ARTICLE IX INDEMNIFICATION............................................53
Section 9.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES............53
Section 9.04. INDEMNIFICATION OF STOCKHOLDER INDEMNIFIED PARTIES....54
Section 9.05. CONDITIONS OF INDEMNIFICATION.........................55
Section 9.06. REMEDIES EXCLUSIVE....................................57
Section 9.07. LIMITATIONS ON INDEMNIFICATION........................57
Section 9.08 INDEMNIFICATION CLAIMS BY TMI AFFILIATES...............58
ARTICLE XI GENERAL PROVISIONS.........................................59
Section 11.01. TREATMENT OF CONFIDENTIAL INFORMATION................59
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THE UNIFORM PROVISIONS
ARTICLE I
ADDITIONAL DEFINITIONS
Section 1.02 ADDITIONAL DEFINED TERMS. As used in this Agreement, the
following terms have the meanings assigned to them below:
"ACQUISITION PROPOSAL" has the meaning specified in Section
6.05.
"AFFILIATE" means, as to any specified Person, any other
Person that, directly or indirectly through one or more intermediaries
or otherwise, controls, is controlled by or is under common control with
the specified Person. As used in this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person (whether through
ownership of Capital Stock of that Person, by contract, or otherwise).
"CAPITAL LEASE" means a lease of (or other agreement conveying
the right to use) real or personal property that is required to be
classified and accounted for as a capital lease under GAAP as in effect
on the date of this Agreement.
"CAPITAL STOCK" means, with respect to: (a) any corporation,
any share, or any depositary receipt or other certificate representing
any share, of an equity ownership interest in that corporation; and (b)
any other Entity, any share, membership or other percentage interest,
unit of participation or other equivalent (however designated) of an
equity interest in that Entity.
"CASH COMPENSATION" means, as applied to any employee,
nonemployee director or officer of, or any natural person who performs
consulting or other independent contractor services for, the Company or
any Company Subsidiary, the wages, salaries, bonuses (discretionary and
formula), fees and other cash compensation paid or payable by the
Company and each Company Subsidiary to that employee or other natural
person.
"CERCLA" means the Comprehensive Environmental Response,
Conservation, and Liability Act of 1980.
"CERTIFICATE OF MERGER" means: (a) if the Surviving
Corporation is a Delaware corporation, the certificate of merger
respecting the Merger which contains the information required by the
DGCL to effect the Merger; and (b) if the Company's Organization State
is not Delaware, the articles or certificate of merger respecting the
Merger which contains the information required by the laws of the
Company's Organization State to effect the Merger.
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"CHARTER DOCUMENTS" means, with respect to any Entity at any
time, in each case as amended, modified and supplemented at that time,
the articles or certificate of formation, incorporation or organization
(or the equivalent organizational documents) of that Entity, (b) the
bylaws or limited liability company agreement or regulations (or the
equivalent governing documents) of that Entity and (c) each document
setting forth the designation, amount and relative rights, limitations
and preferences of any class or series of that Entity's Capital Stock or
of any rights in respect of that Entity's Capital Stock.
"CLAIM NOTICE" has the meaning specified in Section 9.05.
"CLOSING" has the meaning specified in Section 7.01.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY COMMITMENT" has the meaning specified in Section
4.22.
"COMPANY ERISA BENEFIT PLAN" has the meaning specified in
Section 4.26.
"COMPANY ERISA PENSION PLAN" has the meaning specified in
Section 4.26.
"COMPANY ERISA GROUP" means any "group of organizations"
within the meaning of Section 414(b), (c), (m) or (o) of the Code or any
"controlled group" as defined in Section 4001 (a)(14) of ERISA.
"COMPANY SUBSIDIARY" means at any time any Entity that is a
Subsidiary of the Company at that time.
"CONFIDENTIAL INFORMATION" means, with respect to any Person,
all trade secrets and other confidential, nonpublic and/or proprietary
information of that Person, including information derived from designs,
reports, investigations, research, testing, development,
work-in-progress, codes, marketing and sales programs, capital
expenditure projects, cost summaries, pricing formulae, contract
analyses, financial information, projections, confidential filings with
any Governmental Authority and any other confidential, nonpublic
concepts, methods of doing business, ideas, materials or information
prepared or performed for, by or on behalf of that Person.
"CURRENT BALANCE SHEET" has the meaning specified in Section
1.01.
"CURRENT BALANCE SHEET DATE" has the meaning specified in
Section 1.01
"CURRENT DATE" means any day during the 20-day period ending
on the date of the Closing.
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"DAMAGE" to any specified Person means any cost, damage
(including any consequential damage) or expense (including reasonable
and necessary or appropriate fees and actual expenses of and
disbursements by attorneys, consultants, experts or other
Representatives and Litigation costs) to, any fine of or penalty on, or
any liability (including loss of earnings or profits) of, any other
nature of that Person.
"DAMAGE CLAIM" means, as asserted (a) against any specified
Person, any claim, demand or Litigation made or pending against that
Person for Damages to any other Person, or (b) by the specified Person,
any claim or demand of the specified Person against any other Person for
Damages to the specified Person.
"DGCL" means the General Corporation Law of the State of
Delaware.
"DERIVATIVE SECURITIES" of a specified Entity means any
Capital Stock or debt security or other Indebtedness of the specified
Entity or any other Person which is convertible into or exchangeable
for, or any option, warrant or other right to acquire, (a) any unissued
Capital Stock of the specified Entity or (b) any Capital Stock of the
specified Entity which has been issued and is being held by the Entity
directly or indirectly as treasury Capital Stock.
"EFFECTIVE TIME" has the meaning specified in Section 2.02.
"ELECTION PERIOD" has the meaning specified in Section 9.05.
"EMPLOYEE POLICIES AND PROCEDURES" means at any time all
employee manuals and all material policies, procedures and work-related
rules that apply at that time to any employee, nonemployee director or
officer of, or any other natural person performing consulting or other
independent contractor services for, the Company or any Company
Subsidiary.
"EMPLOYMENT AGREEMENT" means at any time (a) any agreement to
which the Company or any Company Subsidiary is a party which then
relates to the direct or indirect employment or engagement, or arises
from the past employment or engagement, of any natural person by the
Company or any Company Subsidiary, whether as an employee, a nonemployee
officer or director, a consultant or other independent contractor, a
sales representative or a distributor of any kind, including any
employee leasing or service agreement and any noncompetition agreement,
and (b) any agreement between the Company or any Company Subsidiary and
any Person which arises from the sale of a business by that Person to
the Company or any Company Subsidiary and limits that Person's
competition with the Company or any Company Subsidiary
"ENTITY" means any sole proprietorship, corporation,
partnership of any kind having a separate legal status, limited
liability company, business trust, unincorporated
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organization or association, mutual company, joint stock company or
joint venture.
"ENVIRONMENTAL LAWS" means any and all Governmental
Requirements relating to the environment or worker health or safety,
including ambient air, surface water, land surface or subsurface strata,
or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including Solid Wastes, Hazardous Wastes or
Hazardous Substances) or noxious noise or odor into the environment or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, recycling, removal, transport or handling
of pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes (including petroleum, petroleum distillates,
asbestos or asbestos-containing material, polychlorinated biphenyls,
chlorofluorocarbons or hydrochlorofluorocarbons).
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA AFFILIATE" means, with respect to any specified Person
at any time, any other Person, including an Affiliate of the specified
Person, that is, or at any time within six years of that time was, a
member of any ERISA Group of which the specified Person is or was a
member at the same time.
"ERISA AFFILIATE PENSION PLAN" has the meaning specified in
Section 4.26.
"ERISA EMPLOYEE BENEFIT PLAN" means any "employee benefit
plan" as defined in Section 3(3) of ERISA and includes any ERISA Pension
Benefit Plan.
"ERISA PENSION BENEFIT PLAN" means any "employee pension
benefit plan," as defined in Section 3(2) of ERISA, including any plan
that is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code (excluding any Multiemployer
Plan).
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FINAL PROSPECTUS" means the prospectus included in the
Registration Statement at the time it becomes effective, except that if
the prospectus first furnished to the Underwriter after the Registration
Statement becomes effective for use in connection with the IPO differs
from the prospectus included in the Registration Statement at the time
it becomes effective (whether or not the prospectus so furnished to the
Underwriter is required to be filed with the SEC pursuant to Securities
Act Rule 424(b)), the prospectus so furnished is the "FINAL PROSPECTUS."
"FINANCIAL STATEMENTS" means the Initial Financial Statements
and the other financial statements of the Company and the Company
Subsidiaries, if any, delivered to TMI pursuant to Section 6.09 prior to
the Effective Time.
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"GAAP" means generally accepted accounting principles and
practices in the United States as in effect from time to time which (i)
have been concurred with by Xxxxxx Xxxxxxxx LLP and (ii) have been or
are applied on a basis consistent (except for changes concurred with by
Xxxxxx Xxxxxxxx LLP) with the most recent audited Financial Statements
delivered to TMI prior to the Effective Time.
"GENERAL RELEASE" means the general release of the Company and
the Company Subsidiaries to be executed at or before, and delivered to
TMI and the Company at, the Closing, effective as of the Effective Time,
by each Stockholder, which general release shall be in the form of
Exhibit 1.02-B with the blanks appropriately filled.
"GOVERNMENTAL APPROVAL" means at any time any authorization,
consent, approval, permit, franchise, certificate, license, implementing
order or exemption of, or registration or filing with, any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any national, state, county,
municipal or other government, domestic or foreign, or any agency,
board, bureau, commission, court, department or other instrumentality of
any such government.
"GOVERNMENTAL REQUIREMENT" means at any time (a) any law,
statute, code, ordinance, order, rule, regulation, judgment, decree,
injunction, writ, edict, award, authorization or other requirement of
any Governmental Authority in effect at that time or (b) any obligation
included in any certificate, certification, franchise, permit or license
issued by any Governmental Authority or resulting from binding
arbitration, including any requirement under common law, at that time.
"GUARANTY" means, for any specified Person, without
duplication, any liability, contingent or otherwise, of that Person
guaranteeing or otherwise representing liability for any obligation of
any other Person (the "primary obligor") in any manner, whether directly
or indirectly, and including any liability of the specified Person,
direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) that obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the
payment of that obligation, (b) to purchase property, securities or
services for the purpose of assuring the owner of that obligation of its
payment, or (c) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay that obligation; PROVIDED, HOWEVER,
that the term "Guaranty" excludes endorsements for collection or deposit
in the ordinary course of the endorser's business.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976.
"IMMEDIATE FAMILY MEMBER" of a Stockholder means at any time:
(a) if the
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Stockholder is a natural person, any child or grandchild (by blood or
legal adoption) or spouse of that Stockholder at that time, or any child
of the spouse; and (b) if the Stockholder is an Entity whose ultimate
beneficial owner is a natural person, or a natural person and his
spouse, any child or grandchild (by blood or legal adoption) or spouse
at that time (if not then an ultimate beneficial owner of that Entity),
or any child of the spouse, of the ultimate beneficial owner or owners.
"INDEBTEDNESS" of any Person means, without duplication, (a)
any liability of that Person (i) for borrowed money or arising out of
any extension of credit to or for the account of that Person (including
reimbursement or payment obligations with respect to surety bonds,
letters of credit, banker's acceptances and similar instruments), for
the deferred purchase price of property or services or arising under
conditional sale or other title retention agreements, other than trade
payables arising in the ordinary course of business, (ii) evidenced by
notes, bonds, debentures or similar instruments, (iii) in respect of
Capital Leases, or (iv) in respect of Interest Rate Protection
Agreements, (b) any liability secured by any Lien upon any property or
assets of that Person (or upon any revenues, income or profits of that
Person therefrom), whether or not that Person has assumed that liability
or otherwise become liable for the payment thereof, or (c) any liability
of others of the type described in the preceding clause (a) or (b) in
respect of which that Person has incurred, assumed or acquired a
liability by means of a Guaranty.
"INDEMNITY NOTICE" has the meaning specified in Section 9.05.
"INDEMNIFIED PARTY" has the meaning specified in Section 9.05.
"INDEMNIFYING PARTY" has the meaning specified in Section
9.05.
"INFORMATION" means written information, including (a) data,
certificates, reports and statements (excluding Financial Statements)
and (b) summaries of unwritten agreements, arrangements, contracts,
plans, policies, programs or practices or of unwritten amendments or
modifications of, supplements to or waivers under any of the foregoing
documents.
"INTEREST RATE PROTECTION AGREEMENT" means, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement
providing for the transfer or mitigation of interest rate risks of that
Person, either generally or under specific contingencies, between that
Person and any other Person.
"IPO" means the first time after September 1, 1997 a
registration statement filed under the Securities Act and respecting a
primary offering by TMI of shares of TMI Common Stock (other than a
registration statement respecting shares being offered pursuant to a
Company ERISA Benefit Plan or any Other Compensation Plan) is declared
effective under the Securities Act and the shares registered by that
registration statement
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are issued and sold by TMI (otherwise than pursuant to the exercise by
the Underwriter of any over-allotment option).
"IPO CLOSING DATE" means the date on which TMI first receives
payment for the shares of TMI Common Stock it sells to the Underwriter
in the IPO.
"IPO COMMITTEE" means those persons named in the Registration
Statement as the directors of TMI effective upon consummation of the IPO
Closing, other than Xxxxxx X. Xxxxxxxxx and Xxxx X. Xxxxxx, XX, M.D.
"IPO PRICE" means the price per share of TMI Common Stock
which is set forth as the "price to public" on the cover page of the
Final Prospectus.
"IPO PRICING DATE" means the date, if any, on which TMI and
the Underwriter agree in the Underwriting Agreement to the price per
share of Common Stock at which the Underwriter, subject to the terms and
conditions of the Underwriting Agreement, will purchase newly issued
shares of TMI Common Stock from TMI on the IPO Closing Date.
"IRS" means the Internal Revenue Service.
"LIEN" means, with respect to any property or asset of any
Person (or any revenues, income or profits of that Person therefrom) (in
each case whether the same is consensual or nonconsensual or arises by
contract, operation of law, legal process or otherwise), (a) any
mortgage, lien, security interest, pledge, attachment, levy or other
charge or encumbrance of any kind thereupon or in respect thereof or (b)
any other arrangement under which the same is transferred, sequestered
or otherwise identified with the intention of subjecting the same to, or
making the same available for, the payment or performance of any
liability in priority to the payment of the ordinary, unsecured
creditors of that Person, including any "adverse claim" (as defined in
Section 8-302(b) of each applicable Uniform Commercial Code) in the case
of any Capital Stock. For purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any asset that Person has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention
agreement relating to that asset.
"LITIGATION" means any action, case, proceeding, claim,
grievance, suit or investigation or other proceeding conducted by or
pending before any Governmental Authority or any arbitration proceeding.
"MATERIAL" means, as applied to any Entity, material to the
business, operations, property or assets, liabilities, financial
condition or results of operations of that Entity and its Subsidiaries
considered as a whole.
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"MATERIAL ADVERSE EFFECT" means, with respect to the
consequences of any fact or circumstance (including the occurrence or
non-occurrence of any event) to the Company and the Company Subsidiaries
considered as a whole (or after the Effective Time the Surviving
Corporation and the Company Subsidiaries considered as a whole), that
such fact or circumstance has caused, is causing or will cause, directly
or indirectly, singly or in the aggregate with other facts and
circumstances, any Damages in excess of the Threshold Amount.
"MATERIAL AGREEMENT" of an Entity means any contract or
agreement (a) to which that Entity or any of its Subsidiaries is a
party, or by which that Entity or any of its Subsidiaries is bound or to
which any property or assets of that Entity or any of its Subsidiaries
is subject and (b) which is Material to that Entity.
"MINIMUM CASH AMOUNT" has the meaning specified in Section
7.02.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA, Section 414 of the Code or Section 3(37)
of ERISA.
"NEWCO COMMON STOCK" means the common stock, par value $.001
per share, of Newco.
"ORGANIZATION STATE" means, as applied to (a) any corporation,
its state or other jurisdiction of incorporation, (b) any limited
liability company or limited partnership, the state or other
jurisdiction under whose laws it is organized and existing in that legal
form, and (c) any other Entity, the state or other jurisdiction whose
laws govern that Entity's internal affairs.
"OTHER AGREEMENTS" has the meaning specified in the
Preliminary Statement in this Agreement.
"OTHER COMPENSATION PLAN" means any compensation arrangement,
plan, policy, practice or program established, maintained or sponsored
by the Company or any Company Subsidiary, or to which the Company or any
Company Subsidiary contributes, on behalf of any of its employees,
nonemployee directors or officers or other natural persons performing
consulting or other independent contractor services for the Company or
any Company Subsidiary, including all such arrangements, plans,
policies, practices or programs providing for severance pay, deferred
compensation, incentive, bonus or performance awards or the actual or
phantom ownership of any Capital Stock or Derivative Securities of the
Company or any Company Subsidiary, but excluding all Company ERISA
Pension Plans and Employment Agreements.
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"OTHER FINANCING SOURCES" has the meaning specified in Section
7.02.
"OTHER NEWCO SUBSIDIARIES" means the Subsidiaries of TMI which
are parties to the Other Agreements.
"OTHER TRANSACTION DOCUMENTS" means the Other Agreements and
the other written agreements, documents, instruments and certificates at
any time executed pursuant to or in connection with the Other Agreements
(other than the Transaction Documents and the Underwriting Agreement),
all as amended, modified or supplemented from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PERMITTED INVESTMENTS" means at the time of their purchase or
other acquisition by the Company or any Company Subsidiary (a)
obligations issued or guaranteed by the United States of America with a
remaining maturity not exceeding one year, (b) commercial paper with
maturities of not more than 270 days and a published rating of not less
than A-1 by S&P or P-1 by Xxxxx'x, and (c) certificates of deposit and
bankers' acceptances having maturities of not more than one year of any
commercial bank or trust company if (A) the issuing bank or trust
company has a combined capital and surplus of at least $500,000,000 and
(B) its unsecured long-term debt obligations, or those of a holding
company of which it is a Subsidiary, are rated not less than A- by S&P
or A3 by Xxxxx'x.
"PERMITTED LIENS" means, as applied to the property or assets
of any Person (or any revenues, income or profits of that Person
therefrom): (a) Liens for Taxes if the same are not at the time due and
delinquent; (b) Liens of carriers, warehousemen, mechanics, laborers and
materialmen for sums not yet due; (c) Liens incurred in the ordinary
course of that Person's business in connection with worker's
compensation, unemployment insurance and other social security
legislation (other than pursuant to ERISA or Section 412(n) of the
Code); (d) Liens incurred in the ordinary course of that Person's
business in connection with deposit accounts or to secure the
performance of bids, tenders, trade contracts, statutory obligations,
surety and appeal bonds, performance and return-of- money bonds and
other obligations of like nature; (e) easements, rights-of-way,
reservations, restrictions and other similar encumbrances incurred in
the ordinary course of that Person's business or existing on property
and not materially interfering with the ordinary conduct of that
Person's business or the use of that property; (f) defects or
irregularities in that Person's title to its real properties which do
not materially diminish the value of the surface estate or interfere
with the ordinary conduct of that Person's business or the use of any of
such properties; (g) any interest or title of a lessor of assets being
leased by any Person pursuant to any Capital Lease disclosed in Section
4.19 of the Disclosure Statement or any lease that, pursuant to GAAP,
would be accounted for as an operating lease; and (h) Liens securing
purchase money Indebtedness disclosed in Section
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4.18 or 4.19 of the Disclosure Statement so long as such Liens do not
attach to any property or assets other than the properties or assets
purchased with the proceeds of such Indebtedness.
"PERSON" means any natural person, Entity, estate, trust,
union or employee organization or Governmental Authority or, for the
purpose of the definition of "ERISA Affiliate," any trade or business.
"PLAN" has the meaning specified in Section 4.27.
"PRIVATE PLACEMENT MEMORANDUM" means the TMI Private Placement
Memorandum dated as of September 7, 1997, relating to the offer of TMI
Common Stock in connection with the Merger.
"PROHIBITED TRANSACTION" means any transaction that is
prohibited under Section 4975 of the Code or Section 406 of ERISA and
not exempt under Section 4975 of the Code or Section 408 of ERISA.
"PROPERTY, PLANT AND EQUIPMENT" means at any time any property
that then would be included and classified as property, plant and
equipment on a consolidated balance sheet prepared in accordance with
GAAP of the Company and the Company Subsidiaries.
"PROPRIETARY RIGHTS" means (a) patents, applications for
patents and patent rights, (b) in each case, whether registered,
unregistered or under pending registration, trademark rights, trade
names, trade name rights, corporate names, business names, trade styles
or dress, service marks and logos and other trade designations and
copyrights and (c), in the case of the Company or any Company
Subsidiary, all agreements relating to the technology, know-how or
processes used or marketed in any business of the Company or any Company
Subsidiary.
"QUALIFIED PLANS" has the meaning specified in Section 4.27.
"REGISTRATION RIGHTS AGREEMENT" means the registration rights
agreement to be executed and delivered at the Closing by TMI and the
Stockholders electing to be parties thereto in the form of Exhibit
1.02-A, with it blanks appropriately completed.
"REGISTRATION STATEMENT" means the registration statement,
including (a) each preliminary prospectus included therein prior to the
date on which that registration statement is declared effective under
the Securities Act (including any prospectus filed with the SEC pursuant
to Securities Act Rule 424(b)), (b) the Final Prospectus and (c) any
amendments thereof and all supplements and exhibits thereto, filed by
TMI with the SEC to register shares of TMI Common Stock under the
Securities Act for public
10
offering and sale in the IPO.
"RETURNS" means the returns, reports or statements (including
any information returns) any Governmental Requirement requires to be
filed for purposes of any Tax.
"RELATED PARTY AGREEMENT" means any contract or other
agreement, written or oral, to which the Company or any Company
Subsidiary is a party or is bound or by which any property of the
Company or any Company Subsidiary is bound or may be subject and (a) to
which any Stockholder or any of that Stockholder's Related Persons or
Affiliates also is a party, (b) of which any Stockholder or any of that
Stockholder's Related Persons or Affiliates is a beneficiary, or (c) as
to which any transaction contemplated thereby properly would be
characterized (without regard to the amount involved) as a related party
transaction for purposes of applying the disclosure requirements of GAAP
or the SEC applicable to the Registration Statement.
"RELATED PERSON" of a Stockholder means: (a) if the
Stockholder is a natural person, (i) any Immediate Family Member of the
Stockholder, (ii) any Estate of the Stockholder or any Immediate Family
Member of the Stockholder, (iii) the trustee of any inter vivos or
testamentary trust of which all the beneficiaries are Related Persons of
the Stockholder and (iv) any Entity the entire equity interest in which
is owned by any one or more of the Stockholder and Related Persons of
the Stockholder; and (b) if the Stockholder is an Entity, Estate or
trust, (i) any Person who owns an equity interest in the Stockholder on
the date hereof, (ii) any Person who would be a Related Person under
clause (a) of this definition of a natural person who is an ultimate
beneficial owner of the Stockholder or (iii) any other Entity the entire
equity interest in which is owned by any one or more of the Stockholder
and Related Persons of the Stockholder. As used in this definition,
"Estate" means, as to any natural person who has died or been
adjudicated mentally incompetent by a court of competent jurisdiction,
(i) that person's estate or (ii) the administrator, conservator,
executor, guardian or representative of that person's estate.
"REPRESENTATIVES" means, with respect to any Person, the
directors, officers, employees, Affiliates, accountants (including
independent certified public accountants), advisors, attorneys,
consultants or other agents of that Person, or any other representatives
of that Person or of any of that Person's directors, officers,
employees, Affiliates, accountants (including independent certified
public accountants), advisors, attorneys, consultants or other agents.
"REPORTABLE EVENT" means, with respect to any Company ERISA
Pension Plan, (a) the occurrence of any of the events set forth in
Section 4043(b) or 4043(c) (other than a Reportable Event as to which
the provision of 30 days' notice to the PBGC is waived under applicable
regulations), 4062(e) or 4063(a) of ERISA with respect to that plan, (b)
any event requiring the Company or any ERISA Affiliate to provide
security to that plan
11
under Section 401 (a)(29) of the Code, or (c) any failure to make a
payment required by Section 412(m) of the Code with respect to that
plan.
"RCRA" means the Resource Conservation and Recovery Act of
1976.
"RESTRICTED PAYMENT" means, with respect to any Entity at any
time, any of the following effected by the Entity: (a) any declaration
or payment of any dividend or other distribution, direct or indirect on
account of any Capital Stock of that Entity or any Affiliate of the
Entity or (b) any direct or indirect redemption, retirement, purchase or
other acquisition for value of, or any direct or indirect purchase,
payment or sinking fund or similar deposit for the redemption,
retirement, purchase or other acquisition for value of, or to obtain the
surrender of, any then outstanding Capital Stock of the Entity or any
Affiliate of the Entity or any then outstanding warrants, options or
other rights to acquire or subscribe for or purchase unissued or
treasury Capital Stock of the Entity or any of its Affiliates.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933.
"SOLID WASTES, HAZARDOUS WASTES OR HAZARDOUS SUBSTANCES" have
the meanings ascribed to those terms in CERCLA, RCRA or any other
Environmental Law applicable to the business or operations of the
Company or any Company Subsidiary which imparts a broader meaning to any
of those terms than does CERCLA or RCRA.
"S&P" means Standard and Poor's Rating Group.
"STOCKHOLDER INDEMNIFIED PARTY" means (a) each Stockholder and
each of that Stockholder's Affiliates (other than the Company or,
following the Effective Time, the Surviving Corporation or TMI or any of
its Subsidiaries, if the Stockholder is an Affiliate of TMI), agents and
counsel and (b) prior to the Effective Time, the Company and each of its
officers, directors, employees, agents and counsel who are not
Stockholder Indemnified Parties within the meaning of clause (a) of this
definition.
"STOCKHOLDER INDEMNIFIED LOSS" has the meaning specified in
Section 9.04.
"SUBSIDIARY" of any specified Person at any time, means any
entity a majority of the Capital Stock of which is at that time owned or
controlled, directly or indirectly, by the specified Person.
"SUPPLEMENTAL INFORMATION" has the meaning specified in
Section 6.07.
"TAX" or "TAXES" means all net or gross income, gross
receipts, net proceeds,
12
sales, use, ad valorem, value added, franchise, withholding, payroll,
employment, excise, property, deed, stamp, alternative or add-on
minimum, environmental or other taxes, assessments, duties, fees, levies
or other governmental charges or assessments of any nature whatever
imposed by any Governmental Requirement, whether disputed or not,
together with any interest, penalties, additions to tax or additional
amounts with respect thereto.
"TAXING AUTHORITY" means any Governmental Authority having or
exercising jurisdiction with respect to any Tax.
"TERMINATION EVENT" means, with respect to any Company ERISA
Pension Plan, (a) any Reportable Event with respect to that plan which
is likely to result in the termination of that plan, (b) the termination
of, or the filing of a notice of intent to terminate, that plan or the
treatment of any amendment to that plan as a termination under Section
4041(c) of ERISA, or (c) the institution of proceedings to terminate, or
the appointment of a trustee to administer, that plan under Section 4042
of ERISA.
"TMI COMMON STOCK" means the common stock, par value $.001 per
share, of TMI.
"TMI INDEMNIFIED PARTY" means TMI and its Affiliates and each
of their respective officers, directors, employees, agents and counsel;
PROVIDED, HOWEVER, that no Person who indemnifies TMI Indemnified
Parties in this Agreement in his capacity as a Stockholder will be a TMI
Indemnified Party for purposes of this Agreement, notwithstanding that
the Person is a TMI Indemnified Party for purposes of one or more of the
Other Agreements.
"TMI INDEMNIFIED LOSS" has the meaning specified in Section
9.03.
"THIRD PARTY CLAIM" has the meaning specified in Section 9.05.
"TRANSACTION DOCUMENT" means this Agreement, the Certificates
of Merger, the General Release, the Registration Rights Agreement and
the other written agreements, documents, instruments and certificates
executed pursuant to or in connection with this Agreement (other than
the Other Transaction Documents and the Underwriting Agreement),
including those specified in Article VII to be delivered at or before
the Closing, all as amended, modified or supplemented from time to time.
"UNDERWRITER" means collectively (a) the investment banking
firms that prospectively may enter into the Underwriting Agreement and
(b) from and after the IPO Pricing Date, the investment banking firms
parties to the Underwriting Agreement.
"UNDERWRITING AGREEMENT" has the meaning specified in Section
7.02.
13
"WELFARE PLAN" means an "employee welfare benefit plan" as
defined in Section 3(1) of ERISA.
"WHOLLY OWNED SUBSIDIARY" means any corporation or other
Entity all of the outstanding Capital Stock of which, on a fully diluted
basis, is owned and controlled, directly or indirectly through another
Wholly Owned Subsidiary, by the Company.
Section 1.03. OTHER DEFINITIONAL PROVISIONS. (a) Except as otherwise
specified herein, all references herein to any Governmental Requirement
defined or referred to herein, including the Code, CERCLA, ERISA, the
Exchange Act, RCRA and the Securities Act, shall be deemed references to
that Governmental Requirement or any successor Governmental Requirement,
as the same may have been amended or supplemented from time to time, and
any rules or regulations promulgated thereunder.
(b) When used in this Agreement, the words "herein," "hereof"
and "hereunder" and words of similar import shall refer to this
Agreement as a whole and not to any provision of this Agreement, and the
words "Article," "Section," "Annex," "Schedule" and "Exhibit" refer to
Articles and Sections of, and Annexes, Schedules and Exhibits to, this
Agreement unless otherwise specified.
(c) Whenever the context so requires, the singular number
includes the plural and VICE VERSA, and a reference to one gender
includes the other gender and the neuter.
(d) The word "including" (and, with correlative meaning, the
word "include") means including, without limiting the generality of any
description preceding such word, and the words "shall" and "will" are
used interchangeably and have the same meaning.
Section 1.04 CAPTIONS. Captions to Articles, Sections and subsections
of, and Annexes, Schedules and Exhibits to, this Agreement or any other
Transaction Document are included for convenience of reference only, and shall
not constitute a part of this Agreement or any other Transaction Document for
any other purpose, nor shall they in any way affect the meaning or construction
of any provision of this Agreement or any other Transaction Document.
14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Section 3.02. OWNERSHIP AND STATUS OF COMPANY CAPITAL STOCK. The
Stockholder is the record and beneficial owner (or, if the Stockholder is a
trust or the estate of a deceased natural person, the legal owner) of the number
of shares of Company Capital Stock set forth, by each class, and by each series
in each class, thereof, opposite the Stockholder's name in Schedule 3.02, free
and clear of all Liens, except for the Liens accurately set forth in Schedule
3.02, all of which will be released at or before the Effective Time.
Section 3.03. POWER OF THE STOCKHOLDER; APPROVAL OF THE MERGER. (a) The
Stockholder has the full power, legal capacity and authority to execute
and deliver this Agreement and each other Transaction Document to which
the Stockholder is a party and to perform the Stockholder's obligations
in this Agreement and in all other Transaction Documents to which the
Stockholder is a party. This Agreement constitutes, and each such other
Transaction Document, when executed in the Stockholder's individual
capacity and delivered by the Stockholder, will constitute, the legal,
valid and binding obligation of the Stockholder, enforceable against the
Stockholder in accordance with its terms, except as that enforceability
may be (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of
equity (regardless of whether that enforceability is considered in a
proceeding in equity or at law). If the Stockholder is an Entity, the
Stockholder has obtained, in accordance with all applicable Governmental
Requirements and its Charter Documents, all approvals and the taking of
all actions necessary for the authorization, execution, delivery and
performance by the Stockholder of this Agreement and the other
Transaction Documents to which the Stockholder is a party. If the
Stockholder is acting otherwise than in his individual capacity (whether
as an executor or a guardian or in any other fiduciary or representative
capacity), all actions on the part of the Stockholder and all other
Persons (including any court) necessary for the authorization,
execution, delivery and performance by the Stockholder of this Agreement
and the other Transaction Documents to which the Stockholder is a party
have been duly taken.
(b) The Stockholder, acting in each capacity in which he is
entitled, by reason of the Company's Charter Documents or the
Governmental Requirements of the Company's Organization State or for any
other reason, to vote to approve or disapprove the consummation of the
Merger, has voted all the shares of Company Capital Stock owned by him
and entitled to a vote or votes on that matter, in any one or more of
the manners prescribed or permitted by the Company's Charter Documents
or the Governmental Requirements of the Company's Organization State,
whichever are controlling, to approve this Agreement and the
consummation of the Merger and the other transactions contemplated by
this Agreement.
15
Section 3.04. NO CONFLICTS OR LITIGATION. The execution, delivery and
performance in accordance with their respective terms by the Stockholder of this
Agreement and the other Transaction Documents to which the Stockholder is a
party do not and will not (a) violate any Governmental Requirement, (b) breach
or constitute a default under any agreement or instrument to which the
Stockholder is a party or by which the Stockholder or any of the shares of
Company Capital Stock owned by the Stockholder is bound, (c) result in the
creation or imposition of, or afford any Person the right to obtain, any Lien
upon any of the shares of Company Capital Stock owned by the Stockholder (or
upon any revenues, income or profits of the Stockholder therefrom) or (d) if the
Stockholder is an Entity, violate the Stockholder's Charter Documents. No
Litigation is pending or, to the knowledge of the Stockholder, threatened to
which the Stockholder is or may become a party which (a) questions or involves
the validity or enforceability of any of the Stockholder's obligations under any
Transaction Document or (b) seeks (or reasonably may be expected to seek) (i) to
prevent or delay the consummation by the Stockholder of the transactions
contemplated by this Agreement to be consummated by the Stockholder or (ii)
Damages in connection with any consummation by the Stockholder of the
transactions contemplated by this Agreement.
Section 3.05. NO BROKERS. The Stockholder has not, directly or
indirectly, in connection with this Agreement or the transactions contemplated
hereby (a) employed any broker, finder or agent or (b) agreed to pay or incurred
any obligation to pay any broker's or finder's fee, any sales commission or any
similar form of compensation.
Section 3.06. PREEMPTIVE AND OTHER RIGHTS; WAIVER. Except for the right
of the Stockholder to receive shares of TMI Common Stock as a result of the
Merger or to acquire TMI Common Stock pursuant to any written option or warrant
granted by TMI to the Stockholder, the Stockholder either (a) does not have any
statutory or contractual preemptive or other right of any kind (including any
right of first offer or refusal) to acquire any shares of Company Capital Stock
or TMI Common Stock or (b) hereby irrevocably waives each right of that type the
Stockholder owns or otherwise has.
Section 3.07. CONTROL OF RELATED BUSINESSES. Except as accurately set
forth in Schedule 3.07, the Stockholder is not, alone or with one or more other
Persons, the controlling Affiliate of any Entity, business or trade (other than
the Company and the Company Subsidiaries, if the Stockholder is an Affiliate of
the Company) that (a) is engaged in any line of business which is the same as or
similar to any line of business in which the Company or any Company Subsidiary
is engaged or (b) is, or has within the three-year period ending on the date of
this Agreement, engaged in any transaction with the Company or any Company
Subsidiary, except for (i) transactions in the ordinary course of business of
the Company or that Company Subsidiary and (ii) any single transaction (or
series of related transactions) involving property or services having a value,
or the payment of money, in excess of $20,000.
16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
THE COMPANY AND THE STOCKHOLDERS
Section 4.02. QUALIFICATION. Section 4.02 of the Disclosure Statement
accurately lists all the jurisdictions in which the Company and the Company
Subsidiaries is authorized or qualified to own or lease and to operate its
properties or to carry on its business as now conducted, and neither the Company
nor any Company Subsidiary owns, leases or operates properties or carries on its
business in any jurisdiction not listed in that Section.
Section 4.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF CONFLICTS;
REQUIRED CONSENTS. (a) The execution, delivery and performance by the
Company of this Agreement and each other Transaction Document to which
it is a party, and the effectuation of the Merger and the other
transactions contemplated hereby and thereby, are within its corporate
or other power under its Charter Documents and all applicable
Governmental Requirements of its Organization State and have been duly
authorized by all proceedings, including actions permitted to be taken
in lieu of proceedings, required under its Charter Documents and all
applicable Governmental Requirements.
(b) This Agreement has been, and each of the other Transaction
Documents to which the Company is a party, when executed and delivered
to TMI (or, in the case of the Certificate of Merger, the applicable
Governmental Authorities) will have been, duly executed and delivered by
the Company and is, or when so executed and delivered will be, the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as that enforceability
may be (i) limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and (ii) subject to general principles of
equity (regardless of whether that enforceability is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance in accordance with
their respective terms by the Company of the Transaction Documents to
which it is a party have not and will not (i) violate, breach or
constitute a default under (A) the Charter Documents of any of the
Company and the Company Subsidiaries, (B) any Governmental Requirement
applicable to any of the Company and the Company Subsidiaries or (C)
except as set forth in Section 4.03 of the Disclosure Statement, any
Material Agreement of the Company, (ii) except as set forth in Section
4.03 of the Disclosure Statement, result in the acceleration or
mandatory prepayment of any Indebtedness, or any Guaranty not
constituting Indebtedness, of any of the Company and the Company
Subsidiaries or afford any holder of any of that Indebtedness, or any
beneficiary of any of those Guaranties, the right to require any of the
Company and the Company Subsidiaries to
17
redeem, purchase or otherwise acquire, reacquire or repay any of that
Indebtedness, or to perform any of those Guaranties, (iii) cause or
result in the imposition of, or afford any Person the right to obtain,
any Lien upon any property or assets of any of the Company and the
Company Subsidiaries (or upon revenues, income or profits of any of the
Company and the Company Subsidiaries therefrom), (iv) except as set
forth in Section 4.03 of the Disclosure Statement, result in the
revocation, cancellation, suspension or material modification, in any
single case or in the aggregate, of any Governmental Approval possessed
by any of the Company and the Company Subsidiaries at the date hereof
and necessary for the ownership or lease or the operation of its
properties or the carrying on of its business as now conducted,
including any necessary Governmental Approval under each applicable
Environmental Law, or (v) except as set forth in Section 4.03 of the
Disclosure Statement, entitle any Person other than the Company or a
Company Subsidiary to revoke, cancel, suspend or materially modify any
Company Commitment.
(d) Except for (i) the filing of the Certificates of Merger
with the applicable Governmental Authorities, (ii) filings of the
Registration Statement under the Securities Act and the SEC order
declaring the Registration Statement effective under the Securities Act,
and (iii) as may be required by the HSR Act or the applicable state
securities or blue sky laws, no Governmental Approvals are required to
be obtained, and no reports or notices to or filings with any
Governmental Authority are required to be made, by any of the Company
and the Company Subsidiaries for the execution, delivery or performance
by the Company of the Transaction Documents to which it is a party, the
enforcement against the Company of its obligations thereunder or the
effectuation of the Merger and the other transactions contemplated
thereby.
Section 4.04. CHARTER DOCUMENTS AND RECORDS; NO VIOLATION. The Company
has caused true, complete and correct copies of the Charter Documents, each as
in effect on the date hereof, and the minute books and similar corporate or
other Entity records of each of the Company and the Company Subsidiaries to be
delivered or otherwise made available to TMI. No breach or violation of any
Charter Document of any of the Company and the Company Subsidiaries has occurred
and is continuing.
Section 4.05. NO DEFAULTS. No act or omission by the Company or any of
the Company Subsidiaries has occurred, and to the knowledge of the Company, the
Company Subsidiaries and the Stockholders, no other condition or state of facts
exists, or, with the giving of notice or the lapse of time or both, would exist,
which (a) entitles any holder of any outstanding Indebtedness, or any Guaranty
not constituting Indebtedness, of any of the Company and the Company
Subsidiaries, or a representative of that holder, to accelerate the maturity, or
require a mandatory prepayment of that Indebtedness or Guaranty, or affords that
holder or its representative, or any beneficiary of that Guaranty, the right to
require any of the Company and the Company Subsidiaries to redeem, purchase or
otherwise acquire, reacquire or repay any of that Indebtedness, or to perform
that Guaranty in whole or in part, (b) entitles any Person to obtain
18
any Lien (other than a Permitted Lien) upon any properties or assets of any of
the Company and the Company Subsidiaries (or upon revenues, income or profits of
any of the Company and the Company Subsidiaries therefrom), or (c) constitutes a
violation or breach of, or a default under, any Material Agreement of the
Company by any of the Company and the Company Subsidiaries.
Section 4.06. COMPANY SUBSIDIARIES. Section 4.06 of the Disclosure
Statement either (a) accurately sets forth the form of organization, legal name,
each assumed name and Organization State of each Company Subsidiary or (b)
correctly states no Entity is a Company Subsidiary. Except as accurately
disclosed in Section 4.06 of the Disclosure Statement, each Company Subsidiary
is a Wholly Owned Subsidiary. In the case of any Company Subsidiary that is not
a Wholly Owned Subsidiary, Section 4.06 of the Disclosure Statement accurately
sets forth, by each class and each series within each class, the number of
outstanding shares of Capital Stock of the Company Subsidiary, (a) the Company's
aggregate direct and indirect ownership of those shares and (b) the name and
address of record and percentage ownership of those shares of each holder of
record thereof other than the Company or a Company Subsidiary. No Lien exists on
any outstanding share of Capital Stock of any Company Subsidiary which is owned
directly or indirectly by the Company other than (a) the Liens, if any,
described in Section 4.06 of the Disclosure Statement, all of which will be
released at or before the Effective Time, and (b) Permitted Liens. Except as
accurately set forth in Section 4.06 of the Disclosure Statement, the Company
does not own, of record or beneficially, directly or indirectly through any
Person, and does not control, directly or indirectly through any Person or
otherwise, any Capital Stock or Derivative Securities of any Entity other than a
Company Subsidiary.
Section 4.07. CAPITAL STOCK OF THE COMPANY AND THE COMPANY SUBSIDIARIES.
All the issued and outstanding shares of Capital Stock of each of the Company
and the Company Subsidiaries have been duly authorized and validly issued in
accordance with the applicable Governmental Requirements of their issuer's
Organization State and Charter Documents and are fully paid and nonassessable.
Neither the Company nor any Company Subsidiary has issued or sold any shares of
its outstanding Capital Stock in breach or violation of (a) any applicable
statutory or contractual preemptive rights, or any other rights of any kind
(including any rights of first offer or refusal), of any Person or (b) the terms
of any of its Derivative Securities which then were outstanding. No Person has,
otherwise than solely by reason of that Person's right, if any, to vote shares
of the Capital Stock of the Company or any Company Subsidiary it holds (to the
extent those shares afford their holder any voting rights) any right to vote on
any matter with the holders of Capital Stock of the Company or any Company
Subsidiary.
Section 4.08. TRANSACTIONS IN CAPITAL STOCK. Except as accurately set
forth in Section 4.08 of the Disclosure Statement: (a) the Company has no fixed
or contingent obligation to purchase, redeem or otherwise acquire or reacquire
any of its equity securities or any interests therein or to pay any dividend or
make any distribution in respect thereof, and (b) no transaction has been
effected, and no action has been taken, respecting the equity ownership of
either the Company or any Company Subsidiary, in either case in contemplation of
the transactions described in this Agreement.
19
Section 4.09. NO BONUS SHARES. Except as accurately set forth in Section
4.09 of the Disclosure Statement, no outstanding share of Capital Stock of the
Company was issued for less than an amount judged by the Company's Board of
Directors as its fair market value at the time of its issuance or was issued in
exchange for any consideration other than cash.
Section 4.10. PREDECESSOR STATUS; ETC. Section 4.10 of the Disclosure
Statement accurately lists all the legal and assumed names of all predecessor
companies for the past five years of the Company and each Company Subsidiary,
including the names of any Entities from which the Company previously acquired
material assets. Except as accurately disclosed in Section 4.10 of the
Disclosure Statement, the Company has not been a Subsidiary or division of
another corporation or a part of an acquisition that later was rescinded.
Section 4.11. RELATED PARTY AGREEMENTS. Except as set forth in Schedule
4.11, each Related Party Agreement in effect on the date of this Agreement will
have been terminated as of the IPO Closing Date, and no Related Party Agreement
will exist then or thereafter to and including the Effective Time.
Section 4.12. LITIGATION. Except as accurately disclosed in Section 4.12
of the Disclosure Statement, no Litigation is pending or, to the knowledge of
the Company or any Stockholder, threatened to which the Company or any Company
Subsidiary is or may become a party.
Section 4.13. FINANCIAL STATEMENTS; DISCLOSURE. (a) FINANCIAL
STATEMENTS. The Financial Statements (including in each case the related
schedules and notes) delivered to TMI present fairly, in all material
respects, the consolidated financial position of the Company and the
Company Subsidiaries at the respective dates of the balance sheets
included therein and the consolidated results of their operations and
their consolidated cash flows and stockholders' or other owners' equity
for the respective periods set forth therein and have been prepared in
accordance with GAAP. As of the date of each balance sheet included in
all previously delivered Financial Statements, neither the Company nor
any Company Subsidiary then had any outstanding Indebtedness to any
Person or any liabilities of any kind (including contingent obligations,
tax assessments or forward or long-term commitments), or any unrealized
or anticipated loss, which in the aggregate then were Material to the
Company and required to be reflected in those Financial Statements or in
the notes related thereto in accordance with GAAP which were not so
reflected.
(b) DISCLOSURE. To the knowledge of the Company and the
Stockholders (i) all Information (other than financial budgets and
projections) that (A) is set forth in the Disclosure Statement, (B) has
been delivered to TMI by or on behalf of the Company pursuant to an
express requirement of this Agreement, or (C) has been furnished to TMI
by or on behalf of the Company for inclusion in the Registration
Statement under the captions "THE COMPANY," "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
20
CONDITION AND RESULTS OF OPERATIONS," "BUSINESS," "MANAGEMENT," and
"CERTAIN TRANSACTIONS" in any prospectus forming a part of the
Registration Statement is, taken together, true and correct in all
material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein not materially misleading in light
of the circumstances under which those statements were made.
(ii) All financial budgets and projections that have been
or are hereafter from time to time prepared by the Company or
any of its Representatives and made available prior to the
Effective Time to TMI pursuant to or in connection with this
Agreement, any other Transaction Document or the transactions
contemplated hereby or thereby have been and will be prepared
and furnished to TMI in good faith and were and will be based
on facts and assumptions that are believed by the management
of the Company to be reasonable and represented and will
represent management's good faith estimate of the consolidated
projected financial performance of the Company and the Company
Subsidiaries based on the information available to the
Responsible Officer at the time so furnished (it being
acknowledged by TMI that the budgets and projections referred
to in this clause (ii) are derived from judgments made by the
Company's management and are only estimates of future results
based on assumptions made at the time of their preparation,
and that there can be no assurance that the budgets or
projections will be obtained or maintained or that actual
results will not be different from those budgeted or
projected).
Section 4.14. COMPLIANCE WITH LAWS. (a) Except as accurately disclosed
in Section 4.14 of the Disclosure Statement, to the knowledge of the
Company, each of the Company and the Company Subsidiaries are in
compliance in all material respects with the terms and conditions of all
Governmental Approvals necessary for the ownership or lease and the
operation of its properties (including all the facilities and sites it
owns or holds under any lease) and the carrying on of its business as
now conducted. The Company has provided TMI with an accurate, complete
written list of all the Governmental Approvals so possessed. To the
knowledge of the Company, all the Governmental Approvals so listed are
valid, and, except as accurately disclosed in Section 4.14 of the
Disclosure Statement, neither the Company nor any Company Subsidiary has
received any notice from any Governmental Authority of its intention to
cancel, terminate or not renew any of those Governmental Approvals.
21
(b) Except as accurately disclosed in Section 4.14 of the
Disclosure Statement, each of the Company and the Company Subsidiaries:
(i) to the knowledge of the Company, has been and continues to be in
compliance with all Governmental Requirements applicable to it or any of
its presently or previously owned or operated properties (including all
the facilities and sites now or previously owned or held by it under any
lease), businesses or operations, including all applicable Governmental
Requirements under ERISA and Environmental Laws; and (ii)(A) neither the
Company nor any Company Subsidiary has received any notice from any
Governmental Authority which asserts, or raises the possibility of
assertion of, any noncompliance with any of those Governmental
Requirements and (B) to the knowledge of the Company and the
Stockholders, no condition or state of facts exists which would provide
a valid basis for any such assertion.
Section 4.15. CERTAIN ENVIRONMENTAL MATTERS. Except as accurately
disclosed in Section 4.15 of the Disclosure Statement: (a) to the knowledge of
the Company, the Company and each Company Subsidiary have complied, and remain
in compliance, to the knowledge of the Company, with the provisions of all
Environmental Laws applicable to any of them or any of their respective
presently owned or operated facilities, sites or other properties, businesses
and operations and which relate to the reporting by the Company and each Company
Subsidiary of all sites presently owned or operated by any of them where Solid
Wastes, Hazardous Wastes or Hazardous Substances have been treated, stored,
disposed of or otherwise handled; (b) no release (as defined in the applicable
Environmental Laws) at, from, in or on any site owned or operated by the Company
or any Company Subsidiary has occurred which, if all relevant facts were known
to the relevant Governmental Authorities, reasonably could be expected to
require remediation to avoid deed record notices, restrictions, liabilities or
other consequences that would not be applicable if that release had not
occurred; (c) neither the Company nor any Company Subsidiary has transported or
arranged for the transportation of any Solid Wastes, Hazardous Wastes or
Hazardous Substances to, or disposed or arranged for the disposition of any
Solid Wastes, Hazardous Wastes or Hazardous Substances at, any off-site location
that could lead to any valid claim against the Company, any Company Subsidiary,
TMI or Newco, as a potentially responsible party or otherwise, for any clean-up
costs, remedial work, damage to natural resources, personal injury or property
damage, including any claim under CERCLA; and (d) no storage tanks exist on or
under any of the properties owned or operated by the Company or any Company
Subsidiary from which any Solid Wastes, Hazardous Wastes or Hazardous Substances
have been released into the surrounding environment. The Company has provided
TMI with copies (or if not available, accurate written summaries) of all
environmental investigations, studies, audits, reviews and other analyses
conducted by or on behalf, or which otherwise are in the possession, of the
Company or any Company Subsidiary respecting any facility, site or other
property presently owned or operated by the Company and each Company Subsidiary.
Section 4.16. LIABILITIES AND OBLIGATIONS. Section 4.16 of the
Disclosure Statement accurately lists all present liabilities, of every kind,
character and description and whether
22
accrued, absolute, fixed, contingent or otherwise, of each of the Company and
the Company Subsidiaries which exceed or reasonably could be expected to exceed
$10,000 and which (a) had been incurred prior to the Current Balance Sheet Date,
but are not reflected on the Current Balance Sheet, or (b) were incurred after
the Current Balance Sheet otherwise than in the ordinary course of business, and
consistent with the past practice, of that Entity, in each case other than (i)
obligations and liabilities of the Company and the Company Subsidiaries in
respect of the Company Commitments, (ii) obligations and liabilities of the
Company in respect of each Company ERISA Benefit Plan, (iii) obligations and
liabilities of the Company and the Company Subsidiaries set forth in the
Disclosure Statement, and (iv) obligations and liabilities of the Company and
the Company Subsidiaries which are not required to be disclosed pursuant to
another representation or warranty set forth elsewhere in this Article IV by
reason of an exception, proviso, cut-back, threshold or other limitation or
qualification specifically set forth in such other representation and warranty.
Section 4.16 of the Disclosure Statement also accurately lists and describes,
for each of the Company and the Company Subsidiaries: (a) each of its
outstanding secured and unsecured Guaranties not constituting its Indebtedness
and, for each of those Guaranties, whether any Stockholder or Related Person or
Affiliate of any Stockholder is a Person whose obligation is covered by that
Guaranty, and (b) for each of the items listed under clause (a) of this
sentence, (i) if that item is secured by any property or asset of the Company or
any Company Subsidiary, the nature of that security, and (ii) if that item is
covered in whole or in part by a Guaranty of any Stockholder or any Related
Person or Affiliate of any Stockholder, the name of the guarantor.
Section 4.17. RECEIVABLES. Except as accurately set forth in Section
4.17 of the Disclosure Statement, all the accounts and notes or other advances
receivable of the Company and the Company Subsidiaries reflected on the Current
Balance Sheet were collected, or are, in the good faith belief of the Company's
management, collectible, in the respective amounts so reflected, net of the
reserves, if any, reflected in the Current Balance Sheet.
Section 4.18. OWNED AND LEASED REAL PROPERTIES. (a) Section 4.18 of the
Disclosure Statement accurately lists and correctly describes in all
material respects: (i) all real properties owned by any of the Company
and the Company Subsidiaries and, for each of those properties, its
address, the type and square footage of each structure located thereon
and the nature of its use in the business of the Company and the Company
Subsidiaries; (ii) all real properties of which any of the Company and
the Company Subsidiaries is the lessee and, for each of those
properties, its address, the type and square footage of each structure
located thereon the Company or a Company Subsidiary is leasing and the
expiration date of its lease and the use made of the leased property in
the business of the Company and the Company Subsidiaries; and (iii) in
the case of each real property listed as being owned, whether it was
previously owned, and in the case of each real property listed as being
leased, whether it is presently owned, by any Stockholder or any of his
Related Persons or Affiliates (other than the Company and the Company
Subsidiaries, if the Stockholder is an Affiliate of the Company).
23
(b) The Company has provided TMI with true, complete and
correct copies of all title reports and title insurance policies owned
or in the possession of any of the Company and the Company Subsidiaries
and relating to any of the real properties listed as being owned in
Section 4.18 of the Disclosure Statement. Except as accurately set forth
in that Section or those reports and policies, and except for Permitted
Liens, the Company or a Company Subsidiary owns in fee, and has good,
valid and indefeasible title to, free and clear of all Liens, each
property listed in that Section as being owned.
(c) The Company has provided TMI with true, correct and
complete copies of all leases under which the Company or a Company
Subsidiary is leasing each of the properties listed in Section 4.18 of
the Disclosure Statement as being leased, and, except as accurately set
forth in Section 4.18 of the Disclosure Statement, (i) each of those
leases is, to the knowledge of the Company, valid and binding on the
lessor party thereto, and (ii) the lessee party thereto has not sublet
any of the leased space to any Person other than the Company or a
Company Subsidiary.
(d) The fixed assets of each of the Company and the Company
Subsidiaries are affixed only to one or more of the real properties
listed in Section 4.18 of the Disclosure Statement and, except as
accurately set forth in that Section, are well- maintained and adequate
for the purposes for which they presently are being used or held for
use, ordinary wear and tear excepted.
(e) The Company has accurately disclosed in all material
respects in writing to TMI all plans or projects involving the opening
of new operations, the expansion of any existing operations or the
acquisition of any real property or existing business, with respect to
which management of the Company or any Company Subsidiary has made any
expenditure in the two-year period prior to the date of the Agreement in
excess of $25,000, or which if pursued by the Company or any Company
Subsidiary would require additional capital expenditures in excess of
$25,000.
Section 4.19. OWNED AND LEASED PROPERTY, PLANT AND EQUIPMENT. (a) The
Company has provided TMI with a list accurate and complete in all
material respects of the Property, Plant and Equipment owned and leased
by any of the Company and the Company Subsidiaries, which list states,
in the case of each of those properties listed as being owned, whether
it was previously owned, and in the case of each of those properties
listed as being leased, whether it is presently owned, by any
Stockholder or any of his Related Persons or Affiliates (other than the
Company and the Company Subsidiaries, if the Stockholder is an Affiliate
of the Company).
(b) Except as accurately set forth in Section 4.19 of the
Disclosure Statement and except for Permitted Liens, the Company or a
Company Subsidiary has good, valid and indefeasible title to, free and
clear of all Liens, each property listed in that Section as being owned.
24
(c) The Company has provided TMI with true, correct and
complete copies of all leases under which the Company or a Company
Subsidiary is leasing each of the properties listed in Section 4.19 of
the Disclosure Statement as being leased and all leases referred to in
Section 4.21 and, except as accurately set forth in Section 4.19 of the
Disclosure Statement, (i) each of those leases is, to the knowledge of
the Company, valid and binding on the lessor party thereto, and (ii) the
lessee party thereto has not sublet any of the leased property to any
Person other than the Company or a Company Subsidiary.
(d) Except as accurately set forth in Section 4.19 of the
Disclosure Statement, all the Property, Plant and Equipment listed
therein are in good working order and condition, ordinary wear and tear
excepted, and adequate for the purposes for which they presently are
being used or held for use.
Section 4.20. PROPRIETARY RIGHTS. Except as accurately set forth in
Section 4.20 of the Disclosure Statement, each of the Company and the Company
Subsidiaries owns or has the legal right to use all Proprietary Rights that are
necessary to the conduct of its business as now conducted, in each case free of
any claims or infringements known to the Company or any Stockholder. Section
4.20 of the Disclosure Statement accurately (a) lists these Proprietary Rights
(except for those which, under the terms of any agreement by which the Company
acts as sales representative or distributor for any manufacturer or other
supplier, grant the Company or a Company Subsidiary the right to use trade
names, trademark rights, service marks or logos of the manufacturer or supplier
in sales literature or other marketing materials used by the Company or a
Company Subsidiary) and (b) indicates those owned by the Company or any Company
Subsidiary and, for those not listed as so owned, the agreement or other
arrangement pursuant to which they are possessed. Except as accurately set forth
in Section 4.20 of the Disclosure Statement, (a) no consent of any Person will
be required for the use of any of these Proprietary Rights by TMI or any
Subsidiary of TMI following the Effective Time and (b) no governmental
registration of any of these Proprietary Rights has lapsed or expired or been
canceled, abandoned, opposed or the subject of any reexamination request.
Section 4.21. TITLE TO OTHER PROPERTIES. In each case, free and clear of
all Liens except for Permitted Liens and as accurately set forth in Section 4.21
of the Disclosure Statement, each of the Company and the Company Subsidiaries
has good and valid title to, or holds under a lease valid and binding on the
lessor party thereto, all its tangible personal properties and assets (other
than Property, Plant and Equipment) that individually is or in the aggregate are
Material to the Company.
Section 4.22. COMMITMENTS. (a) Except as accurately set forth in Section
4.22(a) of the Disclosure Statement, the Company has provided TMI with a
complete, accurate list of each of the following (each a "Company
Commitment") to which any of the Company and the Company Subsidiaries is
a party or by which any of its properties is bound and which presently
remains executory in whole or in any part:
25
(i) each partnership, joint venture or cost-sharing agreement;
(ii) each guaranty or suretyship, indemnification or
contribution agreement or performance bond;
(iii) each instrument, agreement or other obligation
evidencing or relating to Indebtedness of any of the Company and
the Company Subsidiaries or to money lent or to be lent to
another Person;
(iv) each contract to purchase or sell real property;
(v) each agreement under which any of the Company and the
Company Subsidiaries represents or acts as agent for a
manufacturer or other supplier;
(vi) each agreement (other than individual, current purchase
orders or purchase order acknowledgments) under which any of the
Company and the Company Subsidiaries has committed to purchase
products from a manufacturer or other supplier;
(vii) each agreement (other than individual, current purchase
orders or purchase order acknowledgments) under which any of the
Company and the Company Subsidiaries has agreed to sell or supply
products or services to a hospital, medical clinic, physician or
other customer;
(viii) each agreement with dealers or sales or non-employee
commission agents, public relations or advertising agencies,
accountants or attorneys (other than in connection with this
Agreement and the transactions contemplated hereby) involving
total payments within any 12-month period in excess of $10,000
and which is not terminable without penalty and on no more than
30 days' prior notice,
(ix) each Related Party Agreement involving total payments
within any 12- month period in excess of $10,000 and which is not
terminable without penalty on no more than 30 days' prior notice;
(x) each agreement for the acquisition or provision of
services, supplies, equipment, inventory, fixtures or other
property involving more than $10,000 in the aggregate;
(xi) each contract containing any noncompetition agreement,
covenant or undertaking; or
(xii) each other agreement or commitment not made in the
ordinary course
26
of business that is Material to the Company.
True, correct and complete copies of all written Company Commitments,
and true, correct and complete written descriptions of all oral Company
Commitments, have been delivered or made available to TMI. Except as
accurately set forth in Section 4.22(a) of the Disclosure Statement: (i)
there are no existing or asserted defaults, events of default or events,
occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults or events of default under
any Company Commitment which is Material to the Company by any of the
Company and the Company Subsidiaries or, to the knowledge of the
Company, any other party thereto; and (ii) no penalties have been
incurred, nor are amendments pending, with respect to any Company
Commitment which is Material to the Company. The Company Commitments are
in full force and effect and are valid and enforceable obligations of
the Company or the Company Subsidiaries parties thereto and, to the
knowledge of the Company, the other parties thereto, in accordance with
their respective terms, and no defenses, off-sets or counterclaims have
been asserted or, to the knowledge of the Company, may be made by any
party thereto (other than by the Company or a Company Subsidiary), nor
has the Company or a Company Subsidiary, as the case may be, waived any
rights thereunder, except as accurately described in Section 4.22 of the
Disclosure Statement.
(b)Except as accurately disclosed in Section 4.22(b) of the
Disclosure Statement or contemplated hereby or by any other Transaction
Document to which the Company or any Company Subsidiary or Stockholder
is a party: (i) neither the Company nor any Company Subsidiary or
Stockholder has received notice of any plan or intention of any other
party to any Company Commitment to exercise any right to cancel or
terminate any Company Commitment, and neither the Company nor any
Company Subsidiary or Stockholder knows of any condition or state of
facts, including the consummation of the Merger, which would justify the
exercise of such a right; and (ii) neither the Company nor any Company
Subsidiary or Stockholder currently contemplates, or has reason to
believe any other Person currently contemplates, any amendment or change
to any Company Commitment.
Section 4.23. CAPITAL EXPENDITURES. Section 4.23 of the Disclosure
Statement accurately sets forth the total amount of capital expenditures
currently budgeted to be incurred by the Company and the Company Subsidiaries
during the balance of the Company's current fiscal year. Except as accurately
set forth in Section 4.23 of the Disclosure Statement, to the knowledge of the
Company and the Stockholders, no condition or state of facts exists which will
cause the total capital expenditures of the Company and the Company Subsidiaries
which will be required to replace worn-out or obsolete Property, Plant and
Equipment in the Company's current fiscal year to exceed the amount budgeted for
capital expenditures by the Company and the Company Subsidiaries for that
current fiscal year in order to maintain the types and levels of sales and
services the Company and the Company Subsidiaries presently make or provide.
27
Section 4.24. INVENTORIES. Except as accurately set forth in Section
4.24 of the Disclosure Statement: (a) all inventories, net of reserves
determined in accordance with GAAP, of each of the Company and the Company
Subsidiaries which are classified as such on the Current Balance Sheet are, to
the knowledge of the Company, merchantable and salable or usable in the ordinary
course of business of the Company and the Company Subsidiaries; (b) the
inventories reflected in the Financial Statements, as at the Current Balance
Sheet Date, (i) were reasonable in relation to the then existing circumstances
of the Company and the Company Subsidiaries on a consolidated basis and
classified as current assets in accordance with GAAP, (ii) were consistent with
their past practices and (iii) fairly reflected the average inventory levels
maintained during the 12-month period ended on that date; and (c) neither the
Company nor any Company Subsidiary depends on any single vendor for its
inventories the loss of which could have a Material Adverse Effect on the
Company or ever has sustained a difficulty Material to the Company in obtaining
its inventories.
Section 4.25. INSURANCE. Except as accurately set forth in Section 4.25
of the Disclosure Statement: (a) the Company has provided TMI with: (i) a list
accurate as of the Current Balance Sheet Date of all insurance policies then
carried by each of the Company and the Company Subsidiaries; (ii) an accurate
list of all insurance loss runs and worker's compensation claims received for
the most recently ended three policy years; and (iii) true, complete and correct
copies of all insurance policies carried by each of the Company and the Company
Subsidiaries which are in effect, all of which have been issued by insurers of
recognized responsibility and currently are, and will remain without
interruption through the IPO Closing Date, in full force and effect; (b) no
insurance carried by the Company or any Company Subsidiary has been canceled by
the insurer during the past five years, and neither the Company nor any Company
Subsidiary has ever been denied coverage; and (c) neither the Company nor any
Company Subsidiary or Stockholder has received any notice or other communication
from any issuer of any listed insurance policy of any material increase in any
deductibles, retained amounts or the premiums payable thereunder, and, to the
knowledge of the Company and the Stockholders, no such increase in deductibles,
retainages or premiums is threatened.
Section 4.26. EMPLOYEE MATTERS. (a) CASH COMPENSATION. The Company has
provided TMI with an accurate, complete written list of the names,
titles and rates of annual Cash Compensation, at the Current Balance
Sheet Date and at the date hereof (and the portions thereof attributable
to salary or the equivalent, fixed bonuses, discretionary bonuses and
other Cash Compensation, respectively) of all key employees (including
all employees who are officers or directors), nonemployee officers,
nonemployee directors and key consultants and independent contractors of
each of the Company and the Company Subsidiaries.
(b)EMPLOYMENT AGREEMENTS. Section 4.26(b) of the Disclosure
Statement accurately lists all Employment Agreements remaining executory
in whole or in part on the date hereof, complete and correct copies of
all of which have been provided to TMI by the Company. Neither the
Company nor any Company Subsidiary is a party to any
28
oral Employment Agreement.
(c)OTHER COMPENSATION PLANS. Section 4.26(c) of the Disclosure
Statement accurately lists all Other Compensation Plans either remaining
executory at the date of this Agreement or to later become effective.
The Company has provided TMI with a true, correct and complete copy of
each of the listed Other Compensation Plans that is in writing and an
accurate description of each of the listed Other Compensation Plans that
is not written. Except as accurately set forth in Section 4.26(c) of the
Disclosure Statement, each of the Other Compensation Plans, including
each that is a Welfare Plan, may be unilaterally amended or terminated
by the Company or any Company Subsidiary without liability to any of
them, except as to benefits accrued thereunder prior to amendment or
termination.
(d)ERISA BENEFIT PLANS. Section 4.26(d) of the Disclosure
Statement accurately (i) lists each ERISA Pension Benefit Plan (A) the
funding requirements of which (under Section 301 of ERISA or Section 412
of the Code) are, or at any time during the six-year period ending on
the date of this Agreement were, in whole or in part, the responsibility
of the Company or any Company Subsidiary, or respecting which the
Company or any Company Subsidiary is, or at any time during that period
was, a "contributing sponsor" or an "employer" as defined in Sections
4001(a)(13) and 3(5), respectively, of ERISA (each plan described in
this clause (A) being a "Company ERISA Pension Plan"), (B) each other
ERISA Pension Benefit Plan respecting which an ERISA Affiliate is, or at
any time during that period was, such a "contributing sponsor" or
"employer" (each plan described in this clause (B) being an "ERISA
Affiliate Pension Plan"), and (C) each other ERISA Employee Benefit Plan
that is being, or at any time during that period was, sponsored,
maintained or contributed to by the Company or any Company Subsidiary
(each plan described in this clause (C) and each Company ERISA Pension
Plan being a "Company ERISA Benefit Plan"), (ii) states the termination
date of each Company ERISA Benefit Plan and ERISA Affiliate Pension Plan
that has been terminated, and (iii) identifies for each ERISA Affiliate
Pension Plan the relevant ERISA Affiliates. The Company has provided TMI
with true, complete and correct copies of (i) each Company ERISA Benefit
Plan and ERISA Affiliate Pension Plan, (ii) each trust agreement related
thereto, and (iii) all amendments to those plans and trust agreements.
Except as accurately set forth in Section 4.26(d) of the Disclosure
Statement, (i) neither the Company nor any Company Subsidiary is, or at
any time during the six-year period ended on the date of this Agreement
was, a member of any ERISA Group that currently includes, or included
when the Company or a Company Subsidiary was a member, among its members
any Person other than the Company and the Company Subsidiaries, and (ii)
no Person is an ERISA Affiliate of the Company or any Company Subsidiary
(other than the Company or any Company Subsidiary in the case of any
other Company Subsidiary or any Company Subsidiary in the case of the
Company, if the Company and the Company Subsidiaries comprise an ERISA
Group).
29
(e)EMPLOYEE POLICIES AND PROCEDURES. Section 4.26(e) of the
Disclosure Statement accurately lists all Employee Policies and
Procedures. The Company has provided TMI with a copy of all written
Employee Policies and Procedures and a written description of all
material unwritten Employee Policies and Procedures the continuance or
discontinuance of which could reasonably be expected to have a Material
Adverse Effect.
(f)UNWRITTEN AMENDMENTS. Except as accurately described in
Section 4.26(f) of the Disclosure Statement, no material unwritten
amendments have been made, whether by oral communication, pattern of
conduct or otherwise, with respect to any of the Employment Agreements,
Other Compensation Plans or Employee Policies and
Procedures.
(g)LABOR COMPLIANCE. To the knowledge of the Company, each of the
Company and the Company Subsidiaries has been and is in compliance with
all applicable Governmental Requirements respecting employment and
employment practices, terms and conditions of employment and wages and
hours, and neither the Company nor any Company Subsidiary is liable for
any arrears of wages or penalties for failure to comply with any of the
foregoing. Neither the Company nor any Company Subsidiary has engaged in
any unfair labor practice or discriminated on the basis of race, color,
religion, sex, national origin, age, disability or handicap in its
employment conditions or practices. Except as accurately set forth in
Section 4.26(g) of the Disclosure Statement, there are no (i) unfair
labor practice charges or complaints or racial, color, religious, sex,
national origin, age, disability or handicap discrimination charges or
complaints pending or, to the knowledge of the Company, threatened
against the Company or any of the Company Subsidiaries before any
Governmental Authority (nor, to the knowledge of the Company, does any
valid basis therefor exist) or (ii) existing or, to the knowledge of the
Company, threatened labor strikes, disputes, grievances, controversies
or other labor troubles affecting the Company or any of the Company
Subsidiaries (nor, to the knowledge of the Company, does any valid basis
therefor exist).
(h)UNIONS. Neither the Company nor any Company Subsidiary or
ERISA Affiliate has ever been a party to any agreement with any union,
labor organization or collective bargaining unit. No employees of any of
the Company and the Company Subsidiaries are represented by any union,
labor organization or collective bargaining unit. Except as accurately
set forth in Section 4.26(h) of the Disclosure Statement, to the
knowledge of the Company, none of the employees of the Company and the
Company Subsidiaries has threatened to organize or join a union, labor
organization or collective bargaining unit.
(i)NO ALIENS. All employees of each of the Company and the
Company Subsidiaries are citizens of, or are authorized in accordance
with federal immigration laws to be employed in, the United States.
30
(j)CHANGE OF CONTROL BENEFITS. Except as accurately set forth in
Section 4.26(j) of the Disclosure Statement, neither the Company nor any
of the Company Subsidiaries is a party to any agreement, or has
established any policy, practice or program, requiring it to make a
payment or provide any other form of compensation or benefit or vesting
rights to any person performing services for the Company or any of the
Company Subsidiaries which would not be payable or provided in the
absence of this Agreement or the consummation of the transactions
contemplated by this Agreement, including any parachute payment under
Section 280G of the Code.
(k)RETIREES. Neither the Company nor any of the Company
Subsidiaries has any obligation or commitment to provide medical, dental
or life insurance benefits to or on behalf of any of its employees who
may retire or any of its former employees who have retired except (i) as
may be required pursuant to the continuation of coverage provisions of
Section 4980B of the Code, the applicable parallel provisions of ERISA
and any applicable state law, (ii) continuation of benefits in the event
of disability, and (iii) conversion privileges provided under any
insured Company ERISA Employee Benefit Plans.
Section 4.27. COMPLIANCE WITH ERISA, ETC. (a) COMPLIANCE. Each of the
Company ERISA Benefit Plans and Other Compensation Plans (each, a
"Plan") (i) is in substantial compliance with all applicable provisions
of ERISA, as well as with all other applicable Governmental
Requirements, and (ii) has been administered, operated and managed in
accordance with its governing documents.
(b)QUALIFICATION. All Plans that are intended to qualify under
Section 401(a) of the Code (the "Qualified Plans") are so qualified and
have been determined by the IRS to be so qualified (or application for
determination letters have been timely submitted to the IRS). The
Company has provided TMI with true, complete and correct copies of the
current plan determination letters, most recent actuarial valuation
reports, if any, most recent Form 5500, or, as applicable, Form
5500-C/R, filed with respect to each Qualified Plan and most recent
trustee or custodian report. To the extent that any Qualified Plans have
not been amended to comply with applicable Governmental Requirements,
the remedial amendment period permitting retroactive amendment of these
Qualified Plans has not expired and will not expire within 120 days
after the Effective Time. All reports and other documents required to be
filed with any governmental agency or distributed to plan participants
or beneficiaries (including annual reports, summary annual reports,
actuarial reports, PBGC-1 Forms, audits or Returns) have been timely
filed or distributed.
(c)NO PROHIBITED TRANSACTIONS, ETC. None of the Stockholders, any
Plan or the Company or any Company Subsidiary has engaged in any
Prohibited Transaction. No Plan has incurred an accumulated funding
deficiency, as defined in Section 412(a) of the Code and Section 302(a)
of ERISA, and no circumstances exist under which the Company or any
Company Subsidiary could have any direct or indirect liability
31
whatsoever (including being subject to any statutory Lien to secure
payment of any such liability), to the PBGC under Title IV of ERISA or
to the IRS for any excise tax or penalty with respect to any Plan
maintained or contributed to by the Company or any of its ERISA
Affiliates. Further:
(i) there have been no terminations, partial terminations or
discontinuances of contributions to any Qualified Plan without a
determination by the IRS that such action does not adversely
affect the tax-qualified status of that plan;
(ii) no Termination Event has occurred;
(iii) no Reportable Event has occurred with respect to any
Plan which was not properly reported;
(iv) the valuation of assets of any Qualified Plan, as of the
Effective Time, shall equal or exceed the actuarial present value
of all "benefit liabilities" (within the meaning of Section
40001(a)(16) of ERISA) under that plan in accordance with the
assumptions contained in the Regulations of the PBGC governing
the funding of terminated defined benefit plans;
(v) with respect to Plans qualifying as "group health plans"
under Section 4980B of the Code or Section 607(l) or 609 of ERISA
and related regulations (relating to the benefit continuation
rights imposed by "COBRA" or qualified medical child support
orders), the Company, each Company Subsidiary and the
Stockholders have complied (and at the Effective Time will have
complied) in all material respects with all reporting,
disclosure, notice, election and other benefit continuation and
coverage requirements imposed thereunder as and when applicable
to those plans, and neither the Company nor any Company
Subsidiary has incurred (or will incur) any direct or indirect
liability or is (or will be) subject to any loss, assessment,
excise tax penalty, loss of federal income tax deduction or other
sanction, arising on account of or in respect of any direct or
indirect failure by the Company, any Company Subsidiary or any
Stockholder, at any time prior to the Effective Time, to comply
with any such federal or state benefit continuation or coverage
requirement, which is capable of being assessed or asserted
before or after the Effective Time directly or indirectly against
the Company, any Company Subsidiary, any Stockholder, the
Surviving Corporation or TMI with respect to any of those group
health plans;
(vi) the Financial Statements as of the Current Balance Sheet
Date reflect the approximate total pension, medical and other
benefit liability for all Plans, and no material funding changes
or irregularities are reflected thereon which would cause those
Financial Statements to be not representative of prior periods;
and
32
(vii) neither the Company nor any Company Subsidiary has
incurred liability under Section 4062 of ERISA.
(d)MULTIEMPLOYER PLANS. Except as set forth in Section 4.27(d) of
the Disclosure Statement, neither the Company nor any Company
Subsidiary, and no ERISA Affiliate of any of them, is, or at any time
during the six-year period ended on the date of this Agreement was,
obligated to contribute to a Multiemployer Plan. Neither the Company nor
any Company Subsidiary, and no ERISA Affiliate of any of them, has made
a complete or partial withdrawal from a Multiemployer Plan so as to
incur withdrawal liability as defined in Section 4201 of ERISA.
(e)CLAIMS AND LITIGATION. Except as accurately set forth in
Section 4.27(e) of the Disclosure Statement, no Litigation or claims
(other than routine claims for benefits) are pending or, to the
knowledge of the Company, threatened against, or with respect to, any of
the Plans or with respect to any fiduciary, administrator or sponsor
thereof (in their capacities as such), or any party-in-interest thereof.
(f)EXCISE TAXES, DAMAGES AND PENALTIES. No act, omission or
transaction has occurred which would result in the imposition on the
Company or any Company Subsidiary of (i) breach of fiduciary duty
liability damages under Section 409 of ERISA, (ii) a civil penalty
assessed pursuant to Section 502 of ERISA or (iii) any excise tax under
applicable provisions of the Code with respect to any Plan.
(g)VEBA WELFARE TRUST. Any trust funding a Plan, which is
intended to be exempt from federal income taxation pursuant to Section
501(c)(9) of the Code, satisfies the requirements of that section and
has received a favorable determination letter from the IRS regarding
that exempt status and has not, since receipt of the most recent
favorable determination letter, been amended or operated in a way that
would adversely affect its exempt status.
Section 4.28. TAXES. (a) Each of the following representations and
warranties in this Section 4.28 is qualified to the extent set forth in
Section 4.28 of the Disclosure Statement.
(b)All Returns required to be filed with respect to any Tax for
which any of the Company and the Company Subsidiaries is liable have
been duly and timely filed with the appropriate Taxing Authority, each
Tax shown to be payable on each such Return has been paid, each Tax
payable by the Company or a Company Subsidiary by assessment has been
timely paid in the amount assessed, and adequate reserves have been
established on the consolidated books of the Company and the Company
Subsidiaries for all Taxes for which any of the Company and the Company
Subsidiaries is liable, but the payment of which is not yet due. Neither
the Company nor any Company Subsidiary is, or ever has been, liable for
any Tax payable by reason of the income or property of a Person
33
other than the Company or a Company Subsidiary. Each of the Company and
the Company Subsidiaries has timely filed true, correct and complete
declarations of estimated Tax in each jurisdiction in which any such
declaration is required to be filed by it. No Liens for Taxes exist upon
the assets of the Company or any Company Subsidiary except Liens for
Taxes which are not yet due. Neither the Company nor any Company
Subsidiary is, or ever has been, subject to Tax in any jurisdiction
outside of the United States. No Litigation with respect to any Tax for
which the Company or any Company Subsidiary is asserted to be liable is
pending or, to the knowledge of the Company or any Stockholder,
threatened, and no basis which the Company or any Stockholder believes
to be valid exists on which any claim for any such Tax can be asserted
against the Company or any Company Subsidiary. There are no requests for
rulings or determinations in respect of any Taxes pending between the
Company or any Company Subsidiary and any Taxing Authority. No extension
of any period during which any Tax may be assessed or collected and for
which the Company or any Company Subsidiary is or may be liable has been
granted to any Taxing Authority. Neither the Company nor any Company
Subsidiary is or has been a party to any tax allocation or sharing
agreement. All amounts required to be withheld by any of the Company and
the Company Subsidiaries and paid to governmental agencies for income,
social security, unemployment insurance, sales, excise, use and other
Taxes have been collected or withheld and paid to the proper Taxing
Authority. The Company and each Company Subsidiary have made all
deposits required by law to be made with respect to employees'
withholding and other employment Taxes.
(c)Neither the Company nor any Stockholder is a "foreign person,"
as that term is referred to in Section 1445(f)(3) of the Code.
(d)The Company has not filed a consent pursuant to Section 341
(f) of the Code or any comparable provision of any other tax statute and
has not agreed to have Section 341 (f)(2) of the Code or any comparable
provision of any other Tax statute apply to any disposition of an asset.
The Company has not made, is not obligated to make and is not a party to
any agreement that could require it to make any payment that is not
deductible under Section 280G of the Code. No asset of the Company or of
any Company Subsidiary is subject to any provision of applicable law
which eliminates or reduces the allowance for depreciation or
amortization in respect of that asset below the allowance generally
available to an asset of its type. No accounting method changes of the
Company or of any Company Subsidiary exist or are proposed or threatened
which could give rise to an adjustment under Section 481 of the Code.
Section 4.29. GOVERNMENT CONTRACTS. Except as accurately set forth in
Section 4.29 of the Disclosure Statement, neither the Company nor any Company
Subsidiary is a party to any governmental contract subject to price
redetermination or renegotiation.
Section 4.30. ABSENCE OF CHANGE. Since the Current Balance Sheet Date,
except as accurately set forth in Section 4.30 of the Disclosure Statement, none
of the following has
34
occurred with respect to the Company or any Company Subsidiary:
(a)any circumstance, condition, event or state of facts (either
singly or in the aggregate), other than conditions affecting the economy
or the healthcare industry generally, which has caused, is causing or
could reasonably be expected to cause a Material Adverse Effect on the
Company;
(b)any change in its authorized Capital Stock or in any of its
outstanding Capital Stock or Derivative Securities;
(c)any Restricted Payment, except any declaration or payment of
dividends by any Company Subsidiary solely to the Company;
(d)any increase in, or any commitment or promise to increase, the
rates of Cash Compensation as of the date hereof, or the amounts or
other benefits paid or payable under any Company ERISA Pension Plan or
Other Compensation Plan, except for ordinary and customary bonuses and
salary increases for employees (other than the Stockholders or their
Immediate Family Members) at the times and in the amounts consistent
with its past practice;
(e)any work interruptions, labor grievances or claims filed, or
any similar event or condition of any character, that will have a
Material Adverse Effect on the Surviving Corporation following the
Effective Time;
(f)any distribution, sale or transfer of, or any Company
Commitment to distribute, sell or transfer, any of its assets or
properties of any kind which singly is or in the aggregate are Material
to the Company, other than distributions, sales or transfers in the
ordinary course of its business and consistent with its past practices
to Persons other than to the Stockholders and their Immediate Family
Members and Affiliates;
(g)any cancellation, or agreement to cancel, any Indebtedness,
obligation or other liability owing to it, including any Indebtedness,
obligation or other liability of any Stockholder or any Related Person
or Affiliate thereof, provided that the Company or a Company Subsidiary
may negotiate and adjust bills in the course of good faith disputes with
customers in a manner consistent with past practice, if the adjustments
are (i) included in the Supplemental Information provided TMI pursuant
to Section 6.07 or (ii) do exceed $10,000 in the aggregate;
(h)any plan, agreement or arrangement granting any preferential
rights to purchase or acquire any interest in any of its assets,
property or rights or requiring consent of any Person to the transfer
and assignment of any such assets, property or rights;
35
(i)any purchase or acquisition of, or agreement, plan or
arrangement to purchase or acquire, any property, rights or assets
outside of the ordinary course of its business consistent with its past
practices;
(j)any waiver of any of its rights or claims that singly is or in
the aggregate are Material to the Company;
(k)any transaction by it outside the ordinary course of its
business or not consistent with its past practices and which involves in
excess of $15,000;
(1)any incurrence by it of any Indebtedness or any Guaranty not
constituting its Indebtedness, or any Company Commitment to incur any
Indebtedness or any such Guaranty;
(m) any investment in the Capital Stock, Derivative Securities or
Indebtedness of any Person, other than a Permitted Investment;
(n)except in accordance with the Company's consolidated capital
expenditure budget for the Company's current fiscal year, any capital
expenditure or series of related capital expenditures by the Company and
the Company Subsidiaries collectively in excess of $25,000, or
commitments by the Company and the Company Subsidiaries to make capital
expenditures totaling in excess of $25,000; or
(o)any cancellation or termination of a Material Agreement of the
Company.
Section 4.31. BANK RELATIONS; POWERS OF ATTORNEY. The Company has
provided TMI with an accurate, complete written statement setting forth:
(a)the name of each financial institution in which the Company or
any Company Subsidiary has borrowing or investment arrangements, deposit
or checking accounts or safe deposit boxes;
(b)the types of those arrangements and accounts, including, as
applicable, names in which accounts or boxes are held, the account or
box numbers and the name of each Person authorized to draw thereon or
have access thereto; and
(c)the name of each Person holding a general or special power of
attorney from the Company or any Company Subsidiary and a description of
the terms of each such power.
Section 4.32. RELATIONS WITH GOVERNMENTS, ETC. Neither the Company nor
any Company Subsidiary has made, offered or agreed to offer anything of value to
any governmental official, political party or candidate for government office
which would cause the Company or any
36
Company Subsidiary to be in violation of the Foreign Corrupt Practices Act of
1977 or any Governmental Requirement to a similar effect.
37
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TMI AND NEWCO
Section 5.02. ORGANIZATION; POWER. TMI is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and each of TMI and Newco has all requisite corporate power and authority under
the laws of its Organization State and its Charter Documents to own or lease and
to operate its properties presently and following the Effective Time and to
carry on its business as now conducted and as proposed to be conducted following
the Effective Time. Neither TMI nor Newco has engaged in any operations since
its organization other than in connection with their formation and
capitalization and the transactions contemplated by this Agreement and the Other
Agreements.
Section 5.03. AUTHORIZATION; ENFORCEABILITY; ABSENCE OF CONFLICTS;
REQUIRED CONSENTS. (a) The execution, delivery and performance by each
of TMI and Newco of this Agreement and each other Transaction Document
to which it is a party, and the effectuation of the Merger and the other
transactions contemplated hereby and thereby, are within its corporate
power under its Charter Documents and the applicable Governmental
Requirements of its Organization State and have been duly authorized by
all proceedings, including actions permitted to be taken in lieu of
proceedings, required under its Charter Documents and the applicable
Governmental Requirements of its Organization State.
(b)This Agreement has been, and each of the other Transaction
Documents to which either of TMI or Newco is a party, when executed and
delivered to the other parties thereto (or, in the case of the
Certificate of Merger, the applicable Governmental Authorities), will
have been, duly executed and delivered by it and is, or when so executed
and delivered will be, its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except as that
enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) subject to general
principles of equity (regardless of whether that enforceability is
considered in a proceeding in equity or at law).
(c)The execution, delivery and performance in accordance with
their respective terms by each of TMI and Newco of the Transaction
Documents to which it is a party have not and will not (i) violate,
breach or constitute a default under (A) the Charter Documents of TMI or
Newco, (B) any Governmental Requirement applicable to TMI or Newco or
(C) any Material Agreement of TMI or Newco, (ii) result in the
acceleration or mandatory prepayment of any Indebtedness, or any
Guaranty not constituting Indebtedness, of TMI or Newco or afford any
holder of any of that Indebtedness, or any beneficiary of any of those
Guaranties, the right to require TMI or Newco to redeem, purchase or
otherwise acquire, reacquire or repay any of that Indebtedness, or to
perform
38
any of those Guaranties, (iii) cause or result in the imposition of, or
afford any Person the right to obtain, any Lien upon any property or
assets of TMI or Newco (or upon any revenues, income or profits of
either TMI or Newco therefrom) or (iv) result in the revocation,
cancellation, suspension or material modification, in any single case or
in the aggregate, of any Governmental Approval possessed by TMI or Newco
at the date of this Agreement and necessary for the ownership or lease
and the operation of its properties or the carrying on of its business
as now conducted, including any necessary Governmental Approval under
each applicable Environmental Law.
(d)Except for (i) the filing of the Certificate of Merger with
the applicable Governmental Authorities, (ii) filings of the
Registration Statement under the Securities Act and a registration
statement on Form 8-A with respect to the registration of the TMI Common
Stock under the Exchange Act and the SEC order declaring those
registration statements effective under the Securities Act and the
Exchange Act, respectively, and (iii) as may be required by the HSR Act
or the applicable state securities or blue sky laws, no Governmental
Approvals are required to be obtained, and no reports or notices to or
filings with any Governmental Authority are required to be made, by TMI
or Newco for the execution, delivery or performance by TMI or Newco of
the Transaction Documents to which it is a party, the enforcement
against TMI or Newco, as the case may be, of its obligations thereunder
or the effectuation of the Merger and the other transactions
contemplated thereby.
(e)The representations and warranties made by TMI in paragraphs
(a) through (d) of this Section 5.03 with respect to the Transaction
Documents and Newco are true and correct, MUTADIS MUTANDIS, with respect
to all Other Transaction Documents and all Other Newco Subsidiaries.
Section 5.04. CHARTER DOCUMENTS. TMI has delivered to the Company true,
complete and correct copies of the Charter Documents of each of TMI and Newco.
No breach or violation of any Charter Document of either TMI or Newco has
occurred and is continuing.
Section 5.05. CAPITAL STOCK OF TMI AND NEWCO. (a) Immediately prior to
and immediately after the Effective Time, (i) the authorized Capital
Stock of TMI will be comprised of (A) 20,000,000 shares of TMI Common
Stock and (B) 1,000,000 shares of preferred stock, $.001 par value per
share, (ii) both immediately before and after giving effect to the
Merger and the merger transactions contemplated by the Other Agreements,
(A) the number of shares of TMI Common Stock then issued and
outstanding, and the nature and amount of all Derivative Securities then
outstanding, will be as set forth in the Registration Statement when it
becomes effective under the Securities Act, (B) no shares of the TMI
preferred stock then will be issued or outstanding, (C) TMI will have
authorized for issuance, and reserved for issuance, pursuant to Other
Compensation Plans or the exercise of Derivative Securities the number
of shares of TMI Common Stock set forth in the Registration Statement
when it becomes effective under the Securities Act,
39
and (D) no agreements or commitments shall exist, whether written or
oral, obligating TMI to sell or issue any shares of TMI Capital Stock or
any Derivative Securities of TMI.
(b)The authorized Capital Stock of Newco is comprised of 1,000
shares of Newco Common Stock, all of which shares are issued,
outstanding and owned, of record and beneficially, by TMI.
(c)All shares of TMI Common Stock and Newco Common Stock
outstanding immediately prior to the Effective Time, and all shares of
TMI Common Stock to be issued pursuant to Section 2.04, pursuant to the
Other Agreements and in the IPO, when issued, will have been duly
authorized and validly issued in accordance with the DGCL and their
issuer's Charter Documents, and will be fully paid and nonassessable.
None of the shares of TMI Common Stock to be issued pursuant to Section
2.04 will, when issued, have been issued in breach or violation of (i)
any applicable statutory or contractual preemptive rights, or any other
rights of any kind (including any rights of first offer or refusal), of
any Person or (ii) the terms of any of its Derivative Securities then
outstanding.
Section 5.06. SUBSIDIARIES. Immediately prior to the IPO Closing Date,
(a) TMI will have no Subsidiaries other than Newco and each Entity defined as
"Newco" in each of the Other Agreements, (b) Newco will have no Subsidiaries,
and (c) neither TMI nor Newco will own, of record or beneficially, directly or
indirectly through any Person or otherwise (except pursuant hereto or to the
Other Agreements), any Capital Stock or Derivative Securities of any Entity not
described in this Section 5.06 as a Subsidiary of TMI (in the case of TMI) or
any Entity (in the case of Newco).
Section 5.07. LIABILITIES. Except as disclosed in the Private Placement
Memorandum, neither TMI nor Newco has any material liabilities of any kind other
than those incurred in connection with this Agreement and the Other Agreements
and the transactions contemplated hereby and thereby, including the IPO.
Section 5.08. COMPLIANCE WITH LAWS; NO LITIGATION. Each of TMI and Newco
is in compliance with all Governmental Requirements applicable to it, and no
Litigation is pending or, to the knowledge of TMI, threatened to which TMI or
Newco is or may become a party which questions or involves the validity or
enforceability of any obligation of TMI or Newco under any Transaction Document,
or which seeks (or reasonably may be expected to seek) (a) to prevent or delay
consummation by TMI or Newco of the transactions contemplated by this Agreement
to be consummated by TMI or Newco, as the case may be, or (b) damages from TMI
or Newco in connection with any such consummation.
Section 5.09. NO BROKERS. TMI has not, directly or indirectly, in
connection with this Agreement or the transactions contemplated hereby, employed
any broker, finder or agent, or agreed to pay or incurred any obligation to pay
any broker's or finder's fee, any sales
40
commission or any similar form of compensation.
Section 5.10. PRIVATE PLACEMENT MEMORANDUM. At the date hereof, the
Private Placement Memorandum (other than the historical financial statements,
including the notes thereto, of the Founding Companies (other than the Company)
and the historical information contained therein respecting the Company and the
Stockholders, to which this Section 5.10 does not apply) does not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
the light of the circumstances under which those statements are made.
Section 5.11. REGISTRATION AND OTHER RIGHTS. Except as set forth in the
Registration Rights Agreement or otherwise described in the Private Placement
Memorandum or the Registration Statement, at the Effective Time TMI will have no
(a) commitment to any Person to cause securities of TMI to be registered under
the Securities Act or the securities laws of any state, (b) outstanding
Derivative Securities, or (c) outstanding agreements or commitments of any
character committing TMI to issue or acquire shares of its Capital Stock or
Derivative Securities.
Section 5.12 STOCKHOLDERS AGREEMENT. The representations and warranties
made by TMI in the Stockholders Agreement are true and correct.
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Section 6.02 ACCESS AND COOPERATION; DUE DILIGENCE. (a) From the date of
this Agreement until the earlier to occur of the IPO Closing Date or a
termination of this Agreement under Article XII, the Company, for the
benefit of TMI and each Other Founding Company, will (i) afford to the
Representatives of TMI and each Other Founding Company reasonable access
to all the key employees, sites, properties, books and records of each
of the Company and the Company Subsidiaries, (ii) provide TMI with such
additional financial and operating data and other information relating
to the business and properties of each of the Company and the Company
Subsidiaries as TMI or any Other Founding Company may from time to time
reasonably request, and (iii) cooperate with TMI and each Other Founding
Company and their respective Representatives in the preparation of any
documents or other material which may be required in connection with any
Transaction Documents or any Other Transaction Documents. Each
Stockholder and the Company agree, for the benefit of TMI and each Other
Founding Company, that they will treat all Confidential Information
obtained by them in connection with the negotiation and performance of
this Agreement or the due diligence investigations conducted with
respect to each Other Founding Company as confidential in accordance
with the provisions of Section 11.01. In addition, TMI will cause each
Other Founding Company to enter into a provision similar to this Section
6.02
41
to require each Other Founding Company to keep confidential any
Confidential Information respecting any of the Company and the Company
Subsidiaries obtained by that Other Founding Company.
(b)Each of the Company and the Stockholders will use its best
efforts to secure, as soon as practicable, of this Agreement, all
approvals or consents of third Persons as may be necessary to consummate
the transactions contemplated hereby.
(c)From the date hereof and until the earlier to occur of the IPO
Closing Date or a termination of this Agreement under Article XII, TMI
and Newco will (i) afford to the Representatives of the Company and the
Stockholders access to all sites, properties, books and records of TMI
and Newco, (ii) provide the Company with such additional financial and
operating data and other information relating to the business and
properties of TMI and Newco as the Company or any Stockholder may from
time to time reasonably request, and (iii) cooperate with the Company
and the Stockholders and their respective Representatives in the
preparation of any documents or other material which may be required in
connection with any Transaction Documents.
(d)If this Agreement is terminated pursuant to Section 12.01, TMI
promptly will return all written Confidential Information of the Company
it then possesses to the Company.
Section 6.03. CONDUCT OF BUSINESS PENDING CLOSING. From the date of this
Agreement until the earlier to occur of a termination of this Agreement under
Article XII or the Effective Time, the Company will, and will cause each Company
Subsidiary to, except as and only to the extent set forth in Schedule 6.03:
(a)carry on its businesses in substantially the same manner as it
has heretofore and not introduce any material new method of management,
operation or accounting;
(b)maintain its properties and facilities, including those held
under leases, in as good working order and condition as at present,
ordinary wear and tear excepted;
(c)perform all its obligations under agreements relating to or
affecting its assets, properties and other rights;
(d)keep in full force and effect without interruption all its
present insurance policies or other comparable insurance coverage;
(e)use reasonable commercial efforts to (i) maintain and preserve
its business organization intact, (ii) retain its present employees, and
(iii) maintain its relationships with suppliers, customers and others
having business relations with it;
42
(f)comply with all applicable Governmental Requirements; and
(g)except as required or expressly permitted by this Agreement,
maintain the instruments and agreements governing its outstanding
Indebtedness and leases on their present terms and not enter into new or
amended Indebtedness or lease instruments or agreements involving
amounts over $5,000 in any case or $25,000 in the aggregate, without the
prior written consent of TMI (which consent will not be unreasonably
withheld).
Section 6.04. PROHIBITED ACTIVITIES. From the date of this Agreement
until the Effective Time, without the prior written consent of TMI or unless as
required or expressly permitted by this Agreement, the Company will not, and
will not permit any Company Subsidiary to:
(a)make any change in its Charter Documents;
(b)issue any of its Capital Stock or issue or otherwise create
any of its Derivative Securities;
(c)make any Restricted Payment (other than as provided in
Schedule 6.04);
(d)make any investments (other than Permitted Investments) in the
Capital Stock, Derivative Securities or Indebtedness of any Person;
(e)enter into any contract or commitment or incur or agree to
incur any liability or make any capital expenditures in a single
transaction or a series of related transactions involving an aggregate
amount of more than $25,000 otherwise than in the ordinary course of its
business and consistent with its past practice;
(f)increase or commit or promise to increase the Cash
Compensation payable or to become payable to any officer, director,
stockholder, employee or agent, consultant or independent contractor of
any of the Company and the Company Subsidiaries or make any
discretionary bonus or management fee payment to any such Person, except
bonuses or salary increases to employees (other than the Stockholders or
their Immediate Family Members) at the times and in the amounts
consistent with its past practice;
(g)create or assume any Liens (other than Permitted Liens) upon
any of its assets or properties, whether now owned or hereafter
acquired, except for purchase money Liens incurred in connection with
the acquisition of equipment with an aggregate cost not in excess of
$10,000 and necessary or desirable for the conduct of the business of
any of the Company and the Company Subsidiaries;
(h)adopt, establish, amend or terminate any ERISA Employee
Benefit Plan, or any Other Compensation Plan or Employee Policies and
Procedures, or take any
43
discretionary action, or omit to take any contractually required action,
if that action or omission could either (i) deplete the assets of any
ERISA Employee Benefit Plan or any Other Compensation Plan or (ii)
increase the liabilities or obligations under any such plan;
(i)sell, assign, lease or otherwise transfer or dispose of any of
its owned or leased property or equipment otherwise than in the ordinary
course of its business and consistent with its past practice;
(j)negotiate for the acquisition of any business or the start-up
of any new business;
(k)merge, consolidate or effect a share exchange with, or agree
to merge, consolidate or effect a share exchange with, any other Entity;
(1)waive any of its material rights or claims, provided that it
may negotiate and adjust bills in the course of good faith disputes with
customers in a manner consistent with past practice, but such
adjustments will not be deemed to be included in Section 4.17 of the
Disclosure Statement unless specifically listed in the Supplemental
Information;
(m) commit a material breach of or amend materially or terminate
any Material Agreement of the Company or any of its Governmental
Approvals; or
(n)enter into any other transaction (i) which is Material and
outside the ordinary course of its business and consistent with its past
practice or (ii) prohibited hereby.
Section 6.05. NO SHOP: RELEASE OF DIRECTORS. (a) Each of the Company and
the Stockholders agrees that, from the date of this Agreement until the
first to occur of the Effective Time or the termination of this
Agreement in accordance with Article XII, neither the Company nor any
Stockholder, nor any of their respective officers and directors shall,
and the Company and each Stockholder will direct and use their best
efforts to cause each of their respective Representatives not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or
the making or implementation of any proposal or offer (including any
proposal or offer to the Stockholders) with respect to a merger,
acquisition, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, the Company (any such proposal or offer being herein
called an "Acquisition Proposal") or engage in any activities,
discussions or negotiations concerning, or provide any Confidential
Information respecting, the Company, any Other Founding Company or TMI
to, or have any discussions with, any Person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal. The Company and each Stockholder
will: (i) immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any Persons conducted
heretofore
44
with respect to any of the foregoing, and each will take the steps
necessary to inform the Persons referred to in the first sentence of
this Section 6.05(a) of the obligations undertaken in this Section
6.05(a); and (ii) notify TMI immediately if any such inquiries or
proposals are received by, any such information is requested from or any
such discussions or negotiations are sought to be initiated or continued
with the Company or any Stockholder.
(b)Each of the Company and the Stockholders hereby (i) waives
every right, if any, the Governmental Requirements of the Company's
Organization State afford the Company or Stockholders to require the
Company's directors (or their equivalents if the Company is not a
corporation), in the exercise of their fiduciary duties in their
capacity as such, to engage in any of the activities prohibited by this
Section 6.05 and (ii) releases each such person from any and all
liability he might otherwise have to the Company or any Stockholders but
for this release.
Section 6.06. NOTIFICATION OF CERTAIN MATTERS. The Stockholders and the
Company shall give prompt notice to TMI of (a) the existence or occurrence of
each condition or state of facts which will or reasonably could be expected to
cause any representation or warranty of the Company or any Stockholder contained
herein to be untrue or incorrect in any material respect at or prior to the
Closing or on the IPO Closing Date and (b) any material failure of any
Stockholder or the Company to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by that Person hereunder, provided
that no such notice shall be required until TMI shall give notice to the Company
and the Stockholders of the date scheduled for the Closing with respect to the
occurrence in the ordinary course of business and consistent with past practice
of the Company or any Company Subsidiary, as the case may be, of any condition
or state of facts which would cause any of Sections 4.16, 4.17, 4.18, 4.19 and
4.21 of the Disclosure Statement to be incorrect. TMI shall give prompt notice
to the Company of (a) the existence or occurrence of each condition or state of
facts which will or reasonably could be expected to cause any representation or
warranty of TMI or Newco contained herein to be untrue or inaccurate at or prior
to the Closing or on the IPO Closing Date and (b) any material failure of TMI or
Newco to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder. The delivery of any notice pursuant
to this Section 6.06 shall not be deemed to (a) modify the representations or
warranties herein of the party delivering that notice, or any other party, which
modification may be made only pursuant to Section 6.07, (b) modify the
conditions set forth in Article VII or (c) limit or otherwise affect the
remedies available hereunder to the party receiving that notice.
Section 6.07. SUPPLEMENTAL INFORMATION. Each of the Company and the
Stockholders agrees that, with respect to its representations and warranties
contained in this Agreement, it will have the continuing obligation (except to
the extent otherwise provided in Section 6.06) until the Closing (or earlier
termination of this Agreement under Article XII) to provide TMI promptly with
such additional supplemental Information (collectively, the "Supplemental
Information"), in the form of (a) amendments to then existing Schedules or
Sections of the Disclosure Statement or
45
(b) additional Schedules or Sections of the Disclosure Statement, as would be
necessary, in the light of the circumstances, conditions, events and states of
facts then known to the Company or any Stockholder, to make each of those
representations and warranties true and correct as of the Closing and on the IPO
Closing Date. For purposes only of determining whether the conditions to the
obligations of TMI and Newco which are specified in Sections 7.04(a)(ii)(A) and
7.04(b)(ii) have been satisfied, and not for any purpose under Article IX, the
Schedules and the Disclosure Statement as of the Closing and on the IPO Closing
Date shall be deemed to be the Schedules and the Disclosure Statement as of the
date hereof as amended or supplemented by the Supplemental Information provided
to TMI prior to the Closing pursuant to this Section 6.07; PROVIDED, HOWEVER,
that if the Supplemental Information so provided discloses the existence of
circumstances, conditions, events or states of facts which, in any combination
thereof, (a) have had a Material Adverse Effect on the Company which was not
reflected in the determination of the Merger Consideration or, in the judgment
of TMI (which shall be conclusive for purposes of this Section 6.07 and Article
XII, but not for any purpose of Article IX), (b) are having or will have a
Material Adverse Effect on the Company or the Surviving Corporation, as the case
may be, TMI will be entitled either (i) to terminate this Agreement pursuant to
Section 12.01(a)(iv) to treat as TMI Indemnified Losses for all purposes of
Article IX (which treatment will not prejudice the right of any Stockholder
under Article IX to contest Damage Claims made by TMI in respect of those TMI
Indemnified Losses) all Damages to the Company or the Surviving Corporation
which are attributable to the circumstances, conditions, events and states of
facts first disclosed herein after the date hereof in the Supplemental
Information; and PROVIDED FURTHER, HOWEVER, that if the circumstances,
conditions, events or states of facts disclosed in the Supplemental Information
and having or judged to have in the future such a Material Adverse Effect (A)
have not resulted from a breach by the Company or the Stockholders of any of
their covenants set forth in Article VI or elsewhere in this Agreement and (B)
do not indicate that any representation or warranty of the Stockholders and the
Company made in Articles III and IV shall have been untrue or inaccurate at the
date of this Agreement, then TMI shall only be entitled to terminate this
Agreement pursuant to Section 12.01(a)(iv), and shall not be entitled to treat
as TMI Indemnified Losses any such Damages to the Company or the Surviving
Corporation. TMI will provide the Company with copies of the Registration
Statement, including all pre-effective amendments thereto, promptly after the
filing thereof with the SEC under the Securities Act.
Section 6.08. COOPERATION IN CONNECTION WITH THE IPO. The Company and
the Stockholders will (a) provide TMI and the Underwriter with all the
Information concerning the Company or any of the Stockholders which is
reasonably requested by TMI and the Underwriter from time to time in connection
with effecting the IPO and (b) cooperate with TMI and the Underwriter and their
respective Representatives in the preparation and amendment of the Registration
Statement (including the Financial Statements) and in responding to, the
comments of the SEC staff, if any, with respect thereto. The Company and each
Stockholder agree promptly to (a) advise TMI if, at any time during the period
in which a prospectus relating to the IPO is required to be delivered under the
Securities Act, any information contained in the then current Registration
Statement prospectus concerning the Company or the Stockholders becomes
46
incorrect or incomplete in any material respect and (b) provide TMI with the
information needed to correct or complete that information.
Section 6.09. ADDITIONAL FINANCIAL STATEMENTS. The Company will furnish
to TMI:
(a)as soon as available and in any event within 30 days after the
end of each of the Company's fiscal quarters which ends prior to the IPO
Pricing Date, an unaudited consolidated balance sheet of the Company and
the Company Subsidiaries as of the end of that fiscal quarter and the
related consolidated statements of income or operations, cash flows and
stockholders' or other owners' equity for that fiscal quarter and for
the period of the Company's fiscal year ended with that quarter, in each
case (i) setting forth in comparative form the figures for the
corresponding portion of the Company's previous fiscal year and (ii)
prepared in accordance with GAAP applied on basis consistent throughout
the periods indicated (excepting footnotes) and consistent with the
basis on which the Initial Financial Statements including the Current
Balance Sheet were prepared; and
(b)if requested by TMI in connection with any amendment of the
Registration Statement and promptly following any such request, such
summary consolidated operating or other financial information of the
Company and the Company Subsidiaries as of the end of either the first
or second fiscal month in any of the Company's fiscal quarters as TMI
may request.
Section 6.10. TERMINATION OF PLANS. If requested by TMI, the Company
will, or will cause the applicable Company Subsidiary to, if permitted by all
applicable Governmental Requirements to do so, terminate each Plan identified in
Section 4.26(c) or (d) of the Disclosure Statement as a "Plan To Be Terminated"
at, or if agreed by the Company, prior to, the Effective Time.
Section 6.11. DISPOSITION OF UNWANTED ASSETS. At or prior to the
Closing, the Company will make all arrangements and take all such actions as are
necessary and satisfactory to TMI to dispose, prior to the Effective Time, of
those assets of it or of one or more of the Company Subsidiaries which are
listed in Schedule 6.11.
Section 6.12. HSR ACT MATTERS. If TMI shall determine that filings under
the HSR Act are necessary or appropriate in connection with the effectuation of
the Merger or the consummation of the acquisitions contemplated by the Other
Agreements, and advises the Company in writing of that determination, the
Company promptly will compile and file under the HSR Act such information
respecting it as the HSR Act requires of an Entity to be acquired, and the
expiration or termination of the applicable waiting period and any extension
thereof under the HSR Act shall be deemed a condition precedent set forth in
Section 7.02(b).
Section 6.13. TMI ACTIONS PENDING IPO. Prior to the Closing, TMI,
without the
47
approval of at least a majority of the members of the IPO Committee (and in the
case of clause (viii) below, all of the members of the IPO Committee), shall
not:
(i) amend, modify, grant any waiver under or terminate any of the
Other Transaction Documents;
(ii) incur or agree to incur any indebtedness for borrowed money
or establish any credit facility under which TMI may do so;
(iii) acquire or agree to acquire another business entity other
than pursuant to the Other Agreements;
(iv) sell or issue any shares of TMI's Capital Stock or
Derivative Securities;
(v) withdraw the Registration Statement or terminate the offering
contemplated therein;
(vi) make any commitment or otherwise take any action which would
cause the proceeds of the IPO to be used for a purpose or purposes other
than those described in the Registration Statement under the caption
"USE OF PROCEEDS";
(vii) agree in the Underwriting Agreement to (a) the number of
shares of TMI Common Stock to be sold to the Underwriter under the
Underwriting Agreement, (b) the price per share of TMI Common Stock at
which the Underwriter, subject to the terms and conditions of the
Underwriting Agreement, will purchase newly issued shares of TMI Common
Stock from TMI on the IPO Closing Date, or (c) the underwriting discount
per share of TMI Common Stock so purchased by the Underwriter under the
Underwriting Agreement;
(viii) effect any change in the persons named in the Registration
Statement as constituting the directors of TMI upon consummation of the
IPO Closing, unless the change is required by the death of a proposed
director or his inability or unwillingness to serve in such capacity; or
(ix) enter into any agreement or transaction which, if the IPO is
consummated, would be Material to TMI and which is not described or
contemplated in the Registration Statement or inherent in the offering
contemplated therein or the consummation of the transactions
contemplated therein.
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
48
Section 7.02. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. (a) The
obligation of each party hereto to take the actions contemplated to be
taken by that party at the Closing is subject to the satisfaction of
each of the following conditions on or before the date of the Closing:
(i) NO LITIGATION. No Litigation shall be pending on the date
of the Closing to restrain, prohibit or otherwise interfere with,
or to obtain material damages or other relief from TMI or the
Surviving Corporation in connection with, the consummation of the
Merger or the IPO;
(ii) GOVERNMENTAL APPROVALS. All Governmental Approvals (other
than the acceptance for filing of the Certificate of Merger)
required to be obtained by any of the Company, TMI and Newco in
connection with the consummation of the Merger and the IPO shall
have been obtained; and
(iii) THE REGISTRATION STATEMENT. (A) The Registration
Statement, as amended to cover the offering, issuance and sale by
TMI of such number of shares of TMI Common Stock at the IPO Price
(which need not be set forth in the Registration Statement when
it becomes effective under the Securities Act) as shall yield
aggregate cash proceeds to TMI (net of the Underwriter's discount
or commissions) in at least the amount (the "Minimum Cash
Amount") sufficient when added to the funds, if any, available
from other sources (the "Other Financing Sources"), if any, and
as set forth in the Registration Statement when it becomes
effective under the Securities Act to enable TMI to pay or
otherwise deliver on the IPO Closing Date (1) the total cash
portion of the merger Consideration then to be delivered pursuant
to Section 2.04, (2) the total cash portion of the merger or
other acquisition consideration then to be delivered pursuant to
the Other Agreements as a result of the consummation of the
mergers or other acquisition transactions contemplated thereby,
and (3) the total amount of Indebtedness of the Founding
Companies and TMI which the Registration Statement discloses at
the time it becomes effective under the Securities Act will be
repaid on the IPO Closing Date with proceeds received by TMI from
the IPO and the Other Financing Sources, shall have been declared
effective under the Securities Act by the SEC; (B) no stop order
suspending the effectiveness of the Registration Statement shall
have been issued by the SEC, and the SEC shall not have initiated
or threatened to initiate Litigation for that purpose; (C) the
Underwriter shall have agreed in writing (the "Underwriting
Agreement," which term includes the related pricing agreement, if
any) to purchase from TMI on a firm commitment basis for resale
to the public initially at the IPO Price, subject to the
conditions set forth in the Underwriting Agreement, such number
of shares of TMI Common Stock covered by the Registration
Statement as, when multiplied by the price per share of TMI
Common Stock to be paid by the Underwriter to TMI pursuant to the
Underwriting Agreement, shall equal at least the Minimum
49
Cash Amount; and (D) neither the Registration Statement nor the
Final Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make the statements contained therein not materially misleading
in the light of the circumstances under which those statements
are made.
(b)The obligation of each party hereto with respect to the
actions to be taken on the IPO Closing Date is subject to the
satisfaction on that date of each of the following conditions:
(i) NO LITIGATION. No Litigation shall be pending on the IPO
Closing Date to restrain, prohibit or otherwise interfere with,
or to obtain material damages or other relief from TMI or the
Surviving Corporation in connection with, the consummation of the
Merger or the IPO;
(ii) GOVERNMENTAL APPROVALS. All Governmental Approvals
required to be obtained by the Company, TMI and Newco in
connection with the consummation of the Merger and the IPO shall
have been obtained;
(iii) RECEIPT OF CERTAIN CERTIFICATES. Each party to the
Stockholders Agreement or his Representative shall receive the
certificates that such party is entitled to receive on the IPO
Closing Date pursuant to Section 3.5 of the Stockholders
Agreement;
(iv) REGISTRATION STATEMENT AND FINAL PROSPECTUS. Neither the
Registration Statement, in its form at the Effective Time, nor
the Final Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements contained therein not materially
misleading in the light of the circumstances under which those
statements are made;
(v) CLOSING OF OTHER TRANSACTIONS. The transactions
contemplated in the Other Agreements with Founding Companies
having aggregate combined revenues for their respective most
recent fiscal years representing at least 80% of the aggregate
combined revenues of all Founding Companies for their respective
most recent fiscal years, shall have been consummated
substantially contemporaneously with the IPO Closing; and
(vi) CLOSING OF THE IPO. (A) TMI shall have issued and sold
shares of TMI Common Stock to the Underwriter in accordance with
the Underwriting Agreement for initial resale at the IPO Price
and received payment therefor in an amount at least equal to the
amount by which (1) the Minimum Cash Amount exceeds (2) the
aggregate amount of funds actually received on the IPO Closing
Date, if any, from any one or more of the Other Financing Sources
and (B) the
50
IPO Price shall have been at least $8.
Section 7.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE
STOCKHOLDERS. The obligations of the Company and each Stockholder with respect
to actions to be taken by them at or before the Closing and the actions to be
taken on the IPO Closing Date are subject to the satisfaction, or the written
waiver by the Company on behalf of itself and each Stockholder pursuant to
Section 11.05 on or before the date of the Closing of, in addition to the
conditions specified in Section 7.02 (a) or 7.02 (b), as applicable, (i) all the
conditions set forth in Section 7.01 (b), if any, and (ii) all the following
conditions:
(A) REPRESENTATIONS AND WARRANTIES. All the representations
and warranties of TMI and Newco in Article V shall be true and
correct in all material respects as of the Closing as though made
at that time;
(B) DELIVERY OF DOCUMENTS. TMI shall have delivered to the
Company, with copies for each Stockholder:
(1) an TMI officer's certificate respecting the
representations and warranties of TMI and Newco in Article V
and compliance with the covenants of TMI and Newco in Article
VI and in the form thereof attached as an exhibit to the
Closing Memorandum;
(2) opinions dated the IPO Closing Date and addressed to
the Company and the Stockholders from Counsel for TMI and
Newco substantially in the forms thereof attached as exhibits
to the Closing Memorandum;
(3) a certificate of the secretary or any assistant
secretary of TMI in the form thereof (without attachments
thereto) attached as an exhibit to the Closing Memorandum and
respecting, and to which there shall be attached, (a) the
Charter Documents of TMI and Newco (certified by the Secretary
of State of the State of Delaware in the case of the
certificates of incorporation of TMI included therein); (b)
the resolutions of the boards of directors of TMI and Newco
respecting the Transaction Documents and the transactions
contemplated thereby; (c) a certificate respecting the
incumbency and true signatures of the TMI and Newco officers
who execute the Transaction Documents on behalf of TMI and
Newco, respectively; (d) a specimen certificate evidencing
shares of TMI Common Stock; (e) the prospectus included in the
Registration Statement when it became effective; and (f) a
facsimile copy of the Underwriting Agreement as executed and
delivered by TMI and the Underwriter;
(4) the Registration Rights Agreement duly executed and
delivered by
51
TMI; and
(5) a certificate, dated as of a Current Date, duly issued
by the Secretary of State of the State of Delaware, showing
TMI to be in good standing and authorized to do business in
that State.
Section 7.04. CONDITIONS TO THE OBLIGATIONS OF TMI AND NEWCO. (a) The
obligations of TMI and Newco with respect to actions to be taken by them
at or before the Closing are subject to the satisfaction on or before
the date of the Closing of, in addition to the conditions specified in
Section 7.02 (a), (i) all the conditions set forth in Section 7.01(c),
if any, and (ii) all the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. All the representations
and warranties of the Stockholders and the Company in Articles
III and IV shall be true and correct in all material respects as
of the Closing as though made at that time;
(B) DELIVERY OF DOCUMENTS. The Stockholders and the Company
shall have delivered to TMI:
(1) a Company officer's certificate, signed by a
Responsible Officer, respecting the representations and
warranties of the Stockholders and the Company in Articles III
and IV and compliance with the covenants of the Stockholders
and the Company in Article VI and in the form thereof attached
as an exhibit to the Closing Memorandum;
(2) opinions dated the IPO Closing Date and addressed to
TMI from Counsel for the Company and the Stockholders
substantially in the form thereof attached as exhibits to the
Closing Memorandum;
(3) a certificate of the secretary or any assistant
secretary of the Company in the form thereof (without
attachments thereto) attached as an exhibit to the Closing
Memorandum and respecting, and to which is attached, (a) the
Charter Documents of the Company; (b) the resolutions of the
board of directors of the Company respecting the Transaction
Documents and the transactions contemplated thereby; and (c) a
certificate respecting the incumbency and true signatures of
the Responsible Officers who execute the Transaction Documents
on behalf of the Company;
(4) from each Stockholder, a General Release duly executed
and delivered by that Stockholder;
(5) from each Stockholder, an executed certificate to the
effect that no withholding is required under Section 1445 of
the Code, in the form of Exhibit
52
7.04, with the blanks therein appropriately completed; and
(6) for each of the Company and the Company Subsidiaries,
a certificate, dated as of a Current Date, duly issued by the
appropriate Governmental Authorities in its Organization State
and, unless waived by TMI, in each other jurisdiction listed
for it in Section 4.02 of the Disclosure Statement, showing it
to be in good standing and authorized to do business in its
Organization State and those other jurisdictions and that all
state franchise and/or income tax returns and taxes due by it
in its Organization State and those other jurisdictions for
all periods prior to the Closing have been filed and paid.
(b)The obligations of TMI and Newco with respect to the actions
to be taken on the IPO Closing Date are subject to the satisfaction on
that date of (i) all the conditions set forth in Section 7.01(d), if
any, and (ii) the condition that all the representations and warranties
of the Stockholders and the Company in Articles III and IV shall be true
and correct in all material respects as of the IPO Closing Date as
though made on that date.
53
ARTICLE VIII
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section 8.02. DISCLOSURE. If, subsequent to the IPO Pricing Date and
prior to the 25th day after the date of the Final Prospectus, any Stockholder
becomes aware of any fact or circumstance which would change (or, if after the
Effective Time, would have changed) a representation or warranty of the Company
or any Stockholder in this Agreement or would affect any document delivered
pursuant hereto in any material respect that Stockholder will promptly give
notice of that fact or circumstance to TMI.
Section 8.03. PREPARATION AND FILING OF TAX RETURNS. Each party hereto
will, and will cause its Affiliates to, provide to each of the other parties
hereto such cooperation and information as any of them reasonably may request in
filing any Return, amended Return or claim for refund, determining a liability
for Taxes or a right to refund of Taxes or in conducting any audit or other
proceeding in respect of Taxes. This cooperation and information shall include
providing copies of all relevant portions of the relevant Returns, together with
such accompanying schedules and work papers, documents relating to rulings or
other determinations by Taxing Authorities and records concerning the ownership
and Tax bases of property as are relevant which a party possesses. Each party
will make its employees, if any, reasonably available on a mutually convenient
basis at its cost to provide an explanation of any documents or information so
provided. Subject to the preceding sentence, each party required to file Returns
pursuant to this Agreement shall bear all costs attributable to the preparation
and filing of those Returns.
Section 8.04. DIRECTORS. TMI will cause such corporate proceedings as on
its part will be necessary to cause each of the persons, if any, who are named
in the Final Prospectus as persons who will become members of the board of
directors of TMI following the Effective Time to be appointed to the board when
the prospectus so provides.
Section 8.05. REMOVAL OF GUARANTIES. Within 120 days following the
Effective Time, TMI will cause the Stockholder Guaranties listed in Schedule
8.05 to be terminated.
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ARTICLE IX
INDEMNIFICATION
Section 9.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All the
provisions of this Agreement will survive the Closing and the Effective Time
notwithstanding any investigation at any time made by or on behalf of any party
hereto or the provision of any Supplemental Information pursuant to Section
6.07, provided that the representations and warranties set forth in Articles IV,
V and VI and in any certificate delivered in connection herewith with respect to
any of those representations and warranties will terminate and expire 18 months
after the IPO Closing Date, except as follows: (a) the representations and
warranties of the Stockholders which relate expressly or by necessary
implication to Taxes or ERISA will survive until the expiration of the
applicable statutes of limitations (including all periods of extension and
tolling); and (b) the representations and warranties of TMI and the Company will
terminate and expire at the Effective Time. After a representation and warranty
has terminated and expired, no indemnification will or may be sought on the
basis of that representation and warranty by any Person who would have been
entitled pursuant to this Article IX to indemnification on the basis of that
representation and warranty prior to its termination and expiration, provided
that, in the case of each representation and warranty that will terminate and
expire as provided in this Section 9.02, no claim presented in writing for
indemnification pursuant to this Article IX on the basis of that representation
and warranty prior to its termination and expiration will be affected in any way
by the termination and expiration.
Section 9.03. INDEMNIFICATION OF TMI INDEMNIFIED PARTIES. (a) Subject to
the applicable provisions of Sections 9.02 and 9.07, the Stockholders
covenant and agree that they, jointly and severally, will indemnify each
TMI Indemnified Party against, and hold each TMI Indemnified Party
harmless from and in respect of, all Damages that arise from, are based
on or relate or otherwise are attributable to (i) any breach of the
representations and warranties of the Stockholders or the Company set
forth herein (other than in Article III) or in certificates delivered in
connection herewith (other than in respect of certificates relating only
to the representations and warranties in Article III), (ii) any
nonfulfillment of any covenant or agreement on the part of the
Stockholders or the Company under this Agreement, (iii) any liability
under the Securities Act, the Exchange Act or other applicable
Governmental Requirement which arises out of or is based on (A) any
untrue statement of a material fact relating to the Company and the
Company Subsidiaries, or any of them, which is (1) provided to TMI or
its counsel by the Company or the Stockholders and (2) contained in any
preliminary prospectus relating to the IPO, the Registration Statement
or any prospectus forming a part thereof, or any amendment thereof or
supplement thereto, or (B) any omission or alleged omission to state
therein a material fact relating to the Company and the Company
Subsidiaries, or any of them, required to be stated therein or necessary
to make the statements therein not misleading, and not provided to TMI
or its counsel by the Company or the Stockholders (each such Damage
Claim and each Damage Claim described in Section 9.03(b) being a "TMI
55
Indemnified Loss"); PROVIDED, HOWEVER, that no Stockholder shall be
obligated to indemnify any TMI Indemnified Party against any TMI
Indemnified Loss to the extent that such untrue statement (or alleged
untrue statement) was made in, or such omission (or alleged omission)
occurred in, any preliminary prospectus and the Stockholder or the
Company timely provided, in writing, corrected or the necessary
additional information to TMI and its counsel for inclusion in the Final
Prospectus.
(b)Each Stockholder, severally and not jointly with any other
Person, covenants and agrees that he will indemnify each TMI Indemnified
Party against, and hold each TMI Indemnified Party harmless from and in
respect of, all Damage Claims that arise from, are based on or relate or
otherwise are attributable to (i) any breach of the representations and
warranties of that Stockholder solely as to that Stockholder set forth
in Article III or in certificates delivered by that Stockholder and
relating to those representations and warranties, (ii) any
nonfulfillment of any several, and not joint and several, agreement on
the part of that Stockholder under this Agreement or (iii) any liability
under the Securities Act, the Exchange Act or other applicable
Governmental Requirement which arises out of or is based on (A) any
untrue statement or alleged untrue statement of a material fact relating
solely to that Stockholder which is (1) provided to TMI or its counsel
by that Stockholder and (2) contained in any preliminary prospectus
relating to the IPO, the Registration Statement or any prospectus
forming a part thereof, or any amendment thereof or supplement thereto,
or (B) any omission or alleged omission to state therein a material fact
relating solely to that Stockholder required to be stated therein or
necessary to make the statements therein not misleading, and not
provided to TMI or its counsel by that Stockholder; PROVIDED, HOWEVER,
that no Stockholder shall be obligated to indemnify any TMI Indemnified
Party against any TMI Indemnified Loss to the extent that such untrue
statement (or alleged untrue statement) was made in, or such omission
(or alleged omission) occurred in, any preliminary prospectus and the
Stockholder or the Company timely provided, in writing, corrected or the
necessary additional information to TMI and its counsel for inclusion in
the Final Prospectus.
Section 9.04. INDEMNIFICATION OF STOCKHOLDER INDEMNIFIED PARTIES. TMI
covenants and agrees that it will indemnify each Stockholder Indemnified Party
against, and hold each Stockholder Indemnified Party harmless from and in
respect of, all Damage Claims (that arise from, are based on or relate or
otherwise are attributable to (i) any breach by TMI or Newco of their
representations and warranties set forth herein or in their certificates
delivered to the Company or the Stockholders in connection herewith, (ii) any
nonfulfillment of any covenant or agreement on the part of TMI or Newco under
this Agreement (each such Damage Claim being a "Stockholder Indemnified Loss");
or (iii) any liability under the Securities Act, the Exchange Act or other
applicable Governmental Requirement which arises out of or is based on (A) any
untrue statement or alleged untrue statement of a material fact relating to TMI,
Newco or any of the Other Founding Companies contained in any preliminary
prospectus relating to the IPO, the Registration Statement or any prospectus
forming a part thereof, or any amendment thereof or
56
supplement thereto, or (B) any omission or alleged omission to state therein a
material fact relating to TMI, Newco or any of the Other Founding Companies, or
any of them, required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made.
Section 9.05. CONDITIONS OF INDEMNIFICATION. (a) All claims for
indemnification under this Agreement shall be asserted and resolved as
follows in this Section 9.05.
(b)A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any third-party
claim or claims asserted against the Indemnified Party ("Third Party
Claim") that could give rise to a right of indemnification under this
Agreement and (ii) transmit to the Indemnifying Party a written notice
("Claim Notice") describing in reasonable detail the nature of the Third
Party Claim, a copy of all papers served with respect to the claim (if
any), an estimate of the amount of damages attributable to the Third
Party Claim to the extent feasible (which estimate shall not be
conclusive of the final amount of the claim) and the basis for the
Indemnified Party's request for indemnification under this Agreement.
Except as set forth in Section 9.02, the failure to promptly deliver a
Claim Notice shall not relieve the Indemnifying Party of its obligations
to the Indemnified Party with respect to the related Third Party Claim
except to the extent that the resulting delay is materially prejudicial
to the defense of the claim. Within 15 days after receipt of any Claim
Notice (the "Election Period"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article IX with
respect to the Third Party Claim and (ii) if the Indemnifying Party does
not dispute its potential liability to the Indemnified Party with
respect to the Third Party Claim, whether the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to
defend the Indemnified Party against the Third Party Claim.
(c)If the Indemnifying Party does not dispute its potential
liability to the Indemnified Party and notifies the Indemnified Party
within the Election Period that the Indemnifying Party elects to assume
the defense of the Third Party Claim, then the Indemnifying Party shall
have the right to defend, at its sole cost and expense, the Third Party
Claim by all appropriate proceedings, which proceedings shall be
prosecuted diligently by the Indemnifying Party to a final conclusion or
settled at the discretion of the Indemnifying Party in accordance with
this Section 9.05(c) and the Indemnified Party will furnish the
Indemnifying Party with all information in its possession with respect
to the Third Party Claim and otherwise cooperate with the Indemnifying
Party in the defense of the Third Party Claim; PROVIDED, HOWEVER, that
the Indemnifying Party shall not enter into any settlement with respect
to any Third Party Claim that purports to limit the activities of, or
otherwise restrict in any way, any Indemnified Party or any Affiliate of
any Indemnified Party without the prior consent of that Indemnified
Party (which consent may be withheld in the sole discretion of that
Indemnified Party). The
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Indemnified Party is hereby authorized, at the sole cost and expense of
the Indemnifying Party if found liable hereunder, to file, during the
Election Period, any motion, answer or other pleadings that the
Indemnified Party shall deem necessary or appropriate to protect its
interests or those of the Indemnifying Party. The Indemnified Party may
participate in, but not control, any defense or settlement of any Third
Party Claim controlled by the Indemnifying Party pursuant to this
Section 9.05(c) and will bear its own costs and expenses with respect to
its participation; PROVIDED, HOWEVER, that if the named parties to any
such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party, and the Indemnified Party
has been advised in writing by counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the Indemnifying Party, then the Indemnified Party
may employ separate counsel at the expense of the Indemnifying Party,
and, on its written notification of that employment, the Indemnifying
Party shall not have the right to assume or continue the defense of the
action on behalf of the Indemnified Party.
(d)If the Indemnifying Party (i) within the Election Period (A)
disputes its potential liability to the Indemnified Party under this
Article IX, (B) elects not to defend the Indemnified Party pursuant to
Section 9.05(c) or (C) fails to notify the Indemnified Party that the
Indemnifying Party elects to defend the Indemnified Party pursuant to
Section 9.05(c) or (ii) elects to defend the Indemnified Party pursuant
to Section 9.05(c) but fails diligently and promptly to prosecute or
settle the Third Party Claim, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the Indemnifying Party
(if the Indemnified Party is entitled to indemnification hereunder), the
Third Party Claim by all appropriate proceedings, which proceedings
shall be promptly and vigorously prosecuted by the Indemnified Party to
a final conclusion or settled. The Indemnified Party shall have full
control of such defense and proceedings. Notwithstanding the foregoing,
if the Indemnifying Party has delivered a written notice to the
Indemnified Party to the effect that the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article IX and
if such dispute is resolved in favor of the Indemnifying Party, the
Indemnifying Party shall not be required to bear the costs and expenses
of the Indemnified Party's defense pursuant to this Section 9.05 or of
the Indemnifying Party's participation therein at the Indemnified
Party's request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all reasonable and appropriate costs and
expenses of such litigation. The Indemnifying Party may participate in,
but not control, any defense or settlement controlled by the Indemnified
Party pursuant to this Section 9.05(d), and the Indemnifying Party shall
bear its own costs and expenses with respect to such participation.
(e)If any Indemnified Party should have a claim against any
Indemnifying Party hereunder that does not involve a Third Party Claim,
the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of Damages attributable
to that claim to the extent feasible (which estimate shall not be
conclusive of
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the final amount of the claim) and the basis of the Indemnified Party's
request for indemnification under this Agreement. If the Indemnifying
Party does not notify the Indemnified Party within 15 days from its
receipt of the Indemnity Notice that the Indemnifying Party disputes the
claim, the claim specified by the Indemnified Party in the Indemnity
Notice shall be deemed a liability of the Indemnifying Party hereunder.
If the Indemnifying Party has timely disputed the claim, as provided
above, the dispute shall be resolved by proceedings in an appropriate
court of competent jurisdiction if the parties do not reach a settlement
of such dispute within 30 days after notice of the dispute is given.
(f)Payments of all amounts owing by an Indemnifying Party
pursuant to this Article IX relating to a Third Party Claim shall be
made within 30 days after the latest of (i) the settlement of that Third
Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of that Third Party Claim or (iii) the expiration of the
period for appeal of a final adjudication of the Indemnifying Party's
liability to the Indemnified Party under this Agreement. Payments of all
amounts owing by an Indemnifying Party pursuant to Section 9.05(e) shall
be made within 30 days after the later of (i) the expiration of the 30-
day Indemnity Notice period or (ii) the expiration of the period for
appeal of a final adjudication of the Indemnifying Party's liability to
the Indemnified Party under this Agreement. If and after the aggregate
amount of all Damage Claims paid by a Stockholder under this Article IX
equals or exceeds the amount of cash included in the Merger
Consideration received by that Stockholder, then that Stockholder, in
payment and satisfaction of any remaining unsatisfied or subsequent
Damage Claims in respect of which that Stockholder may be required to
indemnify any TMI Indemnified Party, may transfer and surrender to the
Company such number of shares of TMI Common Stock included in the Merger
Consideration received by such Stockholder as shall equal (i) the amount
of all such remaining unsatisfied or subsequent Damage Claims divided by
(ii) $14.
Section 9.06. REMEDIES EXCLUSIVE. Except as otherwise expressly provided
in this Agreement, the remedies provided in this Article IX are the exclusive
remedies available to one party against the other in respect of any matter
indemnified against in this Article IX.
Section 9.07. LIMITATIONS ON INDEMNIFICATION. (a) Notwithstanding the
provisions of Section 9.03(a), neither the Company nor any of the
Stockholders shall be required to indemnify or hold harmless any of the
TMI Indemnified Parties on account of any TMI Indemnified Loss under
Section 9.03(a) unless the liability of the Company and the Stockholders
in respect of that TMI Indemnified Loss, when aggregated with the
liability of the Company and the Stockholders in respect of all TMI
Indemnified Losses under Section 9.03 (a), exceeds, and only to the
extent the aggregate amount of all those TMI Indemnified Losses does
exceed, the Threshold Amount. In no event shall (i) the aggregate joint
and several liability of the Company and the Stockholders under this
Agreement, including Section 9.03(a), exceed the Ceiling Amount or (ii)
the aggregate
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liability of each Stockholder under this Agreement, including Sections
9.03(a) and 9.03(b), exceed that Stockholder's Pro Rata Share of the
Ceiling Amount.
(b)Notwithstanding the provisions of Section 9.04, TMI shall not
be required to indemnify or hold harmless any of the Stockholder
Indemnified Parties on account of any Stockholder Indemnified Loss
unless the liability of TMI in respect of that Stockholder Indemnified
Loss, when aggregated with the liability of TMI in respect of all
Stockholder Indemnified Losses, exceeds, and only to the extent the
aggregate amount of all those Stockholder Indemnified Losses does
exceed, the Threshold Amount. In no event shall TMI be liable under this
Agreement, including Section 9.04, for any amount in excess of the
Ceiling Amount less that portion of the Merger Consideration which is
payable in cash.
Section 9.08 INDEMNIFICATION CLAIMS BY TMI AFFILIATES. Notwithstanding
the provisions of Sections 9.03 and 9.05, if a TMI Indemnified Party other than
TMI proposes to assert a Damage Claim against one or more Stockholders for a TMI
Indemnified Loss, and if such Damage Claim does not arise as a result of a Third
Party Claim which requires defensive action to be taken within 30 days from the
date of the Third Party Claim, then as a condition to any exercise of its rights
under this Article IX, (i) such TMI Indemnified Party shall notify TMI in
writing of such TMI Indemnified Party's intent to make a claim and of the nature
of the proposed claim, and (ii) TMI shall have 20 days thereafter to elect (by
written notice to such TMI Indemnified Party) to assume the direction and
control of such proposed Damage Claim on behalf of all TMI Indemnified Parties.
If TMI does not so elect within such 20-day period, the TMI Indemnified Party
proposing to assert the Damage Claim may do so. If a Damage Claim proposed to be
asserted by a TMI Indemnified Party other than TMI arises out of a Third Party
Claim that requires that defensive action be taken within 30 days of the Third
Party Claim, then such TMI Indemnified Party may, upon written notice to TMI,
proceed to assert such Damage Claim, and TMI shall have 20 days from the date of
its receipt of such notice to elect to assume the direction and control of such
Damage Claim on behalf of all TMI Indemnified Parties.
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ARTICLE XI
GENERAL PROVISIONS
Section 11.01. TREATMENT OF CONFIDENTIAL INFORMATION. (a) Each of the
Company and the Stockholders, severally and not jointly with any other
Person, acknowledges that it has or may have had in the past, currently
has and in the future may have access to Confidential Information of the
Company and the Company Subsidiaries, the Other Founding Companies and
their Subsidiaries and TMI and its Subsidiaries. Each of the Company and
the Stockholders, severally and not jointly with any other Person,
agrees that it will keep confidential all such Confidential Information
furnished to it and, except with the specific prior written consent of
TMI will not disclose such Confidential Information to any Person except
(a) Representatives of TMI, (b) its own Representatives, provided that
these Representatives (other than counsel) agree to the confidentiality
provisions of this Section 11.01; and provided, further, that
Confidential Information shall not include (i) such information which
becomes known to the public generally through no fault of any
Stockholder, (ii) information required to be disclosed by law or the
order of any governmental authority under color of law, provided, that
prior to disclosing any information pursuant to this clause (ii), each
Stockholder shall, if possible, give prior written notice thereof to TMI
and provide TMI with the opportunity to contest such disclosure, or
(iii) the disclosing party reasonably believes that such disclosure is
required in connection with the defense of a lawsuit against the
disclosing party. In the event of a breach or threatened breach by any
Stockholder of the provisions of this Section 11.01 with respect to any
Confidential Information, TMI shall be entitled to an injunction
restraining such Stockholder from disclosing, in whole or in part, that
Confidential Information. Nothing herein shall be construed as
prohibiting TMI from pursuing any other available remedy for such breach
or threatened breach, including the recovery of damages.
(b)Because of the difficulty of measuring economic losses as a
result of the breach of the foregoing covenants in Section 11.01(a), and
because of the immediate and irreparable damage that would be caused to
TMI for which it would have no other adequate remedy, each of the
Company and the Stockholders agrees that TMI may enforce the provisions
of Section 11.01(a) by injunctions and restraining orders against each
of them who breaches any of those provisions.
(c)The obligations of TMI set forth in Section 6.02(d) are
incorporated in this Section 11.01 by this reference.
(d)The obligations of the parties under this Section 11.01 shall
survive the termination of this Agreement.
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