EXHIBIT 10.27
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AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL ELECTRIC COMPANY,
RUBY MERGER CORP.
AND
OEC MEDICAL SYSTEMS, INC.
Dated as of August 7, 1999
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER
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Page
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ARTICLE I THE MERGER....................................................................... 2
Section 1.1 The Merger................................................................ 2
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Section 1.2 Effective Time............................................................ 2
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Section 1.3 Effects of the Merger..................................................... 2
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Section 1.4 Charter and Bylaws; Directors and Officers................................ 2
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Section 1.5 Conversion of Securities.................................................. 3
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Section 1.6 Parent to Make Certificates Available..................................... 3
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Section 1.7 Dividends; Transfer Taxes; Withholding.................................... 4
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Section 1.8 No Fractional Securities.................................................. 5
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Section 1.9 Return of Exchange Fund................................................... 5
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Section 1.10 No Further Ownership Rights in Company Common Stock...................... 6
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Section 1.11 Closing of Company Transfer Books........................................ 6
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Section 1.12 Lost Certificates........................................................ 6
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Section 1.13 Further Assurances....................................................... 6
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Section 1.14 Closing.................................................................. 6
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB................................ 7
Section 2.1 Organization, Standing and Power.......................................... 7
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Section 2.2 Authority................................................................. 7
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Section 2.3 Consents and Approvals; No Violation...................................... 8
Section 2.4 Parent Common Stock to be Issued in the Merger............................ 9
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Section 2.5 SEC Documents and Other Reports........................................... 9
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Section 2.6 Registration Statement and Proxy Statement................................ 9
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Section 2.7 Absence of Certain Changes or Events......................................10
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Section 2.8 Reorganization............................................................10
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Section 2.9 Operations of Sub.........................................................10
Section 2.10 Accuracy of Representations..............................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................11
Section 3.1 Organization, Standing and Power..........................................11
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Section 3.2 Capital Structure.........................................................11
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Section 3.3 Authority.................................................................13
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Section 3.4 Consents and Approvals; No Violation......................................13
Section 3.5 SEC Documents and Other Reports...........................................14
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Section 3.6 Registration Statement and Proxy Statement................................15
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Section 3.7 Absence of Certain Changes or Events......................................15
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Section 3.8 Permits and Compliance....................................................16
Section 3.9 Tax Matters...............................................................17
Section 3.10 Actions and Proceedings..................................................18
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Section 3.11 Certain Agreements...................................................... 19
Section 3.12 ERISA................................................................... 20
Section 3.13 Compliance with Worker Safety Laws...................................... 22
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Section 3.14 Liabilities; Products................................................... 22
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Section 3.15 Labor Matters........................................................... 23
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Section 3.16 Intellectual Property................................................... 23
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Section 3.17 Opinion of Financial Advisor............................................ 24
Section 3.18 State Takeover Statutes................................................. 24
Section 3.19 Required Vote of Company Shareholders................................... 25
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Section 3.20 Reorganization.......................................................... 25
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Section 3.21 Accounts Receivable..................................................... 25
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Section 3.22 Inventories............................................................. 25
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Section 3.23 Environmental Matters................................................... 25
Section 3.24 Suppliers and Distributors.............................................. 27
Section 3.25 Insurance............................................................... 27
Section 3.26 Accuracy of Information................................................. 28
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Section 3.27 Transactions with Affiliates............................................ 28
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Section 3.28 Title to and Sufficiency of Assets...................................... 29
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Section 3.29 Brokers................................................................. 29
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Section 3.30 Year 2000............................................................... 30
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ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS...................................... 30
Section 4.1 Conduct of Business by the Company Pending the Merger.................... 30
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Section 4.2 No Solicitation.......................................................... 33
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Section 4.3 Third Party Standstill Agreements........................................ 34
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Section 4.4 Reorganization........................................................... 34
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ARTICLE V ADDITIONAL AGREEMENTS........................................................... 35
Section 5.1 Shareholder Meeting...................................................... 35
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Section 5.2 Preparation of the Registration Statement and the Proxy Statement........ 35
Section 5.3 Access to Information.................................................... 36
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Section 5.4 Rule 145 Letters......................................................... 36
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Section 5.5 Stock Exchange Listings.................................................. 36
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Section 5.6 Fees and Expenses........................................................ 36
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Section 5.7 Company Stock Options.................................................... 39
Section 5.8 Reasonable Best Efforts.................................................. 40
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Section 5.9 Public Announcements..................................................... 41
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Section 5.10 Real Estate Transfer and Gains Tax...................................... 41
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Section 5.11 State Takeover Laws..................................................... 41
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Section 5.12 Indemnification; Directors and Officers Insurance....................... 41
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Section 5.13 Notification of Certain Matters......................................... 42
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Section 5.14 Suspension of Employee Incentive Stock Acquisition Plan................. 42
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ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER............................................. 42
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Section 6.1 Conditions to Each Party's Obligation to Effect the Merger............... 42
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Section 6.2 Conditions to Obligation of the Company to Effect the Merger.............. 43
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Section 6.3 Conditions to Obligations of Parent and Sub to Effect the Merger.......... 45
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ARTICLE VII TERMINATION, AMENDMENT AND WAIVER.............................................. 47
Section 7.1 Termination............................................................... 47
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Section 7.2 Effect of Termination..................................................... 49
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Section 7.3 Amendment................................................................. 50
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Section 7.4 Waiver.................................................................... 50
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ARTICLE VIII GENERAL PROVISIONS............................................................ 50
Section 8.1 Non-Survival of Representations and Warranties............................ 50
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Section 8.2 Notices................................................................... 50
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Section 8.3 Interpretation............................................................ 51
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Section 8.4 Counterparts.............................................................. 52
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Section 8.5 Entire Agreement; No Third-Party Beneficiaries............................ 52
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Section 8.6 Governing Law............................................................. 52
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Section 8.7 Assignment................................................................ 52
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Section 8.8 Severability.............................................................. 52
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Section 8.9 Enforcement of this Agreement............................................. 53
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Section 8.10 Defined Terms............................................................ 53
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LIST OF EXHIBITS
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Description
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Exhibit A............................................................ Recital C
Exhibit B............................................................ Recital C
Exhibit C.......................................................... Section 1.4
Exhibit D.......................................................... Section 5.4
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER, dated as of August 7, 1999 (this
"Agreement"), among General Electric Company, a New York corporation ("Parent"),
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Ruby Merger Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Sub"), and OEC Medical Systems, Inc., a Delaware corporation (the
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"Company") (Sub and the Company being hereinafter collectively referred to as
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the "Constituent Corporations").
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RECITALS:
A. The respective Boards of Directors of Parent, Sub and the Company have
approved and declared advisable the merger of Sub with and into the Company (the
"Merger"), and the respective Boards of Directors of Sub and the Company have
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approved and adopted this Agreement;
B. The respective Boards of Directors of Parent and the Company have
determined that the Merger is in furtherance of and consistent with their
respective long-term business strategies and is in the best interest of their
respective shareholders;
C. In order to induce Parent and Sub to enter into this Agreement,
concurrently herewith (i) Parent and the Company are entering into the Stock
Option Agreement dated as of the date hereof (the "Stock Option Agreement") in
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the form of the attached Exhibit A and (ii) Parent and one of the shareholders
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of the Company are entering into the Adviser Agreement dated as of the date
hereof (the "Adviser Agreement") in the form of the attached Exhibit B; and
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D. For federal income tax purposes, it is intended by the parties hereto
that the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
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hereof, and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), Sub shall be merged with and into the Company at the
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Effective Time (as defined in Section 1.2). Following the Merger, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
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assume all the rights and obligations of Sub in accordance with the DGCL.
Notwithstanding anything to the contrary herein, at the election of Parent, any
direct wholly-owned Subsidiary (as hereinafter defined) of Parent may be
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement, in form
and substance reasonably satisfactory to Parent and the Company, in order to
reflect such substitution.
Section 1.2 Effective Time. The Merger shall become effective when the
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certificate of merger (the "Certificate of Merger"), executed in accordance with
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the relevant provisions of the DGCL, is filed with the Secretary of State of the
State of Delaware; provided, however, that, upon mutual consent of the
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Constituent Corporations, the Certificate of Merger may provide for a later date
of effectiveness of the Merger not more than 30 days after the date the
Certificate of Merger are filed. When used in this Agreement, the term
"Effective Time" shall mean the date and time at which the Certificate of Merger
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is accepted for filing or such later time established by the Certificate of
Merger. The filing of the Certificate of Merger shall be made on the date of
the Closing (as defined in Section 1.14).
Section 1.3 Effects of the Merger. The Merger shall have the effects set
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forth in Section 259 of the DGCL.
Section 1.4 Charter and By-laws; Directors and Officers. (a) The
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Certificate of Incorporation of the Company in effect at the Effective Time will
be amended in its entirety at the Effective time to read as set forth in Exhibit
C hereto and shall be the Certificate of Incorporation of Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
The By-laws of Sub in effect at the Effective Time will be the Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) The directors of Sub at the Effective Time shall be the directors of
the Surviving Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified, as the case
may be. The officers of the Company at the Effective Time shall be the officers
of the Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.
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Section 1.5 Conversion of Securities. As of the Effective Time, by
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virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any securities of the Constituent Corporations:
(a) Each issued and outstanding share of common stock, par value $.01
per share, of Sub shall be converted into one validly issued, fully paid
and nonassessable share of Common Stock of the Surviving Corporation.
(b) All shares of Company Common Stock that are held in the treasury of
the Company or by any wholly-owned Subsidiary of the Company and any shares
of Company Common Stock owned by Parent or Sub shall automatically be
canceled and retired and shall cease to exist and no capital stock of
Parent or other consideration shall be delivered in exchange therefor.
(c) Subject to the provisions of Sections 1.8 and 1.10 hereof, each
share of Common Stock, par value $0.01 per share of the Company ("Company
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Common Stock") issued and outstanding immediately prior to the Effective
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Time (other than shares to be canceled in accordance with Section 1.5(b))
shall be converted into the right to receive the number of shares of Parent
Common Stock determined by dividing $36.00 by the Average Parent Share
Price (as defined below) and rounding the result to the nearest one
thousandth of a share (the "Merger Consideration"); provided, however, that
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if between the first day of the Valuation Period (as defined below) and the
Effective Time, the outstanding shares of Parent Common Stock shall have
been changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Merger
Consideration shall be correspondingly adjusted to the extent appropriate
to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. The "Average
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Parent Share Price" means the average of the daily volume-weighted sales
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prices per share of Parent Common Stock on the New York Stock Exchange,
Inc. (the "NYSE") Composite Tape for each of the 10 consecutive trading
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days ending on the trading day which is five days prior to the Closing Date
(the "Valuation Period"). All such shares of Company Common Stock, when so
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converted, shall no longer be outstanding and shall automatically be
canceled and retired and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the
right to receive any dividends and other distributions in accordance with
Section 1.7, certificates representing the shares of Parent Common Stock
into which such shares are converted and any cash, without interest, in
lieu of fractional shares to be issued or paid in consideration therefor
upon the surrender of such certificate in accordance with Section 1.6.
Section 1.6 Parent to Make Certificates Available. (a) Exchange of
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Certificates. Parent shall authorize a bank or trust company (or such other
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person or persons as shall be reasonably acceptable to Parent and the Company)
to act as Exchange Agent hereunder (the "Exchange Agent"). As soon as
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practicable after the Effective Time, Parent shall deposit with the Exchange
Agent, in trust for the holders of shares of
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Company Common Stock converted in the Merger, certificates representing the
shares of Parent Common Stock issuable pursuant to Section 1.5(c) in exchange
for outstanding shares of Company Common Stock and cash, as required to make
payments in lieu of any fractional shares pursuant to Section 1.8 (such cash and
shares of Parent Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund"). The
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Exchange Agent shall deliver the Parent Common Stock contemplated to be issued
pursuant to Section 1.5(c) out of the Exchange Fund. Except as contemplated by
Section 1.9, the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. As soon as practicable after the Effective
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Time, the Exchange Agent shall mail to each record holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock converted in the Merger (the
"Certificates") a letter of transmittal (which shall specify that delivery shall
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be effected, and risk of loss and title to the Certificates shall pass, only
upon actual delivery of the Certificates to the Exchange Agent, and shall
contain instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Parent Common Stock and cash in
lieu of fractional shares). Upon surrender for cancellation to the Exchange
Agent of all Certificates held by any record holder of a Certificate, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Parent Common Stock into which the shares
represented by the surrendered Certificate shall have been converted at the
Effective Time pursuant to this Article I, cash in lieu of any fractional share
in accordance with Section 1.8 and certain dividends and other distributions in
accordance with Section 1.7, and any Certificate so surrendered shall forthwith
be canceled.
Section 1.7 Dividends; Transfer Taxes; Withholding. No dividends or
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other distributions that are declared on or after the Effective Time on Parent
Common Stock, or are payable to the holders of record thereof on or after the
Effective Time, will be paid to any person entitled by reason of the Merger to
receive a certificate representing Parent Common Stock until such person
surrenders the related Certificate or Certificates, as provided in Section 1.6,
and no cash payment in lieu of fractional shares will be paid to any such person
pursuant to Section 1.8 until such person shall so surrender the related
Certificate or Certificates. Subject to the effect of applicable law, there
shall be paid to each record holder of a new certificate representing such
Parent Common Stock: (i) at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other distributions
theretofore paid with respect to the shares of Parent Common Stock represented
by such new certificate and having a record date on or after the Effective Time
and a payment date prior to such surrender; (ii) at the appropriate payment date
or as promptly as practicable thereafter, the amount of any dividends or other
distributions payable with respect to such shares of Parent Common Stock and
having a record date on or after the Effective Time but prior to such surrender
and a payment date on or subsequent to such surrender; and (iii) at the time of
such surrender or as promptly as practicable thereafter, the amount of any cash
payable with respect to a fractional share of Parent Common Stock to which such
holder is entitled pursuant to
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Section 1.8. In no event shall the person entitled to receive such dividends or
other distributions be entitled to receive interest on such dividends or other
distributions. If any cash or certificate representing shares of Parent Common
Stock is to be paid to or issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Certificate so surrendered shall be properly
endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of certificates for such shares of
Parent Common Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Parent or the Exchange
Agent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock such amounts as Parent or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the Code or under any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
Section 1.8 No Fractional Securities. No certificates or scrip
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representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I, and no Parent
dividend or other distribution or stock split shall relate to any fractional
share, and no fractional share shall entitle the owner thereof to vote or to any
other rights of a security holder of Parent. In lieu of any such fractional
share, each holder of Company Common Stock who would otherwise have been
entitled to a fraction of a share of Parent Common Stock upon surrender of
Certificates for exchange pursuant to this Article I will be paid an amount in
cash (without interest), rounded to the nearest cent, determined by multiplying
(i) the Average Parent Share Price by (ii) the fractional interest to which such
holder would otherwise be entitled. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of fractional
share interests, the Exchange Agent shall so notify the Parent, and the Parent
shall deposit such amount with the Exchange Agent and shall cause the Exchange
Agent to forward payments to such holders of fractional share interests subject
to and in accordance with the terms of Section 1.7 and this Section 1.8.
Section 1.9 Return of Exchange Fund. Any portion of the Exchange Fund
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which remains undistributed to the former shareholders of the Company for six
months after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any such former shareholders who have not theretofore complied with
this Article I shall thereafter look only to Parent for payment of their claim
for Parent Common Stock, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock.
Neither Parent nor the Surviving Corporation shall be liable to any former
holder of Company Common Stock for any such shares of Parent Common Stock, cash
and dividends and distributions held in the
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Exchange Fund which is delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 1.10 No Further Ownership Rights in Company Common Stock. All
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shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to Section 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Company Common Stock
represented by such Certificates.
Section 1.11 Closing of Company Transfer Books. At the Effective
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Time, the stock transfer books of the Company shall be closed and no transfer of
shares of Company Common Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, the Exchange Agent or the Parent, such Certificates shall
be canceled and exchanged as provided in this Article I.
Section 1.12 Lost Certificates. If any Certificate shall have been lost,
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stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Exchange Agent, the posting by such person of a bond, in such
reasonable amount as Parent or the Exchange Agent may direct as indemnity
against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of Parent Common Stock, any cash in lieu of
fractional shares of Parent Common Stock to which the holders thereof are
entitled pursuant to Section 1.8 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 1.7.
Section 1.13 Further Assurances. If at any time after the Effective Time
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the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either of the Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either
Constituent Corporation, all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm the Surviving Corporation's
right, title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
Section 1.14 Closing. The closing of the transactions contemplated by
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this Agreement (the "Closing") and all actions specified in this Agreement to
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occur at the Closing shall take place at the offices of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
LLP, Suite 4100, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at 10:00 a.m., local
time, no later than the second business day following the day on which the last
of the conditions set forth in Article VI
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shall have been fulfilled or waived (if permissible) (the "Closing Date") or at
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such other time and place as Parent and the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
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Parent and Sub represent and warrant to the Company as follows:
Section 2.1 Organization, Standing and Power. Each of Parent and Sub is
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a corporation duly organized, validly existing and in good standing under the
laws of its place of incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent and
Sub are duly qualified to do business, and are in good standing, in each
jurisdiction where the character of their properties owned or held under lease
or the nature of their activities makes such qualification necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on Parent. For purposes of this
Agreement, "Material Adverse Effect" means, when used with respect to Parent,
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any change or effect that is or could reasonably be expected (as far as can be
foreseen at the time) to be materially adverse to the business, operations,
properties, assets, liabilities, employee relationships, customer or supplier
relationships, earnings or results of operations or the prospects of Parent and
its Subsidiaries, taken as a whole.
Section 2.2 Authority. On or prior to the date of this Agreement, the
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respective Boards of Directors of Parent and Sub have declared the Merger
advisable and have approved and adopted this Agreement in accordance with the
DGCL. Each of Parent and Sub has all requisite corporate power and authority to
enter into this Agreement, Parent has all requisite corporate power and
authority to enter into the Stock Option Agreement and the Adviser Agreement,
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement by Parent and Sub, the execution and
delivery of the Stock Option Agreement and the Adviser Agreement by Parent and
the consummation by Parent and Sub of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action (including
all Board action) on the part of Parent and Sub, subject to the filing of an
appropriate Certificate of Merger as required by the DGCL. This Agreement has
been duly executed and delivered by Parent and Sub, the Stock Option Agreement
and the Adviser Agreement has been duly executed and delivered by Parent, and
(assuming the valid authorization, execution and delivery of this Agreement and
the Stock Option Agreement by the Company, the valid authorization, execution
and delivery of the Adviser Agreement by the shareholder of the Company that is
a party thereto and the validity and binding effect hereof and thereof on the
Company and such shareholder) this Agreement constitutes the valid and binding
obligation of Parent and Sub enforceable against each of them in accordance with
its terms and the Stock Option Agreement and the Adviser Agreement constitute
the valid and binding obligation of Parent enforceable against Parent in
accordance with its terms. The filing of a registration statement on Form S-4
with the Securities and Exchange Commission (the "SEC") by Parent under the
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Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act"), for the purpose of registering
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the shares of Parent Common Stock to be issued in the Merger (together with any
amendments or supplements thereto, whether prior to or after the effective date
thereof, the "Registration Statement") has been duly authorized by Parent's
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Board of Directors.
Section 2.3 Consents and Approvals; No Violation. Assuming that all
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consents, approvals, authorizations and other actions described in this Section
2.3 have been obtained and all filings and obligations described in this Section
2.3 have been made, and except as set forth in Section 2.3 of the letter dated
the date hereof and delivered on the date hereof by Parent to the Company, which
letter relates to this Agreement and is designated therein as the Parent Letter
(the "Parent Letter"), the execution and delivery of this Agreement, the Stock
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Option Agreement and the Adviser Agreement do not, and the consummation of the
transactions contemplated hereby and thereby and compliance with the provisions
hereof and thereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or result in the
loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent or any of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the By-laws of Parent, each as amended to date, (ii) any
provision of the comparable charter or organization documents of any of Parent's
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
Parent, materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or under the Stock Option Agreement or the
Adviser Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or tribunal (a "Governmental Entity") is required by or with respect
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to Parent or any of its Subsidiaries in connection with the execution and
delivery of this Agreement, the Stock Option Agreement or the Adviser Agreement
by Parent or Sub or is necessary for the consummation of the Merger and the
other transactions contemplated by this Agreement, the Stock Option Agreement or
the Adviser Agreement, except for (i) in connection, or in compliance, with the
provisions of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Securities Act and the Securities Exchange Act of
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1934, as amended (together with the rules and regulations promulgated
thereunder, the "Exchange Act"), (ii) the filing of the Certificate of Merger
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with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business, (iii) such filings and consents as may
be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered
8
by the Merger or by the transactions contemplated by this Agreement, the Stock
Option Agreement or the Adviser Agreement, (iv) such filings, authorizations,
orders and approvals as may be required by state takeover laws (the "State
-----
Takeover Approvals"), (v) such filings as may be required in connection with
------------------
the taxes described in Section 5.10, (vi) applicable requirements, if any, of
state securities or "blue sky" laws ("Blue Sky Laws") and the NYSE, (vii) as
-------------
may be required under foreign laws and (viii) such other consents, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, have a Material
Adverse Effect on Parent, materially impair the ability of Parent or Sub to
perform its obligations hereunder or under the Stock Option Agreement or the
Adviser Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby.
Section 2.4 Parent Common Stock to be Issued in the Merger. All of the
----------------------------------------------
shares of Parent Common Stock issuable in exchange for Company Common Stock at
the Effective Time in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights created by statute, Parent's Certificate of Incorporation or
By-laws or any agreement to which Parent is a party or by which Parent is bound
and will, when issued, be registered under the Securities Act and the Exchange
Act and registered or exempt from registration under applicable Blue Sky laws.
Section 2.5 SEC Documents and Other Reports. Parent has filed all
-------------------------------
required documents with the SEC since January 1, 1995 (the "Parent SEC
----------
Documents"). As of their respective dates, the Parent SEC Documents complied in
---------
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Parent SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
(including, in each case, any notes thereto) of Parent included in the Parent
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with United States generally
accepted accounting principles (except, in the case of the unaudited statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of Parent and its consolidated Subsidiaries as at the respective dates
thereof and the consolidated results of their operations and their consolidated
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein). Except as set forth in Section 2.5 of the Parent Letter,
disclosed in the Parent SEC Documents or as required by generally accepted
accounting principles, Parent has not, since December 31, 1998, made any change
in the accounting practices or policies applied in the preparation of financial
statements.
Section 2.6 Registration Statement and Proxy Statement. None of the
------------------------------------------
information to be supplied by Parent or Sub for inclusion or incorporation by
reference in
9
the Registration Statement or the proxy statement/prospectus included therein
(together with any amendments or supplements thereto, the "Proxy Statement")
----------------
relating to the Adviser Meeting (as defined in Section 5.1) will (i) in the case
of the Registration Statement, at the time it becomes effective, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or (ii) in the case of the Proxy Statement, at the time of the
mailing of the Proxy Statement, at the time of the Shareholder Meeting and at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event with
respect to Parent, its officers and directors or any of its Subsidiaries shall
occur which is required to be described in the Proxy Statement or the
Registration Statement, such event shall be so described, and an appropriate
amendment or supplement shall be promptly filed with the SEC and, as required by
law, disseminated to the shareholders of the Company. The Registration Statement
will comply (with respect to Parent) as to form in all material respects with
the provisions of the Securities Act, and the Proxy Statement will comply (with
respect to Parent) as to form in all material respects with the provisions of
the Exchange Act.
Section 2.7 Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the Parent SEC Documents filed with the SEC prior to the date of this Agreement,
since December 31, 1998, there has been no event causing a Material Adverse
Effect on Parent, nor any development that would, individually or in the
aggregate, result in a Material Adverse Effect on Parent.
Section 2.8 Reorganization. To the actual knowledge of the Vice
--------------
President and Senior Counsel, Taxes of Parent, neither Parent nor any of its
Subsidiaries has taken any action or failed to take any action which action or
failure would jeopardize the qualification of the Merger as a reorganization
within the meaning of Section 368(a) of the Code.
Section 2.9 Operations of Sub. Sub is a direct, wholly-owned subsidiary
-----------------
of Parent, was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
Section 2.10 Accuracy of Representations. Neither this Agreement nor
---------------------------
any other document provided by Parent or Sub or any of their respective
employees or agents to the Company in connection with the transactions
contemplated herein contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows:
Section 3.1 Organization, Standing and Power. The Company is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority to
carry on its business as now being conducted. Each Subsidiary of the Company is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate (in the
case of a Subsidiary that is a corporation) or other power and authority to
carry on its business as now being conducted, except where the failure to be so
organized, existing or in good standing or to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company. The Company and each of its Subsidiaries are duly qualified to do
business, and are in good standing, in each jurisdiction where the character of
their properties owned or held under lease or the nature of their activities
makes such qualification necessary, except where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company. For purposes of this Agreement, "Material Adverse Effect" means,
-----------------------
when used with respect to the Company, any change or effect that is or could
reasonably be expected (as far as can be foreseen at the time) to be materially
adverse to the business, operations, properties, assets, liabilities, employee
relationships, customer or supplier relationships, earnings or results of
operations or the prospects of the Company and its Subsidiaries, taken as a
whole; provided, however, that any effect arising from or relating to the
announcement or pendency of the Merger shall not be taken into account in
determining the occurrence of a Material Adverse Effect.
Section 3.2 Capital Structure.
-----------------
(a) As of the date hereof, the authorized capital stock of the Company
consists of 30,000,000 shares of Company Common Stock and 2,000,000 shares of
preferred stock, no par value ("Company Preferred Stock"). At the close of
-----------------------
business on August 4, 1999, (i) 12,712,293 shares of Company Common Stock were
issued and outstanding, all of which were validly issued, fully paid and
nonassessable and free of preemptive rights, (ii) 1,445,173 shares of Company
Common Stock were held in the treasury of the Company or by Subsidiaries of the
Company, (iii) 2,094,264 shares of Company Common Stock were reserved for future
issuance pursuant to the Company's 1983, 1990 and 1998 Stock Option Plans or
pursuant to any other plans assumed by the Company in connection with any
acquisition, business combination or similar transaction (collectively, the
"Company Stock Option Plans"), (iv) 93,047 shares of Company Common Stock were
---------------------------
reserved for future issuance pursuant to the Company's 1993 Employee Incentive
Stock Acquisition Plan, as amended and restated, and (v) 38,000 warrants to
purchase Company Common Stock (the "Company Warrants") were issued and
----------------
outstanding. No shares of Company Preferred Stock are outstanding.
11
(b) Section 3.2 (b) of the letter dated the date hereof and delivered on the
date hereof by the Company to Parent, which relates to this Agreement and is
designated therein as the Company Letter (the "Company Letter"), contains a
--------------
correct and complete list as of the date of this Agreement of (i) each
outstanding option to purchase shares of Company Common Stock issued under the
Company Stock Option Plans (collectively, the "Company Stock Options"),
---------------------
including the holder, date of grant, exercise price and number of shares of
Company Common Stock subject thereto and (ii) each outstanding warrant,
including the holder, date of grant, exercise price and number of shares of
Company Common Stock subject thereto. Except for the Company Stock Options and
the Company Warrants, there are no options, warrants, calls, rights or
agreements to which the Company or any of its Subsidiaries is a party or by
which any of them is bound obligating the Company or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock of the Company or any of its Subsidiaries or obligating
the Company or any of its Subsidiaries to grant, extend or enter into any such
option, warrant, call, right or agreement.
(c) Except as set forth in Section 3.2 of the Company Letter, there are no
outstanding contractual obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of or any equity interests in any Subsidiary. Each
outstanding share of capital stock of each Subsidiary of the Company that is a
corporation is duly authorized, validly issued, fully paid and nonassessable
and, except as disclosed in the Company SEC Documents filed prior to the date of
this Agreement, each such share is owned by the Company or another Subsidiary of
the Company, free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on voting rights,
charges and other encumbrances of any nature whatsoever. The Company does not
have any outstanding bonds, debentures, notes or other obligations the holders
of which have the right to vote (or convertible into or exercisable for
securities having the right to vote) with the shareholders of the Company on any
matter. Exhibit 21 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1998, as filed with the SEC (the "1998 Company Annual
-------------------
Report"), is a true, accurate and correct statement in all material respects of
------
all of the information required to be set forth therein by the regulations of
the SEC. As of the date hereof, neither the Company nor any of its subsidiaries
is party to or bound by (x) any agreement or commitment pursuant to which the
Company or any Subsidiary of the Company is or could be required to register any
securities under the Securities Act or (y) any debt agreements or instruments
which grant any rights to vote (contingent or otherwise) on matters on which
stockholders of the Company may vote.
(d) Section 3.2(d) of the Company Letter contains a correct and complete list
as of the date of this Agreement of each entity in which the Company owns an
equity interest (other than a Subsidiary), including the number of outstanding
shares of the stock of each such entity (if such entity is a corporation, and,
if not a corporation, then the appropriate corresponding ownership stake in such
entity), the percentage interest represented by the Company's ownership in the
entity, and the date of acquisition of the ownership interest in any such
entity.
12
Section 3.3 Authority. On or prior to the date of this Agreement, the
---------
Board of Directors of the Company has declared the Merger advisable and fair to
and in the best interest of the Company and its shareholders, approved and
adopted this Agreement in accordance with the DGCL, resolved to recommend the
adoption of this Agreement by the Company's shareholders and directed that this
Agreement be submitted to the Company's shareholders for adoption. The Company
has all requisite corporate power and authority to enter into this Agreement and
the Stock Option Agreement, to consummate the transactions contemplated by the
Stock Option Agreement and, subject, in the case of the consummation of the
merger, to approval by the shareholders of the Company of this Agreement, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the Stock Option Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of the
Company, subject, in the case of this Agreement, to (x) approval and adoption of
this Agreement by the shareholders of the Company and (y) the filing of the
Certificate of Merger as required by the DGCL. This Agreement and the Stock
Option Agreement have been duly executed and delivered by the Company and
(assuming the valid authorization, execution and delivery of this Agreement by
Parent and Sub and the Stock Option Agreement by Parent and the validity and
binding effect of the Agreement on Parent and Sub and the Stock Option Agreement
on Parent) constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The filing of the
Proxy Statement with the SEC and the issuance of up to 2,243,346 shares of
Company Common Stock pursuant to the Stock Option Agreement have been duly
authorized by the Company's Board of Directors.
Section 3.4 Consents and Approvals; No Violation. Assuming that all
------------------------------------
consents, approvals, authorizations and other actions described in this Section
3.4 have been obtained and all filings and obligations described in this Section
3.4 have been made, the execution and delivery of this Agreement and the Stock
Option Agreement do not, and the consummation of the transactions contemplated
hereby and thereby and compliance with the provisions hereof and thereof will
not, result in any violation of, or default (with or without notice or lapse of
time, or both) under, or give to others a right of termination, cancellation or
acceleration of any obligation or result in the loss of a material benefit
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company or any of its
Subsidiaries under, any provision of (i) the certificate of incorporation of the
Company (as amended from time to time, the "Company Charter") or the By-laws ,
---------------
(ii) any provision of the comparable charter or organization documents of any of
the Company's Subsidiaries, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its Subsidiaries or
(iv) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii), (iii) or (iv),
any such violations, defaults, rights, liens, security interests, charges or
encumbrances that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company, materially impair the ability of the Company to
perform its obligations hereunder or under the Stock Option Agreement or prevent
the consummation of any of
13
the transactions contemplated hereby or thereby. No filing or registration with,
or authorization, consent or approval of, any Governmental Entity is required by
or with respect to the Company or any of its Subsidiaries in connection with the
execution and delivery of this Agreement or the Stock Option Agreement by the
Company or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement or the Stock Option Agreement,
except for (i) in connection, or in compliance, with the provisions of the HSR
Act, the Securities Act and the Exchange Act, (ii) the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or by the transactions contemplated by this Agreement or
the Stock Option Agreement, (iv) such filings, authorizations, orders and
approvals as may be required to obtain the State Takeover Approvals, (v) such
filings as may be required in connection with the taxes described in Section
5.10, (vi) applicable requirements, if any, of Blue Sky Laws or the NYSE, (vii)
as may be required under foreign laws and (viii) such other consents, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, have a Material
Adverse Effect on the Company, materially impair the ability of the Company to
perform its obligations hereunder or under the Stock Option Agreement or prevent
the consummation of any of the transactions contemplated hereby or thereby.
Section 3.5 SEC Documents and Other Reports. The Company has filed all
-------------------------------
required documents with the SEC since December 31, 1995 (the "Company SEC
-----------
Documents"), except as disclosed in Section 3.5 of the Company Letter. As of
---------
their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and, at the respective times they were filed, none of the Company
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated financial statements (including, in each case,
any notes thereto) of the Company included in the Company SEC Documents complied
as to form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with United States generally accepted accounting
principles (except, in the case of the unaudited statements, to the extent
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as at the respective
dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC
Documents or as required by generally accepted accounting principles, the
Company has not, since December 31, 1995, made any change in the accounting
practices or policies applied in the preparation of financial statements.
14
Section 3.6 Registration Statement and Proxy Statement. None of the
------------------------------------------
information to be supplied by the Company for inclusion or incorporation by
reference in the Registration Statement or the Proxy Statement will (i) in the
case of the Registration Statement, at the time it becomes effective, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading or (ii) in the case of the Proxy Statement, at the time
of the mailing of the Proxy Statement, at the time of the Shareholder Meeting
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event with respect to the Company, its officers and directors or any of its
Subsidiaries shall occur which is required to be described in the Proxy
Statement or the Registration Statement, such event shall be so described, and
an appropriate amendment or supplement shall be promptly filed with the SEC and,
as required by law, disseminated to the shareholders of the Company. The
Registration Statement will comply (with respect to the Company) as to form in
all material respects with the provisions of the Securities Act, and the Proxy
Statement will comply (with respect to the Company) as to form in all material
respects with the provisions of the Exchange Act.
Section 3.7 Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the Company SEC Documents filed with the SEC prior to the date of this
Agreement, (i) the Company and its Subsidiaries have not incurred any material
liability or obligation (indirect, direct or contingent), or entered into any
material oral or written agreement or other transaction, that is not in the
ordinary course of business or that would result in a Material Adverse Effect on
the Company, (ii) the Company and its Subsidiaries have not sustained any loss
or interference with their business or properties from fire, flood, earthquake,
windstorm, accident or other calamity (whether or not covered by insurance) that
has had a Material Adverse Effect on the Company, (iii) there has been no change
in the capital stock of the Company except for the issuance of shares of the
Company Common Stock pursuant to Company Stock Options and no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its stock, (iv) there has not been (A) any adoption of a new Company Plan (as
hereinafter defined), (B) any amendment to a Company Plan materially increasing
benefits thereunder, (C) any granting by the Company or any of its Subsidiaries
to any executive officer or other key employee of the Company or any of its
Subsidiaries of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of the date of the most recent audited financial
statements included in the Company SEC Documents, (D) any granting by the
Company or any of its Subsidiaries to any such executive officer or other key
employee of any increase in severance or termination agreements in effect as of
the date of the most recent audited financial statements included in the Company
SEC Documents or (E) except as set forth in Section 3.7(iv)(E) of the Company
Letter, any entry by the Company or any of its Subsidiaries into any employment,
severance or termination agreement with any such executive officer or other key
employee, (v) there has not been any material changes in the amount or terms of
the indebtedness of the Company and its Subsidiaries from that
15
described in the 1998 Company Annual Report, and (vi) except as set forth in
Section 3.7(vi) of the Company Letter, there has been no event causing a
Material Adverse Effect on the Company, nor any development that would,
individually or in the aggregate, result in a Material Adverse Effect on the
Company.
Section 3.8 Permits and Compliance. Each of the Company and its
----------------------
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
---------------
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and no suspension or
cancellation of any of the Company Permits is pending or, to the Knowledge of
the Company (as hereinafter defined), threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries is in violation of (A) its charter, by-laws or other
organizational documents, (B) any applicable law, ordinance, administrative, or
governmental rule or regulation, including any consumer protection, equal
opportunity, health, health care industry regulation and third-party
reimbursement laws including under any Federal Health Care Program (as defined
in Section 1128B(f) of the U.S. Federal Social Security Act (together with all
regulations promulgated thereunder, the "SSA")), or (C) any order, decree or
---
judgment of any Governmental Entity having jurisdiction over the Company or any
of its Subsidiaries, except, in the case of clauses (A), (B) and (C), for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. Without limiting the foregoing, the Company is
in compliance, in all material respects, with all current applicable statutes,
rules, regulations or orders administered or issued by the United States Food
and Drug Administration (the "FDA") or comparable foreign Governmental Entity;
---
the Company does not have knowledge of any facts which furnish any reasonable
basis for any warning letters from the FDA, Section 305 notices, or other
similar communications from the FDA or comparable foreign entity; and since
December 31, 1998, there have been no recalls, field notifications, alerts or
seizures requested or threatened relating to the Company's products, except set
forth in Section 3.8 of the Company Letter. The Company's products, where
required, are being marketed under valid 510(k) or Pre-Market Approval
Applications. There is no false information or significant omission in any
product application or product-related submission to the FDA or comparable
foreign Governmental Entity. The Company has obtained all necessary regulatory
approvals from any foreign regulatory agencies related to the products
distributed and sold by the Company in those jurisdictions in which the Company
products are sold, except to the extent that the failure to obtain such
approvals would not, individually or in the aggregate, have a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor the officers, directors,
managing employees or agents (as those terms are defined in 42 C.F.R.
(S)1001.1001) of the Company or any Subsidiary: (i) have engaged in any
activities which are prohibited under, or are cause for civil penalties or
mandatory or permissive exclusion from, any Federal Health Care Program under
Sections 1128, 1128A, 1128B, or 1877 of SSA or related state or local statutes,
including knowingly and willfully offering, paying, soliciting or receiving any
16
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind in return for, or to induce, the
purchase, lease, or order, or the arranging for or recommending of the purchase,
lease or order, of any item or service for which payment may be made in whole or
in part under any such program; (ii) have had a civil monetary penalty assessed
against them under Section 1128A of SSA; (iii) have been excluded from
participation under any Federal Health Care Program; or (iv) have been convicted
(as defined in 42 C.F.R. (S) 1001.2) of any of the categories of offenses
described in Sections 1128(a) or 1128(b)(1), (b)(2), or (b)(3) of SSA. Except
as disclosed in the Company SEC Documents filed prior to the date of this
Agreement, there are no contracts or agreements of the Company or its
Subsidiaries having terms or conditions which would have a Material Adverse
Effect on the Company or having covenants not to compete that materially impair
the ability of the Company to conduct its business as currently conducted or
would reasonably be expected to materially impair Parent's ability to conduct
its businesses. Except as set forth in the Company SEC Documents filed prior to
the date of this Agreement, no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event of
default exists or, upon the consummation by the Company of the transactions
contemplated by this Agreement or the Stock Option Agreement, will exist under
any indenture, mortgage, loan agreement, note or other agreement or instrument
for borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject, other than any
defaults that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. "Knowledge of the Company" means the actual
------------------------
knowledge of the directors and officers of the Company.
Section 3.9 Tax Matters. Except as otherwise set forth in Section 3.9 of
-----------
the Company Letter, (i) the Company and each of its Subsidiaries have filed all
federal, and all material state, local, foreign and provincial, Tax Returns (as
hereinafter defined) required to have been filed, and such Tax Returns are
correct and complete, except to the extent that any failure to so file or any
failure to be correct and complete would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company; (ii)
all Taxes (as hereinafter defined) shown to be due on such Tax Returns have been
timely paid or extensions for payment have been properly obtained, or such Taxes
are being timely and properly contested; (iii) the Company and each of its
Subsidiaries have complied with all rules and regulations relating to the
withholding of Taxes and the remittance of withheld Taxes, except to the extent
that any failure to comply with such rules and regulations would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company; (iv) neither the Company nor any of its
Subsidiaries has waived any statute of limitations in respect of its Taxes; (v)
any Tax Returns required to have been filed by or with respect to the Company
and each of its Subsidiaries relating to federal and state income Taxes have
been examined by the Internal Revenue Service ("IRS") or the appropriate state
---
taxing authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired; (vi) no issues that have
been raised by the relevant taxing authority in connection with the examination
of Tax Returns required to have been
17
filed by or with respect to the Company and each of its Subsidiaries are
currently pending; (vii) all deficiencies asserted or assessments made as a
result of any examination of such Tax Returns by any taxing authority have been
paid in full; (viii) no withholding is required under Section 1445 of the Code
in connection with the Merger; (ix) neither the Company nor any of its
Subsidiaries has engaged in any transaction that would constitute a "tax
shelter" within the meaning of Section 6111 or 6662 of the Code; (x) neither the
Company nor any of its Subsidiaries has submitted a request for a ruling to the
IRS or a State tax authority since December 31, 1997; (xi) neither the Company
nor any of its subsidiaries has made or rescinded any express or deemed election
relating to Taxes since December 31, 1997, (xii) neither the Company nor any of
its Subsidiaries has changed any of its methods of reporting income or
deductions for Tax purposes from those employed in the preparation of its Tax
Returns for the year ending December 31, 1997; and (xiii) except as set fort on
Section 3.9(xiii) of the Company Letter, the Company and its Subsidiaries have
each established adequate reserves for the payment of any potential liability
relating to Taxes. To the Knowledge of the Company, the representations set
forth in the Company Tax Certificate attached to the Company Letter, if made on
the date hereof (assuming the Merger were consummated on the date hereof), would
be true and correct. For purposes of this Agreement: (i) "Taxes" means any
-----
federal, state, local, foreign or provincial income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or added minimum, ad valorem, value-added, transfer or excise tax,
or other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty imposed by any
Governmental Entity, and (ii) "Tax Return" means any return, report or similar
----------
statement (including the attached schedules) required to be filed with respect
to any Tax, including any information return, claim for refund, amended return
or declaration of estimated Tax.
Section 3.10 Actions and Proceedings. Except as set forth in the Company
-----------------------
SEC Documents filed prior to the date of this Agreement, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against or involving the Company or any of its Subsidiaries,
or against or involving any of the present or former directors, officers,
employees, consultants, agents or shareholders of the Company or any of its
Subsidiaries, as such, any of its or their properties, assets or business or any
Company Plan (as hereinafter defined) that, individually or in the aggregate,
would have a Material Adverse Effect on the Company or materially impair the
ability of the Company to perform its obligations hereunder or under the Stock
Option Agreement. Except as set forth in Section 3.10 of the Company Letter,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations (including claims for workers' compensation)
pending or, to the Knowledge of the Company, threatened against or involving the
Company or any of its Subsidiaries or any of its or their present or former
directors, officers, employees, consultants, agents or shareholders, as such, or
any of its or their properties, assets or business or any Company Plan that,
individually or in the aggregate, would have a Material Adverse Effect on the
Company or materially impair the ability of the Company to perform its
obligations hereunder or under the Stock Option Agreement. There are no
actions, suits, labor disputes or other litigation, legal or administrative
proceedings or governmental investigations pending or, to the Knowledge of the
Company, threatened
18
against or affecting the Company or any of its Subsidiaries or any of its or
their present or former officers, directors, employees, consultants, agents or
shareholders, as such, or any of its or their properties, assets or business
relating to the transactions contemplated by this Agreement and the Stock Option
Agreement.
Section 3.11 Certain Agreements.
------------------
(a) Except as set forth in Section 3.11(a) of the Company Letter, neither the
Company nor any of its Subsidiaries is a party to any oral or written agreement
or plan, including any employment agreement, severance agreement, stock option
plan, stock appreciation rights plan, restricted stock plan or stock purchase
plan, pension plan (as defined in Section 3(2) of ERISA) or welfare plan (as
defined in Section 3(1) of ERISA) (collectively the "Compensation Agreements"),
-----------------------
any of the benefits of which will be increased, or the vesting of the benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the Stock Option Agreement or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement or the Stock Option Agreement. No
holder of any option to purchase shares of Company Common Stock, or shares of
Company Common Stock granted in connection with the performance of services for
the Company or its Subsidiaries, is or will be entitled to receive cash from the
Company or any Subsidiary in lieu of or in exchange for such option or shares as
a result of the transactions contemplated by this Agreement or the Stock Option
Agreement except as provided in Section 5.7. Section 3.11(a) of the Company
Letter sets forth (i) for each officer, director or employee who is a party to,
or will receive benefits under, any Compensation Agreement as a result of the
transactions contemplated herein, the total amount that each such person may
receive, or is eligible to receive, assuming that the transactions contemplated
by this Agreement are consummated on the date hereof, and (ii) the total amount
of indebtedness owed to the Company or its Subsidiaries from each officer,
director or employee of the Company and its Subsidiaries.
(b) Set forth in Section 3.11(b) of the Company Letter is a list of all
contracts that are significant to the Company and its Subsidiaries' businesses
(whether oral or written), including all distribution contracts, sole-source
supply contracts, national accounts contracts and real property leases,
(collectively, "Significant Contracts"). Prior to the date hereof, the Company
---------------------
has provided true and complete copies of all such contracts to Parent.
(c) Each Significant Contract is a legal, valid and binding agreement of the
Company or its Subsidiaries, neither the Company nor any of its Subsidiaries (or
to the Knowledge of the Company, and any other party thereto) is in default
under any Significant Contract, and none of such Significant Contracts has been
canceled by the other party thereto; each Significant Contract is in full force
and effect and no event has occurred which, with the passage of time or the
giving of notice or both, would constitute a default, event of default or other
breach by the Company or any Subsidiary party thereto which would entitle the
other party to such Significant Contract to terminate the same or declare a
default or event of default thereunder; the Company and the Subsidiaries are not
in receipt of any claim of default under any such agreement; the Company or any
19
Subsidiary party to such Significant Contract maintains good business
relationships with the other party to such agreement; in each instance, except
where it would have a Material Adverse Effect on the Company.
Section 3.12 ERISA. (a) Each Company Plan is listed in Section 3.12(a)
-----
of the Company Letter. With respect to each Company Plan, the Company has made
available to Parent a true and correct copy of (i) the three most recent annual
reports (Form 5500) filed with the IRS, (ii) each such Company Plan that has
been reduced to writing and all amendments thereto, (iii) each trust agreement,
insurance contract or administration agreement relating to each such Company
Plan, (iv) a written summary of each unwritten Company Plan, (v) the most recent
summary plan description or other written explanation of each Company Plan
provided to participants, (vi) the three most recent actuarial reports or
valuations relating to a Company Plan subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), (vii) the most
-----
recent determination letter and request therefore, if any, issued by the IRS
with respect to any Company Plan intended to be qualified under section 401(a)
of the Code, (viii) any request for a determination currently pending before the
IRS, (ix) all correspondence with the IRS, the Department of Labor, the SEC or
Pension Benefit Guaranty Corporation relating to any outstanding controversy
and(x) all forms and certificate samples used to comply with Sections 4980, 9801
and 9802 of the Code. Except as would not have a Material Adverse Effect on the
Company, each Company Plan complies in all respects with ERISA, the Code and all
other applicable statutes and governmental rules and regulations. Except as set
forth in Section 3.12(a) of the Company Letter, no "reportable event" (within
the meaning of Section 4043 of ERISA) has occurred with respect to any Company
Plan for which the 30-day notice requirement has not been waived. Neither the
Company nor any of its Subsidiaries or ERISA Affiliates (as hereinafter defined)
has withdrawn from any Company Multiemployer Plan (as hereinafter defined) and
would not incur any withdrawal liability if it withdrew from all Company
Multiemployer Plans on the date of this Agreement. No action has been taken, or
is currently being considered, to terminate or withdraw from any Company Plan
subject to Title IV of ERISA and there is no reason to believe the Pension
Benefit Guaranty Corporation would initiate the termination of any such Plan.
No Company Plan, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA), whether or not waived.
(b) Except as listed in Section 3.12(b) of the Company Letter, with
respect to the Company Plans, no event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances in connection with
which the Company or any Subsidiary or ERISA Affiliate or Company Plan fiduciary
could be subject to any liability under the terms of such Company Plans, ERISA,
the Code or any other applicable law which would have a Material Adverse Effect
on the Company. All Company Plans that are intended to be qualified under
Section 401(a) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending and the Company is
not aware of any reason why any such Company Plan is not so qualified in
operation. Neither the Company nor any of its Subsidiaries or ERISA Affiliates
has been notified by any Company Multiemployer Plan that such Company
Multiemployer Plan is currently in reorganization or insolvency under
20
and within the meaning of Section 4241 or 4245 of ERISA or that such Company
Multiemployer Plan intends to terminate or has been terminated under Section
4041A of ERISA. No event has occurred and, to the Knowledge of the Company,
there exists no condition or set of circumstances that would result in a
material increase in the contributions required to be made to any Company
Multiemployer Plan by the Company or any Subsidiary or ERISA Affiliate. Except
as disclosed in Section 3.12(b) of the Company Letter, neither the Company nor
any of its Subsidiaries or ERISA Affiliates has any liability or obligation
under any welfare plan to provide benefits after termination of employment to
any employee or dependent other than as required by Section 4980B of the Code.
(c) As used herein, (i) "Company Plan" means a "pension plan" (as defined
------------
in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a "welfare
plan" (as defined in Section 3(1) of ERISA), or any other written or oral bonus,
profit sharing, deferred compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, restricted stock, stock
appreciation right, holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel policy,
insurance or other plan, arrangement or understanding, in each case established
or maintained by the Company or any of its Subsidiaries or ERISA Affiliates or
as to which the Company or any of its Subsidiaries or ERISA Affiliates has
contributed or otherwise may have any liability, (ii) "Company Multiemployer
---------------------
Plan" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
----
to which the Company or any of its Subsidiaries or ERISA Affiliates is or has
been obligated to contribute or otherwise may have any liability, and (iii)
"ERISA Affiliate" means any trade or business (whether or not incorporated)
----------------
which would be considered a single employer with the Company pursuant to Section
414(b), (c), (m) or (o) of the Code and the regulations promulgated under those
sections or pursuant to Section 4001(b) of ERISA and the regulations promulgated
thereunder.
(d) Section 3.12(d) of the Company Letter contains a list of all (i)
severance and employment agreements with employees of the Company and each
Subsidiary and ERISA Affiliate, (ii) severance programs and policies of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees and (iii) plans, programs, agreements and other arrangements of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees containing change of control or similar provisions.
(e) Except as set forth in Section 3.12(e) of the Company Letter, neither
the Company nor any of its Subsidiaries is a party to any agreement, contract or
arrangement that could result, separately or in the aggregate, in the payment,
acceleration or enhancement of any benefit as a result of the transactions
contemplated hereby including, without limitation, the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code or any
payments not deductible under Section 162(m) of the Code.
(f) Except as set forth in Section 3.12(f) of the Company Letter, with
respect to each Company Plan not subject to United States law
21
(a "Company Foreign Benefit Plan"), except as would not have a Material Adverse
----------------------------
Effect on the Company, (i) the fair market value of the assets of each funded
Company Foreign Benefit Plan, the liability of each insurer for any Company
Foreign Benefit Plan funded through insurance or the reserve shown on the
Company's consolidated financial statements for any unfunded Company Foreign
Benefit Plan, together with any accrued contributions, is sufficient to procure
or provide for the projected benefit obligations, as of the Effective Time, with
respect to all current and former participants in such plan according
reasonable, country specific actuarial assumptions and valuations and no
transaction contemplated by this Agreement shall cause such assets or insurance
obligations or book reserve to be less than such projected benefit obligations;
and (ii) each Company Foreign Benefit Plan required to be registered has been
registered and has been maintained in good standing with the appropriate
regulatory authorities.
Section 3.13 Compliance with Worker Safety Laws. The properties, assets
----------------------------------
and operations of the Company and its Subsidiaries are in compliance with all
applicable federal, state, local and foreign laws, rules and regulations,
orders, decrees, judgments, permits and licenses relating to public and worker
health and safety (collectively, "Worker Safety Laws"), except for any
------------------
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. With respect to such properties, assets and
operations, including any previously owned, leased or operated properties,
assets or operations, there are no past, present or reasonably anticipated
future events, conditions, circumstances, activities, practices, incidents,
actions or plans of the Company or any of its Subsidiaries that may interfere
with or prevent compliance or continued compliance with applicable Worker Safety
Laws, other than any such interference or prevention as would not, individually
or in the aggregate with any such other interference or prevention, have a
Material Adverse Effect on the Company.
Section 3.14 Liabilities; Products. (a) Except as fully reflected or
---------------------
reserved against in the financial statements included in the 1998 Company Annual
Report, or disclosed in the footnotes thereto and as disclosed in the Company
Letter, the Company and its Subsidiaries had no liabilities (including Tax
liabilities) at the date of such financial statements, absolute or contingent,
other than liabilities that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company, and had no liabilities (including Tax
liabilities) that were not incurred in the ordinary course of business. As of
the date hereof, there was no indebtedness for borrowed money of the Company and
its Subsidiaries.
(b) Except as set forth in Section 3.14(b) of the Company Letter, since
December 31, 1995, neither the Company nor any Subsidiary has received a claim
for or based upon breach of product warranty (other than warranty service and
repair claims in the ordinary course of business not material in amount or
significance), strict liability in tort, negligent manufacture of product,
negligent provision of services or any other allegation of liability, including
or resulting in product recalls, arising from the materials, design, testing,
manufacture, packaging, labeling (including instructions for use), or sale
22
of its products or from the provision of services; and, to the Knowledge of the
Company, there is no basis for any such claim which, if asserted, would likely
have a Material Adverse Effect on the Company.
(c) The Company has provided in Section 3.14(c) of the Company Letter a
schedule of products in development and planned introductions. The Company
reasonably expects the goals set forth therein to be achieved in all material
respects, except for such deviations as would not have a Material Adverse Effect
on the Company. The product and service engineering, development, manufacturing
and quality control processes which have been and are being followed by the
Company are reasonably designed to produce products and services which (i) are
consistent with the claims made about them in the Company's sales brochures and
other statements made about them by or on behalf of the Company, (ii) otherwise
meet the reasonable expectations of customers, (iii) comply with applicable
regulatory requirements and (iv) avoid claims of the type described in Section
3.14(b).
Section 3.15 Labor Matters. Except as set forth in Section 3.15 of the
-------------
Company Letter, neither the Company nor any of its Subsidiaries is a party to
any collective bargaining agreement or labor contract. Neither the Company nor
any of its Subsidiaries has engaged in any unfair labor practice with respect to
any persons employed by or otherwise performing services primarily for the
Company or any of its Subsidiaries (the "Company Business Personnel"), and there
--------------------------
is no unfair labor practice complaint or grievance against the Company or any of
its Subsidiaries by any person pursuant to the National Labor Relations Act or
any comparable state agency or foreign law pending or threatened in writing with
respect to the Company Business Personnel, except where such unfair labor
practice, complaint or grievance would not have a Material Adverse Effect on the
Company. There is no labor strike, dispute, slowdown or stoppage pending or, to
the Knowledge of the Company, threatened against or affecting the Company or any
of its Subsidiaries which may interfere with the respective business activities
of the Company or any of its Subsidiaries, except where such dispute, strike or
work stoppage would not have a Material Adverse Effect on the Company.
Section 3.16 Intellectual Property. "Company Intellectual Property"
--------------------- -----------------------------
means all United States and foreign trademarks, trademark registrations,
trademark rights and renewals thereof, trade names, trade name rights, trade
dress, patents, patent rights, patent applications, industrial models,
inventions, invention disclosures, author's rights, designs, utility models,
inventor rights, software, copyrights, copyright registrations and renewals
thereof, servicemarks, servicemark registrations and renewals thereof,
servicemark rights, trade secrets, applications for trademark and servicemark
registrations, know-how, confidential information and other proprietary rights,
and any data and information of any nature or form used or held for use in
connection with the businesses of the Company and/or its Subsidiaries as
currently conducted or as currently contemplated by the Company, together with
all applications currently pending or in process for any of the foregoing.
Except as disclosed in the Company SEC Documents filed with the SEC prior to the
date hereof, the Company and its Subsidiaries own, or possess adequate licenses
or other valid rights to use (including the right to sublicense to customers,
suppliers or others as needed), all of the material Company Intellectual
23
Property that is necessary for the conduct or contemplated conduct of the
Company's or Subsidiaries' businesses. Section 3.16 of the Company Letter lists
each material license or other agreement pursuant to which the Company or any
Subsidiary has the right to use Company Intellectual Property utilized in
connection with any product of, or service provided by, the Company and its
Subsidiaries, the cancellation or expiration of which would have a Material
Adverse Effect on the Company (the "Company Licenses"). There are no pending,
----------------
and between the date hereof and the Effective Time, there shall not be any
pending, or to the Knowledge of the Company, threatened interferences, re-
examinations, oppositions or cancellation proceedings involving any patents or
patent rights, trademarks or trademark rights, or applications therefor, of the
Company or any Subsidiary, except such as may be commenced by Parent or any
Subsidiary of Parent and except such as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. There is no breach or
violation by the Company or by any Subsidiary under, and, to the Knowledge of
the Company, there is no breach or violation by any other party to, any Company
License that is reasonably likely to give rise to any termination or any loss of
rights thereunder. To the Knowledge of the Company, there has been no
unauthorized disclosure or use of confidential information, trade secret rights,
processes and formulas, research and development results and other know-how of
the Company or any Subsidiary, the value of which to the Company and its
Subsidiaries is dependent upon the maintenance of the confidentiality thereof.
The conduct of the business of the Company and the Subsidiaries as currently
conducted or contemplated does not and will not infringe upon or conflict with,
in any way, any license, trademark, trademark right, trade name, trade name
right, patent, patent right, industrial model, invention, service ▇▇▇▇, service
▇▇▇▇ right, copyright, trade secret or any other intellectual property rights of
any third party. Except as disclosed in the Company SEC Documents filed with
the SEC prior to the date hereof or in Section 3.16 of the Company Letter, there
are no infringements of, or conflicts with, any Company Intellectual Property
Except as set forth in Section 3.16 of the Company Letter, neither the Company
nor any Subsidiary has licensed or otherwise permitted the use by any third
party of any proprietary information or Company Intellectual Property on terms
or in a manner which, individually or in the aggregate, would have a Material
Adverse Effect on the Company.
Section 3.17 Opinion of Financial Advisor. The Company has received the
----------------------------
written opinion of Chase Securities Inc. dated the date hereof to the effect
that, as of the date hereof, the Merger Consideration is fair to the Company's
shareholders from a financial point of view, a copy of which opinion has been
delivered to Parent .
Section 3.18 State Takeover Statutes. The Board of Directors of the
-----------------------
Company has, to the extent such statute is applicable, taken all action
(including appropriate approvals of the Board of Directors of the Company)
necessary to render the provisions of Section 203 of the DGCL inapplicable to
the Merger, this Agreement, the Stock Option Agreement, the Adviser Agreement
and the transactions contemplated hereby and thereby. To the Knowledge of the
Company, no other state takeover statute is applicable to the Merger, this
Agreement, the Stock Option Agreement, the Adviser Agreement and the
transactions contemplated hereby and thereby.
24
Section 3.19 Required Vote of Company Shareholders. The affirmative vote
-------------------------------------
of the holders of a majority of the outstanding shares of Company Common Stock
is required to adopt this Agreement. No other vote of the security holders of
the Company is required by law, the Company Charter or the By-laws of the
Company or otherwise in order for the Company to consummate the Merger and the
transactions contemplated hereby and in the Stock Option Agreement.
Section 3.20 Reorganization. To the Knowledge of the Company, neither it
--------------
nor any of its Subsidiaries has taken any action or failed to take any action
which action or failure would jeopardize the qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
Section 3.21 Accounts Receivable. All of the accounts and notes
-------------------
receivable of the Company and its Subsidiaries set forth on the books and
records of the Company (net of the applicable reserves reflected on the books
and records of the Company and in the financial statements included in the
Company SEC Documents) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) constitute valid claims, and (iii) except as set forth on
Section 3.21(iii) of the Company Letter, are good and collectible at the
aggregate recorded amounts thereof (net of such reserves) without right of
recourse, defense, deduction, return of goods, counterclaim, or offset and have
been or will be collected in the ordinary course of business and consistent with
past experience.
Section 3.22 Inventories. Except as set forth in Section 3.22 of the
-----------
Company Letter, all inventories of the Company and its Subsidiaries consist of
items of merchantable quality and quantity usable or saleable in the ordinary
course of business, are saleable at prevailing market prices that are not less
than the book value amounts thereof or the price customarily charged by the
Company or the applicable Subsidiary therefor, conform to the specifications
established therefor, and have been manufactured in accordance with applicable
regulatory requirements, except to the extent that the failure of such
inventories so to consist, be saleable, conform, or be manufactured would not
have a Material Adverse Effect on the Company. Except as set forth in Section
3.22 of the Company Letter, the quantities of all inventories, materials, and
supplies of the Company and each Subsidiary (net of the obsolescence reserves
therefor shown in the financial statements included in the Company SEC Documents
and determined in the ordinary course of business consistent with past practice)
are not obsolete, damaged, slow-moving, defective, or excessive, and are
reasonable and balanced in the circumstances of the Company and its
Subsidiaries, except to the extent that the failure of such inventories to be in
such conditions would not have a Material Adverse Effect on the Company.
Section 3.23 Environmental Matters.
---------------------
(a) For purposes of this Agreement, the following terms shall have the
following meanings: (i) "Hazardous Substances" means (A) petroleum and
--------------------
petroleum products, by-products or breakdown products, radioactive materials,
asbestos-containing
25
materials and polychlorinated biphenyls, and (B) any other chemicals, materials
or substances regulated as toxic or hazardous or as a pollutant, contaminant or
waste under any applicable Environmental Law; (ii) "Environmental Law" means any
-----------------
law, past, present or future and as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, or common law, relating to pollution or protection of the
environment, health or safety or natural resources, including those relating to
the use, handling, transportation, treatment, storage, disposal, release or
discharge of Hazardous Substances; and (iii) "Environmental Permit" means any
--------------------
permit, approval, identification number, license or other authorization required
under any applicable Environmental Law.
(b) Except as disclosed in Section 3.23 of the Company Letter, the Company
and the Subsidiaries are and have been in compliance with all applicable
Environmental Laws, have obtained all Environmental Permits and are in
compliance with their requirements, and have resolved all past non-compliance
with Environmental Laws and Environmental Permits without any pending, on-going
or future obligation, cost or liability, except in each case for the notices set
forth in Section 3.23 of the Company Letter or where such non-compliance would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.
(c) Except as disclosed in Section 3.23 of the Company Letter, neither the
Company nor any of its Subsidiaries has (i) placed, held, located, released,
transported or disposed of any Hazardous Substances on, under, from or at any of
the Company's or any of its Subsidiaries' properties or any other properties,
other than in a manner that would not, in all such cases taken individually or
in the aggregate, result in a Material Adverse Effect on the Company, (ii) any
Knowledge or reason to know of the presence of any Hazardous Substances on,
under, emanating from, or at any of the Company's or any of its Subsidiaries'
properties or any other property but arising from the Company's or any of its
Subsidiaries' current or former properties or operations, other than in a manner
that would not result in a Material Adverse Effect on the Company, or (iii) any
Knowledge or reason to know, nor has it received any written notice (A) of any
violation of or liability under any Environmental Laws, (B) of the institution
or pendency of any suit, action, claim, proceeding or investigation by any
Governmental Entity or any third party in connection with any such violation or
liability, (C) requiring the investigation of, response to or remediation of
Hazardous Substances at or arising from any of the Company's or any of its
Subsidiaries' current or former properties or operations or any other
properties, (D) alleging noncompliance by the Company or any of its Subsidiaries
with the terms of any Environmental Permit in any manner reasonably likely to
require material expenditures or to result in material liability or (E)
demanding payment for response to or remediation of Hazardous Substances at or
arising from any of the Company's or any of its Subsidiaries' current or former
properties or operations or any other properties, except in each case for the
notices set forth in Section 3.23 of the Company Letter.
(d) Except as disclosed in Section 3.23 of the Company Letter, no
Environmental Law imposes any obligation upon the Company or any of its
Subsidiaries arising out of or as a condition to any transaction contemplated by
this Agreement,
26
including any requirement to modify or to transfer any permit or license, any
requirement to file any notice or other submission with any Governmental Entity,
the placement of any notice, acknowledgment or covenant in any land records, or
the modification of or provision of notice under any agreement, consent order or
consent decree.
(e) The Company and its Subsidiaries have provided Parent with copies of
any Environmental assessment or audit report or other similar studies or
analyses currently in the possession of or available to the Company or any of
its Subsidiaries relating to any real property currently or formerly owned,
leased or occupied by the Company or any of its Subsidiaries.
Section 3.24 Suppliers; and Distributors.
---------------------------
(a) Except as set forth in Section 3.24(a) of the Company Letter, neither
the Company nor any Subsidiary has received any notice, oral or written, or has
any reason to believe that any significant supplier, including without
limitation any sole source supplier, will not sell raw materials, supplies,
merchandise and other goods to the Company or any Subsidiary at any time after
the Effective Time on terms and conditions substantially similar to those used
in its current sales to the Company and its Subsidiaries, subject only to
general and customary price increases, unless comparable raw materials,
supplies, merchandise or other goods are readily available from other sources on
comparable terms and conditions.
(b) Except as set forth in Section 3.24 (b) of the Company Letter, neither
the Company nor any Subsidiary has received any notice, oral or written, or has
any reason to believe that any distributors, sales representatives, sales
agents, manufacturer's representatives, or other third party product sellers,
will not sell the products of the Company or any Subsidiary at any time after
the Effective Time on terms and conditions substantially similar to those used
in its current sales and distribution contracts of the Company and its
Subsidiaries.
Section 3.25 Insurance. All material fire and casualty, general
---------
liability, business interruption, product liability, and sprinkler and water
damage insurance policies maintained by the Company or any of its Subsidiaries
are with reputable insurance carriers, provide full and adequate coverage for
all normal risks incident to the business of the Company and the Subsidiaries
and their respective properties and assets, and are in character and amount at
least equivalent to that carried by persons engaged in similar businesses and
subject to the same or similar perils or hazards, except for any such failures
to maintain insurance policies that, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. The Company and each Subsidiary
have made any and all payments required to maintain such policies in full force
and effect. Except as set forth in Section 3.25 of the Company Letter, neither
the Company nor any Subsidiary has received notice of default under any such
policy, and has not received written
27
notice or, to the Knowledge of the Company, oral notice of any pending or
threatened termination or cancellation, coverage limitation or reduction or
material premium increase with respect to such policy.
Section 3.26 Accuracy of Information. Neither this Agreement nor any
-----------------------
other document provided by the Company or its Subsidiaries or any of their
respective employees or agents to Parent in connection with the transactions
contemplated herein contains an untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein, in light of the circumstances under which they are made, not
misleading.
Section 3.27 Transactions with Affiliates. (a) For purposes of this
----------------------------
Section 3.27, the term "Affiliated Person" means (i) any holder of 2% or more of
-----------------
the Company Common Stock, (ii) any director, officer or senior executive of the
Company or any Subsidiary, (iii) any person, firm or corporation that directly
or indirectly controls, is controlled by, or is under common control with, any
of the Company or any Subsidiary or (iv) any member of the immediate family or
any of such persons.
(b) Except as set forth in Section 3.27 of the Company Letter or in the
Company SEC Reports filed with the SEC prior to the date hereof, since December
31, 1998, the Company and its Subsidiaries have not, in the ordinary course of
business or otherwise, (i) purchased, leased or otherwise acquired any material
property or assets or obtained any material services from, (ii) sold, leased or
otherwise disposed of any material property or assets or provided any material
services to (except with respect to remuneration for services rendered in the
ordinary course of business as director, officer or employee of the Company or
any Subsidiary), (iii) entered into or modified in any manner any contract with,
or (iv) borrowed any money from, or made or forgiven any loan or other advance
(other than expenses or similar advances made in the ordinary course of
business) to, any Affiliated Person.
(c) Except as set forth in Section 3.27 of the Company Letter or in the
Company SEC Reports filed with the SEC prior to the date hereof, (i) the
contracts of the Company and its Subsidiaries do not include any material
obligation or commitment between the Company or any Subsidiary and any
Affiliated Person, (ii) the assets of the Company or any Subsidiary do not
include any receivable or other obligation or commitment from an Affiliated
Person to the Company or any Subsidiary and (iii) the liabilities of the Company
and its Subsidiaries do not include any payable or other obligation or
commitment from the Company or any Subsidiary to any Affiliated Person.
(d) To the Knowledge of the Company and except as set forth in Section
3.27 of the Company Letter or in the Company SEC Reports filed
28
with the SEC prior to the date hereof, no Affiliated Person of any of the
Company or any Subsidiary is a party to any contract with any customer or
supplier of the Company or any Subsidiary that affects in any material manner
the business, financial condition or results of operation of the Company or any
Subsidiary.
Section 3.28. Title to and Sufficiency of Assets. (a) As of the date
----------------------------------
hereof, the Company and its Subsidiaries own, and as of the Effective Time the
Company and its Subsidiaries will own, good and marketable title to all of their
assets constituting personal property which is material to their business
(excluding, for purposes of this sentence, assets held under leases), free and
clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions (collectively,
"Liens"), except as set forth in the Company SEC Documents filed with the SEC
-----
prior to the date hereof, or Section 3.28 of the Company Letter. Such assets,
together with all assets held by the Company and its Subsidiaries under leases,
include all tangible and intangible personal property, contracts and rights
necessary or required for the operation of the businesses of the Company as
presently conducted.
(b) As of the date hereof, the Company and its Subsidiaries own, and as of
the Effective Time the Company and its Subsidiaries will own, good and
marketable title to all of their Real Estate (as defined below) which is
material to such persons (excluding, for purposes of this sentence, Real Estate
leases), free and clear of any and all Liens, except as set forth in the Company
SEC Documents filed with the SEC prior to the date hereof or in Section 3.28 of
the Company Letter or such other Liens on Real Estate which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
Such Real Estate assets, together with all Real Estate assets held by the
Company and its Subsidiaries under leases, are adequate for the operation of the
businesses of the Company as presently conducted. The leases to all Real Estate
occupied by the Company and its Subsidiaries which are material to the operation
of the businesses of the Company are in full force and effect and no event has
occurred which with the passage of time, the giving of notice, or both, would
constitute a default or event of default by the Company or any Subsidiary or, to
the Knowledge of the Company, any other person who is a party signatory thereto,
other than such defaults or events of default which, individually or in the
aggregate, would not have a Material Adverse Effect on the Company. For
purposes of this Agreement, "Real Estate" means, with respect to the Company or
-----------
any Subsidiary, as applicable, all of the fee or leasehold ownership right,
title and interest of such person, in and to all real estate and improvement
owned or leased by any such person and which is used by any such person in
connection with the operation of its business.
Section 3.29 Brokers. No broker, investment banker or other person,
-------
other than Chase Securities Inc. the fees and expenses of which will be paid by
the Company (as reflected in an agreement between Chase Securities Inc. and the
Company, a copy of which has been furnished to Parent), is entitled to any
broker's, finder's or other similar fee or commission in connection with the
transactions contemplated by this Agreement and by the Stock Option Agreement
based upon arrangements made by or on behalf of the Company.
29
Section 3.30 Year 2000. Except as set forth in Section 3.30 of the
----------
Company Letter, the current and previously sold products of the Company and its
Subsidiaries and software, operations, systems and processes (including, to the
Knowledge of the Company, software, operations, systems and processes obtained
from third parties) used in the conduct of the business of the Company and its
Subsidiaries, are Year 2000 Compliant and the Company has delivered to Parent
true and correct copies of any consultant or other third-party reports prepared
on behalf of the Company with respect to such compliance. For purposes of this
Agreement, "Year 2000 Compliant" means the ability to process (including
-------------------
calculate, compare, sequence, display or store), transmit or receive data or
data/time data from, into and between the twentieth and twenty-first centuries,
and the years 1999 and 2000, and leap year calculations without error or
malfunction. Neither the Company nor any of its Subsidiaries have any
obligations under any warranty agreements, agreements, or otherwise to remedy
any information technology defect relating to a failure to be Year 2000
Compliant, except where any such warranty agreements, agreements or obligations
to remedy would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 4.1 Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
Except as expressly permitted by clauses (i) through (xviii) of this Section
4.1, during the period from the date of this Agreement through the Effective
Time, the Company shall, and shall cause each of its Subsidiaries to, in all
material respects carry on its business in the ordinary course of its business
as currently conducted and, to the extent consistent therewith, use reasonable
best efforts to preserve intact its current business organizations, keep
available the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement or as set forth in the
Company Letter (with specific reference to the applicable subsection below), the
Company shall not, and shall not permit any of its Subsidiaries to, without the
prior written consent of Parent:
(i) (A) other than dividends paid by wholly-owned Subsidiaries, declare,
set aside or pay any dividends on, or make any other actual, constructive
or deemed distributions in respect of, any of its capital stock, or
otherwise make any payments to its shareholders in their capacity as such,
(B) other than in the case of any Subsidiary, split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (C) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
30
(ii) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options (including options under the Company Stock Option Plans) to acquire
any such shares, voting securities, equity equivalent or convertible
securities, other than (A) the issuance of shares of Company Common Stock
upon the exercise of Company Stock Options outstanding on the date of this
Agreement in accordance with their current terms and (B) the issuance of
shares of Company Common Stock pursuant to the Stock Option Agreement;
(iii) amend the Company Charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, limited liability company,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets;
(v) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets, other than sales of inventory that
are in the ordinary course of business consistent with past practice;
(vi) incur any indebtedness for borrowed money, guarantee any such
indebtedness or make any loans, advances or capital contributions to, or
other investments in, any other person, other than (A) in the ordinary
course of business consistent with past practices and (B) indebtedness,
loans, advances, capital contributions and investments between the Company
and any of its wholly-owned Subsidiaries or between any of such wholly-
owned Subsidiaries, in each case in the ordinary course of business
consistent with past practices;
(vii) alter (through merger, liquidation, reorganization, restructuring
or in any other fashion) the corporate structure or ownership of the
Company or any Subsidiary;
(viii) except as provided in Section 4.1(viii) of the Company Letter,
enter into or adopt any, or amend any existing, severance plan, agreement
or arrangement or enter into or amend any Company Plan, employment
agreement (with an employee at or above management level), or any
consulting agreement out of the ordinary course;
(ix) except as provided in Section 4.1(ix) of the Company Letter,
increase the compensation payable or to become payable to its directors,
officers or employees (except for increases in the ordinary course of
business consistent with past practice in salaries or wages of employees of
the Company or any of its Subsidiaries who are not officers of the Company
or any of its Subsidiaries) or grant any severance or termination pay to,
or enter into any employment or severance agreement with, any director or
officer of the Company or any of its
31
Subsidiaries, or establish, adopt, enter into, or, except as may be
required to comply with applicable law, amend in any material respect or
take action to enhance in any material respect or accelerate any rights or
benefits under, any labor, collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;
(x) knowingly violate or knowingly fail to perform any obligation or
duty imposed upon it or any Subsidiary by any applicable material federal,
state or local law, rule, regulation, guideline or ordinance;
(xi) make any change to accounting policies or procedures (other than
actions required to be taken by generally accepted accounting principles);
(xii) prepare or file any Tax Return inconsistent with past practice or,
on any such Tax Return, take any position, make any election, or adopt any
method that is inconsistent with positions taken, elections made or methods
used in preparing or filing similar Tax Returns in prior periods;
(xiii) make or rescind any express or deemed election relating to Taxes,
change any of its methods of reporting income or deductions for Tax
purposes, or settle or compromise any material federal, state, local or
foreign income tax liability;
(xiv) commence any litigation or proceedings or settle or compromise any
material claims or litigation;
(xv) enter into, renew, terminate or amend any agreement or contract
material to the Company and its Subsidiaries, taken as a whole, including
any Significant Contract; or purchase any real property or make or agree to
make any new capital expenditure or expenditures which in the aggregate
are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their terms,
of liabilities reflected or reserved against in, or contemplated by, the
most recent financial statements (or the notes thereto) of the Company
included in the Company SEC Documents or incurred in the ordinary course of
business consistent with past practice; or
(xvii) authorize, recommend, propose or announce an intention to do any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
32
Section 4.2 No Solicitation. (a) The Company shall not, nor shall it
---------------
permit any of its Subsidiaries to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor or
representative of, the Company or any of its Subsidiaries to, (i) solicit,
initiate or encourage the submission of, any Takeover Proposal (as hereafter
defined), (ii) enter into any agreement with respect to or approve or recommend
any Takeover Proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to the Company
or any Subsidiary in connection with, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to, any Takeover Proposal; provided, however, that nothing
-------- -------
contained in this Section 4.2(a) shall prohibit the Company or its directors
from (i) complying with Rule 14e-2 promulgated under the Exchange Act with
regard to a tender or exchange offer or (ii) referring a third party to this
Section 4.2(a) or making a copy of this Section 4.2(a) available to any third
party; and provided, further, that prior to the Shareholder Meeting, if the
-------- -------
Board of Directors of the Company reasonably determines the Takeover Proposal
constitutes a Superior Proposal (as defined below), then, to the extent required
by the fiduciary obligations of the Board of Directors of the Company, as
determined in good faith by a majority thereof after consultation with
independent counsel (who may be the Company's regularly engaged independent
counsel), the Company may, (A) in response to an unsolicited request therefor,
furnish information with respect to the Company and its Subsidiaries to any
person pursuant to a customary confidentiality statement (as determined by the
Company's independent counsel) and (B) withdraw or modify its recommendation of
this Agreement. Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the preceding sentence by any officer
or director of the Company or any of its Subsidiaries or any financial advisor,
attorney or other advisor or representative of the Company or any of its
Subsidiaries, whether or not such person is purporting to act on behalf of the
Company or any of its Subsidiaries or otherwise, shall be deemed to be a breach
of this Section 4.2(a) by the Company. For purposes of this Agreement,
"Takeover Proposal" means any proposal for a merger, tender offer or other
------------------
business combination involving the Company or any of its Subsidiaries or any
proposal or offer to acquire in any manner, directly or indirectly, an equity
interest in, any voting securities of, or a substantial portion of the assets of
the Company or any of its Subsidiaries, other than the transactions contemplated
by this Agreement and the Stock Option Agreement, and "Superior Proposal" means
-----------------
a bona fide proposal made by a third party to acquire the Company pursuant to a
tender or exchange offer, a merger, a sale of all or substantially all its
assets or otherwise on terms which a majority of the disinterested members of
the Board of Directors of the Company determines, at a duly constituted meeting
of the Board of Directors or by unanimous written consent, in its reasonable
good faith judgment to be more favorable to the Company's shareholders than the
Merger (based on the advice of the Company's independent financial advisor that
the value of the consideration provided for in such proposal exceeds the value
of the consideration provided for in the Merger) and for which financing, to the
extent required, is then committed or which, in the reasonable good faith
judgment of a majority of such disinterested members, as expressed in a
resolution adopted at a duly constituted meeting of such members (based on the
advice of the Company's independent financial advisor), is reasonably capable of
being obtained by such third party.
33
(b) The Company shall advise Parent in writing within 24 hours of (i) any
Takeover Proposal or any expression of interest regarding a potential Takeover
Proposal that is received by or communicated to any officer or director of the
Company or, to the Knowledge of the Company, any financial advisor, attorney or
other advisor or representative of the Company with respect to which the Board
decides to furnish information pursuant to Section 4.2(a) (an "Approved
Inquiry"), (ii) the material terms of such Takeover Proposal or Approved Inquiry
(including a copy of any written proposal), and (iii) the identity of the person
making any such Takeover Proposal or Approved Inquiry. If the Company intends
to furnish any Person with any information with respect to any Approved Inquiry
or Takeover Proposal in accordance with Section 4.2(a), the Company shall advise
Parent in writing of such intention not less than 48 hours in advance of
providing such information.
Section 4.3 Third Party Standstill Agreements. During the period from
---------------------------------
the date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which the Company or any of its Subsidiaries is a party
(other than any involving Parent). During such period, the Company agrees to
enforce, to the fullest extent permitted under applicable law, the provisions of
any such agreements, including, but not limited to, obtaining injunctions to
prevent any breaches of such agreements and to enforce specifically the terms
and provisions thereof in any court of the United States or any state thereof
having jurisdiction.
Section 4.4 Reorganization. During the period from the date of this
--------------
Agreement through the Effective Time, unless the other party shall otherwise
agree in writing, none of Parent, the Company or any of their respective
Subsidiaries shall take or fail to take any action with the actual knowledge of
those taking or failing to take such action (or those directing such action or
failure to take action) that such action or failure would jeopardize the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code or would cause any of the representations and warranties set
forth in the Company Tax Certificate attached to the Company Letter or the
Parent Tax Certificate attached to the Parent Letter to be untrue or incorrect.
34
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
Section 5.1 Shareholder Meeting. The Company will, as soon as
-------------------
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of shareholders (the "Shareholder Meeting") for the
-------------------
purpose of considering the approval and adoption of this Agreement and at such
meeting call for a vote and cause proxies to be voted in respect of the approval
and adoption of this Agreement. The Company will, through its Board of
Directors, recommend to its shareholders the adoption and approval of this
Agreement, and shall not withdraw or modify such recommendation unless, in
compliance with Section 4.2 hereof, the Board's fiduciary duties require it to
do so with respect to a Superior Offer. Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 5.1 shall not be affected by the commencement, public
proposal, public disclosure or communication to the Company of a Takeover
Proposal.
Section 5.2 Preparation of the Registration Statement and the Proxy
-------------------------------------------------------
Statement.
---------
(a) The Company and Parent shall promptly prepare and file with the SEC the
Proxy Statement and Parent shall prepare and file with the SEC the Registration
Statement, in which the Proxy Statement will be included as a prospectus. Each
of Parent and the Company shall use its reasonable best efforts to have the
Registration Statement declared effective under the Securities Act as promptly
as practicable after such filing. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall mail the
Proxy Statement to its shareholders. Parent shall also take any action (other
than qualifying to do business in any jurisdiction in which it is now not so
qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Parent Common Stock in the Merger and upon the
exercise of the Substitute Options (as defined in Section 5.7), and the Company
shall furnish all information concerning the Company and the holders of Company
Common Stock as may be reasonably requested in connection with any such action.
(b) Parent and the Company promptly will notify each other of the receipt of
comments from the SEC and of any request by the SEC for amendments or
supplements to the Registration Statement or the Proxy Statement or for
additional information, and promptly will supply each other with copies of all
correspondence between the parties and the SEC with respect thereto. If, at any
time prior to the Shareholder Meeting, any event should occur relating to or
affecting the Company, Parent or Sub, or to their respective Subsidiaries,
officers or directors, which event should be described in an amendment or
supplement to the Registration Statement or the Proxy Statement, the parties
promptly will inform each other and cooperate in preparing, filing and having
declared effective or clearing with the SEC and, if required by applicable state
securities laws, distributing to the Company's stockholders such amendment or
supplement.
35
Section 5.3 Access to Information. Subject to currently existing
---------------------
contractual and legal restrictions applicable to the Company or any of its
Subsidiaries, the Company shall, and shall cause each of its Subsidiaries to,
afford to the Parent and its Subsidiaries and each of their accountants,
counsel, financial advisors and other representatives of Parent reasonable
access to, and permit them to make such inspections as they may reasonably
require of, during the period from the date of this Agreement through the
Effective Time, all of their respective properties, books, contracts,
commitments and records (including engineering records and Tax Returns and the
work papers of independent accountants, if available and subject to the consent
of such independent accountants) and, during such period, the Company shall, and
shall cause each of its Subsidiaries to (i) furnish promptly to Parent a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws, (ii) furnish promptly to Parent all other information concerning its
business, properties and personnel as Parent may reasonably request, (iii)
promptly make available to Parent all personnel of the Company and its
Subsidiaries knowledgeable about matters relevant to such inspections and (iv)
provide reasonable access to the Company's facilities and operation to enable
Parent to conduct an environmental, health and safety review of the business,
including the right to take samples. No investigation pursuant to this Section
5.3 shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto. All
information obtained by Parent pursuant to this Section 5.3 shall be kept
confidential in accordance with the Confidentiality Agreement, dated July 29,
1999 between Parent and the Company (the "Confidentiality Agreement").
-------------------------
Section 5.4 Rule 145 Letters. On the date hereof, the Company shall
----------------
cause to be prepared and delivered to Parent a list (reasonably satisfactory to
counsel for Parent) identifying all persons who, at the time of the Shareholder
Meeting, may be deemed to be "affiliates" of the Company as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act (the "Rule 145
--------
Affiliates"). The Company shall use its reasonable best efforts to cause each
----------
person who is identified as a Rule 145 Affiliate in such list to deliver to
Parent within 30 days of the date hereof a written agreement in substantially
the form of Exhibit D hereto, executed by each of such persons identified in the
---------
foregoing list.
Section 5.5 Stock Exchange Listings. Parent shall use its reasonable
-----------------------
best efforts to list on the NYSE, upon official notice of issuance, any shares
of Parent Common Stock to be issued in connection with the Merger which have not
been previously listed.
Section 5.6 Fees and Expenses. (a) Except as provided in this
-----------------
Section 5.6 and Section 5.10, whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby, including the fees and disbursements of
counsel, financial advisors and accountants, shall be paid by the party
incurring such costs and expenses, provided that all printing expenses and all
filing fees (including filing fees under the Securities Act, the Exchange Act
and the HSR Act) shall be divided equally between Parent and the Company.
36
(b) Notwithstanding any provision in this Agreement to the contrary, if
this Agreement is terminated (A) by the Company pursuant to Section 7.1(d)(i)
after receipt of a Superior Proposal or (B) by Parent pursuant to Section
7.1(b), (c) or (f), (C) by Parent or the Company pursuant to Section 7.1(e)
(after receipt of a publicly disclosed Superior Proposal or after the occurrence
of any of the events described in clause (i), (ii) or (iii) of Section 7.1(f))
or (g), then, in each case, the Company shall (without prejudice to any other
rights of Parent against the Company) reimburse Parent upon demand for all out-
of-pocket fees and expenses incurred or paid by or on behalf of Parent or any
Affiliate (as hereinafter defined) of Parent in connection with this Agreement,
the Stock Option Agreement and the transactions contemplated herein or therein,
including all fees and expenses of counsel, investment banking firms,
accountants and consultants (collectively, "Parent Fees"), provided, however,
-------- -------
that (y) in no event shall the amount paid pursuant to this Section 5.6(b) in
reimbursement of Parent Fees exceed $2 million, and (z) no Parent Fees shall be
reimbursed pursuant to this Section 5.6(b) if a Termination Fee has been paid to
Parent. As used herein, "Affiliate" shall have the meaning set forth in Rule
---------
405 under the Securities Act.
(c) Notwithstanding any provision in this Agreement to the contrary:
(i) if this Agreement is terminated:
(A) by the Company pursuant to Section 7.1(d)(i) after
receipt of a Superior Proposal, or
(B) by Parent pursuant to Section 7.1(b) or (f), or
(C) by Parent pursuant to Section 7.1(c) or by Parent or
the Company pursuant to Section 7.1(e) in either case after receipt of a
publicly disclosed Superior Proposal or after the occurrence of any of
the events described in clause (i), (ii) or (iii) of Section 7.1(f),
and, in the case of (A), (B) or (C), prior to, concurrently with or within
twelve months after such a termination a Third Party Acquisition Event (as
defined below) occurs, then the Company shall (in addition to any
obligation under Section 5.6(b) and without prejudice to any other rights
of Parent against the Company) pay to Parent the Termination Fee (as
defined below) in cash, such payment to be made promptly, but in no event
later than the second business day following, the later to occur of such
termination and such Third Party Acquisition Event; or
(ii) if this Agreement is terminated by Parent or the Company pursuant
to Section 7.1(g), then the Company shall (in addition to any obligation
under Section 5.6(b) and without prejudice to any other rights of Parent
against the Company) pay to Parent the Termination Fee in cash, such
payment to be made by the Company concurrently with such termination if the
termination is by the Company, or no later than the second business day
following such termination if the termination is by Parent.
37
"Termination Fee" means $15 million, provided, however, that (i) such
--------------- -------- -------
amount shall be reduced to an amount not less than zero by subtracting from $15
million the amount realized or realizable (based on the facts as they exist on
the date such fee shall become due) by Parent under the Stock Option Agreement
which is in excess of $10 million, and (ii) the total of the Termination Fee and
any amount actually realized by Parent under the Stock Option Agreement shall
not exceed $25 million; provided further that if such Fee shall be so reduced by
-------- -------
an amount so realizable by Parent and thereafter the Stock Option Agreement
shall terminate without receipt by Parent of such amount, then an additional
payment shall be made to Parent in the amount by which the Termination Fee was
reduced hereunder promptly following such termination.
A "Third Party Acquisition Event" means any of the following events: (A)
-----------------------------
any Person (other than Parent or its Affiliates and other than ▇▇▇▇▇▇▇▇▇-▇▇▇▇
Associates, Inc., FLA Advisers, L.L.C., FLA Asset Management, Inc. and Stamford
Advisers Corp., so long as the aggregate beneficial ownership of these four
entities does not exceed 25%) acquires or becomes the beneficial owner of 20%
or more of the outstanding shares of Company Common Stock; (B) any group (other
than a group which includes or may reasonably be deemed to include Parent or any
of its Affiliates) is formed which, at the time of formation, beneficially owns
20% or more of the outstanding shares of Company Common Stock; (C) the Company
enters into, or announces that it proposes to enter into, an agreement,
including, an agreement in principle, providing for a merger or other business
combination involving the Company or a "significant subsidiary" (as defined in
Rule 1.02(w) of Regulation S-X as promulgated by the SEC) of the Company or the
acquisition of a substantial interest in, or a substantial portion of the
assets, business or operations of, the Company or a significant subsidiary
(other than the transactions contemplated by this Agreement); (D) any Person
(other than Parent or its Affiliates) is granted any option or right,
conditional or otherwise, to acquire or otherwise become the beneficial owner of
shares of Company Common Stock which, together with all shares of Company Common
Stock beneficially owned by such Person, results or would result in such Person
being the beneficial owner of 20% or more of the outstanding shares of Company
Common Stock; or (E) there is a public announcement with respect to a plan or
intention by the Company to effect any of the foregoing transactions. For
purposes of this Section 5.6(c), the terms "group" and "beneficial owner" shall
be defined by reference to Section 13(d) of the Exchange Act.
(d) Notwithstanding any provision in this Agreement to the contrary, if
this Agreement is terminated (i) by the Company pursuant to Section 7.1(b) or
(c), then Parent shall (without prejudice to any other rights of the Company
against Parent) reimburse the Company upon demand for all out-of-pocket fees and
expenses incurred or paid by or on behalf of the Company or any Affiliate of the
Company in connection with this Agreement, the Stock Option Agreement and the
transactions contemplated herein or therein, including all fees and expenses of
counsel, investment banking firms, accountants and consultants (collectively,
"Company Fees"), provided, however, that (A) in no event shall the amount paid
-------- -------
pursuant to this Section 5.6(d) in reimbursement of the Company Fees exceed $2
million, and (B) no Company Fees shall be reimbursed pursuant to this
38
Section 5.6(d) if the Company receives the full fee payable to it as a result of
a termination of this Agreement pursuant to Section 7.1(h), 7.1(i) or 7.1(j),
(ii) by Parent pursuant to Section 7.1(h), Parent shall pay to the Company $15
million in cash, such payment to be made no later than the second business day
following such termination, or (iii) by the Company pursuant to Section 7.1(i)
or by the Parent pursuant to Section 7.1(j), Parent shall pay to the Company $10
million in cash, such payment to be made no later than the second business day
following either such termination.
Section 5.7 Company Stock Options. (a) Except as provided in Section
---------------------
5.7(a) of the Company Letter, at the Effective Time, each Company Stock Option
which is outstanding immediately prior to the Effective Time shall become and
represent an option to purchase the number of shares of Parent Common Stock (a
"Substitute Option"), decreased to the nearest whole share, determined by
------------------
multiplying the number of shares of Company Common Stock subject to such Company
Stock Option immediately prior to the Effective Time by the Conversion Number
(as defined below), at an exercise price per share of Parent Common Stock,
increased to the nearest whole cent, equal to the exercise price per share of
Company Common Stock subject to such Company Stock Option immediately prior to
the Effective Time divided by the Conversion Number. Parent shall pay cash to
holders of Substitute Options in lieu of issuing fractional shares of Parent
Common Stock upon the exercise thereof. The "Conversion Number" means the
-----------------
number of shares of Parent Common Stock into which each share of Company Common
Stock is converted as of the Effective Time, determined in accordance with
Section 1.5(c) hereof. After the Effective Time, except as otherwise expressly
provided in this Section 5.7, each Substitute Option shall be exercisable upon
the same terms and conditions (including vesting schedules) as were applicable
to the related Company Stock Option immediately prior to the Effective Time.
The Company shall take all action necessary to implement the provisions of this
Section 5.7, including amendment of the Company Stock Option Plans, and to
ensure that, after giving effect to the foregoing, no Company Stock Option shall
be exercisable for Company Common Stock following the Effective Time. The
Company shall take no action to accelerate or otherwise affect the
exercisability of any Company Stock Option, except as expressly provided in
Section 5.7(b) or (c), or otherwise affect the exercise period thereof. As soon
as reasonably practicable, and in no event later than 20 days after the
Effective Time, Parent shall file a registration statement on Form S-8 (or any
successor or other appropriate form) with respect to Parent Common Stock subject
to all Substitute Options.
(b) Prior to the Effective Time, the Company shall take such action
satisfactory to Parent as shall be necessary to provide that upon the
termination of employment of a holder of a Substitute Option by the Company
without "Cause" (as defined below) or due to death or disability, each
-----
Substitute Option then held by such holder which is not then exercisable shall
become fully exercisable on the date of such termination of employment. For
purposes of this Section 5.7(b), "Cause" shall mean conviction of a criminal
offense, theft, fraud, breach of trust or refusal to perform services properly
assigned following notice and an opportunity to cure.
39
(c) Prior to the Effective Time, the Company shall take such action
satisfactory to Parent as shall be necessary to provide that upon the cessation
of service as a director of the Company by each person who is a non-employee
director of the Company immediately prior to the Effective Time, (i) each
Substitute Option held by such person immediately following the Effective Time
which is not then exercisable in accordance with its original vesting schedule
shall continue to become exercisable in accordance with such original vesting
schedule as if the service of such director had not ceased; and (ii) each
Substitute Option held by such person immediately following the Effective Time
which is then exercisable shall continue to be exercisable in accordance with
the original term of each such Substitute Option as if the service of such
director had not ceased.
Section 5.8 Reasonable Best Efforts. (a) Upon the terms and subject to
-----------------------
the conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including: (i) the obtaining of
all necessary actions or non-actions, waivers, consents and approvals from all
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid or
vigorously defend an action or proceeding by, any Governmental Entity (including
those in connection with the HSR Act and State Takeover Approvals), (ii) the
obtaining of all necessary consents, approvals or waivers from third parties,
(iii) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement, the Stock Option Agreement or the
consummation of the transactions contemplated hereby and thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement. No party to this Agreement shall consent to any
voluntary delay of the consummation of the Merger at the behest of any
Governmental Entity without the consent of the other parties to this Agreement,
which consent shall not be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not take any
action, or enter into any transaction, which would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement.
(c) Notwithstanding anything to the contrary contained in this Agreement,
in connection with any filing or submission required or action to be taken by
either Parent or the Company to effect the Merger and to consummate the other
transactions contemplated hereby, the Company shall not, without Parent's prior
written consent, commit to any divestiture transaction, and neither Parent nor
any of its Affiliates shall be required to divest or hold separate or otherwise
take or commit to take any action that limits its freedom of action with respect
to, or its ability to retain, the Company or any of
40
the businesses, product lines or assets of Parent or any of its Subsidiaries or
that otherwise would have a Material Adverse Effect on Parent.
(d) Parent and the Company acknowledge the rights to terminate this
Agreement set forth in Section 7.1(i) and 7.1(j) hereof, but also acknowledge
that if they agree at any time after May 6, 2000 that progress is being made
toward the satisfactory resolution of any then pending issues under the HSR Act,
they will continue to use their reasonable best efforts to attempt to secure a
mutually satisfactory resolution of those issues which will permit the closing
of the merger.
Section 5.9 Public Announcements. Parent and the Company will not issue
--------------------
any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions without prior consultation with the other party, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange.
Section 5.10 Real Estate Transfer and Gains Tax. Parent and the Company
----------------------------------
agree that either the Company or the Surviving Corporation will pay any foreign,
state or local tax which is attributable to the transfer of the beneficial
ownership of the Company's or its Subsidiaries' real property, if any
(collectively, the "Gains Taxes"), and any penalties or interest with respect to
-----------
the Gains Taxes, payable in connection with the consummation of the Merger. The
Company and Parent agree to cooperate with the other in the filing of any Tax
returns with respect to the Gains Taxes, if any, including supplying in a timely
manner a complete list of all real property interests held by the Company and
its Subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns if there are any Gains Taxes
applicable. The portion of the consideration allocable to the real property of
the Company and its Subsidiaries shall be determined by Parent in its reasonable
discretion.
Section 5.11 State Takeover Laws. If any "fair price," "business
-------------------
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or in
the Stock Option Agreement, Parent and the Company and their respective Boards
of Directors shall use their best efforts to grant such approvals and take such
actions as are necessary so that the transactions contemplated hereby and
thereby may be consummated as promptly as practicable on the terms contemplated
hereby and thereby and otherwise act to minimize the effects of any such statute
or regulation on the transactions contemplated hereby and thereby.
Section 5.12 Indemnification; Directors and Officers Insurance. (a) From
-------------------------------------------------
and after the Effective Time, Parent shall cause the Surviving Corporation to
indemnify and hold harmless all past and present officers and directors of the
Company and of its Subsidiaries to the same extent and in the same manner such
persons are indemnified as of the date of this Agreement by the Company pursuant
to the DGCL, the Company Charter, the Company's By-laws for acts or omissions
occurring at or prior to the Effective Time (including indemnifying and holding
harmless such persons for acts or omissions occurring at or prior to the
Effective Time in respect of the Merger and the
41
transactions contemplated thereby to the same extent and in the manner as such
persons are indemnified as of the date of this Agreement by the Company pursuant
to the DGCL, the Company Charter, the Company's By-laws.
(b) Parent shall cause the Surviving Corporation to provide, for an
aggregate period of not less than three years from the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring prior to the Effective Time (the
"D&O Insurance") that is substantially similar to the Company's existing policy
--------------
or, if substantially equivalent insurance coverage is unavailable, the best
available coverage; provided, however, that neither the Parent nor the Surviving
-------- -------
Corporation shall be required to pay an annual premium for the D&O Insurance in
excess of the last annual premiums paid prior to the date hereof (which premiums
the Company represents and warrants to be approximately $70,000 per annum ), but
in such case shall purchase as much coverage as possible for such amount.
(c) Parent hereby agrees that, effective at the Effective Time, Parent
will guarantee the obligations of the Surviving Corporation under Section
5.12(a) and (b).
Section 5.13 Notification of Certain Matters. Parent shall use its
-------------------------------
reasonable best efforts to give prompt notice to the Company, and the Company
shall use its reasonable best efforts to give prompt notice to Parent, of: (i)
the occurrence, or non-occurrence, of any event the occurrence, or non-
occurrence, of which it is aware and which would be reasonably likely to cause
(x) any representation or warranty contained in this Agreement and made by it to
be untrue or inaccurate in any material respect or (y) any covenant, condition
or agreement contained in this Agreement and made by it not to be complied with
or satisfied in all material respects, (ii) any failure of Parent or the
Company, as the case may be, to comply in a timely manner with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on Parent or the Company, as the case may be;
provided, however, that the delivery of any notice pursuant to this Section 5.13
-------- -------
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
Section 5.14 Suspension of Employee Incentive Stock Acquisition Plan.
-------------------------------------------------------
The Company shall amend, effective as of the date hereof, the 1993 Employee
Incentive Stock Acquisition Plan to halt purchases under the Plan at the end of
the payroll period in which this Agreement is executed.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.
----------------------------------------------------------
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
conditions:
42
(a) Shareholder Approval. This Agreement shall have been duly approved
--------------------
by the requisite vote of shareholders of the Company in accordance with
applicable law, the Company Charter and the Company's By-laws.
(b) Stock Exchange Listings. The Parent Common Stock issuable in the
-----------------------
Merger and not previously listed shall have been authorized for listing on the
NYSE, subject to official notice of issuance.
(c) HSR and Other Approvals. (i) The waiting period (and any extension
-----------------------
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(ii) All authorizations, consents, orders, declarations or approvals of,
or filings with, or terminations or expirations of waiting periods imposed by,
any Governmental Entity, which the failure to obtain, make or occur would have
the effect of, directly or indirectly, restraining, prohibiting or restricting
the Merger or any of the transactions contemplated hereby or would have,
individually or in the aggregate, a Material Adverse Effect on Parent (assuming
the Merger had taken place), shall have been obtained, shall have been made or
shall have occurred.
(d) Registration Statement. The Registration Statement shall have become
----------------------
effective in accordance with the provisions of the Securities Act. No stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and no proceedings for that purpose shall have been initiated
or, to the Knowledge of Parent or the Company, threatened by the SEC. All
necessary state securities or blue sky authorizations (including State Takeover
Approvals) shall have been received.
(e) No Order. No court or other Governmental Entity having jurisdiction
--------
over the Company or Parent, or any of their respective Subsidiaries, shall have
enacted, issued, promulgated, enforced or entered any law, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is then in effect and has the effect of,
directly or indirectly, restraining, prohibiting or restricting the Merger or
any of the transactions contemplated hereby.
Section 6.2 Conditions to Obligation of the Company to Effect the
-----------------------------------------------------
Merger. The obligation of the Company to effect the Merger shall be subject to
------
the fulfillment at or prior to the Effective Time of each of the following
additional conditions:
(a) Performance of Obligations; Representations and Warranties. Each of
----------------------------------------------------------
Parent and Sub shall have performed in all material respects each of its
agreements and covenants contained in this Agreement required to be performed on
or prior to the Effective Time, each of the representations and warranties of
Parent and Sub contained in this Agreement that is qualified by materiality
shall have been true and correct when made, and shall be true and correct on and
as of the Effective Time as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct as of such certain date) and each of the
43
representations and warranties that is not so qualified shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects on and as of the Effective Time as if made on and as of such
date (other than representations and warranties which address matters only as of
a certain date which shall be true and correct in all material respects as of
such certain date), in each case except as contemplated or permitted by this
Agreement, and the Company shall have received certificates signed on behalf of
each of Parent and Sub by one of its officers to such effect.
(b) Tax Opinion. The Company shall have received an opinion of
-----------
Holland & ▇▇▇▇, counsel to the Company, in form and substance reasonably
satisfactory to the Company, dated the Effective Time, substantially to the
effect that on the basis of facts, representations and assumptions set forth in
such opinion which are consistent with the state of facts existing as of the
Effective Time, for federal income tax purposes:
(i) the Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Code, and the Company, Sub and Parent will each be a
party to that reorganization within the meaning of Section 368(b) of the
Code;
(ii) no gain or loss will be recognized by Parent, Sub or the Company as
a result of the Merger;
(iii) no gain or loss will be recognized by the shareholders of the
Company upon the conversion of their shares of Company Common Stock solely
into shares of Parent Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of Parent
Common Stock;
(iv) the aggregate tax basis of the shares of Parent Common Stock
received solely in exchange for shares of Company Common Stock pursuant to
the Merger (including a fractional share of Parent Common Stock for which
cash is paid) will be the same as the aggregate tax basis of such shares of
Company Common Stock exchanged therefor;
(v) the holding period for shares of Parent Common Stock received
solely in exchange for shares of Company Common Stock pursuant to the
Merger will include the shareholder's holding period for such shares of
Company Common Stock, provided such shares of Company Common Stock were
held as capital assets by the shareholder at the Effective Time; and
(vi) a shareholder of the Company who receives cash in lieu of a
fractional share of Parent Common Stock will recognize gain or loss equal
to the difference, if any, between such shareholder's basis in the
fractional share (determined under clause (iv) above) and the amount of
cash received.
In rendering such opinion, Holland & ▇▇▇▇ may receive and rely upon
representations from Parent, the Company, and others, including representations
from Parent substantially similar to the representations in the Parent Tax
Certificate attached to the
44
Parent Letter, representations from the Company substantially similar to the
representations in the Company Tax Certificate attached to the Company Letter,
and representations from the shareholder who is entering into the Adviser
Agreement substantially similar to the representations in the Adviser Tax
Certificate attached to the Adviser Agreement.
(c) Material Adverse Change. Since the date of this Agreement, there
-----------------------
shall have been no change that is or could reasonably be expected (as far as can
be foreseen at the time) to be materially adverse to the business, operations,
properties, assets, liabilities, employee relationships, customer or supplier
relationships, earnings or results of operations, or the prospects of Parent
and its subsidiaries taken as a whole. The Company shall have received a
certificate signed on behalf of Parent by an officer of Parent to such effect.
(d) Company Stock Option Plans. Parent shall have taken all action
--------------------------
required to be taken by it to implement the provisions of Section 5.7.
Section 6.3 Conditions to Obligations of Parent and Sub to Effect the
---------------------------------------------------------
Merger. The obligations of Parent and Sub to effect the Merger shall be
------
subject to the fulfillment at or prior to the Effective Time of each of the
following additional conditions:
(a) Performance of Obligations; Representations and Warranties. The
----------------------------------------------------------
Company shall have performed in all material respects each of its covenants and
agreements contained in this Agreement required to be performed on or prior to
the Effective Time, each of the representations and warranties of the Company
contained in this Agreement that is qualified by materiality shall have been
true and correct when made, and shall be true and correct on and as of the
Effective Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be true
and correct as of such certain date), each of the representations and warranties
that is not so qualified shall have been true and correct in all material
respects when made, and shall be true and correct in all material respects on
and as of the Effective Time as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct in all material respects as of such certain
date), in each case except as contemplated or permitted by this Agreement,
provided, however, that for the purpose of this Section 6.3(a) and of Section
7.1(c), in the case of the representations and warranties made in Section 3.7
hereof relating to the period between the date of this Agreement and the
Effective Time, such representations and warranties shall only be deemed to not
be true and correct if the aggregate effect of the matters as to which they are
not true and correct would constitute a Post Signing Material Adverse Change as
defined in Section 6.3(e) hereof. Parent shall have received a certificate
signed on behalf of the Company by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(b) Tax Opinion. Parent shall have received an opinion of ▇▇▇▇▇▇, ▇▇▇▇ &
-----------
▇▇▇▇▇▇▇▇ LLP, counsel to Parent, in form and substance reasonably satisfactory
to Parent, dated the Effective Time, substantially to the effect that on the
basis of facts,
45
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time, for federal income
tax purposes:
(i) the Merger will constitute a "reorganization" within the meaning of
Section 368(a) of the Code, and the Company, Sub and Parent will each be a
party to that reorganization within the meaning of Section 368(b) of the
Code;
(ii) no gain or loss will be recognized by Parent, Sub or the Company as
a result of the Merger;
(iii) no gain or loss will be recognized by the shareholders of the
Company upon the conversion of their shares of Company Common Stock solely
into shares of Parent Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of Parent
Common Stock;
(iv) the aggregate tax basis of the shares of Parent Common Stock
received solely in exchange for shares of Company Common Stock pursuant to
the Merger (including a fractional share of Parent Common Stock for which
cash is paid) will be the same as the aggregate tax basis of such shares of
Company Common Stock exchanged therefor;
(v) the holding period for shares of Parent Common Stock received
solely in exchange for shares of Company Common Stock pursuant to the
Merger will include the shareholder's holding period for such shares of
Company Common Stock, provided such shares of Company Common Stock were
held as capital assets by the shareholder at the Effective Time; and
(vi) a shareholder of the Company who receives cash in lieu of a
fractional share of Parent Common Stock will recognize gain or loss equal
to the difference, if any, between such shareholder's basis in the
fractional share (determined under clause (iv) above) and the amount of
cash received.
In rendering such opinion, ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP may receive and rely upon
representations from Parent, the Company, and others, including representations
from Parent substantially similar to the representations in the Parent Tax
Certificate attached to the Parent Letter, representations from the Company
substantially similar to the representations in the Company Tax Certificate
attached to the Company Letter, and representations from the shareholder who is
entering into the Adviser Agreement substantially similar to the representations
in the Adviser Tax Certificate attached to the Adviser Agreement.
(c) Consents. (i) The Company shall have obtained the consent or
--------
approval of each person or Governmental Entity whose consent or approval shall
be required in connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except as to which the failure to obtain such consents and approvals
would not, in the reasonable opinion of Parent, individually or in the
aggregate, have a Material Adverse Effect on the
46
Company or Parent or upon the consummation of the transactions contemplated in
this Agreement, the Stock Option Agreement or the Adviser Agreement.
(ii) In obtaining any approval or consent required to consummate any of
the transactions contemplated herein, in the Stock Option Agreement or the
Adviser Agreement, no Governmental Entity shall have imposed or shall have
sought to impose any condition, penalty or requirement which, in the reasonable
opinion of Parent, individually or in aggregate would have a Material Adverse
Effect on the Company or Parent.
(d) Affiliate Agreements. Parent shall have received the written
--------------------
agreements from Rule 145 Affiliates of the Company described in Section 5.4.
(e) Post Signing Material Adverse Change. Since the date of this
------------------------------------
Agreement, there shall have been no Post Signing Material Adverse Change (as
hereinafter defined). Parent shall have received a certificate signed on behalf
of the Company by the Chief Executive Officer and the Chief Financial Officer of
the Company to such effect. For purposes of this Section 6.3(e), the term "Post
----
Signing Material Adverse Change" shall mean any adverse change or changes in the
-------------------------------
business, operations, properties, assets, liabilities, employee relationships,
customer or supplier relationships, earnings or results of operations or the
prospects of the Company and its subsidiaries, taken as a whole after the date
of this Agreement that are or could reasonably be expected (as far as can be
foreseen at the time) to be adverse in an aggregate amount in excess of
$35,000,000. Notwithstanding anything to the contrary contained herein, the
definition of Post Signing Material Adverse Change shall not relate to any other
definition of materiality, and in no way shall be read to create a materiality
standard for any other purpose related to this Agreement.
(f) Company Stock Option Plans. The Company shall have taken all action
--------------------------
required to be taken by it to implement the provisions of Section 5.7.
(g) Company Warrants. All of the Company Warrants shall have been
-----------------
terminated or been exercised. In addition, the Registration Rights Agreement,
dated as of September 5, 1996, by and among the Company and the holders of the
Company Warrants shall have been terminated.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 7.1 Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after any approval of the matters
presented in connection with the Merger by the shareholders of the Company:
(a) by mutual written consent of Parent and the Company;
47
(b) by either Parent or the Company if the other party shall have failed
to comply in any material respect with any of its covenants or agreements
contained in this Agreement required to be complied with prior to the date
of such termination, which failure to comply has not been cured within five
business days following receipt by such other party of written notice of
such failure to comply;
(c) by either Parent or the Company if there has been (i) a breach by
the other party (in the case of Parent, including any material breach by
Sub) of any representation or warranty that is not qualified as to
materiality which has the effect of making such representation or warranty
not true and correct in all material respects or (ii) a breach by the other
party (in the case of Parent, including any material breach by Sub) of any
representation or warranty that is qualified as to materiality, in each
case which breach has not been cured within five business days following
receipt by the breaching party of written notice of the breach;
(d) by either Parent or the Company if: (i) the Merger has not been
effected on or prior to the close of business on the later of May 7, 2000
or the date 75 days after the waiting period applicable to the consummation
of the Merger under the HSR Act has expired or been terminated; provided,
--------
however, that the right to terminate this Agreement pursuant to this
-------
Section 7.1(d)(i) shall not be available to any party whose failure to
fulfill any of its obligations contained in this Agreement has been the
cause of, or resulted in, the failure of the Merger to have occurred on or
prior to the aforesaid date; or (ii) any court or other Governmental Entity
having jurisdiction over a party hereto shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement and
such order, decree, ruling or other action shall have become final and
nonappealable;
(e) by either Parent or the Company if the shareholders of the Company
do not approve this Agreement at the Shareholder Meeting or at any
adjournment or postponement thereof;
(f) by Parent if (i) the Board of Directors of the Company shall not
have recommended, or shall have resolved not to recommend, or shall have
qualified, modified or withdrawn its recommendation of the Merger or
declaration that the Merger is advisable and fair to and in the best
interest of the Company and its shareholders, or shall have resolved to do
so, (ii) the Board of Directors of the Company shall have recommended to
the shareholders of the Company any Takeover Proposal or shall have
resolved to do so or (iii) a tender offer or exchange offer for 20% or more
of the outstanding shares of capital stock of the Company is commenced by a
third party that is not on Affiliate of Parent, and the Board of Directors
of the Company fails to recommend against acceptance of such tender offer
or exchange offer by its shareholders (including by taking no position with
respect to the acceptance of such tender offer or exchange offer by its
shareholders);
48
(g) by Parent or the Company if the Company enters into a merger,
acquisition or other agreement (including an agreement in principle) to
effect a Superior Proposal or the Board of Directors of the Company
resolves to do so; provided, however, that the Company may not terminate
-------- -------
this Agreement pursuant to this Section 7.1(g) unless (i) the Company has
delivered to Parent a written notice of the Company's intent to enter into
such an agreement to effect the Superior Proposal, (ii) 48 hours have
elapsed following delivery to Parent of such written notice by the Company
and (iii) during such 48 hour period the Company has fully cooperated with
Parent, including informing Parent of the terms and conditions of the
Takeover Proposal and the identity of the Person making the Takeover
Proposal, with the intent of enabling Parent to agree to a modification of
the terms and conditions of this Agreement so that the transactions
contemplated hereby may be effected; provided, further, that Company may
-------- -------
not terminate this Agreement pursuant to this Section 7.1(g) unless at the
end of such 48 hour period the Board of Directors of Company continues
reasonably to believe that the Takeover Proposal constitutes a Superior
Proposal when compared to the Merger (taking into account any such
modification as may be proposed by Parent) and concurrently with such
termination Company pays to Parent the amounts specified under Sections
5.6(a), (b) and (c);
(h) by Parent if there has been a Post Signing Material Adverse Change;
(i) by Company if the waiting period applicable to the consummation of
the Merger under the HSR Act has not expired or been terminated on or prior
to May 7, 2000; or
(j) by Parent if the waiting period applicable to the consummation of
the Merger under the HSR Act has not expired or been terminated on or prior
to August 7, 2000.
The right of any party hereto to terminate this Agreement pursuant to
this Section 7.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
Section 7.2 Effect of Termination. In the event of termination of this
---------------------
Agreement by either Parent or Company, as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of Company, Parent, Sub or their respective officers or directors
(except for the last sentence of Section 5.3 and the entirety of Section 5.6,
which shall survive the termination); provided, however, that nothing contained
-------- -------
in this Section 7.2 shall relieve any party hereto from any liability for any
willful breach of a representation or warranty contained in this Agreement or
the breach of any covenant contained in this Agreement.
49
Section 7.3 Amendment. This Agreement may be amended by the parties
---------
hereto, by or pursuant to action taken by their respective Boards of Directors,
in the case of Sub or Company, or a Senior Vice President of Parent, at any time
before or after approval of the matters presented in connection with the Merger
by the shareholders of Company, but, after any such approval, no amendment shall
be made which by law requires further approval by such shareholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 7.4 Waiver. At any time prior to the Effective Time, the
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parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE VIII
GENERAL PROVISIONS
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Section 8.1 Non-Survival of Representations and Warranties. The
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representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.
Section 8.2 Notices. All notices and other communications hereunder
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shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
General Electric Company
c/o GE Medical Systems
▇.▇. ▇▇▇ ▇▇▇, ▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
for overnight courier deliveries, to:
General Electric Company
c/o GE Medical Systems
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
with copies to:
General Electric Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Attention: Vice President and Senior Counsel - Transactions
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Company, to:
OEC Medical Systems, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Holland & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Section 8.3 Interpretation. (a) When a reference is made in this
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Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
(b) "Subsidiary" means any corporation, partnership, limited
----------
liability company, joint venture or other legal entity of which Parent or
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns or controls,
51
directly or indirectly, 50% or more of the stock or other equity interests the
holders of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, limited
liability company, joint venture or other legal entity.
Section 8.4 Counterparts. This Agreement may be executed in
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counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries. This
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Agreement, except for the Stock Option Agreement and as provided in the last
sentence of Section 5.3, constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. This Agreement, except for the
provisions of Section 5.12, is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
Section 8.6 Governing Law. Except to the extent that the laws of the
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State of Delaware are mandatorily applicable to the Merger, this Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
Section 8.7 Assignment. Subject to Section 1.1, neither this
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Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties.
Section 8.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
may be consummated as originally contemplated to the fullest extent possible.
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Section 8.9 Enforcement of this Agreement. The parties hereto agree
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that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific wording or
were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof (but any
such proceeding shall be brought exclusively in either the U.S. District Court
for the District of Connecticut or the District of Delaware), such remedy being
in addition to any other remedy to which any party is entitled at law or in
equity. Each party hereto waives any right to a trial by jury in connection
with any such action, suit or proceeding and waives any objection based on forum
non conveniens or any other objection to venue thereof.
Section 8.10 Defined Terms.
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Each of the following terms is defined in the Section identified
below:
1998 Company Annual Report.................... Section 3.2(c)
Affiliate..................................... Section 5.5(b)
Affiliated Person............................. Section 3.27
Agreement..................................... Preamble
Average Parent Share Price.................... Section 1.5(c)
Blue Sky Laws................................. Section 2.3
Cause......................................... Section 5.7(c)
Certificate of Merger......................... Section 1.2
Certificates.................................. Section 1.6(b)
Closing....................................... Section 1.14
Company....................................... Preamble
Company Business Personnel.................... Section 3.15
Company Charter............................... Section 3.4
Company Common Stock.......................... Section 1.5(c)
Company Foreign Benefit Plan.................. Section 3.12(f)
Company Intellectual Property................. Section 3.16
Company Letter................................ Section 3.2(b)
Company Licenses.............................. Section 3.16
Company Multiemployer Plan.................... Section 3.12(c)
Company Permits............................... Section 3.8
Company Plan.................................. 26
Company Preferred Stock....................... Section 3.2(a)
Company SEC Documents......................... Section 3.5
Company Stock Option Plans.................... Section 3.2(a)
Company Stock Options......................... Section 3.2(b)
Company Warrants.............................. Section 3.2(a)
Compensation Agreements....................... Section 3.11(a)
Confidentiality Agreement..................... Section 5.3
Constituent Corporations...................... Preamble
Conversion Number............................. Section 5.7(a)
D&O Insurance................................. Section 5.12(b)
DGCL.......................................... Section 1.1
Effective Time................................ Section 1.2
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Environmental Law.................................... Section 3.23(a)(ii)
Environmental Permit................................. Section 3.23(a)(iii)
ERISA................................................ Section 3.12(a)
ERISA Affiliate...................................... Section 3.12(c)
Exchange Act......................................... Section 2.3
Exchange Agent....................................... Section 1.6(a)
Exchange Fund........................................ Section 1.6(a)
FDA.................................................. Section 3.8
Gains Taxes.......................................... Section 5.10
Governmental Entity.................................. Section 2.3
Hazardous Substances................................. Section 3.23(a)(i)
HSR Act.............................................. Section 2.3
IRS.................................................. Section 3.9
Knowledge of the Company............................. Section 3.8
Liens................................................ Section 3.28
Material Adverse Effect.............................. Section 2.1, 3.1
Merger............................................... Recitals
Merger Consideration................................. Section 1.5(c)
NYSE................................................. Section 1.5(c)
Parent............................................... Preamble
Parent Letter........................................ Section 2.3
Parent SEC Documents................................. Section 2.5
Post Signing Material Adverse Change................. Section 6.3(e)
Proxy Statement...................................... Section 2.6
Real Estate.......................................... Section 3.28(b)
Registration Statement............................... Section 2.2
reorganization....................................... Recitals
Rule 145 Affiliates.................................. Section 5.4
SEC.................................................. Section 2.2
Securities Act....................................... Section 2.2
Adviser Agreement.................................... Recitals
Shareholder Meeting.................................. Section 5.1
Significant Contracts................................ Section 3.11(b)
SSA.................................................. Section 3.8
State Takeover Approvals............................. Section 2.3
Stock Option Agreement............................... Recitals
Sub.................................................. Preamble
Subsidiary........................................... Section 8.3(b)
Substitute Option.................................... Section 5.7(a)
Superior Proposal.................................... Section 4.2(a)
Surviving Corporation................................ Section 1.1
Takeover Proposal.................................... Section 4.2(a)
Tax Return........................................... Section 3.9
Taxes................................................ Section 3.9
Termination Fee...................................... Section 5.6(c)(ii)
Third Party Acquisition Event........................ Section 5.6(c)(ii)
Valuation Period..................................... Section 1.5(c)
Worker Safety Laws................................... Section 3.13
Year 2000 Compliant.................................. Section 3.30
54
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
GENERAL ELECTIC COMPANY,
a New York Corporation
By:_____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
RUBY MERGER CORP.
a Delaware Corporation
By:_____________________________
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
OEC MEDICAL SYSTEMS, INC.
a Delaware Corporation
By:_____________________________
Name:
Title:
55