AGREEMENT AND PLAN OF MERGER
dated JUNE 8, 1999
among
EM LABORATORIES, INCORPORATED,
EM SUBSIDIARY, INC.
and
VWR SCIENTIFIC PRODUCTS CORPORATION
ARTICLE I - THE OFFER 2
Section 1.1. The Offer 2
Section 1.2. Company Actions 3
Section 1.3. Standstill Agreement 5
ARTICLE II - THE MERGER 5
Section 2.1. The Merger 5
Section 2.2. Effective Time; Closing 5
Section 2.3. Effects of the Merger 5
Section 2.4. Articles of Incorporation and By-laws;
Officers and Directors 5
ARTICLE III - EFFECT OF THE MERGER ON THE
STOCK OF THE CONSTITUENT
CORPORATIONS; SURRENDER OF
CERTIFICATES 6
Section 3.1. Effect on Stock. 6
Section 3.2. Surrender of Certificates 6
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY 8
Section 4.1. Organization 8
Section 4.2. Subsidiaries 9
Section 4.3. Capital Structure 9
Section 4.4. Authorization; Binding Agreement 10
Section 4.5. Consents and Approvals; No Violations 10
Section 4.6. SEC Documents and Other Reports 10
Section 4.7. Absence of Materially Adverse Change 11
Section 4.8. Information Supplied 11
Section 4.9. Compliance with Laws 12
Section 4.10. Permits. 12
Section 4.11. Contracts. 12
Section 4.12. Taxes and Tax Returns 12
Section 4.13. Litigation and Liabilities 14
Section 4.14. Employee Benefit Plans 14
Section 4.15. Environmental Matters 16
Section 4.16. Charter Provisions 18
Section 4.17. Intellectual Property 18
Section 4.18. Labor Relations. 18
Section 4.19. Insurance. 19
Section 4.20. Finders and Investment Bankers 19
Section 4.21. Contracts; Indebtedness 19
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB 19
Section 5.1. Organization 19
Section 5.2. Authority 19
Section 5.3. Consents and Approvals; No Violations 20
Section 5.4. Information Supplied 20
Section 5.5. Interim Operations of Sub 21
Section 5.6. Finders and Investment Bankers 21
Section 5.7. Financing 21
ARTICLE VI - COVENANTS RELATING TO CONDUCT
OF BUSINESS 21
Section 6.1. Conduct of Business by the Company
Pending the Merger 21
Section 6.2. No Solicitation 23
Section 6.3. Disclosure to Parent; Delivery of Certain
Filings 24
ARTICLE VII - ADDITIONAL AGREEMENTS 24
Section 7.1. Shareholder Approval; Preparation of
Proxy Statement 24
Section 7.2. Access to Information 25
Section 7.3. Expenses 26
Section 7.4. Public Announcements 26
Section 7.5. State Takeover Laws 26
Section 7.6. Indemnification, Exculpation and
Insurance 26
Section 7.7. Notification of Certain Matters 27
Section 7.8. Board of Directors 27
Section 7.9. Additional Agreements 28
Section 7.10. Certain Litigation 29
Section 7.11. Severance Payments 29
ARTICLE VIII - CONDITIONS PRECEDENT 29
Section 8.1. Conditions to Each Party's Obligation to
Effect the Merger 29
Section 8.2. Conditions of Obligations of Parent and
Sub. 30
ARTICLE IX - TERMINATION AND AMENDMENT 30
Section 9.1. Termination 30
Section 9.2. Effect of Termination and Abandonment 31
Section 9.3. Amendment 32
Section 9.4. Waiver 32
ARTICLE X - GENERAL PROVISIONS 32
Section 10.1. Non-Survival of Representations and
Warranties and Agreements 32
Section 10.2. Notices 32
Section 10.3. Interpretation; Definitions. 33
Section 10.4. Counterparts 37
Section 10.5. Entire Agreement; No Third-Party
Beneficiaries 38
Section 10.6. Governing Law 38
Section 10.7. Assignment 38
Section 10.8. Severability 38
Section 10.9. Enforcement of this Agreement 38
Section 10.10. Obligations of Subsidiaries 38
Section 10.11. Merger of the Company into Sub 38
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER,
dated June 8, 1999 (this "Agreement") among EM
LABORATORIES, INCORPORATED, a New York
corporation ("Parent"), EM SUBSIDIARY, INC., a
Pennsylvania corporation and a wholly-owned subsidiary of
Parent ("Sub"), and VWR SCIENTIFIC PRODUCTS
CORPORATION, a Pennsylvania corporation (the "Company")
(Sub and the Company being hereinafter collectively referred to
as the "Constituent Corporations"). Except as otherwise set
forth herein, capitalized (and certain other) terms used herein
shall have the meanings set forth in Section 10.3.
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors
of Parent, Sub and the Company have approved the acquisition
of the Company by Parent on the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition,
Parent proposes to cause Sub to make a cash tender offer (as it
may be amended from time to time as permitted under this
Agreement, the "Offer") to acquire all of the issued and
outstanding shares of Common Stock, par value $1.00, of the
Company (the "Shares") (other than Shares owned by Parent or
any Affiliate thereof and excluding Shares owned by the
Company or by any Subsidiary of the Company) at a purchase
price of $37.00 per Share (such purchase price being referred to
as the "Offer Price"), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in
this Agreement; and the Unaffiliated Directors have
unanimously adopted resolutions approving the Offer, this
Agreement and the Merger and recommending that the
Company's shareholders accept the Offer and adopt this
Agreement;
WHEREAS, the respective Boards of Directors
of Sub and the Company have each approved the merger of Sub
with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in this Agreement, whereby
each of the Shares, other than Shares owned directly or
indirectly by Parent, Sub or the Company and Dissenting Shares,
will be converted into the right to receive the price per Share
paid in the Offer;
WHEREAS, the Unaffiliated Directors have
unanimously approved the terms of the Shareholders Agreement
(the "Shareholders Agreement") to be entered into by Parent,
Sub and certain holders of Shares, pursuant to which such
holders have, among other things, agreed to vote such shares in
favor of the Merger and tender such shares pursuant to the Offer;
and
WHEREAS, Parent, Sub and the Company desire
to make certain representations, warranties, covenants and
agreements in connection with the Offer and the Merger and
also to prescribe various conditions to the Offer and the Merger.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, Parent, Sub
and the Company hereby agree as follows:
ARTICLE I - THE OFFER TC
Section 1.1. The Offer TC .
(a) Provided that this Agreement shall not have
been terminated in accordance with Section 9.1, and subject to
the provisions of this Agreement, as promptly as practicable but
in no event later than five business days after the date of the
public announcement by Parent and the Company of this
Agreement, Sub shall, and Parent shall cause Sub to, commence
the Offer. The offer to purchase which is sent to the Company's
shareholders in connection with the Offer shall provide for an
initial expiration date for the Offer (the "Expiration Date" XE
"Expiration Date" ") of 20 business days (as defined in Rule
14d-1 under the Exchange Act) from the date of commencement
of the Offer. The obligation of Sub to, and of Parent to cause
Sub to, commence the Offer and accept for payment, and pay
for, any Shares tendered pursuant to the Offer shall be subject
only to the conditions set forth in Exhibit A (the "Offer
Conditions") (all of which are for the benefit of, and may be
asserted by Sub regardless of the circumstances giving rise to
any such condition and any of which may be waived in whole or
in part by Sub in its sole discretion, provided that, without the
prior written consent of the Company, Sub shall not waive the
Minimum Condition (as defined in Exhibit A)). Sub expressly
reserves the right to modify the terms of the Offer, except that,
without the prior written consent of the Company, Sub shall not
(i) reduce the number of Shares to be purchased in the Offer, (ii)
reduce the Offer Price, (iii) impose any conditions to the Offer
in addition to the Offer Conditions or modify the Offer
Conditions (other than to waive any Offer Conditions to the
extent not prohibited by this Agreement), (iv) except as provided
in the next sentence, extend the Offer, (v) change the form of
consideration payable in the Offer or (vi) make any other change
or modification in any of the terms of the Offer in any manner
that is adverse to the holders of Shares. Notwithstanding the
foregoing, Sub may, without the consent of the Company, (i)
extend the Offer, if at the Expiration Date or extended expiration
date of the Offer any of the Offer Conditions shall not be
satisfied or waived, until such time as such conditions are
satisfied or waived, (ii) extend the Offer for any period required
by any rule, regulation, interpretation or position of the SEC or
the staff thereof applicable to the Offer and (iii) on one or more
occasions, extend the Offer for a period of up to an aggregate of
15 business days if, on a scheduled expiration date on which the
Offer Conditions shall have been satisfied or waived, the
number of Shares that have been validly tendered and not
withdrawn pursuant to the Offer, when taken together with the
Shares owned by Parent, Sub or an Affiliate thereof do not
constitute at least 80% of the then issued and outstanding
Shares. Parent and Sub agree that Sub shall not terminate the
Offer between scheduled expiration dates (except in the event
that this Agreement is terminated pursuant to Section 9.1) and
that, in the event that Sub would otherwise be entitled to
terminate the Offer at any scheduled expiration date thereof due
to the failure of one or more of the Offer Conditions, unless this
Agreement shall have been terminated pursuant to Section 9.1,
Sub shall, and Parent shall cause Sub to, extend the Offer until
such date as the Offer Conditions have been satisfied or such
later date as required by applicable law; provided, however, that
nothing herein shall require Sub to extend the Offer beyond the
Outside Date; provided, further, that neither Parent nor Sub shall
be obligated to make any such extension if, in the reasonable
belief of Parent or Sub, as applicable, all Offer Conditions are
not capable of being satisfied prior to the Outside Date. Subject
to the terms and conditions of the Offer and this Agreement, Sub
shall, and Parent shall cause Sub to, accept for payment and pay
for, all Shares validly tendered and not withdrawn pursuant to
the Offer that Sub is permitted to accept for payment and pay for
under applicable law, as soon as practicable (and, in any event,
within three business days after the later of the expiration of the
Offer and the receipt by the depository for the Offer of the
certificates representing such tendered Shares). If this
Agreement is terminated pursuant to Section 9.1(d), Parent or
Sub shall terminate the Offer. Sub may, at any time, transfer or
assign to one or more corporations directly or indirectly wholly-
owned by Parent the right to purchase all or any portion of the
Shares tendered pursuant to the Offer, but any such transfer or
assignment shall not relieve Sub of its obligations under the
Offer or prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment.
(b) On the date of commencement of the Offer,
Parent and Sub shall file with the SEC (i) a Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") and (ii) a
Rule 13e-3 Transaction Statement on Schedule 13E-3 (the
"Schedule 13E-3") with respect to the Offer, which shall contain
an offer to purchase and a related letter of transmittal and
summary advertisement (such Schedule 14D-1 and Schedule
13E-3 and the documents included therein pursuant to which the
Offer shall be made, together with any supplements or
amendments thereto, the "Offer Documents"), and Parent and
Sub shall cause the Offer Documents to be disseminated to
holders of Shares as and to the extent required by applicable
federal securities laws. Parent, Sub and the Company each
agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any
material respect, and Parent and Sub further agree to take all
steps necessary to cause the Schedule 14D-1 and the Schedule
13E-3 as so corrected to be filed with the SEC and the other
Offer Documents as so corrected to be disseminated to holders
of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel
shall be given reasonable opportunity to review and comment
upon the Offer Documents prior to their filing with the SEC or
dissemination to the Company's shareholders. Parent and Sub
agree to provide the Company and its counsel any comments
Parent, Sub or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after the
receipt of such comments and to cooperate with the Company
and its counsel in responding to such comments.
(c) Parent shall provide or cause to be provided
to Sub on a timely basis all funds necessary to accept for
payment, and pay for, any Shares that are validly tendered and
not withdrawn pursuant to the Offer and that Sub is permitted to
accept for payment under applicable law and pay for, pursuant to
the Offer.
Section 1.2. Company Actions TC .
(a) The Company hereby approves of and
consents to the Offer and represents and warrants that the Board
of Directors of the Company, at a meeting duly called and held,
duly adopted (by unanimous vote, with the Affiliated Directors
(as defined in the Standstill Agreement) not participating)
resolutions approving the Offer, this Agreement, the Merger and
the Shareholders Agreement, determining that the Offer and the
Merger are fair to, and in the best interests of, the Company's
shareholders and recommending that the Company's
shareholders accept the Offer and approve and adopt this
Agreement and the Merger. Simultaneously with the execution
of this Agreement, each of the Unaffiliated Directors of the
Company has indicated to the Company that he intends to tender
and sell his Shares in response to the Offer, except that
Unaffiliated Directors whose sales of their Shares in response to
the Offer might result in liability under Section 16(b) of the
Exchange Act intend that if they do not tender and sell their
Shares in response to the Offer, they shall vote their Shares in
favor of the Merger. The Company represents and warrants that
its Board of Directors has received the opinion of each of BT
Alex. ▇▇▇▇▇ Incorporated ("BT Alex. ▇▇▇▇▇") and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ Read LLC ("Warburg Dillon Read") to the effect that, as
of the date of this Agreement, the cash consideration to be
received in the Offer and the Merger by holders of Shares (other
than Parent and Affiliates thereof) is fair to such holders from a
financial point of view. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the
Company's Board of Directors described in this Section 1.2.
(b) On the date the Offer Documents are filed
with the SEC, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the Offer (such Schedule 14D-9, as amended
from time to time, the "Schedule 14D-9") containing the
recommendation described in Section 1.2(a) and shall cause the
Schedule 14D-9 to be disseminated to the Company's
shareholders as and to the extent required by applicable federal
securities laws. Each of the Company, Parent and Sub agrees
promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall
have become false or misleading in any material respect, and the
Company further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the Schedule 14D-
9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company's shareholders, in each case as and
to the extent required by applicable federal securities laws.
Parent and its counsel shall be given reasonable opportunity to
review and comment upon the Schedule 14D-9 prior to its filing
with the SEC or dissemination to the Company's shareholders.
The Company agrees to provide Parent and its counsel any
comments the Company or its counsel may receive from the
SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and to cooperate with Parent,
Sub and their counsel in responding to such comments.
(c) In connection with the Offer and the Merger,
the Company shall cause its transfer agent to furnish Sub
promptly with mailing labels containing the names and
addresses of the record holders of Shares as of a recent date and
of those Persons becoming record holders subsequent to such
date, together with copies of all lists of shareholders, security
position listings and computer files and all other information in
the Company's possession or control regarding the beneficial
owners of Shares, and shall furnish to Sub such information and
assistance (including updated lists of shareholders, security
position listings and computer files) as Parent or Sub may
reasonably request in communicating the Offer to the record and
beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents
necessary to consummate the Merger, Parent and Sub and their
Affiliates, associates and agents shall hold in confidence the
information contained in any such labels, listings and files, shall
use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, shall
promptly, upon request, deliver, and shall use reasonable efforts
to cause their Affiliates, associates and agents to deliver, to the
Company all copies of such information then in their possession
or control.
Section 1.3. Standstill Agreement TC .
Effective upon the acquisition of Shares pursuant to the Offer,
the Standstill Agreement shall terminate in its entirety.
ARTICLE II - THE MERGER TC
Section 2.1. The Merger TC . Upon the
terms and subject to the conditions hereof, and in accordance
with the PBCL, Sub shall be merged with and into the Company
at the Effective Time. Following the Effective Time, 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 assume all the rights and
obligations of Sub and the Company in accordance with the
PBCL.
Section 2.2. Effective Time; Closing TC .
As promptly as practicable after the satisfaction or, if
permissible, waiver of the conditions set forth in Article VIII,
the parties hereto shall cause the Merger to be consummated by
delivering to the Secretary of State of the Commonwealth of
Pennsylvania the articles of merger, in such form as required by,
and executed and acknowledged in accordance with, the relevant
provisions of the PBCL (the "Articles of Merger"), and shall
make all other filings and recordings required by the PBCL in
connection with the Merger. The Merger shall become effective
at the time of filing of the Articles of Merger with the Secretary
of State of the Commonwealth of Pennsylvania, or at such later
time, which shall be as soon as reasonably practicable, specified
as the effective time in the Articles of Merger (the "Effective
Time"). Prior to such filing, a closing shall be held at the offices
of ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇, or such other place as the parties shall agree,
for the purpose of confirming the satisfaction or waiver, as the
case may be, of the conditions set forth in Article VIII.
Section 2.3. Effects of the Merger TC . The
Merger shall have the effects set forth in Section 1929 of the
PBCL.
Section 2.4. Articles of Incorporation and By-
laws; Officers and Directors TC .
(a) The Articles of Incorporation of the
Company, as in effect immediately prior to the Effective Time,
shall be the Articles of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided
therein or by applicable law.
(b) The By-laws of the Company shall be
amended as of the Effective Time to read in their entirety as the
By-laws of Sub, as in effect immediately prior to the Effective
Time, until thereafter changed or amended as provided, therein,
by the Articles of Incorporation of the Surviving Corporation or
by applicable law.
(c) The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving
Corporation, until the next annual meeting of shareholders of the
Surviving Corporation (or the earlier of their resignation or
removal) and until their respective successors are duly elected
and qualified, as the case may be.
(d) The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal and
until their respective successors are duly elected and qualified,
as the case may be.
ARTICLE III - EFFECT OF THE MERGER ON THE STOCK
OF THE
CONSTITUENT CORPORATIONS; SURRENDER OF
CERTIFICATES TC
Section 3.1. Effect on Stock. TC As of the
Effective Time, by virtue of the Merger and without any action
on the part of any of Sub, the Company or the holders of any
securities of the Constituent Corporations and in accordance
with Section 1906 of the PBCL:
(a) Capital Stock of Sub. Each issued and
outstanding share of capital stock of Sub shall be
converted into and become one validly issued, fully paid
and nonassessable share of common stock, $1.00 par
value, of the Surviving Corporation.
(b) Treasury Stock and Parent Owned Stock.
Each Share that is owned by the Company or by any
Subsidiary of the Company and each Share that is owned
by Parent, Sub or any other Subsidiary of Parent shall
automatically be cancelled and retired and shall cease to
exist, and no consideration shall be delivered in
exchange therefor.
(c) Conversion of Shares. Subject to Section
3.1(d), each Share issued and outstanding (other than
Shares to be cancelled in accordance with Section
3.1(b)), shall be cancelled and be converted into the right
to receive from the Surviving Corporation in cash,
without interest or dividends, the price per Share paid in
the Offer (the "Merger Consideration"). As of the
Effective Time, all such Shares shall be cancelled, and
when so cancelled, shall no longer be outstanding and
shall automatically be retired and shall cease to exist, and
each holder of a certificate representing any such Shares
shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration for each
such Share, without interest or dividends.
(d) Shares of Dissenting Shareholders.
Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding Shares held by a
Person (a "Dissenting Shareholder") who has not voted
in favor of or consented to the Merger and complies in
all respects with Sections 1930 and 1575 through 1580 of
the PBCL concerning the right of holders of Shares to
require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 3.1(c), but
shall become the right to receive payment of the fair
value of such Shares in accordance with Sections 1930
and 1575 through 1580 of the PBCL. If, after the
Effective Time, a holder of Dissenting Shares withdraws
his demand for appraisal or fails to perfect or otherwise
loses his right of appraisal, in any case pursuant to the
PBCL, his Shares shall be deemed to be converted as of
the Effective Time into the right to receive the Merger
Consideration for each such Share, without interest or
dividends. The Company shall give Parent prompt
notice of any demands for appraisal of Shares received
by the Company. The Company shall not, without the
prior written consent of Parent, make any payment with
respect to, or settle or offer to settle, any such demands.
Section 3.2. Surrender of Certificates TC .
(a) Paying Agent. Prior to the Effective Time,
Parent shall designate a bank or trust company who shall be
reasonably satisfactory to the Company to act as paying agent in
the Merger (the "Paying Agent"), and from time to time, on,
prior to or after the Effective Time, Parent shall make available,
or cause the Surviving Corporation to make available, to the
Paying Agent cash in the amounts necessary for the payment of
the Merger Consideration as provided in Section 3.1 upon
surrender as part of the Merger of certificates formerly
representing Shares. Funds made available to the Paying Agent
shall be invested by the Paying Agent as directed by Parent (it
being understood that any and all interest or income earned on
funds made available to the Paying Agent pursuant to this
Agreement shall be turned over to Parent).
(b) Exchange Procedure. As soon as reasonably
practicable after the Effective Time, the Surviving Corporation
shall cause the Paying Agent to mail to each holder of record of
a certificate or certificates that immediately prior to the Effective
Time represented Shares (the "Certificates"), (i) a letter of
transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in a
form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration as
provided in Section 3.1. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents
as may be appointed by Parent, together with such letter of
transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the
amount of cash, without interest or dividends, into which the
Shares theretofore represented by such Certificate shall have
been converted pursuant to Section 3.1, and the Certificate so
surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a
Person other than the Person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the
Person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a Person other than
the registered holder of such Certificate or establish to the
satisfaction of the Surviving Corporation that such tax has been
paid or is not applicable. Until surrendered as contemplated by
this Section 3.2, each Certificate (other than Certificates
representing Dissenting Shares) shall be deemed at any time
after the Effective Time to represent only the right to receive
upon such surrender the amount of cash, without interest or
dividends, into which the Shares of stock theretofore represented
by such Certificate shall have been converted pursuant to
Section 3.1. No interest shall be paid or shall accrue on the cash
payable upon the surrender of any Certificate. Parent or the
Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts as Parent or the Paying
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 Paying Agent, such withheld
amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect of which
such deduction and withholding was made by the Parent or the
Paying Agent.
(c) No Further Ownership Rights in Shares. All
cash paid upon the surrender of Certificates in accordance with
the terms of this Article III shall be deemed to have been paid in
full satisfaction of all rights pertaining to the Shares theretofore
represented by such Certificates. At the Effective Time, the
stock transfer books of the Company shall be closed, and there
shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of the Shares that were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving
Corporation or the Paying Agent for any reason, they shall be
cancelled and exchanged as provided in this Article III.
(d) Termination of Payment Fund. Any portion
of the funds made available to the Paying Agent to pay the
Merger Consideration which remains undistributed to the
holders of Shares for six months after the Effective Time shall
be delivered to Parent, upon demand, and any holders of Shares
who have not theretofore complied with this Article III and the
instructions set forth in the letter of transmittal mailed to such
holders after the Effective Time shall thereafter look only to the
Surviving Corporation (subject to abandoned property, escheat
or other similar laws) for payment of the Merger Consideration
to which they are entitled, without interest or dividends.
(e) No Liability. None of Parent, Sub, the
Company or the Paying Agent shall be liable to any Person in
respect of any cash delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(f) Company Options. The Company hereby
represents and warrants that either (i) all outstanding options to
purchase Shares (the "Company Options" XE "Company
Options" ") granted under the Company's 1986 Long Term
Incentive Stock Plan and the 1995 Stock Incentive Plan (the
"Company Option Plans"), whether or not then exercisable or
vested, shall, pursuant to the terms of the Company Option
Plans, be cancelled as of the consummation of the Offer and the
holders thereof shall be entitled to receive from Parent upon
consummation of the Offer, in respect of each Share subject to
such Company Option, an amount in cash equal to the excess, if
any, of the Merger Consideration over the exercise price per
share thereof (such payment to be net of applicable withholding
taxes) or (ii) the Company shall take all such steps as shall be
necessary to achieve substantially the same result as described in
clause (i) of this paragraph (f).
(g) Company Option Plans. The Company
hereby represents and warrants that all Company Option Plans
provide, or have been or will be amended as and when required
to provide for the actions described in Section 3.2(f) hereof. The
Company shall cause the Company Option Plans to terminate as
of the Effective Time.
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY TC
In addition to the representations and warranties
of the Company in Sections 1.2 and 3.2(f) and (g) hereof, the
Company represents and warrants to Parent and Sub as follows:
Section 4.1. Organization TC . The
Company and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has requisite corporate
power and authority to carry on its business as now being
conducted. The Company and each of its Subsidiaries is duly
qualified or licensed to do business and in good standing in each
jurisdiction in which the nature of its business or the ownership
or leasing of its properties makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not
reasonably be expected to have a Materially Adverse Effect on
the Company or prevent or materially delay the consummation
of the Offer and/or the Merger. The Company has delivered to
Parent complete and correct copies of its Articles of
Incorporation and By-laws and has made available to Parent the
Articles of Incorporation and By-laws (or similar organizational
documents) of each of its Subsidiaries.
Section 4.2. Subsidiaries TC . Exhibit A of
the Company Letter lists each Subsidiary of the Company. All
of the outstanding shares of capital stock of each Subsidiary that
is a corporation have been validly issued and are fully paid and
nonassessable. Except as set forth in Item 4.2 of the Company
Letter, all of the outstanding shares of capital stock of each
Subsidiary of the Company are owned by the Company, free and
clear of all Liens. Except as set forth in Item 4.2 of the Company
Letter and except for the capital stock of its Subsidiaries, the
Company does not own, directly or indirectly, any material
capital stock or other ownership interest in any corporation,
partnership, joint venture, limited liability company or other
entity.
Section 4.3. Capital Structure TC . The
authorized capital stock of the Company consists of 25,000,000
shares of Preferred Stock, $1.00 par value (the "Preferred
Stock") and 120,000,000 shares of Common Stock, par value
$1.00. At the close of business on March 31, 1999, (i) no shares
of Preferred Stock were outstanding, (ii) 28,962,527 shares of
Common Stock were issued and outstanding, (iii) 4,978 shares
of Common Stock were held by the Company in treasury and
(iv) 2,396,184 shares of Common Stock were reserved for
issuance pursuant to outstanding Company Options or other
rights to purchase Shares under the Company Option Plans, the
Company's Employee Stock Ownership Plan and the
Company's Executive Bonus Plan. Except (i) as set forth above
and (ii) as provided in the Standstill Agreement, as of the date
hereof, there are no outstanding (A) shares of capital stock or
other voting securities of the Company, (B) securities of the
Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company, (C) options or other
rights to acquire from the Company, or other obligations,
arrangements or commitments of the Company to issue, any
capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the
Company or (D) equity equivalents, stock appreciation rights,
phantom stock, interests in the ownership or earnings of the
Company or other similar rights (collectively, "Company
Securities"). Each outstanding Share is, and each Share which
may be issued pursuant to the Company Option Plans and the
other agreements and instruments listed above will be, when
issued, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no
outstanding bonds, debentures, notes or other indebtedness of
the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any
matter on which the Company's shareholders may vote. Except
as set forth above or in Item 4.3 of the Company Letter, there are
no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind 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 create, or cause to be
issued, delivered or sold or created, additional shares of capital
stock or other voting securities or equity equivalents of the
Company or of any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking.
There are no outstanding contractual obligations
of the Company or any of its Subsidiaries to repurchase, redeem
or otherwise acquire any Company Securities, or any shares of
capital stock of any Subsidiaries of the Company.
Section 4.4. Authorization; Binding
Agreement TC . The Company has all requisite corporate
power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the consummation of the
transactions contemplated hereby, including, but not limited to,
the Offer and the Merger, have been duly and validly authorized
by the Company's Board of Directors and no other corporate
proceedings on the part of the Company or any of its
Subsidiaries are necessary to authorize the execution and
delivery of this Agreement or to consummate the transactions
contemplated hereby (other than the adoption of this Agreement
by the shareholders of the Company to the extent required by the
PBCL). This Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of
equity regarding the availability of remedies. The Board of
Directors of the Company has approved this Agreement, the
Shareholder Agreement and the transactions contemplated
hereby and thereby (including but not limited to the Offer, the
Merger and the matters provided for in the Shareholder
Agreement) so as to render inapplicable hereto and thereto the
limitation on business combinations contained in Chapter 25 of
the PBCL (or any similar provision). As a result, the only vote
of holders of any class or series of the Company's capital stock
required to adopt this Agreement and the transactions
contemplated hereby, including the Merger, is the affirmative
vote of a majority of the outstanding Shares, and if Section
1924(b)(1)(ii) of the PBCL is applicable to the Merger, no such
vote shall be required. No other state takeover or control share
statute or similar statute or regulation applies or purports to
apply to the Offer, the Merger, the Shareholder Agreement or
any of the transactions contemplated hereby or thereby.
Section 4.5. Consents and Approvals; No
Violations TC . Except as set forth in Item 4.5 of the
Company Letter, except for filings, permits, authorizations,
consents and approvals as may be required under, and other
applicable requirements of, the Exchange Act, the HSR Act, the
PBCL, state takeover laws and foreign and supranational laws
relating to antitrust and anticompetition clearances, neither the
execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the
transactions contemplated hereby nor the consummation of the
transactions contemplated by the Shareholders Agreement by the
parties thereto will (i) conflict with or result in any breach of any
provision of the Articles of Incorporation or By-laws of the
Company or of the similar organizational documents of any of
its Subsidiaries, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity
or other Person, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the material terms,
conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets
may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets.
Section 4.6. SEC Documents and Other
Reports TC . The Company has filed with the SEC all
documents required to be filed by it since August 31, 1995 under
the Securities Act or the Exchange Act (the "Company SEC
Documents"). As of their respective filing 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, each as in effect on the date so filed, and at the
time filed with the SEC none of the Company SEC Documents,
including the financial statements of the Company and the notes
thereto, 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 financial statements of the Company (including the notes
thereto) included in the Company SEC Documents comply as of
their respective dates as to form in all material respects with the
then applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting
principles (except in the case of the unaudited statements, as
permitted by Form 10-Q under the Exchange Act) applied on a
consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly present the
consolidated financial position of the Company and its
consolidated Subsidiaries as at the 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 none of which were
or will be material in amount or effect). The Company has
heretofore furnished or made available to Parent a complete and
correct copy of any amendments or modifications which have
not yet been filed with the SEC to executed agreements,
documents or other instruments which previously had been filed
by the Company with the SEC pursuant to the Securities Act or
the Exchange Act. No Subsidiary is required to file any form,
report or other document with the SEC.
Section 4.7. Absence of Materially Adverse
Change TC . Except as disclosed in Item 4.7 of the Company
Letter, since December 31, 1998, the Company and its
Subsidiaries have conducted their respective businesses in all
material respects only in the ordinary course, and there has not
been (i) any Materially Adverse Change with respect to the
Company, (ii) any declaration, setting aside or payment of any
dividend or other distribution with respect to its capital stock or
any redemption, purchase or other acquisition of any of its
capital stock, (iii) any split, combination or reclassification of
any of its capital stock or any issuance or the authorization of
any issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (iv) any change in
accounting methods, principles or practices by the Company
materially affecting its assets, liabilities, business or results of
operations, (v) any grant by the Company or its Subsidiaries to
any officer of the Company or its Subsidiaries of any increase in
compensation, except as was required under employment
agreements in effect as of December 31, 1998 or as were made
in the ordinary course of business consistent with past practice,
(vi) any grant by the Company or its Subsidiaries to any such
officer of any increase in severance or termination pay, except as
part of a standard employment package to any person promoted
or hired, or as was required under employment, severance or
termination agreements in effect as of December 31, 1998, (vii)
any revaluation by the Company of any of its material assets or
(viii) any other action or omission of the type described in
subparagraphs (a), (b), (c), (e), (f), (g), (h), (j), (k), (l), (m), (n)
or (o) of Section 6.1.
Section 4.8. Information Supplied TC .
None of the information supplied or to be supplied by the
Company specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the
Offer pursuant to Rule 14f-1 promulgated under the Exchange
Act (the "Information Statement") or (iv) the proxy statement
(together with any amendments or supplements thereto, the
"Proxy Statement") relating to the Shareholders Meeting, will,
in the case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times the Offer
Documents, the Schedule 14D-9 and the Information Statement
are filed with the SEC or first published, sent or given to the
Company's shareholders, or, in the case of the Proxy Statement,
at the time the Proxy Statement is first mailed to the Company's
shareholders or at the time of the Shareholders Meeting, 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 or necessary to
correct any statement in any earlier communication with respect
to the solicitation of proxies for the Shareholders Meeting which
has become false or misleading. The Schedule 14D-9, the
Information Statement and the Proxy Statement will comply as
to form in all material respects with the requirements of the
Exchange Act, except that no representation or warranty is made
by the Company with respect to statements made or incorporated
by reference therein based on information supplied by Parent or
Sub specifically for inclusion or incorporation by reference
therein.
Section 4.9. Compliance with Laws TC .
Except as set forth in the Company SEC Documents, the
business and operations of the Company and each of its
Subsidiaries have been operated in compliance with all Laws
applicable thereto, except for any instances of non-compliance
which, individually or in the aggregate, have not had and would
not be reasonably likely in the future to have a Materially
Adverse Effect on the Company.
Section 4.10. Permits. TC (i) The Company
and its Subsidiaries have all material permits, certificates,
licenses, approvals and other authorizations required in
connection with the operation of their respective businesses
(collectively, "Company Permits" XE "Company Permits" ),
(ii) neither the Company nor any of its Subsidiaries is in
violation in any material respect of any Company Permit and
(iii) no proceedings are pending or, to the knowledge of the
Company, threatened, to revoke or limit any Company Permit.
Section 4.11. Contracts. TC Except as set
forth in Item 4.11 of the Company Letter, neither the Company
nor any of its Subsidiaries is a party or is subject to any note,
bond, mortgage, indenture, contract, lease, license, agreement or
instrument that is required to be described in or filed as an
exhibit to any Company SEC Document (collectively, the
"Company Material Contracts" XE "Company Material
Contract" ) which is not so described in or filed as required by
the Securities Act or the Exchange Act. All such Company
Material Contracts are valid and binding and are in full force and
effect and enforceable against the Company or such Subsidiary
and, to the knowledge of the Company, against the other parties
thereto in accordance with their respective terms, except to the
extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by
principles of equity regarding the availability of remedies.
Neither the Company nor any of its Subsidiaries is in violation
or breach of or default under any such Company Material
Contract.
Section 4.12. Taxes and Tax Returns TC .
Except as set forth in Item 4.12 of the Company Letter:
(a) The Company and each of its Subsidiaries
and any consolidated, combined, unitary or aggregate group for
tax purposes of which the Company or any of its Subsidiaries is
or has been a member has timely filed, or caused to be timely
filed all Tax Returns required to be filed by it, and has paid,
collected or withheld, or caused to be paid, collected or
withheld, all Taxes required to be paid, collected or withheld,
other than such Taxes for which adequate reserves in the
Company's financial statements have been established in
accordance with generally accepted accounting principles,
consistently applied, or which are being contested in good faith.
All such Tax Returns were true, correct and complete in all
material respects. None of the Tax Returns contains any position
which is or would be subject to penalties under Section 6662 of
the Code (or any corresponding provision of state, local or
foreign Tax law). There are no claims or assessments pending
against the Company or any of its Subsidiaries for any alleged
deficiency in any Tax, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the
Company or any of its Subsidiaries (other than in each case,
claims or assessments for which adequate reserves in the
Company's financial statements have been established or which
are being contested in good faith or are immaterial in amount).
Neither the Company nor any of its Subsidiaries has any waivers
or extensions of any applicable statute of limitations to assess
any Taxes. There are no outstanding requests by the Company
or any of its Subsidiaries for any extension of time within which
to file any Tax Return or within which to pay any material
amounts of Taxes shown to be due on any return. No claim has
been made in writing to the Company or to any of its
Subsidiaries in the past three years by an authority in a
jurisdiction where the Company or its Subsidiaries do not file
Tax Returns that it is or may be subject to taxation by that
jurisdiction, nor is there any meritorious basis for an
investigation or other proceeding that would result in such an
assessment. To the best knowledge of the Company, there are
no liens for Taxes on the assets of the Company or any of its
Subsidiaries except for statutory liens for current Taxes not yet
due and payable.
(b) Section 4.12 of the Company Letter sets forth
(1) the taxable years of the Company and its Subsidiaries as to
which the respective statutes of limitations have not expired, and
(2) with respect to such years, sets forth those years for which
examinations have been completed, those years for which
examinations are presently being conducted, those years for
which examinations have not been initiated, and those years for
which Tax Returns have not yet been filed.
(c) All material elections with respect to Tax
affecting the Company as of the date hereof are set forth in
Section 4.12(c) of the Company Letter.
(d) Neither the Company nor any of its
Subsidiaries has filed a consent under Section 341(f) of the Code
concerning collapsible corporations. Neither the Company nor
any of its Subsidiaries has made any payments, or is obligated to
make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments
that will not be deductible under Sections 162(m) or 280G of the
Code or any similar provision of foreign, state or local law.
Neither the Company nor any of its Subsidiaries is a party to or
bound by any tax indemnity, tax sharing or tax allocation
agreement or arrangement. Except for the group of which the
Company is presently the common parent, neither the Company
nor any of its Subsidiaries has ever been a member of an
affiliated group of corporations, within the meaning of Section
1504 of the Code.
(e) Neither the Company nor any of its
Subsidiaries has (i) a material amount of income reportable for a
period ending after the Effective Time, but attributable to a
transaction (e.g., an installment sale) occurring in or a change in
accounting method made for a period ending on or prior to the
Effective Time which resulted in a deferred reporting of income
from such transaction or from such change in accounting method
(other than a deferred intercompany transaction); or (ii) deferred
gain or loss arising out of any deferred intercompany
transaction. Neither the Company nor any of its Subsidiaries has
any excess loss account (as defined in Treasury Regulation
Section 1.1502-19) with respect to the stock of any of its
Subsidiaries. No "ownership change" (within the meaning of
Section 382(g) of the Code) has, to the Company's knowledge,
occurred prior to the date hereof which currently limits the
Company's ability to utilize any net operating loss carryovers
under Section 382 of the Code.
(f) For purposes of this Agreement, the term
"Tax" shall mean any federal, state, local, foreign or provincial
income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, alternative or added minimum,
ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty imposed
by any Governmental Entity. The term "Tax Return" shall mean
a report, return or other information (including any attached
schedules or any amendments to such report, return or other
information) required to be supplied to or filed with a
Governmental Entity with respect to any Tax, including an
information return, claim for refund, amended return or
declaration or estimated Tax.
Section 4.13. Litigation and Liabilities TC .
Except as disclosed in the Company SEC Documents and except
as set forth in Item 4.13 of the Company Letter or otherwise
disclosed in writing to Parent, (a) there is no suit, action,
arbitration, investigation, claim, proceeding or audit
("Litigation XE "Litigation" ") pending or, to the best
knowledge of the Company, threatened against the Company or
any of its Subsidiaries, nor is there any judgment, decree, writ,
award, injunction, rule or order of any Governmental Entity
outstanding against the Company or any of its Subsidiaries that
are reasonably likely, individually or in the aggregate, to have a
Materially Adverse Effect; (b) there are no obligations or
liabilities, contingent, absolute, determined, determinable or
otherwise, including, without limitation, those relating to
environmental and occupational safety and health matters, that
are reasonably likely, individually or in the aggregate, to have a
Materially Adverse Effect and (c) as of the date hereof, no facts
are known to the executive officers or directors of the Company
on the date hereof that could reasonably be expected to form the
basis for valid claims as to which rights to indemnification and
advancement of expenses to the executive officers or directors of
the Company or any Subsidiary would be applicable.
Section 4.14. Employee Benefit Plans TC .
(a) As used in this Agreement, "Benefit Plan"
shall mean any employee benefit plan, including, without
limitation, (i) any employee benefit plan as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974,
as amended, together with all regulations thereunder ("ERISA")
maintained or contributed to by the Company or any Subsidiary
during the three-year period preceding the date hereof, whether
or not such plan is subject to any or all of ERISA's provisions,
and (ii) whether or not described in the preceding clause, any
pension, profit sharing, severance, employment, change-in-
control, bonus, stock bonus, deferred or supplemental
compensation, retiree medical or life insurance, death benefit or
insurance, retirement, thrift, stock purchase or stock option plan
or any other compensation, welfare, fringe benefit, perquisite or
retirement plan, or other material program, policy or
arrangement of any kind or nature whatsoever, whether oral or
written, maintained or contributed to by the Company or any of
the Subsidiaries or otherwise providing for compensation,
benefits for or the welfare of any or all of the current or former
employees, directors, consultants or agents of the Company or
any of its Subsidiaries or their beneficiaries or dependents.
Except as set forth in Item 4.14 of the Company Letter, neither
the Company nor any of its Subsidiaries contributes to or has at
any time during the six-year period preceding the date of this
Agreement contributed to, or has any outstanding liability with
respect to, any Multiemployer Plan as defined in Section 3(37)
of ERISA.
(b) Except as set forth in Item 4.14 of the
Company Letter and except for such instances of non-
compliance with ERISA and the regulations promulgated
thereunder that, individually or in the aggregate, have not had
and would not be reasonably likely in the future to have a
Materially Adverse Effect on the Company: (i) each Benefit
Plan has been established and administered in accordance with
its terms and in compliance with applicable provisions of
ERISA, the Code and all other applicable laws, rules and
regulations; (ii) the Company has received no notice from any
Governmental Entity questioning or challenging such
compliance; (iii) each Benefit Plan which is intended to be tax-
qualified under Code Sections 401(a) and (k) (as applicable) is
so qualified in form and operation and has received a favorable
determination letter as to its qualification, and nothing has
occurred, whether by action or failure to act, that would cause
the loss of such qualification; (iv) no event has occurred and no
condition exists with respect to a Benefit Plan or other plan
(whether or not covering employees of the Company or any of
its Subsidiaries) that would subject the Company or any of its
Subsidiaries, either directly or by reason of their affiliation with
an ERISA Affiliate (as hereinafter defined) to any material tax,
fine, lien or penalty imposed by ERISA, the Code or other
applicable laws, rules and regulations; (v) for each Benefit Plan
with respect to which a Form 5500 has been filed, no material
change has occurred with respect to the matters covered by the
most recent Form 5500 since the date thereof; (vi) no
"reportable event" (as such term is defined in ERISA Section
4043) other than any event with respect to which reporting is
waived pursuant to the regulations under ERISA Section 4043,
"prohibited transactions" (as such term is defined in ERISA
Section 406 and Code Section 4975), "accumulated funding
deficiency" (as such term is defined in ERISA Section 302 and
Code Section 412 (whether or not waived)) or failure to make by
its due date a required installment under Code Section 412(m)
has occurred with respect to any Benefit Plan, or any other plan
maintained for employees of any ERISA Affiliate of the
Company or any of its Subsidiaries. "ERISA Affiliate," as
applied to any Person, means (i) any corporation which is a
member of a controlled group of corporations (within the
meaning of Code Section 414(b)) of which that Person is a
member, (ii) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under
common control (within the meaning of Code Section 414(c)) of
which that Person is a member and (iii) any member of an
affiliated service group (within the meaning of Code Section
414(m) and (o)) of which that Person, any corporation described
in clause (i) above or any trade or business described in clause
(ii) above is a member.
(c) With respect to any Benefit Plan, (i) no
actions, suits or claims (other than routine claims for benefits in
the ordinary course) are pending or, to the knowledge of the
Company, threatened and (ii) no facts or circumstances exist, to
the knowledge of the Company, that could reasonably be
expected to give rise to any such actions, suits or claims.
(d) Except as set forth in Item 4.14 of the
Company Letter, no Benefit Plan exists that could result in the
payment to any present or former employee, director, consultant
or agent of the Company or any of its Subsidiaries of any money
or other property, or accelerate or provide any other rights or
benefits, to any such Person as a result of the transactions
contemplated by this Agreement, whether or not such payment
would constitute a parachute payment within the meaning of
Code Section 280G, and no payment in respect of a Benefit Plan
would constitute an excess parachute payment under Code
Section 280G.
(e) With respect to each Benefit Plan, the
Company has made available to Parent a true and correct copy
of (i) the Benefit Plans and all amendments thereto, (ii) the most
recent annual report on Form 5500 filed with the IRS, (iii) each
trust agreement and group annuity contract, if any, and all
amendments thereto relating to such Benefit Plan, (iv) the most
recent actuarial report or valuation relating to any such Benefit
Plan subject to Title IV of ERISA, (v) the most recent IRS
determination letter with respect to any such Benefit Plan which
is intended to be "qualified" within the meaning of Section
401(a) of the Code and (vi) the most recent summary plan
descriptions.
(f) As of the date hereof, all material payments
required to be made by or under any Benefit Plan, any related
trusts, or any related collective bargaining agreement have been
made or are being processed in accordance with normal
operating procedures, and except as set forth in the Company's
financial statements, all material amounts required to be
reflected thereon have been properly accrued to date as liabilities
under or with respect to each Benefit Plan for the current year.
(g) Except as identified in Item 4.14 of the
Company Letter, no Benefit Plan is or has ever been subject to
Title IV of ERISA.
(h) Except as identified in Item 4.14 of the
Company Letter, neither the Company nor any of its
Subsidiaries has any post-retirement or similar obligations under
any employee welfare benefit plan (as such term is defined in
Section 3(1) of ERISA) or otherwise to provide health or death
benefits to or in respect of current or former employees,
directors, agents or consultants, except as specifically required
by the continuation requirements of Part 6 of Title I of ERISA.
Section 4.15. Environmental Matters TC .
(a) Except as set forth in Item 4.15 of the
Company Letter and except as, individually or in the aggregate,
have not had and are not reasonably likely in the future to have a
Materially Adverse Effect on the Company or prevent or
materially delay the consummation of the Offer or the Merger:
(i) the Company and its Subsidiaries
are, and within the period of all applicable
statutes of limitation have been, in material
compliance with all Environmental Laws (as
hereinafter defined);
(ii) the Company and its Subsidiaries
hold all Environmental Permits (as hereinafter
defined) (each of which is in full force and effect)
required for any of their current operations and
for any property owned, leased, or otherwise
operated by any of them (collectively, the
"Premises"), and are, and within the period of all
applicable statutes of limitation have been, in
material compliance with the terms of all such
Environmental Permits. No event has occurred
which, with the passage of time or the giving of
notice or both, would constitute material non-
compliance with Environmental Laws;
(iii) no review by, or approval of, any
Governmental Entity or other Person is required
under any Environmental Law in connection with
the execution or delivery of this Agreement or the
transfer of title to the Premises, if any,
contemplated in connection therewith;
(iv) neither the Company nor any of
its Subsidiaries has received any written notice of
an Environmental Claim (as hereinafter defined)
that remains unresolved and, to the knowledge of
the Company, no such Environmental Claims are
currently pending or threatened;
(v) to the knowledge of the
Company neither the Company nor any of its
Subsidiaries has reason to believe that any
Hazardous Materials presently on the Premises or
on any other property are reasonably likely to
form the basis of any Environmental Claim
against any of them; and
(vi) the Company is involved in
various environmental, contractual, warranty and
public liability cases and claims that are
considered routine to the Company's business
and, in the opinion of the Company's
management, the potential financial impact of
these matters is not material to the business,
properties, assets, prospects, operations or
condition (financial or otherwise) of the
Company and its Subsidiaries.
(b) For purposes of this Agreement, the terms
below shall have the following meanings:
"Environmental Claim" XE "Environmental
Claim" means any claim, demand, action, suit, complaint,
proceeding, directive, investigation, lien, demand letter, or
notice of alleged noncompliance, violation or liability, by any
Person or entity asserting liability or potential liability
(including without limitation, liability or potential liability for
enforcement, investigatory costs, remediation costs, operation
and maintenance costs, governmental response costs, natural
resource damages, property damage, personal injury, fines or
penalties), regardless of legal theory, arising out of, based on or
resulting from (i) the presence, discharge, emission, release or
threatened release of any Hazardous Materials at any location
including, without limitation, the Premises, or (ii) the condition
of the Premises or the present use thereof, or (iii) otherwise
relating to obligations or liabilities under any Environmental
Law.
"Environmental Laws" XE "Environmental
Laws" means any and all laws, rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees or other legally
enforceable requirement (including, without limitation, common
law) of any foreign government, the United States or any
Governmental Entity regulating, relating to or imposing liability
or standards of conduct concerning protection of human health
or the environment, including, without limitation, ambient air,
surface waters, ground waters, lands, sub-surface strata, biota
and cultural properties.
"Environmental Permit" XE "Environmental
Permit" means all permits, licenses, registrations, approvals,
exemptions and other filings with or authorizations by any
Governmental Entity under any Environmental Law.
"Hazardous Materials" XE "Hazardous
Materials" means all hazardous or toxic substances, wastes,
materials or chemicals, petroleum (including crude oil or any
fraction thereof), petroleum products, asbestos, asbestos-
containing materials, pollutants and contaminants that are
regulated pursuant to any Environmental Laws.
Section 4.16. Charter Provisions TC . The
actions of the Board of Directors of the Company previously
taken and/or taken in approving the Offer (including the
purchase of Shares pursuant to the Offer), the Merger, this
Agreement, the Shareholders Agreement and the transactions
contemplated by this Agreement and the Shareholders
Agreement, are sufficient to render irrevocably inapplicable (i)
Article VII of the Company's Articles of Incorporation and (ii)
any state anti-takeover law to (A) the Offer, the Merger, this
Agreement and the Shareholders Agreement, (B) the
transactions contemplated by this Agreement and/or the
Shareholders Agreement and (C) any other transaction between
Parent and any of its Affiliates on the one hand, and the
Company and any of its Affiliates, on the other hand,
consummated after the date that Sub acquires Shares pursuant to
the Offer. Pursuant to the Company's Articles of Incorporation,
Section 2538(a) and Subchapters E, F, G and H of Chapter 25 of
the PBCL are not applicable to the Company.
Section 4.17. Intellectual Property TC .
Except as set forth in Item 4.17 of the Company Letter, with
respect to all patents, trademarks, trade names, service marks,
copyrights and any applications therefor, technology, know-
how, trade secrets, computer software programs or applications,
trade names and tangible or intangible proprietary information
or materials that are used in the respective businesses of the
Company and its Subsidiaries as currently conducted, the
Company has no knowledge (a) that such use violates the rights
of any third Person or (b) of any pending or threatened litigation
involving such use, which violation or litigation in the aggregate
has or could be reasonably expected to have a Materially
Adverse Effect on the Company.
Section 4.18. Labor Relations. TC No
representation election, arbitration proceeding, grievance (other
than with respect to incidents in the ordinary course of business),
labor strike, dispute (other than with respect to incidents in the
ordinary course of business), slowdown, stoppage or other labor
trouble is pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries. No
complaint against the Company or any of its Subsidiaries is
pending or, to the knowledge of the Company, threatened before
the National Labor Relations Board, the Equal Employment
Opportunity Commission or any similar foreign, state or local
agency, by or on behalf of any employee of the Company or any
of its Subsidiaries. The Company and each of its Subsidiaries is
in compliance in all material respects with all laws and
regulations governing workplace safety, terms and conditions of
employment, payment of wages and overtime, employment of
non-citizens, discrimination in the workplace, and other
employment and labor laws. Neither the Company nor any of its
Subsidiaries has engaged in any unfair labor practice.
Section 4.19. Insurance. TC All insurance
policies carried by, or covering, the Company and its
Subsidiaries with respect to their businesses, assets and
properties are, in respect of the risks insured against and the
amount of coverage provided, consistent with insurance policies
customarily carried by Persons similarly situated who engage in
businesses similar to the businesses of the Company and its
Subsidiaries. All such insurance policies are in full force and
effect, and no notice of cancellation has been given with respect
to any such policy. All premiums due on such policies have
been paid in a timely manner and the Company and its
Subsidiaries have complied in all material respects with the
terms and provisions of such policies.
Section 4.20. Finders and Investment Bankers
TC . Neither the Company nor any of its officers or directors
has employed any broker, finder or financial advisor or
otherwise incurred any liability for any brokerage fees,
commissions or financial advisors' or finders' fees in connection
with the transactions contemplated hereby, other than pursuant
to an agreement or agreements with BT Alex. ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Read, copies of which has been provided to
Parent.
Section 4.21. Contracts; Indebtedness TC .
Except as disclosed in the Company SEC Documents or as listed
under Item 4.21 or other Items of the Company Letter, (a) there
are no contracts or agreements that are material to the business,
properties, assets, financial condition or results of operations of
the Company and its Subsidiaries taken as a whole, and
(b) neither the Company nor any of its Subsidiaries is in
violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice
would cause such a violation of or default under) any loan or
credit agreement, note, bond, mortgage, indenture, lease, permit,
concession, franchise, license or any other contract, agreement,
arrangement or understanding, to which it is a party or by which
it or any of its properties or assets is bound, except for violations
or defaults that could not reasonably be expected to result in a
Materially Adverse Effect on the Company.
ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB TC
Parent and Sub represent and warrant to the
Company as follows:
Section 5.1. Organization TC . Each of
Parent and Sub is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation and has requisite corporate power and authority to
carry on its business as now being conducted.
Section 5.2. Authority TC . Parent and Sub
have the requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance
of this Agreement by Parent and Sub, and the consummation by
Parent and Sub of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Sub, and no other
corporate proceedings on the part of Parent or Sub or their
respective Boards of Directors are necessary to authorize or
approve this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Parent and Sub and
constitutes the legal, valid and binding agreement of the Parent
and Sub, enforceable against the Parent and Sub in accordance
with its terms, except to the extent that enforceability hereof
may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of
creditors' rights generally and by principles of equity regarding
the availability of remedies.
Section 5.3. Consents and Approvals; No
Violations TC . Except as set forth in Item 5.3 of the Parent
Letter, except for filings, permits, authorizations, consents and
approvals as may be required under, and other applicable
requirements of, the Exchange Act, the HSR Act, the PBCL,
state takeover laws and foreign and supranational laws relating
to antitrust and anticompetition clearances, neither the
execution, delivery or performance of this Agreement by Parent
and Sub nor the consummation by Parent and Sub of the
transactions contemplated hereby will (i) conflict with or result
in any breach of any provision of the respective Articles of
Incorporation or By-laws of Parent and Sub, (ii) require any
filing with, or permit, authorization, consent or approval of, any
Governmental Entity, (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment,
cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license,
lease, contract, agreement or other instrument or obligation to
which Parent or any of its Subsidiaries is a party or by which
any of them or any of their properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent, any of its Subsidiaries or any of
their properties or assets.
Section 5.4. Information Supplied TC .
None of the information supplied or to be supplied by Parent or
Sub specifically for inclusion or incorporation by reference in (i)
the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the
case of the Offer Documents, the Schedule 14D-9 and the
Information Statement, at the respective times the Offer
Documents, the Schedule 14D-9 and the Information Statement
are filed with the SEC or first published, sent or given to the
Company's shareholders, or, in the case of the Proxy Statement,
at the time the Proxy Statement is first mailed to the Company's
shareholders or at the time of the Shareholders Meeting, 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 or necessary to
correct any statement in any earlier communication with respect
to the solicitation of proxies for the Shareholders Meeting which
has become false or misleading, except that no representation or
warranty is made by Parent or Sub in connection with any of the
foregoing with respect to statements made or incorporated by
reference therein based on information supplied by the Company
or any of its representatives specifically for inclusion or
incorporation by reference therein. The Offer Documents will
comply as to form in all material respects with the requirements
of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by Parent or
Sub in connection with any of the foregoing with respect to
statements made or incorporated by reference therein based on
information supplied by the Company or any of its
representatives specifically for inclusion or incorporation by
reference therein.
Section 5.5. Interim Operations of Sub TC .
Sub 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 5.6. Finders and Investment Bankers
TC . Neither Parent nor Sub nor any of their respective officers
or directors has employed any broker, finder or financial advisor
or otherwise incurred any liability for any brokerage fees,
commissions or financial advisors' or finders' fees in connection
with the transactions contemplated hereby, other than pursuant
to an agreement with ▇▇▇▇▇▇ Brothers.
Section 5.7. Financing TC . Parent has or
will have, and shall provide Sub with, the funds necessary to
consummate the Offer and the Merger and the transactions
contemplated hereby in accordance with the terms hereof.
ARTICLE VI - COVENANTS RELATING TO CONDUCT
OF BUSINESS TC
Section 6.1. Conduct of Business by the
Company Pending the Merger TC . During the period from
the date of this Agreement until the earlier of the Effective Time
or such time as Parent's and Sub's designees shall constitute a
majority of the Board of Directors of the Company, the
Company shall, and shall cause each of its Subsidiaries to, in all
material respects, except as contemplated by this Agreement,
carry on its business in the ordinary course as currently
conducted and, to the extent consistent therewith, with no less
diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact their current business
organizations, keep available the services of their current
officers and employees and preserve their relationships with
customers, suppliers and others having business dealings with
them to the end that goodwill and ongoing businesses shall be
unimpaired at the Effective Time. Without limiting the
generality of the foregoing, and except as otherwise
contemplated by this Agreement, during such period, the
Company shall not, and shall not permit any of its Subsidiaries
to, without the prior written consent of Parent (which consent
shall not be unreasonably withheld or delayed):
(a) amend or propose to amend its Articles of
Incorporation or By-laws (or comparable governing instruments)
or change the number of directors constituting the entire Board
of Directors of the Company or any of its Subsidiaries;
(b) authorize for issuance, issue, deliver, grant,
sell, pledge, or otherwise dispose of or propose to issue, deliver,
grant, sell, pledge or otherwise dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any
kind to acquire or sell any shares of, the capital stock or other
securities of the Company or any of its Subsidiaries including,
but not limited to, stock appreciation rights, phantom stock, any
securities convertible into or exchangeable for shares of stock of
any class of the Company or any of its Subsidiaries; provided,
however, that the foregoing shall not prohibit the issuance of
Shares upon the exercise of Company Options granted prior to
the date of this Agreement;
(c) split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other
distribution (whether in cash, stock, securities or other property
or any combination thereof) in respect of its capital stock, or
directly or indirectly redeem, purchase or otherwise acquire or
offer to acquire, directly or indirectly, any shares of its capital
stock or other securities;
(d) (i) except in the ordinary course of business
consistent with past practice (1) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly,
indirectly, continently or otherwise) for the obligations of any
Person or (2) make any loans, advances or capital contributions
to, or investments in, any other Person (other than to one of its
Subsidiaries); (ii) acquire the stock or the assets of, or merge or
consolidate with, any other Person; (iii) voluntarily incur any
liability or obligation (absolute, accrued, contingent or
otherwise) other than in the ordinary course of business
consistent with past practice; or (iv) sell, transfer, mortgage,
pledge or otherwise dispose of, or encumber, or agree to sell,
transfer, mortgage, pledge or otherwise dispose of or encumber,
any assets or properties, real, personal or mixed of the Company
and its Subsidiaries other than sales of products in the ordinary
course of business and in a manner consistent with past practice;
(v) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as
an accommodation become responsible for, the obligations of
any Person, or make any loans, advances or capital contributions
to, or investments in, any other Person (other than in the
ordinary course of business consistent with past practice); (vi)
enter into any contract or agreement, other than in the ordinary
course of business consistent with past practice, or amend, alter
or terminate any Company Material Contract; or (vii) authorize
any capital expenditure except in compliance with procedures
heretofore established by resolutions duly adopted by the Board
of Directors of the Company;
(e) increase in any manner the compensation of
any of its directors, officers or employees (other than in the
ordinary course of business consistent with past practice) or
enter into, establish, amend or terminate any Benefit Plan,
employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit
sharing, health or other welfare, stock option or other equity,
pension, retirement, vacation, severance, deferred compensation
or other compensation or benefit plan, policy, agreement, trust,
fund or arrangement with, for or in respect of, any shareholder,
officer, director, other employee, agent, consultant or Affiliate
other than as required pursuant to the terms of agreements in
effect on the date of this Agreement and set forth in Item 6.1 of
the Company Letter;
(f) except as may be required as a result of a
change in Law or in generally accepted accounting principles,
change any of the accounting practices or principles used by it;
(g) make any material Tax election, settle or
compromise any material federal, state, local or foreign Tax
liability, or waive any statute of limitations for any Tax claim or
assessment;
(h) settle or compromise any material pending or
threatened suit, action or claim;
(i) adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any
of its Subsidiaries (other than the Merger);
(j) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction (i) in the ordinary course of business and consistent
with past practice of liabilities reflected or reserved against in
the financial statements of the Company or incurred in the
ordinary course of business and consistent with past practice and
(ii) of liabilities required to be paid, discharged or satisfied
pursuant to the terms of any contract in existence on the date
hereof or entered into in accordance with this Section 6.1;
(k) permit any insurance policy naming the
Company or any of its Subsidiaries as a beneficiary or a loss
payable payee to be cancelled or terminated without notice to
Parent, except in the ordinary course of business and consistent
with past practice; or
(l) take, or offer or propose to take, or agree to
take, in writing or otherwise, any of the actions described in this
Section 6.1 or take or omit to take any action which would make
any of the representations or warranties of the Company
contained in this Agreement untrue and incorrect in any material
respect as of the date when made if such action had then been
taken or omitted, or would result in any of the Offer Conditions
or the conditions set forth in Article VIII hereof not being
satisfied.
The Company shall, and the Company shall cause each of its
Subsidiaries to, use its or their best efforts to comply in all
material respects with all Laws applicable to it or any of its
properties, assets or business and maintain in full force and
effect all the Company Permits necessary for such business.
Section 6.2. No Solicitation TC .
(a) The Company shall not, nor shall it permit
any of its Subsidiaries to, nor shall it permit any of its executive
officers, directors, authorized representatives or authorized
agents to, directly or indirectly, (i) solicit, initiate or knowingly
encourage (including by way of furnishing non-public
information) any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any
Takeover Proposal or (ii), except as expressly permitted
pursuant to paragraph (b) of this Section 6.2, participate in any
discussions or negotiations regarding any Takeover Proposal.
For purposes of this Agreement, "Takeover Proposal" means (x)
any inquiry, proposal or offer from any Person relating to any
direct or indirect acquisition or purchase of any of the assets of
the Company or its Subsidiaries (other than the purchase of
inventory or other assets in the ordinary course of business) or
any of the Shares then outstanding, any tender offer or exchange
offer for any of the Shares then outstanding, or any merger,
consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the
Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement or (y) any other transaction the
consummation of which could reasonably be expected to
impede, interfere with, prevent or delay the Offer and/or the
Merger or which would reasonably be expected to dilute the
benefits to Parent of the transactions contemplated by this
Agreement and the Shareholders Agreement.
(b) Neither the Unaffiliated Directors nor any
committee designated thereby shall withdraw or modify, or
propose publicly to (i) withdraw or modify, in a manner adverse
to Parent, the approval or recommendation by Unaffiliated
Directors or such committee of the Offer, the Merger or this
Agreement (or any transaction contemplated thereby); provided
that, the Unaffiliated Directors may, (A) in response to any
Takeover Proposal, suspend such recommendation for a period
of up to 24 hours pending the analysis by the Unaffiliated
Directors of such Takeover Proposal, which analysis may
include to the extent necessary discussions with a Person making
such Takeover Proposal regarding same, or (B) at any time prior
to the consummation of the Offer, modify or withdraw such
recommendation, but only if the Unaffiliated Directors
determine in good faith, based on a written opinion of Drinker
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP (a "Written Opinion"), that it would be a
breach of its fiduciary duties not to so modify or withdraw such
recommendation, (ii) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal or
(iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar
agreement (each, an "Acquisition Agreement") related to any
Takeover Proposal.
(c) In addition to the obligations of the Company
contained in paragraphs (a) and (b) of this Section 6.2, the
Company shall immediately advise Parent orally and in writing
of any request for information or of any Takeover Proposal, the
material terms and conditions of such request or Takeover
Proposal and the identity of the Person making such request or
Takeover Proposal.
(d) Subject to Section 6.2(e), nothing contained
in this Section 6.2 shall prohibit the Company from taking and
disclosing to its shareholders a position contemplated by Rules
14d-9 and 14e-2 promulgated under the Exchange Act or from
making any disclosure to the Company's shareholders if, in the
good faith judgment of the Board of Directors of the Company,
based on a Written Opinion, such disclosure is required under
applicable law.
(e) If Sub purchases Shares pursuant to the Offer,
the Company and its Board of Directors shall take all actions
legally permitted to permit the Merger to occur.
Section 6.3. Disclosure to Parent; Delivery of
Certain Filings TC . The Company shall promptly advise
Parent orally and in writing if there occurs, to the knowledge of
the Company, any change or event which results in the executive
officers of the Company having a good faith belief that such
change or event has resulted in or is reasonably likely to result in
a Materially Adverse Effect on the Company or that such change
or event could materially delay the consummation of the Offer
and/or the Merger. The Company shall provide to Parent, and
Parent shall provide to the Company, copies of all filings made
by the Company or Parent, as the case may be, with any
Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
ARTICLE VII - ADDITIONAL AGREEMENTS TC
Section 7.1. Shareholder Approval; Preparation
of Proxy Statement TC .
(a) If the approval of the Company's
shareholders of this Agreement and the Merger is required by
law, the Company shall, at Parent's request, as soon as
practicable following the expiration of the Offer in accordance
with the terms of Section 1.1 of this Agreement, so long as
permitted by law, duly call, give notice of, convene and hold a
meeting of its shareholders (the "Shareholders Meeting") for the
purpose of obtaining such approval. The Company shall,
through its Board of Directors (but subject to the right of the
Company's Board of Directors to withdraw or modify its
approval or recommendation of the Offer, the Merger and this
Agreement as set forth in Section 6.2(b)), recommend to its
shareholders that the shareholders approve the Merger.
Notwithstanding the foregoing, if Sub or any other Subsidiary of
Parent shall acquire 80% or more of the then outstanding Shares,
the parties shall, at the request of Parent, take all necessary and
appropriate actions to cause the Merger, pursuant to the terms
thereof, to become effective in accordance with
Section 1924(b)(1)(ii) of the PBCL, as promptly as practicable
after such acquisition without a meeting of the Shareholders of
the Company, including, without limitation, adoption by the
board of directors of Sub of a short-form plan of merger in
accordance with the PBCL and consistent with the terms of the
Merger.
(b) If the approval of the Company's
shareholders of this Agreement and the Merger is required by
law, the Company shall, at Parent's request, as soon as
practicable following the expiration of the Offer in accordance
with the terms of Section 1.1, and to the extent permitted by law,
prepare and file a preliminary Proxy Statement with the SEC
and shall use all reasonable efforts to respond to any comments
of the SEC or its staff, and, to the extent permitted by law, to
cause the Proxy Statement to be mailed to the Company's
shareholders as promptly as practicable after responding to all
such comments to the satisfaction of the staff. The Company
shall notify Parent promptly of the receipt of any comments
from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or
for additional information and shall supply Parent with copies of
all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the
other hand, with respect to the Proxy Statement or the Merger.
If at any time prior to the Shareholders Meeting there shall occur
any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its shareholders such an amendment or
supplement. Parent shall cooperate with the Company in the
preparation of the Proxy Statement or any amendment or
supplement thereto. Parent and its counsel shall be given a
reasonable opportunity to review and comment upon the Proxy
Statement and any such correspondence prior to its filing with
the SEC or dissemination to the Company's shareholders, and
the Company shall not so file or disseminate any Proxy
Statement, or any amendment or supplement thereto, to which
Parent reasonably objects.
(c) Parent agrees to cause all Shares purchased
pursuant to the Offer and all other Shares of the Company
entitled to vote on the Merger owned by Parent or any
Subsidiary of Parent to be voted in favor of the Merger.
Section 7.2. Access to Information TC .
Between the date of this Agreement and the Effective Time, the
Company shall give, and shall cause its accountants and legal
counsel to give, Parent and its respective authorized
representatives (including, without limitation, its financial
advisors, accountants and legal counsel), at all reasonable times,
access as reasonably requested to all personnel, offices and other
facilities and to all contracts, agreements, commitments, books
and records of or pertaining to the Company and its Subsidiaries,
shall permit the foregoing Persons to make such reasonable
inspections as they may require and, as permitted under
applicable law and subject to certain restrictions existing as of
the date of this Agreement that are known to all parties hereto,
shall cause its officers promptly to furnish Parent with (a) such
financial and operating data and other information with respect
to the business and properties of the Company and its
Subsidiaries as Parent may from time to time reasonably request,
and (b) a copy of each report, schedule and other document filed
or received by the Company or any of its Subsidiaries pursuant
to the requirements of applicable securities laws or the NASD.
Section 7.3. Expenses TC . All fees, costs
and expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party
incurring such fees, costs or expenses, whether or not the Offer
or the Merger is consummated, subject to the rights of Parent
under Section 9.2 hereof.
Section 7.4. Public Announcements TC .
Parent and the Company shall consult with each other before
issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make
any such public statement prior to such consultation, except as
may be required by applicable law, fiduciary duties or by
obligations pursuant to any listing agreement with or regulation
of the NASD.
Section 7.5. State Takeover Laws TC . If
any "fair price" or "control share acquisition" statute or other
similar statute or regulation shall become applicable to the
transactions contemplated hereby, Parent and the Company and
their respective Boards of Directors shall use all reasonable
efforts to grant or obtain such approvals and take such actions as
are necessary so that the transactions contemplated hereby may
be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects
of any such statute or regulation on the transactions
contemplated hereby.
Section 7.6. Indemnification, Exculpation and
Insurance TC .
(a) All rights to indemnification and exculpation
from liabilities for acts or omissions occurring at or prior to the
Effective Time existing in favor of the current or former
directors, officers or employees of the Company as provided in
the Company's Articles of Incorporation or By-laws or pursuant
to agreements existing on the date of this Agreement shall be
assumed by the Surviving Corporation, and Parent shall cause
the Surviving Corporation to honor such obligations in
accordance with the terms thereof, without further action, as of
the Effective Time, and such rights shall continue in full force
and effort in accordance with their respective terms. Such rights,
and the Surviving Corporation's and Parent's related
obligations, shall apply in all respects to the current or former
directors, officers and employees of each of its Subsidiaries as
though such directors, officers and employees were entitled to
indemnification rights pursuant to the Company's Articles of
Incorporation or By-laws as in effect on the date hereof or
pursuant to such agreements, as the case may be. In addition,
from and after the Effective Time, directors and officers of the
Company who become or remain directors or officers of Parent
shall be entitled to the same indemnity rights and protections
(including those provided by directors' and officers' liability
insurance) as are afforded to other directors and officers of
Parent. Notwithstanding any other provision hereof, the
provisions of this Section 7.6(a) are intended to be for the
benefit of, and shall be enforceable by, each indemnified party,
his or her heirs and his or her representatives and (ii) are in
addition to, and not in substitution for, any other rights to
indemnification or contribution that any such person may have
by contract or otherwise.
(b) Parent shall, and shall cause the Surviving
Corporation or one of its Affiliates to, maintain in effect for six
years after the Effective Time policies of directors' and officers'
liability insurance equivalent in all material respects to those
maintained by or on behalf of the Company and its Subsidiaries
on the date hereof (and having coverage and containing terms
and conditions which in the aggregate are not less advantageous
to the persons currently covered by such policies as insured)
with respect to claims arising from any actual or alleged
wrongful act or omission occurring at or prior to the Effective
Time for which a claim has not been made against any director
or officer of the Company or any director or officer of its
Subsidiaries prior to the Effective Time.
Section 7.7. Notification of Certain Matters
TC . Parent shall give prompt notice to the Company, and the
Company shall give prompt notice to Parent, of: (i) the
occurrence, or non-occurrence, in each case, to the knowledge of
the Company or Parent, as the case may be, of any event the
occurrence, or non-occurrence, of which results in the executive
officers of the Company or Parent, as the case may be, having a
good faith belief that such change or event would be reasonably
likely to cause (x) any representation or warranty of such entity
contained in this Agreement that is not qualified as to materiality
to be untrue or inaccurate in any material respect, (y) any
representation or warranty of such entity contained in this
Agreement that is qualified as to materiality to be untrue or
inaccurate in any respect, or (z) any covenant, condition or
agreement of such entity contained in this Agreement not to be
complied with or satisfied in all material respects; and (ii) the
executive officers of the Company or Parent, as the case may be,
believing in good faith that the Company or Parent, as the case
may be, has, to the knowledge of the Company or Parent, as the
case may be, failed to comply with in all material respects or
satisfy in all material respects any covenant, condition or
agreement of such entity to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice
pursuant to this Section 7.7 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Each of the Company, Parent and Sub shall give prompt notice
to the other parties hereof of any notice or other communication
from any third party alleging that the consent of such third party
is or may be required in connection with the transactions
contemplated by this Agreement.
Section 7.8. Board of Directors TC .
Promptly after such time as Sub purchases Shares pursuant to
the Offer (but subject to the satisfaction of the Minimum
Condition), Sub shall be entitled, to the fullest extent permitted
by law, to designate at its option up to that number of directors,
rounded to the next highest whole number, of the Company's
Board of Directors, subject to compliance with Section 14(f) of
the Exchange Act, as shall make the percentage of the
Company's directors designated by Sub equal to the aggregate
voting power of the Shares held by Parent or any of its
Subsidiaries; provided, however, that in the event that Sub's
designees are elected to the Board of Directors of the Company,
until the Effective Time, such Board of Directors shall have (i)
at least three Unaffiliated Directors who are directors on the date
of this Agreement or are designated by a majority of the
Unaffiliated Directors of the Company who were directors on
the date hereof and (ii) the number of Affiliated Directors
required by the Standstill Agreement which shall be in addition
to the number of directors designated by Sub pursuant to this
Section 7.8; and provided, further that, in such event, if the
number of Unaffiliated Directors shall be reduced below three
for any reason whatsoever, the remaining Unaffiliated Directors
shall, to the fullest extent permitted by law, designate a person to
fill such vacancy who shall be deemed to be an Unaffiliated
Director for purposes of this Agreement or, if no Unaffiliated
Directors then remain, the other directors shall designate three
persons to fill such vacancies who shall not be officers or
Affiliates of the Company or any of its Subsidiaries, or officers
or Affiliates of Parent, of any of its Subsidiaries or of any other
entity in which Parent owns, directly or indirectly, any material
amount of capital stock or other significant ownership interest,
and such persons shall be deemed to be Unaffiliated Directors
for purposes of this Agreement.
Following the election or appointment of Sub's
designees pursuant to this Section 7.8 and prior to the Effective
Time, any termination or amendment of this Agreement by the
Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Sub or
waiver or assertion of any of the Company's rights hereunder,
and any other consent or action by the Board of Directors of the
Company with respect to this Agreement (other than
recommending or reconfirming the recommendation that the
holders of the Shares approve and adopt this Agreement and the
Merger, and making determinations in connection therewith,
which recommendations and determinations may be made by a
majority of the Board of Directors as constituted at any time
after such election or appointment of Sub's designees pursuant
to this Section) shall to the fullest extent permitted by applicable
law require the concurrence of a majority of the Unaffiliated
Directors and, to the fullest extent permitted by law, no other
action by the Company, including any action by any other
director of the Company, shall be required to approve such
actions. To the fullest extent permitted by applicable law, the
Company shall take all actions requested by Parent which are
reasonably necessary to effect the election of any such designee,
including mailing to its shareholders the Information Statement
containing the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the
Schedule 14D-9 (provided that Sub shall have provided to the
Company on a timely basis all information required to be
included in the Information Statement with respect to Sub's
designees). Parent and Sub shall be solely responsible for any
information with respect to either of them and their nominees,
officers, directors and Affiliates required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. In
connection with the foregoing, the Company shall promptly, at
the option of Parent, to the fullest extent permitted by law, either
increase the size of the Company's Board of Directors and/or
obtain the resignation of such number of its current directors as
is necessary to enable Sub's designees to be elected or appointed
to the Company's Board of Directors as provided above.
Section 7.9. Additional Agreements TC .
(a) Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement,
including using all reasonable efforts to obtain all necessary
waivers, consents and approvals (including, without limitation,
obtaining consents from landlords under leases providing for
various remedies in the event of a change in control of the
tenant) and effect all necessary registrations and filings. In case
at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this
Agreement, the proper officers and/or directors of Parent, Sub
and the Company shall take all such actions.
(b) Each of Parent, Sub and the Company agrees
to use its reasonable best efforts promptly to take all reasonable
steps to secure all clearances under the HSR Act and under any
applicable foreign laws relating to the regulation of competition,
or from federal, state or foreign governments or governmental
authorities or agencies with respect to the transactions
contemplated by this Agreement. Notwithstanding any other
provision hereof, in no event shall Parent, Sub or any of their
Affiliates (collectively, the "Parent Group") be required to take
or fail to take any action in order to obtain or grant a consent
arising out of any contractual or legal obligation of or applicable
to the Company or its Subsidiaries, other than obligations such
as those under the HSR Act which apply to both the Company
and the Parent Group and then only to the extent applicable to
the Parent Group, and in no event shall any member of the
Parent Group be required to enter into or offer to enter into any
divestiture, hold-separate, business limitation or similar
agreement or undertaking in connection with this Agreement or
the transactions contemplated hereby or otherwise.
Section 7.10. Certain Litigation TC . The
Company agrees that it shall not settle any litigation commenced
after the date hereof against the Company or any of its directors
by any shareholder of the Company relating to the Offer, the
Merger, this Agreement or the Shareholders Agreement without
the prior written consent of Parent. In addition, the Company
shall not voluntarily cooperate with any third party that may
hereafter seek to restrain or prohibit or otherwise oppose the
Offer or the Merger and shall cooperate with Parent and Sub to
resist any such effort to restrain or prohibit or otherwise oppose
the Offer or the Merger.
Section 7.11. Severance Payments TC .
Parent hereby agrees that for a period of one year after the
consummation of the Offer, all persons who, as of the date of
this Agreement, are employees of the Company or any of its
Subsidiaries and who are involuntarily terminated by the
Company or the Surviving Corporation shall be entitled to
receive severance pay and benefits equal to the severance pay
and benefits provided for in the Company's severance pay plan,
a description of which plan is set forth as Exhibit D to the
Company Letter.
ARTICLE VIII - CONDITIONS PRECEDENT TC
Section 8.1. Conditions to Each Party's
Obligation to Effect the Merger TC . The respective
obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Offer. Subject to the satisfaction or waiver by
Sub of all of the Offer Conditions (it being understood that
pursuant to Section 1.1(a) Sub cannot waive the Minimum
Condition without the prior written consent of the Company),
Sub shall have accepted for payment all Shares validly tendered
in the Offer and not withdrawn. Neither Parent nor Sub may
invoke this condition if Sub fails to purchase Shares so tendered
and not withdrawn in violation of the terms of this Agreement or
the Offer.
(b) Shareholder Approval. If required by any
applicable law or the constituent documents of any party hereto,
this Agreement and the Merger shall have been approved at or
prior to the Effective Time by the requisite vote of the
shareholders of the Company in accordance with the PBCL and
the Company's Articles of Incorporation and By-laws, which the
Company has represented shall be solely the affirmative vote of
a majority of the outstanding Shares.
(c) No Injunction or Action. No order, statute,
rule, regulation, executive order, stay, decree, judgment or
injunction shall have been enacted, entered, promulgated or
enforced by any court or other Governmental Entity which
temporarily, preliminarily or permanently prohibits or prevents
the consummation of the Merger which has not been vacated,
dismissed or withdrawn prior to the Effective Time.
(d) Other Approvals. On or prior to the Effective
Time, the waiting period (and any extension thereof) applicable
to the Merger under the HSR Act and any similar foreign Laws
shall have been terminated or shall have expired and all consents
necessary for the consummation of the Merger shall have been
obtained.
Section 8.2. Conditions of Obligations of
Parent and Sub. TC The obligations of Parent and Sub to
effect the Merger are subject to the satisfaction of the condition
(which may be waived in whole or in part by Parent) that the
Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement
on or before the earlier of (i) such time as Parent's or Sub's
designees shall constitute at least a majority of the Company's
Board of Directors pursuant to Section 2.4 of this Agreement
and (ii) the Effective Time; provided, however, that no failure
by the Company to have so performed any such obligation shall
constitute a failure of satisfaction of the foregoing condition
where the Company's failure of performance was caused by
Parent.
ARTICLE IX - TERMINATION AND AMENDMENT TC
Section 9.1. Termination TC . This
Agreement may be terminated at any time prior to the Effective
Time, whether before or after the approval of this Agreement
and the Merger by the shareholders of the Company (if required
by applicable law):
(a) by mutual written consent of Parent, Sub and
the Company;
(b) by any of Parent, Sub or the Company:
(i) if (x) as a result of the failure of
any of the Offer Conditions set forth in
Exhibit A, the Offer shall have terminated or
expired in accordance with its terms without Sub
having accepted for payment any Shares pursuant
to the Offer or (y) Sub shall have, consistent with
its obligations hereunder, failed to pay for the
Shares prior to December 31, 1999 (the "Outside
Date"); provided, however, that the right to
terminate this Agreement pursuant to this
Section 9.1(b)(i) shall not be available to any
party whose failure to perform any of its
obligations under this Agreement results in the
failure of any such Offer Condition or if the
failure of such condition results from facts or
circumstances that constitute a breach of any
representation or warranty under this Agreement
by such party; or
(ii) if any Governmental Entity 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 or ruling or other action shall
have become final and nonappealable; provided,
however, that Parent or the Company, as the case
may be, may not terminate this Agreement
pursuant to this Section 9.1 if it has not complied
with its obligations under Section 7.09 hereof
with respect to any such order, decree, ruling, or
other action;
(c) by either Parent or Sub if the Company shall
have breached in any material respect any of its material
covenants or other agreements contained in this
Agreement which breach or failure to perform is
incapable of being cured or, the Company having been
given reasonable written notice of such breach by Parent,
has not been cured within one business day prior to the
then scheduled Expiration Date;
(d) by any of Company, Parent or Sub if either
Parent or Sub is entitled to terminate the Offer as a result
of the occurrence of any event set forth in paragraph (c)
of Exhibit A; provided that the temporary suspension of
the recommendation of the Company's Board of
Directors referred to herein in accordance with Section
6.2(b) shall not give rise to a right of termination
pursuant to this Section 9.1(d);
(e) by the Company if Parent or Sub shall have
breached in any material respect any of its material
covenants or other agreements contained in this
Agreement, which breach or failure to perform is
incapable of being cured or, Parent having been given
reasonable written notice of such breach by the
Company, has not been cured within one business day
prior to the then scheduled Expiration Date; or
(f) by the Company, if the Offer has not been
timely commenced in accordance with Section 1.1.
Section 9.2. Effect of Termination and
Abandonment TC .
(a) In the event of termination of this Agreement
and the abandonment of the Offer or the Merger pursuant to this
Article IX, this Agreement (other than Sections 4.20, 5.6, 7.3,
this Section 9.2, Article X, the penultimate sentence of Section
1.1(a) and the last sentence of 1.2(c)) shall become void and of
no effect with no liability on the part of any party hereto (or of
any of its directors, officers, employees, agents, legal or
financial advisors or other representatives); provided, however,
that no such termination shall relieve any party hereto from any
liability for any breach of this Agreement prior to termination. If
this Agreement is terminated as provided herein, each party shall
hold in confidence all materials obtained from, or based on or
otherwise reflecting or generated in whole or in part from
information obtained from, any other party hereto in connection
with the transactions contemplated by this Agreement, and shall
not use any such materials for the purpose of competing with the
businesses of the other parties hereto, whether obtained before
or after the execution hereof.
(b) In the event that this Agreement is terminated
by Parent pursuant to Section 9.1(d) hereof, then the Company
shall promptly pay Parent upon its request all reasonable out-of-
pocket charges and expenses incurred by Parent or its Affiliates
in connection with this Agreement and the transactions
contemplated hereby, including without limitation reasonable
and documented attorneys' and accountants' fees and
disbursements and fees and expenses of Parent's financial
advisor and any information agent and depositary retained in
connection with the Offer and all printing and mailing fees and
expenses, in an amount not to exceed $8,000,000.
Section 9.3. Amendment TC . This
Agreement may be amended by action taken by Parent, Sub and
the Company at any time before or after approval hereof by the
shareholders of the Company (if required), but, after any such
approval, no amendment shall be made which in any way
materially adversely affects the rights of such shareholders,
without the further approval of such shareholders. Without the
prior approval of a majority of the then serving Unaffiliated
Directors, if any are then serving on the Board, this Agreement
may not be amended at any time (a) subsequent to the purchase
by Sub of any Shares pursuant to the Offer and (b) prior to the
Effective Time. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties
hereto.
Section 9.4. Waiver TC . At any time prior
to the Effective Time, the parties hereto may (a) extend the time
for the performance of any of the obligations or other acts of the
other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant thereto and (c) subject to the terms
of this Agreement, waive compliance with any of the
agreements or conditions contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall
be valid only if set forth in a written instrument signed on behalf
of such party and, after the purchase of Shares pursuant to the
Offer, but prior to the Effective Time, as to the Company, only if
such waiver is approved by a majority of the then serving
Unaffiliated Directors, if any are then serving on the Board.
ARTICLE X - GENERAL PROVISIONS TC
Section 10.1. Non-Survival of Representations
and Warranties and Agreements TC . None of the
representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive
the Effective Time. This Section 10.1 shall not limit any
covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time of the
Merger.
Section 10.2. Notices TC . All notices and
other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (which is
confirmed) or sent by overnight courier (providing proof of
delivery) 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:
EM Laboratories,
Incorporated
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: President and Chief
Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
VWR Scientific Products
Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Drinker ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Section 10.3. Interpretation; Definitions. TC
When a reference is made in this Agreement to an Article or a
Section, such reference shall be to an Article or 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." As used in this Agreement, the phrase "made
available" shall mean that the information referred to has been
made available if requested by the party to whom such
information is to be made available.
As used in this Agreement, the following terms
have the meanings specified or referred to in this Section 10.3
and shall be equally applicable to both the singular and plural
forms. Any agreement referred to below shall mean such
agreement as amended, supplemented or modified from time to
time to the extent permitted by the applicable provisions thereof
and by this Agreement.
"Acquisition Agreement" shall have the meaning
set forth in Section 6.2(b).
"Affiliate" with respect to any Person, means any
other Person controlling, controlled by or under common control
with such Person.
"Affiliated Directors" shall have the meaning set
forth in the Standstill Agreement.
"Agreement" means this Agreement and Plan of
Merger, dated as of June 8, 1999, among Parent, Sub and the
Company.
"Articles of Merger" shall have the meaning set
forth in Section 2.2.
"Benefit Plans" shall have the meaning set forth
in Section 4.14(a).
"Certificate" shall have the meaning set forth in
Section 3.2(b).
"Code" means the Internal Revenue Code of
1986, as amended.
"Company" shall have the meaning set forth in
the introductory paragraph of this Agreement.
"Company Option Plans" shall have the meaning
set forth in Section 3.2(f).
"Company Options" shall have the meaning set
forth in Section 3.2(f).
"Company Letter" means the letter from the
Company to Parent dated the date hereof, which letter relates to
this Agreement and is designated therein as the Company Letter.
"Company Material Contract" shall have the
meaning set forth in Section 4.11.
"Company Permits" shall have the meaning set
forth in Section 4.10.
"Company SEC Documents" shall have the
meaning set forth in Section 4.6.
"Company Securities" shall have the meaning set
forth in Section 4.3.
"Constituent Corporations" shall have the
meaning set forth in the introductory paragraph of this
Agreement.
"Dissenting Shares" shall have the meaning set
forth in Section 3.1(d).
"Dissenting Shareholder" shall have the meaning
set forth in Section 3.1(d).
"Effective Time" shall have the meaning set forth
in Section 2.2.
"Environmental Claim" shall have the meaning
set forth in Section 4.15.
"Environmental Laws" shall have the meaning
set forth in Section 4.15.
"Environmental Permits" shall have the meaning
set forth in Section 4.15.
"ERISA" shall have the meaning set forth in
Section 4.14.
"ERISA Affiliate" shall have the meaning set
forth in Section 4.14(b).
"Exchange Act" means the Securities Exchange
Act of 1934, as amended, together with the rules and regulations
promulgated thereunder.
"Expenses" means documented and reasonable
out-of-pocket fees and expenses incurred or paid by or on behalf
of Parent in connection with the Offer, the Merger or the
consummation of any of the transactions contemplated by this
Agreement, including all fees and expenses of law firms,
commercial banks, investment banking firms, accountants,
experts and consultants to Parent.
"Expiration Date" shall have the meaning set
forth in Section 1.1(a).
"Governmental Entity" means any Federal, state,
local or foreign government or any court, tribunal,
administrative agency or commission or other governmental or
other regulatory authority or agency, domestic, foreign or
supranational.
"Hazardous Materials" shall have the meaning set
forth in Section 4.15.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended.
"Information Statement" shall have the meaning
set forth in Section 4.8.
"knowledge" shall mean, with respect to the
Company, the actual knowledge of its executive officers and the
actual knowledge of the senior officer of each of its foreign
Subsidiaries and, with respect to Parent, the actual knowledge of
its executive officers of Parent.
"Law" means any law, statute, rule, regulation,
ordinance and other pronouncement having the effect of law of
the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision or of any
Governmental Entity.
"Liens" means any pledges, claims, liens,
charges, encumbrances and security interests of any kind or
nature whatsoever.
"Litigation" shall have the meaning set forth in
Section 4.14.
"Materially Adverse Change" or "Materially
Adverse Effect" means, when used in connection with the
Company or Parent, as the case may be, any change or effect (or
any development that, insofar as can reasonably be foreseen, is
likely to result in any change or effect) or fact or condition (or
any development that, insofar as can reasonably be foreseen, is
likely to result in any fact or condition), except in respect of
general economic or financial conditions in the industry of
which the Company, or Parent, as the case may be, is a part, that
is materially adverse to the business, properties, assets, condition
(financial or otherwise) or results of operations of the Company
and its Subsidiaries taken as a whole, or Parent and its
Subsidiaries taken as a whole, as the case may be.
"Merger" shall have the meaning set forth in the
third Whereas provision of this Agreement.
"Merger Consideration" shall have the meaning
set forth in Section 3.1(c).
"Minimum Condition" shall have the meaning set
forth in Exhibit A of this Agreement.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"Offer" shall have the meaning set forth in the
second Whereas provision of this Agreement.
"Offer Conditions" shall have the meaning set
forth in Section 1.1(a).
"Offer Documents" shall have the meaning set
forth in Section 1.1(b).
"Offer Price" shall have the meaning set forth in
the second Whereas provision of this Agreement.
"Outside Date" shall have the meaning set forth
in Section 9.1(b)(i).
"Parent" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Parent Group" shall have the meaning set forth
in Section 7.09(b).
"Parent Letter" means the letter from Parent to
the Company dated the date hereof, which letter relates to this
Agreement and is designated therein as the Parent Letter.
"Paying Agent" shall have the meaning set forth
in Section 3.2(a).
"PBCL" means the Business Corporation Law of
1988, as amended, of the Commonwealth of Pennsylvania.
"Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, association,
trust, unincorporated organization or other entity.
"Preferred Stock" shall have the meaning set
forth in Section 4.3.
"Premises" shall have the meaning set forth in
Section 4.15(a)(ii).
"Proxy Statement" shall have the meaning set
forth in Section 4.8.
"Schedule 13E-3" shall have the meaning set
forth in Section 1.1(b).
"Schedule 14D-1" shall have the meaning set
forth in Section 1.1(b).
"Schedule 14D-9" shall have the meaning set
forth in Section 1.2(b).
"SEC" means the Securities and Exchange
Commission.
"Securities Act" means the Securities Act of
1933, as amended, together with the rules and regulations
promulgated thereunder.
"Shares" shall have the meaning set forth in the
second Whereas provision of this Agreement.
"Standstill Agreement" means the Standstill
Agreement by and between EM Industries, Incorporated and the
Company, dated as of February 27, 1995, as amended by
Amendment No. 1 to the Standstill Agreement, dated September
15, 1995, by and among EM Industries, Incorporated, Parent and
the Company.
"Shareholders Agreement" shall have the
meaning set forth in the fifth Whereas provision of this
Agreement.
"Shareholders Meeting" shall have the meaning
set forth in Section 7.1(a).
"Sub" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Subsidiary" or "Subsidiary" of any Person
means another Person, an amount of the voting securities, other
voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly
or indirectly by such first Person.
"Surviving Corporation" shall have the meaning
set forth in Section 2.1.
"Takeover Proposal" shall have the meaning set
forth in Section 6.2(a).
"Tax" shall have the meaning set forth in Section
4.12(f).
"Tax Return" shall have the meaning set forth in
Section 4.12(f).
"Transfer Taxes" shall have the meaning set forth
in Section 7.5.
"Unaffiliated Directors" shall have the meaning
set forth in the Standstill Agreement.
"Written Opinion" shall have the meaning set
forth in Section 6.2(b).
Section 10.4. Counterparts TC . This
Agreement may be executed in 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, it being
understood that all parties need not sign the same counterpart.
Section 10.5. Entire Agreement; No Third-Party
Beneficiaries TC . Except for the Standstill Agreement and
the Shareholders Agreement, this Agreement 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 is not
intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder.
Section 10.6. Governing Law TC . This
Agreement shall be exclusively governed by, construed in
accordance with, and interpreted according to the substantive
law of the Commonwealth of Pennsylvania without giving effect
to the principles of conflict of laws.
Section 10.7. Assignment TC . Except as
otherwise provided in Section 1.1(a), neither this Agreement nor
any of the rights, interests or obligations hereunder shall be
assigned or delegated by any of the parties hereto without the
prior written consent of the other parties except that either
Parent or Sub shall have the right without the consent of the
Company to assign all of its respective rights and delegate all of
its respective obligations under this Agreement to any Affiliate
of either Parent or Sub, subject in any case to Parent's guarantee
of the performance by such Affiliate of all of Parent's and Sub's
obligations hereunder, including without limitation the
obligation to pay the Offer Price and the Merger Consideration,
and the Company shall take all action necessary to permit such
assignee to consummate the Merger after the purchase of Shares.
Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 10.8. Severability TC . In case any
provision in this Agreement shall be held invalid, illegal or
unenforceable in a jurisdiction, such provision shall be modified
or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and
the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired
thereby nor shall the validity, legality or enforceability of such
provision be affected thereby in any other jurisdiction.
Section 10.9. Enforcement of this Agreement
TC . The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms
and provisions hereof in any court of the United States or any
state having jurisdiction, such remedy being in addition to any
other remedy to which any party is entitled at law or in equity.
Section 10.10. Obligations of Subsidiaries TC .
Whenever this Agreement requires any Subsidiary of Parent
(including Sub) or of the Company to take any action, such
requirement shall be deemed to include an undertaking on the
part of Parent or the Company, as the case may be, to cause such
Subsidiary to take such action.
Section 10.11. Merger of the Company into Sub
TC . If at any time prior to the Effective Time Parent notifies
the Company that it desires for the Company to be merged with
and into Sub (in lieu of Sub merging with and into the
Company), the Company, Parent and Sub shall promptly
negotiate in good faith an amendment to and restatement of this
Agreement which provides for such changes to this Agreement
as are necessary or appropriate to effectuate such merger (and
upon finalization thereof, the parties shall promptly enter into
such amendment and restatement).
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.
EM LABORATORIES,
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice-President &
Secretary
EM SUBSIDIARY, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
VWR SCIENTIFIC
PRODUCTS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer,
Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-
1(c) promulgated under the Exchange Act (relating to Sub's
obligation to pay for or return tendered Shares after termination or
withdrawal of the Offer), pay for, and (subject to any such rules or
regulations) may delay the acceptance for payment of any tendered
Shares and (except as provided in this Agreement) amend or
terminate the Offer (whether or not any Shares have been
theretofore purchased or paid for pursuant to the Offer) (A) unless
the following conditions shall have been satisfied: (i) there shall be
validly tendered and not withdrawn prior to the expiration of the
Offer a number of Shares which represents a majority of the total
number of outstanding Shares, excluding any Shares held by
Parent, Sub or any Affiliate thereof (the "Minimum Condition"
XE "Minimum Condition" ) and (ii) any applicable waiting period
under the HSR Act or any similar applicable foreign Law,
including but not limited to the requirements of the German federal
antitrust supervisory authority (Bundeskartelamt), shall have
expired or been terminated prior to the expiration of the Offer and
the required approval of any Governmental Entity for this
Agreement or the consummation of the transactions contemplated
by this Agreement shall have been obtained or (B) if at any time
after the date of this Agreement and before the time of payment for
any such Shares (whether or not any Shares have theretofore been
accepted for payment or paid for pursuant to the Offer), any of the
following events shall occur and be continuing:
(a) there shall be threatened or pending
by any Governmental Entity any suit, action or
proceeding (i) challenging the acquisition by Parent
or Sub of any Shares under the Offer, seeking to
restrain or prohibit the making or consummation of
the Offer or the Merger or the performance of any
of the other transactions contemplated by this
Agreement or the Shareholders Agreement or
seeking to obtain from the Company, Parent or Sub
any damages that are material in relation to the
Company and its subsidiaries taken as a whole, (ii)
seeking to prohibit or materially limit the ownership
or operation by the Company, Parent or any of their
respective Subsidiaries of any portion of the
business or assets of the Company and its
Subsidiaries, taken as a whole, or Parent and its
Subsidiaries, taken as a whole, or to compel the
Company or Parent to dispose of or hold separate
any portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, or
Parent and its Subsidiaries, taken as a whole, as a
result of the Offer or any of the other transactions
contemplated by this Agreement or the
Shareholders Agreement, (iii) seeking to impose
limitations on the ability of Parent or Sub to acquire
or hold, or exercise full rights of ownership of, any
Shares to be accepted for payment pursuant to the
Offer including, without limitation, the right to vote
such Shares on all matters properly presented to the
shareholders of the Company, (iv) seeking to
prohibit Parent or any of its Subsidiaries from
effectively controlling in any respect any portion of
the business or operations of the Company or its
Subsidiaries or (v) which otherwise is reasonably
likely to have a Materially Adverse Effect on the
business, properties, assets, financial condition or
results of operations of the Company and its
Subsidiaries taken as a whole;
(b) there shall be enacted, entered,
enforced, promulgated or deemed applicable to the
Offer or the Merger by any Governmental Entity
any statute, rule, regulation, judgment, order or
injunction, other than the application to the Offer or
the Merger of applicable waiting periods under the
HSR Act, that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above;
(c) the Unaffiliated Directors, or any
committee designated thereby, shall have
withdrawn, or modified or changed (including by
amendment of the Schedule 14D-9) their
recommendation of the Offer, the Merger or this
Agreement or approved or recommended a
Takeover Proposal, or shall have resolved to do so;
(d) it shall have been publicly disclosed
or Parent or Sub shall have otherwise learned that
any Person or "group" (as defined in Section
13(d)(3) of the Exchange Act), other than Parent or
its Affiliates or any group of which any of them is a
member, shall have acquired beneficial ownership
(determined pursuant to Rule 13d-3 under the
Exchange Act) of more than 20% of the Shares
through the acquisition of stock, the formation of a
group or otherwise, or shall have been granted an
option, right or warrant, conditional or otherwise, to
acquire beneficial ownership of more than 20% of
the Shares;
(e) any of the representations and
warranties of the Company set forth in this
Agreement (without giving effect to the materiality
limitations contained herein) shall not be true and
correct in any respect as of the date of
consummation of the Offer as though made on and
as of such date (except for representations and
warranties made as of a specified date, which shall
not be true and correct as of the specified date),
except for any breach or breaches which, in the
aggregate, would not have a Materially Adverse
Effect on the Company;
(f) the Company shall have failed to
perform in any material respect any material
obligation or to comply in any material respect with
any material agreement or covenant of the
Company to be performed or complied with by it
under this Agreement;
(g) there shall have occurred any event
that, individually or when considered together with
any other matter, has had or is reasonably likely in
the future to have a Materially Adverse Effect on
the Company;
(h) there shall have occurred (i) any
general suspension of, or limitation on prices (other
than suspensions or limitations triggered by price
fluctuations on a trading day) for, trading in
securities on any national securities exchange or the
over-the-counter market in the United States of
America or the Federal Republic of Germany, (ii) a
declaration of a banking moratorium or any
suspension of payments in respect of banks in the
United States of America or in the Federal Republic
of Germany, (iii) any material limitation (whether
or not mandatory) by any government or
governmental, administrative or regulatory
authority or agency, domestic or foreign, on, the
extension of credit by banks or other lending
institutions, (iv) a commencement of a war or
armed hostilities or other national calamity directly
or indirectly involving the United States of America
or the Federal Republic of Germany and Parent
shall have determined that there is a reasonable
likelihood that such event may be of materially
adverse significance to it or the Company, or (v) in
the case of any of the foregoing existing at the time
of the execution of this Agreement, a material
acceleration or worsening thereof;
(i) any applicable waiting period under
Section 721 of Title VII of the Defense Production
Act of 1950, as amended by Section 5021 of the
Omnibus Trade and Competitiveness Act of 1988
and Section 837 of the National Defense Authority
Act for Fiscal Year 1993 (the "Exon-▇▇▇▇▇▇
Provisions") shall not have expired, (b) the
Committee on Foreign Investment in the United
States ("CFIUS") shall have initiated an
investigation of the transactions contemplated under
this Agreement, or (c) if CFIUS initiates an
investigation, the applicable waiting period under
the Exon-▇▇▇▇▇▇ Provisions relating to such
investigation shall have expired, or such
investigation shall have been completed and the
President shall have announced a decision to take
action pursuant to the Exon-▇▇▇▇▇▇ Provisions
before the expiration of the period ending on the
15th day (or if such day is not a business day, the
next business day) following the completion of such
investigation, which has a substantial likelihood of
resulting, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v)
of paragraph (a) above or such 15 day waiting
period shall not have expired; or
(j) this Agreement shall have been
terminated in accordance with its terms.
The foregoing conditions are for the sole benefit of
Parent and Sub and may, subject to the terms of this Agreement, be
waived by Parent and Sub in whole or in part at any time and from
time to time in their sole discretion. The failure by Parent or Sub at
any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts and circumstances
and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Terms used but not
defined herein shall have the meanings assigned to such terms in
the Agreement to which this Exhibit A is a part.
NYA 174058.12
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