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EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
dated JUNE 8, 1999
among
EM LABORATORIES, INCORPORATED,
EM SUBSIDIARY, Inc.
and
VWR SCIENTIFIC PRODUCTS CORPORATION
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TABLE OF CONTENTS
PAGE
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
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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
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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:
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ARTICLE I - THE OFFER
Section 1.1 The Offer.
(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"") 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
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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.
(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
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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.
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Section 1.3. Standstill Agreement. Effective upon the acquisition of
Shares pursuant to the Offer, the Standstill Agreement shall terminate in its
entirety.
ARTICLE II - THE MERGER
Section 2.1. The Merger. 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. 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. 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.
(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.
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ARTICLE III - EFFECT OF THE MERGER ON THE STOCK OF THE
CONSTITUENT CORPORATIONS; SURRENDER OF CERTIFICATES
Section 3.1. Effect on Stock. 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.
(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,
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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
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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"")
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
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. 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
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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. 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. 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.
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Section 4.4. Authorization; Binding Agreement. 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. 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. The Company has filed
with the SEC all documents required to be filed by it since August 31, 1995
under the Securities Act
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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. 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. 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
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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. 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. (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"), (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. 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") 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. Except as set forth in Item 4.12
of the Company Letter:
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(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.
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(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. 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") 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.
(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
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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
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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.
(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);
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(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" 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" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees or other legally
enforceable requirement (including,
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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" means all permits, licenses, registrations,
approvals, exemptions and other filings with or authorizations by any
Governmental Entity under any Environmental Law.
"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. 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. 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. 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
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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. 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. 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. 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
Parent and Sub represent and warrant to the Company as follows:
Section 5.1. Organization. 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. 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
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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. 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. 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
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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. 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. 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. 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
Section 6.1. Conduct of Business by the Company Pending the Merger.
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;
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(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;
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(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.
(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.
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(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. 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
Section 7.1. Shareholder Approval; Preparation of Proxy Statement.
(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
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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. 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
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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. 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. 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. 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.
(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
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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. 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. 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
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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.
(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
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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. 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. 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
Section 8.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) 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
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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. 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
Section 9.1. Termination. 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
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(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.
(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
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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. 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. 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
Section 10.1. Non-Survival of Representations and Warranties and
Agreements. 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. 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: (▇▇▇) ▇▇▇-▇▇▇▇
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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. 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.
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"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.
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"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.
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"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).
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"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. 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.
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Section 10.5. Entire Agreement; No Third-Party Beneficiaries. 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. 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. 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. 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. 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. 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. 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
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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).
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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
40
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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") 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;
46
(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
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47
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.
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