EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
dated as of October 19, 2002
entered into by
STERICYCLE, INC.,
SHARPS ACQUISITION CORPORATION
and
▇▇▇▇▇▇▇ HEALTHCARE, INC.
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS 1
ARTICLE 2
THE TRANSACTION
2.1 Merger ........................................................... 1
2.2 Closing........................................................... 1
2.3 Closing Events.................................................... 2
(a) Certificate of Merger...................................... 2
(b) Deliveries by Company...................................... 2
(c) Deliveries by Parent and Merger Sub........................ 2
2.4 Effects of Merger................................................. 2
(a) General.................................................... 2
(b) Corporate Organization..................................... 3
(c) Conversion of Company Shares............................... 3
(d) Company Treasury Shares.................................... 3
(e) Conversion of MergerSub's Stock............................ 3
2.5 Exchange Fund Procedures.......................................... 4
(a) Exchange Fund.............................................. 4
(b) Exchange Procedures........................................ 4
(c) No Further Ownership Rights................................ 5
(d) Termination of Exchange Fund............................... 5
(e) No Liability............................................... 5
(f) Lost Certificates.......................................... 5
(g) Stock Transfer Books....................................... 6
(h) Appraisal Rights........................................... 6
(i) Stock Options.............................................. 6
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF COMPANY
3.1 Organization...................................................... 7
3.2 Authority......................................................... 8
3.3 Enforceability.................................................... 8
3.4 Capital Stock..................................................... 8
3.5 No Violation...................................................... 10
3.6 No Consent Required............................................... 10
3.7 SEC Reports and Financial Statements.............................. 10
3.8 Equipment......................................................... 11
3.9 Contracts......................................................... 11
3.10 Real Property..................................................... 13
3.11 Permits........................................................... 13
3.12 Intellectual Property............................................. 14
3.13 Undisclosed Liabilities........................................... 14
3.14 Taxes ........................................................... 14
3.15 No Material Adverse Change........................................ 15
3.16 Employee Benefits................................................. 15
3.17 Insurance......................................................... 17
3.18 Compliance........................................................ 17
3.19 Legal Proceedings................................................. 18
3.20 Absence of Certain Events......................................... 18
3.21 Environmental Matters............................................. 19
3.22 Employees......................................................... 20
3.23 Labor Relations................................................... 20
3.24 Broker's Fee...................................................... 20
3.25 Takeover Statutes................................................. 21
3.26 Proxy Statement................................................... 21
3.27 Vote Required..................................................... 21
3.28 Opinion of Financial Advisor...................................... 21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB
4.1 Organization...................................................... 22
4.2 Authority......................................................... 22
4.3 Enforceability.................................................... 22
4.4 No Violation...................................................... 22
4.5 No Consent Required............................................... 23
4.6 SEC Reports and Financial Statements.............................. 23
4.7 Broker's Fee...................................................... 23
4.8 MergerSub Formation............................................... 24
4.9 Proxy Statement................................................... 24
4.10 Board Approval.................................................... 24
4.11 Vote Required..................................................... 24
4.12 Compliance with Applicable Laws; Regulatory Matters............... 24
4.13 Ownership of Company Shares....................................... 25
4.14 Financing......................................................... 25
ARTICLE 5
EVENTS PRIOR TO CLOSING
5.1 General........................................................... 25
5.2 Conduct of Business by Company.................................... 25
5.3 Stockholders Meeting.............................................. 25
5.4 Approvals and Consents; Cooperation............................... 26
5.5 Access to Information............................................. 27
5.6 Notice of Developments............................................ 27
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5.7 Acquisition Proposals............................................. 28
5.8 Public Announcements.............................................. 29
5.9 Employee Matters.................................................. 29
5.10 Fees and Expenses................................................. 29
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions of Parent and MergerSub................................ 30
6.2 Conditions of Company............................................. 31
ARTICLE 7
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
NO OTHER REPRESENTATIONS AND WARRANTIES 32
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination by Company or Parent................................. 32
8.2 Termination by Company........................................... 33
8.3 Termination by Parent............................................ 33
8.4 Effect of Termination............................................ 33
8.5 Amendment........................................................ 34
8.6 Extension and Waiver............................................. 35
ARTICLE 9
EVENTS FOLLOWING MERGER
9.1 Continuing Indemnification....................................... 35
9.2 Certain Records.................................................. 36
9.3 Performance by MergerSub......................................... 37
ARTICLE 10
MISCELLANEOUS
10.1 Confidentiality.................................................. 37
10.2 Notices.......................................................... 37
10.3 Entire Agreement................................................. 38
10.4 Assignment....................................................... 38
10.5 No Third Party Beneficiaries..................................... 38
10.6 Severability..................................................... 38
10.7 Captions......................................................... 39
10.8 Construction..................................................... 39
10.9 Counterparts..................................................... 39
10.10 Governing Law; Jurisdiction; Waiver of Jury Trial................ 39
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10.11 Binding Effect................................................... 40
ANNEX I
DEFINITIONS 42
EXHIBITS
Form of Amendment and Restatement of Company's Certificate
of Incorporation............................................... A
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is entered into as
of October 19, 2002 by Stericycle, Inc., a Delaware corporation ("Parent"),
Sharps Acquisition Corporation, a Delaware corporation and wholly owned
subsidiary of Parent ("MergerSub"), and ▇▇▇▇▇▇▇ Healthcare, Inc., a Delaware
corporation ("Company").
WHEREAS, this Agreement contemplates a transaction in which Parent will
acquire all of the outstanding capital stock of Company for cash through a
reverse merger of MergerSub with and into Company.
WHEREAS, the respective boards of directors of Parent, MergerSub and
Company have approved, and deem it advisable and in the best interests of their
respective stockholders to consummate, this Agreement and the merger of
MergerSub with and into Company pursuant to this Agreement.
WHEREAS, the board of directors of Company, based upon the unanimous
recommendation of a special committee of the board of directors (the "Special
Committee"), has resolved to recommend that the stockholders of Company adopt
this Agreement and approve the consummation of the merger of Company with
MergerSub pursuant to this Agreement.
NOW, THEREFORE, in consideration of their mutual promises and intending
to be legally bound, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
Certain capitalized terms used in this Agreement are defined in
ANNEX I.
ARTICLE 2
THE TRANSACTION
2.1 MERGER
Upon the terms and subject to the conditions of this Agreement,
MergerSub shall merge with and into Company (the "Merger") at the Effective
Time. The separate corporate existence of MergerSub shall cease, and Company
shall be the corporation surviving the Merger (the "Surviving Corporation"), and
shall succeed to and assume all of the rights and obligations of MergerSub in
accordance with the DGCL.
2.2 CLOSING
Upon the terms and subject to the conditions set forth in this
Agreement, the closing of
the transactions contemplated by this Agreement ("Closing") shall take place at
the offices of [name of law firm] at 10:00 a.m. on the second business day
following the satisfaction or waiver of all of the Parent Closing Conditions and
all of the Company Closing Conditions (except for those that by their nature are
to be satisfied at Closing), or at such other place, time and date as shall be
agreed in writing by the Parties (the "Closing Date").
2.3 CLOSING EVENTS
At Closing, the following events shall take place, all of which shall
be considered to take place concurrently:
(a) CERTIFICATE OF MERGER
The Company shall execute and acknowledge a certificate of
merger consistent with the terms of this Agreement and otherwise in
form and substance reasonably satisfactory to the Parties (the
"Certificate of Merger"), and shall file the Certificate of Merger in
the office of the Secretary of State of the State of Delaware, as
provided in the DGCL.
(b) DELIVERIES BY COMPANY
Company shall deliver to Parent and MergerSub an Officer's
Certificate certifying that all of the Company Closing Conditions have
been either satisfied or waived.
(c) DELIVERIES BY PARENT AND MERGERSUB
Parent and MergerSub shall make or cause the following
deliveries to Company:
(1) Parent and MergerSub shall have deposited the Merger
Consideration with the Paying Agent in accordance with Section
2.5; and
(2) Parent and MergerSub shall deliver an Officer's
Certificate certifying that all of the Parent Closing Conditions
have been either satisfied or waived.
2.4 EFFECT OF MERGER
(a) GENERAL
The Merger shall become effective at the time (the "Effective
Time") that the Certificate of Merger is duly filed in the office of
the Secretary of State of the State of Delaware or at such later time
as the parties hereto may agree and is provided in the Certificate of
Merger. The Merger shall have the effects described in Section 259 of
the DGCL. The Surviving Corporation may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either Company or MergerSub in
order to carry out and give effect to the Merger.
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(b) CORPORATE ORGANIZATION
As of the Effective Time, Company's certificate of incorporation
as in effect immediately prior to the Effective Time shall be amended
in its entirety as attached hereto as EXHIBIT A, and as so amended,
shall be the certificate of incorporation of the Surviving Corporation.
As of the Effective Time, the bylaws, directors and officers of
MergerSub immediately prior to the Effective Time shall be the bylaws,
directors and officers of the Surviving Corporation.
(c) CONVERSION OF COMPANY SHARES
At the Effective Time, by virtue of the Merger and without any
action on the part of any Stockholder or any holder of capital stock of
Parent or MergerSub, each Company Share shall be converted into the
right to receive an amount (the "Merger Consideration"), payable upon
surrender of the Company Stock Certificate representing the share
pursuant to Section 2.5(b), as follows:
(1) each share of Company Preferred Stock issued and
outstanding immediately prior to the Effective Time (other than
a Dissenting Share or a share held in treasury by Company) shall
be converted into the right to receive, in cash (without
interest), an amount per share equal to the Preferred Stock
Merger Consideration, and all such shares of Company Preferred
Stock shall automatically be canceled and cease to exist; and
(2) each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
a Dissenting Share or a share held in treasury by Company) shall
be converted into the right to receive, in cash (without
interest), an amount per share equal to the Common Stock Merger
Consideration, and all such shares of Company Common Stock shall
automatically be canceled and cease to exist.
(d) COMPANY TREASURY SHARES
At the Effective Time, by virtue of the Merger and without any
action on the part of any Stockholder or any holder of capital stock of
Parent or MergerSub, each share of Company Common Stock and Company
Preferred Stock held in treasury by Company shall be automatically
canceled and cease to exist, and no payment of Merger Consideration
shall be made in respect of the share.
(e) CONVERSION OF MERGERSUB'S STOCK
At the Effective Time, by virtue of the Merger and without any
action on the part of any Stockholder or any holder of capital stock of
Parent or MergerSub, each share of MergerSub's common stock, par value
$.01 per share, shall be converted into one fully paid and
nonassessable share of common stock of the Surviving Corporation.
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2.5 EXCHANGE FUND AND PROCEDURES
(a) EXCHANGE FUND
Prior to the Effective Time, Parent shall appoint a commercial
bank or trust company reasonably acceptable to Company to act as the
paying agent (the "Paying Agent") for the purpose of exchanging Company
Shares for Merger Consideration. At or prior to the Effective Time,
Parent shall deposit with the Paying Agent, in trust for the benefit of
holders of Company Shares and Company Stock Options, cash sufficient in
the aggregate for the Paying Agent to make full payment of the Merger
Consideration payable pursuant to Section 2.4(c) and any amounts
payable pursuable to Section 2.5(i) (net of any required withholding of
taxes). This deposit shall be invested by the Paying Agent as directed
by Parent, and any interest or other income resulting from the
investment shall be Parent's sole and exclusive property and shall be
paid to Parent upon demand. No part of such interest or income shall
accrue to the benefit of holders of Company Shares.
(b) EXCHANGE PROCEDURES
The Surviving Corporation shall cause the Paying Agent, as soon
as reasonably practicable after the Effective Time, to mail to each
registered holder of Company Shares immediately prior to the Effective
Time (i) a letter of transmittal in customary form and containing such
other provisions as Parent reasonably may require (a "Letter of
Transmittal") and (ii) instructions for surrendering the stock
certificate or certificates representing the holder's Company Shares
(each a "Company Stock Certificate") in exchange for the Merger
Consideration payable in respect of the holder's certificate or
certificates which immediately prior to the Effective Time represented
outstanding Company Shares which were converted into the right to
receive the Merger Consideration. The Proxy Statement shall provide
that, in lieu of delivery following the Effective Time as aforesaid,
and commencing on the tenth (10th) calendar day prior to the date of
the Stockholders Meeting, the Letter of Transmittal and instructions
for use will be promptly delivered by the Paying Agent to each prior
holder of Company Shares from whom the Paying Agent receives a written
request therefor prior to the date of the Stockholders Meeting, and
that each such prior holder of Company Shares shall be entitled
thereafter to surrender its Company Stock Certificate in accordance
with the procedures described herein, in the Letter of Transmittal and
in the accompanying instructions, and Parent shall cause the Paying
Agent to comply with the foregoing. Upon surrender of a Company Stock
Certificate to the Paying Agent for cancellation, together with a
Letter of Transmittal duly executed and completed in accordance with
its instructions and such other documents as the Paying Agent
reasonably may require, the Paying Agent shall pay to the holder of the
surrendered certificate, as promptly as practicable after the Effective
Time, the Merger Consideration payable in respect of the Company Shares
represented by the certificate, and the Company Stock Certificate so
surrendered shall be canceled. The Letter of Transmittal shall provide
that such payment shall, at the holder's election and upon delivery of
wire transfer instructions, be by wire
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transfer at the Company's expense for payments exceeding $1,000,000. If
any portion of the Merger Consideration payable in respect of any
Company Shares is to be paid to a Person other than the registered
holder of those shares, it shall be a condition to making such payment
that the Company Stock Certificate representing those shares is
surrendered properly endorsed or otherwise in proper form for transfer
and that the Person requesting such payment shall (i) pay any transfer
or other Taxes required as a result of payment to a Person other than
the registered holder or (ii) establish to the satisfaction of the
Paying Agent that such Tax has been paid or is not payable. At and
after the Effective Time and until surrendered as contemplated by this
Section 2.5(b), each Company Stock Certificate (other than Company
Stock Certificates representing Dissenting Shares or shares of Company
Common Stock or Company Preferred Stock held in treasury to be canceled
pursuant to Section 2.4(d) shall be deemed to represent for all
purposes only the right to receive the Merger Consideration payable
upon such surrender.
(c) NO FURTHER OWNERSHIP RIGHTS
From and after the Effective Time, holders of Company Shares
outstanding immediately prior to the Effective Time shall cease to have
any rights in respect of those shares, except as otherwise provided for
in this Agreement or by applicable Law. The Merger Consideration issued
and paid upon conversion of Company Shares in accordance with the terms
of this Article 2 shall be deemed to have been issued and paid in full
satisfaction of all rights in respect of those shares.
(d) TERMINATION OF EXCHANGE FUND
Any portion of the Exchange Fund remaining undistributed nine
(9) months after the Effective Time shall be delivered to the Surviving
Corporation or as the Surviving Corporation directs, and thereafter any
holder of Company Shares who did not comply with this Article 2 prior
to such delivery shall look, solely to the Surviving Corporation for
the Merger Consideration payable in respect of those shares (subject to
abandoned property, escheat and similar Laws).
(e) NO LIABILITY
None of Parent, MergerSub, the Company or the Paying Agent shall
be liable to any Person in respect of any shares of Company Common
Stock (or dividends or other distributions respect thereto), or cash
from the Exchange Fund, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(f) LOST CERTIFICATES
Upon delivery to the Paying Agent of a "lost certificate"
affidavit in customary form to the effect that a Company Stock
Certificate has been lost, stolen or destroyed, and, if reasonably
required by the Surviving Corporation, delivery of a bond in such
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reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against the Surviving Corporation in
respect of the certificate, the Paying Agent shall deliver to the
Person claiming ownership of the lost, stolen or destroyed Company
Stock Certificate the Merger Consideration payable in respect of the
Company Shares previously represented by the certificate.
(g) STOCK TRANSFER BOOKS
Company's stock transfer books shall be closed immediately upon
the Effective Time, and there shall be no further registration of
transfers of Company Shares on Company's stock transfer records.
(h) APPRAISAL RIGHTS
Notwithstanding anything in this Agreement to the contrary, a
Dissenting Share shall not be converted into the right to receive
Merger Consideration, but instead such holder shall be entitled to
payment of the fair value of such shares in accordance with Section 262
of the DGCL, unless and until the Dissenting Stockholder fails to
perfect or effectively withdraws or loses those rights. At the
Effective Time, each Dissenting Share shall be canceled and cease to
exist or be outstanding, and each holder of Dissenting Shares shall
cease to have any rights with respect thereto, except the right to
receive the fair value of the shares is accordance with the provisions
of Section 262 of the DGCL. Notwithstanding the foregoing, if a
Dissenting Stockholder fails to perfect or effectively withdraws or
otherwise forfeits the right to appraisal under Section 262, the right
of such Dissenting Stockholder to be paid the fair value of such
holder's Dissenting Shares shall cease to exist and such Dissenting
Stockholder's Dissenting Shares shall be deemed to have converted into
and represent for all purposes only the right to receive the Merger
Consideration payable upon surrender of the Company Stock Certificate
representing those shares pursuant to Section 2.5(b). Company shall
give Parent (i) prompt notice of any written demand for appraisal of
any Company Shares, any attempted withdrawal of any such demand, and
any other instrument served on the Company pursuant to the DGCL
relating to rights of appraisal and (ii) the opportunity to consult
with respect to all negotiations and proceedings with respect to
demands for appraisal under the DGCL. Company shall not voluntarily
make any payment in respect of, or settle or offer to settle, any
demand for appraisal without Parent's prior written consent, which
shall not be unreasonably withheld.
(i) STOCK OPTIONS
Company shall take all action necessary so that each outstanding
Company Stock Option, whether or not it is then vested or exercisable,
shall be canceled immediately prior to the Effective Time, and shall
thereafter represent (whether or not previously vested) only the right
to receive from the Surviving Corporation, at the Effective Time or as
soon as practicable thereafter, in consideration for the option's
cancellation, an amount in cash equal to the product of (i) the number
of shares of Company Common Stock
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issuable upon exercise of the option multiplied by (ii) the excess, if
any, of the Common Stock Merger Consideration over the exercise price
per share payable under the option, (with the amount payable subject to
reduction for required withholding of taxes). Promptly following the
execution of this Agreement, Company shall mail to each person who is a
holder of an outstanding Company Stock Option (whether or not then
vested or exercisable) a letter in a form acceptable to Parent
describing the treatment of and payment for Company Stock Options
pursuant to this Section 2.5(i) and providing instructions to use to
obtain payment for the holder's Company Stock Options under this
Agreement. These instructions shall require, inter alia, that as a
condition of payment, the holder shall be required to deliver a
release, in a form acceptable to Parent, by which the holder
effectively relinquishes all rights in respect of the holder's Company
Stock Options upon payment in accordance with this Section 2.5(i). The
Surviving Corporation shall cause the Paying Agent, at the Effective
Time or as soon as reasonably practicable thereafter, to deliver to
such holder the amount of cash provided for in the first sentence of
this Section 2.5(i). Company shall take all actions necessary to cause
all stock option, stock grant and stock purchase plans, and any other
plan, program or arrangement with respect to equity securities of
Company or any Subsidiary, to be terminated effective as of the
Effective Time and to ensure that no Person shall have any rights
thereunder to acquire equity securities of Company, any Subsidiary,
Parent or the Surviving Corporation after such time.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF COMPANY
Except as set forth in (i) the Company disclosure schedule delivered by
Company to Parent at or prior to the execution of this Agreement (the "Company
Disclosure Schedule") (provided that the listing of an item in one schedule of
the Company Disclosure Schedule shall be deemed to be a listing in each schedule
of the Company Disclosure Schedule and to apply to any other representation and
warranty of the Company in this Agreement to the extent that it is reasonably
apparent from a reading of such disclosure item that it would also qualify or
apply to such other schedule or representation and warranty) or (ii) the Company
SEC Reports, Company represents and warrants to Parent and MergerSub as follows:
3.1 ORGANIZATION
Each Target Company is a corporation duly organized, validly existing
and in good standing under the Laws of its state of incorporation, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform its obligations under all Contracts. Each Target Company is
duly qualified to do business as a foreign corporation and is in good standing
under the Laws of each state or other jurisdiction in which qualification is
required by Law (except where the failure to be qualified and in good standing
would not reasonably be expected to have a Material Adverse Effect).
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3.2 AUTHORITY
Company has the power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement. By necessary
corporate action, based upon the unanimous recommendation of the Special
Committee, the board of directors of Company has duly and validly authorized the
execution and delivery of this Agreement and approved this Agreement and the
consummation of the Merger and declared it advisable, and has resolved to
recommend that the stockholders of Company approve this Agreement and the
consummation of the merger of Company with MergerSub pursuant to this Agreement.
Company's execution and delivery of this Agreement and, subject to receipt of
Stockholder Approval, consummation of the Merger, have been duly authorized by
all necessary action required by Company's Organizational Documents and the
DGCL.
3.3 ENFORCEABILITY
This Agreement constitutes a legally valid and binding obligation of
Company, enforceable against Company in accordance with its terms except as
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at law).
3.4 CAPITAL STOCK
(a) Company's authorized capital stock consists of 12,000,000
shares of Company Common Stock and 2,000,000 shares of Company
Preferred Stock.
(b) Company had 4,390,264 shares of Company Common Stock issued
and outstanding as of September 30, 2002. All of these shares are duly
authorized, validly issued, fully paid and nonassessable, and none of
them was issued in violation of or subject to any preemptive rights. As
of the date of this Agreement, Company holds 391,029 shares of Company
Common Stock in treasury, and no shares of Company Common Stock are
held by any Subsidiary.
(c) Company had 17,666 shares of Company Preferred Stock issued
and outstanding as of October 11, 2002. All of these shares are duly
authorized, validly issued, fully paid and nonassessable, and none of
them was issued in violation of or subject to any preemptive rights. As
of the date of this Agreement, Company holds no shares of Company
Preferred Stock in treasury, and no shares of Company Preferred Stock
are held by any Subsidiary.
(d) As of October 11, 2002, there were outstanding Company Stock
Options to purchase a total of 385,000 shares of Company Common Stock,
as listed in Section 3.4(d) of the Company Disclosure Schedule. Section
3.4(d) of the Company Disclosure Schedule also provides, for each stock
option listed, the name of the holder, the number of underlying shares,
the date of grant, the applicable vesting schedule and the exercise
price.
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(e) As of the date of this Agreement: (i) except as described in
Sections 3.4(b) and 3.4(c), there are no other classes of outstanding
shares of capital stock or other classes of equity securities of
Company or any other class of equity equivalents; and (ii) except as
described in Sections 3.4(c) and 3.4(d), there are no other classes of
securities of Company convertible into or exchangeable for shares of
capital stock or other classes of equity securities of Company or
options, warrants, calls, puts, subscription rights, conversion rights
or other Contracts to which Company is party or by which it is bound
providing for Company's issuance of any Company Shares or other equity
securities.
(f) Except for the Voting Agreement or as provided in Company's
certificate of incorporation, as amended to the date of this Agreement,
there are no stockholders agreements, buy-sell agreements, voting
trusts or other Contracts to which Company or any Subsidiary is a party
or by which it is bound relating to the voting or disposition of any
Company Shares or creating any obligation of Company or any Subsidiary
to repurchase, redeem or otherwise acquire or retire any Company Shares
or any Company Stock Options or warrants.
(g) Section 3.4(g) of the Company Disclosure Schedule lists for
each Subsidiary, its name and jurisdiction of incorporation and the
number of authorized shares of each class of its capital stock. All of
the issued and outstanding shares of capital stock of each Subsidiary
are duly authorized, validly issued, fully paid and nonassessable, and
none of them was issued in violation of any preemptive rights.
(h) Company holds of record and owns beneficially all of the
issued and outstanding shares of capital stock of each Subsidiary, free
and clear of any Liens (other than restrictions on transfer under the
Securities Act and state securities Laws) and there are no other
outstanding equity securities or equity equivalents of any Subsidiary.
(i) There are no securities of any Subsidiary convertible into
or exchangeable for shares of capital stock or other equity securities
of the Subsidiary or options, warrants, calls, puts, subscription
rights, conversion rights or other Contracts to which any Subsidiary is
party or by which it is bound providing for its issuance of any shares
of its capital stock or any other equity securities.
(j) There are no stockholders agreements, buy-sell agreements,
voting trusts or other Contracts to which any Subsidiary is a party or
by which it is bound relating to the voting or disposition of any
shares of the Subsidiary's capital stock or creating any obligation of
the Subsidiary to repurchase, redeem or otherwise acquire or retire any
shares of its capital stock or any stock options or warrants.
(k) Except for the Subsidiaries or as described in the Company
SEC Reports, Company does not own any shares of capital stock of or
other equity interest in any corporation or other Person.
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3.5 NO VIOLATION
Subject only to obtaining Stockholder Approval, Company's execution,
delivery and performance of this Agreement will not, either directly or
indirectly (and with or without Notice or the passage of time or both):
(a) violate or conflict with its Organizational Documents or
those of any Subsidiary;
(b) except as would not reasonably be expected to have a
Material Adverse Effect, result in a breach of or default under any
Contract to which it or any Subsidiary is a party or by which it is
bound;
(c) except as would not reasonably be expected to have a
Material Adverse Effect, result in the imposition or creation of any
Lien (other than a Permitted Lien) upon any of its assets or any of the
assets of any Subsidiary; or
(d) except as would not reasonably be expected to have a
Material Adverse Effect, violate or conflict with, or give any
Governmental Authority the right to challenge the Merger or to obtain
any other relief under, any Law or Order to which it or any Subsidiary
is subject.
3.6 NO CONSENT REQUIRED
Except (i) as required by the Securities Act, the Exchange Act, The
Nasdaq National Market, Inc. or applicable Takeover Statutes or (ii) where
Company's failure to give, file or obtain any Notice, Permit or Consent would
not reasonably be expected to have a Material Adverse Effect, and except for
(iii) filing and recordation of appropriate documents for the Merger as required
by the DGCL, Company's execution, delivery and performance of this Agreement do
not require any Notice to, filing with, Permit from or other Consent of any
Governmental Authority or other Person.
3.7 SEC REPORTS AND FINANCIAL STATEMENTS
Company has filed with the SEC all forms, reports, schedules, exhibits
and other documents that it has been required to file (collectively, including
all exhibits thereto, the "Company SEC Reports"), each of which complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act and the related SEC rules and regulations in effect on the date
that it was filed with the SEC. None of the Company SEC Reports, including any
financial statements or schedules included or incorporated by reference in the
Company SEC Reports, contained, as of their respective dates of filing (and, if
amended or superseded by a filing prior to the date of this Agreement or of the
Closing Date, then on the date of such filing), any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or incorporated by reference or necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. No
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Subsidiary is required to file any forms, reports or other documents with the
SEC.
The consolidated financial statements of Company included in the
Company SEC Reports complied as to form in all material respects with applicable
accounting requirements and the relevant published rules and regulations of the
SEC and present fairly, in conformity with GAAP applied on a consistent basis
during the periods involved (except as otherwise noted therein), the
consolidated financial position of Company and its consolidated Subsidiaries as
of the dates indicated and their consolidated results of operations and cash
flows for the periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and to the lack of
footnotes and other presentation items).
3.8 EQUIPMENT
Schedule 3.8 of the Company Disclosure Schedule contains a complete and
accurate list of all of the Equipment of the Target Companies as of the date of
this Agreement having a purchase price of more than $10,000 per piece of
Equipment (grouping the Equipment listed by Target Company, and identifying each
piece of Equipment by Equipment description).
3.9 CONTRACTS
(a) Section 3.9(a) of the Company Disclosure Schedule consists
of 12 subschedules which contain complete and accurate lists of the
following Contracts of the Target Companies as of the date of this
Agreement (grouping the Contracts listed on each subschedule by Target
Company, and listing each Contract only once if more than one listing
otherwise would be required):
(1) a list of the top 20 Customer Contracts (by revenues
for the twelve (12) month period ended August 31, 2002)
identifying each Customer Contract by name of customer, billing
address and contract term (Section 3.9(a)(1) of the Company
Disclosure Schedule);
(2) all Equipment Leases involving monthly payments of
more than $1,000, identifying each Equipment Lease by (i) vendor
and Equipment description, and (ii) lessor, lessee and term of
lease (Section 3.9(a)(2) of the Company Disclosure Schedule);
(3) all Facility Leases and Former Facility Leases,
identifying each Facility Lease and Former Facility Lease by (i)
name, location and use of the Facility in question, and (ii) for
each Facility Lease, lessor, lessee and term of lease (Section
3.9(a)(3) of the Company Disclosure Schedule);
(4) all Contracts (or series of related Contracts) for the
purchase or sale of raw materials, parts, supplies, products or
other personal property, or for the receipt of services, the
performance of which will extend over a period of more than six
months or involve payments in an amount exceeding $25,000
(Section 3.9(a)(4) of the Company Disclosure Schedule);
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(5) all Contracts with lenders evidencing or securing any
indebtedness for borrowed money (Section 3.9(a)(5) of the
Company Disclosure Schedule);
(6) all Contracts with distributors and sales
representatives (Section 3.9(a)(6) of the Company Disclosure
Schedule);
(7) all Contracts guaranteeing the contractual performance
of or any payment by another Person (other than a Target
Company) (Section 3.9(a)(7) of the Company Disclosure Schedule)
where the Target Companies' liability exceeds $25,000;
(8) all Contracts creating a partnership or joint venture
with another Person (Section 3.9(a)(8) of the Company Disclosure
Schedule);
(9) all Contracts restricting or purporting to restrict a
Target Company's geographical area or scope of business
activities or limiting or purporting to limit the freedom to
engage in any line of business or to compete with any Person
(Section 3.9(a)(9) of the Company Disclosure Schedule), except
for arrangements entered into in the Ordinary Course of
Business;
(10) all Contracts granting a right of first refusal or
first negotiation with respect to any material asset of a Target
Company (Section 3.9(a)(10) of the Company Disclosure Schedule);
(11) all Contracts (other than Employee Benefit Plan)
relating to employee compensation, employment, termination of
employment or consulting services, involving annual payments of
in excess of $25,000 including any such Contract that would
result in any benefit payable to any Person following
consummation of the Merger of at least $25,000 (Section
3.9(a)(11) of the Company Disclosure Schedule); and
(12) all Contracts (or series of related Contracts)
entered into outside of the Ordinary Course of Business and
involving the expenditure or receipt by any party of an amount
exceeding $25,000 (Section 3.9(a)(12) of the Company Disclosure
Schedule).
(b) Each Material Contract of the Target Companies is a legally
valid and binding obligation of the subject Target Company and, to the
Knowledge of the Company, the other parties thereto (except where the
failure to be legally valid, binding and enforceable and in full force
and effect would not reasonably be expected to have a Material Adverse
Effect, either individually or in the aggregate with all such other
Contracts).
(c) Except as would not reasonably be expected to result in a
Material Adverse
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Effect: (i) no Target Company is in Default under any Material
Contract, and to Company's Knowledge, no other party to a Material
Contract is in Default in any material respect under the Contract; and
(ii) no event has occurred or circumstance exists that (with or without
Notice or the passage of time, or both) would result in a Default by a
Target Company under a Material Contract or would give any party to a
Material Contract the right to exercise any remedy under the Contract
or to cancel, terminate or modify the Material Contract.
(d) Except as would not reasonably be expected to result in a
Material Adverse Effect, no Target Company has given Notice to or
received Notice from any other Person relating to an alleged, possible
or potential Default under any Material Contract.
(e) For each Facility Lease listed in Section 3.9(a)(3) of the
Company Disclosure Schedule, the Target Company party to the Facility
Lease has a good and valid leasehold interest in the Facility Lease
free and clear of all Liens, except for (i) Taxes and general and
special assessments not in default and payable without penalty and
interest, (ii) easements, covenants and other encumbrances or
restrictions that do not materially impair the current use, occupancy,
value or marketability of the Target Company's interest, (iii) any
landlord's or other statutory lien incidental to the Ordinary Course of
Business and (iv) Permitted Liens.
3.10 REAL PROPERTY
Section 3.10 of the Company Disclosure Schedule contains a complete and
accurate list of all material Real Property owned by the Target Companies as of
the date of this Agreement (identified by Target Company and common name). For
each item of Real Property listed in Section 3.10 of the Company Disclosure
Schedule, title to the parcel is free and clear of all Liens, except for (i)
Taxes and general and special assessments not in default and payable without
penalty and interest, (ii) easements, covenants and other encumbrances or
restrictions that do not materially impair the current use, occupancy, value or
marketability of the property, (iii) statutory liens incidental to the Ordinary
Course of Business and (iv) Permitted Liens.
3.11 PERMITS
(a) Except as would not reasonably be expected to have a
Material Adverse Effect, in the case of each Permit held by the Target
Companies:
(1) the Permit is valid and in full force and effect;
(2) the holder of the Permit has complied with the
terms of the Permit in all material respects;
(3) to Company's Knowledge, no event has occurred or
circumstance exists that (with or without Notice or the passage
of time or both) would constitute or result in the holder's
violation of or failure to comply with the Permit or result in
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the revocation, withdrawal, suspension, cancellation,
termination or material modification of the Permit;
(4) the holder of the Permit has not received any written
Notice from any Governmental Authority or other Person regarding
(i) any actual, alleged or potential violation of or failure to
comply with the Permit or (ii) any actual, proposed or potential
revocation, withdrawal, suspension, cancellation, termination or
modification of the Permit; and
(5) the holder of the Permit has duly filed on a timely
basis all applications that were required to be filed for the
renewal of the Permit and has duly made on a timely basis all
other filings, if any, required to have been made in respect of
the Permit.
(b) The Target Companies hold all Permits required for the
lawful conduct of the Business as it is currently conducted (except for
any Permits the failure to obtain which would not reasonably be
expected to have a Material Adverse Effect);
3.12 INTELLECTUAL PROPERTY
The Target Companies have rights to all Intellectual Property of any
kind or character necessary for the conduct and operation of the Business as it
is currently conducted, except where the failure to have such rights would not
reasonably be expected to have a Material Adverse Effect.
3.13 UNDISCLOSED LIABILITIES
The Target Companies do not have any Liabilities except for (i)
Liabilities disclosed in the financial statements included in the Company's SEC
Reports, (ii) Liabilities incurred in the Ordinary Course of Business since June
30, 2002 and (iii) Liabilities which would not reasonably be expected to have a
Material Adverse Effect.
3.14 TAXES
(a) Except as would not reasonably be expected to have a
Material Adverse Effect, each Target Company has filed all Tax Returns
that it was required to file prior to the date of this Agreement. All
of the Tax Returns filed were correct and complete in all respects
except as would not reasonably be expected to have a Material Adverse
Effect, and all material amounts of Taxes due in connection with these
Tax Returns have been paid (other than (i) Taxes for which adequate
reserves have been established as reflected on the June 30 Balance
Sheet, as such amounts have changed and may change since June 30,
2002), and (ii) Taxes which are being contested in good faith the
nonpayment of which would not reasonably be expected to have a Material
Adverse Effect).
(b) No federal or state income Tax Return that any Target
Company filed prior to
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the date of this Agreement is currently under audit or examination by a
Governmental Authority, and no Target Company has received Notice from
any Governmental Authority that (i) any federal or state income Tax
Return that it filed will be audited or examined or that (ii) it is or
may be liable for a material amount of additional Taxes in respect of
any Tax Return or for the payment of a material amount of Taxes in
respect of a Tax Return that it did not file (because, for example, it
believed that it was not subject to taxation by the jurisdiction in
question).
(c) Except as would not reasonably be expected to have a
Material Adverse Effect, no Target Company had any amount of delinquent
Taxes as of June 30, 2002.
(d) No Target Company has extended the time in which to file any
Tax Return or extended or waived the statute of limitations for the
assessment of any Tax.
(e) No Target Company has filed a consent under ss. 341(f) of
the Internal Revenue Code (relating to collapsible corporations) or
made any payments, or is or could become obligated under an existing
Contract (including a stock option) to make any payments, that are not
deductible under ss. 280G of the Internal Revenue Code (relating to
"golden parachute" payments).
(f) Section 3.14(f) of the Company Disclosure Schedule lists all
federal and all material other income Tax Returns that the Target
Companies have filed since January 1, 1998. No Target Company is a
party to any agreement providing for the allocation or sharing of
Taxes.
(g) Company has not been at any time during the applicable
period specified in ss. 897(c)(1)(A)(ii) of the Internal Revenue Code,
a "United States real property holding corporation" within the meaning
of ss. 897(c) of the Internal Revenue Code.
(h) No Target Company has constituted either a "distributing
corporation" or a "controlled corporation" (within the meaning of ss.
355(a)(1)(A) of the Internal Revenue Code) in a distribution of stock
qualifying for tax-free treatment under ss. 355 of the Internal Revenue
Code in the two years prior to the date of this Agreement.
3.15 NO MATERIAL ADVERSE CHANGE
Since June 30, 2002, (i) there has not been any change in Company's
consolidated financial position, results of operations or assets, and (ii) no
event has occurred or circumstance exists relating to Company or any Subsidiary
that, individually or in the aggregate, has had a Material Adverse Effect.
3.16 EMPLOYEE BENEFITS
(a) Section 3.16(a) of the Company Disclosure Schedule contains
a complete and accurate list of all Employee Benefit Plans under which
any Target Company has any
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obligation or Liability whether contingent or otherwise (grouping the
Employee Benefit Plans by Target Company).
(b) Except as would not reasonably be expected to result in a
Material Adverse Effect, in the case of each Employee Benefit Plan
listed in Section 3.16(a) of the Company Disclosure Schedule:
(1) the plan has been maintained and operated in material
compliance with the applicable requirements of ERISA, the
Internal Revenue Code and any other Law;
(2) all required contributions to or premiums or other
payments in respect of the plan have been timely paid;
(3) there have been no "prohibited transactions" (as
defined in ss. 406 of ERISA and ss. 4975 of the Internal Revenue
Code) in respect of the plan which could reasonably result in
Liability to a Target Company; and
(4) no Suit in respect of the administration or operation
of the plan or the investment of plan assets is pending or, to
Company's Knowledge, Threatened, and to Company's Knowledge,
there is no basis for any such Suit.
(c) Except to the extent required by ss. 4980B of the Internal
Revenue Code or any similar state law, no Target Company provides
health or other welfare benefits to any retired or former employee or
is obligated to provide health or other welfare benefits to any active
employee following his or her retirement or other termination of
service.
(d) No Target Company maintains or in the past six (6) years has
maintained an Employee Benefit Plan that is or was subject to the
"minimum funding standards" of ss. 302 of ERISA or Title IV of ERISA.
(e) No Target Company contributes to or in the past six (6)
years has been required to contribute to any "multiemployer plan" (as
defined in ss. 3(37) of ERISA).
(f) Each Employee Benefit Plan listed in Section 3.16(a) of the
Company Disclosure Schedule and any related trust intended to qualify
under ss. 401(a) of the Internal Revenue Code has received a
determination from the Internal Revenue Service that it so qualifies.
(g) Except as contemplated by this Agreement, neither the
execution of this Agreement nor the consummation of the Merger will
result in an increase in benefits under any Employee Benefit Plan
listed in Section 3.16(a) of the Company Disclosure Schedule or any
Contract with any current, former or retired employee of the Company or
an acceleration of the time of payment or vesting of any benefits.
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3.17 INSURANCE
(a) Section 3.17(a) of the Company Disclosure Schedule consists
of three subschedules and lists:
(1) all insurance policies in effect on the date of this
Agreement under which any Target Company or any director or
officer of a Target Company (in his or her capacity as a
director or officer) is insured at any time since January 1,
1998 (Section 3.17(a)(1) of the Company Disclosure Schedule);
(2) all self-insurance arrangements by any Target Company
since January 1, 1998 (Section 3.17(a)(2) of the Company
Disclosure Schedule); and
(3) all obligations of any Target Company to provide
insurance coverage to any Person other than an employee (Section
3.17(a)(3) of the Company Disclosure Schedule).
(b) Except as would not reasonably be expected to have a
Material Adverse Effect, with respect to each insurance policy listed
in Section 3.17(a)(1) of the Company Disclosure Schedule under which a
Target Company is currently insured:
(1) the policy is valid and in full force and effect, and
will continue in full force and effect following consummation of
the Merger; and
(2) with respect to all pending claims, the Target Company
has not received (i) any refusal of coverage, (ii) any Notice
that a defense will be afforded with a reservation of rights, or
(iii) any Notice of cancellation or any other indication that
the policy is no longer in full force or effect or will not be
renewed or that the insurance company is unwilling or unable to
perform its obligations.
3.18 COMPLIANCE
(a) Since January 1, 1998, each Target Company has complied
with, and is currently in compliance with, each Law and Order that is
or was applicable to it or to the conduct of the Business (except for
non-compliance that would not reasonably be expected to have a Material
Adverse Effect, either individually or in the aggregate with all such
other non-compliance).
(b) Except as would not reasonably be expected to have a
Material Adverse Effect, no Target Company has received any written
Notice which has not been resolved from any Governmental Authority or
other Person regarding (i) any actual, alleged or potential violation
of or failure to comply with any applicable Law or Order or (ii) any
actual, alleged or potential obligation to undertake or bear all or any
portion of the cost of any remedial action of any kind.
-17-
3.19 LEGAL PROCEEDINGS
(a) Section 3.19(a) of the Company Disclosure Schedule consists
of two subschedules and lists:
(1) all Suits pending as of the date of this Agreement in
which any Target Company is a party (Section 3.19(a)(1) of the
Company Disclosure Schedule); and
(2) all other Suits since January 1, 1998 through the date
of this Agreement involving monetary claims of more than $50,000
or requests for injunctive relief in which any Target Company
was a party (Section 3.19(a)(2) of the Company Disclosure
Schedule).
(b) None of the pending Suits listed in Section 3.19(a)(1) of
the Company Disclosure Schedule would reasonably be expected to have a
Material Adverse Effect.
(c) to Company's Knowledge, as of the date of this Agreement,
there is no Suit Threatened or investigation pending against any Target
Company which would reasonably be expected to have a Material Adverse
Effect.
3.20 ABSENCE OF CERTAIN EVENTS
Since June 30, 2002 through the date of this Agreement, no Target
Company has:
(a) sold, leased, transferred or disposed of any of its assets
used, held for use or useful in conduct of the Business with a book
value in excess of $1,000 except in the Ordinary Course of Business;
(b) entered into any Material Contract relating to the Business
except in the Ordinary Course of Business;
(c) terminated, accelerated or modified any Material Contract
relating to the Business to which it is or was a party or by which it
is or was bound, or has agreed to do so, or has received Notice that
another party had done so or intends to do so, except in the case of
Material Contracts which expired in accordance with their terms or
which were terminated, accelerated or modified in any material respect
in the Ordinary Course of Business;
(d) imposed or permitted any Lien (other than a Permitted Lien)
on any of its assets except in the Ordinary Course of Business;
(e) other than in the Ordinary Course of Business, delayed or
postponed payment of its vendor accounts payable and other
Liabilities;
(f) cancelled, compromised, waived or released any claim or
right involving in excess of $1,000 outside of the Ordinary Course of
Business;
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(g) experienced any damage, destruction or loss to any of its
assets used, held for use or useful in conduct of the Business (whether
or not covered by insurance) which has resulted in a Material Adverse
Effect;
(h) changed the base compensation or other terms of employment
of any of its employees involving consideration in excess of $50,000
except in the Ordinary Course of Business;
(i) paid a bonus to any employee other than in the Ordinary
Course of Business;
(j) adopted a new material Employee Benefit Plan, terminated any
material existing plan or increased materially the benefits under or
otherwise materially modified any existing plan except as contemplated
in this Agreement;
(k) amended its Organizational Documents;
(l) issued, sold, redeemed or repurchased, or effected any
split, combination or reclassification of, any shares of its capital
stock or other securities or retired any indebtedness;
(m) granted any stock options other than in the Ordinary Course
of Business;
(n) declared or paid any dividends or made any other
distributions in respect of its capital stock;
(o) made, or guaranteed, any loans or advances to another
Person, other than a Target Company, or made any investment or
commitment therefor in any Person, other than a Target Company, in each
case other than in the Ordinary Course of Business;
(p) made any capital expenditures in excess of $25,000 in the
aggregate;
(q) made any material change in its accounting principles or
methods; or
(r) entered into any Contract to do any of the matters described
in the preceding clauses (a)-(q).
3.21 ENVIRONMENTAL MATTERS
(a) Each Target Company is, and has been at all times since
January 1, 1995, in compliance with all applicable Environmental Laws
and Occupational Safety and Health Laws (except where non-compliance
would not reasonably be expected to have a Material Adverse Effect,
either individually or in the aggregate with all such other
non-compliance), and to Company's Knowledge, there are no facts,
circumstances or
-19-
conditions which would reasonably be expected to prevent compliance in
the future (except where non-compliance would not reasonably be
expected to have a Material Adverse Effect, either individually or in
the aggregate with all such other non-compliance).
(b) No Target Company has received any Notice from any
Governmental Authority, any private citizen acting in the public
interest, the current or prior owner or operator of any current or
former Facility, or any other Person, of (i) any actual or potential
violation or failure to comply with any Environmental Laws or (ii) any
actual or potential Cleanup Liability or other Environmental Liability,
which would reasonably be expected to have a Material Adverse Effect,
either individually or in the aggregate with all other such matters.
3.22 EMPLOYEES
Section 3.22 of the Company Disclosure Schedule contains a complete and
accurate list of the following information for the employees of each Target
Company as of the date of this Agreement (grouping the employees by Target
Company), including employees on leave of absence: name; job title; date of
hire; current base compensation; and changes in base compensation since January
1, 2001 (or date of hire, if later). To Company's Knowledge, except where
non-compliance therewith would not reasonably be expected to have a Material
Adverse Effect, no employee of any Target Company is a party to or is otherwise
bound by any Contract or arrangement, including any confidentiality,
noncompetition or proprietary rights agreement, that presently limits or
restricts the scope of his or her duties as an employee of the Surviving
Corporation (or of a Subsidiary of the Surviving Corporation).
3.23 LABOR RELATIONS
No Target Company is or has ever been a party to any collective
bargaining agreement or other labor Contract. Except as would not reasonably be
expected to have a Material Adverse Effect, no Target Company is experiencing,
or has experienced at any time, and, to Company's Knowledge, there is no
reasonable basis to expect any Target Company to experience: (i) any strike,
slowdown, picketing or work stoppage by or lockout of its employees; (ii) any
Suit relating to the alleged violation of any Law or Order relating to labor
relations or employment matters (including any charge or complaint filed by an
employee or union with the U.S. National Labor Relations Board or Equal
Employment Opportunity Commission or any other comparable Governmental
Authority); (iii) any other labor or employment dispute; or (iv) any activity to
organize or establish a collective bargaining unit, trade union or employee
association.
3.24 BROKER'S FEE
Company has no Liability or obligation to pay any fees or commissions
to any broker, finder or agent with respect to the transactions contemplated by
this Agreement.
-20-
3.25 TAKEOVER STATUTES
No "fair price", "moratorium", "control share acquisition" or other
similar antitakeover statute or regulation enacted under state or federal laws
in the United States (with the exception of Section 203 of the DGCL) applicable
to the Company ("Takeover Statutes") is applicable to the Merger or the other
transactions contemplated hereby. Assuming the accuracy of the representation
and warranty set forth in Section 4.13, the action of the Board of Directors of
the Company in approving this Agreement (and the transactions provided for
herein) is sufficient to render inapplicable to this Agreement (and the
transactions provided for herein) the restrictions on "business combinations"
(as defined in Section 203 of the DGCL) as set forth in Section 203 of the DGCL.
3.26 PROXY STATEMENT
None of the information supplied or to be supplied by the Company for
inclusion or incorporation by reference in the Proxy Statement (and each
amendment of or supplement to the Proxy Statement, if any) will, on the date it
is mailed to the Stockholders and at the time of the Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or incorporated by reference or necessary in
order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading or necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies for the
Stockholders Meeting which shall have become false or misleading.
Notwithstanding the foregoing, Company makes no representation or warranty in
respect of statements made in any of the foregoing documents based on
information supplied by Parent or MergerSub in writing for inclusion in such
documents. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations of the
SEC.
3.27 VOTE REQUIRED
The affirmative vote of the holders of a majority of the outstanding
shares of Company Common Stock is the only vote of holders of any class or
series of Company's capital stock necessary to adopt this Agreement and to
consummate the Merger.
3.28 OPINION OF FINANCIAL ADVISOR
The Special Committee has received the opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇, dated October 19, 2002, to the effect that, as of such date, the Common
Stock Merger Consideration to be received by the holders of Company Common Stock
is fair to such holders from a financial point of view.
-21-
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB
Except as set forth in the Parent SEC Reports, Parent and MergerSub
represent and warrant to Company as follows:
4.1 ORGANIZATION
Each of Parent and MergerSub is are a corporation duly organized,
validly existing and in good standing under the Laws of the State of Delaware,
with full corporate power and authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it purports to own
or use, and to perform its obligations under all Contracts. Parent directly owns
all of the issued and outstanding shares of MergerSub's capital stock.
4.2 AUTHORITY
Each of Parent and MergerSub has the power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement. The
execution, delivery and performance of this Agreement by Parent and MergerSub
have been duly authorized by all necessary action required by their respective
Organizational Documents and applicable Law.
4.3 ENFORCEABILITY
This Agreement constitutes a legally valid and binding obligation of
Parent and MergerSub, enforceable against them in accordance with its terms
except as enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting the
enforcement of creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law).
4.4 NO VIOLATION
The execution, delivery and performance of this Agreement by Parent and
MergerSub will not, in the case of each of them, either directly or indirectly
(and with or without Notice or the passage of time or both):
(a) violate or conflict with its Organizational Documents;
(b) except as would not reasonably be expected to have a
Material Adverse Effect, result in a breach of or default under any
Contract to which it is a party or by which it is bound;
(c) except as would not reasonably be expected to have a
Material Adverse Effect, result in the imposition or creation of any
Lien (other than a Permitted Lien) upon any of its assets; or
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(d) violate or conflict with, or give any Governmental Authority
or other Person the right to challenge the Merger or to obtain any
other relief under, any Law or Order to which it is subject.
4.5 NO CONSENT REQUIRED
Except (i) as required by the Securities Act, the Exchange Act, The
Nasdaq National Market, Inc. or applicable Takeover Statutes or (ii) where its
failure to give, file or obtain any Notice, Permit or Consent would not
reasonably be expected to have a Material Adverse Effect, and except for (iii)
filing and recordation of appropriate documents for the Merger as required by
the DGCL, the execution, delivery and performance of this Agreement by Parent
and MergerSub do not require any Notice to, filing with, Permit from or other
Consent of any Governmental Authority or other Person.
4.6 SEC REPORTS AND FINANCIAL STATEMENTS
Parent has filed with the SEC all forms, reports, schedules, exhibits
and other documents that it has been required to file (collectively, including
all exhibits thereto, the "Parent SEC Reports"), each of which complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act and the related SEC rules and regulations in effect on the date
that it was filed with the SEC. None of the Parent SEC Reports, including any
financial statements or schedules included or incorporated by reference in the
Parent SEC Reports, contained, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or of the Closing
Date, then on the date of such filing) filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
incorporated by reference or necessary in order to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
The consolidated financial statements of Parent included in the Parent
SEC Reports complied as to form in all material respects with applicable
accounting requirements and the relevant published rules and regulations of the
SEC and present fairly, in conformity with GAAP applied on a consistent basis
during the periods involved (except as otherwise noted therein), the
consolidated financial position of Parent and its consolidated subsidiaries as
of the dates indicated and their consolidated results of operations and cash
flows for the periods then ended (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments and to the lack of
footnotes and other presentation items).
4.7 BROKER'S FEE
Neither Parent nor MergerSub has any Liability or obligation to pay any
fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
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4.8 MERGERSUB FORMATION
MergerSub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. Since the date of its
incorporation, MergerSub has not carried on any business or conducted any
operations other than the execution of this Agreement, the performance of its
obligations under this Agreement and related ancillary matters.
4.9 PROXY STATEMENT
None of the information supplied or to be supplied by Parent or
MergerSub for inclusion or incorporation by reference in the Proxy Statement
(and each amendment of or supplement to the Proxy Statement, if any) will, on
the date it is mailed to the Stockholders and at the time of the Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or incorporated by reference or
necessary in order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading or necessary to correct
any statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders Meeting which shall have become false or
misleading.
4.10 BOARD APPROVAL
The Board of Directors of MergerSub, by unanimous written consent, has
unanimously approved this Agreement and declared it advisable and in the best
interests of MergerSub's sole stockholder.
4.11 VOTE REQUIRED
The affirmative vote of Parent, as the sole stockholder of MergerSub,
is the only vote of the stockholders of Parent or the stockholders of MergerSub
necessary to adopt this Agreement.
4.12 COMPLIANCE WITH APPLICABLE LAWS; REGULATORY MATTERS
Parent and its subsidiaries hold all permits, licenses, certificates,
franchises, registrations, variances, exemptions, orders and approvals of all
Governmental Authorities, except for those which the failure to hold would not
reasonably be expected to have a Material Adverse Effect (the "Parent Permits").
Parent and its subsidiaries are in compliance with the terms of the Parent
Permits, except where the failure so to comply would not reasonably be expected
to have a Material Adverse Effect. The businesses of Parent and its subsidiaries
are not being and have not been conducted in violation of any law, ordinance,
regulation, judgment, decree, injunction, rule or order of any Governmental
Authority, except for violations which would not reasonably be expected to have
a Material Adverse Effect. As of the date of this Agreement, no investigation by
any Governmental Authority with respect to Parent or any of its material
subsidiaries is pending or, to the Knowledge of Parent, threatened in writing,
other than investigations which would not reasonably be expected to have a
Material Adverse Effect.
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4.13 OWNERSHIP OF COMPANY SHARES
Neither Parent nor MergerSub is, nor at any time during the last three
years has it been, an "interested stockholder" of Company as defined in Section
203 of the DGCL. Neither Parent nor MergerSub owns (directly or indirectly,
beneficially or of record) and is not a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of, in
each case, any shares of capital stock of Company (other than as contemplated by
this Agreement).
4.14 FINANCING
Parent represents that as of the date hereof it has, and on the Closing
Date it will have and will cause MergerSub or the Surviving Corporation as the
case may be to have, access to sufficient funds to deliver (i) the Merger
Consideration to the Paying Agent in accordance with Section 2.5(a) and (ii)
cash in an aggregate amount necessary to satisfy the Surviving Corporation's
payment obligations to holders of Company Stock Options in accordance with
Section 2.5(i).
ARTICLE 5
EVENTS PRIOR TO CLOSING
5.1 GENERAL
Pending Closing, each Party shall use its reasonable best efforts to
take all actions and to do all things necessary in order to consummate the
Merger (including, in the case of Company, satisfaction, but not waiver, of the
Company Closing Conditions, and in the case of Parent and MergerSub,
satisfaction, but not waiver, of the Parent Closing Conditions).
5.2 CONDUCT OF BUSINESS BY COMPANY
Pending Closing:
(a) Company shall, and shall cause each Subsidiary to, conduct
the Business only in the Ordinary Course of Business and with no less
diligence and effort than would be applied in the absence of this
Agreement; and
(b) Company shall not, and shall cause each Subsidiary not to,
take any affirmative action that results in the occurrence of an event
described in Section 3.20 or fail to take any reasonable action within
its control that would avoid the occurrence of an event described in
Section 3.20 (other than capital expenditures in fiscal year 2004
consistent with the level of capital expenditures in fiscal year 2003).
5.3 STOCKHOLDERS MEETING
Subject to Section 5.7 hereof, Company shall take all lawful action to
(i) cause a special
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meeting of its Stockholders (the "Stockholders Meeting") to be duly called and
held as soon as possible for the purpose of obtaining Stockholder Approval and
(ii) solicit proxies from its Stockholders to obtain Stockholder Approval.
Company's board of directors shall recommend approval and adoption of this
Agreement and the Merger by Company's Stockholders and, except as permitted by
Section 5.7(c), shall not withdraw, amend, or modify their respective
recommendations in a manner adverse to Parent (or announce publicly its
intention to do so). In this regard, Company shall:
(a) as promptly as practicable after the date of this Agreement,
prepare and file with the SEC a preliminary proxy statement containing
the information required to be disclosed to the Stockholders in
connection with the vote of the Stockholders to provide Stockholder
Approval, give Parent the opportunity to review the preliminary proxy
statement prior to its being filed with the SEC, and, after
consultation with Parent, respond promptly to any comments made by the
SEC with respect to the preliminary proxy statement and cause a
definitive proxy statement (the "Proxy Statement") to be mailed to the
Stockholders; and
(b) subject to the fiduciary duties of the Board of Directors
and Section 5.7 of this Agreement, include in the Proxy Statement the
recommendation of Company's board of directors that the Stockholders
vote in favor of adoption of this Agreement;
(c) subject to the fiduciary duties of the Board of Directors
and Section 5.7 of this Agreement, use its reasonable best efforts to
obtain Stockholder Approval; and
(d) otherwise comply in all material respects with all legal
requirements applicable to the Stockholders Meeting.
After the date hereof, none of Parent, MergerSub or any of Parent's
other subsidiaries shall purchase, offer to purchase or enter into any contract,
agreement or understanding with respect to Company Shares, except pursuant to
the Merger and the Voting Agreement.
5.4 APPROVALS AND CONSENTS; COOPERATION
Each of the Company and Parent shall cooperate with each other and use
(and shall cause their respective Subsidiaries to use) its reasonable efforts to
take or cause to be taken all actions, and do or cause to be done all things,
necessary, proper or advisable on their part under this Agreement and applicable
laws to consummate and make effective the Merger and the other transactions
contemplated by this Agreement as soon as practicable, including (i) preparing
and filing as promptly as practicable (including, without limitation, filing the
notifications required by the New York City Business Integrity Commission within
five (5) business days following the date of this Agreement) all documentation
to effect all necessary applications, notices, petitions, filings, tax ruling
requests and other documents and to obtain as promptly as practicable all
consents, waivers, licenses, orders, registrations, approvals, permits, tax
rulings and authorizations necessary or advisable to be obtained from any third
party and/or any Governmental Authority in order to consummate the Merger or any
of the other transactions
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contemplated by this Agreement, (ii) taking such reasonable steps as may be
necessary to obtain all such consents, waivers, licenses, registrations,
permits, authorizations, tax rulings, orders and approvals and (iii) with
respect to Parent, taking such reasonable steps as may be necessary to assist
Company with its obligations pursuant to Section 5.3. Without limiting the
generality of the foregoing, each of the Company and Parent agrees to make all
necessary filings in connection with the Required Regulatory Approvals as
promptly as practicable after the date of this Agreement, and to use its
reasonable efforts to furnish or cause to be furnished, as promptly as
practicable, all information and documents requested with respect to such
Required Regulatory Approvals and shall otherwise cooperate with the applicable
Governmental Authority in order to obtain any Required Regulatory Approvals in
as expeditious a manner as possible. Each of the Company and Parent shall use
its best efforts to resolve such objections, if any, as any Governmental
Authority may assert with respect to this Agreement and the transactions
contemplated hereby in connection with the Required Regulatory Approvals. In the
event that a suit is instituted by a Person or Governmental Authority
challenging this Agreement and the transactions contemplated hereby as violative
of applicable antitrust or competition laws, each of the Company and Parent
shall use its best efforts to resist or resolve such suit. The Company and
Parent each shall, upon request by the other, furnish the other with all
information concerning itself, its Subsidiaries, directors, officers and
stockholders and such other matters as may reasonably be necessary or advisable
in connection with any statement, filing, ruling request, notice or application
made by or on behalf of the Company, Parent or any of their respective
Subsidiaries to any third party and/or any Governmental Authority in connection
with the Merger or the other transactions contemplated by this Agreement.
5.5 ACCESS TO INFORMATION
Pending Closing, Company shall, and shall cause each Subsidiary to (i)
give Parent and its representatives (including counsel, financial advisors and
accountants) access during normal business hours (but without unreasonable
interference with operations) to its Facilities and Books and Records and other
documents and (ii) make its officers and employees available to respond to
reasonable inquiries regarding the Company, the Subsidiaries and the Business.
Company shall furnish Parent and its representatives with all information and
copies of all documents concerning the Company, the Subsidiaries and the
Business, and the Company Shares and Company Options, that Parent and its
representatives reasonably request. Company shall furnish to Parent, at the
earliest time that they are available, such monthly and quarterly financial
statements and data as are routinely prepared by Company.
5.6 NOTICE OF DEVELOPMENTS
Pending Closing, the Parties shall promptly give Notice to each of the
other Parties of: (i) any fact or circumstance of which a Party becomes aware
that causes or constitutes an inaccuracy in any of Party's representations and
warranties in Articles 3 or 4 on the date of this Agreement that would
reasonably be expected to result in a failure to satisfy any of the conditions
in Section 6.1 or 6.2; (ii) any breach of or default of any Party's other
obligations in this Article 5 that would reasonably be expected to result in a
failure to satisfy any of the conditions in Section 6.1 or 6.2; or (iii) the
occurrence of any event that may make satisfaction of
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any of the conditions in Section 6.1 or 6.2 impossible or unlikely; but the
delivery of any Notice pursuant to this Section 5.6 shall not cure such breach
or non-compliance or limit or otherwise affect the rights, obligations or
remedies available to any Party under this Agreement.
5.7 ACQUISITION PROPOSALS
(a) Immediately after the execution and delivery of this
Agreement, Company shall, and shall cause its affiliates and their
respective officers, directors, employees, investment bankers,
attorneys, accountants and other advisors and representatives to, cease
and terminate any existing activities, discussions or negotiations with
any parties previously conducted in respect of any possible Acquisition
Proposal. Company shall take all necessary steps promptly to inform the
individuals or entities referred to in the next sentence of this
Section 5.7(a) of the obligations undertaken in this Section 5.7(a).
From the date of this Agreement and prior to the earlier of the
Effective Time or the Termination Date, Company shall not, and shall
not authorize or cause any Subsidiary or any officer, director or
employee of Company or any Subsidiary, or any investment banker,
attorney, accountant or other advisor or representative of Company or
any Subsidiary, to, directly or indirectly, (i) solicit, initiate or
knowingly encourage the submission of any Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding, or furnish to
any Person any information in respect of, or take any other action to
facilitate, any Acquisition Proposal or any inquiries or the making of
any proposal that constitutes, or reasonably would be expected to lead
to, any Acquisition Proposal.
(b) Notwithstanding the limitation provided for in clause (ii)
of the second sentence of Section 5.7(a), if Company receives a bona
fide written proposal or offer that Company's board of directors and
the Special Committee determine in good faith is or would reasonably be
expected to result in a third party making a Superior Company Proposal,
Company may (A) furnish information with respect to Company to the
Person making such proposal or offer (if the Person first enters into a
confidentiality agreement with Company containing restrictions as to
confidentiality substantially equivalent to or more protective of
Company than those in the confidentiality agreement between Company and
Parent), and (B) participate in discussions or negotiations with such
person regarding such proposal or offer.
(c) Except as expressly permitted by this Section 5.7, Company's
board of directors and the Special Committee shall not approve or
recommend to stockholders any Acquisition Proposal. Nothing contained
in this Agreement shall prohibit Company from complying with Rule 14e-2
promulgated under the Exchange Act with regard to any Acquisition
Proposal or making any disclosure to Company's Stockholders which, in
the good faith reasonable judgment of Company's board of directors, is
required under applicable Law. Notwithstanding anything contained in
this Agreement to the contrary, any action by Company's board of
directors or the Special Committee permitted by, and taken in
accordance with, this Section 5.7 shall not constitute a breach of this
Agreement by Company.
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(d) In the event Company receives a Superior Company Proposal,
nothing contained in this Agreement shall prevent the Company's board
of directors, the Special Committee or an Authorized Officer of the
Company from executing or entering into an agreement relating to such
Superior Company Proposal and recommending such Superior Company
Proposal to the Stockholders; and in such case, Company's board of
directors may withdraw, modify or refrain from making its
recommendation (including a declaration of advisability) of the Merger
and/or adoption of this Agreement, and, to the extent it does so,
Company may refrain from calling, providing notice of and holding the
Stockholders Meeting to adopt this Agreement and from soliciting
proxies or consents to secure the vote or written consent of its
stockholders to adopt this Agreement and may terminate this Agreement.
5.8 PUBLIC ANNOUNCEMENTS
Each of Parent, Subsidiary and Company shall consult with one another
before issuing any press release or otherwise making any public statements in
respect of the transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as required by Law or the rules of
The Nasdaq National Market, Inc.
5.9 EMPLOYEE MATTERS
Parent shall cause the Surviving Corporation to honor the obligations
of each Target Company under the provisions of each Employee Benefit Plan listed
on Section 3.16(a) of the Company Disclosure Schedule and all written employment
Contracts referred to on Section 3.22 of the Company Disclosure Schedule,
subject to Parent's right to amend or terminate any such benefit plan or
employee Contract in accordance with its terms; provided, however, that Parent
shall not amend or terminate any such benefit plan prior to the first (1st)
anniversary of the Effective Date unless the Employee Benefit Plans of Parent in
which the employees of the Target Companies are eligible to participate provide
for benefits which, in the aggregate, are substantially equal to or greater than
those provided under the plans listed on Schedule 3.16(a). After the Effective
Time, the employees of each Target Company shall be eligible to participate in
the Employee Benefit Plans of Parent in accordance with their respective terms
of participation, as such plans may be in effect from time to time, and at
Parent's sole discretion, such employees may become employees of Parent. Service
with any Target Company will be counted for purposes of determining periods of
eligibility to participate or to vest in benefits under any applicable Employee
Benefit Plan of Parent. At Parent's sole discretion, administrative functions,
including but not limited to payroll processing, may be transferred to
processors of Parent's choosing.
5.10 FEES AND EXPENSES
If the Merger is consummated, the Surviving Corporation shall pay the
legal, financial advisory and accounting fees and expenses of Company in
addition to such other reasonable and customary expenses incurred by Company
(including, but not limited to, the printing, filing and
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mailing to Company Stockholders of the Proxy Statement) in connection with the
Merger. If the Merger is not consummated, all expenses incurred in connection
with this Agreement and the transactions contemplated by this Agreement shall be
paid by the Party incurring those expenses.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 CONDITIONS OF PARENT AND MERGERSUB
The respective obligations of Parent and MergerSub to consummate the
Merger and to take the other actions that they are respectively required to take
at Closing are subject to the satisfaction of each of the following conditions
(the "Parent Closing Conditions") prior to or at Closing:
(a) (i) the representations and warranties of Company in Article
3 that are qualified by reference to a Material Adverse Effect are true
and correct on the Closing Date as if they were made at and as of
Closing (other than representations and warranties that address matters
only as of a certain date, which need only be true and correct as of
such certain date), and (ii) the representations and warranties of
Company in Article 3 that are not so qualified are true and correct in
all material respects on the Closing Date as if they were made at and
as of Closing (other than representations and warranties that address
matters only as of a certain date, which need only be true and correct
in all material respects as of such certain date), except, in each
case, for representations and warranties the breach of which has not
had, and would not reasonably be expected to have, a Material Adverse
Effect;
(b) Company shall have complied with all covenants applicable to
Company set forth in this Agreement except for such non-compliance as
would not reasonably be expected to result in a Material Adverse
Effect;
(c) the receipt of the consent, approval and authorization
required for consummation of the Merger by the New York City Business
Integrity Commission;
(d) holders of Company Shares representing no more than five
percent (5%) of the outstanding shares of Company Common Stock have
exercised (and not withdrawn or otherwise forfeited) the rights of a
dissenting stockholder under Section 262 of the DGCL with respect to
their Company Shares;
(e) Stockholder Approval has been obtained; and
(f) no temporary restraining order, preliminary or permanent
injunction or other order issued by a court or other Governmental
Authority of competent jurisdiction shall be in effect and have the
effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger; provided, however, that the provisions of
this Section 6.1(f) shall not be available to Parent or MergerSub if
either of such Parties' failure to
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fulfill its obligations pursuant to Sections 5.4 or 5.5 shall have been
the cause of, or shall have resulted in, such order or injunction.
Parent and MergerSub may waive any Parent Closing Condition specified
in this Section 6.1 by a written waiver delivered to Company at any time prior
to or at Closing.
6.2 CONDITIONS OF COMPANY
The obligation of Company to consummate the Merger and to take the
other actions that it is required to take at Closing is subject to the
satisfaction of each of the following conditions (the "Company Closing
Conditions") prior to or at Closing:
(a) (i) the representations and warranties of Parent and
MergerSub in Article 4 that are qualified by reference to a Material
Adverse Effect are true and correct on the Closing Date as if they were
made at and as of Closing (other than representations and warranties
that address matters only as of a certain date, which need only be true
and correct as of such certain date), and (ii) the representations and
warranties of Parent and MergerSub in Article 4 that are not so
qualified are true and correct in all material respects on the Closing
Date as if they were made at and as of Closing (other than
representations and warranties that address matters only as of a
certain date, which need only be true and correct in all material
respects as of such certain date), except, in each case, for
representations and warranties the breach of which has not had, and
would not reasonably be expected to have, a Material Adverse Effect;
(b) Parent and MergerSub shall have complied with all covenants
applicable to Parent or MergerSub set forth in this Agreement except
for such non-compliance as would not reasonably be expected to result
in a Material Adverse Effect;
(c) receipt of the consent, approval and authorization required
by the New York City Business Integrity Commission for consummation of
the Merger;
(d) Stockholder Approval has been obtained; and
(e) no temporary restraining order, preliminary or permanent
injunction or other order issued by a court or other Governmental
Authority of competent jurisdiction shall be in effect and have the
effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger; provided, however, that the provisions of
this Section 6.2(e) shall not be available to Company if such Party's
failure to fulfill its obligations pursuant to Sections 5.4 or 5.5
shall have been the cause of, or shall have resulted in, such order or
injunction.
Company may waive any Company Closing Condition specified in this
Section 6.2 by a written waiver delivered to Parent and MergerSub at any time
prior to or at Closing.
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ARTICLE 7
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
NO OTHER REPRESENTATIONS AND WARRANTIES
None of the representations, warranties, covenants and other agreements
in this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective Time,
except for those covenants and agreements contained herein and therein that by
their terms apply or are to be performed in whole or in part after the Effective
Time and this Article 7. Each party hereto agrees that, except for the
representations and warranties contained in this Agreement, none of Company,
Parent or MergerSub makes any other representations or warranties, and each
hereby disclaims any other representations and warranties made by itself or any
of its officers, directors, employees, agents, financial and legal advisors or
other representatives, with respect to the execution and delivery of this
Agreement, the documents and the instruments referred to herein, or the
transactions contemplated hereby or thereby, notwithstanding the delivery or
disclosure to the other party or the other party's representatives of any
documentation or other information with respect to any one or more of the
foregoing.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION BY COMPANY OR PARENT
This Agreement may be terminated:
(a) at any time prior to the Effective Time, whether before or
after Stockholder Approval, by mutual written consent of the Parties by
action of their respective boards of directors (or committees of the
respective boards of directors delegated with such authority);
(b) by either Company or Parent, if the Merger shall not have
been consummated by the Outside Date; provided, that such Outside Date
may, at Company's option, be extended at one or more times to a date
which is up to an additional ninety (90) days from the Outside Date in
the event all conditions to effect the Merger other than those set
forth in Sections 6.1(c) and 6.2(c) (the "Extension Conditions") have
been or are capable of being satisfied at the time of such extension
and the Extension Conditions have been or are reasonably capable of
being satisfied on or prior to the date which is an additional ninety
(90) days from the Outside Date; provided, further, that the right to
terminate this Agreement under this Section 8.1(b) shall not be
available to any Party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of
the Merger to occur on or before such date; or
(c) by either the Company or Parent, if any Governmental
Authority shall have issued an order, decree or ruling or taken any
other action (which order, decree, ruling or
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other action the parties shall have used their reasonable efforts to
resist, resolve or lift, as applicable), permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall
have become final and nonappealable, provided, however, that neither
Company nor Parent may terminate this Agreement pursuant to this
Section 8.1(c) unless the Party seeking to terminate this Agreement has
used its best efforts to oppose any such governmental order or decision
or to have such order or decision vacated or made inapplicable to the
Merger contemplated by this Agreement.
8.2 TERMINATION BY COMPANY
Company may terminate this Agreement:
(a) if the Company enters into a definitive agreement providing
for the implementation of a Superior Company Proposal; or
(b) if Stockholder Approval is not obtained at the Stockholders
Meeting by reason of failure to obtain the required vote at such
meeting or any adjournment thereof.
8.3 TERMINATION BY PARENT
Parent may terminate this Agreement:
(a) if (i) Company's board of directors or the Special Committee
withdraws or materially and adversely to Parent modifies its approval
of this Agreement and the Merger or its recommendations to the
Stockholders (other than as a result of a breach by Parent or MergerSub
of a material representation, warranty or obligation under this
Agreement or the failure of any Company Closing Condition) (it being
understood, however, that for all purposes of this Agreement, the fact
that Company has supplied any Person with information regarding Company
or has entered into discussions or negotiations with such Person as
permitted by this Agreement, or the public disclosure of such facts,
shall not be deemed a withdrawal or modification of the Company's board
of directors or the Special Committee's recommendation of the Merger or
the adoption of this Agreement or (ii) Company enters into a definitive
agreement with respect to an Acquisition Proposal; or
(b) if Stockholder Approval is not obtained at the Stockholder
Meeting by reason of failure to obtain the required vote at such
meeting or any adjournment thereof.
8.4 EFFECT OF TERMINATION
(a) In the event of the termination of this Agreement pursuant
to this Article 8, the Merger shall be abandoned and this Agreement
(other than this Section 8.4, Section 5.10 and Section 10.1) shall
become void and of no effect, without (subject to this Section 8.4) any
Liability on the part of any Party (or of any of its directors,
officers, employees,
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agents, legal and financial advisors, or other representatives).
(b) If:
(1) Parent terminates this Agreement pursuant to Section
8.3(a), Company shall pay Parent a termination fee of
$1,500,000; or
(2) if Company terminates this Agreement pursuant to
Section 8.2(a) and at such time this Agreement was terminable by
Parent pursuant to Section 8.3(a), Company shall pay Parent a
termination fee of $1,500,000; or
(3) if Company terminates this Agreement pursuant to
Section 8.1(b), and all of the conditions to Closing set forth
in Section 6.1 were at such time satisfied or capable of being
satisfied, or the failure to satisfy such conditions was a
result of Parent's or MergerSub's breach of this Agreement,
Parent shall pay Company a termination fee of $1,500,000.
Any termination fee payable under this Paragraph 8.4(b) shall be paid
by a wire transfer of immediately available funds within two business
days after receipt of demand for payment from the Party to whom the fee
is owed accompanied by appropriate wire transfer instructions.
(c) The Parties acknowledge that the agreements contained in
Section 8.4(b) are an integral part of the transactions contemplated by
this Agreement and constitute liquidated damages and not a penalty, and
that, without these agreements, the Parties would not have entered into
this Agreement. If a Party fails to pay a termination fee that it is
required to pay under Section 8.4(b), and, in order to obtain payment,
the Party to whom the fee is owed brings suit which results in a
judgment against the defaulting Party, the defaulting Party shall pay
the costs and expenses of the Party bringing suit (including attorneys'
fees), together with interest from the date of termination of this
Agreement on all of the amounts owed at the prime rate of Bank of
America, N.A., in effect from time to time during such period plus two
percent (2%).
8.5 AMENDMENT
This Agreement may be amended by the parties hereto, by action taken or
authorized by their respective Boards of Directors, at any time before or after
approval of the matters presented in connection with the Merger by the
stockholders of Company, but, after any such approval, no amendment shall be
made which by law or in accordance with the rules of The Nasdaq National Market,
Inc. requires further approval by such stockholders without such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
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8.6 EXTENSION AND WAIVER
At any time prior to the Effective Time, the parties hereto, by action
taken or authorized by their respective Boards of Directors, may, to the extent
legally allowed, (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. 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. No delay on the part of any
party hereto in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. Unless
otherwise provided, the rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
ARTICLE 9
EVENTS FOLLOWING MERGER
9.1 CONTINUING INDEMNIFICATION
At or promptly following the Effective Time, Parent shall cause the
certificate of incorporation and bylaws of the Surviving Corporation to contain
provisions with respect to indemnification, advancement of expenses and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time substantially identical to those in Company's certificate of
incorporation and bylaws as of the date of this Agreement, and for a period of
six (6) years from the Effective Time, Parent shall cause those provisions not
to be amended, repealed or otherwise modified in any manner that would adversely
affect the rights thereunder of the individuals who, at the Effective Time, were
directors, officers, employees or agents of Company. Prior to the Effective
Time, Company shall, in consultation with Parent, purchase policies or
extensions of current policies of directors' and officers' liability insurance
(a) providing coverage and amounts and containing terms and conditions which
are, in the aggregate, materially no less advantageous to the insured than those
policies currently maintained by Company set forth on Section 3.17(a) of the
Company Disclosure Schedule on the date of this Agreement, (b) which shall not
result in any gaps or lapses in coverage with respect to matters occurring prior
to the Effective Time, and (c) providing coverage for a six (6) year period
after the Effective Time with respect to claims arising from acts, facts,
errors, omissions or events that occurred on or before the Effective Time
including, without limitation, in respect of the transactions contemplated
hereby. On or before the Effective Time, the parties shall use their reasonable
best efforts to obtain such policies in the form previously described. Parent
shall, and shall cause the Surviving Corporation to, maintain such policies in
full force and effect, and continue to honor Company's obligations thereunder
for the six (6) year period provided herein.
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This Section 9.1 shall survive the consummation of the Merger at the Effective
Time, is binding on all successors and assigns of the Surviving Corporation, and
is enforceable by individuals and their respective heirs and legal
representatives who, at the Effective Time, were directors or officers of
Company. From and after the Effective Time through the sixth anniversary of the
date on which the Effective Time occurs, Parent and the Surviving Corporation
shall jointly and severally indemnify and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director, officer, employee or agent of the Company and of any
of its Subsidiaries (the "Covered Parties"), against all claims, losses,
liabilities, damages, judgments, fines and reasonable fees, costs and expenses,
including attorneys' fees disbursements (collectively, the "Costs"), incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to (i) the fact that the Covered Party is or was an officer, director, employee
or agent of the Company or any of its subsidiaries or (ii) matters existing or
occurring at or prior to the Effective Time (including this Agreement and the
transactions and actions contemplated hereby), whether asserted or claimed prior
to, at or after the Effective Time, to the fullest extent permitted under
applicable law. Each Covered Party will be entitled to advancement of expenses
incurred in the defense of any claim, action, suit, proceeding or investigation
from Parent and Surviving Corporation within ten business days of receipt by
Parent from the Covered Party of a request therefore; provided that any person
to whom expenses are advanced provides an undertaking, to the extent required by
the DGCL, to repay such advances if it is ultimately determined that such person
is not entitled to indemnification.
Notwithstanding anything herein to the contrary, if any claim, action,
suit proceeding or investigation (whether arising before, at or after the
Effective Time) is made against any Covered Party, on or prior to the sixth
anniversary of the Effective Time, the provisions of this Section 9.1 shall
continue in effect until the final disposition of such claim, action, suit,
proceeding or investigation.
9.2 CERTAIN RECORDS
Parent shall permit the Stockholders designated by Company prior to the
Effective Time (but no more than five (5) in number) to retain copies of (i) all
records and correspondence of Company relating to any proposed sale, merger or
similar transaction involving Company, including any bids received from
potential acquirors and analyses relating to Parent, and (ii) any other material
records of Company, including Tax returns, reports or forms filed on Company's
behalf for a valid purpose at the sole cost of such persons.
9.3 PERFORMANCE BY MERGERSUB
Parent shall cause MergerSub prior to the Effective Time to comply with
its obligations hereunder and shall, subject to the terms herein, cause
MergerSub to consummate the Merger as contemplated herein and whenever prior to
the Effective Time this Agreement requires MergerSub to take any action, such
requirement shall be deemed to include an undertaking of Parent to cause
MergerSub to take such action.
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ARTICLE 10
MISCELLANEOUS
10.1 CONFIDENTIALITY
Pending Closing and following termination of this Agreement for any
reason, the agreement executed by the Parties on December 14, 2000, as amended,
concerning confidentiality shall remain in full force and effect.
10.2 NOTICES
All Notices under this Agreement shall be in writing and sent by
certified or registered mail, overnight messenger service, personal delivery or
facsimile transmission, as follows:
(a) if to Company, to:
▇▇▇▇▇▇▇ Healthcare, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Parent and MergerSub, to:
Stericycle, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇
President and CEO
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ and Colmar
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
All Notices sent by certified or registered mail shall be considered to have
been given three business days after being deposited in the mail. All Notices
sent by overnight courier service or personal delivery shall be considered to
have been given when actually received by the intended recipient. All notices
sent by facsimile transmission shall be considered to have been given when
transmitted with confirmation that transmission was made, so long as a copy was
also sent on the same day in either of the manners provided in the sentence
immediately preceding this sentence. A Party may change its or their address or
facsimile number for purposes of this Agreement by Notice in accordance with
this Section 10.2.
10.3 ENTIRE AGREEMENT
This Agreement supersedes all prior agreements between the Parties with
respect to its subject matter and constitutes (together with the Schedules and
the Parties' Closing Documents) a complete and exclusive statement of the terms
of the agreement between the Parties with respect to its subject matter;
provided, that the confidentiality agreement described in Section 10.1 shall not
be integrated with this Agreement. This Agreement may not be amended except by a
written agreement signed by the Party to be charged with the amendment.
10.4 ASSIGNMENT
No Party may assign any of its rights under this Agreement without the
prior written consent of the other Party or Parties.
10.5 NO THIRD PARTY BENEFICIARIES
Except for Section 9.1 (which is intended to be for the benefit of the
Persons covered thereby and may be enforced by such Persons), nothing in this
Agreement shall be considered to give any Person other than the Parties any
legal or equitable right, claim or remedy under or in respect of this Agreement
or any provision of this Agreement and this Agreement and all of its provisions
are for the sole and exclusive benefit of the Parties and their respective
successors and permitted assigns.
10.6 SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party.
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Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible. Any provision of this Agreement held invalid or unenforceable
only in part, degree or certain jurisdictions will remain in full force and
effect to the extent not held invalid or unenforceable. To the extent permitted
by applicable law, each party waives any provision of law which renders any
provision of this Agreement invalid, illegal or unenforceable in any respect.
10.7 CAPTIONS
The captions of articles and sections of this Agreement are for
convenience only and shall not affect this the construction or interpretation of
this Agreement.
10.8 CONSTRUCTION
All references in this Agreement to "Section" or "Sections" refer to
the corresponding section or sections of this Agreement. All words used in this
Agreement shall be construed to be of the appropriate gender or number as the
context requires. Unless otherwise expressly provided, the word "including" does
not limit the preceding words or terms.
10.9 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be considered an original copy of this Agreement and all of which,
when taken together, shall be considered to constitute one and the same
agreement.
10.10 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
(a) This Agreement shall be governed and construed in accordance
with the laws of the State of Delaware, without regard to the laws that
might be applicable under conflicts of law principles.
(b) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive
jurisdiction of any Delaware State court, or Federal court of the
United States of America, sitting in Delaware, and any appellate court
from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the agreements delivered in connection
herewith or the transactions contemplated hereby or thereby or for
recognition or enforcement of any judgment relating thereto, and each
of the parties hereby irrevocably and unconditionally (i) agrees not to
commence any such action or proceeding except in such courts, (ii)
agrees that any claim in respect of any such action or proceeding may
be heard and determined in such Delaware State court or, to the extent
permitted by law, in such Federal court, (iii) waives, to the fullest
extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any such action or
proceeding in any
-39-
such Delaware State or Federal court, and (iv) waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such Delaware State or
Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in
Section 10.2. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted
by law.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED
AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE EITHER OF SUCH WAIVERS, (ii) IT UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF SUCH WAIVERS, (iii) IT MAKES SUCH WAIVERS
VOLUNTARILY, AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 10.10(c).
(d) The parties 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 of this Agreement.
10.11 BINDING EFFECT
This Agreement shall apply to, be binding in all respects upon and
inure to the benefit of Parties and their respective successors and permitted
assigns.
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In witness, the Parties have executed this Agreement.
STERICYCLE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO
SHARPS ACQUISITION CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇ HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP and CFO
-41-
ANNEX I
DEFINITIONS
ACQUISITION PROPOSAL means an inquiry, offer or proposal (other than
the Proposed Transaction) regarding any of the following matters:
(a) an investment in the Company representing more than
twenty-five percent (25%) of the Company's capital stock or a purchase
from the Company of more than twenty-five percent (25%) of the shares
of its capital stock or any debt securities convertible into or
exchangeable for more than twenty-five percent (25%) of the shares of
its capital stock;
(b) a merger, consolidation, share exchange, recapitalization,
business combination or other similar transaction involving all of the
Company's equity interests or all Company Common Stock;
(c) the sale, lease, exchange, mortgage, pledge, transfer or
other disposition of all or substantially all the Company's assets in a
single transaction or a series of related transactions;
(d) a tender offer or exchange offer for twenty-five percent
(25%) or more of the outstanding shares of the Company's capital stock
or the filing of a registration statement under the Securities Act of
1933 in connection with such a tender offer or exchange offer;
(e) purchase of more than twenty-five percent (25%) of the
Company's capital stock directly or indirectly owned or controlled by
Company's largest Stockholder as of the date of this Agreement; or
(f) any public announcement of a proposal, plan or intention to
do, or any agreement to engage in, any of the matters described in the
preceding clauses (a), (b), (c), (d) and (e).
AGREEMENT is defined in the preamble to this
AUTHORIZED OFFICER means a corporate officer of a corporation who is
duly authorized to perform the specified action.
BOARD OF DIRECTORS means the board of directors of a corporation.
BOOKS AND RECORDS means books, records, ledgers, files, documents,
correspondence, lists, reports, creative materials, advertising and promotional
materials and other printed or written materials.
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BUSINESS means Company's business of managing medical waste and
distributing health-care products.
CERTIFICATE OF MERGER is defined in Section 2.3(a).
CLEANUP LIABILITY means any Liability under any Environmental Law for
corrective action, including any investigation, cleanup, removal, containment or
other remedial or response action or activity of the type covered by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980.
CLOSING is defined in Section 2.2.
CLOSING DATE is defined in Section 2.2.
CLOSING DOCUMENTS means, in respect of a Party, the documents,
instruments and agreements that it is required to deliver or enter into at
Closing pursuant to the terms of this Agreement.
COMMON STOCK MERGER CONSIDERATION means, in respect of a share of
Company Common Stock, Eight Dollars and Fifty-seven Cents ($8.57).
COMPANY means ▇▇▇▇▇▇▇ Healthcare, Inc., a Delaware corporation.
COMPANY CLOSING CONDITIONS is defined in Section 6.2.
COMPANY COMMON STOCK means Company's common stock, par value $.01 per
share.
COMPANY DISCLOSURE SCHEDULE is defined in Article 3.
COMPANY PREFERRED STOCK means Company's preferred stock, par value $.01
per share, designated as Series A Cumulative Convertible Preferred Stock.
COMPANY SEC REPORTS is defined in Section 3.7.
COMPANY SHARES means shares of Company Preferred Stock or Company
Common Stock, or both.
COMPANY STOCK CERTIFICATE is defined in Section 2.5(b).
COMPANY STOCK OPTION means an option to purchase shares of Company
Common Stock.
CONSENT means any approval, consent, ratification, waiver or other
authorization (including any Permit).
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CONTRACT means any legally binding contract, agreement, obligation,
promise or undertaking (whether written or oral, and whether express or
implied).
COPYRIGHTS means all copyrights and copyrightable works, and all
applications, registrations and renewals in the United States Copyright Office
therefor.
COSTS is defined in Section 9.1.
COVERED PARTIES is defined in Section 9.1.
CUSTOMER CONTRACT means a Contract with a customer relating to the
collection, transportation, treatment or disposal of regulated medical waste,
including sharps and sharps containers.
DEFAULT means, in respect of a Contract, a breach or violation of or
default under the Contract, or the occurrence of an event which with notice or
the passage of time (or both) would constitute a breach, violation or default or
permit termination, modification or acceleration of the Contract.
DGCL means the General Corporation Law of the State of Delaware, as
amended.
DISSENTING SHARE means a Company Share which is issued and outstanding
immediately prior to the Effective Time and which is held by a stockholder of
Company who did not vote in favor of the Merger or consent thereto in writing
and who is entitled to demand and properly demands appraisal of such shares
pursuant to, and who has complied with all of the relevant provisions of Section
262 of the DGCL.
DISSENTING STOCKHOLDER means a Stockholder who holds a Dissenting
Share.
EFFECTIVE TIME is defined in Section 2.4(a).
EMPLOYEE BENEFIT PLAN means (i) an "employee pension plan" as defined
in ss. 3(2) of ERISA, (ii) an "employee welfare benefit plan" as defined in ss.
3(1) of ERISA or (iii) any other employee benefit or fringe benefit plan or
program, whether established by Law, a written agreement or other instrument, or
custom or informal understanding.
ENVIRONMENTAL LAWS means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 and Resource Conservation and Recovery
Act of 1976, and all other applicable Laws relating to or imposing Liability or
standards of conduct for the use, handling, generation, manufacturing,
distribution, processing, collection, transportation, transfer, storage,
treatment, disposal, clean-up, or Release of Hazardous Materials.
ENVIRONMENTAL LIABILITY means any Cleanup Liability or any other
Liability under any Environmental Law or Occupational Safety and Health Law,
including any Liability arising from a Release of Hazardous Materials at, on, in
or under any Facility or other Real Property.
I-3
EQUIPMENT means machinery, equipment, spare parts, furniture, fixtures
and other items of tangible personal property of any type or kind used, held for
use or useful in the conduct of the Business (but not including Inventories or
Leasehold Improvements).
EQUIPMENT LEASE means a Contract for the lease of Equipment or for the
purchase of Equipment under a conditional sales or title retention agreement.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations issued by the Internal Revenue Service and
Department of Labor.
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended, and
the related rules and regulations promulgated by the SEC.
EXCHANGE FUND means cash that Parent deposits with the Paying Agent
pursuant to Section 2.5(a).
EXPENSES means all out-of-pocket expenses (including all fees and
expenses of counsel, accountants, investment bankers, experts and consultants)
incurred by a Party or on its behalf in connection with, or related to, the
authorization, preparation, negotiation, execution and performance of this
Agreement and the transactions contemplated hereby, including, in the case of
Company, the preparation, filing, printing and mailing of the Proxy Statement
and the solicitation of stockholder proxies.
EXTENSION CONDITIONS is defined in Section 8.1(b).
FACILITY means any office, manufacturing facility, warehouse or other
location or site that any Target Company currently leases, operates, occupies or
uses, or that it formerly leased, operated, occupied or used, in the conduct of
the Business.
FACILITY LEASE means a lease of or other right to operate, occupy or
use a Facility that any Company currently leases, operates, occupies or uses in
connection with the conduct of the Business.
FORMER FACILITY LEASE means a lease of a Facility that any Company or
any predecessor-in-interest of the Company formerly leased in connection with
the conduct of the Business, which term ended after December 31, 1996.
GAAP means United States generally accepted accounting principles.
GOVERNMENTAL AUTHORITY means (i) any federal, state, provincial, local,
municipal, foreign or other government and (ii) any governmental or
quasi-governmental body of any kind (including any administrative or regulatory
agency, department, branch, commission or other entity).
HAZARDOUS MATERIALS means any waste or other substance of any kind that
is listed,
I-4
defined, designated or classified under any Law or Order as hazardous,
radioactive or toxic.
INTERNAL REVENUE CODE means the U.S. Internal Revenue Code of 1986, as
amended.
INTELLECTUAL PROPERTY means Patents, Marks, Copyrights and Proprietary
Information owned or used by the Target Companies in their operations as of the
date of this Agreement.
JUNE 30 BALANCE SHEET means the Company's unaudited condensed
consolidated balance sheet as of June 30, 2002 included in Company's Form 10-Q
for the quarter ended June 30, 2002.
KNOWLEDGE means, in respect of Company or Parent, the actual knowledge
of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇, in the
case of the Company or ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇. ten ▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, in the case of Parent, of a particular fact or other
specified matter.
LAW means any law, ordinance, code, regulation, rule of any
Governmental Authority.
LEASEHOLD IMPROVEMENTS means depreciable or amortizable improvements
made by (or on behalf of) the tenant under a Facility Lease which belong to the
tenant and not to the landlord.
LETTER OF TRANSMITTAL is defined in Section 2.5(b).
LIABILITY means any liability or obligation, whether or not known or
unknown, absolute or contingent, liquidated or unliquidated, or due or to become
due.
LIEN means any lien, security interest, claim, community property
interest, equitable interest, option, pledge, right of first refusal or other
encumbrance.
MARKS means trade marks, service marks, brand names and logos and
federal and state applications, registrations and renewals therefor.
MATERIAL ADVERSE EFFECT means:
(a) when used in respect of Company or in respect of a
representation and warranty by Company, any adverse change,
circumstance or effect that, individually or in the aggregate with all
other adverse changes, circumstances and effects, is or is reasonably
likely to be materially adverse to the business, operations, assets,
liabilities, financial condition or results of operations of Company
and the Subsidiaries taken as a whole or on the ability of Company to
consummate the transactions contemplated by this Agreement; provided,
however, that with respect to the Target Companies the term Material
Adverse Effect shall not include (i) any change, circumstance, event or
effect that relates to or results primarily from the announcement or
other disclosure or consummation of the transactions contemplated by
this Agreement or (ii) changes in general economic conditions,
financial markets (including fluctuations in the price of
I-5
shares of Company Shares or shares of capital stock of Parent) or
conditions generally affecting the medical waste management,
health-care product distribution or related industries; and
(b) when used in respect of Parent or in respect of a
representation and warranty by Parent and MergerSub, any adverse
change, circumstance or effect that, individually or in the aggregate
with all other adverse changes, circumstances and effects, is or is
reasonably likely to be materially adverse to the business, operations,
assets, liabilities, financial condition or results of operations of
Parent and its subsidiaries taken as a whole or on the ability of
Parent and MergerSub to consummate the transactions contemplated by
this Agreement.
MATERIAL CONTRACT means a Contract listed by the Company in the Company
Disclosure Schedule or of a type described in clause (10) of Item 601 of
Regulation S-K of the Securities Act.
MERGER is defined in Section 2.1.
MERGER CONSIDERATION is defined in Section 2.4(c).
MERGERSUB means Sharps Acquisition Corporation, a Delaware corporation
and wholly owned subsidiary of Parent.
NOTICE means any written notice, demand, charge or complaint from any
Person.
OCCUPATIONAL SAFETY AND HEALTH LAWS means the Occupational Safety and
Health Act of 1970, as amended, and all other applicable Laws and Orders
intended to provide safe and healthful working conditions and to reduce
occupational safety and health hazards.
OFFICER'S CERTIFICATE means a certificate signed by an Authorized
Officer whose responsibilities extend to the subject matter of the certificate.
ORDER means any order, judgment, decree, ruling, consent decree,
settlement agreement, stipulation or injunction entered or issued by any court,
Governmental Authority or arbitrator.
ORDINARY COURSE OF BUSINESS means, in respect of a Party, an action
taken by it which is consistent with its past practices and is taken in the
ordinary course of the normal day-to-day operations.
ORGANIZATIONAL DOCUMENTS means the certificate or articles of
incorporation and by-laws of a corporation, each as amended to date.
OUTSIDE DATE means February 28, 2003.
PARENT means Stericycle, Inc., a Delaware corporation.
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PARENT CLOSING CONDITIONS is defined in Section 6.1.
PARENT DISCLOSURE SCHEDULE is defined in Article 4.
PARENT PERMITS is defined in Section 4.12.
PARENT SEC REPORTS is defined in Section 4.6.
PARTY means both Parent and MergerSub (or either one of them, as the
context requires) or Company, and Parties means all of them.
PATENTS means patents and patent applications and related United States
Patent and Trademark Office reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations therefor.
PAYING AGENT is defined in Section 2.5(a).
PERMIT means any approval, consent, license, permit, registration,
certificate, waiver, confirmation or other authorization issued, granted or
otherwise made available by any Governmental Authority including but not limited
to all pre-market notifications, pre-market approvals and findings of
substantial equivalence filed with or issued by the United States Food and Drug
Administration.
PERMITTED LIEN means (i) any Lien for Taxes that are not yet due and
payable, (ii) any carrier's, warehouseman's, mechanic's, materialman's,
repairman's, landlord's, lessor's or similar statutory Lien incidental to the
Ordinary Course of Business or (iii) any Lien the existence of which is not
reasonably likely to have a Material Adverse Effect.
PERSON means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association,
organization, estate, trust or other entity or any Governmental Authority.
PREFERRED STOCK MERGER CONSIDERATION means, in respect of a share of
Company Preferred Stock, One Hundred Dollars ($100.00) together with an amount
equal to the cumulative dividends, if any, accrued and unpaid on such share to
the Effective Time.
PROPRIETARY INFORMATION means trade secrets and proprietary or
confidential business information, including: (i) ideas, formulas, discoveries
and inventions (whether patentable or unpatentable, and whether or not reduced
to practice), (ii) know-how, and (iii) computer source codes, programs, software
and documentation (other than those that are commercially available).
PROXY STATEMENT is defined in Section 5.3(a).
REAL PROPERTY means land or an interest in land (other than an interest
in a Facility Lease).
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RELEASE means a spill, leak, emission, discharge, deposit, dumping or
other release into the environment, whether intentional or unintentional.
REQUIRED REGULATORY APPROVALS means all authorizations, consents,
orders and approvals of, and declarations and filings with, and all expirations
of waiting periods imposed by, any Governmental Authority which, if not obtained
in connection with the consummation of the transactions contemplated hereby,
would reasonably be expected to have a Material Adverse Effect on the Company or
materially impair or delay the ability of the Company, Parent or Merger Sub to
consummate the transactions contemplated hereby.
SEC means the Securities and Exchange Commission.
SECURITIES ACT means the Securities Act of 1933, as amended, and the
related rules and regulations promulgated by the SEC.
SPECIAL COMMITTEE is defined in the third recital at the beginning of
this Agreement.
STOCKHOLDER means a Person who is the owner of record of one or more
Company Shares as of Closing.
STOCKHOLDER APPROVAL means the adoption of this Agreement by the
affirmative approval of the holders of a majority of the outstanding shares of
Company Common Stock as of the record date fixed for such action.
STOCKHOLDERS MEETING is defined in Section 5.3.
SUBSIDIARY means BioWaste Systems, Inc., a Georgia corporation, Medical
Waste Systems, Inc., a Delaware corporation, ▇▇▇▇▇▇▇ Laboratories, Inc., a Texas
corporation, ASH Enterprises, Inc., a Georgia corporation, Biofor, Inc., a
Georgia corporation, Bio-Waste Management Corporation, a New York corporation,
or ▇▇▇▇▇▇▇ Management Company, a Georgia corporation, and Subsidiaries means all
of them.
SUIT means any action, suit, proceeding or arbitration (whether civil,
criminal, administrative or investigative in nature, and whether formal or
informal) by, before or in any court, Governmental Authority or arbitrator.
SUPERIOR COMPANY PROPOSAL means any proposal made by a third party to
acquire more than 50% of the voting power of the equity securities or more than
50% of the assets of Company, pursuant to a tender or exchange offer, a merger,
a consolidation, a liquidation or dissolution, a recapitalization, a sale of its
assets or otherwise, which a majority of Company's board of directors (or a
committee delegated with authority to make such determination) determines in its
good faith judgment to be more favorable from a financial point of view to
Company Stockholders than the transactions contemplated by this Agreement (after
consultation with Company's financial advisor), after considering, among other
things, (i) the likelihood and timing of consummation of the proposed
transaction and (ii) any amendments or modifications
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of this Agreement that Parent has offered or proposed at the time of
determination.
SURVIVING CORPORATION is defined in Section 2.1.
TAKEOVER STATUTES is defined in Section 3.25.
TARGET COMPANY means Company or any Subsidiary, and Target Companies
means Company and all Subsidiaries.
TAX means any federal, state, provincial, local, municipal or foreign
tax, charge, fee, levy, or similar assessment or liability, imposed by any
Governmental Authority, including without limitation, income, franchise, gross
receipts, capital stock, profits, withholding, social security, unemployment,
real property, personal property, stamp, excise, occupation, sales, use,
transfer, value added, estimated or other tax (including any related interest,
fines, penalties and additions), and any transferee liability in respect of
Taxes and any liability in respect of Taxes imposed by contract, Tax sharing
agreement, Tax reimbursement agreement, or any similar agreement.
TAX RETURN means any return (including any information return), report,
statement, form or other document required to be filed with or submitted to any
Governmental Authority in connection with the determination, assessment,
collection or payment of any Tax.
THREATENED means, in respect of a Suit, that Parent (in respect of a
Notice to Parent) or Company (in respect of Notice to a Target Company) has
Knowledge that Notice has been given that the Suit will be, or is likely to be,
initiated in the foreseeable future.
VOTING AGREEMENT means that certain Voting Agreement dated as of the
date hereof, by and among Parent, MergerSub and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
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EXHIBIT A
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
▇▇▇▇▇▇▇ HEALTHCARE, INC.
▇▇▇▇▇▇▇ Healthcare, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), certifies as follows:
The Corporation (f/k/a ▇▇▇-▇▇▇▇▇▇▇ Healthcare, Inc.) filed its original
Certificate of Incorporation with the Secretary of State of the State of
Delaware on December 18, 1981. The Corporation was the surviving corporation in
the merger effected by the filing of the Certificate of Merger filed by the
Corporation on February 18, 1982. The Corporation filed a Certificate of
Amendment on August 19, 2002. The Corporation was the surviving corporation in
the merger effected by the filing of the Certificate of Merger filed by the
Corporation on [DATE], 2002. The Corporation has filed this Amended and Restated
Certificate of Incorporation in order to integrate and further amend its
Certificate of Incorporation as currently in effect.
This Amended and Restated Certificate of Incorporation was duly
proposed by the Corporation's board of directors and adopted by the
Corporation's stockholders in the manner and by the vote prescribed by sections
228, 242 and 245 of the General Corporation Law of the State of Delaware (the
"Delaware General Corporation Law").
The Corporation's Certificate of Incorporation, as currently in effect,
is amended and restated to read as follows:
ARTICLE 1
NAME
The name of the Corporation is ▇▇▇▇▇▇▇ Healthcare, Inc.
ARTICLE 2
REGISTERED OFFICE AND REGISTERED AGENT
the address of the Corporation's registered office in the State of
Delaware is_______________. The name of the Corporation's registered agent at
this address is Corporation Service Company.
ARTICLE 3
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
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ARTICLE 4
CAPITAL STOCK
The Corporation is authorized to issue 1,000 shares of stock of one
class, designated as common stock, having a par value of $.01 per share.
ARTICLE 5
DURATION
The Corporation shall have perpetual existence.
ARTICLE 6
BYLAWS
The Corporation's board of directors is authorized to adopt, amend or
repeal the Corporation's bylaws.
ARTICLE 7
NUMBER OF DIRECTORS
The number of directors shall be fixed by, or determined in the manner
specified in, the Corporation's bylaws.
ARTICLE 8
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation elects to be governed by Section 203 of the General
Corporation Law of the State of Delaware.
ARTICLE 9
LIMITATION ON DIRECTORS' LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for a breach of the
director's fiduciary duty as a director, except for: (i) a breach of the
director's duty of loyalty to the Corporation or its stockholders; (ii) an act
or omission which was not in good faith or which involved intentional misconduct
or a knowing violation of law; (iii) liability under section 174 of the Delaware
General Corporation Law for the unlawful payment of dividends or the unlawful
purchase or redemption of stock; or (iv) any transaction from which the director
derived an improper personal benefit.
If the Delaware General Corporation Law is amended to authorize
corporate action further limiting or eliminating the personal liability of
directors, the liability of a director of the Corporation shall be further
limited or eliminated to the fullest extent permitted by the amendment.
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No circumscribing amendment or repeal of this Article 9 shall apply to
or have any effect on the personal liability or alleged liability of any
director of the Corporation for or in respect of acts or omissions occurring
prior to the amendment or repeal.
ARTICLE 11
AMENDMENTS
The Corporation reserves the right to amend or repeal any provisions of
this Amended and Restated Certificate of Incorporation, and add any new
provisions, in the manner now or in the future prescribed by the Delaware
General Corporation Law, and all rights conferred upon the Corporation's
stockholders by this Amended and Restated Certificate of Incorporation are
subject to this reservation.
In witness, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be signed by its [OFFICE AND NAME], and attested
to by its [OFFICE AND NAME], on [DATE]. Their signatures below constitute their
respective affirmations and acknowledgements, under penalties of perjury, that
this instrument is the Corporation's act and deed and that the facts stated in
this instrument are true.
▇▇▇▇▇▇▇ HEALTHCARE, INC.
By
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Name:
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Title:
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Attest:
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Name:
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Title:
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