Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
among
NATUREX, S.A.
NATUREX ACQUISITION CORP.
and
PURE WORLD, INC.
Dated as of June 6, 2005
TABLE OF CONTENTS
Page
ARTICLE I THE OFFER..........................................................................................1
SECTION 1.01. The Offer..............................................................................1
SECTION 1.02. Company Action.........................................................................4
ARTICLE II THE MERGER........................................................................................5
SECTION 2.01. The Merger.............................................................................5
SECTION 2.02. Closing................................................................................5
SECTION 2.03. Effective Time.........................................................................5
SECTION 2.04. Effect of the Merger...................................................................5
SECTION 2.05. Certificate of Incorporation; By-laws..................................................5
SECTION 2.06. Directors and Officers.................................................................6
SECTION 2.07. Conversion of Securities...............................................................6
SECTION 2.08. Treatment of Options...................................................................6
SECTION 2.09. Dissenting Shares......................................................................7
SECTION 2.10. Surrender of Shares; Stock Transfer Books..............................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................................................9
SECTION 3.01. Organization and Qualification; Subsidiaries...........................................9
SECTION 3.02. Certificate of Incorporation and By-laws..............................................10
SECTION 3.03. Capitalization........................................................................10
SECTION 3.04. Authority Relative to the Transactions................................................10
SECTION 3.05. No Conflict; Required Filings and Consents............................................11
SECTION 3.06. SEC Filings; Financial Statements.....................................................12
SECTION 3.07. Absence of Certain Changes or Events..................................................14
SECTION 3.08. Absence of Litigation.................................................................14
SECTION 3.09. Employee Benefit Plans................................................................14
SECTION 3.10. Property; Title to Assets.............................................................16
SECTION 3.11. Taxes.................................................................................16
SECTION 3.12. Material Contracts....................................................................17
SECTION 3.13. Environmental Matters.................................................................18
SECTION 3.14. Labor and Employment Matters..........................................................18
SECTION 3.15. Compliance with Laws; Permits.........................................................18
SECTION 3.16. Ephedra...............................................................................18
SECTION 3.17. Offer Documents; Schedule 14D-9.......................................................18
SECTION 3.18. Opinion of Financial Advisor..........................................................19
SECTION 3.19. Brokers...............................................................................19
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER...........................................19
SECTION 4.01. Corporate Organization................................................................19
SECTION 4.02. Authority Relative to the Transactions................................................19
SECTION 4.03. No Conflict; Required Filings and Consents............................................20
SECTION 4.04. Financing.............................................................................20
SECTION 4.05. Offer Documents; Proxy Statement......................................................20
SECTION 4.06. Brokers...............................................................................21
ARTICLE V CONDUCT OF BUSINESS PENDING THE MERGER............................................................21
SECTION 5.01. Conduct of Business by the Company Pending the Merger.................................21
SECTION 5.02. Advice of Changes; Government Filings.................................................23
ARTICLE VI ADDITIONAL AGREEMENTS............................................................................24
SECTION 6.01. Stockholders' Meeting.................................................................24
SECTION 6.02. Proxy Statement.......................................................................25
SECTION 6.03. Company Board Representation; Section 14(f) of the Exchange Act.......................25
SECTION 6.04. Access to Information; Confidentiality................................................26
SECTION 6.05. No Solicitation of Transactions.......................................................27
SECTION 6.06. Employee Benefits Matters.............................................................29
SECTION 6.07. Directors' and Officers' Indemnification; Insurance...................................31
SECTION 6.08. Notification of Certain Matters.......................................................31
SECTION 6.09. Further Action; Reasonable Best Efforts...............................................32
SECTION 6.10. Subsequent Financial Statements.......................................................32
SECTION 6.11. Public Announcements..................................................................32
SECTION 6.12. Takeover Statute......................................................................33
SECTION 6.13. Bedminster Services...................................................................33
ARTICLE VII CONDITIONS TO THE MERGER........................................................................33
SECTION 7.01. Conditions to the Merger..............................................................33
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER..............................................................34
SECTION 8.01. Termination...........................................................................34
SECTION 8.02. Effect of Termination.................................................................35
SECTION 8.03. Fees and Expenses.....................................................................36
SECTION 8.04. Amendment.............................................................................36
SECTION 8.05. Waiver................................................................................37
ARTICLE IX GENERAL PROVISIONS...............................................................................37
SECTION 9.01. Non-Survival of Representations. Warranties and Agreements............................37
SECTION 9.02. Notices...............................................................................37
SECTION 9.03. Certain Definitions...................................................................38
SECTION 9.04. Severability..........................................................................42
SECTION 9.05. Entire Agreement; Assignment..........................................................42
SECTION 9.06. Parties in Interest...................................................................42
SECTION 9.07. Specific Performance..................................................................42
SECTION 9.08. Governing Law.........................................................................42
SECTION 9.09. Waiver of Jury Trial..................................................................43
SECTION 9.10. Headings..............................................................................43
SECTION 9.11. Counterparts..........................................................................43
SECTION 9.12. Company Disclosure Schedule...........................................................43
AGREEMENT AND PLAN OF MERGER, dated as of June 6, 2005 (this "Agreement"),
among NATUREX, S.A., a societe anonyme organized under the laws of the French
Republic ("Parent"), NATUREX ACQUISITION CORP., a Delaware corporation and
direct wholly owned Subsidiary of Parent ("Purchaser"), and PURE WORLD, INC., a
Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Purchaser and the Company have each
determined that it is in the best interests of their respective stockholders for
Parent to acquire the Company upon the terms and subject to the conditions set
forth herein;
WHEREAS, Purchaser shall, and Parent shall cause Purchaser to, make a cash
tender offer (the "Offer") to acquire all the issued and outstanding shares of
common stock, par value $0.01 per share, of the Company ("Shares"), for $4.30
per Share (such amount, or any greater amount per Share paid pursuant to the
Offer, being the "Per Share Amount"), net to the seller in cash;
WHEREAS, the Board of Directors of the Company (the "Company Board") has
unanimously approved (except for the abstention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇) the making
of the Offer and resolved to recommend that holders of Shares tender their
Shares pursuant to the Offer;
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company have
each approved this Agreement and declared its advisability and approved the
merger (the "Merger") of Purchaser with and into the Company in accordance with
the General Corporation Law of the State of Delaware (the "DGCL"), following the
consummation of the Offer; and
WHEREAS, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Stockholder") and certain of his Affiliates
have entered into a Stockholder Agreement, dated as of the date hereof (the
"Stockholder Agreement"), providing that, among other things, the Stockholder
and certain of his Affiliates will (i) tender their Shares into the Offer and
(ii) vote the Shares owned of record and beneficially by them in favor of the
Merger and, if applicable, the other transactions contemplated by this
Agreement.
NOW, THEREFORE, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. The Offer.
(a) Provided that this Agreement shall not have been terminated in accordance
with Article VIII and none of the events set forth in Annex A (the "Offer
Conditions") shall have occurred and be continuing, Purchaser shall, and
Parent shall cause the Purchaser, to:
(i) commence (within the meaning of Rule 14d-2 under the Exchange Act)
the Offer as promptly as reasonably practicable after the date
hereof, but in no event later than ten Business Days after the
execution of this Agreement; and
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(ii) cause the Offer to remain open until the twentieth Business Day
after such commencement of the Offer (the "Initial Expiration
Date").
(b) The obligation of the Purchaser to accept for payment, purchase and pay
for any Shares validly tendered pursuant to the Offer on or prior to the
Initial Expiration Date and not withdrawn prior to such Initial Expiration
Date shall be subject only to the satisfaction or waiver of the Offer
Conditions, specifically including the Offer Condition that at least that
number of shares of Company Common Stock, which, together with Shares
beneficially owned by Parent, Purchaser and their direct and indirect
Subsidiaries, shall represent at least a majority of the total issued and
outstanding shares of Company Common Stock on a Fully-Diluted Basis shall
have been validly tendered and not withdrawn prior to 12:00 p.m.
(midnight) New York City time, on the Expiration Date (the "Minimum
Condition").
Purchaser shall, and Parent shall cause Purchaser, to accept for payment
and pay for Shares tendered pursuant to the Offer, subject only to the
satisfaction of each of the conditions set forth in Annex A (the "Offer
Conditions"). At the Company's request, Purchaser will, and Parent shall
cause Purchaser to, extend the Offer after the Initial Expiration Date for
one or more periods not to exceed an aggregate of twenty Business Days if
the Offer Conditions have not been satisfied at the Initial Expiration
Date. Subject to the prior satisfaction of the Offer Conditions, Purchaser
shall, and Parent shall cause Purchaser to, consummate the Offer in
accordance with its terms and accept for payment all Shares tendered and
not withdrawn by 9:00 a.m. Eastern time on the next Business Day after the
expiration of the Offer. Purchaser expressly reserves the right to waive
any Offer Condition, or increase the Per Share Amount payable in the Offer
and to make any other changes in the terms and conditions of the Offer.
However, without the consent of the Company, Purchaser shall not, and
Parent shall not permit Purchaser to:
(i) decrease the Per Share Amount or change the form of
consideration payable in the Offer;
(ii) reduce the number of Shares subject to the Offer;
(iii) impose conditions to the Offer in addition to the Offer
Conditions; or
(iv) change the Offer in a manner adverse to the holders of the
Shares.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company:
(i) extend the Offer for one or more periods of not more than
fifteen Business Days each beyond the Initial Expiration Date,
if, at any scheduled expiration of the Offer, any of the Offer
Conditions shall not be satisfied or waived; or
(ii) extend the Offer for any period required by any rule,
regulation or interpretation of the Securities and Exchange
Commission (the "SEC"), or the staff thereof, applicable to
the Offer (provided that Purchaser shall
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keep the Company reasonably informed of Purchaser's or
Parent's contact with the SEC or the staff thereof with
respect to the Offer).
The Per Share Amount shall be net to the seller in cash, upon the terms
and subject to the conditions of the Offer (the "Merger Consideration").
Purchaser shall, and Parent shall cause Purchaser to, pay for all Shares
validly tendered and not withdrawn promptly following the acceptance of
Shares for payment pursuant to the Offer. Notwithstanding the immediately
preceding sentence and subject to the applicable rules of the SEC and the
terms and conditions of the Offer, Purchaser expressly reserves the right
to delay payment for Shares in order to comply in whole or in part with
applicable Laws. Any such delay shall be effected in compliance with Rule
14e-1(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Purchaser may extend the Offer after the acceptance of
Shares thereunder for a further period of time by means of a subsequent
offering period ("Subsequent Offering Period") under Rule 14d-11
promulgated under the Exchange Act of not more than twenty Business Days
to meet the objective that there be validly tendered, in accordance with
the terms of the Offer, prior to the expiration of the Offer (as so
extended), and not withdrawn a number of Shares which, together with
Shares then beneficially owned by Parent and Purchaser and their direct
and indirect Subsidiaries, represents at least 90% of the then outstanding
Shares on a Fully-Diluted Basis.
(c) On the date of commencement of the Offer, Purchaser and Parent shall file
with the SEC a Tender Offer Statement on Schedule TO (together with all
exhibits, amendments and supplements thereto, the "Schedule TO") with
respect to the Offer. The Schedule TO shall comply in all material
respects with the provisions of the Exchange Act, the rules and
regulations promulgated thereunder and all other applicable Laws, and
shall contain or shall incorporate by reference an offer to purchase
relating to the Offer (the "Offer to Purchase") and forms of the related
letter of transmittal and any related summary advertisement (the Schedule
TO, the Offer to Purchase and such other documents, together with all
exhibits, supplements and amendments thereto, being referred to herein
collectively as the "Offer Documents"). Each of Parent, Purchaser and the
Company shall correct promptly any information provided by it for use in
the Offer Documents that shall have become false or misleading in any
material respect, and Parent and Purchaser further agree to take all steps
necessary to cause the Schedule TO, as so corrected, to be filed with the
SEC, and the other Offer Documents, as so corrected, to be disseminated to
holders of Shares, in each case as and to the extent required by
applicable federal securities laws. Parent and Purchaser shall give the
Company and its counsel a reasonable opportunity to review and comment on
the Offer Documents prior to such documents being filed with the SEC or
disseminated to holders of Shares. Parent and Purchaser shall provide the
Company and its counsel with any comments that Parent, Purchaser or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments and shall provide
the Company and its counsel with a reasonable opportunity to participate
in the response of the Parent and Purchaser to such comments.
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SECTION 1.02. Company Action.
(a) Subject to Section 6.05(d), the Company hereby consents to the inclusion
in the Offer Documents of the recommendation of the Company Board
described in Section 3.04. The Company has been advised by its directors
and executive officers that they intend to tender all Shares beneficially
owned by them to Purchaser pursuant to the Offer and, if applicable, the
Stockholder Agreement.
(b) On the date of commencement of the Offer, the Company shall file with the
SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together
with all amendments and supplements thereto, the "Schedule 14D-9"), which
shall:
(i) comply in all material respects with the provisions of the Exchange
Act, the rules and regulations thereunder and all other applicable
Laws; and
(ii) contain the Fairness Opinion and, except as provided in Section
6.05(d), the recommendation of the Company Board described in
Section 3.04.
The Company shall disseminate the Schedule 14D-9 to the extent required by
Rule 14d-9 under the Exchange Act, and any other applicable federal
securities laws. Each of the Company, Parent and Purchaser agrees to
correct promptly any information provided by it for use in the Schedule
14D-9 which shall have become false or misleading in any material respect,
and the Company further agrees to take all steps necessary to cause the
Schedule 14D-9, as so corrected, to be filed with the SEC and disseminated
to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company shall give Parent and its
counsel a reasonable opportunity to review and comment on the Schedule
14D-9 prior to such document being filed with the SEC or disseminated to
holders of Shares. The Company shall provide Parent and its counsel with
any comments that the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of
such comments and shall provide Parent and its counsel with a reasonable
opportunity to participate in the response of the Company to such
comments.
(c) The Company shall promptly furnish Parent and Purchaser with mailing
labels containing the names and addresses of all record holders of Shares,
with non-objecting beneficial owner lists and with security position
listings in written and electronic form of Shares held in stock
depositories, each as of a recent date. The Company shall promptly furnish
Parent and Purchaser with such additional information, including, without
limitation, updated listings, mailing labels and security position
listings, and such other assistance in disseminating the Offer Documents
to holders of Shares as Parent or Purchaser may reasonably request.
Subject to the requirements of applicable Law, and except for such steps
as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Merger, Parent and
Purchaser shall hold in confidence the information contained in such
labels, listings and files, shall use such information only in connection
with the Transactions, and, if this Agreement shall be terminated in
accordance with Section 8.01, shall deliver to the Company or destroy all
copies of such information then in their possession.
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ARTICLE II
THE MERGER
SECTION 2.01. The Merger.
Upon the terms and subject to the conditions set forth in Article VII, and in
accordance with the DGCL, at the Effective Time (as defined below), Purchaser
shall be merged with and into the Company. As a result of the Merger, the
separate corporate existence of Purchaser shall cease and the Company shall
continue as the surviving corporation of the Merger (the "Surviving
Corporation").
SECTION 2.02. Closing.
The closing of the Merger (the "Closing") will take place on the second Business
Day after satisfaction or waiver (as permitted by this Agreement and applicable
law) of the conditions (excluding conditions that, by their terms, cannot be
satisfied until the Closing Date) set forth in Article VII (the "Closing Date"),
unless another time or date is agreed to in writing by the parties hereto. The
Closing shall be held at the offices of ▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, unless another place is agreed to in writing
by the parties hereto.
SECTION 2.03. Effective Time.
At the Closing, the parties shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware, in such form as is required by, and executed in
accordance with, the relevant provisions of the DGCL (the date and time of such
filing of the Certificate of Merger (or such later time as may be agreed by the
parties hereto and specified in the Certificate of Merger) being the "Effective
Time.
SECTION 2.04. Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property, rights,
privileges, powers and franchises of the Company and Purchaser shall vest in the
Surviving Corporation, and all debts, liabilities, obligations, restrictions,
disabilities and duties of each of the Company and Purchaser shall become the
debts, liabilities, obligations, restrictions, disabilities and duties of the
Surviving Corporation.
SECTION 2.05. Certificate of Incorporation; By-laws.
(a) At the Effective Time, the Certificate of Incorporation of the Surviving
Corporation shall be the Certificate of Incorporation of the Company as in
effect immediately prior to the Effective Time.
(b) At the Effective Time, the By-laws of the Company, as in effect
immediately prior to the Effective Time, shall be the By-laws of the
Surviving Corporation until thereafter duly amended.
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SECTION 2.06. Directors and Officers.
The directors of Purchaser immediately prior to the Effective Time and the
President and Chief Operating Officer of the Company shall be the initial
directors of the Surviving Corporation, each to hold office in accordance with
the Certificate of Incorporation and By-laws of the Surviving Corporation, and
the officers of Purchaser immediately prior to the Effective Time and the
President and Chief Operating Officer of the Company shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed and qualified or until their earlier
death, resignation or removal.
SECTION 2.07. Conversion of Securities.
At the Effective Time, by virtue of the Merger and without any action on the
part of Purchaser, the Company or the holders of any of the following
securities:
(a) each Share issued and outstanding immediately prior to the Effective Time
(other than any Shares to be canceled pursuant to Section 2.07(b), and any
Dissenting Shares (as defined below)) shall be canceled and shall be
converted automatically into the right to receive an amount equal to the
Merger Consideration payable, without interest, to the holder of such
Share, upon surrender, in the manner provided in Section 2.10, of the
certificate that formerly evidenced such Share;
(b) each Share held in the treasury of the Company and each Share owned by
Purchaser, Parent or any direct or indirect Subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be canceled without
any conversion thereof and no payment or distribution shall be made with
respect thereto; and
(c) each share of common stock, par value $0.01 per share, of Purchaser issued
and outstanding immediately prior to the Effective Time shall be converted
into and exchanged for one validly issued, fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving
Corporation ("Surviving Corporation Shares").
SECTION 2.08. Treatment of Options.
(a) Between the date of this Agreement and the Effective Time, the Company
shall take all necessary action (which shall be effective as of the
Effective Time) to:
(i) terminate (effective as of the Effective Time) the Company's 1991
and 1997 Stock Option Plans, and use its reasonable efforts to
terminate each stock option agreement granted otherwise than under
such plans which shall themselves constitute separate plans, each as
amended through the date of this Agreement (collectively, the
"Company Stock Option Plans"); and
(ii) use its reasonable efforts to cancel, as of the Effective Time, each
outstanding option to purchase Shares of Company Common Stock
granted under the Company Stock Option Plans (each, a "Company Stock
Option") that is outstanding and unexercised, whether or not vested
or exercisable, as of such date
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(in each case, without the creation of additional liability to the
Company or any Subsidiary).
(b) As of the Effective Time, each holder of a Company Stock Option cancelled
immediately prior to the Effective Time pursuant to Section 2.08(a)(ii)
shall be entitled to receive an amount of cash, without interest, equal to
the product of:
(i) the total number of Shares subject to such Company Stock Option,
multiplied by
(ii) the excess, if any, of the Merger Consideration over the exercise
price per Share of such Company Stock Option (with the aggregate
amount of such payment to the holder to be rounded to the nearest
cent), less applicable withholding taxes. No holder of a Company
Stock Option that has an exercise price per Share that is equal to
or greater than the Merger Consideration shall be entitled to any
payment with respect to such cancelled Company Stock Option before
or after the Effective Time.
SECTION 2.09. Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary and to the
extent available under the DGCL, Shares that are outstanding immediately
prior to the Effective Time and that are held by stockholders who shall
have neither voted in favor of the Merger nor consented thereto in writing
and who shall have demanded properly in writing appraisal for such Shares
in accordance with Section 262 of the DGCL (collectively, the "Dissenting
Shares") shall not be converted into, or represent the right to receive,
the Merger Consideration. Such stockholders shall be entitled to receive
payment of the appraised value of such Shares held by them in accordance
with the provisions of such Section 262, except that all Dissenting Shares
held by stockholders who shall have failed to perfect or who effectively
shall have withdrawn or lost their rights to appraisal of such Shares
under such Section 262 shall thereupon be deemed to have been converted
into, and to have become exchangeable for, as of the Effective Time, the
right to receive the Merger Consideration, without any interest thereon,
upon surrender, in the manner provided in Section 2.10, of the certificate
or certificates that formerly evidenced such Shares.
(b) The Company shall give Parent prompt notice of any demands for appraisal
received by the Company, withdrawals of such demands, and any other
instruments served pursuant to the DGCL and received by the Company, and
Parent shall have the right to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. The Company shall
not, except with the prior written consent of Parent, make any payment
with respect to any demands for appraisal or offer to settle or settle any
such demands.
SECTION 2.10. Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, Purchaser shall designate a bank or trust
company to act as agent (the "Paying Agent") for the holders of Shares to
receive the funds to which holders of Shares shall become entitled
pursuant to Section 2.07(a). Such funds shall be
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invested by the Paying Agent as directed by the Surviving Corporation. Any
interest and other income resulting from such investments shall be paid to
Purchaser.
(b) Promptly after the Effective Time, the Surviving Corporation shall cause
to be mailed to each Person who was, at the Effective Time, a holder of
record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.07(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and instructions for use
in effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together
with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, and such other documents as may
be required pursuant to such instructions, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration
for each Share formerly evidenced by such Certificate, and such
Certificate shall then be canceled. No interest shall accrue or be paid on
the Merger Consideration payable upon the surrender of any Certificate for
the benefit of the holder of such Certificate. If the payment equal to the
Merger Consideration is to be made to a Person other than the Person in
whose name the surrendered certificate formerly evidencing Shares is
registered on the stock transfer books of the Company, it shall be a
condition of payment that the certificate so surrendered shall be endorsed
properly or otherwise be in proper form for transfer and that the Person
requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a Person
other than the registered holder of the certificate surrendered, or shall
have established to the satisfaction of Purchaser that such taxes either
have been paid or are not applicable. If any holder of Shares is unable to
surrender such holder's Certificates because such Certificates have been
lost, stolen, mutilated or destroyed, such holder may deliver in lieu
thereof an affidavit and indemnity bond in form and substance and with
surety reasonably satisfactory to the Surviving Corporation.
(c) At any time following the ninth month after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent
and not disbursed to holders of Shares (including, without limitation, all
interest and other income received by the Paying Agent in respect of all
funds made available to it), and, thereafter, such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned
property, escheat and other similar laws) only as general creditors
thereof with respect to any Merger Consideration that may be payable upon
due surrender of the Certificates held by them. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Share for any Merger Consideration delivered in
respect of such Share to a public official pursuant to any abandoned
property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the stock
transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the
Company. From and after the Effective Time, the holders of Shares
outstanding immediately prior to the Effective Time shall cease to have
any
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rights with respect to such Shares except as otherwise provided herein or
by applicable Law.
(e) All Merger Consideration paid upon the surrender for exchange of
Certificates in accordance with the terms of this Article II shall be
deemed to have been paid in full satisfaction of all rights pertaining to
the Shares theretofore represented by such Certificates. If, after the
Effective Time, Certificates are presented to the Surviving Corporation or
the Paying Agent for any reason, they shall be canceled and exchanged as
provided in this Article II, except as otherwise provided by Law.
(f) Each of the Surviving Corporation, the Paying Agent, Purchaser and the
Parent shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable hereunder to any Person such amounts as it
is required to deduct and withhold with respect to the making of such
payment under any provision of Federal, state, local or foreign tax law.
To the extent that amounts are so deducted and withheld, such deducted and
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Person in respect of which such deduction and
withholding was made.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser that:
SECTION 3.01. Organization and Qualification; Subsidiaries.
(a) Each of the Company and each Subsidiary of the Company is a corporation or
limited liability company duly formed, validly existing and in good
standing under the laws of the jurisdiction of its formation and has the
requisite power and authority and all necessary governmental approvals to
own, lease and operate its properties and to carry on its business as it
is now being conducted. Each of the Company and each Subsidiary is duly
qualified or licensed as a foreign corporation or limited liability
company to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or
the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in
good standing that would not have a Company Material Adverse Effect.
(b) A true and complete list of all the Subsidiaries, together with the
jurisdiction of formation of each Subsidiary, is set forth in Section
3.01(b) of the Company Disclosure Schedule (the "Company Disclosure
Schedule"), which has been prepared by the Company and delivered by the
Company to Parent and Purchaser prior to the execution and delivery of
this Agreement. Except as disclosed in Section 3.01(b) of the Company
Disclosure Schedule, the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or
entity.
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(c) Each of the Company and its Subsidiaries has the requisite corporate power
and corporate authority in all material respects to own, lease and operate
its properties and to carry on its respective businesses as they are now
being conducted.
SECTION 3.02. Certificate of Incorporation and By-laws.
The Company has heretofore furnished to Parent a complete and correct copy of
the Certificate of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Subsidiary. Such
Certificates of Incorporation, By-laws or equivalent organizational documents
are in full force and effect. Neither the Company nor any Subsidiary is in
violation of any of the provisions of its Certificate of Incorporation, By-laws
or equivalent organizational documents.
SECTION 3.03. Capitalization.
(a) The authorized capital stock of the Company consists of 30,000,000 Shares
("Company Common Stock"). As of the date of this Agreement, 8,077,018
Shares are issued and outstanding, all of which are validly issued, fully
paid and nonassessable. Except as set forth in Section 3.03 of the Company
Disclosure Schedule, which Schedule sets forth the name of the holder of
each option, warrant or other right to purchase capital stock of the
Company, the number of Shares that may be purchased by such holder and the
price per Share at which such Shares may be purchased, there are no
options, warrants, agreements, or other arrangements of any character that
are binding on the Company or any Subsidiary that obligate the Company or
any Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, the Company or any Subsidiary. The Company Common
Stock is not entitled to preemptive rights.
(b) The Company has made available to Parent accurate and complete copies of
all Company Stock Option Plans pursuant to which the Company has granted
the Company Stock Options that are currently outstanding. All Shares
subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable.
SECTION 3.04. Authority Relative to the Transactions.
The Company has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution and delivery by the Company of this Agreement
and the consummation by the Company of the Transactions have been duly and
validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the Transactions (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the then
outstanding shares of Company Common Stock (the "Company Stockholder
Approval")), if and to the extent required by applicable Law, and the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by the Company and,
assuming the due authorization, execution and delivery by the other parties
thereto, constitutes the legal, valid and binding obligation of the Company,
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enforceable against the Company in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all Laws relating to fraudulent transfers), reorganization, moratorium or
similar Laws affecting creditors' rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
at law or in equity). The Company Board, at a meeting duly called and held, has
unanimously (except for the abstention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇):
(a) determined that this Agreement and the transactions contemplated hereby,
including each of the Offer and the Merger (collectively, the
"Transactions"), are fair to, and in the best interests of, the holders of
Shares;
(b) approved, adopted and declared advisable this Agreement and the
Transactions (such approval and adoption having been made in accordance
with the DGCL, including without limitation Section 203 thereof); and
(c) resolved, subject to Section 6.05(d), to recommend that the holders of
Shares accept the Offer and tender their Shares pursuant to the Offer,
and, if required, approve and adopt this Agreement and the Transactions
(the "Company Tender Recommendation").
SECTION 3.05. No Conflict; Required Filings and Consents.
The execution and delivery by the Company of this Agreement do not, and the
performance by the Company of this Agreement and the consummation of the
Transactions by the Company will not:
(a) violate the Certificate of Incorporation or By-laws or any equivalent
organizational documents of the Company or any Subsidiary;
(b) violate any United States or non-United States statute, law, ordinance,
regulation, rule, code, executive order, injunction, judgment, decree or
other order ("Law") applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected; or
(c) except as set forth in Section 3.05 of the Company Disclosure Schedule,
result in any breach of or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any
property or asset of the Company or any of its Subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any property or asset of any of them is bound or
affected, except for any such conflicts, violations, breaches, defaults or
other occurrences which would not, individually or in the aggregate, have
a Company Material Adverse Effect.
(d) Neither the Company nor any of its Subsidiaries is required to obtain any
consent, permit, approval, order or authorization of any government, any
instrumentality, subdivision, court, administrative agency or commission
or other authority thereof, or any quasi
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governmental or private body exercising any regulatory, taxing, importing
or other governmental or quasi governmental authority (a "Governmental
Authority"), in connection with the execution and delivery of this
Agreement by the Company or the consummation of the Transactions except
for (x) those required under or in relation to (A) the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), (B) the DGCL
with respect to the filing of the Certificate of Merger, (C) rules and
regulations of The Nasdaq Stock Market and (D) such as may be required
under any applicable state securities or blue sky laws and (y) such
consents, permits, approvals, orders or authorizations the failure of
which to obtain is not reasonably likely to have, individually or in the
aggregate, a Company Material Adverse Effect.
(e) The Board of Directors of the Company, or an appropriate committee
thereof, has taken, or prior to the Effective Time will take, all action
necessary so that the Rule 16b-3(e) exemption from Section 16 under the
Exchange Act is applicable to the disposition by all persons who are
directors and/or officers of the Company of the Company Common Stock and
Company Stock Options in or in connection with the Merger.
SECTION 3.06. SEC Filings; Financial Statements.
(a) The Company has filed or furnished, as the case may be, all forms, reports
and documents required to be filed or furnished by it with the SEC since
June 30, 2002, and has heretofore made available to Parent:
(i) its Annual Reports on Form 10-KSB, as amended, for the fiscal years
ended December 31, 2002, 2003 and 2004, respectively;
(ii) its Quarterly Report on Form 10-QSB for the period ended March 31,
2005;
(iii) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since June 30, 2002;
and
(iv) all other forms, reports and registration statements (other than
Quarterly Reports on Form 10-QSB not referred to in clause (i)
above) filed by the Company with the SEC since June 30, 2002.
(The forms, reports and other documents referred to in clauses (i), (ii),
(iii) and (iv) above being, collectively, the "Company SEC Reports".)
The Company SEC Reports were prepared in accordance with the Exchange Act,
and the rules and regulations promulgated thereunder. The Company SEC
Reports, as of their respective dates, did not, and any Company SEC
Reports filed with the SEC subsequent to the date hereof and prior to the
purchase of Shares pursuant to the Offer will not, contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All of such
Company SEC Reports, as of their respective dates, complied as to form in
all material respects with the applicable requirements of the Securities
Act and the Exchange Act and the rules and regulations promulgated
thereunder.
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(b) Each of the consolidated financial statements (including, in each case,
any notes thereto) contained in the Company SEC Reports on Form 10-KSB was
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto) and each
fairly presents, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company and its
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted therein.
(c) Neither the Company nor any Subsidiary has any liability or obligation
(whether known or unknown, accrued, absolute, contingent or otherwise)
which would be required to be reflected, reserved for or disclosed in a
consolidated balance sheet of the Company and its consolidated
Subsidiaries, including the notes thereto, prepared as of the date of this
Agreement in accordance with GAAP and consistent with the consolidated
balance sheet of the Company and the consolidated Subsidiaries as at
December 31, 2004, including the notes thereto (the "2004 Balance Sheet"),
except for:
(i) liabilities and obligations to the extent reflected, reserved for or
disclosed in the 2004 Balance Sheet;
(ii) liabilities and obligations that were incurred in the ordinary
course of business consistent with past practice since December 31,
2004 (none of which has had or is reasonably like to have,
individually or in the aggregate, a Company Material Adverse
Effect); or
(iii) as set forth in Section 3.06(c) of the Company Disclosure Schedule.
(d) Information Supplied.
(i) The information supplied or to be supplied by the Company for
inclusion or incorporation by reference in Schedule TO or the Offer
Documents and any other document filed or to be filed by Purchaser
or Parent with the SEC or any other Governmental Authority in
connection with the Offer will, at the respective times such
documents are filed and when first published, sent or given to the
stockholders of the Company shall not contain an untrue statement of
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not false or
misleading. If at any time before Closing any event relating to the
Company is discovered by the Company that is required to be set
forth in an amendment to the Schedule TO or a supplement to the
Offer Documents, the Company shall promptly inform Parent.
(ii) Notwithstanding the foregoing provisions of this Section 3.06(d), no
representation or warranty is made by the Company with respect to
statements made or incorporated by reference in the Schedule TO or
the Offer Documents based on information supplied by Parent or the
Purchaser for inclusion or incorporation by reference therein.
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SECTION 3.07. Absence of Certain Changes or Events.
Since December 31, 2004, except as set forth in the Company SEC Reports filed
prior to the date hereof, Section 3.07 of the Company Disclosure Schedule, or as
expressly contemplated by this Agreement:
(a) the Company and the Subsidiaries have conducted their businesses only in
the ordinary course and in a manner consistent with past practice;
(b) there has not been any Company Material Adverse Effect;
(c) except to the extent required under the Plans or in the ordinary course of
business, there has not been any material increase in the compensation
payable or which could become payable by the Company and its Subsidiaries
to their officers or key employees, or any amendment of any compensation
and benefit plans resulting in a material increase in payments thereunder;
(d) there has not been any issuance or agreement to issue shares of Company
Common Stock, other than under the Company Option Plans; and
(e) none of the Company or any Subsidiary has taken any action that, if taken
after the date of this Agreement, would constitute a material breach of
any of the covenants set forth in Section 5.01.
SECTION 3.08. Absence of Litigation.
Except as set forth in the Company SEC Reports filed prior to the date hereof or
in Section 3.08 of the Company Disclosure Schedule:
(a) there is no litigation, suit, claim, action, proceeding, arbitration or
investigation (an "Action") pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary, or any
property or asset of the Company or any Subsidiary and
(b) there are no judgments, decrees, injunctions, rules or orders of any
Governmental Authority,
except for any of the foregoing under clauses (a) and (b) above that,
individually or in the aggregate, would not result or reasonably be likely to
result in losses and expenses (including reasonable expenses of counsel) in
excess of $100,000 or otherwise constitute a Company Material Adverse Effect.
SECTION 3.09. Employee Benefit Plans.
(a) Section 3.09(a) of the Company Disclosure Schedule lists all employee
benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock
option, stock purchase, restricted stock, incentive, deferred
compensation, excess benefit, retiree medical or life insurance,
- 14 -
supplemental retirement, severance, salary continuation, change in
control, termination or other benefit plans, programs or arrangements, and
all material employment, retention, termination, severance or other
contracts or agreements, whether legally enforceable or not, whether
written or unwritten, that cover any of the current or former employees,
officers, or directors of the Company or any Subsidiary and with respect
to which the Company or any Subsidiary has any liability or obligation or
which are maintained, contributed to or sponsored by the Company or any
Subsidiary (collectively, the "Plans"); provided, however, that there
shall be no obligation hereunder to list on Section 3.09(a) of the Company
Disclosure Schedule any Plan that is not material. For each material Plan,
the Company has furnished or made available to Parent a true and complete
copy of the following documents, if applicable: (i) each Plan document and
all amendments thereto, and where such Plan is unwritten, a written
description of the material terms thereof, (ii) all trust agreements,
insurance or annuity contracts or other funding vehicles, (iii) the
current summary plan description, (iv) the three most recent annual
reports on Form 5500 filed with the IRS and (v) the most recent
determination letter or opinion letter from the IRS with respect to any
Plan that is intended to be qualified under Section 401(a) of the Code or
the standardized prototype plan on which such Plan is based.
(b) Except as disclosed in Section 3.09(b) of the Company Disclosure Schedule,
each Plan has been maintained, operated and administered in material
compliance with its terms and the requirements of all applicable Laws
including, without limitation, ERISA and the Code. Except as disclosed in
Section 3.09(b) of the Company Disclosure Schedule, the Company and the
Subsidiaries have performed all obligations required to be performed by
them under, are not in any respect in default under or in violation of,
and have no knowledge of any default or violation by any party to, any
Plan.
(c) Except as otherwise disclosed on Section 3.09(c) of the Company Disclosure
Schedule, there will be no payment, accrual of additional benefits,
acceleration of payments or vesting of any benefit under any contract,
agreement, plan or other arrangement, whether or not a Plan, and no
employee, officer or director of the Company or any of the Subsidiaries
will become entitled to severance, termination pay or similar payments or
benefits in connection with the transactions contemplated by this
Agreement (either alone or in combination with any other event), other
than as specifically provided for in this Agreement. No payment, accrual
of additional benefits, acceleration of payments or vesting of any benefit
under this Agreement, any Plan or similar agreement or arrangement between
the Company or any of its Affiliates and any "disqualified individual" (as
such term is defined in Section 280G of the Code) could reasonably be
expected to be characterized as an "excess parachute payment" (as such
term is defined in Section 280G of the Code) in connection with the
transactions contemplated by this Agreement (either alone or in
combination with any other event).
(d) All contributions, premiums or payments required to be made with respect
to any Plan have been made on or before their due dates, with such
exceptions as would not be reasonably likely to have a Company Material
Adverse Effect.
- 15 -
SECTION 3.10. Property; Title to Assets.
(a) The Company owns no real property. Section 3.10 of the Company Disclosure
Schedule lists each parcel of real property currently leased, subleased or
licensed by the Company or any Subsidiary together, in each case, with the
name of the lessor, the lessee and the date of the lease, sublease,
license, assignment of the lease, any guaranty given or leasing
commissions payable by the Company or any Subsidiary in connection
therewith and each material amendment to any of the foregoing
(collectively, the "Lease Documents").
(b) True, correct and complete copies of all Lease Documents have been
delivered to Parent. All such current leases, subleases and licenses are
in full force and effect, are valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default (or event which, with notice or lapse
of time, or both, would constitute a material default) by the Company or
any Subsidiary or, to the Company's knowledge, by the other party to such
lease, sublease or license.
(c) Except as disclosed in Section 3.10 of the Company Disclosure Schedule,
the Company and the Subsidiaries own or have valid leasehold interests in,
all of their respective properties and assets (other than assets disposed
of in the ordinary course of business since December 31, 2004) free and
clear of all encumbrances except for defects in title, easements,
encroachments, restrictive covenants and similar encumbrances or
impediments that are not reasonably likely to have a Company Material
Adverse Effect.
SECTION 3.11. Taxes
(a) Except as set forth in Section 3.11(a) of the Company Disclosure Schedule,
the Company and the Subsidiaries have timely filed (or caused to be timely
filed) all material Tax Returns required to be filed by them and have paid
and discharged all material Taxes required to be paid or discharged
(whether or not shown on such Tax Returns). All such Tax Returns are true,
correct and complete in all material respects. Except as set forth in
Section 3.11(a) of the Company Disclosure Schedule, neither the Company
nor any Subsidiary has granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any
Tax. All amounts of material Taxes required to be withheld by or with
respect to the Company or any Subsidiary have been timely withheld and
remitted to the applicable Governmental Authority. The accruals and
reserves for Taxes reflected in the 2004 Balance Sheet are adequate to
satisfy all material Taxes accruable through such date (including interest
and penalties, if any, thereon) in accordance with GAAP. Neither the
Company nor any Subsidiary is a party to any indemnification, allocation
or sharing agreement with respect to Taxes that could give rise to a
payment or indemnification obligation (other than agreements among the
Company and its Subsidiaries and other than customary Tax indemnifications
contained in credit or other commercial agreements the primary purpose of
which does not relate to Taxes).
(b) Except as set forth in Section 3.11(b) of the Company Disclosure Schedule,
there are no pending or, to the Knowledge of the Company, threatened in
writing, audits,
- 16 -
examinations, investigations or other proceedings in respect of any Tax
matter of the Company or any Subsidiary.
(c) There are no Tax liens upon any property or assets of the Company or any
of the Subsidiaries except liens for current Taxes not yet due and
payable.
SECTION 3.12. Material Contracts.
(a) Subsections (i) through (v) of Section 3.12(a) of the Company Disclosure
Schedule list the following types of contracts and agreements, whether
written or oral, to which the Company or any Subsidiary is a party (such
contracts and agreements as are required to be set forth in Section
3.12(a) of the Company Disclosure Schedule being the "Material
Contracts"):
(i) each "material contract" (as such term is defined in Item 601
(b)(10) of Regulation S-B of the SEC) with respect to the Company
and its Subsidiaries;
(ii) all contracts and agreements relating to issuances of securities of
the Company or any Subsidiary (and all letters of intent, term
sheets and draft agreements relating to any such pending
transactions);
(iii) all contracts and agreements evidencing indebtedness in an amount in
excess of $25,000;
(iv) all Lease Documents; and
(v) all other contracts and agreements in an amount in excess of
$25,000, whether or not made in the ordinary course of business,
which are material to the Company, any Subsidiary or the conduct of
its and their respective businesses, or the absence of which would,
individually or in the aggregate, have a Company Material Adverse
Effect.
(b) (i) Each Material Contract is a legal, valid and binding agreement of
the Company or the applicable Subsidiary, as the case may be, and,
to the Company's knowledge, of the other party(ies) thereto; and
(ii) except as set forth in Section 3.12(b) of the Company Disclosure
Schedule, (A) neither the execution of this Agreement nor the
consummation of any Transaction shall constitute a default under,
give rise to cancellation rights under, or otherwise adversely
affect any of the rights of the Company or any Subsidiary under any
Material Contract, and (B) neither the Company nor any of its
Subsidiaries is in material breach of, or default under, any
Material Contract to which it is a party..
The Company has furnished or made available to Parent true and complete copies
of all Material Contracts, including any amendments thereto.
- 17 -
SECTION 3.13. Environmental Matters
Except as set forth in Section 3.13 of the Company Disclosure Schedule, the
Company has not received any notice, demand, letter, claim or request for
information relating to the Company property alleging violation of or liability
under any Environmental Law and there are no proceedings, actions, orders,
decrees, injunctions of other claims, or to the knowledge of the Company, any
threatened actions or claims, relating to or otherwise alleging liability under
any Environmental Law.
SECTION 3.14. Labor and Employment Matters
Except as disclosed in Section 3.14 of the Company Disclosure Schedule, (i)
neither the Company nor any of its Subsidiaries has entered into, is a party to
or is bound by any express or implied collective bargaining agreements or other
agreement, contract, commitment, arrangement or understanding with any labor
union or labor organization, and (ii) no union organization campaign is pending,
or to the Knowledge of the Company has been threatened with respect to the
employees of the Company or any of its Subsidiaries.
SECTION 3.15. Compliance with Laws; Permits
The Company and its Subsidiaries are in compliance with the Federal Food, Drug,
and Cosmetic Act as it pertains to the importation, manufacture, processing,
marketing and distribution of ingredients sold as dietary supplement, cosmetic
or drug ingredients and all other applicable laws, rules, regulations, codes,
ordinances, orders, policies and guidelines of all Governmental Authorities
except for any failures to so comply as would not reasonably be expected to have
a Company Material Adverse Effect.
SECTION 3.16. Ephedra
Except as disclosed in Section 3.16 of the Company Disclosure Schedule, none of
the Company or any of its Subsidiaries has, since January 1, 2000, produced,
marketed, distributed or sold any product containing any substance derived from
the plant Ephedra including ephedra, ma ▇▇▇▇▇ and ephedrine (the "Ephedra
Products"). Section 3.16 of the Company Disclosure Schedule sets forth the
following information relating to the Ephedra Products since January 1, 2000:
(i) revenues derived by the Company and its Subsidiaries from the Ephedra
Products, and (ii) the names of the customers to whom the Ephedra Products were
sold.
SECTION 3.17. Schedule 14D-9.
The Schedule 14D-9 will not, when it is filed with the SEC or is first
published, sent or given to the stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, the Company makes no representation or warranty
with respect to any information supplied in writing by Parent, Purchaser or any
of Parent's or Purchaser's Representatives for inclusion in the foregoing
documents. The Schedule 14D-9 shall comply in all material respects as to form
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder.
- 18 -
SECTION 3.18. Opinion of Financial Advisor.
The Company has received the written opinion (the "Fairness Opinion") of ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Inc., dated the date of this Agreement, to the effect that, as of the
date of this Agreement, the Merger Consideration is fair, from a financial point
of view, to the Company's stockholders, a copy of which opinion will be
delivered to Parent concurrent with the execution and delivery of this Agreement
by the Company.
SECTION 3.19. Brokers.
No broker, finder or investment banker (other than ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.) is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of the
Company. The Company has heretofore furnished to Parent a complete and correct
copy of all agreements between the Company and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc., pursuant to
which such firm would be entitled to any payment relating to the Transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and warrant to the
Company that:
SECTION 4.01. Corporate Organization.
Parent is a societe anonyme duly organized, validly existing and in good
standing under the laws of the French Republic. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Each of Parent and Purchaser has the requisite corporate power and
authority and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted.
SECTION 4.02. Authority Relative to the Transactions.
Each of Parent and Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement, to perform its respective obligations
hereunder and to consummate the Transactions. The execution and delivery by
Parent and Purchaser of this Agreement and the consummation by Parent and
Purchaser of the Transactions have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Parent or Purchaser are necessary to authorize this Agreement or to consummate
the Transactions (other than, with respect to the Merger, the filing and
recordation of appropriate merger documents as required by the DGCL). This
Agreement has been duly and validly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of each of Parent
and Purchaser, enforceable against each of Parent and Purchaser in accordance
with its terms, subject to the effect of any applicable bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting creditors' rights generally
and subject to the effect of general principles of equity (regardless of whether
considered in a proceeding at law or in equity).
- 19 -
SECTION 4.03. No Conflict; Required Filings and Consents.
The execution and delivery by Parent and Purchaser of this Agreement do not, and
the performance by Parent and Purchaser of this Agreement and the consummation
of the Transactions by Parent and Purchaser will not:
(a) violate the Certificate of Incorporation or By-laws of Purchaser or the
organizational documents of Parent;
(b) violate any Law applicable to Parent or Purchaser or by which any property
or asset of either of them is bound or affected; or
(c) result in any breach of, or constitute a default (or an event which, with
notice or lapse of time or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any property or asset of
either of them is bound or affected, except for any such conflicts,
violations, breaches, defaults or other occurrences which would not,
individually or in the aggregate, have a Parent Material Adverse Effect.
SECTION 4.04. Financing.
Parent has, or has commitments for, sufficient funds to permit Parent and
Purchaser to consummate all the Transactions, including, without limitation,
acquiring all the outstanding Shares in the Offer and the Merger.
SECTION 4.05. Offer Documents; Proxy Statement.
The Offer Documents shall not, at the time the Offer Documents are filed with
the SEC or are first published, sent or given to stockholders of the Company, as
the case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. The information supplied by Parent for inclusion
in the Proxy Statement or the information statement filed under Section 14(f) of
the Exchange Act and Rule 14f-1 thereunder (the "Information Statement") shall
not, at the date the Proxy Statement or the Information Statement (or any
amendment or supplement thereto) is first mailed to stockholders of the Company,
at the time of the Stockholders' Meeting or at the Effective Time, contain any
untrue statement of a material fact, or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not false or 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, Parent and Purchaser
make no representation or warranty with respect to any information supplied by
the Company or any of its Representatives for inclusion in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material
- 20 -
respects as to form with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder.
SECTION 4.06. Brokers.
No broker, finder or investment banker (other than ▇▇▇▇▇▇▇▇ Capital Advisors LLC
and Canec International Ltd.) is entitled to any brokerage, finder's or other
fee or commission in connection with the Transactions based upon arrangements
made by or on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
The Company agrees that, between the date of this Agreement and the Effective
Time, except as expressly contemplated by any other provision of this Agreement
or as set forth in Section 5.01 of the Company Disclosure Schedule, unless
Parent shall otherwise consent in writing:
(a) the businesses of the Company and its Subsidiaries shall be conducted only
in, and the Company and its Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice; and
(b) the Company shall use commercially reasonable efforts to preserve
substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers,
employees and consultants of the Company and the Subsidiaries and to
preserve the current relationships of the Company and the Subsidiaries
with customers, suppliers and other Persons with which the Company or any
Subsidiary has significant business relations.
Except as expressly contemplated by any other provision of this Agreement or as
set forth in Section 5.01 of the Company Disclosure Schedule, neither the
Company nor any Subsidiary shall, between the date of this Agreement and the
Effective Time, directly or indirectly, do, or propose to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of Incorporation or By-laws or
equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant or encumber, or authorize such
issuance, sale, pledge, disposition, grant, or encumbrance of:
(i) any shares of any class of capital stock of the Company or any
Subsidiary, or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital
stock, or any other ownership interest (including, without
limitation, any phantom interest), of the Company or any Subsidiary
(except for the issuance of Shares issuable pursuant to employee
stock options outstanding on the date of this Agreement and granted
under Company Stock Option Plans in effect on the date of this
Agreement); or
- 21 -
(ii) any assets of the Company or any Subsidiary, except in the ordinary
course of business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of its
capital stock;
(d) reclassify, combine, split, subdivide or redeem, or purchase or otherwise
acquire, directly or indirectly, any of its capital stock;
(e) (i) acquire (including, without limitation, by merger, consolidation, or
acquisition of stock or assets or any other business combination)
any corporation, partnership, other business organization or any
division thereof or any significant amount of assets;
(ii) issue any debt securities or assume, guarantee or endorse, or
otherwise become responsible for, the obligations of any Person, or
make any loans or advances; or
(iii) enter into or amend any contract or agreement with respect to any
matter set forth in this Section 5.01(e), other than in the ordinary
course of business and consistent with past practice;
(f) (i) hire any additional employees other than in the ordinary course of
business, except (A) to fill vacancies arising after the date of
this Agreement; (B) to hire non-executive employees for the
Company's Beijing office; or (C) to meet increased production
demand.
(ii) make any offers to any employee of an employment position other than
the employment position he or she currently holds, except for offers
of an employment position made in the ordinary course of business
and consistent with past practice in connection with the promotion
or demotion of any employee of the Company or any of its
Subsidiaries who is not a director or officer of the Company;
(iii) increase the compensation payable or to become payable or the
benefits provided to its directors, officers or employees, except
for increases in the ordinary course of business and consistent with
past practice in salaries or wages of employees of the Company or
any of its Subsidiaries who are not directors or officers of the
Company;
(iv) except as set forth in Section 5.01 of the Company Disclosure
Schedule, grant any loan, advance, extensions of credit to current
or former employees or forgiveness or deferral of any loans due from
any employee, other than any loan, advance or extension of credit to
a current employee in circumstances and in amounts consistent with
past practice, in any event not to exceed $10,000 for any one
employee and $25,000 in the aggregate;
(v) establish, adopt, enter into, terminate or amend any Plan or
establish, adopt or enter into any plan, agreement, program, policy,
trust, fund or other arrangement
- 22 -
that would be a Plan if it were in existence as of the date of this
Agreement for the benefit of any director, officer or employee
except as required by this Agreement or the Transactions
contemplated hereby, or as required by ERISA, the Code or to
otherwise comply with applicable Law;
(vi) grant any equity or equity based awards (provided that equity awards
may be transferred in accordance with the applicable plan document
or agreement);
(g) enter into, amend or modify in any material respect, or consent to the
termination of, any Material Contract, or amend, waive or modify in any
material respect, or consent to the termination of, the Company's or any
Subsidiary's rights thereunder other than in the ordinary course of
business consistent with past practice;
(h) fail to make in a timely manner any material filings with the SEC required
under the Securities Act or the Exchange Act or the rules and regulations
promulgated thereunder;
(i) change any Tax election, annual tax accounting period, or method of tax
accounting, file amended Tax Returns or claims for Tax refunds by the
Company or its Subsidiaries, enter into a closing agreement relating to
Taxes or any settlement of any Tax claim, audit or assessment;
(j) make any changes in its accounting methods, principles or practices
currently in effect, except as required by changes in GAAP or by
Regulation S-X under the Exchange Act, in each case as concurred in by its
independent public accountants;
(k) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of
the Company or any of its Subsidiaries (other than the Transactions);
(l) except as required by applicable Law or GAAP, revalue in any material
respect any of its assets, including writing down the value of inventory
in any material manner, or writing-off notices or accounts receivable in
any material manner; or
(m) authorize, agree or commit to do any of the foregoing.
SECTION 5.02. Advice of Changes; Government Filings.
Each party shall promptly advise the other orally and in writing of (a) any
representation or warranty made by it in this Agreement (i) to the extent
qualified by Material Adverse Effect becoming untrue or inaccurate and (ii) to
the extent not qualified by Material Adverse Effect becoming untrue or
inaccurate in any material respect except that this clause (ii) shall be deemed
satisfied so long as such representations or warranties being untrue or
inaccurate, taken together, do not have a Material Adverse Effect on the Company
or Parent, as the case may be, or (b) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement required to
be complied with or satisfied by it under this Agreement. However, no such
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement. The Company shall file all reports required to be filed by
it with the SEC (and all other Governmental
- 23 -
Authorities) between the date of this Agreement and the Effective Time
including, the Schedule 14D-9 and the Information Statement or Proxy Statement,
as the case may be, and shall (to the extent permitted by Law or any applicable
confidentiality agreement) deliver to Parent copies of all such reports promptly
after the same are filed. Subject to applicable Laws relating to the exchange of
information, each of the Company and Parent shall have the right to review in
advance, and to the extent practicable each will consult with the other, with
respect to all the information relating to the other party and each of their
respective Subsidiaries, which appears in any filings, announcements or
publications made with, or written materials submitted to, any third party or
any Governmental Authority in connection with the transactions contemplated by
this Agreement. In exercising the foregoing right, each of the parties hereto
agrees to act reasonably and as promptly as practicable. Each party agrees that,
to the extent practicable, it will consult with the other party with respect to
the obtaining of all permits, consents, approvals and authorizations of all
third parties and Governmental Authorities necessary or advisable to consummate
the transactions contemplated by this Agreement and each party will keep the
other party apprised of the status of matters relating to completion of the
transactions contemplated hereby.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholders' Meeting.
(a) If required by applicable Law in order to consummate the Merger, the
Company, acting through the Company Board, shall:
(i) in accordance with applicable Law and the Company's Certificate of
Incorporation and By-laws, duly call, give notice of, convene and
hold an annual or special meeting of its stockholders as promptly as
practicable following consummation of the Offer for the purpose of
considering and taking action on this Agreement and the Merger (the
"Stockholders' Meeting"); and
(ii) (A) include in the Proxy Statement, and not subsequently withdraw
or modify in any manner adverse to Purchaser or Parent, the
unanimous recommendation of the Company Board (except for the
abstention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and any other Company Board
members designated by Parent and Purchaser in accordance with
the terms hereof) that the stockholders of the Company approve
and adopt this Agreement and the Merger; and
(B) use its best efforts to obtain such approval and adoption. At
the Stockholders' Meeting, Parent and Purchaser shall cause
all Shares then beneficially owned by them and their
affiliates to be voted in favor of the approval and adoption
of this Agreement and the Merger.
(b) Notwithstanding the foregoing, in the event that Purchaser shall acquire
at least 90% of the then outstanding Shares, the parties shall take all
necessary and appropriate action to cause the Merger to become effective,
in accordance with Section 253 of the DGCL, as
- 24 -
promptly as reasonably practicable after such acquisition, without a
meeting of the stockholders of the Company.
SECTION 6.02. Proxy Statement.
If approval of the Company's stockholders is required by applicable Law to
consummate the Merger, promptly following consummation of the Offer, the Company
shall file a proxy statement or information statement under Section 14 of the
Exchange Act (the "Proxy Statement") with the SEC, and shall use its best
efforts to have the Proxy Statement cleared by the SEC as promptly as
practicable. Parent, Purchaser and the Company shall cooperate with each other
in the preparation of the Proxy Statement and in responding to any comments of
the SEC with respect to the Proxy Statement or any requests by the SEC for any
amendment or supplement thereto or for additional information. Each of
Purchaser, Parent and the Company and its respective counsel shall have a
reasonable opportunity to review and comment on:
(a) the Proxy Statement, including all amendments and supplements thereto,
prior to such documents being filed with the SEC or disseminated to
holders of Shares; and
(b) all responses to requests for additional information and replies to
comments from the SEC or the staff thereof prior to their being filed
with, or sent to, the SEC. Each of the Company, Parent and Purchaser
agrees to use its reasonable best efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and
requests by the SEC and to cause the Proxy Statement and all required
amendments and supplements thereto to be mailed to the holders of Shares
entitled to vote at the Stockholders' Meeting at the earliest practicable
time.
SECTION 6.03. Company Board Representation; Section 14(f) of the Exchange Act.
(a) Promptly upon the purchase by Purchaser of Shares pursuant to the Offer
and from time to time thereafter. Purchaser shall be entitled to designate
up to such number of directors, rounded up to the next whole number, on
the Company Board as shall give Purchaser representation on the Company
Board equal to the product of the total number of directors on the Company
Board (giving effect to the directors elected pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares
beneficially owned by Purchaser or any affiliate of Purchaser following
such purchase bears to the total number of Shares then outstanding, and
the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected or appointed as directors of the
Company, including increasing the size of the Company Board or securing
the resignations of incumbent directors, or both.
(b) The Company shall promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder to fulfill
its obligations under this Section 6.03, and shall include in the Schedule
14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-l to fulfill
such obligations. Parent or Purchaser shall supply to the Company, and be
solely responsible for, any information with respect to either of them and
their nominees, officers, directors and affiliates required by such
Section 14(f) and Rule 14f-1.
- 25 -
(c) Following the election of designees of Purchaser pursuant to this Section
6.03, prior to the Effective Time, any:
(i) amendment of this Agreement or the Certificate of Incorporation or
By-laws of the Company or any Subsidiary;
(ii) termination of this Agreement by the Company;
(iii) extension by the Company of the time for the performance of any of
the obligations or other acts of Parent or Purchaser;
(iv) recommendation to the Company stockholders or any modification or
withdrawal of any such recommendation in connection with this
Agreement or the Transactions; or
(v) waiver of any of the Company's rights hereunder,
in each case, shall require the concurrence of a majority of the directors of
the Company then in office who neither were designated by Purchaser nor are
employees of the Company or any Subsidiary. If the independent directors of the
Company Board deem it advisable in connection with the Transactions to retain
outside legal counsel, such directors shall be entitled to retain such counsel
at the expense of the Company.
SECTION 6.04. Access to Information; Confidentiality.
(a) Subject to applicable Law and confidentiality agreements, including that
certain confidentiality agreement dated February 15, 2005 between Naturex,
Inc., a Subsidiary of Parent, and the Company (the "Confidentiality
Agreement"), from the date of this Agreement until the Effective Time, the
Company shall (and shall cause its Subsidiaries to):
(i) provide to Parent and Parent's Representatives access, during normal
business hours and upon reasonable notice by Parent, to the
officers, employees, agents, properties, offices and other
facilities of the Company and its Subsidiaries and to the books and
records thereof;
(ii) furnish to Parent all monthly and quarterly statements of revenue
and expense and earnings as are regularly and customarily provided
to senior management of the Company; and
(iii) furnish to Parent such information concerning the business,
properties, contracts, assets, liabilities, personnel and other
aspects of the Company as Parent or its Representatives may
reasonably request.
(b) Each party shall, and shall cause its affiliates and Representatives to:
(i) comply with the Confidentiality Agreement as if a party thereto; and
- 26 -
(ii) hold in strict confidence all nonpublic documents and information
furnished or made available by one party to the other(s) and their
respective affiliates and Representatives.
SECTION 6.05. No Solicitation of Transactions.
(a) The Company shall not, and the Company shall cause its Subsidiaries and
its and their respective Representatives not to, directly or indirectly:
(i) Solicit, knowingly encourage or initiate any inquiries for the
making of any proposal or offer (including any proposal or offer to
its stockholders) that constitutes, or could reasonably be expected
to lead to, any Competing Transaction (as defined below) (each such
proposal or offer an "Acquisition Proposal");
(ii) participate in discussions or negotiations with, or disclose or
provide any non-public information relating to the Company or its
Subsidiaries to, or afford access to any of the properties, books or
records of the Company or its Subsidiaries to, any Person with
respect to an Acquisition Proposal;
(iii) agree to, approve, endorse or recommend any Competing Transaction or
enter into any letter of intent or other contract, agreement or
commitment providing for or otherwise relating to any Competing
Transaction;
(iv) grant any waiver or release under any standstill or similar
agreement by any Person who has made an Acquisition Proposal; or
(v) authorize or direct any Representative of the Company or any of its
Subsidiaries to take any such action.
The Company shall, and shall cause its Subsidiaries and instruct its and
their Representatives to, immediately cease and cause to be terminated all
existing discussions or negotiations with any Person conducted heretofore
with respect to any proposal relating to a Competing Transaction.
(b) Notwithstanding anything to the contrary in this Section 6.05, before the
time of acceptance for payment of Shares pursuant to the Offer, the
Company Board may furnish information to, and enter into discussions with,
a Person who has made a bona fide, written Acquisition Proposal, but only
if
(i) such Acquisition Proposal was made after the date of this Agreement
(it being understood that such an Acquisition Proposal made after
the date of this Agreement by a Person who made an Acquisition
Proposal regarding a Competing Transaction prior to the date of this
Agreement shall be considered a new Acquisition Proposal made after
the date of this Agreement) and none of the Company, its
Subsidiaries and their Representatives has violated any of the
restrictions set forth in this Section 6.05;
- 27 -
(ii) the Company Board has determined in good faith after consultation
with outside legal counsel (who may be the Company's regularly
engaged outside legal counsel) and a financial advisor that such
Acquisition Proposal constitutes or could reasonably be expected to
lead to a Superior Proposal (as defined below) and that, in light of
such proposal, the failure to furnish information or enter into
discussions could reasonably be inconsistent with its fiduciary
duties to the Company's stockholders under applicable law; and
(iii) such person shall have executed a confidentiality agreement on terms
no less favorable to the Company than those contained in the
Confidentiality Agreement, except that such confidentiality
agreement may permit such person to share evaluation material with
its financing sources.
(c) In addition to the obligations of the Company set forth in Sections
6.05(a) and (b), the Company shall promptly as practicable (i) advise
Parent and Purchaser, telephonically and in writing, of the Company's
receipt of any Acquisition Proposal and (ii) provide Parent and Purchaser,
in writing, with the terms and conditions of any such Acquisition
Proposal, or a copy of such Acquisition Proposal, inquiry or request and
the identity of the Person making the same. The Company shall inform
Parent within 48 hours of any change to the material terms of any such
Acquisition Proposal. Within 24 hours upon such determination by the Board
of Directors of the Company that an Acquisition Proposal constitutes a
Superior Proposal, the Company shall deliver to Parent and Purchaser, a
written notice (a "Notice of Superior Proposal") advising them of such
determination, specifying the terms and conditions of such Superior
Proposal and the identity of the Person making such Superior Proposal, and
providing Parent and Purchaser with a copy of the Superior Proposal.
(d) If the Company Board determines, in its good faith judgment prior to the
time of the acceptance for payment of Shares pursuant to the Offer and
after consulting with outside legal counsel (who may be the Company's
regularly engaged outside legal counsel), that the failure to make a
change in the Company Tender Recommendation by the Company Board or any
committee thereof in a manner adverse to Parent or Purchaser, (a "Change
in the Company Recommendation") could reasonably be inconsistent with its
fiduciary duties to the Company's stockholders under applicable Law, then,
notwithstanding anything in Section 6.05(a) to the contrary, the Company
Board may make a Change in the Company Recommendation and/or recommend a
Superior Proposal, and the Company may enter into any agreement otherwise
prohibited by Section 6.05(a) in connection with the termination of this
Agreement, in accordance with the terms of this Agreement; provided,
however, that no such Change in the Company Recommendation or
recommendation of a Superior Proposal may be made until after the third
Business Day following Parent's receipt of written notice from the Company
(an "Adverse Recommendation Notice") (i) advising Parent that the Board of
Directors has received a Superior Proposal, (ii) advising that the Board
of Directors intends to make such Change in the Company Recommendation or
recommendation of a Superior Proposal, and (iii) containing all
information required by Section 6.05(c), together with copies of any
written offer or proposal in respect of such Superior Proposal (it being
understood and agreed that any material amendment to the financial terms
or other material terms of such
- 28 -
Superior Proposal shall require a new Adverse Recommendation Notice and a
new three Business Day period). Any disclosure that the Company Board may
be compelled to make with respect to an Acquisition Proposal or otherwise
in order to comply with its fiduciary duties under applicable Law or Rule
14d-9 or 14e-2 under the Exchange Act will not constitute a violation of
this Agreement.
(e) A "Competing Transaction" means any of the following (other than the
Transactions):
(i) any merger, consolidation, share exchange for 35% of any class of
equity securities of the Company, business combination,
recapitalization, liquidation, dissolution or other similar
transaction (including any so-called merger-of-equals and whether or
not the Company is the entity surviving any such transaction)
involving the Company or any Subsidiary;
(ii) any sale, lease, exchange, transfer or other disposition of all or
substantially all of the assets of the Company or of any Subsidiary;
(iii) any sale, exchange, transfer or other disposition in which the
Company or any Subsidiary participates and which results in any
person beneficially owning more than 35% of any class of equity
securities of the Company or of any Subsidiary; or
(iv) any transaction or series of transactions, including a tender offer
or exchange offer, that, if consummated, would result in any person
beneficially owning more than 35% of any outstanding class of equity
securities of the Company.
(f) A "Superior Proposal" means a written offer (in its most recently amended
or modified terms, if amended or modified) made by a third party to enter
into a Competing Transaction, the effect of which would be that the
stockholders of the Company would beneficially own less than 50% of the
capital stock of the combined or ongoing entity and which the Company
Board determines, in its good faith judgment (after consulting with its
financial advisor) and taking into account all relevant legal, financial,
regulatory and other aspects of the offer that it deems relevant, to be
more favorable to Company stockholders than the Offer and Merger.
SECTION 6.06. Employee Benefits Matters.
(a) From and after the Effective Time and until December 31 of the calendar
year in which the Effective Time occurs, employees of the Company and its
Subsidiaries shall be offered participation in employee benefit plans,
programs, policies and arrangements that are no less favorable in the
aggregate to those provided under the applicable employee benefit plans
(as defined in Section 3(3) of ERISA (excluding plans exempt under Section
201(2) of ERISA)), programs, policies and arrangements of the Company and
its Subsidiaries in effect at the Effective Time (collectively, "Current
Plans"). However, nothing contained in this Section 6.06(a) shall:
- 29 -
(i) obligate or commit Parent or its Subsidiaries to continue any
particular Current Plan after the Effective Time or to maintain in
effect any particular Current Plan or any level or type of benefits;
(ii) obligate or commit Parent or its Subsidiaries to provide any
employee of the Company or any Subsidiary with any equity
compensation pursuant to any equity compensation plans, programs or
arrangements sponsored or provided by Parent or any of its
Subsidiaries or affiliates for the benefit of its employees; or
(iii) prohibit Parent or its Subsidiaries from making any changes to any
Current Plan.
(b) Parent will cause the Company and the Subsidiaries to credit each employee
of the Company and the Subsidiaries as of the Effective Time with such
number of unused vacation days and other paid time off accrued by each
employee with the Company and the Subsidiaries prior to the Effective Time
in accordance with the Company's personnel policies applicable to such
employees on the date hereof, copies of which have been made available to
Parent. However, Parent may, in its sole discretion and to the extent
permitted by applicable law, require that such vacation and other paid
time off be taken by the employee prior to June 30, 2006.
(c) Employees of the Company and its Subsidiaries shall receive credit for
purposes of eligibility to participate and vesting (but not for benefit
accruals under any defined benefit pension plan) under any employee
benefit plan, program or arrangement established or maintained by the
Surviving Corporation or any of its U.S. affiliates for service accrued
prior to the Effective Time with the Company or any Subsidiary to the
extent such employee may be eligible to participate on or after the
Effective Time to the same extent recognized by the Company or any
Subsidiary under comparable plans immediately prior to the Effective Time.
However, such crediting of service shall not operate to duplicate any
benefit or the funding of any such benefit.
(d) With respect to the welfare benefit plans, programs and arrangements
maintained, sponsored or contributed to by Parent or its Subsidiaries
("Parent Welfare Benefit Plans") in which an employee of the Company or
the Subsidiaries may be eligible to participate on or after the Effective
Time, Parent shall use commercially reasonable efforts to cause its
insurance carrier to waive any limitations on benefits relating to
pre-existing conditions (if any) with respect to participation and
coverage requirements applicable to employees of the Company and its
Subsidiaries under Parent Welfare Benefit Plans to the same extent such
limitations are waived under any comparable U.S. plan of Parent or its
Subsidiaries and shall, to the extent permitted under the applicable
plans, recognize for purposes of annual deductible and out-of-pocket
limits under its medical and dental plans, deductible and out-of-pocket
expenses paid by employees of the Company and its Subsidiaries in the
calendar year in which the Effective Time occurs.
- 30 -
SECTION 6.07. Directors' and Officers' Indemnification; Insurance.
(a) The By-laws of the Surviving Corporation, which shall be the By-laws of
the Company, shall not be amended, repealed or otherwise modified for a
period of six years from the Effective Time in any manner that would
affect adversely the rights thereunder of individuals who, at or prior to
the Effective Time, were directors, officers, employees, fiduciaries or
agents of the Company (collectively, "Indemnified Directors/Officers"),
unless such modification shall be required by law. All rights to
indemnification, advancement of expenses and exculpation from liabilities
for acts or omissions occurring at or prior to the Effective Time existing
in favor of the Indemnified Directors/Officers as provided in any written
indemnification contract or agreement with the Company or any Subsidiary
in effect on the date of this Agreement shall be assumed by the Surviving
Corporation as of the Effective Time and shall continue in full force and
effect in accordance with their terms and shall not be amended, repealed,
terminated or otherwise modified (except as required by Law) for a period
of six years after the Effective Time in any manner that would adversely
affect the rights thereunder of the Indemnified Directors/Officers. Parent
hereby unconditionally guarantees the obligations of the Surviving
Corporation under this Section 6.07(a).
(b) The Company shall purchase and maintain in effect for a period of six (6)
years after the Effective Time an insurance policy covering Company
directors' and officers' liability for actions and omissions arising
before the Effective Time that provides $2 million of coverage on terms
reasonably acceptable to the directors of the Company. However, the cost
thereof to the Company shall not exceed $200,000, and any amount in excess
thereof may be paid by the officers and directors pro rata in their
discretion.
(c) If Parent or the Surviving Corporation or any of their respective
successors or assigns:
(i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such
consolidation or merger, or
(ii) transfers all or substantially all of its properties and assets to
any Person, then, and in each such case, proper provision shall be
made so that the successors and assigns of Parent or the Surviving
Corporation, as the case may be, shall assume the obligations set
forth in this Section 6.07.
SECTION 6.08. Notification of Certain Matters.
The Company shall give prompt notice to Parent, and Parent shall give prompt
notice to the Company, of:
(a) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which could reasonably be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect; and
(b) any failure of the Company, Parent or Purchaser, as the case may be, to
comply in any material respect with or satisfy in any material respect any
covenant or agreement to be complied with or satisfied by it hereunder.
However, the delivery of any notice pursuant
- 31 -
to this Section 6.08 shall not limit or otherwise affect the remedies
available hereunder to the party giving or receiving such notice.
SECTION 6.09. Further Action; Reasonable Best Efforts.
Upon the terms and subject to the conditions of this Agreement, each of the
parties hereto shall:
(a) make promptly its respective filings, and thereafter make any other
required submissions, under any applicable foreign, federal or state
antitrust, competition or fair trade Laws with respect to the
Transactions; and
(b) use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary,
proper or advisable under applicable Laws or otherwise to consummate and
make effective the Transactions, including, without limitation, using its
reasonable best efforts to obtain all Permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Company and the Subsidiaries as are
necessary for the consummation of the Transactions and to fulfill the
conditions to the Offer and the Merger. However, neither Purchaser nor
Parent will be required by this Section 6.09 to take any action, including
entering into any consent decree, hold separate orders or other
arrangements, that:
(i) requires the divestiture of any assets of any of Purchaser, Parent,
the Company or any of their respective Subsidiaries;
(ii) limits Parent's freedom of action with respect to, or its ability to
retain, the Company and the Subsidiaries or any portion thereof or
any of Parent's or its Affiliates' other assets or businesses. In
case, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement
shall use their reasonable best efforts to take all such action.
SECTION 6.10. Subsequent Financial Statements.
The Company shall, if practicable, provide Parent:
(a) its financial results for any period ending after the date of this
Agreement prior to making any such financial results publicly available;
and
(b) any report or document (other than reports under Section 16 of the
Exchange Act) to be filed with the SEC after the date of this Agreement
prior to any such filing, it being understood that, in either case, Parent
shall have no liability by reason of being provided with any such
documents.
SECTION 6.11. Public Announcements.
The initial press release relating to this Agreement shall be a joint press
release the text of which has been agreed to by each of Parent and the Company.
Thereafter, unless otherwise required by
- 32 -
applicable Law or the requirements of The Nasdaq Stock Market, each of Parent
and the Company shall use its reasonable best efforts to consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement, the Offer, the Merger or any of the other
Transactions.
SECTION 6.12. Takeover Statute
If any "fair price," "moratorium," "control share acquisition," "interested
stockholder," "business combination" or other similar anti-takeover statute or
regulation (including, without limitation, the business combination provisions
of Section 203 of the DGCL) (each a "Takeover Statute") shall become applicable
to the transactions contemplated hereby, the Company and the members of the
Board of Directors of the Company, subject to its fiduciary duties, shall grant
such approvals and take such actions as are reasonably necessary to the extent
practicable so that the transactions contemplated hereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
eliminate or minimize the effects of such Takeover Statute on the transactions
contemplated hereby.
SECTION 6.13. Bedminster Services
Bedminster Management Corp. shall continue to provide to the Company its
existing services for health and life insurance plan coverage until September 1,
2005.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Merger.
The obligations of the Company, Parent and Purchaser to consummate the Merger
shall be subject to the satisfaction or waiver (where permissible), at or prior
to the Effective Time, of the following conditions:
(a) If required, the Company shall have obtained the Company Stockholder
Approval in accordance with, and to the extent required by, the DGCL and
the Company's Certificate of Incorporation.
(b) No Governmental Authority shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, judgment, decree, executive
order or award (an "Order") which is then in effect and has the effect of
making the Merger illegal or otherwise restricting, preventing or
prohibiting consummation of the Merger.
(c) Purchaser or its permitted assignee shall have purchased all Shares
validly tendered and not withdrawn pursuant to the Offer.
- 33 -
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.
This Agreement may be terminated and the Offer and the Merger may be abandoned
at any time prior to the Effective Time by action duly taken or authorized by
the Board of Directors of the terminating party or parties, notwithstanding any
requisite approval and adoption of this Agreement by the stockholders of the
Company, as follows:
(a) if no Shares have been accepted for payment pursuant to the Offer, by
mutual written consent of Parent and the Company duly authorized by the
Boards of Directors of Parent and the Company;
(b) if no Shares have been accepted for payment pursuant to the Offer, by
Parent if a Company Triggering Event (as defined below) shall have
occurred;
(c) if no Shares have been accepted for payment pursuant to the Offer, by the
Company if the Company Board determines to accept a Superior Proposal;
(d) by Parent if due to a failure to satisfy any Offer Condition, including
the Minimum Condition, Purchaser shall have:
(i) terminated the Offer without having accepted any Shares for payment
thereunder; or
(ii) failed to accept Shares for payment pursuant to the Offer within 60
days following the commencement of the Offer,
unless such action or inaction under (i) or (ii) shall have been caused by
or resulted from the failure of Parent or Purchaser to perform, in any
material respect, any of their covenants or agreements contained in this
Agreement or the material breach by Parent or Purchaser of any of their
representations or warranties contained in this Agreement;
(e) by the Company, if Purchaser shall have:
(i) terminated the Offer without having accepted any Shares for payment
thereunder; or
(ii) failed to accept Shares for payment pursuant to the Offer within 60
days following the commencement of the Offer,
unless such action or inaction under (i) or (ii) shall have been caused by
or resulted from the failure of the Company to perform, in any material
respect, any of its covenants or agreements contained in this Agreement or
the material breach by the Company of any of its representations or
warranties contained in this Agreement; or
- 34 -
(f) if no Shares have been accepted for payment pursuant to the Offer, by
either Parent or the Company if the Effective Time shall not have occurred
on or before October 15, 2005; provided, however, that the right to
terminate this Agreement under this Section 8.01(f) 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 Effective Time
to occur on or before such date.
For purposes of this Agreement, a "Company Triggering Event" shall be deemed to
have occurred if:
(i) a Change in Company Recommendation shall have occurred or the
Company Board shall have resolved to make a Change in Company
Recommendation;
(ii) the Company Board shall have recommended to the stockholders of the
Company a Competing Transaction or shall have publicly announced it
intends to do so or shall have entered into any letter of intent or
similar document or any agreement, contract or commitment accepting
any Competing Transaction;
(iii) the Company shall have failed to include in the Schedule 14D-9 the
recommendation of the Company Board in favor of holders of Shares
accepting the Offer and tendering their Shares in the Offer;
(iv) a tender offer or exchange offer for the outstanding shares of
capital stock of the Company is commenced (other than pursuant to
the Transactions), and the Company Board fails to recommend against
acceptance of such tender offer or exchange offer by its
stockholders; or
(v) the Company Board, upon request of Parent following receipt of a
proposal or offer for a Competing Transaction, fails to reaffirm the
approval or recommendation of the Offer, the Merger and this
Agreement within five Business Days after such request.
SECTION 8.02. Effect of Termination.
In the event of the termination of this Agreement pursuant to Section 8.01, this
Agreement shall forthwith become void, and there shall be no liability under
this Agreement on the part of any party hereto, except:
(a) as set forth in Section 8.03; and
(b) nothing herein shall relieve any party from liability for any willful
breach of any of its representations, warranties, covenants or agreements
set forth in this Agreement prior to such termination.
However, the terms of Section 6.04(b) shall survive any termination of this
Agreement.
- 35 -
SECTION 8.03. Fees and Expenses.
(a) Except as set forth in this Section 8.03, all Expenses (as defined below)
incurred in connection with this Agreement, the Offer and the Merger shall
be paid by the party incurring such expenses, whether or not the Offer,
the Merger or any other transaction is consummated. "Expenses," as used in
this Agreement, shall include all reasonable out-of-pocket expenses
(including, without limitation, all reasonable fees and expenses of
counsel, accountants, auditors, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or
on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Offer Documents, the
Schedule 14D-9, the Information Statement and the Proxy Statement, the
solicitation of stockholder tenders, the filing of any required notices
and all other matters related to consummation of the Offer, the Merger and
the other transactions contemplated by this Agreement.
(b) The Company agrees that:
(i) (A) if Parent shall terminate this Agreement pursuant to Section
8.01(b); or
(B) if the Company shall terminate this Agreement pursuant to
Section 8.01(c); or
(C) Parent shall terminate the Agreement pursuant to Section
8.01(d); and
(ii) within twelve months after such termination, the Company enters into
an agreement for a Competing Transaction or a Competing Transaction
is consummated;
then upon such termination and under the circumstances described in clause (ii)
of this Section 8.03(b), upon the execution of an agreement for, and the
consummation of, a Competing Transaction the Company shall pay to Parent a fee
of $750,000 (the "Fee"); provided that the Company shall not be liable for any
amount of Parent's Expenses. The Fee shall be payable by wire transfer of
immediately available funds. The Company acknowledges that the agreements
contained in this Section 8.03 are an integral part of the transactions
contemplated by this Agreement and that, without these agreements, Parent and
the Purchaser would not enter into this Agreement. Accordingly, if the Company
fails to promptly pay the amount due pursuant to this Section 8.03, and, in
order to obtain such payment, Parent or the Purchaser commences an action or
proceeding which results in a judgment against the Company for the Fee, the
Company shall pay to Parent and the Purchaser their reasonable costs and
expenses (including reasonable attorney's fees) incurred in connection with such
action or proceeding, together with interest per annum on the amount of the Fee
at the prime rate as announced in the Wall Street Journal from the date such
payment was required to be made to the date of payment.
SECTION 8.04. Amendment.
Subject to Section 6.03(c), this Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the Effective Time.
- 36 -
However, after the approval and adoption of this Agreement and the Transactions
by the stockholders of the Company, no amendment may be made that would reduce
the amount or change the type of consideration into which each Share shall be
converted upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by each of the parties hereto.
SECTION 8.05. Waiver.
Subject to Section 6.03(c), at any time prior to the Effective Time, any party
hereto may:
(a) extend the time for the performance of any obligation or other act of any
other party hereto;
(b) waive any inaccuracy in the representations and warranties of any other
party contained herein or in any document delivered pursuant hereto; and
(c) waive compliance with any agreement of any other party or any condition to
its own obligations contained herein.
Any such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations. Warranties and Agreements.
The representations, warranties and agreements in this Agreement and in any
certificate delivered pursuant hereto shall terminate at the Effective Time or
upon the termination of this Agreement pursuant to Section 8.01, as the case may
be, except that the agreements set forth in Articles I and II and Section
6.04(b) and 6.07 and this Article IX shall survive the Effective Time.
SECTION 9.02. Notices.
All notices, requests, claims, demands and other communications hereunder shall
be in writing and shall be given (and shall be deemed to have been duly given
upon receipt) by delivery in person, by facsimile transmissions between the
hours of 9:00 A.M. and 5:00 P.M. in the recipient party's time zone, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
9.02):
if to Parent or Purchaser:
Naturex, S.A.
Site D'Agroparc Montfavet, B.P. 1218
F-84911 Avignon Cedex
France
- 37 -
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer
Telephone No.: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
Facsimile No: ▇▇▇ ▇ ▇▇ ▇▇ ▇▇ ▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇ & Priest LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company:
Pure World, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: : ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Davies ▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.03. Certain Definitions
(a) For purposes of this Agreement:
"Affiliate" of a specified Person means a Person who, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such specified Person.
"Beneficial owner", with respect to any Shares, has the meaning ascribed
to such term in Rule 13d-3(a) under the Exchange Act.
"Business Day" means any day on which the principal offices of the SEC in
Washington, D.C. are open to accept filings, or, in the case of determining a
date when any payment is due, any day on which banks are not required or
authorized to close in The City of New York.
- 38 -
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Company Material Adverse Effect" means any event, circumstance, change or
effect that, individually or in the aggregate with all other events,
circumstances, changes and effects, is or is reasonably likely to be materially
adverse to (i) the business, financial condition, or results of operations of
the Company and the Subsidiaries taken as a whole or (ii) the ability of the
Company to consummate the transactions contemplated by this Agreement.
"Control" (including the terms "controlled by" and "under common control
with") means the possession, directly or indirectly, or as trustee or executor,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, as trustee or
executor, by contract or credit arrangement or otherwise.
"Environmental Law" means any Law relating to: (A) the protection,
investigation, remediation, or restoration of the environment or natural
resources, (B) the handling, use, storage, treatment, disposal, release or
threatened release of any hazardous substance, (C) noise, odor, pollution,
contamination, land use, any injury or threat of injury to persons or property,
or (D) the protection of the health and safety of employees or the public.
"Fully-Diluted Basis" means, for determining a number of outstanding
shares, taking into account all issued and outstanding shares of Company Common
Stock and the number of shares that would be outstanding assuming the exercise,
conversion or exchange of all options, warrants, convertible or exchangeable
securities and similar rights to acquire shares and the issuance of all shares
of Company Common Stock that the Company is obligated to issue thereunder.
"Governmental Authority" means any national, federal, state, provincial,
county, municipal or local government, foreign or domestic, or the government of
any political subdivision of any of the foregoing.
"Knowledge of the Company" and the "Company's Knowledge" and words of
similar import means the actual knowledge of any executive officer of the
Company or any of its Subsidiaries after due inquiry.
"Parent Material Adverse Effect" means any event, circumstance, change or
effect that, individually or in the aggregate with all other events,
circumstances, changes and effects, is or is reasonably likely to be materially
adverse to (i) the business, financial condition or results of operations of
Parent and its Subsidiaries taken as a whole or (ii) the ability of Parent to
consummate the transactions contemplated by this Agreement.
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
"Representative" means, with respect to any Person, such Person's
officers, directors, employees, accountants, auditors, attorneys, consultants,
legal counsel, agents, investment bankers, financial advisors and other
representatives.
- 39 -
"Subsidiary" or "Subsidiaries" of the Company, the Surviving Corporation,
Parent or any other Person means an affiliate controlled by such Person,
directly or indirectly, through one or more intermediaries.
"Tax Returns" means in respect of any Tax, any return, declaration,
report, election, claim for refund or information return or other statement,
form or disclosure filed or required to be filed with any Governmental Authority
or taxing authority, including any schedule or attachment thereto, and including
any amendment thereof.
"Tax " or "Taxes" shall mean (i) any and all taxes, assessments, fees,
levies, duties, tariffs, customs, imposts and other governmental charges of any
kind (together with any and all interest, penalties, additions to tax and
additional amounts imposed with respect thereto) imposed by any Governmental
Authority or taxing authority, including, without limitation: taxes or other
charges on or with respect to income, franchise, windfall or other profits,
gross receipts, property, sales, use, capital stock, payroll, employment, social
security, workers' compensation, unemployment compensation or net worth's-taxes
or other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value-added or gains taxes; license, registration and documentation
fees; tariffs and similar charges, (ii) any liability for payment of amounts
described in clause (i) whether as a result of transferee liability, of being a
member of an affiliated, consolidated, combined or unitary group for any period,
or otherwise through operation of law, and (iii) any liability for the payment
of amounts described in clause (i) or (ii) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any other person..
(b) The following terms have the meaning set forth in the Sections set forth
below:
Defined Term Location of definition
--------------------------------------------------- --------------------------
2004 Balance Sheet ................................ Section 3.06(c)
Action ............................................ Section 3.08
Acquisition Proposal .............................. Section 6.05(a)(i)
Adverse Recommendation Notice ..................... Section 6.05(d)
Agreement ......................................... Preamble
Certificate of Merger ............................. Section 2.03
Certificates ...................................... Section 2.10(b)
Change in the Company Recommendation .............. Section 6.05(d)
Closing ........................................... Section 2.02
Closing Date ...................................... Section 2.02
Company ........................................... Preamble
Company Board ..................................... Recitals
Company Common Stock .............................. Section 3.03(a)
Company Disclosure Schedule ....................... Section 3.01(b)
Company SEC Reports ............................... Section 3.06(a)
Company Stock Option .............................. Section 2.08(a)
Company Stock Option Plans ........................ Section 2.08(a)
Company Stockholder Approval ...................... Section 3.04
Company Tender Recommendation ..................... Section 3.04(c)
Company Triggering Event .......................... Section 8.01
- 40 -
Defined Term Location of definition
--------------------------------------------------- --------------------------
Competing Transaction ............................. Section 6.05(d)
Confidentiality Agreement ......................... Section 6.04(a)
Current Plans ..................................... Section 6.06(a)
DGCL .............................................. Recitals
Dissenting Shares ................................. Section 2.09(a)
Effective Time .................................... Section 2.03
Ephedra Products .................................. Section 3.16
ERISA ............................................. Section 3.09(a)
Exchange Act ...................................... Section 1.01(b)
Expenses .......................................... Section 8.03(a)
Fairness Opinion .................................. Section 3.18
Fee ............................................... Section 8.03(b)
GAAP .............................................. Section 3.06(b)
Indemnified Directors/Officers .................... Section 6.07(a)
Information Statement ............................. Section 4.05
Initial Expiration Date ........................... Section 1.01(a)
Law ............................................... Section 3.05(b)
Lease Documents ................................... Section 3.10(a)
Material Contracts ................................ Section 3.12(a)
Merger ............................................ Recitals
Merger Consideration .............................. Section 1.01(b)
Minimum Condition ................................. Section 1.01(b)
Notice of Superior Proposal ....................... Section 6.05(c)
Offer ............................................. Recitals
Offer Conditions .................................. Section 1.01(a)
Offer Documents ................................... Section 1.01(c)
Offer to Purchase ................................. Section 1.01(c)
Order ............................................. Section 7.01(b)
Parent ............................................ Preamble
Parent Welfare Benefit Plans ...................... Section 6.06(d)
Paying Agent ...................................... Section 2.10(a)
Per Share Amount .................................. Recitals
Plans ............................................. Section 3.09(a)
Proxy Statement ................................... Section 6.02
Purchaser ......................................... Preamble
Schedule 14D-9 .................................... Section 1.02(b)
Schedule TO ....................................... Section 1.01(c)
SEC ............................................... Section 1.01(b)
Securities Act .................................... Section 3.05(d)
Shares ............................................ Recitals
Stockholder Agreement. ............................ Recitals
Stockholders ...................................... Recitals
Stockholders' Meeting ............................. Section 6.01(a)
Subsequent Offering Period ........................ Section 1.01(b)
Superior Proposal ................................. Section 6.05(f)
- 41 -
Defined Term Location of definition
--------------------------------------------------- --------------------------
Surviving Corporation ............................. Section 2.01
Surviving Corporation Shares ...................... Section 2.07(c)
Takeover Statute .................................. Section 6.12
Transactions ...................................... Section 3.04(a)
SECTION 9.04. Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Transactions
is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties 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 a mutually acceptable manner in order that the Transactions be
consummated as originally contemplated to the fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment.
This Agreement and the Confidentiality Agreement constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof. This Agreement shall not
be assigned (whether pursuant to a merger, by operation of law or otherwise),
except that Parent and Purchaser may assign all or any of their rights and
obligations hereunder to any Affiliate of Parent; provided that no such
assignment shall relieve the assigning party of its obligations hereunder if
such assignee does not perform such obligations.
SECTION 9.06. Parties in Interest.
This Agreement shall be binding upon and inure solely to the benefit of each
party hereto, and nothing in this Agreement, express or implied, is intended to
or shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Section 6.07 (which
is intended to be for the benefit of the Persons covered thereby and may be
enforced by such Persons).
SECTION 9.07. Specific Performance.
The parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or equity.
SECTION 9.08. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of Delaware applicable to contracts executed in and to be performed
in that State. The parties hereto hereby:
- 42 -
(a) submit to the exclusive jurisdiction of any such state or federal court
sitting in the State of Delaware for the purpose of any Action arising out
of or relating to this Agreement brought by any party hereto; and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally
to the jurisdiction of the above-named courts, that its property is exempt
or immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the Transactions may not be enforced in or by any of the
above-named courts.
SECTION 9.09. Waiver of Jury Trial.
Each party to this Agreement waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
action, suit or proceeding arising out of this Agreement.
SECTION 9.10. Headings.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.11. Counterparts.
This Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement.
SECTION 9.12. Company Disclosure Schedule.
Parent and Purchaser shall not be entitled to claim that any fact or combination
of facts constitutes a breach of any of the representations or warranties
contained in this Agreement if and to the extent that such fact or combination
of facts has been disclosed in any Section of the Company Disclosure Schedule or
the Company SEC Reports filed prior to the date of this Agreement in sufficient
detail to put a reasonable person on notice of the relevance of the facts or
circumstances so disclosed. The inclusion of any item in any Section of the
Company Disclosure Schedule:
(a) does not represent a determination by the Company that such item is
"material"; and
(b) does not represent a determination by the Company that such item did not
arise in the ordinary course of business.
- 43 -
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
NATUREX, S.A.
By : /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Executive Officer
NATUREX ACQUISTION CORP.
By : /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
PURE WORLD, INC.
By : /s/ Qun ▇▇ ▇▇▇▇▇
--------------------------
Qun ▇▇ ▇▇▇▇▇
President
- 44 -
MERGER AGREEMENT
COMPANY DISCLOSURE SCHEDULE
--------------------------------------------------------------------------------
Section 3.01(b) Subsidiaries
--------------------------------------------------------------------------------
Section 3.03 Company Stock Options and Other Awards
--------------------------------------------------------------------------------
Section 3.05 Breaches; Defaults; Consents
--------------------------------------------------------------------------------
Section 3.06(c) Undisclosed Liabilities
--------------------------------------------------------------------------------
Section 3.07 Absence of Certain Changes or Events
--------------------------------------------------------------------------------
Section 3.08 Litigation
--------------------------------------------------------------------------------
Section 3.09(a) Employee Benefit Plans
--------------------------------------------------------------------------------
Section 3.09(b) Employee Benefit Plan Compliance Disclosure
--------------------------------------------------------------------------------
Section 3.09(c) Employee Benefit Plans
--------------------------------------------------------------------------------
Section 3.10 Leased Real Property
--------------------------------------------------------------------------------
Section 3.11(a) Taxes
--------------------------------------------------------------------------------
Section 3.11(b) Pending Tax Proceedings
--------------------------------------------------------------------------------
Section 3.12(a) Material Contracts
--------------------------------------------------------------------------------
Section 3.12(b) Breach or Default of Material Contracts Resulting from
Transactions
--------------------------------------------------------------------------------
Section 3.13 Environmental Matters
--------------------------------------------------------------------------------
Section 3.14 Labor and Employment Matters
--------------------------------------------------------------------------------
Section 3.16 Ephedra
--------------------------------------------------------------------------------
Section 5.01 Conduct of Business Pending the Merger
--------------------------------------------------------------------------------
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, and subject to the terms and
conditions of the Agreement, Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC
(including Rule 14e-1(c) under the Exchange Act) pay for, and may delay the
acceptance for payment of or payment for, any Shares tendered pursuant to the
Offer, and may extend, terminate or amend the Offer, subject to the terms of the
Agreement, if (i) immediately prior to the expiration of the Offer (as extended
in accordance with the Agreement) the Minimum Condition shall not have been
satisfied, or (ii) at any time on or after the date of this Agreement and prior
to the Initial Expiration Date, any of the following conditions shall occur:
(a) there shall be pending against Purchaser or Parent any action, suit or
proceeding (hereinafter, an "Action") brought by a Governmental Authority
(i) challenging or seeking to make illegal, materially delay, make
materially more costly or otherwise, directly or indirectly, restrain or
prohibit, the making of the Offer, the acceptance for payment of any
Shares by Parent, Purchaser or any other Affiliate of Parent, or the
consummation of the Transactions or seeking to obtain from the Company,
Parent or the Purchaser any damages that are material in relation to the
Company and its Subsidiaries taken as a whole, or in relation to the
amount to be paid by Parent and Purchaser for all of the Shares on a
Fully-Diluted Basis, (ii) seeking to restrain, enjoin or otherwise
prohibit or prevent the Transactions, (iii) seeking to prohibit or impose
any material limitations on Parent's, the Purchaser's or any of their
respective Affiliates' ownership, operation or effective control of all or
any material portion of the business or assets of the Company and its
Subsidiaries taken as a whole, (iv) requiring divestiture by the Purchaser
or any of its Affiliates of any Shares or current material business or
material assets (including, without limitation, any material business or
material assets of the Company or any of its Subsidiaries) which is
reasonably likely, individually or in the aggregate, to have a Company
Material Adverse Effect; or (v) seeking to impose material limitations on
the ability of Parent or the Purchaser effectively to acquire or hold, or
to exercise full rights of ownership of, the Shares including the right to
vote the Shares purchased by them on an equal basis with all other Shares
on all matters properly presented to the stockholders of the Company;
(b) any Governmental Authority or court of competent jurisdiction shall have
issued an order, decree, injunction or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting or preventing
the Transactions and such order, decree, injunction, ruling or other
action shall have become final and non-appealable;
(c) there shall have been any statute, rule, regulation, legislation or
interpretation enacted, promulgated, amended, issued or deemed applicable
by a Governmental Authority to (i) Parent, the Company or any Subsidiary
or affiliate of Parent or the Company or (ii) any Transaction, by any
United States or non-United States legislative body or Governmental
Authority with appropriate jurisdiction, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
paragraph (a) above;
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(d) any Company Material Adverse Effect shall have occurred since the date of
this Agreement;
(e) there shall have occurred (i) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, or (ii)
any limitation (whether or not mandatory) by any Governmental Authority on
the extension of credit by banks or other lending institutions which
materially and adversely affects the ability of Parent and Purchaser to
consummate the Transactions;
(f) it shall have been publicly disclosed, or Purchaser shall have otherwise
learned, that beneficial ownership (determined for the purposes of this
paragraph as set forth in Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of the then outstanding Shares has been acquired after the
date hereof by any Person, other than Parent or any of its affiliates;
(g) the representations and warranties of the Company in the Agreement shall
not be true and correct as of the date of such determination (except for
representations and warranties that relate to a specific date or time,
which need only be true and correct as of such date or time) except for
such failures of representations or warranties to be true and correct
which, in the aggregate, would not be reasonably likely to have a Company
Material Adverse Effect;
(h) the Board of Directors of the Company (or a special committee thereof) (i)
shall have withdrawn, modified or changed in a manner adverse to the
Parent and the Purchaser (including by amendment of the Schedule 14D-9)
its recommendation of the Offer, this Agreement or the Merger, or approved
or recommended any Competing Transaction or any other acquisition of
Shares other than the Offer and the Merger; or (ii) fails to reconfirm the
Company Tender Recommendation within five (5) Business Days after receipt
of a request by the Parent or the Purchaser; provided that any such
request may be made only one time within five (5) Business Days after
notice of any of the following events (as any of the following events may
occur from time to time): (A) receipt by the Company of a proposal or
offer for a Competing Transaction, (B) any material change to an existing
proposal or offer for a Competing Transaction, (C) a public announcement
of any transaction to acquire a material portion of the Company Common
Stock by a Person other than the Purchaser, the Parent or any of their
Subsidiaries or Affiliates other than an existing Acquisition Proposal,
and (D) any extension of the Offer.
(i) the Company shall have breached or failed to perform in any material
respect any obligation or to comply in any material respect with any
material agreement or material covenant of the Company required to be
performed or complied with by it under the Agreement prior to such
determination;
(j) the Agreement shall have been terminated in accordance with its terms; or
(k) Purchaser and the Company shall have agreed that Purchaser shall terminate
the Offer or postpone the acceptance for payment of Shares thereunder.
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The capitalized terms used in this Annex A shall have the meanings ascribed to
them in the Agreement to which it is annexed.
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