AGREEMENT AND PLAN OF MERGER
DATED AS OF OCTOBER 24, 2001
AMONG
▇▇▇▇▇▇ LABORATORIES
RAINBOW ACQUISITION CORP.
AND
VYSIS, INC.
TABLE OF CONTENTS
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ARTICLE I Definitions.........................................................................2
SECTION 1.01 Definitions..................................................................2
ARTICLE II The Offer and the Merger...........................................................10
SECTION 2.01 The Offer...................................................................10
SECTION 2.02 Company Actions.............................................................12
SECTION 2.03 Board of Directors; Section 14(f)...........................................13
SECTION 2.04 The Merger..................................................................14
SECTION 2.05 Closing.....................................................................14
SECTION 2.06 Effective Time..............................................................14
SECTION 2.07 Certificate of Incorporation and By-laws....................................15
SECTION 2.08 Directors...................................................................15
SECTION 2.09 Officers....................................................................15
ARTICLE III Effect on the Capital Stock of the Constituent Corporations; Exchange of
Certificates ......................................................................15
SECTION 3.01 Effect on Capital Stock.....................................................15
SECTION 3.02 Exchange of Certificates....................................................16
ARTICLE IV Representations and Warranties of the Company .....................................18
SECTION 4.01 Organization, Standing and Power............................................18
SECTION 4.02 Company Subsidiaries........................................................18
SECTION 4.03 Capital Structure...........................................................19
SECTION 4.04 Authorization; Validity of Agreement; Necessary Action......................20
SECTION 4.05 No Conflicts; Consents......................................................20
SECTION 4.06 SEC Documents; Financial Statements; Undisclosed Liabilities................21
SECTION 4.07 Information Supplied........................................................22
SECTION 4.08 Absence of Certain Changes or Events........................................22
SECTION 4.09 Taxes.......................................................................22
SECTION 4.10 Benefit Plans...............................................................24
SECTION 4.11 Litigation..................................................................25
SECTION 4.12 Compliance with Applicable Laws.............................................25
SECTION 4.13 Contracts; Debt Instruments.................................................25
SECTION 4.14 Intellectual Property.......................................................26
SECTION 4.15 Takeover Laws...............................................................27
SECTION 4.16 Brokers.....................................................................27
SECTION 4.17 Regulatory Compliance.......................................................27
SECTION 4.18 Opinion of Financial Advisor................................................28
SECTION 4.19 Employee Matters............................................................28
SECTION 4.20 Insurance...................................................................29
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SECTION 4.21 Environmental, Health and Safety Laws.......................................29
SECTION 4.22 Customers and Suppliers.....................................................30
SECTION 4.23 Transactions with Affiliates................................................30
SECTION 4.24 Condition of Assets.........................................................31
SECTION 4.25 Real and Personal Property..................................................31
SECTION 4.26 Certain Business Practices..................................................31
ARTICLE V Representations and Warranties of Parent and Sub ..................................32
SECTION 5.01 Organization, Standing and Power............................................32
SECTION 5.02 Sub.........................................................................32
SECTION 5.03 Financing...................................................................32
SECTION 5.04 Ownership of Company Common Stock...........................................32
SECTION 5.05 Authorization; Validity of Agreement; Necessary Action......................32
SECTION 5.06 No Conflicts; Consents......................................................32
SECTION 5.07 Information Supplied........................................................33
SECTION 5.08 Brokers.....................................................................33
SECTION 5.09 Litigation..................................................................33
ARTICLE VI Covenants Relating to Conduct of Business .........................................34
SECTION 6.01 Conduct of Business.........................................................34
SECTION 6.02 Certain Tax Matters.........................................................36
SECTION 6.02 No Solicitation ............................................................37
ARTICLE VII Additional Agreements .............................................................39
SECTION 7.01 Preparation of Proxy Statement; Stockholders Meeting........................39
SECTION 7.02 Access to Information; Confidentiality......................................39
SECTION 7.03 Reasonable Best Efforts; Notification.......................................40
SECTION 7.04 Stock Options...............................................................41
SECTION 7.05 Indemnification; D&O Insurance..............................................41
SECTION 7.06 Public Announcements........................................................42
SECTION 7.07 Transfer Taxes..............................................................43
SECTION 7.08 Employee Benefit Matters....................................................43
SECTION 7.09 State Takeover Laws.........................................................44
SECTION 7.10 Termination Notifications...................................................44
ARTICLE VIII Conditions Precedent ..............................................................44
SECTION 8.01 Conditions to Each Party's Obligation to Effect the Merger..................44
ARTICLE IX Termination, Amendment and Waiver .................................................45
SECTION 9.01 Termination.................................................................45
SECTION 9.02 Effect of Termination.......................................................46
SECTION 9.03 Amendment...................................................................46
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TABLE OF CONTENTS
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SECTION 9.04 Extension; Waiver...........................................................46
SECTION 9.05 Procedure for Termination, Amendment, Extension or Waiver...................46
ARTICLE X General Provisions ................................................................47
SECTION 10.01 Nonsurvival of Representations and Warranties...............................47
SECTION 10.02 Notices.....................................................................47
SECTION 10.03 Interpretation..............................................................48
SECTION 10.04 Severability................................................................48
SECTION 10.05 Counterparts................................................................48
SECTION 10.06 Entire Agreement; No Third-Party Beneficiaries..............................48
SECTION 10.07 Governing Law...............................................................49
SECTION 10.08 Assignment..................................................................49
SECTION 10.09 Enforcement.................................................................49
EXHIBIT A Conditions of the Offer
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AGREEMENT AND PLAN OF
MERGER
AGREEMENT AND PLAN OF MERGER dated as of October 24, 2001 (the
"AGREEMENT"), by and among ▇▇▇▇▇▇ LABORATORIES, an Illinois corporation
("PARENT"), RAINBOW ACQUISITION CORP., a
Delaware corporation and a wholly owned
subsidiary of Parent ("SUB"), and VYSIS, INC., a
Delaware corporation (the
"COMPANY").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved, and deem it to be advisable and in the best interests of
their respective stockholders to consummate, the acquisition of the Company by
Parent on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "OFFER") to purchase all of the issued and outstanding
shares of Company Common Stock (as defined herein) for U.S. $30.50 per share of
Company Common Stock (the "Offer Price"), net to the seller in cash upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of Sub and the Company have
each approved the merger (the "MERGER") of Sub into the Company on the terms and
subject to the conditions set forth in this Agreement, whereby each issued share
of Company Common Stock, other than shares directly or indirectly owned by
Parent or the Company and Dissenters' Shares (as hereinafter defined), will be
converted into the right to receive an amount in cash equal to the Offer Price;
WHEREAS, the Company Board (as defined herein) has determined that the
consideration to be paid for each share of Company Common Stock in the Offer and
the Merger is fair to the holders of such shares of Company Common Stock and has
resolved to recommend that the holders of such shares of Company Common Stock
accept the Offer and approve and adopt this Agreement and each of the
Transactions (as defined herein) upon the terms and subject to the conditions
set forth herein;
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger; and
WHEREAS, as a condition and inducement to Parent's and Sub's entering
into this Agreement and incurring the obligations set forth herein, the Major
Stockholder (as defined herein) concurrently herewith, is entering into a
Stockholder Agreement (as defined herein), dated as of the date hereof, with
Parent and Sub, pursuant to which such Major Stockholder is agreeing, among
other things, to tender the shares of Company Common Stock held by it in the
Offer and to grant Parent a proxy with respect to the voting of such shares of
Company Common Stock, upon the terms and subject to the conditions set forth in
the Stockholder Agreement, and in order to induce Parent and Sub to enter into
this Agreement, the Company Board has approved the execution and delivery of the
Stockholder Agreement and the transactions contemplated therein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACTIVITIES TO DATE" has the meaning set forth in SECTION 4.17(a).
"AFFILIATE" means, for any Person, another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a Person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise.
"AGREEMENT" has the meaning set forth in the heading hereof.
"ALTERNATIVE ACQUISITION" means any direct or indirect acquisition of
all or a substantial part of the business and properties of the Company or any
of the Company Subsidiaries or any capital stock of the Company or any of the
Company Subsidiaries, whether by merger, tender offer, exchange offer, sale of
assets or similar transactions involving the Company or any Company Subsidiary,
division or operating or principal business unit of the Company.
"ALTERNATIVE ACQUISITION PROPOSAL" has the meaning set forth in SECTION
6.03(a).
"APPLICABLE LAW" means any statute, law (including common law),
ordinance, rule or regulation applicable to the Company, any Company Subsidiary,
Parent or any Parent Subsidiary or their respective properties or assets.
"APPOINTMENT TIME" has the meaning set forth in SECTION 2.03(a).
"APPROVALS" has the meaning set forth in SECTION 4.17(a).
"BP" means BP America, Inc., a
Delaware corporation.
"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.
"CERTIFICATE" or "CERTIFICATES" mean the certificate or certificates
that immediately prior to the Effective Time represented outstanding shares of
Company Common Stock.
"CERTIFICATE OF MERGER" means a certificate of merger, or other
appropriate documents, to be filed with the Secretary of State of the State of
Delaware to effect the Merger.
"CLOSING" means the closing of the Merger.
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"CLOSING DATE" means the date on which the Closing occurs.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY" has the meaning set forth in the heading hereof.
"COMPANY AGREEMENT" means any Contract or other instrument or
obligation to which the Company or any Company Subsidiary is a party or by which
any of them or any of their respective properties or assets may be bound.
"COMPANY BOARD" means the Board of Directors of the Company.
"COMPANY BOARD RECOMMENDATION" has the meaning set forth in Section
7.01(b).
"COMPANY BY-LAWS" means the by-laws of the Company, as amended to the
date of this Agreement.
"COMPANY CAPITAL STOCK" has the meaning set forth in SECTION 4.03.
"COMPANY CHARTER" means the certificate of incorporation of the
Company, as amended to the date of this Agreement.
"COMPANY COMMON STOCK" means the common stock, $.001 par value per
share, of the Company.
"COMPANY DISCLOSURE LETTER" means the letter, dated as of the date of
this Agreement, delivered by the Company to Parent and Sub pursuant to ARTICLE
IV.
"COMPANY EMPLOYEES" means the employees of the Company and the Company
Subsidiaries.
"COMPANY INTELLECTUAL PROPERTY RIGHTS" means Intellectual Property
Rights that are owned by, or exclusively licensed to, the Company and the
Company Subsidiaries, including without limitation, Copyrights, Domain Names,
Licenses In to the extent that such licenses are exclusive, Patents Owned,
Patents Licensed to the extent that such patents are exclusively licensed, and
Trademarks.
"COMPANY MATERIAL ADVERSE EFFECT" means a material adverse effect on
the business, properties (including intangible properties), assets, liabilities,
financial condition or operations or results of operations of the Company and
the Company Subsidiaries taken as a whole, or a material adverse effect on the
ability of the Company to perform its obligations under this Agreement or on the
ability of the Company to consummate the Offer, the Merger and the other
Transactions without material deviation from the time frame such actions would
otherwise be consummated in the absence of such effect; PROVIDED, that, for
purposes of this Agreement, a Company Material Adverse Effect shall not include,
alone or in combination: (i) changes to the United States economy in general or
to the healthcare industry in general that are not unique to the Company or the
Company Subsidiaries or (ii) any change resulting from the announcement or
disclosure of the Transactions.
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"COMPANY OPTION PLANS" means the 1996 Stock Incentive Plan, the 1998
Long Term Incentive Plan, the 1998 Outside Director Stock Option, the 1999
Outside Directors Stock Option Plan and the 2001 Long Term Incentive Plan.
"COMPANY PLANS" has the meaning set forth in SECTION 4.10(a).
"COMPANY PREFERRED STOCK" has the meaning set forth in SECTION 4.03.
"COMPANY REPRESENTATIVES" has the meaning set forth in Section 6.03(a).
"COMPANY SAR" means any stock appreciation right linked to the price of
Company Common Stock and granted under any Company Option Plan.
"COMPANY SEC DOCUMENTS" means all reports, schedules, forms, statements
and other documents required to be filed by the Company with the SEC since
December 31, 1997.
"COMPANY STOCK OPTION" means any option to purchase Company Common
Stock granted under any Company Option Plan.
"COMPANY STOCKHOLDER APPROVAL" has the meaning set forth in SECTION
4.04(c).
"COMPANY STOCKHOLDERS MEETING" means a meeting of the Company's
stockholders for the purpose of seeking Company Stockholder Approval.
"COMPANY SUBSIDIARIES" means all the Subsidiaries of the Company.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement, dated
April 17, 2001, as amended on August 21, 2001, between the Company and Parent.
"CONSENT" means any consent, approval, license, Permit, Order or
authorization.
"CONTRACT" means any contract, lease, license, indenture, note, bond,
mortgage, agreement, concession, franchise, instrument, undertaking, commitment,
understanding or other arrangement (whether written or oral).
"COPYRIGHTS" means the copyright registrations set forth in Section
1.01(a) of the Company Disclosure Letter.
"DETERMINATION LETTER" has the meaning set forth in Section 4.10(c).
"DGCL" means the
Delaware General Corporation Law, as amended from time
to time.
"D&O INSURANCE" means directors' and officers' insurance.
"DISSENTERS' SHARES" means shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by any
Person who is entitled to demand and properly demands payment of the fair value
of such shares pursuant to, and who complies in all respects with, Section 262
of the DGCL.
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"DOMAIN NAMES" means the Internet domain names set forth in Section
1.01(b) of the Company Disclosure Letter.
"EFFECTIVE TIME" has the meaning set forth in SECTION 2.06.
"ENVIRONMENTAL CLAIM" shall mean any claim, action, investigation or
notice by any person or entity alleging potential liability for investigatory,
cleanup or governmental response costs, or natural resources or property
damages, or personal injuries, attorney's fees or penalties relating to (i) the
presence, or release into the environment, of any Hazardous Substances at any
location owned or operated by the Company or any Company Subsidiary, prior to
the Effective Time or in the past, or (ii) any violation, or alleged violation,
of any Environmental, Health and Safety Law.
"ENVIRONMENTAL, HEALTH AND SAFETY LAWS" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976 and the Occupational Safety and Health Act
of 1970, each as amended, together with all other Applicable Laws (including
rules, regulations, codes, common law, plans, injunctions, judgments, Orders,
decrees, rulings and charges thereunder) of any Governmental Entity concerning
pollution or protection of the environment, public health and safety, or
employee health and safety, including laws relating to emissions, discharges,
releases, or threatened releases of Hazardous Substances into ambient air,
surface water, ground water, or lands or otherwise relating to the manufacture,
generation, processing, distribution, use, treatment, storage, disposal,
clean-up, transport, or handling of Hazardous Substances, in each case as in
effect prior to the Effective Time.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" means, with respect to any Person, any corporation,
trade or business which, together with such Person, is a member of a controlled
group of corporations or a group of trades or businesses under common control
within the meaning of Section 414 of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE AGENT" means the bank or trust company selected by Parent
prior to the Effective Time to act as exchange agent for the payment of the
Merger Consideration.
"EXCHANGE FUND" has the meaning set forth in SECTION 3.02(a).
"FDA" means the United States Food and Drug Administration or any
successor agency.
"FDCA" means the Federal Food, Drug and Cosmetic Act, as amended.
"FILED COMPANY SEC DOCUMENTS" means all Company SEC Documents that were
filed and publicly available prior to the date of this Agreement.
"FINANCIAL STATEMENTS" means the consolidated financial statements of
the Company and the Company Subsidiaries included in each of the Company's
Annual Report on Form 10-K for
5
the fiscal year ended December 31, 2000, the Company's Quarterly Report on Form
10-Q for the quarters ended March 31, 2001 and June 30, 2001, including in each
case the footnotes thereto.
"FULLY DILUTED SHARES" has the meaning set forth in EXHIBIT A hereto.
"GAAP" as to any Person means generally accepted United States
accounting principles.
"GOVERNMENTAL ENTITY" means any:
(i) federal, state, local, municipal or foreign government;
(ii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, board, department,
official, instrumentality or entity and any court or other tribunal);
or
(iii) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory,
or taxing authority or power of any nature.
"HAZARDOUS SUBSTANCE" means: (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing polychlorinated biphenyls, and radon gas;
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous substances," "toxic
substances," "contaminants" or "pollutants" or words of similar meaning and
regulatory effect; or (iii) any other chemical, material or substance, exposure
to which is prohibited, limited, or regulated by any applicable Environmental,
Health and Safety Law.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"INDEBTEDNESS" means all liabilities or obligations, whether primary or
secondary or absolute or contingent: (i) for borrowed money; (ii) evidenced by
notes, bonds, debentures, guarantees or similar obligations; or (iii) secured by
Liens.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION 7.05(a).
"INDEPENDENT DIRECTORS" has the meaning set forth in SECTION 2.03(a).
"INTELLECTUAL PROPERTY RIGHTS" means any or all of the following and
all worldwide common law and statutory rights in, arising out of, or associated
with: (i) patents and applications therefor and all reissues, divisions,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof; (ii) trade secrets (including proprietary know-how, technology,
technical data and customer lists, and all documentation relating to any of the
foregoing); (iii) copyrights, copyright registrations and applications therefor;
(iv) Internet domain names; (v) industrial designs and any registrations and
applications therefor; (vi) trade names, logos, common law trademarks and
service marks, trademark and service ▇▇▇▇
6
registrations and applications therefor; and (vii) all moral rights of authors
and inventors, however denominated.
"INTERCOMPANY AGREEMENTS" has the meaning set forth in Section 4.23(a).
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means the actual knowledge of the executive officers of the
Company or Parent, after reasonable inquiry, as applicable.
"LICENSES IN" means the license agreements set forth in Section 1.01(c)
of the Company Disclosure Letter.
"LICENSES OUT" means the license agreements set forth in Section
1.01(d) of the Company Disclosure Letter.
"LIENS" means pledges, liens, charges, mortgages, encumbrances and
security interests of any kind or nature whatsoever.
"MAJOR STOCKHOLDER" means Amoco Technology Company, a
Delaware
corporation.
"MATERIAL CONTRACTS" means those Contracts which are filed or required
to be filed as exhibits to the Company SEC Documents.
"MATERIAL INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
Rights that are material to the business, properties (including intangible
properties), assets, liabilities, financial condition or operations or results
of operations of the Company and the Company Subsidiaries taken as a whole.
Without limiting the generality of the foregoing, any Intellectual Property
Right that is a material element of a Material Product is a Material
Intellectual Property Right.
"MATERIAL PRODUCT" means any Product that has annual worldwide gross
sales revenues of $1,000,000 or greater.
"MERGER" has the meaning set forth in the recitals hereto.
"MERGER CONSIDERATION" means the U.S. dollar cash amount equal to the
price per share of Company Common Stock paid pursuant to the Offer.
"MINIMUM CONDITION" has the meaning set forth in EXHIBIT A hereto.
"OFFER" has the meaning set forth in the recitals hereto.
"OFFER DOCUMENTS" has the meaning set forth in SECTION 2.01(b).
"OFFER PRICE" has the meaning set forth in the recitals hereto.
"ORDER" means with respect to any Person, any award, decision,
injunction, judgment, stipulation, order, ruling, subpoena, writ, decree,
consent decree, or verdict entered, issued,
7
made, or rendered by any court, administrative agency, arbitrator or other
Governmental Entity affecting such Person or any of its properties.
"OUTSIDE DATE" means December 31, 2001, subject to extension pursuant
to SECTION 9.01(b)(i).
"PARENT" has the meaning set forth in the heading hereto.
"PARENT BOARD" has the meaning set forth in SECTION 5.05.
"PARENT MATERIAL ADVERSE EFFECT" means a material adverse effect on the
ability of Parent or Sub to perform its obligations under this Agreement or on
the ability of Parent or Sub to consummate the Offer, the Merger and the other
Transactions without material deviation from the time frame such actions would
otherwise be consummated in the absence of such effect.
"PARENT SUBSIDIARIES" means all the Subsidiaries of Parent.
"PATENTS OWNED" means the patents and patent applications set forth in
Section 1.01(e) of the Company Disclosure Letter.
"PATENTS LICENSED" means the patents and patent applications licensed
under the Licenses In.
"PERMIT" means licenses, franchises, permits, consents, approvals,
Orders, certificates, authorizations, declarations and filings.
"PERMITTED LIENS" means: (i) statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen incurred in the ordinary and usual
course of business for amounts not yet overdue or being contested in good faith;
(ii) Liens for Taxes not yet due and payable or being contested in good faith in
appropriate proceedings during which collection or enforcement is stayed; and
(iii) Liens that, in the aggregate, do not and will not (A) materially interfere
with the ability of the Company and the Company Subsidiaries to conduct business
as currently conducted and (B) materially impair the value of the assets of the
Company and Company Subsidiaries (taken as a whole) or the ability of the
Company to consummate the Transactions.
"PERSON" means any individual, firm, corporation (including any
non-profit corporation), general or limited partnership, company, limited
liability company, trust, joint venture, estate, association, organization,
labor union, or other entity or Governmental Entity.
"POST-SIGNING RETURNS" has the meaning set forth in Section 6.02.
"PROCEEDINGS" means any action, arbitration, audit, claim, hearing,
proceeding, investigation, litigation, or suit (whether civil, criminal,
administrative or investigative) commenced, brought, conducted or heard by or
before, or otherwise involving, any Governmental Entity or arbitrator.
"PRODUCTS" has the meaning set forth in SECTION 4.17(a).
8
"PROXY STATEMENT" means a proxy or information statement of the Company
relating to the approval of this Agreement by the Company's stockholders.
"RETENTION AGREEMENTS" means the Retention Agreements between the
Company and certain executives of the Company set forth in SECTION 1.01(g) of
the Company Disclosure Letter.
"SCHEDULE 14D-9" means the Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer, as amended from time to time.
"SCHEDULE TO" means the Tender Offer Statement on Schedule TO with
respect to the Offer, as amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SEVERANCE PLAN" means the Severance Plan, dated August 17, 2001, of
the Company.
"STOCK TRANSFER TAX" means any state, local, foreign or provincial Tax
which is attributable to the transfer of Company Common Stock pursuant to this
Agreement.
"STOCKHOLDER AGREEMENT" means the agreement, dated as of the date
hereof, by and among the Major Stockholder, Parent and Sub, pursuant to which
the Major Stockholder has agreed, among other things, to tender the shares of
Company Common Stock held by it in the Offer and to grant Parent a proxy with
respect to the voting of such shares of Company Common Stock upon the terms and
subject to conditions set forth therein.
"SUB" has the meaning set forth in the heading hereto.
"SUB BOARD" has the meaning set forth in SECTION 5.05.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, general or limited partnership, company, limited liability company,
trust, joint venture, organization or other entity of which more than 50% of the
total voting power of shares of capital stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person.
"SUPERIOR COMPANY PROPOSAL" has the meaning set forth in SECTION
6.03(e).
"SURVIVING CORPORATION" has the meaning set forth in SECTION 2.04.
"TAX" or "TAXES" means any income, corporation, gross income, gross
receipts, franchise, profits, gains, capital stock, duty, withholding, social
security (or similar), employment, unemployment, disability, real property,
personal property, wealth, welfare, stamp, excise, license, severance,
environmental (including taxes under Section 59A of the Code), customs duties,
occupation, sales, use, transfer, registration, value added, payroll, premium,
9
property, or windfall profits tax, estimated, ad valorem or excise tax,
alternative or add-on minimum tax or other tax of any kind whatsoever (whether
measured in whole or in part by net income and including any fee, assessment or
other charge in the nature of or in lieu of any tax) imposed by any Tax
Authority, including any interest, penalty, or addition thereto, whether
disputed or not (whether imposed by law, contractual agreement or otherwise) and
any liability in respect of any such amounts as a result of being a member of
any affiliated, consolidated, combined, unitary or similar group.
"TAX AUTHORITY" means, with respect to any Tax, the Governmental Entity
or political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Taxes for such entity or subdivision,
including any Governmental Entity that imposes, or is charged with collecting,
social security or similar charges or premiums.
"TAX RETURN" means all federal, state, local, provincial and foreign
tax returns, declarations, statements, reports, schedules, forms, information
returns or other documents filed or required to be filed with any Tax Authority
(including any amendments, attachments or exhibits to any of the foregoing).
"TRADEMARKS" means the marks set forth in Section 1.01(h) of the
Company Disclosure Letter.
"TRANSACTIONS" means, collectively, the Offer, the Merger and the other
transactions contemplated hereby, including, without limitation, the
transactions contemplated by the Stockholder Agreement.
"TRANSFER TAXES" means any state, local, foreign or provincial Tax
which is attributable to the transfer of the beneficial ownership of the
Company's or the Company's Subsidiaries' real or personal property.
"U.S." means the fifty (50) states, District of Columbia, territories
and possessions of the United States of America.
"VOTING COMPANY DEBT" means any bonds, debentures, notes or other
indebtedness of the Company or any Company Subsidiary having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company or any Company Subsidiary
may vote.
ARTICLE II
THE OFFER AND THE MERGER
SECTION 2.01 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with SECTION 9.01 and none of the events set forth in EXHIBIT A shall
have occurred and be continuing, as promptly as practicable but in no event
later than five (5) Business Days after the date of this Agreement, Sub shall,
and Parent shall cause Sub to, commence the Offer within the meaning of the
applicable rules and regulations of the SEC. The Offer shall initially be
scheduled to expire
10
twenty (20) Business Days following the commencement thereof. The obligation of
Sub to, and of Parent to cause Sub to, accept for payment, and pay for, any
shares of Company Common Stock tendered pursuant to the Offer shall be subject
only to the satisfaction of each of the conditions set forth in EXHIBIT A (any
of which may be waived by Sub in its sole discretion); PROVIDED, HOWEVER, that,
without the prior written consent of the Company, Sub shall not waive the
Minimum Condition. Sub expressly reserves the right to modify the terms of the
Offer, except that, without the prior written consent of the Company, Sub shall
not (i) reduce the number of shares of Company Common Stock subject to the
Offer, (ii) reduce the Offer Price, (iii) add to the conditions set forth in
EXHIBIT A, (iv) modify the conditions set forth in EXHIBIT A in a manner adverse
to the holders of Company Common Stock, (v) except as provided in the next
sentence, extend the Offer, (vi) change the form of consideration payable in the
Offer or (vii) make any other change or modification in any of the terms of the
Offer in any manner that is adverse to the holders of Company Common Stock.
Notwithstanding the foregoing, (i) Sub shall extend the Offer for one or more
periods if at the initial scheduled expiration date or any subsequent expiration
date of the Offer any of the conditions to Sub's obligation to purchase shares
of Company Common Stock are not satisfied or waived, until such time as such
conditions are satisfied or waived (but not after the Outside Date) and (ii) Sub
may, without the consent of the Company, (A) extend the Offer if all of the
conditions to the Offer are satisfied or waived but the number of the Shares
validly tendered and not withdrawn is less than ninety percent (90%) of the
Fully Diluted Shares, for an aggregate period not to exceed twenty (20) Business
Days (for all such extensions); PROVIDED, that Sub shall immediately accept and
promptly pay for all Company Common Stock tendered prior to the date of an
extension pursuant to clause (A) and shall otherwise meet the requirements of
Rule 14d-11 under the Exchange Act in connection with each such extension, and
(B) extend the Offer for any period required by any rule, regulation,
interpretation or position of the SEC or the staff thereof applicable to the
Offer. On the terms and subject to the conditions of the Offer and this
Agreement, Sub shall pay for all shares of Company Common Stock validly tendered
and not withdrawn pursuant to the Offer promptly after the expiration of the
Offer and, with respect to any extension of the Offer pursuant to Rule 14d-11
under the Exchange Act, shall immediately accept and promptly pay for all shares
of Company Common Stock as they are validly tendered. If this Agreement is
terminated by Parent, Sub or the Company, Sub shall, and Parent shall cause Sub
to, terminate promptly the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer,
which shall contain an offer to purchase and a related letter of transmittal
(such Schedule TO and the documents included therein pursuant to which the Offer
will be made, together with any supplements or amendments thereto, the "OFFER
DOCUMENTS"). The Offer Documents will comply as to form in all material respects
with the applicable provisions of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder. Parent shall deliver copies of
the proposed forms of the Offer Documents to the Company within a reasonable
time prior to the commencement of the Offer for review and comment by the
Company and its counsel. Each of Parent, Sub and the Company shall promptly
correct any information provided by it for use in the Offer Documents if and to
the extent that such information shall have become false or misleading in any
material respect or as otherwise required by law, and each of Parent and Sub
shall take all steps necessary to amend or supplement the Offer Documents and to
cause the Offer Documents, as so amended or supplemented, to be filed with the
SEC and to be disseminated to the Company's
11
stockholders, in each case as and to the extent required by applicable federal
securities laws. Parent and Sub shall provide the Company and its counsel with
any comments, whether written or oral, or other communications Parent, Sub or
their counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments and shall cooperate with
the Company and its counsel in responding to such comments or other
communications.
(c) Parent shall provide or cause to be provided to Sub upon expiration
of the Offer or any subsequent extension thereof, as applicable, all funds
necessary to immediately accept for payment, and pay for, any shares of Company
Common Stock that are validly tendered and not withdrawn pursuant to the Offer
and that Sub is permitted to accept for payment under applicable law pursuant to
the Offer.
SECTION 2.02 COMPANY ACTIONS.
(a) The Company hereby approves of and consents to each of the
Transactions (including for purposes of Section 203 of the DGCL). The Company
hereby consents to the inclusion in the Offer Documents of the recommendations
of the Company Board described in SECTION 4.04(b) of this Agreement.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC the Schedule 14D-9 containing the recommendations
described in SECTION 4.04(b) (subject to the Company Board's ability to modify
or withdraw such recommendations in accordance with the terms of this Agreement)
and shall cause the Schedule 14D-9 to be disseminated to the holders of Company
Common Stock, together with the Offer Documents, as required by applicable
federal securities laws. The Schedule 14D-9 will comply as to form in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations promulgated thereunder. The Company shall deliver copies
of the proposed form of the Schedule 14D-9 to Parent within a reasonable time
prior to the filing thereof with the SEC for review and comment by Parent and
its counsel. Each of the Company, Parent and Sub shall promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that such information shall have become false or misleading in any material
respect or as otherwise required by law, and the Company shall take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9, as so amended or supplemented, to be filed with the SEC and disseminated
to the Company's stockholders, in each case as and to the extent required by
applicable federal securities laws. The Company shall provide Parent and its
counsel with any comments, whether written or oral, or other communications 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 or other
communications.
(c) In connection with the Offer, the Company shall, or shall cause its
transfer agent to, furnish Sub promptly with mailing labels containing the names
and addresses of all record holders of Company Common Stock, each as of a recent
date and of those Persons becoming record holders subsequent to such date,
together with copies of all lists of stockholders, security position listings,
computer files and all other information in the Company's possession or control
regarding the record holders and beneficial owners of Company Common Stock, and
shall furnish to Sub such information and assistance (including updated lists of
stockholders, mailing
12
labels, security position listings and computer files) as Parent may reasonably
request in communicating the Offer to the Company's stockholders. 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 Transactions, Parent and Sub shall hold in confidence the information
contained in any such labels, listings and files, shall use such information
only in connection with the Transactions and, if this Agreement shall be
terminated, shall deliver to the Company or destroy all copies of such
information then in their possession or control.
SECTION 2.03 BOARD OF DIRECTORS; SECTION 14(f).
(a) If requested by Parent, promptly after the acceptance for payment
of, and full payment for, the shares of Company Common Stock to be purchased
pursuant to the Offer, Parent shall be entitled to designate such number of
directors on the Company Board (and on each committee of the Company Board and
on each board of directors of each Company Subsidiary designated by Parent) as
will give Parent representation on the Company Board (or such committee or
Company Subsidiary board of directors) equal to at least that number of
directors, rounded up to the next whole number, which is the product of (i) the
total number of directors on the Company Board (or such committee or Company
Subsidiary board of directors) giving effect to the directors appointed or
elected pursuant to this sentence multiplied by (ii) the percentage that (A)
such number of shares of Company Common Stock so accepted for payment and paid
for by Sub plus the number of shares of Company Common Stock otherwise owned by
Parent, Sub or any other Parent Subsidiary bears to (B) the number of shares of
Company Common Stock then outstanding, and the Company shall, at such time,
cause Parent's designees to be so appointed or elected (the time of the
appointment of such directors being referred to herein as the "APPOINTMENT
TIME"); PROVIDED, HOWEVER, that in the event that Parent's designees are elected
to the Company Board, until the Effective Time, the Company Board shall have at
least three (3) directors who are directors on the date of this Agreement and
who are not employees of BP or any of BP's Affiliates (other than the Company)
(the "INDEPENDENT DIRECTORS"); and PROVIDED FURTHER that, in such event, if the
number of Independent Directors shall be reduced below three (3) for any reason
whatsoever, the remaining Independent Directors shall, to the fullest extent
permitted by law, designate a person to fill such vacancy who shall be deemed to
be an Independent Director for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate three (3) persons to
fill such vacancies who shall not be employees or Affiliates (other than the
Company) of BP, or officers or Affiliates of Parent or any of Parent
Subsidiaries, and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. The Company shall take all actions necessary to
cause the persons designated by Parent to be directors on the Company Board (or
a committee of the Company Board or the board of directors of a Company
Subsidiary designated by Parent) pursuant to the preceding sentence to be so
appointed or elected (whether, at the request of Parent, by means of increasing
the size of the Company Board (or such committee or Company Subsidiary board of
directors) (and shall, if necessary, amend the Company By-laws or organizational
documents of the Company Subsidiary, as applicable, to permit such an increase)
or seeking the resignation of directors and causing Parent's designees to be
appointed or elected).
(b) The Company's obligation to appoint designees of Parent to the
Company Board shall be subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder. The
13
Company shall promptly take all actions required pursuant to Section 14(f) and
Rule l4f-1 in order to fulfill its obligations under this SECTION 2.03, 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-1
to enable Parent's designees to be elected to the Company Board. Parent and Sub
will supply to the Company any information with respect to any of them and their
nominees, officers, directors and Affiliates required by Section 14(f) and Rule
14f-1.
(c) Following the election or appointment of Parent's designees
pursuant to this SECTION 2.03 and prior to the Effective Time, (i) any
amendment, or waiver of any term or condition, of this Agreement or the Company
Charter or Company By-laws and (ii) any termination of this Agreement by the
Company, any extension by the Company of the time for the performance of any of
the obligations or other acts of Parent or Sub or waiver or assertion of any of
the Company's rights hereunder, and any other consent or action by the Company
Board with respect to this Agreement that adversely affects the holders of
shares of Company Common Stock, will require the concurrence of a majority of
both (A) the then directors of the Company Board who were directors of the
Company Board on the date of this Agreement or their successors who were
recommended to succeed by a majority of such directors, and (B) the then
Independent Directors.
SECTION 2.04 THE MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, Sub shall be merged
with and into the Company at the Effective Time. At the Effective Time, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation (the "SURVIVING CORPORATION") and shall succeed to
and assume all the rights and obligations of Sub and the Company in accordance
with the DGCL.
SECTION 2.05 CLOSING. The Closing shall take place at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois), ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00 a.m. on the second Business Day following the
satisfaction (or, to the extent permitted by Applicable Law, waiver by all
parties) of the conditions set forth in ARTICLE VIII (or, to the extent
permitted by Applicable Law, waived by the parties entitled to the benefits
thereof) or at such other time, date and place as shall be fixed by written
agreement between the parties.
SECTION 2.06 EFFECTIVE TIME. At the Closing, Parent and the Company
will cause the Certificate of Merger to be executed and filed with the Secretary
of State of the State of
Delaware as provided in Section 251 or 253, as
applicable, of the DGCL. The Merger shall become effective at the time when the
Certificate of Merger has been duly filed with the Secretary of State of the
State of
Delaware or such other time as shall be agreed upon by the parties and
set forth in the Certificate of Merger in accordance with the DGCL (the
"EFFECTIVE TIME"). From and after the Effective Time, the Merger shall have all
the effects provided by Section 259 of the DGCL, including without limitation,
the effect that the Surviving Corporation shall possess all of the assets,
rights, privileges, powers and franchises and shall be subject to all of the
liabilities, restrictions, disabilities and duties of the Company and Sub, all
as provided under the DGCL.
14
SECTION 2.07 CERTIFICATE OF INCORPORATION AND BY-LAWS. (a) The
certificate of incorporation of Sub, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation (except that the certificate of incorporation of Sub shall be
amended so that the name of the Surviving Corporation specified therein shall be
the name of the Company as specified in its certificate of incorporation as of
immediately prior to the Merger) until thereafter changed or amended as provided
therein or by Applicable Law.
(b) The by-laws of Sub, as in effect immediately prior to the Effective
Time, shall be the by-laws of the Surviving Corporation until thereafter changed
or amended as provided therein or by Applicable Law.
SECTION 2.08 DIRECTORS. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until their
successors have been duly elected or appointed and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
SECTION 2.09 OFFICERS. The officers of the Company shall, from and
after the Effective Time, be the officers of the Surviving Corporation until
their successors have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
ARTICLE III
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 3.01 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of Sub, the Company or any
holder of any shares of Company Common Stock or any shares of capital stock of
Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of common stock, par value $0.001 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share
of Company Common Stock that is held by the Company as treasury stock, or owned
by the Company Subsidiaries, Parent, Sub or any other Parent Subsidiary shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and no consideration shall be delivered in exchange therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to SECTION 3.01(b) and
SECTION 3.01(d), each issued and outstanding share of Company Common Stock shall
be converted automatically into the right to receive the Merger Consideration.
As of the Effective Time, all such shares of Company Common Stock shall no
longer be outstanding and shall automatically be canceled and retired and shall
cease to exist, and each holder of a Certificate shall cease to
15
have any rights with respect thereto, except the right to receive the Merger
Consideration upon surrender of such Certificate in accordance with SECTION
3.02, without interest.
(d) DISSENTERS' SHARES. Notwithstanding anything in this Agreement to
the contrary, Dissenters' Shares shall not be converted into, or represent the
right to receive, Merger Consideration as provided in SECTION 3.01(c), but
rather the holders of Dissenters' Shares shall be entitled to payment of the
appraised value of such Dissenters' Shares in accordance with Section 262 of the
DGCL; PROVIDED, HOWEVER, that if any such holder shall fail to perfect or
otherwise shall waive, withdraw or lose the right to receive payment of
appraised value under Section 262 of the DGCL, then the right of such holder to
be paid the appraised value of such holder's Dissenters' Shares shall cease and
such Dissenters' Shares shall be treated as if they had been converted as of the
Effective Time into the right to receive the Merger Consideration, without any
interest thereon, as provided in SECTION 3.01(c). The Company shall provide
prompt notice to Parent of any demands received by the Company for appraisal of
any shares of Company Common Stock, attempted withdrawals of any such demands
and any other documents received in connection with any assertion of rights to
payment of appraised value under Section 262 of the DGCL, and Parent shall have
the right to participate in and direct all negotiations and proceedings with
respect to such demands. The Company shall not, except with the prior written
consent of Parent, make any payment with respect to, or settle or offer to
settle, any such demands, or agree to do any of the foregoing.
SECTION 3.02 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, Parent shall select
EquiServe Trust Company, N.A. or such other bank or trust company who shall be
reasonably satisfactory to the Company to act as the Exchange Agent for the
payment of the Merger Consideration upon surrender of Certificates representing
Company Common Stock. When and as needed, Parent or Sub shall deposit, or cause
to be deposited, in trust with the Exchange Agent, the Merger Consideration to
which holders of shares of Company Common Stock shall have the right to receive
at the Effective Time pursuant to SECTION 3.01(c) (such amount being hereinafter
referred to as the "EXCHANGE FUND").
(b) EXCHANGE PROCEDURE. As soon as reasonably practicable after the
Effective Time, Parent or the Surviving Corporation shall cause the Exchange
Agent to mail to each holder of record of a Certificate or Certificates (other
than holders of Certificates representing shares of Common Stock referred to in
SECTION 3.01(b)), (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in a
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration. Upon surrender of a Certificate for cancellation
to the Exchange Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly executed and completed,
and such other documents as may reasonably be required by the Exchange Agent,
the holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each share of Company Common Stock theretofore
represented by such Certificate, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company Common
Stock which is not registered in the transfer records of the Company,
16
payment may be made to a Person other than the Person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the Person requesting
such payment shall (A) pay to the Exchange Agent any Transfer Taxes or other
Taxes required by reason of the payment to a Person other than the registered
holder of such Certificate, or (B) establish to the satisfaction of the Parent
or Surviving Corporation that such Tax has been paid or is otherwise not
applicable. Until surrendered as contemplated by this SECTION 3.02, each
Certificate (other than Certificates representing Dissenters' Shares) shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration, without interest, into
which the shares of Company Common Stock theretofore represented by such
Certificate shall have been converted pursuant to SECTION 3.01(c). No interest
shall be paid or shall accrue on any Merger Consideration payable upon the
surrender of any Certificate.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration paid in accordance with the terms of this ARTICLE III upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares, and there
shall be no further registration of transfers on the stock transfer books of the
Surviving Corporation of shares of Company Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time, any
Certificates formerly representing shares of Company Common Stock are presented
to the Surviving Corporation, Parent or the Exchange Agent for any reason, they
shall be canceled and exchanged as provided in this ARTICLE III.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
(including any earnings received with respect thereto) that remains
undistributed to the holders of Company Common Stock six (6) months after the
Effective Time shall be delivered to the Surviving Corporation and any holder of
Company Common Stock who has not theretofore complied with this ARTICLE III
shall thereafter look only to the Surviving Corporation (subject to abandoned
property, escheat or similar Applicable Law) for payment of its claim for Merger
Consideration.
(e) NO LIABILITY. None of Parent, Sub, the Company, the Surviving
Corporation or the Exchange Agent shall be liable to any Person in respect of
any cash from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Applicable Law.
(f) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent or the Surviving Corporation.
(g) WITHHOLDING RIGHTS. The Surviving Corporation shall be entitled to
deduct and withhold from the consideration otherwise payable to any holder of
Company Common Stock pursuant to this Agreement such amounts as may be required
to be deducted and withheld with respect to the making of such payment under the
Code, or under any provision of state, local or foreign tax law.
(h) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such
17
Certificate to be lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with SECTION 3.01,
provided that the Person to whom the Merger Consideration is paid shall, as a
condition precedent to the payment thereof, indemnify the Surviving Corporation
and Parent in a manner satisfactory to them (including, without limitation, the
posting by such Person of such bond and security as the Surviving Corporation
and Parent may reasonably request) against any claim that may be made against
the Surviving Corporation and Parent with respect to the Certificate claimed to
have been lost, stolen or destroyed.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding section or subsections of the
Company Disclosure Letter, dated the date of this Agreement, delivered by the
Company to Parent and Sub (it being understood that if it is readily apparent
from the text of the disclosure that an item disclosed in one section or
subsection of the Company Disclosure Letter is omitted from another section or
subsection where such disclosure would be appropriate, such item shall be deemed
to have been disclosed in such section or subsection of the Company Disclosure
Letter from which such item is omitted), the Company represents and warrants to
Parent and Sub as follows:
SECTION 4.01 ORGANIZATION, STANDING AND POWER. The Company and each of
the Company Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is organized and has
full power and authority and possesses all Permits necessary to enable it to
own, lease or otherwise hold its properties and assets and to conduct its
business as presently conducted, and there has occurred no default under, or
violation of, any such Permit, except where such default or violation or the
failure to have such Permits individually or in the aggregate, would not have,
or reasonably be expected to have a Company Material Adverse Effect. The Company
and each Company Subsidiary is duly qualified to do business in each
jurisdiction in which the nature of its business or its ownership of its
properties make such qualification necessary or beneficial, except in such
jurisdictions where the failure to be so qualified, individually or in the
aggregate, would not have, or reasonably be expected to have, a Company Material
Adverse Effect. True and complete copies of the Company Charter, the Company
By-laws and the charter documents, by-laws and equivalent organizational
documents (and in each case all amendments thereto) of each of the Company
Subsidiaries as in effect immediately prior to the date hereof have been made
available to Parent.
SECTION 4.02 COMPANY SUBSIDIARIES. Except as set forth in Section
4.02(a) of the Company Disclosure Letter, the Company owns, directly or
indirectly, each of the outstanding shares of capital stock or a one hundred
percent (100%) ownership interest, as applicable, of each of the Company
Subsidiaries free and clear of all Liens. Each of the outstanding shares of
capital stock of each of the Company Subsidiaries having corporate form is duly
authorized, validly issued, fully paid and nonassessable. The following
information for each Company Subsidiary is set forth in SECTION 4.02(b) of the
Company Disclosure Letter: (a) its name and jurisdiction of incorporation or
organization; (b) its authorized capital stock or share capital; and (c) the
name of each stockholder or owner and the number of issued and outstanding
shares of capital stock or share capital held by it or the type and amount of
any ownership interest. Except
18
as set forth in Section 4.02(c) of the Company Disclosure Letter, other than the
Company Subsidiaries, there are no other entities in which the Company owns, of
record or beneficially, any direct or indirect equity interest or any right
(including contingent rights) to acquire the same.
SECTION 4.03 CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 35,000,000 shares of Company Common Stock and 10,000,000
shares of preferred stock, $0.001 par value per share (the "COMPANY PREFERRED
STOCK" and collectively with the Company Common Stock, "COMPANY CAPITAL STOCK").
As of the date hereof, (a) 10,291,789 shares of Company Common Stock and no
shares of Company Preferred Stock were issued and outstanding, (b) no shares of
Company Common Stock and no shares of Company Preferred Stock were held by the
Company in its treasury, and (c) 2,227,470 shares of Company Common Stock were
subject to outstanding Company Stock Options. Of the 2,227,470 shares of Company
Common Stock subject to outstanding Company Stock Options, 272,750 shares are
subject to Company Stock Options issued pursuant to the Company's 2001 Long Term
Incentive Plan and upon the consummation of the Offer, options to purchase
204,562 shares of Company Common Stock will terminate and be surrendered to the
Company with no further payment by the Company, Parent or Sub. Except as set
forth above as of the date hereof, no shares of capital stock or other voting
securities of the Company were issued, reserved for issuance or outstanding. All
outstanding shares of Company Capital Stock are, and all such shares that may be
issued prior to the Effective Time will be when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the DGCL, the
Company Charter, the Company By-laws or any Contract to which the Company is a
party or otherwise bound. There is no Voting Company Debt and there are no
Company SARs issued or outstanding and the only rights outstanding under any
Company Option Plan are Company Stock Options. Except as set forth above, as of
the date of this Agreement, there are no options, warrants, call rights,
convertible or exchangeable securities, "phantom" stock rights, stock
appreciation rights, stock-based performance units, commitments, Contracts,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound (i) obligating the
Company or any Company Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
interests in, or any security convertible or exercisable for or exchangeable
into any capital stock of or other equity interest in, the Company or of any
Company Subsidiary or any Voting Company Debt, (ii) obligating the Company or
any Company Subsidiary to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking
or (iii) that give any Person the right to receive any economic benefit or right
similar to or derived from the economic benefits and rights accruing to holders
of Company Capital Stock. There are not any (A) contractual obligations of the
Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or any Company Subsidiary, or (B) voting
trusts or other agreements or understandings to which the Company or any of the
Company Subsidiaries is a party with respect to the voting or transfer of
capital stock of the Company or any of the Company Subsidiaries.
19
SECTION 4.04 AUTHORIZATION; VALIDITY OF AGREEMENT; NECESSARY ACTION.
(a) The Company has full corporate power and authority to execute and
deliver this Agreement and, subject to adoption by the Company's stockholders of
this Agreement (if required), to consummate the Transactions. The execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the Transactions have been duly authorized by all necessary
corporate action on the part of the Company, and except for the Company
Stockholder Approval in the case of the Merger (if required), no other corporate
action on the part of the Company is necessary to authorize the consummation of
the Transactions. This Agreement has been duly executed and delivered by the
Company and constitutes (assuming the due authorization, execution and delivery
by Parent and Sub) the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to general principles of equity.
(b) The Company Board, at a meeting duly called and held prior to
execution of this Agreement, duly adopted resolutions (i) approving and
declaring advisable this Agreement, the Stockholder Agreement and the other
Transactions (such approvals having been made in accordance with the DGCL,
including for purposes of Section 203 thereof), (ii) determining that the terms
of the Offer, the Merger and the other Transactions are fair to and in the best
interests of the Company and its stockholders, (iii) recommending that the
holders of Company Common Stock accept the Offer and tender their shares of
Company Common Stock pursuant to the Offer, (iv) recommending that the Company's
stockholders approve and adopt this Agreement and the Merger and (v) adopting
this Agreement. Such resolutions are sufficient to render inapplicable to Parent
and Sub and this Agreement, the Stockholder Agreement, the Offer, the Merger and
the other Transactions, the restrictions on "business combinations" set forth in
Section 203 of the DGCL.
(c) The only vote of holders of any class or series of Company Capital
Stock necessary to approve and adopt this Agreement and the Merger is the
approval and adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock (the "COMPANY STOCKHOLDER APPROVAL").
SECTION 4.05 NO CONFLICTS; CONSENTS. Except as set forth in SECTION
4.05 of the Company Disclosure Letter, the execution and delivery by the Company
of this Agreement does not, and the consummation of the Transactions and
compliance with the terms hereof and thereof, and the execution, delivery and
performance of the Stockholder Agreement by the parties thereto, will not
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation or to loss of a
material benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any Person under, or impose any penalty or fine under,
or result in the creation of any Lien (other than Permitted Liens) upon any of
the properties or assets of the Company or any Company Subsidiary under, any
provision of (a) the Company Charter, the Company By-laws or the comparable
charter or organizational documents of any Company Subsidiary, (b) any Company
Agreement, or (c) subject to the filings and other matters referred to in the
following sentence, any provision of any
20
Order or Applicable Law applicable to the Company or any Company Subsidiary or
their respective properties or assets, other than, in the cases of CLAUSES (b)
or (c) above, any such items that, individually or in the aggregate, would not
have, or reasonably be expected to have a Company Material Adverse Effect. No
Consent of, or registration, declaration or filing with, any Governmental Entity
is required to be obtained or made by or with respect to the Company or any
Company Subsidiary in connection with the execution, delivery and performance of
this Agreement or the consummation of the Transactions, other than (i)
compliance with and filings under the HSR Act and the pre-merger notification
requirements of Austria, Germany, Ireland, Italy, Turkey, and Croatia, (ii) the
filing with the SEC of (A) the Schedule 14D-9, (B) a Proxy Statement, if
shareholder approval is required by Applicable Law, and (C) such reports under
Sections 13 and 14 of the Exchange Act, as may be required in connection with
this Agreement, the Stockholder Agreement and the Transactions, (iii) the filing
of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of the other
jurisdictions in which the Company is qualified to do business, (iv) such
filings as may be required in connection with the Taxes described in SECTION
7.07, (v) such other items as are set forth in SECTION 4.05 of the Company
Disclosure Letter, and (vi) such Consents which, if not obtained, would not,
individually or in the aggregate, have, or reasonably be expected to have a
Company Material Adverse Effect.
SECTION 4.06 SEC DOCUMENTS; FINANCIAL STATEMENTS; UNDISCLOSED
LIABILITIES.
(a) The Company has timely filed with the SEC all Company SEC
Documents. As of its respective date, each Company SEC Document, including,
without limitation, any financial statements or schedules included therein,
complied in all material respects with the requirements of the Securities Act
and Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such Company SEC Documents, and did not
contain any untrue statement of a 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 were made, not
misleading. Except to the extent that information contained in any Company SEC
Document has been revised or superseded by a later filed Company SEC Document
(which later filed Company SEC Document has been filed prior to the date
hereof), none of the Company SEC Documents contains any untrue statement of a
material fact or omits 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 misleading.
(b) Except as set forth in SECTION 4.06(b) of the Company Disclosure
Letter, the Financial Statements comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(c) The Company and the Company Subsidiaries have no material
liabilities, whether accrued, absolute, contingent or otherwise, and whether or
not required to be disclosed on a
21
balance sheet prepared in accordance with GAAP, except liabilities (i) stated or
reserved against in the Financial Statements of the Company included in the
Filed Company SEC Documents or disclosed in SECTION 4.06(c) of the Company
Disclosure Letter or (ii) incurred in (A) the ordinary and usual course of
business consistent with past practice since June 30, 2001 and disclosed to
Parent prior to the date hereof or (B) in connection with the Transactions
contemplated hereby.
SECTION 4.07 INFORMATION SUPPLIED. None of the information supplied or
to be supplied by the Company included or incorporated by reference in (a) the
Offer Documents or the Schedule 14D-9 will, at the time such document is filed
with the SEC, at any time it is amended or supplemented and at the time it is
first published, sent or given to the Company's stockholders, 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 light of the
circumstances under which they are made, not misleading, or (b) the Proxy
Statement will, at the date it is first mailed to the Company's stockholders and
at the time of the Company Stockholders Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Schedule 14D-9 and
the Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations promulgated
thereunder, except that no representation is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or incorporation by
reference therein.
SECTION 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Filed Company SEC Documents or in SECTION 4.08 of the Company Disclosure
Letter, from the date of the most recent audited financial statements included
in the Filed Company SEC Documents (a) the Company and the Company Subsidiaries
have conducted their business only in the ordinary and usual course of business
consistent with past practice, (b) none of the Company or any Company Subsidiary
has experienced or been affected by any event, change, effect or development
that, individually or in the aggregate, has had or would have, or would
reasonably be expected to have a Company Material Adverse Effect and (c) none of
the Company or any Company Subsidiary (i) has taken any action that, if taken
after the date of this Agreement, would constitute a breach of any of the
covenants set forth in SECTIONS 6.01(a), 6.01(b) (excluding from such Section
for the purposes of this Section the words "outstanding as of the date of this
Agreement"), 6.01(d), 6.01(e), 6.01(f), 6.01(g) or 6.01(i) of this Agreement.
Since June 30, 2001, except as set forth in SECTION 4.08 of the Company
Disclosure Letter, there was no (i) material increase in the indebtedness of the
Company and the Company Subsidiaries, (ii) material decrease in the net assets
of the Company as compared with the amounts shown on the unaudited balance
sheets included in the Company's June 30, 2001, 10-Q and (iii) material
decrease, as compared with the corresponding period in the preceding year, in
revenues or the total per share amount of net income of the Company.
SECTION 4.09 TAXES.
(a) All Tax Returns required to be filed by or with respect to the
Company or any Company Subsidiary, have been filed and all material Taxes
required to be paid by or with respect to the Company or any Company Subsidiary,
whether disputed or not and whether or not
22
shown on any Tax Return, have been paid, except Taxes which have not yet accrued
or otherwise become due, for which adequate provision has been made in the
pertinent financial statements referred to in SECTION 4.06 hereof. All such Tax
Returns were correct and complete in all material respects when filed. Except as
would not be material, the provisions for Taxes on the Financial Statements are
sufficient as of their respective dates for the payment of all accrued and
unpaid Taxes of any nature of the Company and the Company Subsidiaries, whether
or not assessed or disputed. All Taxes and other assessments and levies which
the Company or any of the Company Subsidiaries is required to withhold or
collect have been withheld and collected and have been paid over on a timely
basis to the proper Governmental Entities in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or other
third party. Except as set forth in SECTION 4.09(a) of the Company Disclosure
Letter, there is no pending dispute or claim concerning any Tax liability of the
Company or any of the Company Subsidiaries either (A) claimed or raised by any
Tax Authority or (B) as to which the Company has Knowledge based upon personal
contact with any agent of or other Person acting on behalf of or for such Tax
Authority. Except as set forth in SECTION 4.09(a) of the Company Disclosure
Letter, neither the Company nor any of the Company Subsidiaries has received
notice of any audit of any Tax Return filed by such Person. Except as set forth
in SECTION 4.09(a) of the Company Disclosure Letter, neither the Company nor any
of the Company Subsidiaries has received notice of any claim made by any
authority in a jurisdiction where the Company or such Company Subsidiary does
not file Tax Returns that the Company or such Company Subsidiary is or may be
subject to taxation by that jurisdiction.
(b) Except as set forth in SECTION 4.09(b) of the Company Disclosure
Letter, neither the Company nor any of the Company Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency, nor has any such waiver or
agreement been requested by the IRS or any other Tax Authority; and neither the
Company nor any of the Company Subsidiaries currently is the beneficiary of any
extension of time within which to file any Tax Return.
(c) Except as set forth in SECTION 4.09(c) of the Company Disclosure
Letter: neither the Company nor any of the Company Subsidiaries has filed a
consent under Section 341(f) of the Code concerning collapsible corporations or
agreed to have Section 341(f)(2) of the Code apply; neither the Company nor any
of the Company Subsidiaries has made any payments, is obligated to make any
payments, or is party to any agreement that under any circumstances could
obligate it to make any payments that will not be deductible under Section 280G
or Section 162(m) of the Code; neither the Company nor any of the Company
Subsidiaries is a party to any Tax allocation or sharing agreement; neither the
Company nor any of the Company Subsidiaries (i) has been a member of an
affiliated group filing a consolidated federal income Tax Return (other than (A)
such a group of which the Company is the common parent or (B) for the period
ending on or before February 10, 1998, such a group with respect to which Amoco
Corporation was the common parent) or (ii) will be required to pay the Taxes of
any Person other than Company or any Company Subsidiaries under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by Contract, agreement or otherwise;
and neither the Company nor any of the Company Subsidiaries is or will be
required to include in income any adjustment pursuant to Section 481(a) of the
Code by reason of a voluntary change in accounting method initiated by the
Company or a Company Subsidiary (nor does the Company have any Knowledge that
the IRS has proposed any such adjustment or change of
23
accounting method). There are no requests for rulings or determinations in
respect of any Tax or Tax matter pending between the Company or any of the
Company Subsidiaries and any Tax Authority. Since October 1, 1997, none of the
Company or any Company Subsidiary has been a distributing or controlled
corporation in a transaction to which Section 355 of the Code applied. The
transactions contemplated by this Agreement are not subject to any Tax
withholding provision.
SECTION 4.10 BENEFIT PLANS.
(a) SECTION 4.10(a) of the Company Disclosure Letter contains a true
and complete list of each "employee benefit plan" (within the meaning of Section
3(3) of ERISA), stock purchase, stock option, severance, retention, employment,
change-in-control, fringe benefit, collective bargaining, unemployment
compensation, bonus, incentive, deferred compensation and all other employee
benefit plans, agreements, programs, policies or other arrangements, whether or
not subject to ERISA under which any current or former Company Employee,
director or consultant of the Company or the Company Subsidiaries or any of
their respective ERISA Affiliates has any right to benefits or under which the
Company or the Company Subsidiaries has any liability (including any Contract
between the Company or any Affiliate of the Company and any current or former
employee, director or consultant or the Company or any Affiliate of the Company
relating to the "change-in-control" or sale of the Company or any Company
Subsidiary). All such plans, agreements, programs, policies and arrangements
shall be collectively referred to as the "COMPANY PLANS."
(b) With respect to each Company Plan, the Company has made available
to Parent a current, accurate and complete copy (or, to the extent no such copy
exists, an accurate description) thereof and, to the extent applicable: (i) any
related trust agreement or other funding instrument; (ii) the most recent IRS
determination or opinion letter, if applicable; (iii) any summary plan
description and (iv) the most recent (A) Form 5500 and attached schedules, (B)
audited financial statements, (C) actuarial valuation reports and (D) attorney's
response to an auditor's request for information.
(c) (i) Each Company Plan has been established and complies and has
been administered in form and operation in all material respects in accordance
with its terms, and in material compliance with the applicable provisions of
ERISA, the Code and other Applicable Laws; (ii) each Company Plan which is
intended to be qualified within the meaning of Section 401(a) of the Code and
each trust intended to qualify under the meaning of Section 501(a) of the Code
has either received a favorable determination letter from the IRS with respect
to each such Company Plan as to its qualified status under the Code, ERISA and
the Uruguay Round Agreements Act, the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996,
the Taxpayer Relief Act of 1977, the IRS Restructuring and Reform Act of 1998
and the Community Renewal Tax Relief Act of 2000 (collectively referred to as
"GUST") or has remaining a period of time under applicable Treasury regulations
or IRS pronouncements in which to apply for such a determination letter (a
"DETERMINATION LETTER") and make any amendments necessary to obtain a favorable
determination and no event has occurred which would adversely affect the status
of such determination letter or the qualified status of such Company Plan; (iii)
no event has occurred and no condition exists that would reasonably be expected
to subject the Company or the Company Subsidiaries or any of their respective
ERISA
24
Affiliates, to any material Tax, fine, Lien, penalty or other liability imposed
by ERISA or the Code, including but not limited to Title IV of the Code; (iv) no
non-exempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA and Section 4975 of the Code) has occurred with respect to any Company
Plan; and (v) no Company Plan provides retiree welfare benefits and none of the
Company or any Company Subsidiaries has any obligations to provide any retiree
welfare benefits except, in either case, to the extent required by Section 4980B
of the Code.
(d) With respect to any Company Plan (or the assets thereof), (i) no
Proceedings (other than routine claims for benefits in the ordinary and usual
course of business) are pending or threatened in writing, (ii) no facts or
circumstances exist that could reasonably be expected to give rise to any such
actions, suits or claims and (iii) none of the assets of any Company Plan are
invested in employer securities or employer real property.
(e) Except as set forth in SECTION 4.10(e) of the Company Disclosure
Letter, no Company Plan exists that could result in the payment to any present
or former Company Employee of any money or other property or accelerate or
provide any other rights or benefits to any present or former employee of the
Company or any Company Subsidiary as a result of the Transactions, including the
Offer and the Merger, either alone or in combination with another event.
(f) None of the Company Plans is subject to Title IV of ERISA and none
of the Company Plans is a multiemployer plan (as defined in Section 3(37) of
ERISA).
SECTION 4.11 LITIGATION. Except as set forth in SECTION 4.11 of the
Company Disclosure Letter and except as would not, individually or in the
aggregate, have, or be reasonably expected to have a Company Material Adverse
Effect, there are (a) no Orders to which the Company or any Company Subsidiary
is a party or by which any of their respective properties or assets are bound,
and (b) no Proceedings (i) pending against the Company or any Company Subsidiary
or, (ii) to the Knowledge of the Company, threatened against the Company or any
Company Subsidiary. There are no Proceedings pending or, to the Knowledge of the
Company, threatened against the Company or any Company Subsidiary which may call
into question the validity or hinder the enforceability or performance of this
Agreement.
SECTION 4.12 COMPLIANCE WITH APPLICABLE LAWS. The Company and each
Company Subsidiary has been and is in compliance with all Applicable Laws and
Orders, including, without limitation, ERISA, Environmental, Health and Safety
Laws, all Applicable Laws and Orders relating to antitrust or trade regulation,
employment practices and procedures, wages, hours of work, independent
contractor classification, income Tax withholding and occupational health and
safety, except for such noncompliance as would not, individually or in the
aggregate, have, or reasonably be expected to have, a Company Material Adverse
Effect.
SECTION 4.13 CONTRACTS; DEBT INSTRUMENTS.
(a) The Company has made available to Parent prior to the date of this
Agreement complete and correct copies of each of the Material Contracts, each as
amended or modified to the date hereof (including any waivers currently in
effect with respect thereto). Except as set forth in SECTION 4.13(a) of the
Company Disclosure Letter: (i) each Material Contract is valid
25
and binding on the Company and the Company Subsidiaries, as applicable, and is
in full force and effect; and (ii) neither the Company nor any of the Company
Subsidiaries is in violation of or in default under (nor does there exist any
condition which with the passage of time or the giving of notice or both would
cause such a violation of or default under) any Material Contract to which it is
a party or by which it or any of its properties or assets is bound, except for
violations or defaults that would not, individually or in the aggregate, have,
or reasonably be expected to have a Company Material Adverse Effect. No
condition exists or event has occurred which (whether with or without notice or
lapse of time or both) would constitute a default by the Company or a Company
Subsidiary or, to the Knowledge of the Company, any other party thereto under
any Material Contract or result (other than due to consummation of the Offer or
the Merger) in a right of termination of any Material Contract.
(b) Set forth in SECTION 4.13(b) of the Company Disclosure Letter is
(i) a list of all loan or credit agreements, notes, bonds, mortgages, indentures
and other agreements and instruments pursuant to which any Indebtedness of the
Company or the Company Subsidiaries in an aggregate principal amount in excess
of $100,000 is outstanding or may be incurred, and (ii) the respective principal
amounts currently outstanding thereunder.
(c) Except as set forth in SECTION 4.13(c) of the Company Disclosure
Letter, each of the Company and the Company Subsidiaries is not subject to the
terms of any non-competition, right of first refusal, option or other agreement
(including any area restrictions) which may restrict in any way the conduct or
operations or future conduct or operations of the business of the Company or any
Company Subsidiary or the use of the Company Intellectual Property Rights.
SECTION 4.14 INTELLECTUAL PROPERTY. The Company and the Company
Subsidiaries own or possess adequate licenses or other valid rights to use the
Material Intellectual Property Rights. Except as set forth in SECTION 4.14(a) of
the Company Disclosure Letter, neither the Company nor any of its Subsidiaries
has granted to any other Person any license to use any of the foregoing. To the
Knowledge of the Company, there is no infringement by any Person of any Material
Intellectual Property Right owned or exclusively licensed by the Company or the
Company Subsidiaries. The Company or a Company Subsidiary holds all right, title
and interest in, has maintained in good standing, and has no Liens, oppositions,
actions for cancellation, nullity, invalidation or the like pending against
Patents Owned, Copyrights, Trademarks and Domain Names, except as otherwise
stated on the pertinent schedules therefor. To the Knowledge of the Company, all
Patents Licensed have been maintained in good standing and have no Liens,
oppositions, actions for cancellation, nullity, invalidation or the like pending
against them, except as stated in the pertinent schedules therefor. All material
Licenses In and Licenses Out are valid and binding obligations of the Company or
the Company Subsidiaries, as applicable, have not been terminated or expired
(except in accordance with their terms without default thereunder), to the
Knowledge of the Company are in full force and effect and there are no disputes
or actions pending or, to the Knowledge of the Company, threatened regarding
same except as stated in the pertinent schedules therefor. Except as set forth
in SECTION 4.14(b) of the Company Disclosure Letter, there are no third party
Intellectual Property Rights (other than patents and trademarks) and, to the
Knowledge of the Company, no third party patents or trademarks, that are
infringed by any Products or existing activities of the Company or any Company
Subsidiary, and the Company has made reasonable inquiries to determine whether
any Material Product infringes any third party Intellectual Property Rights. The
sections of the
26
Company Disclosure Letter referenced under the definitions for Copyrights,
Domain Names, Licenses In, Licenses Out, Patents Owned, Patents Licensed and
Trademarks list, collectively, (i) all patents and patent applications,
copyright registrations, trade marks, service marks and Internet domain names,
in each case, owned by the Company or any of the Company Subsidiaries which are
material to the business of the Company and the Company Subsidiaries and (ii)
all licenses, sublicenses and other Contracts pursuant to which the Company or
any Company Subsidiary is authorized to use any third party patents, copyrights,
trade marks or service marks, in each case, which are material to the business
of the Company and the Company Subsidiaries.
SECTION 4.15 TAKEOVER LAWS. The Company Board has taken all action
necessary to ensure that Section 203 of the DGCL will not impose any additional
procedural, voting, approval, fairness or other restrictions on the timely
consummation of the Transactions or restrict, impair or delay the ability of
Parent or Sub to engage in any Transaction or to vote or otherwise exercise all
rights as a stockholder of the Company. No other "fair price," "moratorium,"
"control share acquisition" or other anti-takeover statute or regulation of any
Governmental Entity is applicable to the Company or the Transactions.
SECTION 4.16 BROKERS. Except as set forth in SECTION 4.16 of the
Company Disclosure Letter, no broker, investment banker, financial advisor,
consultant or other Person, other than Wachovia Securities (formerly known as
First Union Securities, Inc.) ("WACHOVIA"), the fees and expenses of which will
be paid by the Company, is entitled to any broker's, finder's, financial
advisor's or other fee or commission in connection with the Offer, the Merger
and/or any other Transaction based upon arrangements made by or on behalf of the
Company. Except for the letter agreement dated August 30, 2001 between the
Company and Wachovia (a true and correct copy of which has been made available
to the Parent), the Company has not entered into any agreement with Wachovia for
any fee or commission in connection with the Offer, the Merger and/or any other
Transaction.
SECTION 4.17 REGULATORY COMPLIANCE.
(a) (i) With respect to each of the Company's and the Company
Subsidiaries' products and, to the extent applicable, products under development
(collectively, "PRODUCTS"), (A) the Company and the Company Subsidiaries have
obtained and hold in the name of the Company or a Company Subsidiary all
applicable approvals, clearances and registrations required by any Governmental
Entity, to permit any manufacturing, distribution, sales, marketing or human
research and development activities of the Company and the Company Subsidiaries
to date (the "ACTIVITIES TO DATE") with respect to each Product (collectively,
"APPROVALS"); (B) the Company and the Company Subsidiaries are in compliance in
all material respects with all terms and conditions of each Approval including
all Product claims subject to the adulteration and misbranding provisions of the
FDCA and any foreign counterpart and with all requirements pertaining to the
Activities to Date with respect to each Product which is not required to be the
subject of an Approval; (C) the Company and the Company Subsidiaries are in
compliance in all material respects with all applicable requirements (as set
forth in relevant statutes and regulations) regarding registration or
notification for each site (in any country) at which each Product is
manufactured, processed, packed, held for distribution or from which and into
which it is distributed; and (D) to the extent any Product is intended for
export from the ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇
the Company and the Company Subsidiaries are in compliance in all material
respects with either all FDA requirements for marketing or 21 U.S.C. Section
381(e) or Section 382; (ii) all manufacturing operations performed by or on
behalf of the Company and the Company Subsidiaries have been and are being
conducted in full compliance with current good manufacturing practice,
including, but not limited to, the Quality System Regulation issued by the FDA;
(iii) all nonclinical laboratory studies of Products under development, as
described in 21 C.F.R. Section 58.3(d), sponsored by the Company and the Company
Subsidiaries have been and are being conducted in full compliance with the good
laboratory practice regulations set forth in 21 C.F.R. Part 58; (iv) all
clinical studies of Products, as described in 21 C.F.R. Section 50.3(c),
sponsored by the Company and the Company Subsidiaries have been and are being
conducted in full compliance with 21 C.F.R. Sections 812, 50, 54 and 56; (v) the
Company and the Company Subsidiaries are in full compliance with all reporting
requirements for all Approvals or plant registrations described in clause (a)(i)
above; except, in the case of the preceding clauses (a)(i) through (a)(v), for
any such failures to obtain or noncompliance which, individually or in the
aggregate, would not have, or reasonably be expected to have, a Company Material
Adverse Effect. Without limiting the generality of the foregoing definition of
"Approvals," such definition shall specifically include, with respect to the
United States, premarket approval applications under Section 515 of the FDCA,
premarket notifications under Section 510(k) of the FDCA, and investigational
device exemptions, and product export applications issued by the FDA.
(b) None of the Company, the Company Subsidiaries nor any of its
officers, employees or agents has made any untrue statement of a material fact
or fraudulent statement to the FDA or any similar Governmental Entity in any
other jurisdiction, failed to disclose a fact required to be disclosed to the
FDA or any similar Governmental Entity in any other jurisdiction, or committed
any act, made any statement, or failed to make any statement, that would
reasonably be expected to provide a basis for the FDA to invoke its policy
respecting, "Fraud, Untrue Statements of Material Facts, Bribery, and Illegal
Gratuities," set forth in 56 Fed. Reg. 46191 (September 10, 1991).
(c) The Company has, prior to execution of this Agreement, made
available to Parent copies of or made available for Parent's review any and all
documents in its or any of its Subsidiaries' possession that the Company
believes are material to assessing the Company's or any of the Company
Subsidiaries' compliance with the FDCA and implementing regulations.
SECTION 4.18 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Wachovia, the Company's financial advisor, dated the date of this
Agreement, that, as of such date, the consideration to be received in the Offer
and the Merger by the Company's stockholders is, in the opinion of such advisor,
fair to the Company's stockholders (excluding BP and its Affiliates) from a
financial point of view, a signed copy of which opinion has been delivered to
Parent.
SECTION 4.19 EMPLOYMENT MATTERS. Except as set forth in SECTION 4.19 of
the Company Disclosure Letter:
(a) In the last three (3) years, neither the Company nor any Company
Subsidiary has experienced nor is there threatened or pending any labor strikes,
slowdowns, lockouts, grievances, unfair labor practice charges or complaints,
arbitrations or other disputes arising out
28
of any collective bargaining agreement. To the Knowledge of the Company, there
is no organizational effort presently being made or threatened by or on behalf
of any labor union with respect to Company Employees.
(b) There are no collective bargaining or other labor union Contracts
to which the Company or any Company Subsidiary is a party or by which it is
bound.
(c) Neither the Company nor any Company Subsidiary is a party to, or
otherwise bound by, any consent decree or settlement agreement with, or citation
by, any Governmental Entity relating to employees or employment practices.
(d) In the past three (3) years, (i) neither the Company nor any
Company Subsidiary has effectuated a "plant closing" (as defined in the WARN
Act) affecting any site of employment or one or more facilities or operating
units within any site of employment or facility of its business; (ii) there has
not occurred a "mass layoff" (as defined in the WARN Act) affecting any site of
employment or facility of the Company's or any Company Subsidiary's business;
and (iii) neither the Company nor any Company Subsidiary has been affected by
any transaction or engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state, local or foreign law or
regulation.
(e) Neither the Company nor any Company Subsidiary has caused any of
its employees to suffer an "employment loss" (as defined in the WARN Act) during
the ninety (90) day period prior to the date hereof.
SECTION 4.20 INSURANCE. SECTION 4.20 of the Company Disclosure Letter
sets forth all material policies of fire, liability, workmen's compensation and
other forms of insurance owned or held by the Company and each Company
Subsidiary copies of which have been made available to Parent. All such policies
are in full force and effect, all premiums with respect thereto covering all
periods up to and including the date hereof have been paid, and no notice of
cancellation, termination or reservation of rights has been received with
respect to any such policy. Such policies are sufficient for compliance with all
material requirements of Applicable Laws and of all material Company Agreements.
Neither the Company nor any Company Subsidiary has been refused any insurance
with respect to its assets or operations, nor has its coverage been limited, by
any insurance carrier to which it has applied for any such insurance or with
which it has carried insurance during the last five (5) years.
SECTION 4.21 ENVIRONMENTAL, HEALTH AND SAFETY LAWS. Except as disclosed
in the Company SEC Documents (a) neither the Company nor any Company Subsidiary
has received any communication or notice, whether from a Governmental Entity or
otherwise, alleging any violation of or noncompliance with any Environmental,
Health and Safety Laws by the Company or any Company Subsidiary or for which the
any of them is responsible, and there is no pending or, to the Knowledge of the
Company, threatened Environmental Claim, except where such Environmental Claim
would not have, or be reasonably expected to have, a Company Material Adverse
Effect; (b) to the Knowledge of the Company, there are no past or present facts
or circumstances that would reasonably be expected to form the basis of any
Environmental Claim against the Company or any Company Subsidiary or against any
person or entity whose liability for any Environmental Claim the Company or any
Company Subsidiary has retained or assumed
29
either contractually or by operation of law, except where such Environmental
Claim, if made, would not have, or reasonably be expected to have, a Company
Material Adverse Effect; (c) to the extent required by applicable Environmental,
Health and Safety Laws, the Company and the Company Subsidiaries have filed (or
will have filed by the Closing Date) all applications necessary to renew or
obtain any necessary Permits or other authorizations in a timely fashion so as
to allow the Company and the Company Subsidiaries to continue to operate their
businesses in compliance with applicable Environmental, Health and Safety Laws,
and the Company does not expect such new or renewed Permits or other
authorizations to include any terms or conditions that will have a material
impact on the Company or the Company Subsidiaries; (d) the Company and the
Company Subsidiaries have not, and to the Knowledge of the Company, no other
person has, released, discharged, or otherwise disposed, of any Hazardous
Substances on, beneath or adjacent to any real property currently or formerly
owned, operated or leased by the Company or the Company Subsidiaries, except for
discharges of Hazardous Substances subject to a Permit pursuant to applicable
Environmental, Health and Safety Law or for releases, discharges or disposals
that are not likely to have, or would not reasonably be expected to have, a
Company Material Adverse Effect; and (e) no employee of the Company or any
Company Subsidiary, in the course of his or her employment with the Company or
said Company Subsidiary, has been exposed to any Hazardous Substances during the
course of his or her employment that could give rise to any claim that would
have, or reasonably be expected to have, a Company Material Adverse Effect. The
Company has made available to Parent all assessments, reports, data, results of
investigations or audits, and other information that is in the possession of or
reasonably available to the Company regarding environmental matters pertaining
to or the environmental condition of the business of the Company and its
Subsidiaries, or the compliance (or noncompliance) by the Company or any Company
Subsidiary with any Environmental, Health and Safety Laws. All Permits and other
governmental authorizations currently held or required to be held by the Company
and its Subsidiaries pursuant to any Environmental, Health and Safety Laws are
set forth in SECTION 4.21 of the Company Disclosure Letter, all such Permits and
other authorizations are in effect, no appeal nor any other action is pending to
revoke any such Permit or other authorization and the Company and the Company
Subsidiaries are in compliance with all terms and conditions of all such Permits
and other authorizations except where such non-compliance would not have, or
would not reasonably be expected to have a Company Material Adverse Effect.
SECTION 4.22 CUSTOMERS AND SUPPLIERS. There has not been any material
adverse change in the business relationship of the Company or any Company
Subsidiary with any customer who accounted for more than five percent (5%) of
the Company's sales (on a consolidated basis) during the period from January 1,
2000 to the date hereof, or any supplier from whom the Company and the Company
Subsidiaries purchased more than five percent (5%) of the goods or services (on
a consolidated basis) which it purchased during the same period; PROVIDED, that
notwithstanding the foregoing, no representation or warranty is made with
respect to Parent or any Parent Subsidiaries.
SECTION 4.23 TRANSACTIONS WITH AFFILIATES. (a) SECTION 4.23(a) of the
Company Disclosure Letter sets forth a complete and accurate list of all
Contracts and other arrangements to which BP or any of its Affiliates (other
than the Company and the Company Subsidiaries), on the one hand, and the Company
or any of the Company Subsidiaries, on the other hand, is a party or by which
the Company or any of its Subsidiaries is bound (the "INTERCOMPANY AGREEMENTS").
30
The Company has furnished to Parent complete and correct copies of all
Intercompany Agreements.
(b) Except as set forth in SECTION 4.23(b) of the Company Disclosure
Letter, there are no assets or services provided by, or at the expense of, BP or
any of its Affiliates (other than the Company or any Company Subsidiary) which
are used by the Company or any Company Subsidiary in the conduct of its
business.
SECTION 4.24 CONDITION OF ASSETS. Except as disclosed in SECTION 4.24
of the Company Disclosure Letter, the Company and each Company Subsidiary owns,
leases or has the legal right to use all the properties and assets used in the
conduct of its business except where the failure of the Company or Company
Subsidiaries to so own, lease or have the legal right to use would have, or
reasonably be expected to have, a Company Material Adverse Effect. All Contracts
material to the business of the Company entered into by Affiliates of the
Company other than Company Subsidiaries have been validly assigned to the
Company. All of the property, plant and equipment of the Company and each
Company Subsidiary has been maintained in good operating condition and repair,
ordinary wear and tear excepted, and permit the Company and each Company
Subsidiary to conduct their operations in the ordinary course of business in a
manner materially consistent with their past practices.
SECTION 4.25 REAL AND PERSONAL PROPERTY. (a) Set forth in SECTION
4.25(a) of the Company Disclosure Letter is a list of all of the real property
owned, leased or subleased by the Company or any Company Subsidiary. Other than
with respect to Company Intellectual Property Rights which are addressed in
SECTION 4.14 hereof, each of the Company and the Company Subsidiaries has good
and marketable title to, or valid leasehold interests in, all its properties and
assets, free and clear of all Liens and other encumbrances, except for Liens and
other encumbrances that, individually or in the aggregate, would not have, or be
reasonably expected to have, a Company Material Adverse Effect. Each of the
Company and the Company Subsidiaries enjoys peaceful and undisturbed possession
of the properties under all such leases, except as would not, individually or in
the aggregate, have, or reasonably be expected to have, a Company Material
Adverse Effect.
(b) The Company has not received or given notice of default under any
real property leases and, to the Knowledge of the Company, there is no event
which, with notice or the passage of time or both, would constitute a default
under such leases.
SECTION 4.26 CERTAIN BUSINESS PRACTICES. Neither the Company, any
Company Subsidiary nor any director, officer, employee or agent of the Company
or any Company Subsidiary acting on behalf of the Company or any Company
Subsidiary has (a) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity, (b)
made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, (c)
consummated any transaction, made any payment, entered into any agreement or
arrangement or taken any other action in violation of Section 1128B(b) of the
Social Security Act, as amended, or (d) made any other unlawful payment.
31
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 5.01 ORGANIZATION, STANDING AND POWER. Each of Parent and Sub
is duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has all requisite corporate power and
authority to conduct its businesses as presently conducted, other than such
franchises, licenses, Permits, authorizations and approvals the lack of which,
individually or in the aggregate, would not have, or reasonably be expected to
have, a Parent Material Adverse Effect.
SECTION 5.02 SUB. Sub is a wholly owned Subsidiary of Parent.
SECTION 5.03 FINANCING. Parent has or has available to it and will make
available to Sub, all funds necessary to consummate all the Transactions and pay
the related fees and expenses of Parent and Sub.
SECTION 5.04 OWNERSHIP OF COMPANY COMMON STOCK. As of the date of this
Agreement, neither Parent nor Sub beneficially owns any Company Common Stock and
during the period three (3) years prior to date hereof neither Parent nor Sub
was an "interested stockholder" of the Company as such term is defined in
Section 203 of the DGCL.
SECTION 5.05 AUTHORIZATION; VALIDITY OF AGREEMENT; NECESSARY ACTION.
Each of Parent and Sub has full corporate power and authority to execute and
deliver this Agreement and each agreement, document and instrument to be
executed and delivered by or on behalf of Parent and/or Sub, as the case may be,
pursuant to or in connection with this Agreement and to consummate the
Transactions. The Board of Directors of Sub (the "SUB BOARD") has adopted a
resolution approving this Agreement. The execution, delivery and performance by
Parent and Sub of this Agreement and the consummation of the Transactions have
been duly authorized by the Board of Directors of Parent (the "PARENT BOARD")
and the Sub Board and by Parent as the sole stockholder of Sub and no other
corporate action on the part of Parent or Sub or any other Person is necessary
to authorize the execution and delivery by Parent and Sub of this Agreement or
the consummation of the Transactions. This Agreement, has been duly executed and
delivered by each of Parent and Sub and constitutes (assuming the due
authorization, execution and delivery thereof by the Company), the valid and
binding obligations of each of Parent and Sub, as the case may be, enforceable
against each of them in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and subject to general principles of equity.
SECTION 5.06 NO CONFLICTS; CONSENTS. The execution and delivery by each
of Parent and Sub of this Agreement, does not, and the consummation of the
Transactions and compliance with the terms hereof and thereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under any provision of (a) the charter or organizational
documents of Parent or Sub, (b) any material Contract to which Parent or Sub is
a
32
party or by which any of their respective properties or assets is bound or (c)
subject to the filings and other matters referred to in the following sentence,
any Order or Applicable Law applicable to Parent or Sub or their respective
properties or assets, other than, in the case of CLAUSES (b) and (c) above, any
such items that, individually or in the aggregate, would not have, or reasonably
be expected to have a Parent Material Adverse Effect. No Consent of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained or made by or with respect to Parent or Sub in connection with the
execution, delivery and performance of this Agreement or the consummation of the
Transactions, other than (i) compliance with and filings under the HSR Act and
the pre-merger notification requirements of Austria, Germany, Ireland, Italy,
Turkey, and Croatia, (ii) the filing with the SEC of (A) the Offer Documents and
(B) such reports under Sections 13 and 14 of the Exchange Act, as may be
required in connection with this Agreement, the Stockholder Agreement, the
Offer, the Merger and the other Transactions, (iii) the filing of the
Certificate of Merger with the Secretary of State of the State of
Delaware and
appropriate documents with the relevant authorities of the jurisdictions in
which the Company is qualified to do business, (iv) such filings as may be
required in connection with the Taxes described in SECTION 7.07 and (v) such
Consents which, if not obtained, would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect .
SECTION 5.07 INFORMATION SUPPLIED. None of the information supplied or
to be supplied in writing by Parent or Sub and included or incorporated by
reference in (a) the Offer Documents or the Schedule 14D-9 will, at the time
such document is filed with the SEC, at any time it is amended or supplemented
and at the time it is first published, sent or given to the Company's
stockholders, 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 light of the circumstances under which they are made, not
misleading, or (b) the Proxy Statement will, at the date it is first mailed to
the Company's stockholders and at the time of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
promulgated thereunder, except that no representation is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 5.08 BROKERS. No broker, investment banker, financial advisor
or other Person, other than ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Offer, the
Merger and/or any other Transaction based upon arrangements made by or on behalf
of Parent or Sub.
SECTION 5.09 LITIGATION. As of the date of this Agreement, there are no
Proceedings pending or, to the Knowledge of Parent, threatened against Parent or
Sub which would reasonably be expected to have a Parent Material Adverse Effect
or which may call into question the validity or hinder the enforceability or
prompt performance of this Agreement.
33
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 6.01 CONDUCT OF BUSINESS. Except for matters expressly
permitted by this Agreement, from the date of this Agreement to the Appointment
Time the Company shall, and shall cause each Company Subsidiary to, in all
material respects, conduct its business in the ordinary and usual course of
business consistent with past practice. In addition, and without limiting the
generality of the foregoing, except for matters expressly permitted by this
Agreement or set forth in SECTION 6.01 of the Company Disclosure Letter, from
the date of this Agreement to the Appointment Time, the Company shall not, and
shall not permit any Company Subsidiary to, do any of the following without the
prior written consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends and
distributions by a direct or indirect wholly owned Subsidiary of the Company to
its parent, (ii) split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock, (iii) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities or (iv) adopt a plan of complete or
partial liquidation (or resolutions providing for or authorizing such
liquidation), dissolution, merger, consolidation, restructuring,
recapitalization or reorganization of the Company or any of the Company
Subsidiaries (other than the Merger);
(b) issue, deliver, sell, grant or encumber or authorize the issuance,
delivery, sale, grant or encumbrance of, (i) any shares of its capital stock,
(ii) any Voting Company Debt or other voting securities, (iii) any securities
convertible into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, voting securities or convertible or exchangeable
securities or (iv) any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock-based performance units, other than or upon the
exercise of Company Stock Options outstanding on the date of this Agreement and
in accordance with their present terms;
(c) amend its certificate of incorporation, by-laws or other comparable
charter or organizational documents;
(d) acquire or agree to acquire (i) by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other manner,
any business or any Person or division thereof or (ii) any assets, except
purchases of inventory, materials and supplies in the ordinary and usual course
of business consistent with past practice and except for capital expenditures
permitted under SECTION 6.01(g);
(e) except as set forth in SECTION 6.01(e) of the Company Disclosure
Letter, (i) grant to any officer, director, employee, agent or consultant of the
Company or any Company Subsidiary any increase in compensation or fringe
benefits, (ii) grant to any present or former employee, officer, director, agent
or consultant of the Company or any Company Subsidiary any increase in severance
or termination pay, (iii) enter into or amend any employment, consulting,
indemnification, severance or termination Contract with any such present or
former employee,
34
officer, director, agent or consultant, (iv) establish, adopt, enter into or
amend any Company Plan or other benefit or compensation plan, program,
arrangement or Contract, except as required by Applicable Law, (v) except as
permitted or required under SECTION 7.04, take any action to accelerate any
rights or benefits, or make any material determinations not in the ordinary and
usual course of business, under any Company Plan, (vi) loan or advance money or
other property in excess of $10,000 to any present or former employees,
officers, directors, agents or consultants of the Company or any Company
Subsidiary or make any change in any existing borrowing or lending arrangements
on or on behalf of any such persons or (vii) except as permitted or required
under SECTION 7.04 grant any new, or amend any existing, Company Stock Option or
enter into any agreement under which any Company Stock Option would be required
to be issued;
(f) make any change in accounting methods, principles or practices
affecting the reported consolidated assets, liabilities or results of operations
of the Company, except insofar as may have been required by a change in GAAP;
(g) make or agree to make any new capital expenditure or expenditures
that, are (i) individually, in excess of $50,000, (ii) in the aggregate, in
excess of $200,000 or (iii) individually or in the aggregate, in excess of the
amounts provided for in the Company's 2001 capital expenditure plan; PROVIDED,
HOWEVER, that if the Closing shall occur following December 31, 2001, the
Company shall be required to obtain the consent of Parent for any new capital
expenditure or expenditures that are, (i) individually in excess of $50,000,
(ii) in each financial quarter, in the aggregate in excess of $200,000 or (iii)
individually or in the aggregate, in excess of the amounts provided for in the
Company's 2002 capital expenditure plan (which plan shall be submitted by the
Company to Parent for approval); PROVIDED FURTHER, HOWEVER that if the Company
requests the consent of Parent for capital expenditures in excess of the
thresholds set forth in this provision, such consent shall not be unreasonably
withheld;
(h) modify, amend or terminate any Company Agreement (including,
without limitation, any Company Agreement relating to any Company Intellectual
Property Rights) or waive, release or assign any material rights or claims,
except in the ordinary course of business consistent with past practice;
(i) (i) incur or assume any long-term debt or, except in the ordinary
course of business consistent with past practice, incur or assume any short-term
Indebtedness in amounts not consistent with past practice; (ii) modify the terms
of any Indebtedness, other than modifications of short-term debt in the ordinary
course of business and consistent with past practice; (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except in
the ordinary course of business and consistent with past practice; or (iv) make
any loans, advances or capital contributions to, or investments in, any other
person (other than to or in wholly owned Company Subsidiaries);
(j) transfer, license or sublicense any tangible assets or lease, sell,
mortgage, pledge, dispose of, or encumber any of its properties or assets except
sales of inventory, products or obsolete equipment in the ordinary course of
business consistent with past practice;
35
(k) take, or agree to commit to take, any action that would be
reasonably likely to result in any of the conditions to the Offer set forth in
EXHIBIT A or any of the conditions to the Merger set forth in ARTICLE VIII not
being satisfied, or that would materially impair the ability of the Company,
Parent, Sub or the holders of shares of Company Common Stock to consummate the
Offer or the Merger in accordance with the terms hereof or materially delay such
consummation;
(l) discharge, settle, assign or satisfy any claims, whether or not
pending before a Governmental Entity, in excess of $25,000 individually or
$250,000 in the aggregate, or waive any material benefits of, or agree to modify
in any material respect adverse to the Company, any confidentiality, standstill
or similar agreements to which the Company or any Company Subsidiary is a party;
(m) enter into or extend any Contracts relating to the distribution,
sale, promotion or marketing by third parties of the Products (including
Products under development), other than pursuant to any such Contracts currently
in place in accordance with their terms as of the date hereof;
(n) transfer, assign, terminate, cancel, abandon or modify any
Approvals or fail to maintain such Approvals as currently in effect;
(o) fail to maintain all insurance policies as currently in effect or
allow any of such policies to lapse;
(p) transfer or license to any Person or entity or otherwise extend,
amend, allow to lapse or go abandoned, or modify any Material Intellectual
Property Rights or Company Intellectual Property Rights other than implied
licenses provided to customers for their specific end use;
(q) enter into any license agreement with any person or entity to
obtain any Intellectual Property Right other than implied licenses provided to
customers for their specific end use;
(r) terminate any Company Employee without cause; or
(s) authorize any of, or commit or agree to take any of, the foregoing
actions or authorize, recommend, propose or announce an intention to do any of
the foregoing.
SECTION 6.02 CERTAIN TAX MATTERS From the date hereof until the
Appointment Time, the Company will (a) file timely all material Tax Returns
("POST-SIGNING RETURNS") required to be filed by it (after taking into account
any applicable extensions), (b) timely pay all material Taxes due and payable
with respect to such Post-Signing Returns that are so filed, (c) accrue a
liability in its books and records and financial statements in accordance with
past practice and GAAP for all Taxes payable by the Company for which no
Post-Signing Return is due prior to the Effective Time, (d) promptly notify
Parent of any Proceeding pending against or with respect to the Company in
respect of any Tax where there is a reasonable possibility of a determination or
decision which would have a material adverse effect on the Company's Tax
liabilities or Tax attributes and will not settle or compromise any such
Proceeding without
36
Parent's prior written consent, and (e) not make any material Tax election
except for those elections that are in accordance with past practice or that are
otherwise required by Applicable Law, settle or compromise any Tax liability or
refund or file any amended Tax Return without Parent's prior written consent,
which such consent shall not be unreasonably withheld.
SECTION 6.03 NO SOLICITATION.
(a) From the date of this Agreement until the earlier of the Effective
Time or the termination of this Agreement, the Company and the Company
Subsidiaries shall not (and the Company will not permit any of its or any of its
Company Subsidiaries' officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its Company Subsidiaries (collectively, "COMPANY REPRESENTATIVES") to)
directly or indirectly (i) solicit, initiate, engage in discussions or negotiate
with any Person or take any other action intended or designed to facilitate any
inquiry or effort of any Person (other than Parent) relating to any Alternative
Acquisition, (ii) provide information with respect to the Company or any Company
Subsidiary to any Person, other than Parent, relating to a possible Alternative
Acquisition by any Person, other than Parent, (iii) enter into any agreement
with respect to any proposal for an Alternative Acquisition ("ALTERNATIVE
ACQUISITION PROPOSAL"), (iv) grant any waiver or release under any standstill,
confidentiality or similar agreement or (v) take any actions which would be
sufficient to render inapplicable the restrictions on "business combinations" in
Section 203 of the DGCL to any current or future stockholder of the Company or
any of its Affiliates (other than Parent or Sub). Notwithstanding the foregoing,
prior to the acceptance for payment of Company Common Stock pursuant to the
Offer, the Company Board may, to the extent required by the fiduciary
obligations of the Company Board under Delaware law, as determined in good faith
by the Company Board (after consultation with outside legal counsel), with
respect to an unsolicited Alternative Acquisition Proposal that the Company
Board determines, in good faith (after consultation with outside legal counsel),
is or is reasonably likely to result in a Superior Company Proposal (as defined
in SECTION 6.03(e)), (x) furnish information with respect to the Company to the
Person or group making such Alternative Acquisition Proposal and its
representatives pursuant to a confidentiality agreement with terms no more
favorable to the Person making the Alternative Acquisition Proposal than those
applicable to Parent under the Confidentiality Agreement (except that such
confidentiality agreement need not contain any standstill provisions) and (y)
participate in discussions with such Person or group and its representatives
regarding such Alternative Acquisition Proposal. The Company shall cease and
cause to be terminated immediately all existing discussions or negotiations
conducted heretofore with respect to any Alternative Acquisition Proposal. For
purposes of this SECTION 6.03, the term "Person" shall include any group as
defined in the Exchange Act.
(b) Except as set forth in this SECTION 6.03, neither the Company Board
nor any committee thereof shall (i) withdraw or modify, or propose to withdraw
or modify, in a manner adverse to Parent or Sub, the approval or recommendation
by the Company Board or any such committee of this Agreement, the Offer or the
Merger, (ii) approve or cause or permit the Company to enter into any letter of
intent, agreement in principle, definitive agreement or similar Contract
constituting or relating to, or which is intended to or is reasonably likely to
lead to any Alternative Acquisition Proposal, (iii) approve or recommend, or
propose to approve or recommend, any Alternative Acquisition Proposal or (iv)
agree or resolve to take actions set
37
forth in CLAUSES (i), (ii) or (iii) of this sentence. Notwithstanding the
foregoing, if, during the period prior to the acceptance for payment of the
Company Common Stock pursuant to the Offer, the Company Board receives a
Superior Company Proposal and the Company Board determines in good faith (after
consultation with outside legal counsel), that to take such action is required
by its fiduciary obligations under Delaware law, the Company Board may, during
such period, in response to a Superior Company Proposal, withdraw or modify its
recommendation of the Offer, the Merger and this Agreement at any time after the
fifth Business Day following Parent's receipt of written notice from the Company
advising Parent that the Company Board has received a Superior Company Proposal
and intends to withdraw or modify its recommendation, identifying the Person
making such Superior Company Proposal and specifying the financial and other
material terms and conditions of such Superior Company Proposal (it being agreed
and understood by the parties that such withdrawal or modification of the
Company Board's recommendation shall not alter the Company Board's approval of
this Agreement, the Stockholder Agreement and, the Transactions for purposes of
Section 203 of the DGCL.
(c) The Company promptly, and in any event within two (2) Business
Days, shall advise Parent in writing of receipt by it (or any Company
Representatives) of any Alternative Acquisition Proposal or any inquiry
indicating that any Person is considering making or wishes to make an
Alternative Acquisition Proposal, identifying such Person, and the financial and
other material terms and conditions of any Alternative Acquisition Proposal or
potential Alternative Acquisition Proposal, (i) notify Parent after receipt of
any request for nonpublic information relating to it or any of its Subsidiaries
or for access to its or any of its Subsidiaries' properties, books or records by
any Person, identifying such Person and the information requested by such
Person, that may be considering making, or has made, an Alternative Acquisition
Proposal and promptly provide Parent with any nonpublic information which is
given to such Person pursuant to this Section 6.03(c) and (ii) keep Parent
promptly advised of the status and the financial and other material terms and
conditions of any such Alternative Acquisition Proposal or inquiry. The Company
shall give Parent advance notice of at least one (1) Business Day of any
information to be supplied to, and subject to SECTION 6.03(b), at least two (2)
Business Days' advance notice of any confidentiality agreement to be entered
into with, any Person making such Alternative Acquisition Proposal.
(d) Subject to the terms of this SECTION 6.03, the Company may take and
disclose to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act and make any required disclosure to the
Company's stockholders if, in the good faith judgment of the Company Board,
failure so to disclose would be inconsistent with its obligations under
Applicable Law.
(e) For purposes of this Agreement, "SUPERIOR COMPANY PROPOSAL" means
any written bona fide proposal made by a third party to acquire all the equity
securities or assets of the Company through a tender or exchange offer, a
merger, a consolidation, or other similar transaction that is (i) on terms which
the Company Board determines in its good faith judgment (after consultation with
a financial advisor of nationally recognized reputation) to be superior for the
holders of the Company Common Stock to the Offer and the Merger, (ii) in the
reasonable judgment of the Company Board, capable of being fully financed on a
timely basis, and (iii) reasonably likely to be consummated promptly (taking
into account, among other things, all legal, financial, regulatory and other
aspects of the proposal and the identity of the offeror).
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ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 PREPARATION OF PROXY STATEMENT; STOCKHOLDERS MEETING.
(a) If the approval of this Agreement by the Company's stockholders is
required by Applicable Law, the Company shall, promptly following the acceptance
of payment of, and full payment for, the shares tendered pursuant to the Offer,
prepare in accordance with the rules and regulations of the SEC and file with
the SEC the Proxy Statement in preliminary form, and each of the Company and
Parent shall use its reasonable best efforts to respond as promptly as
practicable to any comments of the SEC with respect thereto. The Company shall
notify Parent promptly of the receipt of any comments from the SEC or its staff
and of any request by the SEC or its staff for amendments or supplements to the
Proxy Statement or for additional information and shall supply Parent with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement. If, at any time prior to receipt of Company Stockholder
Approval, there shall occur any event that should be set forth in an amendment
or supplement to the Proxy Statement, the Company shall promptly prepare and
mail to its stockholders such an amendment or supplement. The Company shall not
mail any Proxy Statement, or any amendment or supplement thereto, to which
Parent reasonably objects. The Company shall use its reasonable best efforts to
cause the Proxy Statement to be mailed to the Company's stockholders as promptly
as practicable after filing with the SEC.
(b) If the approval of this Agreement by the Company's stockholders is
required by Applicable Law, the Company shall, consistent with Applicable Law,
promptly after the acceptance of payment of, and full payment for, the shares
tendered pursuant to the Offer, duly call, give notice of, convene and hold the
Company Stockholders Meeting for the purpose of seeking Company Stockholder
Approval. The Company shall, through the Company Board, except to the extent
that the Company Board shall have withdrawn or modified its recommendation of
this Agreement, the Offer or the Merger as permitted by SECTION 6.03(b), (i)
recommend to its stockholders that they approve and adopt this Agreement and the
Merger, (THE "COMPANY BOARD RECOMMENDATION"), (ii) use its reasonable best
efforts to obtain such approval and adoption and (iii) include the Company Board
Recommendation in the Proxy Statement. Notwithstanding the foregoing, if Sub or
any other Subsidiary of Parent shall acquire at least ninety percent (90%) of
the outstanding shares of Company Common Stock, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective promptly after the expiration of the Offer without a
stockholders meeting in accordance with Section 253 of the DGCL.
(c) Parent shall cause (i) Sub to take all actions required in SECTION
7.01(a) and SECTION 7.01(b), and (ii) all shares of Company Common Stock
purchased pursuant to the Offer and all other shares of Company Common Stock
owned by Sub or any other Subsidiary of Parent to be voted in favor of the
approval and adoption of this Agreement and the Merger.
SECTION 7.02 ACCESS TO INFORMATION; CONFIDENTIALITY. The Company shall,
and shall cause each of the Company Subsidiaries to, afford to Parent, and to
Parent's officers, employees,
39
accountants, counsel, financial advisers and other representatives, reasonable
access during normal business hours during the period prior to the Effective
Time to all their respective properties, books, Contracts, commitments,
personnel and records and, during such period, the Company shall, and shall
cause each of the Company Subsidiaries to, furnish promptly to Parent (a) a copy
of each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws and (b) all other information concerning its business, properties and
personnel as Parent may reasonably request in writing. Without limiting the
generality of the foregoing, the Company shall, within two (2) Business Days of
request therefor, provide to Parent the information described in Rule
14a-7(a)(2)(ii) under the Exchange Act and any information to which a holder of
Company Common Stock would be entitled under Section 220 of the DGCL (assuming
such holder met the requirements of such section). All information exchanged
pursuant to this SECTION 7.02 shall be subject to the Confidentiality Agreement
and the Confidentiality Agreement shall remain in full force and effect in
accordance with its terms. No investigation pursuant to this Section 7.02 shall
affect any representation or warranty in this Agreement of any party hereto or
any condition to the obligations of the parties hereto.
SECTION 7.03 REASONABLE BEST EFFORTS; NOTIFICATION.
(a) Upon the terms and subject to the conditions set forth in this
Agreement each of the parties shall use their respective reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, and
to assist and cooperate with the other parties and the Major Stockholder in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other Transactions, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings and the taking of all
reasonable steps as may be necessary to obtain any necessary approval or waiver
from, or to avoid an action or Proceeding by, any Governmental Entity, including
under the HSR Act and the pre-merger notification requirements of Austria,
Germany, Ireland, Italy, Turkey, and Croatia, (ii) the obtaining of all
necessary consents, approvals or waivers from third parties, (iii) the defending
of any lawsuits or other Proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Transactions, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the Transactions
and to fully carry out the purposes of this Agreement.
(b) The Company and Parent shall make an appropriate filing under the
HSR Act with respect to the Transaction within five (5) Business Days of the
date hereof and respond as promptly as practicable to any inquiries received
from the Federal Trade Commission and the Antitrust Division of the Department
of Justice for additional information or documentation and respond as promptly
as practicable to all inquiries and requests received from any other
Governmental Entity in connection with antitrust matters. Concurrently with the
filing of notifications under the HSR Act or as soon thereafter as practicable,
the Company and Parent shall each request early termination of the HSR Act
waiting period. In addition, the Company and Parent shall promptly make any
filing that is required under the pre-merger notification requirements of
Austria, Germany, Ireland, Italy, Turkey, and Croatia.
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(c) Notwithstanding anything to the contrary in this Agreement, neither
Parent nor any of the Parent Subsidiaries shall be required to agree (with
respect to (i) Parent or the Parent Subsidiaries or (ii) the Company or the
Company Subsidiaries) to any divestitures, licenses, hold separate arrangements
or similar matters, including covenants affecting business operating practices.
(d) The Company and Parent each shall keep the other apprised of the
status of matters relating to completion of the Transactions contemplated by
this Agreement, including promptly furnishing the other with copies of notices
or other communications received by Parent or the Company, as the case may be,
or any of its Subsidiaries, from any Governmental Entity with respect to any of
the Transactions.
SECTION 7.04 STOCK OPTIONS.
(a) As promptly as practicable, but in no event later than twenty (20)
Business Days following the date of this Agreement, the Company shall take, or
cause to be taken, all such actions as are required to adjust the terms of all
outstanding Company Stock Options heretofore granted under any Company Option
Plan or otherwise, to provide that each Company Stock Option that is outstanding
immediately prior to the Effective Time, to the extent vested and exercisable as
of the Effective Time in accordance with its terms, shall be canceled as of the
Effective Time in exchange for a cash payment by the Company to be made on the
date following the Effective Time (or as soon as practicable thereafter) of an
amount equal to (i) the excess, if any, of (A) the price per share of Company
Common Stock to be paid pursuant to the Offer over (B) the exercise price per
share of Company Common Stock subject to such Company Stock Option, multiplied
by (ii) the number of shares of Company Common Stock for which such Company
Stock Option shall not theretofore have been exercised.
(b) All amounts payable pursuant to this SECTION 7.04 shall be subject
to any required withholding of Taxes and shall be paid without interest. As
promptly as practicable, but in no event later than twenty (20) Business Days
following the date of this Agreement, the Company shall obtain all consents of
the holders of the Company Stock Options as shall be necessary to effectuate the
terms of this SECTION 7.04.
(c) As promptly as practicable, but in no event later than twenty (20)
Business Days following the date of this Agreement, the Company shall take all
such actions as are required so that the Company Option Plans shall terminate as
of the Effective Time, and the provisions in any other Company Plan providing
for the issuance, transfer or grant of any capital stock of the Company or any
interest in respect of any capital stock of the Company shall be deleted as of
the Effective Time, and to ensure that following the Effective Time no holder of
a Company Stock Option or any participant in any Company Option Plan or other
Company Plan shall have any right thereunder to acquire any capital stock of the
Company or the Surviving Corporation.
SECTION 7.05 INDEMNIFICATION; D&O INSURANCE.
(a) Parent shall, or shall cause the Surviving Corporation to, honor
for a period of not less than six (6)-years from the Effective Time (or, in the
case of matters occurring at or prior to the Effective Time for which a claim is
asserted within the six (6)-year period contemplated by
41
this SECTION 7.05, until such matters are finally resolved), all rights to
indemnification or exculpation, existing in favor of a director, officer,
employee or agent (an "INDEMNIFIED PERSON") of the Company or any of the Company
Subsidiaries (including, without limitation, rights relating to advancement of
expenses and indemnification rights to which such persons are entitled because
they are serving as a director, officer, agent or employee of another entity at
the request of the Company or any of the Company Subsidiaries), as provided
under applicable provisions of the DGCL, the Company Charter, the Company
By-laws or any indemnification agreement (true and correct copies of which have
been made available to Parent), in each case, as in effect on the date of this
Agreement, and relating to actions or events through the Effective Time;
PROVIDED, HOWEVER, that Parent shall not be required to indemnify any
Indemnified Person in connection with any Proceeding (or portion thereof)
relating to actions or events through the Effective Time to the extent involving
any claim initiated by such Indemnified Person unless such actions or events
were authorized by the Company Board (if board authority would be ordinarily
obtained prior to the taking of such action) or unless such Proceeding is
brought by an Indemnified Person to enforce rights under this SECTION 7.05;
PROVIDED FURTHER that any determination required to be made with respect to
whether an Indemnified Person's conduct complies with the standards set forth
under the DGCL, the Company Charter, the Company Bylaws or any such agreement,
as the case may be, shall be made by independent legal counsel jointly selected
by such Indemnified Person and Parent.
(b) Parent shall, or shall cause the Surviving Corporation to maintain
the Company's D&O Insurance for a period of not less than six (6) years after
the Effective Time; PROVIDED THAT Parent or the Surviving Corporation may
substitute therefor policies of substantially similar coverage and amounts
containing terms no less advantageous to such former directors or officers;
PROVIDED FURTHER that if the existing D&O Insurance expires or is cancelled
during such period, Parent or the Surviving Corporation shall use its reasonable
best efforts to obtain substantially similar D&O Insurance; and PROVIDED FURTHER
that neither Parent nor the Surviving Corporation shall be required to expend,
in order to maintain or procure an annual D&O Insurance policy, an amount in
excess of 200% of the last annual premium paid prior to the date hereof, but in
such case shall purchase as much coverage as possible for such amount.
(c) The provisions of this SECTION 7.05 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Person, his or her
heirs and his or her personal representatives and shall be binding on all
successors and assigns of Parent, the Company and the Surviving Corporation.
SECTION 7.06 PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand, and
the Company, on the other hand, shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the Offer, the Merger and the
other Transactions and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
Applicable Law, court process or by obligations pursuant to any listing
agreement with any national securities exchange and then only with such advance
notice to and consultation with the other as is reasonably practical. The
parties agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.
42
SECTION 7.07 TRANSFER TAXES. Except as provided in Section 3.02 of this
Agreement, either Sub or the Surviving Corporation shall pay all Transfer Taxes,
if any, and any penalties or interest with respect to the Transfer Taxes,
payable in connection with the consummation of the Offer or the Merger, and all
Stock Transfer Taxes, if any, and any penalties or interest with respect to any
such Stock Transfer Taxes. With respect to any shares purchased in the Offer and
the Merger, the Company acknowledges that the amount of the Transfer Taxes
payable with respect to any shares of Company Common Stock may be withheld by
Sub from the amount to be paid pursuant to the Offer and the Merger with respect
to such shares.
SECTION 7.08 EMPLOYEE BENEFIT MATTERS. (a) For a period of twelve (12)
months following the Effective Time, Parent shall provide, or shall cause the
Company or Parent's Affiliates to provide, Company Employees with wages, salary,
bonus and other cash compensation and benefit plans, programs, policies and
arrangements that are no less favorable, in the aggregate, to Company Employees
than those provided generally to similarly situated employees of Parent. In
determining whether an employee is "similarly situated," for the purposes of the
previous sentence, Parent shall have sole and absolute discretion to determine
in good faith whether an employee is similarly situated by reference to such
factors as: nature and scope of the employee's duties; principal location where
those duties are performed; grade level; and performance.
(b) To the extent applicable with respect to employee benefit plans,
programs, policies and arrangements that are established or maintained by Parent
for the benefit of Company Employees (and their eligible dependents), Company
Employees (and their eligible dependents) shall be given credit for their
service with the Company and the Company Subsidiaries (i) for purposes of
eligibility to participate and vesting (but not benefit accrual under a defined
benefit pension plan) to the extent such service was taken into account under a
corresponding Company Plan, and (ii) for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
pre-existing condition limitations and shall be given credit for amounts paid
under a corresponding Company Plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the plans,
programs, policies and arrangements maintained by Parent. Notwithstanding the
foregoing provisions of this clause (b), service and other amounts shall not be
credited to Company Employees (or their eligible dependents) to the extent the
crediting of such service or other amounts would result in the duplication of
benefits.
(c) Parent hereby acknowledges that copies of the Company's Retention
Agreements and Severance Plan have been made available to it and that Parent
agrees to comply and to cause the Company to comply with the provisions of such
plans as of the date hereof.
(d) Nothing in this SECTION 7.08 shall require Parent, the Company or
any of their Affiliates to continue to employ any Company Employee for any
period after the Effective Time.
(e) Prior to the Effective Time, the Company shall file a timely and
complete application for a Determination Letter with respect to each Company
Plan which is not then subject to a favorable Determination Letter.
43
SECTION 7.09 STATE TAKEOVER LAWS. Notwithstanding any other provision
in this Agreement, in no event shall the Company Board's actions causing the
restrictions on "business combinations" in Section 203 of the DGCL not to apply
to this Agreement, the Stockholder Agreement or the Transactions be withdrawn,
revoked or modified by the Company Board. If any state takeover statute other
than Section 203 of the DGCL becomes or is deemed to become applicable to this
Agreement, the Stockholder Agreement, the Offer, the acquisition of shares of
Company Common Stock pursuant to the Offer or the Merger or the other
Transactions, the Company shall take all action necessary to render such statute
inapplicable to all of the foregoing.
SECTION 7.10 TERMINATION NOTIFICATIONS. Following the date of this
Agreement, if any officer of the Company is or becomes aware that any of the
persons set forth in SECTION 1.01(g) of the Company Disclosure Letter plans to
terminate their employment with the Company (notwithstanding the reason for such
termination), such officer shall promptly notify the Chief Executive Officer of
the Company, identifying the name of the individual and any other information
relating to the termination known to the officer. Promptly following receipt of
any such notification, the Chief Executive Officer of the Company shall inform
Parent and shall provide Parent with all information known to him regarding such
termination.
ARTICLE VIII
CONDITIONS PRECEDENT
SECTION 8.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. If required by Applicable Law, the Company
shall have obtained Company Stockholder Approval.
(b) ANTITRUST. The waiting period (and any extension thereof)
applicable to any of the Transactions under the HSR Act shall have been
terminated or shall have expired and any consents, approvals and filings under
any foreign antitrust law, the absence of which would prohibit the consummation
of Merger, shall have been obtained or made.
(c) GERMAN CARTEL OFFICE. Parent shall have received any necessary
approvals, or any applicable period for action shall have expired, under the
German antitrust laws.
(d) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other Order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of any of the Transactions shall be in effect.
(e) ACCEPTANCE OF SHARES. Sub shall have accepted shares of Company
Common Stock for payment pursuant to the Offer; PROVIDED, HOWEVER, that this
condition shall be deemed satisfied if Parent or Sub fails to accept for payment
and pay for shares of Company Common Stock pursuant to the Offer in violation of
the terms of this Agreement and/or the Offer.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after Company Stockholder
Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company if:
(i) Sub has not accepted for payment any shares of Company Common
Stock tendered pursuant to the Offer on or before the Outside Date,
unless the failure to accept and pay for such shares of Company Common
Stock is the result of a breach of this Agreement by the party seeking
to terminate this Agreement; PROVIDED, HOWEVER, that (A) the Outside
Date shall be extended to the extent that the condition set forth in
SECTION (vi) of EXHIBIT A is not satisfied until such time as such
condition is satisfied, but in no event later than June 30, 2002 and
(B) in the event that, on or prior to December 31, 2001, (1) the
waiting period under the HSR Act has not expired or been terminated or
(2) the condition set forth in Exhibit A relating to the pre-merger
notifications in Germany has not been satisfied or waived, then, in
either case, the Outside Date shall be extended to June 30, 2002;
(ii) any Governmental Entity issues an Order or takes any other
action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, shares of Company Common
Stock pursuant to the Offer or the Merger and such Order or other
action shall have become final and nonappealable; or
(iii) (A) Sub shall have failed to commence the Offer within five
(5) Business Days following the date of this Agreement or (B) the Offer
shall have terminated or expired in accordance with its terms without
Sub having purchased any shares of Company Common Stock pursuant to the
Offer; provided, HOWEVER, that the right to terminate this Agreement
pursuant to this CLAUSE (iii) shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement or the
failure of whose representations and warranties to be true or the
failure of whose representations and warranties to be true results in
the failure of any such condition;
(c) by Parent if:
(i) the Company breaches or fails to perform any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach or failure to perform (A) would give rise to
the failure of a condition set forth in EXHIBIT A and (B) cannot be or
has not been cured within thirty (30) days after the giving of written
notice to the Company of such breach; PROVIDED, HOWEVER, that this
Agreement may not be terminated pursuant to this
45
SECTION 9.01(c)(i) if Sub has accepted shares of Company Common Stock
for payment pursuant to the Offer; or
(ii) prior to Sub's acceptance of shares of Company Common Stock
for payment pursuant to the Offer, the Company shall have breached in
any material respect any of its obligations under SECTION 6.03(a); or
(d) by the Company if Parent or Sub breaches or fails to perform in any
material respect any of its representations, warranties, covenants or agreements
contained in this Agreement, which breach or failure to perform cannot be cured
or has not been cured within thirty (30) days after the giving of written notice
to Parent of such breach; PROVIDED, HOWEVER, that this Agreement may not be
terminated pursuant to this SECTION 9.01(d) if Sub has accepted shares of
Company Common Stock pursuant to the Offer.
SECTION 9.02 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either the Company
or Parent as provided in SECTION 9.01, this Agreement shall forthwith become
void and have no effect, without any liability or obligation on the part of
Parent, Sub or the Company, other than SECTION 4.16, SECTION 5.08, the second to
the last sentence of SECTION 7.02, this SECTION 9.02 and ARTICLE X and except to
the extent that such termination results from fraud or the willful breach by a
party of any representation, warranty or covenant set forth in this Agreement.
(b) All fees and expenses incurred in connection with the Merger and
the other Transactions shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated.
SECTION 9.03 AMENDMENT. This Agreement may be amended by the parties at
any time before or after receipt of Company Stockholder Approval; PROVIDED,
HOWEVER, that after receipt of Company Stockholder Approval, there shall be made
no amendment that by law requires further approval by such stockholders without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 9.04 EXTENSION; WAIVER. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) waive compliance with any
of the agreements or conditions contained in this Agreement. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
SECTION 9.05 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
A termination of this Agreement pursuant to SECTION 9.01, an amendment of this
Agreement pursuant to SECTION 9.03 or an extension or waiver pursuant to SECTION
9.04 shall, in order to be effective, be in writing and require in the case of
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors.
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
SECTION 10.01 shall not limit any covenant or agreement contained in this
Agreement which by its terms contemplates performance after the Effective Time.
SECTION 10.02 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) IF TO PARENT OR SUB, TO
▇▇▇▇▇▇ Laboratories
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇-▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President,
Diagnostic Operations
with a copies to:
▇▇▇▇▇▇ Laboratories
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇-▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Senior Vice President, Secretary
and General Counsel
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇
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(b) IF TO THE COMPANY, TO
Vysis, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SECTION 10.03 INTERPRETATION. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation".
SECTION 10.04 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or 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 contemplated hereby 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 an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 10.05 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties. Delivery of an executed
counterpart of this Agreement by facsimile shall be effective to the fullest
extent permitted by Applicable Law.
SECTION 10.06 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, the Stockholder Agreement, the Company Disclosure Letter and all
exhibits and schedules hereto and the Confidentiality Agreement, taken together,
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
Transactions. Other than SECTIONS 7.03(a) and 7.05 of this Agreement, no
48
provision of this Agreement is intended to confer upon any Person other than the
parties any rights or remedies.
SECTION 10.07 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 10.08 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to one or more direct or indirect wholly owned
Subsidiaries of Parent or a combination thereof but no such assignment shall
relieve Sub of any of its obligations under this Agreement. Any purported
assignment without such consent shall be void. Subject to the preceding
sentences, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
SECTION 10.09 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement is not
performed in accordance with its specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Delaware state court or any
Federal court located in the State of Delaware, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (a) consents to submit itself to the personal jurisdiction
of any Delaware state court or any federal court located in the State of
Delaware in the event any dispute arises out of this Agreement or any
Transaction, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (c)
agrees that it will not bring any action relating to this Agreement or any
Transaction in any court other than any Delaware state court or any federal
court sitting in the State of Delaware and (d) waives any right to trial by jury
with respect to any action related to or arising out of this Agreement or any
Transaction.
* * * * *
49
IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed this
Agreement and Plan of Merger, all as of the date first written above.
▇▇▇▇▇▇ LABORATORIES
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President,
Medical Products
RAINBOW ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
VYSIS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
50
EXHIBIT A
Conditions of the Offer
Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Agreement and Plan of Merger (the "AGREEMENT") of
which this Exhibit A is a part. Notwithstanding any other term of the Offer or
this Agreement, and in addition to (and not in limitation of) Sub's right to
extend and amend the Offer, Sub shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-l(c) under the Exchange Act (relating to Sub's obligation to pay for or
return tendered shares of Company Common Stock promptly after the termination or
withdrawal of the Offer), to pay for any shares of Company Common Stock tendered
pursuant to the Offer unless (i) there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer (as it may be extended in
accordance with the requirements of SECTION 2.01) that number of shares of
Company Common Stock which, together with the shares then beneficially owned by
Parent or Sub, would represent at least fifty-one percent (51%) of the Fully
Diluted Shares (the "MINIMUM CONDITION") and (ii) the waiting period (and any
extension thereof) applicable to the purchase of shares of Company Common Stock
pursuant to the Offer under the HSR Act and the pre-merger notification
requirements of Germany shall have been terminated or shall have expired. The
term "FULLY DILUTED SHARES" means all outstanding securities entitled generally
to vote in the election of directors of the Company on a fully diluted basis,
after giving effect to the exercise or conversion of all options, warrants,
rights and securities exercisable or convertible into such voting securities.
Furthermore, notwithstanding any other term of the Offer or this Agreement, Sub
shall not be required to accept for payment or, subject as aforesaid, to pay for
any shares of Company Common Stock not theretofore accepted for payment or paid
for, and may terminate or amend the Offer, with the consent of the Company if,
at any time on or after the date of this Agreement and before the expiration of
the Offer, any of the following conditions shall have occurred and be
continuing:
(i) there shall be pending any suit, action or proceeding brought
by a Governmental Entity (A) challenging the acquisition by Parent or
Sub of any shares of Company Common Stock under the Offer or the
Stockholder Agreement, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger or the performance of any of
the other Transactions or seeking to obtain from the Company, Parent or
Sub any damages that are material in relation to the Company and the
Company Subsidiaries taken as a whole, (B) seeking to prohibit or
impose any material limitations on Parent's or Sub's ownership or
operation (or that of any of their respective Subsidiaries or
Affiliates) of all or a portion of the Company's businesses or assets,
or to compel Parent or Sub or their respective Subsidiaries and
Affiliates to dispose of or hold separate any portion of the business
or assets of the Company or Parent and their respective Subsidiaries,
(C) seeking to impose material limitations on the ability of Sub, or
rendering Sub unable, to accept for payment, pay for or purchase some
or all of the shares of Company Common Stock pursuant to the Offer and
the Merger, (D) seeking to impose limitations on the ability of Sub or
Parent effectively to exercise full rights of ownership of the shares
of Company Common Stock, including, without limitation, the right to
vote the shares of Company Common Stock purchased by it on all matters
A-1
properly presented to the Company's stockholders or (E) which otherwise
is reasonably likely to have a Company Material Adverse Effect;
(ii) any statute, rule, regulation, legislation, interpretation,
judgment, Order or injunction shall be enacted, entered, enforced,
promulgated, amended or issued with respect to, or deemed applicable
to, or any consent or approval withheld with respect to the Offer, the
Merger or any of the other Transactions, by any Governmental Entity
that is reasonably likely to result in any of the consequences referred
to in clauses (A) through (E) of paragraph (i) above;
(iii) any of the representations and warranties of the Company in
this Agreement, disregarding all qualifications and exceptions
contained therein relating to "materiality" or "Company Material
Adverse Effect" or any similar standard or qualification, shall not,
individually or in the aggregate, be true and correct as of the date of
this Agreement and as of such time as though made at such time, except
(A) where the failure of such representations and warranties to be true
and correct would not have a Company Material Adverse Effect, (B) to
the extent such representation and warranty expressly relates to a
specific date (in which case such representation or warranty need only
be true and correct on and as of such specific date), or (C) to the
extent Parent has consented in writing to any supplement or amendment
to the Company Disclosure Letter delivered to Parent;
(iv) the Company shall have and be continuing to have failed to
perform in any material respect any obligation or to comply in any
material respect with any material agreement or covenant of the Company
to be performed or complied with by it under this Agreement other than
any obligation under SECTION 7.10 of the Agreement;
(v) there shall have occurred any change, event, condition, fact
or set of facts or development which individually or in the aggregate
has had, or would be reasonably expected to have, a Company Material
Adverse Effect;
(vi) there shall have occurred (A) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory) or (B) any limitation (whether
or not mandatory) by any United States governmental authority on the
extension of credit by banks or other financial institutions, in either
case, which would materially impair Parent's and Sub's ability to fund
the Transactions; or
(vii) this Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of Sub and Parent and
may, subject to the terms of the Agreement, be waived by Sub and Parent in whole
or in part at any time and from time to time in their sole discretion prior to
the expiration of the Offer. The failure by Parent, Sub or any other Affiliate
of Parent at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts
A-2
and circumstances and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the expiration of the
Offer.
A-3