EXHIBIT 99(a)
AGREEMENT AND PLAN OF MERGER
AMONG
GE MEDICAL SYSTEMS,
A DIVISION OF
GENERAL ELECTRIC COMPANY
TOPAZ MERGER CORP.
AND
LUNAR CORPORATION
DATED AS OF JUNE 2, 2000
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
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ARTICLE I THE MERGER.....................................................................................2
Section 1.1 THE MERGER...........................................................2
Section 1.2 EFFECTIVE TIME.......................................................2
Section 1.3 EFFECTS OF THE MERGER................................................2
Section 1.4 CHARTER AND BYLAWS; DIRECTORS AND OFFICERS...........................2
Section 1.5 CONVERSION OF SECURITIES.............................................3
Section 1.6 PARENT TO MAKE CERTIFICATES AVAILABLE................................4
Section 1.7 DIVIDENDS; TRANSFER TAXES; WITHHOLDING...............................4
Section 1.8 NO FRACTIONAL SECURITIES.............................................5
Section 1.9 RETURN OF EXCHANGE FUND..............................................6
Section 1.10 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK..................6
Section 1.11 CLOSING OF COMPANY TRANSFER BOOKS....................................6
Section 1.12 LOST CERTIFICATES....................................................6
Section 1.13 FURTHER ASSURANCES...................................................6
Section 1.14 CLOSING..............................................................7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB..............................................7
Section 2.1 ORGANIZATION, STANDING AND POWER.....................................7
Section 2.2 AUTHORITY............................................................7
Section 2.3 CONSENTS AND APPROVALS; NO VIOLATION.................................8
Section 2.4 PARENT COMMON STOCK TO BE ISSUED IN THE MERGER.......................9
Section 2.5 SEC DOCUMENTS AND OTHER REPORTS......................................9
Section 2.6 REGISTRATION STATEMENT AND PROXY STATEMENT..........................10
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Section 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS.......................................................10
Section 2.8 REORGANIZATION......................................................10
Section 2.9 OPERATIONS OF SUB...................................................11
Section 2.10 BROKERS.............................................................11
Section 2.11 OWNERSHIP OF COMPANY COMMON STOCK...................................11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............................................11
Section 3.1 ORGANIZATION, STANDING AND POWER....................................11
Section 3.2 CAPITAL STRUCTURE...................................................12
Section 3.3 AUTHORITY...........................................................13
Section 3.4 CONSENTS AND APPROVALS; NO VIOLATION................................13
Section 3.5 SEC DOCUMENTS AND OTHER REPORTS.....................................14
Section 3.6 REGISTRATION STATEMENT AND PROXY STATEMENT..........................15
Section 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS................................15
Section 3.8 PERMITS AND COMPLIANCE..............................................16
Section 3.9 TAX MATTERS.........................................................17
Section 3.10 ACTIONS AND PROCEEDINGS.............................................19
Section 3.11 CERTAIN AGREEMENTS..................................................20
Section 3.12 ERISA...............................................................21
Section 3.13 COMPLIANCE WITH WORKER SAFETY LAWS..................................23
Section 3.14 LIABILITIES; PRODUCTS...............................................23
Section 3.15 LABOR MATTERS.......................................................24
Section 3.16 INTELLECTUAL PROPERTY...............................................24
Section 3.17 OPINION OF FINANCIAL ADVISOR........................................25
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Section 3.18 STATE TAKEOVER STATUTES.............................................25
Section 3.19 REQUIRED VOTE OF COMPANY SHAREHOLDERS...............................26
Section 3.20 REORGANIZATION......................................................26
Section 3.21 ACCOUNTS RECEIVABLE.................................................26
Section 3.22 INVENTORIES.........................................................26
Section 3.23 ENVIRONMENTAL MATTERS...............................................26
Section 3.24 SUPPLIERS AND DISTRIBUTORS..........................................28
Section 3.25 INSURANCE...........................................................28
Section 3.26 TRANSACTIONS WITH AFFILIATES........................................29
Section 3.27 TITLE TO AND SUFFICIENCY OF ASSETS..................................29
Section 3.28 BROKERS.............................................................30
Section 3.29 YEAR 2000...........................................................30
Section 3.30 NO CONSULTING ACTIVITIES SUBJECT TO HOSPITALPHYSICIAN GAINSHARING
RESTRICTIONS........................................................31
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS....................................................31
Section 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER...............31
Section 4.2 NO SOLICITATION.....................................................33
Section 4.3 THIRD PARTY STANDSTILL AGREEMENTS...................................35
Section 4.4 REORGANIZATION......................................................35
ARTICLE V ADDITIONAL AGREEMENTS.........................................................................35
Section 5.1 SHAREHOLDER MEETING.................................................35
Section 5.2 PREPARATION OF THE REGISTRATION STATEMENT AND THE PROXY STATEMENT...36
Section 5.3 ACCESS TO INFORMATION...............................................36
Section 5.4 RULE 145 LETTERS....................................................37
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Section 5.5 FEES AND EXPENSES...................................................37
Section 5.6 COMPANY STOCK OPTIONS...............................................39
Section 5.7 REASONABLE BEST EFFORTS.............................................40
Section 5.8 PUBLIC ANNOUNCEMENTS................................................41
Section 5.9 STATE TAKEOVER LAWS.................................................41
Section 5.10 INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE...................41
Section 5.11 NOTIFICATION OF CERTAIN MATTERS.....................................42
Section 5.12 EMPLOYEE BENEFIT PLANS..............................................42
ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER...........................................................43
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER..........43
Section 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER........44
Section 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE MERGER....44
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...........................................................46
Section 7.1 TERMINATION.........................................................46
Section 7.2 EFFECT OF TERMINATION...............................................48
Section 7.3 AMENDMENT...........................................................48
Section 7.4 WAIVER..............................................................48
ARTICLE VIII GENERAL PROVISIONS.........................................................................49
Section 8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES; NO OTHER
REPRESENTATIONS AND WARRANTIES......................................49
Section 8.2 NOTICES.............................................................49
Section 8.3 INTERPRETATION......................................................50
Section 8.4 COUNTERPARTS........................................................50
Section 8.5 ENTIRE AGREEMENT; NO THIRDPARTY BENEFICIARIES.......................51
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(CONTINUED)
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Section 8.6 GOVERNING LAW.......................................................51
Section 8.7 ASSIGNMENT..........................................................51
Section 8.8 SEVERABILITY........................................................51
Section 8.9 ENFORCEMENT OF THIS AGREEMENT.......................................51
Section 8.10 PERFORMANCE BY SUB..................................................52
Section 8.11 DEFINED TERMS.......................................................52
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LIST OF EXHIBITS
DESCRIPTION
-----------
Exhibit A Stock Option Agreement...............................................................Recital C
Exhibit B Shareholder Agreement................................................................Recital C
Exhibit C Certificate of Incorporation.........................................................Section 1.4
Exhibit D Rule 145 Letter......................................................................Section 5.4
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 2, 2000 (this
"AGREEMENT"), is among GE Medical Systems, a division of General Electric
Company, a New York corporation ("PARENT"), Topaz Merger Corp., a Wisconsin
corporation and a whollyowned subsidiary of Parent ("SUB"), and Lunar
Corporation, a Wisconsin corporation (the "COMPANY") (Sub and the Company being
hereinafter collectively referred to as the "CONSTITUENT CORPORATIONS").
RECITALS:
A. The respective Boards of Directors of Parent, Sub and the Company
have approved and declared advisable the merger of Sub with and into the Company
upon the terms and subject to the conditions of this Agreement (the "MERGER"),
and the respective Boards of Directors of Parent, Sub and the Company have
approved and adopted this Agreement;
B. The respective Boards of Directors of Parent and the Company have
determined that the Merger is in the best interest of their respective
shareholders;
C. In order to induce Parent and Sub to enter into this Agreement,
concurrently herewith (i) Parent and the Company are entering into the Stock
Option Agreement dated as of the date hereof (the "STOCK OPTION AGREEMENT") in
the form of the attached EXHIBIT A and (ii) Parent and a shareholder of the
Company are entering into the Shareholder Agreement dated as of the date hereof
(the "SHAREHOLDER AGREEMENT") in the form of the attached EXHIBIT B; and
D. For federal income tax purposes, it is intended by the parties hereto
that the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "CODE").
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
hereof, and in accordance with the Wisconsin Business Corporation Law (the
"WBCL"), Sub shall be merged with and into the Company at the Effective Time (as
defined in Section 1.2). Following the Merger, 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 in accordance with the WBCL. Notwithstanding anything to the
contrary herein, at the election of Parent, any direct whollyowned Subsidiary
(as hereinafter defined) of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to this Agreement, in form and substance reasonably
satisfactory to Parent and the Company, in order to reflect such substitution.
SECTION 1.2 EFFECTIVE TIME. The Merger shall become effective when the
articles of merger (the "Articles of Merger"), executed in accordance with the
relevant provisions of the WBCL, are received by the Wisconsin Department of
Financial Institutions; PROVIDED, HOWEVER, that, upon mutual consent of the
Constituent Corporations, the Articles of Merger may provide for a later date of
effectiveness of the Merger not more than 30 days after the date the Articles of
Merger are received. When used in this Agreement, the term "EFFECTIVE TIME"
shall mean the date and time at which the Articles of Merger are accepted for
filing or such later time established by the Articles of Merger. The filing of
the Articles of Merger shall be made on the date of the Closing (as defined in
Section 1.14). At the option of Parent, the Surviving Corporation may choose to
file a plan of merger ("Plan of Merger") containing only the terms required by
Section 180.1101(2) of the WBCL with the Articles of Merger in lieu of filing
this Agreement with the Articles of Merger.
SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in this Agreement and applicable provisions of the WBCL.
SECTION 1.4 CHARTER AND BYLAWS; DIRECTORS AND OFFICERS. (a) The Articles
of Incorporation of the Company in effect at the Effective Time will be amended
in its entirety at the Effective Time to read as set forth in EXHIBIT C hereto
and shall be the Articles of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law. The
Bylaws of Sub in effect at the Effective Time will be the Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
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(b) The directors of the Sub at the Effective Time shall
automatically, and without further action, be the directors of the
Surviving Corporation, until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as
the case may be. The officers of the Sub at the Effective Time shall be
the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
SECTION 1.5 CONVERSION OF SECURITIES. As of the Effective Time, by
virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any securities of the Constituent Corporations:
(a) Each issued and outstanding share of common stock, par
value $.01 per share, of Sub shall be converted into one validly
issued, fully paid and nonassessable (except to the extent otherwise
provided in Section 180.0622(2)(b) of the WBCL) share of common stock
of the Surviving Corporation.
(b) All shares of Company Common Stock that are held in the
treasury of the Company and any shares of Company Common Stock owned by
Parent or Sub shall automatically be canceled and retired and shall
cease to exist and no capital stock of Parent or other consideration
shall be delivered in exchange therefor.
(c) Subject to the provisions of Section 1.8 hereof, each
share of Common Stock, par value $0.01 per share, of the Company
("COMPANY COMMON STOCK") issued and outstanding immediately prior to
the Effective Time (other than shares to be canceled in accordance with
Section 1.5(b)) shall be converted into the right to receive the number
of shares of common stock, par value $0.16 per share, of the Parent
("PARENT COMMON STOCK") determined by dividing $17.00 by the Average
Parent Share Price (as defined below) and rounding the result to the
nearest one thousandth of a share (the "MERGER CONSIDERATION");
provided, however, that if between the first day of the Valuation
Period (as defined below) and the Effective Time, the outstanding
shares of Parent Common Stock shall have been changed into a different
number of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Merger Consideration shall be correspondingly
adjusted to the extent appropriate to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares. The "AVERAGE PARENT SHARE PRICE" means the average
of the daily volumeweighted sales prices per share of Parent Common
Stock on the New York Stock Exchange, Inc. for each of the 10
consecutive trading days ending on the trading day which is five
calendar days prior to the Closing Date, or, if such ending date does
not fall on a trading day, then the trading day immediately preceding
the fifth calendar day prior to the Closing Date (the "VALUATION
PERIOD"). All such shares of Company Common Stock, when so converted,
shall no longer be outstanding and shall automatically be canceled and
retired and each holder of a certificate representing any such shares
shall cease to have any rights with respect
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thereto, except the right to receive any dividends and other
distributions in accordance with Section 1.7, certificates representing
the shares of Parent Common Stock into which such shares are converted
and any cash, without interest, in lieu of fractional shares to be
issued or paid in consideration therefor upon the surrender of such
certificate in accordance with Section 1.6.
SECTION 1.6 PARENT TO MAKE CERTIFICATES AVAILABLE.
(a) EXCHANGE OF Certificates. Parent shall authorize a bank, trust
company, or such other person or persons as shall be reasonably
acceptable to Parent and the Company, to act as Exchange Agent hereunder
(the "EXCHANGE Agent"). As soon as practicable after the Effective Time,
Parent shall deposit with the Exchange Agent, in trust for the holders
of shares of Company Common Stock converted in the Merger, certificates
representing the shares of Parent Common Stock issuable pursuant to
Section 1.5(c) in exchange for outstanding shares of Company Common
Stock and cash, as required to make payments in lieu of any fractional
shares pursuant to Section 1.8 (such cash and shares of Parent Common
Stock, together with any dividends or distributions with respect
thereto, being hereinafter referred to as the "EXCHANGE Fund"). The
Exchange Agent shall deliver the Parent Common Stock contemplated to be
issued pursuant to Section 1.5(c) out of the Exchange Fund. Except as
contemplated by Section 1.9, the Exchange Fund shall not be used for any
other purpose.
(b) EXCHANGE PROCEDURES. As soon as practicable after
the Effective Time, the Exchange Agent shall mail to each record holder
of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock
converted in the Merger (the "CERTIFICATES") 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 actual delivery of
the Certificates to the Exchange Agent, and shall contain instructions
for use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Parent Common Stock and cash in
lieu of fractional shares). Upon surrender for cancellation to the
Exchange Agent of a Certificate held by any record holder of a
Certificate, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange
therefor a certificate representing that number of whole shares of
Parent Common Stock into which the shares represented by the
surrendered Certificate shall have been converted at the Effective Time
pursuant to this Article I, cash in lieu of any fractional share in
accordance with Section 1.8 and certain dividends and other
distributions in accordance with Section 1.7, and any Certificate so
surrendered shall forthwith be canceled.
SECTION 1.7 DIVIDENDS; TRANSFER TAXES; WITHHOLDING. No dividends or
other distributions that are declared on or after the Effective Time on Parent
Common Stock, or are payable to the holders of record thereof on or after the
Effective Time, will be paid to any person entitled by reason of the Merger to
receive a certificate representing Parent Common Stock until such person
surrenders the related
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Certificate or Certificates, as provided in Section 1.6, and no cash payment in
lieu of fractional shares will be paid to any such person pursuant to Section
1.8 until such person shall so surrender the related Certificate or
Certificates. Subject to the effect of applicable law, there shall be paid to
each record holder of a new certificate representing such Parent Common Stock:
(i) at the time of such surrender or as promptly as practicable thereafter, the
amount of any dividends or other distributions theretofore paid with respect to
the shares of Parent Common Stock represented by such new certificate and having
a record date on or after the Effective Time and a payment date prior to such
surrender; (ii) at the appropriate payment date or as promptly as practicable
thereafter, the amount of any dividends or other distributions payable with
respect to such shares of Parent Common Stock and having a record date on or
after the Effective Time but prior to such surrender and a payment date on or
subsequent to such surrender; and (iii) at the time of such surrender or as
promptly as practicable thereafter, the amount of any cash payable with respect
to a fractional share of Parent Common Stock to which such holder is entitled
pursuant to Section 1.8. In no event shall the person entitled to receive such
dividends or other distributions be entitled to receive interest on such
dividends or other distributions. If any cash or certificate representing shares
of Parent Common Stock is to be paid to or issued in a name other than that in
which the Certificate surrendered in exchange therefor is registered, it shall
be a condition of such exchange that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of certificates for such shares of
Parent Common Stock in a name other than that of the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Parent or the Exchange
Agent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock such amounts as Parent or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the Code or under any
provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of Company Common Stock in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
SECTION 1.8 NO FRACTIONAL SECURITIES. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I, and no Parent
dividend or other distribution or stock split shall relate to any fractional
share, and no fractional share shall entitle the owner thereof to vote or to any
other rights of a security holder of Parent. In lieu of any such fractional
share, each holder of Company Common Stock who would otherwise have been
entitled to a fraction of a share of Parent Common Stock upon surrender of
Certificates for exchange pursuant to this Article I will be paid an amount in
cash (without interest), rounded to the nearest cent, determined by multiplying
(i) the Average Parent Share Price by (ii) the fractional interest to which such
holder would otherwise be entitled. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of fractional
share interests, the Exchange
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Agent shall so notify the Parent, and the Parent shall deposit such amount with
the Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional share interests subject to and in accordance with the
terms of Section 1.7 and this Section 1.8.
SECTION 1.9 RETURN OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the former shareholders of the Company for six
months after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any such former shareholders who have not theretofore complied with
this Article I shall thereafter look only to Parent for payment of their claim
for Parent Common Stock, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock.
Neither Parent nor the Surviving Corporation shall be liable to any former
holder of Company Common Stock for any such shares of Parent Common Stock, cash
and dividends and distributions held in the Exchange Fund which is delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 1.10 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to Sections 1.7 and 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Company Common Stock
represented by such Certificates.
SECTION 1.11 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
shares of Company Common Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, the Exchange Agent or the Parent, such Certificates shall
be canceled and exchanged as provided in this Article I.
SECTION 1.12 LOST CERTIFICATES. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent or the Exchange Agent, the posting by such person of a bond, in such
reasonable amount as Parent or the Exchange Agent may direct as indemnity
against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of Parent Common Stock, any cash in lieu of
fractional shares of Parent Common Stock to which the holders thereof are
entitled pursuant to Section 1.8 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 1.7.
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SECTION 1.13 FURTHER ASSURANCES. If at any time after the Effective Time
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments or assurances or any other acts or things are necessary,
desirable or proper (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations, or (b) otherwise to carry out the purposes of this
Agreement, the Surviving Corporation and its proper officers and directors or
their designees shall be authorized to execute and deliver, in the name and on
behalf of either of the Constituent Corporations, all such deeds, bills of sale,
assignments and assurances and to do, in the name and on behalf of either
Constituent Corporation, all such other acts and things as may be necessary,
desirable or proper to vest, perfect or confirm the Surviving Corporation's
right, title or interest in, to or under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and otherwise
to carry out the purposes of this Agreement.
SECTION 1.14 CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") and all actions specified in this Agreement to
occur at the Closing shall take place at the offices of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 101660193, at 10:00 a.m., local time,
no later than the second business day following the day on which the last of the
conditions set forth in Article VI shall have been fulfilled or waived (if
permissible) (the "CLOSING DATE") or at such other time and place as Parent and
the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 2.1 ORGANIZATION, STANDING AND POWER. Each of Parent and Sub is
a corporation duly organized, validly existing and in good standing under the
laws of its place of incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent and
Sub are duly qualified to do business, and are in good standing, in each
jurisdiction where the character of their properties owned or held under lease
or the nature of their activities makes such qualification necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on Parent. For purposes of this
Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when
used with respect to Parent, any change or effect that is or could reasonably be
expected (as far as can reasonably be foreseen at the time) to be materially
adverse to the business, operations, properties, assets, liabilities, employee
relationships, customer or supplier relationships, earnings or results of
operations, or the business prospects and condition of Parent and its
Subsidiaries, taken as a whole.
SECTION 2.2 AUTHORITY. On or prior to the date of this Agreement, the
respective Boards of Directors of Parent and Sub have declared the
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Merger advisable and have approved and adopted this Agreement in accordance with
the WBCL. Each of Parent and Sub has all requisite corporate power and authority
to enter into this Agreement, Parent has all requisite corporate power and
authority to enter into the Stock Option Agreement and the Shareholder
Agreement, and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement by Parent and Sub, the execution
and delivery of the Stock Option Agreement and the Shareholder Agreement by
Parent and the consummation by Parent and Sub of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
(including all Board action) on the part of Parent and Sub, subject to the
filing of appropriate Articles of Merger as required by the WBCL. This Agreement
has been duly executed and delivered by Parent and Sub, the Stock Option
Agreement and the Shareholder Agreement have been duly executed and delivered by
Parent, and (assuming the valid authorization, execution and delivery of this
Agreement and the Stock Option Agreement by the Company, the valid
authorization, execution and delivery of the Shareholder Agreement by the
shareholder of the Company that is a party thereto and the validity and binding
effect hereof and thereof on the Company and such shareholder) this Agreement
constitutes the valid and binding obligation of Parent and Sub enforceable
against each of them in accordance with its terms and the Stock Option Agreement
and the Shareholder Agreement constitute the valid and binding obligation of
Parent enforceable against Parent in accordance with its terms. The filing of a
registration statement on Form S4 with the Securities and Exchange Commission
(the "SEC") by Parent under the Securities Act of 1933, as amended (together
with the rules and regulations promulgated thereunder, the "SECURITIES ACT"),
for the purpose of registering the shares of Parent Common Stock to be issued in
the Merger (together with any amendments or supplements thereto, whether prior
to or after the effective date thereof, the "REGISTRATION STATEMENT") has been
duly authorized by Parent's Board of Directors.
SECTION 2.3 CONSENTS AND APPROVALS; NO VIOLATION. Assuming that all
consents, approvals, authorizations and other actions described in this Section
2.3 have been obtained and all filings and obligations described in this Section
2.3 have been made, the execution and delivery of this Agreement, the Stock
Option Agreement and the Shareholder Agreement do not, and the consummation of
the transactions contemplated hereby and thereby and compliance with the
provisions hereof and thereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give to others a
right of termination, cancellation or acceleration of any obligation or result
in the loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent or any of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the Bylaws of Parent, each as amended to date, (ii) any
provision of the comparable charter or organization documents of any of Parent's
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, rights, losses, liens, security interests, charges or encumbrances
that,
8
individually or in the aggregate, would not have a Material Adverse Effect on
Parent, materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or under the Stock Option Agreement or the
Shareholder Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby. No filing or registration with, or
authorization, consent or approval of, any domestic (federal and state), foreign
or supranational court, commission, governmental body, regulatory agency,
authority or tribunal (a "GOVERNMENTAL ENTITY") is required by or with respect
to Parent or any of its Subsidiaries in connection with the execution and
delivery of this Agreement, the Stock Option Agreement or the Shareholder
Agreement by Parent or Sub or is necessary for the consummation of the Merger
and the other transactions contemplated by this Agreement, the Stock Option
Agreement or the Shareholder Agreement, except for (i) in connection, or in
compliance, with the provisions of the HartScottRodino Antitrust Improvements
Act of 1976, as amended (the "HSR ACT"), the Securities Act and the Securities
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "EXCHANGE ACT"), (ii) the filing of the Articles of
Merger with the Secretary of State of the State of Wisconsin and appropriate
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or by the transactions contemplated by this Agreement,
the Stock Option Agreement, or the Shareholder Agreement, (iv) such filings,
authorizations, orders and approvals as may be required by state takeover laws
(the "STATE TAKEOVER APPROVALS"), (v) applicable requirements, if any, of state
securities or "blue sky" laws ("BLUE SKY LAWS") and the New York Stock Exchange
(the "NYSE"), (vi) as may be required under foreign laws and (vii) such other
consents, orders, authorizations, registrations, declarations, approvals and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on Parent, materially impair
the ability of Parent or Sub to perform its obligations hereunder or under the
Stock Option Agreement or the Shareholder Agreement or prevent the consummation
of any of the transactions contemplated hereby or thereby.
SECTION 2.4 PARENT COMMON STOCK TO BE ISSUED IN THE MERGER. All of the
shares of Parent Common Stock issuable in exchange for Company Common Stock at
the Effective Time in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights created by statute, Parent's Certificate of Incorporation or
Bylaws or any agreement to which Parent is a party or by which Parent is bound
and will, when issued, be registered under the Securities Act and the Exchange
Act and registered or exempt from registration under applicable Blue Sky laws.
SECTION 2.5 SEC DOCUMENTS AND OTHER REPORTS. Parent has filed all
required documents with the SEC since January 1, 1995 (the "PARENT SEC
DOCUMENTS"). As of their respective dates, the Parent SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Parent SEC Documents contained any untrue statement of a material
fact or omitted to state a
9
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The consolidated financial statements (including, in each case, any
notes thereto) of Parent included in the Parent SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with United States generally accepted accounting principles
(except, in the case of the unaudited statements, as permitted by Form 10Q of
the SEC) applied on a consistent basis during the periods involved (except as
may be indicated therein or in the notes thereto) and fairly presented in all
material respects the consolidated financial position of Parent and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and their consolidated cash flows for
the periods then ended (subject, in the case of unaudited statements, to normal
yearend audit adjustments and to any other adjustments described therein).
Except as disclosed in the Parent SEC Documents or as required by generally
accepted accounting principles, Parent has not, since March 31, 2000, made any
change in the accounting practices or policies applied in the preparation of
financial statements.
SECTION 2.6 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied in writing by Parent or Sub for inclusion or
incorporation by reference in the Registration Statement or the proxy
statement/prospectus included therein (together with any amendments or
supplements thereto, the "PROXY STATEMENT") relating to the Shareholder Meeting
(as defined in Section 5.1) will (i) in the case of the Registration Statement,
at the time it becomes effective, 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 not misleading or (ii) in the
case of the Proxy Statement, at the time of the mailing of the Proxy Statement,
at the time of the Shareholder Meeting and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to Parent, its officers
and directors or any of its Subsidiaries shall occur which is required to be
described in the Proxy Statement or the Registration Statement, such event shall
be so described, and an appropriate amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the shareholders of
the Company. The Registration Statement will comply (with respect to Parent) as
to form in all material respects with the provisions of the Securities Act, and
the Proxy Statement will comply (with respect to Parent) as to form in all
material respects with the provisions of the Exchange Act.
SECTION 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Parent SEC Documents filed with the SEC prior to the date of this Agreement,
since March 31, 2000, there has been no event causing a Material Adverse Effect
on Parent, nor any development that would, individually or in the aggregate,
result in a Material Adverse Effect on Parent.
SECTION 2.8 REORGANIZATION. To the actual knowledge of the Vice
President and Senior Counsel, Taxes of Parent, (i) neither Parent nor any of
10
its Subsidiaries has taken any action or failed to take any action which action
or failure would jeopardize the qualification of the Merger as a reorganization
within the meaning of Section 368(a) of the Code, and (ii) there are no facts
that would prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code.
SECTION 2.9 OPERATIONS OF SUB. Sub is a direct, whollyowned subsidiary
of Parent, was formed solely for the purpose of engaging in the transactions
contemplated hereby, has engaged in no other business activities and has
conducted its operations only as contemplated hereby.
SECTION 2.10 BROKERS. No broker, investment banker or other person, is
entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
SECTION 2.11 OWNERSHIP OF COMPANY COMMON STOCK. Neither Parent nor any
of its Affiliates is the beneficial owner (as defined in Rule 13d3 promulgated
under the Exchange Act) of, nor has Parent or any of its Affiliates within the
last three years been the beneficial owner of, Company Common Stock equal to or
greater than ten percent (10%) of the aggregate outstanding Company Common
Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.1 ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly organized and validly existing under the laws of the State of
Wisconsin, has filed with the Wisconsin Department of Financial Institutions the
most recent annual report required to be filed by it, has not filed articles of
dissolution, has a perpetual period of existence and has the requisite corporate
power and authority to carry on its business as now being conducted. Each
Subsidiary of the Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized and
has the requisite corporate power and authority to carry on its business as now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power or authority would not, individually or in
the aggregate, have a Material Adverse Effect on the Company. The Company and
each of its Subsidiaries are duly qualified to do business, and are in good
standing, in each jurisdiction where the character of their properties owned or
held under lease or the nature of their activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect on the Company. For purposes
of this Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" mean,
when used with respect to the Company, any change or effect that is or could
reasonably be expected (as far as can reasonably be foreseen at the time) to be
materially adverse to the business, operations, properties, assets, liabilities,
employee relationships, customer or supplier relationships, earnings or results
of
11
operations, or the business prospects and condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole.
SECTION 3.2 CAPITAL STRUCTURE. (a) As of the date hereof, the authorized
capital stock of the Company consists of 25,000,000 shares of Company Common
Stock. At the close of business on May 31, 2000, (i) 8,594,455 shares of Company
Common Stock were issued and outstanding, all of which were validly issued,
fully paid and nonassessable (except to the extent otherwise provided in Section
180.0622(2)(b) of the WBCL) and free of preemptive rights, (ii) no shares of
Company Common Stock were held in the treasury of the Company, (iii) 2,488,000
shares of Company Common Stock were reserved for future issuance pursuant to the
Company's Amended and Restated Stock Option Plan, any other option grants or
plans, or pursuant to any plans assumed by the Company in connection with any
acquisition, business combination or similar transaction (collectively, the
"COMPANY STOCK OPTION PLANS"). No shares of Company Common Stock are held by any
Subsidiary of the Company.
(b) Section 3.2 (b) of the letter dated the date hereof and delivered on
the date hereof by the Company to Parent, which relates to this Agreement and is
designated therein as the Company Letter (the "COMPANY LETTER"), contains a
correct and complete list as of the date of this Agreement of each outstanding
option to purchase shares of Company Common Stock issued under the Company Stock
Option Plans (collectively, the "COMPANY STOCK OPTIONS"), including the holder,
date of grant, term, acceleration of vesting or exercisability, if any, exercise
price and number of shares of Company Common Stock subject thereto. Except as
set forth on Section 3.2(b) of the Company Letter and except for the Company
Stock Options, there are no options, warrants, calls, rights or agreements to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of the Company or any of its Subsidiaries or obligating the Company or any
of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, right or agreement.
(c) Except as set forth in Section 3.2 of the Company Letter, there are
no outstanding contractual obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of or any equity interests in the Company or any Subsidiary.
Each outstanding share of capital stock of each Subsidiary of the Company is
duly authorized, validly issued, fully paid and nonassessable (except to the
extent otherwise provided in Section 180.0622(2)(b) of the WBCL) and, except as
disclosed in the Company SEC Documents (defined below) filed prior to the date
of this Agreement, each such share is owned by the Company or another Subsidiary
of the Company, free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on voting
rights, charges and other encumbrances of any nature whatsoever. The Company
does not have any outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or are convertible into or exercisable
for securities having the right to vote) with the shareholders of the Company
12
on any matter. Section 3.2(c) of the Company Letter contains a correct and
complete list as of the date of this Agreement of each of the Company's
Subsidiaries. Except as set forth on Section 3.2(c) of the Company Letter, as of
the date hereof, neither the Company nor any of its Subsidiaries is party to or
bound by (x) any agreement or commitment pursuant to which the Company or any
Subsidiary of the Company is or could be required to register any securities
under the Securities Act or (y) any debt agreements or instruments which grant
any rights to vote (contingent or otherwise) on matters on which shareholders of
the Company may vote.
(d) Section 3.2(d) of the Company Letter contains a correct and complete
list as of the date of this Agreement of each entity in which the Company owns
an equity interest (other than a Subsidiary), including the number of
outstanding shares of the stock of each such entity, the percentage interest
represented by the Company's ownership in the entity, and the date of
acquisition of the ownership interest in any such entity.
SECTION 3.3 AUTHORITY. On or prior to the date of this Agreement, the
Board of Directors of the Company has unanimously declared the Merger advisable
and fair to and in the best interest of the Company and its shareholders,
approved and adopted this Agreement in accordance with the WBCL, resolved to
recommend the adoption of this Agreement by the Company's shareholders and
directed that this Agreement be submitted to the Company's shareholders for
adoption. The Company has all requisite corporate power and authority to enter
into this Agreement and the Stock Option Agreement, to consummate the
transactions contemplated by the Stock Option Agreement and, subject, in the
case of the consummation of the Merger, to approval and adoption by the
shareholders of the Company of this Agreement, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the Stock
Option Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company, subject, in the case of
this Agreement, to (x) approval and adoption of this Agreement by the
shareholders of the Company and (y) the filing of the Articles of Merger as
required by the WBCL. This Agreement and the Stock Option Agreement have been
duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by Parent and Sub and
the Stock Option Agreement by Parent and the validity and binding effect of the
Agreement on Parent and Sub and the Stock Option Agreement on Parent) constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms. The filing of the Proxy Statement with the SEC and
the issuance of up to 2,014,067 shares of Company Common Stock pursuant to the
Stock Option Agreement have been duly authorized by the Company's Board of
Directors.
SECTION 3.4 CONSENTS AND APPROVALS; NO VIOLATION. Assuming that all
consents, approvals, authorizations and other actions described in this Section
3.4 have been obtained and all filings and obligations described in this Section
3.4 have been made, and except as set forth in Section 3.4 of the Company
Letter, the execution and delivery of this Agreement and the Stock Option
Agreement do not, and
13
the consummation of the transactions contemplated hereby and thereby and
compliance with the provisions hereof and thereof will not, result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give to others a right of termination, cancellation or acceleration of
any obligation or result in the loss of a material benefit under, or result in
the creation of any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company or any of its Subsidiaries under, any
provision of (i) the articles of incorporation of the Company (as amended from
time to time, the "COMPANY CHARTER") or the Bylaws of the Company, (ii) any
provision of the comparable charter or organization documents of any of the
Company's Subsidiaries, (iii) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise or license applicable to the Company or any of its Subsidiaries or
(iv) any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries or any of their respective
properties or assets, other than, in the case of clauses (ii), (iii) or (iv),
any such violations, defaults, rights, losses, liens, security interests,
charges or encumbrances that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company, materially impair the ability of the
Company to perform its obligations hereunder or under the Stock Option Agreement
or prevent the consummation of any of the transactions contemplated hereby or
thereby. No filing or registration with, or authorization, consent or approval
of, any Governmental Entity is required by or with respect to the Company or any
of its Subsidiaries in connection with the execution and delivery of this
Agreement or the Stock Option Agreement by the Company or is necessary for the
consummation of the Merger and the other transactions contemplated by this
Agreement or the Stock Option Agreement, except for (i) in connection, or in
compliance, with the provisions of the HSR Act, the Securities Act and the
Exchange Act, (ii) the filing of Articles of Merger with the Secretary of State
of the State of Wisconsin and appropriate documents with the relevant
authorities of other states in which the Company or any of its Subsidiaries is
qualified to do business, (iii) such filings and consents as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Merger or by the
transactions contemplated by this Agreement or the Stock Option Agreement, (iv)
such filings, authorizations, orders and approvals as may be required to obtain
the State Takeover Approvals, (v) applicable requirements, if any, of Blue Sky
Laws or the Nasdaq National Market, (vi) as may be required under foreign laws
and (vii) such other consents, orders, authorizations, registrations,
declarations, approvals and filings the failure of which to be obtained or made
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, materially impair the ability of the Company to perform its
obligations hereunder or under the Stock Option Agreement or prevent the
consummation of any of the transactions contemplated hereby or thereby.
SECTION 3.5 SEC DOCUMENTS AND OTHER REPORTS. The Company has filed all
required documents with the SEC since June 30, 1995 (the "COMPANY SEC
DOCUMENTS"). As of their respective dates, the Company SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Company SEC Documents contained any untrue statement of a material
fact
14
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The consolidated financial statements (including, in
each case, any notes thereto) of the Company included in the Company SEC
Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with United States generally
accepted accounting principles (except, in the case of the unaudited statements,
to the extent permitted by Form 10Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal yearend audit adjustments and to any other
adjustments described therein). Except as disclosed in the Company SEC Documents
or as required by generally accepted accounting principles, the Company has not,
since June 30, 1999, made any change in the accounting practices or policies
applied in the preparation of financial statements.
SECTION 3.6 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied by the Company in writing for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
will (i) in the case of the Registration Statement, at the time it becomes
effective, 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 not misleading or (ii) in the case of the Proxy Statement, at
the time of the mailing of the Proxy Statement, at the time of the Shareholder
Meeting and at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. If at any time prior to the Effective
Time any event with respect to the Company, its officers and directors or any of
its Subsidiaries shall occur which is required to be described in the Proxy
Statement or the Registration Statement, such event shall be so described, and
an appropriate amendment or supplement shall be promptly filed with the SEC and,
as required by law, disseminated to the shareholders of the Company. The
Registration Statement will comply (with respect to the Company) as to form in
all material respects with the provisions of the Securities Act, and the Proxy
Statement will comply (with respect to the Company) as to form in all material
respects with the provisions of the Exchange Act.
SECTION 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 3.7 of the Company Letter or as disclosed in the Company SEC Documents
filed with the SEC prior to the date of this Agreement, since June 30, 1999 (i)
the Company and its Subsidiaries have not incurred any material liability or
obligation (indirect, direct or contingent), or entered into any material oral
or written agreement or other transaction, that is not in the ordinary course of
business or that would result in a Material Adverse Effect on the Company, (ii)
the Company and its Subsidiaries have not sustained any loss or interference
with their business or properties
15
from fire, flood, windstorm, accident or other calamity (whether or not covered
by insurance) that has had a Material Adverse Effect on the Company, (iii) there
has been no change in the capital stock of the Company except for the issuance
of shares of the Company Common Stock pursuant to Company Stock Options and no
dividend or distribution of any kind declared, paid or made by the Company on
any class of its stock, (iv) there has not been (A) any adoption of a new
Company Plan (as hereinafter defined), (B) any amendment to a Company Plan
materially increasing benefits thereunder, (C) any granting by the Company or
any of its Subsidiaries to any executive officer or other key employee of the
Company or any of its Subsidiaries of any increase in compensation, except in
the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of the date of the most recent
audited financial statements included in the Company SEC Documents, (D) any
granting by the Company or any of its Subsidiaries to any such executive officer
or other key employee of any increase in severance or termination agreements in
effect as of the date of the most recent audited financial statements included
in the Company SEC Documents or (E) except as set forth in Section 3.7(iv) of
the Company Letter, any entry by the Company or any of its Subsidiaries into any
employment, severance or termination agreement with any such executive officer
or other key employee, (v) there has not been any material changes in the amount
or terms of the indebtedness of the Company and its Subsidiaries from that
described in the Company's 1999 Annual Report on Form 10K, and (vi) there has
been no event causing a Material Adverse Effect on the Company, nor any
development that would, individually or in the aggregate, result in a Material
Adverse Effect on the Company.
SECTION 3.8 PERMITS AND COMPLIANCE. Each of the Company and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "COMPANY PERMITS"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and no suspension or
cancellation of any of the Company Permits is pending or, to the Knowledge of
the Company (as hereinafter defined), threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries is in violation of (A) its charter, bylaws or other
organizational documents, (B) any applicable law, ordinance, administrative, or
governmental rule or regulation, including any consumer protection, equal
opportunity, patient confidentiality, health, health care industry regulation
and thirdparty reimbursement laws including under any Federal Health Care
Program (as defined in Section 1128B(f) of the U.S. Federal Social Security Act
(together with all regulations promulgated thereunder, the "SSA")), (C) any
order, decree or judgment of any Governmental Entity having jurisdiction over
the Company or any of its Subsidiaries or (D) any Company Permits, except, in
the case of clauses (A), (B), (C) and (D) for any violations that, individually
or in the aggregate, would not have a Material Adverse Effect on the Company.
Without limiting the foregoing, the Company is in compliance, in all material
respects, with all current applicable statutes, rules, regulations or orders
16
administered or issued by the United States Food and Drug Administration (the
"FDA") or comparable foreign Governmental Entity; the Company does not have
Knowledge of any facts which furnish any reasonable basis for any warning
letters from the FDA, Section 305 notices, or other similar communications from
the FDA or comparable foreign entity; and since April 30, 1997, there have been
no recalls, field notifications, alerts or seizures requested in writing, or to
the Knowledge of the Company, either requested orally or threatened relating to
the Company's products, except as set forth in Section 3.8 of the Company
Letter. The Company's products, where required, are being marketed under valid
510(k) or PreMarket Approval Applications. To the Knowledge of the Company,
there is no false information or significant omission in any product application
or productrelated submission to the FDA or comparable foreign Governmental
Entity. The Company has obtained all necessary regulatory approvals from any
foreign regulatory agencies related to the products distributed and sold by the
Company. Neither the Company nor any Subsidiary, nor the officers, directors,
managing employees or agents (as those terms are defined in 42 C.F.R.
ss.1001.1001) of the Company or any Subsidiary: (i) have engaged in any
activities which are prohibited under, or are cause for civil penalties or
mandatory or permissive exclusion from, any Federal Health Care Program under
Sections 1128, 1128A, 1128B, or 1877 of SSA or related state or local statutes,
including knowingly and willfully offering, paying, soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind in return for, or to induce, the
purchase, lease, or order, or the arranging for or recommending of the purchase,
lease or order, of any item or service for which payment may be made in whole or
in part under any such program; (ii) have had a civil monetary penalty assessed
against them under Section 1128A of SSA; (iii) have been excluded from
participation under any Federal Health Care Program; or (iv) have been convicted
(as defined in 42 C.F.R. ss. 1001.2) of any of the categories of offenses
described in Sections 1128(a) or 1128(b)(1), (b)(2), or (b)(3) of SSA. Except as
disclosed in the Company SEC Documents filed prior to the date of this
Agreement, there are no contracts or agreements of the Company or its
Subsidiaries having terms or conditions which would have a Material Adverse
Effect on the Company or having covenants not to compete that materially impair
the ability of the Company to conduct its business as currently conducted or
would reasonably be expected to materially impair Parent's ability to conduct
its businesses. Except as set forth in the Company SEC Documents filed prior to
the date of this Agreement, no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event of
default exists or, upon the consummation by the Company of the transactions
contemplated by this Agreement or the Stock Option Agreement, will exist under
any indenture, mortgage, loan agreement, note or other agreement or instrument
for borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject, other than any
defaults that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. "KNOWLEDGE OF THE COMPANY" means the actual
knowledge of the directors and executive officers of the Company.
17
SECTION 3.9 TAX MATTERS. Except as otherwise set forth in Section 3.9 of
the Company Letter, (i) the Company and each of its Subsidiaries have timely
filed (taking account of extensions to file that have been properly obtained)
all material Tax Returns (as hereinafter defined) required to have been filed by
it, and such Tax Returns are correct and complete in all material respects; (ii)
the Company and each of its Subsidiaries have timely paid (taking account of
extensions to pay that have been properly obtained) all Taxes (as hereinafter
defined) required to be paid by it that are material (either individually or in
the aggregate) and that have been due and will timely pay (taking account of
such extensions) all Taxes required to be paid by it that are material (either
individually or in the aggregate) and that will be due on or prior to the
Effective Time (other than Taxes that are being timely and properly contested in
good faith), or where payment is not yet due or is being contested in good
faith, has established in accordance with United States generally accepted
accounting principles an adequate reserve, which such reserve is adequate
notwithstanding the items set forth in the Company Letter, for the payment of
such Taxes; (iii) the Company and each of its Subsidiaries have complied in all
material respects with all rules and regulations relating to the withholding of
Taxes and the remittance of withheld Taxes; (iv) neither the Company nor any of
its Subsidiaries has waived any statute of limitations in respect of its Taxes;
(v) no federal, state, local, or foreign audits or administrative proceedings,
of which the Company or its Subsidiaries has written notice, or to the Knowledge
of the Company, oral notice, are pending with regard to any material Taxes or
material Tax Returns of the Company or its Subsidiaries and none of them has
received a written notice of any proposed audit or proceeding from the Internal
Revenue Service ("IRS") or any other taxing authority; (vi) no issues that have
been raised by the relevant taxing authority in connection with the examination
of Tax Returns required to have been filed by or with respect to the Company and
each of its Subsidiaries are currently pending, other than issues that, if
resolved against the Company or its Subsidiaries, would not result in the
imposition of Taxes that are material (either individually or in the aggregate);
(vii) all deficiencies asserted or assessments made as a result of any
examination of such Tax Returns by any taxing authority have been paid in full;
(viii) to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has engaged in any transaction that would constitute a "tax
shelter" within the meaning of Section 6111 or 6662 of the Code and that has not
been disclosed on an applicable Tax Return; (ix) neither the Company nor any of
its Subsidiaries has submitted a request for a ruling to the IRS or a State tax
authority; (x) neither the Company nor any of its subsidiaries has made or
rescinded any express or deemed material election relating to Taxes for any
period the statute of limitations with respect to which has not expired; (xi)
neither the Company nor any of its Subsidiaries has changed any of its methods
of reporting income or deductions for Tax purposes from those employed in the
preparation of its Tax Returns; (xii) neither Company nor any of its
Subsidiaries has been a member of an affiliated group of corporations (within
the meaning of Section 1504(a)) filing a consolidated federal income tax return
(or a group of corporations filing a consolidated, combined, or unitary income
tax return under comparable provisions of state, local, or foreign tax law) for
any taxable period, other than a group the common parent of which is Company;
(xiii) neither Company nor any of its Subsidiaries has any obligation under any
agreement or arrangement with any other person with respect to material Taxes of
such other person
18
(including pursuant to Treasury Regulations Section 1.15026 or comparable
provision of state, local or foreign tax law) including any liability for Taxes
of any predecessor entity; and (xiv) to the Knowledge of the Company, there are
no facts that would prevent the Merger from qualifying as a "reorganization"
within the meaning of Section 368(a) of the Code (xv) Company has furnished to
Parent true and complete copies of all Tax Returns for all periods, the statute
of limitations for the assessment of Tax with respect to which has not expired,
(xvi) neither the Company nor any of its Subsidiaries is a party to any
agreement, contract, arrangement, or plan that has resulted or would result,
individually or in the aggregate, in connection with this Agreement or any
change of control of the Company or any of its Subsidiaries, in the payment of
any "excess parachute payments" within the meaning of Section 280G of the Code;
and (xvii) the Company has not made any payments, and is not party to an
agreement that could require it to make any payments (including any deemed
payment of compensation upon exercise of any option), that would not be fully
deductible by reason of Section 162(m) of the Code.. For purposes of this
Agreement: (i) "TAXES" means any federal, state, local, foreign or provincial
income, gross receipts, property, sales, use, license, franchise, employment,
payroll, withholding, alternative or added minimum, ad valorem, valueadded,
transfer, excise, capital, or net worth tax, or other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest thereon or penalty imposed with respect thereto by
any Governmental Entity, whether computed on a separate, consolidated, unitary,
combined, or any other basis, and shall include any transferee or secondary
liability in respect of any tax (whether imposed by law, contractual agreement,
or otherwise), and (ii) "TAX RETURN" means any return, report or similar
statement (including the attached schedules) required to be filed with respect
to any Tax, including any information return, claim for refund, amended return
or declaration of estimated Tax.
SECTION 3.10 ACTIONS AND PROCEEDINGS. Except as set forth in the Company
SEC Documents filed prior to the date of this Agreement, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against or involving the Company or any of its Subsidiaries,
or against or involving any of the present or former directors, officers,
employees, consultants, agents or shareholders of the Company or any of its
Subsidiaries, as such, any of its or their properties, assets or business or any
Company Plan (as hereinafter defined) that, individually or in the aggregate,
would have a Material Adverse Effect on the Company or materially impair the
ability of the Company to perform its obligations hereunder or under the Stock
Option Agreement. Except as set forth in Section 3.10 of the Company Letter,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations (including claims for workers' compensation)
pending or, to the Knowledge of the Company, threatened against or involving the
Company or any of its Subsidiaries or any of its or their present or former
directors, officers, employees, consultants, agents or shareholders, as such, or
any of the Company's or the Subsidiaries' properties, assets or business or any
Company Plan that, individually or in the aggregate, would have a Material
Adverse Effect on the Company or materially impair the ability of the Company to
perform its obligations hereunder or under the Stock Option Agreement. There are
no actions, suits, labor disputes or other litigation, legal or administrative
proceedings or governmental investigations pending or, to the Knowledge of the
19
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of its or their present or former officers, directors, employees,
consultants, agents or shareholders, as such, or any of its or their properties,
assets or business relating to the transactions contemplated by this Agreement
and the Stock Option Agreement.
SECTION 3.11 CERTAIN AGREEMENTS.(a) Except as set forth in Section
3.11(a) of the Company Letter, neither the Company nor any of its Subsidiaries
is a party to any oral or written agreement or plan relating to the compensation
of employees of the Company or its Subsidiaries, including any employment
agreement, severance agreement, stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan, pension plan (as defined in
Section 3(2) of ERISA) or welfare plan (as defined in Section 3(1) of ERISA)
(collectively the "COMPENSATION AGREEMENTS"), any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
Stock Option Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement or the Stock Option Agreement. No holder of any option to purchase
shares of Company Common Stock, or shares of Company Common Stock granted in
connection with the performance of services for the Company or its Subsidiaries,
is or will be entitled to receive cash from the Company or any Subsidiary in
lieu of or in exchange for such option or shares as a result of the transactions
contemplated by this Agreement or the Stock Option Agreement except as provided
in Section 5.6. Section 3.11(a) of the Company Letter sets forth (i) for each
officer, director or employee who is a party to, or will receive benefits under,
any Compensation Agreement as a result of the transactions contemplated herein,
the total amount that each such person may receive, or is eligible to receive,
assuming that the transactions contemplated by this Agreement are consummated on
the date hereof, and (ii) the total amount of indebtedness owed to the Company
or its Subsidiaries from each officer, director or employee of the Company and
its Subsidiaries.
(b) Set forth in Section 3.11(b) of the Company Letter is a list of all
contracts that are material to the business of the Company and its Subsidiaries
taken as a whole (whether oral or written), including all distribution
contracts, solesource supply contracts, national accounts contracts, any
indenture, mortgage, loan agreement, note or other agreement or instrument for
borrowed money, any guarantee of any agreement or instrument for borrowed money
or any material lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject (collectively,
"SIGNIFICANT CONTRACTS"). Prior to the date hereof, the Company has provided
true and complete copies of all such contracts to Parent.
(c) Except as set forth on Section 3.11(c) of the Company Letter, each
Significant Contract is a legal, valid and binding agreement of the Company or
its Subsidiaries, neither the Company nor any of its Subsidiaries (or to the
Knowledge of the Company, any other party thereto) is in default under any
Significant Contract, and none of such Significant Contracts has been canceled
by the other party thereto; each
20
Significant Contract is in full force and effect and no event has occurred
which, with the passage of time or the giving of notice or both, would
constitute a default, event of default or other breach by the Company or any
Subsidiary party thereto which would entitle the other party to such Significant
Contract to terminate the same or declare a default or event of default
thereunder; the Company and the Subsidiaries are not in receipt of any claim of
default under any such agreement; in each instance, except where it would not
have a Material Adverse Effect on the Company.
SECTION 3.12 ERISA (a) Each Company Plan is listed in Section 3.12(a) of
the Company Letter. With respect to each Company Plan that is maintained in the
United States for the benefit of employees who are not primarily nonresident
aliens (a "U.S. PLAN"), the Company has made available to Parent a true and
correct copy of (i) the three most recent annual reports (Form 5500) filed with
the IRS, (ii) each such U.S. Plan that has been reduced to writing and all
amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to each such U.S. Plan, (iv) a written summary
of each unwritten U.S. Plan, (v) the most recent summary plan description or
other written explanation of each U.S. Plan provided to participants, (vi) the
three most recent actuarial reports or valuations relating to a U.S. Plan
subject to Title IV of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (vii) the most recent determination letter and request
therefor, if any, issued by the IRS with respect to any U.S. Plan intended to be
qualified under section 401(a) of the Code, (viii) any request for a
determination currently pending before the IRS, (ix) all correspondence with the
IRS, the Department of Labor, the SEC or Pension Benefit Guaranty Corporation
relating to any outstanding controversy and (x) all forms and certificate
samples used to comply with Sections 4980, 9801 and 9802 of the Code. Except as
would not have a Material Adverse Effect on the Company, each U.S. Plan complies
in all respects with ERISA, the Code and all other applicable statutes and
governmental rules and regulations. Except as set forth in Section 3.12(a) of
the Company Letter, no "reportable event" (within the meaning of Section 4043 of
ERISA) has occurred with respect to any U.S. Plan for which the 30day notice
requirement has not been waived. Neither the Company nor any of its Subsidiaries
or ERISA Affiliates (as hereinafter defined) has withdrawn from any Company
Multiemployer Plan (as hereinafter defined) and would not incur any withdrawal
liability if it withdrew from all such Company Multiemployer Plans on the date
of this Agreement. No action has been taken, or is currently being considered,
to terminate or withdraw from any U.S. Plan subject to Title IV of ERISA and, to
the Knowledge of the Company, there is no reason to believe the Pension Benefit
Guaranty Corporation would initiate the termination of any such Plan. No U.S.
Plan, nor any trust created thereunder, has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived.
(b) Except as listed in Section 3.12(b) of the Company Letter, with
respect to the U.S. Plans, no event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances in connection with
which the Company or any Subsidiary or ERISA Affiliate or U.S. Plan fiduciary
could be subject to any liability under the terms of such U.S. Plans, ERISA, the
Code or any other applicable law which would have a Material Adverse Effect on
the Company. All U.S. Plans that are intended to be qualified under Section
401(a) of the Code have been determined by the
21
IRS to be so qualified, or a timely application for such determination is now
pending and to the Knowledge of the Company, there is no reason why any such
U.S. Plan is not so qualified in operation. Neither the Company nor any of its
Subsidiaries or ERISA Affiliates has been notified by any Company Multiemployer
Plan that such Company Multiemployer Plan is currently in reorganization or
insolvency under and within the meaning of Section 4241 or 4245 of ERISA or that
such Company Multiemployer Plan intends to terminate or has been terminated
under Section 4041A of ERISA. No event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances that would result in
a material increase in the contributions required to be made to any Company
Multiemployer Plan by the Company or any Subsidiary or ERISA Affiliate. Except
as disclosed in Section 3.12(b) of the Company Letter, neither the Company nor
any of its Subsidiaries or ERISA Affiliates has any liability or obligation
under any welfare U.S. Plan to provide benefits after termination of employment
to any employee or dependent other than as required by Section 4980B of the
Code.
(c) As used herein, (i) "COMPANY PLAN" means a "pension plan" (as
defined in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a
"welfare plan" (as defined in Section 3(1) of ERISA), or any other written or
oral bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, restricted stock, stock
appreciation right, holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel policy,
insurance or other plan, arrangement or understanding, in each case established
or maintained by the Company or any of its Subsidiaries or ERISA Affiliates or
as to which the Company or any of its Subsidiaries or ERISA Affiliates has
contributed or otherwise may have any liability, (ii) "COMPANY MULTIEMPLOYER
PLAN" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
to which the Company or any of its Subsidiaries or ERISA Affiliates is or has
been obligated to contribute or otherwise may have any liability that is
maintained in the United States for the benefit of employees who are not
primarily nonresident aliens, and (iii) "ERISA AFFILIATE" means any trade or
business (whether or not incorporated) which would be considered a single
employer with the Company pursuant to Section 414(b), (c), (m) or (o) of the
Code and the regulations promulgated under those sections or pursuant to Section
4001(b) of ERISA and the regulations promulgated thereunder.
(d) Section 3.12(d) of the Company Letter contains a list of all (i)
severance and employment agreements with employees of the Company and each
Subsidiary and ERISA Affiliate, (ii) severance programs and policies of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees and (iii) plans, programs, agreements and other arrangements of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees containing change of control or similar provisions.
(e) Except as set forth in Section 3.12(e) of the Company Letter, with
respect to each Company Plan not subject to United States law (a "COMPANY
FOREIGN BENEFIT PLAN"), except as would not have a Material Adverse Effect on
the Company, (i) the fair market value of the assets of each funded Company
Foreign Benefit Plan, the
22
liability of each insurer for any Company Foreign Benefit Plan funded through
insurance or the reserve shown on the Company's consolidated financial
statements for any unfunded Company Foreign Benefit Plan, together with any
accrued contributions, is sufficient to procure or provide for the projected
benefit obligations, as of the Effective Time, with respect to all current and
former participants in such plan in accordance with generally accepted country
specific actuarial assumptions and valuations and no transaction contemplated by
this Agreement shall cause such assets or insurance obligations or book reserve
to be less than such projected benefit obligations; and (ii) each Company
Foreign Benefit Plan required to be registered has been registered and has been
maintained in good standing with the appropriate regulatory authorities.
SECTION 3.13 COMPLIANCE WITH WORKER SAFETY LAWS. The properties, assets
and operations of the Company and its Subsidiaries are in compliance with all
applicable federal, state, local and foreign laws, rules and regulations,
orders, decrees, judgments, permits and licenses relating to public and worker
health and safety (collectively, "WORKER SAFETY LAWS"), except for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. With respect to such properties, assets and
operations, including any previously owned, leased or operated properties,
assets or operations, there are no past, present or reasonably anticipated
future events, conditions, circumstances, activities, practices, incidents,
actions or plans (other than those taken by subsequent owners of such
properties, assets or operations) of the Company or any of its Subsidiaries that
may interfere with or prevent compliance or continued compliance with applicable
Worker Safety Laws, other than any such interference or prevention as would not,
individually or in the aggregate with any such other interference or prevention,
have a Material Adverse Effect on the Company.
SECTION 3.14 LIABILITIES; PRODUCTS. (a) Except as fully reflected or
reserved against in the financial statements included in the Company's 1999
Annual Report on Form 10K, or disclosed in the footnotes thereto and as
disclosed in Section 3.14(a) of the Company Letter, the Company and its
Subsidiaries had no liabilities (including Tax liabilities) at the date of such
financial statements, absolute or contingent, other than liabilities that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company, and had no liabilities (including Tax liabilities) that were not
incurred in the ordinary course of business. As of the date hereof, the Company
had less than $250,000 indebtedness for borrowed money.
(b) Except as set forth in Section 3.14(b) of the Company Letter, since
June 30, 1999, neither the Company nor any Subsidiary has received a written, or
to the Knowledge of the Company, oral claim for or based upon breach of product
or service warranty or guaranty or similar claim (other than warranty or
guaranty claims in the ordinary course of business not material in amount or
significance), strict liability in tort, negligent design of product, negligent
provision of services or any other allegation of liability, including or arising
from the materials, design, testing, manufacture, packaging, labeling (including
instructions for use), or sale of its products or from the provision of
23
services; and, to the Knowledge of the Company, there is no basis for any such
claim which, if asserted, would likely have a Material Adverse Effect on the
Company.
(c) The Company has provided in Section 3.14(c) of the Company Letter a
schedule of products in development and planned introductions. The Company
reasonably expects the goals set forth therein to be achieved in all material
respects, except for such deviations as would not have a Material Adverse Effect
on the Company. The product and service engineering, development, manufacturing
and quality control processes which have been and are being followed by the
Company are reasonably designed to produce products and services which (i) are
consistent with the claims made about them in the Company's sales brochures and
other statements made about them by or on behalf of the Company, (ii) otherwise
meet the reasonable expectations of customers, (iii) comply with applicable
regulatory requirements and (iv) avoid claims of the type described in Section
3.14(b).
SECTION 3.15 LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or labor
contract. Neither the Company nor any of its Subsidiaries has engaged in any
unfair labor practice with respect to any persons employed by or otherwise
performing services primarily for the Company or any of its Subsidiaries (the
"COMPANY BUSINESS PERSONNEL"), and there is no unfair labor practice complaint
or grievance against the Company or any of its Subsidiaries by any person
pursuant to the National Labor Relations Act or any comparable state agency or
foreign law pending or threatened in writing with respect to the Company
Business Personnel, except where such unfair labor practice, complaint or
grievance would not have a Material Adverse Effect on the Company. There is no
labor strike, dispute, slowdown or stoppage pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
which may interfere with the respective business activities of the Company or
any of its Subsidiaries, except where such dispute, strike or work stoppage
would not have a Material Adverse Effect on the Company.
SECTION 3.16 INTELLECTUAL PROPERTY. "COMPANY INTELLECTUAL PROPERTY"
means all United States and foreign trademarks, trademark registrations,
trademark rights and renewals thereof, trade names, trade name rights, trade
dress, patents, patent rights, patent applications, industrial models,
inventions, invention disclosures, author's rights, designs, utility models,
inventor rights, software, copyrights, copyright registrations and renewals
thereof, servicemarks, servicemark registrations and renewals thereof,
servicemark rights, trade secrets, applications for trademark and servicemark
registrations, knowhow, data, confidential information and other proprietary
rights, and any data and information of any nature or form used or held for use
in connection with the businesses of the Company and/or its Subsidiaries as
currently conducted or as currently contemplated by the Company, together with
all applications currently pending or in process for any of the foregoing.
Except as disclosed in the Company SEC Documents filed with the SEC prior to the
date hereof, the Company and its Subsidiaries own, or possess adequate licenses
or other valid rights to use (including the right to sublicense to customers,
suppliers or others as needed), all of the material Company Intellectual
Property that is necessary for the conduct or contemplated conduct
24
of the Company's or Subsidiaries' businesses. Section 3.16 of the Company Letter
lists each material license or other agreement pursuant to which the Company or
any Subsidiary has the right to use Company Intellectual Property utilized in
connection with any product of, or service provided by, the Company and its
Subsidiaries, the cancellation or expiration of which would have a Material
Adverse Effect on the Company (the "COMPANY LICENSES"). Except as set forth in
Section 3.16 of the Company Letter, there are no pending, and between the date
hereof and the Effective Time, there shall not be any pending, or to the
Knowledge of the Company, threatened interferences, reexaminations, oppositions
or cancellation proceedings involving any patents or patent rights, trademarks
or trademark rights, or applications therefor, of the Company or any Subsidiary,
except such as may be commenced by Parent or any Subsidiary of Parent and except
such as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. There is no breach or violation by the Company or by any
Subsidiary under, and, to the Knowledge of the Company, there is no breach or
violation by any other party to, any Company License that is reasonably likely
to give rise to any termination or any loss of rights thereunder. To the
Knowledge of the Company, there has been no unauthorized disclosure or use of
confidential information, trade secret rights, processes and formulas, research
and development results and other knowhow of the Company or any Subsidiary, the
value of which to the Company and its Subsidiaries is dependent upon the
maintenance of the confidentiality thereof. The conduct of the business of the
Company and the Subsidiaries as currently conducted or contemplated in
connection with the introduction of planned new products and services does not
and will not infringe upon or conflict with, in any way, any license, trademark,
trademark right, trade name, trade name right, patent, patent right, industrial
model, invention, service ▇▇▇▇, service ▇▇▇▇ right, copyright, trade secret or
any other intellectual property rights of any third party. Except as disclosed
in the Company SEC Documents filed with the SEC prior to the date hereof or in
Section 3.16 of the Company Letter, to the Knowledge of the Company there are no
infringements of, or conflicts with, any Company Intellectual Property. Except
as set forth in Section 3.16 of the Company Letter, neither the Company nor any
Subsidiary has licensed or otherwise permitted the use by any third party of any
proprietary information or Company Intellectual Property on terms or in a manner
which, individually or in the aggregate, would have a Material Adverse Effect on
the Company.
SECTION 3.17 OPINION OF FINANCIAL ADVISOR. The Company will have
received the written opinion of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation ("DLJ") dated the date hereof to the effect that, as of the date
hereof, the Merger Consideration is fair to the Company's shareholders from a
financial point of view, a copy of which opinion has been delivered to Parent.
SECTION 3.18 STATE TAKEOVER STATUTES. The Board of Directors of the
Company has, to the extent such statute is applicable, taken all action
(including appropriate approvals of the Board of Directors of the Company)
necessary to render the provisions of Section 180.1140 through Section 180.1144
of the WBCL inapplicable to the Merger, this Agreement, the Stock Option
Agreement, the Shareholder Agreement, and the transactions contemplated hereby
and thereby. To the Knowledge of the Company, no other state takeover statute or
similar charter or bylaw provisions are
25
applicable to the Merger, this Agreement, the Stock Option Agreement, and the
Shareholder Agreement and the transactions contemplated hereby and thereby.
SECTION 3.19 REQUIRED VOTE OF COMPANY SHAREHOLDERS. The affirmative vote
of the holders of a majority of the outstanding shares of Company Common Stock
is required to adopt this Agreement. No other vote of the security holders of
the Company is required by law, the Company Charter or the Bylaws of the Company
or otherwise in order for the Company to consummate the Merger and the
transactions contemplated hereby and in the Stock Option Agreement.
SECTION 3.20 REORGANIZATION. To the Knowledge of the Company, neither it
nor any of its Subsidiaries has taken any action or failed to take any action
which action or failure would jeopardize the qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
SECTION 3.21 ACCOUNTS RECEIVABLE. All of the accounts and notes
receivable of the Company and its Subsidiaries set forth on the books and
records of the Company (net of the applicable reserves, which such reserves are
adequate notwithstanding the items set forth in the Company Letter, reflected on
the books and records of the Company and in the financial statements included in
the Company SEC Documents) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) except as set forth on Section 3.21(ii) of the Company
Letter, constitute valid claims, and (iii) except as set forth on Section
3.21(iii) of the Company Letter, are good and collectible at the aggregate
recorded amounts thereof (net of such reserves, which such reserves are adequate
notwithstanding the items set forth in the Company Letter,) without right of
recourse, defense, deduction, return of goods, counterclaim, or offset and have
been or will be collected in the ordinary course of business and consistent with
past experience.
SECTION 3.22 INVENTORIES. Except as set forth in Section 3.22 of the
Company Letter, all inventories of the Company and its Subsidiaries consist of
items of merchantable quality and quantity usable or saleable in the ordinary
course of business, are saleable at prevailing market prices that are not less
than the book value amounts thereof or the price customarily charged by the
Company or the applicable Subsidiary therefor, conform to the specifications
established therefor, and have been manufactured in accordance with applicable
regulatory requirements, except to the extent that the failure of such
inventories so to consist, be saleable, conform, or be manufactured would not
have a Material Adverse Effect on the Company. Except as set forth in Section
3.22 of the Company Letter, the quantities of all inventories, materials, and
supplies of the Company and each Subsidiary (net of the obsolescence reserves,
which such reserves are adequate notwithstanding the items set forth in the
Company Letter, therefor shown in the financial statements included in the
Company SEC Documents and determined in the ordinary course of business
consistent with past practice) are not obsolete, damaged, slowmoving, defective,
or excessive, except to the extent that the failure of such inventories to be in
such conditions would not have a Material Adverse Effect on the Company.
26
SECTION 3.23 ENVIRONMENTAL MATTERS. (a) For purposes of this Agreement,
the following terms shall have the following meanings: (i) "HAZARDOUS
SUBSTANCES" means (A) petroleum and petroleum products, by-products or breakdown
products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, and (B) any other chemicals, materials or substances
regulated as toxic or hazardous or as a pollutant, contaminant or waste under
any applicable Environmental Law; (ii) "ENVIRONMENTAL LAW" means any law, past,
present or future (up until the Effective Time) and as amended, and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, or common law, relating to
pollution or protection of the environment, health or safety or natural
resources, including those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Substances; and
(iii) "ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under any applicable Environmental Law.
(b) The Company and the Subsidiaries are and have been in compliance
with all applicable Environmental Laws, have obtained all Environmental Permits
and are in compliance with their requirements, and have resolved all past
non-compliance with Environmental Laws and Environmental Permits without any
pending, on-going or future obligation, cost or liability, except in each case
for the notices set forth in Section 3.21 of the Company Letter or where such
non-compliance or obligation would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
(c) Except as set forth in Section 3.23 of the Company Letter, neither
the Company nor any of its Subsidiaries has (i) placed, held, located, released,
transported or disposed of any Hazardous Substances on, under, from or at any of
the Company's or any of its Subsidiaries' properties or any other properties,
other than in a manner that would not, in all such cases taken individually or
in the aggregate, result in a Material Adverse Effect on the Company, (ii) any
Knowledge of either the presence of or of any reason to know of any Hazardous
Substances on, under, emanating from, or at any of the Company's or any of its
Subsidiaries' properties or any other property but arising from the Company's or
any of its Subsidiaries' current or former properties or operations, other than
in a manner that would not result in a Material Adverse Effect on the Company,
or (iii) any Knowledge of any reason to know, nor has it received any written
notice (A) of any violation of or liability under any Environmental Laws, (B) of
the institution or pendency of any suit, action, claim, proceeding or
investigation by any Governmental Entity or any third party in connection with
any such violation or liability, (C) requiring the investigation of, response to
or remediation of Hazardous Substances at or arising from any of the Company's
or any of its Subsidiaries' current or former properties or operations or any
other properties, (D) alleging noncompliance by the Company or any of its
Subsidiaries with the terms of any Environmental Permit in any manner reasonably
likely to require material expenditures or to result in material liability or
(E) demanding payment for response to or remediation of Hazardous Substances at
or arising from any of the Company's or any of its Subsidiaries' current or
former properties
27
or operations or any other properties, except in each case for the notices or
matters set forth in Section 3.23 of the Company Letter.
(d) Except as set forth in Section 3.23 of the Company Letter, no
Environmental Law imposes any obligation upon the Company or any of its
Subsidiaries arising out of or as a condition to any transfer or transaction
contemplated by this Agreement, including any requirement to modify or to
transfer any Environmental Permit or license, any requirement to file any notice
or other submission with any Governmental Entity, the placement of any notice,
acknowledgment or covenant in any land records, or the modification of or
provision of notice under any agreement, consent order or consent decree.
(e) Except as set forth in Schedule 3.23 (e) of the Company Letter,
there are no environmental assessments or audit reports or other similar studies
or analyses in the possession or control of the Company or any of its
Subsidiaries relating to any real property currently or formerly owned, leased
or occupied by the Company or any of its Subsidiaries.
SECTION 3.24 SUPPLIERS AND DISTRIBUTORS. (a) Neither the Company nor any
Subsidiary has received any written notice, or to the Knowledge of the Company,
oral notice, or has any reason to believe that any significant supplier,
including without limitation any sole source supplier, will not sell raw
materials, supplies, merchandise and other goods to the Company or any
Subsidiary at any time after the Effective Time on terms and conditions
substantially similar to those used in its current sales to the Company and its
Subsidiaries, subject only to general and customary price increases, unless
comparable raw materials, supplies, merchandise, or other goods are readily
available from other sources on comparable terms and conditions.
(b) Neither the Company nor any Subsidiary has received any written
notice, or to the Knowledge of the Company, oral notice, or has any reason to
believe that any distributors, sales representatives, sales agents, or other
third party sellers, will not sell or market the products or services of the
Company or any Subsidiary at any time after the Effective Time on terms and
conditions substantially similar to those used in the current sales and
distribution contracts of the Company and its Subsidiaries.
SECTION 3.25 INSURANCE. All material fire and casualty, general
liability, business interruption, product liability, and sprinkler and water
damage insurance policies maintained by the Company or any of its Subsidiaries
are with reputable insurance carriers, provide full and adequate coverage for
all normal risks incident to the business of the Company and the Subsidiaries
and their respective properties and assets, and are in character and amount
similar to that carried by persons engaged in similar businesses and subject to
the same or similar perils or hazards, except for any such failures to maintain
insurance policies that, individually or in the aggregate, would not have a
Material Adverse Effect on the Company. The Company and each Subsidiary have
made any and all payments required to maintain such policies in full force and
effect. Neither the Company nor any Subsidiary has received notice of default
under any such policy, and has not received written notice or, to the Knowledge
of the
28
Company, oral notice of any pending or threatened termination or cancellation,
coverage limitation or reduction or material premium increase with respect to
such policy.
SECTION 3.26 TRANSACTIONS WITH AFFILIATES. (a) For purposes of this
Section 3.26, the term "AFFILIATED PERSON" means (i) any holder of 2% or more of
the Company Common Stock, (ii) any director, officer or senior executive of the
Company or any Subsidiary, (iii) any person, firm or corporation that directly
or indirectly controls, is controlled by, or is under common control with, any
of the Company or any Subsidiary or (iv) any member of the immediate family or
any of such persons.
(b) Except as set forth in Section 3.26 of the Company Letter or in the
Company SEC Reports filed with the SEC prior to the date hereof, since March 31,
2000, the Company and its Subsidiaries have not, in the ordinary course of
business or otherwise, (i) purchased, leased or otherwise acquired any material
property or assets or obtained any material services from, (ii) sold, leased or
otherwise disposed of any material property or assets or provided any material
services to (except with respect to remuneration for services rendered in the
ordinary course of business as director, officer or employee of the Company or
any Subsidiary), (iii) entered into or modified in any manner any contract with,
or (iv) borrowed any money from, or made or forgiven any loan or other advance
(other than expenses or similar advances made in the ordinary course of
business) to, any Affiliated Person.
(c) Except as set forth in the Company SEC Reports filed with the SEC
prior to the date hereof, (i) the contracts of the Company and its Subsidiaries
do not include any material obligation or commitment between the Company or any
Subsidiary and any Affiliated Person, (ii) the assets of the Company or any
Subsidiary do not include any receivable or other obligation or commitment from
an Affiliated Person to the Company or any Subsidiary and (iii) the liabilities
of the Company and its Subsidiaries do not include any payable or other
obligation or commitment from the Company or any Subsidiary to any Affiliated
Person.
(d) To the Knowledge of the Company and except as set forth in the
Company SEC Reports filed with the SEC prior to the date hereof, no Affiliated
Person of any of the Company or any Subsidiary is a party to any contract with
any customer or supplier of the Company or any Subsidiary that affects in any
material manner the business, financial condition or results of operation of the
Company or any Subsidiary.
SECTION 3.27 TITLE TO AND SUFFICIENCY OF ASSETS. (a) As of the date
hereof, the Company and its Subsidiaries own, and as of the Effective Time the
Company and its Subsidiaries will own, good and marketable title to all of their
assets constituting personal property which is material to their business
(excluding, for purposes of this sentence, assets held under leases), free and
clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions (collectively,
"LIENS"), except as set forth in the Company SEC Documents filed with the SEC
prior to the date hereof, or Section 3.27 of the Company Letter. Such assets,
together with all assets held by the Company and its Subsidiaries under leases,
include all
29
tangible and intangible personal property, contracts and rights necessary or
required for the operation of the businesses of the Company as presently
conducted.
(b) As of the date hereof, the Company and its Subsidiaries will own,
good and marketable title to all of their Real Estate (as defined below) which
is material to such persons (excluding, for purposes of this sentence, Real
Estate leases) free and clear of any and all Liens, except as set forth in the
Company SEC Documents filed with the SEC prior to the date hereof or in Section
3.27 of the Company Letter or such other Liens on Real Estate which would not,
individually or in the aggregate, have a Material Adverse Effect on the Company.
The Real Estate assets (including, for the purpose of this sentence, Real Estate
leases) held by the Company and its Subsidiaries, are adequate for the operation
of the businesses of the Company as presently conducted. The leases to all Real
Estate occupied by the Company and the Subsidiaries which are material to the
operation of the businesses of the Company are in full force and effect and no
event has occurred which with the passage of time, the giving of notice, or
both, would constitute a default or event of default by the Company or any
Subsidiary or, to the Knowledge of the Company, any other person who is a party
signatory thereto, other than such defaults or events of default which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. For purposes of this Agreement, "REAL ESTATE" means, with respect
to the Company or any Subsidiary, as applicable, all of the fee, if any, or
leasehold ownership right, title and interest of such person, in and to all real
estate and improvement owned or leased by any such person and which is used by
any such person in connection with the operation of its business.
SECTION 3.28 BROKERS. No broker, investment banker or other person,
other than DLJ, the fees and expenses of each of which will be paid by the
Company (as reflected in an agreement between DLJ, and the Company, a copy of
each of which has been furnished to Parent), is entitled to any broker's,
finder's or other similar fee or commission in connection with the transactions
contemplated by this Agreement and by the Stock Option Agreement based upon
arrangements made by or on behalf of the Company.
SECTION 3.29 YEAR 2000. Except as set forth in Section 3.29 of the
Company Letter, the current and previously sold products of the Company and its
Subsidiaries and software, operations, systems and processes (including, to the
Knowledge of the Company, software, operations, systems and processes obtained
from third parties) used in the conduct of the business of the Company and its
Subsidiaries, are Year 2000 Compliant and the Company has delivered to Parent
true and correct copies of any consultant or other third-party reports prepared
on behalf of the Company with respect to such compliance. For purposes of this
Agreement, "YEAR 2000 COMPLIANT" means the ability to process (including
calculate, compare, sequence, display or store), transmit or receive data or
data/time data from, into and between the twentieth and twenty-first centuries,
and the years 1999 and 2000, and leap year calculations without error or
malfunction in all material respects. Except as set forth in Section 3.29 of the
Company Letter, neither the Company nor any of its Subsidiaries have any
obligations under any warranty agreements, agreements, or otherwise to remedy
any information technology defect relating to a failure to be Year 2000
Compliant, except where any such
30
warranty agreements, agreements or obligations to remedy would not, individually
or in the aggregate, have a Material Adverse Effect on the Company.
SECTION 3.30 NO CONSULTING ACTIVITIES SUBJECT TO HOSPITAL-PHYSICIAN
GAINSHARING RESTRICTIONS. Neither the Company nor its Subsidiaries have ever
provided any clinical consulting services, including advice, suggestions or
recommendations concerning physician partnership strategies and models, which
would have been subject to the requirements of 42 U.S.C. sec. 1320a-7a(b)(1) and
(2).
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
Except as expressly permitted by clauses (i) through (xvii) of this Section 4.1,
during the period from the date of this Agreement through the Effective Time,
the Company shall, and shall cause each of its Subsidiaries to, in all material
respects carry on its business in the ordinary course of its business as
currently conducted and, to the extent consistent therewith, use reasonable best
efforts to preserve intact its current business organizations, keep available
the services of its current officers and employees and preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, and except as
otherwise expressly contemplated by this Agreement or as set forth in the
Company Letter (with specific reference to the applicable subsection below), the
Company shall not, and shall not permit any of its Subsidiaries to, without the
prior written consent of Parent:
(i) (A) other than dividends paid by wholly-owned
Subsidiaries, declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any of
its capital stock, or otherwise make any payments to its shareholders in
their capacity as such, (B) other than in the case of any Subsidiary,
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 or (C) purchase,
redeem or otherwise acquire any shares of capital stock of the Company
or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock, any other voting securities or
equity equivalent or any securities convertible into, or any rights,
warrants or options (including options under the Company Stock Option
Plans) to acquire any such shares, voting securities, equity equivalent
or convertible securities, other than (A) the issuance of shares of
Company Common Stock upon the exercise of Company Stock Options
outstanding on the date of this Agreement in accordance with their
31
current terms and (B) the issuance of shares of Company Common Stock
pursuant to the Stock Option Agreement;
(iii) amend the Company Charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity
in, or by any other manner, any business or any corporation, limited
liability company, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets;
(v) sell, lease or otherwise dispose of, or agree to sell, lease
or otherwise dispose of, any of its assets, other than sales of
inventory that are in the ordinary course of business consistent with
past practice;
(vi) incur any indebtedness for borrowed money, guarantee any
such indebtedness or make any loans, advances or capital contributions
to, or other investments in, any other person, other than (A) in the
ordinary course of business consistent with past practices and (B)
indebtedness, loans, advances, capital contributions and investments
between the Company and any of its wholly-owned Subsidiaries or between
any of such wholly-owned Subsidiaries, in each case in the ordinary
course of business consistent with past practice;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or
ownership of the Company or any Subsidiary;
(viii) except as provided in Section 4.1(viii) of the Company
Letter, enter into or adopt any, or amend any existing, severance plan,
agreement or arrangement or enter into or amend any Company Plan,
employment, or any consulting agreement;
(ix) except as provided in Section 4.1(ix) of the Company
Letter, increase the compensation payable or to become payable to its
directors, officers or employees (except for increases in the ordinary
course of business consistent with past practice in salaries or wages of
employees of the Company or any of its Subsidiaries who are not officers
of the Company or any of its Subsidiaries) or grant any severance or
termination pay to, or enter into any employment or severance agreement
with, any director or officer of the Company or any of its Subsidiaries,
or establish, adopt, enter into, or, except as may be required to comply
with applicable law, amend in any material respect or take action to
enhance in any material respect or accelerate any rights or benefits
under, any labor, collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee;
32
(x) knowingly violate or knowingly fail to perform any
obligation or duty imposed upon it or any Subsidiary by any applicable
material federal, state or local law, rule, regulation, guideline or
ordinance;
(xi) make any change to accounting policies or procedures
(other than actions required to be taken by generally accepted
accounting principles);
(xii) prepare or file any Tax Return inconsistent with its
past practice in preparing or filing similar Tax Returns in prior
periods or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions taken,
elections made or methods used in preparing or filing similar Tax
Returns in prior periods;
(xiii) make or rescind any express or deemed election relating
to Taxes or change any of its methods of reporting income or deductions
for Tax purposes;
(xiv) commence any litigation or proceeding with respect to
any material Tax liability or settle or compromise any material Tax
liability without Parent's consent (which consent should not be
unreasonably withheld) or commence any other litigation or proceedings
or settle or compromise any other material claims or litigation;
(xv) except as provided in Section 4.1(xv) of the Company
Letter, enter into, renew, terminate or amend any agreement or contract
material to the Company and its Subsidiaries, taken as a whole,
including any Significant Contract; or purchase any real property or
make or agree to make any new capital expenditure or expenditures which
in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent financial statements (or
the notes thereto) of the Company included in the Company SEC Documents
or incurred in the ordinary course of business consistent with past
practice; or
(xvii) authorize, recommend, propose or announce an intention
to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
SECTION 4.2 NO SOLICITATION. (a) The Company shall not, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any officer,
director or employee of or any financial advisor, attorney or other advisor or
representative of, the Company or any of its Subsidiaries to, (i) solicit,
initiate or encourage the submission of, any Takeover Proposal (as hereafter
defined), (ii) enter into any agreement with respect to or approve or recommend
any Takeover Proposal or
33
(iii) participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to the Company or any Subsidiary in
connection with, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Takeover Proposal; PROVIDED, HOWEVER, that nothing contained in this
Section 4.2(a) shall prohibit the Company or its directors from (i) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer or (ii) referring a third party to this Section 4.2(a) or making
a copy of this Section 4.2(a) available to any third party; and PROVIDED,
FURTHER, that prior to the Shareholder Meeting, if the Board of Directors of the
Company reasonably determines the Takeover Proposal constitutes a Superior
Proposal (as defined below), then, to the extent required by the fiduciary
obligations of the Board of Directors of the Company, as determined in good
faith by a majority thereof after consultation with independent counsel (who may
be the Company's regularly engaged independent counsel), the Company may, in
response to an unsolicited request, furnish non-public information, and afford
access to the properties, books, records, officers, employees and
representatives of the Company, participate in discussions or negotiations
regarding the Superior Proposal and, provided that the Company has complied with
the provisos to its rights to terminate this Agreement pursuant to Section
7.1(g) hereof, enter into an agreement with respect to or approve or recommend
to its shareholders a Superior Proposal (and, to the extent permitted by Section
5.1 hereof, withdraw, modify or change its recommendation of this Agreement) .
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding sentence by any officer or director of
the Company or any of its Subsidiaries or any financial advisor, attorney or
other advisor or representative of the Company or any of its Subsidiaries,
whether or not such person is purporting to act on behalf of the Company or any
of its Subsidiaries or otherwise, shall be deemed to be a breach of this Section
4.2(a) by the Company. Nothing in this Section 4.2(a) shall limit the Company's
obligations set forth in Sections 4.2(b) and 5.1 hereof. For purposes of this
Agreement, "TAKEOVER PROPOSAL" means any proposal for a merger, tender offer or
other business combination involving the Company or any of its Subsidiaries or
any proposal or offer to acquire in any manner, directly or indirectly, an
equity interest in, any voting securities of, or a substantial portion of the
assets of the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement and the Stock Option Agreement, and "SUPERIOR
PROPOSAL" means a bona fide proposal made by a third party to acquire the
Company pursuant to a tender or exchange offer, a merger, a sale of all or
substantially all its assets or otherwise on terms which a majority of the
disinterested members of the Board of Directors of the Company determines, at a
duly constituted meeting of the Board of Directors or by unanimous written
consent, in its reasonable good faith judgment (after consultation with its
financial advisor) to be more favorable to the Company's shareholders than the
Merger and for which financing, to the extent required, is then committed or
which, in the reasonable good faith judgment of a majority of such disinterested
members of the Board of Directors of the Company, as expressed in a resolution
adopted at a duly constituted meeting of such directors, is reasonably capable
of being obtained by such third party.
(b) The Company shall advise Parent orally and in writing within 24
hours of its receipt of any Takeover Proposal or any inquiry with respect to or
which
34
could lead to any expression of interest regarding a potential Takeover Proposal
that is received by or communicated to any officer or director of the Company
or, to the Knowledge of the Company, any financial advisor, attorney or other
advisor or representative of the Company, such notice to include (i) the
material terms of such Takeover Proposal or inquiry (including a copy of any
written proposal), and (ii) the identity of the person making any such Takeover
Proposal or inquiry. If the Company intends to participate in discussions or
negotiations with and/or furnish any Person with any information with respect to
any inquiry or Takeover Proposal in accordance with Section 4.2(a), the Company
shall advise Parent orally and in writing of such intention not less than 48
hours in advance of providing such information. The Company will keep Parent
fully informed of the status and details of any such Takeover Proposal or
inquiry.
SECTION 4.3 THIRD PARTY STANDSTILL AGREEMENTS. During the period from
the date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which the Company or any of its Subsidiaries is a party
(other than any involving Parent). During such period, the Company agrees to
enforce, to the fullest extent permitted under applicable law, the provisions of
any such agreements, including, but not limited to, obtaining injunctions to
prevent any breaches of such agreements and to enforce specifically the terms
and provisions thereof in any court of the United States or any state thereof
having jurisdiction.
SECTION 4.4 REORGANIZATION. During the period from the date of this
Agreement through the Effective Time, unless the other party shall otherwise
agree in writing, none of Parent, the Company or any of their respective
Subsidiaries shall take or fail to take any action with the actual knowledge of
those taking or failing to take such action (or those directing such action or
failure to take action) that such action or failure will cause the Merger to not
qualify as a reorganization within the meaning of Section 368(a) of the Code.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 SHAREHOLDER MEETING. The Company will, as soon as
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of shareholders (the "SHAREHOLDER MEETING") for the
purpose of considering the approval and adoption of this Agreement and at such
meeting call for a vote and cause proxies to be voted in respect of the approval
and adoption of this Agreement. The Company will, through its Board of
Directors, recommend to its shareholders the adoption and approval of this
Agreement and shall not withdraw, modify or change such recommendation;
provided, however, that the Board of Directors of the Company may withdraw,
modify or change such recommendation if it (i) has not breached Section 4.2 and
(ii) enters into a merger, acquisition or other agreement (including an
agreement in principle) to effect a Superior Proposal or the Board of Directors
resolves to do so, provided that the Company has complied with the provisos to
35
its right to terminate this Agreement in Section 7.1(g) of this Agreement.
Notwithstanding the Company's rights regarding a Superior Proposal in the
preceding sentence, the Company agrees that its obligations pursuant to the
first sentence of this Section 5.1 shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of a Takeover
Proposal or Superior Proposal.
SECTION 5.2 PREPARATION OF THE REGISTRATION STATEMENT AND THE PROXY
STATEMENT. (a) The Company and Parent shall promptly prepare and file with the
SEC the Proxy Statement and Parent shall prepare and promptly file with the SEC
the Registration Statement, in which the Proxy Statement will be included as a
prospectus. Each of Parent and the Company shall use its reasonable best efforts
to have the Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing. As promptly as practicable after
the Registration Statement shall have become effective, the Company shall mail
the Proxy Statement to its shareholders. Parent shall also take any action
(other than qualifying to do business in any jurisdiction in which it is now not
so qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Parent Common Stock in the Merger and upon the
exercise of the Substitute Shares (as defined in Section 5.6), and the Company
shall furnish all information concerning the Company and the holders of Company
Common Stock as may be reasonably requested in connection with any such action.
(b) Parent and the Company promptly will notify each other of the
receipt of comments from the SEC and of any request by the SEC for amendments or
supplements to the Registration Statement or the Proxy Statement or for
additional information, and promptly will supply each other with copies of all
correspondence between the parties and the SEC with respect thereto. If, at any
time prior to the Shareholder Meeting, any event should occur relating to or
affecting the Company, Parent or Sub, or to their respective Subsidiaries,
officers or directors, which event should be described in an amendment or
supplement to the Registration Statement or the Proxy Statement, the parties
promptly will inform each other and cooperate in preparing, filing and having
declared effective or clearing with the SEC and, if required by applicable state
securities laws, distributing to the Company's shareholders such amendment or
supplement.
SECTION 5.3 ACCESS TO INFORMATION. Subject to currently existing
contractual and legal restrictions applicable to the Company or any of its
Subsidiaries, the Company shall, and shall cause each of its Subsidiaries to,
afford to the Parent and its Subsidiaries and each of their accountants,
counsel, financial advisors and other representatives of Parent reasonable
access, and permit them to make such inspections as they may reasonably require
of, during the period from the date of this Agreement through the Effective
Time, all of their respective properties, books, contracts, commitments and
records (including engineering records and Tax Returns and the work papers of
independent accountants, if available and subject to the consent of such
independent accountants) and, during such period, the Company shall, and shall
cause each of its Subsidiaries to (i) furnish promptly to Parent a copy of each
report,
36
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws, (ii)
consistent with its legal obligations, furnish promptly to Parent all other
information concerning its business, properties and personnel as Parent may
reasonably request, (iii) promptly make available to Parent all personnel of the
Company and its Subsidiaries knowledgeable about matters relevant to such
inspections as reasonably requested by Parent and (iv) provide reasonable access
to the Company's facilities and operations to enable Parent to conduct a health
and safety review of the business, including the right to take samples. No
investigation pursuant to this Section 5.3 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto. All information obtained by Parent pursuant
to this Section 5.3 shall be kept confidential in accordance with the
Confidentiality Agreement, dated May 24, 2000 between Parent and the Company
(the "CONFIDENTIALITY AGREEMENT") and Parent and Company hereby agree that
Paragraphs 7, 8 and 9 of the Confidentiality Agreement shall be terminated and
of no further effect.
SECTION 5.4 RULE 145 LETTERS. On the date hereof, the Company shall
cause to be prepared and delivered to Parent a list (reasonably satisfactory to
counsel for Parent) identifying all persons who, at the time of the Shareholder
Meeting, may be deemed to be "affiliates" of the Company as that term is used in
paragraphs (c) and (d) of Rule 145 under the Securities Act (the "RULE 145
AFFILIATES"). The Company shall use its reasonable best efforts to cause each
person who is identified as a Rule 145 Affiliate in such list to deliver to
Parent within 30 days of the date hereof a written agreement in substantially
the form of EXHIBIT D hereto, executed by each of such persons identified in the
foregoing list.
SECTION 5.5 FEES AND EXPENSES. (a) Except as provided in this Section
5.5, whether or not the Merger is consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby,
including the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the party incurring such costs and expenses,
provided that all printing expenses and all filing fees (including filing fees
under the Securities Act, the Exchange Act and the HSR Act) shall be divided
equally between Parent and the Company.
(b) Notwithstanding any provision in this Agreement to the contrary,
if this Agreement is terminated (A) by the Company pursuant to Section 7.1(d)(i)
after receipt of a Superior Proposal, (B) by Parent pursuant to Section 7.1(b),
(c) or (f), (C) by Parent or the Company pursuant to Section 7.1(e) (after
receipt of a Superior Proposal or after the occurrence of any of the events
described in clause (i), (ii) or (iii) of Section 7.1(f)) or (g), then, in each
case, the Company shall (without prejudice to any other rights of Parent against
the Company) reimburse Parent upon demand for all out-of-pocket fees and
expenses incurred or paid by or on behalf of Parent or any Affiliate (as
hereinafter defined) of Parent in connection with this Agreement, the Stock
Option Agreement and the transactions contemplated herein or therein, including
all fees and expenses of counsel, investment banking firms, accountants and
consultants (collectively, "PARENT FEES") up to a maximum of $2,000,000. As used
herein, "AFFILIATE" shall have the meaning set forth in Rule 405 under the
Securities Act.
37
(c) Notwithstanding any provision in this Agreement to the contrary:
(i) if this Agreement is terminated:
(A) by the Company pursuant to Section 7.1(d)(i)
after receipt of a Superior Proposal, or
(B) by Parent pursuant to Section 7.1(b) or (f), or
(C) by Parent pursuant to Section 7.1(c) or by
Parent or the Company pursuant to Section 7.1(e) in either case
after receipt of a Superior Proposal or after the occurrence of
any of the events described in clause (i), (ii) or (iii) of
Section 7.1(f),
and, in the case of (A), (B) or (C), prior to, concurrently with or
within twelve months after such a termination a Third Party Acquisition
Event (as defined below) occurs, then the Company shall (in addition to
any obligation under Section 5.5(b) and without prejudice to any other
rights of Parent against the Company) pay to Parent the Termination Fee
(as defined below) in cash, such payment to be made promptly, but in no
event later than the second business day following, the later to occur
of such termination and such Third Party Acquisition Event; or
(ii) if this Agreement is terminated by Parent or the Company
pursuant to Section 7.1(g), then the Company shall (in addition
to any obligation under Section 5.5(b) and without prejudice to
any other rights of Parent against the Company) pay to Parent
the Termination Fee in cash, such payment to be made by the
Company concurrently with such termination if the termination is
by the Company, or no later than the second business day
following such termination if the termination is by Parent.
"TERMINATION FEE" means $4,000,000, provided, however, that (i) such
amount shall be reduced to an amount not less than zero by subtracting from
$4,000,000 the amount realized or realizable (based on the facts as they exist
on the date such fee shall become due) by Parent under the Stock Option
Agreement which is in excess of $2,500,000, and (ii) the total of the
Termination Fee and the net amount actually realized by Parent under the Stock
Option Agreement, after netting out the aggregate Exercise Price (as defined
therein) paid by Parent, shall not exceed $6,500,000; provided further that if
such Fee shall be so reduced by the net amount so realizable by Parent and
thereafter the Stock Option Agreement shall terminate without receipt by Parent
of such amount, then an additional payment shall be made to Parent in the amount
by which the Termination Fee was reduced hereunder promptly following such
termination.
A "THIRD PARTY ACQUISITION EVENT" means any of the following events: (A)
any person (other than Parent or its Affiliates) acquires or becomes the
beneficial
38
owner of 20% or more of the outstanding shares of Company Common Stock; (B) any
group (other than a group which includes or may reasonably be deemed to include
Parent or any of its Affiliates) is formed which, at the time of formation,
beneficially owns 20% or more of the outstanding shares of Company Common Stock;
(C) the Company enters into, or announces that it proposes to enter into, an
agreement, including an agreement in principle, providing for a merger or other
business combination involving the Company or a "significant subsidiary" (as
defined in Rule 1.02(w) of Regulation S-X as promulgated by the SEC) of the
Company or the acquisition of a substantial interest in, or a substantial
portion of the assets, business or operations of, the Company or a significant
subsidiary (other than the transactions contemplated by this Agreement); (D) any
person (other than Parent or its Affiliates) is granted any option or right,
conditional or otherwise, to acquire or otherwise become the beneficial owner of
shares of Company Common Stock which, together with all shares of Company Common
Stock beneficially owned by such person, results or would result in such person
being the beneficial owner of 20% or more of the outstanding shares of Company
Common Stock; or (E) there is a public announcement with respect to a plan or
intention by the Company to effect any of the foregoing transactions. For
purposes of this Section 5.5(c), the terms "group" and "beneficial owner" shall
be defined by reference to Section 13(d) of the Exchange Act.
(d) Notwithstanding any provision in this Agreement to the contrary,
if this Agreement is terminated (i) by the Company pursuant to Section 7.1(b) or
(c), then Parent shall (without prejudice to any other rights of the Company
against Parent) reimburse the Company upon demand for all out-of-pocket fees and
expenses incurred or paid by or on behalf of the Company or any Affiliate of the
Company in connection with this Agreement, the Stock Option Agreement and the
transactions contemplated herein or therein, including all fees and expenses of
counsel, investment banking firms, accountants and consultants (collectively,
"Company Fees"), PROVIDED, HOWEVER, that (A) in no event shall the amount paid
pursuant to this Section 5.5(d) in reimbursement of the Company Fees exceed
$2,000,000.
SECTION 5.6 COMPANY STOCK OPTIONS. (a) At the Effective Time, each
Company Stock Option which is outstanding immediately prior to the Effective
Time shall become and represent a right to receive the number of shares of
Parent Common Stock (each a "SUBSTITUTE SHARE"), in an amount equal to:
A x {[ B - (C + T)] / B} x D
A = number of shares of Company Common Stock subject or related to such
Company Stock Option
B = $17.00
C = exercise or purchase price per share of Company Common Stock subject
or related to such Company Stock Option
39
T = all applicable federal, state and local taxes required to be
withheld by the Parent per share of Company Common Stock subject or
related to such Company Stock Option
D = the Merger Consideration
Parent shall pay cash to holders of Substitute Shares in lieu of issuing
fractional shares of Parent Common Stock.
(b) The Company shall take all action necessary in implementing the
provisions of this Section 5.6, including, for avoidance of doubt, amendment of
the Company Stock Option Plans pursuant to a resolution of the Board of
Directors in form and substance satisfactory to Parent, and to ensure that,
after giving effect to the foregoing, no Company Stock Option shall be
exercisable for Company Common Stock or Parent Common Stock following the
Effective Time.
(c) Parent shall use its reasonable best efforts to list on the
NYSE, upon official notice of issuance, any shares of Parent Common Stock to be
issued in connection with the Merger or in connection with Substitute Shares
which have not been previously listed.
SECTION 5.7 REASONABLE BEST EFFORTS. (a) Upon the terms and subject
to the conditions set forth in this Agreement, including without limitation
Section 4.2 hereof, each of the parties agrees to use 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 in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement, including: (i) the obtaining of all necessary actions or non-actions,
waivers, consents and approvals from all Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to obtain
an approval or waiver from, or to avoid or vigorously defend an action or
proceeding by, any Governmental Entity (including those in connection with the
HSR Act and State Takeover Approvals), (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement, the Stock Option Agreement or the consummation of
the transactions contemplated hereby and thereby, 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 contemplated by
this Agreement. No party to this Agreement shall consent to any voluntary delay
of the consummation of the Merger at the behest of any Governmental Entity
without the consent of the other parties to this Agreement, which consent shall
not be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not take any
action, or enter into any transaction, which would cause any of its
representations or
40
warranties contained in this Agreement to be untrue or result in a breach of any
covenant made by it in this Agreement.
(c) Prior to and following the Effective Time, each party shall use
all reasonable best efforts to refrain from taking any action or failing to take
any action, which action or failure to act would cause, or would be reasonably
likely to cause, the Merger to fail to qualify as a reorganization within the
meaning of Section 368(a) of the Code.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action to be
taken by either Parent or the Company to effect the Merger and to consummate the
other transactions contemplated hereby, the Company shall not, without Parent's
prior written consent, commit to any divestiture transaction, and neither Parent
nor any of its Affiliates shall be required to divest or hold separate or
otherwise take or commit to take any action that limits its freedom of action
with respect to, or its ability to retain, the Company or any of the businesses,
product lines or assets of Parent or any of its Subsidiaries or that otherwise
would have a Material Adverse Effect on Parent.
(e) The Company will use its reasonable efforts to cause the persons
listed in Section 5.7(e) of the Company Letter to execute and deliver retention,
employment or consulting agreements in form and substance reasonably
satisfactory to the Parent.
SECTION 5.8 PUBLIC ANNOUNCEMENTS. Parent and the Company will not
issue any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions without prior consultation with the other party, except as may be
required by applicable law or by obligations pursuant to any listing agreement
with or rules of any national securities exchange.
SECTION 5.9 STATE TAKEOVER LAWS. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or in
the Stock Option Agreement, Parent and the Company and their respective Boards
of Directors shall use their best efforts to grant such approvals and take such
actions as are necessary so that the transactions contemplated hereby and
thereby may be consummated as promptly as practicable on the terms contemplated
hereby and thereby and otherwise act to minimize the effects of any such statute
or regulation on the transactions contemplated hereby and thereby.
SECTION 5.10 INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE.
(a) From and after the Effective Time, Parent shall cause the Surviving
Corporation to indemnify and hold harmless all past and present officers and
directors of the Company and of its Subsidiaries to the same extent and in the
same manner such persons are indemnified as of the date of this Agreement by the
Company pursuant to the WBCL, the Company's articles of incorporation and the
Company's By-laws
41
for acts or omissions occurring at or prior to the Effective Time (including
indemnifying and holding harmless such persons for acts or omissions occurring
at or prior to the Effective Time in respect of the Merger and the transactions
contemplated thereby) to the same extent and in the manner as such persons are
indemnified as of the date of this Agreement by the Company pursuant to the
WBCL, the Company's articles of incorporation and the Company's By-laws.
(b) Parent shall cause the Surviving Corporation to provide, for an
aggregate period of not less than three years from the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring prior to the Effective Time (the
"D&O INSURANCE") that is substantially similar to the Company's existing policy
at the Effective Time or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; PROVIDED, HOWEVER, that neither the
Parent nor the Surviving Corporation shall be required to pay an annual premium
for the D&O Insurance in excess of one hundred fifty percent (150%) of the
amount of the last annual premiums paid prior to the date hereof (which premiums
the Company represents and warrants to be not more than $155,000 per annum), but
in such case shall purchase as much coverage as possible for such amount.
(c) Parent hereby agrees that, effective at the Effective Time,
Parent will guarantee the obligations of the Surviving Corporation under Section
5.10(a) and (b).
(d) This covenant is intended to be for the benefit of, and shall be
enforceable by, each of the indemnified parties and their respective heirs and
legal representatives.
SECTION 5.11 NOTIFICATION OF CERTAIN MATTERS. Parent shall use its
reasonable best efforts to give prompt notice to the Company, and the Company
shall use its reasonable best efforts to give prompt notice to Parent, of: (i)
the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which it is aware and which would be reasonably likely to
cause (x) any representation or warranty contained in this Agreement and made by
it to be untrue or inaccurate in any material respect or (y) any covenant,
condition or agreement contained in this Agreement and made by it not to be
complied with or satisfied in all material respects, (ii) any failure of Parent
or the Company, as the case may be, to comply in a timely manner with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on Parent or the Company, as the case may be;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section 5.11
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 5.12 EMPLOYEE BENEFIT PLANS. For the first year following the
Closing Date while employed by the Surviving Corporation, employees of the
Surviving Corporation will receive base wages and salaries at rates no less
favorable to such employees than the rates of wages and salaries paid by the
Company or its Subsidiaries to such employees on the date of this Agreement. For
a period of one year immediately following the Effective Time, Parent shall or
shall cause the Surviving
42
Corporation to maintain in effect employee benefit plans and arrangements which
provide benefits which have a value which is substantially comparable, in the
aggregate, to the benefits provided by the U.S. Plans (not taking into account
the value of any benefits under any such plans which are equity based). For
purposes of determining eligibility to participate, vesting and accrual or
entitlement to benefits where length of service is relevant under any employee
benefit plan or arrangement of the Surviving Corporation, employees of the
Company and its Subsidiaries as of the Effective Time shall receive service
credit for service with the Company and its Subsidiaries to the same extent such
credit was granted under the Company Plans, subject to offsets for previously
accrued benefits and no duplication of benefits.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) SHAREHOLDER APPROVAL. This Agreement shall have been duly
approved by the requisite vote of shareholders of the Company in accordance with
applicable law, the Company Charter and the Company's By-laws.
(b) STOCK EXCHANGE LISTINGS. The Parent Common Stock issuable in the
Merger and upon exercise of Substitute Shares and not previously listed shall
have been authorized for listing on the NYSE, subject to official notice of
issuance.
(c) HSR AND OTHER APPROVALS/CONSENTS OR WAIVERS. (i) The waiting
period (and any extension thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(ii) All authorizations, consents, orders, declarations or
approvals of, or filings with, or terminations or expirations of waiting periods
imposed by, any Governmental Entity, which the failure to obtain, make or occur
would have the effect of, directly or indirectly, restraining, prohibiting or
restricting the Merger or any of the transactions contemplated hereby or would
have, individually or in the aggregate, a Material Adverse Effect on Parent
(assuming the Merger had taken place), shall have been obtained, shall have been
made or shall have occurred.
(d) REGISTRATION STATEMENT. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated or, to the knowledge of Parent or the Company, threatened by the SEC.
All necessary state securities or blue sky authorizations (including State
Takeover Approvals) shall have been received.
43
(e) NO ORDER. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of, directly or indirectly, restraining, prohibiting or restricting
the Merger or any of the transactions contemplated hereby; provided, however,
that the provisions of this Section 6.1(e) shall not be available to any party
whose failure to fulfill its obligations pursuant to Section 5.7 shall have been
the cause of, or shall have resulted in, the enforcement or entering into of any
such law, rule, regulation, executive order, decree, injunction or other order.
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of each of the following
additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES. (i)
Each of Parent and Sub shall have performed in all material respects each of its
agreements and covenants contained in this Agreement required to be performed on
or prior to the Effective Time, (ii) each of the representations and warranties
of Parent and Sub contained in this Agreement that is qualified by materiality
shall have been true and correct when made, and shall be true and correct on and
as of the Effective Time as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct as of such certain date) and (iii) each of the
representations and warranties that is not so qualified shall have been true and
correct in all material respects when made, and shall be true and correct in all
material respects on and as of the Effective Time as if made on and as of such
date (other than representations and warranties which address matters only as of
a certain date which shall be true and correct in all material respects as of
such certain date), in each case except as contemplated or permitted by this
Agreement, and the Company shall have received certificates signed on behalf of
each of Parent and Sub by one of its officers to such effect.
(b) TAX OPINION. The Company shall have received an opinion of
Sidley & Austin, counsel to the Company, in form and substance reasonably
satisfactory to the Company, dated the Effective Time, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time substantially to the
effect that, for federal income tax purposes, the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and the
Company, Sub, and Parent will each be a party to that reorganization within the
meaning of Section 368(b) of the Code.
(c) MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there
shall have been no Material Adverse Change with respect to Parent. The Company
shall have received a certificate signed on behalf of Parent by an officer of
Parent to such effect.
44
(d) COMPANY STOCK OPTION PLANS. Parent shall have taken all action
required to be taken by it to implement the provisions of Section 5.6.
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT
THE MERGER. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of each of the
following additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND WARRANTIES. (i)
The Company shall have performed in all material respects each of its covenants
and agreements contained in this Agreement required to be performed on or prior
to the Effective Time, (ii) each of the representations and warranties of the
Company contained in this Agreement that is qualified by materiality shall have
been true and correct when made, and shall be true and correct on and as of the
Effective Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be true
and correct as of such certain date) and (iii) each of the representations and
warranties that is not so qualified shall have been true and correct in all
material respects when made, and shall be true and correct in all material
respects on and as of the Effective Time as if made on and as of such date
(other than representations and warranties which address matters only as of a
certain date which shall be true and correct in all material respects as of such
certain date), in each case except as contemplated or permitted by this
Agreement. Parent shall have received a certificate signed on behalf of the
Company by its Chief Executive Officer or its Chief Financial Officer to such
effect.
(b) TAX OPINION. Parent shall have received an opinion of ▇▇▇▇▇▇,
▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to Parent, in form and substance reasonably
satisfactory to Parent, dated the Effective Time, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time substantially to the
effect that, for federal income tax purposes, the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and the
Company, Sub, and Parent will each be a party to that reorganization within the
meaning of Section 368(b) of the Code.
(c) CONSENTS. (i) The Company shall have obtained the consent or
approval of each person or Governmental Entity whose consent or approval shall
be required in connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease or other agreement or
instrument, except as to which the failure to obtain such consents and approvals
would not, in the reasonable opinion of Parent, individually or in the
aggregate, have a Material Adverse Effect on the Company or Parent or upon the
consummation of the transactions contemplated in this Agreement or the Stock
Option Agreement or the Shareholder Agreement.
(ii) In obtaining any approval or consent required to consummate any
of the transactions contemplated herein, in the Stock Option Agreement or the
Shareholder Agreement, no Governmental Entity shall have imposed or shall have
sought to impose any condition, penalty or requirement which, in the reasonable
opinion of
45
Parent, individually or in aggregate would have a Material Adverse Effect on the
Company or Parent.
(d) AFFILIATE AGREEMENTS. Parent shall have received the written
agreements from Rule 145 Affiliates of the Company described in Section 5.4.
(e) MATERIAL ADVERSE CHANGE. Since the date of this Agreement, there
shall have been no Material Adverse Change with respect to the Company. Parent
shall have received a certificate signed on behalf of the Company by the Chief
Executive Officer or the Chief Financial Officer of the Company to such effect.
(f) COMPANY STOCK OPTION PLANS. The Company shall have taken all
action required to be taken by it to implement the provisions of Section 5.6.
(g) DIRECTOR AND OFFICER RESIGNATIONS. All of the Directors of
the Company and its Subsidiaries and any officers thereof designated by Parent,
shall have tendered their resignation in form and substance satisfactory to
Parent.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after any approval of the
matters presented in connection with the Merger by the shareholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the other party shall
have failed to comply in any material respect with any of its covenants
or agreements contained in this Agreement required to be complied with
prior to the date of such termination, which failure to comply has not
been cured within five business days following receipt by such other
party of written notice of such failure to comply;
(c) by Parent if (x) there has been a breach of a
representation or warranty of the Company that gives rise to a failure
of the fulfillment of a condition of the Parent's and Sub's obligations
to effect the Merger pursuant to Section 6.3(a)(ii) or by Company if (y)
there has been a breach of a representation or warranty of the Parent or
Sub that gives rise to a failure of the fulfillment of a condition of
the Company's obligations to effect the Merger pursuant to Section
6.2(a)(ii), in each case which breach has not been cured within five
business days following receipt by the breaching party of written notice
of the breach;
(d) by either Parent or the Company if: (i) the Merger has
not been effected on or prior to the close of business on the later of
March 31, 2001 or the
46
date 75 days after the waiting period applicable to the consummation of
the Merger under the HSR Act has expired or been terminated; PROVIDED,
HOWEVER, that the right to terminate this Agreement pursuant to this
Section 7.1(d)(i) shall not be available to any party whose failure to
fulfill any of its obligations contained in this Agreement has been the
cause of, or resulted in, the failure of the Merger to have occurred on
or prior to the aforesaid date; or (ii) any court or other Governmental
Entity having jurisdiction over a party hereto shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties shall have used their reasonable
efforts to resist, resolve or lift, as applicable, subject to the
provisions of Section 5.7) permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final
and nonappealable;
(e) by either Parent or the Company if the shareholders of
the Company do not approve this Agreement at the Shareholder Meeting or
at any adjournment or postponement thereof;
(f) by Parent if (i) the Board of Directors of the Company
shall not have recommended, or shall have resolved not to recommend, or
shall have qualified, changed, modified or withdrawn its recommendation
of the Merger or declaration that the Merger is advisable and fair to
and in the best interest of the Company and its shareholders, or shall
have resolved to do so, (ii) the Board of Directors of the Company,
shall have recommended to the shareholders of the Company any Takeover
Proposal or shall have resolved to do so or (iii) a tender offer or
exchange offer for 20% or more of the outstanding shares of capital
stock of the Company is commenced by a third party that is not an
Affiliate of Parent, and the Board of Directors of the Company fails to
recommend against acceptance of such tender offer or exchange offer by
its shareholders (including by taking no position with respect to the
acceptance of such tender offer or exchange offer by its shareholders);
(g) by Parent or the Company if the Company enters into a
merger, acquisition or other agreement (including an agreement in
principle) to effect a Superior Proposal or the Board of Directors of
the Company resolves to do so; PROVIDED, HOWEVER, that the Company may
not terminate this Agreement pursuant to this Section 7.1(g) unless (i)
the Company has delivered to Parent a written notice of the Company's
intent to enter into such an agreement to effect the Superior Proposal,
(ii) 48 hours have elapsed following delivery to Parent of such written
notice by the Company and (iii) during such 48-hour period the Company
has fully cooperated with Parent, including informing Parent of the
terms and conditions of the Takeover Proposal and the identity of the
person making the Takeover Proposal, with the intent of enabling Parent
to agree to a modification of the terms and conditions of this Agreement
so that the transactions contemplated hereby may be effected; PROVIDED,
FURTHER, that the Company may not terminate this Agreement pursuant to
this Section 7.1(g) unless at the end of such 48 hour
47
period the Board of Directors of the Company continues reasonably to
believe that the Takeover Proposal constitutes a Superior Proposal when
compared to the Merger (taking into account any such modification as may
be proposed by Parent) and concurrently with such termination the
Company pays to Parent the amounts specified under Sections 5.5(a), (b)
and (c);
(h) by Company if the waiting period applicable to the
consummation of the Merger under the HSR Act has not expired or been
terminated on or prior to March 31, 2001; or
(i) by Parent if the waiting period applicable to the
consummation of the Merger under the HSR Act has not expired or been
terminated on or prior to March 31, 2001.
The right of any party hereto to terminate this Agreement pursuant to
this Section 7.1 shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
SECTION 7.2 EFFECT OF TERMINATION. In the event of termination of
this Agreement by either Parent or the Company, as provided in Section 7.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent, Sub or their respective officers or
directors (except for the last sentence of Section 5.3 and the entirety of
Section 5.5, which shall survive the termination); PROVIDED, HOWEVER, that
nothing contained in this Section 7.2 shall relieve any party hereto from any
liability for any willful breach of a representation or warranty contained in
this Agreement or the breach of any covenant contained in this Agreement.
SECTION 7.3 AMENDMENT. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
in the case of Sub or the Company, or a Senior Vice President of Parent, at any
time before or after approval of the matters presented in connection with the
Merger by the shareholders of the Company, but, after any such approval, no
amendment shall be made which by law or the rules of the Nasdaq National Market
requires further approval by such shareholders without such further approval.
This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
SECTION 7.4 WAIVER. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. No delay on the part of any party hereto in exercising any right,
48
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party hereto of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder,
nor shall any single or partial exercise of any right, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder. Unless otherwise provided, the rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies which the parties hereto may otherwise have at law or in equity. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES; NO OTHER
REPRESENTATIONS AND WARRANTIES. The representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
terminate at the Effective Time. Each party hereto agrees that, except for the
representations and warranties contained in this Agreement, none of the Company,
Parent or Sub makes any other representations and warranties, and each hereby
disclaims any other representations and warranties made by itself or any of its
officers, directors, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing.
SECTION 8.2 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
Topaz Merger Corp.
c/o GE Medical Systems
▇.▇. ▇▇▇ ▇▇▇, ▇-▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
GE Medical Systems
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
and:
General Electric Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President and Senior Counsel - Transactions
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Company, to:
Lunar Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Sidley & Austin
Banc One Plaza
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 8.3 INTERPRETATION. (a) 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."
(b) "SUBSIDIARY" means any corporation, partnership, limited
liability company, joint venture or other legal entity of which Parent or
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns or controls, directly or indirectly, 50% or more of the stock
or other equity interests the holders of
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which are generally entitled to vote for the election of the board of directors
or other governing body of such corporation, partnership, limited liability
company, joint venture or other legal entity.
SECTION 8.4 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, except for the Stock Option Agreement and as provided in the last
sentence of Section 5.3, constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof. This Agreement, except for the
provisions of Section 5.10, is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.
SECTION 8.6 GOVERNING LAW. Except to the extent that the laws of the
State of Wisconsin are mandatorily applicable to the Merger, this Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 8.7 ASSIGNMENT. Subject to Section 1.1, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors or assigns.
SECTION 8.8 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms, conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic and
legal substance of the transactions contemplated hereby are 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
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated by this Agreement may be
consummated as originally contemplated to the fullest extent possible.
SECTION 8.9 ENFORCEMENT OF THIS AGREEMENT. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties hereto shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof such
remedy being in addition to any
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other remedy to which any party is entitled at law or in equity. Each party
hereto irrevocably submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York. Each party hereto waives
any right to a trial by jury in connection with any such action, suit or
proceeding and waives any objection based on FORUM NON CONVENIENS or any other
objection to venue thereof.
SECTION 8.10 PERFORMANCE BY SUB. Parent hereby agrees to cause Sub to
comply with its obligations hereunder and to cause Sub to consummate the Merger
as contemplated herein and whenever this Agreement requires Sub to take any
action, such requirement shall be deemed to include an undertaking of Parent to
cause Sub to take such action.
SECTION 8.11 DEFINED TERMS. Each of the following terms is defined in
the Section identified below:
Affiliate...................................................... Section 5.5(b)
Affiliated Person................................................ Section 3.26
Agreement............................................................ Preamble
Agreement of Merger............................................... Section 1.2
Average Parent Share Price..................................... Section 1.5(c)
Blue Sky Laws..................................................... Section 2.3
Certificates................................................... Section 1.6(b)
Closing.......................................................... Section 1.14
Closing Date..................................................... Section 1.14
Company.............................................................. Preamble
Company Business Personnel....................................... Section 3.15
Company Charter................................................... Section 3.4
Company Common Stock........................................... Section 1.5(c)
Company Foreign Benefit Plan.................................. Section 3.12(d)
Company Intellectual Property.................................... Section 3.16
Company Letter................................................. Section 3.2(b)
Company Licenses................................................. Section 3.16
Company Multiemployer Plan.................................... Section 3.12(c)
Company Permits................................................... Section 3.8
Company Plan.................................................. Section 3.12(c)
Company SEC Documents............................................. Section 3.5
Company Stock Option Plans..................................... Section 3.2(a)
Company Stock Options.......................................... Section 3.2(b)
Compensation Agreements....................................... Section 3.11(a)
Confidentiality Agreement......................................... Section 5.3
Constituent Corporations............................................. Preamble
D&O Insurance................................................. Section 5.10(b)
DLJ.............................................................. Section 3.17
Effective Time.................................................... Section 1.2
Environmental Law......................................... Section 3.23(a)(ii)
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Environmental Permit..................................... Section 3.23(a)(iii)
ERISA......................................................... Section 3.12(a)
ERISA Affiliate............................................... Section 3.12(c)
Exchange Act...................................................... Section 2.3
Exchange Agent................................................. Section 1.6(a)
Exchange Fund.................................................. Section 1.6(a)
FDA............................................................... Section 3.8
Governmental Entity............................................... Section 2.3
Hazardous Substances....................................... Section 3.23(a)(i)
HSR Act........................................................... Section 2.3
IRS............................................................... Section 3.9
Knowledge of the Company.......................................... Section 3.8
Liens............................................................ Section 3.27
Material Adverse Change...................................... Section 2.1, 3.1
Material Adverse Effect...................................... Section 2.1, 3.1
Merger...............................................................Recitals
Merger Consideration........................................... Section 1.5(c)
NYSE.............................................................. Section 2.3
Parent............................................................... Preamble
Parent Common Stock............................................ Section 1.5(c)
Parent Fees.................................................... Section 5.5(b)
Parent SEC Documents.............................................. Section 2.5
Plan of Merger.................................................... Section 1.2
Proxy Statement................................................... Section 2.6
Real Estate................................................... Section 3.27(b)
Registration Statement............................................ Section 2.2
reorganization.......................................................Recitals
Rule 145 Affiliates............................................... Section 5.4
SEC............................................................... Section 2.2
Securities Act.................................................... Section 2.2
Shareholder Meeting............................................... Section 5.1
Significant Contracts......................................... Section 3.11(b)
SSA............................................................... Section 3.8
State Takeover Approvals.......................................... Section 2.3
Stock Option Agreement...............................................Recitals
Stockholder Agreement................................................Recitals
Sub.................................................................. Preamble
Substitute Share............................................... Section 5.6(a)
Superior Proposal.............................................. Section 4.2(a)
Surviving Corporation............................................. Section 1.1
Takeover Proposal.............................................. Section 4.2(a)
53
Tax Return........................................................ Section 3.9
Taxes............................................................. Section 3.9
U.S. Plan..................................................... Section 3.12(a)
Valuation Period............................................... Section 1.5(c)
WBCL.............................................................. Section 1.1
Worker Safety Laws............................................... Section 3.13
Year 2000 Compliant.............................................. Section 3.29
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
GENERAL ELECTRIC COMPANY,
A NEW YORK CORPORATION
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and General Counsel
GE Medical Systems
TOPAZ MERGER CORP.,
A WISCONSIN CORPORATION
By: /s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
LUNAR CORPORATION,
A WISCONSIN CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
55