EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF NOVEMBER 3, 1999
AMONG
AMERICAN HOME PRODUCTS CORPORATION,
WOLVERINE SUB CORP.
AND
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY
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TABLE OF CONTENTS
Page
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ARTICLE I
THE MERGER; CERTAIN RELATED MATTERS..........................................2
1.1 The Merger.............................................................2
1.2 Closing................................................................2
1.3 Effective Time.........................................................2
1.4 Effects of the Merger..................................................2
1.5 Certificate of Incorporation...........................................3
1.6 Bylaws.................................................................3
1.7 Officers and Directors of Surviving Corporation and Newco..............3
1.8 Effect on Capital Stock................................................4
1.9 ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options and Other Equity-Based Awards.............4
1.10 Certain Adjustments....................................................6
1.11 Associated Rights......................................................6
ARTICLE II
EXCHANGE OF CERTIFICATES.....................................................7
2.1 Exchange Fund..........................................................7
2.2 Exchange Procedures....................................................7
2.3 Distributions with Respect to Unexchanged Shares.......................8
2.4 No Further Ownership Rights in ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock.............8
2.5 No Fractional Shares of AHP Common Stock...............................8
2.6 Termination of Exchange Fund...........................................9
2.7 No Liability...........................................................9
2.8 Investment of the Exchange Fund........................................9
2.9 Lost Certificates......................................................9
2.10 Withholding Rights....................................................10
2.11 Further Assurances....................................................10
2.12 Stock Transfer Books..................................................10
2.13 Affiliates............................................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES..............................................11
3.1 Representations and Warranties of AHP.................................11
(a) Organization, Standing and Power; Subsidiaries..................11
(b) Capital Structure...............................................12
(c) Authority; No Conflicts.........................................13
(d) Reports and Financial Statements................................14
(e) Information Supplied............................................15
(f) Board Approval..................................................16
(g) Vote Required...................................................16
(h) Litigation; Compliance with Laws................................16
(i) Absence of Certain Changes or Events............................17
(j) Environmental Matters...........................................18
(k) Intellectual Property...........................................19
(l) Brokers or Finders..............................................19
(m) Opinions of AHP Financial Advisors..............................19
(n) Accounting Matters..............................................20
(o) Taxes...........................................................20
(p) Certain Contracts...............................................20
(q) AHP Stockholder Rights Plan.....................................21
3.2 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. ...................21
(a) Organization, Standing and Power; Subsidiaries..................21
(b) Capital Structure...............................................22
(c) Authority; No Conflicts.........................................23
(d) Reports and Financial Statements................................24
(e) Information Supplied............................................25
(f) Board Approval..................................................26
(g) Vote Required...................................................26
(h) Litigation; Compliance with Laws................................26
(i) Absence of Certain Changes or Events............................27
(j) Environmental Matters...........................................27
(k) Intellectual Property...........................................28
(l) Brokers or Finders..............................................28
(m) Opinion of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Advisor.....................28
(n) Accounting Matters..............................................28
(o) Taxes...........................................................29
(p) Certain Contracts...............................................29
(q) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholder Rights Plan..........................29
3.3 Representations and Warranties of AHP and Merger Sub..................29
(a) Organization....................................................29
(b) Corporate Authorization.........................................29
(c) Non-Contravention...............................................30
(d) No Business Activities..........................................30
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS...................................30
4.1 Covenants of AHP. ...................................................30
(a) Ordinary Course.................................................30
(b) Dividends; Changes in Share Capital.............................31
(c) Issuance of Securities..........................................31
(d) Governing Documents.............................................32
(e) No Acquisitions.................................................32
(f) No Dispositions.................................................32
(g) Investments; Indebtedness.......................................32
(h) Pooling; Tax-Free Qualification.................................33
(i) Compensation....................................................33
(j) Accounting Methods; Income Tax Elections........................33
(k) Certain Agreements..............................................33
(l) No Change or Amendment to Rights Agreement......................34
(m) No Related Actions..............................................34
4.2 Covenants of ▇▇▇▇▇▇-▇▇▇▇▇▇▇...........................................34
(a) Ordinary Course.................................................34
(b) Dividends; Changes in Share Capital.............................35
(c) Issuance of Securities..........................................35
(d) Governing Documents.............................................35
(e) No Acquisitions.................................................35
(f) No Dispositions.................................................36
(g) Investments; Indebtedness.......................................36
(h) Pooling; Tax-Free Qualification.................................37
(i) Compensation....................................................37
(j) Accounting Methods; Income Tax Elections........................37
(k) Certain Agreements..............................................37
(l) No Change or Amendment to Rights Agreement......................37
(m) No Related Actions..............................................37
4.3 Governmental Filings..................................................38
4.4 Control of Other Party's Business.....................................38
ARTICLE V
ADDITIONAL AGREEMENTS.......................................................38
5.1 Preparation of Proxy Statement; Stockholders Meetings.................38
5.2 Newco Board of Directors; Executive Officers; Name; Headquarters......42
5.3 Access to Information.................................................42
5.4 Reasonable Best Efforts...............................................43
5.5 Acquisition Proposals.................................................45
5.6 Employee Benefits Matters.............................................46
5.7 Fees and Expenses.....................................................47
5.8 Directors' and Officers' Indemnification and Insurance................48
5.9 Public Announcements..................................................48
5.10 Accountant's Letters..................................................49
5.11 Listing of Shares of AHP Common Stock.................................50
5.12 Dividends.............................................................50
5.13 Affiliates............................................................50
5.14 Section 16 Matters....................................................50
5.15 Specified Litigation..................................................51
ARTICLE VI
CONDITIONS PRECEDENT........................................................51
6.1 Conditions to Each Party's Obligation to Effect the Merger............51
(a) Stockholder Approval............................................51
(b) No Injunctions or Restraints, Illegality........................51
(c) HSR Act; EC Merger Regulation...................................52
(d) Governmental and Regulatory Approvals...........................52
(e) NYSE Listing....................................................52
(f) Effectiveness of the Form S-4...................................52
(g) Pooling.........................................................52
6.2 Additional Conditions to Obligations of AHP and Merger Sub............52
(a) Representations and Warranties..................................53
(b) Performance of Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. .................53
(c) Tax Opinion.....................................................53
(d) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement.................................53
6.3 Additional Conditions to Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. .............53
(a) Representations and Warranties..................................53
(b) Performance of Obligations of AHP. ............................54
(c) Tax Opinion.....................................................54
(d) AHP Rights Agreement............................................54
(e) Amendments......................................................54
(f) Settlement Agreement............................................54
ARTICLE VII
TERMINATION AND AMENDMENT...................................................55
7.1 Termination...........................................................55
7.2 Effect of Termination.................................................57
7.3 Amendment.............................................................62
7.4 Extension; Waiver.....................................................62
ARTICLE VIII
GENERAL PROVISIONS..........................................................63
8.1 Non-Survival of Representations, Warranties and Agreements............63
8.2 Notices...............................................................63
8.3 Interpretation........................................................64
8.4 Counterparts..........................................................64
8.5 Entire Agreement; No Third Party Beneficiaries........................64
8.6 Governing Law.........................................................65
8.7 Severability..........................................................65
8.8 Assignment............................................................65
8.9 Submission to Jurisdiction; Waivers...................................65
8.10 Enforcement...........................................................66
8.11 Definitions...........................................................66
LIST OF EXHIBITS
Exhibit Title
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A Form of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement
B Form of AHP Stock Option Agreement
1.5(a) Form of Amended and Restated Certificate of Incorporation
of Surviving Corporation
1.5(b) Form of Amendments to AHP Certificate of Incorporation
1.6(a) Form of Bylaws of Surviving Corporation
1.6(b) Form of Amendments to Bylaws of AHP
1.7 Board of Directors of Surviving Corporation
5.2(a) Board of Directors of Newco
5.13 Form of Affiliate Letter
6.2(c)(1) Form of AHP Representations Letter
6.2(c)(2) Form of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Representations Letter
AGREEMENT AND PLAN OF MERGER, dated as of November 3, 1999
(this "Agreement"), among AMERICAN HOME PRODUCTS CORPORATION, a Delaware
corporation ("AHP"), Wolverine Sub Corp., a Delaware corporation and a
direct wholly-owned subsidiary of AHP ("Merger Sub"), and ▇▇▇▇▇▇-▇▇▇▇▇▇▇
COMPANY, a Delaware corporation ("▇▇▇▇▇▇-▇▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, the Boards of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP deem
it advisable and in the best interests of each corporation and its
respective stockholders that ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP engage in a business
combination as peer firms in a merger of equals in order to advance the
long-term strategic business interests of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP;
WHEREAS, the combination of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP shall be
effected by the terms of this Agreement through a merger as outlined below
(the "Merger");
WHEREAS, in furtherance thereof, the respective Boards of
Directors of WarnerLambert and AHP have approved the Merger, upon the terms
and subject to the conditions set forth in this Agreement, pursuant to
which each share of common stock, par value $1.00 per share, of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ ("▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock") issued and outstanding
immediately prior to the Effective Time (as defined in Section 1.3), other
than shares owned or held directly or indirectly by AHP or directly or
indirectly by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, will be converted into the right to receive
shares of common stock, par value $0.33 1/3 per share, of AHP ("AHP Common
Stock") as set forth in Section 1.8;
WHEREAS, contemporaneously with the execution and delivery of
this Agreement, (i) as a condition and inducement to AHP's willingness to
enter into this Agreement and the AHP Stock Option Agreement referred to
below, AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ are entering into a Stock Option Agreement
dated as of the date hereof in the form of Exhibit A (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stock Option Agreement") pursuant to which ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is granting to
AHP an option to purchase shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock and (ii) as
a condition and inducement to ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ willingness to enter into
this Agreement and the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP are entering into a Stock Option Agreement dated as
of the date hereof in the form of Exhibit B (the "AHP Stock Option
Agreement", and together with the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement,
the "Stock Option Agreements"), pursuant to which AHP is granting to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ an option to purchase shares of AHP Common Stock;
WHEREAS, for Federal income tax purposes, it is intended 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"), and
the regulations promulgated thereunder; and
WHEREAS, for accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests transaction under
United States generally accepted accounting principles ("GAAP").
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
in this Agreement and in the Stock Option Agreements, and intending to be
legally bound hereby and thereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER; CERTAIN RELATED MATTERS
1.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General
Corporation Law (the "DGCL"), Merger Sub shall be merged with and into
▇▇▇▇▇▇-▇▇▇▇▇▇▇ at the Effective Time. Following the Merger, the separate
corporate existence of Merger Sub shall cease and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
continue as the surviving corporation (the "Surviving Corporation").
1.2 Closing. Upon the terms and subject to the conditions set
forth in Article VI and the termination rights set forth in Article VII,
the closing of the Merger (the "Closing") will take place on the first
Business Day after the satisfaction or waiver (subject to applicable law)
of the conditions (excluding conditions that, by their nature, cannot be
satisfied until the Closing Date) set forth in Article VI, unless this
Agreement has been theretofore terminated pursuant to its terms or unless
another time or date is agreed to in writing by the parties hereto (the
actual time and date of the Closing being referred to herein as the
"Closing Date"). The Closing shall be held at the offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, unless
another place is agreed to in writing by the parties hereto.
1.3 Effective Time. As soon as practicable following the
satisfaction or waiver (subject to applicable law) of the conditions set
forth in Article VI, at the Closing the parties shall (i) file a
certificate of merger (the "Certificate of Merger") in such form as is
required by and executed in accordance with the relevant provisions of the
DGCL and (ii) make all other filings or recordings required under the DGCL.
The Merger shall become effective at such time as the Certificate of Merger
is duly filed with the Delaware Secretary of State or at such subsequent
time as AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall agree and as shall be specified in the
Certificate of Merger (the date and time the Merger becomes effective being
the "Effective Time").
1.4 Effects of the Merger. At and after the Effective Time,
the Merger will have the effects set forth in the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time
all the property, rights, privileges, powers and franchises of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub shall be vested in the Surviving Corporation,
and all debts, liabilities and duties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
1.5 Certificate of Incorporation. (a) The certificate of
incorporation of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, as in effect immediately prior to the
Effective Time, shall be amended and restated so as to read in its entirety
in the form set forth as Exhibit 1.5 and, as so amended and restated, shall
be the certificate of incorporation of the Surviving Corporation, until
thereafter changed or amended as provided therein or by applicable law.
(b) The certificate of incorporation of AHP shall be amended
effective as of the Effective Time as set forth on Exhibit 1.5(b) hereto.
Such amendment is referred to herein as the "Certificate Amendment."
1.6 Bylaws. (a) The bylaws in the form attached as Exhibit
1.6(a) shall be the bylaws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The bylaws of AHP shall be amended effective as of the
Effective Time to the effect provided in Exhibit 1.6(b), with such changes
therein as the parties may mutually agree. The amendment to the bylaws of
AHP if the Bylaw Amendment Vote is obtained is referred to in this
Agreement as the "AHP Bylaw Amendment." For purposes of this agreement, the
term "Bylaw Amendment Vote" means the affirmative vote of the holders of at
least 80% of the combined voting power of the then outstanding shares of
AHP stock entitled to vote generally in the election of directors, voting
together as a single class.
1.7 Officers and Directors of Surviving Corporation and Newco.
The officers of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ as of the Effective Time shall be the
officers of the Surviving Corporation, until the earlier of their
resignation or removal or otherwise ceasing to be an officer or until their
respective successors are duly elected and qualified, as the case may be.
The directors of the Surviving Corporation as of the Effective Time shall
be as provided in Exhibit 1.7, which individuals will serve as directors of
the Surviving Corporation until the earlier of their resignation or removal
or otherwise ceasing to be a director or until their respective successors
are duly elected and qualified. The officers and directors of AHP, as of
the Effective Time, will be as provided in Section 5.2. AHP as of and after
the Effective Time is sometimes referred to herein as "Newco."
1.8 Effect on Capital Stock.
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(a) At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof, each share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock owned by AHP or Merger
Sub or held by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, all of which shall be canceled as provided
in Section 1.8(c)), together with the associated ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights,
shall be converted into 1.4919 validly issued, fully paid and
non-assessable shares (the "Exchange Ratio") of AHP Common Stock and the
associated AHP Rights (as hereinafter defined) (together with any cash in
lieu of fractional shares of AHP Common Stock to be paid pursuant to
Section 2.5, the "Merger Consideration").
(b) As a result of the Merger and without any action on the
part of the holders thereof, at the Effective Time, all shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (together with the associated ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Rights) shall cease to be outstanding and shall be canceled and retired and
shall cease to exist, and each holder of a certificate which immediately
prior to the Effective Time represented any such shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock (a "Certificate") shall thereafter cease to have any rights
with respect to such shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, except as
provided herein or by law.
(c) Each share of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock issued and owned
by AHP or Merger Sub or held by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ at the Effective Time shall,
by virtue of the Merger, cease to be outstanding and shall be canceled and
retired and no stock of AHP or other consideration shall be delivered in
exchange therefor.
(d) At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof, each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time, shall be converted into one validly issued,
fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.
1.9 ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options and Other Equity-Based Awards.
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(a) Each ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option (as defined in Section
3.2(b)) that was granted pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans
(as defined in Section 3.2(b)) prior to the Effective Time and which
remains outstanding immediately prior to the Effective Time shall cease to
represent a right to acquire shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock and
shall be converted, at the Effective Time, into an option to acquire, on
the same terms and conditions as were applicable under the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stock Option (but taking into account any changes thereto, including the
acceleration thereof, provided for in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans
or in such option by reason of this Agreement or the transactions
contemplated hereby), that number of shares of AHP Common Stock determined
by multiplying the number of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock subject
to such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option by the Exchange Ratio, rounded, if
necessary, to the nearest whole share of AHP Common Stock, at a price per
share (rounded to the nearest one-hundredth of a cent) equal to the per
share exercise price specified in such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option divided
by the Exchange Ratio; provided, however, that in the case of any
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code, the option
price, the number of shares subject to such option and the terms and
conditions of exercise of such option shall be determined in a manner
consistent with the requirements of Section 424(a) of the Code.
(b) Pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans,
restricted shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock granted pursuant thereto
which are outstanding immediately prior to the Effective Time shall become
fully vested and free of restrictions as of the Effective Time in
accordance with the terms thereof. Each such award shall be converted, as
of the Effective Time, into a number of shares of AHP Common Stock equal to
the product of (1) the number of shares subject to the award and (2) the
Exchange Ratio; and the number of shares of AHP Common Stock as so
determined shall be delivered to the holder of each such award as soon as
practicable following the Effective Time. On or prior to the Effective
Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ will take all actions necessary such that awards of
restricted shares are treated in accordance with the immediately preceding
sentences, including, but not limited to, precluding each holder from
receiving any cash payments in respect of such awards in connection with
the Merger.
(c) All ▇▇▇▇▇▇-▇▇▇▇▇▇▇ stock credits (including any fractions
thereof) in each stock account which is governed by the terms of
▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ 1996 Stock Plan ("▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Credits") shall, as
of the Effective Time, be converted into a number of AHP stock credits
equal to the product of (1) the number of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Credits in
such stock account immediately prior to the Effective Time and (2) the
Exchange Ratio, and shall otherwise remain subject to the terms and
conditions applicable to such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Credits. On or prior to
the Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall take all actions necessary to
ensure that such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Credits are converted in accordance
with the immediately preceding sentence, including, but not limited to,
precluding each holder from receiving any cash payments in respect of such
stock account in connection with the Merger.
(d) As soon as practicable after the Effective Time, Newco
shall deliver to the holders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options appropriate
notices setting forth such holders' rights pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stock Option Plans (including that, in connection with the Merger and
pursuant to the terms of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans, the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options have become fully vested and exercisable) and
the agreements evidencing the grants of such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options
shall continue in effect on the same terms and conditions (subject to the
adjustments required by this Section 1.9 after giving effect to the Merger
and the terms of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans). To the extent
permitted by law, Newco shall comply with the terms of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stock Option Plans and shall take such reasonable steps as are necessary or
required by, and subject to the provisions of, such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock
Option Plans, to have the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options which qualified as
incentive stock options prior to the Effective Time continue to qualify as
incentive stock options of Newco after the Effective Time.
(e) Newco shall take all corporate action necessary to reserve
for issuance a sufficient number of shares of AHP Common Stock for delivery
upon exercise of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options or in connection with
restricted shares or in connection with the settlement of stock accounts in
accordance with this Section 1.9. Promptly after the Effective Time, Newco
shall file a registration statement on Form S-3 or Form S-8, as the case
may be (or any successor or other appropriate forms), with respect to the
shares of AHP Common Stock subject to such options or restricted shares or
stock accounts and shall use commercially reasonable efforts to maintain
the effectiveness of such registration statement or registration statements
(and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options, restricted shares or stock
accounts remain outstanding. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements
under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), where applicable, Newco shall administer the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans in a manner consistent with the
exemptions provided by Rule 16b-3 promulgated under the Exchange Act.
1.10 Certain Adjustments. If, between the date of this
Agreement and the Effective Time, the outstanding AHP Common Stock or
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock shall have been changed into a different number
of shares or different class by reason of any reclassification,
recapitalization, stock split, split-up, combination or exchange of shares
or a stock dividend or dividend payable in any other securities shall be
declared with a record date within such period, or any similar event shall
have occurred, the Exchange Ratio shall be appropriately adjusted to
provide to the holders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock the same economic
effect as contemplated by this Agreement prior to such event.
1.11 Associated Rights. References in Article I and Article II
of this Agreement to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock shall include, unless the
context requires otherwise, the associated ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights and
references in Article I and Article II of this Agreement to AHP Common
Stock shall include, unless the context requires otherwise, the associated
AHP Rights.
ARTICLE II
EXCHANGE OF CERTIFICATES
2.1 Exchange Fund. Prior to the Effective Time, AHP shall
appoint a commercial bank or trust company reasonably acceptable to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ having net capital of not less than $300,000,000, or a
subsidiary thereof, to act as exchange agent hereunder for the purpose of
exchanging Certificates for the Merger Consideration (the "Exchange
Agent"). At or prior to the Effective Time, AHP shall deposit with the
Exchange Agent, in trust for the benefit of holders of shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, certificates representing the AHP Common Stock
issuable pursuant to Section 1.8 in exchange for outstanding shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock. AHP agrees to make available to the Exchange
Agent from time to time as needed, cash sufficient to pay cash in lieu of
fractional shares pursuant to Section 2.5 and any dividends and other
distributions pursuant to Section 2.3. Any cash and certificates of AHP
Common Stock deposited with the Exchange Agent shall hereinafter be
referred to as the "Exchange Fund".
2.2 Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder
of a Certificate (i) a letter of transmittal which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent, and which letter shall be in customary form and have such other
provisions as AHP may reasonably specify (such letter to be reasonably
acceptable to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ prior to the Effective Time) and (ii)
instructions for effecting the surrender of such Certificates in exchange
for the applicable Merger Consideration. Upon surrender of a Certificate to
the Exchange Agent together with such letter of transmittal, duly executed
and completed in accordance with the instructions thereto, and such other
documents as may reasonably be required by the Exchange Agent, the holder
of such Certificate shall be entitled to receive in exchange therefor (A)
one or more shares of AHP Common Stock (which shall be in uncertificated
book-entry form unless a physical certificate is requested) representing,
in the aggregate, the whole number of shares that such holder has the right
to receive pursuant to Section 1.8 (after taking into account all shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock then held by such holder) and (B) a check in
the amount equal to the cash that such holder has the right to receive
pursuant to the provisions of this Article II, including cash in lieu of
any fractional shares of AHP Common Stock pursuant to Section 2.5 and
dividends and other distributions pursuant to Section 2.3. No interest will
be paid or will accrue on any cash payable pursuant to Section 2.3 or
Section 2.5. In the event of a transfer of ownership of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock which is not registered in the transfer records of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, one or more shares of AHP Common Stock evidencing, in the
aggregate, the proper number of shares of AHP Common Stock, a check in the
proper amount of cash in lieu of any fractional shares of AHP Common Stock
pursuant to Section 2.5 and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.3, may be issued with respect
to such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to such a transferee if the Certificate
representing such shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock is presented to the
Exchange Agent, accompanied by all documents required to evidence and effect
such transfer and to evidence that any applicable stock transfer taxes have
been paid.
2.3 Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to shares of
AHP Common Stock with a record date after the Effective Time shall be paid
to the holder of any unsurrendered Certificate with respect to the shares
of AHP Common Stock that such holder would be entitled to receive upon
surrender of such Certificate and no cash payment in lieu of fractional
shares of AHP Common Stock shall be paid to any such holder pursuant to
Section 2.5 until such holder shall surrender such Certificate in
accordance with Section 2.2. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to such
holder of shares of AHP Common Stock issuable in exchange therefor, without
interest, (a) promptly after the time of such surrender, the amount of any
cash payable in lieu of fractional shares of AHP Common Stock to which such
holder is entitled pursuant to Section 2.5 and the amount of dividends or
other distributions with a record date after the Effective Time theretofore
paid with respect to such whole shares of AHP Common Stock, and (b) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to such surrender and
a payment date subsequent to such surrender payable with respect to such
shares of AHP Common Stock.
2.4 No Further Ownership Rights in ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock.
All shares of AHP Common Stock issued and cash paid upon conversion of
shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock in accordance with the terms of
Article I and this Article II (including any cash paid pursuant to Section
2.3 or 2.5) shall be deemed to have been issued or paid in full
satisfaction of all rights pertaining to the shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock.
2.5 No Fractional Shares of AHP Common Stock.
(a) No certificates or scrip or shares of AHP Common Stock
representing fractional shares of AHP Common Stock or book-entry credit of
the same shall be issued upon the surrender for exchange of Certificates
and such fractional share interests will not entitle the owner thereof to
vote or to have any rights of a stockholder of AHP or a holder of shares of
AHP Common Stock.
(b) Notwithstanding any other provision of this Agreement, each
holder of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock exchanged pursuant to the
Merger who would otherwise have been entitled to receive a fraction of a
share of AHP Common Stock (after taking into account all Certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to the product of (i) such fractional part of
a share of AHP Common Stock multiplied by (ii) the closing price for a
share of AHP Common Stock on the New York Stock Exchange, Inc. ("NYSE")
Composite Transactions Tape on the date of the Effective Time or, if such
date is not a Business Day, the Business Day immediately following the date
on which the Effective Time occurs.
As promptly as practicable after the determination of the amount of cash,
if any, to be paid to holders of fractional interests, the Exchange Agent
shall so notify AHP, and AHP shall cause the Surviving Corporation to
deposit such amount with the Exchange Agent and shall cause the Exchange
Agent to forward payments to such holders of fractional interests subject
to and in accordance with the terms hereof.
2.6 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Certificates for six
months after the Effective Time shall be delivered to Newco or otherwise on
the instruction of Newco, and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to
Newco for the Merger Consideration with respect to the shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock formerly represented thereby to which such
holders are entitled pursuant to Section 1.8 and Section 2.2, any cash in
lieu of fractional shares of AHP Common Stock to which such holders are
entitled pursuant to Section 2.5 and any dividends or distributions with
respect to shares of AHP Common Stock to which such holders are entitled
pursuant to Section 2.3. Any such portion of the Exchange Fund remaining
unclaimed by holders of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock five years
after the Effective Time (or such earlier date immediately prior to such
time as such amounts would otherwise escheat to or become property of any
Governmental Entity (as defined in Section 3.1(c)(iii)) shall, to the
extent permitted by law, become the property of the Surviving Corporation
free and clear of any claims or interest of any Person previously entitled
thereto.
2.7 No Liability. None of AHP, Merger Sub, ▇▇▇▇▇▇-▇▇▇▇▇▇▇, the
Surviving Corporation or the Exchange Agent shall be liable to any Person
in respect of any Merger Consideration from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
2.8 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Newco on a
daily basis; provided, that no such investment or loss thereon shall affect
the amounts payable to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ stockholders pursuant to Article I
and the other provisions of this Article II. Any interest and other income
resulting from such investments shall promptly be paid to Newco.
2.9 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 the Surviving Corporation, the posting by such Person of a bond
in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will deliver in exchange for such
lost, stolen or destroyed Certificate the applicable Merger Consideration
with respect to the shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock formerly
represented thereby, any cash in lieu of fractional shares of AHP Common
Stock, and unpaid dividends and distributions on shares of AHP Common Stock
deliverable in respect thereof, pursuant to this Agreement.
2.10 Withholding Rights. Each of the Surviving Corporation and
AHP shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code and the
rules and regulations promulgated thereunder, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation or AHP, as the case may be, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to
the holder of the shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock in respect of which
such deduction and withholding was made by the Surviving Corporation or
AHP, as the case may be.
2.11 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Merger
Sub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or Merger Sub, any other
actions and things to vest, perfect or confirm of record or otherwise in
the Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the
Merger.
2.12 Stock Transfer Books. The stock transfer books of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall be closed immediately upon the Effective Time and
there shall be no further registration of transfers of shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock thereafter on the records of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. On
or after the Effective Time, any Certificates presented to the Exchange
Agent or AHP for any reason shall be converted into the Merger
Consideration with respect to the shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock
formerly represented thereby (including any cash in lieu of fractional
shares of AHP Common Stock to which the holders thereof are entitled
pursuant to Section 2.5) and any dividends or other distributions to which
the holders thereof are entitled pursuant to Section 2.3.
2.13 Affiliates. Notwithstanding anything to the contrary
herein, to the fullest extent permitted by law, no certificates
representing shares of AHP Common Stock or cash shall be delivered to a
Person who may be deemed an "affiliate" of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ in accordance
with Section 5.13 hereof for purposes of Rule 145 under the Securities Act
of 1933, as amended (the "Securities Act"), or for purposes of qualifying
the Merger for pooling of interests accounting treatment under Opinion 16
of the Accounting Principles Board and applicable rules and regulations of
the Securities and Exchange Commission (the "SEC") until such Person has
executed and delivered an Affiliate Agreement (as defined in Section 5.13)
to AHP.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of AHP. Except as set forth
in the AHP Disclosure Schedule delivered by AHP to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ prior to
the execution of this Agreement (the "AHP Disclosure Schedule") (each
section of which qualifies the correspondingly numbered representation and
warranty or covenant to the extent specified therein), AHP represents and
warrants to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ as follows:
(a) Organization, Standing and Power; Subsidiaries.
----------------------------------------------
(i) Each of AHP and each of its Subsidiaries (as defined in
Section 8.11) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation
or organization, has the requisite power and authority to own, lease
and operate its properties and to carry on its business as now being
conducted, except where the failures to be so organized, existing and
in good standing or to have such power and authority, in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect on AHP, and is duly qualified and in good standing to
do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such
qualification necessary other than in such jurisdictions where the
failures so to qualify or to be in good standing, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
AHP. The copies of the certificate of incorporation and bylaws of AHP
which were previously furnished or made available to ▇▇▇▇▇▇-▇▇▇▇▇▇▇
are true, complete and correct copies of such documents as in effect
on the date of this Agreement.
(ii) Exhibit 21 to AHP's Annual Report on Form 10-K for the
year ended December 31, 1998 includes all the Subsidiaries of AHP
which as of the date of this Agreement are Significant Subsidiaries
(as defined in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other equity interests in,
each such Significant Subsidiary have been validly issued and are
fully paid and nonassessable and are, except as set forth in Exhibit
21, owned directly or indirectly by AHP, free and clear of all
pledges, claims, liens, charges, encumbrances and security interests
of any kind or nature whatsoever (collectively "Liens") and free of
any other restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other
ownership interests), except for restrictions imposed by applicable
securities laws. Except as set forth in the AHP SEC Reports (as
defined in Section 3.1(d)) filed prior to the date hereof, as of the
date of this Agreement, neither AHP nor any of its Subsidiaries
directly or indirectly owns any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for, any
corporation, partnership, joint venture or other business association
or entity (other than Subsidiaries), that is or would reasonably be
expected to be material to AHP and its Subsidiaries taken as a whole.
(b) Capital Structure.
-----------------
(i) As of October 31, 1999, the authorized capital stock of AHP
consisted of (A) 2,400,000,000 shares of AHP Common Stock of which
1,305,717,877 shares were outstanding and 116,374,487 shares were
held in the treasury of AHP and (B) 5,000,000 shares of Preferred
Stock, par value $2.50 per share, of which 24,466 shares designated as
$2 Convertible Preferred Stock (the "$2 Convertible Preferred Stock")
were outstanding and of which 1,400,000 shares have been designated
Series A Junior Participating Preferred Stock and reserved for
issuance upon exercise of the rights (the "AHP Rights") distributed to
the holders of AHP Common Stock pursuant to the Rights Agreement,
dated as of October 13, 1999 between AHP and ChaseMellon Shareholder
Services, L.L.C. (the "AHP Rights Agreement"). As of October 31, 1999,
AHP had reserved or has available 880,776 shares of AHP Common Stock
for issuance upon conversion of the $2 Convertible Preferred Stock.
Since October 31, 1999 to the date of this Agreement, there have been
no issuances of shares of the capital stock of AHP or any other
securities of AHP other than issuances of shares (and accompanying AHP
Rights) upon conversion of the $2 Convertible Preferred Stock or
pursuant to options or rights outstanding as of October 31, 1999 under
the Benefit Plans (as defined in Section 8.11(b)) of AHP. All issued
and outstanding shares of the capital stock of AHP are, and when
shares of AHP Common Stock are issued in the Merger or upon exercise
of stock options converted in the Merger pursuant to Section 1.9, such
shares will be, duly authorized, validly issued, fully paid and
nonassessable and free of any preemptive rights. There were
outstanding as of October 31, 1999 no options, warrants or other
rights to acquire capital stock from AHP other than (x) the AHP Rights
and (y) options, restricted stock and other rights to acquire capital
stock from AHP representing in the aggregate the right to purchase
approximately 87,479,042 shares of AHP Common Stock (collectively, the
"AHP Stock Options") under AHP's 1980 Stock Option Plan, AHP's 1985
Stock Option Plan, AHP's Management Incentive Plan, AHP's 1990 Stock
Incentive Plan, AHP's 1993 Stock Incentive Plan, AHP's 1996 Stock
Incentive Plan, 1999 Stock Incentive Plan, Stock Option Plan for
Non-Employee Directors and the 1994 Restricted Stock Plan for
Non-Employee Directors (collectively, the "AHP Stock Option Plans").
Section 3.1(b) of the AHP Disclosure Schedule sets forth a complete
and correct list, as of October 31, 1999, of the number of shares of
AHP Common Stock subject to AHP Stock Options or other rights to
purchase or receive AHP Common Stock granted under the AHP Benefit
Plans or otherwise, the dates of grant and the exercise prices
thereof. No options or warrants or other rights to acquire capital
stock from AHP have been issued or granted since October 31, 1999 to
the date of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness of AHP
having the right to vote on any matters on which holders of capital
stock of AHP may vote ("AHP Voting Debt") are issued or outstanding.
(iii) Except as otherwise set forth in this Section 3.1(b) and
as contemplated by Section 1.8 and Section 1.9, as of the date of
this Agreement, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any
kind to which AHP or any of its Subsidiaries is a party or by which
any of them is bound obligating AHP or any of its Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other voting securities of AHP
or any of its Subsidiaries or obligating AHP or any of its
Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no
outstanding obligations of AHP, any of its Subsidiaries or, to the
knowledge of AHP, any of its Majority Owned Restricted Affiliates to
repurchase, redeem or otherwise acquire any shares of capital stock
of AHP, any of its Subsidiaries or any of its Majority Owned
Restricted Affiliates.
(c) Authority; No Conflicts.
-----------------------
(i) AHP has all requisite corporate power and authority to
enter into this Agreement and the Stock Option Agreements and to
consummate the transactions contemplated hereby and thereby, subject
to obtaining the requisite stockholder approval of the issuance of
the shares of AHP Common Stock to be issued in the Merger (the "Share
Issuance") and the Certificate Amendment (collectively, the "AHP
Stockholder Approval"). The execution and delivery of this Agreement
and the Stock Option Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of AHP,
subject to obtaining the AHP Stockholder Approval. This Agreement and
the Stock Option Agreements have been duly executed and delivered by
AHP and constitute valid and binding agreements of AHP, enforceable
against it in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity
or at law).
(ii) The execution and delivery of this Agreement and the Stock
Option Agreements by AHP does not or will not, as the case may be,
and the consummation by AHP of the Merger and the other transactions
contemplated hereby and thereby will not, conflict with, or result in
any violation of, or constitute a default (with or without notice or
lapse of time, or both) under, or give rise to a right of, or result
by its terms in the, termination, amendment, cancellation or
acceleration of any obligation or the loss of a material benefit
under, or the creation of a lien, pledge, security interest, charge
or other encumbrance on, or the loss of, any assets, including
Intellectual Property (any such conflict, violation, default, right of
termination, amendment, cancellation or acceleration, loss or
creation, a "Violation") pursuant to: (A) any provision of the
certificate of incorporation or Bylaws of AHP, any material Subsidiary
of AHP or, to the knowledge of AHP, any of its Majority Owned
Restricted Affiliates, or (B) except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on AHP,
subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note, mortgage,
bond, indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to AHP,
any Subsidiary of AHP or, to the knowledge of AHP, any of its Majority
Owned Restricted Affiliates, or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational,
national, state, municipal, local or foreign government, any
instrumentality, subdivision, court, administrative agency or
commission or other authority thereof, or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other
governmental or quasi-governmental authority (a "Governmental
Entity"), is required by or with respect to AHP or any Subsidiary of
AHP in connection with the execution and delivery of this Agreement
and the Stock Option Agreements by AHP or the consummation of the
Merger and the other transactions contemplated hereby and thereby,
except for those required under or in relation to (A) the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (B) state securities or "blue sky" laws (the "Blue Sky
Laws"), (C) the Securities Act, (D) the Exchange Act, (E) the DGCL
with respect to the filing of the Certificate of Merger, (F) rules
and regulations of the NYSE, (G) antitrust or other competition laws
of other jurisdictions, and (H) such consents, approvals, orders,
authorizations, registrations, declarations and filings the failures
of which to make or obtain, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on AHP. Consents,
approvals, orders, authorizations, registrations, declarations and
filings required under or in relation to any of the foregoing clauses
(A) through (G) are hereinafter referred to as "Necessary Consents".
(d) Reports and Financial Statements.
--------------------------------
(i) AHP has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other
documents required to be filed by it with the SEC since January 1,
1998 (collectively, including all exhibits thereto, the "AHP SEC
Reports"). No Subsidiary of AHP is required to file any form, report,
registration statement, prospectus or other document with the SEC.
None of the AHP SEC Reports, as of their respective dates (and, if
amended or superseded by a filing prior to the date of this Agreement
or the Closing Date, then on the date of such filing), contained or
will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
financial statements (including the related notes) included in the AHP
SEC Reports presents fairly, in all material respects, the
consolidated financial position and consolidated results of operations
and cash flows of AHP and its consolidated Subsidiaries as of the
respective dates or for the respective periods set forth therein, all
in conformity with GAAP consistently applied during the periods
involved except as otherwise noted therein, and subject, in the case
of the unaudited interim financial statements, to the absence of notes
and normal year-end adjustments that have not been and are not
expected to be material in amount. All of such AHP SEC Reports, as of
their respective dates (and as of the date of any amendment to the
respective AHP SEC Report), complied as to form in all material
respects with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the AHP SEC Reports filed prior to
the date hereof, since December 31, 1998, AHP and its Subsidiaries
have not incurred any liabilities that are of a nature that would be
required to be disclosed on a balance sheet of AHP and its
Subsidiaries or the footnotes thereto prepared in conformity with
GAAP, other than (A) liabilities incurred in the ordinary course of
business or (B) liabilities that, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on AHP.
(e) Information Supplied.
--------------------
(i) None of the information supplied or to be supplied by AHP
for inclusion or incorporation by reference in (A) the Form S-4 (as
defined in Section 5.1) will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (B) the Joint Proxy Statement/Prospectus
(as defined in Section 5.1) will, on the date it is first mailed to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ stockholders or AHP stockholders or at the time of the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting or the AHP Stockholders Meeting
(each as defined in Section 5.1), contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The Form S-4 and the Joint Proxy Statement/Prospectus
will comply as to form in all material respects with the requirements
of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.1(e), no representation or warranty is made by AHP with respect to
statements made or incorporated by reference in the Form S-4 or the
Joint Proxy Statement/Prospectus based on information supplied by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of AHP, by
resolutions duly adopted by unanimous vote at a meeting duly called and
held and not subsequently rescinded or modified in any way (the "AHP Board
Approval"), has duly (i) determined that this Agreement and the Merger and
the AHP Stock Option Agreement are fair to and in the best interests of AHP
and its stockholders, (ii) approved this Agreement, the AHP Stock Option
Agreement, the Merger, the Certificate Amendment, the amendments to the
bylaws of AHP provided for in Section 1.6(b) hereto and the Share Issuance
and (iii) recommended that the stockholders of AHP approve the Share
Issuance, the AHP Bylaw Amendment and adopt the Certificate Amendment and
directed that the Certificate Amendment, the AHP Bylaw Amendment and the
Share Issuance be submitted for consideration by AHP's stockholders at the
AHP Stockholders Meeting. The AHP Board Approval constitutes approval of
this Agreement, the AHP Stock Option Agreement and the Merger for purposes
of Section 203 of the DGCL. To the knowledge of AHP, except for Section 203
of the DGCL (which has been rendered inapplicable), no state takeover
statute is applicable to this Agreement, the AHP Stock Option Agreement or
the Merger or the other transactions contemplated hereby or thereby.
(g) Vote Required. The adoption of the Certificate Amendment by
(i) the holders of a majority of the outstanding shares of AHP Common Stock
and $2 Convertible Preferred Stock, voting together as a single class, and
(ii) the holders of a majority of the outstanding shares of AHP Common
Stock voting as a separate class, and the approval of the Stock Issuance by
a majority of the votes cast thereon by the holders of shares of AHP Common
Stock and shares of $2 Convertible Preferred Stock, voting together as a
single class, are the only votes of the holders of any class or series of
AHP capital stock necessary to approve the transactions contemplated by the
Merger Agreement, including, the Certificate Amendment and the Share
Issuance.
(h) Litigation; Compliance with Laws.
--------------------------------
(i) Except as disclosed in the AHP SEC Reports filed prior to
the date of this Agreement, there are no suits, actions or
proceedings (collectively "Actions") pending or, to the knowledge of
AHP, threatened, against or affecting AHP or any Subsidiary of AHP
which, in the aggregate, would reasonably be expected to have a
Material Adverse Effect on AHP, nor are there any judgments, decrees,
injunctions, rules or orders of any Governmental Entity or arbitrator
outstanding against AHP or any Subsidiary of AHP which, in the
aggregate, would reasonably be expected to have a Material Adverse
Effect on AHP.
(ii) Except as disclosed in the AHP SEC Reports filed prior to
the date of this Agreement and except as, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on AHP, AHP
and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders and approvals of all Governmental Entities which
are necessary for the operation of the businesses of AHP and its
Subsidiaries, taken as a whole (the "AHP Permits"). AHP and its
Subsidiaries are in compliance with the terms of the AHP Permits,
except where the failures to so comply, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on AHP.
Except as disclosed in the AHP SEC Reports filed prior to the date of
this Agreement, neither AHP nor its Subsidiaries is in violation of,
and AHP and its Subsidiaries have not received any notices of
violations with respect to, any laws, ordinances or regulations of any
Governmental Entity, except for violations which, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
AHP.
(iii) As of the date of this Agreement, AHP has provided to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ prior to the execution of this Agreement all
information known to AHP which is relevant and material to an
assessment of the liability exposure of AHP and its Subsidiaries with
respect to the matters referred to in clauses (I) and (II) of the
proviso in the definition of Material Adverse Effect as to which
▇▇▇▇▇▇-▇▇▇▇▇▇▇ has requested such information prior to the date
hereof. As of the date hereof, there is no information relating to
the litigation matters and Actions disclosed in the AHP SEC Reports
or included on the AHP Disclosure Schedule as to which ▇▇▇▇▇▇-▇▇▇▇▇▇▇
has requested such information, including the matters referred to in
the preceding sentence (the "AHP Specified Litigation Matters") in
the possession of AHP, its Subsidiaries or their counsel not
heretofore provided to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which, in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the AHP SEC Reports filed prior
to the date of this Agreement, and except as permitted by Section 4.1,
since December 31, 1998, (i) AHP and its Subsidiaries have conducted their
business only in the ordinary course and (ii) there has not been any action
taken by AHP or any of its Subsidiaries during the period from December 31,
1998 through the date of this Agreement that, if taken during the period
from the date of this Agreement through the Effective Time, would
constitute a breach of Section 4.1. Except as disclosed in the AHP SEC
Reports filed prior to the date of this Agreement, since December 31, 1998
(or in the event the second proviso in the definition of Material Adverse
Effect is applicable (and accordingly so that the exclusion in the first
proviso of the definition of Material Adverse Effect is inoperative with
respect to Section 3.1(i)) in the case of matters referred to in clauses
(I) and (II) of the proviso in the definition of Material Adverse Effect,
since the date of the Agreement), there have not been any changes,
circumstances or events (including changes, circumstances or events
involving, impacting or related to development stage products of AHP)
which, in the aggregate, have had, or would reasonably be expected to have,
a Material Adverse Effect on AHP.
(j) Environmental Matters. Except as, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on AHP and
except as disclosed in the AHP SEC Reports filed prior to the date of this
Agreement (i) the operations of AHP and its Subsidiaries have been and are
in compliance with all Environmental Laws (as defined below), and with all
licenses required by Environmental Laws, (ii) there are no pending or, to
the knowledge of AHP, threatened, Actions under or pursuant to
Environmental Laws against AHP or its Subsidiaries or involving any real
property currently or, to the knowledge of AHP, formerly owned, operated or
leased by AHP or its Subsidiaries, (iii) AHP and its Subsidiaries are not
subject to any Environmental Liabilities (as defined below), and, to the
knowledge of AHP, no facts, circumstances or conditions relating to,
arising from, associated with or attributable to any real property
currently or, to the knowledge of AHP, formerly owned, operated or leased
by AHP or its Subsidiaries or operations thereon would reasonably be
expected to result in Environmental Liabilities, (iv) all real property
owned and to the knowledge of AHP all real property operated or leased by
AHP or its Subsidiaries is free of contamination from Hazardous Material
(as defined below) that would have an adverse effect on human health or the
environment and (v) there is not now, nor, to the knowledge of AHP, has
there been in the past, on, in or under any real property owned, leased or
operated by AHP or any of its predecessors (a) any underground storage
tanks regulated pursuant to 40 C.F.R. Part 280 or delegated state programs,
dikes or impoundments containing more than a reportable quantity of
Hazardous Materials, (b) any friable asbestos-containing materials or (c)
any polychlorinated biphenyls.
As used in this Agreement, "Environmental Laws" means any and
all federal, state, foreign, interstate, local or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decisions, injunctions,
orders, decrees, requirements of any Governmental Entity, any and all
common law requirements, rules and bases of liability regulating, relating
to or imposing liability or standards of conduct concerning pollution,
Hazardous Materials or protection of human health, safety or the
environment, as currently in effect and includes the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601
et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et
seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Clean Air Act,
33 U.S.C. ss. 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. ss.
2601 et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C., ss. 136 et seq., Occupational Safety and Health Act 29 U.S.C. ss.
651 et seq. and the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.,
as such laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes. As
used in this Agreement, "Environmental Liabilities" with respect to any
person means any and all liabilities of or relating to such person or any
of its Subsidiaries (including any entity which is, in whole or in part, a
predecessor of such person or any of such Subsidiaries), whether vested or
unvested, contingent or fixed, actual or potential, known or unknown, which
(i) arise under or relate to matters covered by Environmental Laws and (ii)
relate to actions occurring or conditions existing on or prior to the
Closing Date. As used in this Agreement, "Hazardous Materials" means any
materials or wastes, defined, listed, classified or regulated as hazardous,
toxic, a pollutant, a contaminant or dangerous in or under any
Environmental Laws which includes petroleum, petroleum products, friable
asbestos, urea formaldehyde, radioactive materials and polychlorinated
biphenyls.
(k) Intellectual Property. Except as, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on AHP and
except as disclosed in the AHP SEC Reports filed prior to the date of the
Agreement: (a) AHP and each of its Subsidiaries owns, or is licensed to use
(in each case, free and clear of any Liens), all Intellectual Property (as
defined below) used in or necessary for the conduct of its business as
currently conducted; (b) the use of any Intellectual Property by AHP and
its Subsidiaries does not infringe on or otherwise violate the rights of
any Person and is in accordance with any applicable license pursuant to
which AHP or any Subsidiary acquired the right to use any Intellectual
Property; (c) to the knowledge of AHP, no Person is challenging, infringing
on or otherwise violating any right of AHP or any of its Subsidiaries with
respect to any Intellectual Property owned by and/or licensed to AHP or its
Subsidiaries; and (d) neither AHP nor any of its Subsidiaries has received
any written notice or otherwise has knowledge of any pending claim, order
or proceeding with respect to any Intellectual Property used by AHP and its
Subsidiaries and to its knowledge no Intellectual Property owned and/or
licensed by AHP or its Subsidiaries is being used or enforced in a manner
that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property. For
purposes of this Agreement, "Intellectual Property" shall mean trademarks,
service marks, brand names, certification marks, trade dress and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction
to register, the foregoing, including any extension, modification or
renewal of any such registration or application; inventions, discoveries
and ideas, whether patentable or not, in any jurisdiction; patents,
applications for patents (including, without limitation, divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; writings
and other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; any similar
intellectual property or proprietary rights.
(l) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of AHP, except Chase
Securities Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, each of whose fees
and expenses will be paid by AHP in accordance with AHP's agreements with
such firms, copies of which have been provided to ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(m) Opinions of AHP Financial Advisors. AHP has received the
opinions of Chase Securities Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
each dated the date of this Agreement, to the effect that, as of such date,
the Exchange Ratio is fair, from a financial point of view, to AHP and its
stockholders, a copy of which opinions have been made available to
▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(n) Accounting Matters. To the knowledge of AHP, neither AHP
nor any of its affiliates has taken or agreed to take any action, and no
fact or circumstance is known to AHP, that would prevent AHP from
accounting for the Merger as a "pooling of interests". At or prior to the
date hereof, AHP has received a letter from its independent public
accountants addressed to AHP, with a copy to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, to the effect
that, based upon representations provided by AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and a
poolability letter from the independent public accountants of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, accounting for the Merger as a pooling of interests under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations is appropriate if the Merger is consummated and closed as
contemplated by this Agreement.
(o) Taxes. Each of AHP and its Subsidiaries has filed all Tax
Returns required to have been filed (or extensions have been duly obtained)
and has paid all Taxes required to have been paid by it, except where
failure to file such Tax Returns or pay such Taxes would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect on AHP.
For purposes of this Agreement: (i) "Tax" (and, with correlative meaning,
"Taxes") means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add on minimum, ad valorem, transfer or excise
tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or
penalty, imposed by any governmental authority or any obligation to pay
Taxes imposed on any entity for which a party to this Agreement is liable
as a result of any indemnification provision or other contractual
obligation, and (ii) "Tax Return" means any return, report or similar
statement required to be filed with respect to any Tax (including any
attached schedules), including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax.
(p) Certain Contracts. As of the date hereof, except as set
forth in the AHP SEC Reports filed prior to the date of this Agreement,
neither AHP nor any of its Subsidiaries is a party to or bound by (i) any
"material contracts" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC) or (ii) any non-competition agreements or any
other agreements or arrangements that limit or otherwise restrict AHP or
any of its Subsidiaries or any of their respective affiliates or any
successor thereto, or that would, after the Effective Time, to the
knowledge of AHP, limit or restrict Newco or any of its affiliates
(including the Surviving Corporation) or any successor thereto, from
engaging or competing in any line of business or in any geographic area,
which agreements or arrangements, in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Newco and its Subsidiaries
(including the Surviving Corporation and its Subsidiaries), taken together,
after giving effect to the Merger.
(q) AHP Stockholder Rights Plan. The Board of Directors of AHP
has amended the AHP Rights Agreement in accordance with its terms to render
it inapplicable to the transactions contemplated by this Agreement and the
AHP Stock Option Agreement. AHP has delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a true and
correct copy of the AHP Rights Agreement, as amended, in effect as of
execution and delivery of this Agreement.
3.2 Representations and Warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. Except as
set forth in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule delivered by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ to AHP prior to the execution of this Agreement (the
"▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule") (each section of which qualifies the
correspondingly numbered representation and warranty or covenant to the
extent specified therein), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ represents and warrants to AHP as
follows:
(a) Organization, Standing and Power; Subsidiaries.
----------------------------------------------
(i) Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and each of its
Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the
requisite power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted, except where the failures to be so organized,
existing and in good standing or to have such power and
authority, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and is duly qualified and in good standing
to do business in each jurisdiction in which the nature
of its business or the ownership or leasing of its
properties makes such qualification necessary other than
in such jurisdictions where the failures so to qualify or
to be in good standing in the aggregate would not
reasonably be expected to have a Material Adverse Effect
on ▇▇▇▇▇▇-▇▇▇▇▇▇▇. The copies of the certificate of
incorporation and Bylaws of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which were
previously furnished or made available to AHP are true,
complete and correct copies of such documents as in
effect on the date of this Agreement.
(ii) Exhibit 21 to ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ Annual Report
on Form 10-K for the year ended December 31, 1998
includes all the Subsidiaries of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which as
of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X
of the SEC). All the outstanding shares of capital stock
of, or other equity interests in, each such Significant
Subsidiary have been validly issued and are fully paid
and nonassessable and are, except as set forth in Exhibit
21, owned directly or indirectly by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, free
and clear of all Liens and free of any other restriction
(including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other
ownership interests), except for restrictions imposed by
applicable securities laws. Except as set forth in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports (as defined in Section 3.2(d))
filed prior to the date hereof, neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor
any of its Subsidiaries directly or indirectly owns any
equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any corporation,
partnership, joint venture or other business association or
entity (other than Subsidiaries), that is or would
reasonably be expected to be material to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
its Subsidiaries taken as a whole.
(b) Capital Structure.
-----------------
(i) As of October 31, 1999, the authorized capital stock of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ consisted of (A) 1,200,000,000 shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, of which 858,661,329 shares were
outstanding and 103,320,279 shares were held in the treasury of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and (B) 5,000,000 shares of Preferred Stock, par value
$1.00 per share, none of which were outstanding and 400,000 shares of
which have been designated Series A Junior Participating Preferred
Stock and reserved for issuance upon exercise of the rights (the
"▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights") distributed to the holders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock pursuant to the Rights Agreement dated as of March 25,
1997, between ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and First Chicago Trust Company of New
York (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement"). Since October 31, 1999
to the date of this Agreement, there have been no issuances of shares
of the capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any other securities of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ other than issuances of shares (and accompanying
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights) pursuant to options or rights outstanding as
of October 31, 1999 under the Benefit Plans of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. All
issued and outstanding shares of the capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
are duly authorized, validly issued, fully paid and nonassessable,
and no class of capital stock is entitled to preemptive rights. There
were outstanding as of October 31, 1999 no options, warrants or other
rights to acquire capital stock from ▇▇▇▇▇▇-▇▇▇▇▇▇▇ other than (x)
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights and (y) options and other rights to acquire
capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ representing in the aggregate the
right to purchase 75,056,685 shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock
(collectively, the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options") under the 1989
Stock Plan, the 1992 Stock Plan, the 1996 Stock Plan, the Restricted
Stock Plan for Directors and the Deferred Compensation Plan for
Directors (collectively, the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Plans").
Except in connection with pre-employment grants of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stock Options made in a manner consistent with past practice to
purchase, in the aggregate, not more than 5,000 shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, Section 3.2(b) of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Disclosure Schedule sets forth a complete and correct list, as of
October 31, 1999, of the number of shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock subject to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options or other rights to
purchase or receive ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock granted under the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Benefit Plans or otherwise, the dates of grant and the
exercise prices thereof. Except in connection with pre-employment
grants of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options made in a manner consistent
with past practice to purchase, in the aggregate, not more than 5,000
shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock, no options or warrants or other
rights to acquire capital stock from ▇▇▇▇▇▇-▇▇▇▇▇▇▇ have been issued
or granted since October 31, 1999 to the date of this Agreement.
(ii) No bonds, debentures, notes or other indebtedness of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ having the right to vote on any matters on which
stockholders may vote ("▇▇▇▇▇▇-▇▇▇▇▇▇▇ Voting Debt") are issued or
outstanding.
(iii) Except as otherwise set forth in this Section 3.2(b), as
of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or
undertakings of any kind to which ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
Subsidiaries is a party or by which any of them is bound obligating
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its Subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of
its Subsidiaries or obligating ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
Subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. As of the date of this Agreement, there are no
outstanding obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Subsidiaries or
to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Majority Owned
Restricted Affiliates to repurchase, redeem or otherwise acquire any
shares of capital stock of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Subsidiaries
or, to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Majority Owned
Restricted Affiliates.
(c) Authority; No Conflicts.
-----------------------
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has all requisite corporate power and
authority to enter into this Agreement and the Stock Option
Agreements and to consummate the transactions contemplated hereby and
thereby, subject in the case of the consummation of the Merger to the
adoption of this Agreement by the Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote (as
defined in Section 3.2(g)). The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary
corporate action on the part of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, subject in the case
of the consummation of the Merger to the adoption of this Agreement
by the Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote. This Agreement and the Stock
Option Agreements have been duly executed and delivered by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and constitute valid and binding agreements of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally or by general equity
principles (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(ii) The execution and delivery of this Agreement and the Stock
Option Agreements by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ does not or will not, as the case
may be, and the consummation by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of the Merger and the
other transactions contemplated hereby and thereby will not, conflict
with, or result in a Violation pursuant to: (A) any provision of the
certificate of incorporation or Bylaws of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any
material Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or, to the knowledge of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Majority Owned Restricted Affiliates or
(B) except as, in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or, subject to
obtaining or making the consents, approvals, orders, authorizations,
registrations, declarations and filings referred to in paragraph
(iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or, to the knowledge
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, any of its Majority Owned Restricted Affiliates or
their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any Subsidiary of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ in connection with the execution and delivery of this
Agreement and the Stock Option Agreements by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or the
consummation of the Merger and the other transactions contemplated
hereby and thereby, except the Necessary Consents and such consents,
approvals, orders, authorizations, registrations, declarations and
filings the failure of which to make or obtain, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(d) Reports and Financial Statements.
--------------------------------
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has filed all required registration
statements, prospectuses, reports, schedules, forms, statements and
other documents required to be filed by it with the SEC since January
1, 1998 (collectively, including all exhibits thereto, the
"▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports"). No Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is
required to file any form, report, registration statement or
prospectus or other document with the SEC. None of the ▇▇▇▇▇▇- ▇▇▇▇▇▇▇
SEC Reports, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will
contain any untrue statement of a material fact or omitted or will
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the
financial statements (including the related notes) included in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports presents fairly, in all material respects,
the consolidated financial position and consolidated results of
operations and cash flows of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its consolidated
Subsidiaries as of the respective dates or for the respective periods
set forth therein, all in conformity with GAAP consistently applied
during the periods involved except as otherwise noted therein, and
subject, in the case of the unaudited interim financial statements, to
the absence of notes and normal and recurring year-end adjustments
that have not been and are not expected to be material in amount. All
of such ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports, as of their respective dates (and
as of the date of any amendment to the respective ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC
Report), complied as to form in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date hereof, since December 31, 1998,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries have not incurred any liabilities
that are of a nature that would be required to be disclosed on a
balance sheet of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries or the footnotes
thereto prepared in conformity with GAAP, other than (A) liabilities
incurred in the ordinary course of business or (B) liabilities that,
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(e) Information Supplied.
--------------------
(i) None of the information supplied or to be supplied by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ for inclusion or incorporation by reference in (A) the
Form S-4 will, at the time the Form S-4 is filed with the SEC, at any
time it is amended or supplemented or at the time it becomes
effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, and (B) the Joint Proxy Statement/Prospectus will, on the
date it is first mailed to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ stockholders or AHP
stockholders or at the time of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders
Meeting or the AHP Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein,
in light of the circumstances under which they were made, not
misleading. The Form S-4 and the Joint Proxy Statement/Prospectus
will comply as to form in all material respects with the requirements
of the Exchange Act and the Securities Act and the rules and
regulations of the SEC thereunder.
(ii) Notwithstanding the foregoing provisions of this Section
3.2(e), no representation or warranty is made by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ with
respect to statements made or incorporated by reference in the Form
S-4 or the Joint Proxy Statement/Prospectus based on information
supplied by AHP or Merger Sub for inclusion or incorporation by
reference therein.
(f) Board Approval. The Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, by
resolutions duly adopted by unanimous vote of those voting at a meeting
duly called and held and not subsequently rescinded or modified in any way
(the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board Approval"), has duly (i) determined that this
Agreement and the Merger and the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement are
fair to and in the best interests of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its stockholders,
(ii) approved this Agreement, the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement and
the Merger and (iii) recommended that the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
adopt this Agreement and approve the Merger and directed that this
Agreement and the transactions contemplated hereby be submitted for
consideration by ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ stockholders at the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Stockholders Meeting. The ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board Approval constitutes
approval of this Agreement, the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement and
the Merger for purposes of Section 203 of the DGCL. To the knowledge of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, except for Section 203 of the DGCL (which has been rendered
inapplicable), no state takeover statute is applicable to this Agreement,
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement or the Merger or the other
transactions contemplated hereby or thereby.
(g) Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock to adopt
this Agreement and approve the Merger (the "Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote")
is the only vote of the holders of any class or series of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
capital stock necessary to adopt this Agreement and approve the Merger and
the other transactions contemplated hereby.
(h) Litigation; Compliance with Laws.
--------------------------------
(i) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed
prior to the date of this Agreement, there are no Actions pending or,
to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, threatened, against or affecting
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which, in the
aggregate, would reasonably be expected to have a Material Adverse
Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇, nor are there any judgments, decrees,
injunctions, rules or orders of any Governmental Entity or arbitrator
outstanding against ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any Subsidiary of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ which, in the aggregate, would reasonably be expected
to have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(ii) Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date of the Agreement and except as would, in the
aggregate, not reasonably be expected to have a Material Adverse
Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries hold
all permits, licenses, variances, exemptions, orders and approvals of
all Governmental Entities necessary for the operation of the
businesses of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries, taken as a whole
(the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Permits"). ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries
are in compliance with the terms of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Permits,
except where the failures to so comply, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇. Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date of this Agreement, neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor
its Subsidiaries is in violation of, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its
Subsidiaries have not received any notices of violations with respect
to, any laws, ordinances or regulations of any Governmental Entity,
except for violations which, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(iii) As of the date hereof, there is no information relating
to litigation matters disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports or
included on the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule as to which AHP
has requested such information (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Specified
Litigation Matters") in the possession of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, its
Subsidiaries or their counsel not heretofore provided to AHP which,
in the aggregate, would reasonably be expected to have a Material
Adverse Effect.
(i) Absence of Certain Changes or Events. Except for
liabilities incurred in connection with this Agreement or the transactions
contemplated hereby, except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date of this Agreement, and except as permitted by
Section 4.2, since December 31, 1998, (i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its
Subsidiaries have conducted their business only in the ordinary course and
(ii) there has not been any action taken by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
Subsidiaries during the period from December 31, 1998 through the date of
this Agreement that, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of Section
4.2. Except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed prior to
the date of this Agreement, since December 31, 1998, there have not been
any changes, circumstances or events (including changes, circumstances or
events involving, impacting or related to development stage products of
▇▇▇▇▇▇-▇▇▇▇▇▇▇) which, in the aggregate, have had, or would reasonably be
expected to have, a Material Adverse Effect on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(j) Environmental Matters. Except as, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date of this Agreement, (i) the operations of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries have been and are in compliance with
all Environmental Laws and with all licenses required by Environmental Laws
(ii) there are no pending or, to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
threatened, Actions under or pursuant to Environmental Laws against
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries or involving any real property currently
or, to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, formerly owned, operated or leased
by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries, (iii) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its
Subsidiaries are not subject to any Environmental Liabilities and, to the
knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, no facts, circumstances or conditions relating
to, arising from, associated with or attributable to any real property
currently or, to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, formerly owned, operated
or leased by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries or operations thereon would
reasonably be expected to result in Environmental Liabilities, (iv) all
real property owned and to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ all real
property operated or leased by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries is free
of contamination from Hazardous Material that would have an adverse effect
on human health or the environment and (v) there is not now, nor, to the
knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, has there been in the past, on, in or under
any real property owned, leased or operated by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
predecessors (a) any underground storage tanks, regulated pursuant to 40
C.F.R. Part 280 or delegated state programs, dikes or impoundments
containing more than a reportable quantity of Hazardous Materials, (b) any
friable asbestos-containing materials or (c) any polychlorinated biphenyls.
(k) Intellectual Property. Except as, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and except as disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports
filed prior to the date of this Agreement, (a) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and each of
its Subsidiaries owns, or is licensed to use (in each case, free and clear
of any Liens), all Intellectual Property used in or necessary for the
conduct of its business as currently conducted; (b) the use of any
Intellectual Property by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries does not
infringe on or otherwise violate the rights of any Person and is in
accordance with any applicable license pursuant to which ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or
any Subsidiary acquired the right to use any Intellectual Property; (c) to
the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, no Person is challenging, infringing on or
otherwise violating any right of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its Subsidiaries
with respect to any Intellectual Property owned by and/or licensed to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries; and (d) neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor any
of its Subsidiaries has received any written notice or otherwise has
knowledge of any pending claim, order or proceeding with respect to any
Intellectual Property used by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries and to
its knowledge no Intellectual Property owned and/or licensed by
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries is being used or enforced in a manner
that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property.
(l) Brokers or Finders. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other similar commission or fee in
connection with any of the transactions contemplated by this Agreement,
based upon arrangements made by or on behalf of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ except Bear,
▇▇▇▇▇▇▇ & Co. Inc., whose fees and expenses will be paid by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
in accordance with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ agreements with such firm, copies of
which have been provided to AHP.
(m) Opinion of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Financial Advisor. ▇▇▇▇▇▇-▇▇▇▇▇▇▇
has received the opinion of Bear, ▇▇▇▇▇▇▇ & Co. Inc., dated the date of
this Agreement, to the effect that, as of such date, the Exchange Ratio is
fair, from a financial point of view, to the holders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock, a copy of which opinion has been made available to AHP.
(n) Accounting Matters. To the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor any of its affiliates has taken or agreed to
take any action, and no fact or circumstance is known to ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
that would prevent AHP from accounting for the Merger as a "pooling of
interests". At or prior to the date hereof, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has received a
letter from its independent public accountants addressed to ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
with a copy to AHP and AHP's independent public accountants, to the effect,
that, based upon representations provided by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, they concur
with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ conclusion that, as of the date of their report, no
conditions exist that would preclude ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ ability to be a party
in a business combination to be accounted for as a pooling of interests.
(o) Taxes. Each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries has
filed all Tax Returns required to have been filed (or extensions have been
duly obtained) and has paid all Taxes required to have been paid by it,
except where failure to file such Tax Returns or pay such Taxes would not,
in the aggregate, reasonably be expected to have a Material Adverse Effect
on ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(p) Certain Contracts. As of the date hereof, except as set
forth in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed prior to the date of this
Agreement, neither ▇▇▇▇▇▇-▇▇▇▇▇▇▇ nor any of its Subsidiaries is a party to
or bound by (i) any "material contracts" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) or (ii) any non-competition
agreements or any other agreements or arrangements that limit or otherwise
restrict ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its Subsidiaries or any of their
respective affiliates or any successor thereto or that would, after the
Effective Time, to the knowledge of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, limit or restrict Newco
or any of its affiliates (including the Surviving Corporation) or any
successor thereto, from engaging or competing in any line of business or in
any geographic area, which agreements or arrangements, in the aggregate,
would reasonably be expected to have a Material Adverse Effect on Newco and
its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
(q) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholder Rights Plan. The Board of
Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has amended the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement
in accordance with its terms to render it inapplicable to the transactions
contemplated by this Agreement and the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option
Agreement. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has delivered to AHP a true and correct copy of
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement, as amended, in effect as of execution
and delivery of this Agreement.
3.3 Representations and Warranties of AHP and Merger Sub. AHP
and Merger Sub represent and warrant to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ as follows:
(a) Organization. Merger Sub is a corporation duly
incorporated, validly existing and in good standing under the laws of
Delaware. Merger Sub is a direct wholly-owned subsidiary of AHP.
(b) Corporate Authorization. Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution,
delivery and performance by Merger Sub of this Agreement and the
consummation by Merger Sub of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the
part of Merger Sub. This Agreement has been duly executed and delivered
by Merger Sub and constitutes a valid and binding agreement of Merger
Sub, enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) Non-Contravention. The execution, delivery and performance
by Merger Sub of this Agreement and the consummation by Merger Sub of
the transactions contemplated hereby do not and will not contravene
or conflict with the certificate of incorporation or bylaws of Merger
Sub.
(d) No Business Activities. Merger Sub has not conducted any
activities other than in connection with the organization of Merger
Sub, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby. Merger Sub has
no Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
4.1 Covenants of AHP. During the period from the date of this
Agreement and continuing until the Effective Time, AHP agrees as to itself
and its Subsidiaries that (except as expressly contemplated or permitted by
this Agreement, the Stock Option
Agreements or the AHP
Disclosure Schedule or as required by a Governmental Entity of competent
jurisdiction or to the extent that ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall otherwise consent
in writing, which consent shall not be unreasonably withheld or delayed):
(a) Ordinary Course.
---------------
(i) AHP and its Subsidiaries shall carry on their respective
businesses in the usual, regular and ordinary course in all material
respects, in substantially the same manner as heretofore conducted,
and shall use all reasonable efforts to preserve intact their present
lines of business, maintain their rights and franchises and preserve
their relationships with customers, suppliers and others having
business dealings with them to the end that their ongoing businesses
shall not be impaired in any material respect at the Effective Time;
provided, however, that no action by AHP or its Subsidiaries with
respect to matters specifically addressed by any other provision of
this Section 4.1 shall be deemed a breach of this Section 4.1(a)(i)
unless such action would constitute a breach of one or more of such
other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 4.1(e), AHP shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any new material line of business or
(B) incur or commit to any capital expenditures or any obligations or
liabilities in connection therewith other than capital expenditures
and obligations or liabilities in connection therewith incurred or
committed to in the ordinary course of business consistent with past
practice and which, together with all such expenditures incurred or
committed since January 1, 1999, are not in excess of the amounts set
forth in Section 4.1(a) of the AHP Disclosure Schedule.
(b) Dividends; Changes in Share Capital. AHP shall not, and
shall not permit any of its Subsidiaries to, and shall not propose to, (i)
declare or pay any dividends on or make other distributions in respect of
any of its capital stock, except (A) the declaration and payment of regular
quarterly cash dividends not in excess of $.23 per share of AHP Common
Stock with usual record and payment dates for such dividends in accordance
with past dividend practice, (B) the declaration and payment of regular
quarterly cash dividends not in excess of $.50 per share on the $2
Convertible Preferred Stock with usual record and payment dates for such
dividends in accordance with past dividend practice and (C) for dividends
by wholly owned Subsidiaries of AHP, (ii) split, combine or reclassify any
of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for, shares
of its capital stock, except for any such transaction by a wholly owned
Subsidiary of AHP which remains a wholly owned Subsidiary after
consummation of such transaction or (iii) repurchase, redeem or otherwise
acquire any shares of its capital stock or any securities convertible into
or exercisable for any shares of its capital stock except for the purchase
from time to time by AHP of AHP Common Stock (and the associated AHP
Rights) in the ordinary course of business consistent with past practice in
connection with the AHP Benefit Plans. Prior to the Effective Time, AHP
shall not redeem the AHP Rights.
(c) Issuance of Securities. AHP shall not, and shall not permit
any of its Subsidiaries to, issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any shares of its capital stock of any
class, any AHP Voting Debt or any securities convertible into or
exercisable for, or any rights, warrants, calls or options to acquire, any
such shares or AHP Voting Debt, or enter into any commitment, arrangement,
undertaking or agreement with respect to any of the foregoing, other than
(i) the issuance of AHP Common Stock (and the associated AHP Rights) upon
the exercise of AHP Stock Options or in connection with other stock-based
benefit plans outstanding on the date hereof, in each case in accordance
with their present terms or pursuant to AHP Stock Options or other stock
based awards granted pursuant to clause (ii) below, (ii) the granting of
AHP Stock Options or other stock based awards to acquire shares of AHP
Common Stock granted under stock based benefit plans outstanding on the
date hereof in the ordinary course of business consistent with past
practice not in excess of the amounts set forth in Section 4.1(c) of the
AHP Disclosure Schedule, (iii) issuances by a wholly owned Subsidiary of
AHP of capital stock to such Subsidiary's parent or another wholly owned
Subsidiary of AHP, (iv) pursuant to acquisitions set forth on the AHP
Disclosure Schedule or the financings therefor, (v) issuances in accordance
with the AHP Rights Agreement or (vi) issuances pursuant to the AHP Stock
Option Agreement.
(d) Governing Documents. Except to the extent required to
comply with their respective obligations hereunder or with applicable law,
AHP and Merger Sub shall not amend or propose to so amend their respective
certificates of incorporation, bylaws or other governing documents.
(e) No Acquisitions. Other than (i) pursuant to the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement, (ii) acquisitions disclosed on the
AHP Disclosure Schedule and (iii) acquisitions for cash in existing or
related lines of business of AHP the fair market value of the total
consideration (including the value of indebtedness acquired or assumed) for
which does not exceed the amount specified in the aggregate for all such
acquisitions in Section 4.1(e) of the AHP Disclosure Schedule and none of
which acquisitions referred to in this clause (iii) presents a material
risk of making it more difficult to obtain any approval or authorization
required in connection with the Merger under Regulatory Laws, AHP shall
not, and shall not permit any of its Subsidiaries to, acquire or agree to
acquire by merging or consolidating with, or by purchasing a substantial
equity interest in or a substantial portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or
agree to acquire any assets (other than the acquisition of assets used in
the operations of the business of AHP and its Subsidiaries in the ordinary
course, which assets do not constitute a business unit, division or all or
substantially all of the assets of the transferor); provided, however, that
the foregoing shall not prohibit (x) internal reorganizations or
consolidations involving existing Subsidiaries of AHP or (y) the creation
of new Subsidiaries of AHP organized to conduct or continue activities
otherwise permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries of AHP, (ii) dispositions
referred to in AHP SEC Reports filed prior to the date of this Agreement or
(iii) as may be required by or in conformance with law or regulation in
order to permit or facilitate the consummation of the transactions
contemplated hereby or the transactions disclosed in the AHP Disclosure
Schedule, AHP shall not, and shall not permit any of its Subsidiaries to,
sell, lease or otherwise dispose of, or agree to sell, lease or otherwise
dispose of, any of its assets (including capital stock of Subsidiaries of
AHP but excluding inventory in the ordinary course of business), if the
fair market value of the total consideration (including the value of the
indebtedness acquired or assumed) therefor exceeds the amount specified in
the aggregate for all such dispositions in Section 4.1(f) of the AHP
Disclosure Schedule.
(g) Investments; Indebtedness. AHP shall not, and shall not
permit any of its Subsidiaries to, other than in connection with actions
permitted by Section 4.1(e), (i) make any loans, advances or capital
contributions to, or investments in, any other Person, other than (x) by
AHP or a Subsidiary of AHP to or in AHP or any Subsidiary of AHP, (y)
pursuant to any contract or other legal obligation of AHP or any of its
Subsidiaries existing at the date of this Agreement or (z) in the ordinary
course of business consistent with past practice in an aggregate amount not
in excess of the aggregate amount specified in Section 4.1(g) of the AHP
Disclosure Schedule (provided that none of such transactions referred to in
this clause (z) presents a material risk of making it more difficult to
obtain any approval or authorization required in connection with the Merger
under Regulatory Laws) or (ii) create, incur, assume or suffer to exist any
indebtedness, issuances of debt securities, guarantees, loans or advances
not in existence as of the date of this Agreement except pursuant to the
credit facilities, indentures and other arrangements in existence on the
date of this Agreement or in the ordinary course of business consistent
with past practice, in each case as such credit facilities, indentures and
other arrangements may be amended, extended, modified, refunded, renewed or
refinanced after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. AHP shall use its
reasonable best efforts not to, and shall use its reasonable best efforts
not to permit any of its Subsidiaries to, take any action (including any
action otherwise permitted by this Section 4.1) that would prevent or
impede the Merger from qualifying as a "pooling of interests" for
accounting purposes or as a "reorganization" under Section 368 of the Code;
provided, however, that nothing hereunder shall limit the ability of AHP to
exercise its rights and/or fulfill its obligations under the Stock Option
Agreements.
(i) Compensation. Other than as contemplated by Section 5.6 or
by Section 4.1(c) or 4.1(i) of the AHP Disclosure Schedule, AHP shall not
increase the amount of compensation of any director or executive officer
except in the ordinary course of business consistent with past practice or
as required by an existing agreement, make any increase in or commitment to
increase any employee benefits, issue any additional AHP Stock Options,
adopt or make any commitment to adopt any additional employee benefit plan
or make any contribution, other than regularly scheduled contributions, to
any AHP Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in AHP SEC Reports filed prior to the date of this Agreement, or
as required by a Governmental Entity, AHP shall not change its methods of
accounting in effect at December 31, 1998, except as required by changes in
GAAP as concurred in by AHP's independent public accountants. AHP shall not
(i) change its fiscal year or (ii) make any material tax election, other
than in the ordinary course of business consistent with past practice.
(k) Certain Agreements. AHP shall not, and shall not permit any
of its Subsidiaries to, enter into any agreements or arrangements that
limit or otherwise restrict AHP or any of its Subsidiaries or any of their
respective affiliates or any successor thereto or that could, after the
Effective Time, limit or restrict Newco or any of its affiliates (including
the Surviving Corporation) or any successor thereto, from engaging or
competing in any line of business or in any geographic area which
agreements or arrangements, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Newco and its
Subsidiaries (including the Surviving Corporation and its Subsidiaries),
taken together, after giving effect to the Merger.
(l) No Change or Amendment to Rights Agreement. AHP shall not
amend, modify or waive any provision of the AHP Rights Agreement, and shall
not take any action to redeem the rights or render the rights inapplicable
to any transaction, other than the Merger and the transactions contemplated
by the AHP Stock Option Agreement.
(m) No Related Actions. AHP will not, and will not permit any
of its Subsidiaries to, agree or commit to do any of the foregoing.
4.2 Covenants of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. During the period from the
date of this Agreement and continuing until the Effective Time,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ agrees as to itself and its Subsidiaries that (except as
expressly contemplated or permitted by this Agreement, the Stock Option
Agreements or the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule or as required by a
Governmental Entity of competent jurisdiction or to the extent that AHP
shall otherwise consent in writing, which consent shall not be unreasonably
withheld or delayed):
(a) Ordinary Course.
---------------
(i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in
all material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact
their present lines of business, maintain their rights and franchises
and preserve their relationships with customers, suppliers and others
having business dealings with them to the end that their ongoing
businesses shall not be impaired in any material respect at the
Effective Time; provided, however, that no action by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or its Subsidiaries with respect to matters specifically addressed by
any other provision of this Section 4.2 shall be deemed a breach of
this Section 4.2(a)(i) unless such action would constitute a breach
of one or more of such other provisions.
(ii) Other than in connection with acquisitions permitted by
Section 4.2(e), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall not permit any of
its Subsidiaries to, (A) enter into any new material line of business
or (B) incur or commit to any capital expenditures or any obligations
or liabilities in connection therewith other than capital
expenditures and obligations or liabilities in connection therewith
incurred or committed to in the ordinary course of business
consistent with past practice and which, together with all such
expenditures incurred or committed since January 1, 1999, are not in
excess of the amounts set forth in Section 4.2(a) of the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule.
(b) Dividends; Changes in Share Capital. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
not, and shall not permit any of its Subsidiaries to, and shall not propose
to, (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except (A) the declaration and payment
of regular quarterly cash dividends not in excess of $.20 per share of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock with usual record and payment dates for such
dividends in accordance with past dividend practice and (B) for dividends
by wholly owned Subsidiaries of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock, except for any such
transaction by a wholly owned Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which remains a
wholly owned Subsidiary after consummation of such transaction, or (iii)
repurchase, redeem or otherwise acquire any shares of its capital stock or
any securities convertible into or exercisable for any shares of its
capital stock except for the purchase from time to time by ▇▇▇▇▇▇-▇▇▇▇▇▇▇
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (and the associated ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights)
in the ordinary course of business consistent with past practice in
connection with the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Benefit Plans. Prior to the Effective
Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not redeem the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights.
(c) Issuance of Securities. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall
not permit any of its Subsidiaries to, issue, deliver or sell, or authorize
or propose the issuance, delivery or sale of, any shares of its capital
stock of any class, any ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Voting Debt or any securities
convertible into or exercisable for, or any rights, warrants, calls or
options to acquire, any such shares or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Voting Debt, or enter
into any commitment, arrangement, undertaking or agreement with respect to
any of the foregoing, other than (i) the issuance of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common
Stock (and the associated ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights) upon the exercise of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options or in connection with other stock-based
benefits plans outstanding on the date hereof, in each case in accordance
with their present terms or pursuant to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options or
other stock based awards granted pursuant to clause (iii) below, (ii)
issuances by a wholly owned Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of capital stock
to such Subsidiary's parent or another wholly owned subsidiary of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, (iii) the granting of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options or other
stock based awards to acquire shares of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock granted
under stock based benefit plans outstanding on the date hereof in the
ordinary course of business consistent with past practice not in excess of
the amounts set forth in Section 4.2(c) of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure
Schedule, (iv) pursuant to acquisitions set forth on the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Disclosure Schedule or the financings therefor, (v) issuances in accordance
with the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement or (vi) issuances pursuant to the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement.
(d) Governing Documents. Except to the extent required to
comply with its obligations hereunder or with applicable law,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not amend or propose to so amend its respective
certificates of incorporation, bylaws or other governing documents.
(e) No Acquisitions. Other than (i) pursuant to the AHP Stock
Option Agreement, (ii) acquisitions disclosed on the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Disclosure Schedule and (iii) acquisitions for cash in existing or related
lines of business of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ the fair market value of the total
consideration (including the value of indebtedness acquired or assumed) for
which does not exceed the amount specified in the aggregate for all such
acquisitions in Section 4.2(e) of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule
and none of which acquisitions referred to in this clause (iii) presents
a material risk of making it more difficult to obtain any approval or
authorization required in connection with the Merger under Regulatory Laws,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall not permit any of its Subsidiaries to,
acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire or agree to acquire any assets (other than the
acquisition of assets used in the operations of the business of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries in the ordinary course, which assets do
not constitute a business unit, division or all or substantially of the
assets of the transferor); provided, however, that the foregoing shall not
prohibit (x) internal reorganizations or consolidations involving existing
Subsidiaries of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or (y) the creation of new Subsidiaries of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ organized to conduct or continue activities otherwise
permitted by this Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving existing Subsidiaries of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, (ii)
dispositions referred to in ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed prior to the
date of this Agreement or (iii) as may be required by or in conformance
with law or regulation in order to permit or facilitate the consummation of
the transactions contemplated hereby or the transactions disclosed in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall not
permit any of its Subsidiaries to, sell, lease or otherwise dispose of, or
agree to sell, lease or otherwise dispose of, any of its assets (including
capital stock of Subsidiaries of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ but excluding inventory in
the ordinary course of business), if the fair market value of the total
consideration (including the value of the indebtedness acquired or assumed)
therefor exceeds the amount specified in the aggregate for all such
dispositions in Section 4.2(f) of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule.
(g) Investments; Indebtedness. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and
shall not permit any of its Subsidiaries to, other than in connection with
actions permitted by Section 4.2(e), (i) make any loans, advances or
capital contributions to, or investments in, any other Person, other than
(x) by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or a Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to or in
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any Subsidiary of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, (y) pursuant to any
contract or other legal obligation of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
Subsidiaries existing at the date of this Agreement or (z) in the ordinary
course of business consistent with past practice in an aggregate amount not
in excess of the aggregate amount specified in Section 4.2(g) of the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule (provided that none of such transactions
referred to in this clause (z) presents a material risk of making it more
difficult to obtain any approval or authorization required in connection
with the Merger under Regulatory Laws) or (ii) create, incur, assume or
suffer to exist any indebtedness, issuances of debt securities, guarantees,
loans or advances not in existence as of the date of this Agreement except
pursuant to the credit facilities, indentures and other arrangements in
existence on the date of this Agreement or in the ordinary course of
business consistent with past practice, in each case as such credit
facilities, indentures and other arrangements and other existing
indebtedness may be amended, extended, modified, refunded, renewed or
refinanced after the date of this Agreement.
(h) Pooling; Tax-Free Qualification. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use
its reasonable best efforts not to, and shall use its reasonable best
efforts not to permit any of its Subsidiaries to, take any action
(including any action otherwise permitted by this Section 4.2) that would
prevent or impede the Merger from qualifying as a "pooling of interests"
for accounting purposes or as a "reorganization" under Section 368 of the
Code; provided, however, that nothing hereunder shall limit the ability of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ to exercise its rights and/or fulfill its obligations under
the Stock Option Agreements.
(i) Compensation. Other than as contemplated by Section 5.6 or
by Sections 4.2(c) or 4.2(i) of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not increase the amount of compensation of any
director or executive officer except in the ordinary course of business
consistent with past practice or as required by an existing agreement, make
any increase in or commitment to increase any employee benefits, issue any
additional ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options, adopt or make any commitment to
adopt any additional employee benefit plan or make any contribution, other
than regularly scheduled contributions, to any ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Benefit Plan.
(j) Accounting Methods; Income Tax Elections. Except as
disclosed in ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed prior to the date of this
Agreement, or as required by a Governmental Entity, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
not change its methods of accounting in effect at December 31, 1998, except
as required by changes in GAAP as concurred in by ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇
independent public accountants. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not (i) change its
fiscal year or (ii) make any material tax election, other than in the
ordinary course of business consistent with past practice.
(k) Certain Agreements. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not, and shall not
permit any of its Subsidiaries to, enter into any agreements or
arrangements that limit or otherwise restrict ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of its
Subsidiaries or any of their respective affiliates or any successor
thereto, or that could, after the Effective Time, limit or restrict Newco
or any of its affiliates (including the Surviving Corporation) or any
successor thereto, from engaging or competing in any line of business or in
any geographic area which agreements or arrangements, individually or in
the aggregate, would reasonably be expected to have a Material Adverse
Effect on Newco and its Subsidiaries (including the Surviving Corporation
and its Subsidiaries), taken together, after giving effect to the Merger.
(l) No Change or Amendment to Rights Agreement. ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall not amend, modify or waive any provision of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights
Agreement, and shall not take any action to redeem the rights or render the
rights inapplicable to any transaction, other than the Merger and the
transactions contemplated by the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement.
(m) No Related Actions. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ will not, and will not
permit any of its Subsidiaries to, agree or commit to any of the foregoing.
4.3 Governmental Filings. Each party shall (a) confer on a
regular and frequent basis with the other and (b) report to the other (to
the extent permitted by law or regulation or any applicable confidentiality
agreement) on operational matters. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP shall file all
reports required to be filed by each of them with the SEC (and all other
Governmental Entities) between the date of this Agreement and the Effective
Time and shall (to the extent permitted by law or regulation or any
applicable confidentiality agreement) deliver to the other party copies of
all such reports, announcements and publications promptly after the same
are filed.
4.4 Control of Other Party's Business. Nothing contained in
this Agreement shall give ▇▇▇▇▇▇-▇▇▇▇▇▇▇, directly or indirectly, the right
to control or direct AHP's operations prior to the Effective Time. Nothing
contained in this Agreement shall give AHP, directly or indirectly, the
right to control or direct ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ operations prior to the
Effective Time. Prior to the Effective Time, each of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision over its respective operations.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Preparation of Proxy Statement; Stockholders Meetings.
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(a) As promptly as reasonably practicable following the date
hereof, AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall prepare and file with the SEC mutually
acceptable proxy materials which shall constitute the Joint Proxy
Statement/Prospectus (such proxy statement/prospectus, and any amendments
or supplements thereto, the "Joint Proxy Statement/Prospectus") and AHP
shall prepare and file a registration statement on Form S-4 with respect to
the issuance of AHP Common Stock in the Merger (the "Form S-4"). The Joint
Proxy Statement/Prospectus will be included in and will constitute a part
of the Form S-4 as AHP's prospectus. The Form S-4 and the Joint Proxy
Statement/Prospectus shall comply as to form in all material respects with
the applicable provisions of the Securities Act and the Exchange Act and
the rules and regulations thereunder. Each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
use reasonable best efforts to have the Form S-4 declared effective by the
SEC and to keep the Form S-4 effective as long as is necessary to
consummate the Merger and the transactions contemplated thereby. AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall, as promptly as practicable after receipt thereof,
provide the other party copies of any written comments and advise the other
party of any oral comments, with respect to the Joint Proxy
Statement/Prospectus received from the SEC. AHP will provide ▇▇▇▇▇▇-▇▇▇▇▇▇▇
with a reasonable opportunity to review and comment on any amendment or
supplement to the Form S-4 prior to filing such with the SEC, and will
provide ▇▇▇▇▇▇-▇▇▇▇▇▇▇ with a copy of all such filings made with the SEC.
Notwithstanding any other provision herein to the contrary, no amendment or
supplement (including by incorporation by reference) to the Joint Proxy
Statement/Prospectus or the Form S-4 shall be made without the approval of
both parties, which approval shall not be unreasonably withheld or delayed;
provided, that with respect to documents filed by a party which are
incorporated by reference in the Form S-4 or Joint Proxy
Statement/Prospectus, this right of approval shall apply only with respect
to information relating to the other party or its business, financial
condition or results of operations; and provided, further, that AHP, in
connection with a Change in the AHP Recommendation, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, in
connection with a Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation, may amend or
supplement the Joint Proxy Statement/Prospectus or Form S-4 (including by
incorporation by reference) pursuant to a Qualifying Amendment (as defined
below)to effect such a Change, and in such event, this right of approval
shall apply only with respect to information relating to the other party or
its business, financial condition or results of operations, and shall be
subject to the right of each party to have its Board of Directors'
deliberations and conclusions to be accurately described. A "Qualifying
Amendment" means an amendment or supplement to the Joint Proxy
Statement/Prospectus or Form S-4 (including by incorporation by reference)
to the extent it contains (i) a Change in the AHP Recommendation or a
Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation (as the case may be), (ii) a
statement of the reasons of the Board of Directors of AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇
(as the case may be) for making such Change in the AHP Recommendation or
Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation (as the case may be) and (iii)
additional information reasonably related to the foregoing. AHP will use
reasonable best efforts to cause the Joint Proxy Statements/Prospectus to
be mailed to AHP stockholders, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ will use reasonable best
efforts to cause the Joint Proxy Statement/Prospectus to be mailed to
▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ stockholders, in each case after the Form S-4 is declared
effective under the Securities Act. AHP shall also take any action (other
than qualifying to do business in any jurisdiction in which it is not now
so qualified or to file a general consent to service of process) required
to be taken under any applicable state securities laws in connection with
the Share Issuance and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall furnish all information
concerning ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and the holders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock as
may be reasonably requested in connection with any such action. Each party
will advise the other party, promptly after it receives notice thereof, of
the time when the Form S-4 has become effective, the issuance of any stop
order, the suspension of the qualification of the AHP Common Stock issuable
in connection with the Merger for offering or sale in any jurisdiction, or
any request by the SEC for amendment of the Joint Proxy
Statement/Prospectus or the Form S-4. If at any time prior to the Effective
Time any information relating to AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇, or any of their
respective affiliates, officers or directors, should be discovered by AHP
or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which should be set forth in an amendment or supplement
to any of the Form S-4 or the Joint Proxy Statement/Prospectus so that any
of such documents would not include any misstatement of a material fact or
omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading,
the party which discovers such information shall promptly notify the other
party hereto and, to the extent required by law, rules or regulations, an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and disseminated to the stockholders of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(b) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall, duly take (subject to compliance with
the provisions of Section 3.1(e) and Section 3.2(e) (provided that
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have used reasonable best efforts to ensure that such
representation is true and correct)), all lawful action to call, give
notice of, convene and hold a meeting of its stockholders on a date
determined in accordance with the mutual agreement of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and
AHP (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting") for the purpose of
obtaining the Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote with respect to the transactions
contemplated by this Agreement and shall take all lawful action to solicit
the adoption of this Agreement by the Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote; and the
Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall recommend adoption of this
Agreement by the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to the effect as set forth
in Section 3.2(f) (the "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation"), and shall not
withdraw, modify or qualify (or propose to withdraw, modify or qualify) in
any manner adverse to AHP such recommendation or take any action or make
any statement in connection with the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting
inconsistent with such recommendation (collectively, a "Change in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation"); provided the foregoing shall not prohibit
accurate disclosure (and such disclosure shall not be deemed to be a Change
in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation) of factual information regarding the
business, financial condition or results of operations of AHP or
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or the fact that an Acquisition Proposal has been made, the
identity of the party making such proposal or the material terms of such
proposal (provided, that the Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ does not
withdraw, modify or qualify (or propose to withdraw, modify or qualify) in
any manner adverse to AHP its recommendation) in the Form S-4 or the Joint
Proxy Statement/Prospectus, to the extent such information, facts, identity
or terms is required to be disclosed therein under applicable law; and,
provided further, that the Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ may make a
Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation (x) pursuant to Section 5.5
hereof or (y) prior to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting if (i) after
the date of this Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ acquires knowledge of facts or
circumstances that the Board of Directors of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ determines in
good faith, after taking into account those facts and circumstances
concerning AHP that are disclosed in the AHP SEC Reports filed prior to the
date of this Agreement (or that ▇▇▇▇▇▇-▇▇▇▇▇▇▇ otherwise has knowledge of
as of the date of this Agreement), constitute a material adverse
development with respect to AHP and (ii) the Board of Directors of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ determines in good faith that, by reason of its
determination in clause (i) and based upon the advice of outside counsel to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, the failure to effect such Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Recommendation would create a substantial probability of violating the
fiduciary duties of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board of Directors under applicable
law. Notwithstanding any Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation, this
Agreement shall be submitted to the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ at the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting for the purpose of adopting the
Agreement and approving the Merger and nothing contained herein shall be
deemed to relieve ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of such obligation.
(c) AHP shall duly take (subject to compliance with the
provisions of Section 3.2(e) and Section 3.1(e) (provided that AHP shall
have used reasonable best efforts to ensure that such representation is
true and correct) all lawful action to call, give notice of, convene and
hold a meeting of its stockholders on a date determined in accordance with
the mutual agreement of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (the "AHP Stockholders
Meeting") for the purpose of obtaining the AHP Stockholder Approval and the
Bylaw Amendment Vote and shall take all lawful action to solicit the
approval of the AHP Bylaw Amendment, the Share Issuance and the adoption of
the Certificate Amendment; and the Board of Directors of AHP shall
recommend approval of the Share Issuance, the AHP Bylaw Amendment and the
adoption of the Certificate Amendment by the stockholders of AHP to the
effect as set forth in Section 3.1(f) (the "AHP Recommendation"), and shall
not withdraw, modify or qualify (or propose to withdraw, modify or qualify)
in any manner adverse to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ such recommendation or take any
action or make any statement in connection with the AHP Stockholders
Meeting inconsistent with such recommendation (collectively, a "Change in
the AHP Recommendation"); provided the foregoing shall not prohibit
accurate disclosure (and such disclosure shall not be deemed to be a Change
in the AHP Recommendation) of factual information regarding the business,
financial condition or operations of AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or the fact that
an Acquisition Proposal has been made, the identity of the party making
such proposal or the material terms of such proposal (provided, that the
Board of Directors of AHP does not withdraw, modify or qualify (or propose
to withdraw, modify or qualify) in any manner adverse to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ its
recommendation) in the Form S-4 or the Joint Proxy Statement/Prospectus, to
the extent such information, facts, identity or terms is required to be
disclosed therein under applicable law; and, provided further, that the
Board of Directors of AHP may make a Change in the AHP Recommendation (x)
pursuant to Section 5.5 hereof or (y) prior to the AHP Stockholders Meeting
if (i) after the date of this Agreement, AHP acquires knowledge of facts or
circumstances that the Board of Directors of AHP determines in good faith,
after taking into account those facts and circumstances concerning
▇▇▇▇▇▇-▇▇▇▇▇▇▇ that are disclosed in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ SEC Reports filed
prior to the date of this Agreement (or that AHP otherwise has knowledge of
as of the date of this Agreement), constitute a material adverse
development with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and (ii) the Board of Directors
of AHP determines in good faith that, by reason of its determination in
clause (i) and based upon the advice of outside counsel to AHP, the failure
to effect such Change in the AHP Recommendation would create a substantial
probability of violating the fiduciary duties of the AHP Board of Directors
under applicable law. Notwithstanding any Change in the AHP Recommendation,
a proposal to approve the Share Issuance, a proposal to approve the AHP
Bylaw Amendment and a proposal to adopt the Certificate Amendment shall be
submitted to the stockholders of AHP at the AHP Stockholders Meeting for
the purpose of obtaining the AHP Stockholder Approval and nothing contained
herein shall be deemed to relieve AHP of such obligation.
(d) For purposes of this Agreement, a Change in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation shall be deemed to include, without
limitation, a recommendation by the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board of Directors of a
third party Acquisition Proposal with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and a
Change in the AHP Recommendation shall be deemed to include, without
limitation, a recommendation by the AHP Board of Directors of a third party
Acquisition Proposal with respect to AHP.
5.2 Newco Board of Directors; Executive Officers; Name;
Headquarters.
(a) At or prior to the Effective Time, AHP will take all action
necessary to (i) reconstitute the Board of Directors of Newco as of the
Effective Time in accordance with Exhibit 5.2(a) hereto and the amendment
to the AHP By-Laws provided for in Section 1.6 of this Agreement,
(ii) cause ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ to be appointed as Chairman of the Board and
▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇ to be appointed as Chief Executive Officer of Newco;
each to be effective as of the Effective Time in accordance with Exhibit
5.2(a) hereto, (iii) cause the other individuals listed in Exhibit 5.2(a)
hereto to be appointed as officers of Newco as of the Effective Time in
accordance with Exhibit 5.2(a) hereto and (iv) adopt a retirement policy
which contains the terms set forth on Exhibit 5.2(a) hereto.
(b) AHP shall change its name as of the Effective Time to
"AmericanWarner, Inc." as set forth on Exhibit 1.5(b).
(c) Following the Effective Time, (i) Newco shall continue to
maintain its principal corporate offices in Madison, New Jersey, (ii) Newco
shall maintain the headquarters of its over-the-counter division in ▇▇▇▇▇▇
Plains, New Jersey and (iii) Newco shall maintain the headquarters of its
pharmaceutical division in Radnor, Pennsylvania.
5.3 Access to Information. Upon reasonable notice, each party
shall (and shall cause its Subsidiaries to) afford to the officers,
employees, accountants, counsel, financial advisors and other
representatives of the other party reasonable access during normal business
hours, during the period prior to the Effective Time, to all its
properties, books, contracts, commitments, records, officers and employees
and, during such period, such party shall (and shall cause its Subsidiaries
to) furnish promptly to the other party (a) a copy of each report,
schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements
of Federal or state securities laws, as applicable (other than documents
which such party is not permitted to disclose under applicable law), and
(b) all other information concerning it and its business, properties and
personnel as such other party may reasonably request (including
consultation on a regular basis with respect to litigation matters);
provided, however, that either party may restrict the foregoing access to
the extent that (i) any law, treaty, rule or regulation of any Governmental
Entity applicable to such party requires such party or its Subsidiaries to
restrict or prohibit access to any such properties or information or (ii)
the information is subject to confidentiality obligations to a third party.
The parties will hold any such information obtained pursuant to this
Section 5.3 in confidence in accordance with, and shall otherwise be
subject to, the provisions of the Mutual Confidentiality Agreement letter
dated July 27, 1999, between ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP (the "Confidentiality
Agreement"), as if such Confidentiality Agreement were in full force and
effect; provided, that nothing in Section 13 thereof shall prohibit or
otherwise restrict a party from making an acquisition proposal to the other
party or from engaging in or becoming a participant in a proxy contest or a
solicitation of proxies with respect to the Merger or the other
transactions contemplated hereby (including the Share Issuance, the
Certificate Amendment and the AHP Bylaw Amendment). Any investigation by
AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall not affect the representations and warranties
of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP, as the case may be.
5.4 Reasonable Best Efforts.
-----------------------
(a) Subject to the terms and conditions of this Agreement, each
party will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under this Agreement and applicable laws and regulations to
consummate the Merger and the other transactions contemplated by this
Agreement as soon as practicable after the date hereof, including (i)
preparing and filing as promptly as practicable all documentation to effect
all necessary applications, notices, petitions, filings, tax ruling
requests and other documents and to obtain as promptly as practicable all
consents, waivers, licenses, orders, registrations, approvals, permits, tax
rulings and authorizations necessary or advisable to be obtained from any
third party and/or any Governmental Entity in order to consummate the
Merger or any of the other transactions contemplated by this Agreement and
(ii) taking all reasonable steps as may be necessary to obtain all such
material consents, waivers, licenses, registrations, permits,
authorizations, tax rulings, orders and approvals. In furtherance and not
in limitation of the foregoing, each party hereto agrees to make an
appropriate filing of a Notification and Report Form pursuant to the HSR
Act and any other Regulatory Law (as defined below) with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional information
and documentary material that may be requested pursuant to the HSR Act and
any other Regulatory Law and to take all other actions necessary to cause
the expiration or termination of the applicable waiting periods under the
HSR Act as soon as practicable. Nothing in this Agreement shall require any
of AHP and its Subsidiaries or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries to sell,
hold separate or otherwise dispose of or conduct their business in a
specified manner, or agree to sell, hold separate or otherwise dispose of
or conduct their business in a specified manner, or permit the sale,
holding separate or other disposition of, any assets of AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or their respective Subsidiaries or the conduct of their business in a
specified manner, whether as a condition to obtaining any approval from a
Governmental Entity or any other Person or for any other reason, if such
sale, holding separate or other disposition or the conduct of their
business in a specified manner is not conditioned on the Closing or, in the
aggregate, would reasonably be expected to have a Material Adverse Effect
on Newco and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together, after giving effect to the Merger.
(b) Each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall, in connection with
the efforts referenced in Section 5.4(a) to obtain all requisite material
approvals and authorizations for the transactions contemplated by this
Agreement under the HSR Act or any other Regulatory Law, use its reasonable
best efforts to (i) cooperate in all respects with each other in connection
with any filing or submission and in connection with any investigation or
other inquiry, including any proceeding initiated by a private party, (ii)
promptly inform the other party of any communication received by such party
from, or given by such party to, the Antitrust Division of the Department
of Justice (the "DOJ"), the Federal Trade Commission (the "FTC") or any
other Governmental Entity and of any material communication received or
given in connection with any proceeding by a private party, in each case
regarding any of the transactions contemplated hereby, and (iii) permit the
other party to review any communication given by it to, and consult with
each other in advance of any meeting or conference with, the DOJ, the FTC
or any such other Governmental Entity or, in connection with any proceeding
by a private party, with any other Person, and to the extent appropriate or
permitted by the DOJ, the FTC or such other applicable Governmental Entity
or other Person, give the other party the opportunity to attend and
participate in such meetings and conferences. For purposes of this
Agreement, "Regulatory Law" means the ▇▇▇▇▇▇▇ Act, as amended, Council
Regulation No. 4064/89 of the European Community, as amended (the "EC
Merger Regulation") the ▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal
Trade Commission Act, as amended, and all other federal, state and foreign,
if any, statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other laws that are designed or intended to
prohibit, restrict or regulate (i) foreign investment or (ii) actions
having the purpose or effect of monopolization or restraint of trade or
lessening of competition.
(c) Subject to the terms and conditions of this Agreement, in
furtherance and not in limitation of the covenants of the parties contained
in Sections 5.4(a) and 5.4(b), if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by
this Agreement as violative of any Regulatory Law, each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall cooperate in all respects with each other and use its
respective reasonable best efforts , including without limitation, selling,
holding separate or otherwise disposing of or conducting their business in
a specified manner, or agreeing to sell, hold separate or otherwise dispose
of or conduct their business in a specified manner or permitting the sale,
holding separate or other disposition of, any assets of AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
or their respective Subsidiaries or the conducting of their business in a
specified manner, in order to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement,
nothing in this Section 5.4 shall limit a party's right to terminate this
Agreement pursuant to Article VII; provided that the foregoing is subject
in all respects to the last sentence of Section 5.4(a).
(d) If any objections are asserted with respect to the
transactions contemplated hereby under any Regulatory Law or if any suit is
instituted by any Governmental Entity or any private party challenging any
of the transactions contemplated hereby as violative of any Regulatory Law,
each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use its reasonable best efforts to
resolve any such objections or challenge as such Governmental Entity or
private party may have to such transactions under such Regulatory Law so as
to permit consummation of the transactions contemplated by this Agreement.
5.5 Acquisition Proposals.
---------------------
Without limitation on any of such party's other obligations
under this Agreement (including under Article IV hereof), each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ agrees that neither it nor any of its Subsidiaries nor any
of the officers and directors of it or its Subsidiaries shall, and that it
shall use its reasonable best efforts to cause its and its Subsidiaries'
employees, agents and representatives (including any investment banker,
attorney or accountant retained by it or any of its Subsidiaries) not to,
directly or indirectly, initiate, solicit, encourage or knowingly
facilitate (including by way of furnishing information) any inquiries or
the making of any proposal or offer with respect to a merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
it, or any purchase or sale of the consolidated assets (including without
limitation stock of Subsidiaries and Majority Owned Restricted Affiliates)
of such party and its Subsidiaries, taken as a whole, having an aggregate
value equal to 10% or more of the market capitalization of such party, or
any purchase or sale of, or tender or exchange offer for, 10% or more of
the equity securities of such party (any such proposal or offer (other than
a proposal or offer made by the other party or an affiliate thereof) being
hereinafter referred to as an "Acquisition Proposal"). Each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ further agrees that neither it nor any of its Subsidiaries
nor any of the officers and directors of it or its Subsidiaries shall, and
that it shall use its reasonable best efforts to cause its and its
Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, have any discussion with or
provide any confidential information or data to any Person relating to an
Acquisition Proposal, or engage in any negotiations concerning an
Acquisition Proposal, or knowingly facilitate any effort or attempt to make
or implement an Acquisition Proposal or accept an Acquisition Proposal.
Notwithstanding anything in this Agreement to the contrary, each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its respective Board of Directors shall be permitted to
(A) to the extent applicable, comply with Rule 14d-9 and Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal,
(B) effect a Change in the AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation, as the
case may be, or (C) engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona
fide written Acquisition Proposal by any such Person, if and only to the
extent that, in any such case as is referred to in clause (B) or (C), (i)
its Stockholders Meeting shall not have occurred, (ii) (x) in the case of
clause (B) above such change is permitted by clause (y) of the second
proviso of the first sentence of Section 5.1(b) or Section 5.1(c), as the
case may be, or it has received an unsolicited bona fide written
Acquisition Proposal from a third party and its Board of Directors conclude
in good faith that such Acquisition Proposal constitutes a Superior
Proposal (as defined in Section 8.11) and (y) in the case of clause (C)
above, its Board of Directors concludes in good faith that there is a
reasonable likelihood that such Acquisition Proposal could result in a
Superior Proposal, (iii) prior to providing any information or data to any
Person in connection with an Acquisition Proposal by any such Person, its
Board of Directors receives from such Person an executed confidentiality
agreement containing terms at least as stringent as those contained in the
Confidentiality Agreement (including Section 13 thereof) and (iv) prior to
providing any information or data to any Person or entering into
discussions or negotiations with any Person, such party notifies the other
party promptly of such inquiries, proposals or offers received by, any such
information requested from, or any such discussions or negotiations sought
to be initiated or continued with, any of its representatives indicating,
in connection with such notice, the name of such Person and the material
terms and conditions of any inquiries, proposals or offers. Each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ agrees that it will promptly keep the other party informed
of the status and terms of any such proposals or offers and the status and
terms of any such discussions or negotiations. Each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ agrees that it will, and will cause its officers, directors
and representatives to, immediately cease and cause to be terminated any
activities, discussions or negotiations existing as of the date of this
Agreement with any parties conducted heretofore with respect to any
Acquisition Proposal. Each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ agrees that it will
use reasonable best efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 5.5. Nothing in this Section 5.5 shall (x) permit AHP or
▇▇▇▇▇▇-▇▇▇▇▇▇▇ to terminate this Agreement (except as specifically provided
in Article VII hereof) or (y) affect any other obligation of AHP or
▇▇▇▇▇▇-▇▇▇▇▇▇▇ under this Agreement. Neither AHP nor ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall
submit to the vote of its stockholders any Acquisition Proposal other than
the Merger.
5.6 Employee Benefits Matters.
-------------------------
(a) Continuation and Comparability of Benefits. Following the
Effective Time, Newco shall honor, cause the Surviving Corporation to
honor, all ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Benefit Plans and related funding arrangements in
accordance with their respective terms. From the Effective Time until such
later date to be agreed by the Task Force (which date shall not be earlier
than the first anniversary of the Effective Time), Newco shall provide
compensation and employee benefits under Benefit Plans (as defined in
Section 8.11) to the employees and former employees of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and their respective Subsidiaries (the "Newco Employees")
that are, in the aggregate, no less favorable in any material respects than
those provided to such persons pursuant to the Benefit Plans in effect on
the date hereof, except to the extent their equity and equity based
compensation shall be dealt with in accordance with Section 5.6(c). Nothing
herein shall require Newco to continue any particular Benefit Plan or
prevent the amendment or termination thereof (subject to the maintenance,
in the aggregate, of the benefits as provided in the preceding sentence);
provided, however, that Newco shall not take any action (by way of
amendment, termination or otherwise) which is in violation of the terms of
any Benefit Plan or applicable law.
(b) Pre-Existing Limitations; Deductibles; Service Credit. With
respect to any Benefit Plans in which any Newco Employees first become
eligible to participate, on or after the Effective Time, and in which are
plans that the Newco Employees did not participate prior to the Effective
Time (the "New Newco Plans"), Newco shall: (A) waive all pre-existing
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Newco Employees under any New Newco
Plans in which such employees may be eligible to participate after the
Effective Time; (B) provide each Newco Employee with credit for any
co-payments and deductibles paid prior to the Effective Time (to the same
extent such credit was given under the analogous Benefit Plan prior to the
Effective Time) in satisfying any applicable deductible or out-of-pocket
requirements under any New Newco Plans in which such employees may be
eligible to participate after the Effective Time, and (C) recognize all
service of the Newco Employees with AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, respectively,
for all purposes (including, without limitation, purposes of eligibility to
participate, vesting credit, entitlement to benefits, and benefit accrual)
in any New Newco Plan in which such employees may be eligible to
participate after the Effective Time, to the extent such service is taken
into account under the applicable New Newco Plan; provided, that the
foregoing shall not apply to the extent it would result in duplication of
benefits, under multiple plans or would result in benefit accruals under
multiple defined benefit pension plans with respect to the same period of
service without offset for benefits accrued under a predecessor defined
benefit pension plan.
(c) Treatment of Equity and Equity - Based Benefit Plans. AHP
and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall, as soon as reasonably practicable after the date
hereof, create a task force comprised of key executive officers and other
employees of each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (half of whom shall be employed
by AHP and half of whom shall be employed by ▇▇▇▇▇▇-▇▇▇▇▇▇▇) (the "Task
Force") which shall review all Benefit Plans of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇
including those which related to, or were based upon the equity of AHP or
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and recommend appropriate Benefit Plans for Newco on and
after the Effective Time, including how to deal with the use of equity and
equity based compensation for employees of Newco. In so doing, the Task
Force shall fully and fairly take into account the past practices of both
AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, shall comply with the provisions of paragraph (a)
of this Section 5.6 and shall in good faith consider appropriate methods by
which Newco Employees may be fairly compensated through the use of Benefit
Plans.
5.7 Fees and Expenses. Whether or not the Merger is
consummated, all Expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring
such Expenses, except (a) if the Merger is consummated, the Surviving
Corporation shall pay, or cause to be paid, any and all property or
transfer taxes imposed on ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or its Subsidiaries and (b)
Expenses incurred in connection with the filing, printing and mailing of
the Joint Proxy Statement/Prospectus, which shall be shared equally by AHP
and ▇▇▇▇▇▇-▇▇▇▇▇▇▇. As used in this Agreement, "Expenses" includes all
out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on
its behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the
transactions contemplated hereby, including the preparation, printing,
filing and mailing of the Joint Proxy Statement/Prospectus and the
solicitation of stockholder approvals and all other matters related to the
transactions contemplated hereby.
5.8 Directors' and Officers' Indemnification and Insurance. The
Surviving Corporation shall, and Newco shall cause the Surviving
Corporation to, (i) indemnify and hold harmless, and provide advancement of
expenses to, all past and present directors, officers and employees of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries (in all of their capacities) (a) to the
same extent such persons are indemnified or have the right to advancement
of expenses as of the date of this Agreement by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ pursuant to
▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ certificate of incorporation, bylaws and indemnification
agreements, if any, in existence on the date hereof with any directors,
officers and employees of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries and (b)
without limitation to clause (a), to the fullest extent permitted by law,
in each case for acts or omissions occurring at or prior to the Effective
Time (including for acts or omissions occurring in connection with the
approval of this Agreement and the consummation of the transactions
contemplated hereby), (ii) include and cause to be maintained in effect in
the Surviving Corporation's (or any successor's) certificate of
incorporation and bylaws for a period of six years after the Effective
Time, the current provisions regarding elimination of liability of
directors, indemnification of officers, directors and employees and
advancement of expenses contained in the certificate of incorporation and
bylaws of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and (iii) cause to be maintained for a period of
six years after the Effective Time the current policies of directors' and
officers' liability insurance and fiduciary liability insurance maintained
by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ (provided that the Surviving Corporation (or any
successor) may substitute therefor policies of at least the same coverage
and amounts containing terms and conditions which are, in the aggregate, no
less advantageous to the insured) with respect to claims arising from facts
or events that occurred on or before the Effective Time; provided, however,
that in no event shall the Surviving Corporation be required to expend in
any one year an amount in excess of 200% of the annual premiums currently
paid by ▇▇▇▇▇▇-▇▇▇▇▇▇▇ for such insurance; and, provided, further, that if
the annual premiums of such insurance coverage exceed such amount, the
Surviving Corporation shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding such amount. The
obligations of the Surviving Corporation under this Section 5.8 shall not
be terminated or modified in such a manner as to adversely affect any
indemnitee to whom this Section 5.8 applies without the consent of such
affected indemnitee (it being expressly agreed that the indemnitees to whom
this Section 5.8 applies shall be third party beneficiaries of this Section
5.8).
5.9 Public Announcements. AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use
reasonable best efforts to develop a joint communications plan and each
party shall use reasonable best efforts (i) to ensure that all press
releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications
plan, and (ii) unless otherwise required by applicable law or by
obligations pursuant to any listing agreement with or rules of any
securities exchange, to consult with each other before issuing any press
release or, to the extent practical, otherwise making any public statement
with respect to this Agreement or the transactions contemplated hereby. In
addition to the foregoing, except to the extent disclosed in or consistent
with the Joint Proxy Statement/Prospectus in accordance with the provisions
of Section 5.1, neither AHP nor ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall issue any press
release or otherwise make any public statement or disclosure concerning the
other party or the other party's business, financial condition
or results of operations without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
5.10 Accountant's Letters. (a) AHP shall use reasonable best
efforts to cause to be delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ two letters from AHP's
independent public accountants, one dated approximately the date on which
the Form S-4 shall become effective and one dated the Closing Date, each
addressed to AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇, in form reasonably satisfactory to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and customary in scope for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4. AHP shall use reasonable best efforts to cause to
be delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a copy of a letter from AHP's independent
accountants dated approximately the date the Form S-4 is declared effective
and as of the Closing Date, stating that accounting for the Merger as a
pooling of interests under Opinion 16 of the Accounting Principles Board
and applicable SEC rules and regulations is appropriate if the Merger is
closed and consummated as contemplated by this Agreement.
(b) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use reasonable best efforts to cause
to be delivered to AHP two letters from ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ independent public
accountants, one dated approximately the date on which the Form S-4 shall
become effective and one dated the Closing Date, each addressed to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP, in form reasonably satisfactory to AHP and
customary in scope for comfort letters delivered by independent public
accountants in connection with registration statements similar to the Form
S-4. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use reasonable best efforts to cause to be
delivered to AHP a copy of a letter from ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ independent
public accountants, addressed to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, dated approximately the
date the Form S-4 is declared effective and as of the Closing Date, stating
that they concur with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ conclusion that, as of the date of
their report, no conditions exist that would preclude ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇
ability to be a party in a business combination to be accounted for as a
pooling of interests.
(c) Each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use reasonable best
efforts to cause the transactions contemplated by this Agreement, including
the Merger, to be accounted for as a pooling of interests under Opinion 16
of the Accounting Principles Board and applicable SEC rules and
regulations, and such accounting treatment to be accepted by the SEC.
5.11 Listing of Shares of AHP Common Stock. AHP shall use its
reasonable best efforts to cause the shares of AHP Common Stock to be
issued in the Merger and the shares of AHP Common Stock to be reserved for
issuance upon exercise of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Options to be approved
for listing on the NYSE, subject to official notice of issuance, prior to
the Closing Date.
5.12 Dividends. After the date of this Agreement, each of AHP
and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall coordinate with the other the payment of dividends
with respect to the AHP Common Stock and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock and
the record dates and payment dates relating thereto, it being the intention
of the parties hereto that holders of AHP Common Stock and ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Common Stock shall not receive two dividends, or fail to receive one
dividend, for any single calendar quarter with respect to their shares of
AHP Common Stock and/or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock or any shares of AHP
Common Stock that any such holder receives in exchange for such shares of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock in the Merger.
5.13 Affiliates. (a) Not less than 45 days prior to the
Effective Time, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall deliver to AHP a letter identifying
all persons who, in the judgment of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, may be deemed at the
time this Agreement is submitted for adoption by the stockholders of
▇▇▇▇▇▇-▇▇▇▇▇▇▇, "affiliates" of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ for purposes of Rule 145
under the Securities Act or for purposes of qualifying the Merger for
pooling of interests accounting treatment under Opinion 16 of the
Accounting Principles Board and applicable SEC rules and regulations, and
such list shall be updated as necessary to reflect changes from the date
thereof. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall use reasonable best efforts to cause each
person identified on such list to deliver to AHP not less than 30 days
prior to the Effective Time, a written agreement substantially in the form
attached as Exhibit 5.13 hereto (an "Affiliate Agreement"). Not less than
45 days prior to the Effective Time, AHP shall deliver to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ a
letter identifying all persons who, in the judgment of AHP, may be deemed
"affiliates" of AHP for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such list
shall be updated as necessary to reflect changes from the date hereof. AHP
shall use reasonable best efforts to cause each person identified on such
list to deliver to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ not less than 30 days prior to the
Effective Time, a written agreement including the substance of paragraphs
(C), (D) and (E) of Exhibit 5.13 hereto.
(b) Newco shall use its reasonable best efforts to publish no
later than 90 days after the end of the first month after the Effective
Time in which there are at least 30 days of post-Merger combined operations
(which month may be the month in which the Effective Time occurs), combined
sales and net income figures as contemplated by and in accordance with the
terms of SEC Accounting Series Release No. 135.
5.14 Section 16 Matters. Prior to the Effective Time, AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall take all such steps as may be required to cause any
dispositions of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (including derivative
securities with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock) or acquisitions of
AHP Common Stock (including derivative securities with respect to AHP
Common Stock) resulting from the transactions contemplated by Article I or
Article II of this Agreement by each individual who is subject to the
reporting requirements of Section 16(a) of the Exchange Act with respect to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, to be exempt under Rule 16b-3 promulgated under the
Exchange Act, such steps to be taken in accordance with the No-Action
Letter dated January 12, 1999, issued by the SEC to Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
5.15 Specified Litigation. (a) From the date hereof to the
Closing Date, AHP shall promptly advise ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of all developments,
and provide ▇▇▇▇▇▇-▇▇▇▇▇▇▇ all additional information not otherwise
provided pursuant to Section 3.1(h) (iii), known to AHP which could
reasonably be expected to be relevant and material to an assessment of the
liability exposure of AHP and its Subsidiaries with respect to AHP
Specified Litigation Matters.
(b) From the date hereof to the Closing Date, ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall promptly advise AHP of all developments, and provide AHP all
additional information not otherwise provided pursuant to Section 3.2(h)
(iii), known to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ which could reasonably be expected to be
relevant and material to an assessment of the liability exposure of
▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Specified Litigation Matters.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, AHP and Merger Sub to effect
the Merger are subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Stockholder Approval. (i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have
obtained the Required ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Vote in connection with the adoption
of this Agreement by the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and (ii) AHP shall
have obtained the AHP Stockholder Approval in connection with the approval
of the Share Issuance and the Certificate Amendment by the stockholders of
AHP.
(b) No Injunctions or Restraints, Illegality. No Laws shall
have been adopted or promulgated, and no temporary restraining order,
preliminary or permanent injunction or other order issued by a court or
other Governmental Entity of competent jurisdiction shall be in effect, (i)
having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger or (ii) which otherwise, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect
on Newco and its Subsidiaries (including the Surviving Corporation and its
Subsidiaries), taken together after giving effect to the Merger.
(c) HSR Act; EC Merger Regulation. The waiting period (and any
extension thereof) applicable to the Merger under the HSR Act shall have
been terminated or shall have expired and approval of the Merger of the
European Commission shall have been obtained pursuant to the EC Merger
Regulation.
(d) Governmental and Regulatory Approvals. Other than the
filing provided for under Section 1.3 and filings pursuant to the HSR Act
and EC Merger Regulation (which are addressed in Section 6.1(c)), all
consents, approvals and actions of, filings with and notices to any
Governmental Entity required of AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or any of their
Subsidiaries to consummate the Merger, the Share Issuance and the other
transactions contemplated hereby, the failure of which to be obtained or
taken, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on Newco and its Subsidiaries (including the
Surviving Corporation and its Subsidiaries), taken together after giving
effect to the Merger, shall have been obtained; provided however, that the
provisions of this Section 6.1(d) shall not be available to any party whose
failure to fulfill its obligations pursuant to Section 5.4 shall have been
the cause of, or shall have resulted in, the failure to obtain such consent
or approval.
(e) NYSE Listing. The shares of AHP Common Stock to be issued
in the Merger and such other shares to be reserved for issuance in
connection with the Merger shall have been approved for listing on the
NYSE, subject to official notice of issuance.
(f) Effectiveness of the Form S-4. The Form S-4 shall have been
declared effective by the SEC under the Securities Act. No stop order
suspending the effectiveness of the Form S-4 shall have been issued by the
SEC and no proceedings for that purpose shall have been initiated or
threatened by the SEC.
(g) Pooling. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received and delivered
to AHP and AHP's independent public accountants, a letter from its
independent public accountants, dated approximately the date the Form S-4
is declared effective and as of the Closing Date, stating that they concur
with ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ conclusions that, as of the date of their letter, no
conditions exist that would preclude ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ ability to be a party
in a business combination to be accounted for as a pooling of interests.
AHP shall received and delivered to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, a letter from its
independent public accountants, dated approximately the date the Form S-4
is declared effective and as of the Closing Date, stating that accounting
for the Merger as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations is appropriate if
the Merger is closed and consummated as contemplated by this Agreement.
6.2 Additional Conditions to Obligations of AHP and Merger Sub.
The obligations of AHP and Merger Sub to effect the Merger are subject to
the satisfaction of, or waiver by AHP, on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. Each of the representations
and warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ set forth in this Agreement that is
qualified as to Material Adverse Effect shall be true and correct, and each
of the representations and warranties of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ set forth in this
Agreement that is not so qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date (except to
the extent in either case that such representations and warranties speak as
of another date); and AHP shall have received a certificate of the chief
executive officer and the chief financial officer of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to such
effect.
(b) Performance of Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have performed or complied with all agreements and
covenants required to be performed by it under this Agreement at or prior
to the Closing Date that are qualified as to Material Adverse Effect and
shall have performed or complied in all material respects with all other
agreements and covenants required to be performed by it under this
Agreement at or prior to the Closing Date that are not so qualified, and
AHP shall have received a certificate of the chief executive officer and
the chief financial officer of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to such effect.
(c) Tax Opinion. AHP shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to AHP, on or before the date the Form S-4 shall become
effective and, subsequently, on the Closing Date, a written opinion dated
as of such dates 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 that each of AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub will
be a party to the reorganization within the meaning of section 368(b) of
the Code. In rendering such opinion, counsel to AHP shall be entitled to
rely upon information, representations and assumptions provided by AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ substantially in the form of Exhibits 6.2(c)(1) and
6.2(c)(2) (allowing for such amendments to the representations as counsel
to AHP deems reasonably necessary).
(d) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement. No Stock Acquisition Date
or Distribution Date (as such terms are defined in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Rights Agreement) shall have occurred pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights
Agreement.
6.3 Additional Conditions to Obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇. The
obligations of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to effect the Merger are subject to the
satisfaction of, or waiver by ▇▇▇▇▇▇-▇▇▇▇▇▇▇, on or prior to the Closing
Date of the following additional conditions:
(a) Representations and Warranties. Each of the representations
and warranties of AHP set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of AHP set forth in this Agreement that is
not so qualified shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date (except to the extent in either
case that such representations and warranties speak as of another date) ;
and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received a certificate of the chief executive
officer and the chief financial officer of AHP to such effect.
(b) Performance of Obligations of AHP. AHP shall have performed
or complied with all agreements and covenants required to be performed by
it under this Agreement at or prior to the Closing Date that are qualified
as to Material Adverse Effect and shall have performed or complied in all
material respects with all other agreements and covenants required to be
performed by it under this Agreement at or prior to the Closing Date that
are not so qualified, and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received a certificate
of the chief executive officer and the chief financial officer of AHP to
such effect.
(c) Tax Opinion. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have received from
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, counsel to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, on or
before the date the Form S-4 shall become effective and, subsequently, on
the Closing Date, a written opinion dated as of such dates 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 that
each of AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and Merger Sub will be a party to the
reorganization within the meaning of section 368(b) of the Code. In
rendering such opinion, counsel to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall be entitled to rely
upon information, representations and assumptions provided by AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ substantially in the form of Exhibits 6.2(c)(1) and
6.2(c)(2) (allowing for such amendments to the representations as counsel
to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ deems reasonably necessary).
(d) AHP Rights Agreement. No Shares Acquisition Date or
Distribution Date (as such terms are defined in the AHP Rights Agreement)
shall have occurred pursuant to the AHP Rights Agreement.
(e) Amendments. AHP shall have taken all such actions as shall
be necessary so that (i) the amendment to the bylaws of AHP required by
Section 1.6(b) and (ii) the Certificate Amendment shall become effective
not later than the Effective Time.
(f) Settlement Agreement. AHP shall have entered into the
Settlement Agreement (as defined below) and such Settlement Agreement shall
be in full force and effect, the Preliminary Approval (as defined below)
shall have been obtained and shall be in full force and effect, the Initial
Opt Out Period (as defined below) shall have expired and AHP (i) shall not
have exercised (or publicly announced or notified ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of its
intention to exercise) and (ii) shall have irrevocably notified the other
parties thereto that it will not exercise, its "walkaway" rights set forth
in Section III.5 of the Memorandum of Understanding (as defined below) (or
corresponding provision of the Settlement Agreement).
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, by action taken or authorized by the Board of
Directors of the terminating party or parties, and except as provided
below, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP:
(a) By mutual written consent of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇;
(b) By either ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP, if the Effective Time
shall not have occurred on or before November 15, 2000 (the "Termination
Date"); provided, however, that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement (including without limitation
such party's obligations set forth in Section 5.4) has been the cause of,
or resulted in, the failure of the Effective Time to occur on or before the
Termination Date;
(c) By either ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP, if any Governmental Entity
(i) shall have issued an order, decree or ruling or taken any other action
(which the parties shall have used their reasonable best efforts to resist,
resolve or lift, as applicable, in accordance with Section 5.4) permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable or (ii) shall have failed
to issue an order, decree or ruling or to take any other action (which
order, decree, ruling or other action the parties shall have used their
reasonable best efforts to obtain, in accordance with Section 5.4), in the
case of each of (i) and (ii) which is necessary to fulfill the conditions
set forth in subsections 6.1(c) and (d), as applicable, and such denial of
a request to issue such order, decree, ruling or take such other action
shall have become final and nonappealable; provided, however, that the
right to terminate this Agreement under this Section 7.1(c) shall not be
available to any party whose failure to comply with Section 5.4 has been
the cause of such action or inaction;
(d) By either ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP, if the approvals of the
stockholders of either AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ contemplated by this Agreement
(other than the AHP Bylaw Amendment) shall not have been obtained by reason
of the failure to obtain the required vote at a duly held meeting of
stockholders or of any adjournment thereof at which the vote was taken;
(e) By AHP, if ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have failed to make the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation or effected a Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Recommendation (or resolved to take any such action), whether or not
permitted by the terms hereof, or shall have materially breached its
obligations under this Agreement by reason of a failure to call the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting in accordance with Section 5.1(b);
(f) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇, if AHP shall have failed to make the AHP
Recommendation or effected a Change in the AHP Recommendation (or resolved
to take any such action), whether or not permitted by the terms hereof, or
shall have materially breached its obligations under this Agreement by
reason of a failure to call the AHP Stockholders Meeting in accordance with
Section 5.1(c);
(g) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇, if a Shares Acquisition Date (as such
term is defined in the AHP Rights Agreement) shall have occurred pursuant
to the AHP Rights Agreement; or
(h) By AHP, if a Stock Acquisition Date (as such term is
defined in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement) shall have occurred
pursuant to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Rights Agreement.
(i) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ at any time during the 10 Business Day
period following the earlier of (i) June 30, 2000, if on or before such
date the condition set forth in Section 6.3(f) is not satisfied, and (ii)
the date on which the satisfaction on or before June 30, 2000 of the
condition set forth in Section 6.3(f) is not possible.
(j) By ▇▇▇▇▇▇-▇▇▇▇▇▇▇ at any time during the 10 Business Day
period following the delivery by AHP to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ of a fully executed
Settlement Agreement, if (i) such Settlement Agreement is not on
substantially the same terms as set forth in the Memorandum of
Understanding and (ii) the terms set forth in the Settlement Agreement
which are not substantially the same as the terms set forth in the
Memorandum of Understanding are in the aggregate, in the reasonable
judgment of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, materially adverse to AHP.
For purposes of this Article VII and Section 6.3(f), the
following terms shall have the following meanings:
"Memorandum of Understanding" shall mean the Memorandum of
Understanding Concerning Settlement of Diet Drug Litigation, dated
October 7, 1999, between AHP and the other parties thereto.
"Initial Opt Out Period" shall have the meaning set forth in the
Memorandum of Understanding.
"Preliminary Approval" shall mean the granting, by order of the
United States District Court for the Eastern District of
Pennsylvania, of the preliminary approval of the Settlement Agreement
as contemplated by Section IV.3 of the Memorandum of Understanding
and the approval of the notice to the Settlement Class (as defined in
the Memorandum of Understanding) and authorization of the issuance of
such notice.
"Settlement Agreement" shall have the meaning set forth in the
Memorandum of Understanding.
7.2 Effect of Termination.
---------------------
(a) In the event of termination of this Agreement by either
▇▇▇▇▇▇-▇▇▇▇▇▇▇ or AHP as provided in Section 7.1, this Agreement shall
forthwith become void and there shall be no liability or obligation on the
part of AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ or their respective officers or directors
except with respect to Section 3.1(l), Section 3.2(l), the second sentence
of Section 5.3, Section 5.7, this Section 7.2 and Article VIII, which
provisions shall survive such termination, and except that,
notwithstanding anything to the contrary contained in this Agreement,
neither AHP nor ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall be relieved or released from any
liabilities or damages arising out of its willful material breach of this
Agreement.
(b) If (A) (I) either party shall terminate this Agreement
pursuant to Section 7.1(d) (provided that the basis for such termination is
the failure of AHP's stockholders to approve the Share Issuance or adopt
the Certificate Amendment) and (II) at any time after the date of this
Agreement and at or before the date of the AHP Stockholders Meeting a
Business Combination (as defined in Section 7.2(d)) proposal with respect
to AHP shall have been publicly announced or otherwise communicated to the
AHP Board of Directors, (B) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall terminate this Agreement
pursuant to Section 7.1(g), (C) (I) either party shall terminate this
Agreement pursuant to Section 7.1(b), (II) at any time after the date of
this Agreement and at or before the Termination Date a Business Combination
proposal with respect to AHP shall have been publicly announced or
communicated to the AHP Board of Directors, (III) following the existence
of such Business Combination proposal and prior to any such termination,
AHP shall have breached (and not cured after notice thereof) any of its
covenants or agreements set forth in this Agreement in any material
respect, which breach shall have materially contributed to the failure of
the Effective Time to occur on or before the Termination Date and (IV)
within twelve months of any such termination of this Agreement, AHP shall
enter into a definitive agreement with any third party with respect to a
Business Combination or a Business Combination with respect to AHP is
consummated, (D) (I) either party shall terminate this Agreement pursuant
to Section 7.1(b), (II) at any time after the date of this Agreement and at
or before the Termination Date a Business Combination proposal with respect
to AHP shall have been publicly announced or communicated to the AHP Board
of Directors, (III) within twelve months of any such termination of this
Agreement, AHP shall enter into a definitive agreement with any third party
with respect to a Business Combination or a Business Combination with
respect to AHP is consummated and (IV) Section 7.2(b)(C)(III) is not
applicable, (E)(I) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall terminate this Agreement pursuant
to Section 7.1(f) and (II) either AHP's Board of Directors shall have,
prior to termination, failed to make the AHP Recommendation or effected a
change in the AHP Recommendation, in either case by reason of a Superior
Proposal, or at any time after the date of this Agreement and at or before
the event giving rise to the right of termination a Business Combination
proposal which satisfies the provisions of subclauses (i) and (ii) of
clause (II) (but not the language preceding subclause (i) in clause (II))
in the definition of Superior Proposal with respect to AHP shall have been
publicly announced or communicated to the AHP Board of Directors and shall
have not been irrevocably withdrawn prior to the event giving rise to the
right of termination, or (F) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall terminate this Agreement
pursuant to Section 7.1(f) in circumstances where the immediately preceding
clause (E) (II) is not applicable;
then:
(i) in the case of clauses (B), (C) or (E), AHP shall pay to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ (in the case of clauses (B) and (E) not later than two
Business Days after the date of termination of this Agreement and in the
case of clause (C) not later than two Business Days after the earlier of
the date such agreement is entered into or such Business Combination is
consummated) an amount equal to $1.8 billion,
(ii) in the case of clause (A), (i) AHP shall pay
▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two Business Days after the date of
termination of this Agreement, an amount equal to $900 million, and (ii) if
within twelve months of termination of this Agreement, AHP enters into a
definitive agreement with any third party with respect to a Business
Combination or any Business Combination with respect to AHP is consummated,
then AHP shall pay to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two Business Days
after the earlier of the date such agreement is entered into or such
Business Combination is consummated, an additional amount equal to $900
million,
(iii) in the case of clause (D), AHP shall pay to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two Business Days after the earlier of the
date such agreement is entered into or such Business Combination is
consummated, an amount equal to $180 million,
(iv) in the case of clause (F), (i) AHP shall pay to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two Business Days after the date of
termination of this Agreement, an amount equal to $900 million, and (ii) if
within twelve months of termination of this Agreement, AHP enters into a
definitive agreement with any third party with respect to a Business
Combination or any Business Combination with respect to AHP is consummated,
provided in each case such Business Combination is more favorable to AHP
stockholders (in their capacities as such) from a financial point of view
than the Merger, then AHP shall pay to ▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two
Business Days after the earlier of the date such agreement is entered into
or such Business Combination is consummated, an additional amount equal to
$1 billion, unless the option granted pursuant to the AHP Stock Option
Agreement has become exercisable in which case, such amount shall be $900
million. For purposes of the foregoing, a Business Combination shall be
deemed to be more favorable to AHP stockholders from a financial point of
view if the AHP Applicable Price exceeds the AHP Reference Price. The "AHP
Applicable Price" means the average of the closing prices of the AHP Common
Stock (as reported on the NYSE Composite Transactions Reporting System (as
reported in The Wall Street Journal or, if not reported therein, in another
authoritative source)) during the five trading day period commencing on the
first full trading day following the initial public announcement (or other
public disclosure) of the earlier to occur of (i) the date on which AHP
enters into a definitive agreement with respect to such Business
Combination and (ii) the date such Business Combination is consummated. The
"AHP Reference Price" means the average of the closing prices of the AHP
Common Stock (as reported on the NYSE Composite Transactions Reporting
System (as reported in The Wall Street Journal or, if not reported therein,
in another authoritative source)) during the five trading day period ending
on the last trading day prior to the initial public announcement (or other
public disclosure) of the earliest to occur of the following: (i)
termination of this Agreement, (ii) AHP's decision to consider effecting
the change in the AHP Recommendation giving use to such right of
termination and (iii) the development with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ upon
which such change in the AHP Recommendation is based.
Notwithstanding the foregoing, in the event of termination
pursuant to Section 7.1(d) in circumstances where ▇▇▇▇▇▇-▇▇▇▇▇▇▇ has the
right to terminate this Agreement pursuant to Section 7.1(f): (i) under
circumstances where Section 7.2(b)(E)(II) applies, then AHP shall pay to
▇▇▇▇▇▇-▇▇▇▇▇▇▇, not later than two Business Days after the date of
termination of this Agreement, an amount equal to $1.8 billion and no
further fee shall be payable under this Section 7.2(b), and (ii) under
circumstances where Section 7.2(b)(E)(II) does not apply, then AHP shall
pay ▇▇▇▇▇▇-▇▇▇▇▇▇▇ upon termination of this Agreement, as the obligation to
pay fees under this Section 7.2, the fees payable under Section 7.2(b)(iv)
as, when and to the extent payable under such Section.
(c) If (A) (I) either party shall terminate this Agreement
pursuant to Section 7.1(d) (provided that the basis for such termination is
the failure of ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ stockholders to adopt this Agreement or
approve the Merger) and (II) at any time after the date of this Agreement
and at or before the date of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting a
Business Combination proposal with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have
been publicly announced or otherwise communicated to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Board of Directors, (B) AHP shall terminate this Agreement pursuant to
Section 7.1(h), (C) (I) either party shall terminate this Agreement
pursuant to Section 7.1(b), (II) at any time after the date of this
Agreement and at or before the Termination Date a Business Combination
proposal with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have been publicly announced
or communicated to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board of Directors, (III) following
the existence of such a Business Combination proposal and prior to any such
termination, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have breached (and not cured after notice
thereof) any of its covenants or agreements set forth in this Agreement in
any material respect, which breach shall have materially contributed to the
failure of the Effective Time to occur on or before the Termination Date
and (IV) within twelve months of any such termination of this Agreement,
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall enter into a definitive agreement with any third party
with respect to a Business Combination or a Business Combination with
respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is consummated, (D) (I) either party shall
terminate this Agreement pursuant to Section 7.1(b), (II) at any time after
the date of this Agreement and at or before the Termination Date a Business
Combination proposal with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have been
publicly announced or communicated to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board of
Directors, (III) within twelve months of any such termination of this
Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall enter into a definitive agreement with any
third party with respect to a Business Combination or a Business
Combination with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is consummated and (IV) Section
7.2(c)(C)(III) is not applicable, (E)(I) AHP shall terminate this Agreement
pursuant to Section 7.1(e) and (II) either ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ Board of
Directors shall have, prior to termination, failed to make the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation or effected a change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Recommendation, in either case by reason of a Superior Proposal, or at any
time after the date of this Agreement and at or before the event giving
rise to the right of termination a Business Combination proposal which
satisfies the provisions of subclauses (i) and (ii) of clause (II) (but not
the language preceding subclause (i) in clause (II)) in the definition of
Superior Proposal with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall have been publicly
announced or communicated to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Board of Directors and
shall have not been irrevocably withdrawn prior to the event giving rise to
the right of termination, or (F) AHP shall terminate this Agreement
pursuant to Section 7.1(e) in circumstances where the immediately preceding
clause (E)(II) is not applicable;
then:
(i) in the case of clauses (B), (C) or (E), ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall pay to AHP (in the case of clauses (B) and (E) not later then two
Business Days after the date of termination of this Agreement and in the
case of clause (C) not later than two Business Days after the earlier of
the date such agreement is entered into or such Business Combination is
consummated) an amount equal to $1.8 billion,
(ii) in the case of clause (A), (i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay
AHP, not later than two Business Days after the date of termination of this
Agreement, an amount equal to $900 million, and (ii) if within twelve
months of termination of this Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ enters into a
definitive agreement with any third party with respect to a Business
Combination or any Business Combination with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is
consummated, then ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay to AHP, not later than two
Business Days after the earlier of the date such agreement is entered into
or such Business Combination is consummated, an additional amount equal to
$900 million,
(iii) in the case of clause (D), ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay to
AHP, not later than two Business Days after the earlier of the date such
agreement is entered into or such Business Combination is consummated, an
amount equal to $180 million,
(iv) in the case of clause (F), (i) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay to
AHP, not later then two Business Days after the date of termination of this
Agreement, an amount equal to $900 million, and (ii) if within twelve
months of termination of this Agreement, ▇▇▇▇▇▇-▇▇▇▇▇▇▇ enters into a
definitive agreement with any third party with respect to a Business
Combination or any Business Combination with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ is
consummated, provided in each case such Business Combination is more
favorable to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ stockholders (in their capacities as such) from
a financial point of view than the Merger, then ▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay to
AHP, not later than two Business Days after the earlier of the date such
agreement is entered into or such Business Combination is consummated, an
additional amount equal to $1 billion, unless the option granted pursuant
to the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stock Option Agreement has become exercisable, in
which case, such amount shall be $900 million. For purposes of the
foregoing, a Business Combination shall be deemed to be more favorable to
▇▇▇▇▇▇-▇▇▇▇▇▇▇ stockholders from a financial point of view if the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Applicable Price exceeds the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Reference Price.
The "▇▇▇▇▇▇-▇▇▇▇▇▇▇ Applicable Price" means the average of the closing
prices of the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (as reported on the NYSE
Composite Transactions Reporting System (as reported in The Wall
Street Journal or, if not reported therein, in another authoritative
source)) during the five trading day period commencing on the first full
trading day following the initial public announcement (or other public
disclosure) of the earlier to occur of (i) the date on which ▇▇▇▇▇▇-▇▇▇▇▇▇▇
enters into a definitive agreement with respect to such Business
Combination and (ii) the date such Business Combination is consummated. The
"▇▇▇▇▇▇-▇▇▇▇▇▇▇ Reference Price" means the average of the closing prices of
the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Common Stock (as reported on the NYSE Composite
Transactions Reporting System (as reported in The Wall Street Journal or,
if not reported therein, in another authoritative source)) during the five
trading day period ending on the last trading day prior to the initial
public announcement (or other public disclosure) of the earliest to occur
of the following: (i) termination of this Agreement, (ii) ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇
decision to consider effecting the Change in the ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Recommendation giving rise to such right of termination and (iii) the
development with respect to AHP upon which such Change in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Recommendation is based.
Notwithstanding the foregoing, in the event of termination
pursuant to Section 7.1(d) in circumstances where AHP has the right to
terminate this Agreement pursuant to Section 7.1(e): (i) under
circumstances where Section 7.2(c)(E)(II) applies, then ▇▇▇▇▇▇-▇▇▇▇▇▇▇
shall pay to AHP, not later than two Business Days after the date of
termination of this Agreement, an amount equal to $1.8 billion and no
further fee shall be payable under this Section 7.2(c); and (ii) under
circumstances where Section 7.2(c)(E)(II) does not apply, then
▇▇▇▇▇▇-▇▇▇▇▇▇▇ shall pay AHP upon termination of this Agreement, as the
obligation to pay fees under this Section 7.2, the fees payable under
Section 7.2(c)(iv) as, when and to the extent payable under such section.
(d) For the purposes of this Section 7.2, "Business
Combination" means with respect to AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇, as the case may
be, (i) a merger, reorganization, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving such party as a result of which either (A) such
party's stockholders prior to such transaction (by virtue of their
ownership of such party's shares) in the aggregate cease to own at least
60% of the voting securities of the entity surviving or resulting from such
transaction (or the ultimate parent entity thereof) or, regardless of the
percentage of voting securities held by such stockholders, if any Person
shall beneficially own, directly or indirectly, at least 40% of the voting
securities of such ultimate parent entity, or (B) the individuals
comprising the board of directors of such party prior to such transaction
do not constitute a majority of the board of directors of such ultimate
parent entity, (ii) a sale, lease, exchange, transfer or other disposition
of at least 40% of the assets of such party and its Subsidiaries, taken as a
whole, in a single transaction or a series of related transactions, or
(iii) the acquisition, directly or indirectly, by a Person of beneficial
ownership of 40% or more of the common stock of such party whether by
merger, consolidation, share exchange, business combination, tender or
exchange offer or otherwise (other than a merger, reorganization,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction upon the consummation of
which such party's stockholders would in the aggregate beneficially own
greater than 60% of the voting securities of such Person).
(e) In no event shall AHP or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ be required to pay
more than $1.8 billion (or, as provided in Section 7.2(b)(iv) and
7.2(c)(iv), $1.9 billion) pursuant to Section 7.2(b) or 7.2(c), as
applicable. All payments under this Section 7.2 shall be made by wire
transfer of immediately available funds to an account designated by the
party entitled to receive payment.
7.3 Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and AHP,
but, after any such approval, no amendment shall be made which by law or in
accordance with the rules of any relevant stock exchange requires further
approval by such stockholders without such further approval. This Agreement
may not be amended except by an instrument in writing signed on behalf of
each of the parties hereto.
7.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant
hereto and (iii) waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. 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
8.1 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in
this Agreement or in any instrument delivered pursuant to this Agreement,
including any rights arising out of any breach of such representations,
warranties, covenants and other agreements, shall survive the Effective
Time, except for those covenants and agreements contained herein and
therein (including Section 5.8) that by their terms apply or are to be
performed in whole or in part after the Effective Time and this Article
VIII.
8.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, or by telecopy or telefacsimile, upon
confirmation of receipt, (b) on the first Business Day following the date
of dispatch if delivered by a recognized next-day courier service, or (c)
on the tenth Business Day following the date of mailing if delivered by
registered or certified mail, return receipt requested, postage prepaid.
All notices hereunder shall be delivered as set forth below, or pursuant to
such other instructions as may be designated in writing by the party to
receive such notice:
(a) if to AHP or Merger Sub, to:
American Home Products Corporation
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) if to ▇▇▇▇▇▇-▇▇▇▇▇▇▇ to:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
8.3 Interpretation. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of
or Exhibit or Schedule to 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".
8.4 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed
by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
8.5 Entire Agreement; No Third Party Beneficiaries.
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(a) This Agreement, the Stock Option Agreements, the
Confidentiality Agreement and the other agreements of the parties referred
to herein constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right,
benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 5.8 (which is intended to be for the benefit
of the Persons covered thereby and may be enforced by such Persons).
8.6 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware (without
giving effect to choice of law principles thereof).
8.7 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the
greatest extent possible.
8.8 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other party, and any attempt to
make any such assignment without such consent shall be null and void,
except that Merger Sub may assign, in its sole discretion, any or all of
its rights, interests and obligations under this Agreement to any direct
wholly owned Subsidiary of AHP without the consent of ▇▇▇▇▇▇-▇▇▇▇▇▇▇, but
no such assignment shall relieve Merger Sub of any of its obligations under
this Agreement. 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 and assigns.
8.9 Submission to Jurisdiction; Waivers. Each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any
judgment in respect hereof brought by the other party hereto or its
successors or assigns may be brought and determined in the Chancery or
other Courts of the State of Delaware, and each of AHP and ▇▇▇▇▇▇-▇▇▇▇▇▇▇
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect to its property, generally and unconditionally, to
the nonexclusive jurisdiction of the aforesaid courts. Each of AHP and
▇▇▇▇▇▇-▇▇▇▇▇▇▇ hereby irrevocably waives, and agrees not to assert, by way
of motion, as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any
reason other than the failure to lawfully serve process (b) that it or its
property is exempt or immune from jurisdiction of any such court or from
any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest
extent permitted by applicable law, that (i) the suit, action or proceeding
in any such court is brought in an inconvenient forum, (ii) the venue of
such suit, action or proceeding is improper and (iii) this Agreement, or
the subject matter hereof, may not be enforced in or by such courts.
8.10 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms. It is accordingly
agreed that the parties shall be entitled to specific performance of the
terms hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
8.11 Definitions. As used in this Agreement:
--------------------------------------
(a) "beneficial ownership" or "beneficially own" shall have the
meaning under Section 13(d) of the Exchange Act and the rules and
regulations thereunder.
(b) "Benefit Plans" means, with respect to any Person, each
employee benefit plan, program, arrangement and contract (including,
without limitation, any "employee benefit plan," as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and any bonus, deferred compensation, stock bonus, stock
purchase, restricted stock, stock option, employment, termination, stay
agreement or bonus, change in control and severance plan, program,
arrangement and contract) in effect on the date of this Agreement or
disclosed on the ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Disclosure Schedule or the AHP Disclosure
Schedule, as the case may be, to which such Person or its Subsidiary is a
party, which is maintained or contributed to by such Person, or with
respect to which such Person could incur material liability under Section
4069, 4201 or 4212(c) of ERISA.
(c) "Board of Directors" means the Board of Directors of any
specified Person and any committees thereof.
(d) "Business Day" means any day on which banks are not
required or authorized to close in the City of New York.
(e) "known or "knowledge" means, with respect to any party, the
knowledge of such party's executive officers after reasonable inquiry.
(f) "Majority Owned Restricted Affiliate" when used with
respect to any party means any corporation or other organization, whether
incorporated or unincorporated, at least a majority of the securities or
other interests of which having by their terms ordinary voting power to
elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization, is
directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or by such party and one or more of its
Subsidiaries, and with respect to which such party is restricted from
having the ability to, by virtue of contractual limitations or limitations
imposed in organizational documents, from electing a majority of the Board
of Directors or others performing similar functions.
(g) "Material Adverse Effect" means, with respect to any entity
any event, change, circumstance or effect that is or is reasonably likely
to be materially adverse to (i) the business, financial condition or
results of operations of such entity and its Subsidiaries taken as a whole,
other than any event, change, circumstance or effect relating (x) to the
economy or financial markets in general or (y) in general to the industries
in which such entity operates and not specifically relating to (or having
the effect of specifically relating to or having a materially
disproportionate effect (relative to most other industry participants) on)
such entity or (ii) the ability of such entity to consummate the
transactions contemplated by this Agreement; provided, however, that for
purposes of Section 3.1 (other than 3.1(i) if, and only if, the succeeding
proviso is applicable and Section 3.1(h)(iii)) only, "Material Adverse
Effect" shall also exclude any event, change, circumstance or effect
relating in any way to (I) any pending, proposed, threatened or potential
litigation against AHP involving dexfenfluramine or fenfluramine or any
settlement or proposed settlement of such litigation or (II) any other
liabilities, whether known or unknown and whether contingent or not,
relating in any way to AHP's production, sale or marketing of
dexfenfluramine or fenfluramine; provided further however, that the
exception to the exclusion set forth in the preceding proviso with respect
to Section 3.1(i) shall apply if, and only if, following the date of the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Stockholders Meeting, any events, changes, circumstances or
effects occur, or ▇▇▇▇▇▇-▇▇▇▇▇▇▇ becomes aware of any events, changes,
circumstances or effects, relating to the matters referred to in the
preceding clauses (I) and (II) which in ▇▇▇▇▇▇-▇▇▇▇▇▇▇'▇ good faith
judgment has had or has a reasonable likelihood of having material adverse
significance with respect to such matters. All references to Material
Adverse Effect on AHP or its Subsidiaries contained in this Agreement shall
be deemed to refer solely to AHP and its Subsidiaries without including its
ownership of ▇▇▇▇▇▇-▇▇▇▇▇▇▇ and its Subsidiaries after the Merger.
(h) "the other party" means, with respect to ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
AHP and means, with respect to AHP, ▇▇▇▇▇▇-▇▇▇▇▇▇▇.
(i) "Person" means an individual, corporation, limited
liability company, partnership, association, trust, unincorporated
organization, other entity or group (as defined in the Exchange Act).
(j) "Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated,
(i) of which such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of which
held by such party or any Subsidiary of such party do not have a majority
of the voting interests in such partnership) or (ii) at least a majority of
the securities or other interests of which having by their terms ordinary
voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or
by any one or more of its Subsidiaries, or by such party and one or more of
its Subsidiaries, except for any Majority Owned Restricted Affiliates.
(k) "Superior Proposal" means with respect to AHP or
▇▇▇▇▇▇-▇▇▇▇▇▇▇, as the case may be, a written proposal made by a Person
other than either such party which is for (I) (i) a merger, reorganization,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving such party as a
result of which either (A) such party's stockholders prior to such
transaction (by virtue of their ownership of such party's shares) in the
aggregate cease to own at least 60% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate parent entity
thereof) or (B) the individuals comprising the board of directors of such
party prior to such transaction do not constitute a majority of the board
of directors of such ultimate parent entity, (ii) a sale, lease, exchange,
transfer or other disposition of at least 40% of the assets of such party
and its Subsidiaries, taken as a whole, in a single transaction or a series
of related transactions, or (iii) the acquisition, directly or indirectly,
by a Person of beneficial ownership of 40% or more of the common stock of
such party whether by merger, consolidation, share exchange, business
combination, tender or exchange offer or otherwise (other than a merger,
consolidation, share exchange, business combination, tender or exchange
offer or other transaction upon the consummation of which such party's
stockholders would in the aggregate beneficially own greater than 60% of
the voting securities of such Person), and which is (II) otherwise on terms
which the Board of Directors of such party in good faith concludes (after
consultation with its financial advisors and outside counsel), taking into
account, among other things, all legal, financial, regulatory and other
aspects of the proposal and the Person making the proposal, (i) would, if
consummated, result in a transaction that is more favorable to its
stockholders (in their capacities as stockholders), from a financial point
of view, than the transactions contemplated by this Agreement and (ii) is
reasonably capable of being completed.
IN WITNESS WHEREOF, AHP, Merger Sub and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ have
caused this Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman, President and Chief
Executive Officer
WOLVERINE SUB CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President and Asst. Secretary
▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇ ▇▇▇▇
Title: Chairman, President and Chief
Executive Officer