Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
ISC ACQUISITION CORPORATION
AND
INDUSTRIAL SCIENTIFIC CORPORATION
DATED AS OF FEBRUARY 23, 1999
AGREEMENT AND PLAN OF MERGER dated as of February 23, 1999 (the
"Agreement") between ISC Acquisition Corporation, a Pennsylvania corporation
("Acquisition"), and Industrial Scientific Corporation, a Pennsylvania
corporation ("Industrial Scientific").
WHEREAS, the Board of Directors of Acquisition and the Board of Directors
of Industrial Scientific upon the recommendation of its special committee of
disinterested members (the "Special Committee") have unanimously approved, and
deem advisable and in the best interests of their shareholders, the merger of
Acquisition with and into Industrial Scientific in accordance with Title 15,
Pennsylvania Consolidated Statutes (the "PBCL") and in accordance with the
terms, and subject to the conditions of, this Agreement (the "Merger");
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties hereto, intending to be
legally bound, agree as follows:
Article I
The Merger
Section 1.01. The Merger. At the Effective Time (as hereinafter
defined), upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the PBCL, Acquisition shall be merged with and
into Industrial Scientific, the separate existence of Acquisition shall cease,
and Industrial Scientific shall continue as the surviving corporation (the
"Surviving Corporation"). The Merger shall have the effects as provided by the
PBCL and other applicable law.
Section 1.02. Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions set forth in Article 5, the parties
shall file in the Department of State of the Commonwealth of Pennsylvania
articles of merger (the "Articles of Merger") executed in accordance with the
relevant provisions of the PBCL and shall make all other filings or recordings
required under the PBCL. The Merger shall become effective at such time as the
Articles of Merger are duly filed in the Department of State of the Commonwealth
of Pennsylvania, or at such other time as is permissible in accordance with the
PBCL and as Acquisition and Industrial Scientific shall agree and as specified
in the Articles of Merger (the time the Merger becomes effective being the
"Effective Time").
Section 1.03. Closing. The closing of the Merger (the "Closing") will
take place at the offices of Xxxxxxxx Xxxxxxxxx Professional Corporation, One
Oxford Centre, Pittsburgh, Pennsylvania at 10:00 a.m. (Pittsburgh time) on the
date of the satisfaction of the conditions provided in Article 5, or at such
other time and place as Acquisition and Industrial Scientific shall agree (the
"Closing Date").
Section 1.04. Certificate of Incorporation; By-Laws; Officers and
Directors. Pursuant to the Merger: (a) the Articles of Incorporation and By-laws
of Industrial Scientific as in effect immediately prior to the Effective Time
shall be the Articles of Incorporation and By-laws of the Surviving Corporation
following the Merger; provided that the number "four (4)" and "nine (9)" in
Article 6(a) of the Articles of Incorporation shall be changed to "two (2)" and
"seven (7)" respectively, until thereafter changed or amended as provided
therein and in accordance with applicable law; (b) Xxxxxx X. XxXxxxxxxx and Xxxx
X. XxXxxxxxxx shall be the directors of the Surviving Corporation following the
Merger and until the earlier of their death, resignation or removal or until
their respective successors are duly elected or appointed and qualified; and (c)
the officers of Industrial Scientific immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until the earlier of their
death, resignation or removal or until their respective successors are duly
elected or appointed and qualified.
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Section 1.05. Effect on Common Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of Acquisition,
Industrial Scientific or the holders of any shares of Common Stock, par value
$.01 per share, of Industrial Scientific (the "Industrial Scientific Common
Stock"):
(a) Common Stock of Acquisition. Each share of Common Stock, par
value $.01 per share, of Acquisition (the "Acquisition Common Stock"),
which is issued and outstanding immediately prior to the Effective Time,
shall be converted into and become one share of Common Stock, par value
$.01 per share, of the Surviving Corporation.
(b) Common Stock of Industrial Scientific. Subject to Sections 1.05
(c), 1.05(d) and 1.06, each share of Industrial Scientific Common Stock
which is issued and outstanding immediately prior to the Effective Time
shall be converted into and become a right to receive $28.50 in cash (the
"Merger Consideration") and, when so converted, shall automatically be
canceled and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Industrial Scientific Common
Stock shall, to the extent such certificate represents such shares, cease
to have any rights with respect thereto, except the right to receive the
Merger Consideration allocable to the shares represented by such
certificate upon surrender of such certificate in accordance with Section
1.08.
(c) Cancellation of Treasury Stock. Any shares of Industrial
Scientific Common Stock that are owned immediately prior to the Effective
Time by Industrial Scientific or any Subsidiary of Industrial Scientific
(as hereinafter defined) which constitute treasury stock in the hands of
the holder thereof, shall be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor, and each
holder of a certificate representing any such shares shall cease to have
any rights with respect thereto. The term "Subsidiary" means any
corporation, joint venture, partnership, limited liability company or other
entity of which Industrial Scientific, directly or indirectly, owns or
controls capital stock (or other equity interests) representing more than
fifty percent of the general voting power under ordinary circumstance of
such entity.
(d) Industrial Scientific Common Stock Held by Acquisition. Any
shares of Industrial Scientific Common Stock that are owned immediately
prior to the Effective Time by Acquisition shall be canceled and retired
and shall cease to exist, and no consideration shall be delivered in
exchange therefor, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto. Acquisition
hereby irrevocably waives any and all rights it may have pursuant to the
terms of this Agreement or under the PBCL (including, without limitation,
any rights to which it may be entitled under Part II, Chapter 15,
Subchapter D of the PBCL) or otherwise to receive pursuant to the Merger
cash or any other consideration for the shares of Industrial Scientific
Common Stock owned or held by it at the Effective Time.
Section 1.06. Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, shares of Industrial Scientific Common Stock
outstanding immediately prior to the Effective Time and held by a holder (if
any) who has perfected his rights to dissent from the Merger in accordance with
Part I, Chapter 15, Subchapter D of the PBCL ("Dissenting Shares") shall be
canceled and retired and shall not be converted into a right to receive the
Merger Consideration, unless such holder fails to perfect or withdraws or
otherwise loses such holder's right to dissent, if any. Such shareholders shall
be entitled to receive payment of the appraised value of such Dissenting Shares
in accordance with the provisions of the PBCL. If, after the Effective Time,
such holder fails to perfect or withdraws or loses any such right to dissent,
each such share of such holder shall be treated as a share that had been
converted as of the Effective Time into the right to receive the Merger
Consideration, without interest, in accordance with Section 1.05(b).
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Section 1.07. Treatment of Options.
(a) Pursuant to the Merger, at the Effective Time, each outstanding
option to purchase shares of Industrial Scientific Common Stock (an
"Industrial Scientific Stock Option"), other than those held by Xxxxxx X.
XxXxxxxxxx and Xxxx X. XxXxxxxxxx, whether or not vested, will be
terminated and, in exchange for such Industrial Scientific Stock Option,
the holder will be entitled to receive, for each share of Industrial
Scientific Common Stock subject to such Industrial Scientific Stock Option,
a cash payment equal to the excess, if any, of the Merger Consideration
over the applicable exercise price.
(b) Prior to the Effective Time, Industrial Scientific shall use
its best efforts to (i) obtain any consents from holders of the options and
(ii) make any amendments to the terms of the Industrial Scientific Stock
Option Plan and any options granted thereunder that, in case of either (i)
or (ii), are necessary or appropriate to give effect to the transactions
contemplated by this Section 1.07. Notwithstanding any other provisions of
this Section 1.07, payment in respect of any options may be withheld until
necessary consents are obtained.
Section 1.08. Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Industrial
Scientific shall appoint a bank or trust company to act as exchange agent
(the "Exchange Agent") for the payment of the Merger Consideration. As of
the Effective Time, Industrial Scientific shall have deposited with the
Exchange Agent, for the benefit of the holders of shares of Industrial
Scientific Common Stock, for exchange in accordance with this Section 1.08,
the aggregate amount of cash payable pursuant to Section 1.05(b) hereof in
exchange for outstanding shares of Industrial Scientific Common Stock (the
"Exchange Fund").
(b) Exchange Procedures. Promptly after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Industrial Scientific Common Stock whose shares were
converted into the right to receive cash pursuant to Section 1.05(b) a
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the certificates representing such shares of
Industrial Scientific Common Stock shall pass, only upon delivery of the
certificates representing such shares of Industrial Scientific Common Stock
to the Exchange Agent and shall be in such form and have such other
provisions as the Exchange Agent may reasonably specify), and instructions
for use in effecting the surrender of the certificates representing such
shares of Industrial Scientific Common Stock, in exchange for the Merger
Consideration. Upon surrender to the Exchange Agent of a certificate or
certificates representing shares of Industrial Scientific Common Stock and
acceptance thereof by the Exchange Agent, the holder thereof shall be
entitled to the amount of cash into which the number of shares of
Industrial Scientific Common Stock previously represented by such
certificate or certificates surrendered shall have been converted pursuant
to this Agreement. The Exchange Agent shall accept such certificates upon
compliance with such reasonable terms and conditions as the Exchange Agent
may impose to effect an orderly exchange thereof in accordance with normal
exchange practices. After the Effective Time, there shall be no further
transfer on the records of Industrial Scientific or its transfer agent of
certificates representing shares of Industrial Scientific Common Stock and
if such certificates are presented to Industrial Scientific for transfer,
they shall be canceled against delivery of the Merger Consideration
allocable to the shares of Industrial Scientific Common Stock represented
by such certificate or certificates. If any Merger Consideration is to be
remitted to a name other than that in which the certificate for the
Industrial Scientific Common Stock surrendered for exchange is registered,
it shall be a condition of such exchange that the certificate so
surrendered shall be properly endorsed, with signature guaranteed, or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay to Industrial Scientific, or its
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transfer agent, any transfer or other taxes required by reason of the
payment of the Merger Consideration to a name other than that of the
registered holder of the certificate surrendered, or establish to the
satisfaction of Industrial Scientific or its transfer agent that such tax
has been paid or is not applicable. Until surrendered as contemplated by
this Section 1.08 each certificate for shares of Industrial Scientific
Common Stock shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration allocable to the shares represented by such certificate as
contemplated by Section 1.05(b). No interest will be paid or will accrue on
any amount payable as Merger Consideration. Subject to completion of the
documentation referred to above, the Merger Consideration shall be paid at
the Effective Time to holders of Industrial Scientific Common Stock.
(c) No Further Ownership Rights in Industrial Scientific Stock.
The Merger Consideration paid upon the surrender for exchange of
certificates representing shares of Industrial Scientific Common Stock in
accordance with the terms of this Section 1.08 shall be deemed to have been
paid in full satisfaction of all rights pertaining to the shares of
Industrial Scientific Common Stock represented by such certificates.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including any interest and other income received by the Exchange Agent in
respect of all such funds) which remains undistributed to the holders of
the certificates representing shares of Industrial Scientific Common Stock
for six months after the Effective Time shall be delivered to the Surviving
Corporation, upon demand, and any holders of shares of Industrial
Scientific Common Stock prior to the Merger who have not theretofore
complied with this Section 1.08 shall thereafter look only to the Surviving
Corporation and only as general creditors thereof for payment of their
claim for Merger Consideration to which such holders may be entitled.
(e) No Liability. No party to this Agreement shall be liable to any
Person (as hereinafter defined) in respect of any amount from the Exchange
Fund delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. The term "Person" means any individual,
corporation, partnership, trust or unincorporated organization or a
government or any agency or political subdivision thereof.
(f) Lost Certificates. In the event any certificate or certificates
representing shares of Industrial Scientific Common Stock shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such certificate or certificates to be lost, stolen or
destroyed, the Exchange Agent will issue in exchange for such lost, stolen
or destroyed certificate the Merger Consideration deliverable in respect
thereof as determined in accordance with this Section 1.08; provided that
the Person to whom the Merger Consideration is paid shall, as a condition
precedent to the payment thereof, indemnify the Surviving Corporation in an
amount reasonably satisfactory to it against any claim that may be made
against the Surviving Corporation with respect to the certificate claimed
to have been lost, stolen or destroyed.
(g) Withholding Rights. The Surviving Corporation and the Exchange
Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
Common Stock such amounts as the Surviving Corporation or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the United States Internal Revenue Code of 1986, as amended
(the "Code"), or any provision of state, local or foreign tax law. To the
extent that amounts are so withheld by the Surviving Corporation or the
Exchange Agent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the shares of Common
Stock in respect of which such deduction and withholding was made by the
Surviving Corporation or the Exchange Agent.
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Section 1.09. Legal Requirements for Merger.
(a) Acquisition will take all reasonable actions necessary to comply
promptly with all legal requirements which may be imposed on Acquisition
with respect to the Merger and will promptly cooperate with and furnish
information to Industrial Scientific in connection with any such
requirements imposed upon Industrial Scientific in connection with the
Merger.
(b) Industrial Scientific will take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed on it
with respect to the Merger and will promptly cooperate with and furnish
information to Acquisition in connection with the Merger.
Section 1.10. Additional Agreements and Provisions. Subject to the
terms and conditions of this Agreement, each of the parties hereto agrees to use
its best efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. If at any time after the Effective Time (as hereinafter defined)
any further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of either
Industrial Scientific or Acquisition, the proper officers and directors of each
corporation that is a party to this Agreement shall take all such necessary
action. The parties hereto agree to use their respective best efforts to
challenge any action brought against any of the parties hereto seeking a
temporary restraining order or preliminary or permanent injunctive relief which
would prohibit, or materially interfere with, the consummation of the
transactions contemplated by this Agreement.
Article II
Representations And Warranties Of Industrial Scientific
Industrial Scientific represents and warrants to Acquisition as follows:
Section 2.01. Organization of Industrial Scientific and its
Subsidiaries. Industrial Scientific and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization and has all the requisite corporate power
and authority to carry on its business as now being conducted and to own, lease,
use and operate the properties owned and used by it. Industrial Scientific and
each of its Subsidiaries is qualified and in good standing to do business in
each jurisdiction in which the nature of its business requires it to be so
qualified, except to the extent the failure to be so qualified has not had, and
would not reasonably be expected to have, a Material Adverse Effect. The term
"Material Adverse Effect" means a material adverse effect on the business,
assets, liabilities, results of operations or financial condition of Industrial
Scientific and its Subsidiaries, taken as a whole.
Section 2.02. Capitalization of Industrial Scientific; Ownership. The
authorized capital stock of Industrial Scientific consists of 15,000,000 shares
of Industrial Scientific Common Stock, of which no more than 3,379,037 shares
are issued and outstanding as of the date hereof, and 1,000,000 shares of
Preferred Stock, without par value, of which no shares are issued and
outstanding as of the date hereof. All of the issued and outstanding shares of
capital stock of Industrial Scientific are duly authorized, validly issued,
fully paid and non-assessable and free of preemptive rights. Except for
outstanding Industrial Scientific Stock Options to purchase an aggregate of no
more than 52,118 shares of Industrial Scientific Common Stock, there are no
outstanding options, warrants or other rights of any kind to acquire (including
preemptive rights) any additional shares of capital stock of Industrial
Scientific or securities convertible into or exchangeable for, or which
otherwise confer on the holder thereof any right to acquire, any such additional
shares, nor is Industrial Scientific committed to issue any such option,
warrant, right or security. Following the Merger, Industrial Scientific will
have no obligation to issue, transfer or sell any shares of its capital stock or
other securities of Industrial Scientific pursuant to any employee benefit plan
or otherwise.
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Section 2.03. Subsidiaries of Industrial Scientific. The only direct or
indirect Subsidiaries of Industrial Scientific are as follows: Industrial
Scientific Devices, Inc.; Industrial Scientific of Delaware, Inc.; Industrial
Scientific Arabia, Ltd.; Industrial Scientific Pty.; HEG Industrial Scientific
Co. Ltd.; and Industrial Scientific PTE Ltd.. All outstanding shares of capital
stock or other equity interests of each Subsidiary are owned by Industrial
Scientific (except for Industrial Scientific Arabia, Ltd., 49% of whose shares
are owned by Industrial Scientific, and HEG Industrial Scientific Co. Ltd., 50%
of whose shares are owned by Industrial Scientific) free and clear of any and
all liens, claims, security interests or options, except for restrictions on
transfer under federal and state securities laws. All shares of capital stock
of each Subsidiary which is a corporation have been validly issued and are fully
paid and non-assessable. There are no outstanding options, warrants or other
rights of any kind to acquire (including preemptive rights) any additional
equity interests of any Subsidiary or securities convertible into or
exchangeable for, or which otherwise confer on the holder thereof any right to
acquire, any additional equity interests of any Subsidiary, nor is any
Subsidiary committed to issue any such option, warrant, right or security.
Other than the Subsidiaries referred to in the first sentence of this Section
2.03, Industrial Scientific does not own, directly or indirectly, any equity
interest in any other corporation, joint venture, partnership, limited liability
company or other entity.
Section 2.04. Authorization. Industrial Scientific has all requisite
corporate power and authority to enter into this Agreement and, subject to any
necessary approval of the Merger by the shareholders of Industrial Scientific,
to carry out its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of Industrial Scientific (other
than the approval of this Agreement and the transactions contemplated hereby by
the shareholders of Industrial Scientific). The Board of Directors of
Industrial Scientific has unanimously adopted resolutions approving this
Agreement and the Merger, and has determined that the terms of the Merger are
fair to, and in the best interests of, Industrial Scientific's shareholders
other than Xxxxxx X. XxXxxxxxxx, Xxxxxxxx X. XxXxxxxxxx, Xxxx X. XxXxxxxxxx and
Acquisition (the "Public Shareholders"). This Agreement has been duly executed
and delivered by Industrial Scientific and, assuming the due authorization,
execution and delivery hereof by Acquisition, constitutes the valid and binding
obligation of Industrial Scientific, enforceable against Industrial Scientific
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights generally
or by general equitable principles.
Section 2.05. Fairness Opinion and Approval by the Special Committee.
On or prior to the date hereof, the Special Committee (i) approved the terms of
this Agreement and the transactions contemplated hereby as they relate to the
Public Shareholders, including without limitation the Merger, (ii) determined
that the Merger is fair to and in the best interest of the Public Shareholders
and (iii) recommended that the Board of Directors of Industrial Scientific
approve and authorize this Agreement and such transactions. The Special
Committee has received an opinion of Ladenburg Xxxxxxxx & Co. Inc. to the effect
that the consideration to be received by the Public Shareholders in the Merger
is fair to such shareholders from a financial point of view as of the date
hereof.
Section 2.06. Brokers And Finders. Other than Ladenburg Xxxxxxxx & Co.
Inc., neither Industrial Scientific nor any Subsidiary has employed any broker,
finder, advisor or intermediary in connection with the transactions contemplated
by this Agreement which would be entitled to a broker's, finder's or similar fee
or commission in connection therewith or upon the consummation thereof. Any such
fees due to Ladenburg Xxxxxxxx & Co. Inc. shall be paid by Industrial
Scientific.
Section 2.07. SEC Documents; Undisclosed Liabilities. Industrial
Scientific has filed all required reports, schedules, forms, statements and
other documents with the Securities and Exchange Commission (the "SEC") since
January 1, 1997 (the "SEC Documents"). As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable to such
SEC Documents. Except to the extent that information contained in any SEC
Document has been revised
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or superseded by a later filed SEC Document, none of the SEC Documents contains
any untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Industrial Scientific included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the case
of unaudited statements, as permitted by applicable instructions or regulations
of the SEC relating to the preparation of quarterly reports on Form10-Q) applied
on a consistent basis during the period involved (except as may be indicated in
the notes thereto) and fairly present the financial position of Industrial
Scientific as of the dates thereof and the results of operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments).
Section 2.08. Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly available prior to the date of
this Agreement, since the date of the most recent audited financial statements
included in the filed SEC Documents, Industrial Scientific has conducted its
business only in the ordinary course, and there has not been any material change
in Industrial Scientific or its business. Since January 1, 1997, Industrial
Scientific has not engaged in discussions with any party other than Acquisition
with respect to any material transaction or transaction that would be deemed a
change of control of Industrial Scientific or such other entity, including,
without limitation, the sale of the capital stock of Industrial Scientific, the
merger of Industrial Scientific with another entity or the acquisition by
Industrial Scientific of another entity.
Section 2.09. Information Statement. None of the information to be
supplied by Industrial Scientific for inclusion in the Information Statement on
Schedule 14C to be distributed to the Shareholders of Industrial Scientific in
connection with the Merger (the "Information Statement") will, at the time of
the mailing of the Information Statement and any amendments or supplements
thereto, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Information Statement will, as of its effective date, comply as
to form in all material respects with all applicable laws, including the
provisions of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder.
Article III
Representations And Warranties Of Acquisition
Section 3.01. Organization and Authority of Acquisition. Acquisition is
a corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Pennsylvania.
Section 3.02. Authorization. Acquisition has all corporate power and
authority to enter into this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Acquisition. This Agreement has been duly executed and delivered by
Acquisition and, assuming the due authorization, execution and delivery hereof
by Industrial Scientific, constitutes the valid and binding obligation of
Acquisition, enforceable against Acquisition in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or similar laws affecting creditors' rights
generally or by general equitable principles.
Section 3.03. Brokers and Intermediaries. Other than Xxxxxx/Hunter,
Inc., Acquisition has not employed any broker, finder, advisor or intermediary
in connection with the transactions contemplated by this Agreement which would
be entitled to a broker's, finder's, or similar fee or commission in connection
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therewith or upon the consummation thereof. Any such fees due to Xxxxxx/Xxxxxx,
Inc. shall be the liability of Acquisition.
Section 3.04. Financing. Acquisition has received indications from a
lending institution that such institution will be prepared to extend the
financing necessary to consummate the Merger.
Section 3.05. Information Statement. None of the information to be
supplied by Acquisition or its shareholders for inclusion in the Information
Statement will, at the time of the mailing of the Information Statement and any
amendments or supplements thereto, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading.
Article IV
Certain Covenants And Agreements
Section 4.01. Announcement. Neither Industrial Scientific nor
Acquisition shall issue any press release or otherwise make any public statement
with respect to this Agreement and the transactions contemplated hereby without
the prior consent of the other (which consent shall not be unreasonably
withheld), except as may be required by applicable law or stock exchange
regulation. Notwithstanding anything in this Section 4.01 to the contrary,
Acquisition and Industrial Scientific will, to the extent practicable, consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any such press release or other public statements with respect
to this Agreement and the transactions contemplated hereby whether or not
required by law.
Section 4.02. No Solicitation. From the date of this Agreement to the
Effective Time, Industrial Scientific covenants and agrees that Industrial
Scientific shall not, nor shall it authorize or permit any of its Subsidiaries
or any officer, director, employee, investment banker, attorney or other adviser
or representative of Industrial Scientific or any of its Subsidiaries
("Industrial Scientific Representatives") to, (i) solicit, initiate, or
encourage the submission of, any Acquisition Proposal, (ii) enter into any
agreement with respect to any Acquisition Proposal or (iii) participate in any
discussions or negotiations regarding, or furnish to any Person any information
for the purpose of facilitating the making of, or take any other action to
facilitate any inquiries or the making of, any proposal that constitutes, or may
reasonably be expected to lead to, any Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation, of which Industrial
Scientific or any of its Subsidiaries had knowledge at the time of such
violation, of the restrictions set forth in the immediately preceding sentence
by any officer, director, employee, investment banker, attorney, employee, or
other adviser or representative of Industrial Scientific or any of its
Subsidiaries, whether or not such Person is purporting to act on behalf of
Industrial Scientific or any of its Subsidiaries or otherwise, shall be deemed
to be a breach of this Section 4.02 by Industrial Scientific. Industrial
Scientific shall promptly advise Acquisition of any Acquisition Proposal and any
inquiries with respect to any Acquisition Proposal. For purposes of this
Agreement, "Acquisition Proposal" means any proposal for a merger or other
business combination involving Industrial Scientific or any of its Subsidiaries
or any proposal or offer to acquire in any manner, directly or indirectly, an
equity interest in Industrial Scientific or any of its Subsidiaries, any voting
securities of Industrial Scientific or any of its Subsidiaries or a substantial
portion of the assets of Industrial Scientific. Notwithstanding the foregoing,
Industrial Scientific, its Subsidiaries and Industrial Scientific
Representatives shall not be obligated to take or refrain from taking any action
pursuant to this Section 4.02 if the Board of Directors of Industrial
Scientific, after consultation with independent legal counsel, determines in
good faith that to take or refrain from taking any such action would result in a
violation of its fiduciary obligations.
Section 4.03. Notification of Certain Matters. Industrial Scientific
shall give prompt notice to Acquisition, and Acquisition shall give prompt
notice to Industrial Scientific, of (a) the occurrence or nonoccurrence of any
event the occurrence or nonoccurrence of which would be likely to cause any
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representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time and (b) any
material failure of Industrial Scientific, or Acquisition, as the case may be,
to comply with or satisfy any covenant, condition or agreement to be complied
with or satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 4.03 shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice.
Section 4.04. Directors' And Officers' Indemnification.
(a) The Articles of Incorporation and the By-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification
and limitation of liability of directors and officers set forth in
Industrial Scientific's Articles of Incorporation and By-laws on the date
of this Agreement, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would adversely affect the rights thereunder of individuals who
on or prior to the Effective Time were directors or officers of Industrial
Scientific, unless such modification is required by law.
(b) The Surviving Corporation shall maintain in effect for six years
from the Effective Time policies of directors' and officers' liability
insurance containing terms and conditions which are not less advantageous
to the insured than any such policies of Industrial Scientific currently in
effect on the date of this Agreement (the "Industrial Scientific Insurance
Policies"), with respect to matters occurring prior to the Effective Time,
to the extent available, and having the maximum available coverage under
any such Industrial Scientific Insurance Policies; provided, that in no
event shall the Surviving Corporation be required to pay annual premiums
for insurance under this Section 4.04(b) in excess of that which is
commercially reasonable; and provided further, however, that if the annual
premiums for such insurance coverage exceed that which is commercially
reasonable, the Surviving Corporation shall be obligated to obtain a policy
with the greatest coverage at a cost which is commercially reasonable.
Section 4.05. Information Statement and Schedule 13E-3. Industrial
Scientific shall file with the SEC as soon as is reasonably practicable after
the date hereof the Information Statement and shall use all reasonable efforts
to respond to comments from the SEC and to cause the Information Statement to be
mailed to Industrial Scientific's shareholders at the earliest practicable time.
The information provided and to be provided by Industrial Scientific and
Acquisition for use in the Information Statement shall be true and correct in
all material respects without omission of any material fact which is required to
make such information not false or misleading as of the date thereof and in
light of the circumstances under which given or made. Industrial Scientific
will not mail the Information Statement to Industrial Scientific's shareholders
unless it is satisfactory in content to the Special Committee and Acquisition,
in the exercise of their reasonable judgment. As soon as practicable after the
date of this Agreement, Acquisition, its shareholders and Industrial Scientific
shall file with the SEC a Rule 13E-3 Transaction Statement on Schedule 13E-3
("Schedule 13E-3"), with respect to the Merger. Each of the parties hereto
agrees to use its reasonable best efforts to cooperate and to provide each other
with such information as any of such parties may reasonably request in
connection with the preparation of the Schedule 13E-3. Each party hereto agrees
promptly to supplement, update and correct any information provided by it for
use in the Information Statement and Schedule 13E-3 if and to the extent that
such information is or shall have become incomplete, false or misleading.
Section 4.06. Dividends. Prior to the Effective Time, Industrial
Scientific shall not pay any dividends or make any other distributions with
respect to the outstanding shares of Industrial Scientific Common Stock.
9
Article V
Conditions Precedent
Section 5.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any of which may be waived by the parties hereto in
writing, in whole or in part, to the extent permitted by applicable law):
(a) No Injunction or Proceeding. No preliminary or permanent
injunction, temporary restraining order or other decree of a court,
legislature or other agency or instrumentality of federal, state or local
government (a "Governmental Entity") shall be in effect, no statute, rule
or regulation shall have been enacted by a Governmental Entity and no
action, suit or proceeding by any Governmental Entity shall have been
instituted or threatened, which prohibits the consummation of the Merger or
materially challenges the transactions contemplated hereby.
(b) Consents. Other than filing the Articles of Merger, all
consents, approvals and authorizations of and filings with Governmental
Entities required for the consummation of the transactions contemplated
hereby, shall have been obtained or effected or filed.
(c) Approval of Holders of Industrial Scientific Common Stock. This
Agreement and the Merger shall have been adopted by the affirmative vote or
written consent of a majority of the shares of Industrial Scientific Common
Stock outstanding.
Section 5.02. Conditions to the Obligation of Industrial Scientific to
Effect the Merger. The obligation of Industrial Scientific to effect the Merger
is further subject to the satisfaction or waiver of each of the following
conditions prior to or at the Closing Date:
(a) Representations and Warranties. The representations and
warranties of Acquisition contained in this Agreement shall be true and
correct in all material respects at and as of the Effective Time as though
made at and as of the Effective Time, except to the extent that any such
representation or warranty is made as of a specified date, in which case
such representation and warranty shall have been true and correct in all
material respects as of such date.
(b) Agreements. Acquisition shall have performed and complied in
all material respects with all its undertakings and agreements required by
this Agreement to be performed or complied with by it prior to or at the
Closing Date.
(c) Opinion of Financial Advisor. The opinion of Ladenburg
Xxxxxxxx & Co. Inc. referred to in Section 2.05 shall have been confirmed
in writing and such written opinion shall not have been withdrawn or
revoked.
(d) Opinion of Counsel for Acquisition. Industrial Scientific shall
have been furnished with an opinion satisfactory to it of Xxxx Xxxxx Xxxx &
XxXxxx LLP, counsel for Acquisition, dated the date of the Closing and
addressed to Industrial Scientific, to the effect that:
(i) Acquisition is a corporation duly incorporated, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania;
10
(ii) The execution, delivery and performance of the Agreement
by Acquisition and the consumation of the Merger have been duly
authorized and approved by all requisite action of Acquisition's Board
of Directors; the Agreement and the Merger have been duly approved by
the shareholders of Acquisition; and the Agreement has been duly
executed and delivered by Acquisition and is a legally valid and
binding obligation of Acquisition enforceable against Acquisition in
accordance with its terms; and
(iii) Upon filing of Articles of Merger with respect to the
Merger in the Department of State of Pennsylvania in accordance with
(S)1927 of the PBCL, the Merger shall become effective under the PBCL.
(e) Availability of Funds. Acquisition shall have funds available
to it at the Closing sufficient to pay the Merger Consideration.
Section 5.03. Conditions to the Obligation of Acquisition to Effect the
Merger. The obligation of Acquisition to effect the Merger is further subject
to the satisfaction or waiver of each of the following conditions prior to or at
the Closing Date:
(a) Representations and Warranties. The representations and
warranties of Industrial Scientific contained in this Agreement shall be
true and correct in all material respects at and as of the Effective Time
as though made at and as of the Effective Time, except to the extent that
any such representation or warranty is made as of a specified date, in
which case such representation or warranty shall have been true and correct
in all material respects as of such date.
(b) Agreements. Industrial Scientific shall have performed and
complied in all material respects with all of its undertakings and
agreements required by this Agreement to be performed or complied with by
it prior to or at the Closing Date.
(c) No Material Adverse Change. Except as set forth in the
Industrial Scientific SEC Reports filed on or prior to the date of this
Agreement, since December 31, 1997 there shall have been no material
adverse change in the business, assets, liabilities, results of operations
or financial condition of Industrial Scientific and its Subsidiaries, taken
as a whole.
(d) Opinion of Counsel for Industrial Scientific. Acquisition shall
have been furnished with an opinion satisfactory to it of Xxxxxxxx
Ingersoll Professional Corporation, counsel for Industrial Scientific,
dated the date of the Closing and addressed to Acquisition, to the effect
that:
(i) Industrial Scientific is a corporation duly incorporated,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania;
(ii) Industrial Scientific's capital stock consists of the
numbers of authorized, issued and outstanding shares of capital stock
set forth in Section 2.02;
(iii) Except for outstanding Industrial Scientific Stock
Options to purchase an aggregate of not more than 52,118 shares of
Industrial Scientific Common Stock, there are no outstanding options,
warrants or other rights of any kind to acquire (including preemptive
rights) any additional shares of capital stock of Industrial
Scientific or securities convertible into or exchangeable for, or
which otherwise confer on the holder thereof any right to acquire, any
such additional shares, nor is Industrial Scientific committed to
issue any such option, warrant, right or security;
11
(iv) The execution, delivery and performance of the Agreement by
Industrial Scientific, and the consumation of the Merger, have each
been duly authorized and approved by all requisite action of
Industrial Scientific's Board of Directors; the Agreement and the
Merger have been duly approved by the shareholders of Industrial
Scientific; and the Agreement has been duly executed and delivered by
Industrial Scientific and is a legally valid and binding obligation of
Industrial Scientific enforceable against Industrial Scientific in
accordance with its terms; and
(v) Upon filing of Articles of Merger with respect to the
Merger in the Department of State of Pennsylvania in accordance with
(S)1927 of the PBCL, the Merger shall become effective under the PBCL.
Article VI
Termination, Amendment And Waiver
Section 6.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time, whether before
or after shareholder approval thereof:
(a) by the mutual written consent of Acquisition, by action of its
Board of Directors, and the Special Committee on behalf of Industrial
Scientific;
(b) by either Acquisition, by action of its Board of Directors, or
the Special Committee on behalf of Industrial Scientific, if:
(i) the Merger has not been consummated on or prior to June 30,
1999; provided, however, that the right to terminate this Agreement
under this Section 6.01(b)(i) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been
the cause of, or resulted in, the failure of the Merger to occur on or
prior to such date; or
(ii) the Special Committee shall have withdrawn, or modified or
changed in any manner adverse to Acquisition its approval of this
Agreement or the Merger after having concluded in good faith after
consultation with independent legal counsel that there is a reasonable
probability that the failure to take such action would result in a
violation of its fiduciary obligations under applicable law.
Section 6.02. Effect of Termination. In the event of the termination
of this Agreement as provided in Section 6.01, written notice thereof shall
forthwith be given by the terminating party or parties to the other party or
parties specifying the provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become null and void, and there shall
be no liability on the part of Acquisition or Industrial Scientific (except as
set forth in this Section 6.02 and Section 7.02 hereof, each which shall survive
any termination of this Agreement); provided that nothing herein shall relieve
any party from any liability or obligation with respect to any willful breach of
this Agreement.
Section 6.03. Amendment. This Agreement may be amended in writing by
the parties hereto; provided, however, that after adoption of this Agreement and
the Merger by the shareholders of Industrial Scientific no such amendment may be
made without the further approval of the shareholders of Industrial Scientific
except to the extent permitted by the PBCL. Notwithstanding the foregoing, any
amendment of this Agreement on behalf of Industrial Scientific shall be subject
to the approval of the Board of Directors of Industrial Scientific upon the
recommendation of the Special Committee.
12
Section 6.04. Waiver. At any time prior to the Effective Time, whether
before or after the approval of holders of Industrial Scientific Common Stock
referred to in Section 5.01(c) hereof, Acquisition, by action taken by its Board
of Directors, or Industrial Scientific, by action taken by its Board of
Directors upon the recommendation of the Special Committee, may (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto or (ii) waive compliance with any of the agreements of any other
party or with any conditions to its own obligations. Any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such party by a duly
authorized officer.
Article VII
Miscellaneous
Section 7.01. Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time and all
such representations and warranties will be extinguished on consummation of the
Merger and neither Acquisition, Industrial Scientific, any Subsidiary, nor any
officer, director or employee or stockholder shall be under any liability
whatsoever with respect to any such representation or warranty after such time.
This Section 7.01 shall not limit any covenant or agreement of the parties which
by its terms contemplates performance after the Effective Time.
Section 7.02. Expenses. Except as contemplated by this Agreement, all
costs and expenses incurred in connection with the Agreement and the
consummation of the transactions contemplated hereby shall be the obligation of
the party incurring such expenses. All costs and expenses incurred by
Acquisition in connection with the Agreement and the consummation of the
transactions contemplated hereby shall, after the Effective Time, be obligations
of the Surviving Corporation.
Section 7.03. Applicable Law. The rights and duties of Acquisition and
Industrial Scientific under this Agreement shall be governed by the law,
excluding conflicts of law rules, of the Commonwealth of Pennsylvania.
Section 7.04. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given or made as
follows: (a) if sent by registered or certified mail in the United States return
receipt requested, upon receipt; (b) if sent by reputable overnight air courier,
two business days after being so sent; (c) if sent by telecopy transmission,
with a copy mailed on the same day in the manner provided in clauses (a) or (b)
above, when transmitted and receipt is confirmed by telephone; or (d) if
otherwise actually personally delivered, when delivered and shall be sent or
delivered as follows:
If to Industrial Scientific, to:
Xxxxx X. Xxxx
Vice President, Finance and Chief Financial Officer
Industrial Scientific Corporation
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Fax: (000)000-0000
with a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxxxxxx Professional Corporation
One Oxford Centre
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
13
and
Xxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxxx
One Riverfront Center
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
If to Acquisition, to:
Xxxx X. XxXxxxxxxx
President
c/o Industrial Scientific Corporation
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Fax: (000)000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxx Xxxxx Xxxx & XxXxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax (000) 000-0000
Such names and addresses may be changed by such notice.
Section 7.05. Entire Agreement. This Agreement (including the
documents and instruments referred to herein) contains the entire understanding
of the parties hereto with respect to the subject matter contained herein,
supersedes and cancels all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, respecting such
subject matter.
Section 7.06. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties.
Section 7.07. Headings; References. The article, section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. All
references herein to "Articles" or "Sections" shall be deemed to be references
to Articles or Sections hereof unless otherwise indicated.
Section 7.08. Counterparts. This Agreement may be executed in one or
more counterparts, each counterpart shall be deemed to be an original but all of
which shall be considered one and the same agreement.
Section 7.09. No Third Party Beneficiaries. Except as provided in
Sections 1.07, 1.08 and 4.04, nothing in this Agreement, express or implied, is
intended to confer upon any Person not a party to this Agreement any rights or
remedies under or by reason of this Agreement.
Section 7.10. Severability; Enforcement. Any term or provision of this
Agreement that is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions
14
of this Agreement or affecting the validity or unenforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provisions
shall be interpreted to be only so broad as is enforceable.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
INDUSTRIAL SCIENTIFIC CORPORATION
By:
-------------------------------------
Name: Xxxx X. XxXxxxxxxx
Title: President
ISC ACQUISITION CORPORATION
By:
-------------------------------------
Name: Xxxx X. XxXxxxxxxx
Title: President
15
ENDORSEMENT
The undersigned, Xxxxxx X. XxXxxxxxxx, Xxxxxxxx X. XxXxxxxxxx and Xxxx X.
XxXxxxxxxx, hereby represent, warrant, covenant and agree as follows:
(a) The undersigned are the holders of record of the number of shares of
Industrial Scientific Common Stock listed below:
Xxxxxx X. XxXxxxxxxx 668,960
Xxxxxxxx X. XxXxxxxxxx 750,000
Xxxx X. XxXxxxxxxx 869,640
(b) The undersigned will, on the date hereof, execute and deliver an
Action by Written Consent of Shareholders of Industrial Scientific Corporation:
(i) approving the Agreement and the Merger; (ii) approving an amendment to the
Articles of Incorporation of Industrial Scientific Corporation providing that
Title 15 of Pennsylvania Consolidated Statutes, Chapter 25 (Registered
Corporations) Subchapter E (Control Transactions), 15 Pa.C.S.A. (S)(S)2541-2548,
shall not be applicable to Industrial Scientific.
(c) The undersigned will, promptly after effectiveness of the amendment to
the Articles of Incorporation of Industrial Scientific Corporation referred to
in paragraph (b) above, contribute to the capital of Acquisition the shares of
Industrial Scientific Common Stock referred to in paragraph (a) above.
-------------------------------------
Xxxxxx X. XxXxxxxxxx
-------------------------------------
Xxxxxxxx X. XxXxxxxxxx
-------------------------------------
Xxxx X. XxXxxxxxxx
16
