EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
JOMED N.V.
JOMED ACQUISITION CORP.
AND
ENDOSONICS CORPORATION
DATED AS OF
AUGUST 5, 2000
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS.................................................................... 2
Section 1.1 DEFINITIONS................................................. 2
ARTICLE II
THE OFFER...................................................................... 9
Section 2.1 THE OFFER................................................... 9
Section 2.2 COMPANY ACTION.............................................. 11
Section 2.3 DIRECTORS................................................... 12
Section 2.4 MERGER WITHOUT MEETING OF SHAREHOLDERS...................... 13
ARTICLE III
THE MERGER AND RELATED MATTERS................................................. 14
Section 3.1 THE MERGER.................................................. 14
Section 3.2 CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION... 14
Section 3.3 BY-LAWS OF THE SURVIVING CORPORATION........................ 14
Section 3.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION......... 14
Section 3.5 CLOSING..................................................... 15
ARTICLE IV
CONVERSION OF SECURITIES....................................................... 15
Section 4.1 CONVERSION OF CAPITAL STOCK................................. 15
Section 4.2 EXCHANGE OF CERTIFICATES.................................... 16
Section 4.3 DISSENTERS' RIGHTS.......................................... 17
Section 4.4 LOST, STOLEN OR DESTROYED CERTIFICATES...................... 18
Section 4.5 COMPANY STOCK PLANS......................................... 18
PAGE
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................. 19
Section 5.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER......... 20
Section 5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT..................... 20
Section 5.3 CAPITALIZATION.............................................. 21
Section 5.4 CONSENTS AND APPROVALS; NO VIOLATIONS....................... 22
Section 5.5 COMPANY REPORTS AND FINANCIAL STATEMENTS.................... 23
Section 5.6 INFORMATION TO BE SUPPLIED.................................. 24
Section 5.7 ABSENCE OF CERTAIN EVENTS................................... 24
Section 5.8 LITIGATION.................................................. 25
Section 5.9 TITLE TO PROPERTIES; ENCUMBRANCES........................... 25
Section 5.10 COMPLIANCE WITH LAWS........................................ 25
Section 5.11 COMPANY EMPLOYEE BENEFIT PLANS.............................. 28
Section 5.12 [Intentionally Left Blank.]................................. 31
Section 5.13 TAXES....................................................... 31
Section 5.14 INTELLECTUAL PROPERTY....................................... 33
Section 5.15 BROKER'S OR FINDER'S FEE.................................... 34
Section 5.16 ENVIRONMENTAL MATTERS....................................... 34
Section 5.17 STATE TAKEOVER STATUTES..................................... 36
Section 5.18 VOTING REQUIREMENTS; BOARD APPROVAL......................... 36
Section 5.19 OPINION OF FINANCIAL ADVISOR................................ 37
Section 5.20 CONTRACTS................................................... 37
Section 5.21 PRODUCTS LIABILITY.......................................... 37
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER......................... 38
Section 6.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER......... 38
Section 6.2 AUTHORIZATION AND VALIDITY OF AGREEMENT..................... 38
Section 6.3 CONSENTS AND APPROVALS; NO VIOLATIONS....................... 38
Section 6.4 INFORMATION TO BE SUPPLIED.................................. 39
Section 6.5 BROKER'S OR FINDER'S FEE.................................... 40
Section 6.6 OWNERSHIP OF CAPITAL STOCK.................................. 40
Section 6.7 NO PRIOR ACTIVITIES......................................... 40
Section 6.8 FINANCING................................................... 40
PAGE
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ARTICLE VII
COVENANTS PRIOR TO CLOSING DATE................................................ 41
Section 7.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS..... 41
Section 7.2 CONFIDENTIALITY............................................. 42
Section 7.3 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE CLOSING
DATE...................................................... 42
Section 7.4 COMPANY SHAREHOLDER MEETING; PREPARATION OF PROXY
STATEMENT................................................. 46
Section 7.5 REASONABLE BEST EFFORTS; NOTIFICATION; INFORMATION AGENT.... 47
Section 7.6 NO SOLICITATION............................................. 48
Section 7.7 ANTITRUST LAWS.............................................. 51
Section 7.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE......... 52
Section 7.9 PUBLIC ANNOUNCEMENTS........................................ 52
Section 7.10 TRANSFER TAXES.............................................. 52
Section 7.11 EMPLOYEE BENEFITS........................................... 53
Section 7.12 OPTION TO ACQUIRE ADDITIONAL SHARES......................... 53
Section 7.13 ACTIONS REGARDING THE RIGHTS................................ 54
Section 7.14 PARENT APPROVAL OF INCREASE TO AUTHORIZED CAPITAL........... 54
ARTICLE VIII
CONDITIONS TO THE MERGER....................................................... 54
Section 8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY..................... 54
Section 8.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND PURCHASER....... 55
Section 8.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY................ 55
ARTICLE IX
TERMINATION AND ABANDONMENT.................................................... 55
Section 9.1 TERMINATION................................................. 55
Section 9.2 EFFECT OF TERMINATION....................................... 57
Section 9.3 PAYMENT OF CERTAIN FEES..................................... 57
PAGE
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ARTICLE X
MISCELLANEOUS.................................................................. 59
Section 10.1 REPRESENTATIONS AND WARRANTIES.............................. 59
Section 10.2 EXTENSION; WAIVER........................................... 59
Section 10.3 NOTICES..................................................... 59
Section 10.4 ENTIRE AGREEMENT............................................ 60
Section 10.5 BINDING EFFECT; BENEFIT; ASSIGNMENT......................... 60
Section 10.6 AMENDMENT AND MODIFICATION.................................. 61
Section 10.7 FURTHER ACTIONS............................................. 61
Section 10.8 HEADINGS.................................................... 61
Section 10.9 ENFORCEMENT................................................. 61
Section 10.10 COUNTERPARTS................................................ 62
Section 10.11 APPLICABLE LAW.............................................. 62
Section 10.12 SEVERABILITY................................................ 62
Section 10.13 WAIVER OF JURY TRIAL........................................ 62
Section 10.14 PARENT GUARANTEE............................................ 62
AGREEMENT AND PLAN OF MERGER
A G R E E M E N T AND PLAN OF MERGER, dated as of August 5, 2000 (this
"AGREEMENT"), by and among JOMED N.V., a company organized under the laws of The
Netherlands ("PARENT"), JOMED ACQUISITION CORP., a Delaware corporation and a
direct wholly owned subsidiary of Parent ("PURCHASER"), and ENDOSONICS
CORPORATION, a Delaware corporation (the "COMPANY").
WHEREAS, the Boards of Directors of Parent and the Company each have
determined that it is advisable and in the best interests of each corporation
and their respective shareholders to consummate the acquisition of the Company
by Parent, upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a cash
tender offer to acquire any and all shares of the issued and outstanding common
stock, U.S.$.001 par value, of the Company (the "COMPANY COMMON STOCK"),
including the related Rights (as hereinafter defined), for U.S.$11.00 per share,
net to the seller in cash; and
WHEREAS, also in furtherance of such acquisition, the Boards of Directors of
each of Parent, Purchaser and the Company have approved this Agreement and the
transactions contemplated hereby, including the merger of Purchaser with and
into the Company, with the Company as the surviving corporation following the
Offer (as hereinafter defined).
NOW THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. When used in this Agreement, the following terms
shall have the respective meanings specified therefor below (such meanings to be
equally applicable to both the singular and plural forms of the terms defined).
"ACTIVITIES TO DATE" shall have the meaning set forth in Section 5.10(c).
"ACQUISITION AGREEMENT" shall have the meaning set forth in Section 7.6(b).
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"AFFILIATE" of any Person shall mean any Person directly or indirectly
controlling, controlled by, or under common control with, such Person; PROVIDED
that, for the purposes of this definition, "control" (including with correlative
meanings, the terms "controlled by" and "under common control with"), as used
with respect to any Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or partnership
interests, by contract or otherwise.
"AGREEMENT" shall have the meaning set forth in the preamble hereto.
"ANTITRUST AUTHORITIES" shall have the meaning set forth in Section 7.7(d).
"ANTITRUST LAW" shall have the meaning set forth in Section 7.7(d).
"ACQUIRING PERSON" shall have the meaning set forth in Section 5.17(b).
"BUSINESS DAY" means a day other than a Saturday, a Sunday or a day on which
banks in New York, New York are permitted or required to close.
"CAPITAL BUDGET" shall have the meaning set forth in Section 7.3(b)(5).
"CERTIFICATE OF MERGER" shall have the meaning set forth in Section 3.1(b).
"CERTIFICATES" shall have the meaning set forth in Section 4.2(b).
"CLOSING" shall have the meaning set forth in Section 3.5.
"CLOSING DATE" shall have the meaning set forth in Section 3.5.
"CODE" shall have the meaning set forth in Section 5.11(b).
"COMPANY" shall have the meaning set forth in the preamble hereto.
"COMPANY BENEFIT PLANS" shall have the meaning set forth in
Section 5.11(a).
"COMPANY COMMON STOCK" shall have the meaning set forth in the recitals
hereof.
"COMPANY DISCLOSURE SCHEDULE" shall have the meaning set forth in
Article V.
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"COMPANY MATERIAL ADVERSE EFFECT" shall mean any event, change, occurrence,
effect, fact or circumstance that is materially adverse to (i) the ability of
the Company to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or (ii) the business, assets, liabilities,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole; PROVIDED, HOWEVER, that none of the following
shall be deemed in themselves, either alone or in combination, to constitute,
and none of the following shall be taken into account in determining whether
there has been or will be, a Company Material Adverse Effect: (a) any change in
the market price or trading volume of the Company's stock after the date hereof;
(b) any failure by the Company to meet internal projections or forecasts or
published revenue or earnings predictions for any period ending (or for which
revenues or earnings are released) on or after the date of this Agreement;
(c) any adverse change, effect, event, occurrence, state of facts or development
to the extent attributable to the announcement or pendency of the Offer or the
Merger (including any cancellations of or delays in customer orders, any
reduction in sales, any disruption in supplier, distributor, partner or similar
relationships or any loss of employees); (d) any adverse change, effect, event,
occurrence, state of facts or development related to any action or inaction by
Parent or Purchaser (including any cancellations of or delays in customer
orders, any reduction in sales, any disruption in supplier, distributor, partner
or similar relationships or any loss of employees); (e) any adverse change,
effect, event, occurrence, state of facts or development attributable to
conditions affecting the industries in which the Company participates, the U.S.
economy as a whole or foreign economies in any locations where the Company or
any of its Subsidiaries has material operations or sales; (f) any adverse
change, effect, event, occurrence, state of facts or development attributable or
relating to (i) out-of-pocket fees and expenses (including legal, accounting,
investment banking and other fees and expenses) incurred in connection with the
transactions contemplated by this Agreement, or (ii) as a result of the
Company's entry into, and as permitted by, this Agreement, the payment of any
amounts due to, or the provision of any other benefits (including benefits
relating to acceleration of stock options) to, any officers or employees under
employment contracts, non-competition agreements, employee benefit plans,
severance arrangements or other arrangements in existence as of the date of this
Agreement; or (g) any adverse change, effect, event, occurrence, state of facts
or development resulting from or relating to compliance with the terms of, or
the taking of any action required by, or the failure to take any action
prohibited by, this Agreement.
"COMPANY PREFERRED STOCK" shall have the meaning set forth in
Section 5.3(a).
"COMPANY PRODUCTS" shall have the meaning set forth in Section 5.10(c).
"COMPANY RECOMMENDATION" shall have the meaning set forth in Section 7.4.
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"COMPANY SEC REPORTS" shall have the meaning set forth in Section 5.5(a).
"COMPANY SHAREHOLDER APPROVAL" shall mean the approval of not less than a
majority of the vote of all outstanding shares of Company Common Stock (voting
as one class, with each share having one vote) of this Agreement and the Merger
at the Company Shareholder Meeting.
"COMPANY SHAREHOLDER MEETING" shall have the meaning set forth in
Section 7.4.
"COMPANY STOCK PLANS" shall have the meaning set forth in Section 4.5(c).
"CONTRACTS" shall have the meaning set forth in Section 5.4.
"DEFECT" shall have the meaning set forth in Section 5.21.
"DGCL" shall mean the Delaware General Corporation Law, as currently in
effect and amended from time to time.
"DISSENTING SHAREHOLDERS" shall have the meaning set forth in
Section 4.1(c).
"DISTRIBUTION DATE" shall have the meaning set forth in Section 5.17(b).
"EFFECTIVE TIME" shall have the meaning set forth in Section 3.1(b).
"ENVIRONMENTAL CLAIMS" shall have the meaning set forth in Section 5.16(b).
"ENVIRONMENTAL LAW" shall have the meaning set forth in Section 5.16(b).
"ERISA" shall have the meaning set forth in Section 5.11(a).
"ERISA AFFILIATE" shall have the meaning set forth in Section 5.11(a).
"EUROPEAN ANTITRUST LAWS" shall have the meaning set forth in Section 5.4.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXPENSES" shall have the meaning set forth in Section 9.3(b).
"FDA" shall mean the U.S. Food and Drug Administration.
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"FULLY DILUTED BASIS" with respect to any Person, shall mean all outstanding
securities entitled generally to vote in the election of directors of such
Person on a fully diluted basis, after giving effect to the exercise or
conversion of all options, rights and securities exercisable for or convertible
into such voting securities.
"GAAP" shall mean generally accepted accounting principles of the United
States of America, as in effect from time to time.
"GLOBAL COORDINATOR" shall mean Credit Suisse First Boston (Europe) Limited,
the Global Coordinator for the Parent Equity Offering.
"GOVERNMENTAL AUTHORITY" shall have the meaning set forth in Section 5.4.
"HAZARDOUS MATERIALS" shall have the meaning set forth in Section 5.16(b).
"HSR ACT" shall have the meaning set forth in Section 5.4.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 7.8(a).
"INTELLECTUAL PROPERTY RIGHTS" shall have the meaning set forth in
Section 5.14(a).
"ISSUANCE OBLIGATION" shall have the meaning set forth in Section 5.3(a).
"LAWS" shall have the meaning set forth in Section 5.4.
"LICENSES" shall have the meaning set forth in Section 5.10(c).
"LIENS" shall mean any and all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, charges or other encumbrances of
any nature or any other limitation or restriction (including any restriction on
the right to vote or sell the same, except as may be provided under applicable
Federal or state securities laws).
"MATERIAL CONTRACTS" shall have the meaning set forth in Section 5.20.
"MERGER" shall have the meaning set forth in Section 3.1(a).
"MERGER CONSIDERATION" shall have the meaning set forth in Section 4.1(c).
"MINIMUM CONDITION" shall have the meaning set forth in Section 2.1(a).
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"OFFER" shall have the meaning set forth in Section 2.1(a).
"OFFER DOCUMENTS" shall have the meaning set forth in Section 2.1(b).
"OFFER PRICE" shall the meaning set forth in Section 2.1(a).
"OFFER TO PURCHASE" shall have the meaning set forth in Section 2.1(a).
"OPTION" shall have the meaning set forth in Section 7.12(a).
"OPTION SHARES" shall have the meaning set forth in Section 7.12(a).
"ORDERS" shall have the meaning set forth in Section 5.4.
"PARENT" shall have the meaning set forth in the preamble hereto.
"PARENT DISCLOSURE SCHEDULE" shall have the meaning set forth in
Article VI.
"PARENT EQUITY OFFERING" shall have the meaning set forth in Section 6.3.
"PARENT MATERIAL ADVERSE EFFECT" shall mean any event, change, occurrence,
effect, fact or circumstance that is materially adverse to (i) the ability of
Parent to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or (ii) the business, assets, liabilities,
results of operations or financial condition of Parent and its Subsidiaries,
taken as a whole.
"PARENT ORDINARY SHARES" shall have the meaning set forth in Section 6.3.
"PAYING AGENT" shall have the meaning set forth in Section 4.2(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERMITS" shall have the meaning set forth in Section 5.10(b).
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, a limited
liability company, a group and a government or other department or agency
thereof.
"PRODUCT" shall have the meaning set forth in Section 5.21.
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"PROXY STATEMENT" shall have the meaning set forth in Section 7.4.
"PURCHASE AGREEMENT" shall mean the agreement to be entered into between the
Parent and the Global Coordinator acting on behalf of the several Managers named
therein relating to the purchase of Parent Ordinary Shares in the Parent Equity
Offering, substantially in the form attached to the commitment letter referred
to in Section 6.8.
"PURCHASER" shall have the meaning set forth in the preamble hereto.
"PURCHASER BENEFIT PLANS" shall have the meaning set forth in Section 7.11.
"PURCHASER COMMON STOCK" shall mean Purchaser's common stock, par value
U.S.$.01 per share.
"REGISTRATIONS" shall have the meaning set forth in Section 5.10(h).
"RELEASES" shall have the meaning set forth in Section 5.16(b).
"RETURNS" shall have the meaning set forth in Section 5.13(a).
"RIGHTS" means the preferred share purchase rights issued by the Company
pursuant to the Rights Agreement.
"RIGHTS AGREEMENT" means the Preferred Shares Rights Agreement, dated
October 20, 1998, between the Company and ChaseMellon Shareholders Services,
L.L.C.
"SCHEDULE 14D-9" shall have the meaning set forth in Section 2.2(b).
"SCHEDULE TO" shall have the meaning set forth in Section 2.1(b).
"SEC" shall mean the U.S. Securities and Exchange Commission.
"SECRETARY OF STATE" shall have the meaning set forth in Section 3.1(b).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"STOCK OPTIONS" shall have the meaning set forth in Section 4.5(a).
"STOCK OPTION PLANS" shall have the meaning set forth in Section 4.5(a).
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"SUBSIDIARY" with respect to a Person shall mean (x) any partnership of
which such Person or any of its Subsidiaries is a general partner or (y) any
other entity in which such Person or any of its Subsidiaries owns or has the
power to vote more than 50% of the equity interests in such entity having
general voting power to participate in the election of the governing body of
such entity.
"SUPERIOR PROPOSAL" shall have the meaning set forth in Section 7.6(a).
"SURVIVING CORPORATION" shall have the meaning set forth in Section 3.1(a).
"TAKEOVER PROPOSAL" shall have the meaning set forth in Section 7.6(a).
"TAXES" shall have the meaning set forth in Section 5.13(a).
"TERMINATION DATE" shall have the meaning set forth in Section 9.1(d)(1).
"TERMINATION FEE" shall have the meaning set forth in Section 9.3(a).
"THIRD PARTY ACQUISITION EVENT" shall have the meaning set forth in
Section 9.3(b).
"TRANSFER TAXES" shall have the meaning set forth in Section 7.10.
"U.S. $" shall mean United States dollars.
"VOTING DEBT" shall have the meaning set forth in Section 5.3(a).
"WARN ACT" shall have the meaning set forth in Section 5.22.
ARTICLE II
THE OFFER
Section 2.1 THE OFFER. (a) Provided that this Agreement shall not have
been terminated pursuant to Section 9.1 hereof, following the public
announcement of the terms of this Agreement (which public announcement shall
occur no later than the first Business Day following the execution of this
Agreement), not later than August 21, 2000, Purchaser shall, and Parent shall
cause Purchaser to, commence (within the meaning of Rule 14d-2 under the
Exchange Act) a tender offer (the "OFFER") to purchase any and all of the shares
of Company
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Common Stock outstanding (including the related Rights) at a price of U.S.$11.00
per share, net to the seller in cash (such price, or such higher price pershare
of Company Common Stock as may be paid in the Offer, being referred to herein as
the "OFFER PRICE"). The Offer shall be subject to the condition that there shall
be validly tendered in accordance with the terms of the Offer, prior to the
expiration date of the Offer and not withdrawn, a number of shares of Company
Common Stock that, together with the shares of Company Common Stock then owned
by Parent and/or Purchaser, represents at least a majority of the shares of
Company Common Stock outstanding on a fully-diluted basis (the "MINIMUM
CONDITION") and to the other conditions set forth in Annex I hereto. The Offer
shall be made by means of an offer to purchase (the "OFFER TO PURCHASE") and the
related letter of transmittal, each in form reasonably satisfactory to the
Company, containing the terms set forth in this Agreement and the conditions set
forth in Annex I.
Purchaser expressly reserves the right, subject to compliance with the
Exchange Act, to waive any of the conditions to the Offer and to make any change
in the terms of or conditions to the Offer; PROVIDED that (i) the Minimum
Condition may be waived only with the prior written consent of the Company and
(ii) no change may be made that changes the form of consideration to be paid,
decreases the Offer Price, decreases the number of shares of Company Common
Stock sought in the Offer, adds to or modifies, in a manner adverse to the
stockholders of the Company, the conditions to the Offer set forth in Annex I,
or (except as provided in the next sentence) changes the expiration date of the
Offer, without the prior written consent of the Company. Without the consent of
the Company, Purchaser shall have the right to extend the expiration date of the
Offer (which shall initially be 20 Business Days from the commencement date of
the Offer), (i) for up to five additional Business Days, (ii) from time to time
thereafter if, at the scheduled or extended expiration date of the Offer, any of
the conditions to the Offer shall not have been satisfied or waived, until such
conditions are satisfied or waived, (iii) for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer or any period required by applicable law, or (iv) for up
to 10 additional Business Days, if, immediately prior to the scheduled or
extended expiration date of the Offer, the Company Common Stock tendered and not
withdrawn pursuant to the Offer constitute more than 80% and less than 90% of
the outstanding Company Common Stock, notwithstanding that all conditions to the
Offer are satisfied as of such expiration date of the Offer.
If any of the conditions to the Offer is not satisfied or waived on any
scheduled or extended expiration date of the Offer, Purchaser shall, and Parent
shall cause Purchaser to, extend the Offer, if such condition or conditions
could reasonably be expected to be satisfied, from time to time until such
conditions are satisfied or waived; PROVIDED that Purchaser shall not be
required to extend the Offer beyond November 15, 2000. Subject to the foregoing
and upon the terms and subject to the conditions of the Offer, Purchaser shall,
and Parent shall cause it to,
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accept for payment and pay for, as promptly as practicable after the expiration
of the Offer, all shares of Company Common Stock validly tendered and not
withdrawn pursuant to the Offer.
(b) As soon as practicable on the date of commencement of the Offer, Parent
and Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO
(the "SCHEDULE TO") with respect to the Offer (such Schedule TO and such
documents included therein pursuant to which the Offer will be made, including
the Offer to Purchase and the related letter of transmittal, together with any
supplements or amendments thereto, the "OFFER DOCUMENTS"). Parent, Purchaser and
the Company each agrees promptly to correct any information provided by it for
use in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect. Parent and Purchaser agree
to take all steps necessary to cause the Schedule TO as so corrected to be filed
with the SEC and the other Offer Documents as so corrected to be disseminated to
holders of shares of Company Common Stock, in each case as and to the extent
required by applicable federal securities laws. The Company and its counsel
shall be given an opportunity to review and comment on the Offer Documents prior
to their being filed with the SEC or disseminated to the holders of shares of
Company Common Stock. The Purchaser also agrees to provide the Company and its
counsel in writing with any comments the Purchaser and its counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after the
receipt of such comments and shall provide the Company and its counsel a
reasonable opportunity to review and comment on the response of the Purchaser to
such comments.
Section 2.2 COMPANY ACTION. (a) The Company hereby approves of and
consents to the Offer and represents that its Board of Directors, at a meeting
duly called and held, has (i) determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
advisable and are fair to and in the best interests of the Company's
stockholders, (ii) approved and adopted this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, in accordance with the
requirements of the DGCL and (iii) resolved to recommend acceptance of the Offer
and approval and adoption of this Agreement and the Merger by its stockholders.
The Company further represents that U.S. Bancorp Xxxxx Xxxxxxx Inc. has
delivered to the Company's Board of Directors its written opinion that the
consideration to be paid in the Offer and the Merger is fair to the holders of
shares of Company Common Stock (other than Parent, Purchaser or their
Affiliates) from a financial point of view. The Company has been advised that
all of its directors and executive officers who own shares of Company Common
Stock intend either to tender their shares of Company Common Stock pursuant to
the Offer or to vote in favor of the Merger. The Company will promptly furnish
Parent with a list of its stockholders, mailing labels and any available listing
or computer file containing the names and addresses of all record holders of
shares of Company Common Stock and lists of securities positions of shares of
Company Common Stock held in stock depositories, in each case true and
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correct as of the most recent practicable date, and will provide to Parent such
additional information (including updated lists of stockholders, mailing labels
and lists of securities positions) and such other assistance as Parent may
reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is commenced, the
Company shall file with the SEC and disseminate to holders of shares of Company
Common Stock, in each case as and to the extent required by applicable federal
securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "SCHEDULE 14D-9") that
shall reflect the recommendations of the Company's Board of Directors referred
to above. The Company, Parent and Purchaser each agree promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false or misleading in any material respect. The
Company agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to holders of shares
of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given an
opportunity to review and comment on the Schedule 14D-9 prior to its being filed
with the SEC. The Company also agrees to provide Parent and its counsel in
writing with any comments the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments and shall provide Parent and its counsel a reasonable opportunity to
review and comment on the response of the Company to such comments.
Section 2.3 DIRECTORS. (a) Promptly upon the purchase of and payment for
not less than a majority of the outstanding shares of Company Common Stock by
Parent or any of its Subsidiaries pursuant to the Offer, Parent shall be
entitled to designate for appointment or election to the Company's Board of
Directors, upon written notice to the Company, such number of directors, rounded
up to the next whole number, on the Board of Directors such that the percentage
of its designees on the Board shall equal the percentage of the outstanding
shares of Company Common Stock beneficially owned by Parent and its affiliates.
In furtherance thereof, the Company shall, upon request of the Purchaser, use
its best efforts promptly to cause Parent's designees to be so elected to the
Company's Board, and in furtherance thereof, to the extent necessary, increase
the size of the Board of Directors or use its best efforts to obtain the
resignation of such number of its current directors as is necessary to give
effect to the foregoing provision. At such time, the Company shall also, upon
the request of Purchaser, use its best efforts to cause Persons designated by
Parent to constitute at least the same percentage (rounded up to the next whole
number) as is on the Company's Board of Directors of (i) each committee of the
Company's Board of Directors, (ii) each board of directors (or similar body) of
each Subsidiary of the Company and (iii) each committee (or similar body) of
each such board.
12
Notwithstanding the foregoing, until the Effective Time, the Board of Directors
of the Company shall have at least three directors who are directors of the
Company on the date of this Agreement (the "CONTINUING DIRECTORS"). The Company
shall promptly take all actions required pursuant to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its
obligations under this Section 2.3(a), including mailing to stockholders the
information required by such Section 14(f) and Rule 14f-1 (or, at Parent's
request, furnishing such information to Parent for inclusion in the Offer
Documents initially filed with the SEC and distributed to the stockholders of
the Company) as is necessary to enable Parent's designees to be elected to the
Company's Board of Directors. The Company's obligations to appoint Parent's
designees to the Company's Board of Directors shall be subject to Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder. Parent or Purchaser
shall supply the Company in writing, and be solely responsible for, any
information with respect to either of them and their nominees, officers,
directors and Affiliates required by such Section 14(f) and Rule 14f-1 as is
necessary in connection with the appointment of any of Parent's designees under
this Section 2.3(a). The provisions of this Section 2.3(a) are in addition to
and shall not limit any rights which Purchaser, Parent or any of their
Affiliates may have as a holder or beneficial owner of shares of Company Common
Stock as a matter of law with respect to the election of directors or otherwise.
(b) Following the election or appointment of Parent's designees pursuant to
Section 2.3(a), the approval of a majority of the Continuing Directors shall be
required to authorize (and such authorization shall constitute the authorization
of the Company's Board of Directors and no other action on the part of the
Company, including any action by any committee thereof or any other director of
the Company, shall be required or permitted to authorize) (i) any termination of
this Agreement by the Company, (ii) any amendment of this Agreement requiring
action by the Company's Board of Directors, (iii) any extension of time for
performance of any obligation or action hereunder by Parent or Purchaser or
(iv) any waiver of compliance with any of the agreements or conditions contained
herein for the benefit of the Company; PROVIDED that if there shall be no such
Continuing Directors, such actions may be effected by majority vote of the
entire Board of Directors of the Company.
Section 2.4 MERGER WITHOUT MEETING OF SHAREHOLDERS. In the event that
Purchaser or any of its Subsidiaries shall acquire at least 90% of the
outstanding shares of Company Common Stock pursuant to the Offer or otherwise,
each of the parties hereto shall take all necessary and appropriate action to
cause the Merger to become effective as soon as practicable (and in any event
not more than five Business Days) after such acquisition, without the Company
Shareholder Meeting, in accordance with Section 253 of the DGCL.
13
ARTICLE III
THE MERGER AND RELATED MATTERS
Section 3.1 THE MERGER. (a) Subject to the terms and upon the conditions
of this Agreement, at the Effective Time the Company and Purchaser shall
consummate a merger (the "MERGER") pursuant to which (a) Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser shall thereupon cease and (b) the Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING
CORPORATION") and shall continue to be governed by the Laws of the State of
Delaware.
(b) Parent, Purchaser and the Company shall cause a Certificate of Merger,
or, if applicable in the event that Purchaser acquires at least 90% of the
outstanding shares of Company Common Stock, a Certificate of Ownership and
Merger (as applicable, the "CERTIFICATE OF MERGER"), to be executed and filed on
the date of the Closing (or on such other date as Parent and the Company may
agree) with the Secretary of State of Delaware (the "SECRETARY OF STATE") as
provided in the DGCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secretary of State or such
time as is agreed upon by the parties and specified in the Certificate of
Merger, and such time is hereinafter referred to as the "EFFECTIVE TIME."
(c) From and after the Effective Time, the Merger shall have the effects set
forth in this Agreement and in the DGCL.
Section 3.2 CERTIFICATE OF INCORPORATION OF THE SURVIVING CORPORATION. The
Certificate of Incorporation of Purchaser, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation.
Section 3.3 BY-LAWS OF THE SURVIVING CORPORATION. The By-Laws of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
By-Laws of the Surviving Corporation.
Section 3.4 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the
Effective Time, the directors of Purchaser immediately prior to the Effective
Time shall be the directors of the Surviving Corporation, each of such directors
to hold office, subject to the applicable provisions of the DGCL and the
Certificate of Incorporation and By-Laws of the Surviving Corporation, until the
next annual stockholders' meeting of the Surviving Corporation and until their
respective successors shall be duly elected or appointed and qualified. At the
Effective Time, the officers of the Company immediately prior to the Effective
Time shall, subject to the
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applicable provisions of the Certificate of Incorporation and By-Laws of the
Surviving Corporation, be the officers of the Surviving Corporation until their
respective successors shall be duly elected or appointed and qualified.
Section 3.5 CLOSING. The closing of the Merger (the "CLOSING") shall take
place at 10:00 a.m., local time, on the later to occur of (a) the day of (and
immediately following) the receipt of approval of the Merger by the Company's
stockholders, or as soon as practicable (and in any event not more than five
Business Days) after expiration of the Offer if such approval is not required
and (b) a date to be specified by the parties, which shall be no later than the
second business day after satisfaction or waiver of all of the conditions set
forth in Article VIII hereof (the "CLOSING DATE"), at the offices of Skadden,
Arps, Slate, Xxxxxxx & Xxxx, Four Times Square, New York, New York, unless
another date or place is agreed to in writing by the parties hereto.
ARTICLE IV
CONVERSION OF SECURITIES
Section 4.1 CONVERSION OF CAPITAL STOCK. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock or any shares of capital stock of Purchaser:
(a) PURCHASER CAPITAL STOCK. Each share of capital stock of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one fully paid and nonassessable share of common stock
of the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PURCHASER-OWNED STOCK. All shares
of Company Common Stock that are owned by the Company or any Subsidiary of the
Company and any shares of Company Common Stock owned by Purchaser or any
Subsidiary of the Purchaser immediately prior to the Effective Time shall be
cancelled and retired and shall cease to exist and no consideration shall be
delivered in exchange therefor; PROVIDED that shares of Company Common Stock
held beneficially or of record by any plan, program or arrangement sponsored or
maintained for the benefit of employees of the Company or any Subsidiaries
thereof shall not be deemed to be held by the Company regardless of whether the
Company has, directly or indirectly, the power to vote or control the
disposition of such shares.
(c) EXCHANGE OF SHARES OF COMPANY COMMON STOCK. Each share of Company
Common Stock (other than shares to be cancelled in accordance with
Section 4.1(b) and any shares which are held by stockholders exercising
appraisal rights pursuant to Section 262 of the
15
DGCL ("DISSENTING SHAREHOLDERS")) issued and outstanding immediately prior to
the Effective Time shall be converted into the right to receive the Offer Price
in cash, payable to the holder thereof, without interest (the "MERGER
CONSIDERATION"), upon surrender of the certificate formerly representing such
share in the manner provided in Section 4.2. All such shares, when so converted,
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist, and each holder of a certificate representing any such
shares shall cease to have any rights with respect thereto, except the right to
receive the Merger Consideration therefor upon the surrender of such certificate
in accordance with Section 4.2, without interest, or the right, if any, to
receive payment from the Surviving Corporation of the "fair value" of such
shares of Company Common Stock as determined in accordance with Section 262 of
the DGCL.
Section 4.2 EXCHANGE OF CERTIFICATES.
(a) PAYING AGENT. Prior to the Effective Time, Parent shall designate a
New York City-based bank or trust company reasonably acceptable to the Company
to act as agent for the holders of shares of Company Common Stock in connection
with the Merger (the "PAYING AGENT") to receive the funds to which holders of
such shares shall become entitled pursuant to Section 4.1(c). Prior to the
filing of the Certificate of Merger with the Secretary of State, Parent shall
deposit with the Paying Agent cash in U.S. dollars in an amount sufficient to
pay the Merger Consideration as provided herein. The Paying Agent shall invest
such funds as directed by the Surviving Corporation on a daily basis; PROVIDED
that no such investment or loss thereon shall affect the amounts payable to the
Company's stockholders pursuant to this Article IV. Parent and the Surviving
Corporation shall replace any monies lost through an investment made pursuant to
this Section 4.2. Any interest and other income resulting from such investments
shall be paid promptly to the Surviving Corporation.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "CERTIFICATES"),
whose shares were converted pursuant to Section 4.1 into the right to receive
the Merger Consideration (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Paying Agent and shall be in
such form and have such other provisions as Parent and the Company may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for payment of the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, the holder of such Certificate shall be entitled to
receive in exchange therefor the Merger Consideration for each share formerly
represented by such Certificate and the Certificate so surrendered shall
16
forthwith be cancelled. If payment of the Merger Consideration is to be made to
a Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or shall be otherwise in proper form for
transfer and that the Person requesting such payment shall have paid any
transfer and other Taxes required by reason of the payment of the Merger
Consideration to a Person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Corporation that such tax either has been paid or is not applicable. Until
surrendered as contemplated by this Section 4.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 4.2.
The right of any stockholder to receive the Merger Consideration shall be
subject to and reduced by any applicable withholding Tax obligation.
(c) TRANSFER BOOKS; NO FURTHER OWNERSHIP RIGHTS IN THE SHARES OF COMPANY
COMMON STOCK. At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of the shares of Company Common Stock on the records of the Company.
From and after the Effective Time, the holders of Certificates evidencing
ownership of the shares of Company Common Stock outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such shares of
Company Common Stock, except as otherwise provided for herein or by applicable
law. If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article IV.
(d) TERMINATION OF FUND; NO LIABILITY. At any time following six months
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any interest received
with respect thereto) which had been made available to the Paying Agent and
which have not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar Laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the foregoing,
none of Parent, the Surviving Corporation or the Paying Agent shall be liable to
any holder of a Certificate for Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
Section 4.3 DISSENTERS' RIGHTS. Notwithstanding anything in this Agreement
to the contrary, if any Dissenting Shareholder shall demand to be paid the "fair
value" of such holder's shares of Company Common Stock, as provided in
Section 262 of the DGCL, such shares shall not be converted into or be
exchangeable for the right to receive the Merger Consideration except as
provided in this Section 4.3 and the Company shall give Parent notice thereof
and Parent shall have the right to participate in all negotiations and
proceedings with respect to any such
17
demands. Neither the Company nor the Surviving Corporation shall, except with
the prior written consent of Parent, voluntarily make any payment with respect
to, or settle or offer to settle, any such demand for payment. If any Dissenting
Shareholder shall fail to perfect or shall have effectively withdrawn or lost
the right to dissent, the shares of Company Common Stock held by such Dissenting
Shareholder shall thereupon be treated as though such shares had been converted
into the Merger Consideration pursuant to Section 4.1.
Section 4.4 LOST, STOLEN OR DESTROYED CERTIFICATES. If any Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
that fact by the Person claiming such Certificate to be lost, stolen or
destroyed and, if required by Parent, the posting by such Person of a bond in
such reasonable amount as Parent may direct as indemnity against any claim that
may be made against it with respect to such Certificate, the Paying Agent shall
deliver in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration for each of the shares of Company Common Stock represented by such
Certificate.
Section 4.5 COMPANY STOCK PLANS. (a) The Company, the Company's Board of
Directors and each relevant committee of the Company's Board of Directors shall,
effective as of the consummation of the Offer, cause each share of restricted
Company Common Stock, including those subject to mandatory resale provisions
under Dutch law (collectively, "RESTRICTED SHARES"), and each employee,
consultant or director option to purchase shares of Company Common Stock
(collectively, the "STOCK OPTIONS") which is outstanding immediately prior to
the consummation of the Offer under the Company's Restated 1988 Stock Option
Plan, the Company's 1998 Stock Option Plan, and the Company's 1999 Nonstatutory
Option Plan (including, without limitation, any option originally granted under
the Microsound Corporation 1997 Stock Plan), each as amended, all other plans
and all individual grants of the Company or its Subsidiaries (the "STOCK OPTION
PLANS") to vest all Restricted Shares and to have all restrictions and mandatory
resale provisions lapse (in the case of the Restricted Shares), and (in the case
of the Stock Options), whether or not then exercisable or vested, to become
fully exercisable and vested. For purposes of each Stock Option Plan in which
the defined term "Corporate Transaction" is used, the Company shall cause the
Company's Board of Directors or each relevant committee of the Company's Board
of Directors acting as administrator of each such Stock Option Plan to determine
prior to the consummation of the Offer that the consummation of the Offer and
the Merger constitute a single "Corporate Transaction". The Company shall use
its reasonable best efforts to cause each Stock Option that is outstanding
immediately prior to the consummation of the Offer to be cancelled in exchange
for an amount in cash, payable at the consummation of the Offer, equal to the
product of (i) the number of shares of Company Common Stock subject to such
Stock Option and (ii) the excess, if any, of the Offer Price over the per share
exercise price of such Stock Option. The Company, the Company's Board of
Directors and each relevant committee of the Company's Board of Directors shall
use
18
their reasonable best efforts to obtain the written consent of the holder of
each Stock Option, effective upon the consummation of the Offer, to such
cancellation. Subject to having obtained any necessary consents from the holders
of Stock Options, the Company shall cause the Company's Board of Directors or
each relevant committee of the Company's Board of Directors to make any
amendments to the Stock Option Plans or stock option agreements thereunder which
may be needed or desirable to implement such cancellation.
(b) Concurrent with the execution of this Agreement, the Company, the
Company's Board of Directors and each relevant committee thereof shall take any
and all action required with respect to the Company's 1988 Employee Stock
Purchase Plan (the "Stock Purchase Plan") to set a New Purchase Date (as defined
in the Stock Purchase Plan) with respect to the Offering Period (as defined in
the Stock Purchase Plan) commencing August 1, 2000, which New Purchase Date
shall be no later than fifteen (15) days after the date hereof. The Company, the
Company's Board of Directors and each relevant committee thereof shall provide
any written notice required under Section 18(b) of the Stock Purchase Plan with
respect to the foregoing.
(c) All Stock Option Plans, the 1998 Employee Stock Purchase Plan and the
1984 Restricted Stock Purchase Plan (together, the "COMPANY STOCK PLANS") shall
terminate as of the Effective Time and the provisions in any other Company
Benefit Plan (as hereinafter defined) or any other plan providing for the
issuance, transfer or grant of any capital stock of the Company or any interest
in respect of any capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall use its reasonable best efforts to ensure
that following the Effective Time no holder of a Stock Option or any participant
in any Company Stock Plan or Company Benefit Plan or any other plan shall have
any right thereunder to acquire any capital stock of the Company, Parent or the
Surviving Corporation.
(d) The Company shall take all such steps as may be required to cause the
transactions contemplated by this Section 4.5 and any other dispositions of
equity securities of the Company (including derivative securities) in connection
with this Agreement by each individual who is a director or officer of the
Company 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, Xxxxxxx & Xxxx LLP.
19
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as disclosed in (i) the Company's disclosure schedule delivered
concurrently with the delivery of this Agreement (the "COMPANY DISCLOSURE
SCHEDULE") or (ii) the Company SEC Reports (as hereinafter defined) made or
filed prior to the date of this Agreement, the Company hereby represents and
warrants to Parent and Purchaser as follows:
Section 5.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each of
the Company and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing (with respect to jurisdictions which
recognize the concept of good standing) under the laws of the jurisdiction of
its incorporation and each such Person has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to be so organized, existing
and in good standing or to have such power and authority could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect. The Company and each of its Subsidiaries is duly qualified or licensed
to do business and is in good standing (with respect to jurisdictions which
recognize the concept of good standing) in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except in such jurisdictions where the
failure to be so qualified or licensed and in good standing could not reasonably
be expected to, individually or in the aggregate, have a Company Material
Adverse Effect. The Company has made available to Parent complete and correct
copies of the Certificate of Incorporation and By-laws of the Company, in each
case as amended (if so amended) to the date of this Agreement, and has made
available the certificates of incorporation and by-laws or other organizational
documents of its Subsidiaries, in each case as amended (if so amended) to the
date of this Agreement. Other than as set forth in Section 5.1 of the Company
Disclosure Schedule, the respective certificates of incorporation and by-laws or
other organizational documents of the Subsidiaries of the Company do not contain
any provision limiting or otherwise restricting the ability of the Company to
control its Subsidiaries. Section 5.1 of the Company Disclosure Schedule sets
forth a list of all Subsidiaries of the Company and their respective
jurisdictions of incorporation or organization and identifies the Company's
(direct or indirect) percentage of equity ownership therein.
Section 5.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. The Company has full
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and, subject to obtaining the Company Shareholder
Approval, to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement by the Company, and the consummation
by it of the transactions contemplated hereby, have been duly
20
authorized and approved by its Board of Directors and no other corporate action
on the part of the Company is necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby, other than obtaining the Company Shareholder
Approval, if necessary. This Agreement has been duly executed and delivered by
the Company and is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
Section 5.3 CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 25,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value U.S.$.001 per share (the "COMPANY PREFERRED
STOCK"). At the close of business on July 31, 2000: (i) 17,798,165 shares of
Company Common Stock were issued and outstanding (excluding shares held by the
Company in its treasury), (ii) 6,576,142 shares of Company Common Stock were
reserved for issuance under the Stock Option Plans and other arrangements,
(iii) no shares of Company Preferred Stock were issued and outstanding and
(iv) 1,139,107 shares of Company Common Stock were held by the Company in its
treasury. All issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in Section 5.3(a) of the Company Disclosure Schedule, there
are no outstanding or authorized options, warrants, rights, subscriptions,
claims of any character, agreements, obligations, convertible or exchangeable
securities, or other commitments, contingent or otherwise, relating to shares of
capital stock or other equity interests of the Company or any of its
Subsidiaries, pursuant to which the Company or any of its Subsidiaries is or may
become obligated to issue shares of its capital stock or other equity interests
or any securities convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of the capital stock or other equity interests of the
Company or any of its Subsidiaries (each an "ISSUANCE OBLIGATION"). There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any outstanding securities of the Company. The Company has no authorized
or outstanding bonds, debentures, notes or other indebtedness the holders of
which have the right to vote (or convertible or exchangeable into or exercisable
for securities the holders of which have the right to vote) with the
stockholders of the Company on any matter ("VOTING DEBT"). Except as set forth
in Section 5.3(a) of the Company Disclosure Schedule, there are no restrictions
of any kind which prevent or restrict the payment of dividends by the Company or
any of its Subsidiaries and there are no limitations or restrictions on the
right to vote, sell or otherwise dispose of such capital stock or other
ownership interests.
(b) All of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued, fully paid and nonassessable. Except as set forth
in the Company SEC Reports or
21
Section 5.3(b) of the Company Disclosure Schedule, no Subsidiary of the Company
has outstanding Voting Debt and no Subsidiary of the Company is bound by,
obligated under, or party to an Issuance Obligation with respect to any security
of the Company or any Subsidiary of the Company and there are no obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding securities of any of its Subsidiaries or any capital
stock of, or other ownership interests in, any of its Subsidiaries.
(c) Except for the Company's interest in its Subsidiaries, and as set forth
in the Company SEC Reports or Section 5.3(c) of the Company Disclosure Schedule,
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for any
equity or similar interest in, any corporation, partnership, joint venture,
limited liability company or other business association or entity which is
material to the Company and its Subsidiaries, taken as a whole.
Section 5.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (i) the
filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended (the "HSR ACT"), are made and the waiting periods thereunder (if
applicable) have been terminated or expired, (ii) the prior notification and
reporting requirements of the antitrust laws of the member states of the
European Union as may be applicable (collectively, the "EUROPEAN ANTITRUST
LAWS") are satisfied and any antitrust filings/notifications which must or may
be effected at the national level in countries having jurisdiction are made and
any applicable waiting periods thereunder have been terminated or expired,
(iii) the prior notification and reporting requirements of other antitrust or
competition laws as may be applicable are satisfied and any antitrust
filings/notifications which must or may be effected in countries having
jurisdiction are made, (iv) the applicable requirements of the Exchange Act are
met, (v) the requirements under any applicable foreign or state securities or
blue sky laws are met, (vi) the filing of the Certificate of Merger and other
appropriate merger documents, if any, as required by the DGCL, are made and
(vii) in the case of this Agreement, the Company Shareholder Approval is
received, the execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby (including
the changes in the composition of the Board of Directors of the Company) do not
and will not: (A) violate or conflict with any provision of the Company's
Certificate of Incorporation or the Company's By-Laws or the comparable
governing documents of any of its Subsidiaries; (B) violate or conflict with any
statute, law, ordinance, rule or regulation (together, "LAWS") or any order,
judgment, decree, writ, permit or license (together, "ORDERS"), of any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision (a "GOVERNMENTAL
AUTHORITY") applicable to the Company or any of its Subsidiaries or by which any
of their respective properties or assets may be bound; (C) except as set forth
in Section 5.4 of the Company Disclosure Schedule, require any filing with, or
22
permit, consent or approval of, or the giving of any notice to, any Governmental
Authority; or (D) except as set forth in Section 5.4 of the Company Disclosure
Schedule, result in a violation or breach of, conflict with, constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation, payment or acceleration) under, or result in
the creation of any Lien upon any of the properties or assets of the Company or
any of its Subsidiaries under, or give rise to any obligation, right of
termination, cancellation, acceleration or increase of any obligation or a loss
of a material benefit under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, franchise, permit, agreement,
contract, lease or other instrument or obligation of any kind ("CONTRACTS") to
which the Company or any of its Subsidiaries is a party, or by which any such
Person or any of its properties or assets are bound, excluding from the
foregoing clauses (B), (C) and (D) conflicts, violations, breaches, defaults,
rights of payment and reimbursement, terminations, modifications, accelerations
and creations and impositions of Liens which could not reasonably be expected
to, individually or in the aggregate, have a Company Material Adverse Effect or
prevent the consummation of any of the transactions contemplated by this
Agreement.
Section 5.5 COMPANY REPORTS AND FINANCIAL STATEMENTS. (a) Since
December 31, 1997, the Company and, to the extent applicable, its Subsidiaries,
have filed all forms, reports and documents with the SEC required to be filed by
it pursuant to the federal securities laws and the SEC rules and regulations
thereunder, and all forms, reports, schedules, registration statements and other
documents filed with the SEC by the Company and, to the extent applicable, its
Subsidiaries have complied in all material respects with all applicable
requirements of the federal securities laws and the SEC rules and regulations
promulgated thereunder. The Company has, prior to the date of this Agreement,
made available to Parent true and complete copies of all forms, reports,
registration statements and other filings filed by the Company and its
Subsidiaries with the SEC since December 31, 1997 (such forms, reports,
registration statements and other filings, together with any exhibits, any
amendments thereto and information incorporated by reference therein, are
sometimes collectively referred to as the "COMPANY SEC REPORTS"). As of their
respective dates, the Company SEC Reports did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and the unaudited consolidated interim
financial statements of the Company included in the Company SEC Reports
(i) comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC, (ii) were
prepared in accordance with GAAP applied on a consistent basis (except as may be
indicated therein or in the notes or schedules thereto) and (iii) present
fairly, in all material respects, the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and changes in stockholders' equity and cash
flows for the periods then ended (subject, in the case of unaudited
23
statements, to normal year-end adjustments). The Company has heretofore made
available to Parent true and correct copies of any amendments and/or
modifications to any Company SEC Reports which have not yet been filed with the
SEC but that are required to be filed with the SEC in accordance with applicable
federal securities laws and the SEC rules and regulations.
(b) Except as set forth or provided in the Company SEC Reports or
Section 5.5(b) of the Company Disclosure Schedule, neither the Company nor any
of its Subsidiaries has any liability or obligation of any nature (whether
accrued, absolute, contingent or otherwise), in each case that is required by
GAAP to be set forth on a consolidated balance sheet of the Company, except for
(i) liabilities and obligations under this Agreement or incurred in connection
with the transactions contemplated hereby and (ii) liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
March 31, 2000 which could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect. Neither the Company nor any
of its Subsidiaries is in default in respect of the material terms and
conditions of any indebtedness or other agreement which could reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
Section 5.6 INFORMATION TO BE SUPPLIED. (a) Each of the Schedule 14D-9 and
the Proxy Statement and the other documents required to be filed by the Company
with the SEC in connection with the Offer, the Merger and the other transactions
contemplated hereby will comply as to form in all material respects with the
requirements of the Exchange Act and will not, on the date of its filing or, in
the case of the Proxy Statement, on the dates it is mailed to stockholders of
the Company and at the time of the Company Shareholder Meeting, and none of the
written information supplied or to be supplied by the Company expressly for
inclusion or incorporation by reference in the Offer Documents will at the time
the Offer Documents are filed with the SEC and first published, sent or given to
the Company's stockholders, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading.
(b) Notwithstanding the foregoing provisions of this Section 5.6, no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference in the Proxy Statement or the Schedule 14D-9
based on information supplied by Parent or Purchaser expressly for inclusion or
incorporation by reference therein or based on information which is not made in
or incorporated by reference in such documents but which should have been
disclosed pursuant to Section 6.4.
24
Section 5.7 ABSENCE OF CERTAIN EVENTS. Except as disclosed in the Company
SEC Reports filed prior to the date hereof or in Section 5.7 of the Company
Disclosure Schedule or as required or expressly permitted by this Agreement,
since December 31, 1999(*) the Company and its Subsidiaries have operated their
respective businesses only in the ordinary course and, except as disclosed in
the Company SEC Reports or in Section 5.7 of the Company Disclosure Schedule,
there has not occurred (i) any event, occurrence or conditions which could
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect; and (ii) neither the Company nor any of its
Subsidiaries has taken any of the actions described in Sections 7.3(b)(3), (5),
(7), (9) or (17).
Section 5.8 LITIGATION. Except as disclosed in the Company SEC Reports
filed prior to the date hereof or Section 5.8 of the Company Disclosure
Schedule, there are no investigations, actions, suits or proceedings pending
against the Company or its Subsidiaries or, to the knowledge of the Company,
threatened against the Company or its Subsidiaries (or any of their respective
properties, rights or franchises), at law or in equity, or before or by any
federal or state commission, board, bureau, agency, regulatory or administrative
instrumentality or other Governmental Authority or any arbitrator or arbitration
tribunal, that could reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect, and, to the knowledge of the
Company, no development has occurred with respect to any pending or threatened
action, suit or proceeding that could reasonably be expected to result in a
Company Material Adverse Effect or could reasonably be expected to prevent,
materially impair or materially delay the consummation of the transactions
contemplated hereby. Neither the Company nor any of its Subsidiaries is subject
to any judgment, order or decree entered in any lawsuit or proceeding which
could reasonably be expected to, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 5.9 TITLE TO PROPERTIES; ENCUMBRANCES. Except as disclosed in
Section 5.9 of the Company Disclosure Schedule, the Company and each of its
Subsidiaries has good, valid and marketable title to, or in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets except where to failure to have such good, valid and
marketable title could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect; in each case subject to no
Liens, except for (A) Liens reflected in the consolidated balance sheet as of
Xxxxx 00, 0000, (X) Liens consisting of zoning or planning restrictions,
easements, permits and other restrictions or limitations on the use of real
property or irregularities in title thereto which do not materially detract from
the value of, or impair the use of, such property by the Company or any of its
Subsidiaries in the operation of their respective businesses, (C) Liens for
current Taxes, assessments or governmental charges or levies on property not yet
due or which are being contested in good faith and (D) Liens which
25
could not reasonably be expected to, individually or in the aggregate, have a
Company Material Adverse Effect.
Section 5.10 COMPLIANCE WITH LAWS. Except as disclosed in the Company SEC
Reports and except as disclosed in Section 5.10 of the Company Disclosure
Schedule:
(a) The Company and each of its Subsidiaries have complied and are presently
complying in all material respects with all applicable Laws, and neither the
Company nor any of its Subsidiaries has received written notification of any
asserted present or past failure to so comply, except in each case where such
non-compliance could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect.
(b) The Company and its Subsidiaries hold, to the extent legally required,
all federal, state, local and foreign permits, approvals, licenses,
authorizations, certificates, rights, exemptions and orders from Governmental
Authorities (the "PERMITS") that are required for the operation of the
respective businesses of the Company and/or its Subsidiaries as now conducted,
except where the failure to hold any such Permit could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect, and there has not occurred any default under any such Permit, except to
the extent that such default could not reasonably be expected to, individually
or in the aggregate, have a Company Material Adverse Effect.
(c) (A) With respect to each of the Company's and its Subsidiaries' products
and, to the extent applicable, products under development (collectively, the
"COMPANY PRODUCTS"), (1) the Company or any of its Subsidiaries has obtained,
unless otherwise exempt, all applicable approvals, clearances, authorizations,
licenses and registrations required by United States or foreign governments or
government agencies, to permit any manufacturing, distribution, sales, marketing
or human research activities of the Company (the "ACTIVITIES TO DATE") with
respect to each Company Product (collectively, the "LICENSES"); (2) the Company
and each of its Subsidiaries are in compliance in all material respects with all
terms and conditions of each License and with all requirements pertaining to the
Activities to Date with respect to each Company Product which is not required to
be the subject of a License; (3) the Company and each of its Subsidiaries are in
compliance in all material respects with all applicable Laws regarding
registration, license, certification for each site (in any country) at which
each Company Product is manufactured, processed, packed, held for distribution
or from which and into which it is distributed; and (4) to the extent any
Company Product has been exported from the United States, the Company has
exported such Company Product in compliance in all material respects with 21
U.S.C. Section 381(e) or Section 382; (B) all manufacturing operations performed
by or on behalf of the Company have been and are being conducted in all material
respects in compliance with current good manufacturing practices, and Quality
System regulations issued by the FDA and, to the extent applicable,
26
counterpart regulations in the European Union and all other countries where
compliance is required; (C) all nonclinical laboratory studies of Company
Products under development, as described in 21 C.F.R. Section 58.3(d), sponsored
by the Company and intended to be used to support regulatory clearance or
approval, have been and are being conducted in compliance in all material
respects with the laboratory practice regulations set forth in 21 C.F.R.
Part 58 and applicable counterpart regulations in the European Union and all
other countries; (D) the Company and each of its Subsidiaries are in compliance
in all material respects with all applicable reporting requirements for all
Licenses or plant registrations described in clause (A) above, including, but
not limited to, the applicable adverse event reporting requirements of 21 C.F.R.
Section 803; except, in the case of the preceding clauses (A) through (D), for
any such failures to obtain or noncompliance which, individually or in the
aggregate, could not reasonably be expected to, individually or in the
aggregate, have a Company Material Adverse Effect. For purposes of this
Section 5.10(c), the term "Licenses" shall specifically include, with respect to
the United States, Company Product license applications, pre-market approval
applications, pre-market notifications under Section 510(k) of the Federal Food,
Drug and Cosmetic Act, as amended, and investigational device exemptions, and
Company Product export applications issued by the FDA.
(d) To the knowledge of the Company, no filing or submission to the FDA or
any other Governmental Authority with regard to the Company Products that is the
basis for any approval or clearance contains any material omission or materially
false information.
(e) To the knowledge of the Company, the Company is in compliance with all
FDA and non-United States equivalent agencies and similar state and local
Governmental Agency requirements concerning the maintenance, compilation and
filing of reports, including medical device reports, with regard to the Company
Products, except where such non-compliance could not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect.
(f) Except as disclosed in Schedule 5.10(f) of the Company Disclosure
Schedule, the Company has not received any written notice or other written
communication from the FDA or any other Governmental Authority (A) contesting
the pre-market clearance or approval of, the uses of or the labeling and
promotion of any of the Company Products or (B) otherwise alleging any violation
of any Laws by the Company, except, in each case, as could not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
(g) Except as set forth in Schedule 5.10(g) of the Company Disclosure
Schedule, there have been no recalls, field notifications or seizures ordered or
adverse regulatory actions taken (or to the Company's knowledge threatened) by
the FDA or any other Governmental
27
Authority with respect to any of the Company Products, including any facilities
where any such Company Products are produced, processed, packaged or stored and
neither the Company nor any of its Subsidiaries has within the last three years,
either voluntarily or at the request of any Governmental Authority, initiated or
participated in a recall of any Product or provided post-sale warnings regarding
any Product, except, in each case, as could not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect.
(h) Except as set forth in Schedule 5.10(h) of the Company Disclosure
Schedule, the Company and each of its Subsidiaries own and hold all Company
Product registrations, licenses, pricing approvals, marketing authorizations and
all other approvals ("REGISTRATIONS") necessary to manufacture, market, sell and
distribute the Company Products in each country where the Company Products are
currently marketed, sold and distributed, except any such Registration which the
Company's failure to own or hold, individually or in the aggregate, could not
reasonably be expected to have a Company Material Adverse Effect.
Section 5.11 COMPANY EMPLOYEE BENEFIT PLANS. (a) Schedule 5.11(a) of the
Company Disclosure Schedule contains a true and complete list of each material
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance or termination pay, hospitalization or other medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension, or
retirement plan, program, agreement or arrangement, and each other material
employee benefit plan, program, agreement or arrangement, sponsored, maintained
or contributed to or required to be contributed to (at any time during the past
six years) by the Company, any of its Subsidiaries or by any trade or business,
whether or not incorporated (an "ERISA AFFILIATE"), that together with the
Company or any Subsidiary of the Company would be deemed a "single employer"
within the meaning of section 4001 of the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations promulgated thereunder
("ERISA"), for the benefit of any employee or terminated employee of the
Company, its Subsidiaries or any ERISA Affiliate, whether formal or informal and
whether legally binding or not (the "COMPANY BENEFIT PLANS").
(b) With respect to each Company Benefit Plan, the Company has made
available to Parent a true and complete copy thereof (including all amendments
thereto), as well as true and complete copies of the annual reports, if required
under ERISA, with respect thereto for the last completed plan year; the
actuarial reports, if required under ERISA, with respect thereto for the last
completed plan year; the most recent report prepared with respect thereto in
accordance with Statement of Financial Accounting Standards No. 87, Employer's
Accounting for Pensions; the most recent Summary Plan Description, together with
each Summary of Material Modifications, if required under ERISA with respect
thereto; if the Company Benefit Plan is funded through a trust or any third
party funding vehicle, the trust or other funding agreement (including all
28
amendments thereto) and the latest financial statements thereof; and the most
recent determination letter received from the Internal Revenue Service, if any,
with respect to each Company Benefit Plan that is intended to be qualified under
section 401 of the Internal Revenue Code of 1986, as from time to time amended
(the "CODE").
(c) No Company Benefit Plan is subject to Title IV of ERISA, and no material
liability under Title IV of ERISA has been incurred by the Company, its
Subsidiaries or any ERISA Affiliate since the effective date of ERISA that has
not been satisfied in full, and no condition exists that presents a material
risk to the Company, its Subsidiaries or any ERISA Affiliate of incurring a
material liability under such Title, other than liability for premiums due to
the PBGC (which premiums have been paid when due).
(d) Neither the Company, nor any Subsidiary of the Company, nor any ERISA
Affiliate, nor any Company Benefit Plan, nor any trust created thereunder, nor,
to the knowledge of the Company, any trustee or administrator thereof has
engaged in a transaction in connection with which the Company, any Subsidiary of
the Company or any ERISA Affiliate, any Company Benefit Plan, any such trust, or
any trustee or administrator thereof, could reasonably be expected to be subject
to either a civil penalty assessed pursuant to section 409 or 502(i) of ERISA or
a tax imposed pursuant to section 4975 or 4976 of the Code which would have a
Company Material Adverse Effect.
(e) All material contributions which the Company, any Subsidiary of the
Company or an ERISA Affiliate are required to make with respect to each Company
Benefit Plan (for which contribution deductions are governed by section 404(a)
of the Code) for the plan years of such plans ending with or within the most
recent tax year of the Company, the Subsidiary or ERISA Affiliate ended prior to
the date of this Agreement either (A) were made prior to the last day of such
tax year or (B) have been or will be made subsequent to such last day within the
time required by section 404(a)(6) of the Code in order to be deemed to have
been made on the last day of such tax year; and all material contribution
amounts properly accrued through the Closing Date with respect to the current
plan year of each Company Benefit Plan will be paid by the Company, a Subsidiary
of the Company or ERISA Affiliate, as appropriate, on or prior to the Closing
Date or will be properly recorded on the Balance Sheet in accordance with
Financial Accounting Standards Board Statement No. 87; and all material
contributions required to be made with respect thereto (whether pursuant to the
terms of any Company Benefit Plan or otherwise) on or prior to the date of this
Agreement have been timely made.
(f) No Company Benefit Plan is a "multiemployer pension plan," as such term
is defined in section 3(37) of ERISA.
29
(g) Except as set forth in Schedule 5.11(g) of the Company Disclosure
Schedule, each Company Benefit Plan has been operated and administered in all
material respects in accordance with its terms and applicable law, including but
not limited to ERISA and the Code.
(h) Each Company Benefit Plan which is intended to be "qualified" within the
meaning of section 401(a) of the Code has received either a favorable opinion
letter from the IRS that the form of such plan is so qualified or a favorable
determination letter from the IRS that such plan is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the Code,
and to the Company's knowledge no event has occurred since the date of such
letter which would reasonably be expected to adversely affect such qualified or
exempt status.
(i) Except as set forth in Schedule 5.11(i) of the Company Disclosure
Schedule, no Company Benefit Plan provides death or medical benefits (whether or
not insured), with respect to current or former employees of the Company, its
Subsidiaries or any ERISA Affiliate beyond their retirement or other termination
of service (other than (i) coverage mandated by applicable law, (ii) death
benefits or retirement benefits under any "employee pension plan," as that term
is defined in section 3(2) of ERISA, or (iii) benefits the full cost of which is
borne by the current or former employee (or his beneficiary).
(j) Except as disclosed in Schedule 5.11(j) of the Company Disclosure
Schedule or expressly provided in this Agreement, the consummation of the
transactions contemplated by this Agreement (and/or any related event) will not
(i) entitle any current or former employee or officer of the Company or any
ERISA Affiliate to severance pay, or any other material payment from the
Company, (ii) accelerate the time of payment or vesting, or increase the amount
of compensation due any such employee or officer, or (iii) require the Company
or any ERISA Affiliate to fund or make any payments to any trust or other
funding vehicle in respect of any Company Benefit Plan.
(k) Except as set forth in Schedule 5.11(k) of the Company Disclosure
Schedule, there are no pending, or, to the knowledge of the Company, threatened
claims by, on behalf of or against any Company Benefit Plan, by any employee or
beneficiary covered under any such Company Benefit Plan, or otherwise involving
any such Company Benefit Plan (other than routine claims for benefits) that
would have a Company Material Adverse Effect.
(l) Except as disclosed in Section 5.11(1) of the Company Disclosure
Schedule, there are no outstanding stock appreciation rights or restricted stock
of the Company. Except as disclosed in Section 5.11(1) of the Company Disclosure
Schedule, there are no outstanding
30
shares of Company Common Stock which are subject to the Company's form of "Stock
Purchase Agreement" relating to "Mandatory Resale Provisions under Dutch Law".
(m) Except as set forth in Schedule 5.11(m) of the Company Disclosure
Schedule, no Company Benefit Plan is subject to ERISA pursuant to
Section 4(b)(4) of ERISA. Each Company Benefit Plan relating to employees not
employed in the United States (A) is in compliance with, in all material
respects, all requirements of law applicable thereto and the respective
requirements of the governing documents of such plan and (B) is fully and
properly funded in accordance with, and the assets thereof are held by a person
authorized to hold such assets under, applicable law and regulation and the
governing documents of such plan except to the extent the failure to be in
compliance with the statements in clauses (A) and (B) would not have a Company
Material Adverse Effect.
(n) Except as set forth in Schedule 5.11(n) of the Company Disclosure
Schedule, there has not been any adoption or amendment by the Company or any of
its Subsidiaries or any ERISA Affiliate of any Company Benefit Plan since
January 1, 2000. Except as disclosed in Schedule 5.11(n) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries, nor any
ERISA Affiliate has any formal plan or commitment, whether legally binding or
not, to create any additional Company Benefit Plan or modify or change any
existing Company Benefit Plan that would affect any employee or terminated
employee of the Company, a Subsidiary of the Company or any ERISA Affiliate. All
employment, consulting, severance, termination, change in control or
indemnification agreements, arrangements or understandings between the Company
or any of its Subsidiaries and any current or former officer or director of the
Company or any of its Subsidiaries which are required to be disclosed in the SEC
Documents have been disclosed therein.
Section 5.12 [Intentionally Left Blank.]
Section 5.13 TAXES. Except as set forth in Section 5.13 of the Company
Disclosure Schedule:
(a) TAX RETURNS. The Company and each of its Subsidiaries has timely filed
or caused to be timely filed with the appropriate Taxing authorities all Federal
income and all other material returns, statements, forms and reports for Taxes
(as hereinafter defined) ("RETURNS") that are required to be filed by, or with
respect to, the Company and such Subsidiaries on or prior to the Closing Date.
The Returns as filed were correct and complete in all material respects. "TAXES"
shall mean all taxes, assessments, charges, duties, fees, levies or other
governmental charges including, without limitation, all Federal, state, local,
foreign and other income, franchise, profits, capital gains, capital stock,
transfer, sales, use, occupation, property, excise,
31
severance, windfall profits, stamp, license, payroll, withholding and other
taxes, assessments, charges, duties, fees, levies or other governmental charges
of any kind whatsoever (whether payable directly or by withholding and whether
or not requiring the filing of a Return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest and shall include any
liability for such amounts as a result either of being a member of a combined,
consolidated, unitary or affiliated group or of a contractual obligation to
indemnify, any person or other entity.
(b) PAYMENT OF TAXES. All material Taxes and Tax liabilities of the
Company and its Subsidiaries that have become due and payable have been timely
paid or fully provided for as a liability on the financial statements of the
Company and its Subsidiaries (or in the notes thereto) in accordance with GAAP.
(c) OTHER TAX MATTERS. Except as set forth in Schedule 5.13(c) of the
Company Disclosure Schedule, no material deficiencies for any Taxes have been
asserted or assessed against the Company or any of its Subsidiaries, which are
not reserved for or which are not being contested in good faith by appropriate
proceedings. To the knowledge of the Company, no Governmental Authority is
presently conducting a Tax audit or investigation with respect to the Company or
any of its Subsidiaries, or has asked for an extension or waiver of an
applicable statute of limitations. With respect to Taxes or any Tax Return, no
power of attorney has been executed by the Company or any of its Subsidiaries.
(d) Neither the Company nor any of its Subsidiaries has been included in any
"consolidated," "unitary" or "combined" Return (other than Returns which include
only the Company and any Subsidiaries of the Company) provided for under the
laws of the United States, any foreign jurisdiction or any state or locality
with respect to material Taxes for any taxable period for which the statute of
limitations has not expired.
(e) All material Taxes which the Company or any of its Subsidiaries is (or
was) required by law to withhold or collect have been duly withheld or
collected, and have been timely paid over to the proper authorities to the
extent due and payable.
(f) There are no Tax sharing, allocation, indemnification or similar
agreements (in writing) in effect as between the Company, any of its
Subsidiaries, or any predecessor or Affiliate of any of them and any other party
under which the Company (or any of its Subsidiaries) could be liable for any
material Taxes of any party other than the Company or any Subsidiary of the
Company.
(g) [Intentionally Left Blank.]
32
(h) [Intentionally Left Blank.]
(i) No election under Section 341(f) of the Code has been made or shall be
made prior to the Closing Date to treat the Company or any of its Subsidiaries
as a consenting corporation, as defined in Section 341 of the Code.
(j) Except as set forth in Schedule 5.13(j) of the Company Disclosure
Schedule, no transaction contemplated by this Agreement is subject to
withholding under Section 1445 of the Code.
(k) [Intentionally Left Blank.]
(l) There are no Liens for Taxes upon any property or assets of the Company
or any of its Subsidiaries, except for Liens for Taxes not yet due or for which
adequate reserves have been established in accordance with GAAP.
(m) No unresolved written claim has been made and delivered by any Taxing
authority in a Jurisdiction where the Company or any of its Subsidiaries does
not pay Taxes or file Returns that the Company or any of its Subsidiaries is or
may be subject to Taxes assessed by such jurisdiction.
Section 5.14 INTELLECTUAL PROPERTY. (a) Schedule 5.14(a) of the Company
Disclosure Schedule sets forth a true and complete list of all patents,
registered and material unregistered trademarks, trade names, service marks and
registered copyrights and applications therefor owned or filed by the Company
and its Subsidiaries, all license agreements to third-party intellectual
property rights bearing royalties or fees in excess of $100,000 per annum
payable to any licensor, and all license agreements pursuant to which the
Company or any of its Subsidiaries licenses any of its intellectual property to
third parties for fees or royalties in excess of $100,000 per annum
(collectively, "INTELLECTUAL PROPERTY RIGHTS"). To the knowledge of the Company,
each of the Company and each of its Subsidiaries owns or has sufficient
unrestricted right to use the Intellectual Property Rights in order to allow it
to conduct, and continue to conduct, its business as currently conducted in all
material respects, and the consummation of the transactions contemplated hereby
will not alter or impair such ability in any respect which would have a Company
Material Adverse Effect.
(b) There is no restriction or encumbrance on the right of the Company to
transfer to Purchaser any of the Intellectual Property Rights, or to grant
licenses to the Intellectual Property Rights, other than any such Liens that
alone or in the aggregate would not result in a Company Material Adverse Effect
or as disclosed on Schedule 5.14(b) of the Company Disclosure
33
Schedule or contained in express restrictions on sublicensing as may be set
forth in any of the license agreements listed on Schedule 5.14. To the knowledge
of the Company, and except as disclosed on Schedule 5.14(b) of the Company
Disclosure Schedule, there are no pending oppositions, cancellations, invalidity
proceedings, interference or re-examination proceedings with respect to the
Intellectual Property Rights and no such proceedings are threatened.
(c) To the knowledge of the Company, and except as disclosed on
Schedule 5.14(c) of the Company Disclosure Schedule, (i) neither the Company nor
any of its Subsidiaries has received any written notice from any other Person
challenging the right of the Company or any of its Subsidiaries to use any of
the Intellectual Property Rights, and (ii) no claims are pending by any Person
with respect to the ownership, validity, enforceability or use of any such
Intellectual Property Rights challenging or questioning the validity or
effectiveness of any of the foregoing. Except as disclosed on Schedule 5.14(c)
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has made any claim of a violation or infringement by others of its
rights to or in connection with the Intellectual Property Rights.
Section 5.15 BROKER'S OR FINDER'S FEE. Except for the fees of U.S. Bancorp
Xxxxx Xxxxxxx Inc. (whose fees and expenses will be paid by the Company in
accordance with the Company's agreement with such firm, a true and correct copy
of which has been previously delivered to Parent by the Company), no agent,
broker, Person or firm acting on behalf of the Company is, or will be, entitled
to any fee, commission or broker's or finder's fees from any of the parties
hereto, or from any Person controlling, controlled by, or under common control
with any of the parties hereto, in connection with this Agreement or any of the
transactions contemplated hereby.
Section 5.16 ENVIRONMENTAL MATTERS. (a) Except as disclosed in the Company
SEC Reports or as set forth in Schedule 5.16 of the Company Disclosure Schedule,
and except to the extent that, individually or in the aggregate, failure to
satisfy the following representations has not had, and could not reasonably be
expected to have a Company Material Adverse Effect.
(i) The Company and each of its Subsidiaries are, and have been, and
each of the Company's former Subsidiaries, while a Subsidiary of the
Company, were in compliance with all applicable Environmental Laws;
(ii) Neither the Company nor any Subsidiary of the Company has
received any Environmental Claim, and there are no present or, to the
knowledge of the Company, past actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
Release, threatened Release or presence of any Hazardous Material which
could form the basis of any Environmental Claim against the Company, or
to the best
34
knowledge of the Company, against any person or entity whose liability for any
Environmental Claim the Company has or may have retained or assumed either
contractually or by operation of law.
(iii) Except for leases entered into in the ordinary course of
business, as to which no written notice of a claim for indemnity or
reimbursement has been received by the Company, neither the Company nor
any of its Subsidiaries has entered into any agreement that may require
it to pay to, reimburse, guarantee, pledge, defend, indemnify, or hold
harmless any Person for or against any Environmental Claim.
(iv) During the period of ownership or operation by the Company and
its Subsidiaries of any of their respective current or previously owned
or leased properties, there have been no Releases or threatened Releases
of Hazardous Material by the Company or any of its Subsidiaries or, to
the knowledge of the Company, by any other person or entity, in, on,
under or affecting such properties.
(v) To the knowledge of the Company, prior to the period of ownership
or operation by the Company and its Subsidiaries of any of their
respective current or previously owned or leased properties, there were
no Releases or threatened Releases of Hazardous Material in, on, under or
affecting any such property.
(vi) Neither the Company nor any of its Subsidiaries has treated,
stored or disposed of "hazardous waste", as that term is defined in the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 ET SEQ., analogous
state laws, or the regulations promulgated thereunder, such that the
Company or any of its Subsidiaries would be required to obtain a
hazardous waste facility permit under said laws for such treatment,
storage or disposal.
(b) For purposes of this Section 5.16, the following terms shall have the
following meanings:
"ENVIRONMENTAL CLAIMS" means any claim, demand, notice, complaint, court
order, administrative order or request for information from any Governmental
Entity or private party, alleging violation of, or asserting any noncompliance
with or liability under or potential liability under, any Environmental Laws,
except for matters which are no longer threatened or pending and for which the
Company or its Subsidiaries are not subject to further requirements pursuant to
an administrative or court order, judgment, or a settlement agreement.
35
"ENVIRONMENTAL LAWS" means any federal, state, or local statute, law, rule,
regulation, ordinance, code or rule of common law and any judicial or
administrative interpretation thereof binding on the Company or its operations
or property as of the date hereof and Closing Date, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health or Hazardous Materials, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq.; and their state and local
counterparts and equivalents.
"HAZARDOUS MATERIALS" means (A) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(B) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous wastes," "extremely hazardous substances," "restricted
hazardous wastes," "toxic substances," "pollutants," "toxic pollutants,"
"contaminants" or words of similar import, under any applicable Environmental
Law; and (C) any other chemical, material or substances, exposure to which is
prohibited, limited or regulated by any Governmental Authority.
"RELEASES" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, emitting, escaping, emptying or seeping into or upon any land
or water or air, or otherwise entering into the environment.
Section 5.17 STATE TAKEOVER STATUTES. (a) The Board of Directors of the
Company has approved the Offer, the Merger and this Agreement and such approval
is sufficient to render inapplicable to the Offer, the Merger, this Agreement
and the other transactions contemplated hereby the provisions of Section 203 of
the DGCL. No other takeover statute or similar statute or regulation of any
state is applicable to the Offer, the Merger, this Agreement and the other
transactions contemplated hereby.
(b) The Board of Directors of the Company has taken all necessary action so
that (i) the Rights will not be exercisable, trade separately, or be otherwise
affected by the Offer, the Merger or the other transactions required hereby,
(ii) none of Parent and its Affiliates will be deemed to be an "ACQUIRING
PERSON" for purposes thereof in consummating the Offer and Merger and (iii) a
"DISTRIBUTION DATE" shall not occur by virtue of the Offer, the Merger or the
other transactions contemplated hereby. The Company will take any action
reasonably requested
36
by Parent to ensure and confirm that the Company, Parent and their respective
affiliates will not have any obligations in connection with the Rights or the
Rights Agreement in connection with the Offer, the Merger and the other
transactions contemplated hereby on the terms provided herein.
Section 5.18 VOTING REQUIREMENTS; BOARD APPROVAL. (a) The affirmative vote
of the holders of at least a majority of the outstanding shares of the Company
Common Stock (voting as one class, with each share of the Company Common Stock
having one (1) vote) entitled to be cast approving this Agreement is the only
vote of the holders of any class or series of the Company's capital stock
necessary to approve this Agreement, the Merger and the transactions
contemplated hereby.
(b) The Board of Directors of the Company has, as of the date of this
Agreement, (i) determined that the Offer and the Merger are advisable and fair
to, and in the best interests of the Company and its stockholders,
(ii) approved this Agreement and the transactions contemplated hereby and
(iii) resolved to recommend that the stockholders of the Company approve and
adopt this Agreement, the Offer and the Merger.
Section 5.19 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of U.S. Bancorp Xxxxx Xxxxxxx Inc. to the effect that, as of the date of
this Agreement, the consideration payable in the Offer and the Merger to the
holders of the Company Common Stock is fair to such holders (other than Parent,
Purchaser or their Affiliates) from a financial point of view, and a copy of
such opinion has been, or promptly upon receipt thereof will be, delivered to
Parent; it being understood and acknowledged by Parent and Purchaser that such
opinion has been rendered for the benefit of the Board of Directors of the
Company, and is not intended to, and may not, be relied upon by Parent, its
Affiliates or their respective shareholders.
Section 5.20 CONTRACTS. Except as set forth in Schedule 5.20 of the
Company Disclosure Schedule and except for this Agreement, since December 31,
1999, neither the Company nor any of its Subsidiaries has entered into any
contract, agreement or amendment thereto that would be required to be filed as
an exhibit to a Form 10-K filed by the Company with the SEC as of the date of
this Agreement.
Section 5.21 PRODUCTS LIABILITY. As used in this Section 5.21, the term
"PRODUCT" shall mean any product designed, manufactured, shipped, sold,
marketed, distributed and/or otherwise introduced into the stream of commerce by
or on behalf of the Company or any of its Subsidiaries, including, without
limitation, any product sold in the United States by the Company or any of its
Subsidiaries as the distributor, agent, or pursuant to any other contractual
relationship with a non-US. manufacturer; and the term "DEFECT" shall mean a
defect or impurity of any kind,
37
whether in design, manufacture, processing, or otherwise, including, without
limitation, any dangerous propensity associated with any reasonably foreseeable
use of a Product, or the failure town of the existence of any defect, impurity,
or dangerous propensity. Except as set forth in Section 5.21 of the Company
Disclosure Schedule, there is no pending or, to the knowledge of the Company,
threatened, claim, action, suit, inquiry, proceeding or investigation by any
individual or Governmental Authority in which a Product is alleged to have a
Defect, except any such claim, action, suit, inquiry, proceeding or
investigation which, individually or in the aggregate, could not reasonably be
expected to have a Company Material Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Except as disclosed in Parent's disclosure schedule delivered concurrently
with the delivery of this Agreement (the "PARENT DISCLOSURE SCHEDULE"), Parent
and Purchaser hereby represent and warrant, jointly and severally, to the
Company as follows:
Section 6.1 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each of
Parent and the Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
each such Person has all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions to be consummated by it.
Section 6.2 AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of Parent and
Purchaser has full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Purchaser, and the consummation by each such party
of the transactions contemplated hereby, have been duly authorized and
unanimously approved by the respective Board of Directors of Parent and
Purchaser and no other corporate action on the part of either of Parent or
Purchaser is necessary to authorize the execution, delivery and performance of
this Agreement by each of Parent and Purchaser and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and Purchaser and is a valid and binding obligation
of each of Parent and Purchaser, enforceable against each of Parent and
Purchaser in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
38
Section 6.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (i) the
filings required under the HSR Act are made and the waiting periods thereunder
(if applicable) have been terminated or expired, (ii) the prior notification and
reporting requirements of the European Antitrust Laws are satisfied and any
antitrust filings/notifications which must or may be effected at the national
level in countries having jurisdiction are made and any applicable waiting
periods thereunder have been terminated or expired, (iii) the prior notification
and reporting requirements of other antitrust or competition laws as may be
applicable are satisfied and any antitrust filings/notifications which must or
may be effected in countries having jurisdiction are made, (iv) the applicable
requirements of the Exchange Act are met, (v) the requirements under any
applicable foreign or state securities or blue sky laws are met, (vi) the filing
of the Certificate of Merger and other appropriate merger documents, if any, as
required by the DGCL, are made, and (vii) the stockholders of the Parent have
approved an increase in the authorized capital of the Parent and a waiver of
preemptive rights in order for the Parent to make an US $150 million equity
offering (the "PARENT EQUITY OFFERING") of ordinary bearer shares, nominal value
(0.01 per share, of the Parent ("PARENT ORDINARY SHARES")), the execution and
delivery of this Agreement by Parent and Purchaser and the consummation by
Parent and Purchaser of the transactions contemplated hereby do not and will
not: (A) violate or conflict with any provision of the governing documents of
Parent, Purchaser or any of their respective Subsidiaries; (B) violate or
conflict with any Laws or Orders of any Governmental Authority applicable to
Parent, Purchaser or any of their respective Subsidiaries or by which any of
their respective properties or assets may be bound; (C) except as set forth in
Section 6.3 of the Parent Disclosure Schedule, require any filing with, or
permit, consent or approval of, or the giving of any notice to, any Governmental
Authority; or (D) except as set forth in Section 6.3 of the Parent Disclosure
Schedule, result in a violation or breach of, conflict with, constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of any Lien upon any of the properties or assets of Parent, Purchaser
or any of their respective Subsidiaries under, or give rise to any obligation,
right of termination, cancellation, acceleration or increase of any obligation
or a loss of a material benefit under, any of the terms, conditions or
provisions of any Contracts to which Parent, Purchaser or any of their
respective Subsidiaries is a party, or by which any such Person or any of its
properties or assets are bound, excluding from the foregoing clauses (B),
(C) and (D) conflicts, violations, breaches, defaults, rights of payment and
reimbursement, terminations, modifications, accelerations and creations and
impositions of Liens which could not reasonably be expected to, individually or
in the aggregate, have a Parent Material Adverse Effect or impair Parent's or
Purchaser's ability to consummate the transactions to be consummated by them
pursuant to this Agreement. Parent has obtained and made available to the
Company a valid, binding and enforceable commitment from Tor Xxxxxx, President
of Parent, that Xx. Xxxxxx will vote all shares of Parent owned by him, and the
shares of Parent owned by certain other shareholders for which he has received
proxies, in favor of approving an increase in the autho-
39
rized capital of the Parent and a waiver of preemptive rights in order for the
Parent to consummate the Parent Equity Offering by issuing a number of shares
sufficient to receive the $150 million proceeds from the Parent Equity Offering,
subject to condition (f) as set forth in Annex I to this Agreement.
Section 6.4 INFORMATION TO BE SUPPLIED. (a) Each of the Offer Documents
and the other documents required to be filed by Parent with the SEC in
connection with the Offer, the Merger and the other transactions contemplated
hereby will comply as to form, in all material respects, with the requirements
of the Exchange Act and will not, on the date of its filing, and none of the
information supplied or to be supplied by Parent or the Purchaser expressly for
inclusion or incorporation by reference in the Schedule 14D-9 or the Proxy
Statement will, in the case of the Schedule 14D-9, at the time the
Schedule 14D-9 is filed with the SEC and first published, sent or given to the
Company's stockholders or, in the case of the Proxy Statement on the dates the
Proxy Statement is mailed to stockholders of the Company and at the time of the
Company Shareholder Meeting will not, 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.
(b) Notwithstanding the foregoing provisions of this Section 6.4, no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference in the Offer Documents, the Schedule 14D-9 or Proxy
Statement based on information supplied by the Company expressly for inclusion
or incorporation by reference therein or based on information which is not made
in or incorporated by reference in such documents but which should have been
disclosed pursuant to Section 5.6.
Section 6.5 BROKER'S OR FINDER'S FEE. Except for Credit Suisse First
Boston Corporation ("CSFB") (whose fees and expenses will be paid by Parent or
Purchaser), no agent, broker, Person or firm acting on behalf of Parent or
Purchaser is, or will be, entitled to any fee, commission or broker's or
finder's fees from any of the parties hereto, or from any Person controlling,
controlled by, or under common control with any of the parties hereto, in
connection with this Agreement or any of the transactions contemplated hereby.
Section 6.6 OWNERSHIP OF CAPITAL STOCK. Except as set forth in
Section 6.6 of the Parent Disclosure Schedule, neither Parent, Purchaser nor any
of their respective Subsidiaries beneficially owns, directly or indirectly, any
capital stock of the Company or is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
capital stock of the Company, other than as contemplated by this Agreement.
40
Section 6.7 NO PRIOR ACTIVITIES. Purchaser was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has no
Subsidiaries and has undertaken no business or activities other than in
connection with entering into this Agreement and engaging in the transactions
contemplated hereby.
Section 6.8 FINANCING. At the expiration of the Offer and at the Effective
Time, provided that the Parent Equity Offering has been completed as
contemplated in the Purchase Agreement, Parent and Purchaser will have available
all the funds necessary to purchase all the shares of Company Common Stock
pursuant to the Offer and the Merger and to pay all fees and expenses payable by
the Parent or the Purchaser related to the transactions contemplated by this
Agreement. Parent has delivered to the Company true and correct copies of that
certain firm commitment letter addressed to Parent from CSFB dated August 4,
2000, as well as evidence satisfactory to the Company that Parent has sufficient
net cash which, when added to the amounts to be obtained under such commitment
letter, will constitute sufficient funds to make all of the payments referred to
in the previous sentence. Parent has been advised by CSFB that CSFB knows of no
fact or circumstance that is reasonably likely to result in any of the
conditions to funding in such firm commitment letter or the purchase agreement
attached thereto not being satisfied, and Parent and Purchaser know of no such
fact or circumstance. Parent and Purchaser covenant and agree that, upon the
Company's request, Parent and Purchaser shall provide the Company with
information regarding the status of the such financing.
ARTICLE VII
COVENANTS PRIOR TO CLOSING DATE
Section 7.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND
RECORDS. During the period commencing on the date hereof and ending on the
earlier of (i) the Closing Date and (ii) the date on which this Agreement is
terminated pursuant to Section 9.1 hereof, the Company shall, and shall cause
its Subsidiaries to, upon reasonable notice, afford the other party, and its
respective counsel, accountants, consultants, financing sources and other
authorized representatives, access during normal business hours to its and its
Subsidiaries' executive officers, properties, books and records in order that
they may have the opportunity to make such investigations as they shall
reasonably deem necessary of its and its Subsidiaries' affairs; such
investigation shall not, however, affect the representations and warranties made
by the Company in this Agreement. The Company shall furnish promptly to Parent
and Purchaser shall furnish promptly to the Company (x) a copy of each form,
report, schedule, statement, registration statement and other document filed by
it during such period pursuant to the requirements of federal, state or foreign
securities laws and (y) all other information concerning its or its
Subsidiaries' business, properties and personnel as Parent or Purchaser may
reasonably request.
41
The Company agrees to cause its officers and employees to furnish such
additional financial and operating data and other information and respond to
such inquiries as Parent or Purchaser shall from time to time reasonably
request. Parent and Purchaser shall make all reasonable efforts to minimize any
disruption to the businesses of the Company and its Subsidiaries which may
result from the requests made hereunder.
Section 7.2 CONFIDENTIALITY. Prior to the Effective Time and after any
termination of this Agreement, each of Parent and the Company shall hold, and
shall use its best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors, lenders and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning the other party furnished to it or its Affiliates in connection with
the transactions contemplated by this Agreement, except to the extent that such
information can be shown to have been previously known on a nonconfidential
basis by such party, in the public domain through no fault of such party or
later lawfully acquired by such party from sources other than the other party;
PROVIDED that each of Parent and the Company may disclose such information to
its officers, directors, employees, accountants, counsel, consultants, advisors,
lenders and agents in connection with the transactions contemplated by this
Agreement so long as such party informs such Persons of the confidential nature
of such information and directs them to treat it confidentially. Each of Parent
and the Company shall satisfy its obligation to hold any such information in
confidence if it exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information. If
this Agreement is terminated, each of Parent and the Company shall, and shall
use its best efforts to cause its officers, directors, employees, accountants,
counsel, consultants, advisors, lenders and agents to, destroy or deliver to the
other party, upon request, all documents and other materials, and all copies
thereof, that it or its Affiliates obtained, or that were obtained on their
behalf, from the other party in connection with this Agreement and that are
subject to such confidence. Notwithstanding anything to the contrary in this
Agreement, the confidentiality agreement dated June 26, 2000 between the Parent
and the Company shall remain in full force and effect.
Section 7.3 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE CLOSING
DATE. The Company agrees that, except as permitted, required or specifically
contemplated by, or otherwise described in, this Agreement or otherwise
consented to or approved in writing by Parent (which consent or approval shall
not be unreasonably withheld or delayed), during the period commencing on the
date hereof until the Effective Time:
(a) The Company and each of its Subsidiaries shall conduct their respective
operations in all material respects only according to their ordinary and usual
course of business consistent with past practice and shall use their reasonable
best efforts to preserve intact their
42
respective business organizations, keep available the services of their officers
and employees and maintain satisfactory relationships with licensors, suppliers,
distributors, clients, joint venture partners and others having significant
business relationships with them;
(b) Except as set forth in Section 7.3(b) of the Company Disclosure Schedule
or as expressly contemplated by this Agreement, neither the Company nor any of
its Subsidiaries shall:
(1) make any change in or amendment to the Company's Certificate of
Incorporation or its By-Laws;
(2) issue or sell, or authorize to issue or sell, any shares of its
capital stock or any other securities, or issue or sell, or authorize to
issue or sell, any securities convertible into, or options, warrants or
rights to purchase or subscribe for, or enter into any arrangement or
contract with respect to the issuance or sale of, any shares of its
capital stock or any other securities, or make any other changes in its
capital structure, other than (i) the issuance of Company Common Stock
upon the exercise of Stock Options outstanding on the date hereof, in
accordance with their present terms, or (iii) issuances by a wholly owned
Subsidiary of the Company of capital stock to such Subsidiary's parent,
the Company or another wholly owned Subsidiary of the Company;
(3) declare, pay or set aside any dividend or other distribution or
payment with respect to, or split, combine, redeem or reclassify, or
purchase or otherwise acquire, any shares of its capital stock or its
other securities, other than dividends payable by a wholly owned
Subsidiary of the Company to the Company or another wholly owned
Subsidiary of the Company;
(4) incur any capital expenditures or any obligations or liabilities
in respect thereof, except for those (A) contemplated by the capital
expenditure budget for the Company and its Subsidiaries made available to
Parent, (B) incurred in the ordinary course of business of the Company
and its Subsidiaries and set forth in Schedule 7.3(b) of the Company
Disclosure Schedule (the "CAPITAL BUDGET") or (C) not otherwise described
in clauses (A) and (B) which, in the aggregate, do not exceed
U.S.$1.0 million;
(5) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization of division thereof (including
any of the Company's Subsidiaries) or (B) any assets, including real
estate, except (x) purchases of inventory, equipment, other non-material
43
assets in the ordinary course of business consistent with past practice
or (y) expenditures consistent with the Company's Capital Budget;
(6) except in the ordinary course of business consistent with past
practice and except to the extent required under existing employee and
director benefit plans, agreements or arrangements as in effect on the
date of this Agreement, increase the compensation or fringe benefits of
any of its directors, officers or employees or grant any severance or
termination pay not currently required to be paid under existing
severance plans or enter into any employment, consulting or severance
agreement or arrangement with any present or former director, officer or
other employee of the Company or any of its Subsidiaries, or hire or
agree to hire, or enter into any employment agreement with, any new or
additional key employee or officer having an annual salary of
U.S.$150,000 or more;
(7) except as required to comply with applicable law or expressly
provided in this Agreement, (A) adopt, enter into, terminate or amend any
Company Benefit Plan or other arrangement for the current or future
benefit or welfare of any director, officer or current or former
employee, except to the extent necessary to coordinate any such Company
Benefit Plans with the terms of this Agreement, (B) pay any benefit not
provided for under any Company Benefit Plan, accelerate the payment,
right of payment or vesting of any bonus, severance, profit sharing,
retirement, deferred compensation, stock option, insurance or other
compensation or benefits, (C) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or
Company Benefit Plan (including the grant of stock options, stock
appreciation rights, stock based or stock related awards, performance
units or restricted stock, or the removal of existing restrictions in any
Company Benefit Plans or agreements or awards made thereunder) or
(D) except as required by the current terms thereof take any action to
fund or in any other way secure the payment of compensation or benefits
under any employee plan, agreement, contract or arrangement or Company
Benefit Plan;
(8) transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any Lien, any material assets, other
than in the ordinary course of business;
(9) except as required by applicable law or GAAP, make any change in
its methods of accounting;
44
(10) adopt or enter into a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its Subsidiaries (other
than the Merger) or any agreement relating to a Takeover Proposal, except
as provided for in Section 7.6;
(11) (i) incur or assume any long-term debt, or except in the ordinary
course of business, incur or assume any short-term indebtedness in
amounts not consistent with past practice; (ii) incur or modify any
material indebtedness or other liability; (iii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person,
except in the ordinary course of business and consistent with past
practice; (iv) make any loans, advances or capital contributions to, or
investments in, any other Person (other than to wholly owned Subsidiaries
of the Company, or by such Subsidiaries to the Company, or customary
loans or advances to employees in accordance with past practice);
(v) settle any claims in excess of U.S.$1 million other than in the
ordinary course of business, in accordance with past practice, and
without admission of liability; or (vi) enter into any material
commitment or transaction in excess of U.S.$1 million except in the
ordinary course of business;
(12) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction of any such claims,
liabilities or obligations, in the ordinary course of business and
consistent with past practice, or of claims, liabilities or obligations
reflected or reserved against in, or contemplated by, the consolidated
financial statements (or the notes thereto) of the Company and its
consolidated Subsidiaries;
(13) enter into any agreement, understanding or commitment that
materially restrains, limits or impedes the Company's or any of its
Subsidiaries' ability to compete with or conduct any business or line of
business, including, but not limited to, geographic limitations on the
Company's or any of its Subsidiaries' activities;
(14) plan, announce, implement or effect any material reduction in
labor force, lay-off, early retirement program, severance program or
other program or effort concerning the termination of employment of
employees of the Company or its Subsidiaries; PROVIDED, HOWEVER, that
routine employee terminations for cause shall not be considered subject
to this clause (14);
(15) take any action including, without limitation, the adoption of
any shareholder rights plan or amendments to its Certificate of
Incorporation or By-Laws (or comparable governing documents), which
would, directly or indirectly, restrict or impair
45
the ability of Parent to vote, or otherwise to exercise the rights and
receive the benefits of a shareholder with respect to, securities of the
Company acquired or controlled by Parent or Purchaser or permit any
shareholder to acquire securities of the Company on a basis not available
to Parent or Purchaser in the event that Parent or Purchaser were to
acquire any additional shares of the Company Common Stock (subject to the
Company's right to take action specifically permitted by Section 7.6);
(16) materially modify, amend or terminate any material contract to
which it is a party or waive or assign any of its material rights or
claims except in the ordinary course of business consistent with past
practice;
(17) other than in the ordinary course of business consistent with
past practice, make any tax election or enter into any settlement or
compromise of any tax liability that in either case is material to the
business of the Company and its Subsidiaries as a whole; or
(18) agree, in writing or otherwise, to take any of the foregoing
actions.
(c) The Company shall not, and shall not permit any of its Subsidiaries to,
take any voluntary action that would result in (i) any of its representations
and warranties set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material manner having a Company Material
Adverse Effect or (iii) any of the conditions to the Offer set forth in
subsections (a), (c), (d) and (e) of Annex I not being satisfied (subject to the
Company's right to take action specifically permitted by Section 7.6).
Section 7.4 COMPANY SHAREHOLDER MEETING; PREPARATION OF PROXY
STATEMENT. If required by applicable law in order to consummate the Merger, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "COMPANY SHAREHOLDER MEETING") as promptly as
practicable following the acceptance for payment and purchase of shares
by Company Common Stock by the Purchaser pursuant to the Offer for the
purpose of considering and taking action upon the approval of the Merger
and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or information
statement in accordance with the Exchange Act relating to the Merger and
this Agreement and use its best efforts to obtain and furnish the
information required to be included by the
46
Exchange Act and the SEC in the Proxy Statement (as hereinafter defined)
and, after consultation with Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement,
including any amendment or supplement thereto (the "PROXY STATEMENT"), to
be mailed to its stockholders, PROVIDED that no amendment or supplement
to the Proxy Statement will be made by the Company without consultation
with Parent and its counsel;
(iii) take all action necessary to solicit from its stockholders
proxies, and shall take all other action necessary and advisable, to
secure the vote of stockholders required by applicable law and the
Company's Certificate of Incorporation or By-Laws to obtain the approval
for this Agreement and the Merger; and
(iv) unless the Board of Directors of the Company otherwise
determines (based on a majority vote of the Board of Directors in its
good faith judgment that such other action is necessary to comply with
its fiduciary duty to stockholders under applicable law after consulting
with outside legal counsel) prior to the Company Shareholder Approval,
(x) the Company's Board of Directors shall recommend approval and
adoption by its stockholders of this Agreement (the "COMPANY
RECOMMENDATION"), (y) neither the Company's Board of Directors nor any
committee thereof shall amend, modify, withdraw, condition or qualify the
Company Recommendation in a manner adverse to Parent or take any action
or make any statement inconsistent with the Company Recommendation and
(z) the Company shall take all lawful action to solicit the Company
Shareholder Approval whether or not the Company Recommendation remains in
effect.
Section 7.5 REASONABLE BEST EFFORTS; NOTIFICATION; INFORMATION AGENT. (a)
Upon the terms and subject to the conditions set forth in this Agreement, each
of the parties agrees to use all reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Offer and the Merger, and the other transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from any Governmental Authority and the making of all
necessary registrations and filings (including filings with any Governmental
Authority, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Authority, (ii) the obtaining of all necessary consents, approvals
or waivers from third parties, (iii) the defending of any lawsuits or other
legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of any of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining
47
order entered by any court or other Governmental Authority vacated or reversed,
(iv) the obtaining of the financing contemplated by the Parent Equity Offering,
including the Company's providing financial statements and financial and other
business information required to be disclosed by Parent in connection therewith,
and (v) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to fully carry out the purposes
of, this Agreement; PROVIDED, HOWEVER, that no loan agreement or contract for
borrowed money entered into by the Company or any of its Subsidiaries shall be
repaid except as currently required by its terms, in whole or in part, and no
contract shall be amended to increase the amount payable thereunder or otherwise
to be more burdensome to the Company or any of its Subsidiaries in order to
obtain any such consent, approval or authorization without first obtaining the
written approval of Parent.
(b) The Company shall give prompt notice to Parent of (i) any representation
or warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect (including in the case
of representations or warranties by the Company, the Company receiving knowledge
of any fact, event or circumstance which may cause any representation qualified
as to the knowledge of the Company to be or become untrue or inaccurate in any
respect) or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under this Agreement; PROVIDED, HOWEVER, that no such notification shall
affect the representations, warranties, covenants or agreements of the parties
or the conditions to the obligations of the parties under this Agreement. The
Company acknowledges that if after the date of this Agreement the Company
receives knowledge of any fact, event or circumstance that would cause any
representation or warranty that is conditioned as to the knowledge of the
Company to be or become untrue or inaccurate in any respect, the receipt of such
knowledge shall constitute a breach of the representation or warranty that is so
conditioned as of the date of such receipt.
(c) Parent shall, at its expense, engage a nationally-recognized agent to
provide information to stockholders of the Company with respect to the Offer and
to encourage stockholders to deliver their shares to the designated depositary
for the Offer.
Section 7.6 NO SOLICITATION. (a) The Company shall, and shall use its
reasonable best efforts to cause its Affiliates, officers, directors, employees,
financial advisors, attorneys and other advisors, representatives and agents to,
immediately cease any discussions or negotiations with third parties with
respect to any Takeover Proposal (as defined below). The Company shall not, nor
shall it authorize or permit any of its Affiliates to, nor shall it authorize or
permit any officer, director or employee of or any financial advisor, attorney
or other advisor, representative or agent of it or any of its Affiliates, to
(i) directly or indirectly solicit, facilitate, initiate or encourage the making
or submission of, any Takeover Proposal (including, without limitation,
48
the taking of any action which would make Section 203 of the DGCL inapplicable
to a Takeover Proposal), (ii) enter into any agreement, arrangement or
understanding with respect to any Takeover Proposal or enter into any agreement,
arrangement or understanding requiring it to abandon, terminate or fail to
consummate the Merger or any other transaction contemplated by this Agreement,
(iii) initiate or participate in any way in any discussions or negotiations
regarding, or furnish or disclose to any Person (other than a party to this
Agreement) any information with respect to, or take any other action to
facilitate or in furtherance of any inquiries or the making of any proposal that
constitutes, or could reasonably be expected to lead to, any Takeover Proposal,
or (iv) grant any waiver or release under any standstill or similar agreement
with respect to any class of the Company's equity securities (other than to
permit the Company to receive an unsolicitated Takeover Proposal that did not
result from a breach of this Section 7.6); PROVIDED that prior to the acceptance
for payment of shares of Company Common Stock pursuant to the Offer, in response
to an unsolicited Takeover Proposal that did not result from the breach of this
Section 7.6 and following delivery to Parent of notice of the Takeover Proposal
in compliance with its obligations under Section 7.6(d) hereof, the Company may
participate in discussions or negotiations with or furnish information (pursuant
to a confidentiality/ standstill agreement with customary terms) to any third
party which makes a bona fide written Takeover Proposal if (A) a majority of the
Company's Board of Directors reasonably determines in good faith (after
consultation with its financial advisor) that taking such action would be
reasonably likely to lead to the delivery to the Company of a Superior Proposal
and (B) a majority of the Company's Board of Directors determines in good faith
(after consultation with outside legal counsel) that it is necessary to take
such actions in order to comply with its fiduciary duties under applicable law.
Without limiting the foregoing, the Company agrees that any violation of the
restrictions set forth in this Section 7.6(a) by any of its, or any of its
Subsidiaries', officers, employees, Affiliates or directors or any advisor,
representative, consultant or agent retained by the Company or any of its
Subsidiaries or Affiliates in connection with the transactions contemplated
hereby, whether or not such Person is purporting to act on behalf of the Company
or any of its Subsidiaries, shall constitute a breach of this Section 7.6(a) by
the Company.
For purposes of this Agreement, "TAKEOVER PROPOSAL" means any inquiry,
proposal or offer from any Person or group relating to (i) any direct or
indirect acquisition or purchase of 20% or more of the assets of the Company or
any of its Subsidiaries or 20% or more of any class of equity securities of the
Company or any of its Subsidiaries, (ii) any tender offer or exchange offer
that, if consummated, would result in any Person beneficially owning 20% or more
of any class of equity securities of the Company or any of its Subsidiaries or
(iii) any merger, consolidation, business combination, sale of all or any
substantial portion of the assets, recapitalization, liquidation or a
dissolution of, or similar transaction of the Company or any of its Subsidiaries
other than the Offer or the Merger; and "SUPERIOR PROPOSAL" means a bona fide
written Takeover Proposal made by a third party to purchase at least a majority
of the outstanding equity
49
securities of the Company pursuant to a tender offer, exchange offer, merger or
other business combination (x) on terms which a majority of the Company's Board
of Directors determines in good faith (after consultation with its financial
advisor) to be superior to the Company and its stockholders (in their capacity
as stockholders) from a financial point of view (taking into account, among
other things, all legal, financial, regulatory and other aspects of the proposal
and identity of the offeror) as compared to the transactions contemplated hereby
and any alternative proposed by Parent or Purchaser in accordance with
Section 9.1(c) hereof and (y) which is reasonably capable of being consummated.
(b) The Company agrees that, except as set forth in Section 7.6(c), neither
its Board of Directors nor any committee thereof shall (i) approve or recommend,
or, in the case of a committee, propose to the Board of Directors to approve or
recommend any Takeover Proposal or (ii) approve, recommend or cause it to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "ACQUISITION AGREEMENT") related to any
Takeover Proposal.
(c) Notwithstanding anything to the contrary herein, prior to the acceptance
for payment of shares of Company Common Stock pursuant to the Offer, the Company
and/or its Board of Directors may take the actions otherwise prohibited by
Sections 7.6(a) and (b) if (i) a third party makes a Superior Proposal,
(ii) the Company complies with its obligations under Section 7.6(d), (iii) all
of the conditions to the Company's right to terminate this Agreement in
accordance with Section 9.1(c) hereof have been satisfied (including expiration
of the three (3) Business Day period described therein and the payment of all
amounts required pursuant to Section 9.3 hereof) and (iv) simultaneously
therewith, this Agreement is terminated in accordance with Section 9.1(c)
hereof.
(d) The Company agrees that in addition to the obligations of the Company
set forth in paragraphs (a), (b) and (c) of this Section 7.6, promptly after
receipt thereof, the Company shall advise Parent in writing of any request for
information or any Takeover Proposal, or any inquiry, discussions or
negotiations with respect to any Takeover Proposal, and the terms and conditions
of such request, Takeover Proposal, inquiry, discussions or negotiations, and
the Company shall promptly provide to Parent copies of any written materials
received by the Company in connection with any of the foregoing, and the
identity of the Person or group making any such request, Takeover Proposal or
inquiry or with whom any discussions or negotiations are taking place. The
Company agrees that it shall simultaneously provide to Parent any non-public
information concerning the Company provided to any other Person or group in
connection with any Takeover Proposal which was not previously provided to
Parent.
50
(e) Parent agrees that nothing contained in this Section 7.6 shall prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act
with respect to any tender offer.
(f) The Company agrees that immediately following the execution of this
Agreement, it shall request each Person who has heretofore executed a
confidentiality agreement in connection with such Person's consideration of
acquiring the Company or any portion thereof to return or destroy (which
destruction shall be certified in writing by an executive officer of such
Person) all confidential information heretofore furnished to such Person by or
on its behalf.
Section 7.7 ANTITRUST LAWS. (a) Each party hereto shall (i) take promptly
(but in no event later than August 21, 2000) all actions necessary to make the
filings required of it or any of its Affiliates under any applicable Antitrust
Laws in connection with this Agreement and the transactions contemplated hereby,
(ii) comply at the earliest practicable date with any formal or informal request
for additional information or documentary material received by it or any of its
Affiliates from any Antitrust Authority and (iii) cooperate with one another in
connection with any filing under applicable Antitrust Laws and in connection
with resolving any investigation or other inquiry concerning the transactions
contemplated by this Agreement initiated by any Antitrust Authority.
(b) Each party hereto shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any Antitrust Law; PROVIDED HOWEVER, that
the Company shall not, without the prior written consent of Parent, commit to
any divestiture transaction and Parent shall not be required to divest or hold
separate or otherwise take or commence to take any action that, in the
reasonable discretion of Parent, materially limits its ability to conduct the
business or its ability to retain, the Company or any of its affiliates or any
material portion of the assets of the Company.
(c) Each party hereto shall promptly inform the other parties of any
material communication made to, or received by such party from, any Antitrust
Authority or any other Governmental Authority regarding any of the transactions
contemplated hereby.
(d) For purposes of this Agreement, (i) "ANTITRUST AUTHORITIES" means the
Federal Trade Commission, the Antitrust Division of the Department of Justice,
the attorneys general of the several states of the United States and any other
Governmental Authority having jurisdiction with respect to the transactions
contemplated hereby pursuant to applicable Antitrust Laws and (ii) "ANTITRUST
LAW" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the HSR
Act, the Federal Trade Commission Act, as amended, European Antitrust Laws and
all other federal, state and foreign statutes, rules, regulations, orders,
decrees, administrative and
51
judicial doctrines, and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade.
Section 7.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. (a)
Parent, Purchaser and the Surviving Corporation agree that all rights to
indemnification existing in favor of the present or former directors, officers,
employees, fiduciaries and agents of the Company or any of its Subsidiaries
(collectively, the "INDEMNIFIED PARTIES") as provided in the Company's
Certificate of Incorporation or By-Laws or the certificate or articles of
incorporation, by-laws or similar organizational documents of any of the
Subsidiaries as in effect as of the Effective Time shall survive the Merger and
shall continue in full force and effect for six years after the Effective Time
(without modification or amendment, except as required by applicable law) in
accordance with their terms, to the fullest extent permitted by law, and shall
be enforceable by the Indemnified Parties against the Surviving Corporation.
(b) Purchaser shall cause to be maintained in effect for not less than six
years from the Effective Time the current policies of the directors' and
officers' liability insurance maintained by the Company (provided that Purchaser
may substitute therefor polices of at least equivalent coverage containing terms
and conditions which are no less advantageous) with respect to matters occurring
prior to the Effective Time, provided that in no event shall Purchaser or the
Surviving Corporation be required to expend to maintain or procure insurance
coverage pursuant to this Section 7.8 any amount per annum in excess of
U.S.$400,000. In the event the payment of such amount for any year is
insufficient to maintain such insurance or equivalent coverage cannot otherwise
be obtained, the Surviving Corporation shall purchase as much insurance as may
be purchased for the amount indicated. The provisions of this Section 7.8 shall
survive the consummation of the Merger and expressly are intended to benefit
each of the Indemnified Parties.
Section 7.9 PUBLIC ANNOUNCEMENTS. The initial press release with respect
to the execution of this Agreement shall be a joint press release acceptable to
Parent and the Company. Thereafter, Parent and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation and review by the other party of such release or statement,
except as may be required by law, court process or by obligations pursuant to
any listing agreement with a national securities exchange.
52
Section 7.10 TRANSFER TAXES. The Company and Parent shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement (together with
any related interest, penalties or additions to tax, "TRANSFER TAXES"). All
Transfer Taxes shall be paid by the Company and expressly shall not be a
liability of any holder of the Company Common Stock.
Section 7.11 EMPLOYEE BENEFITS. For a period of one year following the
Effective Time, Purchaser shall, or shall cause the Surviving Corporation to,
provide all of the employees of the Surviving Corporation and its subsidiaries
with employee benefit plans, programs, policies or arrangements (the "PURCHASER
BENEFIT PLANS") as are substantially equivalent, in the aggregate, to those
currently provided by the current Company Benefit Plans. Except to the extent
that benefits may be duplicated, each Purchaser Benefit Plan shall give full
credit for each employee's period of service with the Company and its
Subsidiaries prior to the Effective Time for all purposes for which such service
was recognized under the Company Benefit Plans prior to the Effective Time,
including, but not limited to, recognition of service for vesting, amount of
benefits, eligibility to participate, and eligibility for disability and early
retirement benefits (including subsidies relating to such benefits) and full
credit for deductibles satisfied under the benefit plans toward any deductibles
for the same period following the Effective Time, and shall waive any
pre-existing condition limitation for any Company employee covered under any
Company Benefit Plan immediately prior to the Effective Time.
Section 7.12 OPTION TO ACQUIRE ADDITIONAL SHARES.
(a) The Company hereby grants to Purchaser an irrevocable option (the
"OPTION") to purchase up to that number of newly issued shares of Company Common
Stock (the "OPTION SHARES") equal to the number of shares of Company Common
Stock that, when added to the number shares of Company Common Stock owned by
Parent, Purchaser and its Affiliates immediately following consummation of the
Offer, shall constitute one share more than 90% of the shares of Common Company
Stock then outstanding on a fully diluted basis (after giving effect to the
issuance of the Option Shares) for a consideration per Option Share equal to the
Offer Price.
(b) Such Option shall be exercisable only after the purchase of and payment
for shares of Company Common Stock pursuant to the Offer by Parent or Purchaser
as a result of which Parent and its Affiliates own beneficially at least 85% of
the outstanding shares of Company Common Stock on a fully diluted basis. Such
Option shall not be exercisable if (i) the
53
number of shares of Company Common Stock subject thereto exceeds the number of
authorized shares of Company Common Stock available for issuance, or (ii) the
exercise of the Option would violate the applicable rules of the Nasdaq National
Market applicable to the Company.
(c) In the event Purchaser wishes to exercise the Option, Purchaser shall
give the Company a one-day prior written notice of its exercise of the Option
specifying the number of shares of Company Common Stock that are or will be
owned by Parent, Purchaser and its Affiliates immediately following consummation
of the Offer and a place and a time (which may be concurrent with the
consummation of the Offer) for the closing of such purchase. The Company shall,
as soon as practicable following receipt of the notice, deliver written notice
to Purchaser specifying the number of Option Shares. At the closing of the
purchase of the Option Shares, the portion of the purchase price owing upon
exercise of such Option which equals the product of (x) the number of shares of
Company Common Stock purchased pursuant to such Option multiplied by (y) the
Offer Price shall be paid to the Company in cash by wire transfer or cashier's
check.
Section 7.13 ACTIONS REGARDING THE RIGHTS. The Company shall not modify or
waive, except as specifically provided herein, the terms of its Rights
Agreement, or take any action to redeem the Rights, except in connection with
its entering into an Acquisition Agreement pursuant to Section 7.6(c).
Section 7.14 PARENT APPROVAL OF INCREASE TO AUTHORIZED CAPITAL. Parent
shall promptly (but in no event later than August 25, 2000) obtain all requisite
corporate and stockholder approvals and waivers of preemptive rights to
authorize an increase in the authorized capital of Parent sufficient to enable
the Parent to make the Parent Equity Offering.
ARTICLE VIII
CONDITIONS TO THE MERGER
Section 8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of
the Company, Parent and Purchaser to consummate the Merger are subject to the
satisfaction of the following conditions:
(a) this Agreement shall have been approved and adopted by the requisite
vote of the stockholders of the Company, if required by applicable law, in order
to consummate the Merger;
54
(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree of any Governmental Authority of competent
jurisdiction shall prohibit the consummation of the Merger; and
(c) Purchaser shall have purchased shares of Company Common Stock pursuant
to the Offer; PROVIDED, HOWEVER, that neither Parent nor Purchaser shall be
entitled to rely on the condition in this clause (c) if either of them shall
have failed to purchase shares of Company Common Stock pursuant to the Offer in
breach of their obligations under this Agreement.
Section 8.2 CONDITIONS TO THE OBLIGATIONS OF PARENT AND PURCHASER. The
obligations of Parent and Purchaser to consummate the Merger are subject to the
satisfaction of the following further condition: that the Company shall have
performed in all material respects all of its obligations hereunder required to
be performed by it at or prior to the Effective Time.
Section 8.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company to consummate the Merger are subject to the satisfaction of the
following further condition: that Parent and Purchaser shall have performed in
all material respects all of their obligations hereunder required to be
performed by either of them at or prior to the Effective Time.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after the Company Shareholder
Approval:
(a) by mutual written consent of Parent and the Company; or
(b) by Parent:
(1) provided that neither Parent nor Purchaser is in material breach
of its obligations under this Agreement, if at any time prior to the
acceptance for payment of shares of Company Common Stock pursuant to the
Offer, the Company has breached in any material respect any
representation, warranty, covenant or other agreement contained in this
Agreement, which (i) would give rise to the failure of a condition set
forth in clause (d) of Annex I, (ii) cannot be or has not been cured
prior to the Termination Date and (iii) has not been waived by Parent
pursuant to the provisions hereof;
55
(2) if at any time prior to the acceptance for payment of shares of
Company Common Stock pursuant to the Offer, (A) the Company, or its Board
of Directors, as the case may be, shall have (w) entered into any
agreement with respect to any Takeover Proposal other than the Offer or
the Merger or a confidentiality/standstill agreement permitted under
Section 7.6, (x) amended, conditioned, qualified, withdrawn or modified,
or, in the case of a committee, proposed to the Board of Directors, or
resolved to do so, in a manner adverse to Parent or Purchaser, its
approval and recommendation of the Offer, the Merger and this Agreement,
or (y) approved or recommended, or, in the case of a committee, proposed
to the Board of Directors, to approve or recommend, any Takeover Proposal
other than the Offer or the Merger, or (B) the Company or the Company's
Board of Directors or any committee thereof shall have resolved to do any
of the foregoing; or
(3) if the Company breaches in any material respect its obligations
under Section 7.6 or Section 9.1(c) hereof;
(c) by the Company, if at any time prior to the acceptance for payment of
shares of Company Common Stock pursuant to the Offer a Superior Proposal is
received by the Company and the Board of Directors of the Company reasonably
determines in good faith (after consultation with outside legal counsel) that it
is necessary to terminate this Agreement and enter into an agreement to effect
the Superior Proposal in order to comply with its fiduciary duties under
applicable law; PROVIDED that the Company may not terminate this Agreement
pursuant to this Section 9.1(c) unless and until (i) three (3) Business Days
have elapsed following delivery to Parent of a written notice of such
determination by the Board of Directors of the Company and during such three
(3) Business Day period the Company has fully cooperated with Parent, including,
without limitation, informing Parent of the terms and conditions of such
Superior Proposal, and the identity of the Person making such Superior Proposal,
with the intent of enabling both parties to agree to a modification of the terms
and conditions of this Agreement so that the transactions contemplated hereby
may be effected; (ii) at the end of such three (3) Business Day period the
Takeover Proposal continues to constitute a Superior Proposal and the Board of
Directors of the Company confirms its determination (after consultation with
outside legal counsel) that it is necessary to terminate this Agreement and
enter into an agreement to effect the Superior Proposal to comply with its
fiduciary duties under applicable law; and (iii) (x) at or prior to such
termination, Parent has received all fees and Expenses set forth in Section 9.3
hereof by wire transfer in immediately available funds and (y) immediately
following such termination the Company enters into a definitive acquisition,
merger or similar agreement to effect the Superior Proposal;
(d) by either Parent or the Company:
56
(1) if the Offer has not been consummated on or before November 15,
2000 (the "TERMINATION DATE"); PROVIDED that the right to terminate this
Agreement pursuant to this clause shall not be available to any party
whose failure to fulfill any material obligation of this Agreement or
other material breach of this Agreement has been the cause of, or
resulted in, the failure of the Offer to have been consummated on or
prior to the aforesaid date; or
(2) if any court of competent jurisdiction or any Governmental
Authority shall have issued an order, decree or ruling or taken any other
action permanently restricting, enjoining, restraining or otherwise
prohibiting acceptance for payment of, and payment for, shares of Company
Common Stock pursuant to the Offer or consummation of the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(e) by the Company, provided the Company is not in material breach of its
obligations under this Agreement, if Parent or Purchaser shall have (x) failed
to commence the Offer by August 21, 2000 after the public announcement by Parent
and the Company of this Agreement, (y) failed to pay for shares of Company
Common Stock pursuant to the Offer in accordance with Section 2.1 hereof, or
(z) breached in any material respect any of their respective representations,
warranties, covenants or other agreements contained in this Agreement.
Section 9.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by Parent or the Company, as provided in Section 9.1, this Agreement
shall forthwith become void and there shall be no liability hereunder on the
part of the Company, Parent or Purchaser or their respective officers or
directors (except as set forth in Section 7.2, this Section 9.2 and Sections
9.3, 10.3, 10.4, 10.5, 10.9, 10.11, 10.13 and 10.14, which shall survive the
termination); PROVIDED, HOWEVER, that nothing contained in this Section 9.2 or
in Section 9.3 shall relieve any party hereto from any liability for any breach
of this Agreement.
Section 9.3 PAYMENT OF CERTAIN FEES. (a) If this Agreement is terminated
by Parent in accordance with Section 9.1(b)(1), 9.1(b)(2)(A)(w),
9.1(b)(2)(A)(y), 9.1(b)(2)(B) (unless related to a resolution to take any of the
actions set forth in Section 9.1(b)(2)(A)(x), in which case Section 9.3(c) shall
apply) or 9.1(b)(3) hereof or by the Company pursuant to Section 9.1(c), then
the Company shall (A) reimburse Parent for all of its Expenses and (B) pay to
Parent in immediately available funds a termination fee in an amount equal to
U.S.$7 million less Expenses paid or payable by the Company (the "TERMINATION
FEE").
(b) If this Agreement is terminated by Parent or the Company pursuant to
Section 9.1(d)(1) hereof due to a reason other than the conditions listed in
sections (a), (b), (f), (g), (h), (i)
57
or (j) of Annex I to this Agreement and (x) a Takeover Proposal has been made
and publicly announced or communicated to the Company's stockholders after the
date of this Agreement and prior to the Termination Date and (y) concurrently
with or within twelve (12) months of the date of such termination a Third Party
Acquisition Event occurs, then the Company shall within one Business Day of the
occurrence of such a Third Party Acquisition Event (including any revisions or
amendments thereto), if any, pay to Parent the Termination Fee and reimburse
Parent for all of its Expenses.
"THIRD PARTY ACQUISITION EVENT" shall mean (i) the consummation of a
Takeover Proposal involving the purchase of a majority of either the equity
securities of the Company or of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, or any such transaction that, if it had been
proposed prior to the termination of this Agreement would have constituted a
Takeover Proposal or (ii) the entering into by the Company or any of its
Subsidiaries of a definitive agreement with respect to any such transaction.
"EXPENSES" shall mean documented and reasonable out-of-pocket fees and
expenses up to a maximum aggregate amount of U.S.$3 million incurred or paid in
connection with the Merger or the consummation of any of the transactions
contemplated by this Agreement, including, but not limited to, all filing fees,
printing fees and reasonable fees and expenses of law firms, commercial banks,
investment banking firms, accountants, experts and consultants.
(c) If this Agreement is terminated by Parent pursuant to
Section 9.1(b)(2)(A)(x), then (i) the Company shall (A) pay to Parent 50% of the
Termination Fee and (B) reimburse Parent for all of its Expenses and (ii) if
concurrently with or within 12 months after such termination a Third Party
Acquisition Event occurs, then the Company shall pay to Parent 50% of the
Termination Fee within one Business Day of the occurrence of such a Third Party
Acquisition Event (including any revisions or amendments thereto).
(d) Any payment of the Termination Fee (and reimbursement of Expenses)
pursuant to this Section 9.3 shall be made within one Business Day after
termination of this Agreement (or as otherwise expressly set forth in this
Agreement) by wire transfer of immediately available funds. If either party
fails to pay to (or reimburse) the other party any fee or expense due hereunder
(including the Termination Fee), such party shall pay the costs and expenses
(including legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of any unpaid fee and/or expense at the publicly
announced prime rate for leading money center banks as published in THE WALL
STREET JOURNAL from the date such fee was required to be paid to the date it is
paid.
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(e) Parent and Purchaser agree that the payment of the Termination Fee shall
be the sole and exclusive remedy for termination of this Agreement by the Parent
and Purchaser pursuant hereto.
ARTICLE X
MISCELLANEOUS
Section 10.1 REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of the Company, on the one hand, and Parent and
Purchaser, on the other hand, contained herein or in any certificates or other
documents delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any party. Each and every such
representation and warranty shall expire with, and be terminated and
extinguished by, the Closing and thereafter none of the Company, Parent or
Purchaser shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 10.1 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
the Effective Time.
Section 10.2 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company (or, if required by Section 2.3, the Continuing
Directors), Parent or Purchaser, may (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party or (iii) waive compliance with any of the
agreements or conditions contained herein by the other parties hereto. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section 10.3 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
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(a) if to the Company, to it at:
EndoSonics Corporation
0000 Xxxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Esq.
(b) if to either Parent or Purchaser, to it at:
JOMED N.V.
Xxxxxxxxxxxxxx 00
X-000 00 Xxxxxxxxxxx, Xxxxxx
Telecopy: x00-00-000-0000
Attention: Chief Executive Officer
in each case, with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: 000-000-0000
Attention: Bertil Lundqvist, Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date
of delivery unless if mailed, in which case on the third Business Day after
the mailing thereof except for a notice of a change of address, which shall
be effective only upon receipt thereof.
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Section 10.4 ENTIRE AGREEMENT. This Agreement and the schedules and other
documents referred to herein or delivered pursuant hereto, collectively contain
the entire understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior agreements and understandings,
oral and written, with respect thereto.
Section 10.5 BINDING EFFECT; BENEFIT; ASSIGNMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and, with respect
to the provisions of Section 7.8 hereof, shall inure to the benefit of the
Persons or entities benefitting from the provisions thereof who are intended to
be third-party beneficiaries thereof and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties, except that Purchaser may assign
and transfer its right and obligations hereunder to any of its Affiliates.
Except as provided in the immediately preceding sentence, nothing in this
Agreement, expressed or implied, is intended to confer on any Person other than
the parties hereto or their respective successors and permitted assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
Section 10.6 AMENDMENT AND MODIFICATION. Subject to applicable law, this
Agreement may be amended, modified and supplemented in writing by the parties
hereto in any and all respects before the Effective Time (notwithstanding the
Company Shareholder Approval), by action taken by the respective Boards of
Directors of Parent, Purchaser and the Company (or, if required by Section 2.3,
the Continuing Directors) or by the respective officers authorized by such
Boards of Directors or the Continuing Directors, as the case may be; PROVIDED,
HOWEVER, that after the Company Shareholder Approval, no amendment shall be made
which by law requires further approval by the stockholders of the Company
without such further approval.
Section 10.7 FURTHER ACTIONS. Each of the parties hereto agrees that,
except as otherwise provided in this Agreement and subject to its legal
obligations and fiduciary duties, it will use its reasonable best efforts to
fulfill all conditions precedent specified herein, to the extent that such
conditions are within its control, and to do all things reasonably necessary to
consummate the transactions contemplated hereby.
Section 10.8 HEADINGS. The descriptive headings of the several Articles
and Sections of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.
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Section 10.9 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. Each of the parties hereto (a) irrevocably and unconditionally consents
to submit to the jurisdiction of any federal court located in the State of
Delaware or any Delaware State court for the purpose of any action arising out
of or based upon this Agreement or any of the transactions contemplated by this
Agreement brought by any party hereto and for the recognition and enforcement of
any judgment rendered in respect thereof, and (b) waives, and agrees not to
assert by way of motion, as a defense, or otherwise, in any such action, any
claim that it is not subject to the personal jurisdiction of the above-named
courts, that its assets or property is exempt or immune from attachment or
execution, that the action is brought in an inconvenient forum, that the venue
of the action is improper, or that this Agreement or the transactions
contemplated by this Agreement may not be enforced in or by any of the
above-named courts. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in The
Netherlands, Switzerland, Sweden, or any other jurisdiction by suit on the
judgment or in any other manner provided by law.
Section 10.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
Section 10.11 APPLICABLE LAW. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to the conflict of laws rules
thereof.
Section 10.12 SEVERABILITY. If any term, provision, covenant or
restriction contained in this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms, provisions, covenants and
restrictions contained in this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 10.13 WAIVER OF JURY TRIAL. Each of the parties to this Agreement
hereby irrevocably waives all right to a trial by jury in any action, proceeding
or counterclaim arising out of or relating to this Agreement or the transactions
contemplated hereby.
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Section 10.14 PARENT GUARANTEE. Parent hereby guarantees the due
performance of any and all obligations and liabilities of Purchaser under or
arising out of this Agreement and the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of Parent, Purchaser and the Company has caused
this Agreement to be executed by its officers thereunto duly authorized, all as
of the date first above written.
JOMED N.V.
By: /s/ TOR XXXXXX
-----------------------------------------
Name: Tor Xxxxxx
Title: CHIEF EXECUTIVE OFFICER
JOMED ACQUISITION CORP.
By: /s/ TOR XXXXXX
-----------------------------------------
Name: Tor Xxxxxx
Title:
ENDOSONICS CORPORATION
By: /s/ XXXXXXXX XXXXXXXX
-----------------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
ANNEX I
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, but subject to compliance
with Section 2.1(a) of the Agreement and Plan of Merger dated as of August 5,
2000 among Parent, Purchaser and the Company (the "MERGER AGREEMENT") (each
defined term used herein shall have the meaning assigned to such term in the
Merger Agreement), Purchaser shall not be required to accept for payment or pay
for any shares of Company Common Stock tendered pursuant to the Offer, and may
terminate or amend the Offer in accordance with the Merger Agreement, if prior
to the expiration date of the Offer, (i) the Minimum Condition shall not have
been satisfied, or (ii) the applicable waiting period under the HSR Act or any
of the European Antitrust Laws shall not have expired or been terminated or
(iii) at any time on or after the date of the Merger Agreement and prior to the
expiration date of the Offer, any of the following conditions exists:
(a) there shall have been any action threatened or taken, or any statute,
rule, regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any domestic
or foreign Federal or state governmental regulatory or administrative agency or
authority or court or legislative body or commission which directly or
indirectly (l) prohibits, or imposes any material limitations, other than
limitations generally affecting the industries in which the Company and Parent
conduct their business, on, Parent's or Purchaser's ownership or operation (or
that of any of their respective Subsidiaries or Affiliates) of all or a material
portion of the Company's businesses or assets as a whole, or compels Parent or
Purchaser or their respective Subsidiaries and Affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
in each case taken as a whole, (2) prohibits, or makes illegal, the acceptance
for payment, payment for or purchase of shares of Company Common Stock or the
consummation of the Offer, the Merger or the other transactions contemplated by
the Merger Agreement, (3) results in the material delay in the ability of
Purchaser, or renders Purchaser unable, to accept for payment, pay for or
purchase a material amount of the shares of Company Common Stock, or
(4) imposes material limitations on the ability of Purchaser or Parent
effectively to exercise full rights of ownership of the shares of the Company
Common Stock including, without limitation, the right to vote the shares of the
Company Common Stock purchased by it on all matters properly presented to the
Company's stockholders; or
(b) there shall have occurred (1) any general suspension of trading in, or
limitation on prices for, securities in the Nasdaq National Market System
(excluding any coordinated trading halt triggered solely as a result of a
specified decrease in a market index) or a general suspension or material
limitation on trading on or by, as the case may be, the SWX Swiss Exchange
(whether on the SWX New Market segment or otherwise) for a minimum of three
consecutive trading days, (2) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, The
Netherlands, Switzerland or Sweden (whether or not mandatory), (3) a
commencement or escalation of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States, The
Netherlands, Switzerland or Sweden which materially adversely affects or delays
the Offer, (4) any limitation (whether or not mandatory) by any Governmental
Authority on the extension of credit by banks or other financial institutions in
a manner which prohibits the extension of funds to Parent or Purchaser or
(5) in the case of any of the foregoing existing at the time of the commencement
of the Offer, a material acceleration or worsening thereof; or
(c) any change shall have occurred or been threatened (or any development
shall have occurred or been threatened involving a prospective change) in the
business, assets, liabilities, financial condition, capitalization, operations
or results of operations of the Company or any of its Subsidiaries that is or is
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect; or
(d) (1) the Company shall have breached or failed to perform in all material
respects any of its obligations under the Merger Agreement, (2) any of the
representations and warranties of the Company contained in the Merger Agreement
that are qualified by reference to a Company Material Adverse Effect shall not
be true when made or at any time prior to the consummation of the Offer as if
made at and as of such time (except for representations and warranties which
speak as of a particular date, shall not be true as of such particular date), or
(3) any of the representations and warranties of the Company contained in the
Merger Agreement that are not so qualified shall not be true when made or at any
time prior to the consummation of the Offer as if made at and as of such time
(except for representations and warranties which speak as of a particular date,
shall not be true as of such particular date), except, in the case of
clause (3) only, for such inaccuracies as are not reasonably likely to,
individually or in the aggregate, result in a Company Material Adverse Effect;
or
(e) the Company's Board of Directors shall have withdrawn, or modified or
changed in a manner adverse to Parent or the Purchaser (including by amendment
of the Schedule 14D-9) its recommendation of the Offer, the Merger Agreement, or
the Merger, or recommended another proposal or offer, or shall have resolved to
do any of the foregoing; or
(f) if on either of (i) the date of the execution of the Purchase Agreement
or (ii) on the first trading day immediately prior to the closing date of the
Purchase Agreement, as such date is defined in the Purchase Agreement, the
closing price of the Parent Ordinary Shares on the SWX Swiss Exchange shall be
less than (i) 42 Swiss Francs or (ii) one-half of the closing
price of the Parent Ordinary Shares on the SWX Swiss Exchange on the first
trading day following the announcement of the Offer and the Merger.
(g) All of the conditions for the closing of the Offer shall not have been
satisfied in the reasonable judgment of the Global Coordinator for the Parent
Equity Offering.
(h) The Global Coordinator for the Parent Equity Offering shall not have
received on or by the closing for the Parent Equity Offering the opinions of
counsel and letters from accountants specified in the Purchase Agreement.
(i) The SWX Swiss Exchange shall not have approved the Parent Ordinary
Shares to be issued in the Parent Equity Offering for listing on the SWX New
Market of the SWX Swiss Exchange or, prior to the date of the Purchase
Agreement, an order suspending the public offering of the shares shall have been
issued or proceedings for any such purpose shall have been instituted or
contemplated by the SWX Swiss Exchange or any other governmental or
self-regulatory agency or body.
(j) The Purchase Agreement for the Parent Equity Offering shall have been
terminated by the Global Coordinator as a result of (i) the occurrence of
condition (f) as set forth above, (ii) trading generally shall have been
suspended or materially limited on or by, as the case may be, the SWX Swiss
Exchange (whether on the SWX New Market segment or otherwise), (iii) a general
moratorium on commercial banking activities shall have been declared by
authorities in either Switzerland or the Netherlands, (iv) there shall have
occurred a general crisis in international exchange markets or (v) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis, whether or not foreseeable, that,
in the judgment of the Global Coordinator, is material and adverse and, in the
case of any of the foregoing events, such event, singly or together with any
other such event, makes it, in the judgment of the Global Coordinator after
consultation with the Parent, impracticable to market the Parent Ordinary Shares
as contemplated through the Parent Equity Offering.
(k) the Merger Agreement shall have been terminated in accordance with its
terms;
which in the reasonable judgment of Parent or Purchaser but subject to the
provisions of the Merger Agreement, in any such case, and regardless of the
circumstances (including any action or inaction by Parent or Purchaser) giving
rise to such conditions makes it inadvisable to proceed with the Offer and/or
with such acceptance for payment of or payments for shares of Company Common
Stock.
Subject to the provisions of the Merger Agreement, the foregoing conditions
are for the sole benefit of Parent and Purchaser and may be asserted by
Purchaser or, subject to the terms of the Merger Agreement may be waived by
Parent or Purchaser, in whole or in part at any time and from time to time in
the sole discretion of Parent or Purchaser. The failure by Parent or Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
