UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 11, 1999
MEDICAL STERILIZATION, INC.
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(Exact name of registrant as specified in its charter)
New York 2-85008-NY 11-2621408
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(State or other jurisdiction (Commission (IRS Employer or
incorporation) File Number) Identification No.)
225 Underhill Boulevard, Syosset, New York 11791
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (516) 496-8822
Item 2. Acquisition or Disposition of Assets
On January 11, 1999, the Registrant acquired (the "Acquisition") from TFX
Equities Incorporated ("TFX") 100 shares of Common Stock, par value $1.00 per
share, of Endoscopy Specialists Incorporated ("ESI") (being all the issued and
outstanding ESI Common Stock); as well as 625 shares of SSI Surgical Services,
Inc. ("SSI") (being all the issued and outstanding shares of Common Stock of SSI
not already held by the Registrant), and 100 shares of Series A Non-Voting
Preferred Stock) par value $1.00 per share (being all the issued and outstanding
shares of Preferred Stock of SSI).
In consideration for the shares of ESI and SSI acquired by the Registrant,
the Registrant issued to TFX 13,400,000 shares of Common Stock, par value $.01
per share, of the Registrant ("MSI Common Stock") and warrants to purchase (i)
1,250,000 shares of MSI Common Stock at $1.38 per share and (ii) 250,000 shares
of MSI Common Stock at $2.00 per share.
The Registrant retained Needham & Company, Inc. ("Needham") to provide
financial advisory services with respect to the Acquisition. On November 18,
1998, Needham delivered its written opinion (the "Fairness Opinion") that as of
such date and based upon and subject to cer-
<PAGE>
tain assumptions and other matters described in its opinion, the consideration
to be received by the Registrant in the Acquisition is fair to the shareholders
of the Registrant (other than TFX) from a financial point of view.
As previously set forth, the shares of stock were acquired from TFX. TFX
had previously acquired 687,500 shares of Series B Convertible Preferred Stock,
1,945,625 shares of Series C Convertible Preferred Stock and 150,000 shares of
Common Stock of the Registrant, or approximately 48% of the Registrant's voting
stock. Furthermore, three of the directors of the Registrant were employed by
TFX or affiliates.
In an additional relationship between TFX and the Registrant, the
Registrant and TFX entered into a joint venture in May, 1997 to form SSI to
expand the Registrant's services throughout the United States. TFX received
62 1/2% of the stock of SSI in consideration for cash, committed management and
funding working capital requirements. The Registrant received 37 1/2% of the
stock of SSI in consideration for certain technologies, processes and defined
territorial rights.
Endoscopy Specialists Incorporated
ESI, headquartered in Orlando, Florida, was incorporated in 1993 to
provide endoscopic instrument sets to hospitals and other medical facilities on
a per procedure basis. In August 1995, ESI was acquired by TFX.
ESI provides customers specified endoscopic instruments and specialty
products required to perform designated endoscopic surgical procedures. In
addition, ESI assigns highly trained service technicians to each customer
hospital. The ESI service technician is responsible for assisting with the
operating room set up prior to the start of the designated endoscopic case, and
remains on site to serve as a technical expert available to respond to questions
from the surgical staff regarding the proper use of the products and video
systems supplied by ESI. At the completion of the case, the ESI technician
decontaminates and reprocesses the ESI instruments and performs quality
assurance checks on the instruments to validate their readiness for the next
procedure. ESI manages all repairs, refurbishing, reprocessing and replacement
costs associated with the provided products.
ESI offers services for general surgery, gynecology, urology, ENT,
orthopedics, plastic surgery, thoracic surgery and cardiovascular surgery. The
related ESI instrument sets can be basic, containing only instrumentation, or
increasingly complex, to include scopes, video equipment and other accessories.
By using high quality reusable instruments that are properly managed by trained
ESI technicians, ESI delivers higher quality products billed on a per procedure
basis, thus providing a basis for potentially reducing hospital costs.
2
<PAGE>
ESI currently provides services to approximately 100 hospitals and surgery
centers throughout the United States. Maintaining its growth on a controlled
basis, ESI expects to continue to build its business through the strength of its
reputation.
SSI Surgical Services, Inc.
SSI, headquartered in Orlando, Florida, was formed in 1997 as a joint
venture between TFX and the Registrant. SSI was established to provide general
and specialty instrument sets, basins and surgical gowns and towels to hospitals
and other facilities. In August 1998, SSI acquired Sterilization Management
Group ("SMG") which owned and managed five surgical instrument and linen
reprocessing facilities located in major metropolitan areas in the United
States.
SSI offers a broad menu of services both on-site (at customer locations)
and off-site (at the five SSI facilities). These services include, facility
assessment, on-site department management and staffing, asset inventory
management systems, surgical instrument management, equipment and sterile
processing department redesign, sterile processing department
education/certification and off-site sterile reprocessing of surgical
instruments, gowns and towels. SSI currently provides on-site services to six
hospitals and surgery centers and off-site sterilization services to more than
100 customers. SSI's focus on education and management services, strategic
alliances with suppliers of sterilization equipment and asset management
systems, on staff instrument repair and refurbishment resources and its highly
trained team of professionals is expected to allow for continued growth and a
competitive point of difference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements.
(1) The Financial Statements of Businesses Acquired will be filed by
amendment no later than sixty (60) days after the date of filing this report.
(2) Pro Forma Financial Information as of September 30, 1998 is
annexed.
(b) Exhibits.
(1) The Acquisition Agreement dated November 19, 1998 between TFX
Equities Incorporated and MSI is annexed.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The
Registrant has duly caused this report to be filed on its behalf by the
undersigned hereunder duly authorized.
Date: January 26, 1999
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MEDICAL STERILIZATION, INC.
By: /s/ Scott Bartos
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Name: Scott Bartos
Title: President and Chief Executive Officer
4
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL DATA
MEDICAL STERILIZATION, INC.
Pro Forma Consolidated Condensed Balance Sheet
September 30, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Combined Pro Forma Pro Forma
ESI/SSI(1) The Company(2) Adjustments(3) Combined
---------- -------------- -------------- ---------
<S> <C> <C> <C> <C>
ASSETS
Cash ......................... $ 122 $ 100 $ -- $ 222
Account Receivable, Net ...... 3,116 1,734 -- 4,850
Inventory .................... -- 57 -- 57
Prepaid Assets ............... 186 151 -- 337
-------- -------- -------- --------
Total Current Assets ....... 3,424 2,042 -- 5,466
Plant Assets, Net ............ 10,631 6,001 -- 16,632
Goodwill ..................... 737 -- 5,323 A 6,060
Other Assets ................. -- 131 -- 131
-------- -------- -------- --------
Total Assets ............... $ 14,792 $ 8,174 $ 5,323 $ 28,289
======== ======== ======== ========
LIABILITIES AND EQUITY
Notes Payable ................ $ -- $ 555 $ -- $ 555
Accounts Payable & Accrued
Expenses ..................... 1,519 1,155 -- 2,674
Income Taxes Payable ......... 37 -- 16 C 53
-------- -------- -------- --------
Total Current Liabilities .. 1,556 1,710 16 3,282
Long Term Notes payable ...... -- 2,705 -- 2,705
Related Party Payable ........ 4,148 640 500 B 5,288
-------- -------- -------- --------
Total Liabilities .......... 5,704 5,055 516 11,275
Mand. Redeemable Preferred
Stock ........................ -- 1,860 (1,860) D --
Preferred Stock .............. 5,000 1,945 (6,945) D, F --
Common Stock ................. 1 32 162 D, E 195
Additional Paid in Capital ... 3,203 7,651 13,839 E, F 24,693
Retained Earnings (Deficit) .. 884 (8,369) (389) F (7,874)
-------- -------- -------- --------
Total Equity ............... 9,088 1,259 6,667 17,014
-------- -------- -------- --------
Total Liab., Mand. Redeemable
Pref. Stock & Equity ......... $ 14,792 $ 8,174 $ 5,323 $ 28,289
======== ======== ======== ========
</TABLE>
(1) Represents the historical balance sheet for the combined ESI and SSI,
including the pro forma effect of accounting for the acquisition of SMG by
SSI as of January 1, 1997.
(2) Represents the historical balance sheet for the Company.
(3) See Notes to Unaudited Pro Forma Consolidated Condensed Financial
Statements for explanation of pro forma adjustments.
<PAGE>
MEDICAL STERILIZATION, INC.
Pro Forma Consolidated Condensed Statement of Operations
Nine Months Ended September 30, 1998
(Unaudited)
(in thousands, except share-related data)
<TABLE>
<CAPTION>
Combined The Pro Forma Pro Forma
ESI/SSI(1) Company(2) Adjustment(3) Combined
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net Sales ....................... $ 15,785 $ 5,795 $ -- $ 21,580
Cost of Sales ................... 10,358 4,221 -- 14,579
------------ ------------ ---------- ------------
Gross Margin .................... 5,427 1,574 -- 7,001
Operating Expenses .............. 4,694 1,660 266 A 6,620
------------ ------------ ---------- ------------
Operating Profit (Loss) ......... 733 (86) (266) 381
Interest Expense ................ 185 323 -- 508
------------ ------------ ---------- ------------
Earnings (Loss) Before Taxes .... 548 (409) (266) (127)
Income Taxes .................... 214 -- (161) B 53
------------ ------------ ---------- ------------
Net Earnings (Loss) ............. 334 (409) (105) (180)
Preferred Stock Dividends ....... -- 82 (82) C --
------------ ------------ ---------- ------------
Net Earnings (Loss) Applicable to
Common Shareholders ........... $ 334 $ (491) $ (23) $ (180)
============ ============ ========== ============
(Loss) Per Share of Common
Stock-Basic ................... $ (0.15) $ (.01)
============ ============
(Loss) Per Share of Common
Stock-Diluted ................. $ (0.15) $ (.01)
============ ============
Weighted Avg. Common Shares
Outstanding - Basic ............ 3,170,496 19,445,945
------------ ------------
Weighted Avg. Common Shares
Outstanding - Diluted ......... 3,170,496 19,445,945
------------ ------------
</TABLE>
(1) Represents the historical statement of operations for the combined ESI and
SSI, including the pro forma effect of accounting for the acquisition of
SMG by SSI as of January 1, 1997.
(2) Represents the historical statement of operations for the Company.
(3) See Notes to Unaudited Pro Forma Consolidated Condensed Financial
Statements for explanation of pro forma adjustments.
II-2
<PAGE>
MEDICAL STERILIZATION, INC.
Pro Forma Consolidated Condensed Statement of Operations
Year Ended December 31, 1997
(Unaudited)
(in thousands, except share-related data)
<TABLE>
<CAPTION>
Combined The Pro Forma Pro Forma
ESI/SSI(1) Company(2) Adjustments(3) Combined
----------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Net Sales ....................... $ 16,606 $ 10,040 $ -- $ 26,646
Cost of Sales ................... 10,608 6,529 -- 17,137
----------- ----------- --------- -----------
Gross Margin .................... 5,998 3,511 -- 9,509
Operating Expenses .............. 5,676 2,402 355 A 8,433
----------- ----------- --------- -----------
Operating Profit (Loss) ......... 322 1,109 (355) 1,076
Interest Expanse ................ 98 486 -- 584
----------- ----------- --------- -----------
Earnings (Loss) Before Taxes .... 224 623 (355) 492
Income Taxes .................... 80 10 232 B 322
----------- ----------- --------- -----------
Net Earnings (Loss) ............. 144 613 (587) 170
Preferred Stock Dividends ....... -- 109 (109) C --
----------- ----------- --------- -----------
Net Earnings (Loss) Applicable to
Common Shareholders ............ $ 144 $ 504 $ (478) $ 170
=========== =========== ========= ===========
Earnings Per Share of Common
Stock - Basic ................. $ 0.16 $ .01
=========== ===========
Earnings Per Share of Common
Stock - Diluted ................ $ 0.09 $ .01
=========== ===========
Weighted Avg. Common Shares
Outstanding - Basic ............ 3,157,996 19,392,373
----------- -----------
Weighted Avg. Common Shares
Outstanding - Diluted .......... 5,571,683 19,860,435
----------- -----------
</TABLE>
(1) Represents the historical statement of operations for the combined ESI and
SSI, including the pro forma effect of accounting for the acquisition of
SMG by SSI as of January 1, 1997.
(2) Represents the historical statement of operations for the Company.
(3) See Notes to Unaudited Pro Forma Consolidated Condensed Financial
Statements for explanation of pro forma adjustments.
II-3
<PAGE>
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(Unaudited)
Description of Transaction
Pursuant to an Acquisition Agreement, dated November 19, 1998, between the
Company and TFX, the Company will exchange 13,400,000 shares of Common Stock and
warrants to purchase an aggregate of 1,500,000 shares of Common Stock for 100
shares of Common Stock, par value $1.00 per share, of ESI and 625 shares of
Common Stock, par value $1.00 per share, and 100 shares of Series A Non-Voting
Preferred Stock, par value $1.00 per share, of SSI.
Method of Accounting
The unaudited pro forma consolidated condensed financial statements of
operations for the year ended December 31, 1997 mid the nine months ended
September 30, 1998 arc based on the historical financial information of the
Company and combined ESI/SSI, adjusted to give effect, using the purchase method
of accounting, to the Acquisition and the pro forma effect of the acquisition of
SMG by SSI as of January 1, 1997. All material intercompany transactions have
been eliminated in the historical financial statements.
The unaudited pro forma balance sheet has been prepared assuming that the
Acquisition occurred on September 30, 1998.
The unaudited pro forma financial information does not purport to
represent what the Company's results of operations or financial position would
have been had the Acquisition or SSI's acquisition of SMG occurred as of January
1, 1997 or to project the Company's or combined ESI/SSI's results of operations
or financial position for a future period or date, nor does it give effect to
any matters other than those described in the notes thereto.
Notes to Unaudited Pro Forma Consolidated Condensed Statements of Operations
A. Additional amortization resulting from amortization of the excess purchase
price over the fair value of net assets acquired (goodwill), using a
period of 15 years.
B. Estimated taxes calculated at the estimated effective tax rate of 38%,
excluding non-deductible goodwill amortization arising from the
Acquisition.
C. Elimination of preferred stock dividends following the conversion of the
Company preferred stock to common stock as a result of the Acquisition.
Notes to Unaudited Pro Forma Consolidated Condensed Balance Sheet (in thousands,
except per share data)
A. Record the excess of purchase price over the estimated fair value of net
assets acquired (goodwill) which results upon the Acquisition.
New common stock issued 13,400 shares
The Company's stock price $1.00 per share
-------
Purchase price $13,400
Estimated fair value of net assets
acquired, net of transaction fees 8,077
-------
Goodwill $5,323
=======
B. Recording additional costs related to the consummation of the Acquisition
including investment banking, legal and accounting fees.
C. Estimated taxes calculated at the estimated effective tax rate of 38%,
excluding non-deductible goodwill amortization arising from the
Acquisition.
D. Conversion of the Company preferred stock to common stock as a result of
the Acquisition.
II-4
<PAGE>
E. Issuance of 13,400 shares of common stock by the Company in conjunction
with the Acquisition, at a price of $1.00 per share.
F. Elimination of the ESI/SSI equity accounts in connection with the
Acquisition and recording of additional paid in capital.
II-5
ACQUISITION AGREEMENT
between
TFX EQUITIES INCORPORATED
and
MEDICAL STERILIZATION, INC.
Dated November 19, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS .........................................................2
ARTICLE II CONTRIBUTION .......................................................4
2.1. Exchange of Stock .................................................4
2.2. The Closing .......................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF MSI .............................5
3.1. Organization ......................................................5
3.2. Corporate Power and Authority; Effect of Agreement ................5
3.3. Consents ..........................................................5
3.4. Purchase for Investment ...........................................5
3.5. Capitalization ....................................................5
3.6. SEC Reports .......................................................5
3.7. Proxy Statement ...................................................6
3.8. Litigation ........................................................6
3.9. Compliance with Laws ..............................................6
3.10. Taxes .............................................................6
3.11. MSI Warrants ......................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TFX ..............................6
4.1. Organization ......................................................7
4.2. Power and Authority; Effect of Agreement ..........................7
4.3. Consents ..........................................................7
4.4. Purchase for Investment ...........................................7
4.5. Capitalization ....................................................7
4.6. Financial Statements ..............................................7
4.7. Litigation ........................................................7
4.8. Compliance with Laws ..............................................8
4.9. Taxes .............................................................8
ARTICLE V COVENANTS OF MSI ....................................................8
5.1. Fulfillment of Agreements .........................................8
5.2. Access, Information and Documents .................................8
5.3. Material Transactions .............................................8
ARTICLE VI COVENANTS OF TFX ...................................................8
6.1. Fulfillment of Agreements .........................................8
6.2. Access, Information and Documents .................................9
6.3. Conversion of MSI Preferred Stock .................................9
6.4. Material Transactions .............................................9
ARTICLE VII CONDITIONS TO TFX's OBLIGATIONS ...................................9
7.1. Bringdown of Representations and Warranties .......................9
7.2. Performance and Compliance ........................................9
7.3. Satisfactory Instruments ..........................................9
<PAGE>
7.4. Required Consents .................................................9
7.5. Absence of Changes ................................................9
7.6. Fairness Opinion .................................................10
7.7. Authorized Shares of MSI Common Stock ............................10
ARTICLE VIII CONDITIONS TO MSI'S OBLIGATIONS .................................10
8.1. Bringdown of Representations and Warranties ......................10
8.2. Performance and Compliance .......................................10
8.3. Satisfactory Instruments .........................................10
8.4. Required Consents ................................................10
8.5. Absence of Changes ...............................................10
8.6. Fairness Opinion .................................................10
ARTICLE IX CERTAIN ADDITIONAL COVENANTS ......................................11
9.1. Termination ......................................................11
9.2. Costs, Expenses and Taxes ........................................11
ARTICLE X INDEMNIFICATION ....................................................11
10.1. Indemnification By MSI ...........................................11
10.2. Indemnification by TFX ...........................................11
10.3. General Indemnification Procedures ...............................11
ARTICLE XI MISCELLANEOUS .....................................................13
11.1. Nature and Survival of Representations ...........................13
11.2. Notices ..........................................................13
11.3. Entire Agreement .................................................14
11.4. Assignment; Binding Effect; Severability .........................14
11.5. Governing Law ....................................................14
11.6. Execution in Counterparts ........................................14
11.7. No Third Party Beneficiaries .....................................14
11.8. Headings .........................................................14
11.9. Further Assurances ...............................................14
11.10. Amendment and Waiver ............................................14
iii
<PAGE>
DISCLOSURE SCHEDULES
3.5 MSI Options and Warrants
3.8 Litigation
3.9 Compliance with Laws
4.6 Financial Statements
4.7 Litigation
4.8 Compliance with Laws
7.4 Required Consents
EXHIBITS
A Form of MSI $1.38 Warrant
B. Form of MSI $2.00 Warrant
C. Form of Certificate of Amendment
<PAGE>
ACQUISITION AGREEMENT
This Acquisition Agreement (the "Agreement") is made this 19th day of
November, 1998, between TFX EQUITIES INCORPORATED, a Delaware corporation
("TFX"), and MEDICAL STERILIZATION, INC., a New York corporation ("MSI").
Background
A. MSI is engaged in the business of providing off-site reprocessing and
sterilization of standard containerized reprocesable sterilized surgical
instrument sets as well as certain other items requiring sterilization for
healthcare providers such as hospitals, hospital networks and ambulatory
surgi-centers.
B. Pursuant to Section 713(a)(l) of the New York Business Corporation Law,
following full and good faith disclosure of material facts of the interests of
the Interested Directors (as hereinafter defined) in this Agreement and the
transactions contemplated herein, the Board of Directors of MSI, including all
directors of MSI who are not Interested Directors (the "Independent Directors"),
has unanimously determined that the issuance by MSI of 13,400,000 shares of MSI
Common Stock (as hereinafter defined) and the MSI Warrants (as hereinafter
defined) to TFX in exchange for TFX's contribution to MSI of (i) all of the
outstanding capital stock of Endoscopy Specialists Incorporated, a Delaware
corporation ("ESI"), (ii) 625 shares of common stock of SSI Surgical Services,
Inc., a Delaware corporation ("SSI") and (iii) l00 shares of SSI Series A
Preferred Stock (as hereinafter defined), all on the terms and conditions set
forth herein, is fair and in the best interests of the shareholders of MSI other
than TFX (the "Public Shareholders") and has unanimously approved this Agreement
and the transactions contemplated herein, which approval was based in part on
the opinion of Needham & Company, Inc. (the "Independent Advisors"), independent
financial advisors to the Board of Directors of MSI, that, as of the date of
such opinion and based on the assumptions, qualifications and limitations
contained therein, the consideration to be received by MSI for the issuance of
the Issued MSI Stock (as hereinafter defined) and the MSI Warrants is fair to
the Public Shareholders from a financial point of view.
C. At October 31, 1998, TFX owned 150,000 shares of MSI Common Stock,
687,500 shares of MSI Series B Convertible Preferred Stock and 1,945,625 shares
of MSI Series C Convertible Preferred Stock. Shares of MSI Series B Convertible
Preferred Stock and dividends accrued thereon are convertible into shares of MSI
Common Stock (as hereinafter defined). Shares of MSI Series C Convertible
Preferred Stock are convertible into shares of MSI Common Stock, The Board of
Directors of TFX deems it advisable and in the beat interest of TFX and the
stockholder of TFX for TFX, (i) immediately prior to the Closing (as hereinafter
defined), to convert all of the shares of (a) MSI Series B Convertible Preferred
Stock, and all dividends accrued thereon, and (b) MSI Series C Convertible
Preferred Stock into shares of MSI Common Stock (the "Conversion") and, (ii) as
part of the Closing, to exchange all of its shares of Common Stock of ESI, SSI
Common Stock and SSI Series A Preferred Stock for shares of MSI Common Stock and
the warrant to purchase 1,250,000 shares of MSI Common Stock in the form
attached as Exhibit A hereto (the "MSI $1.38 Warrant") and the warrant to
purchase 250,000 shares of MSI Common Stock in the form attached as Exhibit B
hereto (the "MSI $2.00 Warrant" and together with the MSI $1.38 Warrant, the
"MSI Warrants").
D. In order to consummate both the Conversion and the Exchange (as
hereinafter defined), MSI will have to increase the number of authorized but
unissued shares of MSI Common Stock. Accordingly, the Board of Directors of MSI,
including all of the Independent Directors, has unanimously authorized an
amendment to the certificate of incorporation, as amended, of MSI in the form
attached as Exhibit C hereto (the "Amendment") to increase the number of shares
of MSI Common Stock authorized and has unanimously recommended that the
shareholders of MSI authorize the Amendment.
<PAGE>
Terms
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties hereto agree as follows;
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
"Affiliate" of a Person means any Person controlling, controlled by,
or under common control with, such Person. For purposes of this definition,
"control" means the power to direct the management and policies of a Person,
whether through the ownership of voting securities, by agreement or otherwise.
"Agreement" shall have the meaning set forth in the Introduction.
"Amendment" shall have the meaning set forth in the Introduction.
"Authority" shall have the meaning set forth in Section 3.8.
"Best Efforts" is defined to require that the obligated party make a
diligent, reasonable and good faith effort to accomplish the applicable
objective. Such obligation, however, does not require any significant
expenditure of funds or the incurrence of any significant liability on the part
of the obligated party, nor the incurrence of any expense or liability which is
unreasonable in light of the related objective, nor does it require that the
obligated party act in a manner which would otherwise be contrary to prudent
business judgment or normal commercial practices in order to accomplish the
objective. The fact that the objective is not actually accomplished is no
indication that the obligated party did not in fact utilize its Best Efforts in
attempting to accomplish the objective.
"Business" means MSI's provision of off-site reprocessing and
sterilization of standard containerized reprocessable sterilized surgical
instrument sets as well as certain other items requiring sterilization for
healthcare providers such as hospitals, hospital networks and ambulatory
surgi-centers.
"Business Day" means a day which is not a Saturday, a Sunday or a
statutory or civic holiday in the State of New York or any other day on which
the principal offices of either TFX or MSI are closed or become closed prior to
2:00 p.m. local time whether in accordance with established company policy or as
a result of unanticipated events including adverse weather conditions.
"Claim Notice" shall have the meaning set forth in Section 10.3.
"Claim Response" shall have the meaning act forth in Section 10.3.
"Closing" shall have the meaning set forth in Section 2.2.
"Closing Date" shall have the meaning set forth in Section 2.2.
"Conversion" shall have the meaning set forth in the Introduction.
"Damages" means any and all losses, liabilities, damages, penalties,
obligations, awards, fines, deficiencies, interest, claims (including third
party claims, whether or not meritorious), costs and expenses whatsoever
2
<PAGE>
(including reasonable attorneys', accountants' and environmental consultants'
fees and disbursements) resulting from, arising out of or incident to (i) any
matter for which indemnification is provided under this Agreement, or (ii) the
enforcement by an indemnified party of its rights to indemnification under this
Agreement; provided, however, that Damages shall not include consequential or
incidental damages (other than consequential or incidental damages that are
awarded to third parties under matters covered by the foregoing clauses (i) or
(ii)).
"Defense Notice" shall have the meaning set forth in Section 10.3.
"ESI" shall have the meaning set forth in the Introduction.
"ESI Common Stock" means the Common Stock, par value $1.00 per
share, of ESI.
"Exchange" shall have the meaning set forth in Section 2.1.
"Exchange Act" shall have the meaning set forth in Section 3.6.
"Indemnitee" shall have the meaning set forth in Section 10.3.
"Indemnitor" shall have the meaning set forth in Section 10.3.
"Independent Advisors" shall have the meaning set forth in the
Introduction.
"Independent Directors" shall have the meaning set forth in the
Introduction.
"Interested Directors" means those directors of MSI who are
directors or officers of TFX or an Affiliate of TFX or who have a financial
interest in this Agreement and the transactions contemplated herein.
"Issued MSI Stock" shall have the meaning set forth in Section 2.1.
"Market Disruption Event" shall have the meaning set forth in
Section 7.5.
"MSI" shall have the meaning set forth in the Introduction.
"MSI $1.38 Warrant" shall have the meaning set forth in the
Introduction.
"MSI $2.00 Warrant" shall have the meaning set forth in the
Introduction.
"MSI Common Stock" means the Common Stock, par value $.01 per share,
of MSI.
"MSI Preferred Stock" means the Preferred Stock, par value $.01 per
share, of MSI.
"MSI Series B Convertible Preferred Stock" means the Series B
Convertible Preferred Stock, par value $.01 per share, of MSI.
"MSI Series C Convertible Preferred Stock" means the Series C
Convertible Preferred Stock, par value $.01 per share, of MSI.
"MSI Warrants" shall have the meaning set forth in the Introduction.
"Person" means and includes any individual, corporation,
partnership, firm, association, joint venture, joint stock company, trust or
other entity, or any government or regulatory administrative or political
subdivision or agency, department or instrumentality thereof.
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"Proxy Statement" shall have the meaning set forth in Section 3.7.
"Public Shareholders" shall have the meaning set forth in the
Introduction.
"Response Period" shall have the meaning act forth in Section 10.3.
"SEC" shall have the meaning set forth in Section 3.6.
"Securities Act" shall have the meaning set forth in Section 3.6.
"Shareholders' Meeting" shall have the meaning set forth in Section
3.7.
"SSI" shall have the meaning set forth in the Introduction.
"SSI Common Stock" means the Common Stock, par value $1.00 per
share, of SSI.
"SSI Series A Preferred Stock" means the Series A Non-Voting
Preferred Stock, par value $1.00 per share, of SSI.
"TFX" shall have the meaning set forth in the Introduction.
"Transferred ESI Stock" shall have the meaning set forth in Section
2.1.
"Transferred SSI Stock" shall have the meaning set forth in Section
2.1.
"Voluntary Participation" shall have the meaning set forth in
Section 10.3.
ARTICLE II
CONTRIBUTION
2.1. Exchange of Stock. At the Closing referred to in Section 2.2 below, (a) TFX
shall assign and transfer to MSI (i) 100 shares of ESI Common Stock (the
"Transferred ESI Stock"), (ii) 625 shares of SSI Common Stock (the "Transferred
Stock") and (iii) 100 shares of SSI Series A Preferred Stock free and clear of
all liens and encumbrances in exchange for (b) MSI issuing to TFX (i) 13,400,000
shares of MSI Common Stock (the "Issued MSI Stock") free and clear of all liens
and encumbrances and (ii) the MSI Warrants free end clear of all liens and
encumbrances (the "Exchange"). The parties hereto intend that the Exchange is a
transfer to which Section 351 of the Internal Revenue Code permitting tax-free
transfers of property for stock between a corporation and a person in control of
the corporation following such exchange applies.
2.2. The Closing. (a) The closing of the transactions contemplated hereby (the
"Closing") shall take place at 10:00 a.m., local time, on January 11, 1999, or,
if the conditions to Closing set forth in Articles VII and VIII hereof shall not
have been satisfied by such date, as soon as practicable after such conditions
shall have been satisfied, at the offices of Dechert Price & Rhoads, 4000 Bell
Atlantic Tower, 1717 Arch Street, Philadelphia, Pennsylvania, or at such other
time, date or place as the parties shall mutually agree (the "Closing Date") The
effective time of the transactions contemplated hereby shall be deemed to be the
opening of business on the Closing Date.
(b) At the Closing, (i) TFX shall deliver to MSI certificates, accompanied by
duly executed stock transfer powers, representing (A) 625 shares of SSI Common
Stock, (C) 100 shares of SSI Common Stock and (C) 100 shares of SSI Series A
Preferred Stock and (ii) MSI shall deliver to TFX certificates representing
13,400,000 shares of MSI Common Stock and the MSI Warrants.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MSI
MSI represents and warrants to TFX as follows:
3.1. Organization. MSI is a corporation duly organized, validly existing, and in
good standing under the laws of the State of New York, and has all requisite
corporate power and corporate authority to execute, deliver, and perform this
Agreement and to consummate the transactions contemplated hereby.
3.2. Corporate Power and Authority; Effect of Agreement. The execution, delivery
and performance by MSI of this Agreement and the consummation by MSI of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action (including without limitation the unanimous approval of the
Board of Directors of MSI, including the Independent Directors, but excluding
the authorization by the shareholders of the Amendment) on the part of MSI. This
Agreement has been duly and validly executed and delivered by MSI and
constitutes the valid and binding obligation of MSI, enforceable against MSI in
accordance with its terms. The execution, delivery, and performance by MSI of
this Agreement and the consummation by MSI of the transactions contemplated
hereby will not, with or without the giving of notice or the lapse of tame, or
both, (i) violate any provision of law, rule, or regulation to which MSI is
subject, (ii) violate any order, judgment, or decree applicable to MSI or (iii)
violate any provision of the certificate of incorporation, as amended, or the
by-laws, as amended, of MSI.
3.3. Consents. No consent, approval, or authorization of, or exemption by, or
filing with, any governmental authority is required to be obtained or made by
MSI in connection with the execution, delivery and performance by MSI of this
Agreement or the taking by MSI of any other action contemplated hereby.
3.4. Purchase for Investment. MSI is purchasing the Transferred ESI Stock and
the Transferred SSI Stock pursuant to this Agreement for investment and not with
a view to any public resale or other distribution thereof, except in compliance
with applicable securities laws.
3.5. Capitalization. At October 31, 1998, (a) the authorized capital stock of
MSI consists solely of (i) 10,000,000 shares of MSI Common Stock, of which
3,170,496 shares are issued and outstanding and (ii) 3,000,000 shares of MSI
Preferred Stock, of which (A) 1,000,000 shares of the authorized MSI Preferred
Stock are designated as MSI Series B Convertible Preferred Stock, of which
687,500 shares plus dividends in the amount of 246,887 shares accrued thereon
are issued and outstanding and (B) 1,945,625 shares of the authorized MSI
Preferred Stock are designated as MSI Series C Convertible Preferred Stock, of
which 1,945,625 shares are issued and outstanding; and (b) except as provided in
Schedule 3.5, there are no outstanding options, warrants, rights, agreements,
calls, commitments or demands of any character relating to the capital stock of
MSI or securities convertible into or exchangeable for any of such capital
stock. All of such outstanding shares of MSI Common Stock and MSI Preferred
Stock have been duly authorized, validly issued and are fully paid and
nonassessable and were not issued in violation of any pre-emptive rights.
3.6. SEC Reports.
(a) MSI has filed all required forms, reports and documents with the Securities
and Exchange Commission ("SEC") required to be filed by it pursuant to the
federal securities laws and the SEC rules and regulations thereunder, all of
which have complied as of their respective filing dates, or, in the case of
registration statements, their respective effective dates, in all material
respects with all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder. None of such forms, reports or documents, including, without
limitation, any exhibits, financial statements or schedules included therein, at
the time flied, or, in the case of registration statements, their respective
effective dates, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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(b) The balance sheets and the related statements of operations, shareholders'
equity and cash flows (including, without limitation, the related notes thereto)
of MSI included in MSI's Annual Report on Form lO-KSB for the fiscal year ended
December 31, 1997 and MSI's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1998 complied as to form, at the time filed, in all material
respects with generally accepted accounting principles and the published rules
and regulations of the SEC with respect thereto at the time filed and present
fairly, in all material respects, the financial position of MSI as of their
respective dates, and the results of operations, the shareholders' equity and
the cash flows for the periods presented therein, all in conformity with
generally accepted accounting principles applied on a consistent basis, except
as otherwise noted therein.
3.7. Proxy Statement. None of the information with respect to MSI or any
subsidiary of MSI included by MSI in its proxy statement (the "Proxy Statement")
in the form to be mailed to MSI's shareholders in connection with the
consummation of the transactions hereunder will, at the time of the mailing of
the Proxy Statement and any amendments or supplements thereto, and at the time
of the special or annual meeting of shareholders of MSI (the "Shareholders'
Meeting") at which such shareholders will vote to authorize the Amendment,
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.
3.8. Litigation. Except as set forth on Schedule 3.8, there is no pending or, to
the knowledge of MSI, threatened claim, arbitration proceeding, action, suit,
investigation or other proceeding against or involving MSI, or any of the
property or rights of MSI, MSI is not in violation of or default under any
order, judgment, writ, injunction or decree of any federal, state, local or
foreign governmental or regulatory entity (or any department, agency authority
or political subdivision thereof) or court or arbitrator (any of the foregoing,
an "Authority"). Any such order, injunction or decree binding on MSI is
disclosed in Schedule 3.8. Set forth in Schedule 3.8 is a description of all
settlements of claims, arbitration proceedings, actions, suits, investigations
or ether proceedings against or involving MSI, or any of the property or rights
of MSI since January 1, 1993, together with a description of the amount or
nature of each such settlement. During the past three year period, except as set
forth in Schedule 3.8. MSI has not had asserted against it any claim based on
product liability.
3.9. Compliance with Laws. Except as set forth in Schedule 3.9, the operations
of MSI have been conducted in compliance in all material respects with
applicable laws, regulations and other requirements of all Authorities having
jurisdiction over MSI or any of its respective businesses or operations,
including laws, regulations and requirements relating to employment and
employment practice, terms and conditions of employment and wages and hours,
antitrust, consumer protection, immigration, drugs, health, occupational safety
and health, plant closing, pension, requirements of the Food and Drug
Administration, requirements of any Board of Fire Underwriters or similar body,
building, zoning, subdivision matters, and securities. Except as set forth in
Schedule 3.9, during the past three years, MSI has not received any notification
of any assorted present or past failure by MSI to comply with any laws, rules or
regulations, nor is there any basis for such a claim.
3.10. Taxes. All material tax returns required to be filed with respect to MSI
have been filed and all material taxes required to be paid by MSI have been paid
except for (i) such taxes that are being contested in good faith by appropriate
proceedings and for which MSI has set aside adequate reserves on its books and
(ii) taxes that would not have a material adverse affect on MSI.
3.11. MSI Warrants. Upon execution and delivery of each of the MSI Warrants by
MSI, each of the MSI Warrants will be valid and in full force and effect and
will be binding and enforceable in accordance with its terms.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TFX
TFX hereby represents and warrants to MSI as follows:
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4.1. Organization. TFX is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and corporate authority to execute, deliver, and perform this
Agreement and to consummate the transactions contemplated hereby. ESI is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. SSI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Delaware.
4.2. Power and Authority; Effect of Agreement. The execution, delivery and
performance by TFX of this Agreement and the consummation by TFX of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of TFX. This Agreement has been duly and validly
executed and delivered by TFX and constitutes, the valid and binding obligations
of TFX, enforceable against TFX in accordance with its terms. The execution,
delivery, and performance by TFX of this Agreement and the consummation by TFX
of the transactions contemplated hereby will not, with or without the giving of
notice or the lapse of time, or both, (i) violate any provision of law, rule, or
regulation to which TFX is subject, (ii) violate any order, judgment, or decree
applicable to TFX or (iii) violate any provision of the charter or the by-laws
of TFX.
4.3. Consents. No consent, approval, or authorization of, or exemption by, or
filing with, any governmental authority is required to be obtained or made by
TFX in connection with the execution, delivery and performance by TFX of this
Agreement or the taking by TFX of any other action contemplated hereby.
4.4. Purchase for Investment. TFX is purchasing the Issued MSI Stock being
purchased by it pursuant to Section 2.1 hereof for investment and not with a
view to any public resale or other distribution thereof, except in compliance
with applicable securities laws.
4.5. Capitalization. Immediately prior to the Closing, (i) the authorized
capital stock of ESI consists solely of 1,000 shares of ESI Common Stock, of
which 100 shares are currently issued and outstanding; (ii) the authorized
capital stock of SSI consists solely of 2,000 shares of capital stock consisting
of (a) 1,000 shares of SSI Common Stock, of which 1,000 shares are currently
issued and outstanding and (b) 1,000 shares of Preferred Stock of which 100
shares of SSI Series A Preferred Stock are currently issued and outstanding,
(iii) all of the shares of Transferred ESI Stock and Transferred SSI Stock are
held beneficially and of record by TFX, free and clear of any lien, security
interest, restriction, encumbrance or claim; (iv) there are no outstanding
options, warrants, rights, agreements, calls, commitments or demands of any
character relating to the capital stock of ESI or the capital stock of SSI or
securities convertible into or exchangeable for any of such capital stock. All
of such outstanding shares of ESI Common Stock, SSI Common Stock and SSI Series
A Preferred Stock have been duly authorized, validly issued and are fully paid
and nonassessable and were not issued in violation of any pre-emptive rights. At
October 31, 1998, these were no dividends accrued and unpaid on the SSI Series A
Preferred Stock.
4.6. Financial Statements. The balance sheets and the related statements of
operations of each of ESI and SSI for the fiscal year ended December 31, 1997
and for the nine months ended September 30, 1998 attached hereto as Schedule 4.6
were prepared from the books and records of each of ESI and SSI, respectively,
and present fairly, in all material respects, the financial position of each of
ESI and SSI, respectively, as of their respective dates, and the results of
operations for the periods presented therein, all in conformity with generally
accepted accounting principles (other than not containing footnotes or year-end
audit adjustments) applied on a consistent basis, except as otherwise noted
therein.
4.7. Litigation. Except as set forth on Schedule 4.7, there is no pending or, to
the knowledge of ESI, SSI or TFX, respectively, threatened claim, arbitration
proceeding, action, suit, investigation or other proceeding against or involving
ESI, SSI or TFX, respectively, or any of the property or rights of ESI, SSI or
TFX, respectively. None of ESI, SSI or TFX is in violation of or default under
any order, judgment, writ, injunction or decree of any Authority. Any such
order, injunction or decree binding on ESI, SSI or TFX is disclosed in Schedule
4.8. Set forth in Schedule 4.8 is a description of all settlements of any of the
proceedings described in this Section 4.8 since June 1, 1995, together with a
description of the amount or nature of each such settlement. During the past
three year period, except as set forth in Schedule 4.8, none of ESI, SSI or TFX
has had asserted against it any claim based on product liability.
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4.8. Compliance with Laws. Except as set forth in Schedule 4.8, the operations
of each of ESI, SSI and TFX have been conducted in compliance in all material
respects with applicable laws, regulations and other requirements of all
Authorities having jurisdiction over ESI, SSI and TFX, respectively, or any of
their respective businesses or operations, including laws, regulations and
requirements relating to employment and employment practices, terms and
conditions of employment and wages and hours, antitrust, consumer protection,
immigration, drugs, health, occupational safety and health, plant closing,
pension, requirements of the Food and Drug Administration, requirements of any
Board of Fire Underwriters or similar body, building, zoning, subdivision
matters, and securities. Except as set forth in Schedule 4.8, during the past
three years, none of ESI, SSI or TFX has received any notification of any
asserted present or past failure by ESI, SSI or TFX, respectively, to comply
with any laws, rules or regulations, nor is there any basis for such a claim.
4.9. Taxes. All material tax returns required to be filed with respect to ESI or
SSI, as applicable, have been filed and all material taxes required to be paid
by ESI or SSI, as applicable, have been paid except for (i) such taxes that are
being contested in good faith by appropriate proceedings and for which ESI or
SSI, as applicable, has set aside adequate reserves on its books and (ii) taxes
that would not have a material adverse affect on ESI or SSI, as applicable.
ARTICLE V
COVENANTS OF MSI
MSI hereby covenants and agrees with TFX as follows:
5.1. Fulfillment of Agreements. MSI shall use its Best Efforts to cause all of
the conditions to the obligations of TFX under Article VII of this Agreement to
be satisfied on or prior to Closing. MSI shall promptly notify TFX of any event
or fact coming to MSI's attention prior to Closing which causes any of its
representations, warranties, covenants or agreements contained in this Agreement
to be inaccurate in any material respect.
5.2. Access, Information and Documents. From and after the date hereof and
pending the Closing, upon reasonable notice, MSI will give to TFX and to TFX's
counsel, accountants and other representatives and financing sources full access
during normal business hours to all of the properties, books, tax returns,
contracts, commitments, records, officers, personnel and accountants relating to
the Business and will furnish to TFX all such documents and copies of documents
(certified to be true copies if requested) and all information with respect to
the affairs of the Business as TFX may reasonably request; provided, that no
such access shall unreasonably interfere with MSI's operation of its business,
including, without limitation, the Business.
5.3. Material Transaction. From and after the date hereof and pending Closing,
MSI covenants and agrees that it will not, without the consent of TFX:
(a) amend its certificate of incorporation or bylaws (other than by the
Amendment); or
(b) change its issued capital stock or issue any rights or options to acquire
shares of its capital stock or any securities exercisable for or convertible
into shares of its capital stock.
ARTICLE VI
COVENANTS OF TFX
6.1. Fulfillment of Agreements. TFX shall use its Best Efforts to cause all of
the conditions to the obligations of MSI under Article VIII of this Agreement to
be satisfied on or prior to the Closing. TFX shall promptly notify MSI in
writing of any event or fact coming to TFX's attention prior to Closing which
causes any of its representations, warranties, covenants or agreements contained
herein to be inaccurate in any material respect.
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6.2. Access, Information and Documents. From and after the date hereof and
pending the Closing, upon reasonable notice, TFX will give, and will cause ESI
and SSI to give to MSI and to MSI's counsel, accountants and other
representatives and financing sources full access during normal business hours
to all of the properties, books, tax returns, contracts, commitments, records,
officers, personnel and accountants relating to the business of ESI and SSI,
respectfully, and will furnish to MSI all such documents and copies of documents
(certified to be true copies if requested) and all information with respect to
the affairs of the business of ESI and SSI, respectfully, as MSI may reasonably
request; provided, that no such access shall unreasonably interfere with
operation of ESI or SSI's respective business.
6.3. Conversion of MSI Preferred Stock. Immediately prior to the Closing, TFX
shall convert all shares of MSI Preferred Stock, and all dividends accrued
thereon, then beneficially owned by it into shares of MSI Common Stock.
6.4. Material Transactions. From and after the date hereof and pending Closing,
TFX covenants and agrees that it will cause each of ESI and SSI to refrain from,
without the consent of MSI:
(a) amending its certificate of incorporation or bylaws; and
(b) changing its authorized or issued capital stock or issuing any rights or
options to acquire shares of its capital stock or any securities exercisable for
or convertible into shares of its capital stock.
ARTICLE VII
CONDITIONS TO TFX'S OBLIGATIONS
The obligation of TFX to consummate the transactions contemplated hereby
at the Closing shall be subject to the satisfaction (or waiver) at or prior to
the Closing of all of the following conditions:
7.1. Bringdown of Representations and Warranties. The representations and
warranties of MSI contained in this Agreement shall be true and correct in all
material respects, as of the time of Closing with the same force and effect as
though such representations and warranties had been made on, as of and with
reference to such time.
7.2. Performance and Compliance. MSI shall have performed in all material
respects all of the covenants and complied in all material respects with all of
the provisions required by this Agreement to be performed or complied with by it
on or before the Closing and TFX shall hove received a certificate to such
effect, signed by an executive officer of MSI.
7.3. Satisfactory Instruments. All instruments and documents reasonably required
on MSI's part to effectuate and consummate the transactions contemplated hereby
shall be delivered to TFX and shall be in form and substance reasonably
satisfactory to TFX and its counsel in all material respects.
7.4. Required Consents. All consents and approvals of third parties to the
transactions contemplated hereby (including the consents and approvals which are
(a) set forth on Schedule 7.4, or (b) material to the Business) shall have been
obtained (except for such consents and approvals (other than those set forth on
Schedule 7.4) that if not obtained would not in the aggregate have a material
adverse effect on the Business as a whole), and all waiting periods specified by
law the passing of which are necessary for the consummation of such transactions
shall have passed or been terminated.
7.5. Absence of Changes. There shall not have occurred or been threatened (i)
since the date hereof, any material adverse change (or series of changes
constituting a material adverse change) in the operations, properties or
financial condition of the Business taken as a whole, or (ii) since the date of
this Agreement, any Market Disruption Event. As used herein, "Market Disruption
Event" shall mean (a) any suspension or limitation of trading in securities
generally on NASDAQ (not including any suspension or limitation of trading in
any particular security as a result of computerized trading limits), or any
setting of minimum prices for trading on such exchange; (b) any banking
moratorium declared by U.S. Federal or New York authorities; (c) any outbreak or
escalation of major hostilities in which the United States is
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involved, any declaration of war by Congress or any oilier substantial national
or international calamity or emergency; or (d) any other material adverse change
in bank or capital market conditions that has had a material adverse effect on
the syndication of bank credit facilities or the consummation of high yield
offerings.
7.6. Fairness Opinion. Prior to the date on which the Proxy Statement is mailed
to the shareholders of MSI, MSI shall have received an opinion of the
Independent Advisors, satisfactory in form and substance to MSI, substantially
to the effect that as of the date of such opinion, the consideration to be
received by MSI in the Exchange is fair from a financial point of view to the
Public Shareholders, and on the date of the Shareholders' Meeting and at the
Closing Date, such Opinion shall not have been withdrawn or modified in form or
substance in a manner unsatisfactory to MSI.
7.7. Authorized Shares of MSI Common Stock. At the Closing and prior to the
Exchange, the Amendment shall have been duly filed with the Secretary of State
of the State of New York and shall have increased the number of shares of MSI
Common Stock in accordance therewith.
ARTICLE VIII
CONDITIONS TO MSI'S OBLIGATIONS
The obligation of MSI to consummate the transactions contemplated hereby
at the Closing shall be subject to the satisfaction (or waiver) at or prior to
the Closing of all of the following conditions:
8.1. Bringdown of Representations and Warranties. The representations and
warranties of TFX contained in this Agreement shall be true and correct in all
material respects, as of the time of Closing with the same force and effect as
though such representations and warranties had been made on, as of and with
reference to such time.
8.2 Performance and Compliance. TFX shall have performed in all material
respects all of the covenants and complied in all material respects with all of
the provisions required by this Agreement to be performed or complied with by it
on or before the Closing and MSI shall have received a certificate to such
effect, signed by an executive officer of TFX.
8.3 Satisfactory Instruments. All instruments and documents reasonably required
on TFX's part to effectuate and consummate the transactions contemplated hereby
shall be delivered to MSI and shall be in form and substance reasonably
satisfactory to MSI and its counsel in all material respects.
8.4. Required Consent. All consents and approvals of third parties to the
transactions contemplated hereby (including the consents and approvals which are
(a) set forth on Schedule 8.4 or (b) material to the Business) shall have been
obtained (except for such consents and approvals (other than those set forth on
Schedule 8.4) that if not obtained would not in the aggregate have a material
adverse effect on the Business as a whole), and all waiting periods specified by
law the passing of which are necessary for the consummation of such transactions
shall have passed or been terminated.
8.5. Absence of Changes. There shall not have occurred or been threatened (i)
since the date hereof, any material adverse change (or series of changes
constituting a material adverse change) in the operations, properties or
financial condition of the businesses of ESI and SSI taken as a whole, or (ii)
since the date of this Agreement, any Market Disruption Event.
8.6. Fairness Opinion. Prior to the date on which the Proxy Statement is mailed
to the shareholders of MSI, MSI shall have received an opinion of the
Independent Advisors, satisfactory in form and substance to MSI, substantially
to the effect that as of the date of such opinion, the consideration to be
received by MSI in the Exchange is fair from a financial point of view to the
Public Shareholders, and on the date of the Shareholders' Meeting and at the
Closing Date, such opinion shall not have been withdrawn or modified in form or
substance in a manner unsatisfactory to MSI.
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ARTICLE IX
CERTAIN ADDITIONAL COVENANTS
9.1. Termination.
(a) When Agreement May Be Terminated. This Agreement may be terminated at any
time prior to Closing:
(i) by mutual consent of TFX and MSI;
(ii) by TFX if there has been a material breach by MSI of any of its
representations, warranties or covenants under this Agreement which breach is
not curable, or, if curable, MSI has not commenced actions to cure such breach
within 10 days of written notice thereof and cured such breach within 45 days of
such notice;
(iii) by MSI if there has been a material breach by TFX of any of its
representations, warranties or covenants under this Agreement which breach is
not curable, or, if curable, TFX has not commenced actions to cure such breach
within 10 days of written notice thereof and cured such breach within 45 days of
such notice; or
(iv) by either party if the Closing shall not have occurred prior to February
11, 1999.
(b) Effect of Termination. In the event of termination of this Agreement by
either TFX or MSI, as provided above, this Agreement shall forthwith terminate
and there shall be no liability on the part of either TFX or MSI or any of their
respective officers or directors, except for liabilities arising from a breach
of this Agreement prior to such termination; provided, however, that under no
circumstances shall such liabilities include any consequential or incidental
damages; provided, further, that the obligations of the parties set forth in
Section 9.2 hereof shall survive such termination.
9.2. Costs, Expenses and Taxes. Each party to this Agreement will bear all the
fees, costs and expenses which are incurred by it in connection with the
transactions contemplated hereby.
ARTICLE X
INDEMNIFICATION
10.1. Indemnification By MSI. MSI hereby agrees to indemnify and hold harmless
TFX from and against any Damages arising out of or resulting from (i) the breach
or inaccuracy of any representation or warranty made by MSI in this Agreement;
or (ii) the breach by MSI of any covenant contained in this Agreement.
10.2. Indemnification by TFX. TFX hereby agrees to indemnify and hold harmless
MSI from and against any Damages arising out of or resulting from (i) the breach
or inaccuracy of any representation or warranty made by TFX in this Agreement;
(ii) the breach by TFX of any covenant contained in this Agreement or (iii)
material inaccuracy of information concerning ESI or SSI provided by TFX to MSI
that results in liability to MSI pursuant to Addendum A to the Letter Agreement,
dated September 28, 1998, between MSI and Needham & Company, Inc.
10.3. General Indemnification Procedures.
(a) In the event that any party incurs or suffers any Damages with respect to
which indemnification may be sought by such party pursuant to this Article X,
the party seeking indemnification (the "Indemnitee") must assert the claim by
giving written notice (a "Claim Notice") to the party from whom indemnification
is sought (the "Indemnitor"). The Claim Notice must state the nature, basis and
amount (if known) of the claim in reasonable detail based on the information
available to the Indemnitee and, if the Claim Notice is being given with respect
to a third party claim, it must be accompanied by a copy of any written notice
of the third party claimant. If the Claim Notice is being given by reason of any
third party claim,
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it shall be given in a timely manner but in no event more than 30 days after the
filing or other written assertion of any such claim against the Indemnitee, but
the failure of the Indemnitee to give the Claim Notice within such time period
shall not relieve the Indemnitor of any liability for indemnification under this
Article X, except to the extent that the Indemnitor is prejudiced thereby. If
the amount of the claim is not known at the time the Claim Notice is given, the
Indemnitee shall also give notice of such amount to the Indemnitor at such time
as the amount of the claim is reasonably ascertainable. Each Indemnitor to whom
a Claim Notice is given shall respond to any Indemnitee that has given a Claim
Notice (a "Claim Response") within 30 days (the "Response Period") after the
date that the Claim Notice is received by Indemnitor. Any Claim Response shall
specify whether or not the Indemnitor given the Claim Response disputes the
claim described in the Claim Notice. If any Indemnitor fails to give a Claim
Response within the Response Period, such Indemnitor shall be deemed not to
dispute the claim described in the related Claim Notice, in whole or in part. If
any Indemnitor elects not to dispute a claim described in a Claim Notice,
whether by failing to give a timely Claim Response or otherwise, then such claim
shall be conclusively deemed to be an obligation of such Indemnitor. If any
Indemnitor shall be obligated to indemnify an Indemnitee hereunder, such
Indemnitor shall pay to such Indemnitee within 30 days after the last day of the
applicable Response Period (or at such later time as the amount is
ascertainable) the amount to which such Indemnitee shall be entitled. If there
shall be a dispute as to the amount or manner of indemnification under this
Agreement, the Indemnitor and the Indemnitee shall seek to resolve such dispute
through negotiations and, if such dispute is not resolved within 20 days, the
Indemnitee may pursue whatever legal remedies may be available for the recovery
of the Damages claimed from any Indemnitor. If any Indemnitor fails to pay all
or any part of any indemnification obligation on or before the later to occur of
(x) 30 days after the last day of the applicable Response Period, and (y) if the
Claim Notice relates to Damages that have not been liquidated as of the date of
the Claim Notice, the date on which all or any part of such Damages shall have
become liquidated and determined, then the Indemnitor shall also be obligated to
pay to the Indemnity interest on the unpaid amount for each day during which the
obligation remains unpaid at an annual rate of ten percent.
(b) The Indemnitee shall provide to the Indemnitor on request all information
and documentation reasonably necessary to support and verify any Damages that
the Indemnitee believes give rise to the claim for indemnification hereunder and
shall give the Indemnitor reasonable access to all books, records and personnel
in the possession or under the control of the Indemnitee that would have bearing
on such claim.
(c) Except as hereinafter provided, in the case of third party claims for which
indemnification is sought, the Indemnitor shall have the option: (x) to conduct
any proceedings or negotiations in connection therewith, (y) to take all other
steps to settle or defend any such claim (provided that the Indemnitor shall not
settle any such claim without the consent of the Indemnitee (which consent shall
not be unreasonably withheld, it being understood that it shall not be
unreasonable for the Indemnitee to withhold its consent from any settlement
which (1) commits the Indemnitee to take, or to forbear to take, any action, or
(2) does not provide for a complete release of the Indemnitee by such third
party)), and (z) to employ counsel to contest any such claim or liability in the
name of the Indemnitee or otherwise. In any event, the Indemnitee shall be
entitled to participate at its own expense and by its own counsel (a "Voluntary
Participation") in any proceedings relating to any third party claim. The
Indemnitor shall, within 45 days of receipt of the Claim Notice, notify the
Indemnitee of its intention to assume the defense of the claim (a "Defense
Notice"). Until the Indemnitee has received the Defense Notice, the Indemnitee
shall take reasonable stops to defend (but may not settle) the claim. If the
Indemnitor declines to assume the defense of any such claim or fails to give a
Defense Notice within 45 days prior receipt of the Claim Notice, the Indemnitee
shall defend against the claim but shall not settle such claim without the
consent of the Indemnitor (which consent shall not be unreasonably withheld).
The expenses of all proceedings, contests or lawsuits (other than those
incurred in a Voluntary Participation) with respect to claims as to which a
party is entitled to indemnification under this Article X shall represent
indemnifiable Damages under this Agreement. Regardless of which party shall
assume the defense of the claim, the parties shall cooperate fully with one
another in connection therewith. Notwithstanding the foregoing, the Indemnitor
shall not be entitled (except with the consent of the Indemnitee) to take any of
the actions referred to in clauses (x), (y) or (z) of the first sentence of this
subparagraph unless: (a) the third party claim involves principally monetary
damages; and (b) the Indemnitor shall have expressly agreed in writing that, as
between the Indemnitor and the Indemnitee, the Indemnitor shall be solely
obligated to satisfy and discharge such third party claim. Damages payable
hereunder shall be appropriately adjusted to reflect the receipt of insurance
proceeds, tax benefits and detriments and proceeds received with respect to
condemnation, expropriation or eminent domain proceedings.
12
<PAGE>
(d) No action or claim for Damages pursuant to Sections 10.1 or 10.2 hereof
shall be brought or made after April 30, 2000, except that such time limitation
shall not apply to claims for misrepresentations or breaches of warranty
relating to Sections 3.10 and 4.9 which may be asserted until 60 days after the
running of the applicable statute of limitations with respect to such claims.
(e) Indemnification pursuant to this Article X shall be the sole and exclusive
remedy available to the parties hereto for any and all Damages.
ARTICLE XI
MISCELLANEOUS
11.1. Nature and Survival of Representations. The representations, warranties,
covenants and agreements of MSI and TFX contained in this Agreement shall
survive the Closing; provided, however, that the covenants and agreements of MSI
and TFX contained in Articles V and VI, respectively, of this Agreement shall
not survive the Closing.
11.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) three Business Days
after mailing if mailed by certified or registered mail, return receipt
requested, (ii) one Business Day after delivery to Federal Express or other
nationally recognized overnight express carrier, if sent for overnight delivery
with fee prepaid, (iii) upon receipt if sent via facsimile with receipt
confirmed, or (iv) upon receipt if delivered personally, addressed as follows or
to such other address or addresses of which the respective party shall have
notified the other:
If to TFX:
c/o Teleflex, Inc.
630 West Germantown Pike, Suite 450
Plymouth Meeting, PA 19462
Attention: Steven K. Chance
Fax No.: (610) 834-8307
With a required copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103
Attention: Christopher G. Karras
Fax No.: (215) 994-2222
If to MSI to:
Medical Sterilization, Inc.
225 Underhill Boulevard
Syosset, NY 11791
Attention: D. Michael Deignan
Fax No.: (516) 496-8328
With a required copy to:
Murtagh, Cohen & Byrne
13
<PAGE>
1100 Franklin Avenue
Garden City, NY 11530
Attention: Harvey Cohen
Fax No.: (516) 747-1355
11.3. Entire Agreement. The agreement of the parties, which is composed of this
Agreement and the Schedules hereto and the documents referred to herein, sets
forth the entire agreement and understanding between the parties and
supersedes any prior agreement or understanding, written or oral, relating to
the subject matter of this Agreement.
11.4. Assignment; Binding Effect; Severability. This Agreement may not be
assigned by any party hereto without the written consent of the other party.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the successors and permitted assigns of each party hereto. The
provisions of this Agreement are severable, and in the event that any one or
more provisions are deemed illegal or unenforceable the remaining provisions
shall remain in full force and effect unless the deletion of such provision
shall cause this Agreement to become materially adverse to any party, in which
event the parties shall use Best Efforts to arrive at an accommodation which
best preserves for the parties the benefits and obligations of the offending
provision.
11.5. Governing Law, This Agreement shall be governed by and construed and
enforced in accordance with the internal laws (as opposed to the conflicts of
laws provisions) of the State of New York.
11.6. Execution in Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures thereto were upon one
instrument.
11.7. No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to or shall (i) confer on any person other than the parties
hereto and their respective successors or permitted assigns any rights
(including third party beneficiary rights), remedies, obligations or liabilities
under or by reason of this Agreement, or (ii) constitute the parties hereto as
partners or as participants in a joint venture. This Agreement shall not provide
third parties with any remedy, claim, liability, reimbursement, cause of action
or other right in excess of those existing without reference to the terms of
this Agreement.
11.8. Headings. The headings preceding the text of the sections and subsections
hereof are inserted solely for convenience of reference, and shall not
constitute a part of this Agreement, nor shall they affect its meaning,
construction or effect.
11.9. Further Assurances. Each party shall cooperate and take such action as may
be reasonably requested by another party in order to carry out the provisions
and purposes of this Agreement and the transactions contemplated hereby. Each
party will provide such certificates from appropriate officers thereof
confirming compliance by such party with the terms of this Agreement as may
reasonably be requested by the other party at Closing.
11.10. Amendment and Waiver. The parties may by mutual agreement amend this
Agreement in any respect, and any party, as to such party, may (a) extend the
time for the performance of any of the obligations of any other party, (b) waive
any inaccuracies in representations by any other party, (c) waive compliance by
any other party with any of the agreements contained herein and performance of
any obligations by such other party, and (d) waive the fulfillment of any
condition that is precedent to the performance by such party of any of its
obligations under this Agreement. To be effective, any such amendment or waiver
must be in writing and be signed by the party against whom enforcement of the
same is sought.
14
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed on its behalf as of the date first above written.
MEDICAL STERILIZATION, INC
By:/s/ D. Michael Deignan
--------------------------------------------
Name: D. Michael Deignan
Title: President and Chief Executive Officer
TFX EQUITIES INCORPORATED
By:/s/ John J. Sickler
--------------------------------------------
Name: John J. Sickler
Title: President
15
<PAGE>
Exhibit A
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY
NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AT THE TIME
AMENDED, OR IN CONFORMITY WITH THE LIMITATIONS OF RULE 144 OR SIMILAR RULES AS
THEN IN EFFECT UNDER SUCH ACT, OR UNLESS SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE WITH RESPECT THERETO.
WARRANT
To Purchase Shares of Common Stock of
MEDICAL STERILIZATION, INC.
Medical Sterilization, Inc., a New York corporation (the "Company"),
hereby certifies that, for value received or assigned, TFX Equities
Incorporated, a Delaware corporation, ("TFX"), is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time
before 5:00 P.M., New York City time, on December 31, 2005, 1,250,000 fully paid
and nonassessable shares of Common Stock, $.01 par value, of the Company, at a
purchase price per share of $1.38 (the "Purchase Price"). The number and
character of such shares of Common Stock are subject to adjustment as provided
herein.
This Warrant is the MSI Warrant (the "Warrant") evidencing the right
to purchase shares of Common Stock of the Company, issued pursuant to a certain
Acquisition Agreement (the "Agreement"), dated as of November 19, 1998, between
the Company and TFX, a copy of which is on file at the principal office of the
Company.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Medical Sterilization, Inc. and
any corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$.01 par value per share, as authorized on the date of the Agreement, (b) any
other capital stock of any class or classes (however designated) of the Company,
authorized on or after such date, the holders of which shall have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies, be entitled to vote for the
election of a majority of directors of the Company (even though the right so to
vote has been suspended by the happening of such a
<PAGE>
contingency) and (c) any other securities into which or for which any of the
securities described in (a) or (b) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person (corporate
or otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised in full by the holder
hereof by surrender of this Warrant, with the form of subscription at the end
hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment in cash or by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock for which this Warrant is then exercisable by the
Purchase Price.
1.2. Partial Exercise. This Warrant may be exercised in part by surrender
of this Warrant in the manner and at the place provided in subsection 1.1 except
that the amount payable by the holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subsection at the end hereof by (b) the Purchase
Price. On any such partial exercise the Company at its expense will forthwith
issue and deliver to or upon the order of the holder hereof a new Warrant or
Warrants of like tenor, in the name of the holder hereof or as such holder (upon
payment by such holder of any applicable transfer taxes) may request, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock for which such Warrant or Warrants may still be exercised.
1.3. Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a bank or trust company
shall have been appointed as trustee for the holder of this Warrant pursuant to
subsection 4.2, each bank or trust company shall have all the powers and duties
of a warrant agent appointed pursuant to section 11 and shall accept, in its own
name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this section 1.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company
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<PAGE>
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the holder hereof, or as such
holder (upon payment by such holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock (or Other Securities) to which such holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which such holder would otherwise be entitled, cash equal to such fraction
multiplied by the then current market value of one full share, together with any
other stock or other securities and property (including cash, where applicable)
to which such holder is entitled upon such exercise pursuant to section 1 or
otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.:
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) shall have received, or (on or after the
record date fixed for the determination of shareholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock split, then and in each such case the holder of
this Warrant, on the exercise hereof as provided in section 1, shall be entitled
to receive the amount of stock and other securities and property (including cash
in the cases referred to in subdivisions (b) and (c) of this section 3) which
such holder would hold on the date of such exercise if on the date hereof he had
been the holder of record of the number of shares of Common Stock called for on
the face of this Warrant and had thereafter, during the period from the date
hereof to and including the date of such exercise, retained such shares and all
such other or additional stock and other securities and property (including cash
in the cases referred to in subdivisions (b) and (c) of this section 3)
receivable by him as aforesaid during such period, giving effect to all
adjustments called for during such period by section 4.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such
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<PAGE>
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment as provided in section 3.
4.2. Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrant after the effective date of
such dissolution pursuant to this section 4 to a bank or trust company, as
trustee (or the holder or holders of the Warrant.
4.3. Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (any dissolution following any transfer) referred to in this section
4, this Warrant shall continue in full force and effect and the terms hereof
shall be applicable to the shares of stock and other securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the
issuer of any such stock or other securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the properties or
assets of the Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in section 5.
5. No Dilution or Impairment. The Company will not, by amendment of its
Restated Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders of the
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of
stock receivable on the exercise of the Warrant above the amount payable
therefor on such exercise, (b) will take all such action as may he necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant from time to
time outstanding, (c) will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon voluntary or
involuntary dissolution, liquidation or winding up, unless the rights of the
holders thereof shall be limited to a fixed sum or percentage of par value in
respect of participation in dividends and in any such distribution of assets,
and (d) will not transfer all or substantially all of its properties and assets
to any other person (corporate or otherwise), or consolidate with or merge into
any other person or persons any such person to consolidate with or merge into
the Company (if the Company is not the surviving person), unless such other
person shall expressly assume in writing and will be bound by all the terms of
the Warrant.
6. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrant, the Company at its expense will
promptly cause independent certified public accountants of recognized standing
selected by the Company to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate, setting forth such
adjustment
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<PAGE>
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock (or Other
Securities) issued or sold or deemed to have been issued or sold, (b) the number
of shares of Common Stock (or Other Securities) outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such issue or sale and as adjusted and readjusted and provided in this Warrant.
The Company will forthwith mail a copy of each such certificate to each holder
of a Warrant.
7. Notices of Record Date, etc. In the event of:
(a) any taking by the Company of a record of the holders of any
class or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to resolve any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of all
or substantially all the assets of the Company to or consolidation or merger of
the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of
stock of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issue of Common Stock on the exercise of the
Warrant), then and in each such event the Company will mail or cause to be
mailed to each holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
night, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or nights or options with respect thereto, proposed to be issued or panted, the
date of such proposed issue or grant is to be offend or made. Such notice shall
be mailed at least 20 days prior to the date specified In much notice on which
any such action is to be taken.
8. Reservation of Stock, etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.
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<PAGE>
9. Exchange of Warrant. On surrender of any Warrant, properly endorsed, to
the Company, the Company at its expense will issue and deliver to or on the
order of the holder thereof a new Warrant or Warrant of like tenor, in the name
of such holder or as such holder (on payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant or Warrant so surrendered.
10. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction of any Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an officer in either Philadelphia, Pennsylvania
or New York, New York for the purpose of issuing Common Stock (or Other
Securities) on the exercise of the Warrant pursuant to section 1, exchanging
Warrant pursuant to section 9, and replacing Warrant pursuant to section 10, or
any of the foregoing, and thereafter any such issuance, exchange or replacement,
as the case may be, shall be made at such office by such agent.
12. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically entered by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
13 Negotiability, etc. This Warrant is issued upon the following terms, to
all of which the holder or owner hereof, by the taking hereof, consents and
agrees:
(a) title to this Warrant may be transferred by endorsement (by the
holder hereof executing the form of assignment at the end hereof) and delivery
in the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.
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<PAGE>
14. Notices, etc.. All notices and other communications from the Company
to the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of the last holder of this
Warrant who has so furnished an address to the Company.
IN WITNESS WHEREOF, Medical Sterilization, Inc. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be dated
______________, 1999.
MEDICAL STERILIZATION, INC.
By:
-------------------------------------
Name:
Title:
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<PAGE>
Exhibit B
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY
NOT BE SOLD OR TRANSFERRED UNLESS SUCH SALE OR TRANSFER IS IN ACCORDANCE WITH
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AT THE TIME
AMENDED, OR IN CONFORMITY WITH THE LIMITATIONS OF RULE 144 OR SIMILAR RULES AS
THEN IN EFFECT UNDER SUCH ACT, OR UNLESS SOME OTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE WITH RESPECT THERETO.
WARRANT
To Purchase Shares of Common Stock of
MEDICAL STERILIZATION, INC.
Medical Sterilization, Inc., a New York corporation (the "Company"),
hereby certifies that, for value received or assigned, TFX Equities
Incorporated, a Delaware corporation, ("TFX"), is entitled, subject to the terms
set forth below, to purchase from the Company at any time or from time to time
before 5:00 P.M., New York City time, on December 31, 2005, 250,000 fully paid
and nonassessable shares of Common Stock, $.01 par value, of the Company, at a
purchase price per share of $2.00 (the "Purchase Price"). The number and
character of such shares of Common Stock are subject to adjustment as provided
herein.
This Warrant is the MSI Warrant (the "Warrant") evidencing the right
to purchase shares of Common Stock of the Company, issued pursuant to a certain
Acquisition Agreement (the "Agreement"), dated as of November 19, 1998, between
the Company and TFX, a copy of which is on file at the principal office of the
Company.
As used herein the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Company" shall include Medical Sterilization, Inc. and
any corporation which shall succeed or assume the obligations of the Company
hereunder.
(b) The term "Common Stock" includes (a) the Company's Common Stock,
$01 par value per share, as authorized on the date of the Agreement, (b) any
other capital stock of any class or classes (however designated) of the Company,
authorized on or after such date, the holders of which shall have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of which
shall ordinarily, in the absence of contingencies, be entitled to vote for the
election of a majority of directors of the Company (even though the right so to
vote has been suspended by the happening of such a
<PAGE>
contingency) and (c) any other securities into which or for which any of the
securities described in (a) or (b) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and other securities of the Company or any other person (corporate
or otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities.
1. Exercise of Warrant.
1.1. Full Exercise. This Warrant may be exercised in full by the holder
hereof by surrender of this Warrant, with the form of subscription at the end
hereof duly executed by such holder, to the Company at its principal office,
accompanied by payment in cash or by certified or official bank check payable to
the order of the Company, in the amount obtained by multiplying the number of
shares of Common Stock for which this Warrant is then exercisable by the
Purchase Price.
1.2. Partial Exercise. This Warrant may be exercised in part by surrender
of this Warrant in the manner and at the place provided in subsection 1.1 except
that the amount payable by the holder on such partial exercise shall be the
amount obtained by multiplying (a) the number of shares of Common Stock
designated by the holder in the subsection at the end hereof by (b) the Purchase
Price. On any such partial exercise the Company at its expense will forthwith
issue and deliver to or upon the order of the holder hereof a new Warrant or
Warrants of like tenor, in the name of the holder hereof or as such holder (upon
payment by such holder of any applicable transfer taxes) may request, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock for which such Warrant or Warrants may still be exercised.
1.3. Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.
1.4 Trustee for Warrant Holders. In the event that a bank or trust company
shall have been appointed as trustee for the holder of this Warrant pursuant to
subsection 4.2, such bank or trust company shall have all the powers and duties
of a warrant agent appointed pursuant to section 11 and shall accept, in its own
name for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this section 1.
2. Delivery of Stock Certificates, etc., on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company
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<PAGE>
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the holder hereof, or as such
holder (upon payment by such holder of any applicable transfer taxes) may
direct, a certificate or certificates for the number of fully paid and
nonassessable shares of Common Stock (or Other Securities) to which such holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which such holder would otherwise be entitled, cash equal to such fraction
multiplied by the then current market value of one full share, together with any
other stock or other securities and property (including cash, where applicable)
to which such holder is entitled upon such exercise pursuant to section 1 or
otherwise.
3. Adjustment for Dividends in Other Stock, Property, etc.:
Reclassification, etc. In case at any time or from time to time, the holders of
Common Stock (or Other Securities) shall have received, or (on or after the
record date fixed for the determination of shareholders eligible to receive)
shall have become entitled to receive, without payment therefor,
(a) other or additional stock or other securities or property (other
than cash) by way of dividend, or
(b) any cash (excluding cash dividends payable solely out of
earnings or earned surplus of the Company), or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate rearrangement,
other than additional shares of Common Stock (or Other Securities) issued as a
stock dividend or in a stock split, then and in each such case the holder of
this Warrant, on the exercise hereof as provided in section 1, shall be entitled
to receive the amount of stock and other securities and property (including cash
in the cases referred to in subdivisions (b) and (c) of this section 3) which
such holder would hold on the date of such exercise if on the date hereof he had
been the holder of record of the number of shares of Common Stock called for on
the face of this Warrant and had thereafter, during the period from the date
hereof to and including the date of such exercise, retained such shares and all
such other or additional stock and other securities and property (including cash
in the cases referred to in subdivisions (b) and (c) of this section 3)
receivable by him as aforesaid during such period, giving effect to all
adjustments called for during such period by section 4.
4. Adjustment for Reorganization, Consolidation, Merger, etc.
4.1. Reorganization, Consolidation, Merger, etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Warrant, on the exercise hereof as provided in section
1 at any time after the consummation of such reorganization, consolidation or
merger or the effective date of such dissolution, as the case may be, shall
receive, in lieu of the Common Stock (or Other Securities) issuable on such
exercise prior to such consummation or such effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such
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<PAGE>
consummation or in connection with such dissolution, as the case may be, if such
holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment as provided in section 3.
4.2. Dissolution. In the event of any dissolution of the Company following
the transfer of all or substantially all of its properties or assets, the
Company, prior to such dissolution, shall at its expense deliver or cause to be
delivered the stock and other securities and property (including cash, where
applicable) receivable by the holders of the Warrant after the effective date of
such dissolution pursuant to this section 4 to a bank or trust company, as
trustee (or the holder or holders of the Warrant.
4.3. Continuation of Terms. Upon any reorganization, consolidation, merger
or transfer (any dissolution following any transfer) referred to in this section
4, this Warrant shall continue in full force and effect and the terms hereof
shall be applicable to the shares of stock and other securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the
issuer of any such stock or other securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the properties or
assets of the Company, whether or not such person shall have expressly assumed
the terms of this Warrant as provided in section 5.
5. No Dilution or Impairment. The Company will not, by amendment of its
Restated Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of the Warrant, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders of the
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of
stock receivable on the exercise of the Warrant above the amount payable
therefor on such exercise, (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock on the exercise of this Warrant from time to
time outstanding, (c) will not issue any capital stock of any class which is
preferred as to dividends or as to the distribution of assets upon voluntary or
involuntary dissolution, liquidation or winding up, unless the rights of the
holders thereof shall be limited to a fixed sum or percentage of par value in
respect of participation in dividends and in any such distribution of assets,
and (d) will not transfer all or substantially all of its properties and assets
to any other person (corporate or otherwise), or consolidate with or merge into
any other person or persons any such person to consolidate with or merge into
the Company (if the Company is not the surviving person), unless such other
person shall expressly assume in writing and will be bound by all the terms of
the Warrant.
6. Accountants' Certificate as to Adjustments. In each case of any
adjustment or readjustment in the shares of Common Stock (or Other Securities)
issuable on the exercise of the Warrant, the Company at its expense will
promptly cause independent certified public accountants of recognized standing
selected by the Company to compute such adjustment or readjustment in accordance
with the terms of the Warrant and prepare a certificate, setting forth such
adjustment
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<PAGE>
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock (or Other
Securities) issued or sold or deemed to have been issued or sold, (b) the number
of shares of Common Stock (or Other Securities) outstanding or deemed to be
outstanding, and (c) the Purchase Price and the number of shares of Common Stock
to be received upon exercise of this Warrant, in effect immediately prior to
such issue or sale and as adjusted and readjusted and provided in this Warrant.
The Company will forthwith mail a copy of each such certificate to each holder
of a Warrant.
7. Notices of Record Date, etc. In the event of:
(a) any taking by the Company of a record of the holders of any
class or securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to resolve any other right, or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of all
or substantially all the assets of the Company to or consolidation or merger of
the Company with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, or
(d) any proposed issue or grant by the Company of any shares of
stock of any class or any other securities, or any right or option to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities (other than the issue of Common Stock on the exercise of the
Warrant), then and in each such event the Company will mail or cause to be
mailed to each holder of a Warrant a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
night, and stating the amount and character of such dividend, distribution or
right, (ii) the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up is to take place and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or Other Securities) shall be entitled to
exchange their shares of Common Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant is to be offered or made. Such notice shall
be mailed at least 20 days prior to the date specified in such notice on which
any such action is to be taken.
8. Reservation of Stock, etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, all shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.
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<PAGE>
9. Exchange of Warrant. On surrender of any Warrant, properly endorsed, to
the Company, the Company at its expense will issue and deliver to or on the
order of the holder thereof a new Warrant or Warrant of like tenor, in the name
of such holder or as such holder (on payment by such holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant or Warrant so surrendered.
10. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of any Warrant and,
in the case of any such loss, theft or destruction of any Warrant, on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the Company or, in the case of any such mutilation, on surrender and
cancellation of such Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
11. Warrant Agent. The Company may, by written notice to each holder of a
Warrant, appoint an agent having an office in either Philadelphia, Pennsylvania
or New York, New York for the purpose of issuing Common Stock (or Other
Securities) on the exercise of the Warrant pursuant to section 1, exchanging
Warrant pursuant to section 9, and replacing Warrant pursuant to section 10, or
any of the foregoing, and thereafter any such issuance, exchange or replacement,
as the case may be, shall be made at such office by such agent.
12. Remedies. The Company stipulates that the remedies at law of the
holder of this Warrant in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically entered by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
13. Negotiability, etc. This Warrant is issued upon the following terms,
to all of which the holder or owner hereof, by the taking hereof, consents and
agrees:
(a) title to this Warrant may be transferred by endorsement (by the
holder hereof executing the form of assignment at the end hereof) and delivery
in the same manner as in the case of a negotiable instrument transferable by
endorsement and delivery;
(b) any person in possession of this Warrant properly endorsed is
authorized to represent himself as absolute owner hereof and is empowered to
transfer absolute title hereto by endorsement and delivery hereof to a bona fide
purchaser hereof for value; each prior taker or owner waives and renounces all
of his equities or rights in this Warrant in favor of each such bona fide
purchaser, and each such bona fide purchaser shall acquire absolute title hereto
and to all rights represented hereby; and
(c) until this Warrant is transferred on the books of the Company,
the Company may treat the registered holder hereof as the absolute owner hereof
for all purposes, notwithstanding any notice to the contrary.
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<PAGE>
14. Notices, etc.. All notices and other communications from the Company
to the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of the last holder of this
Warrant who has so furnished an address to the Company.
IN WITNESS WHEREOF, Medical Sterilization, Inc. has caused this
Warrant to be signed by its duly authorized officer and this Warrant to be dated
______________, 1999.
MEDICAL STERILIZATION, INC.
By:
-------------------------------------
Name:
Title:
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<PAGE>
Exhibit C
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
MEDICAL STERILIZATION, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
* * * * *
WE, THE UNDERSIGNED, D. Michael Deignan and Harvey Cohen, being
respectively the president and the secretary of Medical Sterilization, Inc. (the
"Corporation") hereby certify:
1. The name of the corporation is Medical Sterilization, Inc.
2. The certificate of incorporation of the Corporation was filed
by the Department of State on the 27th day of May, 1972.
Restated Certificates of incorporation and Certificates of
Amendment were filed on May 12, 1983, August 5,1983, May 24,
1989, January 4, 1990, November 28, 1994, May 31, 1996 and
January 6, 1997, as corrected on January 10, 1997.
3. (a) The certificate of incorporation is amended to increase
the number of authorized shares constituting the Common Stock
of the Corporation from 10,000,000 to 30,000,000.
(b) To effect the foregoing, the first sentence of Paragraph
Fourth relating to the number of authorized shares constituting the Common Stock
of the Corporation is amended to read as follows:
"The aggregate number of shares which the Corporation shall
have authority to issue is Thirty-Three Million (33,000,000)
shares to consist of Thirty Million (30,000,000) shares of
Common Stock, with a par value of $.01 per share, and Three
Million (3,000,000) shares of Preferred Stock, with a par
value of $.01 per share."
4. The foregoing amendment to the Certificate of Incorporation
was authorized by the unanimous written consent of the Board
of Directors of
<PAGE>
the Corporation, followed by the vote of a majority of all the
outstanding shares entitled to vote.
IN WITNESS WHEREOF, we have signed this certificate on the _______
day of ______________, 19__ and we affirm the statements contained therein as
true under penalties of perjury.
----------------------------------------
D. Michael Deignan
President
----------------------------------------
Harvey Cohen
Secretary
2
