<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
NUTRAMAX PRODUCTS, INC.
(NAME OF ISSUER)
NUTRAMAX PRODUCTS, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, $.001 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
67061A 30 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
DONALD E. LEPONE
CHIEF EXECUTIVE OFFICER
NUTRAMAX PRODUCTS, INC.
9 BLACKBURN DRIVE
GLOUSTER, MASSACHUSETTS 01930
(978) 283-1800
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPIES TO:
JOSEPH L. JOHNSON III, ESQ.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109
(617) 570-1000
----------------
OCTOBER 29, 1997
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
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CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION*: AMOUNT OF FILING FEE:
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<S> <C> <C> <C>
$5,737,500.00 $1,147.50
</TABLE>
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* Calculated solely for purposes of determining the filing fee, based upon the
purchase of 450,000 shares at the maximum tender offer price per share of
$12.75.
[_Check]box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
</TABLE>
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<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
NutraMax Products, Inc., a Delaware corporation (the "Company"), and the
address of its principal executive office is 9 Blackburn Drive, Gloucester,
Massachusetts 01930.
(b) This Schedule 13E-4 relates to the offer by the Company to purchase up
to 450,000 shares (or such lesser number of shares as are validly tendered and
not withdrawn) of its Common Stock, $.001 par value per share (the "Shares"),
at prices not greater than $12.75 nor less than $11.00 per Share net to the
Seller in cash, specified by the tendering stockholders, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October
29, 1997 (the "Offer to Purchase"), and in the related Letter of Transmittal
(which together constitute the "Offer"), copies of which are attached as
Exhibits (a)(1) and (a)(2), respectively, and incorporated herein by
reference. As of October 27, 1997, 5,619,768 Shares were issued and
outstanding. Except as set forth in the Offer to Purchase, neither the Company
or any person controlling the Company nor, to the Company's knowledge, any of
its directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations). See Section 9, "Interests of Directors and
Executive Officers; Transactions and Arrangements Concerning the Shares," of
the Offer to Purchase.
(c) The information set forth in "Introduction" and Section 7, "Price Range
of Shares; Dividends," of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable. This statement is being filed by the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 8, "Background and Purpose of
the Offer; Certain Effects of the Offer," Section 10, "Source and Amount of
Funds," of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "Introduction," Section 8, "Background
and Purpose of the Offer; Certain Effects of the Offer," Section 9, "Interests
of Directors and Executive Officers; Transactions and Arrangements Concerning
the Shares," Section 10, "Source and Amount of Funds," Section 11, "Certain
Information About the Company," Section 12, "Effects of the Offer on the
Market for Shares; Registration Under the Exchange Act," and Section 14,
"Certain U.S. Federal Income Tax Consequences," of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Introduction," Section 8, "Background and
Purpose of the Offer; Certain Effects of the Offer," and Section 9, "Interests
of Directors and Executive Officers; Transactions and Arrangements Concerning
the Shares," and Schedule I, "Certain Transactions Involving Shares," of the
Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in "Introduction," Section 8, "Background and
Purpose of the Offer; Certain Effects of the Offer," Section 9, "Interests of
Directors and Executive Officers; Transactions and Arrangements Concerning the
Shares," Section 10, "Source and Amount of Funds," Section 14, "Certain U.S.
Federal Income Tax Consequences," Section 16, "Fees and Expenses," and
Schedule I "Certain Transactions Involving Shares" of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED, OR TO BE COMPENSATED.
The information set forth in "Introduction" and Section 16, "Fees and
Expenses," of the Offer to Purchase is incorporated herein by reference.
II-1
<PAGE>
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in Section 11, "Certain Information About
the Company," of the Offer to Purchase and the financial statements and notes
related thereto contained in Part II of the Company's Annual Report on Form
10-K for the fiscal year ended September 28, 1996 and Part I of the Company's
Quarterly Report on Form 10-Q for the quarter ended June 28, 1997 (copies of
which are included as Exhibits (g)(1) and (g)(2) to this Schedule 13E-4,
respectively) are incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a)-(e) Not Applicable.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Form of Offer to Purchase dated October 29, 1997.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Substitute Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Form of Letter to Stockholders of the Company, dated October 29, 1997
from Donald E. Lepone, President and Chief Executive Officer of the
Company.
(8) Form of Notice of Offer to Purchase for Cash.
(9) Press Release dated October 14, 1997.
(10) Press Release dated October 29, 1997.
(b) Not Applicable.
(c) (1) Agreement dated as of October 14, 1997 by and between the Company
and Cape Ann Investors, L.L.C. ("Cape Ann"). (*)
(2) Amendment to Cape Agreement dated as of October 16, 1997 by and
between the Company and Cape Ann.
(3) Agreement dated as of October 14, 1997 by and between the Company and
Bernard J. Korman ("Mr. Korman").
(4) Registration Rights Agreement dated as of October 16, 1997 by and
between the Company and Mr. Korman.
(5) Agreement dated as of October 14, 1997 by and between the Company and
Donald E. Lepone.
(6) Agreement dated as of October 16, 1997 by and between the Company and
Donald M. Gleklen.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
(g) (1) Financial statements and notes contained in Part II of the Company's
Annual Report on Form 10-K for the fiscal year ended September 28,
1996. (**)
(2) Financial statements and notes contained in Part I of the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 28,
1997. (***)
- --------
(*) Incorporated by reference from the Schedule 13D/A filed by Chilmark
Partners, L.L.C. with the Commission on October 17, 1997.
(**) Incorporated by reference from the Company's Annual Report on Form 10-K
for the fiscal year ended September 28, 1997.
(***) Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 28, 1997.
II-2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
NUTRAMAX PRODUCTS, INC.
/s/ Robert F. Burns
By: _________________________________
Name: Robert F. Burns
Title: Chief Financial Officer
Dated:
October 29, 1997
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<C> <S>
(a)(1) Form of Offer to Purchase dated October 29, 1997.
(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Substitute Form W-9).
(3) Form of Notice of Guaranteed Delivery.
(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(7) Form of Letter to Stockholders of the Company, dated October 29, 1997
from Donald E. Lepone, President and Chief Executive Officer of the
Company.
(8) Form of Notice of Offer to Purchase for Cash.
(9) Press Release dated October 14, 1997.
(10) Press Release dated October 29, 1997.
(b) Not Applicable.
(c)(1) Agreement dated as of October 14, 1997 by and between the Company and
Cape Ann Investors, L.L.C. ("Cape Ann"). (*)
(2) Amendment to Cape Agreement dated as of October 16, 1997 by and
between the Company and Cape Ann.
(3) Agreement dated as of October 14, 1997 by and between the Company and
Bernard J. Korman ("Mr. Korman").
(4) Registration Rights Agreement dated as of October 16, 1997 by and
between the Company and Mr. Korman.
(5) Agreement dated as of October 14, 1997 by and between the Company and
Donald E. Lepone.
(6) Agreement dated as of October 16, 1997 by and between the Company and
Donald M. Gleklen.
(d) Not Applicable.
(e) Not Applicable.
(f) Not Applicable.
(g)(1) Financial statements and notes contained in Part II of the Company's
Annual Report on Form 10-K for the fiscal year ended September 28,
1996. (**)
(2) Financial statements and notes contained in Part I of the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 28,
1997. (***)
</TABLE>
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(*) Incorporated by reference from the Schedule 13D/A filed by Chilmark
Partners, L.L.C. with the Commission on October 17, 1997.
(**) Incorporated by reference from the Company's Annual Report on Form 10-K
for the fiscal year ended September 28, 1997.
(***) Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 28, 1997.
<PAGE>
Exhibit 9a(1)
NUTRAMAX PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH UP TO 450,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $12.75 NOR LESS THAN $11.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE
OFFER IS EXTENDED.
NutraMax Products, Inc., a Delaware corporation (the "Company"), invites its
stockholders to tender shares of its common stock, par value $.001 per share
(the "Shares"), to the Company at prices not greater than $12.75 nor less than
$11.00 per Share in cash, specified by tendering stockholders, upon the terms
and subject to the conditions set forth in this Offer to Purchase and the
related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $12.75 nor less than
$11.00 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering stockholders. The Company will select the lowest Purchase Price
that will allow it to purchase 450,000 Shares (the "Requisite Number") or such
lesser number of Shares as are validly tendered and not withdrawn pursuant to
the Offer at prices not greater than $12.75 nor less than $11.00 per Share.
The Company will pay the Purchase Price for all Shares validly tendered at
prices at or below the Purchase Price and not withdrawn, upon the terms and
subject to the conditions of the Offer, including the proration terms hereof.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their Shares as a result of the Company's recent
announcement regarding fourth quarter performance. See Recent Developments in
Section 11. The Offer is being financed (the "Financing") by sales by the
Company of Shares as follows: (i) to Cape Ann Investors, L.L.C. ("Cape Ann"),
the Company's largest stockholder, pursuant to an Agreement dated as of
October 14, 1997, as amended on October 16, 1997 (the "Cape Ann Agreement"),
by and between the Company and Cape Ann; (ii) to Bernard J. Korman ("Mr.
Korman"), the Company's Chairman of the Board, pursuant to an Agreement dated
as of October 14, 1997 (the "Korman Agreement") by and between the Company and
Mr. Korman; (iii) to Donald E. Lepone ("Mr. Lepone"), the Company's Chief
Executive Officer, pursuant to an Agreement dated as of October 14, 1997 (the
"Lepone Agreement") by and between the Company and Mr. Lepone; and (iv) to
Donald M. Gleklen ("Mr. Gleklen"), a member of the Board of Directors of the
Company, pursuant to an Agreement dated as of October 16, 1997 (the "Gleklen
Agreement" and together with the Cape Ann Agreement, the Korman Agreement and
the Lepone Agreement, the "Investment Agreements") by and between the Company
and Mr. Gleklen.
The Shares are listed and principally traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol "NMPC." On October 28, 1997, the last full trading
day on Nasdaq prior to the announcement by the Company of the price range of
the Offer, the closing per Share sales price as reported on Nasdaq was $12
1/2. On October 14, 1997, the last full trading day on Nasdaq prior to the
announcement by the Company of its intention to make the Offer, the closing
per Share sales price as reported on Nasdaq was $11 7/8. STOCKHOLDERS ARE
URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. SEE SECTION 7.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
FINANCING. HOWEVER, STOCKHOLDERS SHOULD MAKE THEIR OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT
WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF
DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD
OF DIRECTORS HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
The date of this Offer to Purchase is October 29, 1997.
<PAGE>
IMPORTANT
Stockholders desiring to tender all or any portion of their Shares should
either (i) complete and sign the Letter of Transmittal (or, for Eligible
Institutions (as defined in Section 3) only, a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal, mail or deliver
the Letter of Transmittal with any required signature guarantee, or transmit
an Agent's Message (as defined in Section 3) in connection with a book-entry
transfer, together in each case with any other required documents, to Boston
EquiServe L.P. (the "Depositary"), and either mail or deliver the stock
certificates for such Shares to the Depositary (with all such other documents)
or follow the procedure for book-entry delivery set forth in Section 3, or
(ii) request a broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such stockholder. A stockholder having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact that broker, dealer, commercial bank, trust company
or other nominee if such stockholder desires to tender such Shares.
Stockholders who desire to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply with the procedure
for book-entry transfer on a timely basis or whose other required
documentation cannot be delivered to the Depositary, in any case, by the
expiration of the Offer should tender such Shares by following the procedures
for guaranteed delivery set forth in Section 3.
TO EFFECT A VALID TENDER OF SHARES, STOCKHOLDERS MUST VALIDLY COMPLETE THE
LETTER OF TRANSMITTAL, INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH
THEY ARE TENDERING SHARES.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery
may be directed to D. F. King & Co., Inc. (the "Information Agent") at its
address and telephone number set forth on the back cover of this Offer to
Purchase.
2
<PAGE>
SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase. Unless otherwise defined,
capitalized terms used in this summary have the respective meanings ascribed to
them elsewhere in this Offer to Purchase. Stockholders of the Company are urged
to read carefully this Offer to Purchase and the documents incorporated by
reference herein and the Letter of Transmittal, in their entirety.
THE OFFER
Number of Shares to be 450,000 Shares (or such lesser number of Shares
Purchased..................... as are validly tendered).
Purchase Price................ The Company will determine a single per Share
net cash price, not greater than $12.75 nor
less than $11.00 per Share, that it will pay
for Shares validly tendered. The Company will
select the lowest Purchase Price that will
allow it to purchase 450,000 Shares or such
lesser number of Shares as are validly tendered
and not withdrawn pursuant to the Offer at
prices not greater than $12.75 nor less than
$11.00 per Share. All Shares acquired in the
Offer will be acquired at the Purchase Price
even if tendered below the Purchase Price. Each
stockholder desiring to tender Shares must
specify in the Letter of Transmittal the
minimum price (not greater than $12.75 nor less
than $11.00 per Share) at which such
stockholder is willing to have Shares purchased
by the Company. Stockholders wishing to
maximize the possibility that their Shares will
be purchased at the Purchase Price may check
the box in the Letter of Transmittal marked
"Shares Tendered at Price Determined by Dutch
Auction." Checking this box may result in a
Purchase Price of the Shares so tendered at the
minimum price of $11.00 per Share.
Market Price of Shares........ On October 28, 1997, the last full trading day
on Nasdaq prior to the announcement by the
Company of the price range of the Offer, the
closing per Share sales price as reported on
Nasdaq was $12 1/2. On October 14, 1997, the
last full trading day on Nasdaq prior to the
announcement by the Company of its intention to
make the Offer, the closing per Share sales
price as reported on Nasdaq was $11 7/8.
How to Tender Shares.......... See Section 3. Call the Information Agent at
its address and telephone number set forth on
the back cover page of this Offer to Purchase,
or consult your broker for assistance.
Brokerage Commissions......... None.
Stock Transfer Tax............ None, if payment is made to the registered
holder.
Expiration and Proration November 28, 1997, at 12:00 Midnight, Boston,
Dates........................ Massachusetts time, unless extended by the
Company.
Payment Date.................. As soon as practicable after the Expiration
Date.
Position of the Company and
its Directors................
Neither the Company nor its Board of Directors
is making any recommendation to any stockholder
as to whether to tender or refrain from
tendering Shares.
3
<PAGE>
Withdrawal Rights............. Tendered Shares may be withdrawn at any time
until 12:00 Midnight, Boston, Massachusetts
time, on November 28, 1997, unless the Offer is
extended by the Company. See Section 4.
Odd Lots...................... There will be no proration of Shares tendered
by any stockholder owning beneficially or of
record fewer than 100 Shares in the aggregate
as of the Expiration Date who tenders all such
Shares at or below the Purchase Price prior to
the Expiration Date and who completes the "Odd
Lots" box in the Letter of Transmittal.
Further Developments
Regarding the Offer..........
Contact the Information Agent at its address
and telephone number set forth on the back
cover page of this Offer to Purchase, or
consult your broker.
THE FINANCING
The Cape Ann Agreement........ Pursuant to the Cape Ann Agreement (more fully
described in Section 8, "Background and
Purposes of the Offer; Certain Effects of the
Offer"), Cape Ann, the Company's largest
stockholder, will purchase from the Company at
the Purchase Price a number of Shares equal to
(i) 77% of the first $5,000,000 worth of Shares
purchased by the Company pursuant to the Offer
plus (ii) 100% of all additional Shares
purchased by the Company pursuant to the Offer.
Such shares will be purchased from the Company
in a private placement transaction. Upon
completion of the Offer and the Financing and
assuming the Company purchases the maximum
number of Shares pursuant to the Offer
(450,000) at the maximum Purchase Price ($12.75
per Share), Cape Ann will own 1,169,958 Shares
(including the 810,154 Shares currently owned
by Cape Ann) or approximately 20.8% of the then
outstanding Shares.
In connection with the Cape Ann Agreement, the
Company on October 14, 1997 issued 225,000
warrants to purchase shares of the Company's
common stock (the "Warrants") to Cape Ann and
certain related persons of Cape Ann. Subject to
certain anti-dilution adjustments, each Warrant
is exercisable for one share of the Company's
common stock at an exercise price equal to the
fair market value (determined based on the
average prices for the 20 trading days prior to
the first anniversary of the Cape Ann
Agreement), less $2.25. The Warrants are
exercisable for a period of five years
commencing on the first anniversary of the Cape
Ann Agreement. Upon exercise of the Warrants,
Cape Ann will own 1,394,958 Shares or
approximately 23.9% of then outstanding Shares
(assuming (i) the Company purchases the maximum
number of Shares pursuant to the Offer
(450,000) at the maximum Purchase Price ($12.75
per Share), (ii) no additional Shares are
issued by the Company prior to the exercise of
the Warrants, and (iii) no antidilution
adjustments are triggered with respect to the
Warrants prior to such exercise).
4
<PAGE>
The Korman Agreement.......... Pursuant to the Korman Agreement, Mr. Korman,
the Company's Chairman of the Board, will
purchase from the Company at the Purchase Price
a number of Shares equal to 20% of the first
$5,000,000 worth of Shares purchased by the
Company pursuant to the Offer. Such Shares will
be purchased from the Company in a private
placement transaction. Upon completion of the
Offer and the Financing and assuming the
Company purchases the maximum number of Shares
pursuant to the Offer (450,000) at the maximum
Purchase Price ($12.75 per Share), Mr. Korman
will own 189,570 Shares (including 111,139
Shares currently held beneficially by Mr.
Korman, which number includes options which are
or will become exercisable within sixty days of
October 27, 1997) or approximately 3.4% of the
then outstanding Shares.
The Lepone Agreement.......... Pursuant to the Lepone Agreement, Mr. Lepone,
the Company's Chief Executive Officer, will
purchase from the Company at the Purchase Price
a number of Shares equal to 2% of the first
$5,000,000 worth of Shares purchased by the
Company pursuant to the Offer. Such shares will
be purchased from the Company in a private
placement transaction. Upon completion of the
Offer and the Financing and assuming the
Company purchases the maximum number of Shares
pursuant to the Offer (450,000) at the maximum
Purchase Price ($12.75 per Share), Mr. Lepone
will own 554,188 Shares (including 546,345
Shares currently held beneficially by Mr.
Lepone, which number includes options which are
or will become exercisable within sixty days of
October 27, 1997) or approximately 9.9% of the
then outstanding Shares.
The Gleklen Agreement......... Pursuant to the Gleklen Agreement, Mr. Gleklen,
a member of the Board of Directors of the
Company, will purchase from the Company at the
Purchase Price a number of Shares equal to 1%
of the first $5,000,000 worth of Shares
purchased by the Company pursuant to the Offer.
Such shares will be purchased from the Company
in a private placement transaction. Upon
completion of the Offer and the Financing and
assuming the Company purchases the maximum
number of Shares pursuant to the Offer
(450,000) at the maximum Purchase Price ($12.75
per Share), Mr. Gleklen will own 44,422 Shares
(including 40,500 Shares currently held
beneficially by Mr. Gleklen, which number
includes options which are or will become
exercisable within sixty days of October 27,
1997) or approximately 0.8% of the then
outstanding Shares.
5
<PAGE>
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION
WITH THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL. STOCKHOLDERS SHOULD NOT
RELY ON ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATIONS, IF
GIVEN OR MADE, AS HAVING BEEN AUTHORIZED BY THE COMPANY.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<S> <C>
SUMMARY.................................................................. 3
INTRODUCTION............................................................. 7
THE OFFER................................................................ 8
1. Number of Shares; Proration.......................................... 8
2. Tenders by Owners of Fewer than 100 Shares........................... 10
3. Procedure for Tendering Shares....................................... 10
4. Withdrawal Rights.................................................... 14
5. Purchase of Shares and Payment of Purchase Price..................... 14
6. Certain Conditions of the Offer...................................... 15
7. Price Range of Shares; Dividends..................................... 17
8. Background and Purpose of the Offer; Certain Effects of the Offer.... 17
9. Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares................................... 19
10. Source and Amount of Funds........................................... 20
11. Certain Information About the Company................................ 20
12. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act......................................................... 31
13. Certain Legal Matters; Regulatory Approvals.......................... 31
14. Certain U.S. Federal Income Tax Consequences......................... 31
15. Extension of the Offer; Termination; Amendments...................... 33
16. Fees and Expenses.................................................... 34
17. Miscellaneous........................................................ 35
</TABLE>
6
<PAGE>
TO THE HOLDERS OF SHARES OF COMMON STOCK OF
NUTRAMAX PRODUCTS, INC.
INTRODUCTION
NutraMax Products, Inc., a Delaware corporation (the "Company"), invites its
stockholders to tender shares of its common stock, par value $.001 per share
(the "Shares"), to the Company at prices not greater than $12.75 nor less than
$11.00 per Share in cash, specified by tendering stockholders, upon the terms
and subject to the conditions set forth in this Offer to Purchase and the
related Letter of Transmittal (which together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $12.75 nor less than
$11.00 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering stockholders. The Company will select the lowest Purchase Price
that will allow it to purchase 450,000 Shares (the "Requisite Number") or such
lesser number of Shares as are validly tendered and not withdrawn pursuant to
the Offer at prices not greater than $12.75 nor less than $11.00 per Share.
The Company will pay the Purchase Price for all Shares validly tendered prior
to the Expiration Date (as defined in Section 1) at prices at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the proration terms described below.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
If, before the Expiration Date, more than 450,000 Shares are validly
tendered at or below the Purchase Price and not withdrawn, the Company will,
upon the terms and subject to the conditions of the Offer, purchase Shares
first from all Odd Lot Owners (as defined in Section 2) who validly tender all
their Shares at or below the Purchase Price and then on a pro rata basis from
all other stockholders who validly tender Shares at prices at or below the
Purchase Price (and who do not withdraw them prior to the Expiration Date).
The Company will return at its own expense all Shares not purchased pursuant
to the Offer, including Shares tendered at prices greater than the Purchase
Price and not withdrawn and Shares not purchased because of proration. The
Purchase Price will be paid net to the tendering stockholder in cash for all
Shares purchased. Tendering stockholders will not be obligated to pay
brokerage commissions, solicitation fees or, subject to Instruction 7 of the
Letter of Transmittal, stock transfer taxes in connection with the Company's
purchase of Shares pursuant to the Offer. HOWEVER, ANY TENDERING STOCKHOLDER
OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO BOSTON EQUISERVE L.P.
(THE "DEPOSITARY") THE SUBSTITUTE FORM W-9 THAT IS INCLUDED WITH THE LETTER OF
TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX WITHHOLDING
OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH STOCKHOLDER OR OTHER PAYEE
PURSUANT TO THE OFFER. SEE SECTION 3. In addition, the Company will pay all
fees and expenses of D. F. King & Co., Inc. (the "Information Agent") and the
Depositary in connection with the Offer. See Section 16.
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their shares as a result of the Company's recent
announcement regarding fourth quarter performance. See Recent Developments in
Section 11. The Offer is being financed (the "Financing") by sales by the
Company of Shares as follows: (i) to Cape Ann Investors, L.L.C. ("Cape Ann"),
the Company's largest stockholder, pursuant to an Agreement dated as of
October 14, 1997, as amended on October 16, 1997 (the "Cape Ann Agreement"),
by and between the Company and Cape Ann; (ii) to Bernard J. Korman ("Mr.
Korman"), the Company's Chairman of the Board, pursuant to an Agreement dated
as of October 14, 1997 (the "Korman Agreement") by and between the Company and
Mr. Korman; (iii) to Donald E. Lepone ("Mr. Lepone"), the Company's Chief
Executive Officer, pursuant to an Agreement dated as of October 14, 1997 (the
"Lepone Agreement") by and
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between the Company and Mr. Lepone; and (iv) to Donald M. Gleklen ("Mr.
Gleklen" and together with Cape Ann, Mr. Korman and Mr. Lepone, the
"Investors"), a member of the Board of Directors of the Company, pursuant to
an Agreement dated as of October 16, 1997 (the "Gleklen Agreement" and
together with the Cape Ann Agreement, the Korman Agreement and the Lepone
Agreement, the "Investment Agreements") by and between the Company and Mr.
Gleklen (through an individual retirement account for his benefit).
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $12.75 nor less than $11.00 per Share) at which they are willing
to sell their Shares and, if any such Shares are purchased pursuant to the
Offer, to sell those Shares for cash without the usual transaction costs
associated with open-market sales.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
FINANCING. HOWEVER, STOCKHOLDERS SHOULD MAKE THEIR OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT
WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF
DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD
OF DIRECTORS HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
As of October 27, 1997, there were 5,619,768 Shares outstanding and 326,340
Shares issuable upon exercise of vested stock options under the Company's
stock option plans or agreements relating thereto (including stock options
which are or shall become exercisable within sixty days of such date). The
450,000 Shares that the Company is offering to purchase represent
approximately 8% of the outstanding Shares. In addition to the foregoing
(subject to certain antidilution adjustments), (i) 633,200 Shares are issuable
upon exercise of outstanding unvested options under the Company's stock option
plans or agreements relating thereto, which options are eligible for vesting
at various times through 2006, (ii) 225,000 Shares are issuable upon the
exercise of all warrants to purchase Shares of the Company's common stock
issued to Cape Ann and certain related persons of Cape Ann pursuant to the
Cape Ann Agreement (the "Warrants") which Warrants are exercisable for a
period of five years commencing on October 14, 1998, and (iii) 276,363 Shares
are issuable upon exercise of warrants ("ING Warrants") held by ING (U.S.)
Investment Corporation ("ING").
The Shares are listed and principally traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol "NMPC." On October 28, 1997, the last full trading
day on Nasdaq prior to the announcement by the Company of the price range of
the Offer, the closing per Share sales price as reported on Nasdaq was $12
1/2. On October 14, 1997, the last full trading day on Nasdaq prior to the
announcement by the Company of its intention to make the Offer, the closing
per Share sale price as reported on Nasdaq was $11 7/8. THE COMPANY URGES
STOCKHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
THE OFFER
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) 450,000 Shares or such lesser number
of Shares as are validly tendered before the Expiration Date (and not
withdrawn in accordance with Section 4) at a net cash price (determined in the
manner set forth below) not greater than $12.75 nor less than $11.00 per
Share. The term "Expiration Date" means 12:00 Midnight, Boston, Massachusetts
time, on November 28, 1997, unless and until the Company in its sole
discretion shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall refer to the latest time
and date at which the Offer, as so extended by the Company, shall expire. See
Section 15 for a description of the Company's right to extend the time during
which the Offer is open and to delay, terminate or amend the Offer. Subject to
Section 2, if the Offer is oversubscribed, Shares tendered at or below the
Purchase Price before the Expiration Date will be eligible for proration. The
proration period also expires on the Expiration Date.
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The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will
allow it to purchase 450,000 Shares or such lesser number of Shares as are
validly tendered and not withdrawn pursuant to the Offer at prices not greater
than $12.75 nor less than $11.00 per Share. As required under the rules
adopted by the Securities and Exchange Commission (the "Commission"), if (i)
the Company increases or decreases the price to be paid for Shares, the
Company increases the number of Shares being sought and such increase in the
number of Shares being sought exceeds 2% of the outstanding Shares, or the
Company decreases the number of Shares being sought and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner specified
in Section 15, the Offer will be extended until the expiration of a period of
ten business days commencing on the date of such notice. For purposes of the
Offer, a "business day" means any day other than a Saturday, Sunday or federal
holiday and consists of the time period from 12:01 a.m. through 12:00
Midnight, Boston, Massachusetts time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
stockholder desiring to tender Shares must specify the price (not greater than
$12.75 nor less than $11.00 per Share) at which such stockholder is willing to
have the Company purchase Shares. As promptly as practicable following the
Expiration Date, the Company will, in its sole discretion, determine the
Purchase Price (which will be not greater than $12.75 nor less than $11.00 per
Share) that it will pay for Shares validly tendered and not withdrawn pursuant
to the Offer, taking into account the number of Shares so tendered and the
prices specified by tendering stockholders. The Company will select the lowest
Purchase Price that will allow it to purchase 450,000 Shares or such lesser
number of Shares as are validly tendered and not withdrawn pursuant to the
Offer at prices not greater than $12.75 nor less than $11.00 per Share. The
Company will pay the Purchase Price, even if such Shares were tendered below
the Purchase Price, for all Shares validly tendered prior to the Expiration
Date at prices at or below the Purchase Price and not withdrawn, upon the
terms and subject to the conditions of the Offer. All Shares not purchased
pursuant to the Offer, including Shares tendered at prices greater than the
Purchase Price and Shares not purchased because of proration, will be returned
to the tendering stockholders at the Company's expense as soon as practicable
following the Expiration Date.
If the number of Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date is less than or equal to 450,000
Shares, the Company will, upon the terms and subject to the conditions of the
Offer, purchase at the Purchase Price all Shares so tendered.
Priority. Upon the terms and subject to the conditions of the Offer, in the
event that prior to the Expiration Date more than 450,000 Shares are validly
tendered at or below the Purchase Price and not withdrawn, the Company will
purchase such validly tendered Shares in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by an Odd Lot Owner (as defined in
Section 2) who:
(a) tenders all Shares beneficially owned by such Odd Lot Owner at or
below the Purchase Price; and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date on a pro rata basis.
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Proration. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Date. Proration for each stockholder tendering Shares
(other than Odd Lot Owners) shall be based on the ratio of the number of
Shares tendered by such stockholder at or below the Purchase Price to the
total number of Shares tendered by all stockholders (other than Odd Lot
Owners) at or below the Purchase Price. This ratio will be applied to
stockholders tendering Shares (other than Odd Lot Owners) to determine the
number of Shares that will be purchased from each such stockholder pursuant to
the Offer. Although the Company does not expect to be able to announce the
final results of such proration until approximately seven business days after
the Expiration Date, it will announce preliminary results of proration by
press release as promptly as practicable after the Expiration Date.
Stockholders can obtain such preliminary information from the Information
Agent and may be able to obtain such information from their brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a stockholder may affect the United States federal income tax
consequences to the stockholder of such purchase and therefore may be relevant
to a stockholder's decision whether, and in what amounts, to tender Shares. In
addition, the order in which Shares are purchased may affect the United States
federal income tax consequences to a stockholder, because, among other things,
as indicated in Section 14, the United States federal income tax consequences
to a stockholder may vary depending on the extent to which the stockholder's
voting interest in the Company is reduced and on the particular block of
Shares purchased from the stockholder. The Letter of Transmittal affords each
tendering stockholder tendering Shares in certificate form the opportunity to
designate the order of priority in which Shares tendered are to be purchased
in the event of proration for tax purposes.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares on or about October 29, 1997 and will be furnished
to brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the Company's stockholder list, or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to be beneficial owners of Shares.
2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer, will
accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price and not withdrawn on or prior to the Expiration Date
by or on behalf of any stockholder who owns, beneficially or of record, as of
the Expiration Date an aggregate of fewer than 100 Shares ("Odd Lot Owners").
To avoid proration, however, an Odd Lot Owner must validly tender at or below
the Purchase Price all Shares that such Odd Lot Owner owns, beneficially or of
record; partial tenders will not qualify for this preference. This priority is
not available to partial tenders or to owners of 100 or more Shares in the
aggregate, even if such owners have separate stock certificates for fewer than
100 Shares. Any Odd Lot Owner wishing to tender all Shares owned beneficially
or of record by such stockholder pursuant to this Offer must complete the box
captioned "Odd Lots" in the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery and must properly indicate in the section
entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in
the Letter of Transmittal the price at which such Shares are being tendered,
except that an Odd Lot Owner may check the item in the box entitled "Odd Lots"
indicating that the stockholder is tendering all of such stockholder's Shares
at the Purchase Price. See Section 3. Stockholders owning an aggregate of
fewer than 100 Shares whose Shares are purchased pursuant to the Offer will
avoid both the payment of brokerage commissions and any applicable odd lot
discounts payable on a sale of their Shares in transactions on a stock
exchange.
3. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificate for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
(or, for Eligible Institutions only, a manually signed facsimile thereof)
with any required signature guarantees, or an Agent's Message in connection
with a book-entry transfer, together in each case
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with any other documents required by the Letter of Transmittal, must be
received prior to 12:00 Midnight, Boston, Massachusetts time, on the
Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase; or
(ii) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH STOCKHOLDER
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" IN THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.0625 OR
ONE SIXTEENTH ( /1///1//6/) OF A DOLLAR) AT WHICH SUCH STOCKHOLDER'S SHARES
ARE BEING TENDERED, EXCEPT THAT AN ODD LOT OWNER MAY CHECK THE ITEM IN THE BOX
OF THE LETTER OF TRANSMITTAL ENTITLED "ODD LOTS" INDICATING THAT THE
STOCKHOLDER IS TENDERING ALL OF SUCH STOCKHOLDER'S SHARES AT THE PURCHASE
PRICE. Other stockholders wishing to maximize the possibility that their
Shares will be purchased at the Purchase Price may check the box on the Letter
of Transmittal marked "Shares Tendered at Price Determined by Dutch Auction."
Checking this box may result in a purchase of the Shares so tendered at the
minimum price of $11.00 per Share. Stockholders desiring to tender Shares at
more than one price must complete separate Letters of Transmittal for each
price at which Shares are being tendered, except that the same Shares cannot
be tendered (unless properly withdrawn previously in accordance with the terms
of the Offer) at more than one price. IN ORDER TO VALIDLY TENDER SHARES, ONE
AND ONLY ONE PRICE BOX MUST BE CHECKED IN THE APPROPRIATE SECTION ON EACH
LETTER OF TRANSMITTAL.
In addition, Odd Lot Owners who tender all Shares must complete the box
entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the priority available
to Odd Lot Owners as set forth in Section 2.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is
signed by the registered holder of the Shares (which term, for purposes of
this Section, includes any participant in The Depository Trust Company or
Philadelphia Depository Trust Company (the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the holder of the Shares)
tendered therewith and payment and delivery are to be made directly to such
registered holder, or (ii) if Shares are tendered for the account of a member
firm of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust Company
(not a savings bank or savings and loan association) having an office, branch
or agency in the Untied States (each such entity being hereinafter referred to
as an "Eligible Institution"). In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If a certificate representing
Shares is registered in the name of a person other than the signer of a Letter
of Transmittal, or if payment is to be made, or Shares not purchased or
tendered are to be issued, to a person other than the registered holder, the
certificate must be endorsed or accompanied by an appropriate stock power, in
either case signed exactly as the name of the registered holder appears on the
certificate, with the signature on the certificate or stock power guaranteed
by an Eligible Institution. In this regard see Section 5 for information with
respect to applicable stock transfer taxes. In all cases, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of certificates for such Shares (or a
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities as described
above), a properly completed and duly executed Letter of Transmittal (or, for
Eligible Institutions only, a manually signed facsimile thereof), or an
Agent's Message in connection with a book-entry transfer, together in each
case with any other documents required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of
the Offer within two business days after the date of this Offer to
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Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of the Shares by
causing such Facility to transfer such Shares into the Depositary's account in
accordance with such Facility's procedure for such transfer. Even though
delivery of Shares may be effected through book-entry transfer into the
Depositary's account at one of the Book-Entry Transfer Facilities, a properly
completed and duly executed Letter of Transmittal (or, for Eligible
Institutions only, a manually signed facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, together in each case with any other required documents must, in any
case, be transmitted to and received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase prior to the Expiration
Date, or the guaranteed delivery procedure set forth below must be followed.
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO ONE
OF THE BOOK-ENTRY TRANSFER FACILITIES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message from a Book-Entry Transfer
Facility transmitted to, and received by, the Depositary forming a part of a
timely confirmation of a book-entry transfer of Shares (a "Book-Entry
Confirmation") which states that (a) such a Book-Entry Transfer Facility has
received from the participant in such Book-Entry Transfer Facility an express
acknowledgment of such participant's tender of the Shares that are the subject
of the Book-Entry Confirmation, (b) the participant in such Book-Entry
Transfer Facility has received and agrees to be bound by the terms of the
Letter of Transmittal, and (c) the Company may enforce such agreement against
the participant in such Book-Entry Transfer Facility.
Delivery of documents to a Book-Entry Transfer Facility in accordance with
such Facility's procedures does not constitute delivery to the Depositary.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier, telegram
or facsimile transmission), on or prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery substantially in
the form the Company has provided with this Offer to Purchase (indicating
the price at which the Shares are being tendered), including (where
required) a signature guarantee by an Eligible Institution in the form set
forth in such Notice of Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or, for Eligible Institutions only, a manually signed facsimile thereof),
or an Agent's Message in connection with a book-entry transfer, together in
each case with any required signature guarantees or other documents
required by the Letter of Transmittal, are received by the Depositary
within three Nasdaq trading days after the date the Depositary receives
such Notice of Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a stockholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at a Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering stockholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such stockholder.
Federal Income Tax Withholding. To prevent backup federal income tax
withholding equal to 31% of the gross payments payable pursuant to the Offer,
each stockholder who does not otherwise establish an exemption from backup
withholding must notify the Depositary of such stockholder's correct taxpayer
identification number
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(or certify that such taxpayer is awaiting a taxpayer identification number)
and provide certain other information by completing, under penalties of
perjury, the Substitute Form W-9 included in the Letter of Transmittal.
Noncorporate foreign stockholders should generally complete and sign a Form W-
8, Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. As more fully described
below, in the case of a foreign stockholder, even if such stockholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold 30% of the gross payments made pursuant to the Offer
unless a reduced rate of withholding or an exemption from withholding is
applicable.
The Depositary will withhold United States federal income taxes equal to 30%
of the gross payments payable to a foreign stockholder unless the Company and
the Depositary determine that (i) a reduced rate of withholding is available
pursuant to a tax treaty or (ii) an exemption from withholding is applicable
because such gross proceeds are effectively connected with the conduct of a
trade or business within the United States. For this purpose, a foreign
stockholder is any stockholder that is not (a) a citizen or resident of the
United States, (b) a corporation, partnership, or other entity created or
organized in or under the laws of the United States, any State or any
political subdivision thereof (other than any partnership treated as foreign
under United States Treasury regulations), or (c) an estate or trust, the
income of which is subject to United States federal income taxation regardless
of the source of such income. In order to obtain a reduced rate of withholding
pursuant to a tax treaty, a foreign stockholder must deliver to the Depositary
before any payment a properly completed and executed IRS Form 1001. In order
to obtain an exemption from withholding on the grounds that the gross proceeds
paid pursuant to the Offer are effectively connected with the conduct of a
trade or business within the United States, a foreign stockholder must deliver
to the Depositary before any payment a properly completed and executed IRS
Form 4224. The Company and the Depositary will determine a stockholder's
status as a foreign stockholder and eligibility for a reduced rate of, or
exemption from, withholding by reference to any outstanding certificates or
statements concerning eligibility for reduced rate of, or exemption from,
withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and
circumstances indicate that such reliance thereon is not warranted. A foreign
stockholder may be eligible to obtain a refund of all or a portion of any tax
withheld if such stockholder meets the "complete redemption," "substantially
disproportionate" or "not essentially equivalent to a dividend" tests
described in Section 14 or is otherwise able to establish that no tax or a
reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or a treaty-reduced rate of withholding.
For a discussion of certain United States federal income tax consequences
generally applicable to tendering stockholders, see Section 14.
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under
the Exchange Act for a person acting alone or in concert with others, directly
or indirectly, to tender Shares for such person's own account unless at the
time of tender and at the Expiration Date such person has a "net long
position" equal to or greater than the amount tendered in (i) the Shares and
will deliver or cause to be delivered such Shares for the purpose of tender to
the Company within the period specified in the Offer, or (ii) other securities
immediately convertible into, exercisable for or exchangeable into Shares
("Equivalent Securities") and, upon the acceptance of such tender, will
acquire such Shares by conversion, exchange or exercise of such Equivalent
Securities to the extent required by the terms of the Offer and will deliver
or cause to be delivered such Shares so acquired for the purpose of tender to
the Company within the period specified in the Offer. Rule 14e-4 also provides
a similar restriction applicable to the tender or guarantee of a tender on
behalf of another person. A tender of Shares made pursuant to any method of
delivery set forth herein will constitute the tendering stockholder's
representation and warranty to the Company that (i) such stockholder has a
"net long position" in Shares or Equivalent Securities being tendered within
the meaning of Rule 14e-4, and (ii) such tender of Shares complies with Rule
14e-4. The Company's acceptance for payment of Shares tendered pursuant to the
Offer will constitute a binding agreement between the tendering stockholder
and the Company upon the terms and subject to the conditions of the Offer.
Determinations of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity,
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form, eligibility (including time of receipt) and acceptance for payment of
any tender of Shares will be determined by the Company, in its sole
discretion, which determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any or all tenders it determines
not to be in proper form or the acceptance of or payment for which may, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular Share or any particular
stockholder. No tender of Shares will be deemed to be properly made until all
defects or irregularities have been cured or waived. None of the Company, the
Depositary, the Information Agent or any other person is or will be obligated
to give notice of any defects or irregularities in tenders, and none of them
will incur any liability for failure to give any such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OR TRANSMITTAL,
MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless accepted for
payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 Midnight, Boston, Massachusetts time, on December 29,
1997.
For a withdrawal to be effective, the Depositary must receive (at its
address set forth on the back cover of this Offer to Purchase) a notice of
withdrawal in writing, telegraphic or facsimile transmission form on a timely
basis. Such withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares tendered, the number of Shares to
be withdrawn and the name of the registered holder, if different from that of
the person who tendered such Shares. If the certificates have been delivered
or otherwise identified to the Depositary, then, prior to the release of such
certificates, the tendering stockholder must also submit the serial number
shown on the particular certificates evidencing the Shares and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution
(except in the case of Shares tendered by an Eligible Institution). If Shares
have been tendered pursuant to the procedure for book-entry transfer set forth
in Section 3, the notice of withdrawal must specify the name and the number of
the account at the applicable Book-Entry Transfer Facility to be credited with
the withdrawn Shares and otherwise comply with the procedures of such
Facility. All questions as to the form and validity, including time of
receipt, of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all
parties. None of the Company, the Depositary, the Information Agent or any
other person is or will be obligated to give any notice of any defects or
irregularities in any notice of withdrawal, and none of them will incur any
liability for failure to give any such notice. Withdrawals may not be
rescinded, and any Shares properly withdrawn will thereafter be deemed not
tendered for purposes of the Offer. However, withdrawn Shares may be re-
tendered before the Expiration Date by again following any of the procedures
described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and
such Shares may only be withdrawn to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders, and will accept for
14
<PAGE>
payment and pay for (and thereby purchase) Shares validly tendered at or below
the Purchase Price and not withdrawn as soon as practicable after the
Expiration Date. The Company will select the lowest Purchase Price that will
allow it to purchase 450,000 Shares or such lesser number of Shares as are
validly tendered and not withdrawn pursuant to the Offer at prices not greater
than $12.75 nor less than $11.00 per Share. For purposes of the Offer, the
Company will be deemed to have accepted for payment (and therefore purchased),
subject to proration, Shares that are validly tendered at or below the
Purchase Price and not withdrawn when, as and if it gives oral or written
notice to the Depositary of its acceptance of such Shares for payment pursuant
to the Offer.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per Share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Date. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities), a properly completed and duly executed Letter of Transmittal (or,
for Eligible Institutions only, a manually signed facsimile thereof), or any
Agent's Message in connection with a book-entry transfer, in each case with
any other required documents.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering
stockholders. In the event of proration, the Company will determine the
proration factor and pay for those tendered Shares accepted for payment as
soon as practicable after the Expiration Date. However, the Company does not
expect to be able to announce the final results of any such proration until
approximately seven business days after the Expiration Date. Under no
circumstances will the Company pay interest on the Purchase Price including,
without limitation, by reason of any delay in making payment. Certificates for
all Shares not purchased, including all Shares tendered at prices greater than
the Purchase Price and Shares not purchased due to proration, will be returned
(or, in the case of Shares tendered by book-entry transfer, such Shares will
be credited to the account maintained with one of the Book-Entry Transfer
Facilities by the participant who so delivered such Shares) as promptly as
practicable following the Expiration Date or termination of the Offer without
expense to the tendering stockholder. In addition, if certain events occur,
the Company may not be obligated to purchase Shares pursuant to the Offer. See
Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer; provided, however,
that if payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) if unpurchased Shares are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person signing the Letter of Transmittal, the amount of all stock transfer
taxes, if any (whether imposed on the registered holder or such other person),
payable on account of the transfer to such person will be deducted from the
Purchase Price unless evidence satisfactory to the Company of the payment of
such taxes or exemption therefrom is submitted. See Instruction 7 of the
Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER
OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH STOCKHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING
FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN STOCKHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance
15
<PAGE>
for payment of, or the purchase of and the payment for, Shares tendered,
subject to Rule 13e-4(f) promulgated under the Exchange Act, if at any time on
or after October 29, 1997, and prior to the time of payment for any such
Shares (whether any Shares have theretofore been accepted for payment,
purchased or paid for pursuant to the Offer) the Company shall determine
(after consultation with Cape Ann as provided in the Cape Ann Agreement) that
any of the following events shall have occurred:
(a) there shall have been threatened, instituted or pending before any
court, agency, authority or other tribunal any action, suit or proceeding
by any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which (i) challenges or seeks to make
illegal, or to delay or otherwise directly or indirectly to restrain,
prohibit or otherwise affect the making of the Offer, the acquisition of
Shares pursuant to the offer or is otherwise related in any manner to, or
otherwise affects, the Offer; or (ii) could, in the sole judgment of the
Company, materially affect the business, condition (financial or
otherwise), income, operations or prospects of the Company and its
subsidiaries taken as a whole, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company and its
subsidiaries taken as a whole; or
(b) there shall have been any action threatened or taken, or any approval
withheld, or any statute, rule or regulation invoked, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be applicable
to the Offer or the Company or any of its subsidiaries, by any government
or government regulatory or administrative authority or agency or tribunal,
domestic or foreign, which, in the sole judgment of the Company, would or
might directly or indirectly result in any of the consequences referred to
in clause (i) or (ii) of paragraph (a) above; or
(c) there shall have occurred (i) the declaration of any banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory); (ii) any general suspension of trading
in, or limitation of prices for, securities on any United States national
securities exchange or in the over-the-counter market; (iii) the
commencement of a war, armed hostilities or any other national or
international crisis directly or indirectly involving the United States;
(iv) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event which, in
the sole judgment of the Company, might materially affect, the extension of
credit by banks or other lending institutions in the United States; (v) any
significant decrease in the market price of the Shares or in the market
prices of equity securities generally in the United States or any change in
the general political, market, economic or financial conditions or in the
commercial paper markets in the United States or abroad that could have in
the judgment of the Company a material adverse effect on the business,
condition (financial or otherwise), income, operations or prospects or the
Company and its subsidiaries, taken as a whole, or on the trading in the
Shares or; (vi) in the case of any of the foregoing existing at the time of
the announcement of the Offer, a material acceleration or worsening
thereof; or
(d) any change shall occur or be threatened in the condition (financial
or otherwise), business, operations, properties, assets, liabilities,
income or prospects of the Company and its subsidiaries, taken as a whole,
which is or may be material and adverse to the Company and its subsidiaries
taken as a whole (a "Material Adverse Change"); or
(e) Cape Ann shall have terminated its obligations relating to the
Financing as a result of a Material Adverse Change; or
(f) a tender or exchange offer with respect to some or all of the Shares
(other than the Offer), or a merger or acquisition proposal for the
Company, shall have been proposed, announced or made by another person or
shall have been publicly disclosed, or the Company shall have learned that
any person or "group" (within the meaning of Section 13(d)(3) of the
Exchange Act), other than any Investors, shall have acquired or proposed to
acquire beneficial ownership of more than 5% of the outstanding Shares, or
any new group shall have been formed that beneficially owns more than 5% of
the outstanding Shares.
The foregoing conditions are for the Company's benefit and may be asserted
by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived
by the Company in whole or in part. The Company's failure at any time to
exercise any of the
16
<PAGE>
foregoing rights shall not be deemed a waiver of any such right, and each such
right shall be deemed an ongoing right that may be asserted at any time and
from time to time. Any determination by the Company regarding the
inadvisability of proceeding with the purchase of or payment for any Shares
tendered will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and principally traded on Nasdaq. The Company's stock
began trading on Nasdaq on October 31, 1996. Prior to that date, the Company's
stock was traded in the National Association of Securities Dealers National
Market System ("Nasdaq National Market"). The high and low bid quotations per
Share on Nasdaq and Nasdaq National Market, as applicable, as compiled from
published financial sources and the quarterly cash dividends paid per Share
for the periods indicated are listed in the table set forth below. The Company
has a "4-5-4" fiscal calendar wherein each fiscal quarter contains two four
week periods and one five week period, with each period beginning on a Sunday
and ending on a Saturday.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
-------- ------ ---------
<S> <C> <C> <C>
FISCAL 1996
1st Quarter...................................... 10 7 3/4 None
2nd Quarter...................................... 10 1/8 8 1/2 None
3rd Quarter...................................... 10 1/8 8 1/8 None
4th Quarter...................................... 9 15/16 8 None
FISCAL 1997
1st Quarter...................................... 11 8 5/8 None
2nd Quarter...................................... 12 5/8 10 1/4 None
3rd Quarter...................................... 13 3/8 11 3/8 None
4th Quarter...................................... 15 5/8 12 1/2 None
FISCAL 1998
1st Quarter (through October 28, 1997)........... 14 3/8 11 7/8 None
</TABLE>
The closing per Share sales price as reported on Nasdaq on October 28, 1997,
the last full trading day before the announcement by the Company of the price
range of the Shares sought in the Offer, was $12 1/2. On October 14, 1997, the
last full trading day on Nasdaq prior to the announcement by the Company of
its intention to make the Offer, the closing per Share sales price as reported
on Nasdaq was $11 7/8. THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT
QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their Shares as a result of the Company's recent
announcement regarding fourth quarter performance. See "Recent Developments"
in Section 11. The Offer is being financed by sales by the Company of Shares
as follows: (i) to Cape Ann, the Company's largest stockholder, pursuant to
the Cape Ann Agreement; (ii) to Mr. Korman, the Company's Chairman of the
Board, pursuant to the Korman Agreement; (iii) to Mr. Lepone, the Company's
Chief Executive Officer, pursuant to the Lepone Agreement; and (iv) to Mr.
Gleklen, a member of the Board of Directors of the Company, pursuant to the
Gleklen Agreement.
The Offer provides stockholders who are considering a sale of all or a
portion of their Shares the opportunity to determine the price or prices (not
greater than $12.75 nor less than $11.00 per Share) at which they are willing
to sell their Shares and, if any such Shares are purchased pursuant to the
Offer, to sell those Shares for cash without the usual transaction costs
associated with open market sales.
17
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
FINANCING. HOWEVER, STOCKHOLDERS SHOULD MAKE THEIR OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT
WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF
DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO
TENDER OR REFRAIN FROM TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD
OF DIRECTORS HAS AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION.
The Investors will purchase from the Company a number of Shares equal to the
number of Shares acquired by the Company pursuant to the Offer at the Purchase
Price. The proceeds of such sale to the Investors will be used to finance the
Offer.
DESCRIPTION OF THE FINANCING
The following summary of the Financing is qualified in its entirety by
reference to the Investment Agreements, which are attached as Exhibits to the
Schedule 13E-4 to which this Offer to Purchase relates. Certain defined terms
used in the description of the Financing below which are not otherwise defined
in this Offer to Purchase and which are defined in the Investment Agreements
shall have the respective meanings set forth therein.
The Cape Ann Agreement. Pursuant to the Cape Ann Agreement, Cape Ann, the
Company's largest stockholder, will purchase from the Company at the Purchase
Price a number of Shares equal to (i) 77% of the first $5,000,000 worth of
Shares purchased by the Company pursuant to the Offer plus (ii) 100% of all
additional Shares purchased by the Company pursuant to the Offer. Such Shares
will be purchased from the Company in a private placement transaction. Upon
completion of the Offer and the Financing and assuming the Company purchases
the maximum number of Shares pursuant to the Offer (450,000) at the maximum
Purchase Price ($12.75 per Share), Cape Ann will own 1,169,958 Shares
(including 810,154 Shares currently owned by Cape Ann) or approximately 20.8%
of the then outstanding Shares.
In connection with the Cape Ann Agreement, the Company on October 14, 1997
issued 225,000 Warrants to Cape Ann and certain related persons of Cape Ann.
Subject to certain anti-dilution adjustments, each Warrant is exercisable for
one share of the Company's common stock at an exercise price equal to the fair
market value of a Share (determined based on the average prices for the 20
trading days prior to of the first anniversary of the Cape Ann Agreement),
less $2.25. The Warrants are exercisable for a period of five years commencing
on the first anniversary of the Cape Ann Agreement. Under the Cape Ann
Agreement, Cape Ann is entitled to certain registration rights which enable it
to cause the Company to register the Warrants, the Shares issuable upon
exercise of the Warrants and the Shares purchased by Cape Ann pursuant to the
Cape Ann Agreement. Upon exercise of the Warrants, Cape Ann will own 1,394,958
Shares or approximately 23.9% of the then outstanding Shares (assuming (i) the
Company purchases the maximum number of Shares pursuant to the Offer (450,000)
at the maximum Purchase Price ($12.75 per Share), (ii) no additional Shares
are issued by the Company prior to the exercise of the Warrants, and (iii) no
antidilution adjustments are triggered with respect to the Warrants prior to
such exercise).
In addition, the Cape Ann Agreement also amends certain provisions of the
Stock Purchase Agreement dated as of August 12, 1997, as amended (the "Stock
Purchase Agreement"), by and between the Company and Cape Ann to: (i) provide
Cape Ann with registration rights with respect to the Warrants and the Shares
issuable upon exercise of the Warrants, and (ii) to permit, notwithstanding
certain standstill provisions prohibiting, among other things, Cape Ann's
acquisition of equity securities of the Company, Cape Ann's purchase of Shares
(a) in connection with the Financing, (b) upon exercise of the Warrants, and
(c) from time to time in the open market or in privately negotiated
transactions to enable it to maintain its percentage ownership of voting
securities of the Company after purchases made pursuant to clauses (a) and (b)
above.
18
<PAGE>
The Korman Agreement. Pursuant to the Korman Agreement, Mr. Korman, the
Company's Chairman of the Board, will purchase from the Company at the
Purchase Price a number of Shares equal to 20% of the first $5,000,000 worth
of Shares purchased by the Company pursuant to Offer. Such Shares shall be
purchased from the Company in a private placement transaction. Under the
Korman Agreement, Mr. Korman is entitled to certain registration rights which
enable it to cause the Company to register the Shares purchased by Mr. Korman
pursuant to the Korman Agreement.
Upon completion of the Offer and the Financing and assuming the Company
purchases the maximum number of Shares pursuant to the Offer (450,000) at the
maximum Purchase Price ($12.75 per Share), Mr. Korman will own 189,570 Shares
(including 111,139 shares currently held beneficially by Mr. Korman, which
number includes options which are or will become exercisable within sixty days
of October 27, 1997) or approximately 3.4% of the then outstanding Shares.
The Lepone Agreement. Pursuant to the Lepone Agreement, Mr. Lepone, the
Company's Chief Executive Officer, will purchase from the Company at the
Purchase Price a number of Shares equal to 2% of the first $5,000,000 worth of
Shares purchased by the Company pursuant to Offer. Such Shares shall be
purchased from the Company in a private placement transaction.
Upon completion of the Offer and the Financing and assuming the Company
purchases the maximum number of Shares pursuant to the Offer (450,000) at the
maximum Purchase Price ($12.75 per Share), Mr. Lepone will own 554,188 Shares
(including 546,345 Shares currently held beneficially by Mr. Lepone, which
number includes options which are or will become exercisable within sixty days
of October 27, 1997) or approximately 9.9% of the then outstanding Shares.
The Gleklen Agreement. Pursuant to the Gleklen Agreement, Mr. Gleklen, a
member of the Board of Directors of the Company, will (through an individual
retirement account for his benefit) purchase from the Company at the Purchase
Price a number of Shares equal to 1% of the first $5,000,000 worth of Shares
purchased by the Company pursuant to Offer. Such Shares shall be purchased
from the Company in a private placement transaction.
Upon completion of the Offer and the Financing and assuming the Company
purchases the maximum number of Shares pursuant to the Offer (450,000) at the
maximum Purchase Price ($12.75 per Share), Mr. Gleklen will own 44,422 Shares
(including 40,500 Shares currently held beneficially by Mr. Gleklen, which
number includes options which are or will become exercisable within sixty days
of October 27, 1997) or approximately 0.8% of the then outstanding Shares.
9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE SHARES
As of October 27, 1997, there were 5,619,768 Shares outstanding and 326,340
Shares issuable upon exercise of vested stock options under the Company's
stock option plans or agreements related thereto (including stock options
which are or shall become exercisable within sixty days of such date). As of
October 27, 1997, the Company's directors and executive officers as a group (9
persons) beneficially owned 1,037,659 Shares which constituted approximately
18.5% of the outstanding Shares at such time. Pursuant to the Lepone, Korman
and Gleklen Agreements, none of Messrs. Lepone, Korman or Gleklen will tender
any Shares pursuant to the Offer. In addition, the Company has been advised
that none of its directors or executive officers intends to tender any Shares
pursuant to the Offer. However, Messrs. Lepone, Korman and Gleklen have agreed
to purchase 7,843 Shares, 78,431 Shares and 3,922 Shares, respectively, in
connection with the Financing upon completion of the Offer (assuming the
Company purchases the maximum number of Shares (450,000) at the maximum
Purchase Price ($12.75 per Share) pursuant to the Offer). If the Company
purchases 450,000 Shares pursuant to the Offer (approximately 8% of the
outstanding Shares as of October 27, 1997), and if no director or executive
officer tenders Shares pursuant to the Offer, then, after the purchase of
Shares pursuant to the Offer and the purchase of
19
<PAGE>
7,843 Shares, 78,431 Shares and 3,922 Shares by Messrs. Lepone, Korman and
Gleklen respectively, in connection with the Financing, the Company's
directors and executive officers as a group would beneficially own
approximately 20.1% of the outstanding Shares, and Messrs. Lepone, Korman and
Gleklen would beneficially own 9.9%, 3.4% and 0.8%, respectively, of the then
outstanding Shares. In addition to the foregoing (subject to certain
antidilution adjustments), (i) 608,400 Shares are issuable to the Company's
directors and officers as a group upon exercise of outstanding unvested
options under the Company's stock option plans or agreements relating thereto,
which options are eligible for vesting at various times through 2006, (ii)
225,000 Shares are issuable upon the exercise of all Warrants held by Cape Ann
and certain related persons, which Warrants are exercisable for a period of
five years commencing on October 14, 1998, and (iii) 276,363 Shares are
issuable upon the exercise of the ING Warrants by ING. Upon exercise of the
Warrants, Cape Ann will own 1,394,958 Shares or approximately 23.9% of the
then outstanding Shares (assuming (i) the Company purchases the maximum number
of Shares pursuant to the Offer (450,000) at the maximum Purchase Price
($12.75 per Share), (ii) no additional Shares are issued by the Company prior
to the exercise of the Warrants, and (iii) no antidilution adjustments are
triggered with respect to the Warrants prior to such exercise. Upon exercise
of the ING Warrants, ING will own 276,363 Shares or approximately 4.7% of the
then outstanding Shares (assuming (i) the Company purchases the maximum number
of Shares pursuant to the Offer (450,000) at the maximum Purchase Price
($12.75 per Share), (ii) no additional Shares are issued by the Company prior
to the exercise of the ING Warrants, and (iii) no antidilution adjustments are
triggered with respect to the ING Warrants prior to such exercise).
Except as set forth in Schedule I hereto or otherwise described in this
Offer to Purchase, based upon the Company's records and upon information
provided to the Company by its directors, executive officers, associates and
subsidiaries, neither the Company nor any of its associates or subsidiaries or
persons controlling the Company nor, to the best of the Company's knowledge,
any of the directors or executive officers of the Company or any of its
subsidiaries, nor any associates or subsidiaries of any of the foregoing, has
effected any transactions in the Shares during the 40 business days prior to
the date hereof.
Except as set forth in this Offer to Purchase, neither the Company or any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations).
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 450,000 Shares pursuant to the Offer at
a Purchase Price of $12.75 per Share, the Company expects the maximum
aggregate cost of the Shares purchased in the Offer to be approximately $5.738
million. The funds necessary to purchase Shares pursuant to the Offer will
come from the proceeds received from the sale to the Investors of a number of
Shares equal to the number of Shares purchased by the Company pursuant to the
Offer. The funds necessary to pay all related fees and expenses of the Offer
will come from the Company's working capital. See Sections 8, 9 and 11 of this
Offer to Purchase.
11. CERTAIN INFORMATION ABOUT THE COMPANY
The Company is a Delaware corporation engaged principally in the manufacture
and marketing of private label health and personal care products. The
Company's principal executive offices are located at 9 Blackburn Drive,
Gloucester, Massachusetts 01930. Its telephone number at this location is
(978) 283-1800.
20
<PAGE>
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
The following table presents summary historical consolidated financial data
for the periods indicated. The historical financial data (other than book
value per share and the ratio of earnings to fixed charges, which information
was prepared for this Offer to Purchase in accordance with applicable rules
promulgated under the Exchange Act) for the years ended September 28, 1996 and
September 30, 1995 was derived from the audited consolidated financial
statements contained in the Company's Annual Reports on Form 10-K for the year
ended September 28, 1996 and for the year ended September 30, 1995,
respectively. The historical financial data (other than book value per share
and the ratio of earnings to fixed charges, which information was prepared for
this Offer to Purchase in accordance with applicable rules promulgated under
the Exchange Act) for the nine months ended June 28, 1997 was derived from the
unaudited consolidated condensed financial statements contained in the
Company's Quarterly Report on Form 10-Q for the nine months ended June 28,
1997. The following summary financial information should be read in
conjunction with, and is qualified in its entirety by reference to, the
audited and unaudited financial statements and related notes, and other
information pertaining to the Company, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations," contained in the
Annual Reports on Form 10-K for the years ended September 28, 1996 and
September 30, 1995 and the Quarterly Report on Form 10-Q for the nine months
ended June 28, 1997 referred to above. Copies of these reports may be obtained
from the Commission in the manner specified in "Additional Information"
located at the end of this Section.
21
<PAGE>
NUTRAMAX PRODUCTS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
JUNE 28, SEPTEMBER 28, SEPTEMBER 30,
1997 1996 1995
----------- ------------- -------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Current Assets:
Cash................................ $ 92 $ 294 $ 503
Accounts receivable, net............ 12,285 12,848 9,050
Inventories......................... 22,386 18,231 12,497
Deferred income taxes............... 922 801 977
Prepaid expenses and other expense.. 753 618 525
------- ------- -------
Total Current Assets............ 36,438 32,882 23,552
Property, Plant and Equipment, net.... 33,589 29,207 23,714
Restricted Cash....................... 815 4,742 --
Goodwill, net......................... 13,052 13,415 13,978
Other Assets.......................... 3,641 2,632 1,830
------- ------- -------
$87,535 $82,878 $63,074
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Accounts payable.................... $ 7,035 $ 7,265 $ 6,191
Accrued payroll and related taxes... 901 666 455
Accrued expenses--other............. 989 962 850
Current maturities of long-term
debt............................... 2,958 14,498 1,904
------- ------- -------
Total Current Liabilities....... 11,883 23,391 9,400
Long-Term Debt, less current
maturities........................... 60,095 11,780 12,550
Other Long Term Liabilities........... -- 286 312
Deferred Income Taxes................. 2,451 1,604 1,579
Stockholders Equity:
Common Stock--$.001 par value....... 5 9 9
Additional paid-in capital.......... 0(1) 23,468 22,567
Retained earnings................... 13,101(1) 22,340 16,657
------- ------- -------
Total Stockholders' Equity...... 13,106 45,817 39,233
------- ------- -------
$87,535 $82,878 $63,074
======= ======= =======
Book value per share of Common Stock
outstanding
as of the balance sheet date......... $ 2.13 $ 5.37 $ 4.60
</TABLE>
NOTES:
- --------
(1) As a result of the MEDIQ Stock Repurchase, additional paid-in capital was
reduced to $0 and retained earnings was reduced to $13,101.
22
<PAGE>
NUTRAMAX PRODUCTS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
YEAR ENDED
----------------
NINE MONTHS SEPT. SEPT.
ENDED 28, 30,
JUNE 28, 1997 1996 1995
------------- ------- -------
<S> <C> <C> <C>
(UNAUDITED)
INCOME STATEMENT DATA:
Net sales...................................... $ 70,219 $80,479 $63,111
Cost of sales.................................. 51,609 57,686 45,916
----------- ------- -------
Gross profit................................... 18,610 22,793 17,195
Selling, general and administrative expenses... 9,884 11,662 8,694
----------- ------- -------
Operating income............................... 8,726 11,131 8,501
Other credits (charges):
Interest expense............................. (3,245) (1,479) (1,427)
Interest income.............................. 121 95 13
Other........................................ (46) (384) 303
----------- ------- -------
Income before income tax expense............... 5,556 9,363 7,390
Income tax expense............................. 2,250 3,680 2,916
----------- ------- -------
Net income..................................... $ 3,306 $ 5,683 $ 4,474
=========== ======= =======
Earnings per share............................. $ .54 $ .67 $ .53
=========== ======= =======
Weighted average shares outstanding............ 6,156 8,531 8,520
=========== ======= =======
OTHER FINANCIAL DATA:
Ratio of earnings to fixed charges (1)......... 2.52 6.30 5.64
NOTES:
</TABLE>
- --------
(1) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of income before provision for income taxes plus fixed
charges. Fixed charges consist of interest expense (including amortization
of deferred financing costs) and one-third of rent expense from operating
leases which management believes is a reasonable approximation of an
interest factor.
23
<PAGE>
PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
The following summary unaudited pro forma condensed consolidated financial
statements as of and for the year ended September 28, 1996 were derived in
part from the audited consolidated financial statements contained in the
Company's Annual Report on Form 10-K for the year ended September 28, 1996.
The unaudited pro forma financial data for the nine months ended June 28, 1997
was derived in part from the unaudited consolidated financial statements for
the nine months ended June 28, 1997 contained in the Company's Quarterly
Report on Form 10-Q for the period ended June 28, 1997. The pro forma
condensed consolidated statements on income give effect to the Offer and the
MEDIQ Stock Repurchase (as defined below) as if such transactions were
consummated as of the beginning of the periods presented. The September 28,
1996 balance sheet gives effect to the Offer and the MEDIQ Stock Repurchase as
if such transactions had occurred as of September 28, 1996. The pro forma June
28, 1997 balance sheet gives effect to the Offer only, as the MEDIQ Stock
Repurchase is included in the historical amounts presented as of June 28,
1997. The following summary financial information should be read in
conjunction with, and is qualified in its entirety by reference to, the
audited and unaudited financial statements and related notes, and other
information pertaining to the Company, including "Management's Discussion and
Analysis of Financial Condition and Results of Operations," contained in the
Annual Report on Form 10-K for the year ended September 28, 1996 and the
Quarterly Report on Form 10-Q for the nine months ended June 28, 1997 referred
to above. Copies of these reports may be obtained from the Commission in the
manner specified in "Additional Information" below. The unaudited pro forma
information (i) does not purport to represent what the results of operation or
financial position of the Company would actually have been if these
transactions had in fact occurred on such date or to project the Company's
financial position or results of operation for any future period, and (ii)
does not reflect the recent acquisition of the first aid products business
(the "AWC Business") of American White Cross, Inc. ("AWC") and Weaver
Manufacturing Corporation ("Weaver"). See "Recent Developments."
For purposes of this Offer to Purchase, the phrase "MEDIQ Stock Repurchase"
refers to the Company's purchase on December 31, 1996 of all of the Shares
then owned by MEDIQ Incorporated ("MEDIQ") (4,037,258 Shares) (the "MEDIQ
Shares") of which 1,819,000 Shares were held in escrow in support of MEDIQ's
7.5% Subordinated Debentures due 2003. Pursuant to the definitive Stock
Purchase Agreement dated as of November 20, 1996 relating to the MEDIQ Stock
Repurchase, the Company paid an aggregate purchase price of $36,355,000 for
the MEDIQ Shares (representing a purchase price of $9 per MEDIQ Share). The
Company paid MEDIQ $19,963,000 of the $36,355,000 aggregate purchase price in
cash and delivered to MEDIQ a promissory note for the remaining $16,372,000.
24
<PAGE>
PRO FORMA FINANCIAL INFORMATION--(CONTINUED)
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
SEPTEMBER 28, 1996
------------------------------------------------
MEDIQ OFFER
HISTORICAL ADJUSTMENTS ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Total Current Assets......... 32,882 (150)(1) 32,732
-------
Property, Plant and
Equipment, Net.............. 29,207 29,207
Goodwill, Net................ 13,415 13,415
Other Assets................. 7,374 1,376 (2) 8,750
------- -------- -------
$82,878 $ 1,376 $(150) $84,104
------- -------- ----- -------
LIABILITIES AND STOCKHOLDERS EQUITY:
Current Liabilities:
Accounts Payable and
Accrued Expenses.......... $ 8,893 $ 8,893
Current Maturities of Long
Term Debt................. 14,498 (11,518)(3) 2,980
------- -------- -------
Total Current
Liabilities............. $23,391 (11,518) 11,873
-------
Long Term Debt, Less Current
Maturities ................. 11,780 49,460 (3) 61,240
Other Liabilities............ 1,890 1,890
(36,335)(4)
Stockholders Equity.......... 45,817 (1,325)(2) (150)(1) 9,101
1,094 (5)
------- -------- ----- -------
$82,878 $ 1,376 $(150) $84,104
------- -------- ----- -------
Book value per share of
common stock outstanding as
at balance sheet date....... $5.37 $2.00
</TABLE>
NOTES:
- --------
(1) Represents the one time costs associated with the purchase of 450,000
Shares at the maximum Purchase Price of $12.75 per Share, in connection
with the Offer and the subsequent sale of 450,000 Shares to the Investors
at $12.75 per Share.
(2) Represents fees associated with the MEDIQ Stock Repurchase and the debt
financing related to the MEDIQ Stock Repurchase.
(3) Represents the net impact of refinancing existing debt with the debt
financing related to the MEDIQ Stock Repurchase.
(4) Represents the impact of the MEDIQ Stock Repurchase.
(5) Represents the value of the ING Warrants which were issued in connection
with the subordinated debt financing related to the MEDIQ Stock
Repurchase.
25
<PAGE>
PRO FORMA FINANCIAL INFORMATION--(CONTINUED)
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 28, 1996
--------------------------------------------------
PRO FORMA OFFER
HISTORICAL MEDIQ ADJUSTMENTS ADJUSTMENTS PRO FORMA
---------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales.................. $80,479 $80,479
Cost of Sales.............. 57,686 57,686
------- -------
Gross Profit............... 22,793 22,793
Selling, General &
Administrative Expenses... 11,662 11,662
------- -------
Operating Income........... 11,131 11,131
Other (Charges)............ (229)(1)
Interest Expense......... (1,479) (3,810)(2) (5,518)
Interest Income.......... 95 95
Other.................... (384) (384)
------- ------ -------
Income Before Income
Taxes..................... 9,363 (4,039) 5,324
-------
Income Taxes............... 3,680 1,646 (3) 2,034
------- ------ -------
Net Income................. $ 5,683 (2,393) $ 3,290
------- ------ -------
Earnings Per Share......... $ 0.67 $ 0.72
------- -------
Weighted Average Shares
Outstanding............... 8,531 (4,037)(4) 39 (5) 4,549
------- -------
16 (6)
OTHER FINANCIAL DATA:
Ratio of earnings to fixed
charges (7)............... 6.30 1.92
</TABLE>
NOTES:
- --------
(1) Represents amortization of fees directly attributable to the debt
financing related to the MEDIQ Stock Repurchase.
(2) Represents the increase in interest expense incurred in connection with
the MEDIQ Stock Repurchase, the refinancing of existing bank debt and the
amortization of the ING Warrants which were issued in connection with the
subordinated debt financing related to the MEDIQ Stock Repurchase.
(3) Represents the tax effect of pro forma adjustments.
(4) Represents the total number of Shares purchased from MEDIQ in connection
with the MEDIQ Stock Repurchase.
(5) Represents the equivalent Shares associated with the Warrants as
determined by the treasury stock method.
(6) Represents the equivalent Shares associated with the ING Warrants which
were issued in connection with the subordinated debt financing related to
the MEDIQ Stock Repurchase, as determined by the treasury stock method.
(7) For purposes of determining the ratio of earnings to fixed charges,
earnings consist of income before income taxes plus fixed charges. Fixed
charges consist of interest expense (including amortization of deferred
financing costs) and one-third of rent expense from operating leases which
management believes is a reasonable approximation of an interest factor.
26
<PAGE>
PRO FORMA FINANCIAL INFORMATION--(CONTINUED)
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
JUNE 28, 1997
---------------------------------------------
MEDIQ OFFER
HISTORICAL ADJUSTMENTS ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Total Current Assets............ 36,438 (150)(1) 36,288
Property, Plant and Equipment,
Net............................ 33,589 33,589
Goodwill, Net................... 13,052 13,052
Other Assets.................... 4,456 4,456
------- ---- -------
$87,535 (150) 87,385
------- --- ----
LIABILITIES AND STOCKHOLDERS
EQUITY:
Current Liabilities:
Accounts Payable and Accrued
Expense...................... $ 8,925 $ 8,925
Current Maturities of Long
Term Debt 2,958 2,958
------- -------
Total Current Liabilities... $11,883 $11,883
-------
Long Term Debt, Less Current
Maturities..................... 60,095 60,095
Other Liabilities............... 2,451 2,451
Stockholders Equity............. 13,106 (150)(1) 12,956
------- --- ---- -------
$87,535 (150) $87,385
------- --- ---- -------
Book value per common share
outstanding as at balance sheet
date........................... $ 2.13 $ 2.09
------- -------
</TABLE>
NOTES:
- --------
(1) Represents the one time cost associated with the purchase of 450,000
Shares at the maximum Purchase Price of $12.75 per Share in connection
with the Offer and the subsequent sale by the Company of 450,000 Shares to
the Investors at $12.75 per Share.
27
<PAGE>
PRO FORMA FINANCIAL INFORMATION--(CONTINUED)
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
NINE MONTHS ENDED JUNE 28, 1997
--------------------------------------------
MEDIQ OFFER
HISTORICAL ADJUSTMENTS ADJUSTMENTS PRO FORMA
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales........................ $70,219 $70,219
Cost of Sales.................... 51,609 51,609
------- -------
Gross Profit..................... 18,610 18,610
Selling, General & Administrative
Expenses........................ 9,884 9,884
------- -------
Operating Income................. 8,726 8,726
Other (Charges)
Interest Expense............... (3,245) (3,245)
Interest Income................ 121 121
Other.......................... (46) (46)
------- -------
Income Before Income Taxes....... 5,556 5,556
-------
Income Taxes..................... 2,250 2,250
------- -------
Net Income....................... $ 3,306 $ 3,306
------- -------
Earnings Per Share............... $ 0.54 $ 0.53
------- -------
Weighted Average Shares
Outstanding..................... 6,156 39(1) 6,195
------- -------
OTHER FINANCIAL DATA:
Ratio of Earnings to Fixed
Charges (2)..................... $ 2.52 $ 2.52
------- -------
</TABLE>
NOTES:
- --------
(1) Represents the equivalent shares associated with the Warrants as
determined by the treasury stock method.
(2) For purposes of determining the ratio of earnings to fixed charges,
earnings consists of income before provisions for income taxes plus fixed
charges. Fixed charges consist of interest expense (including amortization
of deferred financing costs) and one-third of rent expense from operating
leases which management believes is a reasonable approximation of an
interest factor.
28
<PAGE>
RECENT DEVELOPMENTS
AWC Acquisition. On September 11, 1997, the Company, through three wholly-
owned subsidiaries, acquired the AWC Business (the "Acquisition"). Pursuant to
the terms of the definitive Asset Purchase Agreement relating to the
Acquisition, the Company purchased the AWC Business for $37.5 million and
assumed $3.5 million in post-petition liabilities, subject to post-closing
adjustments for inventory, accounts receivable and assumed liabilities as of
the closing date. The Acquisition was approved by the United States Bankruptcy
Court for the District of Delaware, in which the bankruptcy case of AWC and
Weaver has been pending.
The Acquisition was accounted for under the purchase method of accounting
and resulted in recognition of approximately $10 million in goodwill. This
goodwill is subject to the adjustment based on the final determination of the
purchase price after the post-closing adjustments referred to above.
Financing for the Acquisition included approximately $11 million from the
private placement of 846,154 Shares to Cape Ann and certain related persons of
Cape Ann. Concurrently with the Acquisition, the Company entered into an
amendment to its senior secured credit facility with its banks which increased
the aggregate principal amount available under such credit facility from $60
million to $92.1 million. Of the increased amount, approximately $26 million
was used for the Acquisition and the remaining $6.1 million will be used to
support future working capital needs.
On September 26, 1997, the Company filed a Current Report on Form 8-K (the
"Form 8-K"), with the Commission regarding the Acquisition. As permitted by
the rules promulgated under the Exchange Act, the Form 8-K does not contain
historical or pro forma financial information concerning the AWC Business
because such information was not available at the time of filing. Pursuant to
the rules promulgated under the Exchange Act, the Company is required to
provide such historical and pro forma information by means of an amendment to
the Form 8-K not later than sixty days from the date the filing of such Form
8-K was due.
Fourth Quarter Performance. On October 14, 1997, the Company announced that
its net sales for the thirteen weeks ended September 27, 1997, were estimated
to be $23,914,000, compared with sales of $22,436,000, reported for the same
period of a year ago. Net loss for the quarter was estimated to be between
$933,000 and $1,032,000 or $.19 to $.21 per Share based on 4,914,000 weighted
average Shares outstanding compared to fourth quarter 1996 net income of
$1,712,000 or $.20 per Share based on 8,560,000 weighted average Shares
outstanding.
For the fiscal year ended September 27, 1997, sales were estimated to be
$94,134,000, compared to $80,479,000 for fiscal 1996. Net income for the year
was estimated to be between $2,274,000 or $.39 per Share and $2,373,000 or
$.41 per Share on 5,976,000 weighted average Shares outstanding compared to
$5,683,000 or $.67 per Share based on 8,531,000 average weighted Shares
outstanding for fiscal 1996.
Start-up problems with the production of cough drops described below during
the June through September 1997 period had a negative impact on production and
distribution and resulted in the unanticipated fourth quarter losses. These
problems delayed completion of a major capital expansion program in the
Company's largest division which manufactures cough and cold products. New
production capacity, centered on a new continuous cooking line used in the
manufacture of cough drops, became operational later than planned. The delay
in final installation and operation of the new equipment coupled with
unusually strong demand for cough drops, in turn resulted in delayed shipments
of complete orders to many of the Company's customers. These developments,
taken together, resulted in under-absorbed labor and overhead and over-
crowding in the Company's primary distribution facility. As the Company worked
with customers to ship against firm orders, excess freight costs were
incurred, in addition to unabsorbed manufacturing costs in unrelated product
lines which were temporarily limited in production to relieve mounting
pressure on the distribution facility. Nearly $4.6 million of incremental
unshipped orders had accumulated by the end of the quarter.
The Company's new equipment is now in operation, and shipments against back
orders are progressing. As the Company's order receipts remain strong, the
backorder position continues to be large, and the Company will
29
<PAGE>
continue to incur incremental freight and other expenses as it works to meet
customer demand. These incremental costs will have some effect on first
quarter margins as well, although the Company anticipates a profitable quarter
and fiscal 1998.
In order to provide additional warehousing capacity and improved
distribution efficiencies, the Company's new 80,000 square foot distribution
center located in Gloucester, Massachusetts is scheduled to begin operation in
the December-January time period.
The fourth quarter results have required waivers and amendments of covenants
in the Company's bank loan agreement, and the Offer requires consents from the
Company's senior and subordinated lenders. The Company has obtained all such
waivers, amendments and consents.
General. Some of the information presented in this section Recent
Developments constitutes forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Although management believes
its expectations are based on reasonable assumptions within the bounds of the
Company's knowledge of the Company's business and operations, there can be no
assurance that actual results will not differ materially from its
expectations. Factors which could cause actual results to differ from
expectations include the integration of the newly acquired AWC Business, the
ability of the Company to ship its increased order backlog, the timing of new
product introductions by the Company, the timing of orders received from
customers, the gain or loss of significant customers, changes in the mix of
products sold, competition from other private label manufacturers, seasonal
changes in the demand for the Company's products, increases in the cost of raw
materials, production and distribution delays and changes in the retail market
for health and beauty aids in general. For additional information concerning
these and other important factors which may cause the Company's actual results
to differ materially from expectations and underlying assumptions, please
refer to the reports filed by the Company with the Commission, copies of which
may be obtained in the manner specified in "Additional Information" below.
In addition, this Section contains certain estimates regarding the Company's
fourth quarter performance. These estimates reflect management's best
assessment of the Company's fourth quarter performance. However, stockholders
are cautioned that such estimates are based on financial information that has
not yet been audited. Accordingly, no assurance can be given that such
estimates will not differ materially from the Company's actual performance.
ADDITIONAL INFORMATION
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is obligated to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
the Company's directors and officers, their remuneration, options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 2120, Washington,
D.C. 20549; at its regional offices located at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511; and 7 World Trade Center, New York, New
York 10048. Copies of such material may also be obtained by mail, upon payment
of the Commission's customary charges, from the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C.
20549. The Commission also maintains a Web site on the World Wide Web at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Such reports, proxy statements and other information concerning
the Company also can be inspected at the offices of Nasdaq, 1735 K Street,
N.W., Washington, D.C. 20006, on which the Shares are listed.
30
<PAGE>
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce
the number of stockholders. Nonetheless, there should still be a sufficient
number of Shares outstanding and publicly traded following the Offer to ensure
a continued trading market in the Shares. Based on the published guidelines on
Nasdaq, the Company does not believe that its purchase of Shares pursuant to
the Offer will cause its remaining Shares to be delisted from Nasdaq.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the Commission and comply with the Commission's proxy rules in
connection with meetings of the Company's stockholders. The Company believes
that its purchase of Shares pursuant to the Offer will not result in the
Shares becoming eligible for deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit that appears to
be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory
authority or agency, domestic or foreign, that would be required for the
Company's acquisition or ownership of Shares as contemplated by the Offer.
Should any such approval or other action be required, the Company currently
contemplates that it will seek such approval or other action. The Company
cannot predict whether it may determine that it is required to delay the
acceptance for payment of, or payment for, Shares tendered pursuant to the
Offer pending the outcome of any such matter. There can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the
Company's business. The Company's obligations under the Offer to accept for
payment and pay for Shares are subject to certain conditions. See Section 6.
14. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income taxes
consequences relevant to the Offer. The discussion contained in this summary
is based upon the Internal Revenue Code of 1986, as amended to the date hereof
(the "Code"), existing and proposed United States Treasury regulations
promulgated thereunder, rulings, administrative pronouncements and judicial
decisions, changes to any of which could materially affect the tax
consequences described herein and could be made on a retroactive basis. As
discussed below, depending upon a stockholder's particular circumstances, the
Company's purchase of such stockholder's Shares pursuant to the Offer may be
treated either as a sale or dividend for United States federal income tax
purposes. Accordingly, such a purchase generally will be referred to in this
section of the Offer to Purchase as an exchange of Shares for cash.
This summary does not apply to Shares that were acquired as compensation
(including Shares acquired upon the exercise of options or which were or are
subject to forfeiture restrictions). The summary also does not address the
state, local or foreign tax consequences of participating in the Offer. The
summary discusses only Shares held as capital assets, within the meaning of
Section 1221 of the Code, and does not address all of the tax consequences
that may be relevant to particular stockholders in light of their personal
circumstances, or to certain types of stockholders (such as certain financial
institutions, foreign holders, dealers in securities or commodities, insurance
companies, tax-exempt organizations orpersons who held Shares as a position in
a "straddle" or as part of a "hedging" or "conversion" transaction for United
States federal income tax purposes). In particular, the discussion of the
consequences of an exchange of Shares for cash pursuant to the Offer applies
only to a
31
<PAGE>
United States Holder. For purposes of this summary, a "United States Holder"
is a beneficial owner of Shares that is (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States, any state or any
political subdivision thereof (other than any partnership treated as foreign
under United States Treasury regulations), or (iii) an estate or trust, the
income of which is subject to United States federal income taxation regardless
of its source. EACH STOCKHOLDER SHOULD CONSULT SUCH STOCKHOLDER'S TAX ADVISOR
AS TO THE PARTICULAR CONSEQUENCES OF PARTICIPATION IN THE OFFER.
United States Holders Who Receive Cash Pursuant to the Offer. An exchange of
Shares for cash pursuant to the Offer by a United States Holder will be a
taxable transaction for United States federal income tax purposes. As a
consequence of the exchange, a United States Holder, depending on such
holder's particular circumstances will be treated either as having sold such
holder's Shares or as having received a dividend distribution from the
Company, with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged pursuant to the Offer will be treated as having sold such Shares,
and thus will recognize gain or loss, if the exchange (i) is "not essentially
equivalent to a dividend" with respect to the holder, (ii) is "substantially
disproportionate" with respect to such holder or (iii) results in "complete
termination" of such holder's equity interest in the Company, each as
discussed below. In applying these tests, a United States Holder will be
treated as owning Shares actually or constructively owned by certain related
individuals and entities. Further, for purposes of applying the tests
described in clauses (i) and (ii), the Company believes that the issuance of
the Warrants should be integrated with the Offer as part of an overall plan
and therefore a United States Holder should disregard the Warrants in
determining its interest in the Company immediately prior to the Offer, but
should take into account the Warrants in determining its interest in the
Company immediately after the Offer.
If a United States Holder sells Shares to persons other than the Company at
or about the time such holder also sells Shares to the Company pursuant to the
Offer, and the various sales effected by the holder are part of an overall
plan to reduce or terminate such holder's proportionate interest in the
Company, then the sales to persons other than the Company may, for United
States federal income tax purposes, be integrated with the holder's exchange
of Shares pursuant to the Offer and, if integrated, should be taken into
account in determining whether the holder satisfies any of the three tests
described below.
A United States Holder will satisfy the "not essentially equivalent to a
dividend" test if the reduction in such holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such holder's particular
facts and circumstances. The IRS has indicated in published rulings that any
reduction in the proportionate interest of a stockholder whose relative stock
interest in a publicly-held corporation is minimal and who exercises no
control over corporate affairs should constitute such a "meaningful
reduction." The IRS has further indicated that in determining whether the
proportionate interest of a United States Holder is reduced for this purpose,
consideration will be given to changes in both the holder's equity and voting
interests in the Company.
An exchange of Shares will generally be "substantially disproportionate"
with respect to a United States Holder if (a) the ratio which the Shares owned
actually and constructively by the holder immediately after the redemption
bears to all of the voting stock of the Company at such time is less than 80%
of the ratio which the Shares owned actually and constructively by the holder
immediately before the redemption bears to all of the voting stock of the
Company at such time and (b) the United States Holder's actual and
constructive ownership of the aggregate common stock of the Company
(including, for this purpose, the Warrants) on a fair market value basis also
satisfies the 80% requirement described in clause (a).
A United States Holder that exchanges all Shares actually or constructively
owned by such holder for cash pursuant to the Offer will be treated as having
completely terminated such holder's equity interest in the Company. If a
United States Holder could meet the complete termination of interest test but
for attribution from family members, such attribution can be waived if a
number of requirements are met, including the timely filing of an agreement
with the Internal Revenue Service.
32
<PAGE>
If a United States Holder is treated as having sold such holder's Shares
under any of the tests described above, such holder will recognize gain or
loss equal to the difference between the amount of cash received and such
holder's tax basis in the Shares exchanged therefor. Any such gain or loss
will be capital gain or loss and will be long-term capital gain or loss if the
holding period of the Shares exceeds one year as of the date of the exchange.
Calculations of gain or loss must be made separately for each block of Shares
exchanged by a United States Holder. A United States Holder may be able to
designate which blocks and the order of such blocks of Shares to be tendered
pursuant to the Offer. In the case of a non-corporate holder of Shares, long-
term capital gains will be subject to tax at the reduced rate, and will be
treated as long-term capital gain eligible for a further reduced rate if the
Shares are held for more than eighteen months.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares, the entire
amount of cash received by such holder will be treated as a dividend to the
extent of the Company's current and accumulated earnings and profits, which
the Company anticipates will be sufficient to cover the amount of any such
dividend and will be includible in the holder's gross income as ordinary
income in its entirety, without reduction for the tax basis of the Shares
exchanged. No loss will be recognized. The United States Holder's tax basis in
the Shares exchanged generally will be added to such holder's tax basis in
such holder's remaining Shares. To the extent that cash received in exchange
for Shares is treated as a dividend to a corporate United States Holder, such
holder will be, (i) eligible for a dividends received deduction (subject to
applicable limitations) and (ii) subject to the "extraordinary dividend"
provisions of the Code (in which case the nontaxed portion of the dividend
would reduce a corporate holder's adjusted tax basis in the Shares exchanged,
but not below zero, and would thereafter be taxable as capital gain from the
sale or exchange of the exchanged Shares). To the extent, if any, that the
cash received by a United States Holder is not a dividend because the Company
does not have sufficient current and accumulated earnings and profits, it will
be treated first as a tax-free return of such holder's tax basis in the Shares
and thereafter as capital gain.
The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant
to the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a Holder can be given no assurance that a sufficient number of such
Holder's Shares will be exchanged pursuant to the Offer to ensure that such
exchange will be treated as a sale, rather than as a dividend, for United
States federal income tax purposes pursuant to the rules discussed above.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign stockholders and backup
withholding.
Stockholders who do not receive cash pursuant to the Offer. Stockholders,
none of whose Shares are exchanged pursuant to the Offer, will not incur any
tax liability as a result of the consummation of the Offer.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
EACH STOCKHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion but subject
to the terms and provisions of the Cape Ann Agreement, at any time and from
time to time, and regardless of whether or not any of the events set forth in
Section 6 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its
sole discretion, to terminate the Offer and not accept for payment or pay for
any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in Section 6 hereof by giving oral or written notice
of such termination or postponement to the Depositary and
33
<PAGE>
making a public announcement thereof. The Company's reservation of the right
to delay payment for Shares which it has accepted for payment is limited by
Rules 13e-4(f)(2) and 13e-4(f)(5) promulgated under the Exchange Act, which
require that the Company must pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of a tender offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether any of the events set
forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to holders of Shares or by decreasing or increasing the number of Shares being
sought in the Offer). Amendments to the Offer may be made at any time and from
time to time by public announcement thereof, such announcement, in the case of
an extension, to be issued no later than 9:00 a.m., Boston, Massachusetts
time, on the next business day after the last previously scheduled or
announced Expiration Date. Any public announcement made pursuant to the Offer
will be disseminated promptly to stockholders in a manner reasonably
designated to inform stockholders of such change. Without limiting the manner
in which the Company may choose to make any public announcement, except as
provided by applicable law (including Rules 13e-4(d)(2) and 13e-4(e)(2)
promulgated under the Exchange Act), the Company shall have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including by exercising its sole discretion under Section 6 to conclude
that a condition set forth in Section 6 has not occurred under circumstances
in which a reasonable person could conclude that such condition had in fact
occurred), the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require
the minimum period during which an offer must remain open following material
changes in the terms of the Offer or information concerning the Offer (other
than a change in price or a change in percentage of securities sought) will
depend upon the facts and circumstances, including the relative materiality of
such terms or information. If (i) the Company increases or decreases the price
to be paid for Shares, the Company increases the number of Shares being sought
and such increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or the Company decreases the number of Shares being
sought, and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including,
the date that notice of such increase or decrease is first published, sent or
given, the Offer will be extended until the expiration of such period of ten
business days.
16. FEES AND EXPENSES
The Company has retained D. F. King & Co., Inc. as Information Agent and
Boston EquiServe L.P. as Depositary in connection with the Offer. The
Information Agent and the Depositary will receive reasonable and customary
compensation for their services. The Company will also reimburse the
Information Agent and the Depositary for out-of-pocket expenses, including
reasonable attorneys' fees, and has agreed to indemnify the Information Agent
and the Depositary against certain liabilities in connection with the Offer,
including certain liabilities under the federal securities laws. The
Information Agent may contact stockholders by mail, facsimile, telephone,
telex, telegraph and personal interviews, and may request brokers, dealers and
other nominee stockholders to forward materials relating to the Offer to
beneficial owners. Neither the Information Agent nor the Depositary has been
retained to make recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting any Shares
pursuant to the Offer. The Company will however, on request, reimburse such
persons for customary handling and mailing expenses incurred in forwarding
materials in respect of the Offer to the beneficial owners for which they act
as nominees. No such broker, dealer, commercial bank or trust company has been
authorized to act as the Company's agent for purposes of the Offer. The
Company will pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares, except as otherwise provided in Instruction 7 of the
Letter of Transmittal.
34
<PAGE>
17. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If after such good faith effort, the Company cannot comply with such law,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Shares residing in such jurisdiction. In any jurisdiction
where the securities or blue sky laws of which require the Offer to be made by
a licensed broker or dealer, the Offer is being made on the Company's behalf
by one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to
the Offer. The Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and
in the same manner as set forth in "Additional Information" in Section 11 with
respect to information concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
NutraMax Products, Inc.
October 29, 1997
35
<PAGE>
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers, associates and subsidiaries,
except as described below or otherwise described in this Offer to Purchase,
neither the Company nor any of its associates, subsidiaries or persons
controlling the Company nor, to the best of the Company's knowledge, any of
the directors or executive officers of the Company or any of its subsidiaries,
nor any associate or subsidiary of any of the foregoing, has effected any
transactions in the Shares during the 40 business days prior to October 29,
1997.
Pursuant to a certain Stock Purchase Agreement, dated as of August 12, 1997,
as amended, between the Company and Cape Ann, the Company issued, on September
11, 1997, 846,154 Shares to Cape Ann for $13 per Share in a private placement
transaction in order to finance a portion of the Company's recent Acquisition
of the AWC Business. Such Shares represent approximately 15.1% of the
outstanding Shares of as October 27, 1997. Cape Ann subsequently transferred
36,000 of such Shares to related persons. On or about September 10, 1997,
David M. Schulte, an affiliate of Cape Ann, transferred 5,000 Shares held by a
family investment partnership to the Managing Member of Cape Ann.
36
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted from Eligible
Institutions only. The Letter of Transmittal (or an Agent's Message in lieu
thereof) and certificates for Shares and any other required documents should
be sent or delivered by each stockholder or such stockholder's broker, dealer,
commercial bank, trust company or other nominee to the Depositary at its
address set forth below:
The Depositary for the Offer is:
BOSTON EQUISERVE L.P.
By Mail via Return Envelope:
BOSTON EQUISERVE L.P.
P.O. Box 9061
Boston, MA 02205-8686
By Hand:
STARS
55 Broadway Street
3rd Floor
New York, NY
By Overnight or Express Mail:
BOSTON EQUISERVE L.P.
70 Campanelli Drive
Braintree, MA 02184
By Facsimile Transmission (for Eligible Institutions only):
(617) 794-6333
Confirm Facsimile Transmissions by Telephone:
(617) 794-6388
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone number and
address below. Stockholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer. To confirm delivery
of Shares, stockholders are directed to contact the Depositary.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, N.Y. 10005
Banks and Brokers, Call Collect: (212) 269-5550
All Others, Call Toll-Free: (800) 488-8075
<PAGE>
Exhibit 9a(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
NUTRAMAX PRODUCTS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED OCTOBER 29, 1997
THE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE
OFFER IS EXTENDED.
The Depositary for the Offer is:
BOSTON EQUISERVE L.P.
By Mail via Return By Hand: By Overnight or Express
Envelope: Mail:
STARS
Boston EquiServe L.P. 55 Broadway, 3rd Floor Boston EquiServe L.P.
P.O. Box 9061 New York, NY 10006 70 Campanelli Drive
Boston, MA 02205-8686 Braintree, MA 02184
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
[_IF]ANY OF THE CERTIFICATES FOR THE SHARES THAT YOU OWN HAVE BEEN LOST OR
DESTROYED, CHECK THIS BOX AND SEE INSTRUCTION 15.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ENTIRE LETTER OF
TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, CAREFULLY BEFORE
CHECKING ANY BOX.
<PAGE>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED SHARES TENDERED
HOLDER(S) (PLEASE FILL IN EXACTLY AS NAME(S) (ATTACH ADDITIONAL
APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
- --------------------------------------------------------------------------------------
TOTAL
NUMBER OF
SHARES
REPRESENTED NUMBER OF
CERTIFICATE BY SHARES
NUMBERS CERTIFICATES(S) TENDERED**
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
<S> <C> <C> <C> <C> <C>
Total Shares
</TABLE>
- -------------------------------------------------------------------------------
Indicate in this box the order (by certificate number) in which Shares are
to be purchased in the event of proration.*** (Attach an additional signed
list if necessary.) See Instruction 14.
1st 2nd 3rd 4th 5th
- -------------------------------------------------------------------------------
* Need not be completed by stockholders tendering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by each Share certificate delivered to the Depositary are
being tendered hereby. See Instruction 4.
*** If you do not designate an order, then in the event fewer than all
Shares tendered are purchased due to proration, Shares will be selected
for purchase by the Depositary.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERY TO THE COMPANY WILL
NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID
DELIVERY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company ("DTC") or the Philadelphia Depository Trust Company ("PDTC")
(hereinafter collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 3 of the Offer to Purchase (as
defined below).
Stockholders who cannot deliver their Share certificates and any other
documents required to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) (or who are unable to comply with the procedures for book-
entry transfer on a timely basis) must tender their Shares using the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
See Instruction 2.
Ladies and Gentlemen:
The undersigned hereby tenders to NutraMax Products, Inc., a Delaware
corporation (the "Company"), the above-described shares of its common stock,
par value $.001 per share (the "Shares"), at the price per Share indicated in
this Letter of Transmittal, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated October
29, 1997 (the "Offer to Purchase"), receipt of which is hereby acknowledged,
and in this Letter of Transmittal (which together constitute the "Offer").
<PAGE>
Subject to, and effective upon, acceptance for payment of, and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to all the Shares that are being tendered
hereby or orders the registration of such Shares tendered by book-entry
transfer that are purchased pursuant to the Offer to or upon the order of the
Company and hereby irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by any of the Book-Entry Transfer
Facilities, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Company upon receipt
by the Depositary, as the undersigned's agent, of the Purchase Price (as
defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer
on the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's representation and warranty to
the Company that (i) the undersigned has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, and (ii) the tender of such
Shares complies with Rule 14e-4. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the undersigned and the Company upon the terms and subject to the
conditions of the Offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes on
this Letter of Transmittal.
<PAGE>
The undersigned understands that the Company will determine a single per
Share price (not greater than $12.75 nor less than $11.00 per Share), net to
the Seller in cash (the "Purchase Price"), that it will pay for Shares validly
tendered and not withdrawn pursuant to the Offer, taking into account the
number of Shares so tendered and the prices specified by tendering
stockholders. The undersigned understands that the Company will select the
lowest Purchase Price that will allow it to purchase 450,000 Shares or such
lesser number of Shares as are validly tendered and not withdrawn pursuant to
the Offer at prices not greater than $12.75 nor less than $11.00 per Share.
The undersigned understands that all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn will be purchased at the Purchase
Price, net to the seller in cash, upon the terms and subject to the conditions
of the Offer, including its proration provisions, and that the Company will
return all other Shares, including Shares tendered at prices greater than the
Purchase Price and not withdrawn and Shares not purchased because of
proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may
accept for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased (less the
amount of any federal income or backup withholding tax required to be
withheld), and/or return any Shares not tendered or not purchased, in the
name(s) of the undersigned (or, in the case of Shares tendered by book-entry
transfer, by credit to the account at the applicable Book-Entry Transfer
Facility). Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the Purchase Price of any Shares
purchased (less the amount of any federal income or backup withholding tax
required to be withheld), and/or any certificates for Shares not tendered or
not purchased (and accompanying documents, as appropriate), to the undersigned
at the address shown below the undersigned's signature. In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the Purchase Price of any Shares
purchased (less the amount of any federal income or backup withholding tax
required to be withheld), and/or return any Shares not tendered or not
purchased, in the name(s) of, and mail such check and/or any certificates to,
the person(s) so indicated. The undersigned recognizes that the Company has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof or to order the
registration or transfer of such Shares tendered by book-entry transfer if the
Company does not accept for payment any of the Shares so tendered. If the
Special Payment Instructions are completed, all signatures on this Letter of
Transmittal must be guaranteed by a firm that is an Eligible Institution (as
defined in the Offer to Purchase).
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
----------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED
MUST BE USED. (SEE INSTRUCTION 5)
----------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW),
THERE IS NO VALID TENDER OF SHARES.
----------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[_]The undersigned wants to maximize the chance of having the Company
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box INSTEAD
OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares at,
and is willing to accept, the Purchase Price resulting from the Dutch
auction tender process. This action could result in receiving a price per
Share as low as $11.00 or as high as $12.75.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
----------------
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
[_]$11 [_]$11 1/2 [_]$12 [_]$12 1/2
[_] 11 1/16 [_] 11 9/16 [_] 12 1/16 [_] 12 9/16
[_] 11 1/8 [_] 11 5/8 [_] 12 1/8 [_] 12 5/8
[_] 11 3/16 [_] 11 11/16 [_] 12 3/16 [_] 12 11/16
[_] 11 1/4 [_] 11 3/4 [_] 12 1/4 [_] 12 3/4
[_] 11 5/16 [_] 11 13/16 [_] 12 5/16
[_] 11 3/8 [_] 11 7/8 [_] 12 3/8
[_] 11 7/16 [_] 11 15/16 [_] 12 7/16
<PAGE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who is the beneficial or record owner of an aggregate of
fewer than 100 Shares.
The undersigned either (check one box):
[_]owns beneficially or of record at the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered; or
[_]is a broker, dealer, commercial bank, trust company or other nominee
that (i) is tendering, for the beneficial owner thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by such beneficial owner, that such
beneficial owner owns beneficially at the Expiration Date, an
aggregate of fewer than 100 Shares and is tendering all of his or her
Shares.
If you do not wish to specify a Purchase Price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this
Letter of Transmittal). [_]
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 6, 7 AND 8) (SEE INSTRUCTIONS 6 AND 8)
To be completed ONLY if the To be completed ONLY if the
check for the aggregate Purchase check for the Purchase Price of
Price of Shares purchased (less Shares purchased (less the amount
the amount of any federal income of any federal income and backup
and backup withholding tax re- withholding tax required to be
quired to be withheld) and/or withheld) and/or certificates for
certificates for Shares not ten- Shares not tendered or not pur-
dered or not purchased are to be chased are to be mailed to some-
issued in the name of someone one other than the undersigned or
other than the undersigned. If to the undersigned at an address
these Special Payment Instruc- other than that shown below the
tions are completed, all signa- undersigned's signatures. If
tures on this Letter of Transmit- these Special Delivery Instru-
tal must be guaranteed by a firm ments are completed, all signa-
that is an Eligible Institution tures on this Letter of Transmit-
(as defined in the Offer to Pur- tal must be guaranteed by a firm
chase). that is an Eligible Institution
(as defined in the Offer of Pur-
chase).
Issue check and/or certificates
to:
Name _____________________________ Mail check and/or certificates
(PLEASE PRINT) to:
Address __________________________ Name _____________________________
(PLEASE PRINT) (PLEASE PRINT)
__________________________________ Address __________________________
__________________________________ (PLEASE PRINT)
(INCLUDE ZIP CODE) __________________________________
__________________________________ __________________________________
(TAX IDENTIFICATION OR SOCIAL (INCLUDE ZIP CODE)
SECURITY NUMBER) __________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL STOCKHOLDERS)
______________________________________________________________________________
______________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Dated __________________________________________________________________, 1997
Name__________________________________________________________________________
_________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) ________________________________________________________
Address ______________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No. __________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting
in a fiduciary or representative capacity, please set forth full title and
see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 6)
Name of Firm _________________________________________________________________
Authorized Signature _________________________________________________________
Name__________________________________________________________________________
_________________________________________________________________________
(PLEASE PRINT)
Title ________________________________________________________________________
Address ______________________________________________________________________
Area Code and Telephone No. __________________________________________________
Dated __________________________________________________________________, 1997
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
an Eligible Institution (as defined in the Offer to Purchase), unless (i) this
Letter of Transmittal is signed by the registered holder(s) of the Shares
(which term, for purposes of this document, shall include any participant in a
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on this Letter of Transmittal, or (ii) such
Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be used either if Share
certificates are to be forwarded herewith or if delivery of Shares is to be
made by book-entry transfer pursuant to the procedures set forth in Section 3
of the Offer to Purchase. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at one
of the Book-Entry Transfer Facilities of all Shares delivered electronically,
as well as a properly completed and duly executed Letter of Transmittal (or,
for Eligible Institutions only, a facsimile thereof) or an Agent's Message (as
defined below) in connection with a book-entry transfer, together in each case
with any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal prior to the Expiration Date. If certificates
are forwarded to the Depositary in multiple deliveries, a properly completed
and duly executed Letter of Transmittal must accompany each such delivery.
Stockholders whose Share certificates are not immediately available, who
cannot deliver their Share certificates and all other required documents to
the Depositary or who cannot complete the procedure for delivery by book-entry
transfer prior to the Expiration Date may tender their Shares pursuant to the
guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.
Pursuant to such procedure: (i) such tender must be made by or through an
Eligible Institution, (ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Company (with
any required signature guarantees) must be received by the Depositary prior to
the Expiration Date, and (iii) the certificates for all physically delivered
Shares in proper form for transfer by delivery, or a confirmation of a book-
entry transfer into the Depositary's account at one of the Book-Entry Transfer
Facilities of all Shares delivered electronically, in each case together with
a properly completed and duly executed Letter of Transmittal (or, for Eligible
Institutions only, facsimile thereof) (or, in the case of a book-entry
transfer, an Agent's Message in lieu of the Letter of Transmittal) and any
other documents required by this Letter of Transmittal, must be received by
the Depositary no later than Midnight, Boston, Massachusetts time, on the
third business day after the date of the execution of the Notice of Guaranteed
Delivery, all as provided in Section 3 of the Offer to Purchase.
The term "Agent's Message" means a message from a Book-Entry Transfer
Facility transmitted to, and received by, the Depositary forming a part of a
timely confirmation of a book-entry transfer of Shares (a "Book-Entry
Confirmation") which states that (a) such Book-Entry Transfer Facility has
received from the participant in such Book-Entry Transfer Facility an express
acknowledgment of such participant's tender of the Shares that are the subject
of the Book-Entry Confirmation and specifying the price at which such Shares
are to be tendered, (b) the participant in such Book-Entry Transfer Facility
has received and agrees to be bound by the terms of the Letter of Transmittal,
and (c) the Company may enforce such agreement against the participant in such
Book-Entry Transfer Facility.
Delivery of documents to a Book-Entry Transfer Facility in accordance with
such Facility's procedures does not constitute delivery to the Depositary.
The Notice of Guaranteed Delivery may be delivered by hand or by facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution on the form set forth in such notice.
<PAGE>
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or, for Eligible Institutions only, a facsimile
thereof), the tendering stockholder waives any right to receive any notice of
the acceptance for payment of the Shares.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the Shares not purchased by the Company in
the Offer will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the "Special Payment Instructions" or "Special
Delivery Instructions" boxes on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. INDICATION OF PRICE AT WHICH SHARES ARE BEING TENDERED. For Shares to be
validly tendered, the stockholder must check the box indicating the price per
Share at which such stockholder is tendering Shares under "Price (In Dollars)
Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal,
except that Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
may check the box in the section entitled "Odd Lots" indicating that such
stockholder is tendering all Shares at the Purchase Price determined by the
Company. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED OR
(OTHER THAN AS DESCRIBED ABOVE FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE
IS NO VALID TENDER OF SHARES. A stockholder wishing to tender portions of such
stockholder's Share holdings at different prices must complete a separate
Letter of Transmittal for each price at which such stockholder wishes to
tender each such portion of such stockholder's Shares. The same Shares cannot
be tendered (unless previously validly withdrawn as provided in Section 4 of
the Offer to Purchase) at more than one price. Stockholders wishing to
maximize the possibility that their Shares will be purchased at the relevant
Purchase Price may check the box on the Letter of Transmittal marked "Shares
Tendered at Purchase Price Determined by Dutch Auction." Checking this box may
result in a Purchase Price of the Shares so tendered at the minimum price of
$11.00.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or, for Eligible Institutions only,
facsimiles thereof) as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s), in which case the certificates
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificates. Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
<PAGE>
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Company of the authority of such person so to act must be submitted.
7. STOCK TRANSFER TAXES. Except as set forth in this Instruction, the
Company will pay or cause to be paid any stock transfer taxes with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the aggregate Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s), or if tendered Shares are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such person will be deducted from the Purchase
Price unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. See Section 5 of the Offer to Purchase. Except as
provided in this Instruction 7, it will not be necessary to affix transfer tax
stamps to the certificates representing Shares tendered hereby.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Purchase
Price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal, or if the check and/or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of
Shares Tendered," then the boxes captioned "Special Payment Instructions"
and/or "Special Delivery Instructions" should be completed, respectively.
Stockholders tendering Shares by book-entry transfer will have any Shares not
accepted for payment returned by crediting the account maintained by such
stockholder at the Book-Entry Transfer Facility from which such transfer was
made.
9. ODD LOTS. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered and not withdrawn prior to the Expiration
Date are to be purchased, the Shares purchased first will consist of all
Shares validly tendered and not withdrawn by any stockholder who owns,
beneficially or of record at the Expiration Date, an aggregate of fewer than
100 Shares, and who validly tenders all such Shares (partial tenders of Shares
will not qualify for this preference) and completes the box captioned "Odd
Lots" in this Letter of Transmittal, and, if applicable, the Notice of
Guaranteed Delivery.
10. SUBSTITUTE FORM W-9 AND FORM W-8. To prevent backup federal income tax
withholding equal to 31% of the gross payments payable pursuant to the Offer,
each stockholder who does not otherwise establish an exemption from backup
withholding must notify the Depositary of such stockholder's correct taxpayer
identification number (or certify that such taxpayer is awaiting a taxpayer
identification number) and provide certain other information by completing,
under penalties of perjury, the Substitute Form W-9 included in the Letter of
Transmittal. Noncorporate foreign stockholders should generally complete and
sign a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. As more
fully described below, in the case of a foreign stockholder, even if such
stockholder has provided the required certification to avoid backup
withholding, the Depositary will withhold 30% of the gross payments made
pursuant to the Offer unless a reduced rate of withholding or an exemption
from withholding is applicable.
<PAGE>
11. WITHHOLDING ON FOREIGN STOCKHOLDERS. The Depositary will withhold United
States federal income taxes equal to 30% of the gross payments payable to a
foreign stockholder unless the Company and the Depositary determine that (i) a
reduced rate of withholding is available pursuant to a tax treaty or (ii) an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business within the
United States. For this purpose, a foreign stockholder is any stockholder that
is not (i) a citizen or resident of the United States, (ii) a corporation,
partnership, or other entity created or organized in or under the laws of the
United States, any State or any political subdivision thereof (other than any
partnership treated as foreign under United States Treasury regulations) or
(iii) an estate or trust, the income of which is subject to United States
federal income taxation regardless of the source of such income. In order to
obtain a reduced rate of withholding pursuant to a tax treaty, a foreign
stockholder must deliver to the Depositary before the payment a properly
completed and executed IRS Form 1001. In order to obtain an exemption from
withholding on the grounds that the gross proceeds paid pursuant to the Offer
are effectively connected with the conduct of a trade or business within the
United States, a foreign stockholder must deliver to the Depositary a properly
completed and executed IRS Form 4224. The Company and the Depositary will
determine a stockholder's status as a foreign stockholder and eligibility for
a reduced rate of, or exemption from, withholding by reference to any
outstanding certificates or statements concerning eligibility for a reduced
rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224)
unless facts and circumstances indicate that such reliance thereon is not
warranted. A foreign stockholder may be eligible to obtain a refund of all or
a portion of any tax withheld if such stockholder meets the "complete
redemption," "substantially disproportionate" or "not essentially equivalent
to a dividend" tests described in Section 14 of the Offer to Purchase or is
otherwise able to establish that no tax or a reduced amount of tax is due.
Backup withholding generally will not apply to amounts subject to the 30% or a
treaty-reduced rate of withholding.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or requests
for assistance may be directed to the Information Agent at its telephone
number and address listed below. Requests for additional copies of the Offer
to Purchase, this Letter of Transmittal or other tender offer material may
likewise be directed to the Information Agent, and such copies will be
furnished promptly at the Company's expense. Stockholders may also contact
their local broker, dealer, commercial bank or trust company for documents
relating to, or assistance concerning, the Offer.
13. IRREGULARITIES. All questions as to the number of Shares to be accepted,
the price to be paid therefor and the validity, form, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, which determination shall
be final and binding on all parties. The Company reserves the absolute right
to reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive
any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares or any particular stockholder, and the
Company's interpretation of the terms and conditions of the Offer (including
these instructions) will be final and binding. Tenders will not be deemed to
have been made until all defects and irregularities have been cured or waived
prior to the Expiration Date or at such time as the Company shall determine.
None of the Company, the Depositary, the Information Agent or any other person
is or will be obligated to give notice of any defects or irregularities in
tenders, and none of them will incur any liability for failure to give any
such notice.
14. ORDER OF PURCHASE IN EVENT OF PRORATION. The order in which Shares are
purchased may affect the United States federal income tax consequences to a
stockholder, including because, as indicated in Section 14 of the Offer to
Purchase, the United States federal income tax consequences to a stockholder
may vary depending on the extent to which the stockholder's voting interest in
the Company is reduced and on the particular block of Shares purchased from
the stockholder. The Letter of Transmittal affords each stockholder tendering
shares in certificate form the opportunity to designate the order of priority
in which Shares tendered are to be purchased in the event of proration for tax
purposes and so as to otherwise enable stockholders to designate which Shares
are to be tendered. See Sections 1 and 14 of the Offer to Purchase.
<PAGE>
15. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES. Any holder whose
certificates for Shares have been mutilated, lost, stolen or destroyed should
contact the Depositary at the address indicated above for further instructions
as soon as possible. In the event of a mutilated, lost, stolen or destroyed
certificate, certain procedures will be required to be completed before this
Letter of Transmittal can be processed. Because these procedures may take a
substantial amount of time to complete, notice of any mutilated, lost, stolen
or destroyed certificate should be provided to the Depositary as soon as
possible.
IMPORTANT: THIS LETTER OF TRANSMITTAL, TOGETHER WITH SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY, OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE
EXPIRATION DATE. STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED SUBSTITUTE
FORM W-9 WITH THEIR LETTER OF TRANSMITTAL.
<PAGE>
PART 1--PLEASE PROVIDE --------------------
YOUR TIN IN THE BOX AT Social security
RIGHT AND CERTIFY BY number
SIGNING AND DATING BELOW
SUBSTITUTE
FORM W-9
DEPARTMENT OF
THE TREASURY OR------------------
INTERNAL Employer
REVENUE identification number
SERVICE PART 2--CERTIFICATION--Under penalties of perjury,
I certify that:
------------------------------------------------------
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am
awaiting a number to be issued to me) and
(2) I am not subject to backup withholding either
because: (a) I am exempt from backup
withholding, or (b) I have not been notified by
the Internal Revenue Service (the "IRS") that I
am not subject to backup withholding as a
result of a failure to report all interest or
dividends, or (c) the IRS has notified me that
I am no longer subject to backup withholding.
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ("TIN")
------------------------------------------------------
CERTIFICATION INSTRUCTIONS--You must PART 3--
cross out item (2) above if you have
been notified by the IRS that you are
currently subject to backup withhold-
ing because of underreporting interest
or dividends on your tax return. How-
ever, if after being notified by the
IRS that you are subject to backup
withholding, you received another no-
tification from the IRS that you are
no longer subject to backup withhold-
ing, do not cross out such item (2).
Awaiting
TIN [_]
SIGNATURE ___________ DATE ___________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN
PART 3 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties that a taxpayer identification number has not
been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal
Revenue Service Center or Social Security Administration Office, or (b) I
intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all reportable payments made to me will be withheld, but
that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
------------------------------------ ------------------------------------
Signature Date
<PAGE>
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 488-8075
The Depositary for the Offer is:
BOSTON EQUISERVE L.P.
150 Royall Street
Canton, MA 02021
(800) 426-5523
<PAGE>
Exhibit 9a(3)
NUTRAMAX PRODUCTS, INC.
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of common
stock of NutraMax Products, Inc. are not immediately available, if the
procedure for book-entry transfer cannot be completed on a timely basis, or if
time will not permit all other documents required by the Letter of Transmittal
to be delivered to the Depositary (as defined below) prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase defined below). Such
form may be delivered by hand or transmitted by mail or overnight courier, or
by facsimile transmission, to the Depositary. See Section 3 of the Offer to
Purchase. THE ELIGIBLE INSTITUTION WHICH COMPLETES THIS FORM MUST COMMUNICATE
THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER THE LETTER OF TRANSMITTAL AND
CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN THE TIME SHOWN HEREIN.
FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE
INSTITUTION.
THE DEPOSITARY FOR THE OFFER IS:
BOSTON EQUISERVE L.P.
By Mail Via Return By Hand: By Overnight or
Envelope: Express Mail:
STARS
Boston EquiServe L.P. 55 Broadway Street Boston EquiServe L.P.
P.O. Box 9061 3rd Floor 70 Campanelli Drive
Boston, MA 02205-8686 New York, NY Braintree, MA 02184
By Facsimile Transmission:
(for Eligible Institutions Only)
(617) 794-6333
Confirm Facsimile
Transmission
By Telephone:
(617) 794-6388
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to NutraMax Products, Inc., a Delaware
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 29, 1997 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute
the "Offer"), receipt of which is hereby acknowledged, the number of shares
of common stock, par value $.001 per share (the "Shares"), of the Company
listed below, pursuant to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase.
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
----------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE NOTICE OF GUARANTEED DELIVERY FOR
EACH PRICE SPECIFIED MUST BE USED.
----------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS
BELOW), THERE IS NO VALID TENDER OF SHARES.
----------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[_]The undersigned wants to maximize the chance of having the Company
purchase all of the Shares that the undersigned is tendering (subject to
the possibility of proration). Accordingly, by checking this one box
INSTEAD OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders
Shares at, and is willing to accept, the Purchase Price resulting from the
Dutch auction tender process. This action could result in receiving a
price per Share as low as $11.00 or as high as $12.75.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
[_]$11 [_]$11 1/2 [_]$12 [_]$12 1/2
[_] 11 1/16 [_] 11 9/16 [_] 12 1/16 [_] 12 9/16
[_] 11 1/8 [_] 11 5/8 [_] 12 1/8 [_] 12 5/8
[_] 11 3/16 [_] 11 11/16 [_] 12 3/16 [_] 12 11/16
[_] 11 1/4 [_] 11 3/4 [_] 12 1/4 [_] 12 3/4
[_] 11 5/16 [_] 11 13/16 [_] 12 5/16
[_] 11 3/8 [_] 11 7/8 [_] 12 3/8
[_] 11 7/16 [_] 11 15/16 [_] 12 7/16
2
<PAGE>
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owns beneficially or of record, as of the Expiration
Date, an aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[_]owned beneficially or of record, as of the Expiration Date, an
aggregate of fewer than 100 Shares, all of which are being tendered,
or
[_]is a broker, dealer, commercial bank, trust company or other nominee
who (i) is tendering, for the beneficial owners thereof, Shares with
respect to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owns beneficially, as of the Expiration Date, an
aggregate of fewer than 100 Shares and is tendering all of such
Shares.
If you do not wish to specify a purchase price, check the following box,
in which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per Share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered"
above). [_]
Number of Shares _____________________________________
Certificate No.(s) (If Available) Name(s) (Please Print)
_____________________________________ _____________________________________
_____________________________________
If Shares will be tendered by (Address)
book-entry transfer:
Name of Transferring Institution: _____________________________________
_____________________________________ Area Code and Telephone Number
Account No. _____________________________________
Signature(s)
at (check one)
[_] The Depository Trust Company
[_] Philadelphia Depository Trust Company
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or a
commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States hereby
guarantees (i) that the above-named person(s) has a net long position in the
Shares being tendered within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended, (ii) that such tender of Shares
complies with Rule 14e-4, and (iii) to deliver to the Depositary at one of its
addresses set forth above certificates for the Shares tendered hereby, in
proper form for transfer, or a confirmation of the book-entry transfer of the
Shares tendered hereby into the Depositary's account at The Depository Trust
Company or the Philadelphia Depository Trust Company in each case together
with a properly completed and duly executed Letter(s) of Transmittal (or, for
Eligible Institutions only, facsimiles thereof), or an Agent's Message in
connection with a book-entry transfer, together in each case with any required
signature guarantees and any other required documents, all within three Nasdaq
SmallCap Market trading days after the date hereof.
_____________________________________ _____________________________________
NAME OF FIRM AUTHORIZED SIGNATURE
_____________________________________ _____________________________________
ADDRESS NAME (PLEASE TYPE OR PRINT)
_____________________________________ _____________________________________
CITY, STATE, ZIP CODE TITLE
_____________________________________ _____________________________________
AREA CODE AND TEL. NO. DATE
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM.
YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
4
<PAGE>
Exhibit 9a(4)
NUTRAMAX PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH UP TO 450,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $12.75 NOR LESS THAN $11.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE
OFFER IS EXTENDED.
October 29, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
In our capacity as Information Agent, we are enclosing the material listed
below relating to the offer of NutraMax Products, Inc., a Delaware corporation
(the "Company"), to purchase up to 450,000 shares of its common stock, par
value $.001 per share (the "Shares"), at prices not greater than $12.75 nor
less than $11.00 per Share, net to the seller in cash, specified by tendering
stockholders, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated October 29, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the "Offer").
Also enclosed is certain other material related to the Offer.
The Company will determine, upon the terms and subject to the conditions of
the Offer, a single price per Share (not greater than $12.75 nor less than
$11.00 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering stockholders. The Company will select the lowest Purchase Price
that will allow it to purchase 450,000 Shares or such lesser number of Shares
as are validly tendered and not withdrawn pursuant to the Offer at prices not
greater than $12.75 nor less than $11.00 per Share. The Company will pay the
Purchase Price for all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the provisions relating to proration described in the
Offer to Purchase. See Section 1 of the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase
Price and Shares not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF
THE OFFER TO PURCHASE.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and necessary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of your
clients.
3. A letter to stockholders of the Company from Donald E. Lepone,
President and Chief Executive Officer of the Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (each as defined in the Offer to
Purchase).
5. A letter that may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
for obtaining such clients, instructions with regard to the Offer.
<PAGE>
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal income
tax withholding.
7. A return envelope addressed to Boston EquiServe L.P., the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE OFFER
IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer. The
Company will, however, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary handling and mailing
expenses incurred by them in forwarding materials relating to the Offer to
their customers. The Company will pay all stock transfer taxes applicable to
its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the
Letter of Transmittal.
As described in the Offer to Purchase, if more than 450,000 Shares have been
validly tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date, as defined in Section 1 of the Offer to Purchase, the Company
will accept Shares for purchase in the following order of priority: (i) all
Shares validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date by any stockholder who owned beneficially or of record,
as of the Expiration Date, an aggregate of fewer than 100 Shares and who
validly tenders all of such Shares (partial tenders will not qualify for this
preference) and completes the box captioned "Odd Lots" in the Letter of
Transmittal and, if applicable, the Notice of Guaranteed Delivery; and (ii)
after purchase of all of the foregoing Shares, all other Shares validly
tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date on a pro rata basis.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
FINANCING (AS DEFINED IN THE OFFER TO PURCHASE). HOWEVER, STOCKHOLDERS SHOULD
MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER AND THE PRICE OR PRICES AT WHICH SUCH SHARES SHOULD BE TENDERED.
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS IS MAKING ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. SEE
SECTION 9 OF THE OFFER TO PURCHASE FOR INFORMATION REGARDING THE INTENTION OF
THE COMPANY'S DIRECTORS AND EXECUTIVE OFFICERS WITH RESPECT TO TENDERING
PURSUANT TO THE OFFER.
Any questions or requests for assistance or additional copies of the
enclosed materials may be directed to D. F. King & Co., Inc., 77 Water Street,
New York, N.Y. 10005 (banks and brokers, call collect (212) 269-5550; all
others call toll-free (800) 488-8075).
Very truly yours,
D. F. King & Co., Inc.
Enclosures
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON, THE AGENT OF THE COMPANY, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
Exhibit 9a(5)
LETTER TO CLIENTS
NUTRAMAX PRODUCTS, INC.
OFFER TO PURCHASE FOR CASH UP TO 450,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $12.75 NOR LESS THAN $11.00 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE
OFFER IS EXTENDED
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October 29,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") setting forth an offer by NutraMax Products,
Inc., a Delaware corporation (the "Company"), to purchase up to 450,000 shares
of its common stock, par value $.001 per share (the "Shares"), at prices not
greater than $12.75 nor less than $11.00 per Share, net to the seller in cash,
specified by tendering stockholders, upon the terms and subject to the
conditions of the Offer. Also enclosed herewith is certain other material
related to the Offer, including a letter to stockholders from Donald E.
Lepone, President and Chief Executive Officer of the Company.
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $12.75 nor less than
$11.00 per Share) (the "Purchase Price") that it will pay for the Shares
validly tendered pursuant to the Offer and not withdrawn, taking into account
the number of Shares so tendered and the prices specified by tendering
stockholders. The Company will select the lowest Purchase Price that will
allow it to purchase 450,000 Shares or such lesser number of Shares as are
validly tendered and not withdrawn pursuant to the Offer at prices not greater
than $12.75 nor less than $11.00 per Share. The Company will pay the Purchase
Price for all Shares validly tendered at prices at or below the Purchase Price
and not withdrawn, upon the terms and subject to the conditions of the Offer,
including the provisions thereof relating to proration. See Section 1 of the
Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. AS SUCH, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY
US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is directed to the following:
1. You may tender Shares at prices (in multiples of $.0625 or one-
sixteenths ( 1/16) of a dollar), which cannot be greater than $12.75 nor
less than $11.00 per Share, as indicated in the attached Instruction Form,
net to you in cash.
2. The Offer is extended for up to 450,000 Shares. The Offer is not
conditioned on any minimum number of Shares being tendered. The Offer is,
however, subject to certain other conditions set forth in the Offer to
Purchase.
3. The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, Boston, Massachusetts time, on November 28, 1997, unless the
Offer is extended. Your instructions to us should be forwarded to us in
ample time to permit us to submit a tender on your behalf.
4. As described in the Offer to Purchase, if more than 450,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, the Company will purchase Shares in the following order of
priority:
<PAGE>
(i) first, all Shares validly tendered at or below the Purchase Price
and not withdrawn prior to the Expiration Date by any stockholder who
as of the Expiration Date owns beneficially or of record an aggregate
of fewer than 100 Shares all of which are being tendered (partial
tenders will not qualify for this preference) and completes the box
captioned "Odd Lots" in the Letter of Transmittal, the Notice of
Guaranteed Delivery and the Instruction Form, as applicable; and
(ii) then, after purchase of all the foregoing Shares, all Shares
validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date, on a pro rata basis. See Section 1 of the Offer
to Purchase for a discussion of proration.
Thus, if you owned beneficially or of record, as of the Expiration Date,
an aggregate of fewer than 100 Shares, and you instruct us to tender on
your behalf all such Shares prior to the Expiration Date and check the box
captioned "Odd Lots" in the Instruction Form (and on the Instruction Form),
all such Shares will be accepted for purchase before proration, if any, of
the other tendered Shares.
5. Tendering stockholders will not be obligated to pay any brokerage
Commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the purchase of Shares by the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
FINANCING (AS DEFINED IN THE OFFER TO PURCHASE). HOWEVER, NEITHER THE COMPANY,
NOR ANY OF ITS DIRECTORS OR OFFICERS IS MAKING ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH
STOCKHOLDER SHOULD MAKE HIS OR HER OWN DECISION AS TO WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES
SHOULD BE TENDERED. SEE SECTIONS 8, 9, 10, 11 AND 14 OF THE OFFER TO PURCHASE.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us
the attached Instruction Form. An envelope to return your instructions to us
is enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON
YOUR BEHALF BY THE EXPIRATION OF THE OFFER.
The Offer is being made solely by the Offer to Purchase dated October 29,
1997 and the related Letter of Transmittal. The Offer is not being made to,
nor will tenders be accepted from or on behalf of, holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
violate the laws of such jurisdiction. In any jurisdiction the securities laws
of which require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on the Company's behalf by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTION FORM
WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 450,000 SHARES OF COMMON STOCK
OF
NUTRAMAX PRODUCTS, INC.
AT A PURCHASE PRICE NOT GREATER THAN $12.75 NOR LESS THAN $11.00 PER SHARE
The undersigned acknowledges receipt of your letter and the enclosed Offer
to Purchase, dated October 29, 1997, and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by
NutraMax Products, Inc. (the "Company") to purchase up to 450,000 shares of
its common stock, par value $.001 per share (the "Shares"), at prices not
greater than $12.75 nor less than $11.00 per Share, net to the seller in cash,
specified by tendering stockholders, upon the terms and subject to the
conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are
held by you for the account of the undersigned, at the price per Share
indicated below, upon the terms and subject to the conditions of the Offer.
SHARES TENDERED
[_] By checking this box, all Shares held by us for your account, excluding
fractional Shares, will be tendered. If fewer than all Shares held by us for
your account are to be tendered, please check the box and indicate below the
aggregate number of Shares to be tendered by us.
_________ Shares
Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
(Continued on the Next Page)
3
<PAGE>
PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING TENDERED
----------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE,
A SEPARATE LETTER OF TRANSMITTAL FOR EACH PRICE SPECIFIED
MUST BE USED.
----------------
CHECK ONLY ONE BOX.
IF MORE THAN ONE BOX IS CHECKED, OR IF NO BOX IS CHECKED
(EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND INSTRUCTIONS BELOW),
THERE IS NO VALID TENDER OF SHARES.
----------------
SHARES TENDERED AT PRICE DETERMINED
BY DUTCH AUCTION
[_]The undersigned wants to maximize the chance of having the Company
purchase all the Shares the undersigned is tendering (subject to the
possibility of proration). Accordingly, by checking this one box INSTEAD
OF ONE OF THE PRICE BOXES BELOW, the undersigned hereby tenders Shares at,
and is willing to accept, the Purchase Price resulting from the Dutch
auction tender process. This action could result in receiving a price per
Share as low as $11.00 or as high as $12.75.
***CHECK EITHER THE BOX ABOVE OR CHECK ONE BOX BELOW***
----------------
SHARES TENDERED AT PRICE DETERMINED BY STOCKHOLDER
[_]$11 [_]$11 1/2 [_]$12 [_]$12 1/2
[_] 11 1/16 [_] 11 9/16 [_] 12 1/16 [_] 12 9/16
[_] 11 1/8 [_] 11 5/8 [_] 12 1/8 [_] 12 5/8
[_] 11 3/16 [_] 11 11/16 [_] 12 3/16 [_] 12 11/16
[_] 11 1/4 [_] 11 3/4 [_] 12 1/4 [_] 12 3/4
[_] 11 5/16 [_] 11 13/16 [_] 12 5/16
[_] 11 3/8 [_] 11 7/8 [_] 12 3/8
[_] 11 7/16 [_] 11 15/16 [_] 12 7/16
(Continued on the Next Page)
4
<PAGE>
ODD LOTS
[_] By checking this box, the undersigned represents that the undersigned owns
beneficially or of record as of the Expiration Date, an aggregate of fewer
than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box,
in which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer
(persons checking this box need not indicate the price per Share in the
box entitled "Price (In Dollars) Per Share At Which Shares Are Being
Tendered" above. [_]
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING STOCKHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE
Dated: __________________, 1997
Signatures(s) ______________________
_____________________________________
Name ________________________________
Address _____________________________
_____________________________________
_____________________________________
_____________________________________
Social Security or
Taxpayer ID No.: ___________________
5
<PAGE>
Exhibit 9a(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
DEPOSITARY--Social security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the Depositary.
- ----------------------------------- -----------------------------------
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint The actual
account) owners of the
account or, if
joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only
contributor, the
minor(1)
6. Account in the name of The ward, minor,
guardian or committee or incompetent
for a designated ward, person(3)
minor, or incompetent
person
7.(a)The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee);
(b)So-called trust account The actual
that is not a legal or owner(1)
valid trust under
State law
8. Sole proprietorship The owner(4)
account
- --------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
--
<S> <C>
9. A valid trust, estate, The legal entity
or pension trust (Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public
Department of entity
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
--
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter business or
"doing business as" name. You may use either your SSN or EIN (if you have
one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service (the
"IRS") and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
For purposes of the Offer, payees exempted from backup withholding include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A dealer in securities or commodities required to register in the United
States, the District of Columbia or a possession of the United States.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends not generally subject to withholding include the
following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner payments made
to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE DEPOSITARY, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE DEPOSITARY. IF THE PAYMENTS ARE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments that are not subject to information reporting are also not
subject to backup withholding. For details, see the regulations under sections
6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Depositaries must be given the numbers whether or not
recipients are required to file tax returns. Depositaries must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a Depositary.
Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a Depositary you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit 9a(7)
LOGO
October 29, 1997
Dear Stockholder:
NutraMax Products, Inc. is offering to purchase up to 450,000 shares of its
common stock at a price not greater than $12.75 nor less than $11.00 per share.
The Company is conducting the Offer through a procedure commonly referred to as
a "Dutch Auction." This procedure allows you to select the purchase price
within the specified price range at which you are willing to sell all or a
portion of your shares to the Company without incurring brokerage commissions.
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their shares as a result of the Company's recent
announcement regarding fourth quarter performance. The Offer is being financed
by sales of the Company's common stock, at the same price per share as the
purchase price paid to stockholders of the Company in the Offer, to Cape Ann
Investors, L.L.C., the Company's largest stockholder, Bernard J. Korman, the
Chairman of the Board of Directors of the Company, Donald M. Gleklen, a member
of the Board of Directors of the Company, and myself.
The Offer is explained in detail in the enclosed Offer to Purchase and Letter
of Transmittal. If you wish to tender your shares, instructions on how to
tender shares are provided in the enclosed materials. I encourage you to read
these materials carefully before making any decision with respect to the Offer.
Neither the Company nor its Board of Directors is making any recommendation to
any stockholder whether to tender or refrain from tendering all or any of the
shares of common stock held by such stockholder. Each stockholder should make
his or her own decision as to whether to tender shares and, if so, how many
shares and the price or prices at which such shares should be tendered.
Please note that the offer is scheduled to expire at 12:00 Midnight, Boston,
Massachusetts time, on November 28, 1997, unless extended by the Company.
Questions regarding the Offer should not be directed to the Company but should
instead be directed to D.F. King & Co., Inc., the Information Agent, at (800)
488-8075.
Sincerely,
/s/ Donald E. Lepone,
Donald E. Lepone,
President and Chief Executive Officer
<PAGE>
Exhibit 9a(8)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase and the
related Letter of Transmittal dated October 29, 1997. While the Offer is being
made to all stockholders of the Company, tenders will not be accepted from or on
behalf of stockholders in any jurisdiction in which the acceptance thereof would
not be in compliance with the laws of such jurisdiction. The Company is not
aware of any jurisdiction in which the making of the Offer or the tender of
Shares would not be in compliance with the laws of such jurisdiction. In those
jurisdictions whose laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of the Company by one or
more registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
[LOGO OF NUTRAMAX APPEARS HERE]
NUTRAMAX PRODUCTS, INC.
UP TO 450,000 SHARES
OF ITS COMMON STOCK AT A PURCHASE PRICE
NOT GREATER THAN $12.75 NOR LESS
THAN $11.00 PER SHARE
NutraMax Products, Inc., a Delaware corporation (the "Company"), invites
its stockholders to tender up to 450,000 shares of its common stock, par value
$.001 per share (the "Shares"), to the Company at prices not greater than $12.75
nor less than $11.00 per Share net to seller in cash, specified by tendering
stockholders, upon the terms and subject to the conditions set forth in the
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer").
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
BOSTON, MASSACHUSETTS TIME, ON NOVEMBER 28, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER, HOWEVER, IS SUBJECT TO CERTAIN OTHER CONDITIONS AS SET FORTH IN THE
OFFER TO PURCHASE. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE
OFFER. HOWEVER, STOCKHOLDERS SHOULD MAKE THEIR OWN DECISIONS WHETHER TO TENDER
SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH
SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES
ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES.
As promptly as practicable following the Expiration Date, the Company will
purchase up to 450,000 Shares or such lesser number of Shares as are properly
tendered (and not withdrawn in accordance with Section 4 of the Offer to
Purchase) prior to the Expiration Date at prices not greater than $12.75 nor
less than $11.00 per Share in cash. The term "Expiration Date" means 12:00
Midnight, Boston, Massachusetts time, on November 28, 1997, unless and until the
Company, in its sole discretion, shall have extended the period of time during
which the Offer will remain open, and thereby delay acceptance for payment of,
and payment for, any Shares by giving oral or written notice of such extension
to Boston EquiServe L.P. (the "Depositary") and making a public announcement
thereof.
The Company will, upon the terms and subject to the conditions of the
Offer, determine a single per Share price (not greater than $12.75 nor less than
$11.00 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified by
the tendering stockholders. The Company will select the lowest Purchase Price
that will allow it to buy 450,000 Shares or such lesser number as are validly
tendered and not withdrawn pursuant to the Offer at prices not greater than
$12.75 nor less than $11.00 per Share.
<PAGE>
The Company will pay the Purchase Price for all Shares validly tendered at
prices at or below the Purchase Price and not withdrawn, upon the terms and
subject to the conditions of the Offer, including the proration terms thereof.
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their shares as a result of the Company's recent
announcement regarding fourth quarter performance. The Offer is being financed
pursuant to agreements by and between the Company and its largest stockholder,
and by and between the Company and certain of its executive officers and
directors.
Upon the terms and subject to the conditions of the Offer, if more than
450,000 Shares have been validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date, the Company will purchase such validly
tendered Shares in the following order of priority: (i) all Shares validly
tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date by any stockholder who owns beneficially or of record as of the
Expiration Date an aggregate of fewer than 100 Shares, who validly tenders all
of such Shares (partial tenders will not qualify for this preference) and who
completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery; and (ii) after purchase of all
of the foregoing Shares, all other Shares validly tendered at or below the
Purchase Price and not withdrawn prior to the Expiration Date, on a pro rata
basis.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, to extend the period of time during which the Offer
is open and thereby delay acceptance for payment of, and payment for, any Shares
by giving oral or written notice of such extension to the Depositary and making
a public announcement thereof. The Company's reservation of the rights to delay
payment for Shares it has accepted is limited by Rule 13e-4(f)(5) promulgated
under the Securities Exchange Act of 1934, as amended, which requires that the
Company must pay the consideration offered or return the Shares tendered
promptly after termination or withdrawal of the tender offer.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by the Company
pursuant to the Offer, may also be withdrawn at any time after 12:00 Midnight,
Boston, Massachusetts time, on December 29, 1997. For a withdrawal to be
effective, the Depositary must receive (at one of its addresses set forth on the
back cover of the Offer to Purchase) a notice of withdrawal in written,
telegraphic or facsimile transmission form on a timely basis. Such notice of
withdrawal must specify the name of the tendering stockholder, the name of the
registered holder, if different from that of the person who tendered such
Shares, the number of Shares tendered and the number of Shares to be withdrawn.
If the certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering stockholder must also submit the serial numbers shown on the
particular certificates for Shares to be withdrawn and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution (except in
the case of Shares tendered by an Eligible Institution). If Shares have been
tendered pursuant to the procedure for book-entry tender set forth in Section 3
of the Offer to Purchase, the notice of withdrawal must specify the name and the
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY TENDERS
2
<PAGE>
ARE MADE. The information required to be disclosed by Rule 13e-4(d)(1) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference. The Offer to Purchase and the related Letter of Transmittal are being
mailed to record holders of Shares and are being furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's stockholder list or, if applicable, who are listed as participants in
a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
Additional copies of the Offer to Purchase and the Letter of Transmittal
may be obtained from the Depositary or the Information Agent and will be
furnished promptly at the Company's expense.
The Information Agent for the Offer is:
D. F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 488-8075
October 30, 1997
3
<PAGE>
Exhibit 9a(9)
Donald E. Lepone (978) 283-4611, ext. 1257
President and Chief Executive Officer
NUTRAMAX REPORTS ESTIMATED FOURTH FISCAL QUARTER AND YEAR END 1997 SALES AND
EARNINGS; UNANTICIPATED QUARTERLY LOSS REFLECTS START-UP PROBLEMS; COMPANY TO
COMMENCE SELF TENDER OF ITS SHARES
GLOUCESTER, MASSACHUSETTS -- October 14, 1997 -- NUTRAMAX PRODUCTS, INC.
(Nasdaq: NMPC), a leading manufacturer and marketer of private label health and
personal care products, today reported estimated sales and earnings for its
fourth fiscal quarter and fiscal year 1997.
Net sales for the thirteen weeks ended September 27, 1997, are estimated to
be $23,914,000, compared with sales of $22,436,000, reported for the same period
of a year ago. Net loss for the quarter is estimated to be between $933,000,
and $1,032,000 or $.19 to $.21 per share based on 4,914,000 weighted average
shares outstanding. This compares to fourth quarter 1996 net income of
$1,712,000 or $.20 per share based on 8,560,000 weighted average
shares outstanding.
For the fiscal year ended September 27, 1997, sales are estimated to
be $94,134,000, compared to $80,479,000 for fiscal 1996. Net income for the
year is estimated to be between $2,274,000 or $.39 per share and $2,373,000
or $.41 per share on 5,976,000 weighted average shares outstanding.
This compares to $5,683,000 or $.67 per share based on 8,531,000 average
weighted shares outstanding for fiscal 1996.
NutraMax intends promptly to commence a modified Dutch auction tender for a
portion of its shares at a range of prices to be determined. Financing for this
tender will come from Bernard J. Korman, Chairman of the Board, Donald
E. Lepone, President and Chief Executive Officer and Cape Ann Investors,
L.L.C., the company's largest shareholder. Korman, Lepone and Cape Ann will buy
in aggregate, from the company through a private placement a number of
shares equal to those repurchased in the tender, at the same price the company
pays.
Mr. Lepone said, "We are deeply disappointed to report the earnings
shortfall for this period. However, both the production and distribution issues
which created the earnings problem have been addressed, and we expect operations
to run smoothly as we go forward. We are excited about the strength of customer
orders and the prospects for our business. NutraMax has every expectation of
<PAGE>
continued earnings growth in fiscal year 1998."
"NutraMax remains optimistic about its recent acquisition of the
American White Cross First Aid business. Integration of this new product line
and manufacturing capability is proceeding on schedule," Lepone said.
"The self-tender is being undertaken to provide added market liquidity
for investors who wish to sell, as well as a palpable statement of support
and confidence by the company's management and its largest shareholder that
the operating problems we endured this summer are now behind us," he added.
Start-up problems during the June through September, 1997 period, had
a negative impact on production and distribution and, resulted in
the unanticipated fourth quarter loss. These problems delayed completion of
a major capital expansion program in the company's largest division
which manufactures cough and cold products. New production capacity, centered
on a new continuous cooking line used in the manufacture of cough drops,
became operational later than planned. The delay in final installation and
operation of the new equipment coupled with unusually strong demand for cough
drops, in turn resulted in delayed shipments of complete orders to many of the
Company's customers. These developments, taken together, resulted in delayed
shipments, under-absorbed labor and overhead and over-crowding in the company's
primary distribution facility. As the company worked with customers to ship
against firm orders, excess freight costs were incurred, in addition to
unabsorbed manufacturing costs in unrelated product lines which were temporarily
limited in production to relieve mounting pressure on the distribution facility.
Nearly $4.6 million of incremental unshipped orders had accumulated by
the end of the quarter.
The company's new equipment is now in operation, and shipments against back
orders are progressing. As the company's order receipts remain strong, the
backorder position continues to be large, and the company will continue to incur
incremental freight and other expenses as it works to meet customer demand.
This incremental cost will have some effect on first quarter margins as well,
although the company anticipates a profitable quarter and fiscal 1998.
In order to provide additional warehousing capacity and improved
distribution efficiencies, the company's new 80,000 square foot distribution
center located in Gloucester, MA is scheduled to begin operation in the
December-January time period.
The fourth quarter results have required waivers and amendments of covenants
in the company's bank loan agreement, and the self tender requires consents from
the company's senior and subordinated lenders. The lenders have informed the
company that they will provide such waivers, amendments and consents.
NutraMax is a leading private label health and personal care products
company and the number one manufacturer and marketer of private label Disposable
Douches, ready-to-use Enemas, Pediatric Electrolyte Oral Maintenance Solutions,
Disposable Baby Bottles, Cough Drops and Throat Lozenges. The Company also
markets a broad line of Contact Lens Care Products, OTC and generic prescription
Ophthalmics, Clotrimazole-based Yeast Infection Medications, Toothbrushes,
Dental Floss, Liquid Adult Nutritional
<PAGE>
Products, and Adhesive Bandages, Medical Tapes, First Aid Kits and various First
Aid Products for the hospital and industrial safety markets. NutraMax products
are sold by supermarkets, drug chains and mass merchandisers under both store
brand names and control brands, including Powers, Optopics, Sweet 'n Fresh(R),
Pure & Gentle, Fresh' n Easy, Pro Dental, American White Cross and NutraMax..
Some of the information presented in this release constitutes forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Although the Company believes its expectations are based on
reasonable assumptions within the bounds of its knowledge of its business and
operations, there can be no assurance that actual results will not differ
materially from its expectations. Factors which could cause actual results to
differ from expectations include the integration of the newly acquired American
White Cross First Aid business, the ability of the company to ship its increased
order backlog, the timing of new product introductions by the Company, the
timing of orders received from customers, the gain or loss of significant
customers, changes in the mix of products sold, competition from other private
label manufacturers, seasonal changes in the demand for the Company's products,
increases in the cost of raw materials, production and distribution delays and
changes in the retail market for health and beauty aids in general. For
additional information concerning these and other important factors which may
cause the Company's actual results to differ materially from expectations and
underlying assumptions, please refer to the reports filed by the Company with
the Securities and Exchange Commission.
<PAGE>
Exhibit 9a(10)
IMMEDIATE
October 29, 1997
Donald E. Lepone (978) 283-9611, ext. 1257
President and Chief Executive Officer
NUTRAMAX ANNOUNCES DUTCH AUCTION SELF TENDER
GLOUCESTER, MA -- NUTRAMAX PRODUCTS, INC. (NASDAQ-NMPC), announced today that it
has launched a Dutch auction self tender for approximately 8% of its outstanding
shares of common stock, or 450,000 shares.
All NutraMax stockholders are invited to tender shares within a price range
of $11.00 per share to $12.75 per share. Tendering stockholders will be required
to specify the price within the range that they would be willing to accept.
Stockholders will have until midnight Boston, Massachusetts time, November 28,
1997 to respond to the Company's Dutch auction self tender offer. The Company
will select the lowest purchase price per share that will enable it to buy the
shares pursuant to the offer, and will pay such purchase price for all shares
purchased pursuant to the offer.
All inquires on procedures for the Dutch auction self tender offer should
be directed to D. F. King & Co., Inc., the information agent for the offer. The
address for D. F. King is 77 Water Street, New York, N.Y. 10005. Bankers and
brokers should call the information agent collect at (212) 269-5550. All others
should call toll-free at (800) 488-8075.
The Offer is being undertaken to provide added market liquidity for
stockholders who wish to sell their shares as a result of the Company's recent
announcement regarding fourth quarter performance. The Offer is being financed
pursuant to certain agreements by and between the Company and its largest
stockholder and the Company and certain of the Company's executive officers and
directors.
NutraMax is a leading private label health and personal care products
company and the number one manufacturer and marketer of private label Disposable
Douches, ready-to-use Enemas, Pediatric Electrolyte Oral Maintenance Solutions,
Disposable Baby Bottles, Cough Drops and Throat Lozenges. The Company also
markets a broad line of Contact Lens Care Products, OTC and generic prescription
Opthalmics, Clotrimazole-based Vaginal Yeast Infection Medications,
Toothbrushes, Dental Floss, Liquid Adult Nutritional Products, Adhesive
Bandages, Medical Tapes, First Aid Kits and various first aid products for the
hospital and industrial safety markets. NutraMax products are sold by
supermarkets, drug chains and mass merchandisers under both store brand names
and control brands, including Powers, Optopics, Sweet 'n Fresh (R), Pure &
Gentle, Fresh 'n Easy, Pro Dental, American White Cross and NutraMax.
NutraMax Products, Inc., 9 Blackburn Drive, Gloucester, MA 01930 (978) 283-1800
<PAGE>
Exhibit 9c(2)
AMENDMENT NO.1 (this "Amendment"), dated as of October 16, 1997, to
---------
the Agreement (the "Agreement") dated as of October 14, 1997 by and between
---------
NutraMax Products, Inc., a Delaware corporation (the "Company"), and Cape Ann
-------
Investors, L.L.C., a Delaware limited liability company (the "Purchaser"). All
---------
capitalized terms used in this Amendment and not otherwise defined herein shall
have the meanings set forth in the Agreement.
1. The references to "78%" in the fifth line to ".78" in the
seventh line of Section 2.2 of the Agreement are hereby amended, respectively,
to read "77%" and ".77" and all references in the Agreement to the Other
Purchasers are hereby amended to be a reference to three other purchasers,
rather than two, as previously set forth in the Agreement.
2. Except as expressly provided herein, the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has duly executed
and delivered this Amendment as of the date first above written.
NUTRAMAX PRODUCTS, INC.
By: /s/ Donald E. Lepone
----------------------------------------
Name: Donald E. Lepone
Title: President/CEO
CAPE ANN INVESTORS, L.L.C.
By: Chilmark Fund II, L.P., its Managing
Member
By: Chilmark II, L.L.C., its General Partner
By: /s/ Joel S. Friedland
----------------------------------------
Name: Joel S. Friedland
Title: Vice President
<PAGE>
Exhibit 9c(3)
AGREEMENT
by and between
NUTRAMAX PRODUCTS, INC.
AND
BERNARD J. KORMAN
DATED AS OF
OCTOBER 14, 1997
<PAGE>
AGREEMENT, dated as of October 14, 1997 (the "Agreement"), by and between
---------
NutraMax Products, Inc., a Delaware corporation (the "Company") and Bernard J.
-------
Korman (the "Stockholder").
-----------
WHEREAS, the Company, Cape Ann Investors, L.L.C. ("Cape Ann Investors") and
------------------
the Stockholder desire to effect a series of transactions including an offer by
the Company to repurchase a number of shares to be determined, up to 450,000
shares, of the issued and outstanding Common Stock, par value $.001 per share,
of the Company (the "Common Stock") pursuant to a tender offer as further
------------
described herein (the "Tender Offer") and the purchase by the Stockholder of
------------
shares of Common Stock (the "Stock Purchase"), the proceeds from which shall be
--------------
used to fund, in part, the consideration paid in the Tender Offer by the
Company;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
TENDER OFFER AND STOCK PURCHASE
Section 1.1. Tender Offer. (a) Subject to the provisions of this
------------
Agreement, as promptly as practicable, the Company shall commence the Tender
Offer, which shall be an issuer tender offer to purchase a number of shares, up
to 450,000 shares, of Common Stock to be determined by the Company (the "Offer
-----
Number") at a price per share not in excess of a per share price, and not less
- ------
than a per share price, determined by the Company (the price range from such
maximum to minimum price being referred to herein as the "Per Share Price
---------------
Range"), net to the seller in cash. Pursuant to the Tender Offer, the Company
- -----
will determine the single per share price, within the Per Share Price Range, net
to the seller in cash (such price being referred to as the "Per Share Purchase
------------------
Price"), that it will pay for shares properly tendered pursuant to the Tender
- -----
Offer, taking into account the number of shares so tendered and the prices
specified by the tendering stockholders. The Company will select the lowest Per
Share Purchase Price that will allow it to buy the Offer Number of shares of
Common Stock (or such lesser number of shares as are properly tendered and not
withdrawn at prices within the Per Share Price Range) (such number of shares
being the "Purchased Number"). All shares of Common Stock properly tendered at
----------------
prices at or below the Per Share Purchase Price and not withdrawn will be
purchased at the Per Share Purchase Price, subject to the terms and conditions
of the Tender Offer.
(b) On the date required under applicable rules, the Company shall file
with the Securities and Exchange Commission (the "Commission") an Issuer Tender
----------
Offer Statement on Schedule 13E-4 (together with all amendments and supplements
thereto, the "Tender Offer Statement") with respect to the Tender Offer. The
----------------------
Tender Offer Statement shall contain the Offer to Purchase and such other
information and exhibits as are required by law. The Tender Offer Statement
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company agrees
<PAGE>
promptly to correct any information in the Tender Offer Statement that shall be
or shall have become false or misleading in any material respect and the Company
further agrees to take all steps necessary to cause the Tender Offer Statement
as so corrected to be filed with the Commission and disseminated to the
stockholders of the Company as and to the extent required by applicable federal
securities laws.
(c) Subject to the terms and conditions thereof, the Tender Offer shall
expire at midnight Eastern time on the date that is 20 business days from the
date the Tender Offer is first published, sent or given to holders of Common
Stock; provided, however, that the Company may extend the Tender Offer (i) if,
at the previously scheduled expiration date of the Tender Offer, any of the
conditions to the Company's obligations to accept for payment, and pay for,
shares of Common Stock shall not have been satisfied or waived, until such time
as such conditions are satisfied or waived, (ii) for any period required by any
rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Tender Offer and (iii) for any reason on one or more
occasions for an aggregate period of not more than 5 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence.
(d) The obligation of the Company to accept for payment, and pay for,
shares of Common Stock properly tendered and not withdrawn prior to the
expiration of the Tender Offer shall be subject to the satisfaction or waiver at
or prior to the expiration of the Tender Offer of such conditions as the
Company, in its discretion (except as set forth below), shall have specified in
the Offer to Purchase to be distributed in connection with the Tender Offer.
Notwithstanding the foregoing, the Tender Offer shall not be subject to a
condition that any minimum number of shares of Common Stock be tendered, but
shall be subject to the following conditions: (i) that there shall not have
occurred or been threatened any change in the condition (financial or
otherwise), business, operations, properties, assets, liabilities, income or
prospects of the Company and its subsidiaries, taken as a whole, which is or may
be material and adverse to the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change") and (ii) Cape Ann Investors shall not have, prior to
-----------------------
the expiration date, terminated its obligations under Section 2.2 of the
Agreement by and between the Company and Cape Ann Investors dated as of October
14, 1997 (the "Cape Ann Agreement"), in accordance with the terms thereof, as a
------------------
result of a Material Adverse Change.
(e) The Stockholder will not tender any shares of Common Stock beneficially
owned by the Stockholder to the Company pursuant to the Tender Offer.
Section 1.2. The Stock Purchase. (a) Subject to the terms and conditions
------------------
hereof, promptly after the Company gives notice to the Depositary (as defined in
the Offer to Purchase) of its acceptance of shares for payment pursuant to the
Tender Offer, the Stockholder shall purchase from the Company, and the Company
shall issue, sell and deliver to the Stockholder, a number of shares of Common
Stock equal to 20% of the first $5,000,000 worth of shares purchased pursuant to
the Tender Offer at a purchase price per share equal to
2
<PAGE>
the Per Share Purchase Price. The shares purchased and sold hereunder shall be
validly issued, fully paid and non-assessable, and shall be free and clear of
any liens, security interests, pledges, voting agreements, claims, options and
encumbrances of every kind, character and description whatsoever
("Encumbrances"), except as contemplated by this Agreement. A number of
------------
additional shares of Common Stock equal to the difference obtained by
subtracting the number of shares purchased by the Stockholder hereunder from the
Purchased Number, will be purchased by Cape Ann Investors and one other
purchaser pursuant to separate purchase agreements dated the date hereof.
(b) The Stockholder shall be entitled, on written notice given to the
Company, to terminate his obligations to purchase shares of Common Stock
hereunder if Cape Ann Investors has exercised its right to terminate its
obligations to purchase shares of Common Stock under Section 2.2 of the Cape Ann
Agreement. In the event of any such termination, the Stockholder's obligations
under this Section 1.2 shall immediately terminate and be of no further force or
effect, but all the other provisions of this Agreement shall survive any such
termination and remain in full force and effect.
ARTICLE II
COVENANTS OF THE PARTIES
Section 2.1. Information from the Stockholder. The Stockholder shall
--------------------------------
promptly provide the Company with any information concerning the Stockholder
requested by the Company and required to be included in the Tender Offer
Statement.
Section 2.2. Cooperation; Further Action. In the event that any action
---------------------------
is necessary or desirable to carry out the purposes of this Agreement, each
party shall take, and shall cause its directors, officers, employees,
representatives and agents, as the case may be, to take, all such necessary
actions including the execution and delivery of such further instruments and
documents as may reasonably be requested by any party for such purposes or
otherwise to complete or perfect the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Company as follows:
Section 3.1. Authorization Execution and Delivery of Agreement. The
-------------------------------------------------
Stockholder has all requisite power and authority to execute this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Stockholder and this Agreement constitutes the legal, valid, binding and
enforceable obligation of the Stockholder, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditor's rights and
principles of
3
<PAGE>
equity.
Section 3.2. No Conflict; No Consent. The execution and delivery of this
-----------------------
Agreement and the consummation of the transactions contemplated hereby do not,
and will not, conflict with, or result in any violation of or default under, or
permit the acceleration of any obligation under, or the creation or imposition
of any Encumbrance on any of the properties or assets of the Stockholder under
(i) any indenture, lease, mortgage, deed of trust, loan agreement or other
agreement or instrument, or any permit, license, registration, membership,
authorization or qualification from any federal, state, local or foreign
governmental or regulatory authority (each an "Authority"), of the Stockholder
or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation
of any Authority to which the Stockholder is a party or by which it is bound,
other than, in the case of clause (i) above, where such conflict, violation,
default, acceleration or Encumbrance would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Stockholder. Other than as a result of the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no consent,
------------
approval, order or authorization of, or registration, declaration, filing or
notice to, any Authority is required to be made or obtained by the Stockholder
in order to execute or deliver this Agreement or to consummate the transactions
contemplated hereby.
Section 3.3. Investment Purposes. (a) The Stockholder, by reason of his
-------------------
business and financial experience, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of his investment in the shares of Common Stock, and is
purchasing the shares hereunder for his own account, for investment only and not
with a view to, or any present intention of, effecting a distribution of such
securities or any part thereof. The Stockholder acknowledges that the shares to
be purchased hereunder have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or the securities laws of any state or
--------------
other jurisdiction and cannot be disposed of unless they are subsequently
registered under the Securities Act and any applicable state laws or exemption
from such registration is available.
(b) The Stockholder is an "accredited investor" as that term is defined
in Rule 501 promulgated under the Securities Act.
(c) The Stockholder has had the opportunity to ask questions and to
receive answers concerning the financial condition, operations and prospects of
the Company and the terms and conditions of the Stockholder's investment, as
well as the opportunity to obtain any additional information necessary to verify
the accuracy of information furnished in connection therewith that the Company
possesses or can acquire without unreasonable effort or expense.
4
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholder as follows:
Section 4.1. Due Organization, etc. The Company is a corporation duly
---------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 4.2. Authorization Execution and Delivery of Agreement. (a) The
-------------------------------------------------
Company has full corporate power and authority to execute this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company for all purposes.
This Agreement has been duly executed and delivered by the Company and this
Agreement constitutes the legal, valid, binding and enforceable obligation of
the Company, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditor's rights and principles of equity.
(b) The shares of Common Stock issuable upon consummation of the Stock
Purchase have been duly authorized by all necessary corporate action on part of
the Company, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration therefor set forth herein, the
shares of Common Stock so issued will be validly issued, fully paid and non-
assessable and the Stockholder will acquire valid and marketable title to such
shares, free and clear of any Encumbrances except as contemplated by this
Agreement.
Section 4.3 No Conflict; No Consent. Subject to the receipt of a waiver
-----------------------
from the lenders under the Company's credit facility, which waiver the Company
has been orally advised will be forthcoming promptly, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not, and will not, conflict with, or result in any violation of or default
under, or permit the acceleration of any obligation under, or the creation or
imposition of any Encumbrance on any of the properties or assets of the Company
or any subsidiary of the Company under (i) any provision of the certificate of
incorporation or by-laws or similar constituent documents of the Company or any
subsidiary of the Company, (ii) any indenture, lease, mortgage, deed of trust,
loan agreement or other agreement or instrument, or any permit, license,
registration, membership, authorization of qualification from any Authority, of
the Company or any subsidiary of the Company or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation of any Authority to which
the Company or any of its subsidiaries is a party or by which any of them is
bound, other than, in the case of clause (ii) above, where such conflict,
violation, default, acceleration or Encumbrance would not, individually or in
the aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Company and its subsidiaries, taken as a whole. Other than as a result of the
reporting
5
<PAGE>
requirements of the Exchange Act, no consent, approval, order or authorization
of, or registration, declaration, filing or notice to, any Authority is required
to be made or obtained by the Company or any subsidiary of the Company in order
to execute or deliver this Agreement or to consummate the transactions
contemplated hereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Condition to Agreement. The agreements and covenants
----------------------
contained herein are subject, in their entirety, to the receipt of the requisite
consent or waiver of the lenders referred to in Section 4.3 hereof.
Section 5.2. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of all parties.
Section 5.3. Notices. Any notice, request, instruction or other document
-------
to be given hereunder by a party hereto shall be in writing and shall be deemed
to have been given, (i) when received if given in person, or (ii) on the date of
transmission if sent by nationally recognized overnight courier, certified or
registered mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) If to the Stockholder, addressed as follows:
Bernard J. Korman
Graduate Health System
22nd and Chestnut Streets
Philadelphia, Pennsylvania 19103
(b) If to the Company, addressed as follows:
NutraMax Products, Inc.
9 Blackburn Drive
Gloucester, Massachusetts 01930
Attention: Robert F. Burns, Vice President and
Chief Financial Officer
with a copy to:
Eugene M. Schloss, Jr., Esq.
1700 Cary Road
Huntingdon Valley, Pennsylvania 19006-5002
and
6
<PAGE>
Goodwin, Procter & Hoar, LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Joseph L. Johnson III, Esq.
Section 5.4. Entire Agreement. This Agreement constitutes the entire
----------------
agreement, and supersedes all of the prior agreements and undertakings, both
written and oral, between or among the parties, or any of them, with respect to
the subject matter hereof.
Section 5.5. Counterparts. This Agreement may be executed in two or more
------------
counterparts which together shall constitute a single agreement.
Section 5.6. Parties in Interest; Assignment. This Agreement shall be
-------------------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No provision of this Agreement, express or
implied, is intended to or shall confer upon any other person or entity any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. This Agreement is not assignable except by consent of each of the
parties hereto or operation of law.
Section 5.7. Governing Law. This Agreement and the rights and obligations
-------------
of the parties created hereby shall be governed by the internal laws of the
State of Delaware without regard to the conflict of law rules thereof.
Section 5.8. Captions. All section titles or captions contained in this
--------
Agreement are for convenience only, shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of this Agreement. All
references herein to Sections shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
Section 5.9. Equitable Relief. Each party acknowledges that, in the event
----------------
of any breach of this Agreement by a party, the other party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that, in the event of any breach or threatened breach of the
provisions of this Agreement by such party, the other party, in addition to any
other remedy to which it may be entitled, shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
compel specific performance of this Agreement. Any requirements for the
securing or posting of any bond with respect to such remedy are hereby waived by
each of the parties hereto.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
NUTRAMAX PRODUCTS, INC.
By: /s/ Robert F. Burns
-------------------------------------
Name: Robert F. Burns
Title: Chief Financial Officer
/s/ Bernard J. Korman
-----------------------------------------
Bernard J. Korman
8
<PAGE>
Exhibit 9c(4)
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is entered into as of
October 16, 1997 by and between NutraMax Products, Inc., a Delaware corporation
(the "Company"), and Bernard J. Korman (the "Holder").
WHEREAS, the Holder has agreed to purchase shares (the "Shares") of the
Company's common stock, par value $.001 per share (the "Common Stock"), to be
issued without registration under the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to an Agreement dated as of October 14, 1997 by and
between the Company and the Holder.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. "Piggyback" Registration.
------------------------
If, at any time while the Holder shall hold Shares, the Company proposes to
file a registration statement relating to the offering of any of its capital
stock under the Securities Act (other than (i) a registration statement required
to be filed in respect of employee benefit plans of the Company on Form S-8 or
any similar form from time to time in effect, (ii) any registration statement on
Form S-4 or similar successor form, or (iii) a registration statement relating
to a transaction pursuant to Rule 145 of the Securities Act), whether or not for
sale for its own account, the Company shall, at least twenty-one days (or if
such twenty-one day period is not practicable, then a reasonable shorter period
which shall not be less than seven days) prior to such filing, give written
notice of such proposed filing to the Holder. Upon receipt by the Company not
more than seven days (unless the notice given to the Holder pursuant to the
previous sentence is less than ten days, in which case such seven-day period
shall be shortened to five days) after such notice of a written request from the
Holder for registration of any or all of the Registrable Shares (as hereinafter
defined), the Company shall, subject to Section 2, include such Registrable
Shares requested to be registered in such registration statement, and shall use
all reasonable efforts to cause such registration statement to become effective
with respect to such Registrable Shares, unless the managing underwriter
therefor concludes in its reasonable judgment that the number of securities
requested to be included in such registration exceeds the number which can
reasonably be sold in (or during the time of) such offering, in which case the
Company may decrease the number of shares of Registrable Shares included in such
registration and any other securities proposed to be sold to the extent
necessary to reduce the number of securities to be included in the registration
to the level recommended by the managing underwriter; provided, however, that in
the event of any such reduction, the first shares to be included in such
registration shall be any shares to be registered for the benefit of the
Company, thereafter any shares requested to be registered for the benefit of
holders of Common Stock pursuant to registration rights agreements in effect
between the Company and such holders prior to the date hereof, and thereafter
any Registrable Shares requested to be registered by the Holder hereunder.
Registrable Shares means any Shares and any securities of the Company issued as
a dividend or distribution with respect to or in exchange for any Shares.
<PAGE>
2. Registration Procedures.
-----------------------
(a) The Company shall notify the Holder of the effectiveness of the
Registration Statement and shall furnish to the Holder such number of copies of
the Registration Statement (including any amendments, supplements and exhibits),
the prospectus contained therein (including each preliminary prospectus), any
documents incorporated by reference in the Registration Statement and such other
documents as the Holder may reasonably request in order to facilitate his sale
of the Registrable Shares in the manner described in the Registration Statement.
(b) Subject to the provisions of Section 7, the Company shall prepare and
file with the Securities and Exchange Commission (the "SEC") from time to time
such amendments and supplements to the Registration Statement and prospectus
used in connection therewith as may be necessary to keep the Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all the Registrable Shares until the earlier of
(i) such time as all of the Registrable Shares have been issued or disposed of
in accordance with the intended methods of disposition by the Holder as set
forth in the Registration Statement or (ii) 180 days from the effectiveness of
the Registration Statement. The Company shall file any necessary listing
applications or amendments to the existing applications to cause the shares to
be then listed or quoted on the primary exchange or quotation system on which
the Common Stock is then listed or quoted.
(c) Upon making a request for registration pursuant to Section 1, the
Holder shall furnish to the Company such information regarding his holdings and
the proposed manner of distribution thereof as the Company may reasonably
request and as shall be required in connection with any registration,
qualification or compliance referred to herein.
3. State Securities Laws. Subject to the conditions set forth in this
---------------------
Agreement, the Company shall, promptly upon the filing of a Registration
Statement including Registrable Shares, file such documents as may be necessary
to register or qualify the Registrable Shares under the securities or "Blue Sky"
laws of such states as the Holder may reasonably request, and the Company shall
use reasonable efforts to cause such filings to become qualified; provided,
--------
however, that the Company shall not be obligated to qualify as a foreign
- -------
corporation to do business under the laws of any such state in which it is not
then qualified or to file any general consent to service of process in any such
state.
4. Expenses. The Company shall bear all expenses incurred in connection
--------
with the registration of the Registrable Shares pursuant to Section 1 of this
Agreement. Such expenses shall include, without limitation, all printing, legal
and accounting expenses incurred by the Company and all registration and filing
fees imposed by the SEC, any state securities commission or the National
Association of Securities Dealers, Inc. or, if the Common Stock is not then
listed on the Nasdaq SmallCap Market, the principal national securities exchange
or national market system on which the Common Stock is then traded or quoted.
Notwithstanding the foregoing, the Holder shall be responsible for any brokerage
or underwriting commissions and taxes of any kind (including, without
limitation, transfer taxes)
2
<PAGE>
with respect to any disposition, sale or transfer of Registrable Shares and for
any legal, accounting and other expenses incurred by the Holder.
5. Indemnification by the Company. The Company agrees to indemnify the
------------------------------
Holder and each person or entity, if any, subject to liability because of his,
her or its connection with the Holder, and any underwriter and any person who
controls the underwriter within the meaning of the Securities Act (an
"Indemnitee") against any and all losses, claims, damages, actions, liabilities,
costs and expenses (including without limitation reasonable attorneys' fees,
expenses and disbursements documented in writing), joint or several, arising out
of or based upon any untrue or alleged untrue statement of material fact
contained in the Registration Statement or any prospectus contained therein, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as and
to the extent that such statement or omission arose out of or was based upon
information regarding the Indemnitee or its plan of distribution which was
furnished to the Company by the Indemnitee for use therein, provided, further
that the Company shall not be liable to any person who participates as an
underwriter in the offering or sale of Registrable Shares or any other person,
if any, who controls such underwriter within the meaning of the Securities Act,
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon (i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with information furnished to the Company for use in
connection with the Registration Statement or the prospectus contained therein
by such Indemnitee or (ii) such Indemnitee's failure to send or give a copy of
the final prospectus furnished to it by the Company at or prior to the time such
action is required by the Securities Act to the person claiming an untrue
statement or alleged untrue statement or omission or alleged omission if such
statement or omission was corrected in such final prospectus. The obligations
of the Company under this Section 5 shall survive the completion of any offering
of Registrable Shares pursuant to a Registration Statement under this Agreement
or otherwise and shall survive the termination of this Agreement.
6. Covenant of the Holder. The Holder hereby agrees (a) to cooperate
----------------------
with the Company and to furnish to the Company all such information in
connection with the preparation of the Registration Statement and any filings
with any state securities commissions as the Company may reasonably request, (b)
to deliver or cause delivery of the prospectus contained in the Registration
Statement to any purchaser of the Shares covered by the Registration Statement
from the Holder, (c) to notify the Company of any sale of Registrable Shares by
the Holder and (d) to indemnify the Company, its officers, directors, employees,
agents, representatives and affiliates, and each person, if any, who controls
the Company within the meaning of the Securities Act, and each other person, if
any, subject to liability because of his connection with the Company, against
any and all losses, claims, damages, actions, liabilities, costs and expenses
arising out of or based upon (i) any untrue statement or alleged untrue
statement of material fact contained in either the Registration Statement or the
prospectus contained therein, or any omission or alleged omission to state
therein a material
3
<PAGE>
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, if and
to the extent that such statement or omission arose out of or was based upon
information regarding the Holder or its plan of distribution which was furnished
to the Company by the Holder for use therein, or (ii) the failure by the Holder
to deliver or cause to be delivered the prospectus contained in the Registration
Statement (as amended or supplemented, if applicable) furnished by the Company
to the Holder to any purchaser of the shares covered by the Registration
Statement from the Holder. Notwithstanding the foregoing, (i) in no event will
the Holder have any obligation under this Section 6 for amounts the Company pays
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Holder (which consent shall
not be unreasonably withheld) and (ii) the total amount for which the Holder
shall be liable under this Section 6 shall not in any event exceed the aggregate
gross proceeds received by him or it from the sale of the Holder's Registrable
Shares in such registration. The obligations of the Holder under this Section 6
shall survive the completion of any offering of Registrable Shares pursuant to a
Registration Statement under this Agreement or otherwise and shall survive the
termination of this Agreement.
7. Suspension of Registration Requirement.
--------------------------------------
(a) The Company shall promptly notify the Holder of, and confirm in
writing, the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement or the initiation of any proceedings for that
purpose. The Company shall use reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of the Registration Statement at the
earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in this Agreement,
the Company's obligation under this Agreement to use reasonable efforts to cause
the Registration Statement and any filings with any state securities commission
to be made or to become effective or to amend or supplement the Registration
Statement shall be suspended in the event and during such period pending
negotiations relating to, or consummation of, a transaction or the occurrence of
an event that would require additional disclosure of material information by the
Company in the Registration Statement or such filing (such circumstances being
hereinafter referred to as a "Suspension Event") that would make it impractical
or unadvisable to cause the Registration Statement or such filings to be made or
to become effective or to amend or supplement the Registration Statement, but
such suspension shall continue only for so long as such event or its effect is
continuing but in no event will that suspension exceed ninety (90) days.
Immediately upon receipt by the Holder of notice of a Suspension Event, the
Holder shall cease to offer or sell any Registrable Securities pursuant to such
Registration Statement, cease to deliver or use such Registration Statement and,
if so requested by the Company, return to the Company, at his expense, all
copies (other than permanent file copies) of such Registration Statement.
(c) The Holder agrees, if requested by the Company in the case of a
nonunderwritten offering (a "Nonunderwritten Offering") or if requested by the
managing underwriter or underwriters in an underwritten offering (an
"Underwritten Offering,"
4
<PAGE>
collectively with Nonunderwritten Offering, the "Offering"), not to effect any
public sale or distribution of any of the securities of the Company of any class
included in such Offering, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Offering), during the 15-day
period prior to, and during the 90-day period (or such longer period as may be
required by the managing underwriter or underwriters) beginning on, the date of
pricing of each Offering, to the extent timely notified in writing by the
Company or the managing underwriters. Furthermore, notwithstanding anything to
the contrary set forth in this Agreement, the Company's obligation under this
Agreement to cause a Registration Statement and any filings with any state
securities commission to be made or to become effective or to amend or
supplement such Registration Statement shall be suspended in the event and
during such period as the Company is proceeding with an Offering if the Company
is advised by the underwriters that the sale of shares of Registrable Securities
under such Registration Statement would have a material adverse effect on the
Offering.
8. Black-Out Period. Following the effectiveness of the Registration
----------------
Statement and the filings with any state securities commissions, the Holder
agrees that he will not effect any sales of the Registrable Shares pursuant to
the Registration Statement or any such filings at any time after he has received
notice from the Company to suspend sales as a result of the occurrence or
existence of any Suspension Event, during any Offering, or so that the Company
may correct or update the Registration Statement or such filing. The Holder may
recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement or such filings following further notice to such effect
from the Company, which notice shall be given by the Company not later than
three (3) business days after the conclusion of any such Suspension Event or
Offering.
9. Contribution. If the indemnification provided for in Sections 5 and 6
------------
is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Holder, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
actions, liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holder, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that in no event shall the obligation of any indemnifying
- -------- -------
party to contribute under this Section 9 exceed the amount that such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Sections 5 or 6 hereof had been available
under the circumstances.
5
<PAGE>
The Company and the Holder agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph.
No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
10. No Other Obligation to Register. Except as otherwise expressly
-------------------------------
provided in this Agreement, the Company shall have no obligation to the Holder
to register the Registrable Shares under the Securities Act.
11. Amendments and Waivers. The provisions of this Agreement may not be
----------------------
amended, modified or supplemented without the prior written consent of the
Company and the Holder.
12. Notices. Except as set forth below, all notices and other
-------
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the Company and the Holder
at the following addresses (or at such other address for either party as shall
be specified by like notice, provided that notices of a change of address shall
be effective only upon receipt thereof), and further provided that in case of
directions to amend the Registration Statement pursuant to or Section 6, a
Holder must confirm such notice in writing by overnight express delivery with
confirmation of receipt:
If to the Company: NutraMax Products, Inc.
9 Blackburn Drive
Gloucester, MA 01930
Attn: Chief Financial Officer
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Joseph L. Johnson III, Esq.
If to the Holder: Bernard J. Korman
Graduate Health System
22nd and Chestnut Streets
Philadelphia, PA 19103
In addition to the manner of notice permitted above, notices given pursuant to
Sections 1, 7 and 8 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
6
<PAGE>
14. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the successors and assigns of the Company. This
Agreement may not be assigned by the Holder and any attempted assignment hereof
by the Holder will be void and of no effect and shall terminate all obligations
of the Company hereunder with respect to the Holder.
15. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
16. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed wholly within said State.
17. Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
18. Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[Remainder of Page Intentionally Left Blank]
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY:
NUTRAMAX PRODUCTS, INC.
/s/ Robert F. Burns
____________________________________
Name: Robert F. Burns
Title: Chief Financial Officer
HOLDER:
/s/ Bernard J. Korman
____________________________________
Bernard J. Korman
8
<PAGE>
Exhibit 9c(5)
AGREEMENT
by and between
NUTRAMAX PRODUCTS, INC.
AND
DONALD E. LEPONE
DATED AS OF
OCTOBER 14, 1997
<PAGE>
AGREEMENT, dated as of October 14, 1997 (the "Agreement"), by and between
---------
NutraMax Products, Inc., a Delaware corporation (the "Company") and Donald E.
-------
Lepone (the "Stockholder").
-----------
WHEREAS, the Company, Cape Ann Investors, L.L.C. ("Cape Ann Investors") and
------------------
the Stockholder desire to effect a series of transactions including an offer by
the Company to repurchase a number of shares to be determined, up to 450,000
shares, of the issued and outstanding Common Stock, par value $.001 per share,
of the Company (the "Common Stock") pursuant to a tender offer as further
------------
described herein (the "Tender Offer") and the purchase by the Stockholder of
------------
shares of Common Stock (the "Stock Purchase"), the proceeds from which shall be
--------------
used to fund, in part, the consideration paid in the Tender Offer by the
Company;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
TENDER OFFER AND STOCK PURCHASE
Section 1.1. Tender Offer. (a) Subject to the provisions of this
------------
Agreement, as promptly as practicable, the Company shall commence the Tender
Offer, which shall be an issuer tender offer to purchase a number of shares, up
to 450,000 shares, of Common Stock to be determined by the Company (the "Offer
-----
Number") at a price per share not in excess of a per share price, and not less
- ------
than a per share price, determined by the Company (the price range from such
maximum to minimum price being referred to herein as the "Per Share Price
---------------
Range"), net to the seller in cash. Pursuant to the Tender Offer, the Company
will determine the single per share price, within the Per Share Price Range, net
to the seller in cash (such price being referred to as the "Per Share Purchase
------------------
Price"), that it will pay for shares properly tendered pursuant to the Tender
- -----
Offer, taking into account the number of shares so tendered and the prices
specified by the tendering stockholders. The Company will select the lowest Per
Share Purchase Price that will allow it to buy the Offer Number of shares of
Common Stock (or such lesser number of shares as are properly tendered and not
withdrawn at prices within the Per Share Price Range) (such number of shares
being the "Purchased Number"). All shares of Common Stock properly tendered at
----------------
prices at or below the Per Share Purchase Price and not withdrawn will be
purchased at the Per Share Purchase Price, subject to the terms and conditions
of the Tender Offer.
(b) On the date required under applicable rules, the Company shall file
with the Securities and Exchange Commission (the "Commission") an Issuer Tender
----------
Offer Statement on Schedule 13E-4 (together with all amendments and supplements
thereto, the "Tender Offer Statement") with respect to the Tender Offer. The
----------------------
Tender Offer Statement shall contain the Offer to Purchase and such other
information and exhibits as are required by law. The Tender Offer Statement
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company agrees
<PAGE>
promptly to correct any information in the Tender Offer Statement that shall be
or shall have become false or misleading in any material respect and the Company
further agrees to take all steps necessary to cause the Tender Offer Statement
as so corrected to be filed with the Commission and disseminated to the
stockholders of the Company as and to the extent required by applicable federal
securities laws.
(c) Subject to the terms and conditions thereof, the Tender Offer shall
expire at midnight Eastern time on the date that is 20 business days from the
date the Tender Offer is first published, sent or given to holders of Common
Stock; provided, however, that the Company may extend the Tender Offer (i) if,
at the previously scheduled expiration date of the Tender Offer, any of the
conditions to the Company's obligations to accept for payment, and pay for,
shares of Common Stock shall not have been satisfied or waived, until such time
as such conditions are satisfied or waived, (ii) for any period required by any
rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Tender Offer and (iii) for any reason on one or more
occasions for an aggregate period of not more than 5 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence.
(d) The obligation of the Company to accept for payment, and pay for,
shares of Common Stock properly tendered and not withdrawn prior to the
expiration of the Tender Offer shall be subject to the satisfaction or waiver at
or prior to the expiration of the Tender Offer of such conditions as the
Company, in its discretion (except as set forth below), shall have specified in
the Offer to Purchase to be distributed in connection with the Tender Offer.
Notwithstanding the foregoing, the Tender Offer shall not be subject to a
condition that any minimum number of shares of Common Stock be tendered, but
shall be subject to the following conditions: (i) that there shall not have
occurred or been threatened any change in the condition (financial or
otherwise), business, operations, properties, assets, liabilities, income or
prospects of the Company and its subsidiaries, taken as a whole, which is or may
be material and adverse to the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change") and (ii) Cape Ann Investors shall not have, prior to
-----------------------
the expiration date, terminated its obligations under Section 2.2 of the
Agreement by and between the Company and Cape Ann Investors dated as of October
14, 1997 (the "Cape Ann Agreement"), in accordance with the terms thereof, as a
------------------
result of a Material Adverse Change.
(e) The Stockholder will not tender any shares of Common Stock beneficially
owned by the Stockholder to the Company pursuant to the Tender Offer.
Section 1.2. The Stock Purchase. (a) Subject to the terms and conditions
------------------
hereof, promptly after the Company gives notice to the Depositary (as defined in
the Offer to Purchase) of its acceptance of shares for payment pursuant to the
Tender Offer, the Stockholder shall purchase from the Company, and the Company
shall issue, sell and deliver to the Stockholder, a number of shares of Common
Stock equal to 2% of the first $5,000,000 worth of shares purchased pursuant to
the Tender Offer at a purchase price per share equal to
2
<PAGE>
the Per Share Purchase Price. The shares purchased and sold hereunder shall be
validly issued, fully paid and non-assessable, and shall be free and clear of
any liens, security interests, pledges, voting agreements, claims, options and
encumbrances of every kind, character and description whatsoever
("Encumbrances"), except as contemplated by this Agreement. A number of
------------
additional shares of Common Stock equal to the difference obtained by
subtracting the number of shares purchased by the Stockholder hereunder from the
Purchased Number, will be purchased by Cape Ann Investors and one other
purchaser pursuant to separate purchase agreements dated the date hereof.
(b) The Stockholder shall be entitled, on written notice given to the
Company, to terminate his obligations to purchase shares of Common Stock
hereunder if Cape Ann Investors has exercised its right to terminate its
obligations to purchase shares of Common Stock under Section 2.2 of the Cape Ann
Agreement. In the event of any such termination, the Stockholder's obligations
under this Section 1.2 shall immediately terminate and be of no further force or
effect, but all the other provisions of this Agreement shall survive any such
termination and remain in full force and effect.
ARTICLE II
COVENANTS OF THE PARTIES
Section 2.1. Information from the Stockholder. The Stockholder shall
--------------------------------
promptly provide the Company with any information concerning the Stockholder
requested by the Company and required to be included in the Tender Offer
Statement.
Section 2.2. Cooperation; Further Action. In the event that any action
---------------------------
is necessary or desirable to carry out the purposes of this Agreement, each
party shall take, and shall cause its directors, officers, employees,
representatives and agents, as the case may be, to take, all such necessary
actions including the execution and delivery of such further instruments and
documents as may reasonably be requested by any party for such purposes or
otherwise to complete or perfect the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Company as follows:
Section 3.1. Authorization Execution and Delivery of Agreement. The
-------------------------------------------------
Stockholder has all requisite power and authority to execute this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Stockholder and this Agreement constitutes the legal, valid, binding and
enforceable obligation of the Stockholder, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditor's rights and
principles of
3
<PAGE>
equity.
Section 3.2. No Conflict; No Consent. The execution and delivery of this
-----------------------
Agreement and the consummation of the transactions contemplated hereby do not,
and will not, conflict with, or result in any violation of or default under, or
permit the acceleration of any obligation under, or the creation or imposition
of any Encumbrance on any of the properties or assets of the Stockholder under
(i) any indenture, lease, mortgage, deed of trust, loan agreement or other
agreement or instrument, or any permit, license, registration, membership,
authorization or qualification from any federal, state, local or foreign
governmental or regulatory authority (each an "Authority"), of the Stockholder
or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation
of any Authority to which the Stockholder is a party or by which it is bound,
other than, in the case of clause (i) above, where such conflict, violation,
default, acceleration or Encumbrance would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Stockholder. Other than as a result of the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no consent,
------------
approval, order or authorization of, or registration, declaration, filing or
notice to, any Authority is required to be made or obtained by the Stockholder
in order to execute or deliver this Agreement or to consummate the transactions
contemplated hereby.
Section 3.3. Investment Purposes. (a) The Stockholder, by reason of his
-------------------
business and financial experience, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of his investment in the shares of Common Stock, and is
purchasing the shares hereunder for his own account, for investment only and not
with a view to, or any present intention of, effecting a distribution of such
securities or any part thereof. The Stockholder acknowledges that the shares to
be purchased hereunder have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or the securities laws of any state or
--------------
other jurisdiction and cannot be disposed of unless they are subsequently
registered under the Securities Act and any applicable state laws or exemption
from such registration is available.
(b) The Stockholder is an "accredited investor" as that term is defined
in Rule 501 promulgated under the Securities Act.
(c) The Stockholder has had the opportunity to ask questions and to
receive answers concerning the financial condition, operations and prospects of
the Company and the terms and conditions of the Stockholder's investment, as
well as the opportunity to obtain any additional information necessary to verify
the accuracy of information furnished in connection therewith that the Company
possesses or can acquire without unreasonable effort or expense.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4
<PAGE>
The Company hereby represents and warrants to the Stockholder as follows:
Section 4.1. Due Organization, etc. The Company is a corporation duly
---------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 4.2. Authorization Execution and Delivery of Agreement. (a) The
-------------------------------------------------
Company has full corporate power and authority to execute this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company for all purposes.
This Agreement has been duly executed and delivered by the Company and this
Agreement constitutes the legal, valid, binding and enforceable obligation of
the Company, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditor's rights and principles of equity.
(b) The shares of Common Stock issuable upon consummation of the Stock
Purchase have been duly authorized by all necessary corporate action on part of
the Company, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration therefor set forth herein, the
shares of Common Stock so issued will be validly issued, fully paid and non-
assessable and the Stockholder will acquire valid and marketable title to such
shares, free and clear of any Encumbrances except as contemplated by this
Agreement.
Section 4.3 No Conflict; No Consent. Subject to the receipt of a waiver
-----------------------
from the lenders under the Company's credit facility, which waiver the Company
has been orally advised will be forthcoming promptly, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not, and will not, conflict with, or result in any violation of or default
under, or permit the acceleration of any obligation under, or the creation or
imposition of any Encumbrance on any of the properties or assets of the Company
or any subsidiary of the Company under (i) any provision of the certificate of
incorporation or by-laws or similar constituent documents of the Company or any
subsidiary of the Company, (ii) any indenture, lease, mortgage, deed of trust,
loan agreement or other agreement or instrument, or any permit, license,
registration, membership, authorization of qualification from any Authority, of
the Company or any subsidiary of the Company or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation of any Authority to which
the Company or any of its subsidiaries is a party or by which any of them is
bound, other than, in the case of clause (ii) above, where such conflict,
violation, default, acceleration or Encumbrance would not, individually or in
the aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Company and its subsidiaries, taken as a whole. Other than as a result of the
reporting requirements of the Exchange Act, no consent, approval, order or
authorization of, or registration, declaration, filing or notice to, any
Authority is required to be made or obtained by the Company or any subsidiary of
the Company in order to execute or deliver this
5
<PAGE>
Agreement or to consummate the transactions contemplated hereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Condition to Agreement. The agreements and covenants
----------------------
contained herein are subject, in their entirety, to the receipt of the requisite
consent or waiver of the lenders referred to in Section 4.3 hereof.
Section 5.2. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of all parties.
Section 5.3. Notices. Any notice, request, instruction or other document
-------
to be given hereunder by a party hereto shall be in writing and shall be deemed
to have been given, (i) when received if given in person, or (ii) on the date of
transmission if sent by nationally recognized overnight courier, certified or
registered mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) If to the Stockholder, addressed as follows:
Donald E. Lepone
NutraMax Products, Inc.
9 Blackburn Drive
Gloucester, Massachusetts 01930
(b) If to the Company, addressed as follows:
NutraMax Products, Inc.
9 Blackburn Drive
Gloucester, Massachusetts 01930
Attention: Robert F. Burns, Vice President and
Chief Financial Officer
with a copy to:
Eugene M. Schloss, Jr., Esq.
1700 Cary Road
Huntingdon Valley, Pennsylvania 19006-5002
and
Goodwin, Procter & Hoar, LLP
Exchange Place
6
<PAGE>
53 State Street
Boston, Massachusetts 02109
Attention: Joseph L. Johnson III, Esq.
Section 5.4. Entire Agreement. This Agreement constitutes the entire
----------------
agreement, and supersedes all of the prior agreements and undertakings, both
written and oral, between or among the parties, or any of them, with respect to
the subject matter hereof.
Section 5.5. Counterparts. This Agreement may be executed in two or more
------------
counterparts which together shall constitute a single agreement.
Section 5.6. Parties in Interest; Assignment. This Agreement shall be
-------------------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No provision of this Agreement, express or
implied, is intended to or shall confer upon any other person or entity any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. This Agreement is not assignable except by consent of each of the
parties hereto or operation of law.
Section 5.7. Governing Law. This Agreement and the rights and obligations
-------------
of the parties created hereby shall be governed by the internal laws of the
State of Delaware without regard to the conflict of law rules thereof.
Section 5.8. Captions. All section titles or captions contained in this
--------
Agreement are for convenience only, shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of this Agreement. All
references herein to Sections shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
Section 5.9. Equitable Relief. Each party acknowledges that, in the event
----------------
of any breach of this Agreement by a party, the other party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that, in the event of any breach or threatened breach of the
provisions of this Agreement by such party, the other party, in addition to any
other remedy to which it may be entitled, shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
compel specific performance of this Agreement. Any requirements for the
securing or posting of any bond with respect to such remedy are hereby waived by
each of the parties hereto.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
NUTRAMAX PRODUCTS, INC.
By: /s/ Robert F. Burns
--------------------------------
Name: Robert F. Burns
Title: Chief Financial Officer
/s/ Donald E. Lepone
------------------------------------
Donald E. Lepone
8
<PAGE>
Exhibit 9c(6)
AGREEMENT
by and between
NUTRAMAX PRODUCTS, INC.
AND
DONALD M. GLEKLEN
DATED AS OF
OCTOBER 16, 1997
<PAGE>
AGREEMENT, dated as of October 16, 1997 (the "Agreement"), by and between
---------
NutraMax Products, Inc., a Delaware corporation (the "Company") and BT Alex.
-------
Brown Incorporated, as Custodian f/b/o Donald M. Gleklen (the "Stockholder").
-----------
WHEREAS, the Company, Cape Ann Investors, L.L.C. ("Cape Ann Investors") and
------------------
the Stockholder desire to effect a series of transactions including an offer by
the Company to repurchase a number of shares to be determined, up to 450,000
shares, of the issued and outstanding Common Stock, par value $.001 per share,
of the Company (the "Common Stock") pursuant to a tender offer as further
------------
described herein (the "Tender Offer") and the purchase by the Stockholder of
------------
shares of Common Stock (the "Stock Purchase"), the proceeds from which shall be
--------------
used to fund, in part, the consideration paid in the Tender Offer by the
Company;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
TENDER OFFER AND STOCK PURCHASE
Section 1.1. Tender Offer. (a) Subject to the provisions of this
------------
Agreement, as promptly as practicable, the Company shall commence the Tender
Offer, which shall be an issuer tender offer to purchase a number of shares, up
to 450,000 shares, of Common Stock to be determined by the Company (the "Offer
-----
Number") at a price per share not in excess of a per share price, and not less
- ------
than a per share price, determined by the Company (the price range from such
maximum to minimum price being referred to herein as the "Per Share Price
---------------
Range"), net to the seller in cash. Pursuant to the Tender Offer, the Company
- -----
will determine the single per share price, within the Per Share Price Range, net
to the seller in cash (such price being referred to as the "Per Share Purchase
------------------
Price"), that it will pay for shares properly tendered pursuant to the Tender
- -----
Offer, taking into account the number of shares so tendered and the prices
specified by the tendering stockholders. The Company will select the lowest Per
Share Purchase Price that will allow it to buy the Offer Number of shares of
Common Stock (or such lesser number of shares as are properly tendered and not
withdrawn at prices within the Per Share Price Range) (such number of shares
being the "Purchased Number"). All shares of Common Stock properly tendered at
----------------
prices at or below the Per Share Purchase Price and not withdrawn will be
purchased at the Per Share Purchase Price, subject to the terms and conditions
of the Tender Offer.
(b) On the date required under applicable rules, the Company shall file
with the Securities and Exchange Commission (the "Commission") an Issuer Tender
----------
Offer Statement on Schedule 13E-4 (together with all amendments and supplements
thereto, the "Tender Offer Statement") with respect to the Tender Offer. The
----------------------
Tender Offer Statement shall contain the Offer to Purchase and such other
information and exhibits as are required by law. The Tender Offer Statement
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company agrees
<PAGE>
promptly to correct any information in the Tender Offer Statement that shall be
or shall have become false or misleading in any material respect and the Company
further agrees to take all steps necessary to cause the Tender Offer Statement
as so corrected to be filed with the Commission and disseminated to the
stockholders of the Company as and to the extent required by applicable federal
securities laws.
(c) Subject to the terms and conditions thereof, the Tender Offer shall
expire at midnight Eastern time on the date that is 20 business days from the
date the Tender Offer is first published, sent or given to holders of Common
Stock; provided, however, that the Company may extend the Tender Offer (i) if,
at the previously scheduled expiration date of the Tender Offer, any of the
conditions to the Company's obligations to accept for payment, and pay for,
shares of Common Stock shall not have been satisfied or waived, until such time
as such conditions are satisfied or waived, (ii) for any period required by any
rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Tender Offer and (iii) for any reason on one or more
occasions for an aggregate period of not more than 5 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence.
(d) The obligation of the Company to accept for payment, and pay for,
shares of Common Stock properly tendered and not withdrawn prior to the
expiration of the Tender Offer shall be subject to the satisfaction or waiver at
or prior to the expiration of the Tender Offer of such conditions as the
Company, in its discretion (except as set forth below), shall have specified in
the Offer to Purchase to be distributed in connection with the Tender Offer.
Notwithstanding the foregoing, the Tender Offer shall not be subject to a
condition that any minimum number of shares of Common Stock be tendered, but
shall be subject to the following conditions: (i) that there shall not have
occurred or been threatened any change in the condition (financial or
otherwise), business, operations, properties, assets, liabilities, income or
prospects of the Company and its subsidiaries, taken as a whole, which is or may
be material and adverse to the Company and its subsidiaries, taken as a whole (a
"Material Adverse Change") and (ii) Cape Ann Investors shall not have, prior to
-----------------------
the expiration date, terminated its obligations under Section 2.2 of the
Agreement by and between the Company and Cape Ann Investors dated as of October
14, 1997 (the "Cape Ann Agreement"), in accordance with the terms thereof, as a
------------------
result of a Material Adverse Change.
(e) The Stockholder will not tender any shares of Common Stock
beneficially owned by the Stockholder to the Company pursuant to the Tender
Offer.
Section 1.2. The Stock Purchase. (a) Subject to the terms and conditions
------------------
hereof, promptly after the Company gives notice to the Depositary (as defined in
the Offer to Purchase) of its acceptance of shares for payment pursuant to the
Tender Offer, the Stockholder shall purchase from the Company, and the Company
shall issue, sell and deliver to the Stockholder, a number of shares of Common
Stock equal to 1% of the first $5,000,000 worth of shares purchased pursuant to
the Tender Offer at a purchase price per share equal to
2
<PAGE>
the Per Share Purchase Price. The shares purchased and sold hereunder shall be
validly issued, fully paid and non-assessable, and shall be free and clear of
any liens, security interests, pledges, voting agreements, claims, options and
encumbrances of every kind, character and description whatsoever
("Encumbrances"), except as contemplated by this Agreement. A number of
------------
additional shares of Common Stock equal to the difference obtained by
subtracting the number of shares purchased by the Stockholder hereunder from the
Purchased Number, will be purchased by Cape Ann Investors and two other
purchasers pursuant to separate purchase agreements dated the date hereof.
(b) The Stockholder shall be entitled, on written notice given to the
Company, to terminate his obligations to purchase shares of Common Stock
hereunder if Cape Ann Investors has exercised its right to terminate its
obligations to purchase shares of Common Stock under Section 2.2 of the Cape Ann
Agreement. In the event of any such termination, the Stockholder's obligations
under this Section 1.2 shall immediately terminate and be of no further force or
effect, but all the other provisions of this Agreement shall survive any such
termination and remain in full force and effect.
ARTICLE II
COVENANTS OF THE PARTIES
Section 2.1. Information from the Stockholder. The Stockholder shall
--------------------------------
promptly provide the Company with any information concerning the Stockholder
requested by the Company and required to be included in the Tender Offer
Statement.
Section 2.2. Cooperation; Further Action. In the event that any action
---------------------------
is necessary or desirable to carry out the purposes of this Agreement, each
party shall take, and shall cause its directors, officers, employees,
representatives and agents, as the case may be, to take, all such necessary
actions including the execution and delivery of such further instruments and
documents as may reasonably be requested by any party for such purposes or
otherwise to complete or perfect the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE STOCKHOLDER
The Stockholder hereby represents and warrants to the Company as follows:
Section 3.1. Authorization Execution and Delivery of Agreement. The
-------------------------------------------------
Stockholder has all requisite power and authority to execute this Agreement, to
perform his obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Stockholder and this Agreement constitutes the legal, valid, binding and
enforceable obligation of the Stockholder, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditor's rights and
principles of
3
<PAGE>
equity.
Section 3.2. No Conflict; No Consent. The execution and delivery of this
-----------------------
Agreement and the consummation of the transactions contemplated hereby do not,
and will not, conflict with, or result in any violation of or default under, or
permit the acceleration of any obligation under, or the creation or imposition
of any Encumbrance on any of the properties or assets of the Stockholder under
(i) any indenture, lease, mortgage, deed of trust, loan agreement or other
agreement or instrument, or any permit, license, registration, membership,
authorization or qualification from any federal, state, local or foreign
governmental or regulatory authority (each an "Authority"), of the Stockholder
or (ii) any judgment, order, decree, statute, law, ordinance, rule or regulation
of any Authority to which the Stockholder is a party or by which it is bound,
other than, in the case of clause (i) above, where such conflict, violation,
default, acceleration or Encumbrance would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Stockholder. Other than as a result of the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no consent,
------------
approval, order or authorization of, or registration, declaration, filing or
notice to, any Authority is required to be made or obtained by the Stockholder
in order to execute or deliver this Agreement or to consummate the transactions
contemplated hereby.
Section 3.3. Investment Purposes. (a) The Stockholder, by reason of his
-------------------
business and financial experience, has such knowledge, sophistication and
experience in business and financial matters as to be capable of evaluating the
merits and risks of his investment in the shares of Common Stock, and is
purchasing the shares hereunder for his own account, for investment only and not
with a view to, or any present intention of, effecting a distribution of such
securities or any part thereof. The Stockholder acknowledges that the shares to
be purchased hereunder have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or the securities laws of any state or
--------------
other jurisdiction and cannot be disposed of unless they are subsequently
registered under the Securities Act and any applicable state laws or exemption
from such registration is available.
(b) The Stockholder is an "accredited investor" as that term is defined in
Rule 501 promulgated under the Securities Act.
(c) The Stockholder has had the opportunity to ask questions and to
receive answers concerning the financial condition, operations and prospects of
the Company and the terms and conditions of the Stockholder's investment, as
well as the opportunity to obtain any additional information necessary to verify
the accuracy of information furnished in connection therewith that the Company
possesses or can acquire without unreasonable effort or expense.
4
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Stockholder as follows:
Section 4.1. Due Organization, etc. The Company is a corporation duly
---------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
Section 4.2. Authorization Execution and Delivery of Agreement. (a) The
-------------------------------------------------
Company has full corporate power and authority to execute this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company for all purposes.
This Agreement has been duly executed and delivered by the Company and this
Agreement constitutes the legal, valid, binding and enforceable obligation of
the Company, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditor's rights and principles of equity.
(b) The shares of Common Stock issuable upon consummation of the Stock
Purchase have been duly authorized by all necessary corporate action on part of
the Company, and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration therefor set forth herein, the
shares of Common Stock so issued will be validly issued, fully paid and non-
assessable and the Stockholder will acquire valid and marketable title to such
shares, free and clear of any Encumbrances except as contemplated by this
Agreement.
Section 4.3 No Conflict; No Consent. Subject to the receipt of a waiver
-----------------------
from the lenders under the Company's credit facility, which waiver the Company
has been orally advised will be forthcoming promptly, the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
do not, and will not, conflict with, or result in any violation of or default
under, or permit the acceleration of any obligation under, or the creation or
imposition of any Encumbrance on any of the properties or assets of the Company
or any subsidiary of the Company under (i) any provision of the certificate of
incorporation or by-laws or similar constituent documents of the Company or any
subsidiary of the Company, (ii) any indenture, lease, mortgage, deed of trust,
loan agreement or other agreement or instrument, or any permit, license,
registration, membership, authorization of qualification from any Authority, of
the Company or any subsidiary of the Company or (iii) any judgment, order,
decree, statute, law, ordinance, rule or regulation of any Authority to which
the Company or any of its subsidiaries is a party or by which any of them is
bound, other than, in the case of clause (ii) above, where such conflict,
violation, default, acceleration or Encumbrance would not, individually or in
the aggregate, have a material adverse effect on the condition (financial or
otherwise), business, operations, properties, assets or liabilities of the
Company and its subsidiaries, taken as a whole. Other than as a result of the
reporting
5
<PAGE>
requirements of the Exchange Act, no consent, approval, order or authorization
of, or registration, declaration, filing or notice to, any Authority is required
to be made or obtained by the Company or any subsidiary of the Company in order
to execute or deliver this Agreement or to consummate the transactions
contemplated hereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Condition to Agreement. The agreements and covenants
----------------------
contained herein are subject, in their entirety, to the receipt of the requisite
consent or waiver of the lenders referred to in Section 4.3 hereof.
Section 5.2. Amendment and Modification. This Agreement may be amended,
--------------------------
modified or supplemented only by written agreement of all parties.
Section 5.3. Notices. Any notice, request, instruction or other document
-------
to be given hereunder by a party hereto shall be in writing and shall be deemed
to have been given, (i) when received if given in person, or (ii) on the date of
transmission if sent by nationally recognized overnight courier, certified or
registered mail, return receipt requested or (iii) three days after being
deposited in the U.S. mail, postage prepaid:
(a) If to the Stockholder, addressed as follows:
Donald M. Gleklen
Intelihealth
960C Harvest Drive
Blue Bell, Pennsylvania 19422
(b) If to the Company, addressed as follows:
NutraMax Products, Inc.
9 Blackburn Drive
Gloucester, Massachusetts 01930
Attention: Robert F. Burns, Vice President and
Chief Financial Officer
with a copy to:
Eugene M. Schloss, Jr., Esq.
1700 Cary Road
Huntingdon Valley, Pennsylvania 19006-5002
and
6
<PAGE>
Goodwin, Procter & Hoar, LLP
Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: Joseph L. Johnson III, Esq.
Section 5.4. Entire Agreement. This Agreement constitutes the entire
----------------
agreement, and supersedes all of the prior agreements and undertakings, both
written and oral, between or among the parties, or any of them, with respect to
the subject matter hereof.
Section 5.5. Counterparts. This Agreement may be executed in two or more
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counterparts which together shall constitute a single agreement.
Section 5.6. Parties in Interest; Assignment. This Agreement shall be
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binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No provision of this Agreement, express or
implied, is intended to or shall confer upon any other person or entity any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. This Agreement is not assignable except by consent of each of the
parties hereto or operation of law.
Section 5.7. Governing Law. This Agreement and the rights and obligations
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of the parties created hereby shall be governed by the internal laws of the
State of Delaware without regard to the conflict of law rules thereof.
Section 5.8. Captions. All section titles or captions contained in this
--------
Agreement are for convenience only, shall not be deemed a part of this Agreement
and shall not affect the meaning or interpretation of this Agreement. All
references herein to Sections shall be deemed references to such parts of this
Agreement, unless the context shall otherwise require.
Section 5.9. Equitable Relief. Each party acknowledges that, in the event
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of any breach of this Agreement by a party, the other party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that, in the event of any breach or threatened breach of the
provisions of this Agreement by such party, the other party, in addition to any
other remedy to which it may be entitled, shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
compel specific performance of this Agreement. Any requirements for the
securing or posting of any bond with respect to such remedy are hereby waived by
each of the parties hereto.
7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
NUTRAMAX PRODUCTS, INC.
By: /s/ Robert F. Burns
----------------------------------------
Name: Robert F. Burns
Title: Chief Financial Officer
BT Alex. Brown Incorporated,
as Custodian f/b/o
Donald M. Gleklen
By: /s/ Ralph Campbell
----------------------------------------
Power of Attorney
BT Alex. Brown
Incorporated
8
