SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
STERILE CONCEPTS HOLDINGS, INC.
(NAME OF SUBJECT COMPANY)
MAXXIM ACQUISITION CO.
(VIRGINIA)
MAXXIM MEDICAL, INC.
(TEXAS)
MAXXIM MEDICAL, INC.
(DELAWARE)
(BIDDERS)
------------------------
COMMON STOCK, NO PAR VALUE
(TITLE OF CLASS OF SECURITIES)
85915P 10 9
(CUSIP Number of Class of Securities)
------------------------
KENNETH W. DAVIDSON
MAXXIM MEDICAL, INC.
104 INDUSTRIAL BLVD.
SUGAR LAND, TEXAS 77478
(713) 240-5588
WITH A COPY TO:
JOHN R. BOYER, JR.
BOYER, EWING & HARRIS INCORPORATED
9 GREENWAY PLAZA, SUITE 3100
HOUSTON, TEXAS 77046
(713) 871-2025
(Names, Addresses and Telephone Numbers of Persons Authorized to
Receive Notices and Communications on Behalf of Bidders)
------------------------
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
TRANSACTION VALUE: $110,527,680* AMOUNT OF FILING FEE: $22,105.54 **
- --------------------------------------------------------------------------------
* For purposes of calculating fee only. The amount assumes the purchase of the
outstanding Shares (as defined herein) at $20 per share, net to the seller in
cash, based on the number of Shares represented by the subject Company in the
Agreement and Plan of Merger, dated as of June 10, 1996, outstanding as of
such date.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent
of the aggregate of the cash offered for such number of Shares.
[ ] 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.
Amount Previously Paid: N/A Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
Page 1 of ______ pages
Exhibit Index on page ______
<PAGE>
This Tender Offer Statement on Schedule 14D-1(the "Schedule 14D-1")
relates to the offer by Maxxim Acquisition Co., a Virginia corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Maxxim Medical, Inc.,
a Texas corporation ("Parent"), to purchase all outstanding shares of common
stock, no par value (the "Common Stock"), of Sterile Concepts Holdings, Inc.,
a Virginia corporation (the "Company"), including the associated share
purchase rights, if any (the "Rights" and, together with the Common Stock, the
"Shares"), issued pursuant to the Shareholder Protection Rights Agreement,
dated as of March 6, 1996, between the Company and First Union National Bank of
North Carolina, as Rights Agent, at a price of $20.00 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 14, 1996 (the "Offer
to Purchase"), and in the related Letter of Transmittal which are annexed to
and filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Sterile Concepts Holdings,
Inc., a Virginia corporation (the "Company"), which has its principal
executive offices at 5100 Commerce Road, Richmond, Virginia 23234.
(b) This Schedule 14D-1 relates to the offer by the Purchaser to
purchase all outstanding Shares at a price of $20.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal (which,
together with any amendments and supplements thereto, collectively
constitute the "Offer"), copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The information set forth in
"Introduction" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price Range of the
Shares; Dividends on the Shares") of the Offer to Purchase is incorporated
herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (d) This Schedule 14D-1 is being filed by the Purchaser, Maxxim
Medical, Inc., a Delaware corporation ("Maxxim") and a wholly owned
subsidiary of Parent, and Parent. The Purchaser is a wholly owned
subsidiary of Maxxim. The information set forth in Section 9 ("Certain
Information Concerning the Purchaser, Maxxim and Parent") of the Offer to
Purchase is incorporated herein by reference.
(e) - (f) During the last five years, neither the Purchaser, Parent
nor Maxxim, nor to the best of their knowledge, any of the executive
officers or directors of the Purchaser, Parent or Maxxim (i) has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining
further violations of, or prohibiting activities subject to federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) - (b) The information set forth in Section 9 ("Certain
Information Concerning the Purchaser, Maxxim and Parent") and Section 12
("Purpose of the Offer; The Merger Agreement; Plans for the Company") of
the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a ) - (b) The information set forth in Section 10 ("Source and
Amount of Funds") of the Offer to Purchase is incorporated herein by
reference.
(c) Not applicable
Page 2 of ______ pages
Exhibit Index on page ______
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a) - (e) The information set forth in Section 12 ("Purpose of the
Offer; The Merger Agreement; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Effect of the
Offer on the Market for the Shares; Stock Exchange Listing; Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) - (b) The information set forth in "Introduction", Section 9
("Certain Information Concerning the Purchaser, Maxxim and Parent"),
Section 11 ("Contacts and Transactions with the Company; Background of the
Offer") and Section 12 ("Purpose of the Offer; The Merger Agreement;
Plans for the Company") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in "Introduction," Section 9 ("Certain
Information Concerning the Purchaser, Maxxim, and Parent"), Section 10
("Source and Amount of Funds"), Section 11 ("Contacts and Transactions
with the Company; Background of the Offer") and Section 12 ("Purpose of
the Offer; The Merger Agreement; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and in Section 16
("Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, Maxxim and Parent") of the Offer to Purchase is
incorporated herein by reference. The incorporation by reference herein of
financial information does not constitute an admission that such
information is material to a decision by a security holder of the Company
whether to sell, tender or hold securities being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 12 ("Purpose of the Offer;
The Merger Agreement; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
(b) and (c) The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on
the Market for the Shares; Stock Exchange Listings; Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is
incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter
of Transmittal, to the extent not otherwise incorporated herein by
reference, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
Page 3 of ______ pages
Exhibit Index on page ______
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated June 14, 1996.
(a)(8) Text of Press Release dated June 10, 1996, issued by the
Company and Parent.
(b)(i) Commitment Letter dated as of June 8, 1996, addressed to
Maxxim, executed by NationsBank of Texas, N.A., as Agent for
a syndicate of lenders, and NationsBanc Capital Markets,
Inc., as Arranger and Syndication Agent, for a $165,000,000
Senior Credit Facility.
(b)(ii) Commitment Letter dated as of June 8, 1996, addressed to
Maxxim, executed by NationsBridge, L.L.C. and NationsBanc
Capital Markets, Inc., with respect to a $75,000,000 Bridge
Facility.
(c) Agreement and Plan of Merger dated as of June 10, 1996, by and
among the Purchaser, Maxxim and the Company.
(d) None.
(e) Not applicable.
(f) None.
Page 4 of ______ pages
Exhibit Index on page ______
<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.
Dated: June 14, 1996 MAXXIM ACQUISITION CO.
By: /s/ KENNETH W. DAVIDSON, PRESIDENT
MAXXIM MEDICAL, INC., A TEXAS
CORPORATION
By: /s/ KENNETH W. DAVIDSON,
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
MAXXIM MEDICAL, INC., A DELAWARE
CORPORATION
By: /s/ KENNETH W. DAVIDSON,
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Page 5 of ______ pages
Exhibit Index on page ______
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NAME NUMBER
- ------------------ --------------------------------------------------------------------------------- ------
<S> <C> <C>
(a)(1) Offer to Purchase................................................................
(a)(2) Letter of Transmittal............................................................
(a)(3) Notice of Guaranteed Delivery....................................................
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.........................................................................
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other
Nominees.........................................................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9..............................................................
(a)(7) Form of Summary Advertisement dated June 14, 1996................................
(a)(8) Text of Press Release dated June 10, 1996, issued by the Company and Parent......
(b)(i) Commitment Letter dated as of June 8, 1996, addressed to Maxxim, executed by
NationsBank of Texas, N.A., as Agent for a syndicate of lenders, and NationsBanc
Capital Markets, Inc., as Arranger and Syndication Agent, for a $165,000,000
Senior Credit Facility...........................................................
(b)(ii) Commitment Letter dated as of June 8, 1996, addressed to Maxxim,
executed by NationsBridge, L.L.C., and NationsBanc Capital Markets, Inc., with
respect to a $75,000,000 Bridge Facility.........................................
(c) Agreement and Plan of Merger dated as of June 10, 1996, by and among the
Purchaser, Maxxim and the Company................................................
(d) None.............................................................................
(e) Not applicable...................................................................
(f) None.............................................................................
</TABLE>
<PAGE>
EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
BY
MAXXIM ACQUISITION CO.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
MAXXIM MEDICAL, INC.
AT
$20.00 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF STERILE CONCEPTS HOLDINGS, INC. (THE "COMPANY")
UNANIMOUSLY HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER REFERRED
TO HEREIN ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER AND
RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, MORE THAN TWO-THIRDS OF THE
TOTAL NUMBER OF OUTSTANDING SHARES (ON A FULLY DILUTED BASIS) BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE
SECTION 14.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the Letter of
Transmittal and deliver it and any other required documents to the Depositary
and either deliver the certificates for such Shares to the Depositary along with
the Letter of Transmittal or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 2 prior to the expiration of the Offer
or (2) request such stockholder's 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 such broker, dealer, bank, trust company
or other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedures for book-entry transfer, may tender such Shares by following
the procedures for guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery and other related materials may be obtained at the Purchaser's expense
from the Information Agent or from brokers, dealers, commercial banks or trust
companies.
THE DEALER MANAGER FOR THE OFFER IS:
BEAR, STEARNS & CO. INC.
June 14, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
----
Introduction................................ 1
The Tender Offer............................ 2
1. Terms of the Offer................... 2
2. Procedure for Tendering Shares....... 3
3. Withdrawal Rights.................... 6
4. Acceptance for Payment and Payment... 7
5. Certain Federal Income Tax
Consequences........................ 8
6. Price Range of the Shares; Dividends
on the Shares....................... 8
7. Effect of the Offer on the Market for
the Shares; Stock Exchange Listings;
Exchange Act Registration; Margin
Regulations......................... 9
8. Certain Information Concerning the
Company............................. 10
9. Certain Information Concerning the
Purchaser, Maxxim and Parent........ 12
10. Source and Amount of Funds........... 14
11. Contacts and Transactions with the
Company; Background of the Offer.... 16
12. Purpose of the Offer; The Merger
Agreement; Plans for the Company.... 17
13. Dividends and Distributions.......... 25
14. Certain Conditions of the Offer...... 25
15. Certain Legal Matters................ 26
16. Fees and Expenses.................... 28
17. Miscellaneous........................ 29
Schedule I -- Directors and Executive
Officers of Parent, Maxxim and the
Purchaser.................................. 30
<PAGE>
TO THE HOLDERS OF COMMON STOCK
OF STERILE CONCEPTS HOLDINGS, INC.:
INTRODUCTION
Maxxim Acquisition Co., a Virginia corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Maxxim Medical, Inc., a Texas corporation
("Parent"), hereby offers to purchase all outstanding shares of Common Stock,
no par value (the "Common Stock"), of Sterile Concepts Holdings, Inc., a
Virginia corporation (the "Company"), including the associated share purchase
rights, if any (the "Rights" and, together with the Common Stock, the
"Shares"), issued pursuant to the Shareholder Protection Rights Agreement,
dated as of March 6, 1996 (the "Rights Agreement"), between the Company and
First Union National Bank of North Carolina as Rights Agent, at a price of
$20.00 per Share, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, together with
any amendments or supplements hereto or thereto, collectively constitute the
"Offer"). Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of Bear, Stearns & Co. Inc. ("Bear
Stearns"), which is acting as Dealer Manager (the "Dealer Manager").
Corporate Investor Communications, Inc., which is acting as Information Agent
(the "Information Agent") and KeyCorp Shareholder Services, Inc., which is
acting as the Depositary (the "Depositary"), incurred in connection with the
Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND
THE MERGER AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, MORE THAN TWO-THIRDS OF
THE TOTAL NUMBER OF OUTSTANDING SHARES (ON A FULLY DILUTED BASIS) (THE "MINIMUM
CONDITION") BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION
DATE. SEE SECTION 14.
WHEAT, FIRST SECURITIES, INC. ("WHEAT FIRST"), FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN
OPINION TO THE EFFECT THAT, SUBJECT TO THE QUALIFICATIONS SET FORTH IN SUCH
OPINION, THE CASH CONSIDERATION OF $20.00 PER SHARE TO BE RECEIVED BY THE
HOLDERS OF THE SHARES IS FAIR, FROM A FINANCIAL POINT OF VIEW, TO SUCH HOLDERS.
A COPY OF SUCH OPINION IS INCLUDED WITH THE COMPANY'S
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WITH RESPECT TO THE
OFFER, WHICH IS BEING MAILED TO SHAREHOLDERS CONCURRENTLY HEREWITH. STOCKHOLDERS
ARE URGED TO READ THE OPINION IN ITS ENTIRETY FOR A DESCRIPTION OF THE
ASSUMPTIONS MADE, FACTORS CONSIDERED AND PROCEDURES FOLLOWED BY WHEAT FIRST.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of June 10, 1996 (the "Merger Agreement"), among Maxxim Medical, Inc., a
Delaware corporation ("Maxxim") and a wholly owned subsidiary of Parent, the
Purchaser and the Company pursuant to which, following the consummation of the
Offer and the satisfaction or waiver of certain conditions, the Purchaser will
be merged with and into the Company (the "Merger"), with the Company surviving
the Merger (as such, the "Surviving Corporation") as a wholly owned subsidiary
of Maxxim. In the Merger, each outstanding Share (other than Shares held by the
Company, any subsidiary of the Company, or by Maxxim or any direct or indirect
subsidiary of Maxxim), will be converted into the right to receive the price
paid per Share pursuant to the Offer in cash, without interest (the "Merger
Consideration"). See Section 12.
1
According to the Company, as of June 10, 1996, there were 5,526,384 Shares
issued and outstanding and 549,616 Shares reserved for issuance upon the
exercise of outstanding options to purchase Shares. Based upon the foregoing and
assuming that all outstanding options are exercised, the Purchaser believes that
the Minimum Condition will be satisfied if at least 4,050,667 Shares are validly
tendered and not withdrawn prior to the Expiration Date. If the Minimum
Condition is satisfied and the Purchaser accepts for payment Shares tendered
pursuant to the Offer, the Purchaser is entitled under the Merger Agreement to
elect more than two-thirds of the members of the Company's Board of Directors.
In addition, if the Minimum Condition is satisfied, the Purchaser will be able
to effect the Merger without the affirmative vote of any other stockholder of
the Company.
Certain Federal income tax consequences of the sale of Shares pursuant to
the Offer and the conversion of Shares pursuant to the Merger are described in
Section 5.
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3. The
term "Expiration Date" means 12:00 midnight, New York City time, on Friday,
July 26, 1996, unless and until the Purchaser (subject to the terms of the
Merger Agreement) shall have extended the period of time for which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition, the expiration or termination of all waiting periods imposed by the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended ("HSR Act"),
and the other conditions set forth in Section 14. Subject to the terms and
conditions contained in the Merger Agreement, the Purchaser reserves the right
(but shall not be obligated) to waive any or all such conditions. The Merger
Agreement provides that the Minimum Condition may not be waived or amended
without the consent of the Company. However, if, with the Company's consent, the
Purchaser waives or amends the Minimum Condition during the last five business
days during which the Offer is open, the Purchaser will be required to extend
the Expiration Date so that the Offer will remain open for at least five
business days after the announcement of such waiver or amendment is first
published, sent or given to holders of Shares and may also be required to extend
the Offer if other conditions are waived, depending upon the materiality of the
waiver.
The Purchaser has agreed in the Merger Agreement that it will not, without
the consent of the Company, (a) reduce the number of Shares subject to the
Offer, (b) reduce the Offer Price, (c) modify or add to the tender offer
conditions set forth in Section 14, (d) change the form of consideration payable
in the Offer, (e) waive the Minimum Condition, or (f) extend the Offer beyond
the scheduled expiration date (except that the Offer may be extended to the
extent required by law or in the event the tender offer conditions described in
Section 14 shall not have been satisfied by the scheduled expiration date).
Subject to the terms of the Merger Agreement and applicable law, the
Purchaser reserves the right (but shall not be obligated), and regardless of
whether or not any of the events or facts set forth in Section 14 hereof shall
have occurred, (a) to extend the period of time during which the Offer is open,
and thereby delay acceptance for payment of and the payment for any Shares, by
giving oral or written notice of such extension to the Depositary, and (b) to
amend the Offer in any other respect by giving oral or written notice of such
amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS
RIGHT TO EXTEND THE OFFER.
If by the Expiration Date, any or all of the conditions to the Offer have
not been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the terms and conditions contained in the Merger
Agreement and to the applicable rules and regulations of the Commission, to (a)
terminate the Offer and not accept for payment or pay for any Shares and return
all tendered Shares to tendering stockholders, (b) waive all the unsatisfied
conditions and accept for payment and pay for all Shares validly
2
tendered prior to the Expiration Date and not theretofore withdrawn, (c) extend
the Offer and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain the Shares that have been tendered during the period or
periods for which the Offer is extended, or (d) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, waiver, amendment or termination will be
followed as promptly as practicable by public announcement. In the case of an
extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires that the announcement be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
stockholders in connection with the Offer be promptly disseminated to
stockholders in a manner reasonably designed to inform stockholders of such
change) and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any 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 Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it is unable to pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser,
and such Shares may not be withdrawn except to the extent tendering stockholders
are entitled to withdrawal rights as described in Section 3. However, the
ability of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including, with the Company's consent, a waiver of the Minimum Condition), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the 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 the percentage of
securities sought or the dealers soliciting fee, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought or the dealers soliciting fee, a minimum period
of 10 business days is generally required to allow for adequate dissemination to
stockholders. If, prior to the Expiration Date, the Purchaser should decide to
increase the price per Share being offered in the Offer, such increase will be
applicable to all stockholders whose Shares are accepted for payment pursuant to
the Offer.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed by the Purchaser to record holders of
Shares, and will be furnished to brokers, dealers, banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, either (a) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, together with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message (as defined below),
and any other required documents, must be 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 and either certificates for tendered Shares
3
must be received by the Depositary at one of such addresses or such Shares must
be delivered pursuant to the procedures for book-entry transfer set forth below
and a Book-Entry Confirmation (as defined below) received by the Depositary, in
each case prior to the Expiration Date, or (b) the tendering stockholder must
comply with the guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at The
Depository Trust Company, the Midwest Securities Trust Company and the
Philadelphia Depository Trust Company (the "Book-Entry Transfer Facilities")
for purposes of the Offer within two business days after the date of this Offer
to Purchase. Any financial institution that is a participant in any of the
Book-Entry Transfer Facilities' systems may make book-entry delivery of Shares
by causing a Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and 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 tendering stockholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation". DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). 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.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, an "Eligible Institution"). In all other cases, all
signatures on the Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or certificates
for Shares not tendered or not accepted for payment are to be returned to a
person other than the registered holder of the certificates surrendered, then
the tendered certificates for such Shares must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instruction 5
to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedure for book-entry transfer
4
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date, such
stockholder's tender may be effected if all the following conditions are met:
(i) such tender is 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 Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message, and any other
required documents are received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the New York Stock Exchange is open for
business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (b) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (c) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The acceptance for payment by the Purchaser of Shares pursuant to one of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
APPOINTMENT. By executing the Letter of Transmittal as set forth above,
the tendering stockholder will irrevocably appoint designees of the Purchaser,
and each of them, as such stockholder's attorneys-in-fact and proxies in the
manner set forth in the Letter of Transmittal, each with full power of
substitution, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by the
Purchaser and with respect to any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after June 10, 1996.
All such proxies will be considered coupled with an interest in the tendered
Shares. Such appointment will be effective when, and only to the extent that,
the Purchaser accepts for payment Shares tendered by such stockholder as
provided herein. Upon such appointment, all prior powers of attorney, proxies
and consents given by such stockholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be deemed effective). The designees of the Purchaser will
thereby be empowered to exercise all voting and other rights with respect to
such Shares and other securities or rights, including, without limitation, in
respect of any annual, special or adjourned meeting of the Company's
stockholders, actions by written consent in lieu of any such meeting or
otherwise, as they in their sole discretion deem proper. The Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting and other rights with respect to
such Shares and other securities or rights, including voting at any meeting of
stockholders then scheduled.
5
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right
to waive any defect or irregularity in the tender of any Shares of any
particular stockholder, whether or not similar defects or irregularities are
waived in the case of other stockholders. No tender of Shares will be deemed to
have been validly made until all defects or irregularities relating thereto have
been cured or waived. None of the Purchaser, Parent, Maxxim, the Depositary, the
Information Agent, the Dealer Manager or any other person will be under any duty
to give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder tendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS")
may impose a penalty on such stockholder and the payment of cash to such
stockholder pursuant to the Offer may be subject to backup withholding of 31%.
All stockholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Certain stockholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Noncorporate foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after August
13, 1996.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such notice
of withdrawal must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and, if Share certificates
have been tendered, the name of the registered holder of the Shares as set forth
in the Share certificate, if different from that of the person who tendered the
Shares. If Share certificates have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
tendering stockholder must submit serial numbers shown on such particular
certificates evidencing the Shares to be withdrawn and, the signatures on the
notice of withdrawal must be guaranteed by an Eligible Institution except in the
case of Shares tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedures for book-entry transfer as set
forth in Section 2, the notice of withdrawal must also specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
this section.
6
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be tendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 2.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
NOTICES OF WITHDRAWAL WILL BE DETERMINED BY THE PURCHASER, IN ITS SOLE
DISCRETION, WHICH DETERMINATION WILL BE FINAL AND BINDING. NONE OF THE
PURCHASER, MAXXIM, PARENT, THE DEPOSITARY, THE DEALER MANAGER, THE INFORMATION
AGENT OR ANY OTHER PERSON WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY
DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTIFICATION.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon 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 Purchaser will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn in
accordance with Section 3 promptly after the Expiration Date. All determinations
concerning the satisfaction of such terms and conditions will be within the
Purchaser's sole discretion, which determinations will be final and binding. See
Sections 1 and 14. The Purchaser expressly reserves the right to delay
acceptance for payment of or payment for Shares in order to comply in whole or
in part with any applicable law, including, without limitation, the HSR Act. Any
such delays will be effected in compliance with Rule 14e-l(c) under the Exchange
Act (relating to a bidder's obligation to pay for or return tendered securities
promptly after the termination or withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates for
(or a timely Book-Entry Confirmation with respect to) such Shares, (b) a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and (c) any other documents required by the Letter
of Transmittal. The per Share consideration paid to any stockholder pursuant to
the Offer will be the highest per Share consideration paid to any other
stockholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer, including such rights as are set forth in Sections 1 and 14 (but
subject to compliance with Rule 14e-1(c) under the Exchange Act, which requires
that a tender offeror pay the consideration offered or return the tendered
securities promptly after termination or withdrawal of a tender offer), the
Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedure set forth in Section 2, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
7
The Purchaser reserves the right, subject to the terms of the Merger
Agreement, to transfer or assign, in whole or from time to time in part, to
Maxxim, Parent, or to one or more direct or indirect wholly owned subsidiaries
of Maxxim or Parent, the right to purchase Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for Federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for Federal income tax purposes, a tendering stockholder will recognize gain or
loss equal to the difference between the amount of cash received by the
stockholder pursuant to the Offer or the Merger and the aggregate tax basis in
the Shares tendered by the stockholder and purchased pursuant to the Offer or
converted in the Merger, as the case may be.
If Shares are held by a stockholder as capital assets, any gain or loss
recognized by the stockholder will be capital gain or loss, which will be
long-term capital gain or loss if the stockholder's holding period for the
Shares exceeds one year. Under present law, long-term capital gains recognized
by an individual stockholder will generally be subject to a maximum Federal
marginal tax rate of 28%, and long-term capital gains recognized by a corporate
stockholder will be subject to a maximum Federal marginal tax rate of 35%. In
addition, under present law the ability to use capital losses to offset ordinary
income is limited.
A stockholder that tenders Shares may be subject to 31% backup withholding
unless the stockholder provides its TIN and certifies that such number is
correct or properly certifies that it is awaiting a TIN, or unless an exemption
applies. Exemptions are available for stockholders that are corporations and for
certain foreign individuals and entities. A stockholder that does not furnish a
required TIN may be subject to a penalty imposed by the IRS. See "Backup
Withholding" under Section 2.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX
TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A
PARTICULAR HOLDER IN LIGHT OF ITS INDIVIDUAL CIRCUMSTANCES. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are listed and principally traded on the New York Stock Exchange
("NYSE") under the symbol "SYS," and on the Chicago Stock Exchange ("CSE")
and Philadelphia Stock Exchange. See Section 7. The Shares commenced trading on
the NYSE on September 27, 1994. The following table sets forth, for each of the
periods indicated, the high and low sales prices per Share on the NYSE Composite
Tape, beginning September 27, 1994 as reported in published financial sources.
8
HIGH LOW
--------- ---------
Fiscal 1994
Fourth Quarter (from September
27, 1994)...................... 17 3/8 17
Fiscal 1995
First Quarter................... 17 3/8 15 1/8
Second Quarter.................. 17 5/8 11 3/4
Third Quarter................... 13 3/8 10 3/4
Fourth Quarter.................. 15 11 7/8
Fiscal 1996
First Quarter................... 15 1/2 12 7/8
Second Quarter.................. 21 3/8 12
Third Quarter (through June 13,
1996).......................... 23 19 5/8
On June 7, 1996, the last full trading day before the public announcement
of the execution of the Merger Agreement, the reported closing sales price of
the Shares on the NYSE Composite Tape was $21 5/8 per Share. On June 13, 1996,
the last full trading day before commencement of the Offer, the reported closing
sales price of the Shares on the NYSE Composite Tape was $19 7/8 per Share.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
According to publicly available information, the Company has declared a
dividend of $0.04 per Share during every quarter since the first quarter of
fiscal 1995. The Merger Agreement prohibits the Company from declaring, paying,
setting aside or making any future dividend or other distribution or payment on
the Shares.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK EXCHANGE LISTINGS;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so purchased,
could adversely affect the liquidity and market value of the remaining Shares
held by the public.
STOCK EXCHANGE LISTINGS. Depending upon the number of Shares purchased
pursuant to the Offer, the Shares may no longer meet the requirements of the
NYSE, CSE and PSE for continued listing and may, therefore, be delisted from
such exchanges. According to the NYSE's published guidelines, the NYSE would
consider delisting the Shares if, among other things, the number of
publicly-held Shares (excluding Shares held by officers, directors, their
immediate families and holders of 10% or more of the Shares) were less than
600,000, there were fewer than 1,200 holders of at least 100 Shares, or the
aggregate market value of publicly held Shares were less than $5 million. The
CSE and PSE have similar guidelines based upon the number of holders and the
number and market value of publicly held Shares. According to the Company's
Schedule 14D-9, as of June 12, 1996, there were approximately 112 record holders
of Shares. The Company represented in the Merger Agreement, as of June 10, 1996,
that there were 5,526,384 shares outstanding. If, as a result of the purchase of
Shares pursuant to the Offer, the Shares no longer meet the requirements of the
NYSE, the CSE and the PSE for continued listing, and the listing of the Shares
is discontinued, the market for the Shares could be adversely affected. The
Purchaser intends to cause the Company to seek the delisting of the Shares if it
purchases Shares pursuant to the Offer and the Shares no longer meet the listing
requirements of the exchanges.
MARGIN REGULATIONS. The Shares are currently "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit secured by a pledge of the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no longer
constitute "margin securities" for the purposes of the margin regulations of
the Federal Reserve Board, and therefore could no longer be used as collateral
for loans made by brokers.
9
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with stockholders' meetings and the related
requirement of furnishing an annual report to stockholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933 may be impaired or eliminated. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for listing on the NYSE. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the Shares
under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Virginia corporation with its principal offices at 5100
Commerce Road, Richmond, Virginia 23234. The business of the Company is holding
all of the stock of its subsidiaries, which conduct the Company business.
According to the Company, the Company is the second largest producer of custom
procedure trays in the United States, with a national market share, based on
industry studies, of approximately 19%. The Company assembles, packages and
distributes sterile ready-to-use custom procedure trays for hospitals,
outpatient surgery centers and medical clinics. The Company does not manufacture
any medical products.
Set forth below is a summary of certain selected consolidated financial
information with respect to the Company and its subsidiaries excerpted or
derived from the information contained in the Company 1995 10-K, and its
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996 (the "March
31, 1996 10-Q"). More comprehensive financial information is included in the
Company 1995 10-K, the March 31, 1996 10-Q and other documents filed by the
Company with the Commission, and the following summary is qualified in its
entirety by reference to the Company 1995 10-K, the March 31, 1996 10-Q and such
other documents and all the financial information (including any related notes)
contained therein. The Company 1995 10-K, the March 31, 1996 10-Q and such other
documents may be available for inspection and copies thereof may be obtainable
from the Commission in the manner set forth below.
10
STERILE CONCEPTS HOLDINGS, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED SEPTEMBER 30, ENDED MARCH 31,
---------------------------------- --------------------
1995 1994 1993 1996 1995
---------- ---------- ---------- --------- ---------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $ 146,833 $ 132,098 $ 121,131 $ 94,929 $ 70,981
Operating income................... 13,506 8,872 11,865 5,347 6,683
Net earnings....................... 8,192 5,738 6,484 2,527 4,076
Earnings per share................. $ 1.48 (1) (1) $ 0.24 $ 0.31
BALANCE SHEET DATA(2):
Working capital.................... $ 29,195 $ 21,573 $ 29,476 $ 45,682 $ 27,684
Total assets....................... 57,638 52,214 50,266 89,772 47,289
Stockholders' equity............... 34,012 26,699 32,525 36,098 30,333
</TABLE>
- ------------
(1) Actual earnings per Share data for the years ended September 30, 1994 and
1993 is unavailable as the Company was not public prior to September 27,
1994.
(2) At period end.
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, is required to file periodic reports, proxy
statements 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 and other matters, 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 information should be
available for inspection at the public reference facilities of the Commission at
450 Fifth Street, N.W., Washington, DC 20549, and at the regional offices of the
Commission located at Seven World Trade Center, Suite 1300, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL
60661-2511. Copies of such information are obtainable, by mail, upon payment of
the Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, DC 20549. Such material should
also be available for inspection at the library of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. ALTHOUGH THE PURCHASER, MAXXIM AND PARENT DO NOT HAVE ANY
KNOWLEDGE THAT ANY SUCH INFORMATION IS UNTRUE, NONE OF THE PURCHASER, MAXXIM OR
PARENT TAKES ANY RESPONSIBILITY FOR, OR MAKES ANY REPRESENTATION WITH RESPECT
TO, THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION OR FOR ANY FAILURE BY THE
COMPANY TO DISCLOSE EVENTS THAT MAY HAVE OCCURRED AND MAY AFFECT THE
SIGNIFICANCE OR ACCURACY OF ANY SUCH INFORMATION BUT WHICH ARE UNKNOWN TO THE
PURCHASER, MAXXIM OR PARENT.
In the course of the discussions between representatives of Parent and the
Company (see Section 11), the Company provided Parent with certain projections
of future operating performance. THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW
TO PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE COMMISSION
OR THE GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS REGARDING PROJECTIONS, AND ARE INCLUDED IN THIS OFFER TO PURCHASE
ONLY BECAUSE THEY WERE PROVIDED TO PARENT. THE COMPANY'S INDEPENDENT AUDITORS
HAVE NOT EXAMINED, COMPLIED WITH OR APPLIED ANY PROCEDURES WITH RESPECT TO THESE
PROJECTIONS AND EXPRESS NO OPINION OR ANY KIND OF ASSURANCE THEREON.
11
NONE OF PARENT, MAXXIM, THE PURCHASER OR THE COMPANY, OR ANY OF THEIR RESPECTIVE
FINANCIAL ADVISORS OR THE DEALER MANAGER ASSUMES ANY RESPONSIBILITY FOR THE
VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF THESE PROJECTIONS AND THE
COMPANY HAS MADE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO PARENT,
MAXXIM OR THE PURCHASER REGARDING THESE PROJECTIONS. THESE PROJECTIONS ARE BASED
UPON A VARIETY OF ASSUMPTIONS RELATING TO THE BUSINESS OF THE COMPANY WHICH MAY
NOT BE REALIZED AND ARE SUBJECT TO SIGNIFICANT UNCERTAINTIES AND CONTINGENCIES,
MANY OF WHICH ARE BEYOND THE CONTROL OF THE COMPANY AND, THEREFORE, THESE
PROJECTIONS ARE INHERENTLY IMPRECISE, AND THERE CAN BE NO ASSURANCE THAT THESE
PROJECTIONS WILL BE REALIZED. IT IS EXPECTED THAT THERE WILL BE A DIFFERENCE
BETWEEN THE COMPANY'S ACTUAL AND ESTIMATED OR PROJECTED RESULTS SET FORTH BELOW
AND ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE SHOWN. THE INCLUSION OF THESE
PROJECTIONS SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT, MAXXIM, THE
PURCHASER, THE COMPANY, THE DEALER MANAGER OR ANYONE WHO RECEIVED THESE
PROJECTIONS CONSIDERED THIS INFORMATION A RELIABLE PREDICTION OF FUTURE EVENTS,
AND THIS INFORMATION SHOULD NOT BE RELIED ON AS SUCH. THE COMPANY DOES NOT
INTEND TO UPDATE OR OTHERWISE REVISE THESE PROJECTIONS PRIOR TO THE CONSUMMATION
OF THE MERGER. SET FORTH BELOW IS A SUMMARY OF THE PROJECTIONS. THE PROJECTIONS
SHOULD BE READ TOGETHER WITH THE COMPANY'S SELECTED CONSOLIDATED FINANCIAL
INFORMATION REFERRED TO ABOVE.
STERILE CONCEPTS HOLDINGS, INC.
PROJECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDING SEPTEMBER 30,
----------------------------------------------------------
1996 1997 1998 1999 2000
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net sales............................ $ 196,981 $ 232,350 $ 266,715 $ 299,765 $ 331,040
Operating income..................... 13,556 18,680 22,540 25,543 28,377
Net earnings......................... 6,976 10,541 12,932 15,066 17,423
Earnings per Share................... $ 1.26 $ 1.91 $ 2.34 $ 2.73 $ 3.15
</TABLE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, MAXXIM AND PARENT
The Purchaser, a Virginia corporation and a wholly owned subsidiary of
Maxxim, was organized to acquire the Company and has not conducted any unrelated
activities since its organization. The principal office of the Purchaser is
located at the principal office of Maxxim. All outstanding shares of capital
stock of the Purchaser are owned by Maxxim.
The Parent is a Texas corporation which is a holding corporation, the stock
of which is listed on the NYSE and the sole asset of which is the stock of
Maxxim. The principal office of the Parent is located at the principal office of
Maxxim.
Maxxim is a Delaware corporation with its principal office located at 104
Industrial Blvd., Sugar Land, Texas 77478. Maxxim, through its wholly-owned
subsidiaries, develops, manufactures and markets a diversified range of
specialty medical products, and supplies single use sterile procedure trays to
hospitals, clinics and outpatient surgery centers. Maxxim operates three
divisions: Case Management, Argon Medical, and MAXXIM Medical Europe. Maxxim's
Case Management division manufactures, assembles and sells custom procedure
trays for a wide variety of operating room procedures, infection control apparel
for operating room personnel, patient draping systems, electrosurgical
generators and disposables, and a complete line of surgical and hospital exam
gloves. The Argon Medical division manufactures and markets guide wires,
needles, introducers, catheters, manifolds, high pressure syringes and certain
other sterilized, single use medical and surgical specialty products, which are
used in Maxxim's procedure trays or are sold separately. This Division also
assembles and markets procedure trays for the use primarily in cardiology and
radiology procedures. Many of the products manufactured by Maxxim are included
in the Argon and Case Management procedure trays. MAXXIM Medical Europe serves
as Maxxim's European distributor of Case Management, Argon, and Medica products.
Medica products consist of various self-manufactured and
12
assembled disposable hospital supply products and custom procedure kits for
transfusion, infusion and patient monitoring.
Set forth below is a summary of certain consolidated financial information
with respect to Parent and its subsidiaries, excerpted or derived from audited
financial statements presented in Parent's Annual Report on Form 10-K for the
fiscal year ended October 30, 1995 (the "Parent 1995 10-K") and from the
unaudited financial information for the six months ended May 5, 1996 publicly
discussed in Parent's earning release of June 11, 1996 and to be included in the
Parent's Report on Form 10-Q for the fiscal quarter ended May 5, 1996 to be
filed with the Commission. More comprehensive financial information is included
in the Parent 1995 10-K and other documents filed by Parent with the Commission.
The financial information summary set forth below is qualified in its entirety
by reference to the Parent 1995 10-K and other documents, financial information
and related notes contained therein which have been filed with the Commission,
which are hereby incorporated herein by reference. The Parent 1995 10-K and such
other documents may be inspected and copies may be obtained from the Commission
or NYSE in the manner set forth below.
MAXXIM MEDICAL, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED
-------------------------------------------- ----------------------
OCTOBER 29, OCTOBER 30, OCTOBER 31, MAY 5, APRIL 30,
1995 1994 1993 1996 1995
------------ ------------ ------------ -------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales....................... $265,726 $191,382 $129,740 $177,459 $ 116,878
Cost of sales................... 186,495 129,569 85,247 126,714 80,508
------------ ------------ ------------ -------- ----------
Gross profit.................... 79,231 61,813 44,493 50,745 36,370
Operating expenses.............. 59,493 48,349 35,606 37,553 27,894
Nonrecurring charges............ 10,845 -- -- -- --
------------ ------------ ------------ -------- ----------
Income from operations.......... 8,893 13,464 8,887 13,192 8,476
Interest expense and other,
net........................... 4,060 1,641 768 4,186 1,076
------------ ------------ ------------ -------- ----------
Income before income taxes...... 4,833 11,823 8,119 9,006 7,400
Income taxes.................... 1,904 4,138 2,582 3,329 2,620
Change in accounting for income
taxes......................... -- 380 -- -- --
------------ ------------ ------------ -------- ----------
Net income...................... $ 2,929 $ 8,065 $ 5,537 $ 5,677 $ 4,780
============ ============ ============ ======== ==========
BALANCE SHEET DATA(1):
Working capital................. $ 73,286 $ 82,886 $ 52,722 $ 66,505 $ 65,890
Total assets.................... 264,490 165,416 114,040 257,123 176,186
Long-term obligations(2):
Bank debt and other........ 67,412 1,267 2,086 58,588 2,122
6 3/4% Convertible
subordinated
debentures.............. 28,750 28,750 28,750 28,750 28,750
Shareholders' equity............ 116,351 111,470 68,458 119,077 117,116
</TABLE>
- ------------
(1) At period end.
(2) Excludes current maturities of long-term debt.
Parent is subject to the informational requirements of the Exchange Act
and, in accordance therewith, is required to file periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information as of particular dates
concerning Parent's directors and officers, their remuneration, options granted
to them and other matters, the principal holders of
13
Parent's securities and any material interest of such persons in transactions
with Parent is required to be disclosed in the proxy statements distributed to
the Company's stockholders and filed with the Commission. Such information
should be available for inspection at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, DC 20549, and at the regional
offices of the Commission located at Seven World Trade Center, Suite 1300, New
York, NY 10048 and Citicorp Center, 500 West Madison Street (Suite 1400),
Chicago, IL 60661. Copies of such information should be obtainable, by mail,
upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, DC 20549.
Such material should also be available for inspection at the library of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
DIRECTORS AND OFFICERS. The name, business address, present principal
occupation or employment, five-year employment history and citizenship of each
of the directors and executive officer of Parent, Maxxim and Purchaser is set
forth on Schedule I hereto.
Except as described in this Offer to Purchase, none of the Purchaser,
Maxxim, Parent or, to the best knowledge of the Purchaser, any of the persons
listed in Schedule I hereto, or any associate or majority-owned subsidiary of
the Purchaser, Maxxim, Parent or any of the persons so listed, beneficially owns
any equity security of the Company, and none of the Purchaser, Maxxim, Parent
or, to the best knowledge of the Purchaser, any of the other persons referred to
above, or any of the respective directors, executive officers or subsidiaries of
any of the foregoing, has effected any transaction in any equity security of the
Company during the past 60 days.
Except as described in this Offer to Purchase, since October 1, 1993, there
have not been any contacts, transactions or negotiations between the Purchaser,
Maxxim or Parent, any of their respective subsidiaries or, to the best knowledge
of the Purchaser, any of the persons listed in Schedule I hereto, on the one
hand, and the Company or any of its directors, officers or affiliates, on the
other hand, that are required to be disclosed pursuant to the rules and
regulations of the Commission. Maxxim made sales of its medical products to the
Company estimated at $4.6 million, $4.3 million and $3.8 million during its
fiscal years ended October 29, 1995, October 30, 1994 and October 31, 1993,
respectively. Thereafter, except as described in this Offer to Purchase, none of
the Purchaser, Maxxim, Parent or, to the best knowledge of the Purchaser, any of
the persons listed in Schedule I hereto, has any contract, arrangement,
understanding or relationship with any person with respect to any securities of
the Company.
10. SOURCE AND AMOUNT OF FUNDS
The Purchaser estimates that the total amount of funds required to purchase
all of the Shares pursuant to the Offer, and to pay fees and expenses related to
the Offer and the Merger, will be approximately $123.5 million. The Purchaser
plans to obtain all funds needed for the Offer and the Merger through a capital
contribution. Maxxim intends to borrow the cash necessary to make this capital
contribution under the terms of the credit facilities (collectively, the
"Credit Facilities") to be provided to Maxxim on the terms and conditions set
forth in the Commitment Letters (collectively, the "Commitment Letters").
Maxxim also intends to pursue the sale of the Refinancing Securities as
described in the final paragraph of this Section. The existing line of credit of
Maxxim will be replaced by the Credit Facilities.
Set forth below is a summary description of the Credit Facilities.
Consummation of each of the Credit Facilities is subject to, among other things,
the conditions described below and in the Commitment Letters, and the
negotiation and execution of definitive financing agreements on terms
satisfactory to Maxxim, the Purchaser and the other parties to the Commitment
Letters. This summary description does not purport to be complete, and there can
be no assurance that the terms set forth below will be contained in such
agreements or that such agreements will not contain additional provisions.
$165,000,000 SENIOR CREDIT FACILITY. NationsBank of Texas, N.A.
("NationsBank") has offered to extend to Maxxim a $165,000,000 Senior Credit
Facility (the "Senior Facility") under the terms of a commitment letter dated
June 8, 1996 (the "Senior Facility Commitment Letter"); NationsBanc Capital
Markets, Inc. ("NCMI") has committed to act as Arranger and Syndication Agent
for the Senior Facility, to
14
form a syndicate of financial institutions (collectively, the "Lenders")
reasonably acceptable to Maxxim for the Senior Facility, with a corresponding
reduction in the initial commitment of NationsBank.
The Senior Facility will consist of a $75,000,000 revolving credit
facility, which will include a $15,000,000 sublimit for the issuance of standby
and commercial letters of credit, and a $90,000,000 term loan facility. The
proceeds of the Senior Facility will be used to finance a portion of the
acquisition of the Shares, as well as for working capital, capital expenditures,
refinancing the existing credit facilities of Maxxim and the Company, and other
lawful purposes. Maxxim has agreed to pay to NCMI an upfront fee, a commitment
fee, certain letter of credit fees and administrative agency fees as set forth
in the Senior Facility Commitment Letter. The Senior Facility will bear interest
at a rate equal to LIBOR or the Alternate Base Rate (defined as the higher of
(1) the NationsBank prime rate and (ii) the Federal Funds rate plus .50%) plus a
margin (which will depend on the ratio of total Funded Debt to EBIDTA).
The principal of the term loan portion of the Senior Facility is to be
repaid in quarterly installments, and the entire Senior Facility will mature and
become due and payable five years from the closing thereof; however, Maxxim may
prepay the Senior Facility in whole or in part at any time without penalty or
premium (subject to reimbursement of Lender breakage and redeployment costs
actually incurred in the case of prepayment of LIBOR borrowings), and must be
prepaid with the proceeds of certain asset sales, and permitted debt and equity
issuances.
Repayment of the Senior Facility will be secured by a first priority
perfected security interest in all of the capital stock of Maxxim and each of
its domestic subsidiaries, and sixty-five percent of the capital stock of each
of its foreign subsidiaries, which capital stock shall not be subject to any
other lien or encumbrance. In addition, repayment will be guaranteed by all
existing or newly created subsidiaries of Maxxim, as well as Parent.
The initial funding of the Senior Facility will be subject to satisfaction
of various conditions precedent similar to those set forth in Maxxim's existing
credit facilities, including consummation of the Offer, and receipt by Borrower
of at least $75,000,000 in net proceeds from a bridge notes facility on terms
and conditions reasonably satisfactory to NationsBank and the other Lenders. The
definitive loan documents will also contain representations and warranties,
events of default, financial and other covenants, cost and yield protections,
indemnification and other provisions which are usual and customary for
transactions of this type.
$75,000,000 BRIDGE FACILITY. Maxxim has received a commitment (the
"Bridge Commitment Letter") from NationsBridge, L.L.C. ("NationsBridge"),
that it or one or more of its affiliates will purchase up to $75,000,000 in
aggregate principal amount of senior subordinated unsecured bridge notes (the
"Bridge Notes") of Maxxim, the proceeds of which, together with the proceeds
of the Senior Facility, will be used to effect the consummation of the Offer and
the Merger.
The Bridge Notes will be subordinated to the Senior Facility and senior to
all other subordinated obligations of Parent. Interest on the Bridge Notes will
be payable quarterly in arrears, at the "Base Rate" plus the "Applicable
Margin" per annum. The "Base Rate" will mean the prime rate of interest
publicly announced from time to time by NationsBank, N.A. The "Applicable
Margin" shall initially be 2.00%, increasing an additional 0.50% at the end of
each subsequent 3 month period; provided that such rate shall not exceed 15.50%
per annum, and provided further that cash interest will be capped at 13.50% and
any interest payment in excess of 13.50% will be paid in additional Bridge
Notes. The Bridge Notes will become due and payable twelve months from the date
of issuance, or upon any change of control of Parent, provided that at maturity,
Parent has agreed to issue Senior Subordinated Rollover Notes (the "Rollover
Notes") with a maturity date five years thereafter. Repayment of the Bridge
Notes will be unsecured, but guaranteed on a senior subordinated unsecured basis
by Parent, and any subsidiaries or other affiliates of Maxxim that guarantee the
Senior Facility.
Funding of the Bridge Facility will be subject to conditions precedent
usual and customary for transactions of this type, including completion of the
Offer with at least two-thirds of the Shares tendered. The loan documents will
also contain covenants, representations and warranties usual and customary for
15
transactions of this type, but in no event more restrictive than those set forth
in the Senior Facility. In addition to its obligation to pay all reasonable
costs and expenses incurred by NationsBridge in connection with the issuance of
the Bridge Notes, Maxxim has agreed to pay a commitment fee of 1.00% of the
aggregate principal amount of the Bridge Notes upon execution of the Merger
Agreement, and a funding fee in the same amount upon issuance of the Bridge
Notes. Further, Maxxim has agreed that if on the date exactly nine months after
issuance the Bridge Notes are still outstanding, it will immediately place in
escrow warrants to purchase 5.00% of the fully diluted common stock of Parent
exercisable at a nominal price for a period of seven years. In the event any of
the Bridge Notes are exchanged for any Rollover Notes, NationsBridge shall be
entitled to retain 100% of such warrants.
The Bridge Notes are subject to prepayment, in whole or in part, upon
written notice, at the option of Maxxim, at any time at par plus accrued
interest to the prepayment; subject to the terms of the engagement letter
between Maxxim and NCMI referenced below. Parent must also redeem the Bridge
Notes, subject to certain exceptions, with the net proceeds from the issuance of
any subordinated debt or equity securities, or any other debt issuance to the
extent permitted by the Senior Facility, or the net proceeds from asset sales in
excess of the amount thereof required to be paid to Lenders under the terms of
the Senior Facility. Parent intends to proceed with the issuance of $100,000,000
of senior subordinated unsecured notes (the "Refinancing Securities"), the
proceeds of which are to be utilized in lieu of the issuance of the Bridge
Notes, or to refinance the Bridge Notes. Parent has executed a separate letter
of engagement designating NCMI as the sole or lead underwriter or placement
agent for the Refinancing Securities.
Parent, Maxxim and Purchaser have not conditioned the Offer on obtaining
financing. It is anticipated that borrowings under the Credit Facilities will be
repaid from funds generated internally by Parent and its subsidiaries
(including, if the Merger is consummated, the Company) or other sources, which
may include the proceeds of debt or equity financings of Parent. No decision has
been made concerning these matters, and such decisions will be made based upon
Parent's review from time to time of the advisability of particular transactions
as well as on prevailing interest rates and other financial conditions.
Copies of the Commitment Letters have been filed as an exhibit to the
Tender Offer Statement on Schedule 14D-1 filed by Parent, Maxxim and Purchaser
with the Commission in connection with the Offer. When the loan agreements for
the Credit Facilities have been executed, they will also be filed as exhibits
thereto. References are made to such exhibits for a more complete description of
the terms and conditions of such documents.
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
In July 1994, representatives of Parent and representatives of the Company
first met to discuss a possible acquisition of the Company. Parent was advised
that the Company was in the process of pursuing an initial public offering of
the Shares and that it did not have an interest in pursuing discussions. As the
Company completed such initial public offering in September 1994 at a price to
the public of $17.00 per share of Common Stock, no further discussions took
place at that time.
Following such termination of discussions, Parent monitored the Company's
progress and the price of the Common Stock. On January 30, 1996, the Company's
Common Stock closed at $12.75 per share. Shortly thereafter, the Parent
determined to again explore the possibility of pursing an acquisition of the
Company.
In early February 1996, Kenneth W. Davidson, the Chairman, Chief Executive
Officer and President of Parent, conducted various informal discussions with
Paul Woo, President and Chief Executive Officer of the Company, regarding a
potential acquisition of the Company by Parent. During such period, Mr. Woo
indicated that at that time the Company did not have any interest in combining
with Parent.
Notwithstanding, Mr. Davidson felt it was in the interest of Parent to
continue to pursue an acquisition of the Company. In a letter dated February 14,
1996, Parent offered to purchase all of the outstanding shares of capital stock
of the Company for a price of $16.00 per Share, for consideration consisting of
cash, Parent stock, or a combination of both. On February 26, 1996, Parent
publicly announced its offer to the Company.
16
The Company rejected that offer in a letter dated March 7, 1996.
Additionally, the board of directors of the Company adopted a shareholder
protection rights plan.
By letter dated March 11, 1996, Parent made a revised offer of $17.75 per
Share, for consideration consisting of cash, Parent stock or a combination of
both. The Company rejected that offer in a letter dated March 14, 1996.
On March 25, 1996, Parent made a revised bid of $19.00 per Share, for
consideration consisting of cash, Parent stock or a combination of both, and set
a deadline of April 1, 1996 for the Company's acceptance.
On March 27, 1996, the Company announced that it had retained Wheat First,
as its investment banking firm, for the purpose of helping the Company explore
its strategic alternatives, including a possible business combination.
On April 1, 1996, Parent's offer expired without a response from the
Company.
On April 3, 1996, the Company delivered and the Parent executed a
Confidentiality Agreement with the Company. Thereafter, Parent and its financial
advisor conducted certain due diligence and held preliminary discussions with
representatives of the Company.
On May 7, 1996, Wheat First delivered a letter to Parent inviting a final
written proposal for the acquisition of the Company. The deadline for any such
proposal was set at 5:00 p.m. on Friday, May 17, 1996.
On May 17, 1996, Parent delivered an offer to Wheat First for the
acquisition of all the Shares for a price of $20.00 per Share to be paid
entirely in cash.
On May 22, 1996, Mr. Woo contacted Mr. Davidson to indicate that the
Company would be willing to pursue a transaction with Parent at a price of
$23.00 per Share.
On May 28, 1996, Mr. Davidson advised Mr. Woo that Parent was unwilling to
increase its offer. Mr. Woo indicated that the Company desired to proceed with
serious discussions notwithstanding the Parent's unwillingness to increase its
offer. Thereafter, representatives of Parent met with representatives of the
Company to continue Parent's due diligence review of the Company, and the
respective legal advisors of Parent and the Company met and negotiated
documentation for the contemplated transactions.
Following approval by Parent's Board of Directors on June 3, 1996, the
transactions were presented to and approved by the Board of Directors of the
Company on June 8, 1996. Following approval by the Boards of Directors of the
Company, Parent, Maxxim and the Purchaser, the Merger Agreement was executed on
June 9, 1996 and delivered effective June 10, 1996.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; PLANS FOR THE COMPANY
PURPOSE. The purpose of the Offer is to enable Maxxim to acquire control
of, and the entire equity interest in, the Company. The purpose of the Merger is
to acquire all Shares not tendered and purchased pursuant to the Offer. The
acquisition of the entire equity interest in the Company has been structured as
a cash tender offer followed by a cash merger in order to provide a prompt and
orderly transfer of ownership of the Company from the Company's public
shareholders to Maxxim, and to provide such shareholders with cash for all their
Shares. The purchase of Shares pursuant to the Offer will increase the
likelihood that the Merger will be effected.
THE MERGER AGREEMENT
The following summary of certain provisions of the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement, a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1 filed by
Parent, Maxxim and the Purchaser with the Commission. The Merger Agreement may
be examined and copies may be obtained at the place and in the manner set forth
in Section 8.
17
THE OFFER. The Merger Agreement provides for the making of the Offer by
the Purchaser. The obligation of the Purchaser to accept for payment and pay for
the Shares tendered pursuant to the Offer is subject to the satisfaction of the
Minimum Condition and certain other conditions that are described in Section 14
hereof. The Merger Agreement provides that the Purchaser expressly reserves the
right to modify the terms of the Offer, except that, without the consent of the
Company, the Purchaser will not reduce the number of Shares to be purchased in
the Offer, reduce the purchase price of the Shares in the Offer, modify or add
to the conditions of the Offer, extend the Offer beyond the scheduled expiration
date (except that the Offer may be extended to the extent required by law or in
the event the conditions to the Offer have not been satisfied by the scheduled
expiration date), or change the form of consideration payable in the Offer. In
addition, without the consent of the Company, Maxxim and the Purchaser will not
waive the Minimum Condition.
THE MERGER. The Merger Agreement provides that following the satisfaction
or waiver of the conditions described below under "Conditions to the Merger,"
the Purchaser will be merged with and into the Company, and each then
outstanding Share (other than Shares owned by the Company, any subsidiary of the
Company, Maxxim, the Purchaser, or any other subsidiary of Maxxim) will be
converted into the right to receive an amount in cash equal to the price per
Share paid pursuant to the Offer, without interest.
VOTE REQUIRED TO APPROVE MERGER. The Virginia Stock Corporation Act
("VSCA") requires, among other things, that the adoption of any plan of merger
or consolidation of the Company must be approved by the Board of Directors and
generally by the holders of more than two-thirds of the Company's outstanding
voting securities. The Board of Directors of the Company has approved the Offer
and the Merger; consequently, the only additional action of the Company that may
be necessary to effect the Merger is approval by the Company's stockholders if
the "short-form" merger procedure described below is not available. If the
Purchaser acquires, through the Offer or otherwise, voting power with respect to
more than two-thirds of the outstanding Shares, on a fully diluted basis (which
would be the case if the Minimum Condition were satisfied and the Purchaser were
to accept for payment Shares tendered pursuant to the Offer), it would have
sufficient voting power to effect the Merger without the vote of any other
stockholder of the Company.
The VSCA also provides that if a parent company owns at least 90% of each
class of stock of a subsidiary, the parent company can effect a short-form
merger with that subsidiary without the action of the other stockholders of the
subsidiary. Accordingly, if, as a result of the Offer or otherwise, the
Purchaser owns at least 90% of the outstanding Shares, the Purchaser could, and
intends to, effect the Merger without prior notice to, or any action by, any
other stockholder of the Company.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the Merger is
subject to the satisfaction or waiver (subject to applicable law) of certain
conditions, including the following: (a) to the extent required by applicable
law, the Merger Agreement and the Merger shall have been approved and adopted by
the holders of more than two-thirds of the Shares in accordance with applicable
law and the Company's Articles of Incorporation and Bylaws; (b) any waiting
period (and any extension thereof) under the HSR Act applicable to the Merger
shall have expired or been terminated; (c) no preliminary or permanent
injunction or other order shall have been issued by any court or by any
governmental or regulatory agency, body or authority which prohibits the
consummation of the Offer or the Merger and the transactions contemplated by the
Merger Agreement and which is in effect at the Effective Time, provided,
however, that in the case of a decree, injunction or other order, each of the
parties to the Merger Agreement shall have used reasonable efforts to prevent
the entry of any such injunction or other order and to appeal as promptly as
possible any decree, injunction or other order that may be entered; (d) the
Purchaser shall have accepted for payment and paid for the Shares tendered
pursuant to the Offer; and (e) no statute, rule, regulation, executive order,
decree, or order of any kind shall have been enacted, entered, promulgated, or
enforced by any court or governmental authority which prohibits the consummation
of the Offer or the Merger or has the effect of making the purchase of the
Shares illegal. Further, each of Maxxim and Purchaser shall have performed in
all material respects all obligations and agreements contained in the Merger
Agreement to be performed or complied with by it prior to the closing of the
Merger.
18
TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be
terminated and the transactions contemplated thereby may be abandoned at any
time prior to the effective time of the Merger (the "Effective Time"), whether
before or after approval of the Merger by the stockholders of the Company:
(1) by mutual consent of the Company, on the one hand, and of Maxxim
and Purchaser, on the other hand;
(2) by either Maxxim, on the one hand, or the Company, on the other
hand, if any governmental entity or regulatory agency shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the acceptance for payment of, or
payment for, Shares pursuant to the Offer or the Merger and such order,
decree or ruling or other action shall have become final and nonappealable;
(3) by either Maxxim, on the one hand, or the Company, on the other
hand, if the Purchaser has not accepted for payment, and paid in accordance
with the terms of the Offer, greater than two-thirds of the outstanding
Shares (the "Offer Closing") within six months after commencement of the
Offer, unless the Offer Closing shall not have occurred because of a
material breach of any representation, warranty, obligation, covenant,
agreement or condition set forth in the Merger Agreement on the part of the
party seeking to terminate the Merger Agreement;
(4) by Maxxim, if the Offer is terminated or expires in accordance
with its terms without Purchaser having purchased any Shares thereunder due
to failure to satisfy any of the conditions to the Offer set forth in Annex
A to the Merger Agreement, unless such termination or expiration has been
caused by or results from the failure of Maxxim or Purchaser to perform in
any material respect any of their respective covenants or agreements
contained in the Merger Agreement;
(5) by Maxxim, on the one hand, or the Company, on the other hand, if
the Board of Directors of the Company determines that an Acquisition
Proposal (as defined below) will result in a Superior Proposal (as defined
below) and the Board believes (and has been advised in writing by counsel)
that a failure to terminate the Merger Agreement and enter into an
agreement to effect the Superior Proposal would constitute a breach of its
fiduciary duties;
(6) by the Company, if Maxxim or Purchaser shall have failed to
comply in any material respect with any of the covenants or agreements
contained in the Merger Agreement to be complied with or performed by
Maxxim or Purchaser at or prior to the Offer Closing, or if Maxxim or
Purchaser shall have failed to commence the Offer no later than the fifth
business day after the date of the Merger Agreement; or
(7) by the Company, if (i) prior to the Offer Closing any of the
representations and warranties of Maxxim or Purchaser contained in the
Merger Agreement were untrue or incorrect in any material respect when
made, or (ii) Maxxim or Purchaser shall have terminated the Offer prior to
the Offer Closing or the Offer is terminated or expires in accordance with
its terms.
ACQUISITION PROPOSALS. The Merger Agreement provides that neither the
Company nor any of its subsidiaries will, directly or indirectly, take (and the
Company will not authorize or permit its or its subsidiaries' officers,
directors, employees, representatives, consultants, investment bankers,
attorneys, accountants or other agents or affiliates to so take) any action (1)
to solicit, encourage, facilitate or initiate the submission of any Acquisition
Proposal (as defined below) or (2) to participate in any way in any discussions
or negotiations with, or furnish any information to, any person (other than
Maxxim or Purchaser) in connection with, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Acquisition Proposal, provided, however, that the
Company may participate in discussions or negotiations with or furnish
information to any third party which makes an unsolicited, bona fide
noncollusive proposal in writing with respect to a transaction which the Board
of Directors of the Company believes is likely to result in an Acquisition
Proposal if the Board of Directors believes (and has been advised by counsel)
that failing to take such action would constitute a breach of its fiduciary
duties. In addition, neither the Board of Directors of the Company nor any
Committee thereof shall withdraw or modify, or propose to withdraw or modify, in
a manner
19
adverse to Maxxim the approval and recommendation of the Offer and the Merger
Agreement or approve or recommend any Acquisition Proposal, provided that the
Board of Directors (or a Committee thereof) may recommend to the Company's
stockholders an Acquisition Proposal and in connection therewith withdraw or
modify its approval or recommendation of the Offer or the Merger if (1) the
Board of Directors of the Company has determined that the Acquisition Proposal
is a Superior Proposal (as defined below), and (2) simultaneously with such
withdrawal, modification or recommendation, the Merger Agreement is terminated
in accordance with the terms thereof. The Merger Agreement defines "Acquisition
Proposal" as any proposed merger, consolidation, share exchange or other
business combination, sale or other disposition of any material amount of
assets, sale or issuance of shares of capital stock, tender offer or exchange
offer or similar transaction involving the Company or any of its subsidiaries
and a third party. The Merger Agreement defines "Superior Proposal" as an
unsolicited, bona fide noncollusive Acquisition Proposal on terms which a
majority of the members of the Special Committee and Board of Directors of the
Company determines in its good faith judgment (based on the advice of
independent financial and legal advisors) to be more favorable to the Company
and its shareholders than the transactions contemplated by the Merger Agreement.
In addition to the obligations of the Company described above, the Company
must advise Maxxim immediately of any request for information or of any
Acquisition Proposal, or any proposal with respect to any Acquisition Proposal,
the material terms and conditions of such request or Acquisition Proposal, and
the identity of the person making any such Acquisition Proposal or inquiry. The
Company will promptly inform Maxxim of the status and details both orally and in
writing (including amendments or proposed amendments) of any such request,
takeover proposal or inquiry, and will promptly provide Maxxim with copies of
all such written requests, proposals and inquiries.
FEES AND EXPENSES. The Merger Agreement provides that the Company will pay
$3,500,000 to Maxxim if the Merger Agreement is terminated by Maxxim (i) by
reason of the Board of Directors of the Company determining an Acquisition
Proposal will result in a Superior Proposal, and that a failure to terminate the
Merger Agreement and enter into an agreement to effect the Superior Proposal
would constitute a breach of its fiduciary duties, or (ii) due to the
termination or expiration of the Offer without Purchaser having purchased any
Shares thereunder due to (a) the Company's Board of Directors having withdrawn,
modified or amended in any respect adverse to Maxxim or Purchaser its
recommendation of the Offer or the Merger or shall have resolved to do so, (b)
breach by the Company of any of its covenants or agreements in any material
respect contained in the Merger Agreement, or (c) prior to the Offer Closing,
there being any material representation or warranty made by the Company in the
Merger Agreement which proves to have been untrue or incorrect in any material
respect when made. Except as described above, all costs and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby
shall be paid by the party incurring such costs and expenses.
REDEMPTION OF RIGHTS. The Company represented in the Merger Agreement that
it has taken all action necessary to render the Rights Agreement inapplicable to
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement. As a result, the Rights will not become exercisable in connection
with the Offer, the consummation of the Offer or the Merger.
CONDUCT OF BUSINESS BY THE COMPANY. The Merger Agreement provides that,
except as permitted, required or specifically contemplated by or otherwise
described in the Merger Agreement or otherwise consented to or approved in
writing by Maxxim, during the period commencing on the date of the Merger
Agreement and ending on the date of closing of the Merger:
(1) The Company and each of its subsidiaries will conduct their
respective operations only according to their ordinary and usual course of
business consistent with past practice and will use their reasonable
efforts to preserve intact their respective business organizations, keep
available the services of their officers and employees and maintain
satisfactory relationships with licensors, suppliers, distributors, clients
and others having business relationships with them;
(2) Neither the Company nor any of its subsidiaries shall (i) make
any change in or amendment to its Articles of Incorporation or By-Laws (or
comparable governing documents), each as amended;
20
(ii) issue or sell any shares of its capital stock (other than in
connection with the exercise of certain options outstanding on the date of
the Merger Agreement in accordance with the terms and conditions in effect
on the date of the Merger Agreement) or any of its other securities, or
issue any securities convertible into, or options, warrants or rights to
purchase or subscribe to, or enter into any arrangement or contract with
respect to the issuance or sale of, any shares of its capital stock or any
of its other securities, or make any other changes in its capital
structure; (iii) sell or pledge or agree to sell or pledge any stock owned
by it in any of its subsidiaries; (iv) declare, pay, set aside or make any
dividend or other distribution or payment with respect to, or split,
combine, redeem or reclassify, any shares of its capital stock; (v) except
as set forth in the Merger Agreement, enter into any contract or commitment
with respect to capital expenditures in excess of $150,000 or enter into
any other material contract except contracts in the ordinary course of
business; (vi) acquire a material amount of assets or securities or release
or relinquish any material contract rights other than in the ordinary
course of business; (vii) adopt or amend any employee benefit plan or
non-employee benefit plan or program, employment agreement, license
agreement or retirement agreement, or, except in the ordinary course of
business and consistent with past practice, pay any bonus or contingent or
other extraordinary compensation; (viii) other than in the ordinary course
of business transfer, lease, license, guarantee, sell, mortgage, pledge,
dispose of, encumber or subject to any lien, any assets or incur or modify
any indebtedness or other liability or issue any debt securities or assume,
guarantee or endorse or otherwise as an accommodation become responsible
for the obligations of any person; (ix) agree to the settlement of any
material claim or litigation; (x) make any material tax election or settle
or compromise any material tax liability; (xi) make any material change in
its method of accounting or (xii) agree, in writing or otherwise, to take
any of the foregoing actions; and
(3) Except as set forth in the Merger Agreement, the Company shall
not, and shall not permit any of its subsidiaries to, (i) take any action,
engage in any transaction or enter into any agreement which would cause any
of the Company's representations or warranties set forth in the Merger
Agreement to be untrue as of the date of the closing of the Merger, or (ii)
purchase or acquire, or offer to purchase or acquire, any shares of capital
stock of the Company.
BOARD OF DIRECTORS. The Merger Agreement provides that promptly upon the
Offer Closing, the Purchaser is entitled to designate such number of directors
on the Board of Directors of the Company, rounded up to the next whole number,
as will give Purchaser, subject to compliance with Section 14(f) of the Exchange
Act, representation on such Board of Directors equal to at least that number of
directors which equals the product of the total number of directors on the Board
of Directors (giving effect to the directors elected pursuant to the provisions
described above) multiplied by the percentage that such number of Shares so
accepted for payment and paid for or otherwise acquired or owned by Purchaser or
Maxxim bears to the number of Shares outstanding, and the Company and its Board
of Directors shall, at such time, take any and all such action needed to cause
the Purchaser's designees to be appointed to the Company's Board of Directors
(including to cause directors to resign). Notwithstanding the foregoing, neither
Maxxim, Purchaser nor the Company is permitted to take any action to remove or
replace any member of the Special Committee after consummation of the Offer and
prior to the Effective Time. If at any time prior to the Effective Time there
are less than two members of the Special Committee, as constituted on the date
of the Merger Agreement, on the Company's Board of Directors, Maxxim, Purchaser
and the Company have agreed to use their reasonable efforts to ensure that two
members (the "Continuing Directors") of the Company's Board of Directors are
either (a) members of the Special Committee (as constituted on the date of the
Merger Agreement) or (b) persons who are neither (i) officers or employees of
the Company nor (ii) associated with or affiliated with, or designated by,
Maxxim. In the event that both Continuing Directors resign from the Special
Committee, Maxxim, Purchaser and the Company shall permit the resigning
Continuing Directors to appoint their successors in their reasonable discretion.
The Company has agreed to increase the size of the Company's Board of Directors,
or use its reasonable efforts to secure the resignation of directors, or both,
as is necessary to permit Purchaser's designees to be elected to the Company's
Board of Directors. The Merger Agreement further provides that immediately
following the Offer Closing, the Company, if so requested, will use its
reasonable efforts to cause persons designated by Purchaser to
21
constitute the same percentage of each committee of such board, each board of
directors of each subsidiary of the Company and each committee of each such
board (in each case to the extent of the Company's ability to elect such
persons). At all times prior to the termination of the Option Exercise Period
(as defined below), the composition of the Executive Compensation Committee of
the Board of Directors of the Company shall remain the same as the Special
Committee and the Board of Directors of the Company shall not take any action to
limit or impair the authority of the Executive Compensation Committee to
administer the Plan (as defined below); provided, however, that the Executive
Compensation Committee shall not (i) make any additional grants or awards of any
type pursuant to the Plan, (ii) amend the terms and conditions of any award made
pursuant to the Plan prior to the date of the Merger Agreement, except as
contemplated by the Merger Agreement, nor (iii) have any authority to act with
respect to any matters other than those relating to stock options previously
granted under the Plan.
STOCK OPTION AND OTHER PLANS. Pursuant to the Merger Agreement, during the
period (the "Option Exercise Period") commencing on the date of payment by
Purchaser in accordance with the Offer and ending on the date that is two
business days prior to the Effective Time (provided that the Option Exercise
Period shall not be less than three business days in duration), the Company
shall permit holders of stock options issued pursuant to the Company's Stock
Incentive Plan (the "Plan") which shall have become exercisable to exercise
such stock options in accordance with the provisions of the Plan, including
without limitation those provisions relating to (i) the payment of the exercise
price of stock options by the execution of a recourse note (an "Option Note")
providing for the payment of all amounts due under such note through deductions
from the Merger Consideration which shall become due to the maker of the note at
earlier of the Effective Time or the day that is 120 days from the date of the
Offer Closing, and (ii) the payment of the exercise price of stock options by
the delivery of Shares. After the termination of the Option Exercise Period and
prior to the Effective Time, the Board of Directors of the Company (or, if
appropriate, any Committee thereof) is to adopt appropriate resolutions and take
all other actions necessary to provide for the cancellation, effective at the
Effective Time, of all the outstanding stock options to purchase common stock
(the "Options") granted prior to execution of the Merger Agreement under any
stock option plan of the Company (the "Stock Plans"). Under the terms of the
Merger Agreement, immediately prior to the Effective Time, (i) each Option,
whether or not then vested or exercisable, shall no longer be exercisable for
the purchase of Shares but shall entitle each holder thereof, in cancellation
and settlement therefor, to payments in cash (subject to any applicable
withholding taxes and repayment of any outstanding Option Note, the "Cash
Payment"), at the Effective Time, equal to the product of (x) the total number
of Shares subject to such Option, whether or not then vested or exercisable, and
(y) the excess of the Merger Consideration over the exercise price per Share
subject to such Option, and (ii) each share of Common Stock previously issued in
the form of grants of restricted stock or grants of contingent shares shall
fully vest in accordance with their respective terms. Any then outstanding stock
appreciation rights or limited stock appreciation rights are to be canceled as
of immediately prior to the Effective Time without any payment therefor. As
provided in the Merger Agreement, the Stock Plans and any other plan, program or
arrangement providing for the issuance or grant of any other interest in respect
of the capital stock of the Company or any subsidiary (collectively with the
Stock Plans, referred to as the "Stock Incentive Plans") shall terminate as of
the Effective Time. The Company has agreed to take all steps to ensure that
neither the Company nor any of its subsidiaries is or will be bound by any
Options, other options, warrants, rights or agreements which would entitle any
Person, other than Maxxim or its affiliates, to purchase or own any capital
stock of the Surviving Corporation or any of its subsidiaries or to receive any
payment in respect thereof. The Company will use its best efforts to obtain all
necessary consents to ensure that, after the Effective Time, the only rights of
the holders of Options to purchase Shares in respect of such Options will be to
receive the Cash Payment in cancellation and settlement thereof.
DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. The Merger Agreement
provides that the Articles of Incorporation and the By-laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation from liability set forth in the Company's Articles of Incorporation
and By-laws on the date of the Merger Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely
22
affect the rights thereunder of individuals who on or prior to the Effective
Time were directors, officers, employees or agents of the Company ("Indemnified
Parties"), unless such modification is required by law. Further, Maxxim has
agreed that from and after the purchase of the Shares pursuant to the Offer, it
will indemnify all Indemnified Parties to the fullest extent permitted by
applicable law with respect to all acts and omissions arising out of such
individuals' services as officers, directors, employees or agents of the Company
or any of its subsidiaries or as trustees or fiduciaries of any plan for the
benefit of employees, or otherwise on behalf of, the Company or any of its
subsidiaries, occurring prior to the Effective Time including, without
limitation, the transactions contemplated by the Merger Agreement. Without
limitation of the foregoing, in the event any such Indemnified Party is or
becomes involved in any capacity in any action, proceeding or investigation in
connection with any matter, including without limitation, the transactions
contemplated by the Merger Agreement, occurring prior to, and including, the
Effective Time, Maxxim, from and after the purchase of Shares pursuant to the
Offer, will pay as incurred such Indemnified Party's legal and other expenses
(including the cost of any investigation and preparation) incurred in connection
therewith. Maxxim is also obligated to pay all expenses, including attorneys'
fees, that may be incurred by any Indemnified Party in enforcing the
indemnification provisions of the Merger Agreement, or any action involving an
Indemnified Party resulting from the transactions contemplated by the Merger
Agreement. If for any reason the indemnification provided for in the Merger
Agreement is unavailable with respect to any Indemnified Party or is
insufficient to hold him or her harmless with respect to any such loss, claim,
damage or liability, then Maxxim must contribute to the amount paid or payable
by such Indemnified Party as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect (i) the relative economic
interests of the Company and its affiliates on the one hand and Maxxim on the
other in connection with the Offer and the Merger to which such loss, claim,
damage or liability relates, (ii) the relative fault of the Company and its
affiliates on the one hand and Maxxim on the other with respect to such loss,
claim, damage or liability and (iii) any other relevant equitable
considerations.
The Merger Agreement also requires that for six years from the Effective
Time, Maxxim shall either (x) maintain in effect the Company's current
directors' and officers' liability insurance covering those persons who are
currently covered on the date of the Merger Agreement by the Company's
directors' and officers' liability insurance policy; PROVIDED, HOWEVER, that in
no event shall Maxxim be required to expend in any one year an amount in excess
of 150% of the annual premiums currently paid by the Company for such insurance
for the twelve month period ended September 30, 1996). In the event the annual
premiums of such insurance coverage exceed such amount, Maxxim shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount and to give prompt written notice of any reduction in the
amount or scope of coverage resulting therefrom to the directors and officers
affected thereby. In addition, Maxxim may substitute for such Company policies,
policies with at least the same coverage containing terms and conditions which
are no less advantageous and provided that said substitution does not result in
any gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time or cause Maxxim's directors' and officers' liability insurance
then in effect to cover those persons who are covered on the date of the Merger
Agreement by the Company's directors' and officers' liability insurance policy
with respect to those matters covered by the Company's directors' and officers'
liability policy.
REASONABLE EFFORTS. The Merger Agreement provides that subject to the
terms and conditions provided therein and to the fiduciary duties of the Board
of Directors of the Company under applicable law, each of the parties will, and
the Company will cause each of its subsidiaries to, cooperate and use reasonable
efforts to take, or cause to be taken, all appropriate action, and to make, or
cause to be made, all filings necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by the Merger Agreement, including, without limitation, their
respective reasonable efforts to obtain, prior to the closing of the Merger, all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
its subsidiaries as are necessary for consummation of the transactions
contemplated by the Merger Agreement and to fulfill the conditions to the Offer
and the Merger. Each of the Company and Maxxim has agreed to use its reasonable
efforts to consummate the Merger as promptly as practicable.
23
NOTIFICATION OF CERTAIN MATTERS. Pursuant to the terms of the Merger
Agreement, the Company must give prompt notice to Maxxim of: (1) any notice of,
or other communication relating to, a material default or event that, with
notice or lapse of time or both, might reasonably be expected to become a
material default, received by the Company or any of its subsidiaries subsequent
to the date of the Merger Agreement and prior to the Effective Time, under any
material contract to which the Company or any of its subsidiaries is a party or
is subject; and (2) any material adverse change in the condition of the Company
and its subsidiaries taken as a whole or the occurrence of any event which is
reasonably likely to result in any such change. Each of the Company and Maxxim
have agreed to give prompt notice to the other party of any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by the
Merger Agreement.
EMPLOYEE BENEFITS. Maxxim has agreed that during the period commencing at
the Effective Time and ending on the second anniversary thereof, the employees
of the Company and its subsidiaries will continue to be provided with employee
benefit plans (other than stock option or other plans involving the potential
issuance of securities of the Company or of Maxxim) that are in the aggregate
substantially comparable to those currently provided by the Company and its
subsidiaries to such employees. Maxxim will, and will cause the corporation
surviving the Merger to, honor employee (or former employee) benefit obligations
and contractual rights existing as of the Effective Time, and all employment or
severance agreements, plans or policies adopted by the Board of Directors of the
Company (or any committee thereof) prior to the date of the Merger Agreement and
disclosed to Maxxim under the Merger Agreement in accordance with its terms.
REPRESENTATIONS AND WARRANTIES. In the Merger Agreement, the Company has
made customary representations and warranties to Maxxim and the Purchaser with
respect to, among other things, its organization, capitalization, financial
statements, public filings, employee benefit plans, compliance with laws,
litigation, tax matters, action with respect to certain state takeover laws,
environmental matters, consents and approvals, material contracts, opinions of
financial advisors, undisclosed liabilities and the absence of certain changes
with respect to the Company since March 31, 1996.
APPRAISAL RIGHTS. Holders of Shares do not have appraisal rights in
connection with either the Offer or the Merger.
GOING PRIVATE TRANSACTIONS. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the Merger and the
consideration offered to minority stockholders in such transaction be filed with
the Commission and disclosed to stockholders prior to the consummation of the
Merger.
PLANS FOR THE COMPANY
Following the Merger, it is Maxxim's current intention to maintain certain
administrative offices of the Company in Richmond, Virginia, and to relocate the
Company's executive offices to Sugar Land, Texas. It is currently anticipated
that the existing officers of the Company will retain substantially the same
operational duties as they currently have, but that most if not all of their
executive responsibilities will be assumed by current officers of Maxxim. Maxxim
anticipates that the Company will initially be maintained as a separate entity.
The Company, however, is engaged in substantially the same business as Maxxim's
Case Management division. Maxxim, therefore, intends to eventually combine the
operations of the Case Management division and the Company. Maxxim has not yet
determined exactly how it will effect such combination and whether the Company
will ultimately be maintained as a separate corporation. Maxxim does contemplate
that most if not all of the Company's business operations are likely to be
maintained intact, and that the Company's principal operating facilities will
continue in operations conducting their current business for the foreseeable
future.
24
Except as otherwise described immediately above, the Purchaser, Parent and
Maxxim have no current plans or proposals that would relate to, or result in,
any extraordinary corporate transaction involving the Company, such as a merger,
reorganization or liquidation involving the Company or any of its subsidiaries,
a sale or transfer of a material amount of assets of the Company or any of its
subsidiaries, any change in the Company's capitalization or dividend policy, or
any other material change in the Company's business, corporate structure or
composition of its management or personnel.
13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the terms of the Merger Agreement, the Company has agreed that
except as consented to or approved in writing by Parent, during the period
commencing on the date of the Merger Agreement and ending upon the closing of
the Merger, the Company will not declare, pay, set aside or make any dividend or
other distribution or payment with respect to, or split, combine, redeem or
reclassify, any shares of its capital stock.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Purchaser is not
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
after the termination or withdrawal of the Offer), to pay for any Shares
tendered, and may terminate or amend the Offer in accordance with the Merger
Agreement and may postpone the acceptance of, and payment for, Shares if (i) the
Minimum Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act shall not have expired or been terminated, or (iii) at
any time on or after the date of the Merger Agreement and at or before the time
of payment for any such Shares (whether or not any Shares have theretofore been
accepted for payment or paid for pursuant to the Offer) any of the following
shall occur:
(a) any court or domestic government or governmental authority or
agency shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree or injunction or other
order which (i) makes illegal, materially delays or otherwise directly or
indirectly materially restrains or prohibits the Offer or the Merger, (ii)
prohibits or materially limits the ownership or operation by Maxxim or
Purchaser of all or any material portion of the business or assets of the
Company or compels Maxxim or Purchaser to dispose of all or any material
portion of the business or assets of Maxxim or Purchaser or the Company, or
imposes any limitations on the ability of Maxxim or Purchaser to conduct
its business or own such assets, (iii) imposes limitations on the ability
of Maxxim or Purchaser effectively to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote any Shares
acquired or owned by Purchaser or Maxxim on all matters properly presented
to the Company's stockholders, (iv) requires divestiture by Maxxim or
Purchaser of any Shares, or (v) otherwise materially adversely affects the
condition of the Company and its subsidiaries taken as a whole;
(b) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market, (ii) any material change in
United States or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iv) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States and having a material adverse effect on the Company or
materially adversely affecting (or materially delaying) the consummation of
the Offer, (v) from the date of the Merger Agreement through the date of
termination or expiration of the Offer, a decline of at least 25% in the
Standard & Poor's 500 Index, or (vi) in the case of any of the situations
described in clauses (i) through (v) inclusive existing at the date of
commencement of the Offer, a material acceleration or worsening thereof;
(c) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Maxxim or Purchaser with or from any governmental or regulatory
entity in connection with the execution, delivery and performance of the
Merger
25
Agreement, the Offer and the consummation of the transactions contemplated
by the Merger Agreement shall not have been made or obtained and such
failure could reasonably be expected to have a material adverse effect on
the condition of the Company and its subsidiaries taken as a whole or could
be reasonably likely to prevent or materially delay consummation of the
transactions contemplated by the Merger Agreement;
(d) the Company's Board of Directors shall have withdrawn, modified
or amended in any respect adverse to Maxxim or Purchaser its recommendation
of the Offer or the Merger or shall have resolved to do so;
(e) any representations or warranty made by the Company in the Merger
Agreement shall be untrue or incorrect in any material respect;
(f) there shall have been a breach by the Company of any of its
covenants or agreements in any material respect contained in the Merger
Agreement;
(g) it shall have been publicly disclosed that any person (which
includes a "person" as such term is defined in Section 13(d)(3) of the
Exchange Act) other than Purchaser, any of its affiliates, or any group in
which any of them is a member shall have acquired beneficial ownership of
more than 30% of the outstanding Shares or shall have entered into a
definitive agreement or an agreement in principle with the Company with
respect to a tender offer or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the Company;
or
(h) the Merger Agreement shall have been terminated in accordance
with its terms;
which, in the reasonable judgment of Purchaser, in any such case and regardless
of the circumstances giving rise to any such condition, makes it inadvisable to
proceed with such acceptance for payment.
The foregoing conditions are for the sole benefit of Maxxim or Purchaser,
and may be asserted by them or waived in whole or in part at any time and from
time to time in their sole discretion; provided, however, that, without the
consent of the Company, Maxxim and Purchaser may not waive the Minimum
Condition.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings made by the Company with the Commission and other publicly
available information concerning the Company and discussions of representatives
of Parent with representatives of the Company, none of the Purchaser, Maxxim or
Parent is aware of any license or regulatory permit that appears to be material
to the business of the Company and its subsidiaries, taken as a whole, that
might be adversely affected by the Purchaser's acquisition of Shares (and the
indirect acquisition of the stock of the Company's subsidiaries) as contemplated
herein or of any approval or other action by any governmental entity or
regulatory agency that would be required for the acquisition and ownership of
Shares by the Purchaser as contemplated herein. Should any such approval or
other action be required, the Purchaser, Maxxim and Parent currently contemplate
that such approval or other action will be sought, except as described below
under "State Takeover Laws". While the Purchaser does not presently intend 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 failure to obtain any such
approval or other action might not result in consequences adverse to the
Company's business or that certain parts of the Company's business might not
have to be disposed of if such approvals were not obtained or such other actions
were not taken or in order to obtain any such approval or other action. If
certain types of adverse action are taken with respect to the matters discussed
below, the Purchaser could decline to accept for payment or pay for any Shares
tendered. See Section 14 for certain conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places of business in such states. In
EDGAR V.
26
MITE CORP., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefore was unconstitutional. In CTS CORP. V. DYNAMICS
CORP. OF AMERICA, however, the Supreme Court of the United States held that a
state may, as a matter of corporate law and, in particular, those laws
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions, in particular, that the corporation has a
substantial number of shareholders in the state and is incorporated there.
Subsequently, a number of Federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
ARTICLES 14 AND 14.1 OF THE VSCA. The "affiliated transaction"
provisions and the "control share acquisitions" provisions of the VSCA could
adversely impact the ability of an acquiring company to acquire control of a
Virginia corporation such as the Company. The Company is subject to the
"affiliated transactions" provisions of the VSCA which restrict certain
transactions ("Affiliated Transactions") between the Company and any person
(an "Interested Shareholder") who beneficially owns more than 10% of any class
of the Company's voting securities. These restrictions, which are described
below, do not apply to any Affiliated Transaction with an Interested Shareholder
who has been such continuously since the date the Company first had 300
shareholders of record or whose acquisition of shares making such person an
Interested Shareholder was previously approved by a majority of the Company's
Disinterested Directors then on the Board of Directors. The term "Affiliated
Transactions" includes mergers of the type contemplated in the Merger
Agreement. The term "Disinterested Director" means with respect to a
particular Interested Shareholder, a member of the Company's Board of Directors
who was (i) a member on the date on which an Interested Shareholder became an
Interested Shareholder or (ii) recommended for election by, or was elected to
fill a vacancy and received the affirmative vote of a majority of the
Disinterested Directors then on the Board of Directors. All of the Company's
Disinterested Directors have approved the Offer, the Merger and the Merger
Agreement, therefore, the "affiliated transactions" provisions of the VSCA
will not apply to the Merger.
The Company is also subject to the "control share acquisitions"
provisions of the VSCA, which provides that shares of the Company's voting
securities which are acquired in a "Control Share Acquisition" have no voting
rights unless such rights are granted by a shareholders' resolution approved by
the holders of a majority of the votes entitled to be cast on the election of
directors by persons other than the acquiring person or any officer or
employee-director of the Company. A "Control Share Acquisition" is generally
an acquisition of voting shares which, when added to all other voting shares
beneficially owned by the acquiring person, would cause such person's voting
strength with respect to the election of directors to meet or exceed any of the
following thresholds: (i) one-fifth, (ii) one-third or (iii) a majority;
however, the acquisition of shares of an issuing public corporation is not
subject to the "control share acquisition provisions" of the VSCA if the
acquisition is made pursuant to a tender offer that is made pursuant to an
agreement to which the issuing public corporation is a party. The Offer and the
Merger are therefore not subject to the "control share acquisitions"
provisions of the Act, because the Offer is being made pursuant to the Merger
Agreement, to which the Company is a party.
As set forth above, Articles 14 and 14.1 of the VCSA are inapplicable to
the Merger. The Purchaser does not know whether any other state takeover
statutes purport to apply to the Offer or the Merger and has not complied with
any state takeover statute or regulation other than those adopted by the
Commonwealth of Virginia. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer or
the Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, the Purchaser might be
required to file certain information with, or to receive approvals from, the
relevant state authorities, and the Purchaser might be unable to accept for
payment or pay for Shares tendered pursuant to the Offer, or be delayed in
27
continuing consummating the Offer or the Merger. In such case, the Purchaser may
not be obligated to accept payment or pay for any Shares tendered pursuant to
the Offer. See Section 14.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer,
the acquisition of Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by Parent
and the Company of a Notification and Report Form with respect to the Offer,
unless Parent or the Company receives a request for additional information or
documentary material from the Antitrust Division or the FTC or unless early
termination of the waiting period is granted. Parent expects to file its
Notification and Report Form on or prior to June 19, 1996. Accordingly, the
waiting period with respect to the Offer will expire at 11:59 p.m., New York
City time, on July 4, 1996, unless the Antitrust Division and the FTC terminate
the waiting period prior thereto. If, within the initial 15-day waiting period,
either the Antitrust Division or the FTC requests additional information or
material from Parent or the Company concerning the Offer, the waiting period
will be extended and would expire at 11:59 p.m., New York City time, on the
tenth calendar day after the date of substantial compliance by Parent or the
Company with such request. Only one extension of the waiting period pursuant to
a request for additional information is authorized by the HSR Act. Thereafter,
such waiting period may be extended only by court order or with the consent of
Parent and the Company. In practice, complying with a request for additional
information or material can take a significant amount of time. In addition, if
the Antitrust Division or the FTC raises substantive issues in connection with a
proposed transaction, the parties frequently engage in negotiations with the
relevant governmental agency concerning possible means of addressing those
issues and may agree to delay consummation of the transaction while such
negotiations continue. Expiration or termination of the applicable waiting
period under the HSR Act is a condition to the Purchaser's obligation to accept
for payment and pay for Shares tendered pursuant to the Offer.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's acquisition of
Shares pursuant to the Offer, the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of the
Company or its subsidiaries or Parent or its subsidiaries. Private parties may
also bring legal action under the antitrust laws under certain circumstances.
Based upon the examination of publicly available information relating to the
businesses in which Parent and the Company are engaged, Parent, Maxxim and the
Purchaser believe that the acquisition of Shares by the Purchaser on antitrust
grounds will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, the result thereof. See Section 14.
16. FEES AND EXPENSES
Parent has engaged Bear Stearns to act as financial advisor to Parent in
connection with the proposed acquisition of the Company and as Dealer Manager in
connection with the Offer. Parent has agreed to pay Bear Stearns $550,000 as
compensation for its services to date as financial advisor and Dealer Manager
and a fee of $825,000 that will be payable to Bear Stearns upon consummation of
the Offer. Parent has also agreed to pay Bear Stearns for all reasonable
out-of-pocket expenses, including fees and expenses of legal counsel and other
consultants and advisors, and to indemnify Bear Stearns and certain related
persons against certain liabilities and expenses in connection with the Offer,
including certain liabilities under the federal securities laws.
The Purchaser and Parent have retained Corporate Investor Communications,
Inc. to act as the Information Agent and KeyCorp Shareholder Services, Inc. to
act as the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, facsimile, telegraph
28
and personal interview and may request brokers, dealers, commercial banks, trust
companies and other nominees to forward the Offer material to beneficial owners.
The Information Agent and the Depositary each will receive reasonable and
customary compensation for its services, will be reimbursed for certain
reasonable out-of-pocket expenses and be indemnified against certain liabilities
and expenses in connection therewith, including certain liabilities under the
Federal securities laws. Neither the Information Agent nor the Depositary has
been retained to make solicitations or recommendations in connection with the
Offer.
None of the Purchaser, Maxxim or Parent will pay any fees or commissions to
any broker or dealer or other person (other than the Dealer Manager) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks and trust companies will be reimbursed by the Purchaser
upon request for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
17. MISCELLANEOUS
The Purchaser is not aware of any jurisdiction in which the making of the
Offer or the tender of Shares in connection therewith would not be in compliance
with the laws of such jurisdiction. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with any
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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser, Maxxim and Parent have filed with the Commission a Tender Offer
Statement on Schedule 14D-1 pursuant to Rule 14d-3 of the General Rules and
Regulations under the Exchange Act, together with exhibits, furnishing certain
additional information with respect to the Offer, and may file amendments
thereto. Schedule 14D-1 and any amendments thereto, including exhibits, may be
inspected and copies may be obtained in the manner set forth in Section 9
(except that such material will not be available at the regional offices of the
Commission).
MAXXIM ACQUISITION CO.
MAXXIM MEDICAL, INC., A TEXAS CORPORATION
MAXXIM MEDICAL, INC., A DELAWARE CORPORATION
29
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT, MAXXIM AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business
address, present principal occupation or employment and five-year employment
history of each of the directors and executive officers of Parent are set forth
below. All such directors and executive officers listed below are citizens of
the United States except Messrs. Davidson, Graham and Lamont, each of whom is a
citizen of Canada, and Mr. Wafelman, who is a citizen of the Netherlands. Unless
otherwise indicated, the principal business address of each director or
executive officer is Maxxim Medical, Inc., 104 Industrial Blvd., Sugar Land,
Texas 77478.
KENNETH W. DAVIDSON has served as a director of Parent since 1982, and as
Chairman of the Board of Directors, Chief Executive Officer and President of
Parent since November 1986.
PETER M. GRAHAM has served Parent as Executive Vice President since January
1986, Treasurer since April 1987, and Chief Operating Officer since January
1987.
DAVID L. LAMONT has been Vice President of Parent since March 1988, and
Group Vice President since July 1993. From January 1992 to July 1993 Mr. Lamont
also served as President of the Argon Medical division of Parent.
ALAN S. BLAZEI has served Parent as Vice President, Controller since
December 1990.
THOMAS O. CRAIG was elected as an executive officer of Parent in September
1991. From January 1992 through the present he has served as Executive Vice
President -- International Sales and Marketing. From February 1987 through
January 1992 he was Vice President -- Sales and Marketing for Parent's Henley
Healthcare division, which was sold in May 1996, or predecessors thereof.
JOSEPH D. DAILEY was elected Vice President -- Information Services in
August 1994. From January 1991 until such election he had been Director of
Information Services for Parent. Previously, Mr. Dailey was Executive Vice
President for Ferrell Information Systems, Inc., a Denver, Colorado-based
consulting firm.
HENRY T. DEHART became a Vice President of Parent in November 1993. From
June 1995 through the present he has served as Executive Vice President
Operations, Case Management. From December 1992 through July 1995 he served as
President of the Boundary Healthcare division of Parent. He was Chief Operating
Officer of Boundary Healthcare Products Corp. for more than five years prior to
that time. Mr. DeHart's principal business address is 549 Yorkville Park Square,
Columbus, Mississippi 39702.
JACK F. CAHILL was elected as a Vice President of Parent in May 1995. From
June 1995 through the present he has served as Executive Vice President Sales
and Marketing, Case Management. From May 1994 through June 1995 he served as
President of the Sterile Design division. From July 1993 to May 1994 he served
as Executive Vice President of Sterile Design. For over five years prior to July
1993 he served in various capacities on behalf of Johnson & Johnson Medical,
Inc., the latest of which was Business Director.
DONALD R. DEPRIEST became a director of Parent, effective December 1992,
pursuant to the terms of the agreement between Parent and Boundary Healthcare
Products Corp. ("Boundary") under which Parent acquired Boundary. Since July
1987, Mr. DePriest has been the President of MedCom Development Corporation, a
Delaware corporation, which is the General Partner of MCT Investors, L.P., a
Delaware limited partnership engaged in the business of venture capital
investing. Mr. DePriest was the principal shareholder and President of Boundary
from July 1987 until it was acquired by Parent. Mr. DePriest is also Chairman of
the Board of American Telecasting, Inc. Mr. DePriest's principal business
address is P. O. Box 1076, 206 8th Street North, Columbus, Mississippi
39701-4724.
PETER G. DORFLINGER has served as a director of Parent since 1986 and as
Secretary since 1992. Since November 1986, he has been Vice President, General
Counsel and Secretary of Intermedics, Inc. ("Intermedics"), a principal
shareholder of Parent. Intermedics is owned by SULZERmedica, a Swiss
30
medical device manufacturer that is an operating division of SULZER limited,
another Swiss entity. Since February 1990, Mr. Dorflinger has concurrently been
serving as Group Vice President and General Counsel of SULZERmedica. Mr.
Dorflinger is also a member of the Board of Directors of Benchmark Electronics
Inc. Mr. Dorflinger's principal business address is 4000 Technology Boulevard,
Angleton, Texas 77515.
MARTIN GRABOIS, M.D. has served as a director of Parent since February
1991. Dr. Grabois has been a Professor and Chairman of the Department of
Physical Medicine and Rehabilitation at Baylor College of Medicine in Houston,
Texas since 1978. Since 1978, he has also served as the Senior Attending and
Medical Director in the Department of Physical Medicine at the Methodist
Hospital, Houston, Texas, Consultant Physiatrist to the Texas Institute for
Rehabilitation and Research, Houston, Texas, and the Physician-in-Chief for the
Physical Medicine and Rehabilitation Services of the Harris County Hospital
District, Houston, Texas. In 1994, Dr. Grabois was elected President of the
Academy of Physical Rehabilitation. His principal business address is 1333
Moursund Avenue, Houston, Texas 77030.
ERNEST J. HENLEY, PH.D. has been a director and consultant to Parent since
1976. Dr. Henley's principal employment for more than the past five years has
been as a Professor of Chemical Engineering at the University of Houston.
RICHARD O. MARTIN, PH.D. has served as a director of Parent since November
1989. Dr. Martin has, since April 1, 1991, been President and Chief Executive
Officer of Physio-Control Corp., a manufacturer of cardiac defibrillators and
monitoring equipment. His principal business address is 11811 Willows Road NE,
Redmond, Washington 98073-9706.
HENK R. WAFELMAN, ING. became a director of Parent in 1987. Since 1990, Mr.
Wafelman has been the executive chairman of the Dutch Society of Enterprises in
Medical Technology, a Netherlands based technological society, and holds the
position of chairman of an advisory committee for standardization of medical
aids. Mr. Wafelman's principal business address is Taksteeg 3, 1012 PB,
Amsterdam, The Netherlands.
2. DIRECTORS AND EXECUTIVE OFFICERS OF MAXXIM. Each of the directors and
executive officers of Maxxim are set forth below. The principal occupation of
each of such persons is that of an executive officer of Parent as described
under "Directors and Executive Officers of Parent. All such directors and
executive officers listed below are citizens of the United States except Messrs.
Davidson, Graham and Lamont, each of whom is a citizen of Canada. The principal
business address of each director or executive officer is Maxxim Medical, Inc.,
104 Industrial Blvd., Sugar Land, Texas 77478.
KENNETH W. DAVIDSON has served as sole director, Chief Executive Officer
and President of Maxxim for over five years.
PETER M. GRAHAM has served as Executive Vice President, Treasurer, and
Chief Operating Officer of Maxxim for over five years.
DAVID L. LAMONT has been Vice President of Maxxim for over five years.
ALAN S. BLAZEI has served as Vice President, Controller of Maxxim for over
five years.
3. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. Each of the directors
and executive officers of Purchaser are as set forth below. The principal
occupation of each of such persons is that of an executive officer of Parent as
described under "Directors and Executive Officers of Parent. All such directors
and executive officers listed below are citizens of the United States except
Messrs. Davidson, Graham and Lamont, each of whom is a citizen of Canada. The
principal business address of each director or executive officer is Maxxim
Medical, Inc., 104 Industrial Blvd., Sugar Land, Texas 77478.
KENNETH W. DAVIDSON has served as sole director and President of the
Purchaser since its organization in June 1996.
PETER M. GRAHAM has served as Executive Vice President, Treasurer, and
Chief Operating Officer of the Purchaser since its organization in June 1996.
DAVID L. LAMONT has been Vice President of the Purchaser since its
organization in June 1996.
ALAN S. BLAZEI has served as Vice President, Controller of the Purchaser
since its organization in June 1996.
31
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITORARY FOR THE OFFER IS:
KEYCORP SHAREHOLDER SERVICES, INC.
DELIVERY ADDRESSES
BY MAIL: BY HAND:
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
OH-01-49-0120 Attn: Lorraine Rodewald
Attn: Reorganization Department - or -
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
OTHER INFORMATION
TELEPHONE NUMBERS: BY FACSIMILE:
(For Information) (800) 539-6549 (216) 813-4559
or Confirm by telephone:
(713) 546-5500 (216) 813-4554
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its telephone number and
location listed below. You may also contact your broker, dealer, bank, trust
company or other nominee for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
CALL TOLL FREE: (800) 805-9135
COLLECT: (201) 896-1900
THE DEALER MANAGER FOR THE OFFER IS:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, NY 10167
CALL TOLL FREE: (888) 280-1390
<PAGE>
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
BY
MAXXIM ACQUISITION CO.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
MAXXIM MEDICAL, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
KEYCORP SHAREHOLDER SERVICES, INC.
DELIVERY ADDRESSES
BY MAIL: BY HAND:
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
OH-01-49-0120 Attn: Lorraine Rodewald
Attn: Reorganization Department - or -
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
OTHER INFORMATION
TELEPHONE NUMBERS: BY FACSIMILE:
(For Information) (800) 539-6549 (216) 813-4559
or Confirm by telephone:
(713) 546-5500 (216) 813-4554
- --------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if a tender of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at The Depositary Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depositary Trust Company
(hereinafter collectively referred to as the "Book-Entry Transfer Facilities")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders who deliver Shares by book-entry transfer are referred to herein as
"Book-Entry Stockholders" and other stockholders are referred to herein as
"Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 2 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
in accordance with the guaranteed delivery procedures set forth in Section 2 of
the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[ ]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE
TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution _______________________________________________
Check Box of Book-Entry Transfer Facility:
[ ]The Depository Trust Company
[ ]Midwest Securities Trust Company
[ ]Philadelphia Depository Trust Company
Account Number ______________________________________________________________
Transaction Code Number _____________________________________________________
[ ]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) ______________________________________________
Window Ticket Number (if any) _______________________________________________
Date of Execution of Notice of Guaranteed Delivery __________________________
Name of Institution that Guaranteed Delivery ________________________________
Check Box of Applicable Book-Entry Transfer Facility, if Delivered by
Book-Entry Transfer:
[ ]The Depository Trust Company
[ ]Midwest Securities Trust Company
[ ]Philadelphia Depository Trust Company
Account Number ______________________________________________________________
Transaction Code Number _____________________________________________________
<TABLE>
<CAPTION>
BOXES FOR USE BY ELIGIBLE INSTITUTIONS ONLY
- -------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
OWNER(S) (PLEASE FILL IN, IF BLANK, EXACTLY SHARES TENDERED
AS NAME(S) APPEAR(S) ON CERTIFICATE(S) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C>
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------------------
(1) NEED NOT BE COMPLETED BY BOOK-ENTRY STOCKHOLDERS.
(2) UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES EVIDENCED BY ANY CERTIFICATE DELIVERED
TO THE DEPOSITARY ARE BEING TENDERED. SEE INSTRUCTION 4.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Maxxim Acquisition Co., a Virginia
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Maxxim Medical, Inc., a Texas corporation ("Parent"), the above-described
shares of Common Stock, no par value (the "Common Stock"), including the
associated share purchase rights, if any (the "Rights" and together with the
Common Stock, the "Shares,") of Sterile Concepts Holdings, Inc., a Virginia
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase dated June 14, 1996 (the "Offer to
Purchase"), and this Letter of Transmittal (which, together with any amendments
or supplements thereto or hereto, collectively constitute the "Offer"),
receipt of which is hereby acknowledged.
The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or in part from time to time, to one or more direct
or indirect wholly owned subsidiaries of Parent, the right to purchase Shares
pursuant to the Offer.
Upon 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), subject to, and effective upon, acceptance for payment of, and
payment for, the Shares tendered herewith in accordance with the terms of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the order
of, the Purchaser all right, title and interest in and to all the Shares that
are being tendered hereby (and any and all other Shares or other securities
issued or issuable in respect thereof on or after June 10, 1996 (collectively
"Distributions")), and irrevocably constitutes and appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to the full extent of the undersigned's rights with respect to such Shares (and
any such other Shares or securities or rights), to (a) deliver certificates for
such Shares and/or transfer ownership of such Shares and all Distributions 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 Purchaser upon receipt by the
Depositary, as the undersigned's agent, of the purchase price (adjusted, if
appropriate, as provided in the Offer to Purchase), (b) present such Shares and
all Distributions for cancellation and transfers on the Company's books and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares and all Distributions, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and all Distributions and, when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary or the Purchaser to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and all
Distributions. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the account of the Purchaser any such Distributions issued to
the undersigned, in respect of the tendered Shares, accompanied by documentation
of transfer, and pending such remittance or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and, subject to the terms of the Merger Agreement (as defined in
the Offer to Purchase), may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
3
The undersigned hereby irrevocably appoints Kenneth W. Davidson, Peter M.
Graham, and David L. Lamont, and each of them, and any other designees of the
Purchaser, the attorneys and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's stockholders or otherwise act (including pursuant to written consent)
in such manner as each such attorney and proxy or his substitute shall in his
sole discretion deem proper, to execute any written consent concerning any
matter as each such attorney and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act with respect to all
the Shares tendered hereby which have been accepted for payment by the Purchaser
prior to the time any such vote or action is taken (and any and all
Distributions issued or issuable in respect thereof) and with respect to which
the undersigned is entitled to vote. This appointment is effective when, and
only to the extent that, the Purchaser accepts for payment such Shares as
provided in the Offer to Purchase. This power of attorney and proxy is coupled
with an interest in the tendered shares, is irrevocable and is granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer. Such acceptance for payment shall revoke all prior
powers of attorney and proxies given by the undersigned at any time with respect
to such Shares and no subsequent powers of attorney or proxies may be given by
the undersigned (and, if given, will not be deemed effective). The Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser must be able to exercise full voting and other rights with
respect to such Shares including voting at any meeting of stockholders then
scheduled.
The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the tendered Shares. The acceptance for payment by the Purchaser of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the undersigned and the Purchaser upon the terms and subject to the
conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased and/or
return any certificates for Shares not tendered or accepted for payment, in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased and/or return any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and Special Payment
Instructions are completed, please issue the check for the purchase price of any
Shares purchased and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and mail such check and/or return such
certificates to, the person or persons so indicated. In the case of a book-entry
delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility indicated above with any Shares not accepted for payment. The
undersigned recognizes that the Purchaser has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered holders thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
4
- ------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not
tendered or not purchased and/or the check for the
purchase price of Shares purchased are to be issued in
the name of someone other than the undersigned.
Issue [ ] Check [ ] Certificates to:
Name..................................................
(PLEASE PRINT)
Address...............................................
......................................................
(INCLUDE ZIP CODE)
......................................................
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
......................................................
(ACCOUNT NUMBER)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not
tendered or not purchased and/or the check for the
purchase price of Shares purchased are to be delivered
to someone other than the undersigned, or to the
undersigned at an address other than that appearing
under "Description of Shares Tendered."
Mail [ ] Check [ ] Certificates to:
Name..................................................
(PLEASE PRINT)
Address...............................................
......................................................
(INCLUDE ZIP CODE)
......................................................
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
- ------------------------------------------------------
- --------------------------------------------------------------------------------
STOCKHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNER(S))
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
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 trustee, executor, administrator, guardian, attorneys-in-
fact, agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth full title below. (See Instruction 5.)
Dated ______________________________________________, 1996
Name(s)___________________________________________________
(PLEASE PRINT)
Capacity (Full Title)_____________________________________
Address___________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.________________________
Tax Identification or
Social Security Number_____________________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
AUTHORIZED SIGNATURE_______________________________________
NAME_______________________________________________________
(PLEASE PRINT)
NAME OF FIRM_______________________________________________
ADDRESS____________________________________________________
(INCLUDE ZIP CODE)
DAYTIME AREA CODE AND TELEPHONE NO.________________________
Dated ______________________________________________ , 1996
- --------------------------------------------------------------------------------
5
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES, GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders
either if certificates for Shares are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if a tender of Shares is to be
made pursuant to the procedures for book-entry transfer set forth in Section 2
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, together with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents, must be received by the Depositary at one of its addresses
set forth herein prior to the Expiration Date and either certificates for
tendered Shares must be received by the Depositary at one of the Depositary's
addresses or Shares must be delivered pursuant to the procedures for book-entry
transfer set forth herein (and a Book-Entry Confirmation received by the
Depositary), in each case prior to the Expiration Date as defined in the Offer
to Purchase, or (b) the tendering stockholder must comply with the guaranteed
delivery procedure set forth below.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedures, (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery
provided by the Purchaser or Facsimile thereof must be received by the
Depositary prior to the Expiration Date and (c) the certificates for all
tendered Shares, a Book-Entry Confirmation with respect to all such Shares,
together with a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other by this Letter of
Transmittal required documents, must be received by the Depositary within three
trading days after the date of execution of such Notice of Guaranteed Delivery,
all as provided in Section 2 of the Offer to Purchase. A "trading day" is any
day on which the New York Stock Exchange is open for business.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, that states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF CERTIFICATES FOR SHARES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
STOCKHOLDER AND 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, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile hereof), waive any right to receive any
notice of the acceptance of their Shares for payment.
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
schedule attached hereto.
6
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If
fewer than all the Shares evidenced by any certificate submitted are to be
tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." In any such case, new certificate(s) for
the remainder of the Shares that were evidenced by the old certificate(s) will
be sent to the registered holder, unless otherwise provided in the appropriate
box on this Letter of Transmittal, as soon as practicable after 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. 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 certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or accepted for payment are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Shares tendered hereby, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution. See Instruction 1.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its assignee pursuant
to the Offer. If, however, payment of the purchase price is to be made to, or if
the certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered owner(s), or
if tendered certificates are registered in the name(s) of any person(s) other
than the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered owner(s) or such person(s))
payable on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this letter of
transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not accepted for payment are to
be returned to a person other than the signer of this Letter of Transmittal or
if a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
Any stockholder 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.
8. WAIVER OF CONDITIONS. Except as otherwise provided in the Offer to
Purchase, the Purchaser reserves the absolute right in its sole discretion to
waive any of the specified conditions of the Offer, or any defect or
irregularity in Tender with regard to any Shares tendered.
9. SUBSTITUTE FORM W-9. In order to avoid backup withholding of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 below in this Letter of Transmittal and certify under
penalties of perjury that such TIN is correct and that such stockholder is not
subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on
such stockholder and payment of cash to such stockholder pursuant to the Offer
may be subject to backup withholding of 31%.
7
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses and telephone numbers listed below. Additional copies
of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed
Delivery and the Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9 may be directed to the Information Agent.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), TOGETHER WITH
CERTIFICATES FOR SHARES, OR A BOOK-ENTRY CONFIRMATION FOR SHARES AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF GUARANTY
DELIVERY (OR A FACSIMILE THEREOF) MUST BE RECEIVED BY THE DEPOSITARY, ON OR
PRIOR TO THE EXPIRATION DATE.
8
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------------------------
| PAYOR'S NAME: KEYCORP SHAREHOLDER SERVICES, INC.
SUBSTITUTE | Part I -- PLEASE PROVIDE YOUR TIN IN THE ______________________
FORM W-9 | BOX AT RIGHT AND CERTIFY BY SIGNING AND Social Security number
| DATING BELOW. OR________________________________
| Employer Identification Number(s)
| If awaiting TIN write "Applied for"
| --------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY | Part II -- For payees not subject to backup withholding, see Guidelines for
INTERNAL REVENUE SERVICE | Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
PAYER'S REQUEST FOR TAXPAYER | instructed therein.
IDENTIFICATION NUMBER ("TIN") |
- ----------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that: (1) the number shown on this form is my correct Taxpayer
Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding
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 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.
- ----------------------------------------------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are subject to
backup withholding because of under reporting interest or dividends on your tax returns. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification from the IRS that stating that you are
no longer subject to backup withholding, do not cross out such item (2).
- ----------------------------------------------------------------------------------------------------------------------------
SIGNATURE __________________________________________________ DATE _____________________________________
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN 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 INFORMATION.
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 of perjury 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 to the Depositary, 31% of all
reportable payments made to me will be withheld, but will be refunded if I
provide a certified taxpayer identification number within 60 days.
Signature ____________________________ Date _________________________ , 1996
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Information Agent.
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
CALL TOLL FREE: (800) 805-9135
COLLECT: (201) 896-1900
THE DEALER MANAGER FOR THE OFFER IS:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, NY 10167
CALL TOLL FREE: (888) 280-1390
9
<PAGE>
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, no par value
("Common Stock"), including the associated share purchase rights, if any (the
"Rights" and, together with the Common Stock, the "Shares"), of Sterile
Concepts Holdings, Inc., a Virginia corporation (the "Company"), are not
immediately available or if the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary at the address set forth below prior to the Expiration Date
(as defined in Section 1 of the Offer to Purchase). This form may be delivered
by hand to the Depositary or transmitted by facsimile transmission or mail to
the Depositary and must include a guarantee by an Eligible Institution (as
defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
KEYCORP SHAREHOLDER SERVICES, INC.
DELIVERY ADDRESSES
BY MAIL: BY HAND:
Key Services Corporation KeyCorp Shareholder Services, Inc.
P.O. Box 6477 700 Louisiana Street, Suite 2620
Cleveland, Ohio 44101-1477 Houston, Texas 77002
OH-01-49-0120 Attn: Lorraine Rodewald
Attn: Reorganization Department - or -
Key Services Corporation
4900 Tiedeman Road
Brooklyn, Ohio 44114-2302
Attn: Reorganization Department
OTHER INFORMATION
TELEPHONE NUMBERS: BY FACSIMILE:
(For Information) (800) 539-6549 (216) 813-4559
or Confirm by telephone:
(713) 546-5500 (216) 813-4554
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES 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.
Ladies and Gentlemen:
The undersigned hereby tenders to Maxxim Acquisition Co., a Virginia
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Maxxim Medical, Inc., a Texas corporation, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated June 14, 1996
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
Please Print
Number of Shares
Certificate Nos.
(if available):
(Check one box if shares will be
tendered by book-entry transfer)
[ ] The Depository Trust Company
[ ] Midwest Securities Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
Dated:
Name(s) of Record Holder(s):
PLEASE PRINT
Address(es):
Zip Code
Area Code and Tel. No.:
Signature(s):
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), and any other required documents, within
three trading days after the date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
All capitalized terms used herein have the meanings set forth in the Offer to
Purchase.
Name of Firm: Authorized Signature:
Address: Name:
PLEASE PRINT
Zip Code: Title:
Area Code and Tel No.: Dated:
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
EXHIBIT (A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
BY
MAXXIM ACQUISITION CO.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
MAXXIM MEDICAL, INC.
AT
$20.00 NET PER SHARE
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
June 14, 1996
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by Maxxim Acquisition Co., a Virginia corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Maxxim Medical, Inc.,
a Texas corporation ("Parent"), to act as Dealer Manager in connection with
the Purchaser's Offer to Purchase all outstanding shares of Common Stock, no par
value ("Common Stock"), including the associated share purchase rights, if any
(the "Rights" and, together with the Common Stock, the "Shares") of Sterile
Concepts Holdings, Inc., a Virginia corporation (the "Company"), at $20.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase dated
June 14, 1996 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Please furnish copies of the enclosed
materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated June 14, 1996;
2. Letter of Transmittal for your use in accepting the Offer and for
the information of your clients;
3. The Letter to Stockholders of the Company from the Company
accompanied by the Company's Solicitation / Recommendation Statement
on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee,
with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Notice of Guaranteed Delivery to be used to accept the Offer if
Shares and all other required documents cannot be delivered to the
Depository by The Expiration Date (as hereinafter defined in the
Offer to Purchase);
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup federal
tax withholding; and
7. Return envelope addressed to KeyCorp Shareholder Services, Inc., the
Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, MORE THAN TWO-THIRDS OF
THE TOTAL NUMBER OF OUTSTANDING SHARES (ON A FULLY DILUTED BASIS) BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER. THE OFFER ALSO
IS SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE.
Upon 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 Purchaser will accept for payment and will pay promptly after
the Expiration Date (as defined in the Offer to Purchase) for all Shares validly
tendered prior to the Expiration Date and not properly withdrawn as, if and when
the Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to deliver their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures specified in Section
2 of the Offer to Purchase.
Your prompt action is requested. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS
EXTENDED BY THE PURCHASER.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND
THE MERGER AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by the Depositary of (a) certificates
for or a timely Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to such Shares, (b) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or, in the case of a book-entry transfer effected pursuant to the procedure set
forth in Section 2 of the Offer to Purchase, an Agent's Message (as defined in
the Offer to Purchase), and (c) any other documents required by the Letter of
Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Neither the Purchaser nor Maxxim will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and Information
Agent as described in the Offer to Purchase) in connection with the solicitation
of tenders of Shares pursuant to the Offer. You will be reimbursed upon request
for customary mailing and handling expenses incurred by you in forwarding the
enclosed offering materials to your customers. The Purchaser will pay all stock
transfer taxes applicable to its purchase of shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal.
Questions and requests for additional copies of the enclosed material may
be directed to the Information Agent or the Dealer Manager at their respective
addresses and telephone numbers set forth on the back cover of the enclosed
Offer to Purchase.
Very truly yours,
BEAR, STEARNS & CO. INC.
as Dealer Manager
245 Park Avenue
New York, New York 10167
Call Toll Free: (888) 280-1390
- --------------------------------------------------------------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR ANY
OTHER PERSON THE AGENT OF THE PURCHASER, THE PARENT, THE DEPOSITARY, THE
INFORMATION AGENT, OR THE DEALER MANAGER, OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION, TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT OR
REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, NOT CONTAINED
IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
- --------------------------------------------------------------------------------
2
<PAGE>
EXHIBIT (A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
BY
MAXXIM ACQUISITION CO.
AN INDIRECT WHOLLY OWNED SUBSIDIARY
OF
MAXXIM MEDICAL, INC.
AT
$20.00 NET PER SHARE
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated June 14, 1996
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to the offer by Maxxim Acquisition Co., a Virginia
corporation (the "Purchaser") and an indirect wholly owned subsidiary of
Maxxim Medical, Inc. (the "Parent"), to purchase for cash all outstanding
shares of Common Stock, no par value ("Common Stock"), including the
associated share purchase rights, if any (the "Rights" and together with the
Common Stock, the "Shares") of Sterile Concepts Holdings, Inc., a Virginia
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. 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 TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $20.00 per Share, net to the seller in cash,
without interest thereon.
2. The Offer is being made for all outstanding Shares.
3. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT
THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTEREST OF, THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER AND RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
4. The offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Friday, July 26, 1996, unless the offer is extended by
the Purchaser (the "Expiration Date").
5. The Offer is conditioned upon, among other things, more than
two-thirds of the total number of outstanding Shares (on a fully
diluted basis) being validly tendered and not withdrawn prior to the
expiration of the Offer. The Offer is also subject to other terms and
conditions contained in the Offer to Purchase.
6. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser will be borne by the Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by the Depositary of (a) certificates
for (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase)
with respect to) such Shares, (b) a Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to the
procedure set forth in Section 2 of the Offer to Purchase, an Agent's Message,
and (c) any other documents required by the Letter of Transmittal. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
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 or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of the Purchaser by Bear, Stearns & Co. Inc., the Dealer Manager
for the Offer, or one or more registered brokers or dealers that are licensed
under the laws of such jurisdiction.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf prior to the Expiration Date.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED SHARE PURCHASE RIGHTS)
OF
STERILE CONCEPTS HOLDINGS, INC.
The undersigned acknowledge(s) receipt of your letter, the Offer to
Purchase dated June 14, 1996 (the "Offer to Purchase"), and the related Letter
of Transmittal relating to the Offer by Maxxim Acquisition Co., a Virginia
corporation and an indirect wholly owned subsidiary of Maxxim Medical, Inc., a
Texas corporation, to purchase for cash all outstanding shares of Common Stock,
no par value ("Common Stock"), including the associated share purchase rights,
if any (the "Rights" and together with the Common Stock, the "Shares"), of
Sterile Concepts Holdings, Inc., a Virginia corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the Offer
to Purchase and related Letter of Transmittal.
Dated ............., 1996
NUMBER OF SHARES TO BE TENDERED*
__________________ SHARES
I (we) understand that if I (we) sign the instruction form without
indicating the number of Shares to be tendered in the space above, all Shares
held by you for my (our) account will be tendered.
_______________________________________________________
_______________________________________________________
Signature(s)
______________________________________________________
______________________________________________________
Print Name(s)
______________________________________________________
______________________________________________________
Print Address(es)
______________________________________________________
Daytime Area Code and Telephone Number
______________________________________________________
Tax ID or Social Security Number
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by your
firm for my (our) account are to be tendered.
2
<PAGE>
EXHIBIT (A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. 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 payer.
<TABLE>
<CAPTION>
GIVE THE
SOCIAL SECURITY GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: NUMBER OF FOR THIS TYPE OF ACCOUNT: NUMBER OF
- ------------------------- ---------------- ------------------------- ------------------------------
<C> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate or The legal entity (Do not
pension trust furnish the identifying number
of the personal representative
or trustee unless the legal
entity itself is not
designated in the account
title.)(5)
2. Two or more individuals (joint The actual owner of the 10. Corporate account The corporation
account) account or, if combined funds,
any one of the individuals(1)
3. Husband and wife (joint account) The actual owner of the 11. Religious, charitable, or The organization
account or, if joint funds, educational organization
either person(1) account
4. Custodian account of a minor The minor(2) 12. Partnership account held The partnership
(Uniform Gift to Minors Act) in the name of the
business
5. Adult and minor (joint account) The adult, or if the minor is 13. Association, club, or The organization
the only contributor, the other tax-exempt
minor(1) organization
6. Account in the name of guardian or The ward, minor, or 14. A broker or registered The broker or nominee
committee for a designated ward, incompetent person(3) nominee
minor, or incompetent person
7. A. The usual revocable savings The grantor-trustee(1) 15. Account with the THE PUBLIC ENTITY
trust account (grantor is also Department of Agriculture
trustee) in the name of a public
B. So-called trust account that is The actual owner(1) entity (such as a state or
not a legal or valid trust local government, school
under State law district, or prison) that
receives agricultural
program payments
8. Sole proprietorship account The Owner(4)
</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) Show the name of the owner.
(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.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
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 (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), 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
Payees specifically exempted from backup withholding on ALL payments include the
following:
o A corporation.
o A financial institution.
o An organization exempt from tax under Section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States,
or any subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government,
or any agency or instrumentality thereof.
o An international organization or any agency or instrumentality
thereof.
o A registered dealer in securities or commodities registered in the
U.S. or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a) of the
Code.
o An exempt charitable remainder trust, or a non-exempt trust described
in section 4947(a)(1) of the Code.
o An entity registered at all times during the tax year under the
Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section
1441 of the Code.
o Payments to partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid
in money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
o Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you
have not provided your correct taxpayer identification number to the
payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852 of the Code).
o Payments described in section 6049(b)(5) of the Code to nonresident
aliens.
o Payments on tax-free covenant bonds under section 1451 of the Code.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE
ERRONEOUS BACKUP WITHHOLDING. FILE FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER. WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF YOU
2
ARE A NON-RESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING,
FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN
STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6045, and 6050A and 6050N
of the Code and the regulations promulgated thereunder..
PRIVACY ACT NOTICE. Section 6109 requires most recipients of dividends,
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. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividends, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you
fail to furnish your correct taxpayer identification number to a payer, 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. Willfully 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.
3
EXHIBIT (a)(7)
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, DATED JUNE
14, 1996, AND THE RELATED LETTER OF TRANSMITTAL, AND IS BEING MADE TO ALL
HOLDERS OF SHARES. 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 NOT BE IN COMPLIANCE WITH THE LAWS
OF SUCH JURISDICTION. IN ANY JURISDICTION WHERE THE SECURITIES, BLUE SKY OR
OTHER LAWS REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR DEALER, THE
OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF MAXXIM ACQUISITION CO. BY BEAR,
STEARNS & CO. INC. OR ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER
THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(Including the Associated Share Purchase Rights)
of
STERILE CONCEPTS HOLDINGS, INC.
by
Maxxim Acquisition Co.
an indirect wholly owned subsidiary
of
MAXXIM MEDICAL, INC.
at
$20.00 NET PER SHARE
Maxxim Acquisition Co., a Virginia corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Maxxim Medical, Inc., a Texas corporation
("Parent"), is offering to purchase all outstanding shares of Common Stock, no
par value (the "Common Stock"), of Sterile Concepts Holdings, Inc., a Virginia
corporation (the "Company"), including the associated share purchase rights, if
any (the "Rights" and, together with the Common Stock, the "Shares"), issued
pursuant to the Shareholder Protection Rights Agreement, dated as of March 6,
1996, between the Company and First Union National Bank of North Carolina, as
Rights Agent, at a price of $20.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated June 14, 1996 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
---------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, JULY 26, 1996, UNLESS THE OFFER IS EXTENDED
----------------------------------------------------------------------------
The Offer is conditioned upon, among other things, more than two-thirds of
the total number of outstanding Shares (on a fully diluted basis) being validly
tendered and not withdrawn prior to the expiration of the Offer. The Offer also
is subject to other terms and conditions contained in the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 10, 1996 (the "Merger Agreement"), by and among the Company, the
Purchaser and Maxxim Medical, Inc., a Delaware corporation ("Maxxim") and a
wholly owned subsidiary of Parent. Pursuant to the Merger Agreement, following
the consummation of the Offer and the satisfaction or waiver of certain
conditions, the Purchaser will be merged with and into the Company (the
"Merger"). Following the consummation of the Merger, the Company will continue
as the surviving corporation and will be a wholly owned subsidiary of Maxxim. At
the effective time of the Merger, each outstanding Share (other than any Shares
held by the Company or any subsidiary of the Company, or held directly or
indirectly, by Maxxim or any direct or indirect subsidiary of Maxxim, including
the Purchaser) will be converted into the right to receive an amount in cash
equal to the price per Share paid pursuant to the Offer (without interest).
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY HAS DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE STOCKHOLDERS OF THE COMPANY, HAS APPROVED THE MERGER AGREEMENT, THE OFFER
AND THE MERGER AND RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to KeyCorp
Shareholder Services, Inc. (the "Depositary") of the Purchaser's acceptance of
such Shares for payment pursuant to the Offer. In all cases, upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
validly tendering stockholders. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing Shares (the "Share Certificates")
for such Shares or timely conformation of the book-entry transfer of such Shares
into the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in the Offer to Purchase), (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer of Shares and (iii) any other documents
required by the Letter of Transmittal. Under no circumstances will interest on
the purchase price for Shares be paid by the Purchaser.
The Purchaser expressly reserves the right, in its sole discretion, at any
time and from time to time subject to applicable law and the terms of the Merger
Agreement, to extend the period during which the Offer is open by giving oral or
written notice of such extension to the Depositary. Any such extension will be
followed as promptly as practicable by public announcement thereof no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date (as defined below).
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment and paid for by the
Purchaser as provided in the Offer to Purchase, may also be withdrawn at any
time after August 13, 1996. The term "Expiration Date" means 12:00 midnight, New
York City time, on Friday, July 26, 1996, unless and until the Purchaser,
subject to the terms of the Offer and the Merger Agreement, shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire. In order for a withdrawal to be
effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover of the Offer to Purchase. Any such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
to be withdrawn, and if Share Certificates have been tendered the name of the
registered holder of the Shares as set forth in the Share Certificate, if
different from that of the person who tendered such Shares. If Share
Certificates have been delivered or otherwise identified to the Depositary, then
prior to the physical release of such certificates, the tendering stockholder
must submit the serial numbers shown on the particular certificates evidencing
the Shares to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution (as defined in the Offer to Purchase),
except in the case of Shares tendered for the account of an Eligible
Institution. If Shares have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 2 of the Offer to Purchase, the notice
of withdrawal must specify the name and number of the account at the appropriate
Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in this paragraph. All questions as to the form
and validity (including time of receipt) of notices of withdrawal will be
determined by the Purchaser, in its sole discretion, whose determination shall
be final and binding. Withdrawal of Shares may not be rescinded and any Shares
properly withdrawn will be deemed not validly tendered for purposes of the
Offer, but may be tendered at any subsequent time prior to the Expiration Date
by following any of the procedures described in the Offer to Purchase.
The information required to be disclosed pursuant to Rule 14d-6(e)(1)(vii)
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 Company is providing the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed to record holders of Shares and will
be furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the 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.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained at the Purchaser's expense from the Information Agent or from
brokers, dealers, commercial banks and trust companies. None of Parent, Maxxim
or the Purchaser will pay any fees or commissions to any broker, dealer or other
person (other than the Dealer Manager) for soliciting tenders of Shares pursuant
to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
CORPORATE INVESTOR COMMUNICATIONS, INC.
111 Commerce Road
Carlstadt, New Jersey 07072
Call Toll Free: (800) 805-9135
Collect: (201) 896-1900
THE DEALER MANAGER FOR THE OFFER IS:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
June 14, 1996 Call Toll Free: (888) 280-1390
EXHIBIT (A)(8)
FOR: MAXXIM MEDICAL, INC.
APPROVED BY: Peter M. Graham
Executive Vice President
713/240-5588
CONTACT: Morgan-Walke Associates
Naomi Rosenfeld/Andrea Mabel
Press: Michelle Zawrotny
212/850-5600
Kenneth E. Pieper
214/663-9390
FOR IMMEDIATE RELEASE
MAXXIM MEDICAL SIGNS MERGER AGREEMENT
WITH STERILE CONCEPTS
SUGAR LAND, Texas, June 10, 1996 -- Maxxim Medical, Inc. (NYSE:MAM) and
Sterile Concepts Holdings, Inc. (NYSE:SYS) today jointly announced the signing
of an Agreement of Merger. Under this Agreement, Maxxim will commence a formal
tender offer to the shareholders of Sterile Concepts on June 14, 1996, wherein
Maxxim will offer to purchase all outstanding shares of common stock of Sterile
Concepts for $20 per share. The completion of the tender offer will be
contingent on, among other conditions, receipt of appropriate regulatory
approvals and the valid tender of more than two-thirds of the outstanding shares
of common stock. Following successful completion of the tender offer, Maxxim is
required, subject to certain conditions of the Merger Agreement, to merge
Sterile Concepts with a subsidiary of Maxxim, resulting in the payment of $20
per share for any remaining outstanding shares of Sterile Concepts stock.
"This merger will create a strong force in the medical supply market,"
commented Kenneth W. Davidson, Chairman, Chief Executive Officer and President
of Maxxim Medical. "With the increasing consolidation in the provider side of
the market and the formation of the new "super buying groups," it is extremely
important for a supplier to be in a position to provide nationwide support on a
large scale. The combination of Sterile Concepts with our Sterile Design custom
procedure packs, together with our fluid management systems and protection
products, would place Maxxim in just such a position."
Paul J. Woo, Jr., President and Chief Executive Officer of Sterile
Concepts, commented, "After thoroughly reviewing alternatives available to the
company, we have concluded that combining our operations with Maxxim Medical
would create an organization with the critical mass needed to effectively
compete in the consolidating healthcare marketplace. This merger provides
Sterile Concepts with the opportunity to join forces with a proven leader in the
medical supply market."
Maxxim will finance the transaction through NationsBank. The transaction
cost is estimated to be approximately $147 million, including the assumption of
existing Sterile Concepts debt. Bear, Stearns & Co. advised Maxxim Medical and
Wheat First Butcher Singer advised Sterile Concepts Holdings, Inc.
Sterile Concepts is a leading provider of surgical and clinical custom
procedure trays to hospitals and surgery centers in the United States. The
Company is headquartered in Richmond, Virginia and has production facilities in
Richmond, Temecula, CA and Minnetonka, MN.
Maxxim Medical is a major, diversified medical products manufacturer and
supplier.
<PAGE>
EXHIBIT (b)(i)
June 8, 1996
Maxxim Medical, Inc.
104 Industrial Boulevard
Sugar Land, Texas 77478
Attn.: Peter Graham
Re: $165,000,000 Credit Facility
Dear Peter:
NationsBank of Texas, N.A. ("NationsBank") is pleased to offer to be the agent
(in such capacity, the "Agent") for a $165,000,000 Senior Credit Facility (the
"Credit Facility") to Maxxim Medical, Inc. ("Borrower") and to offer its
commitment to lend $165,000,000 of the Credit Facility upon and subject to the
terms and conditions of this letter and the Summary of Terms and Conditions
(herein so called) attached hereto as Exhibit A. All capitalized terms used and
not otherwise defined herein shall have the meanings set forth in the Summary of
Terms and Conditions. NationsBanc Capital Markets, Inc. ("NCMI") is pleased to
advise you of its commitment, as Arranger and Syndication Agent for the Credit
Facility, to form a syndicate of financial institutions (the "Lenders")
reasonably acceptable to you for the Facility. This commitment shall become
effective upon the execution of the Merger Agreement by the parties thereto.
In connection with the Credit Facility, the Agent and NCMI intend to invite
other Lenders to participate in the Credit Facility with a corresponding
reduction in the initial commitment of NationsBank. The Agent and NCMI will
manage all aspects of the syndication (in consultation with Borrower), including
the selection of potential Lenders, the timing of all offers to potential
Lenders and the acceptance of commitments from Lenders, the amounts offered to
potential Lenders, the compensation provided to Lenders and the allocation of
titles to Lenders. In connection with such syndication, you agree to take such
action as the Agent or NCMI may reasonably request to assist in syndicating the
Credit Facility, including participating in the preparation of an information
memorandum and the holding of a meeting of potential Lenders.
In addition to the fees described in the Summary of Terms and Conditions,
Borrower agrees to pay all fees separately agreed upon in writing with the
Agent, NationsBank or NCMI.
By acceptance of this letter, Borrower represents and warrants to NationsBank
and NCMI that all historical financial statements and other information
regarding Borrower and its subsidiaries, if any, or any guarantor heretofore
delivered to NationsBank or NCMI in connection with the Credit Facility, are
true, correct, and not misleading in any material respect and that any
projections heretofore delivered to NationsBank or NCMI in connection with the
Credit Facility have been prepared in good faith and based on information
believed to be true, correct and not misleading in any material respect.
By acceptance of this offer, Borrower agrees to pay the reasonable out-of-pocket
costs and expenses, including reasonable attorneys' fees and expenses and
reasonable expenses of due diligence, incurred before or after the date hereof
by the Agent or NCMI in connection with the Credit Facility, whether or not the
Credit Facility is ever closed or a funding ever occurs under the Credit
Facility.
In addition, Borrower agrees to indemnify and hold harmless the Agent, NCMI,
each Lender and their respective affiliates, officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, fees and disbursements of counsel) which may be incurred by or
asserted or awarded against any Indemnified Party (including any of the
foregoing arising from the negligence of any Indemnified Party), in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with the Credit Facility, including,
without limitation, any transaction in which the proceeds of any borrowing under
the Credit Facility are or are to be applied, whether or not an Indemnified
Party is a party thereto, and whether or not the transactions contemplated
herein are consummated, unless resulting from the gross negligence or willful
misconduct of the Indemnified Party. Borrower will not settle or consent to
judgment with respect to any such investigation, litigation, or proceeding
without the prior written consent of the Agent and NCMI (which consent shall not
be unreasonably withheld), unless such settlement or consent includes an
unconditional release of each Indemnified Party.
To ensure an orderly and effective syndication of the Credit Facility, Borrower
agrees that from the date of its acceptance of this letter until the completion
of the primary syndication of the Credit Facility (as determined by the Agent
and NCMI but in no event later than 90 days from the date of acceptance of this
letter), Borrower will not, and will not permit any of its subsidiaries to,
syndicate or issue, attempt to syndicate or issue, announce or authorize the
announcement of the syndication or issuance of, or enter into discussions
concerning the syndication or issuance of, any debt facility or debt security,
except with the prior written approval of the Agent and NCMI.
Neither this offer nor the undertaking contained herein may be disclosed to or
relied upon by any other person or entity other than your accountants, attorneys
and other advisors and the Target (as defined in the attached Exhibit A),
without the prior written consent of the Agent, except that following your
acceptance hereof you may make public disclosure hereof as required by law.
This letter shall be governed by and construed in accordance with the laws of
the State of Texas. This letter may be modified or amended only in writing.
This offer will automatically expire on JUNE 8, 1996 unless Borrower executes
this letter.
Very truly yours,
NATIONSBANK OF TEXAS, N.A.,
Individually and as Agent
By:____________________________
Name: Frank T. Hundley
Title: Senior Vice President
NATIONSBANC CAPITAL MARKETS, INC.
By:____________________________
Name: Gary L. Kahn
Title: Senior Vice President & Director
Accepted and agreed to as of the date
first written above:
MAXXIM MEDICAL, INC.
____________________________
Name:
Title:
<PAGE>
EXHIBIT (b)(ii)
June 8, 1996
Maxxim Medical, Inc.
104 Industrial Boulevard
Sugar Land, Texas 77478
Attn.: Mr. Kenneth Davidson
Dear Mr. Davidson:
You have advised NationsBridge, L.L.C. ("NationsBridge") and NationsBanc Capital
Markets, Inc. ("NCMI") that Maxxim Medical, Inc. or one of its affiliates
("Maxxim" or the "Company") proposes to acquire Sterile Concepts Holdings, Inc.
("Sterile Concepts"). The proposed transaction calls for Maxxim to effect a
tender offer (the "Tender Offer") for the purpose of acquiring at least
two-thirds of the outstanding common stock of Sterile Concepts Holdings, Inc.
("Sterile Concepts") for a per share price of $20.00, net to the seller in cash.
Concurrently with or immediately after completion of the Tender Offer, Sterile
Concepts is to be merged with and into Maxxim, with Sterile Concepts being the
surviving entity and becoming a wholly-owned subsidiary of Maxxim. These series
of transactions are collectively referred to as the "Acquisition Transaction,"
and the signing of any purchase, merger, acquisition, or other combination
agreement between Maxxim and Sterile Concepts will hereafter be referred to as
the "Merger Agreement."
In connection with the foregoing, we are pleased to advise you that
NationsBridge hereby commits (the "Commitment"), subject to the terms and
conditions set out below, that it and/or one or more of its affiliates will
purchase up to $75 million in aggregate principal amount of bridge notes (the
"Bridge Notes"), the proceeds of which, together with $165 million in senior
bank financing (the "Senior Bank Facilities") will be used to effect the
Acquisition Transaction.
You have advised us that the Commitment is a condition precedent to the
execution of the Merger Agreement and commencement of the Tender Offer. You have
also advised us that a copy of this letter (the "Bridge Commitment Letter"), and
the attached Summary of Indicative Terms and Conditions (exhibits A, B, C and
D), which is incorporated into and made a part of this Bridge Commitment Letter,
will be provided to Sterile Concepts, but that you understand that our
obligation to make any monies available to Maxxim is subject expressly to the
execution and delivery of definitive documentation, including without
limitation, a definitive securities purchase agreement (the "Securities Purchase
1
Agreement"), reasonably satisfactory to us and covering the matters expressly
referred to herein and covering such other matters as we may reasonably request,
and a warrant agreement (the "Warrant Agreement") (together the "Definitive
Documents") and satisfaction of the other conditions precedent set out in the
Summary of Indicative Terms and Conditions.
The Company agrees to pay to NationsBridge and NCMI the fees and expenses as set
forth.
We understand that the Company intends to proceed with the issuance of $100
million of senior subordinated notes (the "Refinancing Securities"), the
proceeds of which are to be utilized in lieu of the Bridge Note issuance, or to
refinance the Bridge Notes.
The Company has agreed to execute a separate letter of engagement and indemnity
designating NCMI as the sole or lead underwriter or placement agent for the
Refinancing Securities.
The Commitment is not assignable by you. Nothing in this Bridge Commitment
Letter, express or implied, shall give any person, other than the parties
hereto, any benefit or any legal or equitable right, remedy or claim under this
Bridge Commitment Letter.
The Company agrees to indemnify and hold NationsBridge, NCMI and their
affiliates harmless to the extent set forth in Exhibit D to this Bridge
Commitment Letter and, upon demand from time to time, to reimburse NationsBridge
and/or NCMI for all reasonable out-of-pocket costs, expenses and other payments,
including but not limited to reasonable legal fees and disbursements incurred or
made in connection with the Commitment, the Refinancing Securities, and the
preparation, execution and delivery of the Definitive Documents, regardless of
whether or not the Definitive Documents are executed.
Additionally, subject to applicable securities laws, you agree to allow
NationsBridge, NCMI or any of their affiliates to reference this Commitment for
the benefit of promoting NationsBridge, NCMI or one of their affiliates.
This Bridge Commitment Letter and the attached Summary of Indicative Terms and
Conditions in Exhibit A, B, C and D set forth the entire understanding of the
parties as to the scope of the Commitment and NationsBridge's obligations
thereunder. This Commitment will expire upon the earliest of (i) the closing of
the Acquisition Transaction without the execution of a commitment letter between
NationsBridge and Maxxim; (ii) the closing of the Acquisition Transaction
without the use of the Bridge Notes; or (iii) at 5:00 AM Charlotte, North
Carolina time on June 8, 1996 unless accepted prior to such time.
This Bridge Commitment Letter shall be governed by, and construed in accordance
with, the laws of the State of New York as applied to contracts made
2
and performed within such state, without giving effect to the principles of
conflicts of laws thereof. To the fullest extent permitted by applicable law,
each of NationsBridge, NCMI and the Company hereby irrevocably submit to the
jurisdiction of any New York State court or Federal court sitting in the Borough
of Manhattan in New York City in respect of any suit, action or proceeding
arising out of or relating to the provisions of the Commitment and irrevocably
agree that all claims in respect of any such suit, action, or proceeding may be
heard and determined in any such court. Each of NationsBridge, NCMI and the
Company waive, to the fullest extent permitted by applicable law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceedings brought in any such court, and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
Please indicate your acceptance of our Commitment and your agreement to the
matters contained in this Bridge Commitment Letter by executing this document
and returning it to us prior to the time of expiration set forth above.
Sincerely,
NATIONSBRIDGE, L.L.C.
By: ____________________________
Name:
Title:
Accepted and Agreed to as of the
date first hereunder written.
MAXXIM MEDICAL, INC.
By: ____________________________
Name:
Title:
3
EXHIBIT A
MAXXIM MEDICAL, INC.
SENIOR SUBORDINATED UNSECURED BRIDGE NOTES
SUMMARY OF INDICATIVE TERMS AND CONDITIONS
ISSUER: Maxxim Medical, Inc., a Delaware corporation, or one
of its affiliates ("Maxxim" or the "Company"), which is
to acquire (the "Acquisition Transaction") 100% of the
outstanding common stock of Sterile Concepts Holdings,
Inc. ("Sterile Concepts"). It is a condition to the
financing that Sterile Concepts be merged with and into
Maxxim concurrently with, or immediately after, the
Acquisition Transaction, with Sterile Concepts being the
surviving entity and becoming a wholly-owned subsidiary
of Maxxim.
INITIAL PURCHASER: NationsBridge, L.L.C. or an affiliate thereof
("NationsBridge"), and other purchasers arranged by
NationsBridge.
ISSUE: Senior Subordinated Bridge Notes (the "Bridge Notes").
PRINCIPAL AMOUNT: Up to $75,000,000, provided that Total Debt/ LTM
adjusted EBITDA may not exceed 4.5 to 1.0.
PRICE: 100% of principal amount.
MATURITY: 12 months from issuance.
RANKING: The Bridge Notes will be subordinated to the Company's
Senior Bank Facilities and senior to all other
subordinated obligations of the Company to include the
Company's 6 3/4% convertible subordinated debentures due
3/1/2003.
INTEREST RATE: Interest shall be payable at the "Base Rate" plus the
Applicable Margin per annum. The Applicable Margin shall
initially be 2.00% increasing an additional .50% at the
end of each subsequent 3 month period; provided that
such rate shall not exceed 15.50% per annum; provided
further that cash interest will be capped at 13.50% and
any interest payment in excess of 13.50% will be paid in
additional Bridge Notes. The "Base Rate" will mean the
Prime Rate of interest publicly announced from time to
time by NationsBank, N.A.
INTEREST
PAYMENTS: Quarterly in arrears.
4
GUARANTORS: The Bridge Notes will be guaranteed on a senior
subordinated unsecured basis by Maxxim Medical, Inc., a
Texas corporation, and any subsidiaries or other
affiliates of the Company that guarantee the Senior Bank
Facilities.
MANDATORY
EXCHANGE: At maturity (the "Rollover Date") through the issuance
and delivery of Senior Subordinated Rollover Notes with
a maturity of 5 years from the Rollover Date (the
"Rollover Notes" and together with the Bridge Notes, the
"Bridge Securities").
OPTIONAL
PREPAYMENT: The Bridge Notes are subject to prepayment, in whole or
in part, upon written notice, at the option of the
Company, at any time at par plus accrued interest to the
prepayment date; subject to the terms of the engagement
letter between Maxxim and NCMI of even date herewith.
MANDATORY
REDEMPTION: The Company will redeem the Bridge Notes with, subject
to certain agreed exceptions, (i) the net proceeds from
the issuance of any subordinated debt or equity
securities, (ii) the net proceeds from the issuance of
any other debt to the extent permitted by the Company's
Senior Bank Facilities, or (iii) the net proceeds from
asset sales in excess of the amount thereof required to
be paid to the banks under the Company's Senior Bank
Facilities.
MANDATORY DEBT
REFINANCING: Upon notice (a "Refinancing Securities Notice") by
NationsBanc Capital Markets, Inc. ("NCMI") as sole or
lead underwriter or placement agent of up to
$100,000,000 in senior subordinated unsecured notes
("Refinancing Securities"), the Company will issue and
sell Refinancing Securities; provided however, that the
interest rates (whether fixed or floating) shall be
determined by NCMI in light of the then prevailing
market conditions but in no event shall the yield on the
Refinancing Securities issued to refinance the Bridge
Notes exceed 13.00% per annum (exclusive of any
reasonable underwriting fees incurred in connection
therewith).
CHANGE OF
CONTROL: In the event of a Change of Control each Bridge Note
holder will have the right to require the Company to
repurchase the Bridge Notes at 100% of principal amount
plus accrued and unpaid interest thereon.
CONDITIONS
5
PRECEDENT: Conditions precedent to initial funding will be usual
and customary for transactions of this type including:
(i) a signed merger agreement reasonably satisfactory to
NationsBridge in addition to the consummation of the
merger on terms reasonably satisfactory to
NationsBridge; (ii) no material adverse change in the
business, operations, prospects, financial or other
conditions of Maxxim, Sterile Concepts or their
subsidiaries taken as a whole; (iii) completion of the
Tender Offer with at least 662/3% of the shares
tendered; (iv) no material adverse change in the
financial markets which, in the reasonable judgment of
NationsBridge, would make it impractical or inadvisable
to proceed with the funding of the Bridge Notes; (v) the
completion of Senior Bank Facilities in the amount of
$165 million on terms satisfactory to NationsBridge;
(vi) the completion of a legal review which includes,
but is not limited to, all suits and actions, material
contracts, insurance, pension liabilities, tax
liabilities, accounting issues, labor issues, leases,
property ownership, contingent liabilities and
compliance with all applicable laws, the results of
which do not reveal any adverse circumstances which
materially and adversely impact the business and
operations of the Issuer, its affiliates and Sterile
Concepts, taken as a whole, in the reasonable judgment
of NationsBridge; (vii) a review by NationsBridge of
environmental due diligence reports including phase I
reports on all property sites if deemed necessary by
NationsBridge the results of which do not reveal any
adverse circumstances which materially and adversely
impact the business and operations of the Issuer, its
affiliates and Sterile Concepts, taken as a whole, in
the reasonable judgment of NationsBridge; (viii) the
receipt of legal opinions reasonably requested by
NationsBridge; (ix) letters from the appropriate
audit/accounting firms acknowledging NationsBridge's
right to rely upon such auditors' certification of the
financial statements of Maxxim and Sterile Concepts or
their predecessors; (x) the receipt of all fees due and
payable to NationsBridge and/or NCMI; (xi) Shareholder
approval from Maxxim and Sterile Concepts and any other
consents required for the merger; (xii) all material
permits, licenses etc. shall remain in full force and
effect after giving effect to the tender and merger.
COVENANTS,
REPS & WARRANTIES,
EVENTS OF DEFAULT: Usual and customary for a transaction of this type, but
in no event more restrictive than the Senior Bank
Facilities.
RIGHT TO RESELL
6
BRIDGE NOTES: NationsBridge shall have the absolute and unconditional
right to resell the Bridge Notes in compliance with
applicable law to any third parties. In addition,
NationsBridge may share its commitment with any third
party.
GOVERNING LAW: New York.
EXPIRATION DATE: The obligation of NationsBridge to purchase the Bridge
Notes will expire upon the earliest of (i) the
completion of the Acquisition Transaction without the
use of the Bridge Notes, (ii) termination of the Merger
Agreement between Maxxim and Sterile Concepts, unless
NationsBridge has breached its Commitment hereunder, or
(iii) acceptance by Sterile Concepts of an offer other
than Maxxim's, or (iv) July 31, 1996.
FEES AND EXPENSES: COMMITMENT FEE: 1.00% of the aggregate principal amount
of the Bridge Notes, due and payable upon the signing of
the Merger Agreement.
FUNDING FEE: 1.00% of the aggregate principal amount of
the Bridge Notes, due and payable upon issuance of the
Bridge Notes.
EXPENSES: Maxxim will pay all reasonable costs and
expenses incurred by NationsBridge in connection with
the issuance of the Bridge Notes and Refinancing
Securities, including fees and expenses of counsel.
EQUITY
ESCROWED: As defined in "Exhibit C".
7
EXHIBIT B
MAXXIM MEDICAL, INC.
SENIOR SUBORDINATED ROLLOVER NOTES
SUMMARY OF INDICATIVE TERMS AND CONDITIONS
ISSUER: Maxxim Medical, Inc., a Delaware corporation, or one of
its affiliates ("Maxxim" or the "Company").
ISSUE: Senior Subordinated Rollover Notes (the "Rollover
Notes").
PRINCIPAL AMOUNT: Up to 100% of the then outstanding Bridge Notes.
MATURITY: 5 years from the Rollover Date.
INTEREST RATE: At the date of issuance of the Rollover Notes (the
"Rollover Date") the interest rate on the Rollover Notes
will be set at the greater of (a) 12.5%, (b) the
Applicable Treasury Rate plus 6.50% (the "Treasury
Spread") and (c) the Base Rate plus the Applicable
Margin on the Bridge Notes in effect on the Rollover
Date (i.e., the Applicable Margin would be 4.00%). Each
3 month period after the Rollover Date the interest rate
shall be reset (the "Interest Reset Date") to the
greatest of (a), (b), or (c) as adjusted in the manner
set out below. In the case of (a) above the rate set on
the Rollover Date shall increase by .50% each 3 month
period, in the case of (b) above the Treasury Spread
shall increase by .50% each 3 month period and in the
case of (c) above the Applicable Margin shall increase
by .50% each 3 month period. Both the interest rate set
at the Rollover Date and on the Interest Reset Date
shall be subject to a cash interest cap of 13.50%.
Additional interest, if any shall be paid in additional
Bridge Notes or accrue subject to a second total
interest cap of 15.50%.
The Interest Reset Date to establish the interest rate
for a given 3 month period shall be 10 business days
prior to the conclusion of the previous period.
INTEREST PAYMENTS: Quarterly in arrears.
GUARANTORS: The Rollover Notes will be guaranteed on a senior
subordinated basis by Maxxim Medical, Inc., a Texas
corporation, and any subsidiaries or other affiliates of
the Company that guarantee the Senior Bank Facilities.
8
OPTIONAL
REDEMPTION: The Rollover Notes will be redeemable at the option of
the Company, in whole or in part, at any time, at par
plus accrued and unpaid interest to the redemption date,
provided, however, that if the Rollover Notes are sold
to third party purchasers on a fixed rate basis no less
favorable to the Company than the then applicable rate
of interest (it being understood that NationsBridge
shall have the right to unilaterally fix the interest
rate on the Rollover Notes in conjunction with such
third party sales and it also being understood that no
such third party sales shall take place unless the
Company has been given 30 days prior notice), the
Rollover Notes will be non-callable for two (2) years
from the date of issuance and will be callable
thereafter at par plus accrued interest plus a premium
equal to the coupon in effect on the date of issuance of
the Rollover Notes declining ratably to par one year
prior to the maturity of the Rollover Notes.
REGISTRATION
RIGHTS: Holders of the Rollover Notes will be entitled to
registration rights which will require that the Company
file a registration statement prior to issuance of the
Rollover Notes with a requirement for effectiveness upon
issuance of the Rollover Notes.
GOVERNING LAW: New York.
FEES: FUNDING FEE: 2.00% of the aggregate principal amount
of the Rollover Notes, due and payable upon issuance of
the Rollover Notes.
EXPENSES: Maxxim will pay all reasonable costs and
expenses incurred by NationsBridge in connection with
the issuance of the Rollover Notes, including fees and
expenses of counsel.
RANKING,
MANDATORY
REDEMPTION,
MANDATORY
REFINANCING,
COVENANTS,
RIGHT TO SELL
ROLLOVER NOTES: Same as the Bridge Notes.
9
CONDITIONS
PRECEDENT TO
ISSUANCE OF
ROLLOVER NOTES: The ability of the Company to issue any Rollover Notes
to redeem any Bridge Notes is subject to the following
conditions being satisfied:
(i) At the time of the issuance of the Rollover Notes,
(x) there shall exist no Event of Default or event
which with notice and/or lapse of time could become
an Event of Default, (y) the representations and
warranties shall be true and correct, (z) no
material adverse change (to be defined) shall have
occurred and be continuing.
(ii) all fees due to NationsBridge and/or NCMI shall
have been paid in full; and
(iii)no order, decree, injunction or judgment enjoining
the issuance of any Rollover Notes shall be in
effect.
EVENTS OF DEFAULT: Usual and customary for this type of transaction.
10
EXHIBIT C
MAXXIM MEDICAL, INC.
EQUITY AMOUNT ESCROWED
If on the date exactly nine months after the Bridge Notes are issued, the Bridge
Notes are still outstanding, the Company agrees to immediately place in escrow
warrants ("Rollover Warrants") to purchase 5.00% of the fully diluted common
stock of the Company exercisable at a nominal price for a period of 7 years. In
the event that any of the Bridge Notes are exchanged for any Rollover Notes,
NationsBridge shall be entitled to retain 100% of the Rollover Warrants.
Any Rollover Warrants to which NationsBridge is not entitled as set forth above
shall be returned to the Company for cancellation following a determination
thereof.
11
EXHIBIT D
MAXXIM MEDICAL, INC.
INDEMNIFICATION PROVISIONS
In the event that NationsBridge or NCMI becomes involved in any capacity in any
action, proceeding or investigation in connection with any matter contemplated
by this Commitment, the Company will reimburse NationsBridge and/or NCMI for its
reasonable legal and other expenses (including the cost of any investigation and
preparation) as they are incurred by NationsBridge or NCMI. The Company also
agrees to indemnify and hold harmless NationsBridge or NCMI and their affiliates
and their respective directors, officers, employees and agents (the "Indemnified
Parties") from and against any and all losses, claims, damages and liabilities,
joint or several, related to or arising out of any matters contemplated by this
engagement, unless and only to the extent that it shall be finally judicially
determined that such losses, claims, damages or liabilities resulted primarily
from the gross negligence or willful misconduct of NationsBridge or NCMI. The
Indemnified Parties will promptly notify the Company upon receipt of written
notice of any claim or threat to institute a claim; provided that any failure by
the Indemnified Parties to give such notice shall not relieve the Company from
the obligation to indemnify the Indemnified Parties, if the Company is otherwise
notified of the claim. In addition, the Company shall only be relieved of its
indemnity obligations to the extent the Company is materially prejudiced by the
failure to notify it.
If any action, claim, investigation or other proceeding is instituted or
threatened against any Indemnified Parties in respect of which indemnity may be
sought hereunder, the Company shall be entitled to assume the defense thereof
with counsel selected by the Company (which counsel shall be reasonably
satisfactory to such Indemnified Parties) and after notice from the Company to
such Indemnified Parties of its election so to assume the defense thereof, the
Company will not be liable to such Indemnified Parties hereunder for any legal
or other expenses subsequently incurred by such Indemnified Parties in
connection with the defense thereof other than reasonable costs of investigation
and such other expenses as have been approved in advance; provided that (i) if
counsel for such Indemnified Parties determines in good faith that there is a
conflict which requires separate representation for the Company and such
Indemnified Parties, or (ii) the Company fails to assume or proceed in a timely
and reasonable manner with the defense of such action or fails to employ counsel
reasonably satisfactory to such Indemnified Parties in any such action, then in
either such event such Indemnified Parties shall be entitled, subject to prior
approval by the Company, such approval not to be unreasonably withheld, to
select one primary counsel and, if necessary, one local counsel, of their own
choice to represent such Indemnified Parties and the Company shall not, or no
longer, be entitled to assume the defense thereof on behalf of such Indemnified
Parties and such Indemnified Parties shall be entitled to indemnification for
the reasonable expenses (including reasonable fees and expenses of such counsel)
to the extent provided in the preceding paragraph. Such counsel shall, to the
fullest extent consistent with its professional responsibilities, cooperate with
the Company and any counsel designated by the Company. Nothing contained herein
shall preclude any Indemnified Parties, at their own expense, from retaining
additional counsel to represent such Indemnified Parties in any action with
respect to which indemnity may be sought from the Company hereunder. The Company
shall not be liable under this agreement for any settlement made by any
Indemnified Parties without the Company's prior written consent, and the Company
agrees to indemnify and hold harmless any Indemnified Parties from and against
any loss or liability by reason of the settlement of any claim or action with
the consent of the Company. The Company
12
shall not settle any such claim or action without the prior written consent of
the Indemnified Parties unless such settlement provides for a full release of
claims against the Indemnified Parties.
If the indemnification provided for herein is unavailable to an Indemnified
Party in respect of any losses, claims, damages, liabilities or judgments
referred to therein, then the Company, 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, liabilities and expenses (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and NationsBridge or NCMI on the other from the
Commitment or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and NationsBridge or NCMI on the other in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
13
<PAGE>
EXHIBIT (c)
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MAXXIM MEDICAL, INC.
MAXXIM ACQUISITION CO.
AND
STERILE CONCEPTS HOLDINGS, INC.
Dated as of June 10, 1996
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TABLE OF CONTENTS
ARTICLE I
THE OFFER
1.1 The Offer.........................................................2
1.2 Company Actions...................................................3
1.3 Composition of the Board of Directors.............................5
1.4 Action By Directors...............................................8
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 The Merger........................................................9
2.2 Conversion of Stock..............................................10
2.3 Surrender of Certificates........................................11
2.4 Payment..........................................................13
2.5 No Further Rights to Transfers...................................15
2.6 Stock Option and Other Plans.....................................15
2.7 Articles of Incorporation of the Surviving
Corporation.....................................................18
2.8 By-Laws of the Surviving Corporation.............................18
2.9 Directors and Officers of the Surviving
Corporation.....................................................18
2.10 Closing.........................................................19
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company....................19
3.2 Representations and Warranties of Parent and Sub.................37
ARTICLE IV
TRANSACTIONS PRIOR TO AND AFTER THE CLOSING DATE
4.1 Access to Information Concerning Properties
and Records.....................................................41
4.2 Confidentiality..................................................42
4.3 Conduct of the Business of the Company
Pending the Closing Date........................................42
4.4 Proxy Statement.................................................45
4.5 Stockholder Approval............................................46
4.6 Reasonable Efforts..............................................46
4.7 No Solicitation of Other Offers.................................47
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4.8 Notification of Certain Matters.................................50
4.9 HSR Act.........................................................50
4.10 Employee Benefits...............................................50
4.11 Directors' and Officers' Insurance;
Indemnification................................................51
4.12 Financing.......................................................54
4.13 Additional Reports and Filings..................................54
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.1 Conditions Precedent to Obligations of Parent,
Sub and the Company.............................................55
5.2 Conditions Precedent to Obligations of the
Company.........................................................56
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1 Termination......................................................56
6.2 Effect of Termination............................................58
ARTICLE VII
MISCELLANEOUS
7.1 Fees and Expenses................................................59
7.2 Representations and Warranties...................................59
7.3 Extension; Waiver................................................60
7.4 Public Announcements.............................................60
7.5 Notices..........................................................61
7.6 Entire Agreement.................................................62
7.7 Binding Effect; Benefit; Assignment..............................62
7.8 Applicable Law...................................................63
7.9 Severability.....................................................63
7.10 "Person" Defined................................................63
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 10, 1996 (this
"Agreement"), by and among MAXXIM MEDICAL, INC., a Delaware corporation
("Parent"), MAXXIM ACQUISITION CO., a Virginia corporation and a wholly-owned
subsidiary of Parent ("Sub"), and STERILE CONCEPTS HOLDINGS, INC., a Virginia
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company (in the case of the Company, based upon the recommendation of a special
committee of independent directors (the "Special Committee")) have approved the
acquisition of the Company by Parent;
WHEREAS, in contemplation thereof it is proposed that Sub will make
a tender offer (the "Offer") to purchase all the issued and outstanding shares
of common stock, no par value, of the Company ("Common Stock"), subject to the
terms and conditions of this Agreement, at a price of $20.00 per share net to
the seller in cash (the "Offer Price");
WHEREAS, to complete such acquisition, the respective Boards of
Directors of Parent, Sub and the Company have approved the merger of Sub into
the Company (the "Merger"), pursuant to and subject to the terms and conditions
of this Agreement; and
WHEREAS, the directors of the Company have unanimously determined
that each of the Offer and the Merger are fair to, and
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in the best interests of, the holders of Common Stock, approved the Offer and
the Merger and recommended the acceptance of the Offer and approval and adoption
of this Agreement by the stockholders of the Company.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER. Provided that this Agreement shall not have been terminated
in accordance with Article VI hereof and none of the events set forth in Annex A
hereto (the "Tender Offer Conditions") shall have occurred and be existing, as
promptly as practicable, but in no event later than the fifth business day after
the date of this Agreement, Sub shall commence the Offer in compliance in all
material respects with all applicable laws, rules and regulations. The
obligations of Sub to accept for payment and promptly to pay for any shares of
Common Stock tendered shall be subject only to the Tender Offer Conditions, any
of which may be waived; provided, however, that, without the consent of the
Company, Sub shall not waive the condition that there shall have been validly
tendered and not withdrawn prior to the expiration of the Offer a number of
shares of Common Stock which represent greater than two-thirds of the total
voting power
-2-
of all shares of capital stock of the Company outstanding on a fully diluted
basis. The Tender Offer Conditions are for the sole benefit of Parent and Sub
and may be asserted by Parent and Sub regardless of the circumstances giving
rise to any such Tender Offer Conditions and, subject to the preceding sentence,
may be waived by Parent and Sub in whole or in part. Sub expressly reserves the
right to modify the terms of the Offer, except that, without the consent of the
Company, Sub shall not (i) reduce the number of shares of Common Stock to be
purchased in the Offer, (ii) reduce the Offer Price, (iii) modify or add to the
Tender Offer Conditions, (iv) extend the Offer beyond the scheduled expiration
date (except that the Offer may be extended to the extent required by law or in
the event the Tender Offer Conditions shall not have been satisfied by the
scheduled expiration date) or (v) change the form of consideration payable in
the Offer.
1.2 COMPANY ACTIONS. The Company hereby consents to the Offer and the
Merger and represents that (a) its Board of Directors (at a meeting duly called
and held), based upon the recommendation of the Special Committee, has (i)
determined by the unanimous vote of the directors that each of the Offer and the
Merger is fair to, and in the best interests of, the holders of Common Stock,
(ii) approved the Offer and the Merger, (iii) recommended acceptance of the
Offer and approval and adoption of this Agreement by the stockholders of the
Company, (iv) taken all
-3-
other action necessary to render the Shareholder Protection Rights Agreement
dated as of March 6, 1996 (the "Rights Agreement") and Articles 14 and 14.1 of
the Virginia Stock Corporation Act inapplicable to the Offer and the Merger; and
(b) Wheat First Butcher Singer has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by the holders of
Common Stock pursuant to the Offer and the Merger is fair to the holders of
Common Stock from a financial point of view, subject to the assumptions and
qualifications contained in such opinion. The Company shall file with the
Securities and Exchange Commission (the "Commission"), as soon as practicable on
the date of the commencement of the Offer a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") containing the
recommendations referred to in clause (a) of the preceding sentence; provided,
however, that such recommendations may be withdrawn, modified or amended at any
time or from time-to-time to the extent required for the Board of Directors of
the Company to comply with its fiduciary obligations under applicable law.
Parent and Sub and their counsel shall be given the opportunity to review the
Schedule 14D-9 prior to its filing with the Commission. The Company agrees to
provide Parent and its counsel with any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments and shall provide Parent and its counsel an
opportunity to participate, including by way of discussions with the SEC or its
staff, in the
-4-
response of the Company to such comments. The Schedule 14D-9 will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the Commission and on the date first published, sent or
given to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or Sub in writing for inclusion in the Schedule 14D-9. The Company,
Parent and Sub each agrees promptly to correct any information provided by it
for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the Commission and disseminated to the stockholders, in each case as and to
the extent required by applicable federal securities laws. In connection with
the Offer, the Company will promptly furnish Sub with mailing labels, security
position listings and any available listings or computer lists containing the
names and addresses of the record holders of the Common Stock as of the most
recent practicable date and shall furnish Sub with such additional information
(including, but not limited to, updated lists of holders of Common Stock and
their addresses, mailing labels and lists of security positions) and such other
-5-
assistance as Sub or its agents may reasonably request in communicating the
Offer to the Company's stockholders.
1.3 COMPOSITION OF THE BOARD OF DIRECTORS. Promptly upon the acceptance
for payment of, and payment by Sub in accordance with the Offer for, greater
than two-thirds of the outstanding shares of Common Stock pursuant to the Offer
(the "Offer Closing"), Sub shall be entitled to designate such number of
directors on the Board of Directors of the Company, rounded up to the next whole
number, as will give Sub, subject to compliance with Section 14(f) of the
Securities Exchange Act of 1934 (the "Exchange Act"), representation on such
Board of Directors equal to at least that number of directors which equals the
product of the total number of directors on the Board of Directors (giving
effect to the directors elected pursuant to this sentence) multiplied by the
percentage that such number of shares of Common Stock so accepted for payment
and paid for or otherwise acquired or owned by Sub or Parent bears to the number
of shares of Common Stock outstanding and the Company and its Board of Directors
shall, at such time, take any and all such action needed to cause Sub's
designees to be appointed to the Company's Board of Directors (including to
cause directors to resign). Notwithstanding the foregoing, neither Parent, Sub
nor the Company shall take any action to remove or replace any member of the
Special Committee after consummation of the Offer and prior to the Effective
Time (as hereinafter defined). If at any time
-6-
prior to the Effective Time there are less than two members of the Special
Committee, as constituted on the date hereof, on the Company's Board of
Directors, Parent, Sub and the Company shall use their reasonable efforts to
ensure that two members (the "Continuing Directors") of the Company's Board of
Directors are either (a) members of the Special Committee (as constituted on the
date hereof) or (b) persons who are neither (i) officers or employees of the
Company nor (ii) associated with or affiliated with, or designated by, Parent.
In the event that both Continuing Directors resign from the Special Committee,
Parent, Sub and the Company shall permit the resigning Continuing Directors to
appoint their successors in their reasonable discretion. The Company shall take
all action requested by Parent which is reasonably necessary to effect any such
election of Parent's designees to the Board of Directors, including mailing to
its stockholders the Information Statement containing the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and
the Company agrees to make such mailing with the mailing of the Schedule 14D-9
so long as Sub shall have provided to the Company on a timely basis all
information required to be included in the Information Statement with respect to
Sub's designees. The Company shall take all action required pursuant to such
Section and Rule to fulfill its obligations under this Section 1.3 and shall
include in the Schedule 14D-9 such information with respect to the Company and
its officers and directors as is required under such Section and
-7-
Rule to fulfill its obligations under this Section 1.3. Parent and Sub will
supply to the Company in writing and be responsible for any information with
respect to Parent and Sub and their respective nominees, officers, directors and
affiliates required by such Section and Rule. In furtherance thereof, the
Company will increase the size of the Company's Board of Directors, or use its
reasonable efforts to secure the resignation of directors, or both, as is
necessary to permit Sub's designees to be elected to the Company's Board of
Directors. Immediately following the Offer Closing, the Company, if so
requested, will use its reasonable efforts to cause persons designated by Sub to
constitute the same percentage of each committee of such board, each board of
directors of each subsidiary of the Company and each committee of each such
board (in each case to the extent of the Company's ability to elect such
persons). At all times prior to the termination of the Option Exercise Period
(as defined in Section 2.6), the composition of the Executive Compensation
Committee of the Board of Directors of the Company shall remain the same as the
Special Committee and the Board of Directors of the Company shall not take any
action to limit or impair the authority of the Executive Compensation Committee
to administer the Plan (as defined in Section 2.6); provided, however, that the
Executive Compensation Committee shall not (i) make any additional grants or
awards of any type pursuant to the Plan, (ii) amend the terms and conditions of
any award made pursuant to the Plan prior to the date of this Agreement, except
as
-8-
contemplated by this Agreement, or (iii) have any authority to act with
respect to any matters other than those relating to stock options previously
granted under the Plan.
1.4 ACTION BY DIRECTORS. Following the election or appointment of
Parent's designees pursuant to Section 1.3 and prior to the Effective Time, and,
so long as there shall be at least one Continuing Director, if requested by a
majority of the Continuing Directors, such designees shall abstain from acting
upon, and the approval of a majority of the Continuing Directors shall be
required to authorize any termination of this Agreement by the Company, any
amendment of this Agreement requiring action by the Board of Directors of the
Company, any extension of time for the performance of any of the obligations or
other acts of Parent or Sub under this Agreement and any waiver of compliance
with any of the covenants, agreements or conditions under this Agreement for the
benefit of the Company.
ARTICLE II
THE MERGER AND RELATED MATTERS
2.1 THE MERGER. (a) Subject to the terms and conditions of this Agreement,
at the time of the Closing (as defined in Section 2.11 hereof), Articles of
Merger (the "Articles of Merger") shall be duly prepared, executed and
acknowledged by Sub and the Company in accordance with the Virginia Stock
Corporation Act and shall be filed on the Closing Date (as defined in Section
-9-
2.10 hereof). The Merger shall become effective upon the issuance by the State
Corporation Commission of the Commonwealth of Virginia of a certificate of
merger with respect to the Merger in accordance with the provisions and
requirements of the Virginia Stock Corporation Act. The date and time when the
Merger shall become effective is hereinafter referred to as the "Effective
Time."
(b) At the Effective Time, Sub shall be merged with and into the
Company and the separate corporate existence of Sub shall cease, and the Company
shall continue as the surviving corporation under the laws of the Commonwealth
of Virginia under the name of "Sterile Concepts Holdings, Inc." (the "Surviving
Corporation").
(c) From and after the Effective Time, the Merger shall have the
effects set forth in Section 13.1-721 of the Virginia Stock Corporation Act.
2.2 CONVERSION OF STOCK. At the Effective Time:
(a) Each share of Common Stock then issued and
outstanding (other than any shares of Common Stock which are held by the Company
or any subsidiary of the Company, or which are held, directly or indirectly, by
Parent or any direct or indirect subsidiary of Parent (including Sub), all of
which shall be canceled and none of which shall receive any payment with respect
thereto) shall, by virtue of the Merger and without any action on the part of
the holder thereof, be converted into and represent
-10-
the right to receive an amount in cash, without interest, equal to the price
paid for each share of Common Stock pursuant to the offer (the "Merger
Consideration"); and
(b) Each share of common stock, no par value, of Sub then issued and
outstanding shall, by virtue of the Merger and without any action on the part of
the holder thereof, become one fully paid and nonassessable share of common
stock, no par value, of the Surviving Corporation.
2.3 SURRENDER OF CERTIFICATES. (a) Concurrently with or prior to the
Effective Time, Parent shall designate a bank or trust company located in the
United States to act as paying agent (the "Paying Agent") for purposes of making
the cash payments contemplated hereby. As soon as practicable after the
Effective Time, Parent shall cause the Paying Agent to mail or otherwise make
available to each holder of a certificate theretofore evidencing shares of
Common Stock (other than those which are held by any subsidiary of the Company
or which are held directly or indirectly by Parent or any direct or indirect
subsidiary of Parent (including Sub) a notice and letter of transmittal advising
such holder of the effectiveness of the Merger and the procedure for
surrendering to the Paying Agent such certificate or certificates which
immediately prior to the Effective Time represented outstanding Common Stock
(the "Certificates") in exchange for the Merger Consideration deliverable in
respect thereof pursuant to this Article II. Upon the surrender for
-11-
cancellation to the Paying Agent of such Certificates, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereon, and any other items specified by the letter of transmittal, the Paying
Agent shall promptly pay to the Person (as defined in Section 7.10 hereof)
entitled thereto the Merger Consideration deliverable in respect thereof. Until
so surrendered, each Certificate shall be deemed, for all corporate purposes, to
evidence only the right to receive upon such surrender the Merger Consideration
deliverable in respect thereof to which such Person is entitled pursuant to this
Article II. No interest shall be paid or accrued in respect of such cash
payments.
(b) If the Merger Consideration (or any portion thereof) is to be
delivered to a Person other than the Person in whose name the Certificates
surrendered in exchange therefor are registered, it shall be a condition to the
payment of the Merger Consideration that the Certificates so surrendered shall
be properly endorsed or accompanied by appropriate stock powers and otherwise in
proper form for transfer, that such transfer otherwise be proper and that the
Person requesting such transfer pay to the Paying Agent any transfer or other
taxes payable by reason of the foregoing or establish to the satisfaction of the
Paying Agent that such taxes have been paid or are not required to be paid.
(c) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact
-12-
by the Person claiming such Certificate to be lost, stolen or destroyed, the
Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect thereof as
determined in accordance with this Article II, provided that, the Person to whom
the Merger Consideration is paid shall, as a condition precedent to the payment
thereof, give the Surviving Corporation a bond in such sum as it may direct or
otherwise indemnify the Surviving Corporation in a manner satisfactory to it
against any claim that may be made against the Surviving Corporation with
respect to the Certificate claimed to have been lost, stolen or destroyed.
2.4 PAYMENT. Concurrently with or immediately prior to the Effective Time,
Parent or Sub shall deposit in trust with the Paying Agent cash in United States
dollars in an aggregate amount equal to the product of (i) the number of shares
of Common Stock outstanding immediately prior to the Effective Time (other than
shares of Common Stock which are held by any subsidiary of the Company or which
are held directly or indirectly by Parent or any direct or indirect subsidiary
of Parent (including Sub)) and (ii) the Merger Consideration (such amount being
hereinafter referred to as the "Payment Fund"). The Payment Fund shall be
invested by the Paying Agent as directed by Parent in direct obligations of the
United States; obligations for which the full faith and credit of the United
States is pledged to provide for the payment of principal and interest;
obligations of the Federal
-13-
Intermediate Liquidity Banks, Federal Home Loan Banks, National Bank for
Cooperatives, Federal Land Banks, The Government National Mortgage Association
or The Federal National Mortgage Association; commercial paper or finance
company paper which is rated not less than P-1, A-1 or F-1 by Moody's Investors
Services, Inc., Standard & Poor's Ratings Services or Fitch Investors Services,
Inc., as the case may be; certificates of deposit or bankers' acceptances of a
bank or trust company having at least $20,000,000 of combined capital and
surplus; or repurchase agreements secured by any one or more of the foregoing
(collectively, "Permitted Investments"); or in money market funds which are
invested in Permitted Investments, and any net earnings with respect thereto
shall be paid to Parent as and when requested by Parent. The Paying Agent shall,
pursuant to irrevocable instructions, make the payments referred to in Section
2.2(a) hereof out of the Payment Fund. The Payment Fund shall not be used for
any other purpose except as otherwise agreed to by Parent. Promptly following
the date which is three months after the Effective Time, the Paying Agent shall
return to Parent all cash, certificates and other instruments in its possession
that constitute any portion of the Payment Fund (other than net earnings on the
Payment Fund which shall be paid to Parent), and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate may surrender such
Certificate to the Surviving Corporation and (subject to applicable abandoned
property, escheat and similar laws) receive
-14-
in exchange therefor the Merger Consideration, without interest, but shall have
no greater rights against the Surviving Corporation or Parent than may be
accorded to general creditors of the Surviving Corporation or Parent under
applicable law. Notwithstanding the foregoing, neither the Paying Agent nor any
party hereto shall be liable to a holder of shares of Common Stock for any
Merger Consideration delivered to a public official pursuant to applicable
abandoned property, escheat and similar laws.
2.5 NO FURTHER RIGHTS TO TRANSFERS. At and after the Effective Time, each
holder of a Certificate shall cease to have any rights as a stockholder of the
Company, except for, in the case of a holder of a Certificate (other than shares
to be canceled pursuant to Section 2.2(a) hereof), the right to surrender his or
her Certificate in exchange for payment of the Merger Consideration, and no
transfer of shares of Common Stock shall be made on the stock transfer books of
the Surviving Corporation. Certificates presented to the Surviving Corporation
after the Effective Time shall be canceled and exchanged for cash as provided in
this Article II. At the close of business on the day of the Effective Time the
stock ledger of the Company with respect to Common Stock shall be closed.
2.6 STOCK OPTION AND OTHER PLANS. During the period (the "Option Exercise
Period") commencing on the date of payment by Sub in accordance with the Offer
and ending on the date that is
-15-
two business days prior to the Effective Time (provided that the Option Exercise
Period shall not be less than three business days in duration), the Company
shall permit holders of stock options issued pursuant to the Company's Stock
Incentive Plan (the "Plan") which shall have become exercisable to exercise such
stock options in accordance with the provisions of the Plan, including without
limitation those provisions relating to (i) the payment of the exercise price of
stock options by the execution of a recourse note (an "Option Note") providing
for the payment of all amounts due under such note through deductions from the
Merger Consideration which shall become due to the maker of the note at the
earlier of the Effective Time or the day that is 120 days from the date of the
Offer Closing and (ii) the payment of the exercise price of stock options by the
delivery of shares of Common Stock. After the termination of the Option Exercise
Period and prior to the Effective Time, the Board of Directors of the Company
(or, if appropriate, any Committee thereof) shall adopt appropriate resolutions
and take all other actions necessary to provide for the cancellation, effective
at the Effective Time, of all the outstanding stock options to purchase Common
Stock (the "Options") heretofore granted under any stock option plan of the
Company (the "Stock Plans"). Immediately prior to the Effective Time, (i) each
Option, whether or not then vested or exercisable, shall no longer be
exercisable for the purchase of shares of Common Stock but shall entitle each
holder thereof, in cancellation and settlement therefor, to payments in
-16-
cash (subject to any applicable withholding taxes and repayment of any
outstanding Option Note, the "Cash Payment"), at the Effective Time, equal to
the product of (x) the total number of shares of Common Stock subject to such
Option, whether or not then vested or exercisable, and (y) the excess of the
Merger Consideration over the exercise price per share of Common Stock subject
to such Option, if any, each such Cash Payment to be paid to each holder of an
outstanding Option at the Effective Time; provided, however, that with respect
to any person subject to Section 16 of the Exchange Act, any such amount shall
be paid as soon as practicable after the first date payment can be made without
liability to such person subject to Section 16(b) of the Exchange Act, and (ii)
each share of Common Stock previously issued in the form of grants of restricted
stock or grants of contingent shares shall fully vest in accordance with their
respective terms. Any then outstanding stock appreciation rights or limited
stock appreciation rights shall be canceled as of immediately prior to the
Effective Time without any payment therefor. As provided herein, the Stock Plans
and any other plan, program or arrangement providing for the issuance or grant
of any other interest in respect of the capital stock of the Company or any
subsidiary (collectively with the Stock Plans, referred to as the "Stock
Incentive Plans") shall terminate as of the Effective Time. The Company will
take all steps to ensure that neither the Company nor any of its subsidiaries is
or will be bound by any Options, other options, warrants, rights or
-17-
agreements which would entitle any Person, other than Parent or its affiliates,
to purchase or own any capital stock of the Surviving Corporation or any of its
subsidiaries or to receive any payment in respect thereof. The Company will use
its best efforts to obtain all necessary consents to ensure that, after the
Effective Time, the only rights of the holders of Options to purchase shares of
Common Stock in respect of such Options will be to receive the Cash Payment in
cancellation and settlement thereof.
2.7 ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. The Articles
of Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation and
shall be amended so that Article III reads in its entirety as follows: "The
total number of shares of stock of all classes which the Corporation has
authority to issue is 1,000 shares of Common Stock, no par value."
2.8 BY-LAWS OF THE SURVIVING CORPORATION. The By-Laws of Sub, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the Surviving
Corporation.
2.9 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. At the Effective
Time, the directors of Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, each of such directors to hold office,
subject to the applicable provisions of the Articles of Incorporation and
By-Laws of the Surviving Corporation, until the next annual stockholders'
meeting of the Surviving Corporation and until their respective successors shall
be duly elected or appointed and qualified. At the Effective Time, the officers
of the Company immediately prior to the Effective Time shall, subject to the
applicable provisions of the Articles of Incorporation and
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By-Laws of the Surviving Corporation, be the officers of the Surviving
Corporation until their respective successors shall be duly elected or appointed
and qualified.
2.10 CLOSING. The closing of the Merger (the "Closing") shall take place
at the offices of McGuire, Woods, Battle & Boothe, L.L.P., Richmond, Virginia,
as soon as practicable after the last of the conditions set forth in Article V
hereof is fulfilled or waived (subject to applicable law) but in no event later
than the fifth business day thereafter, or at such other time and place and on
such other date as Parent and the Company shall mutually agree (the "Closing
Date").
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Parent and Sub as
follows:
(a) DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each of the
Company and its subsidiaries is a corporation
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duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and each such corporation has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Each of the Company and its
subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except in such jurisdictions where the failure to be so qualified or
licensed and in good standing would not have a material adverse effect on the
business, properties, assets, liabilities, operations, results of operations or
condition (financial or otherwise) (the "Condition") of the Company and its
subsidiaries taken as a whole. The Company has made available to Parent and Sub
complete and correct copies of the Articles of Incorporation and By-Laws of the
Company and its subsidiaries, in each case as amended to the date of this
Agreement. The respective Articles of Incorporation and By-laws or other
organizational documents of the subsidiaries of the Company do not contain any
provision limiting or otherwise restricting the ability of the Company to
control such subsidiaries.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. The Company has the
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby. The
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execution, delivery and performance of this Agreement by the Company, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized and approved by its Board of Directors and no other corporate action
on the part of the Company is necessary to authorize the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby (other than the approval of this Agreement by
the holders of more than two-thirds of the shares of Common Stock). This
Agreement has been duly executed and delivered by the Company and is a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles.
(c) CAPITALIZATION.
(i) The authorized capital stock of the Company consists of
25,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, no par value (the "Preferred Stock"). As of the date hereof, (1)
5,526,384 shares of Common Stock are issued and outstanding, (2) 549,616
shares of Common Stock are reserved for issuance pursuant to outstanding
Options granted under the Stock Incentive Plans, (3) no shares of
Preferred Stock are issued and outstanding and (4)
-21-
no shares of Common Stock are held in the Company's treasury. All issued
and outstanding shares of Common Stock have been validly issued and are
fully paid and nonassessable, and are not subject to, nor were they issued
in violation of, any preemptive rights. Except as set forth in this
Section 3.1(c) or on Schedule 3.1(c) hereto, (i) there are no shares of
capital stock of the Company authorized, issued or outstanding, (ii)
there are not as of the date hereof, and at the Effective Time there will
not be, any outstanding or authorized options, warrants, rights,
subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments, contingent
or otherwise, relating to Common Stock or any other shares of capital
stock of the Company, pursuant to which the Company is or may become
obligated to issue shares of Common Stock, any other shares of its capital
stock or any securities convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of the capital stock of the
Company. The Company has no authorized or outstanding bonds, debentures,
notes or other indebtedness the holders of which have the right to vote
(or convertible or exchangeable into or exercisable for securities having
the right to vote) with the stockholders of the Company or any of its
-22-
subsidiaries on any matter ("Voting Debt"). After the Effective time, the
Surviving Corporation will have no obligation to issue, transfer or sell
any Shares of common stock of the Surviving Corporation pursuant to any
Employee Plan (as defined in Section 3.1(i)).
(ii) Schedule 3.1(c)(ii) hereto lists all of the Company's
subsidiaries. All of the outstanding shares of capital stock of each of
the Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable, are not subject to, nor were they issued
in violation of, any preemptive rights, and are owned, of record and
beneficially, by the Company, free and clear of all liens, encumbrances,
options or claims whatsoever. Except as set forth on Schedule 3.1(c)(ii)
hereto, no shares of capital stock of any of the Company's subsidiaries
are reserved for issuance and there are no outstanding or authorized
options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to the capital stock of any
subsidiary of the Company, pursuant to which such subsidiary is or may
become obligated to issue any shares of capital stock of such subsidiary
or any securities convertible into, exchangeable for, or evidencing the
right to subscribe
-23-
for, any shares of such subsidiary. Except for the subsidiaries listed on
Schedule 3.1(c)(ii), the Company does not own, directly or indirectly, any
capital stock or other equity interest in any Person or have any direct or
indirect equity or ownership interest in any Person and neither the
Company nor any of its subsidiaries is subject to any obligation or
requirement to provide funds for or to make any investment (in the form of
a loan, capital contribution or otherwise) to or in any Person. The
Company's subsidiaries have no Voting Debt.
(d) CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (i) the filings
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), are made and the waiting period thereunder has been
terminated or has expired, (ii) the requirements of the Exchange Act relating to
the Proxy Statement and the Offer are met, (iii) the filing of the Articles of
Merger and other appropriate merger documents, if any, as required by the
Virginia Stock Corporation Act, is made and (iv) approval of the Merger by the
holders of more than two-thirds of the outstanding shares of Common Stock, if
required by the Virginia Stock Corporation Act, is obtained, the execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby will not: (1) violate any provision of the
Articles of Incorporation or By-Laws of the Company or of any of its
-24-
subsidiaries, each as amended; (2) violate any statute, ordinance, rule,
regulation, order or decree of any court or of any governmental or regulatory
body, agency or authority applicable to the Company or any of its subsidiaries
or by which any of their respective properties or assets may be bound; (3)
require any filing with, or the procurement of any permit, consent or approval
of, or the giving of any notice to, any governmental or regulatory body, agency
or authority or consent of any other Person; or (4) result in a violation or
breach of, conflict with, constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
payment or acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Company or any of its subsidiaries under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
agreement, lease, franchise agreement or other instrument or obligation to which
the Company or any of its subsidiaries is a party, or by which it or any of
their respective properties or assets may be bound except, in the case of
clauses (2), (3) and (4) above, for such filing, permit, consent, approval or
violation, which could not reasonably be expected to have a material adverse
effect on the Condition of the Company and its subsidiaries, taken as a whole,
or could be reasonably likely to prevent or materially delay consummation of the
transactions contemplated by this Agreement.
-25-
(e) COMPANY REPORTS AND FINANCIAL STATEMENTS. The Company has, prior
to the date of this Agreement, made available to Parent true and complete copies
of all registration statements and periodic reports filed by the Company with
the Commission under the Securities Act of 1933, as amended, and the Exchange
Act since the date of filing with the SEC of Amendment No. 4 to the Company's
Registration Statement on Form S-1 (No. 33-80736) relating to the initial public
offering of shares of its Common Stock (such periodic reports and registration
statements, together with any exhibits, any amendments thereto and information
incorporated by reference therein, are sometimes collectively referred to as the
"Commission Filings"). As of their respective dates, the Commission Filings did
not contain any untrue statement of a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the audited
consolidated balance sheets of the Company as of the end of the fiscal years
ended September 30, 1995, 1994 and 1993 and the audited consolidated statements
of earnings, audited consolidated statements of changes in stockholders' equity
and audited consolidated statements of cash flows included in the Commission
Filings, were prepared in accordance with generally accepted accounting
principles (as in effect from time to time) applied on a consistent basis
(except as may be indicated therein or in the notes or schedules thereto) and
fairly present the consolidated financial position of the Company and its
-26-
consolidated subsidiaries as of the dates thereof and the results of their
operations and changes in financial position for the periods then ended. In
addition, the Company has previously furnished to Parent a true and complete
copy of the unaudited consolidated balance sheet as of March 31, 1996 and the
unaudited consolidated statements of earnings, unaudited consolidated statements
of changes in stockholders' equity and unaudited consolidated statements of cash
flows for the fiscal quarter ended March 31, 1996 (the "Interim Statements"),
all of which were prepared in accordance with generally accepted accounting
principles (as in effect from time to time) applied on a consistent basis
(except as may be indicated therein or in the notes or schedules thereto) and
fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the results of their
operations and changes in financial positions for the periods then ended.
(f) ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule
3.1(f) hereto or as otherwise contemplated by this Agreement, since March 31,
1996 (i) there has not been any material adverse change in the Condition of the
Company and its subsidiaries taken as a whole; (ii) the businesses of the
Company and each of its subsidiaries have been conducted only in the ordinary
course; (iii) neither the Company nor any of its subsidiaries has incurred any
material liabilities (direct, contingent or otherwise) or engaged in any
material transaction
-27-
or entered into any material agreement outside the ordinary course of business;
(iv) there has been no declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company except for
the normal quarterly cash dividend of $.04 per share paid within approximately
10 days after the end of the March 31, 1996 quarter; and (v) there has been no
change by the Company in accounting principles, practices or methods.
(g) COMPLIANCE WITH LAWS. Except as set forth on Schedule 3.1(g)
hereto, the Company and its subsidiaries are in compliance with all applicable
laws, regulations, orders, judgments and decrees except where the failure to so
comply would not have a material adverse effect on the Condition of the Company
and its subsidiaries taken as a whole or could be reasonably likely to prevent
or materially delay consummation of the transactions contemplated by this
Agreement.
(h) LITIGATION. Except as disclosed in the Commission Filings or as
set forth on Schedule 3.1(h) hereto, there is no action, suit, proceeding at law
or in equity, or any arbitration or any administrative or other proceeding by or
before (or to the knowledge of the Company any investigation by) any
governmental or other instrumentality or agency, pending, or, to the knowledge
of the Company, threatened, against or affecting the Company or any of its
subsidiaries, or any of their properties or rights which could have a material
adverse effect on the Condition of
-28-
the Company and its subsidiaries taken as a whole. Except as disclosed in the
Commission Filings or as set forth on Schedule 3.1(h) hereto, neither the
Company nor any of its subsidiaries is subject to any judgment, order or decree
entered in any lawsuit or proceeding which could have a material adverse effect
on the Condition of the Company and its subsidiaries taken as a whole or on the
ability of the Company or any subsidiary to conduct its business as presently
conducted.
(i) EMPLOYEE BENEFIT PLANS.
(i) Schedule 3.1(i) hereto lists all employee benefit plans
and programs, including, without limitation, (w) all retirement, savings
and other pension plans; (x) all health, severance, insurance, disability
and other employee welfare plans; (y) all incentive, vacation, bonus,
stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, other similar employee plans, programs or
arrangements; and (z) all employment, compensation or severance
agreements, that are maintained by the Company for the benefit of which,
or relate to, current employees and former employees of the Company and
its subsidiaries (collectively, the "Employee Plans").
(ii) None of the Employee Plans is a "multiemployer plan" as
defined in Section 3(37) of ERISA.
-29-
(iii) Except as set forth on Schedule 3.1(i) hereto, all
Employee Plans are in compliance in all material respects with the
requirements prescribed by applicable statutes, orders or governmental
rules or regulations currently in effect with respect thereto, and the
Company has performed all material obligations required to be performed by
it under, and is not in any material respect in default under or in
violation of, any of the Employee Plans.
(iv) Except as set forth on Schedule 3.1(i) hereto, each
Employee Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code ("Code") has heretofore been determined by the
Internal Revenue Service to so qualify, and each trust created thereunder
has heretofore been determined by the Internal Revenue Service to so
qualify, and each trust created thereunder has heretofore been determined
by the Internal Revenue Service to be exempt from tax under the provisions
of Section 501(a) of the Code and, to the knowledge of the Company,
nothing has occurred since the date of the most recent determination that
would be reasonably likely to cause any such Employee Plan or trust to
fail to qualify under Section 401(a) or 501(a) of the Code.
(v) The Company has not incurred any material liability to the
Pension Benefit Guaranty
-30-
Corporation ("PBGC") under Section 4001 ET SEQ. of ERISA, except for
premiums required under Section 4007 of ERISA which are not yet due, and
no condition exists that could reasonably be expected to result in the
Company incurring material liability under Title IV of ERISA, either
singly or as a member of any trade or business, whether or not
incorporated, under common control of or affiliated with the Company,
within the meaning of Section 414(b), (c), (m) or (o) of the Code. All
premiums payable to the PBGC have been paid when due.
(vi) The Company has made available to Parent copies of all
Employee Plans and, where applicable, summary plan descriptions, the most
recent Internal Revenue Service determination letters, if applicable, and
annual reports required to be filed within the last year pursuant to ERISA
or the Code with respect to the Employee Plans.
(vii) No prohibited transaction, as defined in Section 4975 of
the Code, has occurred with respect to any Employee Plan that is a pension
plan as defined in Section 3(2) of ERISA.
(viii) Except as set forth on Schedule 3.1(i) hereto, the Company
does not maintain and has not at any time in the past maintained any plan
which constitutes a defined benefit pension plan subject to
-31-
Title IV of ERISA.
(ix) There are no actions, suits or claims pending, threatened
or anticipated (other than routine claims for benefits) with respect to
any Employee Plan.
(x) Except as set forth on Schedule 3.1(i) hereto, no
compensation or benefit that is or will be payable in connection with the
transactions contemplated by this Agreement will be characterized as an
"excess parachute payment" within the meaning of Section 280G of the Code.
(xi) The Company has not made any commitment to establish any
new Employee Plan, to modify any Employee Plan or to increase benefits or
compensation of employees or former employees of the Company (except for
normal increases in compensation consistent with past practices or as
disclosed in Schedule 3.1(i) hereto), nor has any intention to do so been
communicated to employees or former employees of the Company.
(xii) All material employment or compensation agreements
contained within the Employee Plans are in full force and effect, and
neither the Company nor any subsidiary, nor, to the best of the Company's
knowledge, any other party, is in default under any of them. There have
been no claims of default and, to the best knowledge of the Company and
its subsidiaries, there are no facts or
-32-
conditions which if continued, or on notice, will result in a material
default under any of such employment or compensation agreements.
(xiii) Except for severance payment obligations contained in
those certain employment, severance or compensation agreements specified
on Schedule 3.1(i), neither the Company nor any of its subsidiaries will
owe a severance payment or similar obligation to any of their respective
employees, officers or directors as a result of the Offer or the Merger or
the other transactions contemplated by this Agreement.
(j) LIABILITIES. Except as set forth in the Commission Filings, as
set forth on Schedule 3.1(j) hereto or as otherwise contemplated by this
Agreement, neither the Company nor any of its subsidiaries has any material
outstanding claims, liabilities or indebtedness, whether accrued, absolute,
contingent or otherwise, other than liabilities incurred subsequent to March 31,
1996 in the ordinary course of business. Neither the Company nor any of its
subsidiaries is in default in respect of the material terms and conditions of
any indebtedness or other agreement, which default might reasonably be expected
to have a material adverse effect on the Condition of the Company and its
subsidiaries taken as a whole.
(k) BROKER'S OR FINDER'S FEES. Except for Wheat First Butcher Singer
(whose fees and expenses will be paid by the Company in accordance with the
Company's agreement with such
-33-
firm, a true and correct copy of which has been previously delivered to Parent
by the Company), no agent, broker, Person or firm acting on behalf of the
Company is, or will be, entitled to any fee, commission or broker's or finder's
fees from any of the parties hereto, or from any Person controlling, controlled
by, or under common control with any of the parties hereto, in connection with
this Agreement or any of the transactions contemplated hereby.
(l) ENVIRONMENTAL LAWS AND REGULATIONS. Except as disclosed in the
Commission Filings, or as set forth on Schedule 3.1(l) hereto or as would not
individually or in the aggregate have a material adverse affect on the Condition
of the Company or its subsidiaries taken as a whole; (i) the Company and its
subsidiaries are not in violation of any Environmental Law; (ii) no real
property currently or formerly owned, occupied or operated by the Company or any
Subsidiary is contaminated with any Hazardous Substances requiring remediation
under any Environmental Law; (iii) the Company and its subsidiaries are not
subject to liability for any off-site disposal or contamination; (iv) the
Company and its subsidiaries have not received any claims or notices alleging
liability under any Environmental Law; and (v) there are no circumstances
involving the Company or its subsidiaries that could reasonably be expected to
result in any claims, liabilities, costs or restrictions on the ownership, use,
or transfer of any property pursuant to any Environmental Law. "Environmental
Law" means any law, regulation, order, decree,
-34-
opinion or agency requirement relating to noise, odor, Hazardous Substance or
the protection of the environment or human health and safety. "Hazardous
Substance" means any substance that is listed, classified or regulated by any
government authority or any Environmental Law, in any concentration, including
any petroleum products, asbestos or polychlorinated biphenyls.
(m) RIGHTS AGREEMENT; STATE TAKEOVER LAWS. (i) The Company and the
Board of Directors of the Company have taken all necessary action to (i) render
the Rights Agreement and Articles 14 and 14.1 of the Virginia Stock Corporation
Act as well as any other applicable affiliated transaction, control share
acquisition or similar state takeover laws inapplicable with respect to the
Offer, the Merger and the other transactions contemplated by this Agreement and
(ii) ensure that (y) neither Parent nor Sub nor any of their Affiliates (as
defined in the Rights Agreement) or Associates (as defined in the Rights
Agreement) is considered to be an Acquiring Person (as defined in the Rights
Agreement) and (z) the provisions of the Rights Agreement, including the
occurrence of a Separation Time (as defined in the Rights Agreement), are not
and shall not be triggered by reason of the announcement or consummation of the
Offer, the Merger or the consummation of any of the other transactions
contemplated by this Agreement. The Board of Directors of the Company, at a
meeting duly called and held, will take such actions, if any, that may be
necessary for the Rights to be redeemed immediately prior to the acceptance for
payment
-35-
and purchase of any of the outstanding Shares pursuant to the Offer in
accordance with the terms of this Agreement provided that this Agreement shall
not have been terminated in accordance with its terms. The Company has delivered
to Parent a complete and correct copy of the Rights Agreement as amended and
supplemented to the date of this Agreement.
(n) OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Wheat First Butcher Singer, to the effect that, as of the date of
this Agreement, the consideration to be received in the Offer and the Merger by
the Company's stockholders is fair to the Company's stockholders from a
financial point of view, and a complete and correct signed copy of such opinion
has been, or promptly upon receipt thereof will be, delivered to Parent.
(o) TAX RETURNS. Except as set forth on Schedule 3.1(o), within the
times and in the manner prescribed by law, the Company and each subsidiary has
filed all material foreign country, federal, state and local tax returns
required by law, and has paid all material taxes, assessments and penalties due
and payable. Except as set forth on Schedule 3.1(o), all such tax returns, when
filed, were correct and complete in all material respects. Except as set forth
on Schedule 3.1(o), each of the Company and its subsidiaries has withheld and
paid all material taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party. The provisions for
-36-
taxes reflected in the Interim Statements are adequate for any and all material
foreign, federal, state, county and local taxes for the period ending on March
31, 1996, and for all prior periods, whether or not disputed. There are no
present disputes as to material taxes of any nature allegedly due or payable by
the Company or any of its subsidiaries.
(p) MATERIAL CONTRACTS. Except as set forth on Schedule 3.1(p), the
Company has filed as exhibits to the Commission Filings all material contracts
and agreements required to be filed as exhibits to periodic reports under the
Exchange Act, including without limitation the Asset Purchase Agreement dated
October 2, 1995 by and among the Company, Medical Design Concepts, Inc. and John
W. Hoffee, II (collectively, the "Contracts"). To the best knowledge of the
Company, each of the Contracts is in full force and effect. The Company has
complied in all material respects with its obligations under the Contracts and,
except as set forth on Schedule 3.1(p), to the best knowledge of the Company,
there is no default or event which with notice or lapse of time, or both, would
constitute a default by any party to any of the Contracts the cumulative effect
of which might reasonably be expected to have a material adverse effect on the
Condition of the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries has received notice that any party to any of
the Contracts intends to cancel or terminate any of the Contracts or to exercise
or not exercise any options under any of the Contracts.
-37-
3.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Each of Parent and
Sub represents and warrants to the Company as follows:
(a) DUE ORGANIZATION; GOOD STANDING AND CORPORATE POWER. Each of
Parent and Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and the Commonwealth of
Virginia, respectively.
(b) AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of Parent and Sub
has the corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Parent and Sub, and the consummation by each of them of the transactions
contemplated hereby, have been duly authorized by the Boards of Directors of
Parent and Sub. No other corporate action on the part of either of Parent or Sub
is necessary to authorize the execution, delivery and performance of this
Agreement by each of Parent or Sub and the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by each
of Parent and Sub and is a valid and binding obligation of each of Parent and
Sub, enforceable against each of Parent and Sub in accordance with its terms,
except that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equitable principles.
-38-
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (i) the filings
required under the HSR Act are made and the waiting period thereunder has been
terminated or has expired, (ii) the requirements of the Exchange Act relating to
the Proxy Statement and the Offer are met and (iii) the filing of the Articles
of Merger and other appropriate merger documents, if any, as required by the
laws of the Commonwealth of Virginia is made, the execution and delivery of this
Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated hereby will not: (1) violate any provision of the
Articles of Incorporation or By-Laws of Parent or Sub; (2) violate any statute,
ordinance, rule, regulation, order or decree of any court or of any governmental
or regulatory body, agency or authority applicable to Parent or Sub or by which
either of their respective properties or assets may be bound; (3) require any
filing with, or permit, the procurement of any consent or approval of, or the
giving of any notice to any governmental or regulatory body, agency or authority
or any other Person; or (4) result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right or termination, cancellation or acceleration) under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Parent, Sub or any of their
subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, franchise, permit,
-39-
agreement, lease or other instrument or obligation to which Parent or Sub or any
of their subsidiaries is a party, or by which they or their respective
properties or assets may be bound except, in the case of clauses (3) and (4)
above for any such filing, permit, consent, approval or violation, which could
not reasonably be expected to have a material adverse effect on the
Condition of the Parent and Sub, taken as a whole, or could be reasonably likely
to prevent or materially delay consummation of the transactions contemplated by
this Agreement.
(d) OFFER DOCUMENTS, SCHEDULE 14D-9 AND PROXY STATEMENT. The
documents pursuant to which the Offer will be made, including a Tender Offer
Statement on Schedule 14D-1 and Offer to Purchase and related letter of
transmittal (the "Offer Documents"), will comply in all material respects with
the Exchange Act and the rules and regulations thereunder and any other
applicable laws. If at any time prior to the expiration or termination of the
Offer any event occurs which should be described in an amendment or supplement
thereto, Sub will file and disseminate, as required, an amendment or supplement
which complies in all material respects with the Exchange Act and the rules and
regulations thereunder and any other applicable laws. Prior to the filing with
the Commission, the amendment or supplement shall be delivered to the Company
and its counsel. The written information supplied or to be supplied by Parent
and Sub for inclusion in the Proxy Statement and the Schedule 14D-9 of the
Company will not contain any untrue statement of a
-40-
material fact or omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, no representation or warranty is made
with respect to any information with respect to the Company or its officers,
directors and affiliates provided to Parent or Sub by the Company in writing for
inclusion in the Offer Documents or amendments or supplements thereto.
(e) BROKER'S OR FINDER'S FEES. Except for Bear Stearns & Co., Inc.
(whose fees and expenses as financial advisor to Parent and Sub will be paid by
Parent or Sub in accordance with Parent's agreement with such firm, a true and
correct copy of which has been previously delivered to the Company by Parent),
no agent, broker, Person or firm acting on behalf of Parent or Sub is, or will
be, entitled to any fee, commission or broker's or finder's fees from any of the
parties hereto, or from any Person controlling, controlled by or under common
control with any of the parties hereto, in connection with this Agreement or any
of the transactions contemplated hereby.
(f) COMMON STOCK OWNERSHIP. As of the date hereof, none of Parent,
Sub or their affiliates beneficially owns (within the meaning of Rule 13d-3
under the Exchange Act) any shares of Common Stock.
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ARTICLE IV
TRANSACTIONS PRIOR TO AND AFTER THE CLOSING DATE
4.1 ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS. During the
period commencing on the date hereof and ending on the Closing Date, the Company
shall, and shall cause each of its subsidiaries to, upon reasonable notice,
afford Parent and Sub, and their respective counsel, accountants, consultants
and other authorized representatives, reasonable access during normal business
hours to the officers, accountants, counsel, consultants, employees, properties,
books and records of the Company and its subsidiaries in order that they may
have the opportunity to make such investigations as they shall desire of the
affairs of the Company and its subsidiaries. The Company shall furnish promptly
to Parent and Sub (a) a copy of each report, schedule, registration statement
and other document filed by it or its subsidiaries during such period pursuant
to the requirements of federal or state securities laws and (b) all other
information concerning its or its subsidiaries' business, properties and
personnel as Parent and Sub may reasonably request. The Company agrees to cause
its officers and employees to furnish such additional financial and operating
data and other information and respond to such inquiries as Parent and Sub shall
from time to time reasonably request.
4.2 CONFIDENTIALITY. Information obtained by Parent and Sub pursuant to
Section 4.1 hereof shall be subject to the
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provisions of the Confidentiality Agreement between the Company and Parent dated
March 28, 1996.
4.3 CONDUCT OF THE BUSINESS OF THE COMPANY PENDING THE CLOSING DATE. The
Company agrees that, except as permitted, required or specifically contemplated
by, or otherwise described in, this Agreement or otherwise consented to or
approved in writing by Parent, during the period commencing on the date hereof
and ending on the Closing Date:
(a) The Company and each of its subsidiaries will conduct their
respective operations only according to their ordinary and usual course of
business consistent with past practice and will use their reasonable efforts to
preserve intact their respective business organizations, keep available the
services of their officers and employees and maintain satisfactory relationships
with licensors, suppliers, distributors, clients and others having business
relationships with them;
(b) Neither the Company nor any of its subsidiaries shall (i) make
any change in or amendment to its Articles of Incorporation or By-Laws (or
comparable governing documents), each as amended; (ii) issue or sell any shares
of its capital stock (other than in connection with the exercise of Options
outstanding on the date hereof in accordance with the terms and conditions in
effect on the date hereof) or any of its other securities, or issue any
securities convertible into, or options,
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warrants or rights to purchase or subscribe to, or enter into any arrangement or
contract with respect to the issuance or sale of, any shares of its capital
stock or any of its other securities, or make any other changes in its capital
structure; (iii) sell or pledge or agree to sell or pledge any stock owned by it
in any of its subsidiaries; (iv) declare, pay, set aside or make any dividend or
other distribution or payment with respect to, or split, combine, redeem or
reclassify, any shares of its capital stock; (v) except as set forth on Schedule
4.3(b), enter into any contract or commitment with respect to capital
expenditures in excess of $150,000 or enter into any other material contract
except contracts in the ordinary course of business; (vi) acquire a material
amount of assets or securities or release or relinquish any material contract
rights other than in the ordinary course of business; (vii) adopt or amend any
Employee Benefit Plan or non-employee benefit plan or program, employment
agreement, license agreement or retirement agreement, or, except in the ordinary
course of business and consistent with past practice, pay any bonus or
contingent or other extraordinary compensation; (viii) other than in the
ordinary course of business transfer, lease, license, guarantee, sell, mortgage,
pledge, dispose of, encumber or subject to any lien, any assets or incur or
modify any indebtedness or other liability or issue any debt securities or
assume, guarantee or endorse or otherwise as an accommodation become responsible
for the obligations of any person; (ix) agree to the settlement of any material
claim or
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litigation; (x) make any material tax election or settle or compromise
any material tax liability; (xi) make any material change in its method of
accounting or (xii) agree, in writing or otherwise, to take any of the foregoing
actions; and
(c) Except as set forth on Schedule 4.3(c), the Company shall not,
and shall not permit any of its subsidiaries to, (i) take any action, engage in
any transaction or enter into any agreement which would cause any of the
representations or warranties set forth in Section 3.1 hereof to be untrue as of
the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire,
any shares of capital stock of the Company.
4.4 PROXY STATEMENT. If stockholder approval of the Merger is required by
law, as promptly as practicable, the Company will prepare and file a preliminary
Proxy Statement with the Commission and will use its reasonable efforts to
respond to the comments of the Commission in connection therewith and to furnish
all information required to prepare the definitive Proxy Statement (including,
without limitation, financial statements and supporting schedules and
certificates and reports of independent certified public accountants). Promptly
after the expiration or termination of the Offer, if required by the Virginia
Stock Corporation Act in order to consummate the Merger, the Company will cause
the definitive Proxy Statement to be mailed to the stockholders of the Company
and, if necessary, after the definitive Proxy Statement shall have been so
mailed,
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promptly circulate amended, supplemental or supplemented proxy material and, if
required in connection therewith, resolicit proxies. The Company will not use
any proxy material in connection with the meeting of its stockholders without
Parent's prior approval. Prior to filing the preliminary Proxy Statement with
the Commission and mailing the definitive Proxy Statement to the stockholders of
the Company, the Company shall forward copies of such Proxy Statements to Parent
for Parent's review and comment, and otherwise cooperate with Parent in the
preparation, filing and/or distribution of such Proxy Statements.
4.5 STOCKHOLDER APPROVAL. Promptly after the expiration or termination of
the Offer, if required by the Virginia Stock Corporation Act in order to
consummate the Merger, the Company, acting through its Board of Directors, shall
in accordance with applicable law, promptly call a special meeting of the
holders of Common Stock for the purpose of voting upon this Agreement and the
Merger and the Company agrees that this Agreement and the Merger shall be
submitted at such special meeting. The Company shall use its reasonable efforts
to solicit from its stockholders proxies, and shall take all other action
necessary and advisable, to secure the vote of stockholders required by
applicable law to obtain the approval for this Agreement. Subject to Section 4.7
of this Agreement, the Company agrees that it will include in the Proxy
Statement the recommendation of its Board of Directors that holders of Common
Stock approve and adopt this Agreement and
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approve the Merger. Parent will cause all shares of Common Stock owned by Parent
and its affiliates to be voted in favor of the Merger.
4.6 REASONABLE EFFORTS. Subject to the terms and conditions provided
herein and to the fiduciary duties of the Board of Directors of the Company
under applicable law, each of the Company, Parent and Sub shall, and the Company
shall cause each of its subsidiaries to, cooperate and use reasonable efforts to
take, or cause to be taken, all appropriate action, and to make, or cause to be
made, all filings necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, their respective reasonable
efforts to obtain, prior to the Closing Date, all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company and its subsidiaries as are necessary
for consummation of the transactions contemplated by this Agreement and to
fulfill the conditions to the Offer and the Merger. The Company and Parent shall
use their reasonable efforts to consummate the Merger as promptly as
practicable.
4.7 NO SOLICITATION OF OTHER OFFERS. (a) Neither the Company nor any of
its subsidiaries, shall, directly or indirectly, take (and the Company shall not
authorize or permit its or its subsidiaries officers, directors, employees,
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representatives, consultants, investment bankers, attorneys, accountants or
other agents or affiliates, to so take) any action to (i) solicit, encourage,
facilitate or initiate the submission of any Acquisition Proposal or (ii)
participate in any way in discussions or negotiations with, or, furnish any
information to, any Person (other than Parent or Sub) in connection with, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal, PROVIDED, HOWEVER, that the Company may participate in discussions or
negotiations with or furnish information to any third party which makes an
unsolicited, bona fide noncollusive proposal in writing with respect to a
transaction which the Board of Directors of the Company believes is likely to
result in an Acquisition Proposal if the Board of Directors believes (and has
been advised by counsel) that failing to take such action would constitute a
breach of its fiduciary duties. In addition, neither the Board of Directors of
the Company nor any Committee thereof shall withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Parent the approval and
recommendation of the Offer and this Agreement or approve or recommend any
Acquisition Proposal, provided that the Board of Directors (or a Committee
thereof) may recommend to the Company's stockholders an Acquisition Proposal and
in connection therewith withdraw or modify its approval or recommendation of the
Offer or the Merger if (i) the Board of Directors of the Company has determined
that the Acquisition Proposal is a
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Superior Proposal and (ii) simultaneously with such withdrawal, modification or
recommendation, this Agreement is terminated in accordance with Section 6.1(e).
Any actions permitted under, and taken in compliance with, this Section 4.7
shall not be deemed a breach of any other covenant or agreement of such party
contained in this Agreement.
"Acquisition Proposal" shall mean any proposed merger, consolidation,
share exchange or other business combination, sale or other disposition of any
material amount of assets, sale or issuance of shares of capital stock, tender
offer or exchange offer or similar transaction involving the Company or any of
its subsidiaries and a third party. "Superior Proposal" shall mean an
unsolicited, bona fide noncollusive Acquisition Proposal on terms which a
majority of the members of the Special Committee and Board of Directors of the
Company determines in its good faith judgment (based on the advice of
independent financial and legal advisors) to be more favorable to the Company
and its shareholders than the transactions contemplated hereby.
(b) In addition to the obligations of the Company set forth in
paragraph (a), the Company shall advise Parent immediately of any request for
information or of any Acquisition Proposal, or any proposal with respect to any
Acquisition Proposal, the material terms and conditions of such request or
Acquisition Proposal, and the identity of the person making any such Acquisition
Proposal or inquiry. The Company will promptly inform Parent of the status and
details both orally and in
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writing (including amendments or proposed amendments) of any such request,
takeover proposal or inquiry, and will promptly provide Parent with copies of
all such written requests, proposals and inquiries.
(c) Immediately following the purchase of Shares pursuant to the
Offer, the Company will request each person which has heretofore executed a
confidentiality agreement in connection with its consideration of acquiring the
Company or any portion thereof (the "Confidentiality Agreements") other than
Parent to return all confidential information heretofore furnished to such
person by or on behalf of the Company.
4.8 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt notice
to Parent of: (a) any notice of, or other communication relating to, a material
default or event that, with notice or lapse of time or both, might reasonably be
expected to become a material default, received by the Company or any of its
subsidiaries subsequent to the date of this Agreement and prior to the Effective
Time, under any material contract to which the Company or any of its
subsidiaries is a party or is subject; and (b) any material adverse change in
the Condition of the Company and its subsidiaries taken as a whole or the
occurrence of any event which is reasonably likely to result in any such change.
Each of the Company and Parent shall give prompt notice to the other party of
any notice or other communication from any third party alleging that the consent
of such third party is or may be
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required in connection with the transactions contemplated by this Agreement.
4.9 HSR ACT. The Company and Parent shall file, within eight business days
from the date of this Agreement, Notification and Report Forms under the HSR Act
with the Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") and shall use their reasonable
efforts to respond as promptly as practicable to all inquiries received from the
FTC or the Antitrust Division for additional information or documentation.
4.10 EMPLOYEE BENEFITS. Parent agrees that, during the period commencing
at the Effective Time and ending on the second anniversary thereof, the
employees of the Company and its subsidiaries will continue to be provided with
employee benefit plans (other than stock option or other plans involving the
potential issuance of securities of the Company or of Parent) that are in the
aggregate substantially comparable to those currently provided by the Company
and its subsidiaries to such employees. Parent will, and will cause the
Surviving Corporation to, honor employee (or former employee) benefit
obligations and contractual rights existing as of the Effective Time and all
employment or severance agreements, plans or policies adopted by the Board of
Directors of the Company (or any committee thereof) prior to the date hereof and
disclosed to Parent under this Agreement in accordance with their terms.
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4.11 DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. (a) The Articles
of Incorporation and the By-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's Articles of Incorporation and By-laws on the date of this
Agreement, which provisions shall not be amended, repealed or otherwise modified
for a period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who on or prior to the
Effective Time were directors, officers, employees or agents of the Company
("Indemnified Parties"), unless such modification is required by law.
(b) (i) Parent agrees, from and after the purchase of shares of
Common Stock pursuant to the Offer, to indemnify all Indemnified Parties to the
fullest extent permitted by applicable law with respect to all acts and
omissions arising out of such individuals' services as officers, directors,
employees or agents of the Company or any of its subsidiaries or as trustees or
fiduciaries of any plan for the benefit of employees, or otherwise on behalf of,
the Company or any of its subsidiaries, occurring prior to the Effective Time
including, without limitation, the transactions contemplated by this Agreement.
Without limitation of the foregoing, in the event any such Indemnified Party is
or becomes involved in any capacity in any action, proceeding or investigation
in connection with any
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matter, including without limitation, the transactions contemplated by this
Agreement, occurring prior to, and including, the Effective Time, Parent, from
and after the purchase of shares of Common Stock pursuant to the Offer, will pay
as incurred such Indemnified Party's legal and other expenses (including the
cost of any investigation and preparation) incurred in connection therewith.
Parent shall pay all expenses, including attorneys' fees, that may be incurred
by any Indemnified Party in enforcing this Section 4.11 or any action involving
an Indemnified Party resulting from the transactions contemplated by this
Agreement. If for any reason the indemnification provided for in this Section
4.11 is unavailable with respect to any Indemnified Party or insufficient to
hold him or her harmless with respect to any such loss, claim, damage or
liability, then Parent shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect (i) the relative economic interests of
the Company and its affiliates on the one hand and Parent on the other in
connection with the Offer and the Merger to which such loss, claim, damage or
liability relates, (ii) the relative fault of the Company and its affiliates on
the one hand and Parent on the other with respect to such loss, claim, damage or
liability and (iii) any other relevant equitable considerations.
(c) For six years from the Effective Time, Parent shall either (x)
maintain in effect the Company's current
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directors' and officers' liability insurance covering those persons who are
currently covered on the date of this Agreement by the Company's directors' and
officers' liability insurance policy (a copy of which has been heretofore
delivered to Parent); PROVIDED, HOWEVER, that in no event shall Parent be
required to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by the Company for such insurance, which the Company
represents to be $153,000 (exclusive of related commissions) for the twelve
month period ended September 30, 1996; and PROVIDED FURTHER that if the annual
premiums of such insurance coverage exceed such amount, Parent shall be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount and to give prompt written notice
of any reduction in the amount or scope of coverage resulting therefrom to the
directors and officers affected thereby; PROVIDED FURTHER that Parent may
substitute for such Company policies, policies with at least the same coverage
containing terms and conditions which are no less advantageous and provided that
said substitution does not result in any gaps or lapses in coverage with respect
to matters occurring prior to the Effective Time, or (y) cause the Parent's
directors' and officers' liability insurance then in effect to cover those
persons who are covered on the date of this Agreement by the Company's
directors' and officers' liability insurance policy with respect to those
matters covered by the Company's directors' and officers' liability policy.
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4.12 FINANCING. On or before the day on which Sub accepts for payment the
shares of Common Stock pursuant to the Offer, Parent shall have the funds
necessary to consummate the Offer, the Merger and the transactions contemplated
hereby and shall promptly provide Sub with such funds at the times necessary to
discharge the obligations of Parent and Sub in accordance with the terms hereof.
4.13 ADDITIONAL REPORTS AND FILINGS. Prior to the Effective Time, the
Company shall promptly furnish to Parent a copy of any Form 10-Q or other
reports or other filings filed by the Company under the Exchange Act after the
date hereof.
ARTICLE V
CONDITIONS PRECEDENT TO MERGER
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT, SUB AND THE COMPANY.
The respective obligations of Parent and Sub, on the one hand, and the Company,
on the other hand, to effect the Merger are subject to the satisfaction or
waiver (subject to applicable law) at or prior to the Effective Time of each of
the following conditions:
(a) APPROVAL OF COMPANY'S STOCKHOLDERS. To the extent required by
applicable law, this Agreement and the Merger shall have been approved and
adopted by holders of more than two-thirds of the shares of Common Stock of the
Company in accordance with applicable law (if required by applicable law) and
the Company's Articles of Incorporation and By-Laws;
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(b) HSR ACT. Any waiting period (and any extension
thereof) under the HSR Act applicable to the Merger shall have
expired or been terminated;
(c) INJUNCTION. No preliminary or permanent injunction or other
order shall have been issued by any court or by any governmental or regulatory
agency, body or authority which prohibits the consummation of the Offer or the
Merger and the transactions contemplated by this Agreement and which is in
effect at the Effective Time, PROVIDED, HOWEVER, that, in the case of a decree,
injunction or other order, each of the parties shall have used reasonable
efforts to prevent the entry of any such injunction or other order and to appeal
as promptly as possible any decree, injunction or other order that may be
entered;
(d) PAYMENT FOR COMMON STOCK. Sub shall have accepted
for payment and paid for the shares of Common Stock tendered
pursuant to the Offer; and
(e) STATUTES. No statute, rule, regulation, executive order, decree
or order of any kind shall have been enacted, entered, promulgated or enforced
by any court or governmental authority which prohibits the consummation of the
Offer or the Merger or has the effect or making the purchase of the Common Stock
illegal.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. The obligation of
the Company to effect the Merger is also
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subject to the satisfaction or waiver, at or prior to the Effective Time, of
each of the following conditions:
(a) PERFORMANCE BY PARENT AND SUB. Each of Parent and Sub shall have
performed in all material respects all obligations and agreements contained in
Sections 1.3 and 2.4 of this Agreement to be performed or complied with by it
prior to the Closing Date.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Time,
whether before or after approval of the Merger by the Company's stockholders:
(a) by mutual consent of the Company, on the one hand,
and of Parent and Sub, on the other hand;
(b) by either Parent, on the one hand, or the Company, on the other
hand, if any governmental or regulatory agency shall have issued an order,
decree or ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, shares of
Common Stock pursuant to the Offer or the Merger and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by either Parent, on the one hand, or the Company, on the other
hand, if the Offer shall not have been consummated within six months after
commencement of the Offer unless the Offer Closing shall not have occurred
because of a material
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breach of any representation, warranty, obligation, covenant, agreement or
condition set forth in this Agreement on the part of the party seeking to
terminate this Agreement;
(d) by Parent, if the Offer is terminated or expires in accordance
with its terms without Sub having purchased any Common Stock thereunder due to
failure to satisfy any of the conditions set forth in Annex A hereto, unless
such termination or expiration has been caused by or results from the failure of
Parent or Sub to perform in any material respect any of their respective
covenants or agreements contained in this Agreement;
(e) by either Parent, on the one hand, or the Company,
on the other hand, if the Board of Directors of the Company determines that an
Acquisition Proposal will result in a Superior Proposal and the Board believes
(and has been advised in writing by counsel) that a failure to terminate this
Agreement and enter into an agreement to effect the Superior Proposal would
constitute a breach of its fiduciary duties;
(f) by the Company, if Parent or Sub shall have failed to comply in
any material respect with any of the covenants or agreements contained in this
Agreement to be complied with or performed by Parent or Sub at or prior to the
Offer Closing or if Parent or Sub shall have failed to commence the Offer within
the time required by Section 1.1; or
(g) by the Company, if (i) prior to the Offer Closing, any of the
representations and warranties of Parent or Sub contained in this Agreement were
untrue or incorrect in any
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material respect when made or (ii) Parent or Sub shall have terminated the Offer
prior to the Offer Closing or the Offer is terminated or expires in accordance
with its terms.
6.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 6.1 hereof by Parent or Sub, on the one hand, or
the Company, on the other hand, written notice thereof shall forthwith be given
to the other party or parties specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall become void and have no
effect, and there shall be no liability hereunder on the part of Parent, Sub or
the Company, except that Sections 4.2, 7.1 and this Section 6.2 hereof shall
survive any termination of this Agreement. Nothing in this Section 6.2 shall
relieve any party to this Agreement of liability for breach of this Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 FEES AND EXPENSES. (a) Except as provided in paragraph (b) below, all
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
(b) If this Agreement is terminated by Parent pursuant to Section
6.1(e) hereof or pursuant to Section 6.1(d) hereof by
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reason of paragraphs (d) or (f) of Annex A hereof or if, prior to the Offer
Closing, any material representation or warranty made by the Company herein
shall prove to have been untrue or incorrect in any material respect when made
and as a result thereof this Agreement is terminated by Parent pursuant to
Section 6.1(d) hereof by reason of paragraph (e) of Annex A hereof, the Company
shall pay to Parent, within one business day thereafter, the amount of
$3,500,000.
7.2 REPRESENTATIONS AND WARRANTIES. The respective representations and
warranties of the Company, on the one hand, and Parent and Sub, on the other
hand, contained herein or in any certificates or other documents delivered prior
to or at the Closing shall not be deemed waived or otherwise affected by any
investigation made by any party. Each and every such representation and warranty
shall expire with, and be terminated and extinguished by, the Closing and
thereafter none of the Company, Parent or Sub shall be under any liability
whatsoever with respect to any such representation or warranty. This Section 7.2
shall have no effect upon any other obligation of the parties hereto, whether to
be performed hereunder or after the Effective Time.
7.3 EXTENSION; WAIVER. Subject to the provisions of Section 1.1, at any
time prior to the Effective Time, the parties hereto, by action taken by or on
behalf of the respective Boards of Directors of the Company, Parent or Sub, may
(i) extend the
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time for the performance of any of the obligations or acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein by any other applicable party or in any documents,
certificate or writing delivered pursuant hereto by any other applicable party
or (iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of any party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party.
7.4 PUBLIC ANNOUNCEMENTS. The Company, on the one hand, and Parent and
Sub, on the other hand, agree to consult promptly with each other prior to
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated hereby, and shall not issue any such press
release or make any such public statement prior to such consultation and review
by the other party of a copy of such release or statement, unless required by
applicable law.
7.5 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
mailed, certified or registered mail with postage prepaid, or sent by telex,
telegram or telecopier, as follows:
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(a) If to the Company, to it at:
Sterile Concepts Holdings, Inc.
5100 Commerce Road
Richmond, Virginia 23234
Attention: Paul J. Woo, Jr., President
and Chief Executive Officer
with copies to:
McGuire, Woods, Battle, & Boothe, L.L.P.
One James Center
901 East Cary Street
Richmond, Virginia 23219
Attention: Wellford L. Sanders, Jr., Esq.
and Joseph C. Carter, III, Esq.
LeClair Ryan
707 East Main Street
11th Floor
Richmond, Virginia 23219
Attention: J. Benjamin English, Esq.
(b) If to either Parent or Sub, to it at:
Maxxim Medical, Inc.
104 Industrial Boulevard
Sugar Land, Texas 77478
Attention: Kenneth W. Davidson, Chairman of
the Board, President and Chief
Executive Officer
with a copy to:
Boyer, Ewing & Harris Incorporated
9 Greenway Plaza, Suite 3100
Houston, Texas 77046
Attention: John R. Boyer, Jr., Esq. and
J. Randolph Ewing, Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third business day after the
mailing
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thereof, except for a notice of a change of address, which shall be effective
only upon receipt thereof.
7.6 ENTIRE AGREEMENT. This Agreement and the Annex, schedules and other
documents referred to herein or delivered pursuant hereto, collectively contain
the entire understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior agreements and understandings,
oral and written, with respect thereto.
7.7 BINDING EFFECT; BENEFIT; ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties. Nothing
in this Agreement, expressed or implied, is intended to confer on any Person
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except for Section 4.10 and 4.11, which are intended to be for
the benefit of the persons referred to therein, and may be enforced by such
persons.
7.8 APPLICABLE LAW. This Agreement and the legal relations between the
parties hereto shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia, without regard to the conflict of laws rules
thereof.
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7.9 SEVERABILITY. If any term, provision, covenant or restriction
contained in this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
7.10 "PERSON" DEFINED. "Person" shall mean and include an individual, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.
IN WITNESS WHEREOF, each of Parent, Sub and the Company have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
all as of the date first above written.
MAXXIM MEDICAL, INC.
BY:_____________________________________
NAME:
TITLE:
MAXXIM ACQUISITION CO.
BY:_____________________________________
NAME:
TITLE:
-64-
STERILE CONCEPTS HOLDINGS, INC.
BY:_____________________________________
NAME:
TITLE:
-65-
ANNEX A
TO
AGREEMENT AND PLAN OF MERGER
THE CAPITALIZED TERMS IN THIS ANNEX A SHALL HAVE THE MEANINGS SET FORTH IN
THE AGREEMENT TO WHICH IT IS ANNEXED, EXCEPT THAT THE TERM "MERGER AGREEMENT"
SHALL BE DEEMED TO REFER TO THE AGREEMENT TO WHICH THIS ANNEX A IS APPENDED AND
"PURCHASER" SHALL BE DEEMED TO REFER TO SUB.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1c under the Exchange Act, pay
for any shares of Common Stock tendered and may terminate or amend the Offer in
accordance with the Agreement and may postpone the acceptance of, and payment
for, shares of Common Stock, if (i) there shall not have been validly tendered
and not withdrawn prior to the expiration of the Offer a number of shares of
Common Stock which represent more than two-thirds of the total voting power of
all shares of capital stock of the Company outstanding on a fully diluted basis
(the "Minimum Condition"), (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated or (iii) at any time on or after the
date of the Merger Agreement and at or before the time of payment for any such
shares of Common Stock (whether or not any shares of Common Stock have
A-1
theretofore been accepted for payment or paid for pursuant to the Offer) any of
the following shall occur:
(a) any court or domestic government or governmental authority
or agency shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, executive order, decree or injunction or other
order which (i) makes illegal, materially delays or otherwise directly or
indirectly materially restrains or prohibits the Offer or the Merger, (ii)
prohibits or materially limits the ownership or operation by Parent or
Purchaser of all or any material portion of the business or assets of the
Company or compels Parent or Sub to dispose of all or any material portion
of the business or assets of Parent or Purchaser or the Company, or
imposes any limitations on the ability of Parent or Purchaser to conduct
its business or own such assets, (iii) imposes limitations on the ability
of Parent or Sub effectively to exercise full rights of ownership of the
shares of Common Stock, including, without limitation, the right to vote
any shares of Common Stock acquired or owned by Purchaser or Parent on all
matters properly presented to the Company's stockholders, (iv) requires
divestiture by Parent or Purchaser of any shares of Common Stock, or (v)
otherwise materially adversely affects the
A-2
Condition of the Company and its subsidiaries taken as
a whole;
(b) there shall have occurred (i) any general suspension of
trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market, (ii) any material
change in United States or any other currency exchange rates or a
suspension of, or limitation on, the markets therefor, (iii) a declaration
of a banking moratorium or any suspension of payments in respect of banks
in the United States, (iv) the commencement of a war, armed hostilities or
other international or national calamity directly or indirectly involving
the United States and having a material adverse effect on the Company or
materially adversely affecting (or materially delaying) the consummation
of the Offer, (v) from the date of the Merger Agreement through the date
of termination or expiration of the Offer, a decline of at least 25% in
the Standard & Poor's 500 Index or (vi) in the case of any of the
situations described in clauses (i) through (v) inclusive existing at the
date of commencement of the Offer, a material acceleration or worsening
thereof;
(c) all consents, registrations, approvals, permits,
authorizations, notices, reports or other
A-3
filings required to be obtained or made by the Company, Parent or
Purchaser with or from any governmental or regulatory entity in connection
with the execution, delivery and performance of the Merger Agreement, the
Offer and the consummation of the transactions contemplated by the Merger
Agreement shall not have been made or obtained and such failure could
reasonably be expected to have a material adverse effect on the Condition
of the Company and its subsidiaries taken as a whole or could be
reasonably likely to prevent or materially delay consummation of the
transactions contemplated by the Merger Agreement;
(d) the Company's Board of Directors shall have withdrawn,
modified or amended in any respect adverse to Parent or Purchaser its
recommendation of the Offer or the Merger or shall have resolved to do so;
(e) any representation or warranty made by the
Company in the Merger Agreement shall be untrue or incorrect
in any material respect;
(f) there shall have been a breach by the Company
of any of its covenants or agreements in any material
respect contained in the Merger Agreement;
(g) it shall have been publicly disclosed that
any Person (which includes a "person" as such term is
A-4
defined in Section 13(d)(3) of the Exchange Act) other than Purchaser, any
of its affiliates, or any group in which any of them is a member shall
have acquired beneficial ownership of more than 30% of the outstanding
Common Stock or shall have entered into a definitive agreement or an
agreement in principle with the Company with respect to a tender offer or
exchange offer for any Common Stock or a merger, consolidation or other
business combination with or involving the Company; or
(h) the Merger Agreement shall have been terminated in
accordance with its terms; which, in the reasonable judgment of Purchaser,
in any such case and regardless of the circumstances giving rise to any
such condition, makes it inadvisable to proceed with such acceptance for
payment.
The foregoing conditions are for the sole benefit of Parent or Purchaser,
and may be asserted by them or waived in whole or in part at any time and from
time to time in their sole discretion; provided, however, that, without the
consent of the Company, Parent and Sub shall not waive the Minimum Condition.
A-5
Schedules to the Agreement and Plan of Merger have been omitted pursuant
to Item 601(b)(2) of Regulation S-K, are as described therein and will be
furnished to the Commission upon request.
