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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
AMONG
GE MEDICAL SYSTEMS,
A DIVISION OF
GENERAL ELECTRIC COMPANY
TOPAZ MERGER CORP.
AND
LUNAR CORPORATION
DATED AS OF JUNE 2, 2000
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
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ARTICLE I THE MERGER..................................................................................... 2
Section 1.1 THE MERGER........................................................... 2
Section 1.2 EFFECTIVE TIME....................................................... 2
Section 1.3 EFFECTS OF THE MERGER................................................ 2
Section 1.4 CHARTER AND BY-LAWS; DIRECTORS AND OFFICERS.......................... 2
Section 1.5 CONVERSION OF SECURITIES............................................. 3
Section 1.6 PARENT TO MAKE CERTIFICATES AVAILABLE................................ 4
Section 1.7 DIVIDENDS; TRANSFER TAXES; WITHHOLDING............................... 4
Section 1.8 NO FRACTIONAL SECURITIES............................................. 5
Section 1.9 RETURN OF EXCHANGE FUND.............................................. 6
Section 1.10 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK.................. 6
Section 1.11 CLOSING OF COMPANY TRANSFER BOOKS.................................... 6
Section 1.12 LOST CERTIFICATES.................................................... 6
Section 1.13 FURTHER ASSURANCES................................................... 6
Section 1.14 CLOSING.............................................................. 7
ARTICLE II REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.............................................. 7
Section 2.1 ORGANIZATION, STANDING AND POWER..................................... 7
Section 2.2 AUTHORITY............................................................ 7
Section 2.3 CONSENTS AND APPROVALS; NO VIOLATION................................. 8
Section 2.4 PARENT COMMON STOCK TO BE ISSUED IN THE MERGER....................... 9
Section 2.5 SEC DOCUMENTS AND OTHER REPORTS...................................... 9
Section 2.6 REGISTRATION STATEMENT AND PROXY STATEMENT.......................... 10
Section 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS................................ 10
Section 2.8 REORGANIZATION...................................................... 10
Section 2.9 OPERATIONS OF SUB................................................... 11
Section 2.10 BROKERS............................................................. 11
Section 2.11 OWNERSHIP OF COMPANY COMMON STOCK................................... 11
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................... 11
Section 3.1 ORGANIZATION, STANDING AND POWER.................................... 11
Section 3.2 CAPITAL STRUCTURE................................................... 12
Section 3.3 AUTHORITY........................................................... 13
Section 3.4 CONSENTS AND APPROVALS; NO VIOLATION................................ 13
Section 3.5 SEC DOCUMENTS AND OTHER REPORTS..................................... 14
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Section 3.6 REGISTRATION STATEMENT AND PROXY STATEMENT.......................... 15
Section 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS................................ 15
Section 3.8 PERMITS AND COMPLIANCE.............................................. 16
Section 3.9 TAX MATTERS......................................................... 17
Section 3.10 ACTIONS AND PROCEEDINGS............................................. 19
Section 3.11 CERTAIN AGREEMENTS.................................................. 20
Section 3.12 ERISA............................................................... 21
Section 3.13 COMPLIANCE WITH WORKER SAFETY LAWS.................................. 23
Section 3.14 LIABILITIES; PRODUCTS............................................... 23
Section 3.15 LABOR MATTERS....................................................... 24
Section 3.16 INTELLECTUAL PROPERTY............................................... 24
Section 3.17 OPINION OF FINANCIAL ADVISOR........................................ 25
Section 3.18 STATE TAKEOVER STATUTES............................................. 25
Section 3.19 REQUIRED VOTE OF COMPANY SHAREHOLDERS............................... 26
Section 3.20 REORGANIZATION...................................................... 26
Section 3.21 ACCOUNTS RECEIVABLE................................................. 26
Section 3.22 INVENTORIES......................................................... 26
Section 3.23 ENVIRONMENTAL MATTERS............................................... 26
Section 3.24 SUPPLIERS AND DISTRIBUTORS.......................................... 28
Section 3.25 INSURANCE........................................................... 28
Section 3.26 TRANSACTIONS WITH AFFILIATES........................................ 29
Section 3.27 TITLE TO AND SUFFICIENCY OF ASSETS.................................. 29
Section 3.28 BROKERS............................................................. 30
Section 3.29 YEAR 2000........................................................... 30
Section 3.30 NO CONSULTING ACTIVITIES SUBJECT TO HOSPITAL-
PHYSICIAN GAINSHARING RESTRICTIONS.................................. 31
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS.................................................... 31
Section 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER............... 31
Section 4.2 NO SOLICITATION..................................................... 33
Section 4.3 THIRD PARTY STANDSTILL AGREEMENTS................................... 35
Section 4.4 REORGANIZATION...................................................... 35
ARTICLE V ADDITIONAL AGREEMENTS......................................................................... 35
Section 5.1 SHAREHOLDER MEETING................................................. 35
Section 5.2 PREPARATION OF THE REGISTRATION STATEMENT AND THE PROXY STATEMENT... 36
Section 5.3 ACCESS TO INFORMATION............................................... 36
Section 5.4 RULE 145 LETTERS.................................................... 37
Section 5.5 FEES AND EXPENSES................................................... 37
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Section 5.6 COMPANY STOCK OPTIONS............................................... 39
Section 5.7 REASONABLE BEST EFFORTS............................................. 40
Section 5.8 PUBLIC ANNOUNCEMENTS................................................ 41
Section 5.9 STATE TAKEOVER LAWS................................................. 41
Section 5.10 INDEMNIFICATION; DIRECTORS AND OFFICERS INSURANCE................... 41
Section 5.11 NOTIFICATION OF CERTAIN MATTERS..................................... 42
Section 5.12 EMPLOYEE BENEFIT PLANS.............................................. 42
ARTICLE VI CONDITIONS PRECEDENT TO THE MERGER........................................................... 43
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.......... 43
Section 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT THE MERGER........ 44
Section 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO EFFECT THE MERGER.... 44
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER........................................................... 46
Section 7.1 TERMINATION......................................................... 46
Section 7.2 EFFECT OF TERMINATION............................................... 48
Section 7.3 AMENDMENT........................................................... 48
Section 7.4 WAIVER.............................................................. 48
ARTICLE VIII GENERAL PROVISIONS......................................................................... 49
Section 8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
NO OTHER REPRESENTATIONS AND WARRANTIES............................. 49
Section 8.2 NOTICES............................................................. 49
Section 8.3 INTERPRETATION...................................................... 50
Section 8.4 COUNTERPARTS........................................................ 50
Section 8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES...................... 51
Section 8.6 GOVERNING LAW....................................................... 51
Section 8.7 ASSIGNMENT.......................................................... 51
Section 8.8 SEVERABILITY........................................................ 51
Section 8.9 ENFORCEMENT OF THIS AGREEMENT....................................... 51
Section 8.10 PERFORMANCE BY SUB.................................................. 52
Section 8.11 DEFINED TERMS....................................................... 52
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of June 2, 2000 (this
"AGREEMENT"), is among GE Medical Systems, a division of General Electric
Company, a New York corporation ("PARENT"), Topaz Merger Corp., a Wisconsin
corporation and a wholly-owned subsidiary of Parent ("SUB"), and Lunar
Corporation, a Wisconsin corporation (the "COMPANY") (Sub and the Company being
hereinafter collectively referred to as the "CONSTITUENT CORPORATIONS").
RECITALS:
A. The respective Boards of Directors of Parent, Sub and the Company
have approved and declared advisable the merger of Sub with and into the Company
upon the terms and subject to the conditions of this Agreement (the "MERGER"),
and the respective Boards of Directors of Parent, Sub and the Company have
approved and adopted this Agreement;
B. The respective Boards of Directors of Parent and the Company have
determined that the Merger is in the best interest of their respective
shareholders;
C. In order to induce Parent and Sub to enter into this Agreement,
concurrently herewith (i) Parent and the Company are entering into the Stock
Option Agreement dated as of the date hereof (the "STOCK OPTION Agreement") in
the form of the attached EXHIBIT A and (ii) Parent and a shareholder of the
Company are entering into the Shareholder Agreement dated as of the date hereof
(the "SHAREHOLDER AGREEMENT") in the form of the attached EXHIBIT B; and
D. For federal income tax purposes, it is intended by the parties
hereto that the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, the parties agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
hereof, and in accordance with the Wisconsin Business Corporation Law (the
"WBCL"), Sub shall be merged with and into the Company at the Effective Time (as
defined in Section 1.2). Following the Merger, the separate corporate existence
of Sub shall cease and the Company shall continue as the surviving corporation
(the "SURVIVING CORPORATION") and shall succeed to and assume all the rights and
obligations of Sub in accordance with the WBCL. Notwithstanding anything to the
contrary herein, at the election of Parent, any direct wholly-owned Subsidiary
(as hereinafter defined) of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to this Agreement, in form and substance reasonably
satisfactory to Parent and the Company, in order to reflect such substitution.
SECTION 1.2 EFFECTIVE TIME. The Merger shall become effective when
the articles of merger (the "Articles of Merger"), executed in accordance with
the relevant provisions of the WBCL, are received by the Wisconsin Department of
Financial Institutions; PROVIDED, HOWEVER, that, upon mutual consent of the
Constituent Corporations, the Articles of Merger may provide for a later date of
effectiveness of the Merger not more than 30 days after the date the Articles of
Merger are received. When used in this Agreement, the term "EFFECTIVE TIME"
shall mean the date and time at which the Articles of Merger are accepted for
filing or such later time established by the Articles of Merger. The filing of
the Articles of Merger shall be made on the date of the Closing (as defined in
Section 1.14). At the option of Parent, the Surviving Corporation may choose to
file a plan of merger ("Plan of Merger") containing only the terms required by
Section 180.1101(2) of the WBCL with the Articles of Merger in lieu of filing
this Agreement with the Articles of Merger.
SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in this Agreement and applicable provisions of the WBCL.
SECTION 1.4 CHARTER AND BY-LAWS; DIRECTORS AND OFFICERS. (a) The
Articles of Incorporation of the Company in effect at the Effective Time will be
amended in its entirety at the Effective Time to read as set forth in EXHIBIT C
hereto and shall be the Articles of Incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
The By-laws of Sub in effect at the Effective Time will be the By-laws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) The directors of the Sub at the Effective Time shall automatically,
and without further action, be the directors of the Surviving Corporation, until
the earlier
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of their resignation or removal or until their respective successors are duly
elected and qualified, as the case may be. The officers of the Sub at the
Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.5 CONVERSION OF SECURITIES. As of the Effective Time, by
virtue of the Merger and without any action on the part of Sub, the Company or
the holders of any securities of the Constituent Corporations:
(a) Each issued and outstanding share of common stock, par
value $.01 per share, of Sub shall be converted into one validly
issued, fully paid and nonassessable (except to the extent otherwise
provided in Section 180.0622(2)(b) of the WBCL) share of common stock
of the Surviving Corporation.
(b) All shares of Company Common Stock that are held in the
treasury of the Company and any shares of Company Common Stock owned by
Parent or Sub shall automatically be canceled and retired and shall
cease to exist and no capital stock of Parent or other consideration
shall be delivered in exchange therefor.
(c) Subject to the provisions of Section 1.8 hereof, each
share of Common Stock, par value $0.01 per share, of the Company
("COMPANY COMMON STOCK") issued and outstanding immediately prior to
the Effective Time (other than shares to be canceled in accordance with
Section 1.5(b)) shall be converted into the right to receive the number
of shares of common stock, par value $0.16 per share, of the Parent
("PARENT COMMON STOCK") determined by dividing $17.00 by the Average
Parent Share Price (as defined below) and rounding the result to the
nearest one thousandth of a share (the "MERGER CONSIDERATION");
provided, however, that if between the first day of the Valuation
Period (as defined below) and the Effective Time, the outstanding
shares of Parent Common Stock shall have been changed into a different
number of shares or a different class, by reason of any stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Merger Consideration shall be correspondingly
adjusted to the extent appropriate to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares. The "AVERAGE PARENT SHARE PRICE" means the average
of the daily volume-weighted sales prices per share of Parent Common
Stock on the New York Stock Exchange, Inc. for each of the 10
consecutive trading days ending on the trading day which is five
calendar days prior to the Closing Date, or, if such ending date does
not fall on a trading day, then the trading day immediately preceding
the fifth calendar day prior to the Closing Date (the "VALUATION
PERIOD"). All such shares of Company Common Stock, when so converted,
shall no longer be outstanding and shall automatically be canceled and
retired and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right
to receive any dividends and other distributions in accordance with
Section 1.7, certificates representing the shares of Parent
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Common Stock into which such shares are converted and any cash, without
interest, in lieu of fractional shares to be issued or paid in
consideration therefor upon the surrender of such certificate in
accordance with Section 1.6.
SECTION 1.6 PARENT TO MAKE CERTIFICATES AVAILABLE. (a) EXCHANGE OF
CERTIFICATES. Parent shall authorize a bank, trust company, or such other
person or persons as shall be reasonably acceptable to Parent and the Company,
to act as Exchange Agent hereunder (the "EXCHANGE AGENT"). As soon as
practicable after the Effective Time, Parent shall deposit with the Exchange
Agent, in trust for the holders of shares of Company Common Stock converted in
the Merger, certificates representing the shares of Parent Common Stock issuable
pursuant to Section 1.5(c) in exchange for outstanding shares of Company Common
Stock and cash, as required to make payments in lieu of any fractional shares
pursuant to Section 1.8 (such cash and shares of Parent Common Stock, together
with any dividends or distributions with respect thereto, being hereinafter
referred to as the "EXCHANGE FUND"). The Exchange Agent shall deliver the Parent
Common Stock contemplated to be issued pursuant to Section 1.5(c) out of the
Exchange Fund. Except as contemplated by Section 1.9, the Exchange Fund shall
not be used for any other purpose.
(b) EXCHANGE PROCEDURES. As soon as practicable after the Effective
Time, the Exchange Agent shall mail to each record holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock converted in the Merger (the
"CERTIFICATES") a letter of transmittal (which shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall pass, only
upon actual delivery of the Certificates to the Exchange Agent, and shall
contain instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Parent Common Stock and cash in
lieu of fractional shares). Upon surrender for cancellation to the Exchange
Agent of a Certificate held by any record holder of a Certificate, together with
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a certificate representing that
number of whole shares of Parent Common Stock into which the shares represented
by the surrendered Certificate shall have been converted at the Effective Time
pursuant to this Article I, cash in lieu of any fractional share in accordance
with Section 1.8 and certain dividends and other distributions in accordance
with Section 1.7, and any Certificate so surrendered shall forthwith be
canceled.
SECTION 1.7 DIVIDENDS; TRANSFER TAXES; WITHHOLDING. No dividends or
other distributions that are declared on or after the Effective Time on Parent
Common Stock, or are payable to the holders of record thereof on or after the
Effective Time, will be paid to any person entitled by reason of the Merger to
receive a certificate representing Parent Common Stock until such person
surrenders the related Certificate or Certificates, as provided in Section 1.6,
and no cash payment in lieu of fractional shares will be paid to any such person
pursuant to Section 1.8 until such person shall so
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surrender the related Certificate or Certificates. Subject to the effect of
applicable law, there shall be paid to each record holder of a new
certificate representing such Parent Common Stock: (i) at the time of such
surrender or as promptly as practicable thereafter, the amount of any
dividends or other distributions theretofore paid with respect to the shares
of Parent Common Stock represented by such new certificate and having a
record date on or after the Effective Time and a payment date prior to such
surrender; (ii) at the appropriate payment date or as promptly as practicable
thereafter, the amount of any dividends or other distributions payable with
respect to such shares of Parent Common Stock and having a record date on or
after the Effective Time but prior to such surrender and a payment date on or
subsequent to such surrender; and (iii) at the time of such surrender or as
promptly as practicable thereafter, the amount of any cash payable with
respect to a fractional share of Parent Common Stock to which such holder is
entitled pursuant to Section 1.8. In no event shall the person entitled to
receive such dividends or other distributions be entitled to receive interest
on such dividends or other distributions. If any cash or certificate
representing shares of Parent Common Stock is to be paid to or issued in a
name other than that in which the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such exchange that the
Certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the person requesting such exchange shall pay to
the Exchange Agent any transfer or other taxes required by reason of the
issuance of certificates for such shares of Parent Common Stock in a name
other than that of the registered holder of the Certificate surrendered, or
shall establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not applicable. Parent or the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common Stock
such amounts as Parent or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the Code or under
any provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent or the Exchange Agent, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such
deduction and withholding was made by Parent or the Exchange Agent.
SECTION 1.8 NO FRACTIONAL SECURITIES. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates pursuant to this Article I, and no Parent
dividend or other distribution or stock split shall relate to any fractional
share, and no fractional share shall entitle the owner thereof to vote or to any
other rights of a security holder of Parent. In lieu of any such fractional
share, each holder of Company Common Stock who would otherwise have been
entitled to a fraction of a share of Parent Common Stock upon surrender of
Certificates for exchange pursuant to this Article I will be paid an amount in
cash (without interest), rounded to the nearest cent, determined by multiplying
(i) the Average Parent Share Price by (ii) the fractional interest to which such
holder would otherwise be entitled. As promptly as practicable after the
determination of the amount of cash, if any, to be paid to holders of fractional
share interests, the Exchange Agent shall so notify the Parent, and the Parent
shall deposit such amount with the Exchange Agent and shall cause the Exchange
Agent to forward payments to such holders of
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fractional share interests subject to and in accordance with the terms of
Section 1.7 and this Section 1.8.
SECTION 1.9 RETURN OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the former shareholders of the Company for six
months after the Effective Time shall be delivered to Parent, upon demand of
Parent, and any such former shareholders who have not theretofore complied with
this Article I shall thereafter look only to Parent for payment of their claim
for Parent Common Stock, any cash in lieu of fractional shares of Parent Common
Stock and any dividends or distributions with respect to Parent Common Stock.
Neither Parent nor the Surviving Corporation shall be liable to any former
holder of Company Common Stock for any such shares of Parent Common Stock, cash
and dividends and distributions held in the Exchange Fund which is delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 1.10 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Parent Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof (including any cash paid
pursuant to Sections 1.7 and 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Company Common Stock
represented by such Certificates.
SECTION 1.11 CLOSING OF COMPANY TRANSFER BOOKS. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer of
shares of Company Common Stock shall thereafter be made on the records of the
Company. If, after the Effective Time, Certificates are presented to the
Surviving Corporation, the Exchange Agent or the Parent, such Certificates shall
be canceled and exchanged as provided in this Article I.
SECTION 1.12 LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent or the Exchange Agent, the posting by such person of a bond,
in such reasonable amount as Parent or the Exchange Agent may direct as
indemnity against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of Parent Common Stock, any cash in lieu of
fractional shares of Parent Common Stock to which the holders thereof are
entitled pursuant to Section 1.8 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 1.7.
SECTION 1.13 FURTHER ASSURANCES. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
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bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of either Constituent Corporation, all such other acts and things as may
be necessary, desirable or proper to vest, perfect or confirm the Surviving
Corporation's right, title or interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of such Constituent
Corporation and otherwise to carry out the purposes of this Agreement.
SECTION 1.14 CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") and all actions specified in this Agreement to
occur at the Closing shall take place at the offices of Gibson, Dunn & Crutcher
LLP, 200 Park Avenue, New York, New York 10166-0193, at 10:00 a.m., local time,
no later than the second business day following the day on which the last of the
conditions set forth in Article VI shall have been fulfilled or waived (if
permissible) (the "CLOSING DATE") or at such other time and place as Parent and
the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 2.1 ORGANIZATION, STANDING AND POWER. Each of Parent and Sub
is a corporation duly organized, validly existing and in good standing under the
laws of its place of incorporation and has the requisite corporate power and
authority to carry on its business as now being conducted. Each of Parent and
Sub are duly qualified to do business, and are in good standing, in each
jurisdiction where the character of their properties owned or held under lease
or the nature of their activities makes such qualification necessary, except
where the failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect on Parent. For purposes of this
Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when
used with respect to Parent, any change or effect that is or could reasonably be
expected (as far as can reasonably be foreseen at the time) to be materially
adverse to the business, operations, properties, assets, liabilities, employee
relationships, customer or supplier relationships, earnings or results of
operations, or the business prospects and condition of Parent and its
Subsidiaries, taken as a whole.
SECTION 2.2 AUTHORITY. On or prior to the date of this Agreement, the
respective Boards of Directors of Parent and Sub have declared the Merger
advisable and have approved and adopted this Agreement in accordance with the
WBCL. Each of Parent and Sub has all requisite corporate power and authority to
enter
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into this Agreement, Parent has all requisite corporate power and authority to
enter into the Stock Option Agreement and the Shareholder Agreement, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement by Parent and Sub, the execution and delivery of the
Stock Option Agreement and the Shareholder Agreement by Parent and the
consummation by Parent and Sub of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action (including
all Board action) on the part of Parent and Sub, subject to the filing of
appropriate Articles of Merger as required by the WBCL. This Agreement has been
duly executed and delivered by Parent and Sub, the Stock Option Agreement and
the Shareholder Agreement have been duly executed and delivered by Parent, and
(assuming the valid authorization, execution and delivery of this Agreement and
the Stock Option Agreement by the Company, the valid authorization, execution
and delivery of the Shareholder Agreement by the shareholder of the Company that
is a party thereto and the validity and binding effect hereof and thereof on the
Company and such shareholder) this Agreement constitutes the valid and binding
obligation of Parent and Sub enforceable against each of them in accordance with
its terms and the Stock Option Agreement and the Shareholder Agreement
constitute the valid and binding obligation of Parent enforceable against Parent
in accordance with its terms. The filing of a registration statement on Form S-4
with the Securities and Exchange Commission (the "SEC") by Parent under the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "SECURITIES ACT"), for the purpose of registering
the shares of Parent Common Stock to be issued in the Merger (together with any
amendments or supplements thereto, whether prior to or after the effective date
thereof, the "REGISTRATION STATEMENT") has been duly authorized by Parent's
Board of Directors.
SECTION 2.3 CONSENTS AND APPROVALS; NO VIOLATION. Assuming that all
consents, approvals, authorizations and other actions described in this Section
2.3 have been obtained and all filings and obligations described in this Section
2.3 have been made, the execution and delivery of this Agreement, the Stock
Option Agreement and the Shareholder Agreement do not, and the consummation of
the transactions contemplated hereby and thereby and compliance with the
provisions hereof and thereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give to others a
right of termination, cancellation or acceleration of any obligation or result
in the loss of a material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets of
Parent or any of its Subsidiaries under, any provision of (i) the Certificate of
Incorporation or the By-laws of Parent, each as amended to date, (ii) any
provision of the comparable charter or organization documents of any of Parent's
Subsidiaries, (iii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Subsidiaries or (iv) any judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to Parent
or any of its Subsidiaries or any of their respective properties or assets,
other than, in the case of clauses (ii), (iii) or (iv), any such violations,
defaults, rights, losses, liens, security interests, charges or encumbrances
that, individually or in the aggregate, would not have a Material Adverse Effect
on Parent, materially impair the ability of Parent or Sub to perform their
respective obligations
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hereunder or under the Stock Option Agreement or the Shareholder Agreement or
prevent the consummation of any of the transactions contemplated hereby or
thereby. No filing or registration with, or authorization, consent or approval
of, any domestic (federal and state), foreign or supranational court,
commission, governmental body, regulatory agency, authority or tribunal (a
"GOVERNMENTAL ENTITY") is required by or with respect to Parent or any of its
Subsidiaries in connection with the execution and delivery of this Agreement,
the Stock Option Agreement or the Shareholder Agreement by Parent or Sub or is
necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, the Stock Option Agreement or the Shareholder
Agreement, except for (i) in connection, or in compliance, with the provisions
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), the Securities Act and the Securities Exchange Act of 1934, as
amended (together with the rules and regulations promulgated thereunder, the
"EXCHANGE ACT"), (ii) the filing of the Articles of Merger with the Secretary of
State of the State of Wisconsin and appropriate documents with the relevant
authorities of other states in which the Company or any of its Subsidiaries is
qualified to do business, (iii) such filings and consents as may be required
under any environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Merger or by the
transactions contemplated by this Agreement, the Stock Option Agreement, or the
Shareholder Agreement, (iv) such filings, authorizations, orders and approvals
as may be required by state takeover laws (the "STATE TAKEOVER APPROVALS"), (v)
applicable requirements, if any, of state securities or "blue sky" laws ("BLUE
SKY LAWS") and the New York Stock Exchange (the "NYSE"), (vi) as may be required
under foreign laws and (vii) such other consents, orders, authorizations,
registrations, declarations, approvals and filings the failure of which to be
obtained or made would not, individually or in the aggregate, have a Material
Adverse Effect on Parent, materially impair the ability of Parent or Sub to
perform its obligations hereunder or under the Stock Option Agreement or the
Shareholder Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby.
SECTION 2.4 PARENT COMMON STOCK TO BE ISSUED IN THE MERGER. All of
the shares of Parent Common Stock issuable in exchange for Company Common Stock
at the Effective Time in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights created by statute, Parent's Certificate of Incorporation or
By-laws or any agreement to which Parent is a party or by which Parent is bound
and will, when issued, be registered under the Securities Act and the Exchange
Act and registered or exempt from registration under applicable Blue Sky laws.
SECTION 2.5 SEC DOCUMENTS AND OTHER REPORTS. Parent has filed all
required documents with the SEC since January 1, 1995 (the "PARENT SEC
DOCUMENTS"). As of their respective dates, the Parent SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Parent SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The
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consolidated financial statements (including, in each case, any notes thereto)
of Parent included in the Parent SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with United States generally accepted accounting principles (except,
in the case of the unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly presented in all material
respects the consolidated financial position of Parent and its consolidated
Subsidiaries as at the respective dates thereof and the consolidated results of
their operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). Except as disclosed
in the Parent SEC Documents or as required by generally accepted accounting
principles, Parent has not, since March 31, 2000, made any change in the
accounting practices or policies applied in the preparation of financial
statements.
SECTION 2.6 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied in writing by Parent or Sub for inclusion or
incorporation by reference in the Registration Statement or the proxy
statement/prospectus included therein (together with any amendments or
supplements thereto, the "PROXY STATEMENT") relating to the Shareholder Meeting
(as defined in Section 5.1) will (i) in the case of the Registration Statement,
at the time it becomes effective, 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 not misleading or (ii) in the
case of the Proxy Statement, at the time of the mailing of the Proxy Statement,
at the time of the Shareholder Meeting and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to Parent, its officers
and directors or any of its Subsidiaries shall occur which is required to be
described in the Proxy Statement or the Registration Statement, such event shall
be so described, and an appropriate amendment or supplement shall be promptly
filed with the SEC and, as required by law, disseminated to the shareholders of
the Company. The Registration Statement will comply (with respect to Parent) as
to form in all material respects with the provisions of the Securities Act, and
the Proxy Statement will comply (with respect to Parent) as to form in all
material respects with the provisions of the Exchange Act.
SECTION 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed
in the Parent SEC Documents filed with the SEC prior to the date of this
Agreement, since March 31, 2000, there has been no event causing a Material
Adverse Effect on Parent, nor any development that would, individually or in the
aggregate, result in a Material Adverse Effect on Parent.
SECTION 2.8 REORGANIZATION. To the actual knowledge of the Vice
President and Senior Counsel, Taxes of Parent, (i) neither Parent nor any of its
Subsidiaries has taken any action or failed to take any action which action or
failure would jeopardize the qualification of the Merger as a reorganization
within the meaning
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of Section 368(a) of the Code, and (ii) there are no facts that would prevent
the Merger from qualifying as a reorganization within the meaning of Section
368(a) of the Code.
SECTION 2.9 OPERATIONS OF SUB. Sub is a direct, wholly-owned
subsidiary of Parent, was formed solely for the purpose of engaging in the
transactions contemplated hereby, has engaged in no other business activities
and has conducted its operations only as contemplated hereby.
SECTION 2.10 BROKERS. No broker, investment banker or other person,
is entitled to any broker's, finder's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent or Sub.
SECTION 2.11 OWNERSHIP OF COMPANY COMMON STOCK. Neither Parent nor
any of its Affiliates is the beneficial owner (as defined in Rule 13d-3
promulgated under the Exchange Act) of, nor has Parent or any of its Affiliates
within the last three years been the beneficial owner of, Company Common Stock
equal to or greater than ten percent (10%) of the aggregate outstanding Company
Common Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.1 ORGANIZATION, STANDING AND POWER. The Company is a
corporation duly organized and validly existing under the laws of the State of
Wisconsin, has filed with the Wisconsin Department of Financial Institutions the
most recent annual report required to be filed by it, has not filed articles of
dissolution, has a perpetual period of existence and has the requisite corporate
power and authority to carry on its business as now being conducted. Each
Subsidiary of the Company is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it is organized and
has the requisite corporate power and authority to carry on its business as now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power or authority would not, individually or in
the aggregate, have a Material Adverse Effect on the Company. The Company and
each of its Subsidiaries are duly qualified to do business, and are in good
standing, in each jurisdiction where the character of their properties owned or
held under lease or the nature of their activities makes such qualification
necessary, except where the failure to be so qualified would not, individually
or in the aggregate, have a Material Adverse Effect on the Company. For purposes
of this Agreement, "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" mean,
when used with respect to the Company, any change or effect that is or could
reasonably be expected (as far as can reasonably be foreseen at the time) to be
materially adverse to the business, operations, properties, assets, liabilities,
employee relationships, customer or supplier relationships, earnings or results
of operations, or the business prospects and condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole.
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SECTION 3.2 CAPITAL STRUCTURE. (a) As of the date hereof, the
authorized capital stock of the Company consists of 25,000,000 shares of Company
Common Stock. At the close of business on May 31, 2000, (i) 8,594,455 shares of
Company Common Stock were issued and outstanding, all of which were validly
issued, fully paid and nonassessable (except to the extent otherwise provided in
Section 180.0622(2)(b) of the WBCL) and free of preemptive rights, (ii) no
shares of Company Common Stock were held in the treasury of the Company, (iii)
2,488,000 shares of Company Common Stock were reserved for future issuance
pursuant to the Company's Amended and Restated Stock Option Plan, any other
option grants or plans, or pursuant to any plans assumed by the Company in
connection with any acquisition, business combination or similar transaction
(collectively, the "COMPANY STOCK OPTION PLANS"). No shares of Company Common
Stock are held by any Subsidiary of the Company.
(b) Section 3.2 (b) of the letter dated the date hereof and delivered
on the date hereof by the Company to Parent, which relates to this Agreement and
is designated therein as the Company Letter (the "COMPANY LETTER"), contains a
correct and complete list as of the date of this Agreement of each outstanding
option to purchase shares of Company Common Stock issued under the Company Stock
Option Plans (collectively, the "COMPANY STOCK OPTIONS"), including the holder,
date of grant, term, acceleration of vesting or exercisability, if any, exercise
price and number of shares of Company Common Stock subject thereto. Except as
set forth on Section 3.2(b) of the Company Letter and except for the Company
Stock Options, there are no options, warrants, calls, rights or agreements to
which the Company or any of its Subsidiaries is a party or by which any of them
is bound obligating the Company or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of the Company or any of its Subsidiaries or obligating the Company or any
of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, right or agreement.
(c) Except as set forth in Section 3.2 of the Company Letter, there are
no outstanding contractual obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any shares of Company Common Stock or
any capital stock of or any equity interests in the Company or any Subsidiary.
Each outstanding share of capital stock of each Subsidiary of the Company is
duly authorized, validly issued, fully paid and nonassessable (except to the
extent otherwise provided in Section 180.0622(2)(b) of the WBCL) and, except as
disclosed in the Company SEC Documents (defined below) filed prior to the date
of this Agreement, each such share is owned by the Company or another Subsidiary
of the Company, free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on voting
rights, charges and other encumbrances of any nature whatsoever. The Company
does not have any outstanding bonds, debentures, notes or other obligations the
holders of which have the right to vote (or are convertible into or exercisable
for securities having the right to vote) with the shareholders of the Company on
any matter. Section 3.2(c) of the Company Letter contains a correct and complete
list as of the date of this Agreement of each of the Company's Subsidiaries.
Except as set forth on Section 3.2(c) of the Company Letter, as of the date
hereof, neither the Company
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nor any of its Subsidiaries is party to or bound by (x) any agreement or
commitment pursuant to which the Company or any Subsidiary of the Company is or
could be required to register any securities under the Securities Act or (y) any
debt agreements or instruments which grant any rights to vote (contingent or
otherwise) on matters on which shareholders of the Company may vote.
(d) Section 3.2(d) of the Company Letter contains a correct and
complete list as of the date of this Agreement of each entity in which the
Company owns an equity interest (other than a Subsidiary), including the number
of outstanding shares of the stock of each such entity, the percentage interest
represented by the Company's ownership in the entity, and the date of
acquisition of the ownership interest in any such entity.
SECTION 3.3 AUTHORITY. On or prior to the date of this Agreement, the
Board of Directors of the Company has unanimously declared the Merger advisable
and fair to and in the best interest of the Company and its shareholders,
approved and adopted this Agreement in accordance with the WBCL, resolved to
recommend the adoption of this Agreement by the Company's shareholders and
directed that this Agreement be submitted to the Company's shareholders for
adoption. The Company has all requisite corporate power and authority to enter
into this Agreement and the Stock Option Agreement, to consummate the
transactions contemplated by the Stock Option Agreement and, subject, in the
case of the consummation of the Merger, to approval and adoption by the
shareholders of the Company of this Agreement, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the Stock
Option Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company, subject, in the case of
this Agreement, to (x) approval and adoption of this Agreement by the
shareholders of the Company and (y) the filing of the Articles of Merger as
required by the WBCL. This Agreement and the Stock Option Agreement have been
duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by Parent and Sub and
the Stock Option Agreement by Parent and the validity and binding effect of the
Agreement on Parent and Sub and the Stock Option Agreement on Parent) constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms. The filing of the Proxy Statement with the SEC and
the issuance of up to 2,014,067 shares of Company Common Stock pursuant to the
Stock Option Agreement have been duly authorized by the Company's Board of
Directors.
SECTION 3.4 CONSENTS AND APPROVALS; NO VIOLATION. Assuming that all
consents, approvals, authorizations and other actions described in this Section
3.4 have been obtained and all filings and obligations described in this Section
3.4 have been made, and except as set forth in Section 3.4 of the Company
Letter, the execution and delivery of this Agreement and the Stock Option
Agreement do not, and the consummation of the transactions contemplated hereby
and thereby and compliance with the provisions hereof and thereof will not,
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give to others a right of termination,
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cancellation or acceleration of any obligation or result in the loss of a
material benefit 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 provision of (i) the articles of
incorporation of the Company (as amended from time to time, the "COMPANY
CHARTER") or the By-laws of the Company, (ii) any provision of the comparable
charter or organization documents of any of the Company's Subsidiaries, (iii)
any loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
the Company or any of its Subsidiaries or (iv) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Subsidiaries or any of their respective properties or assets, other than, in
the case of clauses (ii), (iii) or (iv), any such violations, defaults, rights,
losses, liens, security interests, charges or encumbrances that, individually or
in the aggregate, would not have a Material Adverse Effect on the Company,
materially impair the ability of the Company to perform its obligations
hereunder or under the Stock Option Agreement or prevent the consummation of any
of the transactions contemplated hereby or thereby. No filing or registration
with, or authorization, consent or approval of, any Governmental Entity is
required by or with respect to the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement or the Stock Option
Agreement by the Company or is necessary for the consummation of the Merger and
the other transactions contemplated by this Agreement or the Stock Option
Agreement, except for (i) in connection, or in compliance, with the provisions
of the HSR Act, the Securities Act and the Exchange Act, (ii) the filing of
Articles of Merger with the Secretary of State of the State of Wisconsin and
appropriate documents with the relevant authorities of other states in which the
Company or any of its Subsidiaries is qualified to do business, (iii) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Merger or by the transactions contemplated by this
Agreement or the Stock Option Agreement, (iv) such filings, authorizations,
orders and approvals as may be required to obtain the State Takeover Approvals,
(v) applicable requirements, if any, of Blue Sky Laws or the Nasdaq National
Market, (vi) as may be required under foreign laws and (vii) such other
consents, orders, authorizations, registrations, declarations, approvals and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on the Company, materially
impair the ability of the Company to perform its obligations hereunder or under
the Stock Option Agreement or prevent the consummation of any of the
transactions contemplated hereby or thereby.
SECTION 3.5 SEC DOCUMENTS AND OTHER REPORTS. The Company has filed all
required documents with the SEC since June 30, 1995 (the "COMPANY SEC
DOCUMENTS"). As of their respective dates, the Company SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and, at the respective times they were filed,
none of the Company SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial statements
(including, in each case, any notes
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thereto) of the Company included in the Company SEC Documents complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with United States generally accepted accounting principles
(except, in the case of the unaudited statements, to the extent permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods involved
(except as may be indicated therein or in the notes thereto) and fairly
presented in all material respects the consolidated financial position of the
Company and its consolidated Subsidiaries as at the respective dates thereof and
the consolidated results of their operations and their consolidated cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments and to any other adjustments described
therein). Except as disclosed in the Company SEC Documents or as required by
generally accepted accounting principles, the Company has not, since June 30,
1999, made any change in the accounting practices or policies applied in the
preparation of financial statements.
SECTION 3.6 REGISTRATION STATEMENT AND PROXY STATEMENT. None of the
information to be supplied by the Company in writing for inclusion or
incorporation by reference in the Registration Statement or the Proxy Statement
will (i) in the case of the Registration Statement, at the time it becomes
effective, 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 not misleading or (ii) in the case of the Proxy Statement, at
the time of the mailing of the Proxy Statement, at the time of the Shareholder
Meeting and at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. If at any time prior to the Effective
Time any event with respect to the Company, its officers and directors or any of
its Subsidiaries shall occur which is required to be described in the Proxy
Statement or the Registration Statement, such event shall be so described, and
an appropriate amendment or supplement shall be promptly filed with the SEC and,
as required by law, disseminated to the shareholders of the Company. The
Registration Statement will comply (with respect to the Company) as to form in
all material respects with the provisions of the Securities Act, and the Proxy
Statement will comply (with respect to the Company) as to form in all material
respects with the provisions of the Exchange Act.
SECTION 3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in Section 3.7 of the Company Letter or as disclosed in the Company SEC
Documents filed with the SEC prior to the date of this Agreement, since June 30,
1999 (i) the Company and its Subsidiaries have not incurred any material
liability or obligation (indirect, direct or contingent), or entered into any
material oral or written agreement or other transaction, that is not in the
ordinary course of business or that would result in a Material Adverse Effect on
the Company, (ii) the Company and its Subsidiaries have not sustained any loss
or interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance) that has had a
Material Adverse Effect on the Company, (iii) there has been no change in the
capital stock of the Company except for the issuance of shares of the Company
Common Stock pursuant to Company Stock Options and no dividend or distribution
of any kind declared,
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paid or made by the Company on any class of its stock, (iv) there has not been
(A) any adoption of a new Company Plan (as hereinafter defined), (B) any
amendment to a Company Plan materially increasing benefits thereunder, (C) any
granting by the Company or any of its Subsidiaries to any executive officer or
other key employee of the Company or any of its Subsidiaries of any increase in
compensation, except in the ordinary course of business consistent with prior
practice or as was required under employment agreements in effect as of the date
of the most recent audited financial statements included in the Company SEC
Documents, (D) any granting by the Company or any of its Subsidiaries to any
such executive officer or other key employee of any increase in severance or
termination agreements in effect as of the date of the most recent audited
financial statements included in the Company SEC Documents or (E) except as set
forth in Section 3.7(iv) of the Company Letter, any entry by the Company or any
of its Subsidiaries into any employment, severance or termination agreement with
any such executive officer or other key employee, (v) there has not been any
material changes in the amount or terms of the indebtedness of the Company and
its Subsidiaries from that described in the Company's 1999 Annual Report on Form
10-K, and (vi) there has been no event causing a Material Adverse Effect on the
Company, nor any development that would, individually or in the aggregate,
result in a Material Adverse Effect on the Company.
SECTION 3.8 PERMITS AND COMPLIANCE. Each of the Company and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "COMPANY Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and no suspension or
cancellation of any of the Company Permits is pending or, to the Knowledge of
the Company (as hereinafter defined), threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company. Neither the Company
nor any of its Subsidiaries is in violation of (A) its charter, by-laws or other
organizational documents, (B) any applicable law, ordinance, administrative, or
governmental rule or regulation, including any consumer protection, equal
opportunity, patient confidentiality, health, health care industry regulation
and third-party reimbursement laws including under any Federal Health Care
Program (as defined in Section 1128B(f) of the U.S. Federal Social Security Act
(together with all regulations promulgated thereunder, the "SSA")), (C) any
order, decree or judgment of any Governmental Entity having jurisdiction over
the Company or any of its Subsidiaries or (D) any Company Permits, except, in
the case of clauses (A), (B), (C) and (D) for any violations that, individually
or in the aggregate, would not have a Material Adverse Effect on the Company.
Without limiting the foregoing, the Company is in compliance, in all material
respects, with all current applicable statutes, rules, regulations or orders
administered or issued by the United States Food and Drug Administration (the
"FDA") or comparable foreign Governmental Entity; the Company does not have
Knowledge of any facts which furnish any reasonable basis for any warning
letters from the FDA, Section 305 notices, or other similar communications from
the FDA or comparable foreign entity; and since April 30, 1997, there have been
no recalls, field notifications, alerts or seizures requested in writing, or to
the Knowledge of the Company, either requested orally or threatened relating to
the Company's products, except as set forth in Section 3.8 of the Company
Letter. The Company's products, where required, are being marketed under valid
510(k) or Pre-Market Approval Applications. To the Knowledge of the Company,
there is no false information or significant omission in any product application
or product-related submission to the FDA or comparable
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foreign Governmental Entity. The Company has obtained all necessary regulatory
approvals from any foreign regulatory agencies related to the products
distributed and sold by the Company. Neither the Company nor any Subsidiary, nor
the officers, directors, managing employees or agents (as those terms are
defined in 42 C.F.R. Section 1001.1001) of the Company or any Subsidiary: (i)
have engaged in any activities which are prohibited under, or are cause for
civil penalties or mandatory or permissive exclusion from, any Federal Health
Care Program under Sections 1128, 1128A, 1128B, or 1877 of SSA or related state
or local statutes, including knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind in
return for, or to induce, the purchase, lease, or order, or the arranging for or
recommending of the purchase, lease or order, of any item or service for which
payment may be made in whole or in part under any such program; (ii) have had a
civil monetary penalty assessed against them under Section 1128A of SSA; (iii)
have been excluded from participation under any Federal Health Care Program; or
(iv) have been convicted (as defined in 42 C.F.R. Section 1001.2) of any of the
categories of offenses described in Sections 1128(a) or 1128(b)(1), (b)(2), or
(b)(3) of SSA. Except as disclosed in the Company SEC Documents filed prior to
the date of this Agreement, there are no contracts or agreements of the Company
or its Subsidiaries having terms or conditions which would have a Material
Adverse Effect on the Company or having covenants not to compete that materially
impair the ability of the Company to conduct its business as currently conducted
or would reasonably be expected to materially impair Parent's ability to conduct
its businesses. Except as set forth in the Company SEC Documents filed prior to
the date of this Agreement, no event of default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event of
default exists or, upon the consummation by the Company of the transactions
contemplated by this Agreement or the Stock Option Agreement, will exist under
any indenture, mortgage, loan agreement, note or other agreement or instrument
for borrowed money, any guarantee of any agreement or instrument for borrowed
money or any lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject, other than any
defaults that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. "KNOWLEDGE OF THE COMPANY" means the actual
knowledge of the directors and executive officers of the Company.
SECTION 3.9 TAX MATTERS. Except as otherwise set forth in Section 3.9
of the Company Letter, (i) the Company and each of its Subsidiaries have timely
filed (taking account of extensions to file that have been properly obtained)
all material Tax Returns (as hereinafter defined) required to have been filed by
it, and such Tax Returns are correct and complete in all material respects; (ii)
the Company and each
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of its Subsidiaries have timely paid (taking account of extensions to pay that
have been properly obtained) all Taxes (as hereinafter defined) required to be
paid by it that are material (either individually or in the aggregate) and that
have been due and will timely pay (taking account of such extensions) all Taxes
required to be paid by it that are material (either individually or in the
aggregate) and that will be due on or prior to the Effective Time (other than
Taxes that are being timely and properly contested in good faith), or where
payment is not yet due or is being contested in good faith, has established in
accordance with United States generally accepted accounting principles an
adequate reserve, which such reserve is adequate notwithstanding the items set
forth in the Company Letter, for the payment of such Taxes; (iii) the Company
and each of its Subsidiaries have complied in all material respects with all
rules and regulations relating to the withholding of Taxes and the remittance of
withheld Taxes; (iv) neither the Company nor any of its Subsidiaries has waived
any statute of limitations in respect of its Taxes; (v) no federal, state,
local, or foreign audits or administrative proceedings, of which the Company or
its Subsidiaries has written notice, or to the Knowledge of the Company, oral
notice, are pending with regard to any material Taxes or material Tax Returns of
the Company or its Subsidiaries and none of them has received a written notice
of any proposed audit or proceeding from the Internal Revenue Service ("IRS") or
any other taxing authority; (vi) no issues that have been raised by the relevant
taxing authority in connection with the examination of Tax Returns required to
have been filed by or with respect to the Company and each of its Subsidiaries
are currently pending, other than issues that, if resolved against the Company
or its Subsidiaries, would not result in the imposition of Taxes that are
material (either individually or in the aggregate); (vii) all deficiencies
asserted or assessments made as a result of any examination of such Tax Returns
by any taxing authority have been paid in full; (viii) to the Knowledge of the
Company, neither the Company nor any of its Subsidiaries has engaged in any
transaction that would constitute a "tax shelter" within the meaning of Section
6111 or 6662 of the Code and that has not been disclosed on an applicable Tax
Return; (ix) neither the Company nor any of its Subsidiaries has submitted a
request for a ruling to the IRS or a State tax authority; (x) neither the
Company nor any of its subsidiaries has made or rescinded any express or deemed
material election relating to Taxes for any period the statute of limitations
with respect to which has not expired; (xi) neither the Company nor any of its
Subsidiaries has changed any of its methods of reporting income or deductions
for Tax purposes from those employed in the preparation of its Tax Returns;
(xii) neither Company nor any of its Subsidiaries has been a member of an
affiliated group of corporations (within the meaning of Section 1504(a)) filing
a consolidated federal income tax return (or a group of corporations filing a
consolidated, combined, or unitary income tax return under comparable provisions
of state, local, or foreign tax law) for any taxable period, other than a group
the common parent of which is Company; (xiii) neither Company nor any of its
Subsidiaries has any obligation under any agreement or arrangement with any
other person with respect to material Taxes of such other person (including
pursuant to Treasury Regulations Section 1.1502-6 or comparable provision of
state, local or foreign tax law) including any liability for Taxes of any
predecessor entity; and (xiv) to the Knowledge of the Company, there are no
facts that would prevent the Merger from qualifying as a "reorganization" within
the meaning of Section 368(a) of the Code (xv) Company has furnished to Parent
true and complete copies of all Tax Returns
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for all periods, the statute of limitations for the assessment of Tax with
respect to which has not expired, (xvi) neither the Company nor any of its
Subsidiaries is a party to any agreement, contract, arrangement, or plan that
has resulted or would result, individually or in the aggregate, in connection
with this Agreement or any change of control of the Company or any of its
Subsidiaries, in the payment of any "excess parachute payments" within the
meaning of Section 280G of the Code; and (xvii) the Company has not made any
payments, and is not party to an agreement that could require it to make any
payments (including any deemed payment of compensation upon exercise of any
option), that would not be fully deductible by reason of Section 162(m) of the
Code.. For purposes of this Agreement: (i) "TAXES" means any federal, state,
local, foreign or provincial income, gross receipts, property, sales, use,
license, franchise, employment, payroll, withholding, alternative or added
minimum, ad valorem, value-added, transfer, excise, capital, or net worth tax,
or other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest thereon or penalty imposed
with respect thereto by any Governmental Entity, whether computed on a separate,
consolidated, unitary, combined, or any other basis, and shall include any
transferee or secondary liability in respect of any tax (whether imposed by law,
contractual agreement, or otherwise), and (ii) "TAX RETURN" means any return,
report or similar statement (including the attached schedules) required to be
filed with respect to any Tax, including any information return, claim for
refund, amended return or declaration of estimated Tax.
SECTION 3.10 ACTIONS AND PROCEEDINGS. Except as set forth in the
Company SEC Documents filed prior to the date of this Agreement, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against or involving the Company or any of its Subsidiaries,
or against or involving any of the present or former directors, officers,
employees, consultants, agents or shareholders of the Company or any of its
Subsidiaries, as such, any of its or their properties, assets or business or any
Company Plan (as hereinafter defined) that, individually or in the aggregate,
would have a Material Adverse Effect on the Company or materially impair the
ability of the Company to perform its obligations hereunder or under the Stock
Option Agreement. Except as set forth in Section 3.10 of the Company Letter,
there are no actions, suits or claims or legal, administrative or arbitrative
proceedings or investigations (including claims for workers' compensation)
pending or, to the Knowledge of the Company, threatened against or involving the
Company or any of its Subsidiaries or any of its or their present or former
directors, officers, employees, consultants, agents or shareholders, as such, or
any of the Company's or the Subsidiaries' properties, assets or business or any
Company Plan that, individually or in the aggregate, would have a Material
Adverse Effect on the Company or materially impair the ability of the Company to
perform its obligations hereunder or under the Stock Option Agreement. There are
no actions, suits, labor disputes or other litigation, legal or administrative
proceedings or governmental investigations pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
or any of its or their present or former officers, directors, employees,
consultants, agents or shareholders, as such, or any of its or their properties,
assets or business relating to the transactions contemplated by this Agreement
and the Stock Option Agreement.
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SECTION 3.11 CERTAIN AGREEMENTS. (a) Except as set forth in Section
3.11(a) of the Company Letter, neither the Company nor any of its Subsidiaries
is a party to any oral or written agreement or plan relating to the compensation
of employees of the Company or its Subsidiaries, including any employment
agreement, severance agreement, stock option plan, stock appreciation rights
plan, restricted stock plan or stock purchase plan, pension plan (as defined in
Section 3(2) of ERISA) or welfare plan (as defined in Section 3(1) of ERISA)
(collectively the "COMPENSATION AGREEMENTS"), any of the benefits of which will
be increased, or the vesting of the benefits of which will be accelerated, by
the occurrence of any of the transactions contemplated by this Agreement or the
Stock Option Agreement or the value of any of the benefits of which will be
calculated on the basis of any of the transactions contemplated by this
Agreement or the Stock Option Agreement. No holder of any option to purchase
shares of Company Common Stock, or shares of Company Common Stock granted in
connection with the performance of services for the Company or its Subsidiaries,
is or will be entitled to receive cash from the Company or any Subsidiary in
lieu of or in exchange for such option or shares as a result of the transactions
contemplated by this Agreement or the Stock Option Agreement except as provided
in Section 5.6. Section 3.11(a) of the Company Letter sets forth (i) for each
officer, director or employee who is a party to, or will receive benefits under,
any Compensation Agreement as a result of the transactions contemplated herein,
the total amount that each such person may receive, or is eligible to receive,
assuming that the transactions contemplated by this Agreement are consummated on
the date hereof, and (ii) the total amount of indebtedness owed to the Company
or its Subsidiaries from each officer, director or employee of the Company and
its Subsidiaries.
(b) Set forth in Section 3.11(b) of the Company Letter is a list of all
contracts that are material to the business of the Company and its Subsidiaries
taken as a whole (whether oral or written), including all distribution
contracts, sole-source supply contracts, national accounts contracts, any
indenture, mortgage, loan agreement, note or other agreement or instrument for
borrowed money, any guarantee of any agreement or instrument for borrowed money
or any material lease, contractual license or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any such Subsidiary is bound or to which any of the properties, assets or
operations of the Company or any such Subsidiary is subject (collectively,
"SIGNIFICANT CONTRACTS"). Prior to the date hereof, the Company has provided
true and complete copies of all such contracts to Parent.
(c) Except as set forth on Section 3.11(c) of the Company Letter, each
Significant Contract is a legal, valid and binding agreement of the Company or
its Subsidiaries, neither the Company nor any of its Subsidiaries (or to the
Knowledge of the Company, any other party thereto) is in default under any
Significant Contract, and none of such Significant Contracts has been canceled
by the other party thereto; each Significant Contract is in full force and
effect and no event has occurred which, with the passage of time or the giving
of notice or both, would constitute a default, event of default or other breach
by the Company or any Subsidiary party thereto which would entitle the other
party to such Significant Contract to terminate the same or declare a
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default or event of default thereunder; the Company and the Subsidiaries are not
in receipt of any claim of default under any such agreement; in each instance,
except where it would not have a Material Adverse Effect on the Company.
SECTION 3.12 ERISA (a) Each Company Plan is listed in Section 3.12(a)
of the Company Letter. With respect to each Company Plan that is maintained in
the United States for the benefit of employees who are not primarily
non-resident aliens (a "U.S. PLAN"), the Company has made available to Parent a
true and correct copy of (i) the three most recent annual reports (Form 5500)
filed with the IRS, (ii) each such U.S. Plan that has been reduced to writing
and all amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to each such U.S. Plan, (iv) a written summary
of each unwritten U.S. Plan, (v) the most recent summary plan description or
other written explanation of each U.S. Plan provided to participants, (vi) the
three most recent actuarial reports or valuations relating to a U.S. Plan
subject to Title IV of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (vii) the most recent determination letter and request
therefor, if any, issued by the IRS with respect to any U.S. Plan intended to be
qualified under section 401(a) of the Code, (viii) any request for a
determination currently pending before the IRS, (ix) all correspondence with the
IRS, the Department of Labor, the SEC or Pension Benefit Guaranty Corporation
relating to any outstanding controversy and (x) all forms and certificate
samples used to comply with Sections 4980, 9801 and 9802 of the Code. Except as
would not have a Material Adverse Effect on the Company, each U.S. Plan complies
in all respects with ERISA, the Code and all other applicable statutes and
governmental rules and regulations. Except as set forth in Section 3.12(a) of
the Company Letter, no "reportable event" (within the meaning of Section 4043 of
ERISA) has occurred with respect to any U.S. Plan for which the 30-day notice
requirement has not been waived. Neither the Company nor any of its Subsidiaries
or ERISA Affiliates (as hereinafter defined) has withdrawn from any Company
Multiemployer Plan (as hereinafter defined) and would not incur any withdrawal
liability if it withdrew from all such Company Multiemployer Plans on the date
of this Agreement. No action has been taken, or is currently being considered,
to terminate or withdraw from any U.S. Plan subject to Title IV of ERISA and, to
the Knowledge of the Company, there is no reason to believe the Pension Benefit
Guaranty Corporation would initiate the termination of any such Plan. No U.S.
Plan, nor any trust created thereunder, has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived.
(b) Except as listed in Section 3.12(b) of the Company Letter, with
respect to the U.S. Plans, no event has occurred and, to the Knowledge of the
Company, there exists no condition or set of circumstances in connection with
which the Company or any Subsidiary or ERISA Affiliate or U.S. Plan fiduciary
could be subject to any liability under the terms of such U.S. Plans, ERISA, the
Code or any other applicable law which would have a Material Adverse Effect on
the Company. All U.S. Plans that are intended to be qualified under Section
401(a) of the Code have been determined by the IRS to be so qualified, or a
timely application for such determination is now pending and to the Knowledge of
the Company, there is no reason why any such U.S. Plan is not so qualified in
operation. Neither the Company nor any of its Subsidiaries or ERISA Affiliates
has been notified by any Company Multiemployer Plan that such Company
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Multiemployer Plan is currently in reorganization or insolvency under and within
the meaning of Section 4241 or 4245 of ERISA or that such Company Multiemployer
Plan intends to terminate or has been terminated under Section 4041A of ERISA.
No event has occurred and, to the Knowledge of the Company, there exists no
condition or set of circumstances that would result in a material increase in
the contributions required to be made to any Company Multiemployer Plan by the
Company or any Subsidiary or ERISA Affiliate. Except as disclosed in Section
3.12(b) of the Company Letter, neither the Company nor any of its Subsidiaries
or ERISA Affiliates has any liability or obligation under any welfare U.S. Plan
to provide benefits after termination of employment to any employee or dependent
other than as required by Section 4980B of the Code.
(c) As used herein, (i) "COMPANY PLAN" means a "pension plan" (as
defined in Section 3(2) of ERISA (other than a Company Multiemployer Plan)), a
"welfare plan" (as defined in Section 3(1) of ERISA), or any other written or
oral bonus, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, restricted stock, stock
appreciation right, holiday pay, vacation, severance, medical, dental, vision,
disability, death benefit, sick leave, fringe benefit, personnel policy,
insurance or other plan, arrangement or understanding, in each case established
or maintained by the Company or any of its Subsidiaries or ERISA Affiliates or
as to which the Company or any of its Subsidiaries or ERISA Affiliates has
contributed or otherwise may have any liability, (ii) "COMPANY MULTIEMPLOYER
PLAN" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
to which the Company or any of its Subsidiaries or ERISA Affiliates is or has
been obligated to contribute or otherwise may have any liability that is
maintained in the United States for the benefit of employees who are not
primarily non-resident aliens, and (iii) "ERISA AFFILIATE" means any trade or
business (whether or not incorporated) which would be considered a single
employer with the Company pursuant to Section 414(b), (c), (m) or (o) of the
Code and the regulations promulgated under those sections or pursuant to Section
4001(b) of ERISA and the regulations promulgated thereunder.
(d) Section 3.12(d) of the Company Letter contains a list of all (i)
severance and employment agreements with employees of the Company and each
Subsidiary and ERISA Affiliate, (ii) severance programs and policies of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees and (iii) plans, programs, agreements and other arrangements of the
Company and each Subsidiary and ERISA Affiliate with or relating to its
employees containing change of control or similar provisions.
(e) Except as set forth in Section 3.12(e) of the Company Letter, with
respect to each Company Plan not subject to United States law (a "COMPANY
FOREIGN BENEFIT PLAN"), except as would not have a Material Adverse Effect on
the Company, (i) the fair market value of the assets of each funded Company
Foreign Benefit Plan, the liability of each insurer for any Company Foreign
Benefit Plan funded through insurance or the reserve shown on the Company's
consolidated financial statements for any unfunded Company Foreign Benefit Plan,
together with any accrued contributions, is sufficient to procure or provide for
the projected benefit obligations, as
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of the Effective Time, with respect to all current and former participants in
such plan in accordance with generally accepted country specific actuarial
assumptions and valuations and no transaction contemplated by this Agreement
shall cause such assets or insurance obligations or book reserve to be less
than such projected benefit obligations; and (ii) each Company Foreign
Benefit Plan required to be registered has been registered and has been
maintained in good standing with the appropriate regulatory authorities.
SECTION 3.13 COMPLIANCE WITH WORKER SAFETY LAWS. The properties,
assets and operations of the Company and its Subsidiaries are in compliance with
all applicable federal, state, local and foreign laws, rules and regulations,
orders, decrees, judgments, permits and licenses relating to public and worker
health and safety (collectively, "WORKER SAFETY LAWS"), except for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on the Company. With respect to such properties, assets and
operations, including any previously owned, leased or operated properties,
assets or operations, there are no past, present or reasonably anticipated
future events, conditions, circumstances, activities, practices, incidents,
actions or plans (other than those taken by subsequent owners of such
properties, assets or operations) of the Company or any of its Subsidiaries that
may interfere with or prevent compliance or continued compliance with applicable
Worker Safety Laws, other than any such interference or prevention as would not,
individually or in the aggregate with any such other interference or prevention,
have a Material Adverse Effect on the Company.
SECTION 3.14 LIABILITIES; PRODUCTS. (a) Except as fully reflected or
reserved against in the financial statements included in the Company's 1999
Annual Report on Form 10-K, or disclosed in the footnotes thereto and as
disclosed in Section 3.14(a) of the Company Letter, the Company and its
Subsidiaries had no liabilities (including Tax liabilities) at the date of such
financial statements, absolute or contingent, other than liabilities that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company, and had no liabilities (including Tax liabilities) that were not
incurred in the ordinary course of business. As of the date hereof, the Company
had less than $250,000 indebtedness for borrowed money.
(b) Except as set forth in Section 3.14(b) of the Company Letter, since
June 30, 1999, neither the Company nor any Subsidiary has received a written, or
to the Knowledge of the Company, oral claim for or based upon breach of product
or service warranty or guaranty or similar claim (other than warranty or
guaranty claims in the ordinary course of business not material in amount or
significance), strict liability in tort, negligent design of product, negligent
provision of services or any other allegation of liability, including or arising
from the materials, design, testing, manufacture, packaging, labeling (including
instructions for use), or sale of its products or from the provision of
services; and, to the Knowledge of the Company, there is no basis for any such
claim which, if asserted, would likely have a Material Adverse Effect on the
Company.
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(c) The Company has provided in Section 3.14(c) of the Company Letter a
schedule of products in development and planned introductions. The Company
reasonably expects the goals set forth therein to be achieved in all material
respects, except for such deviations as would not have a Material Adverse Effect
on the Company. The product and service engineering, development, manufacturing
and quality control processes which have been and are being followed by the
Company are reasonably designed to produce products and services which (i) are
consistent with the claims made about them in the Company's sales brochures and
other statements made about them by or on behalf of the Company, (ii) otherwise
meet the reasonable expectations of customers, (iii) comply with applicable
regulatory requirements and (iv) avoid claims of the type described in Section
3.14(b).
SECTION 3.15 LABOR MATTERS. Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement or labor
contract. Neither the Company nor any of its Subsidiaries has engaged in any
unfair labor practice with respect to any persons employed by or otherwise
performing services primarily for the Company or any of its Subsidiaries (the
"COMPANY BUSINESS PERSONNEL"), and there is no unfair labor practice complaint
or grievance against the Company or any of its Subsidiaries by any person
pursuant to the National Labor Relations Act or any comparable state agency or
foreign law pending or threatened in writing with respect to the Company
Business Personnel, except where such unfair labor practice, complaint or
grievance would not have a Material Adverse Effect on the Company. There is no
labor strike, dispute, slowdown or stoppage pending or, to the Knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
which may interfere with the respective business activities of the Company or
any of its Subsidiaries, except where such dispute, strike or work stoppage
would not have a Material Adverse Effect on the Company.
SECTION 3.16 INTELLECTUAL PROPERTY. "COMPANY INTELLECTUAL PROPERTY"
means all United States and foreign trademarks, trademark registrations,
trademark rights and renewals thereof, trade names, trade name rights, trade
dress, patents, patent rights, patent applications, industrial models,
inventions, invention disclosures, author's rights, designs, utility models,
inventor rights, software, copyrights, copyright registrations and renewals
thereof, servicemarks, servicemark registrations and renewals thereof,
servicemark rights, trade secrets, applications for trademark and servicemark
registrations, know-how, data, confidential information and other proprietary
rights, and any data and information of any nature or form used or held for use
in connection with the businesses of the Company and/or its Subsidiaries as
currently conducted or as currently contemplated by the Company, together with
all applications currently pending or in process for any of the foregoing.
Except as disclosed in the Company SEC Documents filed with the SEC prior to the
date hereof, the Company and its Subsidiaries own, or possess adequate licenses
or other valid rights to use (including the right to sublicense to customers,
suppliers or others as needed), all of the material Company Intellectual
Property that is necessary for the conduct or contemplated conduct of the
Company's or Subsidiaries' businesses. Section 3.16 of the Company Letter lists
each material license or other agreement pursuant to which the Company or any
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Subsidiary has the right to use Company Intellectual Property utilized in
connection with any product of, or service provided by, the Company and its
Subsidiaries, the cancellation or expiration of which would have a Material
Adverse Effect on the Company (the "COMPANY LICENSES"). Except as set forth in
Section 3.16 of the Company Letter, there are no pending, and between the date
hereof and the Effective Time, there shall not be any pending, or to the
Knowledge of the Company, threatened interferences, re-examinations, oppositions
or cancellation proceedings involving any patents or patent rights, trademarks
or trademark rights, or applications therefor, of the Company or any Subsidiary,
except such as may be commenced by Parent or any Subsidiary of Parent and except
such as would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. There is no breach or violation by the Company or by any
Subsidiary under, and, to the Knowledge of the Company, there is no breach or
violation by any other party to, any Company License that is reasonably likely
to give rise to any termination or any loss of rights thereunder. To the
Knowledge of the Company, there has been no unauthorized disclosure or use of
confidential information, trade secret rights, processes and formulas, research
and development results and other know-how of the Company or any Subsidiary, the
value of which to the Company and its Subsidiaries is dependent upon the
maintenance of the confidentiality thereof. The conduct of the business of the
Company and the Subsidiaries as currently conducted or contemplated in
connection with the introduction of planned new products and services does not
and will not infringe upon or conflict with, in any way, any license, trademark,
trademark right, trade name, trade name right, patent, patent right, industrial
model, invention, service mark, service mark right, copyright, trade secret or
any other intellectual property rights of any third party. Except as disclosed
in the Company SEC Documents filed with the SEC prior to the date hereof or in
Section 3.16 of the Company Letter, to the Knowledge of the Company there are no
infringements of, or conflicts with, any Company Intellectual Property. Except
as set forth in Section 3.16 of the Company Letter, neither the Company nor any
Subsidiary has licensed or otherwise permitted the use by any third party of any
proprietary information or Company Intellectual Property on terms or in a manner
which, individually or in the aggregate, would have a Material Adverse Effect on
the Company.
SECTION 3.17 OPINION OF FINANCIAL ADVISOR. The Company will have
received the written opinion of Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") dated the date hereof to the effect that, as of the date
hereof, the Merger Consideration is fair to the Company's shareholders from a
financial point of view, a copy of which opinion has been delivered to Parent.
SECTION 3.18 STATE TAKEOVER STATUTES. The Board of Directors of the
Company has, to the extent such statute is applicable, taken all action
(including appropriate approvals of the Board of Directors of the Company)
necessary to render the provisions of Section 180.1140 through Section 180.1144
of the WBCL inapplicable to the Merger, this Agreement, the Stock Option
Agreement, the Shareholder Agreement, and the transactions contemplated hereby
and thereby. To the Knowledge of the Company, no other state takeover statute or
similar charter or bylaw provisions are applicable to the Merger, this
Agreement, the Stock Option Agreement, and the Shareholder Agreement and the
transactions contemplated hereby and thereby.
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SECTION 3.19 REQUIRED VOTE OF COMPANY SHAREHOLDERS. The
affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock is required to adopt this Agreement. No other vote of the
security holders of the Company is required by law, the Company Charter or the
By-laws of the Company or otherwise in order for the Company to consummate the
Merger and the transactions contemplated hereby and in the Stock Option
Agreement.
SECTION 3.20 REORGANIZATION. To the Knowledge of the Company,
neither it nor any of its Subsidiaries has taken any action or failed to take
any action which action or failure would jeopardize the qualification of the
Merger as a reorganization within the meaning of Section 368(a) of the Code.
SECTION 3.21 ACCOUNTS RECEIVABLE. All of the accounts and
notes receivable of the Company and its Subsidiaries set forth on the books and
records of the Company (net of the applicable reserves, which such reserves are
adequate notwithstanding the items set forth in the Company Letter, reflected on
the books and records of the Company and in the financial statements included in
the Company SEC Documents) (i) represent sales actually made or transactions
actually effected in the ordinary course of business for goods or services
delivered or rendered to unaffiliated customers in bona fide arm's length
transactions, (ii) except as set forth on Section 3.21(ii) of the Company
Letter, constitute valid claims, and (iii) except as set forth on Section
3.21(iii) of the Company Letter, are good and collectible at the aggregate
recorded amounts thereof (net of such reserves, which such reserves are adequate
notwithstanding the items set forth in the Company Letter,) without right of
recourse, defense, deduction, return of goods, counterclaim, or offset and have
been or will be collected in the ordinary course of business and consistent with
past experience.
SECTION 3.22 INVENTORIES. Except as set forth in Section 3.22
of the Company Letter, all inventories of the Company and its Subsidiaries
consist of items of merchantable quality and quantity usable or saleable in the
ordinary course of business, are saleable at prevailing market prices that are
not less than the book value amounts thereof or the price customarily charged by
the Company or the applicable Subsidiary therefor, conform to the specifications
established therefor, and have been manufactured in accordance with applicable
regulatory requirements, except to the extent that the failure of such
inventories so to consist, be saleable, conform, or be manufactured would not
have a Material Adverse Effect on the Company. Except as set forth in Section
3.22 of the Company Letter, the quantities of all inventories, materials, and
supplies of the Company and each Subsidiary (net of the obsolescence reserves,
which such reserves are adequate notwithstanding the items set forth in the
Company Letter, therefor shown in the financial statements included in the
Company SEC Documents and determined in the ordinary course of business
consistent with past practice) are not obsolete, damaged, slow-moving,
defective, or excessive, except to the extent that the failure of such
inventories to be in such conditions would not have a Material Adverse Effect on
the Company.
SECTION 3.23 ENVIRONMENTAL MATTERS. (a) For purposes of this
Agreement, the following terms shall have the following meanings: (i) "HAZARDOUS
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SUBSTANCES" means (A) petroleum and petroleum products, by-products or breakdown
products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, and (B) any other chemicals, materials or substances
regulated as toxic or hazardous or as a pollutant, contaminant or waste under
any applicable Environmental Law; (ii) "ENVIRONMENTAL LAW" means any law, past,
present or future (up until the Effective Time) and as amended, and any judicial
or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, or common law, relating to
pollution or protection of the environment, health or safety or natural
resources, including those relating to the use, handling, transportation,
treatment, storage, disposal, release or discharge of Hazardous Substances; and
(iii) "ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under any applicable Environmental Law.
(b) The Company and the Subsidiaries are and have been in
compliance with all applicable Environmental Laws, have obtained all
Environmental Permits and are in compliance with their requirements, and have
resolved all past non-compliance with Environmental Laws and Environmental
Permits without any pending, on-going or future obligation, cost or liability,
except in each case for the notices set forth in Section 3.21 of the Company
Letter or where such non-compliance or obligation would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
(c) Except as set forth in Section 3.23 of the Company Letter,
neither the Company nor any of its Subsidiaries has (i) placed, held, located,
released, transported or disposed of any Hazardous Substances on, under, from or
at any of the Company's or any of its Subsidiaries' properties or any other
properties, other than in a manner that would not, in all such cases taken
individually or in the aggregate, result in a Material Adverse Effect on the
Company, (ii) any Knowledge of either the presence of or of any reason to know
of any Hazardous Substances on, under, emanating from, or at any of the
Company's or any of its Subsidiaries' properties or any other property but
arising from the Company's or any of its Subsidiaries' current or former
properties or operations, other than in a manner that would not result in a
Material Adverse Effect on the Company, or (iii) any Knowledge of any reason to
know, nor has it received any written notice (A) of any violation of or
liability under any Environmental Laws, (B) of the institution or pendency of
any suit, action, claim, proceeding or investigation by any Governmental Entity
or any third party in connection with any such violation or liability, (C)
requiring the investigation of, response to or remediation of Hazardous
Substances at or arising from any of the Company's or any of its Subsidiaries'
current or former properties or operations or any other properties, (D) alleging
noncompliance by the Company or any of its Subsidiaries with the terms of any
Environmental Permit in any manner reasonably likely to require material
expenditures or to result in material liability or (E) demanding payment for
response to or remediation of Hazardous Substances at or arising from any of the
Company's or any of its Subsidiaries' current or former properties or operations
or any other properties, except in each case for the notices or matters set
forth in Section 3.23 of the Company Letter.
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(d) Except as set forth in Section 3.23 of the Company Letter,
no Environmental Law imposes any obligation upon the Company or any of its
Subsidiaries arising out of or as a condition to any transfer or transaction
contemplated by this Agreement, including any requirement to modify or to
transfer any Environmental Permit or license, any requirement to file any notice
or other submission with any Governmental Entity, the placement of any notice,
acknowledgment or covenant in any land records, or the modification of or
provision of notice under any agreement, consent order or consent decree.
(e) Except as set forth in Schedule 3.23 (e) of the Company
Letter, there are no environmental assessments or audit reports or other similar
studies or analyses in the possession or control of the Company or any of its
Subsidiaries relating to any real property currently or formerly owned, leased
or occupied by the Company or any of its Subsidiaries.
SECTION 3.24 SUPPLIERS AND DISTRIBUTORS. (a) Neither the
Company nor any Subsidiary has received any written notice, or to the Knowledge
of the Company, oral notice, or has any reason to believe that any significant
supplier, including without limitation any sole source supplier, will not sell
raw materials, supplies, merchandise and other goods to the Company or any
Subsidiary at any time after the Effective Time on terms and conditions
substantially similar to those used in its current sales to the Company and its
Subsidiaries, subject only to general and customary price increases, unless
comparable raw materials, supplies, merchandise, or other goods are readily
available from other sources on comparable terms and conditions.
(b) Neither the Company nor any Subsidiary has received any
written notice, or to the Knowledge of the Company, oral notice, or has any
reason to believe that any distributors, sales representatives, sales agents, or
other third party sellers, will not sell or market the products or services of
the Company or any Subsidiary at any time after the Effective Time on terms and
conditions substantially similar to those used in the current sales and
distribution contracts of the Company and its Subsidiaries.
SECTION 3.25 INSURANCE. All material fire and casualty,
general liability, business interruption, product liability, and sprinkler and
water damage insurance policies maintained by the Company or any of its
Subsidiaries are with reputable insurance carriers, provide full and adequate
coverage for all normal risks incident to the business of the Company and the
Subsidiaries and their respective properties and assets, and are in character
and amount similar to that carried by persons engaged in similar businesses and
subject to the same or similar perils or hazards, except for any such failures
to maintain insurance policies that, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. The Company and each Subsidiary
have made any and all payments required to maintain such policies in full force
and effect. Neither the Company nor any Subsidiary has received notice of
default under any such policy, and has not received written notice or, to the
Knowledge
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of the Company, oral notice of any pending or threatened termination or
cancellation, coverage limitation or reduction or material premium increase with
respect to such policy.
SECTION 3.26 TRANSACTIONS WITH AFFILIATES. (a) For purposes of
this Section 3.26, the term "AFFILIATED PERSON" means (i) any holder of 2% or
more of the Company Common Stock, (ii) any director, officer or senior executive
of the Company or any Subsidiary, (iii) any person, firm or corporation that
directly or indirectly controls, is controlled by, or is under common control
with, any of the Company or any Subsidiary or (iv) any member of the immediate
family or any of such persons.
(b) Except as set forth in Section 3.26 of the Company Letter
or in the Company SEC Reports filed with the SEC prior to the date hereof, since
March 31, 2000, the Company and its Subsidiaries have not, in the ordinary
course of business or otherwise, (i) purchased, leased or otherwise acquired any
material property or assets or obtained any material services from, (ii) sold,
leased or otherwise disposed of any material property or assets or provided any
material services to (except with respect to remuneration for services rendered
in the ordinary course of business as director, officer or employee of the
Company or any Subsidiary), (iii) entered into or modified in any manner any
contract with, or (iv) borrowed any money from, or made or forgiven any loan or
other advance (other than expenses or similar advances made in the ordinary
course of business) to, any Affiliated Person.
(c) Except as set forth in the Company SEC Reports filed with
the SEC prior to the date hereof, (i) the contracts of the Company and its
Subsidiaries do not include any material obligation or commitment between the
Company or any Subsidiary and any Affiliated Person, (ii) the assets of the
Company or any Subsidiary do not include any receivable or other obligation or
commitment from an Affiliated Person to the Company or any Subsidiary and (iii)
the liabilities of the Company and its Subsidiaries do not include any payable
or other obligation or commitment from the Company or any Subsidiary to any
Affiliated Person.
(d) To the Knowledge of the Company and except as set forth in
the Company SEC Reports filed with the SEC prior to the date hereof, no
Affiliated Person of any of the Company or any Subsidiary is a party to any
contract with any customer or supplier of the Company or any Subsidiary that
affects in any material manner the business, financial condition or results of
operation of the Company or any Subsidiary.
SECTION 3.27 TITLE TO AND SUFFICIENCY OF ASSETS. (a) As of the
date hereof, the Company and its Subsidiaries own, and as of the Effective Time
the Company and its Subsidiaries will own, good and marketable title to all of
their assets constituting personal property which is material to their business
(excluding, for purposes of this sentence, assets held under leases), free and
clear of any and all mortgages, liens, encumbrances, charges, claims,
restrictions, pledges, security interests or impositions
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(collectively, "LIENS"), except as set forth in the Company SEC Documents filed
with the SEC prior to the date hereof, or Section 3.27 of the Company Letter.
Such assets, together with all assets held by the Company and its Subsidiaries
under leases, include all tangible and intangible personal property, contracts
and rights necessary or required for the operation of the businesses of the
Company as presently conducted.
(b) As of the date hereof, the Company and its Subsidiaries
will own, good and marketable title to all of their Real Estate (as defined
below) which is material to such persons (excluding, for purposes of this
sentence, Real Estate leases) free and clear of any and all Liens, except as set
forth in the Company SEC Documents filed with the SEC prior to the date hereof
or in Section 3.27 of the Company Letter or such other Liens on Real Estate
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company. The Real Estate assets (including, for the purpose of
this sentence, Real Estate leases) held by the Company and its Subsidiaries, are
adequate for the operation of the businesses of the Company as presently
conducted. The leases to all Real Estate occupied by the Company and the
Subsidiaries which are material to the operation of the businesses of the
Company are in full force and effect and no event has occurred which with the
passage of time, the giving of notice, or both, would constitute a default or
event of default by the Company or any Subsidiary or, to the Knowledge of the
Company, any other person who is a party signatory thereto, other than such
defaults or events of default which, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. For purposes of this Agreement,
"REAL ESTATE" means, with respect to the Company or any Subsidiary, as
applicable, all of the fee, if any, or leasehold ownership right, title and
interest of such person, in and to all real estate and improvement owned or
leased by any such person and which is used by any such person in connection
with the operation of its business.
SECTION 3.28 BROKERS. No broker, investment banker or other
person, other than DLJ, the fees and expenses of each of which will be paid by
the Company (as reflected in an agreement between DLJ, and the Company, a copy
of each of which has been furnished to Parent), is entitled to any broker's,
finder's or other similar fee or commission in connection with the transactions
contemplated by this Agreement and by the Stock Option Agreement based upon
arrangements made by or on behalf of the Company.
SECTION 3.29 YEAR 2000. Except as set forth in Section 3.29 of
the Company Letter, the current and previously sold products of the Company and
its Subsidiaries and software, operations, systems and processes (including, to
the Knowledge of the Company, software, operations, systems and processes
obtained from third parties) used in the conduct of the business of the Company
and its Subsidiaries, are Year 2000 Compliant and the Company has delivered to
Parent true and correct copies of any consultant or other third-party reports
prepared on behalf of the Company with respect to such compliance. For purposes
of this Agreement, "YEAR 2000 COMPLIANT" means the ability to process (including
calculate, compare, sequence, display or store), transmit or receive data or
data/time data from, into and between the twentieth and twenty-first centuries,
and the years 1999 and 2000, and leap year calculations without error or
malfunction in all material respects. Except as set forth in Section 3.29 of the
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Company Letter, neither the Company nor any of its Subsidiaries have any
obligations under any warranty agreements, agreements, or otherwise to remedy
any information technology defect relating to a failure to be Year 2000
Compliant, except where any such warranty agreements, agreements or obligations
to remedy would not, individually or in the aggregate, have a Material Adverse
Effect on the Company.
SECTION 3.30 NO CONSULTING ACTIVITIES SUBJECT TO
HOSPITAL-PHYSICIAN GAINSHARING RESTRICTIONS. Neither the Company nor its
Subsidiaries have ever provided any clinical consulting services, including
advice, suggestions or recommendations concerning physician partnership
strategies and models, which would have been subject to the requirements of
42 U.S.C. sec. 1320a-7a(b)(1) and (2).
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE
MERGER. Except as expressly permitted by clauses (i) through (xvii) of this
Section 4.1, during the period from the date of this Agreement through the
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
in all material respects carry on its business in the ordinary course of its
business as currently conducted and, to the extent consistent therewith, use
reasonable best efforts to preserve intact its current business organizations,
keep available the services of its current officers and employees and preserve
its relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall be unimpaired at
the Effective Time. Without limiting the generality of the foregoing, and except
as otherwise expressly contemplated by this Agreement or as set forth in the
Company Letter (with specific reference to the applicable subsection below), the
Company shall not, and shall not permit any of its Subsidiaries to, without the
prior written consent of Parent:
(i) (A) other than dividends paid by wholly-owned
Subsidiaries, declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any
of its capital stock, or otherwise make any payments to its
shareholders in their capacity as such, (B) other than in the case of
any Subsidiary, split, combine or reclassify any of its capital stock
or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock or
(C) purchase, redeem or otherwise acquire any shares of capital stock
of the Company or any other securities thereof or any rights, warrants
or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock, any other voting securities
or equity equivalent or any securities convertible into, or any rights,
warrants or options (including options under the Company Stock Option
Plans) to acquire any such shares, voting securities, equity equivalent
or convertible securities, other than (A) the issuance
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of shares of Company Common Stock upon the exercise of Company Stock
Options outstanding on the date of this Agreement in accordance with
their current terms and (B) the issuance of shares of Company Common
Stock pursuant to the Stock Option Agreement;
(iii) amend the Company Charter or by-laws;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or equity
in, or by any other manner, any business or any corporation, limited
liability company, partnership, association or other business
organization or division thereof or otherwise acquire or agree to
acquire any assets;
(v) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, other than sales of
inventory that are in the ordinary course of business consistent with
past practice;
(vi) incur any indebtedness for borrowed money, guarantee any
such indebtedness or make any loans, advances or capital contributions
to, or other investments in, any other person, other than (A) in the
ordinary course of business consistent with past practices and (B)
indebtedness, loans, advances, capital contributions and investments
between the Company and any of its wholly-owned Subsidiaries or between
any of such wholly-owned Subsidiaries, in each case in the ordinary
course of business consistent with past practice;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or
ownership of the Company or any Subsidiary;
(viii) except as provided in Section 4.1(viii) of the Company
Letter, enter into or adopt any, or amend any existing, severance plan,
agreement or arrangement or enter into or amend any Company Plan,
employment, or any consulting agreement;
(ix) except as provided in Section 4.1(ix) of the Company
Letter, increase the compensation payable or to become payable to its
directors, officers or employees (except for increases in the ordinary
course of business consistent with past practice in salaries or wages
of employees of the Company or any of its Subsidiaries who are not
officers of the Company or any of its Subsidiaries) or grant any
severance or termination pay to, or enter into any employment or
severance agreement with, any director or officer of the Company or any
of its Subsidiaries, or establish, adopt, enter into, or, except as may
be required to comply with applicable law, amend in any material
respect or take action to enhance in any material respect or accelerate
any rights or benefits under, any labor, collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment,
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termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee;
(x) knowingly violate or knowingly fail to perform any
obligation or duty imposed upon it or any Subsidiary by any applicable
material federal, state or local law, rule, regulation, guideline or
ordinance;
(xi) make any change to accounting policies or procedures
(other than actions required to be taken by generally accepted
accounting principles);
(xii) prepare or file any Tax Return inconsistent with its
past practice in preparing or filing similar Tax Returns in prior
periods or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods;
(xiii) make or rescind any express or deemed election relating
to Taxes or change any of its methods of reporting income or deductions
for Tax purposes;
(xiv) commence any litigation or proceeding with respect to
any material Tax liability or settle or compromise any material Tax
liability without Parent's consent (which consent should not be
unreasonably withheld) or commence any other litigation or proceedings
or settle or compromise any other material claims or litigation;
(xv) except as provided in Section 4.1(xv) of the Company
Letter, enter into, renew, terminate or amend any agreement or contract
material to the Company and its Subsidiaries, taken as a whole,
including any Significant Contract; or purchase any real property or
make or agree to make any new capital expenditure or expenditures which
in the aggregate are in excess of $5 million;
(xvi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities reflected or reserved
against in, or contemplated by, the most recent financial statements
(or the notes thereto) of the Company included in the Company SEC
Documents or incurred in the ordinary course of business consistent
with past practice; or
(xvii) authorize, recommend, propose or announce an intention
to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
SECTION 4.2 NO SOLICITATION. (a) The Company shall not, nor
shall it permit any of its Subsidiaries to, nor shall it authorize or permit any
officer, director or employee of or any financial advisor, attorney or other
advisor or representative of, the Company or any of its Subsidiaries to, (i)
solicit, initiate or
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encourage the submission of, any Takeover Proposal (as hereafter defined), (ii)
enter into any agreement with respect to or approve or recommend any Takeover
Proposal or (iii) participate in any discussions or negotiations regarding, or
furnish to any person any information with respect to the Company or any
Subsidiary 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 Takeover Proposal; PROVIDED, HOWEVER, that nothing
contained in this Section 4.2(a) shall prohibit the Company or its directors
from (i) complying with Rule 14e-2 promulgated under the Exchange Act with
regard to a tender or exchange offer or (ii) referring a third party to this
Section 4.2(a) or making a copy of this Section 4.2(a) available to any third
party; and PROVIDED, FURTHER, that prior to the Shareholder Meeting, if the
Board of Directors of the Company reasonably determines the Takeover Proposal
constitutes a Superior Proposal (as defined below), then, to the extent required
by the fiduciary obligations of the Board of Directors of the Company, as
determined in good faith by a majority thereof after consultation with
independent counsel (who may be the Company's regularly engaged independent
counsel), the Company may, in response to an unsolicited request, furnish
non-public information, and afford access to the properties, books, records,
officers, employees and representatives of the Company, participate in
discussions or negotiations regarding the Superior Proposal and, provided that
the Company has complied with the provisos to its rights to terminate this
Agreement pursuant to Section 7.1(g) hereof, enter into an agreement with
respect to or approve or recommend to its shareholders a Superior Proposal (and,
to the extent permitted by Section 5.1 hereof, withdraw, modify or change its
recommendation of this Agreement) . Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any officer or director of the Company or any of its Subsidiaries or
any financial advisor, attorney or other advisor or representative of the
Company or any of its Subsidiaries, whether or not such person is purporting to
act on behalf of the Company or any of its Subsidiaries or otherwise, shall be
deemed to be a breach of this Section 4.2(a) by the Company. Nothing in this
Section 4.2(a) shall limit the Company's obligations set forth in Sections
4.2(b) and 5.1 hereof. For purposes of this Agreement, "TAKEOVER PROPOSAL" means
any proposal for a merger, tender offer or other business combination involving
the Company or any of its Subsidiaries or any proposal or offer to acquire in
any manner, directly or indirectly, an equity interest in, any voting securities
of, or a substantial portion of the assets of the Company or any of its
Subsidiaries, other than the transactions contemplated by this Agreement and the
Stock Option Agreement, and "SUPERIOR PROPOSAL" means a bona fide proposal made
by a third party to acquire the Company pursuant to a tender or exchange offer,
a merger, a sale of all or substantially all its assets or otherwise on terms
which a majority of the disinterested members of the Board of Directors of the
Company determines, at a duly constituted meeting of the Board of Directors or
by unanimous written consent, in its reasonable good faith judgment (after
consultation with its financial advisor) to be more favorable to the Company's
shareholders than the Merger and for which financing, to the extent required, is
then committed or which, in the reasonable good faith judgment of a majority of
such disinterested members of the Board of Directors of the Company, as
expressed in a resolution adopted at a duly constituted meeting of such
directors, is reasonably capable of being obtained by such third party.
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(b) The Company shall advise Parent orally and in writing
within 24 hours of its receipt of any Takeover Proposal or any inquiry with
respect to or which could lead to any expression of interest regarding a
potential Takeover Proposal that is received by or communicated to any officer
or director of the Company or, to the Knowledge of the Company, any financial
advisor, attorney or other advisor or representative of the Company, such notice
to include (i) the material terms of such Takeover Proposal or inquiry
(including a copy of any written proposal), and (ii) the identity of the person
making any such Takeover Proposal or inquiry. If the Company intends to
participate in discussions or negotiations with and/or furnish any Person with
any information with respect to any inquiry or Takeover Proposal in accordance
with Section 4.2(a), the Company shall advise Parent orally and in writing of
such intention not less than 48 hours in advance of providing such information.
The Company will keep Parent fully informed of the status and details of any
such Takeover Proposal or inquiry.
SECTION 4.3 THIRD PARTY STANDSTILL AGREEMENTS. During the
period from the date of this Agreement through the Effective Time, the Company
shall not terminate, amend, modify or waive any provision of any confidentiality
or standstill agreement to which the Company or any of its Subsidiaries is a
party (other than any involving Parent). During such period, the Company agrees
to enforce, to the fullest extent permitted under applicable law, the provisions
of any such agreements, including, but not limited to, obtaining injunctions to
prevent any breaches of such agreements and to enforce specifically the terms
and provisions thereof in any court of the United States or any state thereof
having jurisdiction.
SECTION 4.4 REORGANIZATION. During the period from the date of
this Agreement through the Effective Time, unless the other party shall
otherwise agree in writing, none of Parent, the Company or any of their
respective Subsidiaries shall take or fail to take any action with the actual
knowledge of those taking or failing to take such action (or those directing
such action or failure to take action) that such action or failure will cause
the Merger to not qualify as a reorganization within the meaning of Section
368(a) of the Code.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 SHAREHOLDER MEETING. The Company will, as soon as
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of shareholders (the "SHAREHOLDER MEETING") for the
purpose of considering the approval and adoption of this Agreement and at such
meeting call for a vote and cause proxies to be voted in respect of the approval
and adoption of this Agreement. The Company will, through its Board of
Directors, recommend to its shareholders the adoption and approval of this
Agreement and shall not withdraw, modify or change such recommendation;
provided, however, that the Board of Directors of the Company may withdraw,
modify or change such recommendation if it (i) has not breached Section 4.2 and
(ii) enters into a merger, acquisition or other agreement
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(including an agreement in principle) to effect a Superior Proposal or the Board
of Directors resolves to do so, provided that the Company has complied with the
provisos to its right to terminate this Agreement in Section 7.1(g) of this
Agreement. Notwithstanding the Company's rights regarding a Superior Proposal in
the preceding sentence, the Company agrees that its obligations pursuant to the
first sentence of this Section 5.1 shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of a Takeover
Proposal or Superior Proposal.
SECTION 5.2 PREPARATION OF THE REGISTRATION STATEMENT AND THE
PROXY STATEMENT. (a) The Company and Parent shall promptly prepare and file with
the SEC the Proxy Statement and Parent shall prepare and promptly file with the
SEC the Registration Statement, in which the Proxy Statement will be included as
a prospectus. Each of Parent and the Company shall use its reasonable best
efforts to have the Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing. As promptly as
practicable after the Registration Statement shall have become effective, the
Company shall mail the Proxy Statement to its shareholders. Parent shall also
take any action (other than qualifying to do business in any jurisdiction in
which it is now not so qualified) required to be taken under any applicable
state securities laws in connection with the issuance of Parent Common Stock in
the Merger and upon the exercise of the Substitute Shares (as defined in Section
5.6), and the Company shall furnish all information concerning the Company and
the holders of Company Common Stock as may be reasonably requested in connection
with any such action.
(b) Parent and the Company promptly will notify each other of
the receipt of comments from the SEC and of any request by the SEC for
amendments or supplements to the Registration Statement or the Proxy Statement
or for additional information, and promptly will supply each other with copies
of all correspondence between the parties and the SEC with respect thereto. If,
at any time prior to the Shareholder Meeting, any event should occur relating to
or affecting the Company, Parent or Sub, or to their respective Subsidiaries,
officers or directors, which event should be described in an amendment or
supplement to the Registration Statement or the Proxy Statement, the parties
promptly will inform each other and cooperate in preparing, filing and having
declared effective or clearing with the SEC and, if required by applicable state
securities laws, distributing to the Company's shareholders such amendment or
supplement.
SECTION 5.3 ACCESS TO INFORMATION. Subject to currently
existing contractual and legal restrictions applicable to the Company or any of
its Subsidiaries, the Company shall, and shall cause each of its Subsidiaries
to, afford to the Parent and its Subsidiaries and each of their accountants,
counsel, financial advisors and other representatives of Parent reasonable
access, and permit them to make such inspections as they may reasonably require
of, during the period from the date of this Agreement through the Effective
Time, all of their respective properties, books, contracts, commitments and
records (including engineering records and Tax Returns and the work papers of
independent accountants, if available and subject to the consent of
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such independent accountants) and, during such period, the Company shall, and
shall cause each of its Subsidiaries to (i) furnish promptly to Parent a copy of
each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of federal or state securities
laws, (ii) consistent with its legal obligations, furnish promptly to Parent all
other information concerning its business, properties and personnel as Parent
may reasonably request, (iii) promptly make available to Parent all personnel of
the Company and its Subsidiaries knowledgeable about matters relevant to such
inspections as reasonably requested by Parent and (iv) provide reasonable access
to the Company's facilities and operations to enable Parent to conduct a health
and safety review of the business, including the right to take samples. No
investigation pursuant to this Section 5.3 shall affect any representation or
warranty in this Agreement of any party hereto or any condition to the
obligations of the parties hereto. All information obtained by Parent pursuant
to this Section 5.3 shall be kept confidential in accordance with the
Confidentiality Agreement, dated May 24, 2000 between Parent and the Company
(the "CONFIDENTIALITY AGREEMENT") and Parent and Company hereby agree that
Paragraphs 7, 8 and 9 of the Confidentiality Agreement shall be terminated and
of no further effect.
SECTION 5.4 RULE 145 LETTERS. On the date hereof, the Company
shall cause to be prepared and delivered to Parent a list (reasonably
satisfactory to counsel for Parent) identifying all persons who, at the time of
the Shareholder Meeting, may be deemed to be "affiliates" of the Company as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act (the
"RULE 145 AFFILIATES"). The Company shall use its reasonable best efforts to
cause each person who is identified as a Rule 145 Affiliate in such list to
deliver to Parent within 30 days of the date hereof a written agreement in
substantially the form of EXHIBIT D hereto, executed by each of such persons
identified in the foregoing list.
SECTION 5.5 FEES AND EXPENSES. (a) Except as provided in this
Section 5.5, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby, including the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the party incurring such costs and expenses,
provided that all printing expenses and all filing fees (including filing fees
under the Securities Act, the Exchange Act and the HSR Act) shall be divided
equally between Parent and the Company.
(b) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement is terminated (A) by the Company pursuant to Section
7.1(d)(i) after receipt of a Superior Proposal, (B) by Parent pursuant to
Section 7.1(b), (c) or (f), (C) by Parent or the Company pursuant to Section
7.1(e) (after receipt of a Superior Proposal or after the occurrence of any of
the events described in clause (i), (ii) or (iii) of Section 7.1(f)) or (g),
then, in each case, the Company shall (without prejudice to any other rights of
Parent against the Company) reimburse Parent upon demand for all out-of-pocket
fees and expenses incurred or paid by or on behalf of Parent or any Affiliate
(as hereinafter defined) of Parent in connection with this Agreement, the Stock
Option Agreement and the transactions contemplated herein or therein, including
all fees and expenses of counsel, investment banking firms, accountants and
consultants (collectively, "PARENT
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FEES") up to a maximum of $2,000,000. As used herein, "AFFILIATE" shall have the
meaning set forth in Rule 405 under the Securities Act.
(c) Notwithstanding any provision in this Agreement to the
contrary:
(i) if this Agreement is terminated:
(A) by the Company pursuant to Section
7.1(d)(i) after receipt of a Superior Proposal, or
(B) by Parent pursuant to Section 7.1(b) or
(f), or
(C) by Parent pursuant to Section 7.1(c) or
by Parent or the Company pursuant to Section 7.1(e) in either
case after receipt of a Superior Proposal or after the
occurrence of any of the events described in clause (i), (ii)
or (iii) of Section 7.1(f),
and, in the case of (A), (B) or (C), prior to, concurrently with or
within twelve months after such a termination a Third Party Acquisition
Event (as defined below) occurs, then the Company shall (in addition to
any obligation under Section 5.5(b) and without prejudice to any other
rights of Parent against the Company) pay to Parent the Termination Fee
(as defined below) in cash, such payment to be made promptly, but in no
event later than the second business day following, the later to occur
of such termination and such Third Party Acquisition Event; or
(ii) if this Agreement is terminated by Parent or the
Company pursuant to Section 7.1(g), then the Company shall (in addition
to any obligation under Section 5.5(b) and without prejudice to any
other rights of Parent against the Company) pay to Parent the
Termination Fee in cash, such payment to be made by the Company
concurrently with such termination if the termination is by the
Company, or no later than the second business day following such
termination if the termination is by Parent.
"TERMINATION FEE" means $4,000,000, provided, however, that
(i) such amount shall be reduced to an amount not less than zero by subtracting
from $4,000,000 the amount realized or realizable (based on the facts as they
exist on the date such fee shall become due) by Parent under the Stock Option
Agreement which is in excess of $2,500,000, and (ii) the total of the
Termination Fee and the net amount actually realized by Parent under the Stock
Option Agreement, after netting out the aggregate Exercise Price (as defined
therein) paid by Parent, shall not exceed $6,500,000; provided further that if
such Fee shall be so reduced by the net amount so realizable by Parent and
thereafter the Stock Option Agreement shall terminate without receipt by Parent
of such amount, then an additional payment shall be made to Parent in the amount
by which the Termination Fee was reduced hereunder promptly following such
termination.
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A "THIRD PARTY ACQUISITION EVENT" means any of the following
events: (A) any person (other than Parent or its Affiliates) acquires or becomes
the beneficial owner of 20% or more of the outstanding shares of Company Common
Stock; (B) any group (other than a group which includes or may reasonably be
deemed to include Parent or any of its Affiliates) is formed which, at the time
of formation, beneficially owns 20% or more of the outstanding shares of Company
Common Stock; (C) the Company enters into, or announces that it proposes to
enter into, an agreement, including an agreement in principle, providing for a
merger or other business combination involving the Company or a "significant
subsidiary" (as defined in Rule 1.02(w) of Regulation S-X as promulgated by the
SEC) of the Company or the acquisition of a substantial interest in, or a
substantial portion of the assets, business or operations of, the Company or a
significant subsidiary (other than the transactions contemplated by this
Agreement); (D) any person (other than Parent or its Affiliates) is granted any
option or right, conditional or otherwise, to acquire or otherwise become the
beneficial owner of shares of Company Common Stock which, together with all
shares of Company Common Stock beneficially owned by such person, results or
would result in such person being the beneficial owner of 20% or more of the
outstanding shares of Company Common Stock; or (E) there is a public
announcement with respect to a plan or intention by the Company to effect any of
the foregoing transactions. For purposes of this Section 5.5(c), the terms
"group" and "beneficial owner" shall be defined by reference to Section 13(d) of
the Exchange Act.
(d) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement is terminated (i) by the Company pursuant to Section
7.1(b) or (c), then Parent shall (without prejudice to any other rights of the
Company against Parent) reimburse the Company upon demand for all out-of-pocket
fees and expenses incurred or paid by or on behalf of the Company or any
Affiliate of the Company in connection with this Agreement, the Stock Option
Agreement and the transactions contemplated herein or therein, including all
fees and expenses of counsel, investment banking firms, accountants and
consultants (collectively, "Company Fees"), PROVIDED, HOWEVER, that (A) in no
event shall the amount paid pursuant to this Section 5.5(d) in reimbursement of
the Company Fees exceed $2,000,000.
SECTION 5.6 COMPANY STOCK OPTIONS. (a) At the Effective Time,
each Company Stock Option which is outstanding immediately prior to the
Effective Time shall become and represent a right to receive the number of
shares of Parent Common Stock (each a "SUBSTITUTE SHARE"), in an amount equal
to:
A x {[ B - (C + T)] / B} x D
A = number of shares of Company Common Stock subject or related to such
Company Stock Option
B = $17.00
C = exercise or purchase price per share of Company Common Stock
subject or related to such Company Stock Option
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T = all applicable federal, state and local taxes required to be
withheld by the Parent per share of Company Common Stock subject or
related to such Company Stock Option
D = the Merger Consideration
Parent shall pay cash to holders of Substitute Shares in lieu of issuing
fractional shares of Parent Common Stock.
(b) The Company shall take all action necessary in
implementing the provisions of this Section 5.6, including, for avoidance of
doubt, amendment of the Company Stock Option Plans pursuant to a resolution of
the Board of Directors in form and substance satisfactory to Parent, and to
ensure that, after giving effect to the foregoing, no Company Stock Option shall
be exercisable for Company Common Stock or Parent Common Stock following the
Effective Time.
(c) Parent shall use its reasonable best efforts to list on
the NYSE, upon official notice of issuance, any shares of Parent Common Stock to
be issued in connection with the Merger or in connection with Substitute Shares
which have not been previously listed.
SECTION 5.7 REASONABLE BEST EFFORTS. (a) Upon the terms and
subject to the conditions set forth in this Agreement, including without
limitation Section 4.2 hereof, each of the parties agrees to use reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including: (i) the obtaining of all necessary
actions or non-actions, waivers, consents and approvals from all Governmental
Entities and the making of all necessary registrations and filings (including
filings with Governmental Entities) and the taking of all reasonable steps as
may be necessary to obtain an approval or waiver from, or to avoid or vigorously
defend an action or proceeding by, any Governmental Entity (including those in
connection with the HSR Act and State Takeover Approvals), (ii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement, the Stock Option Agreement or the
consummation of the transactions contemplated hereby and thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by this Agreement. No party to this Agreement shall consent to any
voluntary delay of the consummation of the Merger at the behest of any
Governmental Entity without the consent of the other parties to this Agreement,
which consent shall not be unreasonably withheld.
(b) Each party shall use all reasonable best efforts to not
take any action, or enter into any transaction, which would cause any of its
representations or
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warranties contained in this Agreement to be untrue or result in a breach of any
covenant made by it in this Agreement.
(c) Prior to and following the Effective Time, each party
shall use all reasonable best efforts to refrain from taking any action or
failing to take any action, which action or failure to act would cause, or would
be reasonably likely to cause, the Merger to fail to qualify as a reorganization
within the meaning of Section 368(a) of the Code.
(d) Notwithstanding anything to the contrary contained in this
Agreement, in connection with any filing or submission required or action to be
taken by either Parent or the Company to effect the Merger and to consummate the
other transactions contemplated hereby, the Company shall not, without Parent's
prior written consent, commit to any divestiture transaction, and neither Parent
nor any of its Affiliates shall be required to divest or hold separate or
otherwise take or commit to take any action that limits its freedom of action
with respect to, or its ability to retain, the Company or any of the businesses,
product lines or assets of Parent or any of its Subsidiaries or that otherwise
would have a Material Adverse Effect on Parent.
(e) The Company will use its reasonable efforts to cause the
persons listed in Section 5.7(e) of the Company Letter to execute and deliver
retention, employment or consulting agreements in form and substance reasonably
satisfactory to the Parent.
SECTION 5.8 PUBLIC ANNOUNCEMENTS. Parent and the Company will
not issue any press release with respect to the transactions contemplated by
this Agreement or otherwise issue any written public statements with respect to
such transactions without prior consultation with the other party, except as may
be required by applicable law or by obligations pursuant to any listing
agreement with or rules of any national securities exchange.
SECTION 5.9 STATE TAKEOVER LAWS. If any "fair price,"
"business combination" or "control share acquisition" statute or other similar
statute or regulation shall become applicable to the transactions contemplated
hereby or in the Stock Option Agreement, Parent and the Company and their
respective Boards of Directors shall use their best efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated hereby and thereby may be consummated as promptly as practicable on
the terms contemplated hereby and thereby and otherwise act to minimize the
effects of any such statute or regulation on the transactions contemplated
hereby and thereby.
SECTION 5.10 INDEMNIFICATION; DIRECTORS AND OFFICERS
INSURANCE. (a) From and after the Effective Time, Parent shall cause the
Surviving Corporation to indemnify and hold harmless all past and present
officers and directors of the Company and of its Subsidiaries to the same extent
and in the same manner such persons are indemnified as of the date of this
Agreement by the Company pursuant to the WBCL, the Company's articles of
incorporation and the Company's By-
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laws for acts or omissions occurring at or prior to the Effective Time
(including indemnifying and holding harmless such persons for acts or omissions
occurring at or prior to the Effective Time in respect of the Merger and the
transactions contemplated thereby) to the same extent and in the manner as such
persons are indemnified as of the date of this Agreement by the Company pursuant
to the WBCL, the Company's articles of incorporation and the Company's By-laws.
(b) Parent shall cause the Surviving Corporation to provide,
for an aggregate period of not less than three years from the Effective Time,
the Company's current directors and officers an insurance and indemnification
policy that provides coverage for events occurring prior to the Effective Time
(the "D&O INSURANCE") that is substantially similar to the Company's existing
policy at the Effective Time or, if substantially equivalent insurance coverage
is unavailable, the best available coverage; PROVIDED, HOWEVER, that neither the
Parent nor the Surviving Corporation shall be required to pay an annual premium
for the D&O Insurance in excess of one hundred fifty percent (150%) of the
amount of the last annual premiums paid prior to the date hereof (which premiums
the Company represents and warrants to be not more than $155,000 per annum), but
in such case shall purchase as much coverage as possible for such amount.
(c) Parent hereby agrees that, effective at the Effective
Time, Parent will guarantee the obligations of the Surviving Corporation under
Section 5.10(a) and (b).
(d) This covenant is intended to be for the benefit of, and
shall be enforceable by, each of the indemnified parties and their respective
heirs and legal representatives.
SECTION 5.11 NOTIFICATION OF CERTAIN MATTERS. Parent shall use
its reasonable best efforts to give prompt notice to the Company, and the
Company shall use its reasonable best efforts to give prompt notice to Parent,
of: (i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which it is aware and which would be reasonably likely to
cause (x) any representation or warranty contained in this Agreement and made by
it to be untrue or inaccurate in any material respect or (y) any covenant,
condition or agreement contained in this Agreement and made by it not to be
complied with or satisfied in all material respects, (ii) any failure of Parent
or the Company, as the case may be, to comply in a timely manner with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder or (iii) any change or event which would be reasonably likely to have
a Material Adverse Effect on Parent or the Company, as the case may be;
PROVIDED, HOWEVER, that the delivery of any notice pursuant to this Section 5.11
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 5.12 EMPLOYEE BENEFIT PLANS. For the first year
following the Closing Date while employed by the Surviving Corporation,
employees of the Surviving Corporation will receive base wages and salaries at
rates no less favorable to such employees than the rates of wages and salaries
paid by the Company or its Subsidiaries to such employees on the date of this
Agreement. For a period of one year immediately following the Effective Time,
Parent shall or shall cause the Surviving
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Corporation to maintain in effect employee benefit plans and arrangements which
provide benefits which have a value which is substantially comparable, in the
aggregate, to the benefits provided by the U.S. Plans (not taking into account
the value of any benefits under any such plans which are equity based). For
purposes of determining eligibility to participate, vesting and accrual or
entitlement to benefits where length of service is relevant under any employee
benefit plan or arrangement of the Surviving Corporation, employees of the
Company and its Subsidiaries as of the Effective Time shall receive service
credit for service with the Company and its Subsidiaries to the same extent such
credit was granted under the Company Plans, subject to offsets for previously
accrued benefits and no duplication of benefits.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
SECTION 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligations of each party to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of each of the
following conditions:
(a) SHAREHOLDER APPROVAL. This Agreement shall have been duly
approved by the requisite vote of shareholders of the Company in accordance with
applicable law, the Company Charter and the Company's By-laws.
(b) STOCK EXCHANGE LISTINGS. The Parent Common Stock issuable
in the Merger and upon exercise of Substitute Shares and not previously listed
shall have been authorized for listing on the NYSE, subject to official notice
of issuance.
(c) HSR AND OTHER APPROVALS/CONSENTS OR WAIVERS. (i) The
waiting period (and any extension thereof) applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated.
(ii) All authorizations, consents, orders,
declarations or approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity, which the failure to
obtain, make or occur would have the effect of, directly or indirectly,
restraining, prohibiting or restricting the Merger or any of the transactions
contemplated hereby or would have, individually or in the aggregate, a Material
Adverse Effect on Parent (assuming the Merger had taken place), shall have been
obtained, shall have been made or shall have occurred.
(d) REGISTRATION STATEMENT. The Registration Statement shall
have become effective in accordance with the provisions of the Securities Act.
No stop order suspending the effectiveness of the Registration Statement shall
have been issued by the SEC and no proceedings for that purpose shall have been
initiated or, to the knowledge of Parent or the Company, threatened by the SEC.
All necessary state securities or blue sky authorizations (including State
Takeover Approvals) shall have been received.
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(e) NO ORDER. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or entered any
law, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) which is then in effect and has
the effect of, directly or indirectly, restraining, prohibiting or restricting
the Merger or any of the transactions contemplated hereby; provided, however,
that the provisions of this Section 6.1(e) shall not be available to any party
whose failure to fulfill its obligations pursuant to Section 5.7 shall have been
the cause of, or shall have resulted in, the enforcement or entering into of any
such law, rule, regulation, executive order, decree, injunction or other order.
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE COMPANY TO EFFECT
THE MERGER. The obligation of the Company to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of each of the following
additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. (i) Each of Parent and Sub shall have performed in all material
respects each of its agreements and covenants contained in this Agreement
required to be performed on or prior to the Effective Time, (ii) each of the
representations and warranties of Parent and Sub contained in this Agreement
that is qualified by materiality shall have been true and correct when made, and
shall be true and correct on and as of the Effective Time as if made on and as
of such date (other than representations and warranties which address matters
only as of a certain date which shall be true and correct as of such certain
date) and (iii) each of the representations and warranties that is not so
qualified shall have been true and correct in all material respects when made,
and shall be true and correct in all material respects on and as of the
Effective Time as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be true
and correct in all material respects as of such certain date), in each case
except as contemplated or permitted by this Agreement, and the Company shall
have received certificates signed on behalf of each of Parent and Sub by one of
its officers to such effect.
(b) TAX OPINION. The Company shall have received an opinion of
Sidley & Austin, counsel to the Company, in form and substance reasonably
satisfactory to the Company, dated the Effective Time, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time substantially to the
effect that, for federal income tax purposes, the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and the
Company, Sub, and Parent will each be a party to that reorganization within the
meaning of Section 368(b) of the Code.
(c) MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no Material Adverse Change with respect to Parent. The
Company shall have received a certificate signed on behalf of Parent by an
officer of Parent to such effect.
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(d) COMPANY STOCK OPTION PLANS. Parent shall have taken all
action required to be taken by it to implement the provisions of Section 5.6.
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND SUB TO
EFFECT THE MERGER. The obligations of Parent and Sub to effect the Merger shall
be subject to the fulfillment at or prior to the Effective Time of each of the
following additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. (i) The Company shall have performed in all material respects each
of its covenants and agreements contained in this Agreement required to be
performed on or prior to the Effective Time, (ii) each of the representations
and warranties of the Company contained in this Agreement that is qualified by
materiality shall have been true and correct when made, and shall be true and
correct on and as of the Effective Time as if made on and as of such date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date) and (iii) each of
the representations and warranties that is not so qualified shall have been true
and correct in all material respects when made, and shall be true and correct in
all material respects on and as of the Effective Time as if made on and as of
such date (other than representations and warranties which address matters only
as of a certain date which shall be true and correct in all material respects as
of such certain date), in each case except as contemplated or permitted by this
Agreement. Parent shall have received a certificate signed on behalf of the
Company by its Chief Executive Officer or its Chief Financial Officer to such
effect.
(b) TAX OPINION. Parent shall have received an opinion of
Gibson, Dunn & Crutcher LLP, counsel to Parent, in form and substance reasonably
satisfactory to Parent, dated the Effective Time, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time substantially to the
effect that, for federal income tax purposes, the Merger will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and the
Company, Sub, and Parent will each be a party to that reorganization within the
meaning of Section 368(b) of the Code.
(c) CONSENTS. (i) The Company shall have obtained the consent
or approval of each person or Governmental Entity whose consent or approval
shall be required in connection with the transactions contemplated hereby under
any loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except as to which the failure to obtain such consents
and approvals would not, in the reasonable opinion of Parent, individually or in
the aggregate, have a Material Adverse Effect on the Company or Parent or upon
the consummation of the transactions contemplated in this Agreement or the Stock
Option Agreement or the Shareholder Agreement.
(ii) In obtaining any approval or consent required to
consummate any of the transactions contemplated herein, in the Stock Option
Agreement or the Shareholder Agreement, no Governmental Entity shall have
imposed or shall have sought to impose any condition, penalty or requirement
which, in the reasonable opinion of
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Parent, individually or in aggregate would have a Material Adverse Effect on the
Company or Parent.
(d) AFFILIATE AGREEMENTS. Parent shall have received the
written agreements from Rule 145 Affiliates of the Company described in Section
5.4.
(e) MATERIAL ADVERSE CHANGE. Since the date of this Agreement,
there shall have been no Material Adverse Change with respect to the Company.
Parent shall have received a certificate signed on behalf of the Company by the
Chief Executive Officer or the Chief Financial Officer of the Company to such
effect.
(f) COMPANY STOCK OPTION PLANS. The Company shall have taken
all action required to be taken by it to implement the provisions of Section
5.6.
(g) DIRECTOR AND OFFICER RESIGNATIONS. All of the Directors of
the Company and its Subsidiaries and any officers thereof designated by Parent,
shall have tendered their resignation in form and substance satisfactory to
Parent.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after any approval of
the matters presented in connection with the Merger by the shareholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the other party shall
have failed to comply in any material respect with any of its covenants
or agreements contained in this Agreement required to be complied with
prior to the date of such termination, which failure to comply has not
been cured within five business days following receipt by such other
party of written notice of such failure to comply;
(c) by Parent if (x) there has been a breach of a
representation or warranty of the Company that gives rise to a failure
of the fulfillment of a condition of the Parent's and Sub's obligations
to effect the Merger pursuant to Section 6.3(a)(ii) or by Company if
(y) there has been a breach of a representation or warranty of the
Parent or Sub that gives rise to a failure of the fulfillment of a
condition of the Company's obligations to effect the Merger pursuant to
Section 6.2(a)(ii), in each case which breach has not been cured within
five business days following receipt by the breaching party of written
notice of the breach;
(d) by either Parent or the Company if: (i) the Merger has not
been effected on or prior to the close of business on the later of
March 31, 2001 or the date 75 days after the waiting period applicable
to the consummation of the
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Merger under the HSR Act has expired or been terminated; PROVIDED,
HOWEVER, that the right to terminate this Agreement pursuant to this
Section 7.1(d)(i) shall not be available to any party whose failure to
fulfill any of its obligations contained in this Agreement has been the
cause of, or resulted in, the failure of the Merger to have occurred on
or prior to the aforesaid date; or (ii) any court or other Governmental
Entity having jurisdiction over a party hereto shall have issued an
order, decree or ruling or taken any other action (which order, decree,
ruling or other action the parties shall have used their reasonable
efforts to resist, resolve or lift, as applicable, subject to the
provisions of Section 5.7) permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final
and nonappealable;
(e) by either Parent or the Company if the shareholders of the
Company do not approve this Agreement at the Shareholder Meeting or at
any adjournment or postponement thereof;
(f) by Parent if (i) the Board of Directors of the Company
shall not have recommended, or shall have resolved not to recommend, or
shall have qualified, changed, modified or withdrawn its recommendation
of the Merger or declaration that the Merger is advisable and fair to
and in the best interest of the Company and its shareholders, or shall
have resolved to do so, (ii) the Board of Directors of the Company,
shall have recommended to the shareholders of the Company any Takeover
Proposal or shall have resolved to do so or (iii) a tender offer or
exchange offer for 20% or more of the outstanding shares of capital
stock of the Company is commenced by a third party that is not an
Affiliate of Parent, and the Board of Directors of the Company fails to
recommend against acceptance of such tender offer or exchange offer by
its shareholders (including by taking no position with respect to the
acceptance of such tender offer or exchange offer by its shareholders);
(g) by Parent or the Company if the Company enters into a
merger, acquisition or other agreement (including an agreement in
principle) to effect a Superior Proposal or the Board of Directors of
the Company resolves to do so; PROVIDED, HOWEVER, that the Company may
not terminate this Agreement pursuant to this Section 7.1(g) unless (i)
the Company has delivered to Parent a written notice of the Company's
intent to enter into such an agreement to effect the Superior Proposal,
(ii) 48 hours have elapsed following delivery to Parent of such written
notice by the Company and (iii) during such 48-hour period the Company
has fully cooperated with Parent, including informing Parent of the
terms and conditions of the Takeover Proposal and the identity of the
person making the Takeover Proposal, with the intent of enabling Parent
to agree to a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be effected;
PROVIDED, FURTHER, that the Company may not terminate this Agreement
pursuant to this Section 7.1(g) unless at the end of such 48 hour
period the Board of Directors of the Company continues reasonably to
believe
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that the Takeover Proposal constitutes a Superior Proposal when
compared to the Merger (taking into account any such modification as
may be proposed by Parent) and concurrently with such termination the
Company pays to Parent the amounts specified under Sections 5.5(a), (b)
and (c);
(h) by Company if the waiting period applicable to the
consummation of the Merger under the HSR Act has not expired or been
terminated on or prior to March 31, 2001; or
(i) by Parent if the waiting period applicable to the
consummation of the Merger under the HSR Act has not expired or been
terminated on or prior to March 31, 2001.
The right of any party hereto to terminate this Agreement
pursuant to this Section 7.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
SECTION 7.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either Parent or the Company, as provided in Section 7.1,
this Agreement shall forthwith become void and there shall be no liability
hereunder on the part of the Company, Parent, Sub or their respective officers
or directors (except for the last sentence of Section 5.3 and the entirety of
Section 5.5, which shall survive the termination); PROVIDED, HOWEVER, that
nothing contained in this Section 7.2 shall relieve any party hereto from any
liability for any willful breach of a representation or warranty contained in
this Agreement or the breach of any covenant contained in this Agreement.
SECTION 7.3 AMENDMENT. This Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective Boards of
Directors, in the case of Sub or the Company, or a Senior Vice President of
Parent, at any time before or after approval of the matters presented in
connection with the Merger by the shareholders of the Company, but, after any
such approval, no amendment shall be made which by law or the rules of the
Nasdaq National Market requires further approval by such shareholders without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
SECTION 7.4 WAIVER. At any time prior to the Effective Time,
the parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. No delay on the part of any party hereto in exercising any right, power
or privilege hereunder shall operate as a waiver
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thereof, nor shall any waiver on the part of any party hereto of any right,
power or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties hereto may otherwise have
at law or in equity. The failure of any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES; NO
OTHER REPRESENTATIONS AND WARRANTIES. The representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement shall
terminate at the Effective Time. Each party hereto agrees that, except for the
representations and warranties contained in this Agreement, none of the Company,
Parent or Sub makes any other representations and warranties, and each hereby
disclaims any other representations and warranties made by itself or any of its
officers, directors, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement,
the documents and the instruments referred to herein, or the transactions
contemplated hereby or thereby, notwithstanding the delivery or disclosure to
the other party or the other party's representatives of any documentation or
other information with respect to any one or more of the foregoing.
SECTION 8.2 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one day after being delivered to an overnight courier or when
telecopied (with a confirmatory copy sent by overnight courier) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to Parent or Sub, to:
Topaz Merger Corp.
c/o GE Medical Systems
P.O. Box 414, W-410
Milwaukee, WI 53201
Attn: General Counsel
Fax: 414-544-3575
with copies to:
GE Medical Systems
3000 North Grandview Blvd.
Waukesha, WI 53188
Attn: General Counsel
49
<PAGE>
and:
General Electric Company
3135 Easton Turnpike
Fairfield, CT 06431-0001
Attn: Vice President and Senior Counsel - Transactions
and
Gibson, Dunn & Crutcher, LLP
200 Park Avenue
New York, New York 10166-0193
Attention: Steve Shoemate
Facsimile No.: 212-351-4035
(b) if to the Company, to:
Lunar Corporation
726 Heartland Trail
Madison, WI 53717
Attn: General Counsel
Fax: 608-826-7106
with a copy to:
Sidley & Austin
Banc One Plaza
10 South Dearborn Street
Chicago, IL 60603
Attn: Steven Sutherland
Fax: 312-853-7036
SECTION 8.3 INTERPRETATION. (a) When a reference is made in
this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation."
(b) "SUBSIDIARY" means any corporation, partnership, limited
liability company, joint venture or other legal entity of which Parent or
Company, as the case may be (either alone or through or together with any other
Subsidiary), owns or controls, directly or indirectly, 50% or more of the stock
or other equity interests the holders of which are generally entitled to vote
for the election of the board of directors or other governing body of such
corporation, partnership, limited liability company, joint venture or other
legal entity.
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SECTION 8.4 COUNTERPARTS. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement, except for the Stock Option Agreement and as provided in the
last sentence of Section 5.3, constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof. This Agreement, except for
the provisions of Section 5.10, is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
SECTION 8.6 GOVERNING LAW. Except to the extent that the laws
of the State of Wisconsin are mandatorily applicable to the Merger, this
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.
SECTION 8.7 ASSIGNMENT. Subject to Section 1.1, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors or assigns.
SECTION 8.8 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other terms, conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement may be consummated as originally contemplated to the fullest extent
possible.
SECTION 8.9 ENFORCEMENT OF THIS AGREEMENT. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof such remedy being in addition to any other remedy to which any party is
entitled at law or in equity. Each party hereto irrevocably submits to the
exclusive jurisdiction of the United States District Court for the Southern
District of New York. Each party hereto waives any right to a trial by jury in
connection
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with any such action, suit or proceeding and waives any objection based on FORUM
NON CONVENIENS or any other objection to venue thereof.
SECTION 8.10 PERFORMANCE BY SUB. Parent hereby agrees to cause
Sub to comply with its obligations hereunder and to cause Sub to consummate the
Merger as contemplated herein and whenever this Agreement requires Sub to take
any action, such requirement shall be deemed to include an undertaking of Parent
to cause Sub to take such action.
SECTION 8.11 DEFINED TERMS. Each of the following terms is
defined in the Section identified below:
<TABLE>
<S> <C>
Affiliate .......................................... Section 5.5(b)
Affiliated Person .................................. Section 3.26
Agreement .......................................... Preamble
Agreement of Merger ................................ Section 1.2
Average Parent Share Price ......................... Section 1.5(c)
Blue Sky Laws ...................................... Section 2.3
Certificates ....................................... Section 1.6(b)
Closing ............................................ Section 1.14
Closing Date ....................................... Section 1.14
Company............................................. Preamble
Company Business Personnel ......................... Section 3.15
Company Charter .................................... Section 3.4
Company Common Stock ............................... Section 1.5(c)
Company Foreign Benefit Plan ....................... Section 3.12(d)
Company Intellectual Property ...................... Section 3.16
Company Letter ..................................... Section 3.2(b)
Company Licenses ................................... Section 3.16
Company Multiemployer Plan ......................... Section 3.12(c)
Company Permits .................................... Section 3.8
Company Plan ....................................... Section 3.12(c)
Company SEC Documents .............................. Section 3.5
Company Stock Option Plans ......................... Section 3.2(a)
Company Stock Options .............................. Section 3.2(b)
Compensation Agreements ............................ Section 3.11(a)
Confidentiality Agreement .......................... Section 5.3
Constituent Corporations ........................... Preamble
D&O Insurance ...................................... Section 5.10(b)
DLJ ................................................ Section 3.17
Effective Time ..................................... Section 1.2
Environmental Law .................................. Section 3.23(a)(ii)
Environmental Permit ............................... Section 3.23(a)(iii)
ERISA .............................................. Section 3.12(a)
ERISA Affiliate .................................... Section 3.12(c)
</TABLE>
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<TABLE>
<S> <C>
Exchange Act ....................................... Section 2.3
Exchange Agent ..................................... Section 1.6(a)
Exchange Fund ...................................... Section 1.6(a)
FDA ................................................ Section 3.8
Governmental Entity ................................ Section 2.3
Hazardous Substances ............................... Section 3.23(a)(i)
HSR Act............................................. Section 2.3
IRS ................................................ Section 3.9
Knowledge of the Company ........................... Section 3.8
Liens .............................................. Section 3.27
Material Adverse Change ............................ Section 2.1, 3.1
Material Adverse Effect ............................ Section 2.1, 3.1
Merger ............................................. Recitals
Merger Consideration ............................... Section 1.5(c)
NYSE ............................................... Section 2.3
Parent ............................................. Preamble
Parent Common Stock ................................ Section 1.5(c)
Parent Fees ........................................ Section 5.5(b)
Parent SEC Documents ............................... Section 2.5
Plan of Merger ..................................... Section 1.2
Proxy Statement .................................... Section 2.6
Real Estate ........................................ Section 3.27(b)
Registration Statement ............................. Section 2.2
reorganization ..................................... Recitals
Rule 145 Affiliates ................................ Section 5.4
SEC ................................................ Section 2.2
Securities Act ..................................... Section 2.2
Shareholder Meeting ................................ Section 5.1
Significant Contracts .............................. Section 3.11(b)
SSA ................................................ Section 3.8
State Takeover Approvals ........................... Section 2.3
Stock Option Agreement ............................. Recitals
Stockholder Agreement .............................. Recitals
Sub ................................................ Preamble
Substitute Share ................................... Section 5.6(a)
Superior Proposal .................................. Section 4.2(a)
Surviving Corporation .............................. Section 1.1
Takeover Proposal .................................. Section 4.2(a)
Tax Return ......................................... Section 3.9
Taxes .............................................. Section 3.9
U.S. Plan .......................................... Section 3.12(a)
Valuation Period ................................... Section 1.5(c)
WBCL ............................................... Section 1.1
Worker Safety Laws ................................. Section 3.13
Year 2000 Compliant ................................ Section 3.29
</TABLE>
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized all as of the date first written above.
GENERAL ELECTRIC COMPANY,
A NEW YORK CORPORATION
By: /s/ J. Keith Morgan
------------------------------
Name: J. Keith Morgan
Title: Vice President and General Counsel
GE Medical Systems
TOPAZ MERGER CORP.,
A WISCONSIN CORPORATION
By: /s/ J. Keith Morgan
------------------------------
Name: J. Keith Morgan
Title: President
LUNAR CORPORATION,
A WISCONSIN CORPORATION
By: /s/ Richard B. Mazess
------------------------------
Name: Richard B. Mazess
Title: President
