Document/Exhibit Description Pages Size
1: 10-Q 10-Q for the Quarter Ended March 31, 1994 14 56K
2: EX-2 Exhibit 2 Agreement and Plan of Merger 63 236K
3: EX-10 Exhibit 10 Revolving Credit Agreement 37 92K
4: EX-20 Exhibit 20 Press Release Dated May 4, 1994 4 12K
5: EX-99 Exhibit 99(A) Stock Option Agreement 13 38K
6: EX-99 Exhibit 99(B) Stock Option Agreement 13 39K
EXHIBIT 2
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
Dated as of May 3, 1994,
Among
NATIONAL HEALTH LABORATORIES INCORPORATED,
N ACQUISITION CORP.
AND
ALLIED CLINICAL LABORATORIES, INC.
TABLE OF CONTENTS
Page
Parties and Recitals . . . . . . . . . . . . . . . 1
ARTICLE I
The Offer
SECTION 1.01. The Offer . . . . . . . . . . . . . . 2
SECTION 1.02. Company Actions . . . . . . . . . . . 4
ARTICLE II
The Merger
SECTION 2.01. The Merger . . . . . . . . . . . . . 6
SECTION 2.02. Closing . . . . . . . . . . . . . . . 6
SECTION 2.03. Effective Time . . . . . . . . . . . 6
SECTION 2.04. Effects of the Merger . . . . . . . . 7
SECTION 2.05. Certificate of Incorporation and
By-laws . . . . . . . . . . . . . . 7
SECTION 2.06. Directors . . . . . . . . . . . . . . 7
SECTION 2.07. Officers . . . . . . . . . . . . . . 7
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock . . . . . . . 8
SECTION 3.02. Exchange of Certificates . . . . . . 9
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the
Company . . . . . . . . . . . . . . 11
SECTION 4.02. Representations and Warranties of
Parent and Sub . . . . . . . . . . 27
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business . . . . . . . . . 30
SECTION 5.02. No Solicitation . . . . . . . . . . . 33
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation of
Proxy Statement . . . . . . . . . . 35
SECTION 6.02. Access to Information; Confidentiality 37
SECTION 6.03. Best Efforts; Notification . . . . . 37
SECTION 6.04. Stock Option Plans . . . . . . . . . 39
SECTION 6.05. Benefit Plans and Employee Matters . 40
SECTION 6.06. Indemnification, Exculpation and
Insurance . . . . . . . . . . . . . 41
SECTION 6.07. Directors . . . . . . . . . . . . . . 42
SECTION 6.08. Fees and Expenses . . . . . . . . . . 43
SECTION 6.09. Public Announcements . . . . . . . . 44
SECTION 6.10. Stockholder Litigation . . . . . . . 45
SECTION 6.11. Convertible Notes . . . . . . . . . . 45
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation
to Effect the Merger . . . . . . . 46
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination . . . . . . . . . . . . . 46
SECTION 8.02. Effect of Termination . . . . . . . . 47
SECTION 8.03. Amendment . . . . . . . . . . . . . . 48
SECTION 8.04. Extension; Waiver . . . . . . . . . . 48
SECTION 8.05. Procedure for Termination, Amendment,
Extension or Waiver . . . . . . . . 48
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and
Warranties . . . . . . . . . . . . 49
SECTION 9.02. Notices . . . . . . . . . . . . . . . 49
SECTION 9.03. Definitions . . . . . . . . . . . . . 50
SECTION 9.04. Interpretation . . . . . . . . . . . 52
SECTION 9.05. Counterparts . . . . . . . . . . . . 52
SECTION 9.06. Entire Agreement; No Third-Party
Beneficiaries . . . . . . . . . . . 53
SECTION 9.07. Governing Law . . . . . . . . . . . . 53
SECTION 9.08. Assignment . . . . . . . . . . . . . 53
SECTION 9.09. Enforcement . . . . . . . . . . . . . 53
EXHIBITS
EXHIBIT A Conditions of the Offer
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER dated as of May
3, 1994, among NATIONAL HEALTH LABORATORIES
INCORPORATED, a Delaware corporation ("Parent"),
N ACQUISITION CORP., a Delaware corporation and a
wholly owned subsidiary of Parent ("Sub"), and
ALLIED CLINICAL LABORATORIES, INC., a Delaware
corporation (the "Company").
WHEREAS, in furtherance of the acquisition of the
Company by Parent on the terms and subject to the conditions
set forth in this Agreement, Parent proposes to cause Sub to
make a tender offer (as it may be amended from time to time
as permitted under this Agreement, the "Offer") to purchase
all the issued and outstanding shares of Common Stock, par
value $.01 per share, of the Company (the "Company Common
Stock"), at a price per share of Company Common Stock of $23
net to the seller in cash (such price, as may hereafter be
increased, the "Offer Price"), upon the terms and subject to
the conditions set forth in this Agreement, and the Board of
Directors of the Company has approved the Offer and is
recommending that the Company's stockholders accept the
Offer;
WHEREAS, the respective Boards of Directors of Parent,
Sub and the Company have approved the Offer and the merger
of Sub into the Company, as set forth below (the "Merger"),
upon the terms and subject to the conditions set forth in
this Agreement, whereby each issued and outstanding share of
Company Common Stock, other than shares owned directly or
indirectly by Parent or the Company and Dissenting Shares
(as defined in Section 3.01(d)), will be converted into the
right to receive the Offer Price;
WHEREAS, Parent, Sub and the Company desire to make
certain representations, warranties, covenants and
agreements in connection with the Offer and the Merger and
also to prescribe various conditions to the Offer and the
Merger; and
WHEREAS, certain stockholders of the Company have each
entered into a separate stock option agreement dated as of
the date hereof with Parent and Sub (the "Option
Agreements"), pursuant to which such stockholders are
granting Sub the option to purchase up to an aggregate of
2,768,815 shares of Company Common Stock upon the terms and
subject to the conditions set forth in the respective Option
Agreements.
NOW, THEREFORE, in consideration of the
representations, warranties, covenants and agreements
contained in this Agreement, the parties agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Subject to the
provisions of this Agreement, as promptly as practicable,
but in no event later than May 10, 1994, Sub shall, and
Parent shall cause Sub to, commence the Offer. The
obligation of Sub to, and of Parent to cause Sub to,
commence the Offer and accept for payment, and pay for, any
shares of Company Common Stock tendered pursuant to the
Offer shall be subject to the conditions set forth in
Exhibit A (any of which may be waived by Sub in its sole
discretion, provided that, without the consent of the
Company, Sub shall not waive the Minimum Tender Condition
(as defined in Exhibit A)) and to the terms and conditions
of this Agreement. Sub expressly reserves the right to
modify the terms of the Offer, except that, without the
consent of the Company (such consent to be authorized by the
Board of Directors of the Company), Sub shall not (i) reduce
the number of shares of Company Common Stock subject to the
Offer, (ii) reduce the Offer Price, (iii) add to the
conditions set forth in Exhibit A, (iv) except as provided
in the next sentence, extend the Offer, (v) change the form
of consideration payable in the Offer or (vi) otherwise
amend the Offer in any manner adverse to the Company's
stockholders. Notwithstanding the foregoing, Sub may,
without the consent of the Company, but subject to the
Company's right to terminate this Agreement pursuant to
Section 8.01(b)(i)(y), (A) extend the Offer, if at the
scheduled expiration date of the Offer any of the conditions
to Sub's obligation to accept for payment, and pay for,
shares of Company Common Stock shall not be satisfied or
waived, until such time as such conditions are satisfied or
waived, (B) extend the Offer for any period required by any
rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer and (C) extend the Offer for
any reason on one or more occasions for an aggregate period
of not more than five business days beyond the latest
expiration date that would otherwise be permitted under
clause (A) or (B) of this sentence. Subject to the terms
and conditions of the Offer and this Agreement, Sub shall,
and Parent shall cause Sub to, accept for payment, and pay
for, all shares of Company Common Stock validly tendered and
not withdrawn pursuant to the Offer that Sub becomes
obligated to accept for payment, and pay for, pursuant to
the Offer as soon as practicable after the expiration of the
Offer.
(b) On the date of commencement of the Offer, Parent
and Sub shall file with the SEC a Tender Offer Statement on
Schedule 14D-1 with respect to the Offer, which shall
contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1
and the documents included therein pursuant to which the
Offer will be made, together with any supplements or
amendments thereto, the "Offer Documents"). Parent and Sub
agree that the Offer Documents shall comply as to form in
all material respects with the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and the Offer Documents,
on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary in order to make the
statements therein, in light of the circumstances under
which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to
information supplied by the Company specifically for
inclusion in the Offer Documents. Each of Parent, Sub and
the Company agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or
misleading in any material respect, and each of Parent and
Sub further agrees to take all steps necessary to amend or
supplement the Offer Documents and to cause the Offer
Documents as so amended or supplemented to be filed with the
SEC and to be disseminated to the Company's stockholders, in
each case as and to the extent required by applicable
Federal securities laws. The Company and its counsel shall
be given a reasonable opportunity to review the Offer
Documents and all amendments and supplements thereto prior
to their filing with the SEC or dissemination to
stockholders of the Company. Parent and Sub agree to
provide the Company and its counsel any comments Parent, Sub
or their counsel may receive from the SEC or its staff with
respect to the Offer Documents promptly after the receipt of
such comments.
(c) Parent shall provide or cause to be provided to
Sub on a timely basis the funds necessary to accept for
payment, and pay for, any shares of Company Common Stock
that Sub becomes obligated to accept for payment, and pay
for, pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company
hereby approves of and consents to the Offer and represents
that the Board of Directors of the Company, at a meeting
duly called and held, duly and unanimously adopted
resolutions approving this Agreement, the Offer and the
Merger, determining that the terms of the Offer and the
Merger are fair to, and in the best interests of, the
Company's stockholders and recommending that the Company's
stockholders accept the Offer and tender their shares
pursuant to the Offer and approve and adopt this Agreement.
The Company represents that its Board of Directors has
received the opinion of Alex. Brown & Sons Incorporated that
the proposed consideration to be received by the holders of
shares of Company Common Stock pursuant to the Offer and the
Merger is fair to such holders from a financial point of
view, and a complete and correct signed copy of such opinion
has been delivered by the Company to Parent. The Company
has been advised by each of its directors and executive
officers that each such person intends to tender all shares
of Company Common Stock owned by such person pursuant to the
Offer.
(b) On the date the Offer Documents are filed with the
SEC, the Company shall file with the SEC a Solicitation/
Recommendation Statement on Schedule 14D-9 with respect to
the Offer (such Schedule 14D-9, as amended from time to
time, the "Schedule 14D-9") containing the recommendation
described in paragraph (a) and shall mail the Schedule 14D-9
to the stockholders of the Company. The Company agrees that
the Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and the
rules and regulations promulgated thereunder and, on the
date filed with the SEC and on the date first published,
sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary in order to make the statements therein, in light
of the circumstances under which they were made, not
misleading, except that no representation is made by the
Company with respect to information supplied by Parent or
Sub specifically for inclusion in the Schedule 14D-9. Each
of the Company, Parent and Sub agrees promptly to correct
any information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become
false or misleading in any material respect, and the Company
further agrees to take all steps necessary to amend or
supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed
with the SEC and disseminated to the Company's stockholders,
in each case as and to the extent required by applicable
Federal securities laws. Parent and its counsel shall be
given a reasonable opportunity to review the Schedule 14D-9
and all amendments and supplements thereto prior to their
filing with the SEC or dissemination to stockholders of the
Company. The Company agrees to provide Parent and its
counsel in writing with any comments the Company or its
counsel may receive from the SEC or its staff with respect
to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company shall
cause its transfer agent to furnish Sub promptly with
mailing labels containing the names and addresses of the
record holders of Company Common Stock as of a recent date
and of those persons becoming record holders subsequent to
such date, together with copies of all lists of
stockholders, security position listings and computer files
and all other information in the Company's possession or
control regarding the beneficial owners of Company Common
Stock, and shall furnish to Sub such information and
assistance (including updated lists of stockholders,
security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the
Company's stockholders. Subject to the requirements of
applicable law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents
necessary to consummate the Merger, Parent and Sub and their
agents shall hold in confidence the information contained in
any such labels, listings and files, will use such
information only in connection with the Offer and the Merger
and, if this Agreement shall be terminated, will, upon
request, deliver, and will use their best efforts to cause
their agents to deliver, to the Company all copies of such
information then in their possession or control.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and subject
to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as defined in Section 2.03). Following
the Effective Time, 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 DGCL. Notwithstanding the foregoing,
Parent may elect at any time prior to the Merger, instead of
merging Sub into the Company as provided above, to merge the
Company with and into Sub; provided, however, that the
Company shall not be deemed to have breached any of its
representations, warranties, covenants or agreements set
forth in this Agreement solely by reason of such election.
In such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the
foregoing and, where appropriate, to provide that Sub shall
be the Surviving Corporation and will continue under the
name "Allied Clinical Laboratories, Inc.". At the election
of Parent, any direct or indirect subsidiary (as defined in
Section 9.03) 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 order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger will
take place at 10:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business
day after satisfaction or waiver of the conditions set forth
in Article VII (the "Closing Date"), at the offices of
Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue,
New York, New York 10019, unless another date or place is
agreed to in writing by the parties hereto.
SECTION 2.03. Effective Time. Subject to the
provisions of this Agreement, as soon as practicable on or
after the Closing Date, the parties shall file a certificate
of merger or other appropriate documents (in any such case,
the "Certificate of Merger") executed in accordance with the
relevant provisions of the DGCL and shall make all other
filings or recordings required under the DGCL. The Merger
shall become effective at such time as the Certificate of
Merger is duly filed with the Delaware Secretary of State,
or at such other time as Sub and the Company shall agree
should be specified in the Certificate of Merger (the time
the Merger becomes effective being hereinafter referred to
as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall
have the effects set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation and
By-laws. (a) The certificate of incorporation of the
Company, as in effect immediately prior to the Effective
Time, shall be amended as of the Effective Time so that
Article FOUR of such certificate of incorporation reads in
its entirety as follows: "The total number of shares of all
classes of stock which the corporation shall have authority
to issue is 100 shares of Common Stock, par value $1.00 per
share." and Article FIVE of such certificate of
incorporation is deleted in its entirety and, as so amended,
such certificate of incorporation shall be the certificate
of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by
applicable law.
(b) The by-laws of the Company as in effect at the
Effective Time shall be the by-laws of the Surviving
Corporation, until thereafter changed or amended as provided
therein or by applicable law.
SECTION 2.06. Directors. The directors of Sub
immediately prior to the Effective Time shall be the
directors 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 2.07. Officers. The officers of the Company
immediately prior to 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.
ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the
Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares of Company
Common Stock or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding
share of capital stock of Sub shall be converted into and
become one fully paid and nonassessable share of Common
Stock, par value $1.00 per share, of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Parent Owned
Stock. Each share of Company Common Stock that is owned
by the Company or by any subsidiary of the Company and
each share of Company Common Stock that is owned by
Parent, Sub or any other subsidiary of Parent shall
automatically be cancelled and retired and shall cease to
exist, and no consideration shall be delivered in exchange
therefor.
(c) Conversion of Company Common Stock. Subject to
Section 3.01(d), each issued and outstanding share of
Company Common Stock (other than shares to be cancelled in
accordance with Section 3.01(b)) shall be converted into
the right to receive from the Surviving Corporation in
cash, without interest, the Offer Price (the "Merger
Consideration"). As of the Effective Time, all such
shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common
Stock shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration,
without interest.
(d) Shares of Dissenting Stockholders.
Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding shares of Company
Common Stock held by a person (a "Dissenting Stockholder")
who objects to the Merger and complies with all the
provisions of Delaware law concerning the right of holders
of Company Common Stock to dissent from the Merger and
require appraisal of their shares of Company Common Stock
("Dissenting Shares") shall not be converted as described in
Section 3.01(c) but shall become the right to receive such
consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the laws of the State of
Delaware. If, after the Effective Time, such Dissenting
Stockholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any
case pursuant to the DGCL, his shares of Company Common
Stock shall be deemed to be converted as of the Effective
Time into the right to receive the Merger Consideration.
The Company shall give Parent (i) prompt notice of any
demands for appraisal of shares of Company Common Stock
received by the Company and (ii) the opportunity to
participate in and direct all negotiations and proceedings
with respect to any such demands. The Company shall not,
without the prior written consent of Parent, make any
payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 3.02. Exchange of Certificates. (a) Paying
Agent. Prior to the Effective Time, Parent shall select a
bank or trust company to act as paying agent (the "Paying
Agent") for the payment of the Merger Consideration upon
surrender of certificates representing Company Common Stock.
(b) Parent To Provide Funds. Parent shall take all
steps necessary to enable and cause the Surviving
Corporation to provide to the Paying Agent on a timely
basis, as and when needed after the Effective Time, funds
necessary to pay for the shares of Company Common Stock as
part of the Merger pursuant to Section 3.01.
(c) Exchange Procedure. As soon as reasonably
practicable after the Effective Time, the Paying Agent shall
mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the
"Certificates") whose shares were converted into the right
to receive the Merger Consideration pursuant to
Section 3.01, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon delivery
of the Certificates to the Paying Agent and shall be in a
form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such
letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent,
the holder of such Certificate shall be entitled to receive
in exchange therefor the amount of cash into which the
shares of Company Common Stock theretofore represented by
such Certificate shall have been converted pursuant to
Section 3.01, and the Certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of
ownership of Company Common Stock which is not registered in
the transfer records of the Company, payment may be made to
a person other than the person in whose name the Certificate
so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay
any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not
applicable. Until surrendered as contemplated by this
Section 3.02, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without
interest, into which the shares of Company Common Stock
theretofore represented by such Certificate shall have been
converted pursuant to Section 3.01. No interest will be
paid or will accrue on the cash payable upon the surrender
of any Certificate.
(d) No Further Ownership Rights in Company Common
Stock. All cash paid upon the surrender of Certificates in
accordance with the terms of this Article III shall be
deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock theretofore
represented by such Certificates, and there shall be no
further registration of transfers on the stock transfer
books of the Surviving Corporation of the shares of Company
Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates
are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be cancelled and exchanged
as provided in this Article III.
(e) No Liability. None of Parent, Sub, the Company or
the Paying Agent shall be liable to any person in
respect of any cash delivered to a public official pursuant
to any applicable abandoned property, escheat or similar
law. If any Certificates shall not have been surrendered
prior to seven years after the Effective Time (or
immediately prior to such earlier date on which any payment
pursuant to this Article III would otherwise escheat to or
become the property of any Governmental Entity (as defined
in Section 4.01(d))), the cash payment in respect of such
Certificate shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free
and clear of all claims or interests of any person
previously entitled thereto.
ARTICLE IV
Representations and Warranties
SECTION 4.01. Representations and Warranties of the
Company. Except as set forth on the Disclosure Schedule
delivered by the Company to Parent prior to the execution of
this Agreement (the "Company Disclosure Schedule"), the
Company represents and warrants to Parent and Sub as
follows:
(a) Organization, Standing and Corporate Power. Each
of the Company and each of its subsidiaries is a
corporation or partnership duly organized, validly
existing and in good standing under the laws of the
jurisdiction in which it is organized and has the
requisite corporate or partnership power and authority to
carry on its business as now being conducted. Each of the
Company and each of its subsidiaries is duly qualified or
licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such
jurisdictions where the failure to be so qualified or
licensed individually or in the aggregate would not have a
material adverse effect on the Company. The Company has
delivered to Parent complete and correct copies of its
certificate of incorporation and by-laws and the
certificates of incorporation and by-laws or other
organizational documents of its Significant Subsidiaries,
in each case as amended to the date of this Agreement.
For purposes of this Agreement, a "Significant Subsidiary"
means any subsidiary of the Company that constitutes a
significant subsidiary within the meaning of Rule 1-02 of
Regulation S-X of the SEC.
(b) Subsidiaries. The Company Disclosure
Schedule lists each subsidiary of the Company. All the
outstanding shares of capital stock of each such
subsidiary have been validly issued and are fully paid and
nonassessable and are owned by the Company, by another
subsidiary of the Company or by the Company and another
such subsidiary, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens"). Except
for the capital stock of its subsidiaries, the Company
does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership,
joint venture or other entity.
(c) Capital Structure. The authorized capital stock
of the Company consists of 20,000,000 shares of Company
Common Stock and 10,000,000 shares of preferred stock, par
value $.01 per share ("Company Preferred Stock"). At the
close of business on May 2, 1994, (i) 8,398,916 shares of
Company Common Stock and no shares of Company Preferred
Stock were issued and outstanding, (ii) no shares of
Company Common Stock were held by the Company in its
treasury, (iii) 508,719 shares of Company Common Stock
were reserved for issuance upon exercise of outstanding
Employee Stock Options (as defined in Section 6.04) and
(iv) 761,904 shares of Company Common Stock were reserved
for issuance upon conversion of the Company's 7.375%
Convertible Senior Subordinated Notes due December 15,
2006 (the "Convertible Notes"). At the close of business
on May 1, 1994, there was $24,000,000 aggregate principal
amount outstanding of the Convertible Notes, which are
convertible into shares of Company Common Stock at the
option of the holder thereof at an exchange price of
$31.50 per share of Company Common Stock. Except as set
forth above, at the close of business on May 1, 1994, no
shares of capital stock or other voting securities of the
Company were issued, reserved for issuance or outstanding.
There are no outstanding stock appreciation rights which
were not granted in tandem with a related Employee Stock
Option. All outstanding shares of capital stock of the
Company are, and all shares which may be issued will be,
when issued, duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive rights.
There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or,
except for the Convertible Notes, convertible into, or
exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote.
Except as set forth above, as of the date of this
Agreement, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind 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 or other voting securities of the Company or of any
of its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking. As of the date of
this Agreement, there are not any outstanding contractual
obligations (i) of the Company or any of its subsidiaries
to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or
(ii) of the Company to vote or to dispose of any shares of
the capital stock of any of its subsidiaries.
(d) Authority; Noncontravention. The Company has the
requisite corporate power and authority to enter into this
Agreement and, subject to, if required by law, approval of
the Merger by an affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock
(the "Company Stockholder Approval"), to consummate the
transactions contemplated by this Agreement. The
execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of the
Company, subject to the Company Stockholder Approval, if
such approval is required by law. This Agreement has been
duly executed and delivered by the Company and constitutes
a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms. The
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse
of time or both) under, or give rise to a right of
termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or
result in the creation of any Lien upon any of the
properties or assets of the Company or any of its
subsidiaries under, (i) the certificate of incorporation
or by-laws of the Company or the comparable charter or
organizational documents of any of its subsidiaries,
(ii) 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 their respective properties
or assets or (iii) subject to the governmental filings and
other matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any of its
subsidiaries or their respective properties or assets,
other than, in the case of clause (ii) or (iii), any such
conflicts, violations, defaults, rights or Liens that
individually or in the aggregate would not (x) have a
material adverse effect on the Company, (y) impair the
ability of the Company to perform its obligations under
this Agreement or (z) prevent the consummation of any of
the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or
registration, declaration or filing with, any Federal,
state or local government or any court, administrative or
regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "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 by the Company or the
consummation by the Company of the transactions
contemplated by this Agreement, except for (1) the filing
of a premerger notification and report form by the Company
under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"), (2) the filing with the SEC of
(A) the Schedule 14D-9, (B) a proxy statement relating to
the Company Stockholder Approval, if such approval is
required by law (as amended or supplemented from time to
time, the "Proxy Statement"), and (C) such reports under
Section 13(a) of the Exchange Act as may be required in
connection with this Agreement and the
transactions contemplated by this Agreement, (3) the filing
of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant
authorities of other states in which the Company is
qualified to do business and (4) such other consents,
approvals, orders, authorizations, registrations,
declarations and filings as would not individually or in the
aggregate (A) have a material adverse effect on the Company,
(B) impair the ability of the Company to perform its
obligations under this Agreement or (C) prevent the
consummation of any of the transactions contemplated by this
Agreement.
(e) SEC Documents; Financial Statements. The Company
has filed all required reports, schedules, forms,
statements and other documents with the SEC since
January 1, 1993 (the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable
to such SEC Documents, and none of the SEC Documents
contained any untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary in order to make the statements
therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that
information contained in any SEC Document has been revised
or superseded by a later Filed SEC Document (as defined in
Section 4.01(g)), none of the SEC Documents contains any
untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The financial statements of the Company included in the
SEC Documents comply as to form in all material respects
with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto,
have been prepared in accordance with generally accepted
accounting principles (except, in the case of 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 in the notes thereto) and fairly
present the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit
adjustments). Except as set forth in the Filed SEC
Documents and except for liabilities and obligations
incurred in the ordinary course of business consistent
with past practice since the date of the most recent
consolidated balance sheet included in the Filed SEC
Documents, neither the Company nor any of its subsidiaries
has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) required by
generally accepted accounting principles to be set forth
on a consolidated balance sheet of the Company and its
consolidated subsidiaries or in the notes thereto.
(f) Information Supplied. None of the information
supplied or to be supplied by the Company specifically for
inclusion or incorporation by reference in (i) the Offer
Documents, (ii) the Schedule 14D-9, (iii) the information
to be filed by the Company in connection with the Offer
pursuant to Rule 14f-1 promulgated under the Exchange Act
(the "Information Statement") or (iv) the Proxy Statement,
will, in the case of the Offer Documents, the
Schedule 14D-9 and the Information Statement, at the
respective times the Offer Documents, the Schedule 14D-9
and the Information Statement are filed with the SEC or
first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at
the time the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Stockholders
Meeting (as defined in Section 6.01(a)), 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.
The Schedule 14D-9, the Information Statement and the
Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the
rules and regulations thereunder, except that no
representation or warranty is made by the Company with
respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub
specifically for inclusion or incorporation by reference
therein.
(g) Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents filed and publicly
available prior to the date of this Agreement (the "Filed
SEC Documents"), since the date of the most recently
audited financial statements included in the Filed SEC
Documents, the Company has conducted its business only in
the ordinary course, and there has not been (i) any
material adverse change in the Company, (ii) any
declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property)
with respect to any of the Company's capital stock,
(iii) any split, combination or reclassification of any of
its capital stock or any issuance or the authorization of
any issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital
stock, (iv)(x) any granting by the Company or any of its
subsidiaries to any executive officer 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 Filed SEC
Documents, (y) any granting by the Company or any of its
subsidiaries to any such executive officer of any increase
in severance or termination pay, except as was required
under any employment, severance or termination agreements
in effect as of the date of the most recent audited
financial statements included in the Filed SEC Documents,
or (z) any entry by the Company or any of its subsidiaries
into any employment, severance or termination agreement
with any such executive officer, (v) any damage,
destruction or loss, whether or not covered by insurance,
that has or could reasonably be expected to have a
material adverse effect on the Company or (vi) any change
in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or
business, except insofar as may have been required by a
change in generally accepted accounting principles.
(h) Litigation. Except as disclosed in the Filed SEC
Documents, as of the date of this Agreement, there is no
suit, action or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its
subsidiaries that individually or in the aggregate could
reasonably be expected to (i) have a material adverse
effect on the Company, (ii) impair the ability of the
Company to perform its obligations under this Agreement or
(iii) prevent the consummation of any of the transactions
contemplated by this Agreement, nor is there any judgment,
decree, injunction, rule or order of any Governmental
Entity or arbitrator outstanding against the Company or
any of its subsidiaries having, or which is reasonably
likely to have, any effect referred to in the foregoing
clause (i), (ii) or (iii) above.
(i) Absence of Changes in Benefit Plans. Except as
disclosed in the Filed SEC Documents, since the date of
the most recent audited financial statements included in
the Filed SEC Documents, there has not been any adoption
or amendment in any material respect by the Company or any
of its subsidiaries of any collective bargaining agreement
or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership,
stock purchase, stock option, phantom stock, retirement,
vacation, severance, disability, death benefit,
hospitalization, medical or other plan, arrangement or
understanding (whether or not legally binding) providing
benefits to any current or former employee, officer or
director of the Company or any of its subsidiaries.
Except as disclosed in the Filed SEC Documents, there
exist no employment, consulting, severance, termination or
indemnification agreements, arrangements or understandings
between the Company or any of its subsidiaries and any
current or former employee, officer or director of the
Company or any of its subsidiaries.
(j) ERISA Compliance. (i) The Company Disclosure
Schedule contains a list and brief description of each
"employee pension benefit plan" (as defined in
Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (sometimes referred to
herein as a "Pension Plan"), each "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA) and
each stock option, stock purchase, deferred compensation
plan or arrangement and each other employee fringe benefit
plan (as defined in Section 6039D(d) of the Code)
maintained, contributed to or required to be maintained or
contributed to by the Company, any of its subsidiaries or
any other person or entity that, together with the
Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Internal Revenue
Code of 1986, as amended (the "Code"), (each, a "Commonly
Controlled Entity"), for the benefit of any current or
former employees, officers, directors or independent
contractors of the Company or any of its subsidiaries
(collectively, "Benefit Plans"). The Company has
delivered to Parent true, complete and correct copies of
(w) each Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (x) the most recent
annual report on Form 5500 filed with the Internal Revenue
Service with respect to each Benefit Plan (if any such
report was required), (y) the most recent summary plan
description for each Benefit Plan for which such summary
plan description is required and (z) each currently
effective trust agreement and insurance or group annuity
contract relating to any Benefit Plan.
(ii) Each Benefit Plan has been administered in all
material respects in accordance with its terms. The
Company, its subsidiaries and all the Benefit Plans are
all in compliance in all material respects with the
applicable provisions of ERISA and the Code.
(iii) All Pension Plans intended to be qualified under
Section 401(a) of the Code have been the subject of
determination letters from the Internal Revenue Service to
the effect that such Pension Plans are qualified and
exempt from Federal income taxes under Section 401(a) and
501(a), respectively, of the Code and no such
determination letter has been revoked nor, to the
knowledge of the Company, has revocation been threatened,
nor has any such Pension Plan been amended since the date
of its most recent determination letter or application
therefor in any respect that would adversely affect its
qualification or materially increase its costs.
(iv) No Pension Plan that the Company or any of its
subsidiaries maintains, or to which the Company or any of
its subsidiaries is obligated to contribute, other than
any Pension Plan that is a "multiemployer plan" (as such
term is defined in Section 4001(a)(3) of ERISA;
collectively, the "Multiemployer Pension Plans"), had, as
of the respective last annual valuation date for each such
Pension Plan, an "unfunded benefit liability" (as such
term is defined in Section 4001(a)(18) of ERISA), based on
actuarial assumptions which have been furnished to Parent
and neither the Company nor any of its subsidiaries is
aware of any facts or circumstances that would materially
change the funded status of any such Benefit Plans. None
of the Pension Plans has an "accumulated funding
deficiency" (as such term is defined in Section 302 of
ERISA or Section 412 of the Code), and there has been no
application for a waiver of the minimum funding standards
imposed by Section 412 of the Code with respect to any
Benefit Plan that is a Pension Plan.
(v) None of the Company, any of its subsidiaries, any
officer of the Company or any of its subsidiaries or any
of the Benefit Plans which are subject to ERISA, including
the Pension Plans, any trusts created thereunder or any
trustee or administrator thereof, has engaged in a non-
exempt "prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) or
any other breach of fiduciary responsibility that could
subject the Company, any of its subsidiaries or any
officer of the Company or any of its subsidiaries to tax
or penalty under ERISA, the Code or other applicable law
that has not been corrected or that individually or in the
aggregate would have a material adverse effect on the
Company (determined assuming that the tax under
Section 4975(b) of the Code is imposed with respect to
such prohibited transaction). Any taxes or penalties
arising from prohibited transactions that have been
corrected have been paid in full. Neither any of such
Benefit Plans nor any of such trusts that is subject to
Title IV of ERISA has been terminated, nor has there been
any "reportable event" (as that term is defined in
Section 4043 of ERISA) with respect thereto, during the
last five years.
(vi) Neither the Company nor any Commonly Controlled
Entity has suffered or otherwise caused a "complete
withdrawal" or a "partial withdrawal" (as such terms are
defined in Section 4203 and Section 4205, respectively, of
ERISA) with respect to any of the Multiemployer Pension
Plans that could lead to the imposition of any withdrawal
liability under Section 4201 of ERISA; and no action has
been taken that alone or with the passage of time could
result in either a partial or complete withdrawal by any
Commonly Controlled Entity in respect of any such plan.
(vii) With respect to any Benefit Plan that is an
employee welfare benefit plan, except as disclosed in the
Company Disclosure Schedule, (x) no such Benefit Plan is
funded through a "welfare benefit fund", as such term is
defined in Section 419(e) of the Code, (y) each such
Benefit Plan that is a "group health plan", as such term
is defined in Section 5000(b)(1) of the Code, complies in
all material respects with the applicable requirements of
Section 4980B(f) of the Code and (z) each such Benefit
Plan (including any such Plan covering retirees or other
former employees) may be amended or terminated without
material liability to the Company or any of its
subsidiaries on or at any time after the consummation of
the Offer.
(viii) No Commonly Controlled Entity has incurred any
material liability to a Pension Plan (other than for
contributions not yet due).
(k) Taxes. (i) Each of the Company and each of its
subsidiaries has filed all tax returns and reports
required to be filed by it. All such returns and reports
are complete and correct in all material respects. Each
of the Company and each of its subsidiaries has paid (or
the Company has paid on its behalf) all taxes shown as due
on such returns and all material taxes for which no return
was required to be filed, and the most recent financial
statements contained in the Filed SEC Documents properly
reflect in accordance with generally accepted accounting
principles all taxes payable by the Company and its
subsidiaries for all taxable periods and portions thereof
through the date of such financial statements.
(ii) No deficiencies for any taxes have been
proposed, asserted or assessed against the Company or any
of its subsidiaries that are not properly reflected in
accordance with generally accepted accounting principles
in the most recent financial statements contained in the
Filed SEC Documents, except for deficiencies that
individually or in the aggregate would not have a material
adverse effect on the Company, and no requests for waivers
of the time to assess any such taxes are pending. The
Company has not agreed with any tax authority to extend
the time to assess any such taxes beyond the date of this
Agreement. The Federal income tax returns of the Company
and each of its subsidiaries consolidated in such returns
have been examined by the Internal Revenue Service for all
years through 1991 and such examination is not ongoing.
The Company has not entered into any closing agreement
with respect to any taxable year.
(iii) As used in this Agreement, "taxes" shall include
all Federal, state, local and foreign income, property,
sales, excise and other taxes, tariffs or duties of any
nature whatsoever.
(l) No Excess Parachute Payments; Section 162(m) of
the Code. (i) Any amount that could be received (whether
in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this
Agreement by any employee, officer or director of the
Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation
arrangement or Benefit Plan currently in effect would not
be characterized as an "excess parachute payment" (as such
term is defined in Section 280G(b)(1) of the Code).
(ii) The disallowance of a deduction under
Section 162(m) of the Code for employee remuneration will
not apply to any amount paid or payable by the Company or
any subsidiary of the Company under any contract, plan,
program, arrangement or understanding.
(m) Compliance with Applicable Laws. (i) Each of the
Company and each of its subsidiaries has in effect all
Federal, state, local and foreign governmental approvals,
authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits")
necessary for it to own, lease or operate its properties
and assets and to carry on its business as now conducted,
and there has occurred no default under any such Permit,
except for the lack of Permits and for defaults under
Permits which lack or default individually or in the
aggregate would not have a material adverse effect on the
Company. Except as disclosed in the Filed SEC Documents,
the Company and its subsidiaries are in compliance with
all applicable statutes, laws, ordinances, rules, orders
and regulations of any Governmental Entity, except for
noncompliance which individually or in the aggregate would
not have a material adverse effect on the Company.
(ii) To the best knowledge of the Company, each of
the Company and its subsidiaries is, and has been, and
each of the Company's former subsidiaries, while
subsidiaries of the Company, was in compliance with all
applicable Environmental Laws, except for noncompliance
which individually or in the aggregate would not have a
material adverse effect on the Company. The term
"Environmental Laws" means any Federal, state or local
statute, code, ordinance, rule, regulation, policy,
guideline, permit, consent, approval, license, judgment,
order, writ, decree, directive, injunction or other
authorization, including the requirement to register
underground storage tanks, relating to: (A) Releases (as
defined below) or threatened Releases of Hazardous
Material (as defined below) into the environment,
including into ambient air, soil, sediments, land surface
or subsurface, buildings or facilities, surface water,
groundwater, publicly-owned treatment works, septic
systems or land; or (B) the generation, treatment,
storage, disposal, use, handling, manufacturing,
transportation or shipment of Hazardous Material.
(iii) During the period of ownership or operation by
the Company and its subsidiaries of any of their
respective current or previously owned or leased
properties, there have been no Releases of Hazardous
Material in, on, under or affecting such properties or, to
the knowledge of the Company, any surrounding site, and
none of the Company or its subsidiaries have disposed of
any Hazardous Material or any other substance in a manner
that could reasonably be anticipated to lead to a Release,
except in each case for those which individually or in the
aggregate would not have a material adverse effect on the
Company. Prior to the period of ownership or operation by
the Company and its subsidiaries of any of their
respective current or previously owned or leased
properties, to the knowledge of the Company, no Hazardous
Material was generated, treated, stored, disposed of,
used, handled or manufactured at, or transported, shipped
or disposed of from, such current or previously owned
properties, and there were no Releases of Hazardous
Material in, on, under or affecting any such property or
any surrounding site, except in each case for those which
individually or in the aggregate would not have a material
adverse effect on the Company. The term "Release" has the
meaning set forth in 42 U.S.C. section 9601(22). The term
"Hazardous Material" means (1) hazardous materials,
pollutants, contaminants, constituents, medical or
infectious wastes, hazardous wastes and hazardous
substances as those terms are defined in the following
statutes and their implementing regulations: the
Hazardous Materials Transportation Act, 49 U.S.C.
section 1801 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. section 6901 et seq., the
Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. section 9601 et seq., the
Clean Water Act, 33 U.S.C. section 1251 et seq., the Toxic
Substances Control Act, 15 U.S.C. section 2601 et seq. and
the Clean Air Act, 42 U.S.C. section 7401 et seq.,
(2) petroleum, including crude oil and any fractions
thereof, (3) natural gas, synthetic gas and any mixtures
thereof, (4) asbestos and/or asbestos-containing material,
(5) radon and (6) PCBs, or materials or fluids containing
PCBs.
(n) State Takeover Statutes. The Board of Directors
of the Company has approved the Offer, the Merger, this
Agreement and the Option Agreements and such approval is
sufficient to render inapplicable to the Offer, the
Merger, this Agreement and the Option Agreements and the
transactions contemplated by this Agreement and the Option
Agreements the provisions of Section 203 of the DGCL and
the provisions of the Tennessee Investor Protection Act.
To the best of the Company's knowledge, no other state
takeover statute or similar statute or regulation applies
or purports to apply to the Offer, the Merger, this
Agreement, the Option Agreements or any of the
transactions contemplated by this Agreement and the Option
Agreements.
(o) Brokers; Schedule of Fees and Expenses. No
broker, investment banker, financial advisor or other
person, other than Alex. Brown & Sons Incorporated, the
fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor'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 the Company. The
estimated fees and expenses incurred and to be incurred by
the Company in connection with this Agreement and the
transactions contemplated by this Agreement (including the
fees of the Company's legal counsel) are set forth in the
Company Disclosure Schedule.
(p) Opinion of Financial Advisor. The Company has
received the opinion of Alex. Brown & Sons Incorporated,
dated the date of this Agreement, to the effect that, as
of such date, the consideration to be received in the
Offer and the Merger by the Company's stockholders is fair
to the Company's stockholders from a financial point of
view, and a signed copy of such opinion has been delivered
to Parent.
(q) Contracts; Debt Instruments. (i) Except as
disclosed in the Filed SEC Documents, there is no contract
or agreement that is material to the business, condition
(financial or otherwise), results of operations or
prospects of the Company and its subsidiaries taken as a
whole. Neither the Company nor any of its subsidiaries is
in violation of or in default under (nor does there exist
any condition which upon the passage of time or the giving
of notice would cause such a violation of or default
under) any loan or credit agreement, note, bond, mortgage,
indenture, lease, permit, concession, franchise, license
or any other contract, agreement, arrangement or
understanding to which it is a party or by which it or any
of its properties or assets is bound, except for
violations or defaults that individually or in the
aggregate would not have a material adverse effect on the
Company.
(ii) Set forth on the Company Disclosure Schedule is
(x) a list of all loan or credit agreements, notes, bonds,
mortgages, indentures and other agreements and instruments
pursuant to which any indebtedness of the Company or any
of its subsidiaries in an aggregate principal amount in
excess of $250,000 is outstanding or may be incurred and
(y) the respective principal amounts currently outstanding
thereunder. For purposes of this Agreement,
"indebtedness" shall mean, with respect to any person,
without duplication, (A) all obligations of such person
for borrowed money, or with respect to deposits or
advances of any kind to such person, (B) all obligations
of such person evidenced by bonds, debentures, notes or
similar instruments, (C) all obligations of such person
upon which interest charges are customarily paid, (D) all
obligations of such person under conditional sale or other
title retention agreements relating to property purchased
by such person, (E) all obligations of such person issued
or assumed as the deferred purchase price of property or
services (excluding obligations of such person to
creditors for raw materials, inventory, services and
supplies incurred in the ordinary course of such person's
business), (F) all capitalized lease obligations of such
person, (G) all obligations of others secured by any lien
on property or assets owned or acquired by such person,
whether or not the obligations secured thereby have been
assumed, (H) all obligations of such person under interest
rate or currency hedging transactions (valued at the
termination value thereof), (I) all letters of credit
issued for the account of such person (excluding letters
of credit issued for the benefit of suppliers to support
accounts payable to suppliers incurred in the ordinary
course of business) and (J) all guarantees and
arrangements having the economic effect of a guarantee of
such person of any indebtedness of any other person.
(r) Title to Properties. (i) Each of the Company and
each of its subsidiaries has good and marketable title to,
or valid leasehold interests in, all its material
properties and assets except for such as are no longer
used or useful in the conduct of its businesses or as have
been disposed of in the ordinary course of business and
except for defects in title, easements, restrictive
covenants and similar encumbrances or impediments that
individually or in the aggregate would not materially
interfere with its ability to conduct its business as
currently conducted. All such material properties and
assets, other than properties and assets in which the
Company or any of its subsidiaries has leasehold
interests, are free and clear of all Liens, except for
Liens that individually or in the aggregate would not
materially interfere with the ability of the Company and
its subsidiaries to conduct business as currently
conducted.
(ii) Each of the Company and each of its subsidiaries
has complied in all material respects with
the terms of all material leases to which it is a party
and under which it is in occupancy, and all such leases
are in full force and effect. Each of the Company and
each of its subsidiaries enjoys peaceful and undisturbed
possession under all such material leases.
(s) Labor Matters. There are no collective bargaining
or other labor union agreements to which the Company or
any of its subsidiaries is a party or by which any of them
is bound. To the best knowledge of the Company, since
December 1, 1992, neither the Company nor any of its
subsidiaries has encountered any labor union organizing
activity, or had any actual or threatened employee
strikes, work stoppages, slowdowns or lockouts.
SECTION 4.02. Representations and Warranties of Parent
and Sub. Parent and Sub represent and warrant to the
Company as follows:
(a) Organization, Standing and Corporate Power. Each
of Parent, Sub and each of Parent's other subsidiaries is
a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and
authority to carry on its business as now being conducted.
Each of Parent, Sub and each of Parent's other
subsidiaries is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the
nature of its business or the ownership or leasing of its
properties makes such qualification or licensing
necessary, other than in such jurisdictions where the
failure to be so qualified or licensed individually or in
the aggregate would not have a material adverse effect on
Parent. Parent has delivered to the Company complete and
correct copies of its certificate of incorporation and
by-laws and the certificate of incorporation and by-laws
of Sub, in each case as amended to the date of this
Agreement.
(b) Authority; Noncontravention. Parent and Sub have
all requisite corporate power and authority to enter into
this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and Sub and the
consummation by Parent and Sub of the transactions
contemplated by this Agreement have been duly authorized
by all necessary corporate action on the part of Parent
and Sub. This Agreement has been duly executed and
delivered by Parent and Sub and constitutes a valid and
binding obligation of each such party, enforceable against
each such party in accordance with its terms. The
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated by this
Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse
of time or both) under, or give rise to a right of
termination, cancellation or acceleration of any
obligation or loss of a material benefit under, or result
in the creation of any Lien upon any of the properties or
assets of Parent or any of its subsidiaries under, (i) the
certificate of incorporation or by-laws of Parent or Sub
or the comparable charter or organizational documents of
any other subsidiary of Parent, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or
license applicable to Parent, Sub or any of Parent's other
subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other
matters referred to in the following sentence, any
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent, Sub or any of Parent's
other subsidiaries or their respective properties or
assets, other than, in the case of clause (ii) or (iii),
any such conflicts, violations, defaults, rights or Liens
that individually or in the aggregate would not (x) have a
material adverse effect on Parent, (y) impair the ability
of Parent and Sub to perform their respective obligations
under this Agreement or (z) prevent the consummation of
any of the transactions contemplated by this Agreement.
No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent, Sub or
any of Parent's other subsidiaries in connection with the
execution and delivery of this Agreement or the
consummation by Parent or Sub, as the case may be, of any
of the transactions contemplated by this Agreement, except
for (1) the filing of a premerger notification and report
form under the HSR Act, (2) the filing with the SEC of
(A) the Offer Documents and (B) such reports under
Sections 13(a), 13(d) and 16(a) of the Exchange Act as
may be required in connection with this Agreement and the
transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Delaware
Secretary of State and appropriate documents with the
relevant authorities of other states in which the Company
is qualified to do business and (4) such other consents,
approvals, orders, authorizations, registrations,
declarations and filings as would not individually or in
the aggregate (A) have a material adverse effect on
Parent, (B) impair the ability of Parent and Sub to
perform their respective obligations under this Agreement
or (C) prevent the consummation of any of the transactions
contemplated by this Agreement. Neither Parent nor any of
its affiliates or associates (as such term is defined in
Section 203 of the DGCL) was, immediately prior to the
execution and delivery of the Option Agreements, an
Interested Stockholder (as such term is defined in
Section 203 of the DGCL) of the Company.
(c) Information Supplied. None of the information
supplied or to be supplied by Parent or Sub specifically
for inclusion or incorporation by reference in the Offer
Documents, the Schedule 14D-9, the Information Statement
or the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents,
the Schedule 14D-9 and the Information Statement are filed
with the SEC or first published, sent or given to the
Company's stockholders, or, in the case of the Proxy
Statement, at the date the Proxy Statement is first mailed
to the Company's stockholders or at the time of the
Stockholders Meeting, 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. The Offer Documents
will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and
regulations promulgated thereunder, except that no
representation or warranty is made by Parent or Sub with
respect to statements made or incorporated by reference
therein based on information supplied by the Company
specifically for inclusion or incorporation by reference
therein.
(d) Brokers. No broker, investment banker, financial
advisor or other person, other than Morgan Stanley & Co.
Incorporated, the fees and expenses of which will be paid
by Parent, is entitled to any broker's, finder's,
financial advisor'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.
(e) Financing. Parent and Sub have obtained bank
commitments for funds sufficient to consummate the Offer
and the Merger on the terms contemplated by this
Agreement, and at the expiration of the Offer and the
Effective Time, Parent and Sub will have available all the
funds necessary for the acquisition of all shares of
Common Stock pursuant to the Offer and to perform their
respective obligations under this Agreement.
(f) Litigation. Except as disclosed in documents filed
with the SEC by Parent, as of the date of this Agreement,
there is no suit, action or proceeding pending or, to the
knowledge of Parent, threatened against Parent or any of
its subsidiaries that individually or in the aggregate
could reasonably be expected to (i) impair the ability of
Parent or Sub to perform their obligations under this
Agreement or (ii) prevent the consummation of any of the
transactions contemplated by this Agreement, nor is there
any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against
Parent or any of its subsidiaries having, or which is
reasonably likely to have, any effect referred to in the
foregoing clause (i) or (ii) above.
ARTICLE V
Covenants Relating to Conduct of Business
SECTION 5.01. Conduct of Business. (a) Conduct of
Business by the Company. Until such time as Parent's
designees shall constitute a majority of the members of the
Board of Directors of the Company, the Company shall, and
shall cause its subsidiaries to, carry on their respective
businesses in the ordinary course and use all reasonable
efforts to preserve intact their current business
organizations, keep available the services of their current
officers and employees and preserve their relationships with
customers, suppliers and others having business dealings
with them. Without limiting the generality of the
foregoing, until such time as Parent's designees shall
constitute a majority of the members of the Board of
Directors of the Company, the Company shall not, and shall
not permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends on, or
make any other distributions in respect of, any of its
capital stock, other than dividends and distributions by
any direct or indirect wholly owned subsidiary of the
Company to its parent, in the case of less than wholly
owned subsidiaries, as required by agreements existing on
the date of this Agreement, (y) 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 (z) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or
any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities,
other than any purchase of the Convertible Notes in
accordance with Section 2.3 of the Note Agreement dated as
of December 1, 1991 (the "Note Agreement");
(ii) issue, deliver, sell, pledge or otherwise
encumber any shares of its capital stock, any other voting
securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares,
voting securities or convertible securities (other than
(x) the issuance of Company Common Stock upon the exercise
of Employee Stock Options outstanding on the date of this
Agreement and in accordance with their present terms and
(y) the issuance of Company Common Stock upon conversion
of the outstanding Convertible Notes by the holders
thereof in accordance with their present terms);
(iii) amend its certificate of incorporation, by-laws or
other comparable charter or organizational documents;
(iv) acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion
of the assets of, or by any other manner, any business or
any corporation, partnership, joint venture, association
or other business organization or division thereof or
(y) any assets that individually or in the aggregate are
material to the Company and its subsidiaries taken as a
whole, except purchases of inventory in the ordinary
course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of
any of its properties or assets, except for sales of its
properties or assets in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or
guarantee any such indebtedness of another person, issue
or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its
subsidiaries, guarantee any debt securities of another
person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another
person or enter into any arrangement having the economic
effect of any of the foregoing or (y) make any loans,
advances or capital contributions to, or investments in,
any other person, other than to the Company or any direct
or indirect wholly owned subsidiary of the Company;
(vii) make or agree to make any new capital expenditure
or expenditures which individually is in excess of
$150,000 or which in the aggregate are in excess of
$1,000,000;
(viii) make any tax election or settle or compromise any
income tax liability;
(ix) pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the
payment, discharge, settlement 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 consolidated financial statements (or the
notes thereto) of the Company included in the Filed SEC
Documents or incurred since the date of such financial
statements in the ordinary course of business consistent
with past practice;
(x) except in the ordinary course of business, modify,
amend or terminate any material contract or agreement to
which the Company or any subsidiary is a party or waive,
release or assign any material rights or claims
thereunder; or
(xi) authorize any of, or commit or agree to take any
of, the foregoing actions.
(b) Other Actions. The Company and Parent shall not,
and shall not permit any of their respective subsidiaries
to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and
warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so
qualified becoming untrue in any material respect or
(iii) any of the conditions to the Offer set forth in
Exhibit A or any of the conditions to the Merger not being
satisfied (subject to the Company's right to take action
consistent with Section 5.02).
SECTION 5.02. 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 investment banker, attorney or other
advisor or representative of, the Company or any of its
subsidiaries to, directly or indirectly, (i) solicit,
initiate or encourage the submission of any takeover
proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any
information with respect to, 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 prior to the
acceptance for payment of shares of Company Common Stock
pursuant to the Offer, to the extent required by the
fiduciary obligations of the Board of Directors of the
Company, as determined in good faith by the Board of
Directors based on the advice of outside counsel, the
Company may, (A) in response to an unsolicited request
therefor, furnish information with respect to the Company to
any person pursuant to a customary confidentiality agreement
(as determined by the Company's outside counsel) and discuss
(1) such information (but not the terms of any possible
takeover proposal) and (2) the terms of this Section 5.02
with such person and (B) upon receipt by the Company of a
takeover proposal, following delivery to Parent of the
notice required pursuant to Section 5.02(c), participate in
negotiations regarding such takeover proposal. Without
limiting the foregoing, it is understood that any violation
of the restrictions set forth in the preceding sentence by
any officer, director or employee of the Company or any of
its subsidiaries or any investment banker, 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 5.02(a) by the Company. For purposes of this
Agreement, "takeover proposal" means any proposal for a
merger or other business combination involving the Company
or any of its Significant Subsidiaries or any proposal or
offer to acquire in any manner, directly or indirectly, an
equity interest in, not less than 25% of the outstanding
voting securities of, or assets representing not less than
25% of the annual revenues of the Company or any of its
Significant Subsidiaries, other than the transactions
contemplated by this Agreement.
(b) Neither the Board of Directors of the Company nor
any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent
or Sub, the approval or recommendation by such Board of
Directors or any such committee of the Offer, this Agreement
or the Merger, (ii) approve or recommend, or propose to
approve or recommend, any takeover proposal or (iii) enter
into any agreement with respect to any takeover proposal.
Notwithstanding the foregoing, in the event the Board of
Directors of the Company receives a takeover proposal that,
in the exercise of its fiduciary obligations (as determined
in good faith by the Board of Directors after reviewing the
advice of outside counsel), it determines to be a superior
proposal, the Board of Directors may (subject to the
following sentences) withdraw or modify its approval or
recommendation of the Offer, this Agreement or the Merger,
approve or recommend any such superior proposal, enter into
an agreement with respect to such superior proposal or
terminate this Agreement, in each case at any time after the
second business day following Parent's receipt of written
notice (a "Notice of Superior Proposal") advising Parent
that the Board of Directors has received a superior
proposal, specifying the material terms and conditions of
such superior proposal and identifying the person making
such superior proposal. The Company may take any of the
foregoing actions pursuant to the preceding sentence only if
Sub shall not have accepted for payment shares of Company
Common Stock pursuant to the Offer. In addition, if the
Company proposes to enter into an agreement with respect to
any takeover proposal, it shall concurrently with taking any
of the foregoing actions pay, or cause to be paid, to Parent
the Expense Fee (as defined in Section 6.08(b)) and, in the
event the Company shall enter into such an agreement, such
agreement shall provide for the payment to Parent of the
Termination Fee (as defined in Section 6.08(c)) upon the
consummation of the transaction contemplated by such
agreement. For purposes of this Agreement, a "superior
proposal" means any bona fide takeover proposal on terms
which the Board of Directors of the Company determines in
its good faith reasonable judgment (after reviewing the
advice of a financial advisor of nationally recognized
reputation) to be more favorable to the Company's
stockholders than the Offer and the Merger. Nothing
contained herein shall prohibit the Company from taking and
disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act prior to
the third business day following Parent's receipt of a
Notice of Superior Proposal provided that the Company does
not withdraw or modify its position with respect to the
Offer or Merger or approve or recommend a takeover proposal.
(c) In addition to the obligations of the Company set
forth in paragraph (b) above, the Company shall promptly
advise Parent orally and in writing of any request for
information or of any takeover proposal, or any inquiry with
respect to or which could lead to any takeover proposal, the
material terms and conditions of such request, takeover
proposal or inquiry, and the identity of the person making
any such takeover proposal or inquiry. The Company will
keep Parent fully informed of the status and details of any
such request, takeover proposal or inquiry.
ARTICLE VI
Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation of
Proxy Statement. (a) If the Company Stockholder Approval
is required by law, the Company will, at Parent's request,
as soon as practicable following the expiration of the
Offer, duly call, give notice of, convene and hold a meeting
of its stockholders (the "Stockholders Meeting") for the
purpose of obtaining the Company Stockholder Approval. The
Company will, through its Board of Directors, recommend
to its stockholders that the Company Stockholder Approval be
given. Notwithstanding the foregoing, if Sub or any other
subsidiary of Parent shall acquire at least 90% of the
outstanding shares of Company Common Stock, the parties
shall, at the request of Parent, take all necessary and
appropriate action to cause the Merger to become effective
as soon as practicable after the expiration of the Offer
without a Stockholders Meeting in accordance with
Section 253 of the DGCL. Without limiting the generality of
the foregoing, the Company agrees that its obligations
pursuant to the first sentence of this Section 6.01(a) shall
not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any
takeover proposal or (ii) the withdrawal or modification by
the Board of Directors of the Company of its approval or
recommendation of the Offer, this Agreement or the Merger.
(b) If the Company Stockholder Approval is required by
law, the Company will, at Parent's request, as soon as
practicable following the expiration of the Offer, prepare
and file a preliminary Proxy Statement with the SEC and will
use its best efforts to respond to any comments of the SEC
or its staff and to cause the Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of
the staff. The Company will notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all
correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff,
on the other hand, with respect to the Proxy Statement or
the Merger. If at any time prior to the Stockholders
Meeting there shall occur any event that should be set forth
in an amendment or supplement to the Proxy Statement, the
Company will promptly prepare and mail to its stockholders
such an amendment or supplement. The Company will not mail
any Proxy Statement, or any amendment or supplement thereto,
to which Parent reasonably objects.
(c) Parent agrees to cause all shares of Company
Common Stock purchased pursuant to the Offer and all other
shares of Company Common Stock owned by Sub or any other
subsidiary of Parent to be voted in favor of the Company
Stockholder Approval.
SECTION 6.02. Access to Information; Confidentiality.
The Company shall, and shall cause each of its subsidiaries
to, afford to Parent, and to Parent's officers, employees,
accountants, counsel, financial advisers and other
representatives, reasonable access during normal business
hours during the period prior to the Effective Time to all
their respective properties, books, contracts, commitments,
personnel and records and, during such period, the Company
shall, and shall cause each of its subsidiaries to, furnish
promptly to Parent (a) 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 and (b) all other information concerning its
business, properties and personnel as Parent may reasonably
request. Except as required by law, Parent will hold, and
will cause its officers, employees, accountants, counsel,
financial advisers and other representatives and affiliates
to hold, any confidential information in accordance with the
Confidentiality Agreement dated July 12, 1993, between
Parent and the Company (the "Confidentiality Agreement").
Parent and its subsidiaries agree not to acquire or agree to
acquire, or, for 90 days following the termination of this
Agreement, otherwise obtain beneficial ownership of, the
stock or assets of any company listed on the Company
Disclosure Schedule pursuant to this Section 6.02.
SECTION 6.03. Best Efforts; Notification. (a) Upon
the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its best
efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most
expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement and
the Option Agreements, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all
reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings,
whether judicial or administrative, challenging this
Agreement or the Option Agreements or the consummation of
any of the transactions contemplated by this Agreement or
the Option Agreements, 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,
and to fully carry out the purposes of, this Agreement and
the Option Agreements. In connection with and without
limiting the foregoing, the Company and its Board of
Directors shall (A) take all action necessary to ensure that
no state takeover statute or similar statute or regulation
is or becomes applicable to the Offer, the Merger, this
Agreement, the Option Agreements or any of the other
transactions contemplated by this Agreement or the Option
Agreements and (B) if any state takeover statute or similar
statute or regulation becomes applicable to the Offer, the
Merger, this Agreement, the Option Agreements or any other
transaction contemplated by this Agreement or the Option
Agreements, take all action necessary to ensure that the
Offer, the Merger and the other transactions contemplated by
this Agreement and the Option Agreements may be consummated
as promptly as practicable on the terms contemplated by this
Agreement and the Option Agreements and otherwise to
minimize the effect of such statute or regulation on the
Offer, the Merger and the other transactions contemplated by
this Agreement and the Option Agreements. Notwithstanding
anything to the contrary set forth in this Section 6.03(a),
the Board of Directors of the Company shall not be
prohibited from taking any action permitted by
Section 5.02(b).
(b) The Company shall give prompt notice to Parent,
and Parent shall give prompt notice to the Company, of
(i) any representation or warranty made by it contained in
this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming
untrue or inaccurate in any material respect or (ii) the
failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied
with or satisfied by it under this Agreement; provided,
however, that no such notification shall affect the
representations, warranties, covenants, or agreements of the
parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 6.04. Stock Option Plans. (a) As soon as
practicable following the date of this Agreement, the Board
of Directors of the Company (or, if appropriate, any
committee administering the Stock Plans) shall adopt such
resolutions or take such other actions as are required to
adjust the terms of all outstanding employee stock options
to purchase shares of Company Common Stock ("Employee Stock
Options") and all outstanding stock appreciation rights
("SARs") heretofore granted under any stock option or stock
appreciation rights plan, program or arrangement of the
Company (collectively, the "Stock Plans") to provide that
each Employee Stock Option (and any SAR related thereto),
whether vested or not, outstanding immediately prior to the
acceptance for payment of shares of Company Common Stock
pursuant to the Offer shall be cancelled in exchange for a
cash payment by the Company of an amount equal to (i) the
excess, if any, of (x) the price per share of Company Common
Stock to be paid pursuant to the Offer over (y) the exercise
price per share of Company Common Stock subject to such
Employee Stock Option, multiplied by (ii) the number of
shares of Company Common Stock for which such Employee Stock
Option shall not theretofore have been exercised.
Notwithstanding the foregoing, the Employee Stock Options
granted within six months prior to the Effective Time to
officers and directors of the Company who are subject to the
reporting requirements of Section 16 of the Exchange Act and
the rules promulgated thereunder shall not be cancelled in
exchange for cash payments, but instead shall be immediately
converted as of the Effective Time into the right ("Adjusted
Option") to purchase the Option Conversion Number (as
defined below) of shares of common stock, par value $.01 per
share, of Parent (or, in the event Parent has consummated
prior to the Effective Time the holding company
reorganization as contemplated by its proxy statement/
prospectus dated April 26, 1994, shares of common stock, par
value $.01 per share, of Parent's public holding company
("Holdings")). Each Adjusted Option will have substantially
the same terms as the Employee Stock Option to which it is
related, except that: (i) the Adjusted Option shall be
deemed fully vested, (ii) if the Adjusted Option holder's
employment with Parent or the Surviving Company is
terminated, the Adjusted Option will remain exercisable for
a period of at least six months after the date of such
termination and (iii) the exercise price of an Adjusted
Option shall be an amount equal to the exercise price of the
Employee Stock Option related to such Adjusted Option as of
the date of this Agreement divided by the Conversion Number
(as defined below). The "Option Conversion Number" for any
Adjusted Option shall be equal to the number of shares of
Company Common Stock purchasable pursuant to the Employee
Stock Option related to such Adjusted Option as of the date
of this Agreement multiplied by the Conversion Number. The
"Conversion Number" shall be a number equal to (x) the Offer
Price divided by (y) the average closing price of common
stock of Parent and/or Holdings, as the case may be, on the
NYSE Composite Tape for the 30 consecutive trading days
prior to the Effective Date. Parent agrees to use best
efforts to take, and, if applicable, to cause Holdings to
take, such actions as are necessary for the conversion of
the Employee Stock Options to Adjusted Options as described
above, including the reservation, issuance and listing of
common stock of Parent or Holdings, as the case may be, as
is necessary to effect the transactions contemplated by this
Section 6.04(a).
(b) All amounts payable pursuant to this Section 6.04
shall be subject to any required withholding of taxes and
shall be paid without interest. The Company shall use its
best efforts to obtain all consents of the holders of the
Employee Stock Options as shall be necessary to effectuate
the foregoing. Notwithstanding anything to the contrary
contained in this Agreement, payment shall, at Parent's
request, be withheld in respect of any Employee Stock Option
until all necessary consents are obtained.
(c) The Stock Plans shall terminate as of the
Effective Time, except with respect to Adjusted Options
granted pursuant to Section 6.04(a), if any, which shall
continue to be governed by the applicable Stock Plan of the
Company, and the provision in any other Benefit Plan
providing for the issuance, transfer or grant of any capital
stock of the Company or any interest in respect of any
capital stock of the Company shall be deleted as of the
Effective Time, and the Company shall ensure that following
the Effective Time no holder of an Employee Option or SAR or
any participant in any Stock Plan or other Benefit Plan
shall have any right thereunder to acquire any capital stock
of the Company or the Surviving Corporation.
SECTION 6.05. Benefit Plans and Employee Matters.
(a) Except as provided in Section 6.04, Parent currently
intends to cause the Surviving Corporation to maintain for a
period of three years after the Effective Time the Benefit
Plans of the Company and its subsidiaries in effect on the
date of this Agreement or to provide benefits to employees
of the Company and its subsidiaries that are no less
favorable in the aggregate to such employees than those in
effect on the date of this Agreement.
(b) Parent currently intends, for a period of three
years after the Effective Time, to provide, or cause its
subsidiaries to provide, to persons who are employees of the
Company or any of its subsidiaries at the Effective Time
("Company Employees"), and whose employment is thereafter
terminated by Parent or any of its subsidiaries, with an
opportunity to apply for subsequent employment opportunities
involving substantially similar job qualifications with the
Parent and its subsidiaries prior to the placement of
advertisements or other open notices to the general public
that such employment opportunities are available; provided,
however, that neither the Parent nor any of its subsidiaries
shall have any obligations to offer employment to any such
former Company Employees.
SECTION 6.06. Indemnification, Exculpation and
Insurance. (a) Parent and Sub agree that all rights to
indemnification and exculpation from liability for acts or
omissions occurring prior to the Effective Time now existing
in favor of the current or former directors or officers of
the Company and its subsidiaries as provided in their
respective certificates of incorporation or by-laws shall
survive the Merger and shall continue in full force and
effect in accordance with their terms for a period of not
less than six years from the Effective Time. Parent will
cause to be maintained for a period of not less than six
years from the Effective Time the Company's current
directors' and officers' insurance and indemnification
policy to the extent that it provides coverage for events
occurring prior to the Effective Time (the "D&O Insurance")
for all persons who are directors and officers of the
Company on the date of this Agreement, so long as the annual
premium therefor would not be in excess of 200% of the last
annual premium paid prior to the date of this Agreement (the
"Maximum Premium"); provided, however, that Parent may, in
lieu of maintaining such existing D&O Insurance as provided
above, cause comparable coverage to be provided under any
policy maintained for the benefit of Parent or any of its
subsidiaries, so long as the material terms thereof are no
less advantageous than the existing D&O Insurance. If the
existing D&O Insurance expires, is terminated or cancelled
during such six-year period, Parent will use all reasonable
efforts to cause to be obtained as much D&O Insurance as can
be obtained for the remainder of such period for an
annualized premium not in excess of the Maximum Premium, on
terms and conditions no less advantageous than the existing
D&O Insurance. The Company represents to Parent that the
Maximum Premium is $113,400.
(b) In the event Parent, the Surviving Corporation or
any of their successors or assigns (i) consolidates with or
merges into any other person and shall not be the continuing
or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such
case, proper provisions shall be made so that the successors
and assigns of Parent or the Surviving Corporation, as the
case may be, shall assume the obligations set forth in this
Section 6.06.
SECTION 6.07. Directors. Promptly upon the acceptance
for payment of, and payment for, any shares of Company
Common Stock by Sub pursuant to the Offer, Sub shall be
entitled to designate such number of directors on the Board
of Directors of the Company as will give Sub, subject to
compliance with Section 14(f) of the Exchange Act, a
majority of such directors, and the Company shall, at such
time, cause Sub's designees to be so elected by its existing
Board of Directors; provided, however, that in the event
that Sub's designees are elected to the Board of Directors
of the Company, until the Effective Time such Board of
Directors shall have at least two directors who are
directors on the date of this Agreement and who are not
officers of the Company (the "Independent Directors"); and
provided further that, in such event, if the number of
Independent Directors shall be reduced below two for any
reason whatsoever, the remaining Independent Director shall
designate a person to fill such vacancy who shall be deemed
to be an Independent Director for purposes of this Agreement
or, if no Independent Directors then remain, the other
directors shall designate two persons to fill such vacancies
who shall not be officers or affiliates of the Company or
any of its subsidiaries, or officers or affiliates of Parent
or any of its subsidiaries, and such persons shall be deemed
to be Independent Directors for purposes of this Agreement.
Subject to applicable law, the Company shall take all action
requested by Parent necessary to effect any such election,
including mailing to its stockholders the Information
Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company agrees to make such mailing with
the mailing of the Schedule 14D-9 (provided that Sub shall
have provided to the Company on a timely basis all
information required to be included in the Information
Statement with respect to Sub's designees). In connection
with the foregoing, the Company will promptly, at the option
of Parent, either increase the size of the Company's Board
of Directors and/or obtain the resignation of such number of
its current directors as is necessary to enable Sub's
designees to be elected or appointed to the Company's Board
of Directors as provided above.
SECTION 6.08. Fees and Expenses. (a) Except as
provided below in this Section 6.08, all fees and expenses
incurred in connection with the Offer, the Merger, this
Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Offer or the Merger is
consummated.
(b) The Company shall pay, or cause to be paid, in
same day funds to Parent all Expenses, not exceeding
$6,000,000 (the "Expense Fee"), as follows:
(i) upon demand, unless this Agreement is terminated by
the Company and Parent or Sub shall have failed to perform
in any material respect any of its obligations under this
Agreement, if this Agreement is terminated pursuant to
Section 8.01(b)(i) as a result of the failure of any
condition set forth in clause (i) or (iii) of
paragraph (e) or in paragraph (f) or (g) of Exhibit A;
(ii) upon demand, unless this Agreement is terminated by
the Company and Parent or Sub shall have failed to perform
in any material respect any of its obligations under this
Agreement, if (x) at any time on or after the date of this
Agreement until one year following the termination of this
Agreement, any person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) (other than Parent
or any of its affiliates) shall have acquired, directly or
indirectly, the Company, assets representing more than 50%
of the revenues of the Company or more than 50% of the
shares of Company Common Stock then outstanding, and
(y)(A) on or after the date of this Agreement and prior to
the expiration of the Offer, such person or group shall
have made a takeover proposal, (B) the Offer, if required
to have been commenced, shall have remained open until the
scheduled expiration date immediately following the date
such takeover proposal was first publicly announced and
(C) this Agreement shall have been terminated pursuant to
Section 8.01(b)(i); or
(iii) concurrently with the Company entering into any
agreement with respect to any superior proposal in
accordance with Section 5.02(b), unless this Agreement is
terminated by the Company and Parent or Sub shall have
failed to perform in any material respect any of its
obligations under this Agreement.
"Expenses" shall mean all documented out-of-pocket fees and
expenses incurred or paid by or on behalf of Parent in
connection with the Offer, the Merger or the consummation of
any of the transactions contemplated by this Agreement,
including all fees and expenses of counsel, commercial
banks, investment banking firms, accountants, experts and
consultants to Parent.
(c) The Company shall pay, or cause to be paid, in
same day funds to Parent upon demand an additional fee of
$6,000,000 (the "Termination Fee") if (i) the Company shall
have entered into an agreement with respect to a superior
proposal in accordance with Section 5.02(b) and the
transaction contemplated by such agreement (or any
subsequent agreement involving a takeover proposal entered
into after the entering into of such agreement) shall have
been consummated within 12 months of the date of this
Agreement or (ii) the Company shall not have entered into
such agreement and the Expense Fee is paid or is payable
pursuant to paragraph (b)(i) (solely with respect a failure
of any condition set forth in clause (i) or (iii) of
paragraph (e) of Exhibit A) or (b)(ii) of this Section 6.08.
SECTION 6.09. Public Announcements. Parent and Sub,
on the one hand, and the Company, on the other hand, will
consult with each other before issuing, and provide each
other the opportunity to review, comment upon and concur
with, any press release or other public statements with
respect to the transactions contemplated by this Agreement,
including the Offer and the Merger, and shall not issue any
such press release or make any such public statement prior
to such consultation, except as may be required by
applicable law, court process or by obligations pursuant to
any listing agreement with any national market system. The
parties agree that the initial press release to be issued
with respect to the transactions contemplated by
this Agreement shall be in the form heretofore agreed to by
the parties.
SECTION 6.10. Stockholder Litigation. The Company
shall give Parent the opportunity to participate in the
defense or settlement of any stockholder litigation against
the Company and its directors relating to any of the
transactions contemplated by this Agreement until the
purchase of Company Common Stock pursuant to the Offer, and
thereafter, shall give Parent the opportunity to direct the
defense of such litigation and, if Parent so chooses to
direct such litigation, Parent shall give the Company and
its directors an opportunity to participate in such
litigation; provided, however, that no such settlement shall
be agreed to without Parent's consent, which consent shall
not be unreasonably withheld; and provided further that no
settlement requiring a payment by a director shall be agreed
to without such director's consent.
SECTION 6.11. Convertible Notes. (a) The Company
shall deliver, or shall cause to be delivered, as promptly
as practicable following completion of the Offer and
following completion of the Merger all notices required with
respect to either such event to be delivered to each holder
of the Convertible Notes pursuant to the Note Agreement,
including an Event Notice (as defined in Section 2.3(a) of
the Note Agreement) and, if applicable, a Put Notice (as
defined in Section 2.3(c) of the Note Agreement). The
Company shall promptly repurchase from any holders
exercising their right to sell their Convertible Notes back
to the Company all such Convertible Notes.
(b) The Company shall also take any steps that may be
necessary to facilitate the automatic adjustment of the
rights of holders of the Convertible Notes following the
Effective Time to receive upon conversion of the Convertible
Notes the Merger Consideration rather than shares of Company
Common Stock in accordance with Section 9.5 of the Note
Agreement, including by preparing and executing the lawful
and adequate provision referred to therein.
(c) Immediately following the execution of this
Agreement, the Company shall deliver to each holder of the
Convertible Notes a notice dated the date of this Agreement
that describes the existence of this Agreement and the
principal economic terms of the Offer and the Merger as
contemplated in this Agreement and notifies each such holder
of such holder's continuing right until consummation of the
Merger to exercise their right to convert their Convertible
Notes to shares of Company Common Stock in accordance with
the terms of such Convertible Notes.
ARTICLE VII
Conditions Precedent
SECTION 7.01. Conditions to Each Party's Obligation to
Effect the Merger. The respective obligation of each party
to effect the Merger is subject to the satisfaction or
waiver on or prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. If required by
applicable law, the Company Stockholder Approval shall
have been obtained.
(b) No Injunctions or Restraints. No statute, rule,
regulation, executive order, decree, temporary restraining
order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or
prohibition preventing the consummation of the Merger
shall be in effect; provided, however, that each of the
parties shall have used best efforts to prevent the entry
of any such injunction or other order and to appeal as
promptly as possible any injunction or other order that
may be entered.
(c) Notice to Holders of Convertible Notes. There
shall have elapsed 30 days following the receipt by the
last holder of Convertible Notes of the notice from the
Company that is referred to in Section 6.11(c).
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether
before or after approval of matters presented in connection
with the Merger by the stockholders of the Company:
(a) by mutual written consent of Parent and the
Company;
(b) by either Parent or the Company:
(i) if (w) as the result of the failure of any of
the conditions set forth in paragraphs (a) through (h)
of Exhibit A to this Agreement, Sub shall have failed
to commence the Offer in the time required by this
Agreement or (x) as a result of the failure of any of
the conditions set forth in Exhibit A to this Agreement
the Offer shall have terminated or expired in
accordance with its terms without Sub having accepted
for payment any shares of Company Common Stock pursuant
to the Offer or (y) Sub shall not have accepted for
payment any shares of Company Common Stock pursuant to
the Offer within 90 days following the date of this
Agreement; provided, however, that the right to
terminate this Agreement pursuant to this
Section 8.01(b)(i) shall not be available to any party
whose failure to perform any of its obligations under
this Agreement results in the failure of any such
condition or if the failure of such condition results
from facts or circumstances that constitute a breach of
representation or warranty under this Agreement by such
party; or
(ii) if any Governmental Entity shall have issued
an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment
for, shares of Company Common Stock pursuant to the
Offer or the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
or
(c) by the Company in accordance with the provisions of
Section 5.02.
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement by either the Company or
Parent as provided in Section 8.01, this Agreement shall
forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Sub or the
Company, other than the provisions of Section 4.01(o),
Section 4.02(d), the last two sentences of Section 6.02,
Section 6.08, this Section 8.02 and Article IX and except to
the extent that such termination results from the willful
and material breach by a party of any of its
representations, warranties, covenants or agreements set
forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may be
amended by the parties at any time before or after obtaining
the Company Stockholder Approval, if required by law;
provided, however, that after any such approval, there shall
not be made any amendment that by law requires further
approval by such stockholders without the further approval
of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each
of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to
the Effective Time, the parties may (a) extend the time for
the performance of any of the obligations or other acts of
the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement
or in any document delivered pursuant to this Agreement or
(c) subject to the proviso of Section 8.03, waive compliance
with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. 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.
SECTION 8.05. Procedure for Termination, Amendment,
Extension or Waiver. A termination of this Agreement
pursuant to Section 8.01, an amendment of this Agreement
pursuant to Section 8.03 or an extension or waiver pursuant
to Section 8.04 shall, in order to be effective, require in
the case of Parent, Sub or the Company, action by its Board
of Directors or the duly authorized designee of its Board of
Directors; provided, however, that in the event that Sub's
designees are appointed or elected to the Board of Directors
of the Company as provided in Section 6.07, after the
acceptance for payment of shares of Company Common Stock
pursuant to the Offer and prior to the Effective Time, the
affirmative vote of the Independent Directors shall be
required by the Company to (i) amend or terminate this
Agreement by the Company, (ii) exercise or waive any of the
Company's rights or remedies under this Agreement or
(iii) extend the time for performance of Parent's and Sub's
respective obligations under this Agreement.
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and
Warranties. None of the representations and warranties in
this Agreement or in any instrument delivered pursuant to
this Agreement shall survive the Effective Time or, in the
case of the Company, shall survive the acceptance for
payment of, and payment for, of shares of Company Common
Stock by Sub pursuant to the Offer. This Section 9.01 shall
not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall
be in writing and shall be deemed given if delivered
personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) 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
National Health Laboratories Incorporated
4225 Executive Square
Suite 800
La Jolla, California 92037
Facsimile: (619) 658-6693
Attention: Mr. James R. Maher
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Facsimile: (212) 474-3700
Attention: Allen Finkelson, Esq.
(b) if to the Company, to
Allied Clinical Laboratories, Inc.
2515 Park Plaza
Nashville, Tennessee 37203
Facsimile: (615) 320-2013
Attention: Mr. Haywood D. Cochrane, Jr.
with a copy to:
Irell & Manella
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Facsimile: (310) 203-7199
Attention: Ronald Loeb, Esq.
and a copy to:
Irell & Manella
333 South Hope Street
Suite 3300
Los Angeles, California 90071
Facsimile: (213) 229-0515
Attention: Stephen Rothman, Esq.
SECTION 9.03. Definitions. For purposes of this
Agreement:
(a) an "affiliate" of any person means another person
that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under
common control with, such first person;
(b) "material adverse change" or "material adverse
effect" means, when used in connection with the Company or
Parent, any change or effect (or any development that,
insofar as can reasonably be foreseen, is likely to result
in any change or effect) that is materially adverse to the
business, properties, assets, condition (financial or
otherwise), results of operations or prospects of such
party and its subsidiaries taken as a whole; provided,
however, that the existence or occurrence of the following
events and circumstances, in any combination thereof,
shall not constitute a "material adverse change" or
"material adverse effect": (i) the subpoena received by
the Company in 1993 from the Office of Inspector General
and the United States Attorneys Office for the Southern
District of California relating to Medicare billing
practices, and any developments, investigations or charges
arising therefrom or relating thereto, (ii) the subpoena
received by the Company in April of 1994 relating to
Medicare billing practices at the clinical laboratory
located in Cincinnati, Ohio, and any developments,
investigations or charges arising therefrom or relating
thereto, (iii) the assessment from the Internal Revenue
Service relating to the amortization of intangible items
for the years 1989, 1990 and 1991, or any future
assessment based on the same issue for subsequent years,
and any developments arising therefrom or relating thereto
(except to the extent any such change or effect referred
to in clause (i), (ii) or (iii) above results from a state
of facts known to the executive officers of the Company,
after appropriate inquiry, on the date of execution of
this Agreement and not disclosed in writing to Parent on
or prior to such time), (iv) any change in laws, rules and
regulations (Federal, state or local) or reimbursement
practices, including, without limitation, changes relating
to Medicare, Medicaid, CHAMPUS program and carrier billing
practices and (v) changes relating to the cancellation,
termination or non-renewal by customers (including
(x) doctors that refer specimens to the Company and
(y) hospitals, health maintenance organizations, preferred
provider organizations, the laboratories of which the
Company manages) of the Company or any of its subsidiaries
or the voluntary termination by existing general managers,
sales managers or sales representatives from and after the
date of the public announcement of this Agreement, unless
and to the extent such cancellations, terminations or non-
renewals are directly attributable to factors other than
the transactions contemplated by this Agreement;
(c) "person" means an individual, corporation,
partnership, joint venture, association, trust,
unincorporated organization or other entity;
(d) a "subsidiary" of any person means another person,
an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to
elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting
interests, 50% or more of the equity interests of which)
is owned directly or indirectly by such first person;
(e) "superior proposal" has the meaning assigned
thereto in Section 5.02(b); and
(f) "takeover proposal" has the meaning assigned
thereto in Section 5.02(a).
SECTION 9.04. Interpretation. When a reference is
made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article or a Section
of, or an Exhibit or Schedule to, 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". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement. All terms
defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined herein.
The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified
or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments
incorporated therein. References to a person are also to
its permitted successors and assigns.
SECTION 9.05. Counterparts. This Agreement may be
executed in one or more 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 9.06. Entire Agreement; No Third-Party
Beneficiaries. This Agreement and the Confidentiality
Agreement constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this
Agreement and except for the provisions of Sections 6.04,
6.05 and 6.06, are not intended to confer upon any person
other than the parties any rights or remedies hereunder.
SECTION 9.07. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of
the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflict of
laws thereof.
SECTION 9.08. Assignment. Neither this Agreement nor
any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without
the prior written consent of the other parties, except that
Sub may assign, in its sole discretion, any of or all its
rights, interests and obligations under this Agreement to
Parent or to any direct or indirect wholly owned subsidiary
of Parent, but no such assignment shall relieve Sub of any
of its obligations under this Agreement. 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 and assigns.
SECTION 9.09. Enforcement. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in
Delaware state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court
in the event any dispute arises out of this Agreement or any
of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave
from any such court and (c) agrees that it will not bring
any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court
other than a Federal or state court sitting in the State of
Delaware.
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.
NATIONAL HEALTH
LABORATORIES INCORPORATED,
by
/s/James R. Maher
______________________
Name: James R. Maher
Title: President and
Chief Executive
Officer
N ACQUISITION CORP.,
by
/s/ James Maher
______________________
Name: James R. Maher
Title: President and
Chief Executive
Officer
ALLIED CLINICAL LABORATORIES, INC.,
by
/s/ Haywood D. Cochrane, Jr.
_____________________________
Name: Haywood D. Cochrane, Jr.
Title: President and
Chief Executive
Officer
Exhibit A
Conditions of the Offer
Notwithstanding any other term of the Offer or this
Agreement, Sub shall not be required to accept for payment
or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered
shares of Company Common Stock after the termination or
withdrawal of the Offer), to pay for any shares of Company
Common Stock tendered pursuant to the Offer unless (i) there
shall have been validly tendered and not withdrawn prior to
the expiration of the Offer that number of shares of Company
Common Stock which, together with the number of shares with
respect to which Sub has a valid and existing option to
purchase pursuant to the Option Agreements, would represent
at least a majority of the Fully Diluted Shares (the
"Minimum Tender Condition") and (ii) any waiting period
under the HSR Act applicable to the purchase of shares of
Company Common Stock pursuant to the Offer shall have
expired or been terminated. The term "Fully Diluted Shares"
means all outstanding securities entitled generally to vote
in the election of directors of the Company on a fully
diluted basis, after giving effect to the exercise or
conversion of all options, rights and securities exercisable
or convertible into such voting securities. Furthermore,
notwithstanding any other term of the Offer or this Agree-
ment, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any shares of Company
Common Stock not theretofore accepted for payment or paid
for, and may terminate or amend the Offer, with the consent
of the Company or if, at any time on or after the date of
this Agreement and before the acceptance of such shares for
payment or the payment therefor, any of the following
conditions exists:
(a) there shall be pending by any Governmental Entity
(or the staff of the Federal Trade Commission or the staff
of the Antitrust Division of the Department of Justice
shall have recommended the commencement of) any suit,
action or proceeding, which has a reasonable possibility
of success, or there shall be pending by any other person
any suit, action or proceeding, which has a substantial
likelihood of success, (i) challenging the acquisition by
Parent or Sub of any shares of Company Common Stock,
seeking to restrain or prohibit the making or consummation
of the Offer or the Merger or the performance of any of
the other transactions contemplated by this Agreement or
Company, Parent or Sub any damages that are material in
relation to the Company and its subsidiaries taken as
whole, (ii) seeking to prohibit or limit the ownership or
operation by the Company, Parent or any of their
respective subsidiaries of a material portion of the
business or assets of the Company and its subsidiaries,
taken as a whole, or Parent and its subsidiaries, taken as
a whole, or to compel the Company or Parent to dispose of
or hold separate any material portion of the business or
assets of the Company and its subsidiaries, taken as a
whole, or Parent and its subsidiaries, taken as a whole,
as a result of the Offer or any of the other transactions
contemplated by this Agreement or the Option Agreements,
(iii) seeking to impose material limitations on the
ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership of, any shares of Company Common
Stock accepted for payment pursuant to the Offer including
without limitation the right to vote the Company Common
Stock accepted for payment by it on all matters properly
presented to the stockholders of the Company, (iv) seeking
to prohibit Parent or any of its subsidiaries from
effectively controlling in any material respect the
business or operations of the Company and its subsidiaries
taken as a whole or (v) which otherwise is reasonably
likely to have a material adverse effect on the business,
properties, assets, condition (financial or otherwise),
results of operations or prospects of the Company and its
subsidiaries taken as a whole, other than any action or
proceeding arising out of the existence or occurrence of
the following events and circumstances, in any combination
thereof: (i) the subpoena received by the Company in 1993
from the Office of Inspector General and the United States
Attorneys Office for the Southern District of California
relating to Medicare billing practices, and any
developments, investigations or charges arising therefrom
or relating thereto, (ii) the subpoena received by the
Company in April of 1994 relating to Medicare billing
practices at the clinical laboratory located in
Cincinnati, Ohio, and any developments, investigations or
charges arising therefrom or relating thereto, and
(iii) the assessment from the Internal Revenue Service
relating to the amortization of intangible items for the
years 1989, 1990 and 1991, or any future assessment based
on the same issue for subsequent years, and any
developments arising therefrom or relating thereto
clause (i), (ii) or (iii) above results from a state of
facts known to the executive officers of the Company,
after appropriate inquiry, on the date of execution of
this Agreement and not disclosed in writing to Parent on
or prior to such time);
(b) there shall be any statute, rule, regulation,
judgment, order or injunction enacted, entered, enforced,
promulgated or deemed applicable to the Offer, the Merger
or the Option Agreements, or any other action shall be
taken by any Governmental Entity or court, other than the
application to the Offer or the Merger of applicable
waiting periods under the HSR Act, that is reasonably
likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of
paragraph (a) above;
(c) there shall have occurred any change (or any
development that, insofar as reasonably can be foreseen,
is reasonably likely to result in any change) that is
materially adverse to the business, properties, assets,
condition (financial or otherwise), results of operations
or prospects of the Company and its subsidiaries taken as
a whole, other than changes relating to the existence or
occurrence of the following events and circumstances, in
any combination thereof: (i) the subpoena received by the
Company in 1993 from the Office of Inspector General and
the United States Attorneys Office for the Southern
District of California relating to Medicare billing
practices, and any developments, investigations or charges
arising therefrom or relating thereto, (ii) the subpoena
received by the Company in April of 1994 relating to
Medicare billing practices at the clinical laboratory
located in Cincinnati, Ohio, and any developments,
investigations or charges arising therefrom or relating
thereto, (iii) the assessment from the Internal Revenue
Service relating to the amortization of intangible items
for the years 1989, 1990 and 1991, or any future
assessment based on the same issue for subsequent years,
and any developments arising therefrom or relating thereto
(except to the extent any such change referred to in
clause (i), (ii) or (iii) above results from a state of
facts known to the executive officers of the Company,
after appropriate inquiry, on the date of execution of
this Agreement and not disclosed in writing to Parent on
regulations (Federal, state or local) or reimbursement
practices, including, without limitation, changes relating
to Medicare, Medicaid, CHAMPUS program and carrier billing
practices and (v) changes relating to the cancellation,
termination or non-renewal by customers (including
(x) doctors that refer specimens to the Company and
(y) hospitals, health maintenance organizations, preferred
provider organizations, the laboratories of which the
Company manages) of the Company or any of its subsidiaries
or the voluntary termination by existing general managers,
sales managers or sales representatives from and after the
date of the public announcement of this Agreement, unless
and to the extent such cancellations, terminations or non-
renewals are directly attributable to factors other than
the transactions contemplated by this Agreement;
(d) there shall have occurred (i) any general
suspension of trading in, or limitation on prices for,
equity securities on the New York Stock Exchange
(excluding any coordinated trading halt triggered solely
as a result of a specified decrease in a market index),
(ii) any extraordinary adverse change in the financial
markets in the United States, (iii) a declaration of a
banking moratorium or any suspension of payments in
respect of banks in the United States, (iv) any limitation
(whether or not mandatory) by any Governmental Entity on,
or other event that materially affects, the extension of
credit by banks or other lending institutions, (v) a
commencement of a war or armed hostilities or other
national or international calamity directly involving the
armed forces the United States on a scale greater than any
other during the two-year period preceding the date of
this Agreement or (vi) in the case of any of the foregoing
existing on the date of this Agreement, a material
acceleration or worsening thereof;
(e) (i) the Board of Directors of the Company or any
committee thereof shall have withdrawn or modified in a
manner adverse to Parent or Sub its approval or
recommendation of the Offer, the Merger, this Agreement or
the Option Agreements, or approved or recommended any
takeover proposal, (ii) the Company shall have entered
into any agreement with respect to any superior proposal
(iii) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the
foregoing actions referred to in clause (i) above;
(f) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as
to materiality shall not be true and correct and any such
representations and warranties that are not so qualified
shall not be true and correct in any material respect, in
each case as of the date of this Agreement or any other
date as of which such representations and warranties
expressly speak;
(g) the Company shall have failed to perform in any
material respect any obligation or to comply in any
material respect with any agreement or covenant of the
Company to be performed or complied with by it under this
Agreement; or
(h) this Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable good faith judgment of Sub or
Parent, in any such case, and regardless of the
circumstances giving rise to any such condition (other than
any action or inaction by Parent or any of its subsidiaries
which constitutes a breach of this Agreement), makes it
inadvisable to proceed with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of
Sub and Parent and may be asserted by Sub or Parent
regardless of the circumstances giving rise to such
condition (other than any action or inaction by Parent or
any of its subsidiaries which constitutes a breach of this
Agreement) or may be waived by Sub and Parent in whole or in
part at any time and from time to time in their sole
discretion. The failure by Parent, Sub or any other
affiliate of Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a
waiver with respect to any other facts and circumstances and
each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘10-Q’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 12/15/06 | | 16 | | | | | None on these Dates |
| Filed on: | | 5/10/94 | | 6 |
| | 5/3/94 | | 1 | | 5 |
| | 5/2/94 | | 16 |
| | 5/1/94 | | 16 |
| | 4/26/94 | | 43 |
| For Period End: | | 3/31/94 |
| | 7/12/93 | | 41 |
| | 1/1/93 | | 19 |
| | 12/1/92 | | 31 |
| List all Filings |
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